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Estate of Severson v. Severson

Supreme Court of Montana

June 25, 2019

ESTATE OF ROBERT LESTER SEVERSON, Plaintiff and Appellant,
v.
LYNN SEVERSON, SEVERSON FAMILY MINERAL TRUST, STOCKMAN BANK OF PLENTYWOOD, INC., and DOES 1 through 10, Inclusive, Defendants and Appellees.

          Submitted on Briefs: May 15, 2019 Decided: June 25, 2019

          APPEAL FROM: District Court of the Fifteenth Judicial District, In and For the County of Sheridan, Cause No. DV 17-47 Honorable Katherine M. Bidegaray, Presiding Judge

          For Appellant: Phillip J. DeFelice, Attorney at Law, Saint Marie, Montana

          For Appellees: Laura Christoffersen, Christoffersen & Knierim, P.C., Culbertson, Montana (for Lynn Severson and Severson Family Mineral Trust) William D. Lamdin, III., Dylan D. Crouse, Crowley Fleck, PLLP, Billings, Montana (for Stockman Bank)

          OPINION

          JIM RICE, JUSTICE

         ¶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 The Estate of Robert Severson (Estate) appeals from two orders granting summary judgment to Defendants Lynn Severson (Lynn), the Severson Family Mineral Trust (Mineral Trust), and Stockman Bank of Plentywood, Inc. (Stockman), and from an order granting Rule 11 sanctions, entered by the Montana Fifteenth Judicial District Court, Sheridan County.

         ¶3 Lynn and the decedent of the Estate, Robert Severson (Robert), were brothers. They each provided aid and service to one another during periods of illness throughout their lives. They both owned mineral interests in lands in common pursuant to the creation of the Mineral Trust in 2011 wherein individuals conveyed certain mineral rights to the trust. In 2011 and 2012, the Mineral Trust leased its mineral acreage to oil companies and received income in the form of lease payments. These payments were shared between the beneficiaries of the trust based upon the beneficiary's ownership interest in the trust, after payment of expenses including accounting fees, attorney fees, and other expenses. Robert's share of the income from the Mineral Trust was deposited into accounts owned by him at Stockman in Malta, Montana. Sometime in 2012, Robert added Lynn as a joint owner with rights of survivorship to his accounts at Stockman, which were governed by an account agreement between Lynn, Robert, and Stockman.

         ¶4 The Estate's claims arise out of certain transactions beginning in 2012. In fall 2012, Robert took out a loan with Stockman for $15, 075 at 6% interest, for which Stockman received a promissory note with what was purported to be Robert's signature. Stockman deposited the loan proceeds into Lynn and Robert's joint account on September 17, 2012, which was reflected in an account statement dated October 5, 2012. The loan was repaid on December 19, 2012 from the same account, which was reflected in an account statement dated January 5, 2013. Stockman mailed all the bank account statements to Robert's Saco, Montana, address that he provided in the account agreement. Robert did not report to Stockman any unauthorized transactions associated with the account. Robert died on September 21, 2015.

         ¶5 On December 4, 2017, Robert's Estate initiated the current action, alleging breach of written agreement, breach of constructive trust, conversion, fraud, and breach of fiduciary duty against Lynn and the Mineral Trust, and a tort claim for breach of the covenant of good faith and fair dealing against Stockman. Lynn and the Mineral Trust moved for summary judgment and for imposition of Rule 11 sanctions and attorney fees, which were granted on June 12, 2018; June 14, 2018; and September 19, 2018; respectively. Stockman also moved for summary judgment, which was granted on June 20, 2018. The Estate appeals both summary judgment orders and the imposition of Rule 11 sanctions.

         ¶6 On appeal, the Estate argues there are material issues of fact that prohibited the entry of summary judgment, including: who signed the 2012 loan document with Stockman, whether Robert properly executed the account agreement with Stockman in favor of Lynn, whether Lynn's actions constituted a breach of trust, and when the statute of limitations commenced for the Estate's claims. The Estate argues its claims are not barred by the statute of limitations, and that the District Court erred by granting Rule 11 sanctions with attorney fees against the Estate.

         ¶7 In response, Lynn and the Mineral Trust argue sanctions are appropriate because allegations made by the Estate were meritless, and that the factual disputes asserted by the Estate are not relevant because the statute of limitations bars those claims in any event. Stockman argues the Estate's claim against it is barred under the account agreement between Robert, Lynn, and Stockman, and by the applicable statutes of limitation. Lynn, the Mineral Trust, and Stockman all contend that summary judgment, Rule 11 sanctions, and attorney fees against the Estate were proper.

         Summary Judgment

         ¶8 "We review de novo a district court's grant or denial of summary judgment, applying the same criteria as the district courts." Modroo v. Nationwide Mut. Fire Ins. Co., 2008 MT 275, ¶ 19, 345 Mont. 262, 191 P.3d 389 (citation omitted). "Summary judgment is appropriate 'if the pleadings, depositions, answers to interrogatories, and admissions on file,' together with any affidavits demonstrate that no genuine issue exists as to any material fact and that the party moving for summary judgment is entitled to judgment as a matter of law." Modroo, ΒΆ 19 (citing M. R. Civ. P. 56(c)). "We view the evidence in the light most favorable ...


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