Smith v. Lindemulder
| Decision Date | 21 June 2022 |
| Docket Number | DA 21-0491 |
| Citation | 409 Mont. 69,512 P.3d 260 |
| Parties | Lily M. SMITH and Vernon T. Lindemulder, Petitioners and Appellees, v. Samuel B. LINDEMULDER, individually and as Trustee of the Alice M. Lindemulder Trust, Respondent and Appellant, and Daniel G. Lindemulder, individually and as Trustee of the Alice M. Lindemulder Trust, Respondent and Appellee. |
| Court | Montana Supreme Court |
For Appellant: Jim B. Lippert, Jim Lippert, Attorney at Law, P.C., Big Timber, Montana
For Appellees: Mark D. Parker, Parker, Heitz, Cosgrove, Billings, Montana (for Lily M. Smith and Vernon T. Lindemulder) David J. Dietrich, Jeffrey E. Janca, Dietrich & Associates, P.C., Billings, Montana (for Lily M. Smith and Vernon T. Lindemulder) Daniel L. Snedigar, Bruce O. Bekkedahl, Patten, Peterman, Bekkedahl & Green, PLLC, Billings, Montana (for Daniel G. Lindemulder) Ariel Overstreet-Adkins, Bluebird Law, Billings, Montana (for Trustee)
¶1 Samuel Lindemulder (Sam) appeals the Twenty-Second Judicial District Court's Order Granting Motion to Approve Settlement Agreement (Order), in which the court approved a settlement agreement reached in mediation (Agreement) involving Sam, his brother Dan Lindemulder (Dan), and their siblings Lily Smith and Vernon Lindemulder (Petitioners). The Agreement resolved claims involving the Alice M. Lindemulder Trust (Trust), established by the parties’ mother, which held approximately 2,151 acres of land in Stillwater County. Sam contends he is the rightful owner of three sections of land held by the Trust. Sam raises four issues, which we reformulate as follows:
¶2 We affirm, and remand for the limited purpose of determining attorney fees incurred on appeal.
¶3 In February 1990, Sam contracted ("Contract for Deed" or "Contract") to purchase from his parents three sections of land, Sections 8, 9, and 20 of Township 1 North, Range 20 East, totaling about 1,660 acres, for $50,000. A Notice of Purchaser's Interest was signed and recorded. As scheduled under the Contract, the final payment would have been due February 2005. In 1997, Sam's mother created the Trust, designating her children as primary beneficiaries, and transferred land into the Trust, including the three sections subject to Sam's Contract for Deed.1 These sections were transferred "subject to the purchase interest of Sam under that certain Contract for Deed dated February 7, 1990." Sam continued to run cattle and otherwise personally use the three sections under contract at all times relevant to this matter. In 2014 Sam's mother passed away, and Sam and Dan became co-trustees of the Trust. In September 2019, Petitioners filed the instant action, alleging they had not received any distributions from the Trust or been provided an explanation from Sam or Dan, as trustees, regarding the failure to make distributions.
¶4 Sam and Dan were jointly represented by counsel, and the matter was litigated for over a year. A mediation was scheduled for December 1, 2020, and due to the COVID-19 pandemic, was conducted remotely.
The mediation resulted in the parties reaching a settlement, and the Agreement was executed by all parties about 30 days later. Pursuant to the Agreement, Sam was permitted to run cattle on the property until June 15, 2021, and would be reimbursed $1,773 for property taxes he had paid. The Agreement provided that Sam and Dan would step down as trustees and an independent successor trustee would be appointed to market and sell the Trust property, including the sections subject to the Contract, with the proceeds to be distributed to the beneficiaries.
¶5 Petitioners filed a motion to approve the Agreement, and a hearing was held on April 15, 2021. However, Sam contested the Agreement; Dan, his co-trustee, did not. Sam argued the Agreement was not enforceable because he lacked capacity to enter it and had been subjected to undue influence. Also, for the first time, Sam contended he owned or otherwise held interest in the three sections covered by the 1990 Contract for Deed.
¶6 Sam testified at length during the hearing. He stated that, a few days prior to the mediation, he went to the hospital due to experiencing COVID-19 symptoms. He was discharged the same day, with his treating doctor instructing him to rest as much as possible. Sam stated he attended the mediation from bed on his cell phone with only audio capability, and a poor connection made it difficult for him to understand what was happening. Because he was ill with COVID-19, he was fatigued and drifted in and out of sleep during the mediation, which caused his incapacity. Regarding undue influence, Sam claimed that Dan and their joint counsel pressured him into signing the Agreement by saying he would be "sued" if he did not sign it. He stated he signed the Agreement only "under protest" because of his disagreement with it and because of the undue influence of his brother and their mutual attorneys. Sam also explained that, after signing the Agreement but prior to the hearing, he discovered, in a box his mother had left for him, the warranty deed to the three sections of land he had contracted to purchase. Sam recorded the deed in February 2021.2
¶7 Cross-examination of Sam established that he was represented by counsel at the mediation and, despite any fatigue he may have been suffering, he had contributed to the mediation, including requesting reimbursement of the property taxes he had paid. Moreover, Sam's testimony established that, while he did not necessarily agree the three sections he claimed to own should have been included in the settlement, he nonetheless understood at the time that their disposition was, in fact, included in the negotiations and the ultimate settlement reached. Regarding undue influence, Sam was unable to articulate how the statements by Dan and their mutual counsel regarding future litigation that would occur if he did not sign the Agreement—effectively a continuation of the litigation he was already a party to—had exerted "undue" influence on him, offering only that he did not like to be sued. Finally, cross-examination established that, despite his claim to have acquired Sections 8, 9, and 20 of the Trust property as of 2005, Sam had entered into, as a co-trustee, a 2017 contract with a wind energy company to install wind turbines on the Trust land, a transaction in which he represented that those sections were owned by the Trust.
¶8 The District Court found Sam had been represented by competent counsel throughout the proceedings, and that, despite suffering from COVID-19 during the mediation, "showed a clear understanding of what property was involved in the Trust and what was going to be done with it." The District Court noted that Sam signed the Agreement a month after the mediation, when his COVID-19 symptoms had dissipated. As to undue influence, the District Court found "the threat of a lawsuit to a person in the middle of litigation is simply not so coercive that Sam can be considered to have been forced to agree to and then sign" the Agreement (emphasis in original), and noted the Agreement resolved the potential litigation Sam expressed concerned about.3 The court accordingly rejected Sam's competency and undue influence contentions.
¶9 The District Court also rejected Sam's position that the Contract for Deed should be enforced. It first concluded that, pursuant to § 27-2-202, MCA, any applicable statute of limitations for an action to enforce the Contract had expired. The District Court found that, although there was evidence Sam made some payments on the Contract, there was no evidence the seller considered the contract satisfied, and that "despite his testimony that he owns the land, Sam's actions indicate that he did not consider the [C]ontract fulfilled either." Although Sam was both a beneficiary and trustee of the Trust, and clearly knew the contested sections of land had been placed in the Trust, he nonetheless took no action to claim ownership of the property. The District Court found that, well after the Contract would have been fulfilled, Sam treated the land as Trust property when he contracted with the wind energy company, and later, when signing the Agreement, which did not recognize his claimed interest. The District Court reasoned Sam had acted inconsistently with any interest he may have had, and concluded Sam had waived any right in the property by his course of conduct. For many of the same reasons, the court also concluded the doctrine of laches barred Sam's contentions regarding the Contract, reasoning that "Sam's unexplained delay in asserting his right would make enforcement of the asserted right inequitable under the circumstances" and that "the law does not allow Sam to wait until— literally—the last moment to assert his property rights under the [C]ontract for [D]eed."
¶10 Sam appeals.
¶11 "Settlement agreements are contracts, and are subject to the provisions of contract law." Murphy v. Home Depot , 2012 MT 23, ¶ 8, 364 Mont. 27, 270 P.3d 72 (citing Dambrowski v. Champion International Corp. , 2003 MT 233, ¶ 9, 317 Mont. 218, 76 P.3d 1080 ). "An agreement is binding if made by an unconditional offer, and accepted unconditionally." Murphy , ¶ 8 (citing Hetherington v. Ford Motor Co. , 257 Mont. 395, 399, 849 P.2d 1039, 1042 (1993) ). In equitable matters, such as this one, we will uphold a district court's findings of fact unless they are clearly erroneous. See Pense v. Lindsey , 2003 MT 182, ¶ 12, 316 Mont. 429, 73 P.3d 168 (citing In re Estate of Bradshaw , 2001 MT 92, ¶ 11, 305 Mont. 178, 24 P.3d 211 ). We view the evidence in the light most favorable to the prevailing party and assign witnesses the same credibility...
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