                                             No.      96-325

               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                                   1997



CLYDE SCHRECKENDGUST,                 JR.,
              Plaintiff          and Appellant,

         v.
FLORENCE BAPTIST            CHURCH, INC.,
              Defendant          and Respondent.




APPEAL FROM:         District  Court of the               Twenty-First         Judicial       District,
                    In and for the County                 of Ravalli,
                    The Honorable    Jeffrey              H. Langton,          Judge      presiding.


COUNSEL OF RECORD:
              For    Appellant:
                          Dirk A.      Williams;        Church,   Harris,          Johnson      &
                          Williams,       Missoula,       Montana

              For    Respondent:
                          David Rodli;        David       Rodli     Law Offices,          Missoula,
                          Montana



                                              Submitted           on Briefs:       January      16,       1997
                                                                    Decided:        January         30,    1997
Filed:
Justice          Karla             M. Gray             delivered                   the       Opinion               of     the           Court.



          Pursuant                 to        Section             I,     Paragraph                  3 (c),          Montana               Supreme               Court

1995      Internal                Operating                 Rules,             the       following                  decision               shall          not          be

cited      as precedent                        and shall                be published                    by its                filing         as a public

document              with        the         Clerk         of        the      Supreme             Court           and by a report                        of      its

result       to            State          Reporter                    Publishing                  Company               and         West         Publishing

Company.

          Clyde             Schreckendgust,                            Jr.         (Clyde)             appeals                from         the       judgment
entered               by         the         Twenty-First                       Judicial                District                     Court,             Ravalli

County,          on its               order         granting                 the     motion            for        summary               judgment               filed

by Florence                  Baptist                Church,             Inc.         (Church).                    We reverse                 and remand.
          The dispositive                            issue            on appeal               is       whether                the       District               Court

erred       in         determining                     that            the         Church           met           its         initial              burden              of
establishing                     that          no genuine                    issue           of     material                  fact         existed              with

regard           to        its          compliance                    with         the        use           restriction                    in       the         1977

warranty              deed.

                                                            FACTUAL BACKGROUND

          In 1975,                Ken Cox founded                            the       Church          known then                    as the          Florence

Bible       Church,                    and      held         worship                 services                in         the         basement              of      his

home.        In        April             of     that         year,             Clyde         conveyed                   a one-acre                 parcel              of

land      (Parcel                A)     in      the     Florence                   Orchard             Homes subdivision,                               Ravalli

County,          to        the        Church          via        a special               warranty                  deed which                 limited             the

use of       Parcel               A to          noncommercial                        church            purposes.                     One year             later,

Clyde       conveyed                    another             one-acre                parcel             of      land            (Parcel             B)     in      the

same       subdivision                         to      the            Church           via         a    warranty                    deed           devoid              of

                                                                                   2
limitation.                  The        Church           opened            a school,              known            as     the         Florence

Christian           Academy,             and began               holding          academic             classes           in        1976.           The
Church          subsequently                    built            a     sanctuary               and         school         building                  on

Parcels           A and B.              The ownership                      and use          of        Parcels            A and B under

the      deeds        to     those       parcels            are        not       at     issue         in    this         case.

          In      1977,       the      Church           offered            to purchase                thirteen           acres            of     land

(the      13-acre            parcel)            adjacent              to       Parcels         A and B from                        Clyde.           At

that      time,        the     Church           was conducting                    a five-day               per      week,           Christian

school         with         approximately                   140        students           from         kindergarten                      through

twelfth           grade         (K-12)          on       Parcels               A and      B.          The      Church               wanted          to
build         a larger             church         sanctuary                and        an athletic                field          on the             13-

acre       parcel            and       convert             its         existing            church             facility                   into       an

extension             of     the       school           building               on Parcels             A and B.

          Clyde            declined             the        Church's               offer          to        purchase                the          land.

Later,         however,               he conveyed                the       13-acre         parcel            to     the            Church          and

the      Florence            Christian             Academy             via       a warranty                deed         (1977         warranty

deed)       which          described             the       real        property            as follows:

          Lots Thi .rty       (30),    Thirty-one       (31) and Thirty-two               (32),
          Florence     Orchard Homes, a platted             subdivision          of Ravalli
          County,     Montana,      LESS Parcel        A and Parcel           B located         in
          said    Lot 30, Certificate             of Survey        No. 836 which           were
          previously        conveyed;      so long as said lands              are used for
          school       and      Christian         church       pUrpOSeS,           that         is
          Fundamental,        Bible    believing,     meeting        the adademic         [sic]
          requirements         of Christian         Education;           grades    K-12      and
          beyond,     [sic]      If this discontinues           the property         conveyed
          shall    revert     back to original          owner or assigners              [sic].
           [Emphasis      added.]

As noted           above,             Parcels           A and B had                   already          been        conveyed                 to     the

Church.             The       first         portion              of    the        quoted         limitation                   in      the        1977


                                                                           3
warranty            deed             is     referred                 to      below           as     the         use       restriction;                      the

second        portion                as the            reversionary                     clause.
          The       Church                held         academic               classes               at     its        school            located               on

Parcels           A and B through                        the         1985-1986               school             year.         Enrollment                    was

l:.mited,          however,                in     large          part         because              many parents                   could         not         pay

the      tuition                being            charged.                    During               the      1987-1988                and             1988-89

academic            years,                only        kindergarten                      and        first          grade        students                    were

enrolled            at         the        Church's              school              on Parcels                  A and        B.          During             the

1989-1990                academic                year,           only          kindergarten                       through              third          grade

students           were          enrolled               at      the         school.

          After          the         1989-1990                school          year,          the        Church          continued              to offer

a four-day               per         week,        kindergarten                      class         taught          by a state-certified

elementary                teacher                at     its          school            on Parcels                 A and           B.           In         1991,

C:.yde       met        with         Gary        Randall                  (Randall),               the     Church's               pastor             at     the

time,        to     discuss                the         language               of       the        1977      warranty               deed         and         the

Church's            intentions                    regarding                  its       school.                  Randall           stated             in     his

a:ifidavit              that         he "expressed                    the          church's             continuing            intent                to have

a school            in         operation                on the              property."                     In     August           of      1991,            the

Church        began            the        Florence             Baptist              Bible         Institute,               a post-secondary

education               program,                 which--with                   the          exception              of      one         semester               in

1!>94--has              been         conducting                 classes                since        that         time.

          After           his        1991 meeting                    with          Randall,              Clyde        apparently                    did     not

contact           the      Church            until            July         5, 1994,            when he advised                      Randall                that

he      would           begin             "foreclosure"                      proceedings                   on      the       13-acre                 parcel

unless            the      Church                was     operating                     a traditional                      on-premises                      K-12

school        by the             end of August,                           1994.          The Church                did      not         comply             with


                                                                                   4
Clyde's            demand                by        the         deadline.                        It       did,             however,                   found          the
Florence               Christian                    Academy               Home             School               Association                           (FCABSA),

apparently               in       1994,            and applied                    for       membership                      in        the      Accelerated

Christian              Education                   program              in        late          July       of         1994;             its         membership

application                   was             approved               in           January                 of          1995.                       The        Church

administers                   the         FCABSA,                supervising                         families              who          belong               to     the

FCABSA         and          who          "home           school"             their              children.                        It         also        provides

those        families                   with        access              to        the       school              building                      and       numerous

resources,               materials,                      curricula,                      guidance               and        certification.                            At

the     conclusion                  of     each          academic                 quarter,               an award                 ceremony               is        held
at    the     school              for      FCAHSA students;                               graduates                  of     the         FCAHSA receive

a     diploma               from           the           Florence                  Christian                    Academy.                            Since           its

inception,              the         Church           has held                traditional                   worship                    services,               Sunday

school        classes,                   adult           Bible       studies                and teen                  group             activities.

                                                           PROCEDURAL HISTORY

            Clyde       filed             an action                against                the         Church          on November                       1,        1994,

seeking           to        quiet          title           to      the        13-acre                  parcel              in         his      name on the

basis        that           the         Church            failed             to         comply           with             the         use          restriction

contained              in      the         1977          warranty                 deed.               He also              sought              to       have        the

Church         ejected                  from        the          13-acre                 parcel           based             on         its          refusal           to
comply        with          his          demand           to      vacate.

            The        Church             responded                 that,                although               it         did         not          "currently

regularly               conduct                on-premises                        private                elementary                         and       secondary

school        classes               during           weekdays,"                     it     was in              compliance                     with       the        use

restriction                   contained                   in      the        1977           warranty                  deed.                   In      addition,

while        the        Church             admitted                that            it      had          refused                 Clyde's               demand          to

                                                                                   5
vacate           the      13-acre             parcel,             it     alleged              that         its     refusal              was proper.

Finally,               the        Church            pled       the          affirmative                    defenses              of      accord           and
satisfaction,                        estoppel,              and the            statute               of     limitations.

           The         Church               subsequently                    moved        for          summary              judgment                on     the

basis       that         no genuine                  issues            of material               fact            existed          regarding               its

compliance               with          the        clear      and unambiguous                          restriction                 requiring               use

for     "school               and Christian                    church              purposes"                which         was contained                       in

the     1977           warranty               deed.          The Church                  also         contended              that            the      First

Amendment               to the          United             States           Constitution                    prohibited                the      District

Court       from          interpreting                      church           doctrine                and religious                      terminology
in order            to       resolve              any ambiguity                 regarding                   additional                terms         in    the

use      restriction.                          In      addition,                the       Church                 argued          that         the        1977

warranty               deed           was         orally          modified               in      1991            when       Clyde             gave        the

Church           five          years           in     which            to     be      operating                   an      on-premises                    K-12

school.                Finally,               the          Church           maintained                    that         Clyde's           attempt              to

quiet       title            to       the      13-acre            parcel           via        exercise             of      the        reversionary

clause           was barred                   by lathes.

           Clyde             filed          a cross-motion                      for       summary                 judgment,              contending

that       his         quiet          title          action            was purely                a contract                  action             without

First       Amendment                  implications.                        He asserted                    entitlement                  to     judgment

as a matter                  of       law     on the          basis           that       the         plain         language              of        the    use

restriction                  contained               in     the        1977 warranty                      deed required                  the        Church

to maintain                  an on-premises                    K-12          academic            school                and that          no genuine

issue        of        material               fact         existed            regarding                   the      Church's              failure              to

comply.                Alternatively,                        he maintained                       that            the      parties'                 intent,

custom           and usage                  for      at      least           fourteen            years             was that              the        Church


                                                                               6
must          ttoperatel'              an on-premises                      K-12         academic                     school             in      order         to
comply          with        the        use     restriction.

          The        District                Court         granted              the         Church's                  motion            for       summary

judgment             and denied                Clyde's             cross-motion.                           Among other                       things,          it

determined                  that         the      Church            had         established                          the        absence              of      any
genuine           issues           of     material                fact         regarding               its           compliance                 with         the

use restriction                        contained            in      the        1977 warranty                         deed            and that             Clyde

failed          to     raise            a genuine              issue           of     material                  fact            in     that       regard.

The District                     Court         subsequently                    entered              judgment                    in     favor         of      the

Church.

          Thereafter,                    Clyde         filed         a motion                  to     alter                or        amend      judgment

which         was deemed                 denied        by operation                      of         law.             Clyde            appealed.

                                                                  DISCUSSION

          Did the District          Court err in determining         that the Church
          met its     initial       burden    of establishing       that    no genuine
          issue    of      material      fact    existed      with   regard    to    its
          compliance       with the use restriction            in the 1977 warranty
          deed?
          Summary             judgment            is       proper          when no genuine                             issues            of     materia

fact      exist         and the              moving        party          is        entitled               to        judgment            as a matter

of     law.          Rule        56(c),         M.R.Civ.P.                 We review                  a district                      court's             grant

or     denial          of        a motion            for       summary               judgment                de nova,                  applying              the

same Rule              56(c),           M.R.Civ.P.,                 criteria                used       by that                  court.            Carelli

v.     Hall          (Mont.            1996),          926        P.2d         756,          759,           53 St.Rep.                       1116,         1117

(citation              omitted).                  The        moving             party          has          the        initial                burden          of

establishing                     the      absence            of      genuine                issues              of     material                 fact         and

entitlement                 to     judgment             as a matter                    of      law.              Carelli,                926 P.2d             at

759      (citation               omitted).                 Only          where        the       moving               party            satisfies              its
initial          burden                does          the        burden             shift         to      the        party              opposing              summary
judgment              to     present                  evidence                   raising              a genuine                   issue            of     material

fact.         Carelli,                  926 P.2d                     at     759-60              (citation               omitted).

           The         arguments                     made             by         Clyde           and         the         Church                to        both          the

District              Court            and this                  Court            refer          interchangeably,                              and often                in

the       aggregate,                    to         Parcels                A and            B and         the        13-acre                  parcel,                often
simply           referring                     to       activities                         on     "the           property."                             They         also
apparently                 assume              that          the          Church's               activities                   on Parcels                     A and B

constitute                  activities                       on           the       13-acre              parcel                   to        which            the       use

restriction                  and         reversionary                             clause          at      issue              apply            and         that,         if
such       activities                    meet          the           use         restriction,                      those               activities                   would

defeat         both           Clyde's                  exercise                   of       the         reversionary                         right            and       his

attempt          to        quiet             title         to         the        13-acre              parcel.                It        is     not       clear          why
the       parties           proceeded                      in        this         manner.               In      any event,                     however,                the
District              Court             joined              in        this          confusion                  by       failing                to       carefully

describe              whether                certain                 activities                  are      taking              place            on Parcels                    A

and B or              on the             13-acre                 parcel;               indeed,            it        appears                 that        the         court
followed              the        parties'                  lead             in     grouping              all           the        property                together

and assuming                     that          any church                       activities               anywhere                  on "the              property"

related               to         the          13-acre                  parcel,                  the      use            restriction                          and       the
reversionary                     clause.

           The problem                        is      that           the         record           before            us does                  not        establish

any       activity                at     all          by         the        Church              on the             13-acre                  parcel.                 Clyde
argues           in        his         opening                  brief             on       appeal              that,              regardless                   of      the
correct             interpretation                              of        the      use       restriction                      relating                  to     school

purposes,              the        record              does not                   support          any church                      use of            the       13-acre


                                                                                       8
parcel           for          any--even                  tangential--school                                    purpose.                  The      Church

responds           that            Ken Cox's              July        21,            1995,            affidavit            establishes                 that
the      13-acre              parcel             "is     used--as                    it      has        been       since           1977        when     the

land      was donated                     by Clyde--as                 an athletic                         field."

          Ken Cox's                 affidavit               states:

          5)     Upon the initial              two acres           [Parcels      A and B] was
          situated      the church and school.                  It was the desire            of the
          church      board       to purchase          from Mr. Schreckendgust                  the
          adjacent        13 acres         in order         to build         a larger       church
          sanctuary        and an athletic          field,       converting       the existing
          church       building         on the        initial         two     acres      into     an
          extension        of the already         established           school.      The church
          board desired            nothing     more than to expand the ministry
          already      started.
          6)     Approximately            in May, 1977,             the church        elders      of
          Florence        Bible      Church,     including          Affiant,       invited      Mr.
          Schreckendgust             to    the    church        to     show him         a three-
          dimensional        model of the proposed                expansion      project      which
          would     include        a large     church        sanctuary        and an athletic
          field       for       the      13    adjacent           acres       owned       by    Mr.
          Schreckendgust.               No other      buildings          or representations
          were made on the three-dimensional                             model.       No school
          buildings       were shown on the model or proposed verbally                            or
          otherwise        for the 13 acres.

While        the            affidavit                  reflects             the              Church's                desires             and      intent

regarding              use of             the     13-acre            parcel,                    it    clearly          does        not      establish
either       the        existence                 or the            use of                an athletic              field          on the         13-acre

parcel       after                Clyde         deeded         it     to         the         Church.

          Nor      does             any     other           affidavit                      or        exhibit          establish                that     the

Church       ever            made use             of     the        13-acre                 parcel.               The affidavit                  of    Mark

Davis,           the        Church's               senior            pastor                 from         October            of      1987         through

September              of         1989,     talks          about           a gentleman                     using           "the      bus       barn     and

parsonage"                  for     his         own personal                 use.                    However,         the         affidavit            does

not      state         on which             parcel           the      bus barn                       and parsonage                 were        located.

The      Church's                 brief         supporting                 its             summary             judgment            motion         in    the


                                                                                 9
District           Court           discusses                improvements,                         such         as a septic                         system          and

drain       field,             and renovations                           on "the              property."                      Again,                the         brief
does       not     establish                  that     the          referenced                    improvements                      and renovations

were       on      the         13-acre               parcel.                    In     January                of      1987,                  the         Church's

attorney             wrote          a letter                  to         Clyde,             exploring                 the           possibility                         of

purchasing               the       "unconditional                          conveyance                    of     the       lands               in         Lots      30,

31 and 32 which                     have previously                          been the               subject              of         the        conditional

conveyance."                             He         refers,                in          that          letter,                       to         substantial

improvements                   placed           on the              land,            but      does        not         elaborate.

           The Church                contends               that          Clyde            conceded,               for         summary                   judgment

purposes,               that         the            Church           and             the      full-time,                    on-premises                          K-12

school           the        Church             earlier               had         been             conducting                       were            Christian,

"Fundamental                   and        Bible             believing"                      and      that          the             school                met       the

academic             requirements                     of      Christian                     education.                        It        also             contends

that        he         conceded                that           the          kindergarten                         and         the              home           school

education              classes            offered             by the            Church             are        Christian,                     Fundamental,

Bible       believing                and meet               the          academic             requirements                         of        kindergarten
and home school                      education,                     respectively.                         While           that               may be true,

those       concessions                   do not              establish                    that      the        kindergarten                             classes,
the     home school                 administration                         or the             home school                   awards                 ceremonies

were       conducted               on the            13-acre              parcel.                  Indeed,            the          record                strongly

suggests             that          all         of     those              activities                 take           place                in         the      Church

buildings              located             on Parcels                    A and B.

           Before           the      Church            can establish                         the     absence                of          genuine             issues

of material                 fact         regarding                 its      compliance                   with         the          use         restriction

in the           1977 warranty                      deed,      it        must         establish--at                      a minimum--that                                it


                                                                                10
makes use of           the     13-acre            parcel             for     church          and school                purposes.           It

has    not      done         so.            We hold              that          the     District                  Court         erred       in

determining           otherwise              and,     for        that          reason,        also         erred         in    granting

summary        judgment            to       the     Church.                 The      court         having          erred         on this

threshold           question,               we      do         not         address           the         legal          analysis           it

applied,       or     the     conclusion                 it     reached,             with      regard             to     whether         the

use    restriction                 in   the         1977         warranty              deed         is      ambiguous;                 those

portions        of     the         District              Court's             opinion           and         order          on     summary

judgment        are     vacated               pending                further          consideration,                      as     may       be
appropriate,           on remand.

       Reversed         and remanded                     for     further             proceedings                 consistent             with

this   opinion.




We concur:




                  Justices              /




                                                                      11
