Opinion
DA 18-0238
01-08-2019
KS VENTURES, LLC an Arizona Limited Liability Company, Plaintiff and Appellee, v. WILLIAM M. RUSSELL; K.E. SMITH REVOCABLE TRUST; MYERS REVOCABLE TRUST; KIM RUSSELL; SHARON HUFF; BEN WEIDLING; THE LAMAR COMPANIES; U.S. TREASURY by and through the INTERNAL REVENUE SERVICE; MONTANA SWEETGRASS RANCH HOMEOWNERS' ASSOCIATION, INC.; DOE DEFENDANTS I THROUGH X, inclusive, Defendants, WILLIAM M. RUSSELL, Defendant and Appellant.
COUNSEL OF RECORD: For Appellant: William M. Russell, Self-Represented, Columbia Falls, Montana For Appellee: Martin S. King, Worden Thane P.C., Missoula, Montana
APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-16-389B Honorable Robert B Allison, Presiding Judge COUNSEL OF RECORD: For Appellant: William M. Russell, Self-Represented, Columbia Falls, Montana For Appellee: Martin S. King, Worden Thane P.C., Missoula, Montana Filed: /S/ BOWEN GREENWOOD
Clerk Chief Justice Mike McGrath delivered the Opinion of the Court. ¶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 William M. Russell appeals from an Eleventh Judicial District order granting summary judgment to KS Ventures, LLC, an Arizona limited liability company (KS Ventures). We affirm. ¶3 The material facts are not in dispute. Karen Smith, a principal in KS Ventures, and Russell were married in 2013. Russell owned several encumbered properties in Montana (the Flathead County properties) and in Arizona, which were then in default. Smith had significant cash resources. The day before the parties were married, Smith and Russell executed a written prenuptial agreement, which included:
(5) From time to time, the parties may agree to enter into a joint business venture. Such venture shall be codified by a written agreement which shall outline the respective profits, equity increases, or value each party owns.¶4 On April 25, 2013, Smith and Russell executed and signed an agreement (Loan Agreement) whereby Smith agreed to loan Russell a revolving line of credit up to $5,000,000. The Loan Agreement stated that failure to pay real property taxes and failure to keep other loans on the Flathead County properties current were events triggering default. Russell additionally signed a deed of trust in favor of Smith securing payment and performance of the Loan Agreement and listing the Flathead County properties. The deed of trust was recorded. The Loan Agreement contained an acceleration clause, whereby the debt secured by the deed of trust would become immediately due in the case of default. Smith assigned the Loan Agreement to KS Ventures. ¶5 Between 2013 and 2016, KS Ventures loaned Russell over $1,921,008 to pay creditors for claims arising prior to the marriage and to protect his collateral. ¶6 Smith filed to annul her marriage to Russell in October 2015. Subsequently, Russell defaulted on the Loan Agreement by ceasing to make payments on the loan advances and failing to pay the prior mortgage and real property taxes on the Flathead County properties. On August 17, 2016, the Superior Court of Arizona, Maricopa County, issued a Decree of Annulment, which: (1) annulled the marriage of Smith and Russell, and (2) found the prenuptial agreement valid and enforceable. ¶7 In May 2016, KS Ventures filed a judicial collection and foreclosure action against Russell seeking repayment of the loan advances under the Loan Agreement and foreclosure on the deed of trust securing repayment. ¶8 On July 21, 2017, KS Ventures filed a motion for summary judgment, which Russell opposed. Russell requested oral argument on KS Ventures' motion, which the District Court granted. Russell failed to appear on the date set for oral argument. Russell then requested the District Court reschedule oral argument, which the District Court denied. On March 5, 2018, the District Court granted KS Ventures' motion for summary judgment, and later, ordered the Flathead County properties foreclosed and awarded KS Ventures attorney fees and costs. Russell appealed. On June 1, 2018, the Flathead County properties were sold. ¶9 On appeal, Russell argues pro se that the District Court improperly denied his request to reschedule the oral argument on KS Ventures' motion for summary judgment after he failed to appear. Russell further argues that the District Court improperly granted summary judgment to KS Ventures because issues of material fact existed. Specifically, Russell argues that the Loan Agreement did not obligate him to repay the $1,921,008 because the Loan Agreement established a joint venture; Smith and Russell were partners, not lender and borrower, respectively. ¶10 This Court reviews a district court's decision to deny oral argument on a summary judgment motion for an abuse of discretion. Virginia City v. Olsen, 2002 MT 176, ¶ 13, 310 Mont. 527, 52 P.3d 383. Any motion for a continuance is within the sound discretion of the district court. This Court will not overrule a district court's decision to deny a request for a continuance, unless there is an affirmative showing of prejudice. Fair Play Missoula, Inc. v. City of Missoula, 2002 MT 179, ¶ 34, 311 Mont. 22, 52 P.3d 926. ¶11 Here, there is no such showing of prejudice. On February 16, 2018, the District Court mailed its order granting Russell's request for oral argument to the address Russell filed with the court. Oral argument was set for March 2, 2018, at 11:00 a.m. Russell failed to appear. For Russell to claim that the District Court denied him due process when he had notice and failed to appear at the scheduled time is "an abuse of the appellate process." See Fair Play Missoula, ¶ 39. The District Court did not abuse its discretion by denying Russell's request to re-schedule oral argument. ¶12 This Court reviews a district court's grant or denial of summary judgment de novo using the same M. R. Civ. P. 56(c) criteria applied by the district court. Lone Moose Meadows, LLC v. Boyne USA, Inc., 2017 MT 142, ¶ 7, 387 Mont. 507, 396 P.3d 128. This Court reviews a district court's findings of fact for clear error and conclusions of law for correctness. Lone Moose Meadows, LLC, ¶ 7. Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c). ¶13 In collection and foreclosure actions, the prima facie elements are: (1) debt of the defendant; (2) non-payment of the debt; and (3) present ownership of the debt by the complaining party. First Nat'l Bank v. Quinta Land & Cattle Co., 238 Mont. 335, 339, 779 P.2d 48, 50 (1989). ¶14 The District Court properly concluded that this proceeding has no genuine issues of material fact. Russell signed the Loan Agreement, which unconditionally obligated him to re-pay the loan advances. Smith assigned the Loan Agreement to KS Ventures. Russell borrowed $1,921,008. Russell defaulted on the Loan Agreement by ceasing to make payments on the loan advances, failing to pay real property taxes on the Flathead County properties, and failing to keep the loans on the Flathead County properties current. KS Ventures filed a collection and foreclosure action against Russell. This Court agrees with the District Court. ¶15 This Court is similarly unpersuaded by Russell's argument that the Loan Agreement created a joint venture, such that KS Ventures and Russell agreed to equally share in both profits and losses. In Montana, a joint venture is an "association of two or more persons to carry on a single business enterprise for profit." Brookins v. Mote, 2012 MT 283, ¶ 43, 367 Mont. 193, 292 P.3d 347. "The relationship of joint adventurers is a matter of intent, and arises only where they intend to associate themselves as such." Rae v. Cameron, 112 Mont. 159, 168, 114 P.2d 1060, 1064 (1941). Establishment of a joint venture requires: "(1) an express or implied agreement or contract creating a joint venture; (2) a common purpose; (3) community of interest; and (4) an equal right to control the venture." Pearson v. McPhillips, 2016 MT 257, ¶ 8, 385 Mont. 171, 381 P.3d 579. ¶16 There is no evidence that either party intended the Loan Agreement to create a joint venture. While the basis for Russell's argument is the sentence in the prenuptial agreement stating, "from time to time, the parties may agree to enter into a joint business venture," the prenuptial agreement further states, "such venture shall be codified by a written agreement which shall outline the respective profits, equity increases, or value each party owns." The Loan Agreement nowhere states the term joint venture or any intent to establish a joint venture. Rather, the Loan Agreement and deed of trust evidence that KS Ventures intended to loan money to Russell secured by certain real properties, and Russell intended to unconditionally repay the loan advances he received. KS Ventures unequivocally owned Russell's debt; Russell and KS Ventures did not share an equal right of control. The District Court properly determined that the Loan Agreement did not create a joint venture between KS Ventures and Russell. ¶17 In sum, Russell failed to raise a genuine issue of material fact. The District Court properly denied Russell's request to reschedule oral argument and granted summary judgment in favor of KS Ventures. ¶18 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶19 Affirmed.
While Russell argues on appeal that his signature on the Loan Agreement was a stamp, KS Ventures presented evidence that Russell admitted he signed the Loan Agreement in a previous action.
/S/ MIKE McGRATH We Concur: /S/ DIRK M. SANDEFUR
/S/ INGRID GUSTAFSON
/S/ BETH BAKER
/S/ JIM RICE