author: JUSTICE HARRISON JUSTICE HUNT, JUSTICE SHEEHY,

text:
    CHARLES L. HASH, Personal Representative of the Estate of MICHAEL M. SCOTT, and DEBBIE JO SCOTT, Plaintiffs and Appellants, v. THE STATE OF MONTANA, a Body Politic, Defendant and Respondent.
    No. 90-251.
    Submitted on briefs Nov. 15, 1991.
    Decided Mar. 21, 1991.
    247 Mont. 497.
    807 P.2d 1363.

      Kenneth E. O’Brien; Hash, O’Brien & Bartlett, Kalispell, for plaintiffs and appellants.
    John Maynard, Chief Defense Counsel, Tort Claims Div., Dept, of Administration, Helena, I. James Heckathorn, and Murphy, Robinson, Heckathorn & Phillips, Kalispell, for defendant and respondent.
   JUSTICE HARRISON

delivered the Opinion of the Court.

Plaintiffs, Charles L. Hash, personal representative of the estate of Michael M. Scott, and Debbie Jo Scott, appeal from a judgment entered against them and in favor of defendant, State of Montana, after a jury trial in the District Court of the Eleventh Judicial District, Flathead County, Montana. We affirm.

Plaintiffs raise the following issues:

1. Did the District Court err in denying plaintiffs’ motions for a directed verdict and for judgment notwithstanding the verdict?

2. Did the District Court err in giving two jury instructions to which plaintiffs objected?

On September 22, 1984, an early fall storm commenced in the vicinity of Marias Pass. By September 24, nine and one-half inches of snow had fallen. The snow that accumulated on U.S. Highway No. 2 was plowed by the Montana Highway Department maintenance crew. Plowing deposited a berm of snow on the edge of the roadway under the guardrail at milepost 194.4. The road at this point is curved and traverses uphill from west to east at approximately a four and one-half percent grade. The curve has an approximate three percent downhill slope from south to north. Narrow canyon walls shade the area until late in the morning and again late in the afternoon.

On Monday, October 1,1984, a United States Forest Service pickup driven by Johnny Flagget was eastbound on his way toward the top of Marias Pass. At approximately 8:55 a.m., when the Flagget vehicle entered the curve at milepost 194.4 it struck a patch of black ice, spun out of control, crossed the centerline and collided with a west bound automobile driven by Michael Scott. Mr. Scott was killed and his wife Debbie, a passenger in the vehicle, was seriously injured.

At the time of the accident, black ice covered both east and west bound lanes of the highway and extended for several hundred feet. The ice was immediately opposite and downhill from the snow berm which was four inches thick on the morning of the accident and located on the high side of the cmrve. The section of the highway where the curve is located was not patrolled by the maintenance crew that day nor was there any sand on the roadway or warning signs in the immediate vicinity of the accident. Investigators determined the ice formed when the snow berm melted during the day causing water to run across the roadway which then froze when the temperature dropped in the evening.

On July 14, 1987, plaintiffs filed a complaint in the Eleventh Judicial District Court, Flathead County, seeking to recover damages against the State. The complaint alleged that the State was negligent in maintaining or monitoring the highway near the accident scene. Trial commenced on November 22, 1989. Plaintiffs’ motion for a directed verdict at the close of the State’s evidence was denied and the jury found for the State. Plaintiffs then moved the court, pursuant to Rule 50(b), M.R.Civ.P., for judgment notwithstanding the verdict, or in the alternative, a new trial. The District Court denied this motion. Plaintiffs now appeal.

I.

Did the District Court err in denying plaintiffs’ motions for a directed verdict and for judgment notwithstanding the verdict?

The standard of review in an appeal from a denial of a motion for judgment notwithstanding the verdict made pursuant to Rule 50(b), M.R.Civ.P, is the same as that for review of a motion for a directed verdict, and a directed verdict may be granted only when it appears as a matter of law that the non-moving party could not recover upon any view of the evidence, including the legitimate inferences to be drawn from it. Wilkerson v. Sch. Dist. No. 15, Glacier Cty. (1985), 216 Mont. 203, 211, 700 P.2d 617, 622. This Court’s function on appeal is to review the evidence in a light most favorable to the prevailing party to determine whether substantial evidence supports the jury’s verdict. Sizemore v. Montana Power Co. (1990), [246 Mont. 37,] 803 P.2d 629, 636, 47 St.Rep. 2252, 2256. This Court cannot reweigh the evidence or disturb the findings of a jury unless that evidence is so inherently impossible or improbable as not to be entitled to belief. Sizemore, 803 P.2d at 636, 47 St.Rep. at 2256.

Plaintiffs assert that the jury instructions, when related to the facts of the instant case, conclusively establish negligence on the part of the State which could not be overlooked by the jury. The District Court instructed the jury that the black ice at the accident scene constituted a hazardous condition and that when such a condition is created or maintained by the State, it is not necessary to show, as a condition precedent to liability, that the State had notice of the condition for a sufficient length of time to remedy it. The court further instructed the jury that inherent in the State’s duty of care, when the State knows or in the exercise of reasonable care should know of a hazardous condition, is the alternative duty to either eliminate the condition or to post adequate signs warning of the hazard if the condition cannot be immediately corrected. In determining whether the State exercised reasonable care the jury was instructed to consider all surrounding circumstances including the state of the art, the priorities set by the State, the methods of maintenance and practical alternatives.

The State is not an insurer of one who uses the highways. State ex rel. Bjord v. District Court (1977), 175 Mont. 63, 67, 572 P.2d 201, 203. However, the State is under a duty to keep its highways in a reasonably safe condition. Buck v. State (1986), 222 Mont. 423, 429, 723 P.2d 210, 214. The State’s duty to keep its highways in a reasonably safe condition extends to the paved portion of the roadway, to the shoulders and the adjacent parts thereof, including guardrails, or bridge abutments. Buck, 222 Mont. at 429, 723 P.2d at 214. What constitutes a reasonably safe condition is generally considered to be a question of fact. Kaiser v. Town of Whitehall (1986), 221 Mont. 322, 327, 718 P.2d 1341, 1344; Limberhand v. Big Ditch Co. (1985), 218 Mont. 132, 144, 706 P.2d 491, 498.

In this case the accident occurred in an area which is part of a twenty-nine mile section of highway maintained by a four-member maintenance crew. Crew members testified the highway was plowed in the usual manner and it was inevitable that some snow would be left on the shoulders of the roadway and under guardrails. There was testimony that snow along the shoulders of the roadway and under guardrails is common during the winter months on all Montana roads and that this does not, in and of itself, create a hazardous driving condition. Crew members also testified that there was no practical alternative to the way the snow was removed from the roadway due to the type of equipment available, risks to the traveling public, and the number of labor-hours required.

In support of their argument that the State was negligent plaintiffs point to the Highway Department’s maintenance manual which prohibits plowing snow to the high side of a curve when possible. However, the jury was instructed that it was up to it to decide if violations of the maintenance manual constituted negligence on the part of the State under the circumstances presented. This is in accord with Townsend v. State (1987), 227 Mont. 206, 738 P.2d 1274, in which we held that violations of the maintenance manual is evidence of negligence but is not negligence per se.

The entire twenty-nine mile section of highway was patrolled by the maintenance crew during the work week immediately preceding the day of the accident. Testimony regarding the road conditions during this time was that by September 28 the road was bare and dry throughout the entire section. The maintenance crew took the weekend off. However, on Saturday, September 29, two members of the crew traveled over the road while off duty and did not see any wet or icy spots.

On the morning of September 30, an accident occurred at the same site where the Scott accident was to occur the following morning. This accident was investigated by Highway Patrol Officer Vollrath. Plaintiffs argue that the State had notice of the existing icy conditions through Officer Vollrath’s investigation of the accident. Officer Vollrath testified that when he arrived at the scene of the accident the roadway was icy and when he left it was wet. He did not notify the maintenance crew of the condition of the road because he did not believe there was a potential for danger. He stated the weather was warm enough that he did not need a coat and he believed that the water would evaporate off the highway. He further testified that during the eight years he was stationed at East Glacier he had often seen water on the roadway and snow under or over the top of the guardrails and that water on a comer does not necessarily constitute a hazard.

Anthony Babcock, acting crew foreman on the day of the accident, testified that the highway was not patrolled on that day because the weather had warmed up to a point where he felt a patrol was not needed. Arthur Little, maintenance superintendent, testified that the decision of whether or not to patrol the highway on a particular day is a judgment call based on the weather. The crew members all testified that before the accident they had never encountered the situation where only one curve of the highway was icy while the remainder of the section was bare and dry.

These facts rise to the level of substantial evidence required to support the jury’s verdict. The evidence established a reasonable basis for which an honest difference of opinion could arise on the question of negligence on the part of State under the circumstances presented. Accordingly, we hold the District Court did not err in denying plaintiffs’ motions for a directed verdict and for judgment notwithstanding the verdict.

II.

Did the District Court err in giving two jury instructions to which plaintiffs objected?

Plaintiffs’ first argument is directed to Instruction No. 23 which provides:

‘You may not consider evidence of conduct of the State in patrolling the highway after October 1, 1984, as any evidence of negligence or culpable conduct on the part of the State.”

Plaintiffs assert that testimony of subsequent patrol was introduced to impeach maintenance foreman Babcock’s reason for failure to patrol on the day of the accident and the District Court erred in giving Instruction No. 23 in that it effectively advised the jury that it should not consider this evidence.

Rule 407, M.R.Evid., addresses subsequent remedial measures and states:

“When, after an event, measures are taken which, if taken previously, would have made the event less likely to occur, evidence of the subsequent measures is not admissible to prove negligence or culpable conduct in connection with the event. This rule does not require the exclusion of evidence of subsequent measures when offered for another purpose, such as proving ownership, control, or feasibility of precautionary measures, if controverted, or impeachment.”

It seems clear that patrolling the highway after the date of the accident was a measure which, if taken previously, would have made the accident less likely to occur. The District Court properly instructed the jury that it could not consider this as evidence of negligence or culpable conduct on the part of the State. Although the testimony of subsequent patrol could not be considered as evidence of negligence or culpable conduct on the part of the State, it was admitted into the record and could be considered by the jury for another purpose. We hold there was no error in giving Instruction No. 23.

Plaintiffs next contend that the District Court erred in giving Instruction No. 14 and refusing plaintiffs’ proposed Instruction No. 45. Instruction No. 14 reads as follows:

“The State of Montana is not an insurer of the safety of persons who use the highways.
“A state must exercise reasonable care to keep the highways over which it has exclusive control reasonably safe for travel.
“Inherent in the duty of reasonable care to be exercised by the defendant, State of Montana, when it knows or in the exercise of reasonable care should know of a hazardous condition, is the alternative duty either to eliminate hazardous conditions or to post adequate and appropriate signs to warn the traveling public of their presence if the conditions cannot be immediately corrected.”

Plaintiffs argue the court erred in that this instruction submitted to the jury the issue of whether the State knew or, in the exercise of reasonable care, should have known of the hazardous condition. Plaintiffs maintain that under the facts established by the record the State created the condition and the highway patrol had knowledge of the condition; therefore, the State would be charged with notice as a matter of law. Plaintiffs’ proposed instruction would have instructed the jury that under the facts of this case the State was presumed to have knowledge of the existing icy conditions.

Jury instructions on appeal are to be viewed in their entirety and in light of the evidence presented. Pipe Indus. Ins. Fund Trust v. Consol. Pipe Trades Trust (1988), 233 Mont. 162, 168, 760 P.2d 711, 715. Our review of the jury instructions in their entirety shows that Instructions Nos. 18 and 21 sufficiently instructed the jury in accordance with plaintiffs’ theory of the case. We hold there was no error in giving Instruction No. 14.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES BARZ, McDONOUGH and WEBER concur.

JUSTICE HUNT,

dissenting:

I dissent. In denying the plaintiffs’ motion for judgment notwithstanding the verdict or, alternatively, for a new trial, the District Court stated that it was “hard pressed to understand how the jury, under the facts and law presented, could have found for the [defendant ... .” I, too, am hard pressed to understand such a verdict.

The District Court instructed the jury as follows:

INSTRUCTION NO. 19
‘You are instructed that the State should be held liable for any injuries or death caused by a dangerous condition existing on its highways where such dangerous condition was created by the State or its employees.”

It was uncontroverted that the dangerous condition that caused the accident in this case was a patch of ice on the highway that was formed by snow melting from a snow berm located on the high side of a super elevated curve. It was also uncontroverted that the snow berm was created by state highway department employees when they plowed snow from the highway onto the high side of the curve, despite the fact that the highway department’s maintenance manual specifically prohibited such activity.

The court also instructed:

INSTRUCTION NO. 18
‘You are instructed that where a hazardous condition exists on a highway and such hazard was created or maintained by the public authority it is not necessary to show as a condition precedent to liability that the public authority had notice of such condition for a sufficient length of time to remedy it.”

This instruction charged the State with notice of the hazardous condition if the condition was created or maintained by the State. As I pointed out above, no one contested the fact that the State created the hazardous condition by plowing snow on the upper side of a super elevated curve. The highway department manual itself warned of the dangers that could result from plowing snow in this manner by providing:

“Snow should not be deposited or allowed to accumulate on the high side of super elevated curves, as this may cause a dangerous situation when the snow thaws. Water may rim across the roadway, freezing as the temperature drops. All snow should be plowed from the upperside of the curves, when possible, to help avoid icy conditions.”

Despite this provision in the manual, the State argued that it could not have foreseen the accident that occurred on this curve. As the saying goes, “Give me a break!”

The court further instructed the jury:

INSTRUCTION NO. 14
“The State of Montana is not an insurer of the safety of persons who use the highways.
“A state must exercise reasonable care to keep the highways over which it has exclusive control reasonably safe for travel.
“Inherent in the duty of reasonable care to be exercised by the defendant, State of Montana, when it knows or in the exercise of reasonable care should know of a hazardous condition, is the alternative duty either to eliminate hazardous conditions or to post adequate and appropriate signs to warn the traveling public of their presence if the conditions cannot be immediately corrected.”

This instruction required the State, once it had notice of the hazardous condition, to exercise reasonable care by either eliminating the danger or posting warning signs. The instruction provided that actual knowledge of the danger was not required, that constructive knowledge was adequate. As I pointed out above, the highway department manual put the crew members on notice of precisely the type of hazard created by snow piled along the side of a super elevated curve. Even though it may not have been possible to remove the snow berm, as the crew members testified, the instruction mandated the State to warn the public that the hazard existed. Having failed to warn, the State was hable for the accident.

The jury was also instructed:

INSTRUCTION NO. 21
“Where the highway patrol discovers a hazardous condition, such as an icy road, and there is a reasonable possibility of impending danger to users of the highway, he has a duty to take precautionary methods to prevent such danger.”

This instruction and the highway patrol officer’s testimony were red herrings. Whether Officer Vollrath thought the area was hazardous is not at issue here because it has already been established that the State had either actual or constructive knowledge of the hazardous condition through the highway department employees who created the hazard.

The facts of this case and the instructions established that the State, through the highway department crew members, had a duty to the public to exercise reasonable care to keep the highways in a reasonably safe condition. The State breached this duty by creating a dangerous condition, a snow berm on a super elevated curve. The State was charged with the knowledge of this condition because it created the condition. The foreseeability of the hazard was acknowledged by the highway department crew members as well as by the department manual. The State failed to either eliminate the hazard or post signs warning of the danger, thus incurring liability as a matter of law.

While we are required to give great deference to the jury’s findings, there are times when the facts as applied to the instructions can lead to but one conclusion. Here, we have such a case. The evidence so overwhelmingly points toward the State’s liability that any other conclusion can only be attributed to a misapplication of the law of the case.

I would reverse the District Comb and remand for entry of judgment notwithstanding the verdict on the issue of liability and a new trial on the issue of damages.

JUSTICE SHEEHY,

dissenting:

I concur in the foregoing dissent of Justice William E. Hunt, Sr.


source: Caselaw Access Project

author: JUSTICE TRIEWEILER

license: Public Domain

text:
    THE FEDERAL LAND BANK OF SPOKANE, a Corporation, Plaintiff and Respondent, v. ROGER SNIDER and PENNY SNIDER, Husband and Wife; Elmer Snider and Florence Snider, Husband and Wife; United States Of America, acting through the Farmers Home Administration; Western Bank of Chinook, N.A.; and Interstate Federal Land Bank Association, a Corporation, Defendants and Appellants, and FEDERAL INTERMEDIATE CREDIT BANK OF SPOKANE, a Federal Corporation and Farm Credit System Capital Corporation, a Federal corporation, Additional Parties Defendant on Counterclaim.
    No. 90-351.
    Submitted on briefs Jan. 31, 1991.
    Rehearing Denied April 18, 1991.
    Decided Mar. 21, 1991.
    247 Mont. 508.
    808 P.2d 475.

      Leo Graybill, Jr., Graybill, Ostrem, Warner & Crotty, Great Falls, for defendants and appellants.
    Kevin C. Meek, Alexander, Baucus & Linnell, Great Falls, for plaintiff and respondent.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

Plaintiff, the Federal Land Bank of Spokane, (“the Bank”) commenced this suit in District Corut to foreclose a mortgage on property owned by the defendants Roger and Penny Snider (Sniders). The Bank also sought a deficiency judgment for the difference between the amount due under a note executed by the Sniders and that amount recovered by the Bank at the foreclosure sale. Following trial before the Blaine County District Court in the Seventeenth Judicial District of Montana, without a jury, judgment was entered for the plaintiff awarding it the sum of $856,560.71, plus interest, attorney fees and costs. In addition, the judgment foreclosed defendants’ mortgage and ordered that defendants’ property, described in that mortgage be sold at foreclosure sale. Sniders were awarded possession of the mortgaged lands during the one-year statutory redemption period. However, they were ordered to pay rents or profits received or earned during the period of redemption to the person who purchased the property at the foreclosure sale. From that judgment, defendants appeal. We affirm in part and reverse in part.

Sniders raise the following issues on appeal:

1. Did the District Court err in refusing the defendants a trial by jury on their legal defenses?

2. Did the District Court err in concluding the plaintiff had no duty to reamortize defendants’ loan under the facts proven at trial?

3. Did the District Court err in finding that defendants are “tenants” during the redemption period, and, therefore, liable for rents and profits to the purchaser at foreclosure?

FACTUAL BACKGROUND

In 1974, Sniders purchased a 1,500-acre ranch north of Harlem from Mr. Snider’s parents. They entered into a contract for deed pursuant to which annual payments were made to his parents.

Periodically, Sniders picked up additional pieces of agricultural land to combine with their original ranching operation.

In 1980, defendants learned that the Wilson Ranch, which consisted of 4,000 acres, was available for purchase. They decided that because of its proximity to their land it would fit in well with their existing operation and increase their income disproportionately to the increase in their expenses.

Defendants intended to purchase the Wilson property on contract but needed financing for the down payment. They sought that financing from the plaintiff through Federal Land Bank in Havre. They offered to secure the loan from the Bank by providing a mortgage on their home and original 1,500-acre ranch. In order to give the Bank’s mortgage priority, Mr. Snider’s parents agreed to subordinate their interest as sellers on the contract for deed and the loan was increased sufficiently to pay off a previous loan to the Farm Home Administration which was secured by the same property.

On December 22,1980, Sniders borrowed $487,000 from the Bank and signed a promissory note agreeing to repay the loan by making thirty-five annual payments in the amount of $52,736.14. An interest payment was due on January 1, 1981; however, the first full annual payment was not due until January 1, 1982. As security for repayment of the loan, Sniders mortgaged their original ranch to the Bank.

Defendants made the payments which were due in 1981, 1982, and 1983.

In 1984, the defendants’ farm income was adversely affected by drought, grasshoppers and poor prices for their cattle. They were unable to make their 1984 loan payment when due. However, they qualified for a disaster loan from the Farm Home Administration in the amount of $85,200. From that amount, they used $63,306.76 to make their 1984 payment to the Bank on July 2,1985.

Conditions did not improve in 1985. In addition, defendants’ wheat crop was poor, and the income that was realized from the wheat crop had to be paid to the Western Bank in Chinook to repay a portion of the operating loan that that bank had extended. Defendants were unable to make their 1985 payment. They requested that the Bank reamortize the payments due pursuant to their loan agreement. However, after analyzing the defendants’ ability to repay a reamortized loan, the Bank declined to do so and notified Sniders that they would begin foreclosure proceedings on May 1,1986, if the 1985 payment was not forthcoming prior to that date. Defendants did not make the 1985 payment. Neither have they made payments for 1986, 1987,1988, 1989, or 1990. As a result, this action was commenced on November 22,1986, and judgment was entered for the plaintiff as set forth above on June 6, 1990.

In their contentions as set forth in the final pretrial order, Sniders denied that they were in default and raised the affirmative defense that their loan agreement with the Bank included unwritten terms which had been breached by the Bank.

At trial, Sniders testified that prior to entering into the loan agreement with the Bank, they became concerned about their ability to make payments during a “disaster year.” They communicated that concern to Jerome Daly, the manager of the Bank in Havre, and testified that he reassured them that in the event of a “disaster year” they could reamortize their payments. Their understanding of reamortization was that they could either pay the delinquent payment at the end of the pay-back period or blend it into their other payments. Defendants testified that when they were unable to make payments in 1985 and 1986, they requested an opportunity to reamortize their loan but, contrary to the Bank’s earlier verbal assurances, they were denied the opportunity to do so. They testified that because of the Bank’s refusal to do so, they were unable to use the amount borrowed from the Farm Home Administration in 1985 to expand their cattle herd and for that reason have been unable to make further payments on their loan since that date.

Jerome Daly acknowledged that reamortization was discussed prior to finalization of the Sniders’ loan, but stated that he did not commit the Bank to reamortization at that time because he did not have the authority to do so. He furthermore testified that before reamortization could be agreed to, the Bank would have to re-evaluate a customer’s financial situation to determine whether there was any reasonable prospect for making payments under a reamortized schedule. He stated that reamortization would have a net effect of increasing the annual payment due from the borrower.

Prior to trial the defendants took the position that their affirmative defense constituted a breach of contract claim and that they were entitled to a jury trial. The District Court concluded that this was an action to foreclose a mortgage which was equitable in nature, and that based on the defendants’ contentions in the pretrial order there were no counterclaims. Defendants’ jury demand was denied.

I.

In asserting their right to have had their case tried before a jury, Sniders rely on this Court’s decision in Gray v. City of Billings (1984), 213 Mont. 6, 689 P.2d 268. In Gray, we held that when a plaintiff combines a legal claim for breach of contract with an equitable action he is entitled to a jury trial of his legal claims. We also referred to authority from the United States Supreme Court which has held that the Seventh Amendment protects a defendant’s right to jury trial on a legal counterclaim. Beacon Theatres, Inc. v. Westover (1959), 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed. 2d 988.

Plaintiff argues that this case does not involve a legal claim nor a legal counterclaim and that Gray does not apply to an affirmative defense.

We need not decide whether the Gray rationale applies in this case.

Before Sniders were entitled to a jury trial, there had to be issues of fact for a jury to decide. Under Montana law, juries decide only issues of fact. Section 25-7-103, MCA. The court decides issues of law. Section 25-7-102, MCA.

Whether or not there is sufficient evidence to raise an issue of fact is a question of law for the court and is not an issue of fact. Mang v. Eliasson (1969), 153 Mont. 431, 458 P.2d 777, and Flansherg v. Montana Power Co. (1969), 154 Mont. 53, 460 P.2d 263. That standard is the same for an appellate court as it is for the trial court. Rhoades v. DeRosier (1976), 14 Wash.App. 946, 546 P.2d 930, 932.

“.. .The right of jury trial on any issue of fact presented by the pleadings is provisional, and if the evidence fails to form such issue of fact, the right of jury trial disappears.”

Loucks v. Albuquerque National Bank (1966), 76 N.M. 735, 418 P.2d 191, 194.

As we stated in Smith v. Polish (1967), 150 Mont. 340, 349, 435 P.2d 776, 780:

“.. .Whether there is any substantial evidence in the case made by party upon whom the burden rests is always a question of law.
“While the fact situation differs here from the case of West v. Wilson, 90 Mont. 522, 4 P.2d 469, the principle here controlling is set down in citing Chief Justice Brantly’s opinion in Escallier v. Great Northern Ry. Co., 46 Mont. 238, 127 P. 458. The principle is the same: ‘The old rule that a case must go to the jury if there is a scintilla of evidence has been almost everywhere exploded. There is no object in permitting a jury to find a verdict which a court would set aside as often as found. The better and improved rule is, not to see whether there is any evidence, a scintilla, a crumb, dust on the scales, but whether there is any upon which a jury can, in any justifiable view, find for the party producing it, upon whom the burden of proof is imposed.’ [Connor v. Giles, 76 Me. 132.]

In this case we hold as a matter of law that Sniders presented insufficient evidence to have submitted the issue raised by their affirmative defense to a jury and that they were, therefore, not prejudiced by the District Court’s refusal to grant their request for a jury trial.

In order to prevail in their claim that the Bank breached its verbal agreement to reamortize, it was necessary that Sniders prove that they would have been in a position to perform their part of such an agreement and that they were damaged by the Bank’s refusal to do so. Brown v. First Federal Savings & Loan Association of Great Falls (1969), 154 Mont. 79, 84-89, 460 P.2d 97, 100-102. In this case, Sniders offered no substantial evidence that they would have been capable of making further loan payments if allowed to reamortize. All of the evidence was to the contrary. Therefore, defendants sustained no damage by the Bank’s refusal to do so.

Sniders’ ability to repay the loan according to its original terms was questionable at best. The projection for being able to do so was based upon 1977 and 1979 calf and grain prices which had declined since those years. Even at those higher prices, the loan appraisal only provided Sniders with $729 of discretionary money at the end of each year.

Subsequent to the time that loan was entered into, Sniders’ income from the ranching operation declined and they incurred substantial additional debt which had to be serviced from less income.

Thomas Wolfe testified that he became manager of the Federal Land Bank Association in Havre in 1985 and met with Sniders in 1986 to discuss their delinquent loan payment. In an effort to try to resolve their default, he did an analysis of their ability to restructure their debt and reamortize their loan at the Bank. That analysis was offered as an exhibit at the time of trial and was uncontradicted. It established that subsequent to December of 1980 Sniders incurred several hundred thousand dollars of additional debt and that the payments necessary to service that debt on an annual basis resulted in a $101,000 operating deficit for the Sniders in 1986. Based upon the need to carry over debt from 1986 to future years because of the Sniders’ inability to pay those debts in a timely manner, the operating deficit was projected to substantially increase on an annual basis. Both plaintiff and defendants agreed that reamortization would result in higher, not lower, annual payments. The uncontroverted evidence was that in 1985 and 1986 Sniders had no ability to make their original payments. There was no prospect for improvement in their financial situation, and they had even less ability to make larger payments in the future. They were not in a position to take advantage of reamortization had it been offered. Therefore, they sustained no damage by the Bank’s refusal to reamortize their loan. Their affirmative defense fails as a matter of law and they were not entitled to a jury trial on that issue.

II.

For the reasons set forth in the preceding paragraphs, we also conclude that the District Court did not err in finding that the Bank had no duty to reamortize defendants’ loan under the facts proved at trial.

III.

This case was tried before the District Court on February 12, 1990. The court’s original Findings of Fact and Conclusions of Law were entered on April 16, 1990. On May 10, 1990, the court entered additional Findings and Conclusions, including Conclusion of Law No. 6 which was as follows:

“The purchaser at the foreclosure sale ordered herein is entitled to receive from the mortgagors, the Sniders, the rents and profits from the mortgaged land during the period of redemption. Any amount received by plaintiff shall be a credit upon the amount required to redeem the property. Section 25-13-822(1), MCA; Citizens’ National Bank v. Western L. & B. Co., 64 Mont. 40, 47 (1922). Such purchaser may demand an accounting of said rents and profits as provided by § 25-13-822(2), MCA.”

On appeal, Sniders argue that as the judgment debtor they are entitled to possession of the property on which they reside pursuant to § 71-1-229, MCA, and that the issue of “rents and profits” only arises when some third person or a true tenant is in possession of the property which has been foreclosed upon. We agree.

Title 71, Chapter 1, of the Montana Code Annotated sets forth the rights and obligations of debtors and creditors involved in the mortgaging of real estate in Montana. Section 71-1-229, MCA, provides in relevant part as follows:

“The purchaser of lands at mortgage foreclosure is not entitled to the possession thereof as against the execution debtor during the period of redemption allowed by law while the execution debtor personally occupies the land as a home for himself and his family .... The intention hereof is to insure to such owner the possession of his land prior to foreclosure and during the year of redemption.”

Chapter 13 of Title 25 of the Montana Code Annotated provides for the execution of judgments. Section 25-13-821, MCA, provides a debtor who personally occupies the land as a home with rights of possession identical to those provided for in § 71-1-229, MCA.

Section 25-13-822, MCA, then provides that:

“(1) The purchaser, from the time of the sale until a redemption, and a redemptioner, from the time of his redemption until another redemption, are entitled to receive from the tenant in possession the rents of the property sold or the value of the use and occupation thereof...”

In arriving at its conclusion that a judgment debtor who occupies the premises as a home for himself and his family is a “tenant in possession” pursuant to § 25-13-822(1), MCA, the District Court relied on this Corut’s decision in Citizens’ National Bank v. Western L. & B. Co. (1922), 64 Mont. 40, 208 P 893. In Citizens’National Bank, the defendant Western Loan foreclosed on certain property located in Hardin. The sheriff’s sale occurred on June 4, 1917. After receiving its certificate of sale from the sheriff, the loan company agreed to sell the property to Mrs. A. Becker on a contract. She took possession of the property on July 23, 1917, and thereafter received rents and profits from the property.

Pursuant to foreclosure of a second mortgage, the plaintiff Citizens’ National Bank subsequently received a sheriff’s certificate pursuant to which it redeemed the property from the first sale. It then demanded from the defendant all rents and profits received subsequent to the original foreclosure.

Under those circumstances, this Court found that Mrs. Becker was a “tenant in possession.” However, that case is distinguished from this case for two reasons: First, Mrs. Becker was not the execution debtor and did not personally occupy the premises as a home for herself; and, second, the case was decided on the basis of the law as it existed prior to 1921. Sections 25-13-821, MCA, and 71-1-229, MCA, which guarantee the judgment debtor the right to possess land he and his family personally occupy as a home were not enacted until 1921 and were not applicable to the facts in Citizens’ National Bank.

In this case the evidence showed that Sniders did occupy the land which was foreclosed on as their home. To require that they pay rent or profits from the land detracts from their unqualified statutory right to possession in a way that was not provided for by the legislature. The sections quoted above provide for an unqualified right to possession. To charge rent for that possession diminishes that right without any statutory basis for doing so.

The plaintiff suggests that if this Court should find that Sniders are entitled to possession of the property foreclosed upon without the payment of rent then this Court should construe § 71-1-229, MCA, to pertain only to that portion of the property on which the defendants reside. In other words, that portion that defendants specifically occupy as a home should be separated from the rest of the 1,500-acre ranch for purposes of possession.

Plaintiff’s position for purposes of collecting rent is different from the position it took when it filed its complaint. Paragraph 11 of the complaint states that the premises foreclosed upon have at all times been used as one lot or parcel; every part of it is necessary for the best use of the property, and, it cannot be sold in separate parcels without material injury.

Section 71-1-229, MCA, makes no provision for subdividing lands that the execution debtor occupies and we decline to add such a provision by judicial decision.

Based on the foregoing discussion, we affirm that portion of the District Court’s judgment foreclosing the Sniders’ mortgage in favor of the plaintiff and reverse that portion which required that defendants pay rent or income to the plaintiff during the one-year period of redemption.

This case is remanded to the District Court for entry of judgment consistent with this Opinion.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, HUNT and WEBER concur.


author: JUSTICE HUNT

text:
    H. ALLEN KEEBLER and BETTY KEEBLER, Plaintiffs and Respondents, v. NEVINS HARDING and RITA HARDING, Defendants and Appellants.
    No. 90-260.
    Submitted on briefs Nov. 8, 1991.
    Decided Mar. 21, 1991.
    247 Mont. 518.
    807 P.2d 1354.

      Gary L. Beiswanger, Billings, for defendants and appellants.
    Richard F. Cebull, Anderson, Brown, Gerbase, Cebull, Fulton, Harman & Ross, P.C., Billings, for plaintiffs and respondents.
   JUSTICE HUNT

delivered the opinion of the Court.

Defendants and appellants, Nevins and Rita Harding, appeal from a judgment of the District Court of the Thirteenth Judicial District, Carbon County, sitting without a jury, denying their claim of the existence of a public or private easement by prescription or otherwise across property owned by plaintiffs and respondents, H. Allen and Betty Keebler. The court permanently enjoined the appellants from using respondents’ property without permission and from interfering in any way with their possession, use and enj oyment of their property. We affirm.

The sole issue on appeal as framed by this Court is whether the District Court properly determined that appellants failed to establish the existence of a prescriptive easement across the respondents’ property.

Defendants and appellants are owners of a 320-acre tract of land located in Carbon County, Montana. Their land is completely surrounded by respondents’ adjoining land. Appellants’ land was originally homesteaded by Horace Pierce in 1914 but has not been owner-occupied since the 1920’s when Mr. Pierce moved to Laurel, Montana. Appellant Rita Harding initially purchased the property in her own name in July, 1983, from Ethel Pierce, absentee owner and widow of Horace Pierce. She later transferred one-half interest in the property to her husband, Nevins Harding.

Access to the appellants’ property is by a road which runs in a northwesterly direction from the Edgar/Pryor Road across land owned by Arden and Gloria Blair, who are not parties to this action, and across land owned by the respondents. From the appellants’ property the road continues in a northwesterly direction toward Silesia, Montana, across lands owned by the respondents and other persons not parties to this action to a point where it forks, with one route continuing toward Silesia, and the other route turning south until a point where it joins a county road which ultimately intersects the Edgar/Pryor Road. Improvements have been made to the road at unestablished times over the years. Apparently the road has followed substantially the same course since homestead days. Gates across the road exist in several locations. However, it appears that none of the gates had ever been locked until some time after the respondents purchased their property from Gerald Greeno in 1979.

This dispute arose shortly after the appellants purchased their propertyin 1983. On August 6 of that year, they met with respondents who told them that no easement existed across their land to appellants’ land. In the fall of 1983, the appellants began cutting chains from gates across the road on respondents’property for access to their land. The respondents discontinued locking their gates in 1984.

The respondents filed this action on April 11,1988, requesting the District Court to declare that appellants have no right, title, or interest whatsoever across the respondents’ land and to enjoin them from trespassing across their lands as a means of ingress to and egress from their property. The respondents’ position was that access across their lands has always been permissive while appellants claimed a prescriptive easement over the route the road takes across the respondents’ property. Both parties agreed that the road over which the appellants claimed the easement is not a county road, and that there is no easement by implication or necessity due to a lack of commonality of ownership. The District Court entered its findings of fact, conclusions of law, and judgment in favor of the respondents on February 9, 1990. This appeal followed.

The party seeking to establish a public or private easement by prescription has the burden of showing several elements. That party must show open, notorious, exclusive, adverse, continuous and uninterrupted use of the easement claimed for the full statutory period. Downing v. Grover (1989), 237 Mont. 172, 175, 772 P.2d 850, 852. The statutory period is five years. Section 70-19-401, MCA.

The appellants were unable to sustain their burden of proof of a private easement by prescription for the period of time after they pmchased their property. The record shows appellants’ first distinct and positive assertion of a claim of right to use the road occmred in the fall of 1983 when they cut chains from the respondents’ gates. The respondents subsequently brought this action in April, 1988, within the five-year statutory period. Therefore, the existence of a prescriptive easement depends on whether the historical use of the road was adverse or permissive. If permissive use is shown, no easement can be acquired since the theory of prescriptive easements is based on adverse use. Wilson v. Chestnut (1974), 164 Mont. 484, 525 P.2d 24.

To be adverse, the use of the alleged easement must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to, and acquiesced in by, the owner of the land. Taylor v. Petranek (1977), 173 Mont. 433, 437, 568 P.2d 120, 122. Once the required elements are established, adverse use is presumed. O’ Conner v. Brodie (1969), 153 Mont. 129, 137, 454 P.2d 920, 925. Additionally, adverse use will be presumed and will be sufficient to establish a title by prescription if there has been unexplained use of the alleged easement for the full statutory period. Taylor, 173 Mont. at 437, 568 P.2d at 122. Either presumption may be overcome by evidence that the use was permissive. See, Rathbun v. Robson (1983), 203 Mont. 319, 661 P.2d 850; Thomas v. Barnum (1984), 211 Mont. 137, 684 P.2d 1106.

The District Court determined the use of the road across the respondents’ property had historically been permissive until the appellants pmchased their property in 1983 and, therefore, any presumption of adverse use was effectively rebutted. The comt further concluded that even if a private easement had been established prior to 1983, any such easement was extinguished by inconsistent acts on the part of the appellants and their predecessors in interest.

The appellants challenge the District Court’s determination of permissive use, attacking many of the court’s findings of fact as clearly erroneous. Our standard of review of a district court’s findings of fact is clear. Rule 52(a), M.R.Civ.R, provides in pertinent part:

“Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses ...”

If the district court’s findings are based on substantial credible evidence, they are not clearly erroneous. Downina, 237 Mont. at 178, 772 P.2d at 853. Upon reviewing the record, we hold the District Court’s findings of fact are not clearly erroneous.

Several witnesses testified concerning the historical use of the road over which the appellants claim a prescriptive easement. Four of these witnesses, Tom Taylor, Glen Marsh, Dorothea Landy and Ethel Holton, were elderly and knew the road from the “old days.” The District Court found that:

“The gist of their testimony was that the use and custom since homesteader days was that in this area people came and went on this road/trail as necessary to their purposes with the understanding among all that use of this sort was conditioned upon observation of the proper respect for the landowner’s interests and uses. The Court finds and concludes that this use was pursuant to implied consent of the landowner.”

Appellants argue that these witnesses did not necessarily appreciate the subtle distinctions involved when describing the nature of the use under cross-examination by the respondents’ counsel and that it is clear that permission was something never considered by the users over the years. It appears the District Court was fully aware of this possibility and specifically found that, although these witnesses were elderly, they were “in full command of their faculties” and “[tjheir memories seemed sharp.” Furthermore, based on our review of the record, we conclude the District Court’s finding is an accurate reflection of these witnesses’ testimony.

Arden Blair also testified to permissive use of the road. He testified that the road over his land is currently being used with permission and that he provides a key to a locked gate on his property to people wishing to use the road. He also testified that his predecessors in interest had given permission to Gerald Greeno, the respondents’ predecessor in interest, to use the road across the Blair property.

The appellants challenge Mr. Blair’s testimony arguing that he was not a credible witness. In non-jury trials, the credibility of witnesses and the weight accorded their testimony is a matter properly left to the discretion of the district court. Matter of Estate of Murnion (1984), 212 Mont. 107, 113, 686 P.2d 893, 896. The District Court found Mr. Blair to be a “totally credible and truthful” witness. We will not substitute our judgment for that of the District Court’s.

We have previously held that evidence of a local custom of neighborly accommodation or courtesy, without more, is sufficient to establish permissive use. In Taylor v. Petranek (1977), 173 Mont. 433, 438, 568 P.2d 120, 123, this Court stated:

“Here the record is replete with testimony from both plaintiff’s and defendant’s witnesses that the homesteaders who initially lived in the area developed common practice of allowing others to cross their lands to reach Suffolk. This evidence is sufficient to support a use permissive in its inception and not under a claim of right.”

See also, Rathbun v. Robson (1983), 203 Mont. 319, 661 P.2d 850. We hold the District Court properly determined that the use of the road over which the appellants claim an easement has always been permissive and, therefore, no private easement by prescription exists. Because we hold the appellants failed to establish a private easement by prescription, we need not consider whether such easement was extinguished.

The District Court also correctly determined that no public easement by prescription exits over the road in question. There is evidence in the record that the road has occasionally been used by hunters, hikers, neighbors gathering firewood, and others. However, this type of occasional use has been held to be insufficient to raise a presumption of adverse use. See, Graham v. Mack (1985), 216 Mont. 165, 699 P.2d 590; Harland v. Anderson (1976), 169 Mont. 447, 548 P.2d 613; Ewan v. Stenberg (1975), 168 Mont. 63, 541 P.2d 60.

Affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, McDONOUGH and SHEEHY concur.


text:
    STATE OF MONTANA, Plaintiff and Respondent, v. KURT McCOLLEY, Defendant and Appellant.
    No. 90-379.
    Submitted on briefs Jan. 17, 1991.
    Decided Mar. 21, 1991.
    247 Mont. 524.
    807 P.2d 1358.

      Kurt McColley, Butte, pro se.
    Marc Racicot, Atty. Gen., Deanne L. Sandholm, Asst. Atty. Gen., Helena, Teresa O’Connor, Deputy Yellowstone County Atty’s. Office, Billings, for plaintiff and respondent.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellant, Kurt McColley, filed a petition for post-conviction relief in the Thirteenth Judicial District Court, Yellowstone County. McColley appeals from the District Courts denial of his petition. We affirm.

The only issue raised by McColley on appeal is whether the District Court erred by denying his petition for post-conviction relief.

McColley was charged with one count of felony criminal sale of dangerous drugs alleged to have been committed on or about April 1 and April 28, 1988. Trial commencedinDistrict Court onFebruaryl, 1989, andMcColley was convicted by juiy and sentenced to a term of twenty years in the Montana State Prison, with ten years suspended. McColley appealed from this conviction to this Court where we upheld the conviction on October 24,1989. State v. McColley (1989), 239 Mont. 466, 781 P.2d 280.

On May 7,1990, McColley filed a petition for post-conviction relief with the District Court. The District Court denied McColley’s petition by an order entered on June 20,1990, and McColley now appeals from the denial of his petition for post-conviction relief.

The factual background leading up to McColley’s conviction is set forth in McColley, 239 Mont. 466, 781 P.2d 280, and will not be repeated here except as is necessary to dispose of the issue before us.

McColley presents four arguments in support of his claim that the District Court erred when it denied his petition for post conviction relief. They are: (1) the denial of the constitution right to representation by a competent lawyer at every critical stage of the proceeding; (2) the unconstitutional use by the State of peijured testimony; (3) the lack of sufficient evidence upon which to base a conviction; and (4) prosecutorial misconduct.

McColley argues that he received ineffective assistance of counsel throughout the proceedings and has thereby been denied his constitutional right to representation. He argues that his counsel failed to adequately prepare for the trial, failed to make proper objections during the trial, failed to call any defense witnesses, and filed an appeal in which no meritorious grounds for appeal were presented.

There is a heavy burden of proof on an appellant who seeks to reverse a judgment on grounds of incompetency of counsel. State v. LaValley (1983), 203 Mont. 393, 398, 661 P.2d 869, 872. To prevail on such a claim McColley must show specific acts or omissions by his counsel which prejudiced his case and resulted in the denial of a fair trial. State v. Stewart (1988), 235 Mont. 239, 241, 767 P.2d 296, 297. As we stated in Stewart, the two-part test this Court applies in judging a claim of ineffective assistance of counsel is, first, whether the defendant can show deficient performance of counsel in that “counsel made errors so serious that counsel was not functioning as the ‘counsel’ guaranteed the defendant by the Sixth Amendment..., [and second,] the defendant must show that the deficient performance prejudiced the defense.” (Citations omitted.) Stewart, 235 Mont. at 241, 767 P.2d at 297.

McColley contends his counsel failed to adequately investigate the facts, specifically an alleged statement by Matt Andre, a “middle man” involved in the drug transactions, made at the time of his arrest. McColley further argues that his counsel failed to discuss the case with him and did not even interview him until the week before the trial. Although these general allegations may in some way indicate insufficient trial preparation, there has been no indication of how this alleged unpreparedness prejudiced appellant’s right to a fair trial. McColley does not present any reasonable probability that the result of the proceeding would have been different but for his counsel’s alleged unpreparedness.

McColley also asserts that his counsel neglected to object to hearsay testimony by police officers and did not make any specific objections during the trial in order to preserve any error for appeal.

The record shows that the hearsay testimony to which McColley refers was properly admissible at trial and his counsel was aware of this fact. As to the general complaint about the lack of other objections, we have previously stated that “defense counsel’s use of objections is within his discretion as trial tactics.” (Citations omitted.) State v. Hurlbert (1988), 232 Mont. 115, 122, 756 P.2d 1110, 1114. And it is well established that it is not our function to second guess the trial tactics of defense counsel when evaluating counsel's representation. See LaValley, 203 Mont. at 397, 661 P.2d at 872.

“Defense counsel's use of objections during trial fie within his or her sound discretion and failure to object must, in addition to being error, also prejudice the defendant.” (Citation omitted.)

Hurlbert, 232 Mont. at 120, 756 P.2d at 1113. The defendant has presented no evidence showing he has been prejudiced.

McColley claims that his counsel failed to call any defense witnesses to testify on his behalf. This argument is factually unfounded. Several of the witnesses called by the State, including Matt Andre, were defense witnesses. At trial Andre continually denied having ever made any statement that would connect McColley to the drug transactions. Defense counsel's decision in this regard is one of trial tactics and strategy and McColley fails to indicate how this alleged deficient performance may have in any way deprived him of a fair trial.

Finally, McColley claims that his counsel filed a frivolous appeal. The appeal to which Mccolley refers was decided on the merits by this Court in McColley, supra. A review of that case disproves such a claim. Effective assistance of counsel does not mean that the defendant is guaranteed assistance of counsel that will result in acquittal. LaValley, 203 Mont. at 398, 661 P.2d at 872.

A claim of ineffective assistance of counsel must be grounded in facts found in the record, not on mere conclusory allegations. Hurlbert, 232 Mont. at 120, 756 P.2d at 1113. McColley has failed to meet the burden ofproofnecessaiy to establish his claim ofineffective assistance of counsel.

McColley’s second argument in support of his claim that the District Court erred by denying his petition is the allegation that the State used peijured testimony. The District Court refused to address this issue based upon the fact that this was a matter which could reasonably have been raised on direct appeal. We agree with the District Court. Where a defendant has been afforded a direct appeal of his conviction, any grounds for relief which reasonably could have been raised on direct appeal may not be subsequently raised in a petition for post-conviction relief. See Duncan v. State (1990), 243 Mont. 232, 794 P.2d 331, and § 46-21-105, MCA. McColley failed to raise this issue and could have reasonably done so on direct appeal. He is procedurally barred from doing so now.

McColley’s last two arguments will be addressed concurrently. He alleges that there was an insufficiency of evidence on which to base a conviction and that there existed prosecutorial misconduct which denied him a fair trial.

As with the previous argument both of these arguments could have been raised on appeal and were not so raised. McColley is therefore procedurally barred from raising these arguments in his petition for post-conviction relief. In addition to failing to raise these claims on direct appeal, McColley also has failed to raise these claims in his original petition for post-conviction relief before the District Court. He attempts to raise these arguments for the first time in this appeal of his petition and may not do so.

Although we do not address the merits of the prosecutorial misconduct issue, we take this opportunity, as we did in State v. Campbell (1990), 241 Mont. 323, 330, 787 P.2d 329, 334, to again remind prosecuting attorneys that Rule 3.4(e) of the Montana Rules of Professional Conduct prohibit a lawyer from, in trial, stating a personal opinion as to the guilt or innocence of an accused.

The standard of review for denial of post-conviction relief is whether there is substantial evidence to support the findings and conclusions of the district court. State v. Coates (1990), 241 Mont. 331, 336, 786 P.2d 1182, 1185. There is substantial evidence in the record to support the District Court.

Affirmed.

JUSTICES HARRISON, TRIEWEILER, MCDONOUGH and WEBER concur.


text:
    FRED G. NIMMICK AND ANN G. NIMMICK, Plaintiffs and Respondents, v. DALE P. HART, Defendant and Appellant. DALE P. HART, Plaintiff and Appellant, v. ALLEN E. ERICKSON, Melba E. Erickson, Fred G. Nimmick, Ann M. Nimmick, Robert E. Wright, Donna Mae Wright, Charles R. Taylor, and Sam Martin, Defendants and Respondents.
    Nos. 90-420 and 90-204.
    Submitted on briefs Jan. 17, 1991.
    Decided Mar. 1, 1991.
    Rehearing Denied April 11, 1991.
    248 Mont. 1.
    808 P.2d 481.

      Thomas W. Trigg, Terry A. Wallace, Missoula, for defendant and appellant.
    Dirk A. Williams, Snavely & Phillips, Missoula, Richard A. Weber, Jr., Koch, McKenna, Goheen, Boggs & Weber, Hamilton, for plaintiffs and respondents.
   JUSTICE TRIEWEILER

dehvered the Opinion of the Court.

In this consolidated action Dale P. Hart appeals from the Fourth Judicial District Court orders granting summary judgment in favor of Charles R. Taylor in cause No. 66726, and Fred G. Nimmick and Ann M. Nimmick in cause No. 66726 and cause No. 71128. We affirm in part and reverse and remand in part.

The parties raise several issues which we restate as follows:

As to Taylor:

I. Whether the District Court erred in determining Hart failed to plead failure of consideration as an affirmative defense.

As to the Nimmicks:

II. Whether the District Court erred in finding no misrepresentation and fraud on the part of the Nimmicks.

III. Whether the District Court erred in collaterally estopping Hart from raising the issues of rescission and misrepresentation concerning his purchase of Terrace.

IV. Whether the District Court erred in dismissing Hart’s affirmative defense of accord and satisfaction.

V. Whether the District Court erred in finding that the Nimmicks had no obligation to mitigate their damages.

VI. Whether the District Court erred in dismissing Hart’s counterclaims.

This cause of action is based on a series of transactions involving the Terrace Mobile Home Park (Terrace) located near East Missoula, Montana. Terrace was originally owned by the Ericksons. The Erick-sons sold Terrace by contract for deed to Furman H. Stockton and Clare E. Stockton on September 25, 1978. The Stocktons then sold Terrace by contract for deed to Fred C. Nimmick and Ann M. Nimmick on November 5, 1982. On April 16, 1984, the Nimmicks in turn sold the property by contract for deed to Robert E. Wright and Donna Mae Wright.

The Wrights were indebted to Charles R. Taylor on a promissory note. After the debt to Taylor arose, Wrights purchased Terrace from the Nimmicks. Subsequently, Taylor acquired a judgment against the Wrights for the debt owed on the promissory note. Taylor then filed a judgment lien against the Wrights’ interest in Terrace.

Taylor scheduled an execution sale of the Wrights interest in Terrace to satisfy his judgment against the Wrights. The Wrights were on the verge of losing their interest in the property through the foreclosure of Taylor’s judgment lien when Samuel Martin, a realtor, contacted Dale Hart in an effort to stave off the impending foreclosure. Previously Martin had been the realtor that handled the Stockton-Nimmick transaction and the Nimmick-Wright transaction.

The involvement of Hart in Terrace took place in two stages. In order to avoid the sale, the Wrights paid $7,500 to Taylor and agreed to pay the balance of the judgment ($7,500 within one year upon a specified schedule). Hart gave the Wrights the above $7,500 to pay Taylor to avoid the execution sale. In return, Hart received a partial assignment of one-third of the Wrights’ purchasers interest in Terrace. Hart also agreed to pay the Wrights an additional $7,500 in January, 1986, to pay off the remaining judgment debt to Taylor.

Despite this payment, on November, 1985, the Wrights defaulted on the underlying contract payments which were to be made to the Ericksons, the title holders of the property. As a result, the Ericksons issued a notice of default and acceleration. To overcome this default, Hart purchased all of the Wrights’ interest in the property and agreed to assume all of the obligations on Terrace, including the remaining debt ($7,500) to Taylor. In order to cure the Wrights’ default to the Ericksons, Hart borrowed $3,500 from the Nimmicks. Hart also gave the Nimmicks a $10,000 promissory note to clear a lien the Nimmicks held against Terrace. The note was secured by a trust indenture on Hart’s personal residence.

Next, Hart signed a promissory note to Taylor for $5,000 and Taylor agreed to release his judgment lien. Hart agreed to grant a trust-indenture covering his interest in Terrace, to secure payment to Taylor. Hart also later delivered $2,500 to attorney Dennis Lind for partial payment of his debt to Taylor. Lind then delivered the $2,500 to Taylor’s attorney. As the parties agreed, Hart signed a promissory note and a trust indenture with Taylor. Unfortunately, Taylor’s judgment lien was not immediately released or satisfied, nor did Hart request Taylor to release or satisfy the judgment lien.

Hart’s promissory note to Taylor was due and payable in full on January 12,1987. On that date, Hart paid Taylor $687 in interest on the promissory note, but failed to pay the full amount of the principal. Other than the single payment of interest on January 12,1987, Hart has made no payments on the promissory note.

On February 20, 1987, Hart sent a letter to Taylor and other parties stating his intention to rescind all transactions related to Hart’s purchase of Terrace. On April 10, 1987, Hart sued Taylor, the Nimmicks, and others in Missoula County Cause No. 66726 alleging that he was fraudulently induced to enter the contract to purchase the mobile home park, and seeking rescission of the contract and damages. Specifically, in regard to Taylor, Hart sought to rescind or avoid Hart’s obligations under the promissory note he signed with Taylor. In response, Taylor denied Hart’s allegations of fraud, and counterclaimed for payment under the promissory note.

On March 22,1988, the District Court granted summary judgment in favor of Taylor upon Hart’s claims of fraud and misrepresentation. Subsequently, Taylor requested summary judgment upon his counterclaim. That motion was also granted.

Hart now appeals the District Court’s second summary judgment order in favor of Taylor.

This appeal also includes Hart’s claims of fraud, misrepresentation and rescission against the Nimmicks in cause No. 66726, and the Nimmicks’ subsequent complaint against Hart for payment of a promissory note in cause No. 71128.

As we mentioned previously in this Opinion, Hart sued the Nimmicks, along with various other defendants, in cause No. 66726 alleging fraud and misrepresentation on the part of the Nimmicks. Specifically, Hart claimed that the Nimmicks, through their agent realtor Sam Martin, misrepresented the value of Terrace. This misrepresentation, according to Hart, led him to purchase an interest in Terrace. The Nimmicks denied any misrepresentation in the sale of Terrace, and further denied any agency relationship with realtor Martin.

On April 15, 1988, the Nimmicks filed a motion for summary judgment. The court found no agency relationship between the Nimmicks and Martin, and, therefore, any statements that Martin made about Terrace could not be imputed to the Nimmicks. The District Court found no misrepresentations on the part of the Nimmicks in the sale of Terrace.

After the District Court’s summary judgment, the Nimmicks served a Notice of Entry of Order upon Hart’s counsel on November 16,1988. The Nimmicks failed to enter a final judgment.

On June 8, 1989, the Nimmicks filed a complaint in cause No. 71128, to collect payment under the promissory note. The facts of the Nimmicks’ cause of action on the promissory note are tied into Hart’s earlier fraud and misrepresentation complaint surrounding his purchase of Terrace. Hart had given the Nimmicks the note, secured by a trust indenture in Hart’s personal residence, in the amount of $10,000 with interest at the rate of 10% on November 21, 1985. As mentioned earlier, Hart gave the note to the Nimmicks in order to clear a lien the Nimmicks had on Terrace.

The record reveals that City Federal Savings Bank also had a trust indenture on Hart’s personal residence; the Bank’s trust indenture was superior to the trust indenture held by the Nimmicks. On December 19,1988, Michael J. Reiley, trustee under the Bank’s trust indenture, recorded a notice of trustee’s sale.

On February 20,1989, Nimmicks’ attorney sent Hart’s attorney an offer to settle Nimmicks’ claim for $8,541.25. By its terms, the compromise offer expired on March 15, 1989. Sometime later Hart called the Nimmicks’ attorney and offered a deed to his home in lieu of foreclosure. The Nimmicks’ attorney by letter to Hart’s attorney rejected Hart’s offer. Furthermore, the Nimmicks’ attorney advised Hart’s counsel that the Nimmicks would be filing suit on the note if the Bank foreclosed its trust indenture on schedule.

On May 19,1989, the Bank’s trustee sold Hart’s home at a trustee sale. As promised, having lost their security, the Nimmicks sued Hart on the note on June 8, 1989. Hart answered, raised affirmative defenses and asserted counterclaims.

On September 20, 1989, the Nimmicks moved for summary judgment on the complaint and Hart’s counterclaims. Following the Nimmicks’ motion, briefing by the parties, and oral argument, the District Court granted partial summary judgment to the Nimmicks, and maintained that Hart is collaterally estopped from raising the claims of rescission and misrepresentation, since both of these claims had been adjudicated in District Court in cause No. 66726.

The Nimmicks then moved for summary judgment on the remaining issues, which Hart opposed. The District Court agreed with the Nimmicks and granted the Nimmicks’ motion for summary judgment. The Court entered judgment on June 7, 1990, and the Nimmicks served Notice of Entry of Judgment on June 11,1990. Hart now appeals both of the District Court’s summary judgments.

Both of these cases on appeal are motions for summary judgment. In reviewing orders for summary judgment, the standard of review for this Court is the same as that used by the District Court under Rule 56(c), M.R.Civ.P.; Kronen v. Richter (1984), 211 Mont. 208, 211, 683 P.2d 1315, 1317. Therefore, this Court can find summary judgment 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.” Rule 56(c), M.R.Civ.P.; Mayer Bros. v. Daniel Richards Jewelers, Inc. (1986), 223 Mont. 397, 399,726 P.2d 815, 816. Once the record reveals no genuine issue of material fact, the burden of proof shifts to the party opposing the summary judgment motion to present facts of a substantial nature that a material fact issue exists. Mayer, 726 P.2d at 816. Mere conclusory or speculative statements are insufficient to raise a genuine issue of material fact. National Gypsum Co. v. Johnson (1979), 182 Mont. 209, 212, 595 P.2d 1188, 1189; Mayer, 726 P.2d at 816. “The opposing party ‘may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial”’ (emphasis in original) Mayer.; 726 P.2d at 816, citing Rule 56(e), M.R. Civ.P. With this standard in mind, we will now review the issues presented by the parties.

Hart v. Taylor

I.

Whether the District Court erred in determining Hart failed to plead failure of consideration as an affirmative defense.

Taylor moved for summary judgment on his counterclaim for payment on the promissory note on October 26, 1988. In an effort to rebut Taylor’s counterclaim, Hart argued rescission based on failure of consideration. Hart contended that the consideration between the parties failed, due to the fact that Taylor failed to release the judgment lien Taylor held on Terrace. Taylor maintained, and the District Court found, that Hart had not pled failure of consideration as an affirmative defense as required by Rule 8(c)l M.R.Civ.P. Furthermore, the Court found that “the letter of rescission from counsel for Hart does not mention failure of consideration for non-payment of the obligation [promissory note] from Hart to Taylor.” The District Court then granted Taylor’s summary judgment motion.

Rule 8(c), M.R.Civ.P. states in pertinent part:

“Affirmative Defenses. In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction, arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, ... and any other matter constituting an avoidance or affirmative defense ...” (Emphasis added.)

The record reveals that Hart failed to affirmatively plead failure of consideration. Hart offers a number of excuses why he failed to plead the affirmative defense, none of which have any merit on this appeal. “An affirmative defense is generally waived if not set forth affirmatively.” Pracht v. Rollins (1989), 239 Mont. 62, 68, 779 P.2d 57, 61; Chandler v. Madsen (1982), 197 Mont. 234, 241, 642 P.2d 1028, 1032. Here, the District Court properly denied Hart’s affirmative defense.

In addition to failing to plead his affirmative defense, Hart’s claim also fails because Hart received actual consideration from Taylor. Taylor had a judgment lien on the Wrights’ interest in Terrace and Taylor scheduled a sale upon a writ of execution. The sale was canceled when Hart provided funds to the Wrights to make a partial payment to Taylor. Hart then took over the remainder of the Wrights’ interest in Terrace and, among other things, agreed to pay Taylor. Hart paid Taylor $2,500, and also signed a promissory note to Taylor and Taylor agreed to release his judgment lien. Hart also agreed to grant a trust indenture in Terrace to secure payment to Taylor. Hart maintains that the release of the judgment lien was consideration for his execution of the promissory note. According to Hart, once Taylor failed to release the judgment lien, the consideration between the parties failed and Hart could properly rescind the contract.

Hart mistakenly contends Taylor’s consideration was the release of the judgment lien. The actual consideration in this case which Hart received was Taylor’s forbearance, Hart’s right to possession of the trailer court, and the receipt of rents from the trailer court.

Release of the judgment lien would not have cleared the title on Terrace. Hart’s granting of a trust indenture for the satisfaction of a judgment lien would only have changed the form of the encumbrance and would not have changed the fact of an encumbrance on Terrace. The facts are clear that Taylor granted to Hart what he wanted, which was time to make payment. After Taylor granted that time and patiently awaited payment, Hart rescinded the contract.

Likewise, Hart’s rescission letter reflects that failure of consideration was not the basis of Hart’s rescission. In pertinent part, the rescission letter states, “The reason for the rescission is that Dale’s consent to the various agreements was obtained by the mistake and or fraud of Sam Martin, who represented that he was a partner and agent of some of you, that the mobile home park was in good condition, and that the cash flow and profitability of the mobile home park was substantial. None of these representations were true, and it is clear that the representations were made to defraud Mr. Hart.”

Nowhere in Hart’s rescission letter is there any mention of Taylor’s judgment lien as a basis for failure of consideration. The District Court was keenly aware of this fact in its order granting Taylor summary judgment:

“[T]he letter of rescission from counsel for Hart does not mention failure of consideration as a reason for nonpayment of the obligations from Hart to Taylor. In looking to the essence of the transaction, it is clear that the quid pro quo was not the release of the judgment lien but rather an extension of time due Hart within which to make payment to Taylor. Such payment has not been made and no material facts exist to support Hart’s nonpayment of his obligation to Taylor.”

Accordingly, the evidence does not support the defense of failure of consideration. Hart received adequate consideration from Taylor. We affirm the District Court grant of summary judgment in favor of Taylor.

Hart v. Nimmicks

Hart raises a number of issues in his lawsuits with Nimmicks in cause Nos. 66726 and 71128. Both of these cases involve numerous motions, orders, affidavits and depositions. In order to sift through the legal quagmire involved in this appeal, we find it necessary to first discuss Hart’s cause of action against Nimmicks in cause No. 66726.

On April 10, 1987, Hart filed his complaint in cause No. 66726 against Nimmicks, among others, seeking rescission of the Terrace purchase agreement and punitive damages for fraud and misrepresentation in his purchase of Terrace. Hart’s complaint alleged that defendant realtor Sam Martin fraudulently induced him to purchase Terrace. Hart also alleged that the Nimmicks were liable for the acts of Martin because (1) Martin was acting as their agent, and (2) the Nimmicks were partners with Martin. He made no allegation that the Nimmicks acted improperly. The Nimmicks denied allegations that Martin acted as their agent. They also supported their denial with affidavits, in which the Nimmicks established that they did not employ Martin as their real estate agent, nor gave him the authority to act as their real estate agent, in connection with Hart’s purchase of Terrace.

The Nimmicks moved for summary judgment on April 15, 1988. Later, on November 7,1988, the District Court granted the Nimmicks’ motion for summary judgment. The District Court found no agency relationship between the Nimmicks and Martin. Furthermore, the court found that any misrepresentations made to Hart occurred in 1985 when Martin was employed by the Wrights. The court found no fraud or misrepresentation on the part of the Nimmicks. After the District Court’s summary judgment order, the Nimmicks served a Notice of Entry of Order upon Hart’s counsel on November 16, 1988. The record reveals that the Nimmicks failed to enter a final judgment with the District Court.

II.

Whether the District Court erred in finding no misrepresentation and fraud on the part of the Nimmicks.

On appeal, Hart argues the District Court overlooked facts which link the Nimmicks to the alleged fraud and misrepresentation in the sale of Terrace. Specifically, Hart claims the District Court disregarded his affidavit, showing the Nimmicks’ fraudulent conduct and subsequent motion to amend the pleadings to conform to his filed affidavit. However, there was no allegation of misconduct by Nimmicks in the complaint and their was no proper motion to amend that complaint. A review of the records reveal that Hart, in his responsive brief stated, “Plaintiff demands that the pleadings be amended to reflect the facts set forth in the affidavit of the parties.”

The District Court properly ignored Hart’s “demand” to amend his pleadings. In order to amend a pleading under Rule 15(a) or Rule 15(b), M.R.Civ.P., a party must file an appropriate motion, and brief accompanying that motion. Rule 2(a), Uniform District Court Rule. “F ailure to file a brief in five days by the moving party shall be deemed an admission that the motion is without merit.” Rule 2(b), Uniform District Court Rules. Here, Hart did not properly file a motion to amend his pleadings. He attempted to amend his pleadings in his responsive brief. Hart’s demand in his responsive brief does not remotely resemble a proper motion, and Hart also failed to file a brief as required under Rule 2(a).

Aside from Hart’s attempt to amend his pleadings, Hart’s affidavit itself does not support his allegations of fraud and misrepresentation on the part of the Nimmicks. In his affidavit, Hart claims Fred Nimmick made a misrepresentation directly to him. Specifically, Hart stated in his affidavit:

“10. At this time Fred Nimmick told Hart that the income from the trailer was there, reaffirming what Martin told Hart;
“13. The representation of Fred Nimmick was not true, and this was a direct representation made by Nimmick to Hart in conjunction with representations made to Hart by Martin, on behalf of the Nimmicks, after Wright’s interest in the park had been terminated.”

These statements are directly contrary to allegations Hart made in his complaint and deposition. In his deposition, Hart stated that the information he relied on in purchasing his interest in Terrace was the listing agreement by which the Wrights employed Martin as the real estate agent. Hart also testified that the Wrights and Martin made the statements on which he relied in purchasing Terrace. Moreover, Hart admitted that the only writing he relied on was a listing agreement between the Wrights and Martin.

Hart stated in his deposition that the only representation of the Nimmicks was that the trailer park had good value. In his affidavit, he contradicted his deposition testimony and maintains that the Nimmicks also stated that all the trailers were in good condition and income producing. The Nimmicks’ alleged statements to Hart do not support a cause of action for misrepresentation. In order for Nimmick’s statements to constitute misrepresentation, Hart needed to rely on those statements to his detriment. There is nothing in Hart’s affidavit, or in his complaint which indicate that Hart relied on the statements allegedly made by the Nimmicks in his purchase of Terrace. Hart’s affidavit and complaint and the District Court record do not support Hart’s claim of fraud and misrepresentation against Nimmicks. Accordingly, the District Court properly found no fraudulent conduct or misrepresentations by the Nimmicks.

III.

Whether the District Court erred in collaterally estopping Hart from raising the issues of rescission and misrepresentation concerning his purchase of Terrace.

On September 20, 1989, the Nimmicks moved for summary judgment on their promissory note complaint, and Hart counterclaimed rescission based on misrepresentation. The District Corut granted partial summary judgment to Nimmicks, and found that Hart was collaterally estopped from raising claims of rescission and misrepresentation since both of these claims had been adjudicated in District Court in cause No. 66726.

Hart argues that the District Court improperly applied the doctrine of collateral estoppel because the court never entered a final judgment in cause No. 66726. Hart reminds this Court that a final judgment is one of the necessary elements of collateral estoppel. Hart is correct that the District Court never entered a final judgment. The record shows only an order of summary judgment and a subsequent Notice of Entry of Order.

We could at this stage remand this issue to the District Court, since the parties failed to enter a final judgment. A remand on this issue, however, would further delay the adjudication of this case, and unreasonably burden the District Court. This Court turns to its equitable powers to resolve this dilemma of hearing an issue without the necessary final judgment. Under our equity jurisdiction, “We have a duty to determine all of the issues of this case and do complete justice.” Peterson v. Montana Bank of Bozeman (1984), 212 Mont. 37, 49, 687 P.2d 673, 679. Our duty to decide equitable issues, such as whether collateral estoppel applies, is defined in section 3-2-204(5), MCA. Under this section, this Court has the power in equity cases and in matters or proceedings of an equitable nature, to review all questions of fact arising on the evidence presented in the record, and to determine the same. Section 3-2-204(5), MCA; Carpenters-Emp. Ret. Tr. v. Galleria Partnership (1989), 239 Mont. 250, 265, 780 P.2d 608, 617. Hart’s counterclaim for rescission was an equitable defense. 17A Am.Jur.2d § 540 Contracts.

Under our equitable jurisdiction power we will decide the issue of collateral estoppel, despite the fact the parties did not enter a final judgment. It would be inequitable to remand this issue back to the District Court, especially in light of the fact that the record reveals no evidence of misrepresentation by the Nimmicks, and no support for Hart’s claim of rescission. We would be remiss in our duty to “do complete justice” if we failed to resolve the issue of collateral estoppel.

As the District Court properly noted in its order:

“The doctrine of collateral estoppel bars litigation of an issue if (1) the issue decided in a prior adjudication was identical with the one presented in the action at bar; (2) the Court in the prior adjudication issued a final judgment on the merits; and (3) the party against whom the collateral estoppel is asserted was a party or had privity with a party in the prior action. Aetna Life and Casualty Insurance Co. v. Johnson (1984), 207 Mont. 409, 673 P.2d 1277, 1279.”

Applying this test to the facts in this case, it is clear that collateral estoppel bars Hart from raising the issues of rescission and misrepresentation. These issues were fully litigated by the parties in cause No. 66726.

Despite the fact that the issue of rescission was previously litigated in the earlier District Court case, Hart attempts to resurrect the issue of rescission by now arguing rescission based on failure of consideration and breach of contract. A review of Hart’s allegations reveals nothing new from what he alleged in Cause No. 66726. Hart is once again alleging misrepresentations which were previously found to have no basis in fact.

IV.

Whether the District Court erred in dismissing Hart’s affirmative defense of accord and satisfaction.

In his answer, Hart raised accord and satisfaction as an affirmative defense. Hart’s answer stated:

“The complaint in this case must be dismissed since the claims upon which it is founded are not enforceable because of an accord and satisfaction.”

A review of the facts reveal that the District Court properly denied Hart’s defense of accord and satisfaction. On February 28,1989, in a letter from the Nimmicks’ attorney, Robert Marcott, to Hart’s attorney, Terry Wallace, the Nimmicks made an offer to settle their claims against Hart for $5,000 plus attorney fees of $3,541.25. Marcott set a March 15,1989 deadline payment of the $8,541.25.

Sometime thereafter Hart called Marcott, and offered the deed to his house in lieu of the Nimmicks’ foreclosure on his home. In an affidavit, Hart maintains that the parties orally agreed over the telephone that “the Nimmicks’ claim would be settled by the payment of money if the Nimmicks’ agreed, and that if they did not, it would be settled by them relinquishing their claim and me signing my house over to them ...”

By letter dated May 4, 1989, Marcott wrote to Wallace, rejecting Hart’s offer of a deed to his home in lieu of foreclosure, and enclosed a key Hart apparently had left at Marcott’s office.

Now, Hart claims the Nimmicks created an accord through the oral agreement between Hart and Marcott. Furthermore, Hart claims that the Nimmicks failed to satisfy the new accord between the parties. The Nimmicks contend their offer on February 28,1989, set the parameters of settlement including a deadline for payment of March 15, 1989. The Nimmicks maintain there was no accord, so there could not have been an accord and satisfaction.

The original promissory note between the parties was a written contract. “A contract in writing may be altered by a contract in writing or by an executed oral agreement.” Section 28-2-1602, MCA. The parties never signed a new written contract, but Hart alleges the parties formed an oral agreement to change and modify the terms of the promissory note. As we stated in Stoddard v. Gookin (1981), 191 Mont. 495, 503, 625 P.2d 529, 534, “An oral agreement altering a written agreement is not an ‘executed oral agreement’ within the statute [§ 28-2-1602, MCA] authorizing modifications of written contracts by an executed oral agreement unless its terms have been fully performed, and performance on one side is not sufficient.” In this case, the terms of the alleged oral agreement were not fully performed. By their attorney’s letter dated May 4, 1989, the Nimmicks established that they would not accept a deed in lieu of foreclosure as a modification of their promissory note. Clearly, the oral agreement was not executed and thus the contract (promissory note) was never properly altered by the parties.

The District Court reviewed the evidence and correctly determined that the written agreement between the Nimmicks and Hart had not been altered by an executed oral agreement, and that there was no accord and satisfaction.

V.

Whether the District Court erred in finding that the Nimmicks had no obligation to mitigate their damages.

In the past, we have held “that a non-defaulting party in a contractual arrangement must act reasonably under the circumstances so as not to unnecessarily enlarge damages caused by the default.” IFG Leasing Co. v. Schultz (1985), 217 Mont. 434, 437, 705 P.2d 576, 577; Diede v. Davis (1983), 203 Mont. 205, 214-215, 661 P.2d 838, 843.

In this case, Hart argues that the Nimmicks failed to mitigate their damages by not purchasing his home at the foreclosure sale. Hart claims that Nimmicks as the junior lienholders, should have bought his house and then in turn sold it at the best possible price. Hart maintains there was enough equity in his home after City Federal Savings Bank (first lienholder) was paid to discharge completely any obligation Hart had to the Nimmicks. Hart also claims, relying on IFG Leasing, 705 P.2d at 577, that the question of mitigation is a material issue of fact not susceptible to a motion for summary judgment. Nimmicks maintain Hart’s bare assertions are insufficient to defeat a motion for summary judgment and that Hart has failed to produce any evidence to support his allegations that he had equity in his home prior to the City Federal foreclosure.

After reviewing the record, we find the Nimmicks did not violate the principle of reasonable mitigation of damages. There is no evidence that there existed enough equity in the home after City Federal’s foreclosure to cover the Nimmicks’ lien. Hart’s assertions of equity come from his conclusory affidavit. Hart never introduced any evidence concerning the foreclosure sale price of his home, and whether that sale price in turn covered City Federal’s lien and the Nimmicks’ lien. Instead, Hart simply asserts there was equity in his property to cover his debt to the Nimmicks. Hart’s bare assertions are insufficient to defeat a motion for summary judgment.

Furthermore, if Hart believed there was equity in the house, he could have recaptured his equity by buying his home at the foreclosure sale. As the District Court properly noted in its order:

“[A] plaintiff is not under a duty to mitigate damages if the other party, who had the duty to perform under the contract, had equal opportunity to perform and equal knowledge of the consequences of nonperformance. 22 Am.Jur.2d § 508, p. 591. In this case, it is the Court’s opinion that Defendant had equal opportunity and equal knowledge of the consequences of his defaulting promissory note.”

Hart has failed to show any genuine issue of material fact in support of his allegations that the Nimmicks failed to reasonably mitigate their damages. Therefore, the District Court properly entered summary judgment in favor of Nimmicks on the issue of failure to mitigate damages.

VI.

Whether the District Court erred in dismissing Hart’s counterclaims.

Hart advanced two counterclaims in his answer, one for tortious interference with business relationships and the other for the loss of his house. Both of these claims accrued on or after May 19,1989, when City Federal foreclosed on Hart’s home.

Nimmicks argue that Hart’s counterclaims are barred by the doctrine of collateral estoppel, which the Nimmicks claim arose as a result of the November 7, 1988, District Court order in cause No. 66726.

That argument fails because of the timing of the events. A judgment can bar claims in existence at the time the judgment was entered, but it cannot bar claims that arise after its entry. Here, Hart’s two counterclaims arose after the foreclosure sale in May, 1989. These counterclaims accrued after the November 7, 1988 District Court order, and therefore this order could not have preclusive effect on Hart’s counterclaims.

The District Court’s order does not address Hart’s counterclaims of tortious interference with business relationships and loss of his house. After reviewing the record, we find little evidence to support these counterclaims. Nevertheless, they are not barred by the District Court’s November 7, 1988 order and the District Court on remand should entertain Hart’s counterclaims. However, unless Hart produces evidence in support of his claims, Rule 11 sanctions should be considered by the District Court.

Accordingly, we affirm the District Court’s summary judgment orders, with the exception of Hart’s two counterclaims. Taylor and Nimmicks are entitled to an award of attorney fees and costs including those incurred on appeal.

Fees and costs on Hart’s counterclaims shall be decided separately.

CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, WEBER and HUNT concur.


text:
    LA RUE SMITH, Plaintiff and Appellant, v. CLIFFORD FLADSTOL and NANCY FLADSTOL, Husband and Wife, Defendants and Respondents.
    No. 90-474.
    Submitted on briefs Feb. 14, 1991.
    Decided Mar. 21, 1991.
    248 Mont. 18.
    807 P.2d 1361.
    La Rue Smith, Great Falls, pro se.
    Mark Bauer, Great Falls, for defendants and respondents.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

La Rue Smith appeals from a judgment entered in the District Court, Eighth Judicial District, Cascade County, denying attorney fees and costs. We affirm the District Court.

The dispositive issue in this case is whether substantial evidence existed to support the District Court’s finding that attorney Smith was engaged to perform limited duties and was paid in full for those services.

Kespondent Nancy Fladstol contacted Smith by telephone on December 17,1986 about retaining Smith as her attorney. An appointment was scheduled for the following day. Mrs. Fladstol informed Smith of pending proceedings to revoke the custodial rights of the Fladstols in their grandson, Louis Jackson. The action to set aside the custody decree was initiated by Kevin Douglas Hall, the father of the child and the son of Nancy Fladstol. Mrs. Fladstol requested Smith to represent her at a scheduled meeting with her son and his attorney.

Smith agreed to accompany Mrs. Fladstol to the December 22,1986 meeting in the offices of Kevin Douglas Hall’s attorney. Pursuant to his representation of Fladstol, Smith accepted a $75 retainer fee.

What transpired at the December 22 meeting is at issue. Smith contends that Hall admitted his affidavit regarding his mother’s incompetence as a custodial parent was false, and that a stipulation to that effect would be prepared. Fladstol, Hall, and his attorney deny any such statement or agreement. Fladstol asserts that the agreement reached at the meeting was to allow transfer of the custody of Louis to his father, and that Hall’s attorney would prepare documentation to that effect. Fladstol testified that she assumed the agreement would resolve all differences between the parties and that no further work would need to be done.

The record shows that Smith refused to enter into any stipulation. Smith continued to prepare documents and do research on behalf of the Fladstols until he was discharged by Mrs. Fladstol on December 29, 1986, for his refusal to sign the stipulation prepared by Hall’s attorney.

Smith initiated suit for fees and costs, and a trial de novo took place on January 2, 1990. The trial court found Smith had been retained as counsel up to and including the December 22,1986 meeting, that he had been fully compensated for his work to that time, and that all other work was unnecessary to the proper representation of Fladstols’ interest in the matter. Accordingly, the court enteredjudgmentin favor of Fladstols, including costs. This appeal ensued.

It is a well-established rule in Montana that the attorney/client relationship is one of agency. Clinton v. Miller (1951), 124 Mont. 463, 226 P.2d 487. It is the lawyer’s role to advocate the client’s interest. In re Marriage of Rolfe (1985), 216 Mont. 39, 699 P.2d 79. Contrary to Smith’s assertions, the record shows that the parties agreed to enter into a stipulation, and thereby avoid prolonging the proceedings. Hall’s attorney testified that:

‘The gist of the conversation was about changing custody from grandma to son at that time. How it was to be done was discussed. I told them I had done it before by stipulation by agreement between the parties. There was discussion in regards to a little bit that there would still have to be a hearing because we still had one other party that was concerned." The essence of the end of the meeting was that I was to draft the document, have it ready, submit it to La Rue, and I would review it. And when we left the meeting it was my understanding that we had reached an agreement. That is between these Parties, all issues had been settled.”

Hall testified similarly:

"Q: What was the ultimate outcome of the meeting on December 22nd in your attorney’s office?
“A: The ultimate outcome was is that she agreed to sign a stipulation stating that she would not contest the custody of Louis being transferred over to me is what I believe.”

The direct evidence of one witness is sufficient for proof of any fact. Section 26-1-301, MCA. Here we have the testimony of several witnesses that the issues had been settled at the meeting. There was substantial evidence before the court that the continuing actions by Smith were unnecessary after the meeting was conducted, and we will not disturb the District Court’s finding absent a showing of clear error. Rule 52(a), M.R.Civ.P.

There was also substantial evidence to support the amount of attorney fees awarded. It was 'undisputed that defendants had agreed to pay plaintiff $35 per hour for his services. Following the December 22 meeting, plaintiff was paid $75. There was no evidence offered to prove that based upon the amount of time spent on plaintiff’s behalf that amount was inadequate as of that date.

For these reasons, the judgment of the District Court is affirmed.

CHIEF JUSTICE TURNAGE and JUSTICES WEBER, HUNT and McDONOUGH concur.