                                        No.    90-046
                      IN THE SUPREME COURT OF THE STATE OF MONTANA
                                              1990

 HARLEY HOVEN, ESTATE OF DONNA HOVEN,
 and HOVEN CONSTRUCTION CO., a Montana
 Corporation,
                Plaintiffs and Appellants,


 FIRST BANK (N.A. ) -BILLINGS, a National
 Banking Association, and FBS CREDIT
 SERVICES, INC., a Minnesota Corporation,
                Defendants and Respondents.

 FIRST BANK (N.A. ) -BILLINGS, a National
 Banking Association,
                Counterclaimant,


 HARLEY HOVEN, ESTATE OF DONNA HOVEN,
 and HOVEN CONSTRUCTION CO., a Montana
 Corporation,
                Counterclaim Defendants.


 APPEAL FROM:              District Court of the Thirteenth Judicial District,
                           In and for the County of Yellowstone,
                           The Honorable Maurice R. Colberg, Jr., Judge
                           presiding.

 COUNSEL OF RECORD:
         i
         -            For Appellant:
         -3
                          James P. Murphy, Billings, Montana
     <       .
     L
     .    .-          For Respondent:
._ ..
 3
          a               Stephen D. Bell and Charles W. Hingle; Dorsey &
                          Whitney; Billings, Montana
     c-    !
          -.              Keith Strong; Dorsey & Whitney; Great Falls, Montana
     ir_.


     i    i
                  i
     i
     i
          i
                 --                           Submitted on Briefs:   May 30, 1990


 Filed:



                                        ' Clerk
Justice Fred J. Weber delivered the Opinion of the Court.

      In the District Court for the Thirteenth Judicial District,
Yellowstone County, plaintiffs Donna Hoven, for whom the estate of
Donna Hoven has been substituted, and Harley Hoven, her husband,
and   Hoven   Construction      Company    (Hoven    Construction),      all
collectively referred to as Hovens, appeal from the Order granting
the summary judgment motion of the defendants, First Bank (N.A.)-
-Billings and FBS Credit Services, Inc., servicing agent for First
Bank, together referred to as Bank.       We affirm.
      The sole issue for our review is whether economic duress is
a defense to the signing of the 1985 and 1986 Agreements?
      The final pre-trial order sets forth the following agreed
facts:    Hoven Construction is a Montana corporation with its
principal place    of business      in Laurel, Montana.          Its sole
stockholders were Harley and Donna Hoven.
      Hoven Construction began doing business with Midland National
Bank (Midland) in May, 1971.       Midland later changed its name to
First Bank (N.A.)-Billings.       Over the years, Hoven Construction
became one of the largest utility and excavation contractors in the
Billings area.     Although     the company did various kinds of
excavation, the    bulk    of   its work    was     the   installation   or
replacement of water and sewer lines in the city of Billings and
other cities in Montana.     Harley Hoven did all of the bidding for
the jobs and spent most of his time working on the jobs himself.
      In the spring of 1985, the Hovens were in debt to the Bank in
the amount of $885,798.29, plus interest.           On May 17, 1985, the
                                    2
Hovens executed       and    signed a    Itworkout Agreementn    (the 1985
Agreement), three promissory notes, two Montana Trust Indentures
and two mortgages with the Bank.         The pertinent parts of the 1985
Agreement stated:
          D.   The total outstanding balance owing Bank on
      5/17/85      , 1985, is $885,798.24, plus interest.
     Borrower warrants, represents and acknowledges that it
     has no defenses to payment of, nor any right to set off
     against, all or any of the foregoing sums nor any
     counterclaims or other actions against the Bank of any
     kind whatsoever.
          E.   Borrower acknowledges that said debt is in
     default and wishes to repay the principal and interest
     owing Bank according to the terms stated herein.
          22. Borrower hereby, and for its successors and
     assigns, releases, acquits and forever discharges Bank
     and its agents, servants, successors, heirs, executors,
     administrators, officers, directors, employees, and
     attorneys, and all other persons, firms, corporations,
     associations or partnerships of and from any and all
     claims, actions, causes of action, demands, rights,
     damages, costs, loss of service, expenses and
     compensation whatsoever which the Borrower now has or
     which may hereafter accrue on account of or in any way
     growing out of any and all known and unknown, foreseen
     and unforeseen damages and consequences thereof resulting
     from any action or inaction concerning the transactions
     between Borrower and Bank.
     In March of 1986, FBS Credit Services, Inc. handled the
Hovenst account as servicing agent for the Bank.             Martin Moss of
FBS Credit was the officer primarily responsible for the Hovenst
account.   Both the Bank and FBS Credit are a part of First Bank
System, Inc.     This is the end of our summary of the agreed
statement of facts.
     In    addition     to    admitted    default,   Hoven     Construction
acknowledged in paragraph F of the 1986 Agreement that it breached
its contract by failing to apply all receivables to its debt.
Specifically, Hoven Construction failed to remit to the Bank the
sum of $118,118.59 that it had collected, in violation of the
Bank's secured interest in Hoven Construction accounts receivable.
     Hovens signed a second agreement with the Bank on May 9, 1986
(the 1986 Agreement).   Relevant portions of the 1986 Agreement are:
         B.   Borrower acknowledges that the operating line
    of credit note matured April 7, 1986, and had to be
    renewed. The real estate note matured April 17, 1986,
    and is in default. Borrower acknowledges that the Bank
    desires to be paid in full for all amounts due and owing
    under said notes, and Borrower enters into this Agreement
    for the purpose of paying said notes in full according
    to the terms and conditions of this Agreement.
         D.   The total outstanding principal balances owing
    Bank according to the terms of the promissory notes
    described above on May 9, 1986, is $885,448.39, plus
    interest.
         F.   Borrower acknowledges that, according to the
    terms and conditions of the existing Agreement between
    the parties herein, Borrower was required to apply all
    receivables from the City of Billings contract on the
    indebtedness at the Bank, but despite this obligation of
    Borrower, Borrower failed to apply the sum of
    $118,118.59, dated March 28, 1986.
          6. Borrower agrees to retain and consult a
    qualified financial advisor, preferably a certified
    public accountant, for the purpose of consultation and
    guidance regarding the monetary affairs of the business,
    including but not limited to, matters concerning income
    and expenditures, control of overhead, and budgetary
    projections .
         20. NO DEFENSE.      THE     BORROWER     WARRANTS,
    REPRESENTS AND ACKNOWLEDGES THAT THEY HAVE NO DEFENSES
    TO PAYMENT OF, NOR ANY RIGHT TO SET OFF AGAINST, ALL OR
    ANY OF THE OBLIGATIONS TO BANK SET FORTH IN THIS
    AGREEMENT AND THE NOTE OR NOTES EXECUTED PRIOR OR
    PURSUANT HERETO, NOR ANY COUNTER CLAIMS OR OTHER ACTIONS
    AGAINST BANK OF ANY KIND WHATSOEVER, EXCEPTING THE
    TRANSACTION REGARDING THE WOODLAND HILLS SUBDIVISION.
    BORROWER ACKNOWLEDGES THAT THE DEBTS EVIDENCED BY
    EXHIBITS lfAt',"B", "C" WILL BE EXTENDED ONLY TO OCTOBER
    1, 1986, AT WHICH TIME ALL SUMS OWED ARE DUE AND PAYABLE,
    INCLUDING NEW MONEYS ADVANCED BETWEEN THE DATE OF THIS
     OR A SUBSEQUENT AGREEMENT, AND THE END OF THE BUDGET.
     As above mentioned, all debts were to be extended only to
October 1, 1986. Hoven Construction ceased business operations at
the end of September, 1986. On February 11, 1987, the Hovens filed
an action in the United States District Court for the District of
Montana which alleged breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, misrepresentation and fraud and
tortious interference with contracts by the Bank.    That action was
dismissed without prejudice on April 28, 1987, for the reason that
the Federal Court lacked subject matter jurisdiction.
     On April 21, 1987, the Bank filed suit in Yellowstone County
District Court against the Hovens, seeking recovery on the
promissory notes executed by the Hovens, and foreclosure of the
mortgages and security instruments. On April 23, 1987, the Hovens
filed suit against the Bank, FBS Credit and First Trust Company of
Montana.     These two cases were consolidated on July 1, 1987.   The
Hovens were designated as the plaintiffs.
     On December 14, 1988, the Bank filed its motion for summary
judgment asserting that the Bank had been released from all
liability under the terms of the 1985 Agreement and the 1986
Agreement.     The pertinent response on the part of the Hovens
asserted that the releases were obtained through economic duress
and were void as against public policy.      The Bank filed a joint
answer and counterclaim.       Following a hearing on the summary
judgment motion, on March 9, 1989, the District Court granted the
Bank's motion for summary judgment.        The Hovens appeal that
decision.
     The issue:    Whether economic duress is a defense to the
signing of the 1985 Agreement and the 1986 Agreement?
     Summary judgment is proper only when there are no genuine
issues of material fact and the moving party is entitled to
judgment as a matter of law.        Rule 56(c),    M.R.Civ.P.   Any
inferences to be drawn from the factual record must be resolved in
favor of the party opposing summary judgment and summary judgment
is never a substitute for a trial on the merits.    Batten v. Watts
Cycle and Marine, Inc. (Mont. 1989), 783 P.2d 378, 46 St.Rep. 1984.
     In this case summary judgment was founded on the legal issue
of the release language of the the 1985 and 1986 Agreements.
Hovens urge that they were under economic duress when they signed
both the 1985 Agreement and the 1986 Agreement.    They contend that
such economic duress was based upon the impending threat of civil
or criminal penalties, including overdraft charges which could
result, and the requirement on the part of the Hovens that they pay
wages and other obligations with a failure to pay resulting in
potential penalties, both civil and criminal.      In addition, the
Hovens argue that the Bank refused to extend other credit except
on the terms set forth in the two agreements, thereby forcing
execution by the Hovens.   In substance the Hovens contend they had
no choice but to sign the agreements, because the failure to sign
would have resulted in a refusal on the part of the Bank to make
further loans and foreclosure by the Bank.
     The Bank contends that the releases are clear and unambiguous
in terms.       The Bank argues that the Hovens did not suffer from any
legally recognized duress at the time they signed the two
agreements.       The Bank contends there is a factual failure to show
economic duress.       The Bank contends that this case is similar to
Aldrich   &    Co. v. Donovan (1989), 238 Mont. 431, 778 P.2d 397. The
Bank argues that Donovan was under similar pressure to the Hovens
in this case--he was pressured by his need for further credit, not
by any duress imposed by the lender.             That was held not to be a
basis for a claim of economic duress.
     In its Memorandum in support of summary judgment, the District
Court considered various theories.            The District Court considered
Sprunk v. First Bank Western Montana Missoula (1987), 228 Mont.
168, 741 P.2d 766, as the closest factual case to the present case.
It pointed out that under S~runka release could be set aside if
it was obtained fraudulently or without adequate consideration.
However, the District Court disposed of that theory by pointing out
that the Hovens failed to raise a genuine issue of material fact
because they failed to set forth facts establishing fraud or
inadequacy of consideration.
     The District Court next considered the theory of economic
duress.       It referred to 79 ALR 3d,   §   2(a) at 603, as setting forth
the three elements of economic duress or compulsion; a (1) wrongful
act that; (2) overcomes the will of a person; (3) who has no
adequate legal remedy to protect his interests. The District Court
pointed out that the Hovens argued that they were under economic
duress because they had overdrawn their checking account, had
borrowed up to their credit limit, and had payroll and other
obligations to meet.   The District Court concluded that the Hovens
had failed to provide any facts to satisfy the elements of economic
duress.   The Hovens had failed to set forth facts establishing a
wrongful act on the part of the Bank in requiring the plaintiffs
to sign the agreements. It pointed out that economic duress is not
established merely by proof that consent was secured by the
pressure of financial circumstances. The District Court concluded
that the defense of economic duress or undue influence could not
be made under the facts of this case.
     We agree with the conclusions of the District Court on the
economic duress theory.   The Aldrich case cited above was decided
by this Court subsequent to the summary judgment decision by the
District Court.    The statements by this Court in Aldrich are
peculiarly pertinent here:
    A claim of economic duress requires a showing that the
    contract at issue was made under circumstances evincing
    a lack of free will on the part of the contracting
    parties. It is not sufficient to show that consent was
    secured by the pressure of financial circumstances, or
    that one of the parties merely insisted on its legal
    right.  ... The note at issue here evidenced an existing
    debt owed by Donovan to Aldrich. Aldrich did not force
    Donovan to incur the debt. Aldrich had a legal right to
    require security of some sort before extending further
    credit to Donovan. He was therefore ltpressuredglonly by
    his need for further credit, not by any duress imposed
    by Aldrich. Aldrich was therefore entitled to summary
    judgment on the note. (Citations omitted).
Aldrich, 778 P.2d at 401.    In his affidavit in opposition to the
Bankls summary judgment motion, Mr. Hoven set forth the factual
theory upon which he based his claim of economic duress.        In
substance, the facts established by the Hovens make it clear that
the duress suffered by them was the result of their own financial
circumstances. As stated in the above quote, it is not sufficient
to show that consent was secured by the pressure of financial
circumstances.
     We conclude that the District Court was correct in its
determination that the Hovens had failed to set forth facts which
establish economic duress as a defense to the releases contained
in the 1985 Agreement and the 1986 Agreement.    We therefore hold
that the Hovens have failed to establish that economic duress was
present in the signing of the 1985 and 1986 Agreements.       As a
result, we affirm the summary judgment ruling in favor of the Bank
by the District Court.
     We will briefly discuss other issues raised by the Hovens in
their briefs.      The Hovens argue that there was a fiduciary
relationship which should result in a different decision. The Bank
disputed the presence of the fiduciary relationship. The District
Court concluded that the Hovens had failed to present facts showing
such a fiduciary relationship.   After a review of the record, we
conclude that the District Court was correct in its conclusion that
the facts presented do not demonstrate a fiduciary relationship and
the issue was properly disposed of by summary judgment.
     The Hovens argued that the release provisions of the two
agreements were not enforceable because of the provisions of 5 28-
2-702, MCA.      That code section in substance provides that a
contract which exempts anyone from responsibility from his own
fraud, or wilful injury, or for a violation of law, is against the
policy of law.    The Hovens failed to present facts bringing that
statute into play.     By its terms the statute therefore does not
apply to existing claims. We conclude there is no proper basis for
the application of 5 28-2-702, MCA, to this case.
     The Hovens filed with this Court a motion to strike the 1985
Agreement because the Bank failed to attach it to its briefs on the
original motion for summary judgment, claiming that, as a result,
the 1985 Agreement was not a part of the record before the District
Court.     Hoven admits he was aware of the provisions of the
agreement.    The Bank made reference to the agreement in its brief
but did not initially attach a copy.     In a similar manner Hoven
Construction referred to the agreement in its pleadings.   The Bank
provided a copy of the agreement to the District Court prior to the
hearing on the motion for summary judgment.   Hoven did not file a
motion to strike the 1985 Agreement or otherwise object.        We
conclude that Hoven waived any right to object to the absence of
the agreement.
     The Hovens contend that the releases are not clear and
unambiguous and therefore are not enforceable.      In addition the
Hovens contend that the 1986 release was a novation of the 1985
release.     Neither of those issues was presented to the District
Court.     We therefore decline to address either issue on appeal
because of the absence of presentation to the District Court.   See
Wyman v. DuBray Land Realty Co. (1988), 231 Mont. 294, 752 P.2d
196; Miller v. Catholic Diocese of Great Falls (1986), 224 Mont.
113, 728 P.2d 794.
    We affirm the summary judgment.




We Concur:     A
Justice William E. Hunt, Sr., dissenting:


     I dissent.    It need hardly be said that summary judgment is
inappropriate when a case presents disputed issues of material
fact.    In this case, the Hovens allege that they were forced to
sign agreements in which they forewent legal rights and defenses
under the threat of civil and criminal penalties.          By granting
summary judgment, the majority, and the District Court before it,
concludes as a matter of law that the threat of civil and criminal
penalties   does   not   constitute   economic   duress.    Under   the
circumstances alleged in this case, I cannot agree.        The Hovens
have raised material issues of fact which should be presented to
a jury for its consideration.     They should not be disposed of by
the District Court on a motion for summary judgment.
     Once again, the majority has approved the trend among the
district courts in this state to sit as fact finders in motions for
summary judgment, thereby denying plaintiffs their rightful day in
court.    What is the old saying?      If I had a nickel for every
dissent I've written protesting this trend       . . . .
           IN THE SUPREME COURT OF THE STATE OF MONTANA
                           NO. 90-046

HARLEY HOVEN, ESTATE OF DONNA HOVEN,
and HOVEN CONSTRUCTION CO.,
a Montana Corporation,
               Plaintiffs and Appellants,
     -v-
FIRST BANK (N.A.) - BILLINGS, a National
Banking Association, and FBS CREDIT
SERVICES, INC., a Minnesota Corporation,
               Defendants and Respondents,          1
                                                    1     O R D E R
                                                    )
FIRST BANK (N.A.) - BILLINGS a National
Banking Association,



HARLEY HOVEN, ESTATE OF DONNA HOVEN,
and HOVEN CONSTRUCTION CO.,
a Montana Corporation,
               Counterclaim Defendants.



     The plaintiffs have filed a petition        for rehearing and
defendants have filed their response. After considering the same,
we order that the following change be made in our opinion in this
matter.
     Delete the following paragraph on page 9:
         We will briefly discuss other issues raised by the
    Hovens in their briefs. The Hovens argue that there was
    a fiduciary relationship which      should result in a
    different decision. The Bank disputed the presence of
    the fiduciary relationship. The District Court concluded
    that the Hovens had failed to present facts showing such
    a fiduciary relationship. After a review of the record,
    we conclude that the District Court was correct in its
    conclusion that the facts presented do not demonstrate
    a fiduciary relationship and the issue was properly
     disposed of by summary judgment.
In place of the above paragraph substitute the following:
          We will briefly discuss other issues raised by the
     Hovens in their briefs. The Hovens argue that there was
     a fiduciary relationship which should result in a
     different decision. The Bank disputed the presence of
     the fiduciary relationship.    After a review of the
     record, we conclude that the facts presented do not
     demonstrate a fiduciary relationship and the issue was
     properly disposed of by summary judgment.
     In all other respects, our opinion shall remain unchanged.
With the foregoing exception the petition for rehearing is denied.
     DATED this      day of September, 1990.            /


                                               6

                                            Chief Justice




                                                   Justices

     Justice ~illiam E. Hunt, Sr. would grant the petition for
rehearing.
