Signal Perfection v. Rmb.

• Decision Date: 03 November 2009
• Docket Number: No. DA 09-0211.,DA 09-0211.
• Citation: Signal Perfection v. Rmb., 224 P.3d 604, 2009 MT 365, 353 Mont. 237 (Mont. 2009)
• Court: Montana Supreme Court
• Parties: SIGNAL PERFECTION, LTD, d/b/a SPL Integrated Solutions, Big Sky Communication & Cable, Inc., Treasure State Electrical Contracting, Inc., and Mankin Construction, Inc., Plaintiffs and Appellees, v. ROCKY MOUNTAIN BANK-BILLINGS, Defendant and Appellant.

224 P.3d 604

2009 MT 365

353 Mont. 237

SIGNAL PERFECTION, LTD, d/b/a SPL Integrated Solutions, Big Sky Communication & Cable, Inc., Treasure State Electrical Contracting, Inc., and Mankin Construction, Inc., Plaintiffs and Appellees, v.ROCKY MOUNTAIN BANK-BILLINGS, Defendant and Appellant.

No. DA 09-0211.

Supreme Court of Montana.

Submitted on Briefs September 23, 2009.

Decided November 3, 2009.

For Appellant: Jeffrey T. Dickson; Christian, Samson & Jones, PLLC; Missoula, Montana.

For Appellees: Timothy A. Filz; Ragain Christensen, Fulton & Filz, PLLC; Billings, Montana (for Mankin Construction, Inc.), W. Scott Green; Patten, Peterman, Bekkedahl & Green, PLLC; Billings, Montana (for Big Sky Communication & Cable, Inc.), Rodd A. Hamman; Calton, Hamman & Wolff, P.C.; Billings, Montana (for Signal Perfection, LTD), Vicki L. McDonald; McDonald Law Firm, LLC; Billings, Montana (for Treasure State Electrical Contracting, Inc.).

Justice W. WILLIAM LEAPHARTdelivered the Opinion of the Court.

¶ 1 Rocky Mountain Bank (RMB) appeals from orders of the District Court of the Thirteenth Judicial District, Yellowstone County, granting summary judgment to Signal Perfection LTD d/b/a SPL Integrated Solutions (SPL), Big Sky Communication and Cable Inc.(Big Sky), Treasure State Electrical Contracting Inc.(Treasure State), and Mankin Construction Inc.(Mankin)(collectively, "contractors").We affirm.

¶ 2We restate the sole issue on appeal:

¶ 3 Whether the contractors' construction liens have priority over RMB's trust indenture under § 71-3-542(4), MCA.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 4 In December 2004 Blackhawk Inc. (Blackhawk) took out a construction loan of approximately $5 million from RMB for the purpose of funding the construction of a casino and restaurant, the 12th Planet Entertainment Complex (12th Planet Complex), on property that it owned at 304 South 24th Street, Billings, Montana.In addition to other security for the loan, RMB recorded a trust indenture on the property at 304 South 24th Street.Thereafter, Blackhawk contracted with SPL to install audio and video systems in the 12th Planet Complex for approximately $1.4 million.As SPL performed the contract, Blackhawk initially made payments corresponding to SPL's progress.As of November 2005, however, Blackhawk stopped making scheduled payments.Nevertheless, SPL continued its work at the 12th Planet Complex, and Blackhawk made no objections to the work performed.Importantly, on November 15, 2005, Blackhawk withdrew the last of the proceeds from the construction loan but apparently did not use them to pay SPL.In response to Blackhawk's non-payment, SPL filed a construction lien on March 23, 2006.SPL substantially completed its work later in March 2006, and subsequently, Blackhawk made one final, partial payment.After this payment, Blackhawk still owed SPL approximately $1 million.In April 2006 SPL filed an amended construction lien.Because Blackhawk failed to pay the remainder of its debt to SPL, SPL sued Blackhawk for breach of contract and to foreclose its construction lien.SPL also sought to have its construction lien adjudged to be prior and superior to any interest of RMB in Blackhawk's property at 304 South 24th Street.RMB answered, generally denying SPL's allegations and asserting that its trust indenture had priority over SPL's lien.

¶ 5 In October 2006 SPL moved for partial summary judgment, seeking, among other things, a ruling that its construction lien was superior to RMB's trust indenture.SPL argued for priority under § 71-3-542(4), MCA, because the trust indenture was taken to secure financing for the construction of the 12th Planet Complex.RMB opposed SPL's motion, arguing first that under § 71-3-542(3), MCA, the priority of SPL's construction lien was limited to the value of those items that could be severed from the 12th Planet Complex without harming the rest of the property.Second, RMB argued that SPL's construction lien was not entitled to priority under § 71-3-542(4), MCA, because SPL continued work after RMB made its final loan distribution to Blackhawk.The District Court rejected RMB's arguments and granted summary judgment to SPL, ruling that under § 71-3-542(4), MCA, SPL's construction lien had priority over RMB's trust indenture because the trust indenture was taken to secure the construction loan made for the purpose of paying for the improvements liened—the construction of the 12th Planet Complex.

¶ 6 In June 2008 RMB moved the District Court under Rule 59(g), M.R. Civ. P., to alter or amend its prior ruling on the question of priority.In support of its motion, RMB first asserted that a portion of its construction loan to Blackhawk was used to repay existing debt that Blackhawk owed to RMB.Consequently, RMB argued, that portion of the construction loan was not subject to § 71-3-542(4), MCA, and was entitled to priority over SPL's construction lien.Second, RMB reasserted its argument that its trust indenture was entitled to priority over that amount of SPL's construction lien that was incurred after RMB distributed the last of the loan proceeds to Blackhawk on November 15, 2005.SPL opposed this motion, contending that the motion was procedurally improper and unsustainable on the merits.The District Court did not rule on the motion within the 60-day period provided by Rule 59(g), M.R. Civ. P., and the motion was deemed denied.

¶ 7 In the meantime, the District Court consolidated SPL's case with those of other contractors—Big Sky and Treasure State— who had filed construction liens against Blackhawk for services and materials provided for the construction of the 12th Planet Complex.Mankin, who had also filed a construction lien against Blackhawk in relation to the 12th Planet Complex, subsequently appeared in the case.Big Sky, Treasure State, and Mankin all moved for summary judgment, contending that their construction liens had priority over RMB's trust indenture on the basis of SPL's arguments and the District Court's prior grant of summary judgment to SPL.RMB opposed these motions, reasserting the arguments it made in opposition to SPL's motion for summary judgment and the additional argument it raised in its Rule 59(g), M.R. Civ. P., motion to alter or amend.The District Court granted summary judgment to Big Sky and Treasure State, ruling that their construction liens were superior to RMB's trust indenture.The District Court also issued a one-sentence judgment in favor of Mankin without addressing whether Mankin's construction lien was entitled to priority over RMB's trust indenture.Consequently, Mankin filed a motion under Rule 60(b)(6), M.R. Civ. P.— which RMB opposed—to amend the judgment to, among other things, give its construction lien priority over RMB's trust indenture.In early 2009the District Court granted Mankin's motion.

¶ 8 After the District Court granted summary judgment to Big Sky and Treasure State, RMB filed another Rule 59(g), M.R. Civ. P., motion to amend and renewed its earlier motion to amend the grant of summary judgment to SPL.The District Court subsequently denied RMB's renewed motion to amend, reasoning that it had lost jurisdiction to address the issues when it failed to rule on RMB's initial motion to amend, which had raised the same issues, within the 60-day time period under Rule 59(g), M.R. Civ. P. RMB timely appealed.

STANDARD OF REVIEW

¶ 9We review a district court's grant of summary judgment de novo, applying the same standard used by the district court under Rule 56, M.R. Civ. P. Mattson v. Mont. Power Co., 2009 MT 286, ¶ 15, 352 Mont. 212, 215 P.3d 675.Under Rule 56(c), M.R. Civ. P., summary judgment is only appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

¶ 10We review a district court's interpretation of a statute for correctness.Holm-Sutherland Co., Inc. v. Town of Shelby,1999 MT 150, ¶ 8, 295 Mont. 65, 982 P.2d 1053.

DISCUSSION

¶ 11Whether the contractors' construction liens have priority over RMB's trust indenture under § 71-3-542(4), MCA.

¶ 12 RMB argues that its trust indenture should receive priority over the contractors' construction liens in two respects.First, RMB contends that the portion of the trust indenture used to repay Blackhawk's preexisting debt should receive priority over the contractors' construction liens.Second, RMB asserts that its entire trust indenture should receive priority over the lien amounts for labor and materials provided after Blackhawk had exhausted its loan from RMB.We find no merit to either argument.

¶ 13 RMB did not present its first argument to the District Court when SPL initially moved for summary judgment, but only raised the argument later in its Rule 59(g), M.R. Civ. P., motion to amend.We do not consider arguments that were not presented to the District Court, but raised for the first time on appeal.State v. Wetzel,2005 MT 154, ¶ 13, 327 Mont. 413, 114 P.3d 269.Nor may a party use Rule 59, M.R. Civ. P., to "raise arguments which could have been raised prior to judgment or [to] give a litigant a second bite at the apple."Hi-Tech Motors, Inc. v. Bombardier Motor Corp. of Am.,2005 MT 187, ¶ 34, 328 Mont. 66, 117 P.3d 159.Because RMB did not properly raise its first argument before the District Court, we decline to address it on appeal.

¶ 14 RMB contends that it did, in fact, raise its argument for partial priority of the portion of the trust indenture used to repay Blackhawk's preexisting debt in response to SPL's motion for partial summary judgment.This, however, is overstatement.While RMB did mention that a portion of the proceeds provided pursuant to the trust indenture "were used to pay off an existing debt Blackhawk owed to Rocky Mountain Bank," it did so...