SEBENA v STATE
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NO. 94-218 IN THE SUPREME COURT OF THE STATE OF MONTANA 1994 JOSEPH SEBENA, DANIEL SEBENA and SEBENA PAVING INC a Montana Corp. Plaintiff;, -vSTATE OF MONTANA, et al. Defendants, ROGER JONES. MARLENE JONES, and DONNA WALKER, Cross-Claim Plaintiffs, Appellants, & -vSTATE of MONTANA, Cross-Claim Respondent. APPEAL FROM: Defendant and District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Thomas A. Olson, Judge presiding. COUNSEL OF RECORD: For Appellants: Eula Compton, Missoula, Montana For Respondent: John H. Tarlow, Landoe, Brown, Planalp and Braaksma, Bozeman, Montana: Roy H. Andes, Montana Department 14 Q/ '7 jyyi,. Submitted on Briefs: August 18, 1994 Justice Fred J. Weber delivered the Opinion of the Court. This is an appeal from the grant of summary judgment to the State of Montana by the Eighteenth Judicial Gallatin County. District Court, We affirm. We consider the following issues on appeal: I. Did the District Court err in granting the State's motion for summary judgment on the Joneses' and D. Walker's negligence claim where the judgment was based on the court's legal determination that the State has no duty of care to third parties in the selection of lessees of state lands? II. Did the District Court abuse its discretion in failing to enjoin the State from re-leasing land formerly leased to M & W Enterprises? III. Did the District Court err in granting summary judgment on the Joneses' and D. Walker's quantum meruit claim? The State of Montana owns school trust land located at North 7th Avenue in Bozeman. The land is administered by the Department of State Lands (DSL). DSL leased this tract of land to M & W Enterprises (M & W) for a ten-year period beginning in April of 1989. M & W agreed to pay $3,000 yearly for the purpose of building an amusement park complete with a waterslide area. The DSL lease was signed by Bill Metzger (Metzger) and Lonnie Walker (L. Walker), alleged general partners of M & W Enterprises, a limited partnership. Cross-Claimants in this case are Roger Jones and Marlene Jones (the Joneses) and Donna Walker (D. Walker). The Joneses paid $50,000 to Metzqer and L. Walker and signed 2 an agreement whereby llAdventureland", in connection the with Walker Metzger and L. Adventureland limited began proceed a she receive record ever of & a made in the and had recovered the organized. demonstrate Instead, limited the to proceedings W of both W manner, signed D. with the corporation entities of were called Court general created percent partnership & be in 3.5 that Bankruptcy M to stock made M & during partners W the as the Walker installed the During this Enterprises. of 1989, Metzger improvements to financial the summer of the judgment $85,000. attorney investors the approached lease action representing DSL from Metzger because of surrounded proposal. the in and the property. the 1991 L. of as the Joneses in $55,000 and a D. Bankruptcy Walker Court Joneses amount D. Joneses, and Walker. unresolved DSL this did M not corporation. and The result, time, against and never 1992 DSL at obtained D. Walker, inquiring refused liabilities received the L. Walker time of hearing. An approximately of L. land. problems, 1991, totalling and the organization fraud Metzger not later encounter further does would registered summer non-dischargeable Walker she that the During similar which M to W a agreement as & In the The and was and stated the which land. Bankruptcy waterslide corporation of leased Investments--represented During percent DSL was same entity ten the partners subsequent promised envisioned Walker business. were $35,000 invested the they a and about this that formal other assuming course of already assignment State payment day on lease of rent on in which period the piece ever filed and salvage The the & 1, could Enterprises The 1992. with file DSL a the claim canceled itself against claims. permit the to did procured not a such claims Joneses do this purported in state lease However, the is devoid of nor to were make did cancellation to the the not of & regulatory of #4586 any submitted procedures remove in evidence to DSL for in the following the followed assignment. lease M ever was were assignment interests proposal 60 so. Walker's assignment a improvements L. record non- for provided the No Joneses D. Walker was lease their offered waterslide, and W 1992. of approval, M persons although and DSL to April land Joneses November attempt of and Metzger's that #4586 W's this land for In lease. two 1994, years DSL leased the land for $28,200. This case construction was lien originally foreclosure Enterprises. Sebena sued including State, the and the investors in dismissed as were involved not In count as February cross-claim investors. meruit. The in of State D. Sebena in 1992, the Joneses subsequently moved for in the M a & W the property, creditors the current other parties They action. appeal. and D. Walker seeking to recover summary as other and and Paving lessee, interest this added 4 state Walker, to manner State Sebena Paving parties the a an any against They with Joneses, project. were by against anyone the plaintiff filed a third judgment on filed count all a two- their losses in auantum counts. The District Court granted summary judgment and dismissed the cross- claims. From Did these orders on the Joneses' judgment was based on the care that the State selection no duty of of state of argue Appellants not best such injury alone negligence legal is for claim determination argue that it State the to according can in The leases the DSL Metzger were and L. its duty to lease it has no duty to action. The State liability; there must has breached that that of has the find. a State of the for of in a this create employees State contends State to the parties responsible background not lie. regards State the appellants on the that lessee does to required, been concedes state State, that it lands: exists to be a that legal order for act the prudently the however, favor argues in must third prudence State and not lessee. The the as imposed motion negligence third and respondent persons that to investigating Walker. The State's court's employees its in the the appeal. lands? negligent to Walker D. Walker's lessees of negligence and has Appellants the granting in D. District the with err Court and the where duty Joneses judgment summary land the court State had judgment is material fact granted no summary duty appropriately and the to the granted moving judgment because Joneses when party 5 is or there due it D. is determined Walker. no judgment genuine as a that Summary issue of matter of law. Mogan While v. some parties, the lease M to also listed in W the is First Sec. Bank P.2d received lease of had of of to the conclusion the April of 1992. as provision is parties. parties (1991), 250 the When a this intended. Mont. 148, the that yearly is typed that the provided The provision responsibility Pas if that both that of the District April 1, 1992, We rent. already upon potential 1992, shows in by clearly 1, the record only Vander 973. by 3--the signed P.2d disputed cancellation contract v. 400, 856 are The canceled the parties terminated Appellants imposing not. is the April case paragraph face, Anaconda The the automatically assignment at enforce this Mont. automatic lease its 259 lease payment was not DSL. affirm nonpayment the the expire by We to in are lease on 384. automatically facts that clear has facts automatically signed Court 818 was letters; is Inc. (1993), the shows capital contract of material & record in Cargill, lease been would further in 1992, that result that was a the the ineffective lease of the purported as the cancelled. have us interpret State a duty lessees. While DSL has of as conclude November the State Court to a the ยง 77-6-205(2), public statutory to "duty," MCA, investigate that duty Montana: The board shall accept the highest bid. If the lessee exercises the preference right and believes the bid to be excessive, the lessee may request an administrative hearing. . . .The department shall grant the request for a hearing if it determines that the statement indicates evidence that the bid may not be in the state's best interests. . . . It is the dutv of the board to secure the best lessees possible, so that the state may receive 6 as is the maximum return possible with the occurrinq to the land. (Emphasis added.) Section 77-6-205(2), the State with the MCA. The statutory least obligation injury on Land Board is to secure the maximum return least injury to the land. The statute does to third cites obligation 205 Mont. 282, duty to exercise that they 667 also decision P.2d v. State for the in its unless care prudently. it of handling due reveals Dept. 428, act must Jeppeson Jeppeson that finds the Court decision the not State proposition of that thorough arbitrary (1983), has DSL a not admits reading reverse or any DSL leases. will State create Lands of However, this to part parties. Appellant the a of a DSL capricious: This Court will not disagree with the proposition that the department should act as prudently as possible with But we respect to the handling of lease assignments. find no evidence suggesting even a hint of arbitrary and capricious behavior on the part of respondent or its employees. . . . this Court will not compel a state agency to make a particular decision with respect to a matter when that agency exercises its own judgment and discretion, and has not violated any statutory provisions or engaged in fraudulent action. Jeppeson, contains or 205 no Mont. evidence capriciously We at that when the leased State the that the was canceled on April was no genuine issue of judgment. We hold the conclude it lease there motion for negligence the summary claim where 667 292-293, State District judgment that P.2d acted land is 1, Court judgment 7 M correct 1992. & We its which arbitrarily, that conclude that precluded granted Joneses' based record contention further correctly was The W. in fact the 433. imprudently, to material on at on the summary State's and D. Walker's the court's legal determination that the State has no duty of care to third parties in the selection of lessees of State lands. II Did the District Court abuse its discretion in failing to enjoin the State from re-leasing land formerly leased to M & W Enterprises? The complaint in this action was filed in September of 1991 and the Joneses' February 1, 1992. and D. Walker's cross-claims were filed on The Joneses and D. Walker allege that at sheriff's sale they purchased 100 percent of the issued and outstanding shares of Metzger Real Estate, Inc., and this purchase, along with their prior investments in the M & W partnership, entitles them to an interest in the DSL lease which was still in force in February of 1992. Because of their claimed interest in the lease with DSL, the Joneses and D. Walker petitioned the court for an injunction against DSL to prevent DSL from re-leasing the property until DSL fully compensated persons for the improvements made to the leased property. The Joneses and D. Walker contend that their interest in M & W entitles them to the injunction. They argue that the court should have granted the injunction until such time as the parties had been compensated completely for the improvements to the land that had been made with their money. The State argues that M & W "Investments" is not the party that is the lessee in this case. "Enterprises," DSL leased land to M a different legal entity. 8 & W Further, DSL claims that it provided an opportunity for persons with an interest in the improvements on the land in question to file claims for removal of the improvements. No claims were filed, and as a result, DSL argues that this question of compensation for improvements is moot. The lease signed by Metzger and L. Walker for M & W calls for improvements to be removed within 60 days of the lease cancellation. The record indicates that despite this 60 day limit, DSL informed the appellants' counsel by letter on September 17, 1992, that the Joneses and D. Walker could remove improvements traceable to her clients within 60 days after the date of the letter. Therefore, the record indicates that appellants had seven months within which to remove the improvements or make claims for compensation. No one made an attempt to remove anything from this leased property nor file a claim for compensation. We conclude that the appellants cannot now claim that DSL failed to provide an opportunity for such removal when the record is clear that they had more than the contractually required time in which to remove such improvements or make a claim. Based on these facts, the District Court denied the appellants' request for an injunction stating that no basis existed for such remedy. The grant or denial of an injunction is a discretionary ruling of the court and we will not reverse that ruling absent an abuse of discretion. Mont. 170, 862 P.2d 42. 227 P.2d 70. 261 The party seeking an injunction must prove his right to the injunction. 492, Gabriel v. Wood (1993), Lewis v. Hanson (1951), 124 Mont. The record clearly demonstrates that the State 9 provided more than the contractually required amount of time for interested persons to make a claim upon the improvements and remove the same. We conclude that the plaintiffs failed to prove their right to an injunction. We hold the District Court did not abuse its discretion in denying the issuance of an injunction to stop the State of Montana from re-leasing its land. III Did the District Court err in granting summary judgment on the Joneses' and D. Walker's quantum The Joneses and D. meruit claim? Walker argue that the State has been unjustly enriched at their expense because of the improvements remaining on the leased land and they are, therefore, entitled to restitution by virtue of the theory of quantum meruit. Further, appellants contend that the State has a statutory duty to ensure that the new lessees of the property compensate the parties whose money went to create the improvements to the land. Appellants claim that the State received the benefit of $16,547.99 for improvements directly and also is receiving $28,200 for the same leased property which DSL leased to M & W for $3,000. Unjust enrichment is an equitable doctrine wherein the plaintiff must show some element of misconduct or fault on the part of the defendant or that defendant somehow took advantage of the plaintiff. Randolph v. Peterson, Inc. v. J.R. Simplot (19S9), 239 Mont. 1, 778 P.2d 879. The District Court granted 10 summary judgment to the State because it found no element of fraud or misconduct on the part of the State. Following a careful review of the record, we do not find any indication of misconduct or fault on the part of the bald assertions create no genuine issues of state. Appellants' material fact. The State is entitled to summary judgment as a law. We hold that the District Court did not err in matter of granting summary judgment to the State on the Joneses' and D. Walker's quantum meruit claim. Affirmed. We Concur: / 11 November 7, 1994 CERTIFICATE OF SERVICE I hereby certify that the following certified order was sent by United States mail, prepaid, to the following named: , Eula Compton Attorney At Law ?26 E. Spruce Missoula MT 59802 John H. Tarlow LANDOE, BROWN, PLANALP and BRAAKSMA, P.C. Box One Bozeman MT 59715 Roy H. Andes Montana Department of State Lands 1625 Eleventh Avenue Helena MT 59620 ED SMITH CLERK OF THE! SUPREME COURT STATE OF MONTANA
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