LeMOND v. YELLOWSTONE DEVELOPMENT LLC LLC LLC 395 LLC

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Supreme Court of Montana.

Greg LeMOND, Plaintiff and Appellee, v. YELLOWSTONE DEVELOPMENT, LLC, a Montana limited liability company; Yellowstone Mountain Club, LLC, a Montana limited liability company; Timothy Blixseth, an individual; Overlook Partners, LLC; and 395 Lampe, LLC, Defendants and Appellants.

395 Lampe, LLC, Counterclaimant and Appellant, v. Greg LeMond, Counterdefendant, Appellee and Cross–Appellant.

No. DA 13–0383.

    Decided: July 14, 2014

ORDER ON REHEARING

¶ 1 On July 14, 2014, we issued an opinion in the above-entitled action, affirming the imposition of a constructive trust in favor of LeMond, but reversing the District Court's judgment and remanding for consideration of the proper measure of the constructive trust. LeMond v. Yellowstone Dev., LLC, 2014 MT 181. Greg LeMond timely filed a Petition for Rehearing on July 29, 2014. Appellants did not respond to LeMond's petition, but Defendants Timothy Blixseth and Overlook Partners timely filed their own Petition for Rehearing on July 30, 2014. LeMond responded to the Defendants' petition on August 11, 2014.

¶ 2 Rule 20(1) provides that a petition for rehearing will be considered only when the Court “overlooked some fact material to the decision,” when “it overlooked some question presented by counsel that would have proven decisive to the case,” or when “its decision conflicts with a statute or controlling decision not addressed by the supreme court.” M.R.App. P. 20(1).

¶ 3 LeMond argues that the Court's decision contains two minor factual errors. First, the Opinion states that “Yellowstone Development traded Lot 11A to the Yellowstone Mountain Club in exchange for Lot 102A.” LeMond, ¶ 10. Although LeMond has not cited evidence in the record confirming the identity of the parties to this transaction, he assures the Court that Yellowstone Mountain Club, LLC, was not involved in this exchange of properties. Instead, Yellowstone Development traded Lot 11A to a third party, YSC, LLC, who in exchange deeded Lot 102A in the Yellowstone Mountain Club Subdivision to Yellowstone Development. Second, LeMond raises a concern regarding this Court's statement that “YCL Trust agreed to pay LeMond $650,000.” LeMond, ¶ 16. Instead, the trustee determined that “the claim should be allowed in the amount of $650,000.00․” Appellants have not objected to LeMond's requested factual corrections. Both of LeMond's assertions are consistent with the briefs filed by the parties and are immaterial to our resolution of the case. Because these statements appear to be in error, we agree that it is appropriate to correct them.

¶ 4 Defendants Blixseth and Overlook Partners argue that the Court overlooked controlling law under which approval of the bankruptcy settlement between LeMond and Yellowstone Development cannot prejudice their substantial rights. The federal precedent cited in the Defendants' petition posits that settlements cannot prejudice or dispose of the rights of a third party. Local No. 93, Int'l Ass'n of Firefighters v. City of Cleveland, 478 U.S. 501, 529 (1986); E.E.O.C. v. Pan American World Airways, Inc., 897 F.2d 1499, 1506 (9th Cir.1990). The Court did not overlook this argument in the Opinion. The cited cases do not involve the doctrine of lis pendens. The bankruptcy settlement established that a contract existed between LeMond and Yellowstone Development; it did not affect the Defendants' rights. By purchasing the property subject to a lis pendens, Defendants acquired only whatever title remained with Yellowstone Development at the termination of the suit between LeMond and Yellowstone Development. LeMond, ¶¶ 28–30. They did not acquire a right to participate in the suit between LeMond and Yellowstone Development. Further, because Overlook Partners purchased with notice of the prior lawsuit, it took the property subject to the litigation and is “bound by the final disposition of the action.” LeMond, ¶ 30.

¶ 5 Defendants also claim that the Bankruptcy Court's order approving the settlement between LeMond and Yellowstone Development cannot be the law of the case because no Montana court ruled on the contract issues raised by the Defendants. As we explained in the Opinion, “[t]he law of the case doctrine applies to coordinate courts, including federal court decisions in related litigation.” LeMond, ¶ 42 (citing Houden v. Todd, 2014 MT 113, ¶ 45, 375 Mont. 1, 324 P.3d 1157; Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure vol. 18B, § 4478.4, 770 (2d ed., West 2002)). The Defendants' claims regarding the law of the case are incorrect. Further, Blixseth does not separately challenge this Court's determination that he lacked standing, LeMond, ¶ 26, and Overlook Partners was not a party to the contract.

¶ 6 Having fully considered the parties' positions, we conclude that rehearing is not warranted under the standards of M.R.App. 20(1)(a), but that two minor changes must be made to the Court's opinion. Accordingly,

¶ 7 IT IS ORDERED that the Opinion in this matter is AMENDED as follows:

(1) By substituting the following sentence for the third sentence of ¶ 10:

In March 2006, Yellowstone Development traded Lot 11A to YSC, LLC, in exchange for Lot 102A, and subsequently subdivided Lot 102A into five new lots.

(2) By substituting the following sentence for the second sentence of ¶ 16:

YCL Trust determined that LeMond's claim should be allowed in the amount of $650,000 and agreed to lift the bankruptcy stay to allow LeMond to pursue title to the lots in the District Court action.

¶ 8 The Court's previous opinion is withdrawn and an Amended Opinion is issued herewith.

¶ 9 IT IS FURTHER ORDERED that the petitions for rehearing are DENIED.

¶ 10 The Clerk of Court is directed to mail copies hereof to all counsel of record.

BAKER, J.

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