Stanley v. Lemire

Decision Date22 November 2006
Docket NumberNo. 05-625.,05-625.
Citation148 P.3d 643,2006 MT 304
PartiesJames and Ida STANLEY, Plaintiffs and Respondents, v. Lillian LEMIRE, Defendant and Appellant.
CourtMontana Supreme Court

Helge Naber, Naber, P.C., Great Falls, Montana Steven M. Johnson, Church, Harris, Johnson & Williams, P.C., Great Falls, for Appellant.

Steven T. Fagenstrom, Fagenstrom Law Office, Great Falls, for Respondent.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 James and Ida Stanley ("the Stanleys") filed suit against Lillian Lemire ("Lemire") in the Cascade County Justice Court, seeking possession of the real property on which Lemire was residing plus unpaid "rent," costs of the suit, and attorney fees. Following a jury trial, the Justice Court entered judgment in favor of the Stanleys except on their claim for unpaid "rent," and this judgment was affirmed by the District Court for the Eighth Judicial District, Cascade County, on all issues except the award of fees and costs. Lemire now appeals to this Court.

¶ 2 The issues on appeal are as follows:

¶ 3 1. Does this Court have jurisdiction over Lemire's appeal?

¶ 4 2. Did the District Court err in its determination that the Justice Court retained subject matter jurisdiction over the Stanleys' action against Lemire after she asserted a claim of title to the real property in dispute?

¶ 5 3. Did the District Court err in affirming the Justice Court's determination that the Stanleys were entitled to an award of attorney fees?

I. The "Rental Contract"

¶ 6 This case arises out of a dispute involving real property located at 1701 13th Avenue South in Great Falls, Montana ("the subject property"). In 1997, Marlene Sorum sold this property to the Stanleys, allegedly with the understanding that Lemire (Ms. Sorum's mother) would be able to live there as long as she wished or for life. However, this understanding was not recorded as part of a deed or contract for sale of the property.

¶ 7 On February 2, 1997, Lemire and the Stanleys entered into a written agreement titled "RENTAL CONTRACT." The agreement provided, in its entirety, as follows:

The contract entered into below is between Joe and Ida Stanley here after called agent and Lillian Lemire here after called tenant.

In consideration of the use and occupancy of the premises as herein specified we mutually agree.

Address or property 1701-13 Th. [sic] Ave. So. Great Falls MT.

Tenant agrees to rent the subject premises for $100.00 per month payable in advance on the fifth day of each month and every month there after.

Pets will be allowed.

Tenant will be responsible for the utilities.

No more than one person may reside in this house, that person being Lillian Lemire. The tenant shall not transfer her interest in and to this agreement, nor shall the tenant assign or sublet the said premises or any part there of in her absence or otherwise permit others to occupy the premises at any time during this agreement. If tenant violates the provisions of this paragraph the agent may immediately take possession of said premises and in the event of litigation, may sue and evict any person or persons occupying said premises.

It is expressly understood and agreed that the owner of said premises, or said agent will not be liable for any damages or injury of any kind to tenant or her family, or of her or her family's property from what ever cause arising from the occupancy of said premises by tenant and or her family.

It is also understood agent will maintain premises in a condition considered safe for the tenant to occupy.

It is also understood that the term of this agreement is for as long as Lillian Lemire wishes to reside at said premises or until her death. If Lillian wishes to terminate said agreement she is required to give a 30 day notice to vacate.

In the event Joe or Ida Stanley for whatever reason no longer act as owner or agent of this property this agreement will in its entirety be honored by the new owner or agent.

It is also understood that the tenant may continue to reside at the premises now and in the future as she has resided in the past.

Thereafter, the Stanleys each signed under the heading "Owner/agent" and Lemire signed under the heading "Tenant."

II. The First Lawsuit

¶ 8 The parties apparently maintained an amicable relationship for the first few years. Then, in August 2001, the Stanleys began holding Lemire's monthly checks (in other words, they did not timely present the checks for payment). Eventually, they did present the checks for payment; however, the bank did not honor any that were over six months old ($800 worth). The Stanleys then attempted to terminate the Rental Contract and regain possession of the subject property on the ground that Lemire had failed to pay rent. On December 24, 2002, they filed suit against Lemire in the Cascade County Justice Court (Cause No. J202V3186). For clarification, this is not the case presently before us on appeal. Rather, as explained below, the appeal before us is from a second lawsuit, which the Stanleys filed in the Cascade County Justice Court in 2004.

¶ 9 In the first lawsuit ("Suit # 1"), the Justice Court ruled in favor of the Stanleys, and an appeal was taken to the District Court (Cause No. BDV-03-368) for a trial de novo.1 Notably, the District Court observed in its Amended Order that

neither of the parties have come to Court with clean hands. The Plaintiffs admit that they held the checks tendered by the Defendant in an attempt to evict her. In fact, they still want her evicted and are requesting damages. The Defendant, for her part, initially refused to re-issue the dishonored checks deeming it the Plaintiffs' problem since she had tendered the checks as required.

¶ 10 That said, the court denied the Stanleys' motion for summary judgment and granted Lemire's motion for summary judgment, "find[ing] that a valid rental contract exists between the parties and that the Defendant performed her obligations under the contract." Furthermore,

[t]he Plaintiffs' actions in retaining the proffered rent checks in an attempt to evict the Defendant amounted to a breach of the contract on the part of the Plaintiffs. The Defendant shall be allowed to continue rental of the premises under the terms of the rental contract entered into by the parties.

At the same time, the Court finds that the Defendant shall pay to the Plaintiffs the amount of $800.00, plus interest at the rate of ten percent (10%) per annum from the time she was notified that the bank would not honor her checks, to cover the stale checks that were not honored by the bank.

Neither party appealed this judgment.

III. The Second Lawsuit

¶ 11 The Stanleys initiated their second lawsuit against Lemire ("Suit # 2," the case now before us) in the Cascade County Justice Court (Cause No. J204V0232) on January 22, 2004. The Complaint for Possession alleged that Lemire had "breached the rental agreement by withholding part of rent monies" totaling, as of that date, $40. The Stanleys sought possession of the premises, unpaid rent, costs of the suit, and attorney fees.

¶ 12 A "voluminous flurry of filings" (as the Justice Court characterized them) ensued. Of those, the following trace the evolution of Lemire's characterization of her interest in the subject property from that of a lessee to that of a life tenant, which is an essential element in resolving Lemire's claim on appeal that the Justice Court lacked jurisdiction over the Stanleys' action.

¶ 13 First, on January 30, 2004, Lemire filed a motion to dismiss in which she characterized her relationship with the Stanleys as a "landlord-tenant arrangement[]." She asserted that she "has a lease of the subject premises for the rest of her natural life" (emphasis added) and that she had reduced her monthly payments by $20 per month "to reflect the reduced value of the leasehold estate" (a reference to damage to a picnic table and a storage shed on the subject property, allegedly caused by Mr. Stanley following the termination of Suit # 1). She construed the Stanleys' complaint, which cited no statutory provisions, as stating an action under the law of unlawful detainer (§ 70-27-108, MCA) and then argued that such an action could not be maintained:

The law of unlawful detainer, however, is not applicable in this case because Ms. Lemire's lease is a residential lease government [sic] by Title 70 Chapter 24 of the Montana Code Annotated [The Montana Residential Landlord and Tenant Act of 1977], and because Ms. Lemire's lease is for life.

¶ 14 A week later, Lemire filed an Answer, Counterclaims, and Demand for Jury Trial. In conformance with her motion to dismiss, she referred to the parties' contract as a "lease agreement" and to the subject property as "the leased premises" and "her leasehold estate." She also asserted, in the Introduction section of this document, that she had filed her motion to dismiss "based on this Court's lack of subject matter jurisdiction, and failure to state a claim for unlawful detainer." Yet, only M.R. Civ. P. 12(b)(6) (failure to state a claim upon which relief can be granted) is mentioned in her motion to dismiss, and neither M.R. Civ. P. 12(b)(1) (lack of jurisdiction over the subject matter) nor the words "subject matter jurisdiction" is mentioned at all. Furthermore, she did not identify (in her answer) the grounds on which she had allegedly challenged the Justice Court's subject matter jurisdiction.

¶ 15 The Stanleys filed a response to Lemire's motion to dismiss on February 11, 2004. Among other things, they argued that Lemire "may be trying to mislead the court into believing that Defendant has a life estate" — a prescient interpretation of her argument, given that Lemire had not yet explicitly characterized her interest as such. The Stanleys continued: "In truth, Defendant...

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