Opinion
DA 24-0084
11-06-2024
FAYE JACKSON, as Personal Representative of the Estate of Edna Balkoski, Plaintiff and Appellant, v. STEVEN J. BALKOSKI, an individual, Defendant and Appellee.
ORDER
Appellant Faye Jackson, as Personal Representative of the Estate of Edna Balkoski, has petitioned for rehearing in the above-titled matter. Appellee Steven J. Balkoski responded in opposition to Jackson's petition.
Under M. R. App. P. 20, this Court seldom grants petitions for rehearing and only entertains such petitions on very limited grounds. This Court will consider a petition for rehearing only if the opinion "overlooked some fact material to the decision," if the opinion missed a question provided by a party or counsel that would have decided the case, or if our decision "conflicts with a statute or controlling decision not addressed" by the Court. M. R. App. P. 20.
In our disposition of this appeal, we affirmed the District Court's determination that Steven's mother Edna Balkoski, prior to her death, had voluntarily transferred a joint tenancy to Steven via a quitclaim deed and there was no basis to rescind the deed. Jackson v. Balkoski, 2024 MT 203N, ¶¶ 16-17. Although Edna had initiated the litigation against Steven, she died while the litigation was in progress and her estate was substituted in September 2020. Jackson, ¶ 14. Because the court determined the quitclaim deed was valid, the District Court further ruled-and we affirmed-that ownership of the property passed to Steven upon Edna's death via the right of survivorship and her estate thus never had an ownership interest in Edna's ownership share. Jackson, ¶ 23.
On appeal, the Estate argued that the District Court erred in quieting title in Steven's favor because the litigation only concerned whether Steven held a valid ownership interest; Edna's share was never at issue. The Estate further asserts that Edna reconveyed her share of the property to herself after she commenced the litigation but prior to her death, which served to sever the joint tenancy with right of survivorship. See W. W. Allen, Annotation, When Acts by One or More of Joint Tenants Will Sever or Terminate the Tenancy, 64 A.L.R.2d 918, § 22 (1959 &Supp. 2020) ("[A] joint tenant who conveys his or her interest in the property without the knowledge or consent of the other joint tenant thereby severs the joint tenancy ...."). On February 20,2020, Edna filed two documents with the Gallatin County Clerk and Recorder. One was titled Declaration of Severance of Joint Tenancy, in which Edna stated, in part, "I . . . hereby sever and terminate the joint tenancy with the intention that I hold my interest... as a tenant in common." The other was titled Quitclaim . Deed, which stated that "Edna M. Balkoski, as Transferor, does hereby transfer . . . unto Edna Magdalena Balkoski . . . ." Edna did not raise the existence of these documents ("Severance Documents") in the ongoing litigation. However, on March 18, 2020, Steven filed a notice of lis pendens, attaching these documents as evidentiary support. The District Court allowed notice of lis pendens on March 20,2020. Aside from Steven's filing, Edna's Severance Documents do not otherwise play a role in the District Court record.
As the Estate explains in its petition for rehearing, Edna's lawsuit concerned only whether Steven had a valid ownership interest in the property. Edna's ownership interest was never in dispute. Thus, the Estate argues the District Court erred in awarding Edna's ownership interest to Steven and this Court erred in affirming the District Court's ruling.
In opposition to the Estate's petition, Steven argues the Estate has insufficient . grounds for rehearing because this Court did not overlook a fact material to the decision as neither Edna nor the Estate put this argument in front of the District Court. Steven notes this Court has long held "it is fundamentally unfair to fault the trial court for failing to rule correctly on an issue it was never given the opportunity to consider." Unified Indus., Inc. v. Easley, 1998 MT 125, ¶ 15, 289 Mont. 118, 364 P.3d 1250 (quoting Day v. Payne, 280 Mont. 273, 276, 929 P.2d 864, 866 (1996)). Steven further argues this Court should not revisit its decision in favor of finality of litigation. He suggests the Estate may be collaterally estopped from raising the issue of whether Edna effectively terminated the joint tenancy by filing the Severance Documents.
Both the Estate and Steven agree on one crucial fact: the Severance Documents- and the issue they raise concerning the existence of the joint tenancy at the time the District Court rendered its decision on the validity of the 2019 quitclaim deed-were not before that court. Thus the District Court did not have jurisdiction to grant Steven the remedy of quieting title to Edna's ownership share in his favor because it could not grant relief outside of the issues presented by the pleadings unless the parties so stipulated. Old Fashion Baptist Church v. Mont. Dep't of Revenue, 206 Mont. 451, 457, 671 P.2d 625, 628 (1983).
In Old Fashion Baptist Church, the Church acquired parcels in a Butte subdivision, designated as lots 6 through 16, in 1975. Old Fashion Baptist Church, 206 Mont, at 452, 671 P.2d at 626. In 1980, the Montana Department of Revenue (DOR) granted tax exemptions on lots 10 through 16 but denied tax exemptions for lots 6 through 9, thereby causing the Church to be delinquent on taxes on those four lots. An individual took a tax assignment on those lots, obtained a tax deed, and recorded the deed without proper notice to the Church, and then quitclaimed his interest in the property to another individual. Old Fashion Baptist Church, 206 Mont, at 453, 671 P.2d at 626. The Church then filed an action in the District Court to quiet title to lots 6 through 9 in its favor. The District Court ruled that the Church was the record owner of lots 6 through 9 and it voided the tax deed. The court further disallowed the tax exemption DOR had granted on lots 10, 11, and 14. Old Fashion Baptist Church, 206 Mont, at 454, 671 P.2d at 626.
On appeal, we held the District Court had no jurisdiction to disallow the tax exemption on lots 10, 11, and 14 because the legal action before the court was to quiet title on lots 6 through 9. Old Fashion Baptist Church, 206 Mont, at 457, 671 P.2d at 628. In that case, we examined the litigant's prayer for judgment, as well as other pleadings, and determined the tax exempt status of the lots was not brought into the litigation. Consequently, the District Court acted without jurisdiction when it removed the exemption status of the lots. Old Fashion Baptist Church, 206 Mont, at 457-58, 671 P.2d at 628.
Similarly here, Edna's ownership share of the property was not brought into the litigation. As the Estate explains, only Steven's ownership share was in dispute in this case: "[T]he parties agreed that Edna owned [her share] up until her death; they disagreed about whether she also owned Steven's [s]hare." (Emphasis the Estate's.) Similar to Old Fashion Baptist Church, the pleadings in this case do not bring Edna's share into the litigation. The District Court thus acted without jurisdiction when it awarded Edna's share to Steven-and we did not follow Old Fashion Baptist Church and similar case law when we affirmed this portion of the District Court's remedy. Therefore the Estate is entitled to rehearing under M. R. App. P. 20(a)(iii) as we failed to address the controlling case law.
We are not persuaded by either of Steven's arguments to the contrary. His argument that we should not fault the District Court "for failing to rule correctly on an issue it was never given the opportunity to consider" does not apply in this instance. In granting rehearing, we make no determination as to the validity of the Severance Documents or their effect, if any, upon the disposition of Edna's ownership interest in the property. We conclude the issue was never before the court and it thus should not have ruled upon it. Second, as Steven acknowledges, the elements of collateral estoppel require "prior litigation." This argument is premature as there is no prior litigation; rather, this case may be the "prior litigation" if future litigation ensues to quiet title between Steven and the Estate regarding the ownership interest Edna held in the property prior to her death.
IT IS THEREFORE ORDERED that the petition for rehearing is GRANTED. Paragraph 23 of this Court's Opinion is VACATED and STRICKEN.
The Clerk is directed to provide a copy of this Order to all counsel of record.