JOSEPH SCHMAUS v. CX RANCH LLP (2023)

Justice Laurie McKinnon 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 Joseph H. Schmaus (Schmaus) appeals from the dismissal of his case entered in the First Judicial District Court, Broadwater County. We affirm.

¶3 In 2013, Schmaus purchased the Fatigue Lode Patented Mining Claim (Fatigue Claim)—Section 1, Township 9 North, Range 1 West—in Broadwater County. When the Fatigue Claim was purchased, Schmaus received no guaranteed access rights to the mining property. The Fatigue Claim is an inholding surrounded by Bureau of Land Management (BLM) land. CX Ranch, LLP (CX Ranch) owns sections 12 (S1/2), 13, and 24 (excluding 15 acres) in Township 9 North, Range 1 West, in Broadwater County.

¶4 In 2018, Schmaus filed a complaint in the First Judicial District Court, Broadwater County, seeking the declaration of historic Broadwater County roads traversing surrounding property which would provide access to the Fatigue Claim.¹ See Schmaus v. Broadwater County, No. BDV-2018-46 (Mont. First Judicial Dist. 2018). According to Schmaus, the BLM denied him a right-of-way to access his Fatigue Claim and the only available access was a three mile long right-of-way across CX Ranch's land.

¶5 In November of 2019, CX Ranch filed a Motion for Summary Judgment asking the court to dismiss the action in its entirety. On November 7, with the motion for summary judgment still pending, Schmaus filed a Motion for Leave of Court to Amend Complaint and Request for Scheduling Conference, seeking leave to amend his complaint to bring new claims against CX Ranch. Among other claims, Schmaus sought to include a claim that pursuant to § 82-2-201, MCA (“Right-of-way of owners of mines”), he was “entitled to a Right of Way” on CX Ranch's land “to be used to facilitate access to his Fatigue Lode Patented Mining Claim.”

¶6 On January 13, 2020, the court issued an order reserving ruling on Schmaus's motion to amend and gave Schmaus four days—until January 17—to submit his proposed amended complaint. If the court received the proposed amended complaint, it would then rule on whether to grant Schmaus's motion for leave to amend his complaint. However, instead of submitting a proposed amended complaint, on January 16, 2020, Schmaus filed with this Court a Petition for a Writ of Supervisory Control seeking to overturn the court's January 13 rulings. The next day, Schmaus filed a Motion to Stay Proceedings and Request for Extension of Time to File Amended Complaint with the District Court, because “the high court may not have a decision out before” the January 17 deadline for his proposed amended complaint and because “four days is not enough time for” Schmaus to prepare the amended complaint. Schmaus never submitted a proposed amended complaint.

¶7 On January 21, this Court declined to exercise supervisory control and dismissed Schmaus's petition. See Schmaus v. Mont. First Judicial Dist. Court, No. OP 20-0045, 399 Mont. 550, 460 P.3d 400 (Jan. 21, 2020). On February 3, the District Court denied Schmaus's motion for a stay as moot and denied Schmaus's motion to amend outright, ruling it was untimely because it was filed after CX Ranch's motion for summary judgment. In the ruling, the court also explained that “[e]ven if the timing of Schmaus's motion to amend were not fatal, his failure to comply with this Court's order to produce his proposed amended complaint is.”

¶8 On February 21, Schmaus filed a motion asking the court “to dismiss this action without prejudice so that he may file an action in the United States District Court and name” CX Ranch and Broadwater County along with “the United States of America Department of Interior Bureau of Land Management and Bureau of Reclamation as Defendants,” who Schmaus claimed were indispensable parties over whom the court did not have jurisdiction. On June 2, the court granted Schmaus's motion and dismissed the action without prejudice.

¶9 Then, on June 25, 2020, Schmaus initiated a new action—Schmaus v. CX Ranch, LLP, No. ADV-2020-31 (Mont. First Judicial Dist. Filed June 25, 2020)—when he filed a Verified Complaint for Eminent Domain Right-of-Way against CX Ranch. In his complaint, he claimed a right of access to the Fatigue Claim by eminent domain across CX Ranch's land. Schmaus claims that after BLM denied him a right-of-way on its land to access the Fatigue Claim, no other access routes are available to him. CX Ranch filed a motion to dismiss the case pursuant to M. R. Civ. P. 12(b)(6), arguing Schmaus's complaint bringing the same eminent domain claim he failed to pursue in the previous litigation failed to state a claim upon which relief could be granted and amounted to abusive litigation tactics. CX Ranch also moved for recovery of its necessary litigation expenses including attorney fees and for sanctions. In supporting its motion, CX Ranch noted it relied on materials outside the pleadings. Schmaus responded and argued that because he never actually pursued the eminent domain claim in the previous case, and because the previous case was dismissed without prejudice, he could pursue the eminent domain claim in this case.

¶10 The District Court granted CX Ranch's motion and dismissed the case on November 13, 2020. The court also granted CX Ranch's request for litigation expenses and attorney fees. Pursuant to Rule 12(d), the court treated CX Ranch's motion to dismiss as a motion for summary judgment under M. R. Civ. P. 56 because CX Ranch submitted matters outside the pleadings. The court also noted that Schmaus presented no evidence to dispute the facts set forth in CX Ranch's motion. In its Order, the District Court explained that Schmaus obtained leave in the previous case:

to pursue eminent domain against CX Ranch to obtain access to the Fatigue Lode across ranch property—precisely the claim he is making here. In support of his motion to dismiss, Schmaus represented to the Court he intended to pursue the matter in the United States District Court against the Bureau of Land Management and Bureau of Reclamation as named defendants and “indispensable parties,” He cannot now proceed solely against CX Ranch.

¶11 On appeal, Schmaus raises the following issues: 1) whether the District Court erred by granting summary judgment in CX Ranch's favor; 2) whether the District Court erred by not providing the parties with notice of its intent to convert CX Ranch's Motion to Dismiss to a Motion for Summary Judgment and not conducting a hearing; and, 3) whether the District Court erred by not accounting for the fact that the prior case was dismissed without prejudice.

¶12 We review district court summary judgment rulings de novo. Dick Anderson Constr., Inc. v. Monroe Prop. Co., 2011 MT 138, ¶ 16, 361 Mont. 30, 255 P.3d 1257. Summary judgment is appropriate 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).

¶13 Schmaus argues that the District Court erred in granting summary judgment in CX Ranch's favor and concluding he did not pursue his eminent domain claim in the previous litigation. Schmaus asserts that he was given leave by the court in the first case to file a proposed amended complaint but could not do so because the court only gave him four days to produce it and then ultimately ruled on February 3 that he could not amend his complaint. In effect, Schmaus argues, he was not allowed to pursue his claim of eminent domain. Schmaus contends that he may now bring his eminent domain claim because the court in the first case dismissed his case without prejudice.

¶14 While we recognize that Schmaus's complaint was dismissed by the court without prejudice, Schmaus's subsequent pleading practice—premised upon incorrect, inconsistent, misrepresentative, and dilatory filings—cannot be ignored and warrants dismissal upon grounds of judicial estoppel and sanction. CX Ranch has been prejudiced by pleadings Schmaus filed following his request to dismiss his complaint and Schmaus's subsequent filings which contained incorrect information and misrepresentations. Although Schmaus's complaint was dismissed without prejudice, Schmaus's pleading practice must be considered as a whole and in its entirety.

¶15 Over a year into the first case that Schmaus filed in 2018, CX Ranch filed a motion for summary judgment. Instead of responding to the motion on its merits, Schmaus filed a motion for leave to amend his complaint and for a new scheduling conference, seeking to bring multiple new claims against CX Ranch. “Litigants should be allowed to change legal theories after a motion for summary judgment has been filed only in extraordinary cases.” Peuse v. Malkuch, 275 Mont. 221, 228, 911 P.2d 1153, 1157 (1996). Despite the tardiness of Schmaus's request, the District Court granted leeway to Schmaus by giving him four days to provide the revised complaint for review, noting that 57 days had already passed since Schmaus had made his amendment request. However, he did not amend his complaint and, instead, used the additional time to prepare and file a proceeding in this Court that CX Ranch had to respond to. After we dismissed that proceeding, Schmaus still did not file an amended complaint, and on February 3, 2020, the District Court denied the motion to amend because Schmaus had failed to avail himself of the opportunity the court gave him.

¶16 Schmaus then filed a motion to dismiss the action for the stated reason that he intended to pursue an action in the U.S. District Court naming the Department of Interior, BLM, and Bureau of Reclamation, which he claimed were indispensable parties, in addition to CX Ranch and Broadwater County. Based on these representations, the District Court, in June 2020, dismissed the action without prejudice so Schmaus could pursue his stated intention. However, Schmaus did not file an action in federal court naming the agencies. Instead, he filed this action, naming only CX Ranch, and pursuing the eminent domain theory that he sought to pursue in the first action, and for which he was granted the opportunity to make the necessary amendments, but failed to do so.

¶17 In short, Schmaus has repeatedly filed pleadings requesting relief and failed to utilize the relief granted. Instead, he pursued other multiple avenues which required CX Ranch to respond at each turn. Now, he circles back to pursue the relief he originally requested. “The fundamental purpose of judicial estoppel is to protect the integrity of the judicial system and thus estop a party from playing ‘fast and loose’ with the court system.” Kauffman-Harmon v. Kauffman, 2001 MT 238, ¶ 15, 307 Mont. 45, 36 P.3d 403 (quotation omitted). Judicial estoppel binds “a party to his or her judicial declarations, and precludes a party from taking a position inconsistent with previously made declarations in a subsequent action or proceeding.” Kauffman-Harmon, ¶ 15. Schmaus's inconsistency includes the reasons he proffered to obtain relief, which he then failed to pursue. “While pro se litigants may be given a certain amount of latitude, that latitude cannot be so wide as to prejudice the other party. ․” Greenup v. Russell, 2000 MT 154, ¶ 15, 300 Mont. 136, 3 P.3d 124. Five years into this litigation, CX Ranch is no closer to resolving Schmaus's claim than when he initiated it.

¶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.

FOOTNOTES

1.   For example, Schmaus “claimed that a 1918 petition submitted ․ to the Broadwater County Commission established a road (Lefler Road) which traversed on at least a portion of the BLM property.” Order on Pending Partial Summary Judgment and Discovery Related Motions at 10, Schmaus v. Broadwater County, No. BDV-2018-46 (Mont. First Judicial Dist. Oct. 11, 2019).

LAURIE McKINNON

We Concur: JAMES JEREMIAH SHEA INGRID GUSTAFSON DIRK M. SANDEFUR JIM RICE