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Date: 10-11-2022

Case Style:

Michael A. Santacroce v. Kenneth G. Ferron

Case Number: 2022 MT 198N

Judge: Mike McGrath

Court: Supreme Court of Montana on appeal from the "District Court of the Eleventh Judicial District, In and For Flathead County, Cause No. DV-19-1029(A) Honorable Amy Eddy, Presiding Judge..." Santacroce v. Ferron, 2022 MT 198N (Mont. 2022)

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Description: Kalispell, Montana divorce lawyers represented the parties seeking to dissolve their marriage.

¶2 Kennith G. Ferron (Ferron) appeals from the Findings of Fact, Conclusions of Law and Order, and Judgment With Permanent Injunction entered by the Eleventh Judicial District Court, Flathead County, granting Michael A. Santacroce (Santacroce) injunctive relief and awarding Santacroce attorney's fees. We affirm.

¶3 Ferron owns property located at 3000 MT Hwy. 35 in Kalispell, Montana (Property). A set of restrictive covenants govern the use of the property, with the stated purpose to provide "country residential living." This case directly implicates three of the covenants: a covenant that forbids any use of the land for any commercial purpose, with exceptions for personal home office activity and sales activity necessary to promote the development of the subject property; a covenant that prohibits the use of any road on the property for an impermissible land use; and a provision for reasonable attorney's fees to the prevailing party in a suit brought on the covenants.

¶4 In 2004, Ferron built a gym on the property and created a parking area in front of the gym.[1] Ferron provided paid fitness services at the gym; his then-wife, Diane Ferron...

(Diane), provided paid dance training there. In 2010, Ferron and Diane began divorce proceedings, which finalized in or around 2015. In 2012, Vergena Mahilom (Mahilom) moved into the property. Mahilom maintains a workspace at the property for personal home office activity related to her occupation as a masseuse. As of 2015, Ferron and Mahilom operated a business called Edge Fitness from the gym.

¶5 In or around 2014, Ferron's financial situation changed which eventually precipitated an alleged end of commercial operations at the gym. Ferron claims that he financially sustained himself during this period by relying on savings, selling personal property, and borrowing money. He has not had to file any taxes since 2015. Ferron maintained that he had not performed any paid services on the property after 2016. He claimed that after his divorce, which was finalized well before 2016, he decided that providing paid fitness services was not worth the marginal income it produced nor the legal risk it created. However, Diane, now his ex-wife, testified that she still had friends paying for fitness services at the gym on the property.

¶6 At some point prior to February 2017, Mahilom wrote social media posts that implied commercial activity was continuing at the gym. One post advertised her location in Kalispell, her possession of fitness equipment, and a specific offer of 60 minutes of fitness training for $50. In 2019, Mahilom formed a limited liability company (LLC) called Advanced Functional Fitness and listed the property as the company's address. Mahilom testified that her employer required her to create the LLC and that she had no other address to provide.

¶7 In 2009, Santacroce acquired property near Ferron's property. At some point in 2014, Ferron provided fitness training to Santacroce's wife for a fee. That year Santacroce began complaining to Ferron about noises and vibrations from the gym. Santacroce also documented between eight and ten vehicles per day visiting the property and the immediate plowing of the parking area in front of the gym upon snowfall. In response to the noise complaints, Santacroce and Ferron reached an agreement regarding the volume level of music from the gym. Though Ferron complied with that volume level, Santacroce continued to complain. Ferron stopped answering calls from Santacroce.

¶8 On September 3, 2019, Ferron received a letter from Santacroce's legal counsel threatening legal action unless Ferron ceased any commercial activity at his gym and stopped the noises and vibrations emerging from the gym. Ferron did not alter his use of the property, and, on January 29, 2020, he was served with a summons and complaint.

¶9 On May 6 and 7, 2021, the District Court conducted a bench trial. The court granted Santacroce injunctive relief and awarded him attorney's fees. Ferron requested a hearing on his objection to the awarded fees. He also sought a new trial or relief from judgment. The court denied both of those motions. Ferron then withdrew his request for a hearing regarding the attorney's fees. On January 7, 2022, the court entered a judgment granting a permanent injunction, and awarded attorney's fees based on uncontested affidavits.

Outcome: ¶16 Affirmed, and remanded to the District Court for a determination of attorney's fees on appeal.

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