Braach v. Missoula County Clerk And , 2013 MT 49N ( 2013 )

February 27 2013
DA 12-0228
IN THE SUPREME COURT OF THE STATE OF MONTANA
2013 MT 49N
ROBERT M. BRAACH and DAWN BRAACH,
Plaintiffs and Appellees,
v.
MISSOULA COUNTY CLERK AND RECORDER,
Defendant and Appellant.
APPEAL FROM: District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DV 11-830
Honorable Edward P. McLean, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Fred R. VanValkenburg, Missoula County Attorney; Martha E. McClain,
Chief Civil Deputy County Attorney; D. James McCubbin, Deputy
County Attorney; Missoula, Montana
For Appellee:
Colleen M. Dowdall, Worden Thane P.C., Missoula, Montana
Submitted on Briefs: December 19, 2012
Decided: February 26, 2013
Filed:
__________________________________________
Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d), 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 Missoula County appeals from the District Court’s Findings of Fact, Conclusions of
Law and Order, filed February 22, 2012. We affirm.
¶3 In 1997 Robert and Dawn Braach bought a house on a tract of land in Missoula
County, described in a deed recorded by Missoula County as Lot 16 of U. S. Government
Survey No. 2, Sec. 30, Twp. 13 N., R. 19 W. During 2000 they obtained approval from
Missoula County for a “subdivision for lease or rent” allowing them to build a rental unit on
the property.1 In November 2001 the Braachs applied for and obtained approval from
Missoula County to use a portion of their property as security for a construction loan to build
the rental unit, as provided by § 76-3-201, MCA (2001). In January 2002 the Braachs had
the property surveyed at the request of the lender and filed certificate of survey (COS) 5235
with Missoula County.2 COS 5235 depicted the Braachs’ entire lot, but separately depicted
“Tract 1” as the portion of the property surveyed for mortgage security. The remaining
portion of the Braachs’ property that was not intended for use as mortgage security is
referred to as the remainder. Before they could build a rental house on Tract 1 Robert
Braach became seriously ill with cancer and the project was postponed until 2005.
1
The details of this rental subdivision are not clear and no documents covering it appear in the District Court record.
2
¶4 In 2005 the Braachs formed a joint venture with a house builder, transferred an
interest in Tract 1 to the builder by quitclaim deed, and recorded the deed with Missoula
County. The joint venture borrowed money using Tract 1 as collateral, and recorded the
construction mortgage with Missoula County. The joint venture built the house on Tract 1,
and the Braachs sold the house and Tract 1 to third parties in 2006. The joint venture house
was deeded to the buyers as Tract 1 of COS 5235, and Missoula County recorded the deed.
Missoula County had separately taxed Tract 1 and the remainder since the Braachs recorded
COS 5235. After the 2006 sale of Tract 1, the County separately billed the new owners for
the property taxes on Tract 1 and the Braachs for the taxes on the remainder property.
¶5 In 2011 the Braachs decided to sell their house on the remainder portion of their
property, and accepted an offer from a purchaser. The Braachs engaged a title insurance
company, which questioned whether Missoula County would allow the sale of the property.
The Missoula County Attorney’s office advised the County Clerk and Recorder to not record
a deed attempting to transfer any portion of COS 5235. Missoula County took the position
that the Braachs’ remainder property shown in COS 5235 was not an independent tract of
land, but that it would allow a deed to be recorded if the Braachs obtained a court order. The
Braachs negotiated with the prospective buyers for an extension of the closing of the sale
until June 30, 2011.
¶6 On June 27, 2011, the Braachs obtained a writ of mandamus from the District Court
ordering Missoula County to record the deed to consummate the property sale. On June 30,
2
A certificate of survey is a drawing of a field survey prepared by a registered surveyor for the purpose of disclosing
facts pertaining to boundary locations. Section 76-3-103(1), MCA.
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2011, the County moved the District Court to conduct further proceedings and to allow it to
respond to the Braachs’ application for the writ of mandamus. The District Court received
motions and briefs and conducted an evidentiary hearing on December 6, 2011.
¶7 Pursuant to the writ the Braachs recorded a deed transferring the property from Robert
Braach and Dawn Braach to Dawn Braach. The County took the position that the writ
applied only to that transaction; that no further deeds would be recorded concerning either
Tract 1 or the remainder depicted on COS 5235; and that the County would require a court
order prior to recording any other deed. The potential buyers were told that if they bought
the Braachs’ property they could not later sell it without a court order, and the sale of the
remainder portion of the property did not take place. The County did not require review
under the Subdivision and Platting Act and did not require any survey. The County’s only
express requirement was that a court had to approve the recording of any deed transferring
any of the property depicted on COS 5235.
¶8 Prior to the December 2011 hearing, Missoula County requested that Braachs’
attorney withdraw from the case based upon an asserted conflict of interest because she once
worked as a Deputy Missoula County Attorney. The Braachs’ attorney declined to withdraw
and responded with an analysis of her position. In October 2012 Missoula County filed a
complaint against the Braachs’ attorney with the Office of Disciplinary Counsel (ODC),
raising the issue of the perceived conflict. The County subsequently filed its ODC complaint
and other related papers as an exhibit in District Court in opposition to the Braachs’ request
for attorney fees.
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¶9 On February 22, 2012, the District Court issued its Findings of Fact, Conclusions of
Law and Order, granting the Braachs’ motion to enforce the June 27, 2011, writ of
mandamus, granting their request for attorney fees, and granting sanctions in favor of the
Braachs. Missoula County appeals, raising a number of issues.
¶10 The County argues that the District Court erred in issuing the initial writ without first
allowing the County a chance to respond. When the District Court issued the initial writ, the
closing on the Braachs’ sale of the property was only a couple of days away and had already
been postponed because of the County’s refusal to record the deed. The County’s position
was that the Braachs could record a deed only if they obtained a court order, and this is
exactly what the Braachs did. Because of the impending closing, which had already been
extended, this situation could not have been addressed without prompt action by the Braachs
and by the District Court. In addition, the District Court subsequently granted the County’s
motion to conduct further proceedings, considered briefs and motions, and held an
evidentiary hearing. The District Court found that there were no specific requirements for
the type or duration of notice prior to a writ of mandate, and that a district court has
discretion regarding the amount of notice to be given of an application for a writ of
mandamus. Section 27-26-202, MCA.
¶11 The District Court acted within its discretion to issue the initial writ and any
procedural prejudice to the County, which does not appear in the record, was addressed by
the subsequent proceedings. There is no effective relief that can now be granted based upon
the County’s allegations of deficient notice and opportunity to be heard, and the issue
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appears to be moot. Mills v. Alta Vista Ranch, 2008 MT 214, ¶ 22, 344 Mont. 212, 187 P.3d
627.
¶12 The County argues that the District Court erred in issuing the writ because the County
lacked a clear legal duty to record the Braachs’ documents. Mandamus is available when the
applicant is entitled to performance of a clear legal duty and has no adequate remedy in the
ordinary course of law. Section 27-26-102, MCA; Jefferson Co. v. Dept. of Enviro. Quality,
2011 MT 265, ¶¶ 16, 21, 362 Mont. 311, 264 P.3d 715. Even where discretion is involved,
where there has been such an abuse of discretion as to amount to no exercise of discretion at
all, mandamus will lie to compel the proper exercise of the official’s powers. Arbitrary or
capricious action constitutes an abuse of discretion. Withers v. Beaverhead County, 218
Mont. 447, 450, 710 P.2d 1339, 1341 (1985).
¶13 A county clerk and recorder is required to record “any instrument . . . authorized by
law to be recorded.” Section 7-4-2617, MCA. In 2002 when the Braachs filed COS 5235
depicting Tract 1, § 76-3-201, MCA (2001), provided that a division of land created to
provide mortgage security was exempted from the requirements of the Subdivision and
Platting Act unless the transaction was undertaken with the purpose of evading that Act.
Missoula County has never determined and does not argue that the Braachs were attempting
to evade the Subdivision and Platting Act.
¶14 The Braachs argue that both Tract 1 and the remainder parcel became “tracts of
record” as defined in § 76-3-103(16), MCA, because they could be identified by documents
on file with the County Clerk and Recorder, in particular the 2002 designation of Tract 1 in
COS 5235 and the 2006 deed conveying Tract 1 from the Braachs to the purchasers of Tract
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1. They further argue that § 76-3-201, MCA (2001), exempted COS 5235 from survey
requirements (even though Tract 1 was surveyed) and from the Subdivision and Platting Act.
The District Court found that the Clerk and Recorder was required to recognize Tract 1 and
the remainder as separate tracts of record and to record the Braachs’ deed for the remainder.
¶15 Section 76-3-201, MCA, was amended effective in October 2003 to provide that a
tract of land created for mortgage security could only be transferred to the entity holding the
security interest. This amendment was not effective in 2002 when the Braachs recorded
COS 5235 creating the mortgage security parcel, Tract 1, but was effective when they
recorded the deed transferring Tract 1 in 2006. The District Court found that prior to the
2003 amendment, Missoula County applied the law to allow the separate transfer of tracts of
land created as mortgage security, whether or not there had been a foreclosure of the
mortgage. Parcels created for mortgage financing were deemed to survive the financing
transaction as separate parcels of land. This interpretation of § 76-3-201, MCA (2001), was
supported by a 1988 opinion of the Montana Attorney General. 42 Op. Atty. Gen. No. 101.
¶16 The District Court determined that under the facts, as a matter of equity Missoula
County was estopped from refusing to allow the Braachs to record the 2011 deed for the
remainder portion of their original property. Missoula County argues that the Braachs did
not establish the elements of estoppel, and that equitable considerations are insufficient to
support a writ of mandamus. The elements of estoppel are well established and require:
(1) the existence of conduct, acts, language, or silence amounting to a
representation or a concealment of a material fact; (2) these facts must be
known to the party estopped at the time of his conduct, or at least the
circumstances must be such that knowledge of them is necessarily imputed to
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him; (3) the truth concerning these facts must be unknown to the other party
claiming the benefit of the estoppel at the time it was acted upon by him; (4)
the conduct must be done with the intention or at least the expectation, that it
will be acted upon by the other party, or under circumstances both natural and
probable that it will be so acted upon; (5) the conduct must be relied upon by
the other party and, thus relying, he must be led to act upon it; and (6) he must
in fact act upon it in such a manner as to change his position for the worse.
Olsen v. Milner, 2012 MT 88, ¶ 32, 364 Mont. 523, 276 P.3d 934. Estoppel has been applied
to governmental entities in Montana. Town of Boulder v. Bullock, 193 Mont. 493, 632 P.2d
716 (1981) (town estopped from requiring owner to remove building that encroached on
town street); Barker v. Town of Stevensville, 164 Mont. 375, 523 P.2d 1388 (1974) (in
mandamus, town was estopped from denying a building permit to applicants).
¶17 The facts in this case sufficiently establish the elements of estoppel. The County
approved the use of a portion of the Braachs’ property as mortgage security in 2001;
recorded COS 5235 in 2002; recorded the deed transferring Tract 1 in 2006; and separately
taxed both parcels of the Braachs’ original property. At no time prior to the prospective sale
of the remainder tract in 2011 did the Braachs know that the County would claim that these
transactions were improper; that the transactions had been affected by a change in the statute
in 2003; or that the County would not recognize the parcels as separate tracts unless required
to do so by a court order. Under these circumstances the County knew or should have
known that the Braachs, the purchasers of Tract 1 and the prospective purchasers of the
remainder of the property would rely upon the County’s apparent legal position and act upon
it. All of them did in fact rely upon the County’s position and actions, to their detriment.
The District Court properly concluded that the County was estopped from refusing to
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recognize the separate tracts shown in COS 5235; was estopped from refusing to record
present or future deeds involving those transactions; and was estopped from requiring a court
order prior to doing so.
¶18 Based upon the facts of this case, Missoula County was estopped from denying that it
had a duty to record deeds involving the Braachs’ present and former property shown in
COS 5235. Under the specific facts of this case the District Court properly concluded that
the County was required to record the deed from the Braachs in 2011 without requiring them
to first obtain a court order, and that the County’s failure to do so supported a writ of
mandamus.
¶19 The County further contends that the District Court improperly awarded attorney fees
to the Braachs. The County’s position was and is that the Braachs or any other person could
record a deed for a sale of any of the property depicted in COS 5235 only upon obtaining a
court order. The Braachs sought a writ of mandamus and obtained an order from the District
Court, in an ultimately futile effort to salvage the 2011 sale of their property.
¶20 A successful applicant for mandamus may recover attorney fees. Newman v. Wittmer,
277 Mont. 1, 11, 917 P.2d 926, 932 (1996); Kadillak v. Montana Dept. State Lands, 198
Mont. 70, 75-76; 643 P.2d 1178, 1182 (1982). The District Court found that the Braachs
were entitled to attorney fees and costs as the prevailing party in a mandamus action. In
addition the District Court found that the County’s act of filing in the District Court’s record
the papers concerning the disciplinary complaint against the Braachs’ attorney was “so
abhorrent in and of itself to justify the awarding of attorney fees and costs.” The District
Court found that the County’s complaint against Ms. Dowdall based upon her former
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employment as a deputy county attorney was a litigation strategy and without merit. The
District Court determined that the Braachs were entitled to fees spent responding to the
County’s complaint. The District Court found that the Braachs had presented competent
expert testimony at the hearing to support their claim for fees and that the fees claimed were
reasonable. The District Court properly exercised its discretion to award attorney fees and
costs to the Braachs.
¶21 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of our
Internal Operating Rules, which provides for memorandum opinions. It is manifest from the
briefs and the record on appeal that sufficient evidence exists to support the findings of fact
below, and the District Court did not abuse its discretion.
¶22 Affirmed.
/S/ MIKE McGRATH
We concur:
/S/ MICHAEL E WHEAT
/S/ PATRICIA COTTER
/S/ BETH BAKER
/S/ JIM RICE
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