Hurly v. Lake Cabin Development, LLC
2012 MT 77
| Mont. | 2012Background
- Lake Cabin negotiated to purchase Robert Hurly family property (Tract 2H) for $450,000 cash, plus a $250,000 nonrefundable option; closing set for January 5, 2006 with 30-day due diligence.
- The contract required floor plans/specifications for two single family homes and two duplexes to be finalized by August 25, 2005, with the option money applied to the purchase.
- Lake Cabin sought City of Whitefish PUD approval; after hearings, public opposition and modifications reduced unit counts; consultants were hired to address concerns.
- An extension extended closing to August 31, 2006; Lake Cabin continued pursuing approvals despite difficulties and delays.
- In 2006 an emergency stormwater moratorium further delayed approvals; by October 2006 Lake Cabin terminated the agreement citing City actions.
- The district court found no enforceable contract and awarded Lake Cabin $250,000? (opinion ultimately reverses this outcome); Hurly family appealed the rulings on contract validity and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of an enforceable contract | Hurly: no contract due to missing material terms | Lake Cabin: contract formed with definite terms | Contract was enforceable (binding with essential terms). |
| Entitlement to refund of the $250,000 option | Hurly: option money should be returned if no enforcement | Lake Cabin: option money may be retained if contract voided for other reasons | Lake Cabin not entitled to refund; option money retained due to waiver of deadline and termination grounds. |
| Attorney's fees award | Hurly: prevailing party not Lake Cabin given contract status | Lake Cabin entitled to fees as prevailing party | Fee award reversed along with contract disposition; remanded for judgment consistent with contract outcome. |
Key Cases Cited
- GRB Farm v. Christman Ranch, Inc., 326 Mont. 236 (Mont. 2005) (agreement not enforceable when terms left for future negotiation (indeterminate))
- Riis v. Day, 188 Mont. 253 (Mont. 1980) (renewal terms must be definite or clearly determinable to enforce)
- Knucklehead Land Co. v. Accutitle, Inc., 340 Mont. 62 (Mont. 2007) (breach of implied covenant requires enforceable contract; waiver considerations apply)
- Phelps v. Frampton, 170 P.3d 474 (Mont. 2007) (implied covenant and enforceability standards in Montana contract law)
- Findley v. Mont. Thirteenth Jud. Dist. Ct., 921 P.2d 870 (Mont. 1996) (essential terms must be present for enforceability; substantial terms suffice)
- Murphy v. Home Depot, 270 P.3d 72 (Mont. 2012) (standard of review for questions of law and attorney's fees)