Stipe v. First Interstate Bank-Polson

• Decision Date: 08 July 2008
• Docket Number: No. DA 07-0346.,DA 07-0346.
• Parties: Charles W. STIPE and DORIS E. STIPE, Plaintiffs and Appellants, v. FIRST INTERSTATE BANK — POLSON, f/k/a Security State Bank & Trust Company, Defendants and Appellees.
• Court: Montana Supreme Court

188 P.3d 1063

2008 MT 239

Charles W. STIPE and DORIS E. STIPE, Plaintiffs and Appellants, v. FIRST INTERSTATE BANK — POLSON, f/k/a Security State Bank & Trust Company, Defendants and Appellees.

No. DA 07-0346.

Supreme Court of Montana.

Submitted on Briefs April 9, 2008.

Decided July 8, 2008.

For Appellants: Quentin M. Rhoades, Sullivan, Tabaracci & Rhoades, P.C., Missoula, Montana.

For Appellees: Dean A. Stensland, Scott M. Stearns; Boone Karlberg, P.C., Missoula, Montana.

Justice W. WILLIAM LEAPHARTdelivered the Opinion of the Court.

¶ 1 Charles W. Stipe and Doris E. Stipe (collectively, the Stipes) appeal from the District Court's order granting summary judgment to First Interstate Bank (FIB). We affirm.

¶ 2 We restate the issues as follows:

¶ 3 Did the District Court err when it granted FIB's summary judgment motion on the claims the Stipes brought under § 81-8-303, MCA?

¶ 4 Did the District Court err when it granted FIB's summary judgment motion on the Stipes' punitive damages claim?

¶ 5 Did the District Court err when it denied the Stipes' request to amend their complaint?

BACKGROUND

¶ 6 The Stipes run a Montana ranching business. Between 1986 and 1997, the Stipes borrowed money from FIB or its predecessor, Security State Bank. The Stipes pledged their livestock as part of the collateral for the loans. After the Stipes defaulted on their loans, FIB took steps to repossess the Stipes' cattle. The Stipes then sought bankruptcy protection. Because the Stipes lacked sufficient resources to care for the cattle, the Bankruptcy court granted FIB relief from the automatic bankruptcy stay, which allowed FIB to pursue non-bankruptcy remedies to repossess the cattle.

¶ 7 FIB filed a complaint with the District Court to obtain possession of the livestock collateral. The District Court issued an order on March 26, 2002, authorizing FIB to immediately enter the Stipe ranch and take possession of the livestock collateral. The court order required that the Stipes cooperate with the repossession and authorized FIB to use law enforcement if necessary to repossess the livestock. On March 28, 2002, FIB and the sheriff attempted to repossess livestock from the Stipe ranch. The timing of the repossession coincided with the Stipes' annual bull sale, which took place on March 29, 2002. The District Court issued a temporary restraining order that halted the repossession, and FIB resumed repossession on April 1, 2002. FIB sold the repossessed livestock collateral to satisfy the debt.

¶ 8 The Stipes sued FIB based on events relating to the livestock repossession. The Stipes based several of their claims on FIB's failure to file a notice of satisfaction of the security agreement until April 30, 2003. The Stipes alleged that FIB willfully or negligently failed to file a notice of satisfaction of the security agreement after FIB disposed of the cattle, in violation of § 81-8-303, MCA. The Stipes also brought a negligence per se claim based on the alleged violation of § 81-8-303, MCA. The Stipes further alleged that FIB had acted with actual malice, entitling the Stipes to punitive damages. The Stipes later filed a motion to amend their first amended complaint to claim intentional interference with prospective economic advantage. The District Court denied the Stipes' motion to amend.

¶ 9 In a ruling on several summary judgment motions, the District Court dismissed all the claims contained in Stipes' first amended complaint. The District Court certified its summary judgment orders as final. The Stipes now appeal.

STANDARD OF REVIEW

¶ 10 We review de novo a district court's grant or denial of summary judgment, applying the same criteria as the district courts. Jacobsen v. Farmers Union Mut. Ins. Co., 2004 MT 72, ¶ 8, 320 Mont. 375, ¶ 8, 87 P.3d 995, ¶ 8. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file," together with any affidavits demonstrate that no genuine issue exists as to any material fact and that the party moving for summary judgment is entitled to judgment as a matter of law. M.R. Civ. P. 56(c). We view the evidence in the light most favorable to the party opposing summary judgment, and we draw all reasonable inferences in favor of the party opposing summary judgment. Oliver v. Stimson Lumber Co., 1999 MT 328, ¶ 22, 297 Mont. 336, ¶ 22, 993 P.2d 11, ¶ 22. We review for abuse of discretion a district court's ruling on a motion to amend the pleadings. Porter v. Galarneau, 275 Mont. 174, 188, 911 P.2d 1143, 1151-52 (1996).

DISCUSSION

¶ 11 I Did the District Court err when it granted FIB's summary judgment motion on the claims the Stipes brought under § 81-8-303, MCA?

¶ 12 The District Court determined that FIB had no obligation to file a notice of satisfaction because the security agreements had never been satisfied. The District Court specifically noted that FIB had received sworn statements that "put FIB on notice" that the Stipes had failed to satisfy their security agreements. The court further stated that the Stipes had failed to present any authority that § 81-3-303, MCA, provided a private right of action.

¶ 13 The Stipes argue that the District Court erred when it determined that no private right of action existed for violations of § 81-8-303, MCA, and they assert that whether the security agreements were satisfied constitutes a disputed question of fact. The Stipes maintain that they possessed a private right of action because they properly pled a claim of negligence per se. The Stipes also assert that the District Court erred when it required them to present authority that a private right of action exists under § 81-8-303, MCA. According to the Stipes, establishing a private right of action is not an element of negligence per se, and thus, any challenges to their claims based on "no private right of action" should have been pled as affirmative defenses. The Stipes maintain that FIB did not plead this affirmative defense and argue that the defense consequently was waived. Thus, the Stipes assert that the District Court's determination that no private right of action existed under § 81-8-303, MCA, violated their due process rights because FIB failed to argue "no private right of action."

¶ 14 A plaintiff must establish five elements to bring a negligence per se claim: (1) that the defendant violated a particular statute; (2) that the statute was enacted to protect a specific class of persons; (3) that the plaintiff is a member of the class; (4) that the plaintiff's injury is the kind of injury that the statute was enacted to prevent; and (5) that the statute was intended to regulate members of the defendant's class. Massee v. Thompson, 2004 MT 121, ¶ 30, 321 Mont. 210, ¶ 30, 90 P.3d 394, ¶ 30. If the plaintiff proves these elements, a defendant is negligent as a matter of law. Estate of Schwabe v. Custer's Inn, 2000 MT 325, ¶ 25, 303 Mont. 15, ¶ 25, 15 P.3d 903, ¶ 25, overruled on other grounds, Giambra v. Kelsey, 2007 MT 158, 338 Mont. 19, 162 P.3d 134. A negligence per se theory, however, does not relieve a plaintiff from proving causation and damages to establish liability, and a plaintiff's claim fails as a matter of law if the defendant's actions did not cause the alleged damages. Estate of Schwabe, ¶ 27, 15 P.3d 903. Similarly, a claim fails as a matter of law if the plaintiff fails to establish the material elements of the claim, including damages. See Kiamas v. Mon-Kota, Inc., 196 Mont. 357, 362-63, 639 P.2d 1155, 1158 (1982) (summary judgment appropriate when plaintiff fails to establish the elements of negligence).

¶ 15 The Stipes claim that FIB violated § 81-8-303, MCA, when it failed to immediately file a notice of satisfaction after FIB sold the cattle that it had repossessed. Section 81-8-303, MCA, requires a secured party, who files notices of security agreements, to "file notices of satisfaction of the security agreements with the department [of livestock] immediately upon the satisfaction of the security agreement." According to the Stipes, FIB's violation of § 81-8-303, MCA, amounts to negligence per se. The Stipes allege that they were injured because the failure of FIB to file a notice of satisfaction interfered with the Stipes' future business. Specifically, the Stipes "could not sell the cattle `free and clear' of FIB's slanderous lien claim, and they [the Stipes] were deprived of opportunities to improve their operation, and to trim it down to a profitable and manageable size." The Stipes further claim that FIB's failure to file a notice of satisfaction prevented the Stipes from selling their cattle "until after market prices had collapsed due to the mad cow disease."

¶ 16 After viewing the evidence in the light most favorable to the Stipes and drawing all reasonable inferences in their favor, we conclude that the District Court did not err in granting summary judgment. Oliver, ¶ 22. Even if we assume that the Stipes are entitled to a private right of action under § 81-8-303, MCA, and that they have satisfied the elements of negligence per se, we fail to see how the Stipes have been damaged. Nothing prevented the Stipes' cattle from being sold: after FIB repossessed the Stipes' cattle, FIB sold them to a Livestock Broker at the Missoula Livestock Auction; the Broker then sold them to buyers from Colorado and Kansas; and the Stipes then repurchased the cattle from those buyers.

¶ 17 The Stipes claim of damages based on their inability to sell the cattle "free and clear" is similarly without merit. The Stipes first learned that FIB had filed no notice of satisfaction after the Stipes sold two animals in Missoula. Following the sale, the Livestock Broker contacted Charles Stipe and informed him that FIB had a lien notice on the cattle and that the Missoula Livestock Auction would have to include FIB's name on any check it issued to the Stipes. Charles Stipe told the Livestock Broker to "hold the check" because...