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Ming Da Situ and Pei Shu Zhou v. H. Douglas Smole

February 12, 2013

MING DA SITU AND PEI SHU ZHOU, PLAINTIFFS AND APPELLANTS,
v.
H. DOUGLAS SMOLE, AS SUCCESSOR TRUSTEE OF THE LOIS M. MURPHY REVOCABLE TRUST, DEFENDANT AND APPELLEE.



APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDV-2009-732 Honorable Kathy Seeley, Presiding Judge

The opinion of the court was delivered by: Justice Patricia O. Cotter

Submitted on Briefs: December 19, 2012

Decided: February 12, 2013

Filed:

Clerk

Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Ming Da Situ and Pei Shu Zhou (collectively "Situs") appeal from an order and judgment of the First Judicial District Court, Lewis and Clark County, dismissing Situs' breach of lease claim on statute of limitation grounds and granting judgment in favor of Lois M. Murphy*fn1 (Murphy). We affirm.

ISSUES

¶2 Situs raise the following two issues on appeal:

¶3 1. Did the District Court err in granting Murphy's motion to dismiss in light of Situs' presentation of facts to demonstrate that the statute of limitations had not expired, as well as facts to demonstrate that Murphy should have been estopped from claiming the statute of limitations as a defense?

¶4 2. Did the District Court improperly consider matters outside the pleadings in ruling on Murphy's motion to dismiss, and fail to provide proper notice and an opportunity for the Situs to present all pertinent materials pursuant to a M. R. Civ. P. 56 motion for summary judgment?

FACTUAL AND PROCEDURAL BACKGROUND

¶5 On or about October 14, 1989, the Situs acquired the assets of a restaurant located at 1306 Euclid Avenue, in Helena, Montana. The real property on which the restaurant building was located was and continues to be owned by Murphy. Situs and Murphy entered into a Memorandum of Agreement (the "Lease") dated October 4, 1989, that granted Situs a ten-year lease of Murphy's real property on which the building was situated. The Lease required Situs to make monthly payments of $175 to Murphy. The Lease granted Situs the option to purchase Murphy's real property at the October 3, 1999 expiration of the Lease. The relevant provision of the Lease provided as follows:

IT IS FURTHER AGREED, that at the expiration of the full term of the within lease agreement, [Situs] shall have, and are hereby granted, an option to purchase from [Murphy] the land which is the subject matter of this lease, at a price mutually agreeable to the parties, it being understood and agreed that in the event that the parties hereto find themselves unable to reach agreement as to the fair value of said land (exclusive of improvements other than paving) at the date of exercise of said option, that parties shall hire mutually acceptable independent qualified appraisers at mutual expense, to evaluate said land, and it is understood and agreed that the parties hereto shall accept said appraisal as fully determinative of the purchase price to be paid.

¶6 Situs claimed that they provided written notice to Murphy of their interest in purchasing the property, although the date of such notice was not provided. Situs alleged that Murphy agreed to the appointment of an independent appraiser on September 28, 2000, but Murphy never followed through in procuring an appraisal.

ΒΆ7 Situs continued to pay Murphy $175 per month until April 2008. In April 2008, Murphy sent Situs a written notice that the monthly rental rate would increase to $650 per month beginning May 1, 2008. Situs ignored this notice and continued to pay $175 per month through March 2009. Murphy served Situs with written notice of tenancy termination dated March 31, 2009. The notice demanded unpaid rent in the amount of $5,700, which represented the difference between the $650 monthly payment demanded by Murphy and the $175 monthly payments made by Situs over the course of the preceding year. Situs continued to send ...


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