Flagstone Development, LLC et al v. Joyner et al

Filing 113

ORDER denying 68 Defendant American Title & Escrow's Motion for Partial Summary Judgment. Signed by Judge Richard F. Cebull on 8/16/2010. (EMA) Modified on 8/16/2010 to indicate a copy mailed to Wayne Marchwick (ACL, ).

IN THE UNITED STATES DISTRICT COURT FO R THE DISTRICT OF MONTANA B ILLIN G S DIVISION FLA G S T O N E DEVELOPMENT, LLC, an A riz o na limited liability company, and LA W R E N C E A. HEATH, P la intiffs , -vs ORDER W A Y N E JOYNER, JUSTIN JOYNER, as ind ivid ua ls ; ROCKY MOUNTAIN T IM B E R LA N D S , LLC, a Montana limited lia b ility company, WAYNE M A R C H W IC K , AMERICAN TITLE AND E S C R O W , a Montana corporation, FIRST A M E R IC A N TITLE COMPANY, a C a lifo rnia corporation, DEVELOPER FIN A N C E CORPORATION, a M a s s a c hus e tts corporation, NICHOLAS P O W E R S , III, a/k/a NICHOLAS D. P O W E R S , JAKE KORELL, LANDMARK O F BILLINGS, INC., a Montana c o rp o ra tio n, JON USSIN, U BAR S REAL E S T A T E , a Montana corporation, and J O H N DOES 11 through 30, D e fe nd a nts . C a us e No. CV-08-100-BLG-RFC

Currently pending before the Court is a Motion for Summary Judgment by D e fe nd a nts American Title and Escrow, seeking an order dismissing Plaintiffs'

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request for specific performance of the Buy-Sell Agreement between Plaintiffs and D e fe nd a nt Rocky Mountain Timberlands, LLC (RMT) to the extent the real p ro p e rty subject to the Buy-Sell Agreement has been sold to bona fide purchasers. Defendants Wayne Joyner, Justin Joyner, Rocky Mountain Timberlands, LLC, Jon U s s in, and U Bar S Real Estate join in the Motion for Summary Judgment. Plaintiffs oppose said motion. U N D I S P U T E D MATERIAL FACTS P la intiffs entered into a Buy-Sell Agreement (and addendums) with Rocky M o unta in Timberlands in 2007 for the purchase and sale of real property located in M us s e ls he ll County, Montana. Subsequently, in April 2008, Rocky Mountain T imb e rla nd s sold a majority of the real property to Defendant Nicholas D. Powers. Rocky Mountain Timberlands executed a Warranty Deed to transfer the real p ro p e rty to Nicholas Powers. The Warranty Deed was recorded on April 4, 2008 in M us s e ls he ll County. Also on April 8, 2008, a Warranty Deed was recorded in M us s e ls he ll County to transfer a portion of the real property from Rocky Mountain T imb e rla nd to M. Gene and Shirley D. Messer. (The portion of the property that w a s transferred to Nicholas Powers and the Messers will hereinafter be collectively re fe rre d to as the "Real Property.")

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Nicholas Powers subsequently transferred his interest in the Real Property to third parties via Warranty Deeds, all which were executed and recorded between O c to b e r 2, 2008, and May 5, 2009. Some of these transferees sold their interests in the Real Property to other third party purchasers. O n February 2, 2010, after all of the aforementioned transfers to third party p urc ha s e rs , Plaintiffs filed a Lis Pendens with the Musselshell County Clerk and R e c o rd e r and the Musselshell County Clerk, describing the Real Property and s ta ting that a suit had been commenced. Plaintiffs later filed a Partial Release of the Lis Pendens on a portion of the Real Property, stating they were waiving their re q ue s t for specific performance as to the portions of the Real Property released. S T A N D A R D OF REVIEW S umma ry judgment is proper when "the pleadings, the discovery and d is c lo s ure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). An issue is "genuine" only if there is a sufficient evidentiary b a s is on which a reasonable fact finder could find for the nonmoving party and a d is p ute is "material" only if it could affect the outcome of the suit under the go ve rning law. Anderson, v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

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The party moving for summary judgment has the initial burden of showing the a b s e nc e of a genuine issue of material fact. Anderson, 477 U.S. at 256-57. Once the moving party has done so, the burden shifts to the opposing party to set forth s p e c ific facts showing there is a genuine issue for trial. In re Barboza, 545 F.3d 7 0 2 , 707 (9th Cir. 2008). The nonmoving party "may not rely on denials in the p le a d ings but must produce specific evidence, through affidavits or admissible d is c o ve ry material, to show that the dispute exists." Id. O n summary judgment, the evidence must be viewed in the light most fa vo ra b le to the non-moving party. Id. The court should not weigh the evidence a nd determine the truth of the matter, but determine whether there is a genuine issue fo r trial. Anderson, 477 U.S. at 249. ANALYSIS D e fe nd a nt first argues that Plaintiffs are not entitled to specific performance in this action because the Real Property has already been sold by Powers to s ub s e q ue nt third-party purchasers, which makes it impossible for RMT to s p e c ific a lly perform the Buy-Sell Agreement. Specific performance is an equitable remedy which requires actual p e rfo rma nc e of a contract, pursuant to the contract's terms and conditions. Double A A Corp. v. Newland & Co., 905 P.2d 138, 273 Mont. 486 (1995). Generally,
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purchasers who enter into a buy-sell agreement and are willing to perform the a gre e me nt pursuant to its terms and conditions are entitled to the remedy of specific p e rfo rma nc e . Smith v. Johnson, 798 P.2d 106, 245 Mont. 137 (1990), citing Mont. C o d e Ann. § 27-1-412. Exceptions to specific performance include: an obligation to render personal s e rvic e or to employ another therein; an agreement to marry or live with another; an a gre e me nt to perform an act which the party has not power to perform lawfully w he n required to do so; an agreement to procure the act or consent of the spouse of the contracting party or of any other third person; or an agreement the terms of w hic h are not sufficiently certain to make the precise act which is to be done clearly a s c e rta ina b le . Mont. Code Ann. § 27-1-412. Defendant argues that the specific performance in this case falls into the c a te go ry of "an agreement to perform an act which the party has not power to p e rfo rm lawfully when required to do so." Mont. Code Ann. § 27-1-412(3). Defendant asserts this argument based upon the fact that the Real Property has been s o ld to third-party purchasers. Granting summary judgment in favor of Defendants at this stage would be the e q uiva le nt of ruling that specific performance cannot occur in part. If specific p e rfo rma nc e is denied as to part of the performance that is due, it may nevertheless
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be granted as to the remainder. Restatement (Second) of Contracts § 358(2) (1981). There are times when the requirements are met for specific performance of part of the performance due from the party in breach, but the remaining part of the p e rfo rma nc e has become impracticable or is otherwise of such a character as to p re c lud e such relief. A Court may properly issue an order as to the first part, to ge the r with any compensation that is appropriate for non-performance of the s e c o nd part. Restatement (Second) of Contracts § 358 cmt. b. "Whenever the seller is unable to convey all that he agreed to, the buyer is e ntitle d , as a matter of right in all cases, to specific performance of whatever interest the seller has, if he will pay the full contract price." Torelle v. Templeman, 94 M o nt. 149, 21 P.2d 60. 5 Pomeroy's Equity Jurisprudence (2d Ed.) § 2256; W illia m s v. Kilpatrick, 195 Ala. 563, 70 So. 742; Anderson v. Kennedy, 51 Mich. 4 6 7 , 16 N. W. 816; Stromme v. Rieck, 107 Minn. 177, 119 N. W. 948, 131 Am. St. R e p . 452; Millard v. Martin, 28 R. I. 494, 68 A. 420. P la intiffs assert that RMT still has titles to some parcels and specific p e rfo rma nc e as to those parcels could be ordered. According to Plaintiffs, the p ub lic record shows that property east of Highway 87 (approximately 2200 acres) s till belongs to RMT and RMT could conceivably be ordered to convey those

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parcels via specific performance. Therefore, Defendant's Motion for Summary J ud gme nt (doc. #68) is DENIED. DATED this 16th day of August, 2010. /s / Richard F. Cebull____________ R IC H A R D F. CEBULL U .S . DISTRICT COURT JUDGE

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