Spain-Morrow Ranch, Inc. v. West

• Decision Date: 12 April 1994
• Docket Number: No. 93-637,SPAIN-MORROW,93-637
• Citation: 264 Mont. 441,872 P.2d 330
• Parties: RANCH, INC., a Montana corporation, and Roger Van Dyken, Lessee, Plaintiffs and Respondents, v. Lawrence E. WEST and Iris J. West, husband and wife, and CMC Heartland Partners, Defendants and Appellants.
• Court: Montana Supreme Court

Page 330

872 P.2d 330

264 Mont. 441

SPAIN-MORROW RANCH, INC., a Montana corporation, and Roger

Van Dyken, Lessee, Plaintiffs and Respondents, v. Lawrence E. WEST and Iris J. West, husband and wife, and CMC

Heartland Partners, Defendants and Appellants.

No. 93-637.

Supreme Court of Montana.

Submitted on Briefs March 24, 1994.

Decided April 12, 1994.

[264 Mont. 442] Wayne Jennings, Bozeman, for defendants and appellants.

Edmund P. Sedivy, Jr., and Lynda S. Weaver, Morrow, Sedivy & Bennett, Bozeman, for plaintiffs and respondents.

TRIEWEILER, Justice.

Plaintiffs Spain-Morrow Ranch, Inc., and Roger Van Dyken filed a complaint in the Eighteenth Judicial District Court in Gallatin County against defendants Lawrence E. West, Iris J. West, and CMC Heartland Partners to quiet title to a parcel of land and set aside a tax deed delivered to Lawrence West and Iris West. Wests counterclaimed to quiet title in their favor. The District Court granted Spain-Morrow Ranch, Inc., and Roger Van Dyken's motion for summary judgment and denied Wests' motion for summary judgment. We affirm the judgment of the District Court.

The dispositive issue on appeal is whether the District Court properly concluded that plaintiffs were occupants of the abandoned railroad right-of-way, and therefore, entitled to notice of the pending issuance of a tax deed.

FACTUAL BACKGROUND

The land which is the subject of this dispute consists of 3.27 acres of railroad right-of-way abandoned in 1978 by the Chicago, Milwaukee, St. Paul and Pacific Railroad Co. The 100-foot-wide strip of land runs north and south through an agricultural parcel currently owned by Spain-Morrow Ranch, Inc., and farmed by its lessee, Roger Van Dyken. They have operated under a lease agreement since 1968.

In legal proceedings for its reorganization, the Chicago, Milwaukee, St. Paul and Pacific Railroad Co. received authority to abandon its former railroad line in Gallatin County, Montana on May 8, 1978. CMC Heartland Partners is the successor in interest to the railroad, but did not claim any right, title, or interest in the property in this proceeding.

Gallatin County acquired an interest in the right-of-way by a tax sale certificate on July 12, 1986. On August 3, 1992, Lawrence West and Iris West tendered $223.17 to satisfy delinquent taxes and received an assignment of the tax sale certificate from Gallatin County. On September 10, 1992, Wests filed an affidavit of proof of service of notice of pending tax deed which identified CMC Heartland Partners as an owner to whom notice was required and given. Wests further identified the right-of-way land as unoccupied. No notice was given to Spain-Morrow or Van Dyken. Gallatin County issued a tax deed to Wests on October 22, 1992.

Spain-Morrow and Van Dyken filed their complaint on January 29, 1993. They alleged that they possessed and occupied the right-of-way land and that Wests' failure to provide them with notice upon application for a tax deed rendered the tax deed void. Spain-Morrow further alleged ownership in fee simple of the right-of-way land as evidenced by a warranty deed recorded at the Gallatin County Clerk and Recorder's office.

The District Court filed a notice of entry of default against CMC Heartland Partners on April 22, 1993. On October 27, 1993, the District Court granted Spain-Morrow and Van Dyken's motion for summary judgment based on its determination that Spain-Morrow and Van Dyken were "occupants" of the right-of-way and further, that Spain-Morrow was an "interested party." The District Court concluded that Wests' failure to comply with the statutory notice requirement deprived Spain-Morrow and Van Dyken of their redemption rights and declared the Wests' tax deed void as a matter of law.

STANDARD OF REVIEW

Our review of a summary judgment order is de novo. Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214. Summary 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. Rule 56(c) M.R.Civ.P. The initial burden is on the moving party to establish that there is no genuine issue of material fact; and once met, the burden shifts to the party opposing the motion to establish otherwise. Thelen v. City of Billings (1989), 238 Mont. 82, 85, 776 P.2d 520, 522.

Did the District Court properly conclude that Spain-Morrow and Van Dyken were occupants of the abandoned railroad right-of-way, and therefore, entitled to notice of the pending issuance of a tax deed?

The procedure for obtaining an ownership interest in land sold for taxes is set forth in Title 15, Chapters 17 and 18 of the Montana Code Annotated. Section 15-18-111(1), MCA, provides:

[R]edemption of a property tax lien acquired at a tax sale or otherwise may be made by the owner, the holder of an unrecorded or improperly recorded interest, the occupant of the property, or any interested party within 36 months from the date of the first day of the tax sale or within 60 days following the giving of the notice required in 15-18-212, whichever is later. [Emphasis added].

Section 15-18-212(4), MCA, provides:

The notice required under subsections (1) and (2) must be made by certified mail, return receipt requested, to each interested party and the current occupant, if any, of the property. [Emphasis added].

The notice must provide "that a tax deed will be issued to the purchaser or assignee unless the property tax lien is redeemed prior to the expiration of the redemption period." Section 15-18-212(1)(b), MCA.

Wests contend that subsection (2) of § 15-18-111, MCA, applies in this case, rather than subsection (1). Subsection (2) pertains to "property subdivided as a residential or commercial lot" and does not give a right of redemption to "occupants." Wests argue that since the parcel in question contains less than 20 acres, it is a subdivision according to § 76-3-103(14), MCA, of the Montana Subdivision and Platting Act, and that since it was used as a railroad right-of-way, it is commercial property. However, we note that the deed which created the right-of-way is dated March 28, 1910, and that the subdivision statute relied on by Wests was not enacted until 1973. Section 76-3-206, MCA, of the same Act provides that it is not applicable to deeds executed prior to July 1, 1974. Furthermore, the railroad abandoned the right-of-way in 1978, and there is no indication in the record that it was ever used for commercial purposes since that date. The only evidence is that it has been used for agricultural purposes. In § 15-1-101(1)(d), MCA, which defines "commercial" when used in connection with taxation, "agricultural lands" are specifically excluded. Therefore, we conclude that the land in question was not a "commercial lot," and that subsection (1), rather than subsection (2), of the redemption statute applied and required notice to the "occupant of the property."

Wests also argue that there are material facts in dispute which preclude dismissal of the case by summary judgment. They argue that when they inspected the railroad parcel before receiving the assignment in August 1992, it did not appear to be occupied. In an affidavit, Irene West stated that during the on-site inspection, she observed the right-of-way to be clearly distinguishable from either of the adjoining grain crops, and that the right-of-way consisted of grass and weeds which showed no signs of tilling, cultivation, plowing, or other agricultural activity. She observed no cattle in the field, but noted the irrigation wheel line stretching across the entire field, including the former right-of-way. She stated that in November 1992 she observed that someone had begun to plow the right-of-way parcel.

Spain-Morrow produced affidavits establishing that since 1978 it has removed the old railroad fence and posts and has gradually reclaimed the railroad bed through removal of rock and leveling. They stated that since 1990 Spain-Morrow and Van Dyken have treated...