Bergum v. Musselshell Cnty.

382 Mont. 322

367 P.3d 353

2016 MT 47

Barbara Brown BERGUM, Richard Brown, Jeannette Studer, Caroline Y. Houston, Kathy F. Arnoux, Ethel Gentry, Plaintiffs and Appellants,

v.MUSSELSHELL COUNTY, a quasi-municipal corporation; and the assignees, and creditors of the above named entity; and all other Unknown persons claiming, or who might claim any right, title estate or interest in, or lien or encumbrance upon, the real property described in the complaint, or any thereof, adverse to plaintiffs' ownership, or any cloud upon plaintiffs' title thereto, whether such claim or possible claim be present or contingent, including any claim or possible claim of dower, inchoate or accrued, Defendants, Appellees and Cross–Appellants.

No. DA 15–0328.

Supreme Court of Montana.

Submitted on Briefs Jan. 20, 2016.

Decided March 1, 2016.

For Appellants: Jacquelyn M. Hughes, Hughes Law PLLC, Billings, Montana.

For Appellees and Cross–Appellants: R. Allan Payne, Marc G. Buyske, LL.M., Doney Crowley P.C., Helena, Montana.

Justice LAURIE McKINNON delivered the Opinion of the Court.

¶ 1 Barbara Brown Bergum, Richard Brown, Jeannette Studer, Caroline Y. Houston, Kathy F. Arnoux, and Ethel Gentry (collectively Bergum) filed this action to quiet title in the Fourteenth Judicial District Court, Musselshell County, against Musselshell County. Both parties moved for summary judgment. The District Court granted judgment in favor of Musselshell County. Bergum appeals. Musselshell County cross-appeals from an order regarding attorney fees and costs. We affirm.

¶ 2 Bergum and Musselshell County raise several issues on appeal.

We conclude the following issues are determinative:

1. Did the District court err in concluding that the statute of limitations in § 2214, RCM (1935), barred Bergum's quiet title action?

2. Did the District Court err in denying Musselshell County its attorney fees under § 25–7–105, MCA ?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 3 The controversy in this case centers on the disputed ownership of subsurface mineral rights to coal-rich land located in Musselshell County (Subject Real Property).¹ The Subject Real Property has a lengthy and intricate history of ownership. Beginning in 1873, the United States Congress approved appropriations of vacant coal lands of up to 160 acres, provided the applicant was at least twenty one years old, a United States citizen, and paid $10 per acre.² In 1908, both Lincoln Wescott and Annie Wescott received patents for adjacent parcels of 160 and 160.58 acres, for which they paid $1,600 and $1,605.80 respectively. Also in 1908, Lincoln Wescott conveyed his patented 160 acres to Annie Wescott. This combined 320.58 acres comprises the Subject Real Property.

¶ 4 In 1935, Annie Wescott, now Annie Owen, conveyed the Subject Real Property to Charles Wilson. In 1936, county-assessed taxes on the Subject Real Property were not paid and the County Assessor listed the taxes as delinquent. The taxes remained delinquent until 1941 when Charles Wilson payed a portion of the taxes owed and redeemed the property. Critically, the Certificate of Redemption of Property Sold for Taxes, dated March 5, 1941, describes the Subject Real Property Charles Wilson redeemed and states "surface rights only." From this point, the Subject Real Property's subsurface rights (Subsurface Rights) and surface rights (Surface Rights) are severed. On the same day Charles Wilson redeemed the "surface rights only," he conveyed his interest in the Subject Real Property and other property to E.K. Woodley and E.C. Woodley.

¶ 5 The Subsurface Rights were not redeemed in 1941. Subsequently, the unredeemed portion of the original tax delinquency, which began in 1936, remained delinquent until 1945 and was listed under Charles Wilson's name. In 1945, Musselshell County applied for a tax deed. Affidavits of service, filed with both the Musselshell County Clerk and Recorder and the Treasurer's office, verify that the County provided notice of an impending tax sale by publication and registered mail. In 1946, Musselshell County held a tax sale where it purchased the Subsurface Rights for $251.32. The Treasurer of Musselshell County issued a tax deed to Musselshell County on February 5, 1946, for the Subject Real Property "less surface which has been redeemed."

¶ 6 Regarding the Surface Rights after 1941, another tax delinquency occurred in 1945 and was listed under E.K. Woodley's name. Also in 1945, E.K. Woodley and E.C. Woodley conveyed their interest in the Subject Real Property and other property to Francis Brown, Murry Brown, and Jim Brown. Still in 1945, Jim Brown and Murry Brown conveyed their interests to Francis Brown. In 1950, Francis Brown conveyed his interest in the Subject Real Property to Roy Gentry and Ethel Gentry. In this conveyance, Francis Brown attempted to retain a fifty percent mineral interest in the Subject Real Property (Mineral Right of Entry).

¶ 7 In 1955, Roy Gentry and Ethel Gentry filed an action to quiet title to the Subject Real Property. The title was quieted in their favor by decree recorded on January 6, 1956, but an exception was listed for Musselshell County's interest in the Subsurface Rights. The decree stated Roy Gentry and Ethel Gentry "are entitled to a decree of this Court quieting title as to said real estate" except for "the interest of Musselshell County, Montana, in and to the minerals, including coal, pertaining to the [Subject Real Property], together with a right of entry on said lands." Francis Brown, who claimed to have maintained a Mineral Right of Entry in the Subject Real Property, was not named as a party in this quiet title proceeding.

¶ 8 Finally, in 2007, Bergum initiated an action against Musselshell County to quiet title to the Subject Real Property as successor in interest to the Mineral Right of Entry Francis Brown purportedly retained when he transferred the Subject Real Property in 1950. Musselshell County and Bergum filed competing motions for summary judgment in 2012. On October, 3, 2012, the District Court held a hearing on the parties' respective motions for summary judgment. Over two years later, on December 19, 2014, the District Court granted Musselshell County's motion for summary judgment. On April 13, 2015, the District Court entered an order awarding costs, but not attorney fees. On April 28, 2015, the District Court entered its judgment in favor of Musselshell County from which Bergum appeals. Musselshell County cross-appeals from the District Court's order regarding attorney fees and costs.

STANDARD OF REVIEW

¶ 9 A district court's grant of summary judgment is reviewed de novo. Omimex Can., Ltd. v. State, 2015 MT 102, ¶ 11, 378 Mont. 490, 346 P.3d 1125 (citation omitted). Summary judgment is appropriate where there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). "We review a district court's conclusions of law for correctness." Kiser v. Kiser, 2015 MT 315, ¶ 7, 381 Mont. 368, 360 P.3d 1139 (citation omitted)

¶ 10 If legal authority exists for a district court to award attorney fees, then a district court's grant or denial of attorney fees is a discretionary ruling which we review for abuse of discretion. Swapinski v. Lincoln Cnty., 2015 MT 275, ¶ 8, 381 Mont. 138, 357 P.3d 329 (citation omitted).

DISCUSSION

¶ 11 1. Did the District court err in concluding that the statute of limitations in § 2214, RCM (1935), barred Bergum's quiet title action?

¶ 12 At the District Court level, Bergum challenged the sufficiency of the tax deed procedure used by Musselshell County to purchase the Subject Real Property's Subsurface Rights in 1946. The District Court, in its order granting Musselshell County summary judgment, concluded that "[e]ven if a problem existed with respect to Musselshell County's tax deed procedure, the statute of limitations set forth in R.C.M. (1935) Section 2214 bars any claim by [Bergum] based on such problem(s)."

¶ 13 Bergum argues the District Court erred in applying § 2214, RCM (1935), to conclude her quiet title action was barred. Bergum claims that § 2214, RCM (1935), by its own language, does not apply for two alternative reasons; either because 1) "no taxes were delinquent on said lands" or 2) "redemption had been made from said tax sale." Section 2214, RCM (1935). Essentially, Bergum argues the taxes assessed on the Subject Real Property were unconstitutional and, because they were never legally assessed, could never have become delinquent. Alternatively, Bergum argues that allowing a taxpayer to redeem only a portion of tax-delinquent property is unconstitutional and, therefore, asserts that Charles Wilson's redemption of the property in 1941 effectively redeemed the entire Subject Real Property, not just the "surface rights only." Under either alternative, Bergum maintains that § 2214, RCM (1935), does not apply or bar her quiet title action.

¶ 14 In response, Musselshell County argues § 2214, RCM (1935), applies and bars Bergum's action because the taxes assessed on the Subject Real Property were constitutional at the time they were assessed under Article 12, Section 3, of the 1889 Montana Constitution, which required mining claims be taxed. Further, Musselshell County points to § 2211, RCM (1935), entitled " Redemption from tax sales—piecemeal redemption" as support for its proposition that piecemeal redemption was constitutional and statutorily authorized. The District Court agreed with Musselshell County and concluded § 2214, RCM (1935), barred Bergum's current quiet title action. We agree with the District Court and Musselshell County.

¶ 15 The law applicable at the time the taxes were assessed and the sale occurred must be used to determine the validity of the taxes and the procedure used. See Fariss v. Anaconda Copper Mining Co., 31 F.Supp. 571, 576 (D.Mont.1940) ; King v. Rosebud Cnty., 193 Mont. 268, 275, 631 P.2d 711, 715 (1981) (The court looked to statutes in force in 1939 to...