                                 NO.   93-598

             IN THE SUPREME COURT OF THE STATE OF MONTANA




LINDEY'S, INC., a Minnesota
Corporation,
            Plaintiff and Appellant,
      v.
PAT M- GOODOVER, GALE A. and VERNA WELCH,
all persons unknown, claiming or who might
                                                                    -
                                                   1; 7;- t-t 3 9 1994


claim any right, title, estate or interest.          C' f .>~. ? $ J
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in, or lien or encumbrance upon the real    GL.Es:<          ~ t . ~ ~ caum w
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property described in the complaint adverse     sx:aTZ GF i \ W % ~ N ~
to plaintiff's ownership or any cloud upon
plaintiff's title thereto whether such claim
or possible claim be present or contingent,
            Defendants and Respondents.




APPEAL FROM:      District Court of the Fourth Judicial District,
                  In and for the County of Missoula,
                  The Honorable John S. Henson, Judge presiding.


COUNSEL OF RECORD:
            For Appellant:
                  Paul Neal Cooley, Skelton       &   Cooley,
                  Missoula, Montana
            For Respondents:
                  John K. Tabaracci, Sullivan         &       Tabaracci,
                  Missoula, Montana


                               Submitted on Briefs:             February 10, 1994
                                              Decided:          April 12, 1994
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
     Plaintiff/appellant, Lindey's, Inc., appeals from an order of
the Fourth Judicial District Court, Missoula County, granting
summary judgment to defendants/respondents, Pat M. Goodover, and
Gale A.    and Verna Welch, and dismissing appellant's amended
complaint which sought to quiet title to a narrow triangular parcel
of land that appellant contends exists between two lots on Seeley
Lake owned by respondents.
     We affirm on issue one and remand on the issue of Rule 11
sanctions for notice and hearing on attorney fees and                for
consideration of attorney fees for this appeal.
     Appellant raises the following issues:
     1.    Did the District Court err when it granted respondents'
motion for summary judgment?
     2.    Did    the   District Court   err   in   assessing Rule   11

sanctions?
     This case is the fifth appeal stemming from a boundary dispute
between appellant and respondent Goodover, both of Seeley Lake. In
the present case, appellant brings an action against all unknown
persons who might claim right to a newly disputed parcel at Seeley
Lake Shore Sites, namely, a portion of Lot 4, owned by Gale A. and
Verna Welch.     In Goodover v. Lindey's, InC. (1988), 232 Mont. 302,
757 P.2d   1290 (Goodover I), we affirmed the District Court's
determination in Cause No. 60203 ofthe boundary between Goodover's
and appellant's lots.     Since that decision, the parties presented
this Court with three related appeals in Goodover v. Lindey 's, Inc.
(1990), 246 Mont. 80, 802 P.2d 1258 (Goodover 11), writ denied
(1992), 254 Mont. 539, 840 P.2d 587, Goodover v. Lindey's, Inc.
(1992), 255 Mont. 430, 843 P.2d 765 (Goodover 111), and Goodover v.
Lindeyls, Inc. (1993), 257 Mont. 38, 847 P.2d 699 (Goodover IV).
        A review of the facts of the prior appeals are detailed in

Goodover I, 757 P.2d at 1291-93, Goodover 11, 802 P.2d at 1259, and
Goodover 111, 843 P.2d at 767-68.      For purposes of this decision,
we will review only those f a c t s relevant to this appeal.
        The parties own single lots at Seeley Lake Shore Sites in

Missoula County.     All the lots are aligned on the shore of Seeley
Lake.     The boundaries between the parties       lots run north/south.
Appellant owns Lot 1.      Goodover owns adjoining Lot 2.       The Welches
own L o t 4, adjoining Goodover's lot.       Lot 1 lies n o r t h of L o t 2.
Lot 2 is north of hot 4.
        On October   5,   1992, appellant filed an equitable action
against all unknown persons who might claim an interest adverse to

its claim in an alleged narrow triangular parcel of land in L o t 4

on the boundary w i t h L o t   2.    Both   Goodover and      t h e Welches
intervened in the case.         Subsequently, appellant amended its
complaint, adding an independent action to set aside the decision
in Cause No. 60203 on the grounds of alleged newly discovered
evidence.    Appellant claimed that in 1990 it re-surveyed eight of

the lots at Seeley Lake Shore Sites and found eight original
monuments in their original locations.          The surveyor located an

original marker, determined to be the boundary between L o t s 2 and
4,   that was 18 feet from the second generation marker used by
appellant in Cause No. 60203.    The surveyor did not find a monument
indicating the original corner marker between Lots 1 and 2, tbe
disputed boundary in Cause No. 60203.
     As a result of its 1990 survey, appellant claimed that a
narrow triangular parcel of Itno man's land," in what is Lot 4
belonging to the Welches, had not been accounted for judicially in
Cause No. 60203. Specifically, appellant claimed that discovery of
the original monuments established that this parcel was %nclaimed
by any legal entity or person with a legal claim," and "was
abandoned by the former owner thereof in the course of litigation."
Further, appellant claimed "that it was the first to discover [the
land], the first to lay claim to it, that it has improved it and
made beneficial use of it by having it surveyed and that it intends
to pay taxes on the same."      This equity argument was premised on
the theory that this parcel of land is of equal dimension to the
parcel of land appellant contends was taken from it in Cause
No. 60203.
     Appellant asked the District Court to reconsider Cause
No. 60203, in light of its claim under Rule 60(b), M.R.Civ.P.,     of
"newly discovered evidence," namely, the newly discovered original
corner monument common to Lots 2 and 4.
     The District Court found that as a result of the decision in
Cause No. 60203, which this Court affirmed in Goodover I, the
boundary between Lots 2 and 4 was res judicata.   The court concluded

that appellant was seeking, in essence, to relitigate the boundary
of Lots 1 and 2.
     The    court also   found that appellant could    not   invoke
Rule 60(b), M.R.Civ.P., to bring an independent cause of action to
set aside the judgment entered in Cause No. 60203 under a theory of
newly discovered evidence.   The court concluded that appellant's
so-called newly discovered evidence could have been discovered
before the initial trial.
     In addition, the District Court found that appellant could not
claim the disputed parcel under the theory that it was the first
party to discover it, the first to lay claim to it, that it had
improved it and made beneficial use of it by having it surveyed and
that it intended to pay taxes on it. The court concluded that such
a claim could only spring from adverse possession, pursuant to
5 70-19-411, MCA, which appellant failed to establish.
     On June 27, 1993, the District Court dismissed appellant's
complaint and granted respondentst motion for summary judgment.
The court also awarded respondents their costs and attorney fees,
pursuant to Rule 11, M.R.Civ.P.,   as they had requested in their
reply brief in support of the motion for summary judgment.
     On October 12, 1993, appellant filed this appeal.
                              ISSUE 1
     Did the District Court err when it granted respondentstmotion
for summary judgment?
     Appellant argues that the District Court should have set aside
Cause No.    60203, and denied respondentst motion for summary
judgment.   Appellant claims that it had a meritorious independent
cause of action under Rule 60(b), M.R.Civ. P.    Appellant asserts
that after it had filed its independent equitable action on the
grounds of newly discovered evidence, pursuant to Rule 60(b),
M.R.c~v.P., the ~istrictCourt granted its motion to amend the
complaint, even after respondents opposed the motion partially on
the grounds that there was no basis in fact or law for relitigation
of these issues.    Appellant contends that the court's decision to
grant its motion to amend implied that its independent cause of
action had merit.
     In addition, appellant claims title to the narrow triangular
parcel of land on the Welches' Lot 4 on the theory that it was the
first to discover, lay claim to, and improve the parcel. Appellant
contends that its 1990 survey created a discrepancy between the
original boundary of Lots 2 and 4, and the same boundary as
referenced in Cause No.       60203.   Appellant argues that this
discrepancy impliedly created a narrow triangular parcel of land
which was '*omitted1' Cause No. 60203, and which was "abandoned by
                    in
the former owner thereof in the course of litigation."
     Appellant asks this Court to set aside Goodover I, because the
newly discovered evidence clearly indicates the incorrectness of
Goodover I and Goodover 11.
     A trial court's award of summary judgment requires the absence
of any genuine issue as to material fact and that the movant is
entitled to summary judgment as a matter of law.       Rule 56(c),
M.R.Civ.P.
     The court found that, in essence, appellant's new claim to
part of the Welches' Lot 4 was an attempt to relitigate the
boundary between Lots 1 and 2, which had been determined judicially
in Cause No. 60203, and affinned in Goodover I The court reasoned
                                              .
that for any    such parcel of      land to exist, that judicial
determination would have to be ignored.      As a result, the court
found that appellant's Rule 60 (b) claim was barred by res judicata.

     We agree with the District Court that the matter is resjudicata

and that appellant's claim is without merit.       Appellant's claim
that its 1990 survey of Seeley Lake Shore Sites created a narrow
parcel of unclaimed land in Lot 4 is a distortion. The boundaries
between the Seeley Lake Shore Sites lots are interdependent.
Appellant's determination of the boundary between Lots 2 and 4 as
a result of its 1990 survey, and its subsequent claim to the
so-called "no man's land*' in Lot 4, could arise only by way of
reasserting that the boundary between Lots 1 and 2 as found by the
District Court in Cause No. 60203 was inaccurate--a matter already
adjudged and affirmed by this Court.     We agree with the District
Court that for any such parcel of Lot 4 to exist, that judicial
determination must be ignored.     Our holdings in Goodover I1 and
Goodover I11 are again on point:
     We stated in Goodover 11:

          Lindey's raises a myriad of issues in an attempt to
          relitigate the boundary-line question. We refuse
          to examine these arguments, however, because the
          boundary-line issue was reviewed and finally
          decided during the first appeal to this Court. The
          District Court's determination of the boundary line
          is thus res judicata and cannot be reconsidered on
          this appeal.
     246 Mont. at 82, 802 P.2d at 1260.
Goodover 111, 843 P.2d at 773.
     Further,   appellant's   independent    action,   pursuant   to
Rule 60(b), M.R.Civ.P., on the grounds of newly discovered evidence
has no merit and thus raised no genuine issues of fact or law.    A
party may seek relief from a final judgment for:
     newly discovered evidence which by due diligence could
     not have been discovered in time to move for a new trial
     under Rule 59 (b).
Rule 60(b) (2), M.R.Civ.P.     The court reasoned that with due
diligence appellant could have discovered the original boundaries
before the initial trial.     The court relied on an affidavit of
appellant's 1990 surveyor who ascribed negligence on the part of
the earlier surveyors, and not impossibility, as the reason that
the evidence had not been discovered before the initial trial.
Thus, the court found that appellant could not rely on the
exception to a final judgment in Rule 60(b), M.R. Civ.P., and raised
no genuine issues of fact or law on the grounds of newly discovered
evidence.   We conclude that the District Court had substantial
credible evidence with which to conclude that appellant could not
rely on Rule 60(b), M.R.Civ.P.,     and raised no genuine issues of
fact or law.
     We do not agree with appellant that when the District Court
granted its motion to amend the complaint, it impliedly ruled that
its independent action had merit.    The ruling was not substantive,
but rather, procedural in nature and was granted as a matter of
course. Rule 15(a), M.R.Civ.P.
     In addition to the foregoing, the court granted respondents'
motion for summary judgment because appellant failed to establish
adverse possession of the disputed parcel of land.            The court
reasoned that appellant's "1 saw it firstr'theory could only spring
from adverse possession, pursuant to        §   70-19-411,   MCA, which
appellant would not assert and did not establish.            Montana law
requires   occupancy   and   payment   of   taxes   to   prove   adverse
possession:
     In no case shall adverse possessions be considered
     established under this code unless it shall be shown that
     the land has been occupied and claimed for a period of
     5 years continuously and the party or persons, their
     predecessors, and grantors have during such period paid
     all the taxes, state, county, or municipal, which have
     been legally levied and assessed upon said land.
Section 70-19-411, MCA.      The court found that appellant was a
stranger to the record title of Lot 4, had never been seized of the
property, and had not paid taxes on the same.
     We agree that appellant could not claim the Welches' land on
the grounds that it was abandoned judicially and that appellant
discovered, laid claim to, and improved the disputed parcel.         At
best, appellant's claim and alleged improvements to the Welches'
property amounted to trespass.         Because appellant failed to
establish adverse possession, the court rightly found no genuine
issue of fact or law based on appellant's "I saw it first" theory.
     Finally, appellant's equitable claim to the disputed parcel
because it approximates the land that was taken from it in Cause
No. 60203 is likewise without merit.        Such a claim demonstrates
appellant's continued refusal to accept the results of Goodover I
and its progeny, and in essence, to relitigate the boundary issue.
     Where appellant could have discovered the original boundaries
before the initial trial, its Rule 60(b) claim to the disputed
parcel of land was barred by res judicata.   We hold that appellant

raised no genuine issues of fact or law, and that the District
Court properly granted respondents' motion for summary judgment.
                               ISSUE 2
     Did the District Court err in assessing Rule 11 sanctions?
     Lindey's argues that the District Court violated its due
process rights when the court imposed Rule 11 sanctions in this
manner.   Appellant alleges that before the District Court imposed
Rule 11 sanctions, it should have issued an order to show cause why
appellant should not receive the sanctions. Appellant asserts that
it needed time to prepare its case against the sanctions. Further,
appellant argues that the District Court did not disclose upon
which document or pleading it based its ruling for sanctions.
     The record shows that in their motion for summary judgment,
respondents raised the issue of whether appellant's independent
action had any factual or legal basis for its quiet title action
against the disputed parcel. In addition, in their reply brief in
support of the motion for summary judgment, respondents requested
their costs and attorney fees, pursuant to Rule 11, M.R.Civ.P.
     In pertinent part, Rule 11, M.R.Civ.P., reads as follows:
     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.     ... If a
     pleading, motion, or other paper is signed in violation
     of this rule, the court, upon motion or upon its own
     initiative, shall impose upon the person who signed it,
     a represented party, or both, an appropriate sanction,
     which may include an order to pay to the other party or
     parties the amount of the reasonable expenses incurred
     because of the filing of the pleading, motion, or other
     paper, including a reasonable attorney's fee.
     Respondents argue that Rule 11, M.R.Civ.P.,            contains no
requirement that a trial court issue a separate and specific order
to show cause, setting forth the specific questionable conduct, or
affording an opportunity to be heard.        In addition, respondents
assert that the Montana Rules of Civil Procedure provided appellant
with adequate notice of the claimed violation and ample opportunity
to consider the issue without any violation of appellant's due
process rights.   Respondents argue that appellant had full notice
that the District Court was required to impose sanctions should it
determine that the facts constituted a violation of the rule.
     This issue presents a case of first impression. We agree with
appellant that it is entitled to notice and a hearing, and
specifically, to know the basis upon which the District Court
imposed sanctions.
     Respondents rely on the language of Rule 11, M.R.Civ.P.,       and
their pleadings    wherein   they   raised    the   issue   of   whether
appellant's independent action had any factual or legal basis, and
wherein they requested their costs and attorney fees, pursuant to
Rule 11.
     Although Montana's Rule 11 does not state that a trial court
must give notice to show cause and hold a hearing before imposing
Rule 11 sanctions, we hold that a trial court should do so in order
to provide the party with due process.       The party should be
afforded sufficient time in which to prepare its case against
imposition of sanctions. In addition, atrial court should specify
in its judgment or order upon which pleading(s), motion(s),     or
other paper(s) it bases imposition of Rule 11 sanctions.
     We affirm on issue one and remand on the issue of Rule 11
sanctions for notice and hearing on attorney fees and          for
consideration of attorney fees for this appeal.




We concur:
