Salminen v. Frampton

• Decision Date: 02 December 2014
• Docket Number: No. DA 14–0179.,DA 14–0179.
• Citation: 339 P.3d 602,377 Mont. 244
• Parties: Don F. SALMINEN and Susan P. Salminen, Plaintiffs and Appellants, v. MORRISON & FRAMPTON, PLLP; Centennial Contracting and Development, LLC; and Leonard Investments, LLC, Defendants and Appellees.
• Court: Montana Supreme Court

377 Mont. 244

339 P.3d 602

Don F. SALMINEN and Susan P. Salminen, Plaintiffs and Appellants,

v.MORRISON & FRAMPTON, PLLP; Centennial Contracting and Development, LLC; and Leonard Investments, LLC, Defendants and Appellees.

No. DA 14–0179.

Supreme Court of Montana.

Submitted on Briefs Oct. 8, 2014.

Decided Dec. 2, 2014.

Affirmed in part; reversed in part; remanded. For Appellants: John Heenan, Bishop & Heenan, Billings, Montana.

For Appellee Morrison & Frampton, PLLP: Fred Simpson, Reep, Bell, Laird & Simpson, Missoula, Montana.

For Appellees Centennial Contracting and Development, LLC and Leonard Investments. LLC: Angela Jacobs Persicke, Marcel A. Quinn, Hammer, Jacobs & Quinn, PLLC, Kalispell, Montana.

Chief Justice MIKE McGRATH delivered the Opinion of the Court.

¶ 1 Don and Susan Salminen appeal from the District Court's Order and Rationale on Motion to Dismiss, dated December 26, 2012, and the Order and Rationale on Motion for Judgment on the Pleadings, dated August 30, 2013. We reverse in part, affirm in part, and remand.

¶ 2 The issue on appeal is whether the District Court erred in dismissing the Salminens' complaint.

¶ 17 Subsequently, Frampton's clients Centennial and Leonard moved for judgment on the pleadings. The District Court denied the motion as to the negligence claims (which the Salminens later dismissed), finding that the clients, as the principals of their agent Frampton, owed a “general duty of care” to the Salminens that could not be resolved on a motion for judgment on the pleadings. The District Court granted judgment on the pleadings to Centennial and Leonard on the remaining claims for the same reasons that were relied upon in dismissing the claims against Frampton.

STANDARD OF REVIEW

¶ 18 This Court reviews de novo, to determine whether it is correct, a district court's decision on a motion to dismiss under M.R. Civ. P. 12(b)(6). Ming Da Situ v. Smole, 2013 MT 33, ¶ 11, 369 Mont. 1, 303 P.3d 747. This Court and the district court must accept as true the complaint's factual allegations, Western Security Bank, ¶ 55, 359 Mont. 34, 249 P.3d 35, considering them in the light most favorable to the plaintiff. Tally Bissell Neighbors v. Eyrie Shotgun Ranch, 2010 MT 63, ¶ 15, 355 Mont. 387, 228 P.3d 1134. A court may dismiss a complaint for failure to state a claim only if it appears beyond doubt that the plaintiff could prove no set of facts that would entitle him to relief. Missoula YWCA v. Bard, 1999 MT 177, ¶ 3, 295 Mont. 260, 983 P.2d 933.

DISCUSSION

¶ 19 Issue: Whether the District Court erred in dismissing the Salminens' complaint.

¶ 20 Rule 8(a), M.R. Civ. P., provides that a complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” along with a demand for the relief sought. The purpose of Rule 8(a) is to provide the defendant fair notice of the claim and the grounds upon which it rests, Griffin v. Moseley, 2010 MT 132, ¶¶ 38–39, 356 Mont. 393, 234 P.3d 869, so that the defendant may prepare a responsive pleading. Larson v. Green Tree Financial Corp., 1999 MT 157, ¶¶ 34–35, 295 Mont. 110, 983 P.2d 357. See, e.g., M.R. Civ. P., Appendix of Forms, Form 11, “ Complaint for Conversion.”

¶ 21 Proof of a claim for conversion requires that plaintiff own the property; that plaintiff have the right to possess the property; that defendant exercise unauthorized control over the property; and that plaintiff suffer damages. Feller v. First Interstate Bancsystem, 2013 MT 90, ¶ 26, 369 Mont. 444, 299 P.3d 338; St. Peter & Warren v. Purdom, 2006 MT 172, ¶ 19, 333 Mont. 9, 140 P.3d 478; King v. Zimmerman, 266 Mont. 54, 60, 878 P.2d 895, 899 (1994); Farmers State Bank v. Imperial Cattle Co., 218 Mont. 89, 95, 708 P.2d 223, 227 (1985).² The Salminens' claim for conversion incorporated the facts summarized above and alleged that they “owned and were in lawful possession of the subject personal property,” and the defendants “exercised unauthorized dominion” over it. They alleged they had suffered damages as a result of unlawful conversion and that they would seek damages to be determined by a jury.

¶ 22 The District Court dismissed the Salminens' claim for conversion because Frampton “exercised authorized control over the Plaintiffs' property pursuant to a writ of execution and obtained the right to enter Plaintiffs' premises under a warrant of execution.” The District Court discounted the fact that Frampton held the property for six months because the Salminens' claim to exemption from execution was nothing but a “conclusion of law” until they obtained an order that the property was exempt and must be returned. The District Court concluded that the Salminens failed to state a claim for conversion as a matter of law.

¶ 23 The District Court erred in determining that the Salminens failed to state a claim for conversion. The process of executing upon a judgment debtor's assets is controlled by statute. A writ of execution is issued in the name of the State of Montana, and is directed to a “sheriff or levying officer.” Section 25–13–301, MCA. The writ allows a levy or seizure of assets, as was done in this case against the Salminens' bank account and wages. A judgment debtor can claim the right to certain exemptions from execution for personal property, § 25–13–609, MCA, by filing a claim for exemption with the district court, § 25–13–212, MCA. The Salminens did so in this case, and just a few days later Frampton appeared at their house and seized their possessions. Under § 25–13–212(3), MCA, the Salminens were entitled to a hearing on the claims for exemption within ten days. In fact, although they requested a hearing, the District Court did not hold one for almost three months. The decision on their request for exemption was not rendered for several more months, but was ultimately in favor of the Salminens. This failure to conduct a hearing and to promptly render a decision on the exemption issue after the hearing clearly hampered the Salminens' efforts to regain their personal property.

¶ 24 While a personal property exemption can be lost if the owner does not assert it, § 25–13–212(2), MCA, In re Estate of Sandvig, 250 Mont. 220, 223, 819 P.2d 184, 186 (1991), exemptions from execution are rooted in the Montana Constitution. Article XIII, Section 5 requires that the Legislature enact liberal exemption laws and it is well established that those laws will be liberally construed in favor of the debtor. In re Maynard, 2006 MT 162, ¶ 4, 332 Mont. 485, 139 P.3d 803. One of the purposes of statutory exemptions from execution is to protect debtors from becoming entirely destitute. Bank of America v. Ivey, 2010 MT 131, ¶ 8, 356 Mont. 388, 234 P.3d 867. Debtors have a property interest in statutory exemptions from execution. Dorwart v. Caraway, 2002 MT 240, ¶ 20, 312 Mont. 1, 58 P.3d 128.

¶ 25 A judgment creditor may enter a debtor's home to seize and execute upon personal property only by obtaining a warrant of execution as provided in § 25–13–213, MCA. The statute provides that if there is “reason to believe that there is personal property subject to execution” in the debtor's residence, the creditor may “file” an application for a warrant with the district court. The application must be supported by an affidavit stating that the writ of execution has been issued and returned unsatisfied in whole or in part; that the affiant has reason to believe that there is “property subject to execution” in the debtor's residence; that there is no other property available for levy and execution; and describing the property sought. If the “judge” determines that reasonable cause exists, the judge may issue a warrant authorizing entry into the residence and seizure of the property. Section 25–13–213(2), MCA. In the present case the Salminens' claims that their property was wrongfully seized rely upon their allegations of Frampton's failure to follow these requirements and they allege that he falsified the affidavit supporting the warrant. They allege that Frampton procured the warrant of execution not because he had actual reason to believe that property in their home was subject to execution as required by the statute. Rather, they allege that Frampton procured the warrant with the plan to seize all of their personal property so that they would provide other assets to satisfy the judgment, and so that they would not have to endure future seizures of their property.

¶ 26 It is clear that under § 25–13–213, MCA, the judgment creditor seeking a warrant has a burden to determine that there is personal property in the debtor's home and that the property is subject to execution. ³ At the time Frampton obtained the warrant and entered the Salminens' home they had filed their claim of exemption pursuant to the statute and had requested a hearing. Frampton knew or should have known that much of the property in the home was covered by the exemption claim.

¶ 27 If the Salminens can prove the allegations in their complaint, they may be able to establish that the entry into their home and seizure of the property was not authorized by law. Therefore there are facts which, if proven, could establish that there was conversion of the Salminens' property. The District Court erred in determining that as a matter of law the Salminens could not establish conversion and that claim should not have been dismissed.

¶ 28 The Salminens contend that the District Court should not have dismissed their claim for abuse of process. The complaint, after incorporating the facts noted above, alleges that there was an abuse of process because Frampton filed an affidavit containing false statements and had an ulterior purpose in taking the Salminens' property that Frampton knew was exempt. The ulterior motive was to “leverage [Salminens'] settlement position and coerce them to come up with the money to satisfy the civil judgment in order to get their exempt personal property...