Nimmick v. Hart
| Decision Date | 11 April 1991 |
| Docket Number | 90-204,Nos. 90-420,s. 90-420 |
| Citation | 808 P.2d 481,248 Mont. 1 |
| Parties | Fred G. NIMMICK and Ann G. Nimmick, Plaintiffs and Respondents, v. Dale P. HART, Defendant and Appellant. Dale P. HART, Plaintiff and Appellant, v. Allen E. ERICKSON, Melba E. Erickson, Fred G. Nimmick, Ann M. Nimmick, Robert E. Wright, Donna Mae Wright, Charles R. Taylor, and Sam Martin, Defendants and Respondents. |
| Court | Montana Supreme Court |
Thomas W. Trigg, Terry A. Wallace, Missoula, for defendant and appellant.
Dirk A. Williams, Snavely & Phillips, Missoula, Richard A. Weber, Jr., Koch, McKenna, Goheen, Boggs & Weber, Hamilton, for plaintiffs and respondents.
In this consolidated action Dale P. Hart appeals from the Fourth Judicial District Court orders granting summary judgment in favor of Charles R. Taylor in cause no. 66726, and Fred G. Nimmick and Ann M. Nimmick in cause no. 66726 and cause no. 71128. We affirm in part and reverse and remand in part.
The parties raise several issues which we restate as follows:
As to Taylor:
I. Whether the District Court erred in determining Hart failed to plead failure of consideration as an affirmative defense.
As to the Nimmicks:
II. Whether the District Court erred in finding no misrepresentation and fraud on the part of the Nimmicks.
III. Whether the District Court erred in collaterally estopping Hart from raising the issues of rescission and misrepresentation concerning his purchase of Terrace.
IV. Whether the District Court erred in dismissing Hart's affirmative defense of accord and satisfaction.
V. Whether the District Court erred in finding that the Nimmicks had no obligation to mitigate their damages.
VI. Whether the District Court erred in dismissing Hart's counterclaims.
This cause of action is based on a series of transactions involving the Terrace Mobile Home Park (Terrace) located near East Missoula, Montana. Terrace was originally owned by the Ericksons. The Ericksons sold Terrace by contract for deed to Furman H. Stockton and Clare E. Stockton on September 25, 1978. The Stocktons then sold Terrace by contract for deed to Fred C. Nimmick and Ann M. Nimmick on November 5, 1982. On April 16, 1984, the Nimmicks in turn sold the property by contract for deed to Robert E. Wright and Donna Mae Wright.
The Wrights were indebted to Charles R. Taylor on a promissory note. After the debt to Taylor arose, Wrights purchased Terrace from the Nimmicks. Subsequently, Taylor acquired a judgment against the Wrights for the debt owed on the promissory note. Taylor then filed a judgment lien against the Wrights' interest in Terrace.
Taylor scheduled an execution sale of the Wrights interest in Terrace to satisfy his judgment against the Wrights. The Wrights were on the verge of losing their interest in the property through the foreclosure of Taylor's judgment lien when Samuel Martin, a realtor, contacted Dale Hart in an effort to stave off the impending foreclosure. Previously Martin had been the realtor that handled the Stockton-Nimmick transaction and the Nimmick-Wright transaction.
The involvement of Hart in Terrace took place in two stages. In order to avoid the sale, the Wrights paid $7,500 to Taylor and agreed to pay the balance of the judgment ($7,500 within one year upon a specified schedule). Hart gave the Wrights the above $7,500 to pay Taylor to avoid the execution sale. In return, Hart received a partial assignment of one-third of the Wrights' purchasers interest in Terrace. Hart also agreed to pay the Wrights an additional $7,500 in January, 1986, to pay off the remaining judgment debt to Taylor.
Despite this payment, on November, 1985, the Wrights defaulted on the underlying contract payments which were to be made to the Ericksons, the title holders of the property. As a result, the Ericksons issued a notice of default and acceleration. To overcome this default, Hart purchased all of the Wrights' interest in the property and agreed to assume all of the obligations on Terrace, including the remaining debt ($7,500) to Taylor. In order to cure the Wrights' default to the Ericksons, Hart borrowed $3,500 from the Nimmicks. Hart also gave the Nimmicks a $10,000 promissory note to clear a lien the Nimmicks held against Terrace. The note was secured by a trust indenture on Hart's personal residence.
Next, Hart signed a promissory note to Taylor for $5,000 and Taylor agreed to release his judgment lien. Hart agreed to grant a trust-indenture covering his interest in Terrace, to secure payment to Taylor. Hart also later delivered $2,500 to attorney Dennis Lind for partial payment of his debt to Taylor. Lind then delivered the $2,500 to Taylor's attorney. As the parties agreed, Hart signed a promissory note and a trust indenture with Taylor. Unfortunately, Taylor's judgment lien was not immediately released or satisfied, nor did Hart request Taylor to release or satisfy the judgment lien.
Hart's promissory note to Taylor was due and payable in full on January 12, 1987. On that date, Hart paid Taylor $687 in interest on the promissory note, but failed to pay the full amount of the principal. Other than the single payment of interest on January 12, 1987, Hart has made no payments on the promissory note.
On February 20, 1987, Hart sent a letter to Taylor and other parties stating his intention to rescind all transactions related to Hart's purchase of Terrace. On April 10, 1987, Hart sued Taylor, the Nimmicks, and others in Missoula County Cause No. 66726 alleging that he was fraudulently induced to enter the contract to purchase the mobile home park, and seeking rescission of the contract and damages. Specifically, in regard to Taylor, Hart sought to rescind or avoid Hart's obligations under the promissory note he signed with Taylor. In response, Taylor denied Hart's allegations of fraud, and counterclaimed for payment under the promissory note.
On March 22, 1988, the District Court granted summary judgment in favor of Taylor upon Hart's claims of fraud and misrepresentation. Subsequently, Taylor requested summary judgment upon his counterclaim. That motion was also granted.
Hart now appeals the District Court's second summary judgment order in favor of Taylor.
This appeal also includes Hart's claims of fraud, misrepresentation and rescission against the Nimmicks in cause no. 66726, and the Nimmicks' subsequent complaint against Hart for payment of a promissory note in cause no. 71128.
As we mentioned previously in this Opinion, Hart sued the Nimmicks, along with various other defendants, in cause no. 66726 alleging fraud and misrepresentation on the part of the Nimmicks. Specifically, Hart claimed that the Nimmicks, through their agent realtor Sam Martin, misrepresented the value of Terrace. This misrepresentation, according to Hart, led him to purchase an interest in Terrace. The Nimmicks denied any misrepresentation in the sale of Terrace, and further denied any agency relationship with realtor Martin.
On April 15, 1988, the Nimmicks filed a motion for summary judgment. The court found no agency relationship between the Nimmicks and Martin, and, therefore, any statements that Martin made about Terrace could not be imputed to the Nimmicks. The District Court found no misrepresentations on the part of the Nimmicks in the sale of Terrace.
After the District Court's summary judgment, the Nimmicks served a Notice of Entry of Order upon Hart's counsel on November 16, 1988. The Nimmicks failed to enter a final judgment.
On June 8, 1989, the Nimmicks filed a complaint in cause no. 71128, to collect payment under the promissory note. The facts of the Nimmicks' cause of action on the promissory note are tied into Hart's earlier fraud and misrepresentation complaint surrounding his purchase of Terrace. Hart had given the Nimmicks the note, secured by a trust indenture in Hart's personal residence, in the amount of $10,000 with interest at the rate of 10% on November 21, 1985. As mentioned earlier, Hart gave the note to the Nimmicks in order to clear a lien the Nimmicks had on Terrace.
The record reveals that City Federal Savings Bank also had a trust indenture on Hart's personal residence; the Bank's trust indenture was superior to the trust indenture held by the Nimmicks. On December 19, 1988, Michael J. Reiley, trustee under the Bank's trust indenture, recorded a notice of trustee's sale.
On February 20, 1989, Nimmicks' attorney sent Hart's attorney an offer to settle Nimmicks' claim for $8,541.25. By its terms, the compromise offer expired on March 15, 1989. Sometime later Hart called the Nimmicks' attorney and offered a deed to his home in lieu of foreclosure. The Nimmicks' attorney by letter to Hart's attorney rejected Hart's offer. Furthermore, the Nimmicks' attorney advised Hart's counsel that the Nimmicks would be filing suit on the note if the Bank foreclosed its trust indenture on schedule.
On May 19, 1989, the Bank's trustee sold Hart's home at a trustee sale. As promised, having lost their security, the Nimmicks sued Hart on the note on June 8, 1989. Hart answered, raised affirmative defenses and asserted counterclaims.
On September 20, 1989, the Nimmicks moved for summary judgment on the complaint and Hart's counterclaims. Following the Nimmicks' motion, briefing by the parties, and oral argument, the District Court granted partial summary judgment to the Nimmicks, and maintained that Hart is collaterally estopped from raising the claims of rescission and misrepresentation, since both of these claims had been adjudicated in District Court in cause no. 66726.
The Nimmicks then moved for summary judgment on the remaining issues, which Hart opposed. The District Court agreed with the Nimmicks and granted the Nimmicks' motion for summary judgment. The Court entered judgment on June 7, 1990, and the Nimmicks served Notice of Entry of Judgment on June 11, 1990....
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