Peuse v. Malkuch
| Decision Date | 22 February 1996 |
| Docket Number | No. 95-388,95-388 |
| Citation | 275 Mont. 221,911 P.2d 1153 |
| Parties | Randy PEUSE, Plaintiff and Respondent, v. James R. MALKUCH and Betty Malkuch, husband and wife, Defendants and Appellants. |
| Court | Montana Supreme Court |
Appeal From District Court of the Seventh Judicial District, In and for the County of Dawson; The Honorable Dale Cox, Judge presiding.
Richard L. Burns, Glendive, for Appellants.
Marvin L. Howe, Simonton, Howe & Schneider, Glendive, for Respondent.
This is an appeal from a decision of the Seventh Judicial District Court, Dawson County, granting partial summary judgment in favor of respondent Randy Peuse, and denying appellants James R. Malkuch and Betty Malkuch's motion for reconsideration of summary judgment order and motion for leave to amend answer. We affirm.
The issues on appeal are as follows:
1. Did the District Court err in granting Peuse's motion for partial summary judgment?
2. Did the District Court err in denying the Malkuchs the opportunity to amend their answer?
In March 1990 Peuse and the Malkuchs entered into an agreement to sell and purchase certain real property in Dawson County, Montana. The agreement provided for specific performance and the Malkuchs were to deliver possession and occupancy to Peuse on the closing date. The agreement also provided that if the Malkuchs' title was not merchantable and could not be made merchantable before the closing date, an additional thirty day grace period would be allowed to make the title merchantable. At the time the agreement was executed there existed an unsatisfied judgment against the Malkuchs.
The Malkuchs had enrolled this particular property in the United States Department of Agriculture's Conservation Reserve Program (CRP). The agreement provided that Peuse would receive the CRP payments but it did not address whether the property would be kept in the program after the sale. After executing the agreement, the Malkuchs sought assurances that Peuse would keep the property in CRP so that the Malkuchs would not incur penalties on payments already received. Peuse refused.
The agreement's closing date was originally set for April 21, 1990. On September 24, 1990, Peuse and James Malkuch agreed to extend the closing date to January 15, 1991, in order to reduce the Malkuchs' tax burden. Betty Malkuch refused to sign the amendment for the extension of time. No other amendments to agreement were made.
The closing date of January 15, 1991, passed with no sale occurring, and on May 27, 1992, Peuse filed suit for specific performance. The Malkuchs answered, alleging that Peuse breached the agreement and thus the Malkuchs were not obligated to perform. The Malkuchs also retained the right to file an amended answer when they obtained the necessary information through discovery to fully answer Peuse's complaint.
On November 24, 1992, Peuse sent a set of interrogatories and a request for admissions to the Malkuchs' attorney. The Malkuchs complied with the discovery request but initiated no discovery efforts of their own.
On January 15, 1993, Peuse filed a motion for continuance of the pretrial conference acknowledging that the Malkuchs' original attorney had been in ill health. On March 31, 1993, the Malkuchs filed a motion continuing all proceedings because their attorney was undergoing treatment for cancer and had insufficient time to prepare his case. Due to this illness, the Malkuchs' attorney withdrew from representation of the Malkuchs on December 20, 1993.
A preliminary pretrial conference was scheduled for March 1, 1994. The Malkuchs obtained new counsel immediately prior to the scheduling conference. Trial was set for October 6, 1994. On April 5, 1994, Peuse filed a motion for partial summary judgment. On April 29, the Malkuchs filed an opposition to the motion alleging two questions of fact not alleged in the Malkuchs' original answer.
On May 19, the Malkuchs filed a motion for leave to amend their answer to include two new affirmative defenses which corresponded to the new questions of fact raised in the Malkuchs' response to the summary judgment motion. The District Court granted partial summary judgment in favor of Peuse on June 9, 1994. On June 17, the Malkuchs moved the court to reconsider its order. The District Court denied both the Malkuchs' motion for leave to amend the answer and their motion to reconsider on August 9, 1994. From the District Court's orders of June 9 and August 9, 1994, the Malkuchs appeal.
Did the District Court err in granting Peuse's motion for partial summary judgment?
In our review of a district court's grant of summary judgment, we use the same standard as that used by the court under Rule 56(c), M.R.Civ.P.--"[s]ummary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law." Spain-Morrow Ranch, Inc. v. West (1994), 264 Mont. 441, 444, 872 P.2d 330, 331-32 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214).
In Sprunk v. First Bank Western Montana Missoula (1987), 228 Mont. 168, 172, 741 P.2d 766, 768, we ruled that the moving party in a motion for summary judgment has the initial burden of establishing that there are no genuine issues of fact. If this burden is met, the party opposing the motion has the burden to show that a material factual issue does exist. In meeting that burden, the opposing party must set forth specific findings showing that there is a genuine factual issue for trial.
As the District Court noted, the agreement provided that Peuse could demand that the Malkuchs specifically perform their obligations. The court also noted that the Malkuchs admitted they failed to perform their obligations under the agreement at the time appointed for their performance, and that Peuse claimed he was ready and willing to purchase the property at all times on and between the two closing dates.
The court found that while "there is a disagreement between the parties as to whether or not Peuse agreed to keep the Malkuch property on the CRP program, there is no dispute that continuing the Malkuch property on the CRP program was not a term written into the 'Agreement to Sell and Purchase'." The court reasoned that even if Peuse had agreed to keep the property on the CRP program a breech of that term was not a material breach of the agreement entitling the Malkuchs to terminate the agreement. The court found no material issues of fact and thus concluded the interest of justice, judicial economy, and existing law required the granting of Peuse's motion for partial summary judgment based on specific performance.
The Malkuchs assert that summary judgment was not appropriate because there were genuine issues of material fact. First, they contend they did not have merchantable title to the property pursuant to the terms of the agreement. Therefore, a question exists as to whether there was a valid agreement in existence after the closing date and grace period. Second, they contend that Betty Malkuch did not initial the extension of the closing date which creates a genuine issue of material fact regarding whether any provision extending the closing date was binding upon her. Finally, they argue that Peuse's obligation to keep the property in CRP is implicit in the agreement's reference to CRP payments and a question exists as to whether Peuse breached the agreement.
Peuse asserts that the issues of merchantable title and the extension of the agreement's closing date were not presented by the Malkuchs prior to their response to Peuse's motion for summary judgment. Therefore, Peuse contends the District Court's grant of partial summary judgment on the issues set forth by the parties at the time the summary judgment motion was filed was proper. Peuse reasons that in any event the District Court considered the Malkuchs' new defenses and concluded they were not material to an award of summary judgment based on specific performance.
Specific performance may be compelled pursuant to § 27-1-411(4), MCA,...
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