Interstate Production Credit Ass'n v. Desaye

No. 90-628

IN THE SUPREME COURT OF THE STATE OF MONTANA

1991

INTERSTATE PRODUCTION CREDIT ASSOCIATION OF

Plaintiff and Respondent,

-vs-

JOSEPH L. DeSAYE AND GRACE L. DeSAYE,

Defendants, Counter-Claimants

INTERSTATE PRODUCTION CREDIT ASSOCIATION OF GREAT FALLS, MONTANA,

Counter-Defendant.

APPEAL FROM: District Court of the Twelfth Judicial ~istrict,

In and for the County of Choteau,

The Honorable John M. McCarvel, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Leo Graybill, Jr. ; Graybill, Ostrem, Warner &

Crotty, Great Falls, Montana.

For Respondent:

John Paul; Alexander, Baucus & Linnell, Great Falls,

Montana.

Submitted on briefs: October 3, 1991

Decided: November 14, 1991

Filed:

Justice R. C. McDonough delivered the Opinion of the Court.

This is an appeal from a judgment of possession of the Twelfth

Judicial District, Chouteau County. Subsequent to a foreclosure

action, the District Court found that the appellants, Joe and Grace

DeSaye (DeSaye), were not entitled to possession of their farm in

Loma, Montana during the statutory redemption period. We affirm.

A question in this case involves the District Court's denial

of a motion in limine during the foreclosure proceeding. DeSaye was

precluded from introducing expert testimony regarding the interest

rates charged by respondent, Interstate Production Credit

Association of Great Falls, Montana (IPCA). However, this Court

granted IPCA1s motion dismissing DeSayest appeal of the District

Court's ruling on the motion in limine because DeSayes failed to

file their appeal of the foreclosure judgment and decree in a

timely fashion.

There is one issue for our review. Did the District Court err

by finding that Joseph L. DeSaye was not entitled to possession of

the foreclosed farm during the statutory redemption period?

Following a jury verdict in favor of IPCA, the District Court

entered a judgment and decree of foreclosure against DeSayes.

DeSaye objected that the judgment failed to identify how the issue

of possession during the year of redemption would be resolved. The

court ordered briefs on the possession issue and an evidentiary

hearing was held. The subject property, located at Loma, Montana,

is a large irrigated farm consisting of two houses and several

outbuildings. The Itlarge"house is occupied by DeSayes' son Grant,

2

Grant's wife and their children. Grant utilizes the property to

run cattle independently of his father. In addition, along with

his father, he attends to farming operations. Initially, the court

found that during the redemption period DeSaye would be entitled to

possession of the 'small house1 but not to the 'large house',

outbuildings and surrounding grounds.

Subsequent to the District Court's decision, this Court

decided Federal Land Bank of Spokane v. Snider (1991), 48 St.Rep.

285, 808 P.2d 475. In Snider, this Court held that when determining

possession of foreclosed property during the redemption period

there is no basis for dividing lands that the execution debtor

occupies. In May, 1991, we requested the District Court to

reconsider its decision in light of the Snider decision. The

District Court reviewed the record, found it unnecessary to obtain

further evidence and determined that DeSaye did not occupy the

foreclosed land as a home for himself and his family thereby

granting possession of all the foreclosed land to IPCA. DeSaye

appeals.

Section 71-1-229, MCA, provides in relevant part that:

The purchaser of lands at mortgage foreclosure is

not entitled to the possession thereof as against the

execution debtor during the period of redemption allowed

by law while the execution debtor personally occupies the

land as a home for himself and his family.

Determining who is entitled to possession of the property hinges on

whether DeSaye (the execution debtor) personally occupied the land

as a home for himself and his family. Resolution of this matter is

a question of fact to be determined by the trial court.

This Court will affirm the findings of a trial court sitting

without a jury unless the findings are clearly erroneous. Rule

52(a), M.R.Civ.P. In comparison, this Court will affirm the

verdict of a jury if there is substantial credible evidence in the

record to support the verdict. It is necessary to clarify these

two standards and their proper application.

Substantial credible evidence when used to support a jury

verdict is fairly well understood; however, when substantial

evidence is used in the clearly erroneous standard it is less

clear. If a finding is not supported by substantial evidence it is

clearly erroneous. The converse proposition that a finding

supported by substantial evidence cannot be clearly erroneous is

not true in a non-jury case. Wright and Miller, 9 Federal Practice

and Procedure, CiviI 3 2585 at p. 735. vvSubstantial

evidence and

clearly erroneous are not synonymous and a finding may be set

aside, though supported by substantial evidence if found to be

clearly erroneous.gt W.R.B. Corp. v. Geer (C.A. 5th, 1963) , 313

F.2d 750.

We adopt the following three-part test to determine if a

finding is clearly erroneous. First, the Court will review the

record to see if the findings are supported by substantial

evidence. Second, if the findings are supported by substantial

evidence we will determine if the trial court has misapprehended

the effect of evidence. Western Cottonoil Co. v. Hodges (C.A. 5th

1954) , 218 F. 2d 158.; Narragansett Improvement Company v. United

States (1961), 290 F.2d 577. Third, if substantial evidence exists

and the effect of the evidence has not been misapprehended the

Court may still find that [A] finding is 'clearly erroneous' when,

although there is evidence to support it, a review of the record

leaves the court with the definite and firm conviction that a

mistake has been c~rnmitted.~~

U.S. v. U.S. Gypsum Co. (1948), 68

S.Ct. 525, 333 U.S. -364, 92 L.Ed. 746.

In the instant case, the District Court based its findings

that DeSaye did not reside in Loma on the following six facts.

First, DeSayelstelephone number was listed in Arizona at the home

of his present wife, Carol Struck, while no listing was found in

his name at the Loma farm. Second, neither DeSayels mailing

address nor vehicle registration identify the Loma farm. His

mailing address is a post office box at Havre, Montana. Third,

Desaye was found to have spent more than 50 percent of his time in

Arizona. Fourth, his current wife resides in Mesa, Arizona and has

never spent a night at the Loma farm. Fifth, Joe and Grace Desaye

divorced in 1989. Joseph L. DeSaye claimed in petition for

dissolution and was found in the final decree of marriage

dissolution to be a resident of the State of Arizona. Sixth, the

farmhouse is occupied by DeSayest son and his family who run

livestock independent of DeSaye.

We find that the facts above provide substantial evidence that

DeSaye did not make his home at the Loma farm. DeSaye contends that

these facts are not determinative. He testified and maintains that

he considers the Loma farm to be his home. Numerous examples from

the record are cited to refute the District Court's finding and to

support his contention that he does in fact live at the Loma farm.

DeSaye alleges that the record clearly supports a finding that he

does reside at the Loma farm and that he should be given possession

during the redemption period.

Although conflicts may exist in the evidence presented, it is

the duty of the trial judge to resolve such conflicts. Due regard

is to be given the trial court's ability to judge the credibility

of the witnesses. Rule 52(a), M.R.Civ.P. This Court's function is

not to substitute its judgment for the trier of fact. Wallace v.

Wallace (1983), 203 ~ o n t .255, 661 P.2d 455.

The language of 5 71-1-229, MCA, is clear in that execution

debtors themselves must 'personallyt reside at the foreclosed

property. We decline Desaye's invitation to include his son's

family residence at the farm as being able to substitute for his

own. While it is unclear why the District Court initially found

that DeSaye did reside in the 'small house,' but on reconsideration

found that the small house was not his home, it remains that the

substantial evidence does support the court's finding on

reconsideration. The District Court did not misapprehend the

effect of its evidence. Furthermore, a review of the evidence does

not leave us with a definite and firm conviction that a mistake has

been committed. Affirmed.

Justice

/

We Concur: