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                                                                No. 98-319

                           IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                              1999 MT 275N




MURLAND W. SEARIGHT and

VIRGINIA M. SEARIGHT,

Plaintiffs and Appellants,

v.

DARRELL S. WORM,

Defendant and Respondent.




                                                          APPEAL FROM: District Court of the Eleventh Judicial
                                                          District,

In and for the County of Flathead,

The Honorable Ted O. Lympus, Judge presiding.




COUNSEL OF RECORD:

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For Appellants:

Murland Searight, Attorney at Law, Columbia Falls, Montana

For Respondent:

(No appearance made)




                                                                                                Submitted on Briefs: April 29, 1999

                                                                                                         Decided: November 16, 1999

Filed:




__________________________________________

Clerk

Justice W. William Leaphart delivered the Opinion of the Court.




¶ Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal
Operating Rules, the following decision shall not be cited as precedent but shall be
filed as a public document with the Clerk of the Supreme Court and shall be
reported by case title, Supreme Court cause number and result to the State Reporter
Publishing Company and to West Group in the quarterly table of noncitable cases
issued by this Court.

¶ Murland and Virginia Searight (the Searights) appeal the judgment and order of
the Eleventh Judicial District Court, Flathead County. We affirm.
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¶ The following issues are presented on appeal:

¶ 1. Whether the Searights were denied a fair trial when the District Court declined
to recuse itself.

¶ 2. Whether the District Court erred in granting summary judgment in favor of
Darrell Worm.

¶ 3. Whether the District Court abused its discretion in declining to impose Rule 11
sanctions on Darrell Worm.

                                                        Standard of Review

¶ We review a district court's conclusions of law to determine whether they are
correct. Steer, Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601,
603.



                                           Factual and Procedural Background

¶ In 1986, Attorney Darrell Worm (Worm) represented Bonnie Howell (Howell) in a
labor dispute with the Searights. The Department of Labor and Industry awarded
Howell $1,110.14 in wages and the same amount as a penalty. In October, 1989
Worm filed a motion for attorney fees and costs. In November, 1989 Worm and the
Searights filed a stipulation for attorney fees that the District Court included in its
subsequent order. The parties agreed that Howell was entitled to attorney fees and
costs as part of the judgment in her favor and that the attorney fees were $1,526.25.

¶ Judgment was filed in November, 1989. However, in August, 1990 the Searights
moved to vacate the judgment and sought to stay enforcement of a writ of execution.
Worm responded. In October, 1990 the Searights appealed the November, 1989
judgment and Worm filed a motion for $1,916.20 in attorney fees and costs that were
incurred after the November, 1989 judgment. A hearing was not held on that motion
because of the Searights' appeal. In April, 1991 this Court affirmed the November,
1989 judgment of the District Court. Searight v. Howell (1991), 248 Mont. 122, 809

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P.2d 588.

¶ In May, 1991 Worm filed a motion and affidavit seeking $1,524.69 in attorney fees
incurred after his October, 1990 motion for attorney fees. In total, Worm sought
$3,440.89 for attorney fees that were incurred after the November, 1989 judgment. In
May, 1991 the Searights sent Worm a check in the amount of $3,440.89 for attorney
fees and costs. The Searights requested that Worm cancel a hearing on attorney fees
that was set for June 14, 1991. Worm vacated the hearing but did not inform the
Searights of his action. The Searights stopped their check and sent Worm a check for
$2,666.77, explaining that the original check for $3,440.89 incorrectly included
monies for an October, 1990 hearing that was not held. The Searights added that
they enclosed the check "in satisfaction of judgment of this case."

¶ In a letter dated June 4, 1991 Worm responded:

                  I have received the payment you forwarded in the amount of $2,666.77. I
                  have, however, accepted it in partial not full satisfaction of the obligation for
                  attorney fees and costs in this matter.

                  Enclosed is an Amended Motion and Affidavit which should explain why the
                  payment is, in my view, partial and not complete. Unless we can reach an
                  amiable resolution of this issue I will proceed to schedule a hearing before the
                  Judge. After you have had a chance to review the enclosed, please contact me.



¶ In his enclosed amended motion and affidavit, Worm stated that he was submitting
the affidavit in amendment of affidavits that he had submitted in 1990 and 1991 and
that he accepted the check for $2,666.77 "in partial payment of accrued attorney fees
and costs herein." Worm asserted that a dispute remained regarding whether Howell
was also entitled to both interest on the attorney fees and costs that the District Court
awarded her pursuant to the November, 1989 judgment and to attorney fees for
three hours spent preparing her appellate brief. Worm concluded that with these
additional items, the total for attorney fees and costs was $3,016.39. Thereafter, the
Searights appeared for the vacated June, 1991 hearing and advised the District
Court in an "Affidavit of Appearance" that no hearing was held.



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¶ In July, 1991 the Searights wrote Worm, advising him that "more than forty-five
days have passed without action due to your failure to hold the required evidentiary
hearings. Your motions for costs and attorney fees are deemed denied." The
Searights demanded that Worm return their check for $2,666.77. Worm responded
in a letter that he was willing to "consider the $2,666.77 payment as satisfaction in
full of the [Searights'] attorney fee and cost obligation . . . ." Worm also filed a notice
that he was withdrawing the claim for attorney fees that he filed in June, 1991 and
his earlier claim for attorney fees in the amount of $1,524.69 because Howell had
received $2,666.77 in satisfaction of her claim for attorney fees and costs.

¶ In August, 1991 the Searights filed a complaint in District Court, alleging that
"Defendant [Worm], by fraud and malice wrongfully withheld and converted to his
own use Plaintiffs' money in the amount of $2,666.77." In March, 1993 the Searights
moved the District Court for sanctions on Worm. In May, 1994 the Searights moved
for summary judgment. In August, 1994 Worm filed a cross-motion for summary
judgment; the Searights later withdrew their motion for summary judgment. The
Searights petitioned this Court for a writ of supervisory control. In September, 1997
this Court denied the Searights' petition and remanded the matter to District Court
for "the timely rendition of decisions on pending motions." In September, 1997 the
Searights moved for the disqualification of the Honorable Ted O. Lympus. This
Court appointed the Honorable C. B. McNeil to hear the Searights' motion. Judge
McNeil denied the Searights' motion for disqualification and set aside as void the
Searights' affidavit, concluding in part that it was "fatally defective because it fails to
allege any facts showing personal bias or prejudice of the presiding judge." In
November, 1997 the District Court granted Worm's cross-motion for summary
judgment. In February, 1998 the Searights moved the District Court to set aside
orders and order a new trial. The Searights also moved the District Court to recuse
Judge Lympus. In April, 1998 the District Court denied the Searights' motions to
recuse, to set aside orders, and to order a new trial and entered judgment in favor of
Worm. From that judgment the Searights appeal. Worm has not filed a response.

                                                                Discussion

¶ 1. Whether the Searights were denied a fair trial when the District Court declined
to recuse itself.

¶ The Searights argue that their right to a fair trial was violated when the District


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Court declined to recuse itself after showing bias and personal hostility toward them.
The Searights contend that the District Court's response to their petition for writ of
supervisory control disclosed inappropriate ex parte communications between the
District Court and Worm. The Searights also argue that in its response to their
petition for writ of supervisory control, the District Court engaged in "an ad
hominem personal diatribe." The Searights argue further that the District Court's
orders are permeated with misstatements of law and fact that are "explainable only
by the court's determination to achieve the desired result in accordance with Judge
Lympus' personal bias and demonstrated personal hostility towards Mr. Searight."

¶ In its response to the Searights' petition for writ of supervisory control, the District
Court commented that after it had deemed the matters in the present case to be fully
submitted, "its law clerk contacted Defendant [Worm] by telephone and requested
that he submit a proposed order on all the outstanding motions . . . . [Worm's] office
sent to the Court a computer disc with all of Defendant's briefs filed in response to
[the Searights'] various motions. The purpose of the disc was to enable the law clerk
to prepare a proposed order on those motions." The District Court concluded:

                  The Court is ready to rule and has been for some time. . . . Moreover and
                  finally, the Court has also for some time viewed this matter as nothing more
                  than an absolutely meritless but nevertheless vexatious harassment inflicted
                  upon Darrell Worm by Murland Searight, a retired naval officer living up the
                  North Fork with a law degree and a lot of time on his hands.



¶ The Searights' contention that the District Court had an improper ex parte
communication with Worm is without merit. Worm merely provided the District
Court with a computer disc that contained his responses to the Searights' various
motions. The Searights have not shown that they have been prejudiced by that "ex
parte" communication between the District Court and Worm nor that the
communication concerned the merits of the present case. Compare State v. Hage
(1993), 258 Mont. 498, 503, 853 P.2d 1251, 1254, overruled on other grounds by State
v. Hansen, 1999 MT 253, ___ P.2d ___, 56 St.Rep. 997 (concluding appellant had not
shown prejudice as a result of ex parte contact); Shields v. Thunem (1986), 220 Mont.
449, 451, 716 P.2d 217, 218-19 (concluding judge should have disqualified himself
after ex parte meetings with parties in which "discussions relative to the merits of the


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case" were held); Eleventh Judicial District Court Rule 6(C) (providing in part that
"[t]here shall be no ex parte discussion with the Court of substantive issues")
(emphasis added).

¶ The District Court's remarks characterizing Mr. Searight and the Searights' case
have two distinct elements that we consider separately. First, the District Court
described the Searights' case as a meritless and vexatious harassment. We conclude
that this description was not an ad hominem attack but rather a singularly blunt
assessment of the Searights' case. Further, we note that the Searights do not dispute
the District Court's statement that at the time it offered that assessment of the
Searights' case, it had decided the issues but had yet to prepare an order.

¶ Second, the District Court described Murland as a retired naval officer with a law
degree and a lot of time on his hands. Although the Searights do not dispute the
accuracy of this observation, we do not encourage such judicial observations.
However, we conclude that the District Court's statement did not create an
impression of impropriety that implicated the Searights' right to a fair trial.

¶ Viewing as a whole the District Court's remarks about Mr. Searight and the merits
of the Searights' case, we conclude that they fall short of the circumstances that we
have previously determined warrant the disqualification of a judge to avoid the
appearance of impropriety. Compare In re Marriage of Miller (1989), 239 Mont. 12,
19, 778 P.2d 888, 892 (concluding on remand case should be assigned to different
judge to avoid impression of impropriety when newspaper article was published
about original judge who responded with published letter to newspaper) and
Washington v. Montana Min. Properties (1990), 243 Mont. 509, 515-16, 795 P.2d 460,
464 (concluding judge should be disqualified because his son interning for
respondent's law firm, newspaper article reporting that judge socialized with
members of respondent's law firm at football game, and judge's ruling allowing
counsel for respondent to testify "have snowballed to create an appearance of
impropriety"). We hold that the District Court's denial of the Searights' motion to
recuse did not violate their right to a fair trial.

¶ 2. Whether the District Court erred in granting summary judgment in favor of
Darrell Worm.

¶ Our standard of review in appeals from summary judgment rulings is de novo. See


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Meyer v. Creative Nail Design, Inc., 1999 MT 74, ¶ 13, 294 Mont. 46, ¶ 13, 975 P.2d
1264, ¶ 13. In Bruner v. Yellowstone County (1995), 272 Mont. 261, 900 P.2d 901, we
concluded that to prove that summary judgment is appropriate:

                  The movant must demonstrate that no genuine issues of material fact exist.
                  Once this has been accomplished, the burden then shifts to the non-moving
                  party to prove, by more than mere denial and speculation, that a genuine issue
                  does exist. Having determined that genuine issues of material fact do not
                  exist, the court must then determine whether the moving party is entitled to
                  judgment as a matter of law.

Bruner, 272 Mont. at 264-65, 900 P.2d at 903 (citations omitted). To be granted summary
judgment, the "moving party has the burden of showing a complete absence of any
genuine issue as to all facts considered material in light of the substantive principles that
entitle the moving party to judgment as a matter of law and all reasonable inferences are to
be drawn in favor of the party opposing summary judgment." Kolar v. Bergo (1996), 280
Mont. 262, 266, 929 P.2d 867, 869. Conclusory statements alone do not create genuine
issues of material fact. See Sprunk v. First Bank System (1992), 252 Mont. 463, 466-67,
830 P.2d 103, 105 (hereafter, Sprunk II). Thus, "[t]he party opposing summary judgment
must 'set forth specific facts and cannot rely on speculative, fanciful, or conclusory
statements.' " Sprunk II, 252 Mont. at 466, 830 P.2d at 105 (citation omitted). Further, "[i]
mportant in the determination [of the existence of genuine issues of material fact] is
whether the material facts are actually disputed by the parties or whether the parties
simply interpret the facts differently." Sprunk II, 252 Mont. at 466, 830 P.2d at 105.

¶ As previously discussed, the Searights brought suit claiming that Worm had
unlawfully retained the payment of $2,666.77 and converted it to his personal use.
Section 27-1-713, MCA, provides

                  Duty to restore thing wrongfully acquired or retained. One who obtains a
                  thing without the consent of its owner, by a consent afterwards rescinded, or
                  by an unlawful exaction which the owner could not at the time prudently
                  refuse must restore it to the person from whom it was thus obtained unless he
                  has acquired a title thereto superior to that of such other person . . . .




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¶ The Searights contend that in the absence of a district court order determining
their liability, they were under no obligation to pay Worm. They argue that Worm
made a counter offer to their offer and that they properly rejected his counteroffer;
they also argue that Worm made a qualified acceptance of their offer that is invalid
under Montana law. Finally, the Searights contend that the District Court's findings
of "essential" undisputed facts are contradicted by the record.

¶ As a preliminary matter, we note the Searights' argument that the District Court
erroneously assigned the burden in moving for summary judgment to them. The
record reveals that the Searights moved for summary judgment, that Worm made a
cross-motion for summary judgment, and that the Searights withdrew their motion
for summary judgment. We conclude that the District Court erred in assigning the
burden in moving for summary judgment to the Searights. Upon de novo review, we
determine whether Worm met his burden to show that there were no genuine issues
of material fact.

¶ In its order on summary judgment, the District Court determined that because the
Searights' payment to Worm was voluntary and unconditional, the Searights had to
show "that they retained the right . . . to rescind their original consent thus entitling
them to the return of the money." The District Court also determined that although
Worm acknowledged the Searights' payment in the amended motion that he filed in
June, 1991, he also claimed additional attorney fees that "were inadvertently omitted
from the original motions." Further, the District Court determined that even if the
Searights had retained the right to rescind their payment, their conduct after making
the payment showed an implied if not an express waiver of their right to rescind.

¶ The Searights argue that the District Court erred in concluding that they had
moved to exclude evidence of their $2,666.77 payment to Worm pursuant to Rule
408, M.R.Evid., and §§ 26-1-701, et seq., MCA. The District Court reached this
conclusion in its November, 1997 Order on motions and rationale. We note that the
Searights have failed to show the relevance of this conclusion to the District Court's
order granting summary judgment in favor of Worm. Moreover, the record shows
that the Searights did object to admission of their payment of $2,666.77 as evidence
of liability or amount. Further, in its November, 1997 Order on motions and
rationale, the District Court concluded that the Searights' liability was not at issue,
commenting "[a]t this point, the Court can only determine whether, having once
made a payment to Defendant, Plaintiffs are entitled to force Defendant to refund

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it." The Searights do not dispute that conclusion on appeal, and we conclude that
their argument is mistaken and without merit.

¶ The Searights also argue that the District Court erred in finding that their original
payment of $2,666.77 was unconditional. They place much reliance on Worm's
written response that he accepted the check in "partial satisfaction" of the monies
owed and they assert that their offer of payment was expressly conditioned upon
satisfaction of the case. They argue further that Worm gave them a mere qualified
acceptance, in violation of § 28-2-504, MCA, which requires that "acceptance must
be absolute and unqualified."

¶ Section 28-2-504, MCA, provides:

                  Acceptance to be absolute. An acceptance must be absolute and unqualified
                  or must include in itself an acceptance of that character which the proposer
                  can separate from the rest and which will bind the person accepting. A
                  qualified acceptance is a new proposal.



¶ In Sawyer-Adecor Intern., Inc. v. Anglin (1982), 198 Mont. 440, 646 P.2d 1194, the
parties agreed to a purchase of mining claims. They executed a letter of intent
providing in part that the offeree (Joyce) pay the offeror (Sawyer) $1,500 when the
letter of intent was signed. Joyce paid Sawyer $1,500 and thereafter executed an
agreement for purchase and sale. The agreement for purchase and sale met all the
conditions set forth in the parties' letter of intent. However, the agreement for
purchase and sale executed by Joyce included the additional provision that should
title to the mining claims be deemed defective, Joyce would have an option to acquire
only those mining claims that had good title with a pro rata reduction of the
purchase price. The Court in Sawyer-Adecor Intern., Inc., determined that "Joyce's
written acceptance, by the executed written agreement of April 9, 1976, was an
acceptance which included 'in itself an acceptance of that character which the
proposer [Sawyer] can separate from the rest and which will bind the person
accepting.' " Sawyer-Adecor Intern., Inc., 198 Mont. at 451, 646 P.2d at 1200 (citation
omitted).

¶ In the present case, we hold that Worm's acceptance of the Searights' payment of


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$2,666.77 was an acceptance "of that character which the proposer can separate
from the rest and which will bind the person accepting." Section 28-2-504, MCA. The
Searights offered the payment of $2,666.77 "in satisfaction of judgment of this case."
The Searights do not dispute that they intended their payment to cover the attorney
fees that Worm had mentioned in his previous filings with the District Court. Nor do
they dispute that Worm accepted the money for that purpose. Although Worm
inartfully characterized his acceptance as a "partial satisfaction" because of the
additional fees that he believed he had incurred, the record is clear that he accepted
the Searights' check for $2,666.77 for the attorney fees that he addressed previously
in filings with the District Court. With regard only to those attorney fees, the
Searights' offer and Worm's acceptance were unconditional. Worm did not accept
the Searights' offer on condition that they also pay him additional monies. Rather, he
accepted their offer but also expressed his belief that they owed additional monies
that he would pursue if they could not reach an "amiable" resolution.

¶ Moreover, the record clearly establishes that the Searights did not revoke their
offer before Worm accepted their check. Thus, the Searights did not have a right to
revoke their offer after Worm accepted their check. Compare Sawyer-Adecor Intern.,
Inc., 198 Mont. at 451, 646 P.2d at 1200 (concluding that "to revoke the offer . . .
Sawyer must have communicated that revocation to Joyce before he accepted that
continuing offer"); § 28-2-512, MCA (providing that communication of notice of
revocation by a proposing party must occur before the other party's acceptance has
been communicated to the proposing party). We hold that there are no genuine issues
of material fact and that Worm is entitled to summary judgment as a matter of law.
Because this holding is dispositive, we do not address the other issues raised here by
the Searights.

¶ 3. Whether the District Court abused its discretion in declining to impose sanctions
on Worm.

¶ The Searights argue in essence that Worm has lied repeatedly in his briefs and that
he should be sanctioned. The Searights adduce nine "counts" that they believe
substantiate their contention that Worm has made false assertions "designed to
muddy the legal and factual waters in general and divert attention from the actual
issues. . . . [Worm's] actions have caused unnecessary delay and needless increase in
the expense of litigation." The District Court concluded that "[i]n each respect
Plaintiffs' objections are over differences of opinion or characterizations of

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undisputed facts which fall within the realm of legitimate advocacy. Plaintiffs seem to
believe that disagreeing with them should subject Defendant to sanctions. They are
mistaken."

¶ Rule 11, M.R.Civ.P., provides in pertinent part:

                  The signature of an attorney or party constitutes a certificate by the signer that
                  the signer has read the pleading, motion, or other paper; that to the best of the
                  signer's knowledge, information, and belief formed after reasonable inquiry it
                  is well grounded in fact and is warranted by existing law or a good faith
                  argument for the extension, modification, or reversal of existing law, and that
                  it is not interposed for any improper purpose, such as to harass or to cause
                  unnecessary delay or needless increase in the cost of litigation.

We review a district court's conclusions concerning Rule 11, M.R.Civ.P., sanctions for
abuse of discretion. Carl Weissman & Sons, Inc. v. D & L Thomas Corp., 1998 MT 213, ¶
53, 290 Mont. 433, ¶ 53, 963 P.2d 1263, ¶ 53.

¶ Having reviewed the record, we agree with the District Court that the instances of
alleged attorney misconduct complained of by the Searights reflect legitimate
disagreement, not efforts to "harass or to cause unnecessary delay or needless
increase in the cost of litigation." Rule 11, M.R.Civ.P. We hold that the District
Court did not abuse its discretion in denying the Searights' motion for Rule 11
sanctions. Finally, in light of the gratuitously protracted and contentious record, we
note the District Court appropriately cautioned the Searights that they have
"misapplied and misstated the law, have failed to articulate a coherent theory in
pursuing their litigation, and have imposed an unreasonable burden upon Defendant
and the Court by the sheer volume of such filings."

¶ Affirmed.

/S/ W. WILLIAM LEAPHART

We concur:

/S/ WILLIAM E. HUNT, SR.

/S/ JIM REGNIER
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/S/ KARLA M. GRAY




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