                                                                                   November 25 2009




                                           DA 09-0144

               IN THE SUPREME COURT OF THE STATE OF MONTANA
                                          2009 MT 406N



SILVER HILL FINANCIAL BAYVIEW
LOAN SERVICING, LLC, BAYVEIW
FINANCIAL MANAGEMENT CORP.,
BAYVIEW FINANCIAL, LP, BAYVIEW
LENDING GROUP, LLC, and
AZTECH MORTGAGE CORP.,

              Plaintiffs and Appellees,

         v.

THOMAS M. MOSSER,

              Defendant and Appellant.


APPEAL FROM:          District Court of the Eighteenth Judicial District,
                      In and For the County of Gallatin, Cause No. DV 07-184C
                      Honorable John C. Brown, Presiding Judge


COUNSEL OF RECORD:

               For Appellant:

                      Thomas M. Mosser, (self-represented litigant); Bozeman, Montana

               For Appellees:

                      David L. Charles, Kevin P. Heaney, Kenneth K. Lay; Crowley Fleck,
                      PLLP; Helena, Montana



                                                  Submitted on Briefs: November 4, 2009

                                                             Decided: November 25, 2009


Filed:

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

¶1      Pursuant to Section I, Paragraph 3(d)(v), Montana Supreme Court 1996 Internal

Operating Rules, as amended in 2006, the following memorandum decision shall not be

cited as precedent. It shall be filed as a public document with the Clerk of the Supreme

Court and its case title, Supreme Court cause number and disposition shall be included in

this Court’s quarterly list of noncitable cases published in the Pacific Reporter and

Montana Reports.

¶2      Appellant Thomas M. Mosser (Mosser) appeals from the order of the Eighteenth

Judicial District Court, Gallatin County, denying his motion for partial summary

judgment and granting summary judgment in favor of Silver Hill Financial, Bayview

Loan Servicing, Bayview Financial, Bayview Financial Management and Bayview

Lending Group (collectively Bayview-Silver Hill).

¶3      The issue on appeal is as follows:

¶4      1. Did the District Court properly enter summary judgment for Bayview-Silver

Hill.

¶5      On or about August 14, 2006, Mosser, through Aztech Mortgage Corp., applied to

Bayview-Silver Hill for a $1,000,000 refinancing loan on the Downtown Imperial Inn,

which he owned through his company, Downtown Realty Investors (DRI).                 On

August 18, 2006, Bayview-Silver Hill sent Mosser a “Conditional Pre-Approval Letter”

indicating that he had been conditionally pre-approved for a $1,000,000 loan. Bayview-

Silver Hill included a more personalized letter that also indicated their “intent to fund

70% or $1 million . . . .” Ultimately, however, Bayview-Silver Hill did not lend Mosser


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one million dollars and on October 31, 2006, DRI, with Mosser personally guaranteeing

DRI’s indebtedness, executed an Adjustable Rate Promissory Note (Note) in favor of

Silver Hill Financial, LLC in the total principle amount of only $852,000. As security for

this indebtedness, DRI executed and delivered a Deed of Trust, encumbering the

Downtown Imperial Inn, for the benefit of Silver Hill Financial, LLC. The Note, Deed of

Trust and Guaranty were all assigned to Bayview Loan Servicing, LLC on October 31,

2006.

¶6      Ultimately, DRI and Mosser failed to make a single payment and did not meet

their financial obligations under the Note. As a result, on March 21, 2007, Bayview Loan

Servicing, LLC initiated this action and filed a Motion for Summary Judgment to

foreclose the Deed of Trust and Security Agreement encumbering the Downtown

Imperial Inn. In response, Mosser and DRI filed a Third-Party Complaint against Silver

Hill, LLC, Bayview Financial, LP, Bayview Financial Management Corp., Bayview

Lending Group, LLC and Aztech Mortgage Corp. premised on theories of fraud,

negligent misrepresentation, rescission and negligence. On February 6, 2009, Mosser

dissolved DRI and transferred the Downtown Imperial Inn and property back to himself.

On February 17, 2009, the District Court entered summary judgment on Bayview Loan

Servicing, LLC’s Verified Complaint for Foreclosure. On March 2, 2009, the District

Court entered its Order, Final Judgment and Decree of Foreclosure and granted summary

judgment for Silver Hill and the remaining Bayview Third-Party Defendants. Additional

facts are discussed below as relevant.




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¶7    On appeal, Mosser argues that the District Court erred in granting summary

judgment in favor of Bayview-Silver Hill. Mosser maintains that Bayview-Silver Hill

fraudulently misrepresented to him that they would loan him one million dollars, but then

funded a loan of only $852,000.       He maintains that the District Court improperly

excluded evidence of this alleged fraud and negligent misrepresentation including such

relevant documents as the “Conditional Pre-Approval” letters indicating Bayview-Silver

Hill’s intent to finance one million dollars. Mosser asserts that under the fraud exception

to the Parol Evidence Rule, the District Court should have allowed him to present

extrinsic evidence to establish that Bayview-Silver Hill committed fraud.        In short,

Mosser argues that, in excluding the relevant evidence of fraud, the District Court

misapplied the Parol Evidence Rule and Merger Doctrine and therefore, improperly

granted summary judgment.

¶8    Bayview-Silver Hill counters that the fraud exception to the Parol Evidence Rule

does not apply because the alleged fraud directly contradicts the written loan documents.

Basing their argument on this Court’s holding in Sherrod, Inc. v. Morrison-Knudsen Co.,

249 Mont. 282, 815 P.2d 1135 (1991), Bayview-Silver Hill contends that the fraud

exception that would allow Mosser to enter extrinsic evidence “only applies when the

alleged fraud does not relate directly to the subject of the contract.” Under Sherrod,

Bayview-Silver Hill maintains that evidence of an agreement for a one million dollar

loan, such as the “Conditional Pre-Approval” letters, are inadmissible because they

directly contradict the actual loan documents for an $852,000 loan.          Without that




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evidence, Bayview-Silver Hill argues that there is no genuine issue of material fact in

dispute and that the District Court properly granted summary judgment in their favor.

¶9     We review a district court’s ruling on a motion for summary judgment de novo,

applying the same criteria applied by the district court. Spinler v. Allen, 1999 MT 160,

¶ 14, 295 Mont. 139, 983 P.2d 348. Under this analysis, summary judgment is only

appropriate if there are no genuine issues of material fact and the moving party is entitled

to judgment as a matter of law. Natl. Cas. Co. v. Am. Bankers Ins. Co. of Fla., 2001 MT

28, ¶ 13, 304 Mont. 163, 19 P.3d 223.

¶10    In relevant part § 28-2-905, MCA, provides that “whenever the terms of an

agreement have been reduced to writing by the parties, it is to be considered as containing

all those terms” and as a result, “there can be . . . no evidence of the terms of the

agreement other than the contents of the writing . . . except . . . to establish illegality or

fraud.” Here, the parties vigorously dispute the applicability of the fraud exception that

would allow Mosser to present evidence of Bayview-Silver Hill’s alleged fraud and

misrepresentation. While the District Court granted summary judgment on the basis that

the fraud exception does not apply, we determine that such a conclusion is not required in

order to affirm the District Court’s disposition of this case.

¶11    Even assuming arguendo, that Mosser could, under the fraud exception, present

evidence of alleged misrepresentations Bayview-Silver Hill made with respect to a one

million dollar loan, that evidence would be insufficient to avoid summary judgment.

“Actual fraud consists of ‘acts committed by a party to the contract . . . with intent to

deceive another party thereto or to induce him to enter into the contract.’” Richards v.


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JTL Group, Inc., 2009 MT 173, ¶ 40, 350 Mont. 516, 212 P.3d 264 (citing § 28-2-405,

MCA). Here, even with the evidence Mosser argues should be considered under the

fraud exception, there is no evidence of deceit. The evidence Mosser points to in support

of his fraud argument, such as the “Conditional Pre-Approval” letters, make it clear that

the one million dollar figure “[did] not constitute a loan approval.” The correspondences

addressing a one million dollar loan, clearly explained that “Conditional Pre-Approval

does not constitute a loan approval and is instead a preliminary assessment of your

current creditworthiness.” Rather than supporting an argument for fraud, the evidence

Mosser wishes to present here shows that Bayview-Silver Hill made it clear from the start

that the financing of a one million dollar loan was conditional and depended on final

approval. As such, even if the District Court should have considered this evidence under

the fraud exception, Mosser cannot succeed on his allegations of fraud. Consequently,

we conclude that the District Court properly granted summary judgment in favor of

Bayview-Silver Hill.

¶12   Having reviewed the record, the District Court’s decision and the parties’

arguments on appeal, we have determined to decide this case pursuant to Section I,

Paragraph 3(d) of our 1996 Internal Operating Rules, as amended in 2006, which

provides for memorandum opinions. It is manifest on the face of the briefs and the

record before us that the appeal is without merit because the findings of fact are

supported by substantial evidence, the legal issues are clearly controlled by settled

Montana law which the District Court correctly interpreted, and the record supports the




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District Court’s denial of Mosser’s motion for partial summary judgment and granting of

summary judgment in favor of Bayview-Silver Hill.

¶13   Affirmed.

                                              /S/ W. WILLIAM LEAPHART


We concur:


/S/ MIKE McGRATH
/S/ PATRICIA O. COTTER
/S/ BRIAN MORRIS
/S/ JIM RICE




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