Patton v. Madison County
| Decision Date | 26 July 1994 |
| Docket Number | 93-446,Nos. 93-445,s. 93-445 |
| Citation | 877 P.2d 993,265 Mont. 362 |
| Parties | Gordon PATTON, William Winn, Robert Allen, and Val Farrell, Petitioners and Respondents, v. MADISON COUNTY and The Board of County Commissioners, William R. Dringle, Chairman; Byron Bayers, John Allhands, and Walter Kannon, and Hambletonian Inn, Inc., Respondents and Appellants. Dan R. McCLAIN and Mary Alice McClain, Trustees under the Dan R. McClain and Mary Alice McClain Declaration of Trust, Plaintiffs and Respondents, v. Walter KANNON and Hambletonian Inn, Inc., Defendants and Appellants. |
| Court | Montana Supreme Court |
James H. Goetz and Robert K. Baldwin, Goetz, Madden & Dunn, Bozeman, for appellants.
J. Robert Planalp, Landoe, Brown, Planalp & Braaksma, Bozeman, Loren Tucker, Madison County Attorney, Virginia City, for respondents.
This is an appeal by appellants Walter Kannon and Hambletonian Inn, Inc., from a Fifth Judicial District Court, Madison County, judgment enforcing the settlement agreement, dated August 17, an order dated July 7, 1993, and an order denying Kannon's motion for summary judgment dated June 15, 1992. We reverse.
The following are issues on appeal:
I. Did the District Court err in enforcing the oral settlement dictated into the record on June 23, 1992?
II. Did the District Court err in denying Kannon's May 5, 1992, motion for summary judgment regarding Patton's lack of standing?
III. Did the District Court err in denying Kannon's May 4, 1992, motion for summary judgment regarding McClain's claim that Kannon was violating the restrictive covenants?
IV. Did the District Court err in granting judicial review of the respondents' challenge to the Board of County Commissioners' approval of the recorded covenants in the instant case?
Initially, we provide some framework to assist in a more complete understanding of the present case. On October 26, 1993, pursuant to Rule 4(b), M.R.App.P., counsel for the parties stipulated to the consolidation of the appeals in the two above captioned cases because of the numerous identical or overlapping issues. This Court ordered the two cases consolidated on October 27, 1993.
The appellants in the first case are Madison County and the Board of County Commissioners (Board), the Hambletonian Inn, Inc. and Walter Kannon, who, with his family, is a shareholder in Hambletonian Inn, Inc. (collectively, Kannon). Kannon is also the president of Hambletonian Inn, Inc. The Inn owns Lots 3 and 4 in the Kenner Estates Minor Subdivision. The respondents (Patton respondents) in the first captioned case are owners of real property adjacent to the Kenner Estates Subdivision.
The appellants in the second captioned case are Walter Kannon and the Hambletonian Inn, Inc. (collectively Kannon). The respondents (McClain respondents) in the second captioned case live within the four tract Kenner Estates Subdivision. When all respondents from both cases are referred to, the term "respondents" will be used.
The following background material is gleaned from the petition in Patton v. Madison County, one of the two cases consolidated herein. The petition alleges the following:
That on or about November 29, 1988, the Madison County Planning Board considered the application of Bay Bank for approval of a four-lot subdivision known as Kenner Estates located on 24.8 acres adjacent to the Madison River.
On December 7, 1988, the Madison County Planning Board recommended to the Respondents that the preliminary plat for Kenner Estates be approved subject to State Department of Health and Environmental Sciences' approval and covenants be recorded that provided no structures would be allowed on any of the four tracts except one single-family dwelling, one garage and one guest house.
That at the regular meeting of the Respondents on February 13, 1989, the application for preliminary plat approval of Kenner Estates was approved.... This approval was conditioned on the applicants obtaining approval of the State Department of Health and Environmental Sciences and the recording of protective covenants that provide that no structure should be allowed on any of the four tracts except one single-family dwelling, a garage and a guest house.
. . . . .
After receipt of the preliminary plat approval, the applicant recorded a set of protective covenants that did not conform to the mandated terms of the approved protective covenants....
That since the approval of the subdivision, at least three of the four residential lots have been sold to purchasers. One such purchaser, Walter Kannon, has utilized his tract of land as a commercial hunting and fishing lodge which has housed, fed and entertained sportsmen for a fee.
The respondents further state in their brief that the Hambletonian Inn, Inc. closed the sale of Lot 3 on May 23, 1989, receiving title subject to the protective covenants of record, which had been previously filed on May 12, 1989. They assert that on November 27, 1989, they attended a Madison County Planning Board meeting for the express purpose of registering complaints that the Inn was being operated in violation of the protective covenants of the subdivision.
Finally, the respondents state in their brief:
The protective covenants as recorded are interpreted to mean that this is a residential subdivision and that there is allowed on each tract of land three structures: a single family dwelling, a two car garage and one guest house on Tracts 1, 2 and 3. There are no dog kennels allowed on any tract nor are there any stables for horses allowed on any tract except Tract 4. The phrase "existing structures excepted" means that any structures that presently existed within the subdivision that were not a dwelling, a two car garage or a guest house need not be torn down. Commercial operations are prohibited from the Kenner Estates Subdivision.
On April 30, 1990, the Planning Board passed a motion accepting the Kenner Estates Subdivision and the covenants as recorded. The covenants as recorded were accepted even though the covenants proposed were not the same as those recorded. At the May 7, 1990 meeting of the Board of County Commissioners, the County decided to give their full support to the Planning Board's decision to accept the covenants to the subdivision as recorded and followed their decision with a letter to the Planning Board. The respondents thereafter, filed two separate actions contesting the operation of the bed and breakfast on Lot 3.
Did the District Court err in enforcing the oral settlement dictated into the record on June 23, 1992?
Kannon asserts that the settlement agreement was not a binding agreement. Kannon insists that the "settlement" which was recorded at the June 23, 1992 hearing was conditioned upon approval of a final settlement agreement. We agree.
The transcript of the proceedings on June 23, 1992, reveals the following testimony:
Secondly, although my clients are here and I believe all respective clients are here and I want them to consent to this in sum and substance, this is conditioned upon the approval of the appropriate settlement documents and covenants by the parties of record and their attorneys.
(Emphasis added.) Additionally, the testimony relates that:
We dictated into the record the hope that this matter can be drawn, submitted, approved and then a hearing scheduled by the County Commissioners very soon....
The Court, in reply to this statement, concluded:
Well, we'll just continue it without a date and then counsel can keep in touch with me and keep me advised as to the progress. And we'll schedule the matter if it has to be tried. Does there appear to be--are you in the ballpark? Is there going to be a settlement?
Counsel then replied:
I think so. (Emphasis added.)
"An agreement is binding if made by an unconditional offer, and accepted unconditionally." Hetherington v. Ford Motor Co. (1993), 257 Mont. 395, 399, 849 P.2d 1039, 1042. In the instant case, the settlement read into the record states that "this is conditioned upon the approval of the appropriate settlement documents and covenants." (Emphasis added.) There is, therefore, no unconditional offer, and there can also, then, be no unconditional acceptance.
The intentions of the parties are those disclosed and agreed to in the course of the negotiations. A party's latent intention not to be bound does not prevent the formation of a binding contract. Such a condition, that it will not be effective until signed, must be part of the agreement between the parties. (Citations omitted.)
Hetherington, 849 P.2d at 1042. Here, the intention of the parties, made clear on the record, was that the final settlement documents and covenants would have to be approved. The respondents' attorney said he thought that there was going to be a settlement. The condition that the settlement would not be effective until signed was a part of the agreement between the parties. Hetherington, 849 P.2d at 1042. Therefore, there was no unconditional offer nor was there an unconditional acceptance.
Kannon also argues that there was no "meeting of the minds" on the material terms of the settlement and therefore, there was no binding agreement. Again, we agree. The transcript of June 23, 1992, reveals that the agreement was conditional. Moreover, in the correspondence between the attorneys which followed the June hearing, the respondents' attorney added extra restrictions in the list of covenants in their amended covenants dated July 13, 1992. Kannon's letter in response to the respondents' amended covenants stated that further discussion would be appreciated regarding possible additions to existing structures. Additionally, the respondents did not reply to another set of amended covenants Kannon had prepared, and instead, wrote Judge Davis to request...
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