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Harrison v. Harrison

Supreme Court of Montana

July 2, 2019

WILLIAM (BILL) D. HARRISON and HARRIET (SHERRIE) A. HARRISON, individually and as husband and wife, Plaintiffs,
v.
THOMAS (TOM) D. HARRISON and KIMBERLY (KIM) HARRISON, husband and wife; and LINCOLN ROAD RV PARK, INC., a Montana corporation, Defendants and Counter-Plaintiffs,
v.
WILLIAM (BILL) D. HARRISON and HARRIET (SHERRIE) A. HARRISON, individually and as husband and wife, Counter-Defendants. And JON BOUSER, KIMBERLY BOUSER, individually and as husband and wife, ERICK BRODSHO, HEATHER BRODSHO, individually and as husband and wife, GORDON BROWN, LYNDEE BROWN, individually and as husband and wife, PAUL CHATRIAND, TAMRAH CHATRIAND, Individually and as husband and wife, KENDALL CUNNINGHAM, ABIGAIL CUNNINGHAM, individually and as husband and wife, REBECCA SMITH EANES, JOSEPH FOWLER, FRANK GONZALEZ, TRACY GONZALEZ, individually and as husband and wife, HEATHER HARRINGTON, ROBERT HOLLIDAY, ZACHARY KOZAK, CHERIE LOFTON, JOSEPH MARINER, RICHARD NEWBY, KRISTEN NEWBY, individually and as husband and wife, ROBIN ROUSE, ALLEN TARYN ROUSE, individually and as husband and wife, IAN STEFFAN, JESSICA STUART, LINDSAY ZELL, EMILIANO CUAUTEMOC ZELL, individually and as husband and wife, GV75, LLC, a limited liability company, Intervenors, Plaintiffs, and Appellees,
v.
THOMAS (TOM) D. HARRISON and KIMBERLY (KIM) HARRISON, husband and wife; Defendants and Appellants, and LINCOLN ROAD RV PARK, INC., a Montana corporation, Defendant and Appellee.

          Submitted on Briefs: April 24, 2019

          APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV 2015-959 Honorable Mike Menahan, Presiding Judge

          For Appellants Palmer A. Hoovestal, Hoovestal Law Firm, PLLC, Helena, Montana

          For Appellees Candace Payne, Candace Payne Law, PLLC, Helena, Montana, Scott Svee, Sean D. Slanger, Jackson, Murdo & Grant, P.C., Helena, Montana

          DIRK SANDEFUR, 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 Thomas D. Harrison and Kimberly Harrison (Tom and Kim) appeal the judgment of the Montana First Judicial District Court ordering them each to remit $25, 000 to Lincoln Road RV Park, Inc. (LRRP) to pay ongoing expenses of the corporation in receivership. We affirm.

         ¶3 LRRP is a closely held Montana business corporation. In 1993, William and Harriet "Sherrie" Harrison (Bill and Sherrie), their son Tom, his wife Kim, and two others chartered LRRP to develop an RV park in or about Helena, Montana.[1] After acquiring the land from Bill and Sherrie without compensation in 1993, LRRP later subdivided and developed it into a 10-acre, 77-space RV park and an adjacent 31-lot residential subdivision (Grand Valley Estates).[2] At all times pertinent, Tom and Kim managed and operated the day-to-day business and affairs of LRRP with the consent of Bill and Sherrie. Bill, Sherrie, Tom, and Kim were the directors of LRRP. For the first 23 years, the LRRP shareholders had an amicable and professional business relationship without significant strife or controversy.

         ¶4 In 2012, advancing in age, Bill and Sherrie sold their ranch in Dillon, Montana and moved to Helena where they built a house in Grand Valley Estates. Bill and Sherrie lived with Tom and Kim for at least five months during the construction of their home. By 2015, Bill and Sherrie were respectively 87 and 82 years old and had been experiencing various health problems. In July 2015, Bill and Sherrie sold their Helena home and moved into a senior living center in Laurel, Montana, in proximity to their daughter, Lee Ann Harrison. Bill and Sherrie subsequently granted powers of attorney to Lee Ann who has since assisted them in the conduct of their personal and business affairs.

         ¶5 As of 2015, LRRP still owned and operated the RV park and owned eight subdivision lots. After Lee Ann began administering their affairs, Bill and Sherrie became aware and concerned about various actual or perceived financial and management problems with LRRP including: (1) delinquent federal taxes and penalties related to corporate business; (2) financial discrepancies or self-dealing; (3) a $91, 455.40 default judgment against LRRP, Bill, and Sherrie;[3] (4) an adverse administrative action and penalty against LRRP by the United States Environmental Protection Agency (EPA);[4] and (5) a brewing dispute with Grand Valley Estates property owners over LRRP's outstanding development obligations under the subdivision plat and covenants. On December 14, 2015, Bill and Sherrie filed a district court complaint against LRRP, Tom, and Kim, asserting various tort claims and claims for corporate accounting, shareholder indemnification, dissolution of the corporation, appointment of a pre-dissolution receiver, preliminary injunctive relief, and punitive damages.

         ¶6 Upon consideration of the complaint, an ex parte motion for a receiver, and supporting affidavits, the District Court found an "immediate danger" that the RV park "assets will be removed . . . or lost, materially injured, destroyed, or unlawfully disposed of." The court accordingly appointed a receiver to "preserve, protect, and liquidate" the assets and business of LRRP including:

the authority to sell all of the real and personal property of [LRRP], to incur and pay when due (to the extent they accrue after the Receiver's appointment) all expenses incurred by [LRRP] in the ordinary course of business, and to make such other payments that the Receiver determines in good faith are necessary or beneficial to the winding down of [LRRP's] business operations and the liquidation of [its] assets.

         The court further temporarily excluded Tom and Kim from the business and ordered the receiver to file monthly reports on the administration of the receivership. The court restricted the receiver from selling or disposing of LRRP assets "outside of the ordinary course of business" without prior court approval.

         ¶7 On January 29, 2016, Tom and Kim filed an amended answer denying the material assertions underlying Bill and Sherrie's claims. They further asserted various affirmative defenses and counterclaims including, inter alia, claims for removal of Bill and Sherrie as LRRP directors, tortious interference with the operation of LRRP, and appointment of a guardian for Bill and Sherrie. On February 19, 2016, based on alleged procedural and substantive deficiencies in her appointment, Tom and Kim filed a motion for termination and discharge of the receiver. On April 19, 2016, a number of Grand ...


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