                                              No. 88-392

                     IN THE SUPREME COURT OF THE STATE OF MONTANA
                                                 1989




FIRST BANK WESTERN MONTANA MISSOULA,
                               Plaintiff and Respondent,
          -vs-
VERNONT T. GREGOROFF and LUANNE
GREGOROFF,
                               Defendants and Appellants.




APPEAL FROM:                   District Court of the Second Judicial District,
                               In and for the County of Silver Bow,
                               The Honorable Mark P. Sullivan, Judge presiding.


COUNSEL OF RECORD:
          For Appellant:
                               David L. Holland argued, Butte, Montana
                               David J. Wing argued, Butte, Montana

          For Respondent:
                             Corette, Smith, Pohlman & Allen; Lisa Swan Semansky
                            %rgued and R.D. Corette, Jr. argued, Butte, Montana
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                                                 Submitted:   January 10, 1989
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                                                   Decided:   March 2 , 1989
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                                                 Clerk
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.

      Appellants Vernon and Luanne Gregoroff challenge the
constitutionality of Montana's Claim and Delivery statutes,
under which their trailer was seized by the Butte-Silver Bow
County   sheriff.     Appellants allege they were denied
procedural due process when the District Court, upon motion
of respondent First Bank Western Montana, ordered the seizure
of the trailer without providing notice of or opportunity for
an immediate post-seizure hearing. The appellants' motion to
quash the claim and delivery order was denied, and
respondent's motion for summary judgment was subsequently
granted. This appeal arises from the District Court's order
and judgment entered against the appellants. We affirm, but
remand for clarification of the judgment.
      In 1983, Gregoroffs purchased a fifth-wheel trailer
from Rangitsch Brothers in Missoula, Montana.    The purchase
was financed through respondent First Bank Western Montana
(hereinafter    referred   to   the   Bank).       Gregoroffs
simultaneously executed a retail installment contract which
granted a security interest in the trailer to the Bank.
      Gregoroffs ultimately defaulted on the installment
contract, and the Bank was unable to locate the trailer for
several months after the default.       After locating the
Gregoroffs, the Bank unsuccessfully attempted to have the
note payments brought current. The Gregoroffs were informed
by Bank employee Donna Duffy that they must either make the
late note payments under the contract or turn the trailer
over to the Rank. Mr. Gregoroff informed Duffy that he would
not surrender the trailer, but would be taking a job in
Arizona which would enable him to make the note payments.
Although he informed Duffy that he, Mrs. Gregoroff and their
young   daughter   were   living   in   the   trailer, he   did   not
specifically state that he was taking his family or the
trailer to Arizona.
      On September 16, 1986, the Bank commenced a Claim an
Delivery action against the appellants, as provided for und-er
S 27-17-101 et seq., MCA.    Lisa Swan Semansky, counsel for
the Bank, made an ex parte appearance before District Judge
Arnold Olsen for Claim and Delivery of the trailer.        No
notice was given to the Gregoroffs that the Bank was seeking
a court ordered delivery.
        Recause Judge Sullivan was not available, the matter
was heard by Judge Olsen. At the request of the Judge, the
Motion was presented in the Clerk of Court's office, not in
the courtroom, and, therefore, no record. was made of the
hearing.
        The Bank's motion for Claim and Delivery was supported
by a bond in an amount double the value of the property, as
required by 5 27-17-205, MCA. The bond. ensures the defendant
is protected in the event the seizure is determined to be
unlawful. Additionally, Semansky attached to the motion the
Bank's complaint and an affidavit of Donna Duffy.       The
affida~ritstated in part:
            10. Rased on information and bel-ief,
            Gregoroffs are using and living in the
            1983 40 Foot Aluma Lite fifth-wheel
            trailer, Serial No. KR381V29DW002152, and
            thereby are decreasing its value.
            11. The       ...   trailer    .     ..is
            decreasing in value by virtue of the fact
            that such property decreases in value
            with age.
          14. Based on her conversation with
          Defendant Vernon Gregoroff on September
          15th, 1986, when he refused to relinquish
          possession of the 1983 40 foot Aluma Lite
          fifth-wheel    trailer,   this    affiant
          believes that Gregoroffs will take the
          trailer to Arizona some time within the
          next week.
      Judge Olsen signed the order and the seizure was
completed the evening of September 17, 1986, by the
Butte-Silver Bow County sheriff.         The trailer, which
contained most of the Gregoroffs' personal belongings, was
taken to Rangitsch Brothers' lot in Missoula.
      On October 1, 1986, Gregoroffs filed a motion to quash
the order. District Judge Mark Sullivan denied this motion,
nearly fourteen months later, on December 31, 1987. The Bank
then filed a motion for summary judgment on its complaint
January 20, 1988. This motion was granted, and judgment was
entered for the Bank on May 18, 1988. Gregoroffs appeal from
this judgment.
      Gregoroffs raise four issues for review:
      1. Does S 27-17-203 (2), MCA, violate the due process
clause of the Fourteenth Amendment of the United States
Constitution?
      2. Does § 27-17-203 (2), MCA, violate Article 11,
Section 17 of the Montana Constitution?
      3. Did the District Court err in granting its order to
seize the property without a hearing in open court as
required by the statute?
      4. Did the District Court err in granting the order
based on a fatally defective affidavit?
Issue Nos. 1 and 2
      Does   § 27-17-203 (2),  MCA,   violate   due  process
guarantees of the United States and Montana Constitutions?
      Appellants argue S 27-17-203 (2), MCA, is unconstitu-
tional because it allows a court ordered seizure of property
without requiring notice of or opportunity for an immediate
post-seizure hearing. We disagree.
      Section 27-17-203, MCA, provides:
           The sheriff shall make no seizure unless
           an order from a judge of the court having
           jurisdiction of the cause is attached to
           the affidavit.   The judge may sign such
           an order if he is satisfied:
          (1) that the party seeking possession of
          the property has made a prima facie
          showing of his right to possession and
          the necessity for seizure at a show cause
          hearing before him with at least 3 days'
          notice to the person in possession of the
          property; if such person cannot be found
          for personal service, notice posted on
          the property and in three public places
          in the county where the property is
          located is sufficient service for this
          purpose; or
          ( 2 ) that the delay caused by notice and
          a hearing would seriously impair the
          remedy sought by the party seeking
          possession.   Evidence of such impairment
          must be presented in open court, and the
          court must set forth with specificity the
          reasons why such delay would seriously
          impair the remedy sought by the person
          seeking possession.
      In Mitchell v. W.T. Grant Co. (1974), 41.6 U.S. 600, 94
S.Ct. 1895, 40 L.Ed.2d 406, the Supreme Court modified its
earlier position that a hearing must always precede a court
ordered seizure of property.   The Court held that Sniadach v.
Family Finance Corp. (1969), 395 U.S. 337, 89 S.Ct. 1820, 23
L.Ed.2d 349, and Fuentes v. Shevin (19721, 407 U.S. 67, 9 2
S.Ct. 1983, 32 Ij.Ed.2d 556, did not categorically require a
pre-seizure hearing in every situation.
           Their import, however, is not so clear as
           petitioner would have it: they merely
           stand for the proposition that a hearing
           must be had before one is finally
           deprived of his property and do not deal
           at    all    with    the   need    for   a
           pre-termination hearing where a full and
           immediate post-termination hearing is
           provided.     The usual rule has been
           " [wlhere only property       rights   are
           involved, mere     postponement   of   the
           judicial enquiry is not a denial of due
           process, if the opportunity given for
           ultimate    judicial    determination   of
           liability is adequate."       Phillips v.
           Commissioner, 283 U.S.       589, 596-597
           (1931).
Mitchell, 416 U.S. at 611.
      Similar to Louisiana's sequestration procedure outlined
in Mitchell, Montana's Claim and Delivery procedure balances
and protects the interests of both parties involved in the
action.   Subsection (2) of S 27-17-203, MCA, is an extra-
ordinary remedy, and we in no way countenance abuse of its
provisions. However, we conclude the statutes do provide the
constitutional safeguards required by the United States and
Montana Constitutions.
      A pre-hearing seizure may only be obtained under
circumstances which indicate the plaintiff's remedy would be
seriously impaired. The plaintiff must swear to facts which
support this claim, and must file a bond in an amount double
the value of the property to protect the defendant.
Additionally, the delivery order can only be obtained from,
and under the supervision of, a judge or justice of the
peace, not a court clerk or adminis1trative officer.
Moreover, Montana's statutes allow the defendant to file a
bond to immediately regain possession of the property.
      While S 27-17-203(2), MCA, does not provide for a post-
seizure hearing, a defendant may immediately apply for a
motion to quash the order, which the appellants did in this
action. Additionally, under Rule 1, M.R.App.P., a defendant
can promptly seek review by this Court of a denial of that
motion.    Furthermore, as mentioned in Mitchell, a final
judicial determination of liability follows the seizure, at
which time the defendant can challenge the validity of the
Claim and Delivery order.
      The appellants knew they had defaulted under the terms
of the retail installment contract.        The terms of the
contract gave the Bank the right to repossess the trailer
when the appellants defaulted.     Such a property interest
distinguishes this case from Fuentes, supra.     Furthermore,
the appellants were notified by the Bank in writing, and by
Duffy in person, that the trailer would be repossessed if a
resolution could not be reached. No satisfactory effort to
resolve the delinquency was made and, therefore, it came as
no surprise to the appellants when the trailer was seized.
      As noted in Mitchell, 416 U.S.         at 610, " [t]he
requirements of due process of law 'are not technical, nor is
any particular form of procedure necessary."'     We conclude
the substantial rights of the appellants have been protected
and   that  the   Claim   and Delivery    statutes are    not
unconstitutional.
Issue No. 3
      Appellants argue the District Court erred because the
Bank's attorney met with Judge Olsen, and the order was
signed, in the Clerk of Court's office, not in "open court"
as required by the statute.       While appellants raise a
technical argument, the Judge's decision to meet with
Semansky and hear the evidence in the Clerk of Court's office
does not constitute reversible error.
      Subsection (2) of S 27-17-203, MCA, o l ? requires the
                                           n:
evidence be presented in open court. It does not require a
record of the hearing be made.    The "open court" language
requires the plaintiff or his attorney be present before the
judge or justice when the ex parte motion for Claim and
Delivery is made, and prevents the plaintiff from obtaining
the order merely upon written application. Judge Olsen was
acting in his official, judicial capacity when he heard the
evidence and concluded sufficient evidence was present to
issue the order.


Issue No. 4
      Finally, appellants argue it was error to issue the
order based on an affidavit which contained the conclusory
allegations of employee Duffy. We again disagree. Section
27-17-201, MCA, requires that an affidavit, by the person
claiming the property or someone in his behalf, state:
           (1) facts which establish reasonable
           belief that the person claiming the
           property is the owner or is lawfully
           entitled to possession and that the
           seizure is necessary to prevent the
           removal. or destruction of the property;

          (2) that the property is       wrongfully
          detained by the defendant;
           (3) that the same has not been taken for
           a tax, assessment, or fine, pursuant to
           statute, or seized under an execution or
           an attachment against the property of the
           person claiming the property or, if so
           seized, that it is by statute exempt from
           seizure; and
           (4) a particular description of      the
           property and the actual value of     the
           property.
The affidavit contained these required statements and alleged
two grounds for a Claim and Delivery order: that the trailer
was depreciating by the appellants' daily use of the trailer,
and that Gregoroff's employer had just completed work in
Butte, Montana and was beginning another job in Arizona
within the next week. While mere depreciation was not the
type of serious impairment contemplated by the statute,
threat of removal of the property from the jurisdiction does
satisfy that requirement.
     The statutes require the    judge be   satisfied by the
evidence that the delay caused by a hearing would seriously
impair the remedy sought.     As disclosed bv the Claim and
Delivery order, Judge Olsen found that a delay would
seriously impair the remedy.
           Evidence indicates that Defendant Vernon
           T. Gregoroff is employed by Acme Cement
           and Concrete of Spokane, Washington. The
           job that Acme Cement and Concrete was
           doing in Butte, Montana ended the week of
           September 15th, 1986.    Acme Cement and
           Concrete will begin a new job in Arizona.
           Defendant Vernon     T.  Gregoroff   will
           continue to be emploved bv Acme Cement
           and Concrete in Arizona. Since Vernon T.
           Gregoroff and Luanne Gregoroff live in
           the property described in Exhibit "A",
           they   will   be  moving   the   property
           described. in Exhihit "A" to Arizona.
           Removing  the  property   described  in
           Exhibit "A" to Arizona would preclude
           Plaintiff from recovering possession of
           the property described in Exhibit "A".
Judge Olsen subsequently submitted two affidavits which
express his understanding of the procedures of this case.
The first affidavit states he signed the order without any
hearing.   The second affidavit states he signed the order
because sufficient evidence was presented which satisfied him
"that any delay caused by notice and a hearing would
seriously   impair    repossession   of   the    trailer   by
plaintiff-claimant in this case."       We conclude Duffy's
affidavit, supported by the verified complaint presented
sufficient evidence to enable the Judge to conclude that
notice and delay would seriously impair the Bank's remedy of
repossession.
      Finally, we recognize a problem in the judgment. The
judgment states the Bank is entitled to recover $16,058.67
plus legal interest and costs, but it does not account For
the value of the trailer which has been seized. It is not
disputed that the Bank is not entitled to both the trailer
and its value. Section 27-17-401, MCA, entitles a plaintiff
to judgment for possession of the property (or the value of
the property if delivery cannot be had) . Since the Bank is
now in possession of the trailer, it is not also entitled to
its value.    Additionally, while the order and judgment
mentions attorney's fees in the amount of $10,000.85, it
apparently only entitles the Bank to the value of the
trailer, legal interest and costs, but no attorney's fees.
However, we do not rule on this issue, but point out that, in
any case, the contract does limit attorney's fees to 15% of
the amount owed.
      We affirm, but remand this case to the District Court
to clarify its judgment on these points accordingly.




We concur:         R
