Hanson v. Fort Peck
Hanson v. Fort Peck, 2023 MT 208
Affirmed in part, reversed in part on November 7, 2023, in a 7 to 0 published opinion — 37 pages and 9,689 words .
Case
DA 22-0312
Opinion
majority
Majority
Dirk M. Sandefur
37 pages · 9,689 words
Joined by
Mike McGrath
Laurie McKinnon
James Jeremiah Shea
Beth Baker
Ingrid Gustafson
Jim Rice
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Cites to
2018 MT 58 Raap v. Wolf Point School Dist DA 17-0386 2011 MT 138 D. Anderson v. Monroe Property DA 10-0440 2023 MT 44 Kipfinger v. G.F. Obstetrical DA 21-0552 2017 MT 276 Davis v. Westphal DA 17-0003 2012 MT 321 Kluver, et al. v. PPL Mt, et al DA 11-0681 2019 MT 28 Larson v. Secretary of State DA 18-0414 2012 MT 242 Chipman v. Northwest DA 12-0050 2015 MT 55 Citizens for Open Gov't. v. City of Polson DA 14-0562 2018 MT 67 Lenz v. Fsc Securities DA 17-0124 2011 MT 262 Aaa Construction v. Choice Land DA 10-0629 2018 MT 182 Assoc. Management v. Ruff DA 17-0102 2019 MT 173 Bucy v. Edward Jones DA 18-0493 2019 MT 181 Jarussi v. Farber, et al DA 18-0608 2019 MT 48 Davidson v. Barstad DA 18-0050 2009 MT 329 Lou Woodruff v. Bretz DA 07-0489 2008 MT 9 Bonner School District v. Bonner Education Association et al DA 06-0724 2009 MT 399 Andersen v. Schenk DA 08-0123Full text
OCR’d from the filed PDF
Majority
Dirk M. Sandefur
11/07/2023
DA 22-0312
Case Number: DA 22-0312
IN THE SUPREME COURT OF THE STATE OF MONTANA
2023 MT 208
LANNY HANSON, JAMIE HANSON and
WINDSOCK LAND AND CATTLE PARTNERSHIP, LLC,
Plaintiffs and Appellees,
v.
TOWN OF FORT PECK, a political subdivision
of the State of Montana,
Defendant and Appellant.
APPEAL FROM:
District Court of the Seventeenth Judicial District,
In and For the County of Valley, Cause No. DV-19-52
Honorable Yvonne Laird, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
John G. Crist, Harlan B. Krogh, Crist, Krogh, Alke & Nord, PLLC, Billings,
Montana
For Appellees:
Shawn P. Cosgrove, Geoffrey T. Cunningham, Parker, Heitz & Cosgrove,
PLLC, Billings, Montana
Submitted on Briefs: January 11, 2023
Decided: November 7, 2023
Filed:
' 4,--6%--•f
__________________________________________
Clerk
Justice Dirk Sandefur delivered the Opinion of the Court.
¶1
The Town of Fort Peck, Montana (Town), appeals from the April 2022 and June
2022 judgments of the Montana Seventeenth Judicial District Court, Valley County,
enforcing the parties’ April 2021 mediated memorandum of understanding (MOU)
regarding a subdivision dispute, and then implementing it in the form of a more formal
final settlement agreement proposed by Plaintiffs (Developers) for Town Council approval.
We address the following restated issue:
Whether the District Court erroneously concluded that the mediated MOU was a
valid and enforceable contract duly approved by the Town Council at its closed
April 2021 meeting?
Affirmed in part, reversed in part, and remanded for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
¶2
In separate series of contractual agreements with the Town, Developers purchased
and subdivided certain Town-owned tracts into two separate residential subdivisions
(Windsock Sky Park Subdivision and Windsock Subdivision) in accordance with Title 76,
chapter 3, MCA (Montana Subdivision and Platting Act).1 Pursuant to those contractual
agreements, and resulting Town approval of the proposed subdivisions, the contemplated
infrastructure for each subdivision included, inter alia, paved streets to be constructed by
Developers in accordance with certain agreed specifications which the Town would then
accept and maintain as public streets upon construction approval.
1
The parties’ compliance with the pertinent requirements of the Montana Subdivision and Platting
Act is neither of record, nor at issue, in this case.
2
¶3
In 2016, years after Town approval of each subdivision, a dispute arose as to
whether the recently paved Windsock Sky Park Subdivision streets complied with a
previously agreed minimum street width requirement.
The Town asserted that the
governing subdivision approval and contracts required 24-foot wide streets, rather than the
21-foot wide streets constructed. In November 2017, following various back-and-forth
communications, the Town Mayor notified Developers that the Town Council rejected the
newly paved streets for public maintenance on the asserted ground that they did not comply
with the previously agreed minimum width requirement. In August 2019, Developers filed
a contract claim asserting that the Town breached its contract duty to accept the subject
streets as constructed.
The claim thus prayed for compensatory damages and
prevailing-party contract attorney fees.
¶4
Upon initial and amended answers, the Town moved for summary judgment
pursuant to M. R. Civ. P. 56 on the asserted grounds that the stated contract claim was
time-barred by § 76-3-625(1), MCA (180-day limitation period regarding compensatory
claims against local governments based on a final subdivision action/decision/order or
subdivision regulation), and/or § 27-2-209(5), MCA (six-month limitations period
regarding claims against municipalities “arising from” an adverse decision “relating to a
land use, construction, or development project”). However, in April 2021, the parties
engaged in mediated settlement negotiations in which Developers participated personally
and through counsel, and the Town through the Town Attorney and Mayor. The day-long
mediation resulted in an informal typewritten MOU which set forth 17 points of agreement
3
and was undersigned by the Town Attorney, Developers, and Developers’ counsel. In
pertinent part, the MOU specified that: (1) the “20 foot” minimum “paving width”
prescribed by “the 1982 Montana Model Subdivision Regulations” applied to all streets in
both subdivisions; (2) “the Town will accept maintenance of” the previously constructed
Sky Park subdivision streets upon Developers’ provision of road “cross-section” drawings
“confirm[ing]” that those roads “met” the agreed 20-foot minimum paving width standard;
and (3) “each side [will] bear[] its own costs and attorney fees.”
¶5
The MOU also included a line for the Mayor’s signature upon the contemplated
subsequent approval of the Town Council. At the time of initial signing of the MOU, the
parties verbally agreed that Developers’ counsel would draft a formal settlement agreement
incorporating the MOU provisions for formal Town Council consideration and approval.
Developers’ counsel and the Town Attorney thus subsequently cosigned and filed a
stipulated motion to that effect, to wit as pertinent:
Plaintiffs . . . and Defendant[] Town . . . by and through [their respective]
attorney[s] of record . . . [report that] Plaintiffs and Defendants’
representatives, following mediation, have reached an agreement in
principle. The agreement requires approval from the Town Council and
roadway testing. . . . Therefore, the parties ask that the Court vacate the
present scheduling order and extend all pending deadlines indefinitely. The
parties intend to file a status report with the Court within 45 days confirming
settlement or to establish a new scheduling order going forward.
(Emphasis added—case original.)
¶6
On April 19, 2021, as previously agreed, Developers’ counsel emailed the Town
Attorney a proposed final settlement agreement intended to formalize the mediated MOU
for Town Council approval. Later that day, the Town Council and Town Attorney met in
4
a closed “executive session” to discuss the mediated MOU and resulting
Developers-proposed final settlement agreement. Strangely, the record on appeal includes
no contemporaneous meeting minutes or other official record refencing even the general
purpose or subject matter of the closed meeting, much less who was present or what action
resulted, if any.2 In a subsequent litigation-related affidavit, however, the Town Clerk
attested that she was personally present at the April 19th meeting and that:
[the Town Council discussed the MOU], the fact that the points in the MOU
would be included in a formal settlement agreement, and that [the Council]
would have to vote to approve the final agreement at a regular Town Council
meeting. [Developer] Lanny Hanson was not present in the executive
session[]. There was no vote taken by the Town Council in the executive
session. The Town Council can only take action approving or disapproving
a contract in regular or special session of the Town Council open to the
public.
2
See §§ 7-5-4122 and -4123, MCA (municipal “council must cause a journal of the proceedings”
or “special meeting[s]”). Compare 2021-09-22 “Regular Meeting” and 2021-10-11 “Special
Meeting” minutes attached to subsequent Town Clerk affidavit, in pertinent part noting that
council subsequently met in closed “executive session[s]” with the Town Attorney to discuss the
then-pending litigation in this case pursuant to § 2-3-203(4)(a), MCA (litigation exception to
statutory Montana open meeting requirement). See also § 2-3-212, MCA (minutes requirements
in re open and closed meetings of public or governing bodies inter alia); Raap v. Wolf Point Sch.
Bd., 2018 MT 58, ¶ 14, 391 Mont. 12, 414 P.3d 788 (“[u]nder Article II, Section 9, and
§ 2-3-203(1) and (3), MCA, meetings of public bodies and agencies are presumptively open to all
absent “a showing of individual privacy rights” or other recognized exception “sufficient to
override” the public right to know”—“[t]he burden of overcoming the presumption of openness is
squarely on the public body or agency, not the public or persons seeking to observe government
deliberations” and the public body thus has the burden “[a]t the time of closure . . . to articulate a
rationale for closure that is sufficiently descriptive to afford reasonable notice to the public of the
legal and factual basis for closure without disclosing [the] private [or confidential] information”
at issue).
5
(Internal enumeration omitted—emphasis added.) At or after the closed meeting, however,
the Mayor signed the informal MOU on the line previously left blank, but did not similarly
sign the resulting Developers-proposed final settlement agreement.
¶7
The next day, the Town Attorney emailed a copy of the Mayor-signed MOU to
Developers’ counsel and requested an editable version of Developers’ earlier-submitted
proposed final agreement for contemplated Town amendments. In a responsive email
remittal of the draft agreement, Developers’ counsel asked, “[d]oes this mean things got
approved last night?” An email string included with a later filed affidavit of the Town
Attorney manifested that she responded, “[y]es[,] [t]he [MOU] was approved, but we did
not act on the settlement agreement yet because I’d like to add more content.” The affidavit
email string further manifested the Town Attorney also referred to her contemplated
additional content as “substantial additions” to the Developers-proposed settlement
agreement.
¶8
A week later the Town Attorney sent Developers’ counsel a Town-edited version of
the proposed final settlement agreement, with an email assertion that the edited draft
“matches [the Town’s] understanding of our settlement.”
In regard to the MOU
requirement for Developers to provide “street paving cross-section drawings” prepared by
a qualified engineer, the Town-edited version of the proposed final agreement included
new language further requiring Developers to provide and pay for a supporting
6
geotechnical engineering investigation and report.3 However, nothing in the language of
the informal mediated MOU referenced or otherwise manifestly implied such a
requirement.
Developers’ counsel thus later remitted a red-lined version of the
Town-edited draft striking-out, inter alia, all references to a geotechnical investigation
requirement.
¶9
By email dated May 20, 2021, the Town Attorney advised Developers’ counsel that
“we might have a serious problem” because “[t]he Town is insisting that the [street]
development cross section include[] a geotechnical evaluation.” The email explained that
the Town’s geotechnical investigation demand stemmed from a notation in a 2019 street
cross-section drawing quote independently obtained by the Mayor from a third-party
engineering firm stating that its proposed “[r]oadway section thicknesses” specification
would be “based on the results of a geotechnical investigation.” In a follow-up email on
May 26, 2021, apparently recognizing that the parties had not previously agreed to such
requirement, the Town Attorney asked whether Developers would “object to the Town
performing a geotechnical investigation of the [subject] roads.” (Emphasis added.) In June
2021, after responding that the parties’ mediated agreement did not include a geotechnical
investigation
and
report
requirement,
Developers
3
provided
the
Town
with
We take notice that the manifest purpose of the Town-requested geotechnical engineering
investigation and report was to provide the Town assurance that the previously constructed Sky
Park subdivision streets were constructed in a manner to provide lasting durability under prevailing
geotechnical conditions.
See ASTM International Road and Paving Standards,
https://www.astm.org/products-services/standards-and-publications/standards/road-standards-and
-paving-standards.html. The pertinent issue, however, was whether Developers in fact agreed at
mediation to provide such assurance.
7
engineer-prepared street cross-section drawings showing that the constructed Sky Park
subdivision streets complied with the 20-foot minimum width requirement specified in the
MOU.
¶10
In August 2021, Developers’ counsel filed a district court status report with a copy
of the parties’ mediated MOU. The report explained that the “the parties ha[d] reached an
agreement, in principle, through mediation,” but a disagreement remained “regarding [the]
formal language of the settlement” which the parties expected to resolve in the next month.
When no agreement regarding the disputed geotechnical investigation requirement resulted
in that time, the Town Council later unanimously approved the Town-edited version of the
proposed final settlement agreement, including the still-disputed geotechnical investigation
requirement, at a regularly scheduled public meeting on September 20, 2021. When
Developers did not sign the Town-edited version of the proposed agreement due to
inclusion of the disputed geotechnical investigation requirement, the Town Council
unanimously voted to “rescind” its prior approval of the Town-edited version of the
proposed final settlement agreement at another regularly scheduled meeting on October 11,
2021.
¶11
Over four months later, based on their assertion that the Town Council approved it
in closed session in April 2021, Developers filed a February 2022 motion seeking court
enforcement of the parties’ mediated MOU, and for court “adopt[ion]” of their
implemented proposed final settlement agreement as submitted to the Town in advance of
the meeting. The motion was supported with an affidavit from Developer Lanny Hanson
8
attesting to his “personal knowledge” of what allegedly took place during the Council’s
April 2021 closed meeting.4 The Hanson affidavit also referenced various attached copies
of selected email communications between the parties’ respective counsel, the competing
proposed final settlement agreements, various subdivision approval documents, and
Developers’ previously submitted June 2021 engineering report (including, inter alia, the
referenced Sky Park subdivision street “paving cross-section” drawings and an engineering
review of the completed Sky Park subdivision streets with recommendations for similar
construction of the as-yet completed Windsock Subdivision streets). Developers cited no
legal authority as the procedural basis or framework for the motion, but asserted that the
issue of validity and enforceability of the mediated MOU was a question of law for court
determination.
¶12
In opposition, the Town asserted, inter alia, that the informal MOU was not a valid
and enforceable contract because it was only a tentative agreement subject to later Town
Council approval and formalization in a superseding final agreement signed by the parties.
Contrary to Developers’ assertion, the Town asserted that the Town Council did not vote
to approve the MOU or implement Developers-proposed final agreement at its April 2021
closed meeting. The Town further asserted that any such action at a closed meeting would
have been invalid ab initio in violation of §§ 7-1-4141 through -4143, MCA (municipal
4
The Town Clerk’s subsequent affidavit attested that “Lanny Hanson was not present in the
executive session[].”
9
governing body notice and open meeting requirements).5 The Town also filed separate
supporting affidavits of the Town Attorney and Town Clerk, with referenced attachments
(inter alia including various email communications and meeting minutes regarding the
2021-09-20 and 2021-10-11 Town Council meetings).
¶13
In April 2022, without hearing or reference to any procedural basis or framework
for the adjudication, the District Court issued a written judgment and supporting analysis
granting Developers’ motion. In substantive essence, construed in the light most favorable
to Developers, the court concluded as matters of law that:
(1)
the express language of the mediated MOU was clear and unambiguous to
the extent of its express terms;
(2)
it was beyond genuine material dispute on the record facts that the express
language of the MOU clearly and unambiguously stated the mutual intent
and agreement of the parties regarding the matters specified therein regarding
the matter contemporaneously in dispute, i.e., the compliance of existing and
contemplated subdivision streets with previously agreed construction
specifications;
(3)
the express language of the MOU neither expressly included, nor manifestly
implied, any requirement for Developers to provide the referenced “street
paving cross-section drawings” based on or in conjunction with a related
geotechnical engineering analysis;
(4)
it was beyond genuine material dispute on the record facts that the parties’
underlying oral agreement at mediation did not include or otherwise
contemplate a street paving geotechnical investigation and report, or any
agreement that the disputed subdivision streets must conform thereto;
(5)
it was beyond genuine material dispute on the record facts that the Town’s
disputed demand for a geotechnical investigation and report “was a new
5
See also §§ 2-3-103, -104, and -203, MCA (public notice/participation and open meeting
requirement applicable to all “public or governmental bodies,” inter alia).
10
demand” not made until “over a month after [the] mediation” and resulting
MOU;
(6)
the parties were thus not operating under a mutual mistake of fact at the time
of agreement and signature as to whether the MOU-specified paving
cross-section drawing would necessarily further include a supporting
geotechnical investigation;6 and
(7)
regardless of the parties’ mutual contemplation of a more formal superseding
final settlement agreement, the written MOU “contains all . . . essential
terms” required for contract formation (i.e., capable and identifiable parties,
mutual assent, lawful object, and mutual consideration), but that the Town’s
“consent” to those terms was subject to a mutually agreed parol condition
requiring subsequent Town Council approval of the MOU terms.
The District Court thus concluded that the enforceability of the MOU as an independent
contract ultimately depended on the disputed issue of fact as to whether the Town Council
voted to approve the MOU at its April 2021 closed meeting as asserted by Developers or,
alternatively, only tentatively discussed it in advance of formal action at a subsequent open
meeting as asserted by the Town. In resolution of that issue, the court expressly found the
Town Clerk’s affidavit assertion that the Council took “no vote” approving the MOU at its
closed April 2021 meeting “to be uncredible” in juxtaposition to various noted
circumstantial facts. (Emphasis added.) By inference from those noted circumstantial
6
The court expressly noted that the Town Attorney’s subsequent record email statements “over a
month after the mediation indicate[] that the geotechnical evaluation was a new demand made by
the Council around that time.” The Court further noted that the “record shows” that the 2019
engineering quote independently obtained by the Mayor, and later identified by the Town Attorney
as the basis for the Town’s post-mediation demand for a geotechnical investigation, distinctly
listed the cross-section drawings and geotechnical investigation as separate cost-items, thereby
indicating that they are “different things,” and there was thus no record basis upon which to support
a finding or conclusion that the parties “were operating under a mutual misunderstanding
concerning the” MOU-referenced “cross-section drawings.”
11
facts, the District Court thus found that the Town Council “took action to approve the
MOU” in its closed April 2021 meeting. (Emphasis added.)
¶14
Based on that critical finding of fact in context of the above-noted conclusions of
law, the District Court ultimately concluded that the mediated MOU was an independently
valid and enforceable contract, in accordance with its written terms, and as approved by
the Town Council at its ensuing April 2021 closed meeting. In regard to the Town’s open
meeting law violation argument, the Court concluded that, unlike an aggrieved member of
the public, a municipal governing body lacks jurisprudential standing to later assert on
remorse that a prior imprudent action was void due to the governing body’s own violation
of applicable open meeting requirements. The Court thus rejected the Town’s apparent
alternative defense that any approval vote taken by the Town Council at its closed April
2021 meeting was in any event void in violation of applicable open meeting requirements.
Finally, on the stated ground that the enforceable MOU expressly provided that the parties
were responsible for their own attorney fees, the court denied Developers’ claim for
attorney fees under the prevailing-party attorney fees provision of their prior subdivision
contract(s). The Town timely appeals the court’s grant of Developers’ “[m]otion to
[e]nforce and [i]mplement” the mediated MOU.7
7
The Developers’ motion and briefing requested two distinct but related remedies, i.e., validation
and enforcement of the mediated MOU and implementation of it in the form of their more formal
proposed final settlement agreement as subsequently tendered to the Town Attorney for Town
Council approval. In light of the District Court’s narrow analytical focus, we limit our review to
the independent enforceability of the MOU and whether the court correctly concluded that the
Town Council approved it, either alone or as incorporated in Developers proposed final settlement
agreement, in its closed April 2021 meeting.
12
STANDARD OF REVIEW
¶15
Summary judgment rulings are subject to de novo review on appeal for conformance
with applicable M. R. Civ. P. 56 standards and requirements. Dick Anderson Constr. v.
Monroe Prop. Co., 2011 MT 138, ¶ 16, 361 Mont. 30, 255 P.3d 1257.8 Courts may grant
summary judgment only when 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)(3). The moving party
has the initial Rule 56 burden of showing a complete absence of any genuine issue of
material fact on the Rule 56 factual record, and that the movant is entitled to judgment as
a matter of law. Weber v. Interbel Tel. Coop., 2003 MT 320, ¶ 5, 318 Mont. 295, 80 P.3d
88; Thelen v. City of Billings, 238 Mont. 82, 85, 776 P.2d 520, 522 (1989). The burden
then shifts to the opposing party to either demonstrate the existence of a genuine issue of
material fact precluding judgment as a matter of law, or that the moving party is in any
event not entitled to judgment as a matter of law. Osterman v. Sears, Roebuck & Co., 2003
MT 327, ¶ 17, 318 Mont. 342, 80 P.3d 435 (citing Bruner v. Yellowstone Cty., 272 Mont.
261, 264, 900 P.2d 901, 903 (1995)). Whether a genuine issue of material fact exists or
whether a party is entitled to judgment as a matter of law are questions of law subject to de
8
“As a narrow exception to the de novo [Rule 56] standard of review” not implicated here,
“preliminary rulings admitting or excluding evidence proffered for Rule 56 consideration as to
whether the subject evidence issue satisfies or complies with a pertinent rule of evidence or
procedure, and thus qualifies for consideration under Rule 56, are, like other evidentiary rulings
normally within the discretion of the trial court, subject to review for an abuse of discretion.”
Kipfinger v. Great Falls Ob. & Gyn. Assocs., 2023 MT 44, ¶ 14 n.19, 411 Mont. 269, 525 P.3d
1183.
13
novo review for correctness. Ereth v. Cascade Cty., 2003 MT 328, ¶ 11, 318 Mont. 355,
81 P.3d 463.
¶16
A genuine issue of material fact remains for factfinder determination only if the
Rule 56 record manifests a nonspeculative factual basis upon which the factfinder could
make a finding of fact on an essential element of proof required for the legal claim or
defense at issue which would then preclude judgment as a matter of law. See Davis v.
Westphal, 2017 MT 276, ¶ 12, 389 Mont. 251, 405 P.3d 73; State Med. Oxygen & Supply,
Inc. v. Am. Med. Oxygen Co., 267 Mont. 340, 344, 883 P.2d 1241, 1243 (1994); Weinberg
v. Farmers State Bank, 231 Mont. 10, 27, 752 P.2d 719, 730 (1988) (exclusive domain of
factfinder to resolve questions of fact subject to reasonable dispute);9 Doe v. Univ. of
Denver, 952 F.3d 1182, 1189 (10th Cir. 2020) (“fact is material if” it could affect the
outcome of the claim or defense at issue and “genuine” if the finder of fact could reasonably
find “in favor of the nonmoving party” on the evidence at issue—citation omitted). The
appellate court must view the Rule 56 factual record in the light most favorable to the
non-moving party and draw all reasonable inferences in favor thereof. Weber, ¶ 5; Gamble
Robinson Co. v. Carousel Properties, 212 Mont. 305, 311-12, 688 P.2d 283, 286-87
(1984). The Rule 56 factual record includes “the pleadings, the discovery and disclosure
materials on file, and any affidavits” of record. M. R. Civ. P. 56(c)(3). On de novo review,
the appellate court may “examine the entire record” in assessing whether a genuine issue
9
See also §§ 25-7-103 and 26-1-202, MCA (exclusive domain of finder of fact).
14
of material fact precluded summary judgment. Hudson v. McDonald, 229 Mont. 426, 429,
747 P.2d 221, 223 (1987) (citing Shimsky v. Valley Credit Union, 208 Mont. 186, 189-90,
676 P.2d 1308, 1310 (1984)).
DISCUSSION
¶17
Whether the District Court erroneously concluded that the mediated MOU was a
valid and enforceable contract duly approved by the Town Council at its closed
April 2021 meeting?
¶18
As a preliminary matter, we must first identify and adhere to the applicable
procedural context and framework, and attendant standards for decision, for proper review
of the assertions of error at issue. Peculiarly, neither the parties, nor the District Court,
asserted or otherwise referenced below the procedural context and framework for
adjudication of Developers’ motion, whether M. R. Civ. P. 56 (summary judgment), trial
on the merits, or other special proceeding authorized by statute.
That fundamental
oversight is now compounded by the parties’ narrow focus on appeal on various assertions
of substantive law and related fact, unmoored from the governing procedural framework
and standards for decision below, and corresponding standards of appellate review.
¶19
“[E]xcept as stated in Rule 81,” the Montana Rules of Civil Procedure “govern the
procedure in all civil actions and proceedings in district courts.” M. R. Civ. P. 1 (special
treatment of Uniform Probate Code proceedings omitted).
Subject to exception not
applicable here, Rule 81 similarly provides that the Rules govern all civil proceedings,
including “special statutory proceeding[s],” for which the Rules do not otherwise
specifically provide, to wit:
15
Where any statute . . . , whether or not applicable to a special statutory
proceeding, provides that any act in a civil proceeding in a district court shall
be done in the manner provided by law or as in a civil action or as provided
by any statute superseded by these rules, such act shall be done in accordance
with these rules and the procedure thereon shall conform to these rules,
insofar as practicable.
M. R. Civ. P. 81(b). Here, the only special statutory scheme applicable to mediation and
enforcement of mediated settlement agreements under current state law is the recent
Montana enactment of the Uniform Collaborative Law Act. See Title 25, chapter 40, MCA
(2015).10
In essence, the Act defines and provides for the initiation, conduct, and
termination/conclusion of a defined “collaborative law process,” and “enforce[ment]” of a
resulting defined “collaborative law participation agreement.” See §§ 25-40-102(3), (12),
(14), -103, -104, and -119, MCA. Here, however, there is no record indication that the
parties consciously initiated and proceeded under the technical requirements of the Act.
See §§ 25-40-102(2), -103, and -104(1), MCA (defined “collaborative law process” and
“collaborative law participation agreement[s]”). The Act nonetheless provides that the
court may still “enforce” a technically non-compliant mediated settlement agreement “in
the interests of justice” under certain circumstances (i.e., an “agreement evidenced by a
record resulting from the process in which the parties participated” and court “findings”
that the parties “signed a record indicating an intention to enter into” an Act-defined
10
Section 26-1-813, MCA, provides for limited confidentiality and privilege protections regarding
the mediation process but specifies no process or special proceeding for enforcement of mediated
settlement agreements. See also Kluver v. PPL Montana, LLC, 2012 MT 321, ¶¶ 52-59, 368 Mont.
101, 293 P.3d 817 (referencing unenacted Uniform Mediation Act (2001)). The mediation
confidentiality and nondisclosure privilege and protections provided by § 26-1-813, MCA, are thus
not at issue in this case.
16
“collaborative law participation agreement” under “reasonabl[e] belie[f] they were
participating in” an Act-defined “collaborative law process”). Section 25-40-119(2),
MCA. While the record manifests that the parties’ mediation process and resulting MOU
largely tracked the Act-provided “collaborative law process” under §§ 25-40-102(3), (5),
(7), (10), (12)-(14), -104, and -105, MCA, they did not request, and the District Court did
not make, any of the requisite findings specified by § 25-40-119(2), MCA. The parties’
apparent disregard of the Act is ultimately of no consequence because it in any event does
not specify any special or abbreviated procedure for enforcement of mediated settlement
agreements. See Title 25, chapter 40, MCA (2015). The pertinent Montana Rules of Civil
Procedure, and any applicable supplemental statutory rules, thus applied and governed the
adjudication of Developers’ mediation agreement enforcement motion here. See M. R.
Civ. P. 1 and 81(b), supra.
¶20
Accordingly, the record manifests that neither party sought adjudication of the
subject motion by trial on the merits in accordance with Title 25, chapter 7, parts 1-7, MCA,
and M. R. Civ. P. 38-52. Based on their respective assertions that they were each entitled
to judgment as a matter of law, and given that Developers’ motion was in substance neither
a Rule 12 or 41 motion to dismiss, nor Rule 37 discovery motion, the only remaining
procedural path available for adjudication of the subject motion was Rule 56 summary
judgment. See M. R. Civ. P. 56, supra. We thus construe Developers’ motion for
enforcement of the parties’ mediated MOU as a Rule 56 motion for summary judgment.
Within the framework of M. R. Civ. P. 56, we construe the cognizable essence of the
17
Town’s pertinent assertion of error to be that the District Court erroneously granted
summary judgment to Developers based on erroneous conclusions of law that the:
(1)
MOU was a valid and enforceable contract based on the mutual assent of the
Town as culminated in Town Council approval of the MOU, and/or
Developers-proposed final settlement agreement, at its April 2021 closed
meeting;
(2)
MOU was neither ambiguous, nor based on a mutual mistake of fact, as to
whether the expressly referenced street paving cross-section drawings
requirement necessarily required or included a supporting geotechnical
analysis; and
(3)
Town lacked jurisprudential standing to later assert that any Town Council
approval of the MOU, and/or proposed final settlement agreement, at its
April 2021 closed meeting was in any event invalid in violation of statutory
open meeting requirements.
For analytical clarity, we address those assertions in inverse order.
1. Town Standing to Assert Invalidity of Alleged Town Council Action at the April
2021 Closed Meeting Due to Open Meeting Violation.
¶21
As a matter of law, the Town Council was and is a “public or governmental body”
as referenced in § 2-3-203(1), MCA, and a “municipal governing body” as referenced in
§§ 7-1-4141(1) and -4142, MCA. See §§ 7-1-4101, -4111, 4121(6), (15), -4122, -4123,
7-3-113, -122(4), 7-5-4101, and -4121, MCA. The District Court thus correctly recognized
that the Town Council was at all times subject to the open meeting requirements of
§§ 2-3-203(1) and 7-1-4141(1), MCA.
¶22
Jurisprudential standing is one of several threshold justiciability prerequisites to the
exercise of independently existing subject matter jurisdiction. Larson v. State, 2019 MT
28, ¶¶ 18 and 45, 394 Mont. 167, 434 P.3d 241. As pertinent here, jurisprudential standing
18
requires, inter alia, assertion of a substantively cognizable claim for relief “based on an
alleged wrong or illegality that has in fact caused, or is likely to cause, the [claimant] to
personally suffer specific, definite, and direct harm to person, property, or exercise of
right.” Larson, ¶ 46. Whether a party lacks standing to assert a particular legal claim or
defense is a question of law subject to de novo review on appeal. Chipman v. Northwest
Healthcare Corp., 2012 MT 242, ¶ 16, 366 Mont. 450, 288 P.3d 193. The open meeting
requirements of §§ 2-3-203(1) and 7-1-4141(1), MCA, are statutory implementations of
Article II, Section 9, of the Montana Constitution (right of “person[s] . . . to observe
deliberations of all public bodies . . . of state government and its subdivisions[] except
where the demand of individual privacy clearly exceeds the merits of public disclosure”).
Citizens for Open Gov’t, Inc. v. City of Polson, 2015 MT 55, ¶ 15, 378 Mont. 293, 343 P.3d
584 (citing Common Cause v. Comm’r of Political Practices Candidates Nomination
Comm., 263 Mont. 324, 328-29, 868 P.2d 604, 607 (1994)). As a referenced “public body”
to which Mont. Const. art. II, § 9 applies, the Town Council is not a referenced “person”
protected by Mont. Const. art. II, § 9 from the non-compliant acts or conduct of that same
“public body.” See Mont. Const. art. II, § 9. Without regard for the disputed issue of fact
as to what occurred at the April 2021 closed meeting of the Town Council, we thus hold
that the District Court correctly concluded that the Town lacked jurisprudential standing to
assert that any act by the Council in closed session approving the subject MOU, and/or
accompanying proposed final settlement agreement, was in any event invalid due to
violation of the open meeting requirements of §§ 2-3-203(1) and 7-1-4141(1), MCA.
19
2. MOU Unenforceability Due to Mutual Mistake of Fact or Ambiguous Terms.
¶23
Even if a contract is otherwise validly formed and enforceable, a party to a contract
may rescind or seek rescission of the contract if the parties formed the contract based on a
mutual mistake of fact. Section 28-2-1711(1), MCA.11 For purposes of contract formation
and rescission, a “mutual mistake of fact” is “an unconscious ignorance or forgetfulness of
a fact . . . material to the contract,” or a “belief in the present existence of a thing material
to the contract which does not exist or in the past existence of such a thing which [did] not
exist.” Section 28-2-409, MCA. If at all, a “mutual mistake occurs” at the time of contract
formation, and only if all “parties share a common misconception about a vital fact upon
which they based their bargain.” Mitchell v. Boyer, 237 Mont. 434, 437, 77 P.2d 384, 386
(1989). See similarly South v. Transp. Ins. Co., 275 Mont. 397, 401, 913 P.2d 233, 235
(1996) (fact is material to a contract if a “vital fact upon which the parties based their
bargain”). An otherwise validly formed contract is thus subject to rescission due to mutual
mistake of fact only if both parties entered into the contract under a mistake of fact “so
substantial and fundamental as to defeat the object of the contract.” Van Hook v. Baum,
11
The mutual assent required, inter alia, as an essential element for valid contract formation, see
infra, may not be mutual and free for purposes of contract formation if the product of undue
influence, duress, menace, fraud, or mistake of fact or law as those terms are narrowly defined by
law. See §§ 28-2-301, -302, and -401, MCA. However, those formation defects do not render the
resulting contract void ab initio, but merely voidable and thus subject to rescission or judicial
reformation upon election of the aggrieved party under certain circumstances. See §§ 28-2-302,
-1611, -1701, and -1711 through -1715, MCA; Montana Ass’n of Underwriters v. State, 172 Mont.
211, 217-18, 563 P.2d 577, 581 (1977) (citing 1 Williston on Contracts, 3d ed., § 15); Beebe v.
James, 91 Mont. 403, 414-17, 8 P.2d 803, 806-07 (1932); Mut. Ben. Life Ins. Co. v. Winne, 20
Mont. 20, 29-32, 49 P. 446, 449-50 (1897).
20
245 Mont. 407, 409, 800 P.2d 151, 152 (1990). Accord South, 275 Mont. at 401, 913 P.2d
at 235.
¶24
In contrast, a contract is subject to rescission due to the unilateral mistake of fact of
one party only if that party entered into the contract under a substantial mistake or
misapprehension of material fact due to unconscious ignorance or oversight, and the
mistake or misapprehension of fact was not the result of the party’s own failure to exercise
reasonable care under the circumstances. Section 28-2-409, MCA; Silva v. McGuines, 189
Mont. 252, 256-57, 615 P.2d 879, 881-82 (1980); Quinn v. Briggs, 172 Mont. 468, 475-78,
565 P.2d 297, 301-02 (1977). See similarly Restatement (Second) Of Contracts § 153
(1981) (unilateral mistake of fact). Absent a showing of “fraud, misrepresentation or other
wrongful act by the other contracting party,” a party “who executes a written contract is
presumed to know the contents of the contract and to assent to” the terms specified therein.
Silva, 189 Mont. at 256, 615 P.2d at 882; Quinn, 172 Mont. at 476, 565 P.2d at 301.
“Absent incapacity to contract, ignorance of the contents of a written contract is not a
ground for relief from liability.” Silva, 189 Mont. at 256, 615 P.2d at 882; Quinn, 172
Mont. at 476, 565 P.2d at 301. “A party to a contract cannot avoid the contract on the
ground that [the party] made a mistake where there has been no misrepresentation, no
ambiguity in the terms of the contract, and the other party has no notice of such mistake
and acts in good faith.” Silva, 189 Mont. at 256, 615 P.2d at 881-82; Quinn, 172 Mont. at
475, 565 P.2d at 301. “[E]ven if one of the contracting parties believes the words of the
contract mean something different, the parties . . . are bound by the plain meaning of the
21
words . . . as properly interpreted,” unless the party claiming mistake can prove that the
other party was aware of the mistake. Silva, 189 Mont. at 256, 615 P.2d at 881-82; Quinn,
172 Mont. at 475-76, 565 P.2d at 301. If a party fails to exercise reasonable care under the
circumstances and “acts . . . in such a manner as to lead” the other party to believe that it
assents to the terms of the written contract, the party “will be bound in law and in equity,
even though . . . the party supposes the writing is an instrument of entirely different
character.” Silva, 189 Mont. at 256, 615 P.2d at 882; Quinn, 172 Mont. at 476, 565 P.2d
at 301. “The integrity of written contracts would be destroyed if contracting parties, having
admitted signing the instrument, were allowed to rescind the contract on the basis [that]
they neither read nor understood the expressed agreement.” Silva, 189 Mont. at 256, 615
P.2d at 882; Quinn, 172 Mont. at 476, 565 P.2d at 301.
¶25
Here, the District Court effectively concluded that it was beyond genuine material
dispute on the record presented that there was no contemporaneous mutual or unilateral
mistake among the parties at mediation regarding the meaning of the MOU-referenced
“paving cross-section drawings.”
The court further concluded that the plain and
unambiguous, albeit limited, language of the MOU included no express or manifestly
implicit requirement for the referenced “paving cross-section drawings” to include or be
supported by an accompanying geotechnical investigation and analysis. In that regard, the
factual record manifests without contradiction that the Town did not communicate or
otherwise assert any such desire and demand until over three weeks after the mediation
when it appeared for the first time in the Town-edited proposed final settlement agreement.
22
The Town has further made no supported evidentiary showing that the referenced Sky Park
“paving cross-section drawings,” discussed at mediation in the context of the narrow
precipitating dispute (as to whether the already-constructed streets complied with
previously-agreed minimum street width requirement), would necessarily include or
require a supporting geotechnical analysis.12 We hold that the District Court correctly
concluded as a matter of law that the MOU unambiguously included no express or
manifestly implicit requirement for a Developers-provided geotechnical investigation, and
that the mediated agreement was not based on either a mutual mistake of fact or a qualifying
unilateral mistake of fact made by the Town.
3. Contract Validity and Enforceability of Mediated MOU and/or Developers’
Proposed Final Settlement Agreement.
¶26
A contract is a legally enforceable “agreement” that requires a party “to do or not
do a certain thing.” Section 28-2-101, MCA. See also § 27-1-105, MCA (contract
“obligation is a legal duty” binding a party “to do or not do a certain thing”). The essential
elements generally required for formation of a valid and enforceable contract include:
(1) identifiable parties capable of contracting; (2) a lawful object (including lawful
underlying terms and conditions); (3) the communicated mutual assent of the parties to the
12
The Town has made no assertion, much less showing, that the previously agreed street
construction specifications expressly or implicitly included a requirement for a supporting
geotechnical analysis.
23
same contract terms and conditions;13 and (4) sufficient reciprocal consideration.14 See
§§ 28-2-101, -102, -202, -301, -303, -501 through -503, -601 through -604, -701, and -801
through -803, MCA; Lenz v. FSC Sec. Corp., 2018 MT 67, ¶¶ 17-18, 391 Mont. 84, 414
P.3d 1262; AAA Constr. Of Missoula, LLC v. Choice Land Corp., 2011 MT 262, ¶ 19, 362
Mont. 264, 264 P.3d 709; Keesun Partners v. Ferdig Oil Co., Inc., 249 Mont. 331, 337,
816 P.2d 417, 421 (1991).
¶27
Even if a contemplated more formal superseding agreement does not materialize
due to subsequent party recalcitrance or disagreement regarding other ancillary or related
terms, the terms of an informal settlement agreement are still independently enforceable as
a contract if the informal agreement both satisfies the essential elements required for
contract formation, and the terms of the agreement do not clearly and unambiguously
require the parties to execute a more formal superseding agreement as a condition
13
Mutual assent “is established when there has been an offer” from one party and “unconditional
acceptance” of the terms and conditions of “that offer” by another. Keesun Partners, 249 Mont.
at 337, 816 P.2d at 421 (citations omitted). Parties mutually assent only to the extent that they “all
agree upon the same thing in the same sense.” Section 28-2-303, MCA.
14
Sufficient consideration generally requires: (1) a benefit offered by a party/promisor to the other
party, or the party/promisor’s offer to suffer a detriment; (2) in exchange for or to induce a
reciprocal benefit from or detriment suffered by the other; and (3) the offered exchange or
inducement involves a benefit to which the benefitted party is not already lawfully entitled or a
detriment which the party/promisor is not already lawfully bound to incur. Associated Mgmt.
Servs., Inc. v. Ruff, 2018 MT 182, ¶ 28, 392 Mont. 139, 424 P.3d 571 (citing § 28-2-801, MCA—
internal punctuation omitted). See also Bucy v. Edward Jones & Co., L.P., 2019 MT 173, ¶ 27,
396 Mont. 408, 445 P.3d 812 (“mutuality of consideration” requires “valuable consideration on or
for both sides of the agreement”). “Absent [contrary] affirmative proof . . . , a written contract is
presumed to be supported by ‘good and sufficient consideration.’” Ruff, ¶ 28 (citing
§§ 26-1-602(38) and 28-2-804, MCA).
24
precedent to contract formation (i.e., a condition precedent to the parties’ mutual assent to
be bound by the tentatively agreed settlement terms). See, e.g., Kluver v. PPL Montana,
LLC, 2012 MT 321, ¶¶ 31-33, 35-39, and 42, 368 Mont. 101, 293 P.3d 817 (informal
electronic MOU of mediated agreement contemporaneously drafted by plaintiff’s counsel
and promptly emailed to other counsel valid and enforceable on its terms despite
subsequent repudiation of the client/party several weeks later where MOU included no
manifestation of party intent that the mediated agreement would be conditional or not
binding, extrinsic evidence manifested contemporaneous mutual assent to its express
terms, encompassed complete agreement of the parties on all essential terms, and included
“all . . . information necessary to create” contemplated final settlement agreement and
related transaction instruments); Marta Corp. v. Thoft, 271 Mont. 109, 113, 894 P.2d 333,
335 (1995) (valid and enforceable contract formed where represented parties personally
agreed to various unconditional “general terms” subsequently memorialized in a written
stipulation cosigned by respective counsel—parties thus bound by the subsequently filed
stipulation regardless of a party’s subsequent second-thought repudiation and refusal to
sign contemplated final settlement agreement); Hetherington v. Ford Motor Co., 257 Mont.
395, 398-403, 849 P.2d 1039, 1042-44 (1993) (valid and specifically enforceable
settlement contract formed where represented plaintiffs authorized counsel to notify other
party/counsel of their unconditioned acceptance of other’s unconditional offer—later
disagreement as to whether final settlement documents should include a nondisclosure
clause or liability admission were immaterial/ancillary matters not addressed or reserved
25
as conditions of parties’ prior assents to the agreed terms); Long v. Needham, 37 Mont.
408, 423-24, 96 P. 731, 736 (1908) (“where the parties make the reduction of the contract
to writing and its signature by them a condition precedent to its completion, it will not be
a contract until it is reduced to writing and signed”—“[b]ut, where they assent to all of its
terms, the mere reference to a future contract in writing will not negat[e] the existence of a
present and completed one”—citation omitted). Compare Jarussi v. Sandra L. Farber
Trust, 2019 MT 181, ¶¶ 15 and 17-24, 396 Mont. 488, 445 P.3d 1226 (email
communications stating or manifesting informal settlement agreement not enforceable as
validly formed contract despite clear offer and unconditional acceptance where a
disagreement remained as to the scope or meaning of the agreed terms);15 Patton v.
Madison Cty., 265 Mont. 362, 367-68, 877 P.2d 993, 996 (1994) (informal settlement
agreement not enforceable as validly formed contract due to lack of mutual assent to all
essential contract terms where disagreement remained regarding issues “central to the very
performance of the contract” and record clearly manifested parties’ intent that the agreed
settlement would not be effective until later incorporated in a more formal written
agreement). Moreover, upon satisfaction of other contract formation requirements, a
15
Kluver also addressed various related matters, not at issue here including, inter alia, the
sufficiency of the electronic agreement and transmittal email as a signed writing in compliance
with applicable statutes of frauds, whether plaintiff’s counsel had sufficient client authorization to
agree to or sign the MOU on the client/plaintiff’s behalf, whether the court erroneously considered
extrinsic evidence as to what occurred during the course of the mediation in violation of
§ 26-1-813, MCA (mediation confidentiality and privilege), and whether the court erroneously
considered extrinsic evidence regarding privileged attorney-client communications. Kluver,
¶¶ 21-30 and 52-62.
26
“party to a settlement agreement is bound if [the party] has manifested assent to the
agreement’s terms[,] and has not manifested an[y] intent not to be bound by that assent.”
Lockhead v. Weinstein, 2003 MT 360, ¶ 12, 319 Mont. 62, 81 P.3d 1284 (citing
Hetherington, 257 Mont. at 399, 849 P.2d at 1042—emphasis added).16 Consequently, a
party’s undisclosed intent to not be bound, subsequent change of mind, or later assertion
of new or different terms does not preclude or vitiate formation of a valid and enforceable
informal settlement agreement if the informal agreement independently satisfies all
essential contract formation requirements. See Kluver, ¶¶ 7 and 31-42; Marta Corp., 271
Mont. at 113, 894 P.2d at 335; Hetherington, 257 Mont. at 398-403, 849 P.2d at 1042-44.
¶28
Of course, the essential contract requirements for mutual assent and reciprocal
consideration necessarily require agreed terms that are sufficiently specific, descriptive,
and complete to make the parties’ respective reciprocal obligations under the informal
agreement clearly identifiable or ascertainable from those terms. Kluver, ¶¶ 37-38. But,
enforceability requires only that the informal agreement state the agreed terms of
settlement in a reasonably certain and complete manner sufficient to identify and permit
required performance and enforcement of the manifestly intended reciprocal obligations of
the parties, thereby accomplishing the manifest intended purpose of the agreement. See
Kluver, ¶¶ 36-38 (“absolute certainty and completeness in every detail is not a prerequisite”
to enforcement— “only reasonable certainty and completeness” regarding the agreed terms
16
Accord Kluver, ¶ 33 (citing Lockhead, ¶ 12).
27
and purpose of the agreement required—quoting Steen v. Rustad, 132 Mont. 96, 106, 313
P.2d 1014, 1020 (1957)). Thus, the independent validity and enforceability of an informal
settlement agreement does not depend on the inclusion or specification of other related but
unstated “matters which are merely subsidiary,” ancillary, “collateral,” or immaterial to
performance of the central or primary terms of the agreement. See, e.g., Kluver, ¶ 36
(quoting Steen, 132 Mont. at 106, 313 P.2d at 1020).
¶29
It is beyond genuine material dispute on the evidentiary record presented here that
the parties’ informal MOU, as contemporaneously signed by Developers, their counsel,
and the Town Attorney, completely and accurately stated their complete agreement
regarding the matters expressly referenced therein.
The express MOU terms were
manifestly clear and unambiguous on their face, with no non-speculative supported
extrinsic evidentiary showing that the referenced “new paving cross-section drawings for
Sky Park Subdivision” meant anything other than the type of engineer-prepared street
cross-section drawings later provided to the Town by Developers in June 2021.
¶30
Moreover, as analyzed supra, it is further beyond genuine material dispute on the
record presented that neither party agreed to the written terms stated in the MOU while
laboring under a contemporaneous mistake of fact regarding their meaning. In that regard,
the language of the mediated MOU neither included, nor manifested, any express or
implied requirement or intent that the referenced “new paving cross-section drawings for
Sky Park Subdivision” would necessarily include, or be accompanied by, a geotechnical
analysis conducted by a qualified engineer at Developers’ expense. It is similarly beyond
28
genuine material dispute that the Town did not first assert a request or demand for an
accompanying geotechnical investigation regarding the Sky Park streets until well after the
close of the parties’ mediated settlement negotiations, and the Town Attorney’s
contemporaneous signing of the informal MOU. We hold that the District Court correctly
recognized that the parties’ mediated settlement did not include any express or implied
agreement or intent that the referenced requirement for “new paving cross-section drawings
for Sky Park Subdivision” would include, or be accompanied by, a supporting geotechnical
analysis conducted by a qualified engineer at Developers’ expense.
¶31
“A contract condition is the subsequent occurrence of a specific uncertain act, event,
or circumstance.” Davidson v. Barstad, 2019 MT 48, ¶¶ 20-23, 395 Mont. 1, 435 P.3d 640
(citing § 28-1-401, MCA, and Restatement (Second) of Contracts § 224 (1981)). As
distinct from a condition precedent to a performance of an obligation required by the terms
of an already validly formed contract, “[a] condition precedent to contract formation is a
specific condition, usually an extraneous event or circumstance or third-party act, the
occurrence upon which the reciprocal promises constituting the contract consideration
depend.” Davidson, ¶ 20. See also § 28-1-403, MCA (a “condition precedent” inter alia
includes a condition to be satisfied “before some right dependent thereon accrues”).
“[F]ailure or non-satisfaction of a condition precedent to contract formation renders the
contemplated contract non-existent as never [fully] formed[,] and thus non-binding and
unenforceable.” Davidson, ¶ 21. In other words, an agreement satisfying the essential
elements required for valid contract formation (i.e., identifiable parties capable of
29
contracting, communicated mutual assent of the parties to the same contract terms and
conditions, sufficient reciprocal consideration, and lawful object, terms, and conditions),
but which is subject to a condition precedent to formation, is a valid contract that is
conditionally binding and enforceable (i.e., effective) only upon satisfaction of the agreed
condition precedent to formation. See § 28-1-403, MCA (a “condition precedent” inter
alia includes a condition to be satisfied “before some right dependent thereon accrues”);
Davidson, ¶¶ 20-21.
¶32
Here, it is beyond genuine material dispute on the factual record presented that the
parties did not ultimately agree on the terms of a contemplated final settlement agreement
incorporating and formalizing the terms of their mediated settlement agreement due to a
post-mediation dispute as to whether the more formal final agreement should also further
require a supporting geotechnical analysis regarding Sky Park Subdivision streets.
However, nothing in the express language of the MOU, or in the extrinsic evidentiary
showing made by the Town in opposition to Developers’ enforcement motion, manifests
any mutual assent to a requirement for the parties’ subsequent approval and execution of a
superseding final settlement agreement as a condition precedent to their mutual assent to
the terms of their mediated agreement as stated in the MOU. Rather, it is beyond genuine
material dispute that the only agreed condition precedent to their mutual assent to the
mediated agreement was subsequent approval of the express terms stated in their resulting
30
MOU by the Town Council.17 We hold that the parties’ mediated settlement agreement, as
stated in their resulting unintegrated MOU, satisfied all essential requirements for valid
contract formation, but was only conditionally binding and enforceable (i.e., effective)
upon satisfaction of a mutually agreed parol condition precedent to formation—Town
Council approval of those terms. 18
¶33
Thus, as recognized by the District Court, the ultimately dispositive issue was
whether the Town Council in fact approved the MOU-specified settlement terms, and/or
17
Without breaching the statutory confidentiality of the parties’ communications at mediation, the
agreed parol condition precedent to formation was extrinsically evidenced, inter alia, by the open
Mayor’s signature line in their resulting MOU, and the substantive language of their
contemporaneous joint post-mediation motion for vacation of the litigation scheduling order (i.e.,
“following mediation” the parties “have reached an agreement in principle . . . requir[ing] approval
from the Town Council”).
18
Under the common law parol evidence rule, extrinsic evidence is generally not admissible to
contradict, vary, or supplement the express terms of an integrated written agreement. See Mary J.
Baker Revocable Tr. v. Cenex Harvest States, Cooperatives, Inc., 2007 MT 159, ¶ 21 n.2, 338
Mont. 41, 164 P.3d 851 (quoting Williston on Contracts § 33:1, at 541); Habets v. Swanson, 2000
MT 367, ¶ 24, 303 Mont. 410, 16 P.3d 1035; Savik v. Entech, Inc., 278 Mont. 152, 156-58, 923
P.2d 1091, 1094-95 (1996); Baker v. Bailly, 240 Mont. 139, 143, 782 P.2d 1286, 1288 (1989)
(citing Williston on Contracts, 3d ed., § 631); John D. Calamari & Joseph M. Perillo, The Law of
Contracts § 3-2 at 135-36 and § 3-4 at 145 (3d ed. 1987). An integrated agreement is a written
agreement intended by the parties as the full, final, and exclusive expression of the terms of the
agreement, thus superseding any and all prior or contemporaneous agreements, understandings, or
negotiations regarding its scope or meaning. Woodruff v. Bretz, Inc., 2009 MT 329, ¶ 19 n.3, 353
Mont. 6, 218 P.3d 486 (citing Black’s Law Dictionary (Bryan A. Garner ed., 8th ed., West 2004));
Bonner Sch. Dist. No. 14 v. Bonner Educ. Ass’n, 2008 MT 9, ¶ 36, 341 Mont. 97, 176 P.3d 262;
Brimstone Min., Inc. v. Glaus, 2003 MT 236, ¶ 46, 317 Mont. 236, 77 P.3d 175; The Law of
Contracts § 3-2 at 135. An integrated agreement is typically indicated by an express integration
clause (i.e., merger clause), or by inference from the express terms of the agreement regarding
their manifest scope and completeness). See §§ 28-2-301 through -302, MCA (required
interpretation of contracts to give effect to manifest intent of the parties to extent ascertainable
from clear and unambiguous express language); Brimstone, ¶ 46; The Law of Contracts § 3-6 at
156. Here, the written MOU included no integration or merger clause, and it is undisputed that it
was subject to an agreed parol condition requiring subsequent Town Council approval of its terms.
31
the Developers-proposed final settlement agreement, in closed session on April 2021.19
Developers assert that the Mayor’s act of adding his signature to the MOU after the Town
Council’s April 2021 closed meeting manifests the Council’s approval of the MOU, and
thus satisfaction of that condition precedent to contract formation. Certainly, the Town, as
a municipality, has general power to contract with private and other governmental parties.
Sections 7-1-4124(4) and 7-5-4301, MCA. While the Town Mayor was at all times vested
with various statutory authority as the chief executive and administrative officer of the
Town, see §§ 7-1-4121(2), (5), (11), 7-3-113, -201, -202(1), -203, -212 through -216,
7-5-4102, and -4205, MCA, he had no unilateral authority to “mak[e] . . . any contract”
with Developers, or even “execute” a council-made or approved contract, without
“approval of” the Town Council. See §§ 7-1-4123(4), -4124(3), 7-3-203(7), and 7-5-4121,
MCA. The Town Council was and is the ultimate “governing body” of the Town with the
exclusive authority, inter alia, to “mak[e] . . . any [municipal] contract.”
See
§§ 7-1-4122(6), -4123, 7-3-113, -122(4), -201, 7-5-4101, and -4121, MCA. However,
19
The Town again asserts in support of its contrary factual assertion that the Town Council could
not possibly have done so as a matter of law because any such action at a closed meeting would
necessarily have been invalid in violation of the public notice and open meeting requirements of
§§ 2-3-203(1) and 7-1-4141 through -4143, MCA. Putting aside the Town’s manifest lack of
standing for such defensive assertion under the circumstances, and without need to address
whether the closed April 2021 Council meeting in fact violated open meeting laws as concluded
by the District Court, we note that an open meeting violation does not necessarily render any action
taken at an unlawfully closed meeting invalid as a matter of law. See § 2-3-213, MCA (“[a]ny
decision made in violation of [§] 2-3-203 may be declared void by a district court having
jurisdiction”—emphasis added); Citizens for Open Gov’t, ¶¶ 19-26 (district court “discretion to
void a decision made in violation of . . . open meeting laws” when necessary under the
circumstances if government body/agency failed to subsequently “cure” the violation by affording
“subsequent opportunities for public comment” prior to final decision).
32
general powers municipalities may exercise granted statutory power only in the manner
provided by law. See §§ 7-1-4101, -4111, -4121(9), (15), -4122, and -4124, MCA
(municipalities as corporate political subdivisions of the state and distribution of municipal
powers).
¶34
In the exercise of granted authority, the Town Council can lawfully act only upon a
majority vote of a quorum of its members. Section 7-5-4121, MCA. Consequently, while
possibly non-conclusive circumstantial evidence indicating that the Town Council voted
to approve the MOU-specified settlement terms at the April 2021 closed meeting, and thus
concomitantly authorized the Mayor to then sign the MOU, the Mayor’s signing of the
MOU neither conclusively effected the requisite Town assent to those terms as a matter of
law, nor conclusively evidenced Town Council approval of the MOU as a matter of law or
fact. Thus, the Town Council could have lawfully approved the terms of the MOU at its
closed April 2021 meeting, thereby satisfying the agreed parol condition precedent to
contract formation, only upon a majority vote of a quorum of the council at that meeting.
Section 7-5-4121, MCA. Whether the Town Council approved the terms of the MOU at
the April 2021 closed meeting upon a majority vote of a quorum was and is a question of
evidentiary fact.
¶35
Based on its finding that the Town Clerk’s affidavit assertion, that the Town
Council took “no vote” approving the MOU at the closed April 2021 meeting, was
“uncredible” in juxtaposition to various noted circumstantial facts, including the Mayor’s
subsequent signature of the MOU, the District Court found that the Town Council “took
33
action to approve the MOU” at the April 2021 closed meeting, thus satisfying the agreed
condition precedent to contract formation. However, under M. R. Civ. P. 56, the question
of whether a genuine issue of material fact precludes summary judgment on an essential
element of proof of the legal claim or defense at issue is a question of law dependent upon
whether the non-speculative record facts would support only one reasonable finding of fact.
Davis, ¶ 12; Ereth, ¶ 11; State Med. Oxygen & Supply, 267 Mont. at 344, 883 P.2d at 1243;
Doe, 952 F.3d at 1189. Within that framework, it is the exclusive province of the factfinder
to resolve questions of fact subject to reasonable dispute. Sections 25-7-103 and 26-1-202,
MCA; Weinberg, 231 Mont. at 27, 752 P.2d at 730. Except where the evidence is
“conclusive,” the finder of fact is generally the exclusive “judge of the effect and value of
evidence,” including “a witness’s credibility.”
Sections 26-1-203 and -302, MCA.
Consequently, “at the summary judgment stage, the court [may] not make findings of fact,
weigh the evidence, choose one disputed fact over another, or assess the credibility of
witnesses.” Andersen v. Schenk, 2009 MT 399, ¶ 2, 353 Mont. 424, 220 P.3d 675. The
limited role of the court regarding factual matters is to examine the Rule 56 factual record
“to determine whether there is a genuine issue as to any material fact relating to the legal
issues raised.” Andersen, ¶ 2. Here, the court exceeded its limited Rule 56 role by making
a dispositive finding of fact based on an evidentiary credibility determination regarding an
acknowledged genuine issue of material fact.
We hold that the District Court thus
erroneously granted Developers judgment as a matter of law that the Town Council “took
action to approve” the parties’ mediated MOU at its April 2021 closed meeting.
34
CONCLUSION
¶36
We hold that the District Court correctly concluded as a matter of law that the
parties’ mediated MOU:
(1)
unambiguously included no express or manifestly implicit requirement for a
Developers-provided geotechnical investigation, and was not void or
voidable based on a mutual mistake of fact or a qualifying unilateral mistake
of fact by the Town Attorney;
(2)
did not include any express or implied agreement or intent that the referenced
requirement for “new paving cross-section drawings for Sky Park
Subdivision” would include, or be accompanied by, a supporting
geotechnical analysis conducted by a qualified engineer at Developers’
expense; and
(3)
satisfied all essential requirements for valid contract formation but was only
conditionally binding and enforceable upon satisfaction of a mutually agreed
parol condition precedent to formation—Town Council approval of the
MOU terms.
We hold further, however, that the District Court erroneously granted Developers judgment
as a matter of law that the Town Council “took action to approve” the parties’ mediated
MOU at its April 2021 closed meeting. A genuine issue of material fact remains for
factfinder determination as to whether a majority of a quorum of the Town Council voted
to approve the MOU-specified terms of settlement, and thus satisfied the agreed condition
precedent to contract formation and enforceability of the MOU. We therefore affirm in
part, reverse in part, and remand for proper resolution of this outstanding issue of material
fact and entry of a corresponding judgment.
¶37
Affirmed in part, reversed in part, and remanded for further proceedings.
/S/ DIRK M. SANDEFUR
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We concur:
/S/ MIKE McGRATH
/S/ LAURIE McKINNON
/S/ JAMES JEREMIAH SHEA
/S/ BETH BAKER
/S/ INGRID GUSTAFSON
/S/ JIM RICE
36