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Harmon v. Fink

Supreme Court of Montana

January 2, 2019

CHRISTOPHER HARMON and REBEKAH HARMON, Plaintiffs and Appellees,
BARBARA A. FINK, an individual, and FREDERICK M. ADOLF, an individual; John Does 1 through 10, inclusive of any or all persons, known or unknown, claiming or who might claim any right, title estate, or interest in or lien or encumbrance upon the real property described in the Complaint adverse to Plaintiffs' ownership or any cloud upon Plaintiffs' title, whether such claim or possible claim be present or contingent, including the person or persons in possession if the Plaintiffs are not in possession, Defendants, BARBARA A. FINK, an individual, Defendant and Appellant.

          Submitted on Briefs: November 14, 2018

          District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV 16-266 Honorable Jeffrey H. Langton, Presiding Judge.

          For Appellant: Barbara A. Fink, Self-Represented, Hamilton, Montana.

          For Appellees: Alex Beal, Law Offices of Alex Beal, PLLC, Missoula, Montana.



         ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court's quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports.

         ¶2 Barbara A. Fink (Fink) appeals from an order of the Twenty-First Judicial District Court, Ravalli County, granting Christopher and Rebekah Harmon (the Harmons) summary judgment. We affirm.

         ¶3 The facts of this case are undisputed. Fink owned a parcel of land, Lot 24, in Hamilton, Montana, on which she lived in a home with a well. In 2007, Fink subdivided Lot 24 into two parcels-Tract 24A and Tract 24B. She recorded the subdivision. Fink's residence and well were located on Tract 24B; Tract 24A remained undeveloped with no water source. Fink subsequently obtained a trust indenture on Tract 24B (Trust Indenture) by conveying a deed of trust to a bank, which was recorded in June 2007.

         ¶4 A few years later, Fink obtained approval to re-aggregate the two parcels. In September 2009, Fink recorded the re-aggregation, recreating the original Lot 24. Fink then subdivided Lot 24 again, creating two parcels-Tract 24-A-1 and Tract 24-B-1- with boundaries identical to the former Tract 24A and Tract 24B. She recorded the subdivision in April 2010. Fink's residence and well remained on Tract 24-B-1. A month later, in March 2010, Fink executed a quit-claim deed transferring all of her interest in Tract 24-A-1-the undeveloped parcel-to her father, Frederick Adolf (Adolf). Fink recorded the deed in April 2010.

         ¶5 Beginning in May 2010, Fink stopped paying the Trust Indenture on Tract 24-B-1. Later that year, the successor trustee of the Trust Indenture filed a notice of trustee's sale, providing notice that Fink defaulted and scheduling a trustee's sale of Tract 24-B-1 for February 10, 2011. Just before the scheduled trustee's sale, Fink (the owner of Tract 24-B-1) and Adolf (the owner of Tract 24-A-1) executed an Easement Agreement. In the Easement Agreement, Fink and Adolf agreed to modify Tract 24-B-1's well system to provide water for both Tract 24-B-1 and Tract 24-A-1. Fink recorded the Easement Agreement on February 9, 2011, one day before the scheduled trustee's sale.

         ¶6 The trustee cancelled Tract 24-B-1's February 10, 2011 sale and thereafter rescheduled the sale multiple times while Fink attempted to refinance the property. In the summer of 2011, Adolf constructed a small cabin on Tract 24-A-1 and, pursuant to the Easement Agreement, connected the structure to Tract 24-B-1's well. The successor trustee eventually rescheduled the trustee's sale a fourth and final time, setting it to occur on June 21, 2012. The successor trustee notified Fink of the sale but did not notify Adolf. The Federal National Mortgage Association (Fannie Mae) purchased Tract 24-B-1 at the trustee's sale, foreclosing the Trust Indenture. In December 2012, the Harmons purchased Tract 24-B-1 from Fannie Mae. In 2013, Adolf quit-claimed a 1% interest in Tract 24-A-1 back to Fink, making Adolf a 99% owner and Fink a 1% owner.

         ¶7 In July 2016, the Harmons filed a complaint against Fink and Adolf in District Court, asking the court to declare the Easement Agreement unenforceable. After Fink and Adolf answered the Harmons' complaint, both sides filed motions for summary judgment. The District Court ultimately granted the Harmons' motion for summary judgment, finding that the June 21, 2012 trustee's sale of Tract 24-B-1 extinguished the Easement Agreement because the Easement Agreement, a junior easement, was subject to extinguishment through foreclosure of the Trust Indenture, a senior mortgage. See § 70-21-302, MCA; Terry L. Bell Generations Trust v. Flathead Bank of Bigfork, 2013 MT 152, ¶ 12, 370 Mont. 342, 302 P.3d 390. Fink appeals, contending the trustee did not provide adequate notice of the trustee's sale, and accordingly, the sale could not have extinguished the junior Easement Agreement.

         ¶8 We review a district court's grant of summary judgment de novo, applying the same standard as the district court. Knucklehead Land Co. v. Accutitle, Inc., 2007 MT 301, ¶ 10, 340 Mont. 62, 172 P.3d 116. The court should grant summary judgment when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3).

         ¶9 The Legislature enacted the Small Tract Financing Act of Montana, §§ 71-1-301 to -321, MCA (the Act), to ease financing restrictions on small tracts of real property. Section 71-1-302, MCA. The Act struck a compromise between lenders (trustees) and borrowers (grantors) whereby the grantors gave up their rights to possession and redemption while the trustees gave up their right to deficiency judgment upon default. Knucklehead, ¶ 13 (citing First State Bank of Forsyth v. Chunkapura, 226 Mont. 54, 57, 734 P.2d 1203, 1205 (1987)). ...

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