Ming Da Situ and Pei Shu Zhou v. H. Douglas Smole, as successor trustee of the Lois M. Murphy revocable trust

Summary

The Montana Supreme Court affirmed dismissal of Ming Da Situ and Pei Shu Zhou’s breach-of-lease and option-to-purchase claims as barred by the statute of limitations. The Court held that the statute began running when the plaintiffs exercised the purchase option and that their continued possession as holdover tenants did not extend the option. The Court also rejected equitable estoppel and upheld the district court’s treatment of the motion as a Rule 12(b)(6) matter.

Holdings

1. The claims were barred by Montana's eight-year statute of limitations because the limitations period began when the Situs exercised the option by demanding performance, and even using September 28, 2000 as the accrual date, the August 17, 2009 action was untimely.
2. Murphy was not equitably estopped from asserting the statute of limitations because the Situs did not allege facts showing that Murphy's conduct caused them, in good faith, to change their position for the worse.
3. The district court did not improperly convert the Rule 12(b)(6) motion into a Rule 56 motion by noting an inconsistency regarding the rent-increase date in a footnote, because that fact had no bearing on the statute-of-limitations analysis.

Questions Presented

1. Whether the district court properly dismissed the Situs' contract and option-to-purchase claims as barred by Montana's eight-year statute of limitations for written contracts.
2. Whether Murphy was equitably estopped from asserting the statute of limitations because of her alleged acquiescence and silence concerning the purchase option and appraisal.
3. Whether the district court improperly considered material outside the pleadings without converting the Rule 12(b)(6) motion into a Rule 56 summary-judgment motion and providing notice and an opportunity to present pertinent materials.

Disposition

affirmed