Meagher v. Butte-Silver Bow City-County

• Decision Date: 05 June 2007
• Docket Number: No. DA 06-0136.,DA 06-0136.
• Citation: 160 P.3d 552,2007 MT 129
• Parties: Mykl MEAGHER, Plaintiff and Appellant, v. BUTTE-SILVER BOW CITY-COUNTY, A Municipal Corporation and Political Subdivision of the State of Montana, Defendant and Respondent.
• Court: Montana Supreme Court

160 P.3d 552

2007 MT 129

Mykl MEAGHER, Plaintiff and Appellant, v. BUTTE-SILVER BOW CITY-COUNTY, A Municipal Corporation and Political Subdivision of the State of Montana, Defendant and Respondent.

No. DA 06-0136.

Supreme Court of Montana.

Submitted on Briefs December 28, 2006.

Decided June 5, 2007.

For Appellant: Kevin E. Vainio, Butte, Montana.

For Respondent: Eileen Joyce, Butte-Silver Bow Deputy County Attorney, Butte, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Mykl Meagher appeals the Second Judicial District Court's grant of summary judgment in favor of Butte-Silver Bow City-County (BSB or the County). Meagher filed a Complaint against BSB alleging that the County breached an oral agreement under which the County agreed to sell certain properties to Meagher. BSB filed a motion to dismiss pursuant to M.R. Civ. P. 12(b)(6) (Rule 12(b)(6)). The District Court converted the Rule 12(b)(6) motion into a motion for summary judgment and entered judgment in favor of the County. Meagher appeals. We reverse and remand.

ISSUES

¶ 2 A restatement of the issues on appeal is:

¶ 3 Did the District Court erroneously fail to comply with M.R. Civ. P. 56 (Rule 56) when it converted the County's Motion to Dismiss to a motion for summary judgment?

¶ 4 Did the District Court err when it denied Meagher's motion for a continuance?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 5 In October 2003 Butte-Silver Bow City-County acquired several properties through tax forfeiture proceedings and posted them for sale at the County Treasurer's Office. In July 2004 Meagher identified five properties he wished to purchase from the County. As required by the county treasurer, Meagher submitted five letters to the Chief Executive and Council of Commissioners, offering in each to pay BSB's established bid value for the respective parcels. Attached to each letter was a $50.00 check to cover the required administrative fee.

¶ 6 In August 2004 the County met with Meagher and orally agreed to sell him the two properties located on W. Broadway Street and S. Wyoming Street, contingent upon Meagher completing specified restoration and remodeling work on the properties by November 1, 2004. It also agreed to place a hold on selling two of the other properties Meagher wanted to purchase conditioned on his restoration work on the Broadway and Wyoming Street properties. The BSB Council memorialized the oral agreement as it pertained to the sale of the Broadway and Wyoming Street properties in a September 15, 2004, resolution. Meagher undertook the required work, expended approximately $30,000.00 in labor and material, and held an open house showing the remodeled properties on November 15, 2004. Several commissioners attended the open house. BSB subsequently conveyed these two properties to Meagher.

¶ 7 Despite repeated requests by Meagher between September 2004 and June 2005, the County ultimately denied his requests to purchase the other three properties and recommended that the administration fees he had paid for each of these properties be returned to him.

¶ 8 On July 25, 2005, Meagher filed suit against BSB claiming that he and BSB had entered into an oral contract under which the County was obligated to sell him all five properties on which he had placed bids and paid administrative fees. He sought specific performance under this oral agreement. In August 2005 the County filed a Motion to Dismiss under Rule 12(b)(6) on the ground that the Complaint failed to state a claim for which relief could be granted. In its Brief in Support of Motion to Dismiss, the County argued that no oral or written agreement existed, and therefore specific performance was unavailable.

¶ 9 Meagher responded with a brief in opposition to the County's Motion to Dismiss in which he specifically objected to the County's inclusion of "facts, exhibits and arguments" that extended beyond the contents of his Complaint. While objecting to the County's additional "facts," Meagher explained that he included additional facts in his brief in opposition so as "to more clearly answer the [County's] Brief." He noted that if the District Court considered the additional facts presented by the parties, the court would be converting the County's Motion to Dismiss into a motion for summary judgment. Meagher advised the court that if it intended to undertake such a conversion the District Court had to provide the parties with notice of its intent and allow him the opportunity to produce pertinent and relevant facts to overcome summary judgment. The County filed its reply brief in support of its Motion to Dismiss in which it indicated that it "would not object to the [c]ourt converting its Motion to Dismiss to a Motion for Summary Judgment and allowing [Meagher] to supplement the record."

¶ 10 On September 27, the District Court scheduled a hearing on BSB's Motion to Dismiss for November 1, 2005. On October 11, it rescheduled the hearing for October 19, 2005. On October 13, it vacated the hearing until further notice, and on October 20, rescheduled it for November 7, 2005. In each notice, the District Court referred to the hearing as a hearing on the County's Motion to Dismiss. On October 28, 2005, Meagher filed an affidavit in which he detailed his recollection of the dealings with the County vis-à-vis the five properties. On Friday, November 4, Meagher's counsel filed a Motion to Continue Hearing explaining that Meagher had left for Thailand on business, and requesting a continuance of the hearing until the second week of March at which time Meagher would have returned. The District Court did not receive Meagher's Motion until Monday morning, November 7, just prior to the commencement of the hearing. After considering Meagher's request and the County's objection to a continuance, the court denied Meagher's motion and held the scheduled hearing.

¶ 11 The court heard testimony with respect to facts, exhibits and evidence beyond what was included in Meagher's Complaint. On December 28, 2005, it issued its Order Granting Motion for Summary Judgment to BSB. In it the court explained that

[T]he parties' subsequent pleadings proposed that the [c]ourt convert such Motion [to Dismiss] to a Motion for Summary Judgment. Meagher has also supplemented the record through filing an Affidavit in support of his position. The [c]ourt reviewed the briefs submitted, the oral arguments, and the pleadings in their entirety and considered the same.

The District Court ruled that no contract existed between the parties and therefore the County was not obligated to sell the remaining three properties to Meagher. Additionally, it determined that the County had the authority to seek and accept a separate purchase proposal from another buyer under a "developer's packet." Lastly it held that no genuine issues of material fact existed and the County was entitled to judgment as a matter of law.

¶ 12 Meagher appeals. We reverse and remand the matter to the District Court for further proceedings.

STANDARD OF REVIEW

¶ 13 We review de novo a district court's ruling on a motion to dismiss pursuant to Rule 12(b)(6). A motion to dismiss under Rule 12(b)(6) has the effect of admitting all well-pleaded allegations in the complaint. In considering the motion, the complaint is construed in the light most favorable to the plaintiff, and all allegations of fact contained therein are taken as true. Plouffe v. State, 2003 MT 62, ¶ 8, 314 Mont. 413, ¶ 8, 66 P.3d 316, ¶ 8 (citations omitted).

¶ 14 We also review an order granting summary judgment de novo, relying on the provisions of M.R. Civ. P. Rule 56. Hajenga v. Schwein, 2007 MT 80, ¶ 11, 336 Mont. 507, ¶ 11, 155 P.3d 1241, ¶ 11 (citation omitted). Summary judgment is an extreme remedy that should be granted only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Hajenga, ¶ 11.

DISCUSSION

¶ 15 The first issue before us is whether the District Court erred in converting the County's Motion to Dismiss into a motion for summary judgment without giving notice to Meagher. A motion to dismiss under Rule 12(b)(6) allows the district court to examine only whether "a claim has been adequately stated in the complaint." Gebhardt v. D.A. Davidson & Co., 203 Mont. 384, 389, 661 P.2d 855, 857 (1983). As a result, the court is limited to an examination of the contents of the complaint in making its determination of adequacy. Additionally, the effect of a Rule 12(b)(6) motion to dismiss is that all the well-pleaded allegations in the complaint are admitted as true; therefore, it should not be dismissed "unless it appears beyond reasonable doubt that the plaintiff can prove no set of facts which would entitle him to relief." Gebhardt, 203 Mont. at 389, 661 P.2d at 857-58 (citation omitted).

¶ 16 Rule 12(b) allows the court to convert a motion to dismiss into a motion for summary judgment when matters outside the pleadings are presented to the court. Rule 12(b) states in part:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for...