*1 BATTEN, individually EARL Honda- Rimrock d/b/a Harley Davidson, WATTS Appellant, Plaintiff INC., MARINE, CYCLE AND Company, & De- and Oakland Respondents. fendants No. 88-297. Sept. on Briefs
Submitted
Decided Nov.
T. & Singer, Thomas Butte, Poore, III, Poore, Robinson, ings, & de- James A. Roth respondents. fendants and Opinion
JUSTICE WEBER of the Court. delivered the (Batten) defend- purchased motorcycle dealership Plaintiff from seller, failed, Watts, and his ants. When the business he sued Oakland, agent, real estate under theories of negligent misrepresentation, seeking compensatory and Judicial damages. Court for the Thirteenth District District, in County, granted favor Yellowstone appeals. affirm. judgment, defendants. From this We presented appeal
The issues are: in summary judgment 1. Did the District Court err in favor of defendants? Did the District Court err in award of fees its costs
to the defendants? purchased Billings Honda-Harley
Defendant Watts Davidson (BHHD) Brey operated from profit- Arnie in business ably years. purchasing for a number of Batten became interested in motorcycle motorcycle personal business due his in interest rid- ing. He had background an educational which included Bachelor Degree, Geology, graduate Arts a Bachelor of in Science several business, in courses and he had studied for the Colorado real estate significant motorcycle exam. He had read a amount about the indus- try, motorcycles and the various makes of and their sales records. dealerships, He responding looked at various in to an ad- Cycle Magazine, in purchas- vertisement News became interested ing BHHD. Post, seeing
After another ad the Denver Batten called Watts’ agent, Gary Oakland, inquire dealership, about the sent a copy of the brochure which included the statements financial year fiscal representations ended November Because the case, the brochure are central to this we forth will set the brochure pertinent part: *3 $360,000.00 “PRICE: $160,000.00
“DOWN PAYMENT: $15,000.00 REQUIRED: “EARNEST MONEY Billings Honda-Harley largest “DESCRIPTION: is the Davidson Harley-Davidson dealer Honda motorcycles and in the state price cycles, Montana. The parts inventory, shop includes the used tools, dealership agreement, name, improvements, leasehold trade $360,000.00 inventory priced etc. The new merchandise is above and floor-plan is financed a arrangement.
“In company Harley-Da- sold over 450 Honda’s and 72 motorcycles. vidson $2,700.00
“BUILDING: The per real estate is leased at rate of month. It 14,400 approximately square facility consists of feet. The good condition, is in attractive, ample parking. is and has The rent presently is per square including $2.25 foot utilities and other expenses. completely
“EMPLOYEES: The business is a staffed with sales manager, parts manager, manager, mechanics, service and book- keeper-secretary. It is people understood that these towish remain firm, with the agree
“The seller will to non-competition. a covenant of Ronald J. Watts “OWNER: Gary
“BROKER: Oakland” state- request, provided with financial Upon his was later Batten dealership years. family his visited the ments for other He and then community. Both inspect Billings and the business business Oakland, repre- put out and advertisements the local out-of-state Montana; making leading dealership in as BHHD as the sented had profits Harley-Davidson; and the business on both Honda facility complete assets; strong run and had nice with a well a representa- and Batten maintains that these sales service office staff. nego- purchase After convinced him to the business. a series tions Oakland, purchase agreement Gary signed with Batten tiations receipt in October deposit August, 1982. The deal was closed year. of that
During year ownership, gross sales million $1.6 the first years higher six Watts’ previous which were than under $20,000 profits approximately management. had Batten $24,000. November, 1983, changed Batten the location of the bus- mix, iness, product changed the name and the fired dropped show employees. After the business did not sales June, 1985, complaint against profit. In Batten filed damages. he seeking compensatory Oakland operate May he filed a continued to the business until when Chapter Bankruptcy. 7 Petition in
I Did the District err in favor Court defendants? urges con- representations made defendants
cerning negli- the business amounted to misrepresentation. only proper when gent judgment genuine party moving there are no issues material fact and 56(c), Any entitled to as a matter law. Rule M.R.Civ.P. *4 inferences to be resolved drawn from the factual record must be Simmons v. Jenkins party favor of the opposing summary judgment. (1988), 429,] 1067, St.Rep. P.2d Mont. 750 45 328. [230 Kronen v. is never a substitute for trial on the merits. a (1984), 208, 1315, Richter 211, 211 683 1317.
Here, summary judgment by defend- materials submitted on successfully genuine
ants show that there are no issues of material Thus, proof prove prima fact. of burden shifts to Batten to a fraud, fraud, negligent facie case of or misrepresentation. prove prove order to fraud of Batten must all its nine ele
ments. The elements are: representation;
1. a falsity;
2. its materiality;
3. its speaker’s 4. knowledge falsity truth; ignorance or of its speaker’s 5. representation upon; intent be relied ignorance 6. falsity; hearer’s
7.
representation;
hearer’s reliance on the
rely
8.
right
hearer’s
to
representation;
on the
consequent
hearer’s
proximate injury
caused
the reliance.
Sprunk
Mont.,
v. First Bank
(Mont.
W.
Missoula
1987),
228 Mont.
168,
766,
St.Rep.
Fraud,
an intentional act of mis-
City
representation,
Gregory
v.
Forsyth
(1980),
132,
187 Mont.
of
248,
609 P.2d
presumed
proved
can never be
pre-
but must be
ponderance
Wright
v. Blevins
(1985),
of the evidence.
217 Mont.
439, 705 P.2d
of fraud is not sufficient. In Re
suspicion
113. Mere
Marriage
Hoyt
(1985),
449,
215 Mont.
Constructive
unlike
require
actual
does
dis
honesty
purpose
28-2-406(1), MCA;
or intent
to deceive. Section
Moschell
(1980),
v. Hulse
190 Mont.
A plaintiff’s
P.2d 155.
opinions
provide
alone do not
prove
sufficient basis
fact to
con
structive fraud when
duty
there is no
evidence
breach of
or of
Westlake
(1986),
fraudulent act or
v. Osborne
omission.
220 Mont.
91, 713
duty
P.2d 548. Breach of
to disclose material
facts is an in
dispensable
Dykstra
Mends v.
element of constructive
fraud.
195 Mont.
Negligent misrepresentation proof. has a lesser It standard require does not misrepresent, intent to rather but a failure use reasonable care competence or in obtaining communicating information. liability limited the loss suffered person(s) relying on the information. State Bank Townsend See Maryann’s, Inc. 21, 33, 204 Mont. 664 P.2d 301. In Townsend, State (Second) Bank we cited the Restatement Torts part, § as follows: liability “The stated in this Section is likewise more restricted than misrepresentation that for fraudulent stated 531. When there § *5 negligence, the coupled with only good faith to deceive but no intent sufficiently jus- misrepresentation less maker the fault of the of consequences.” tify responsibility for its a narrower attempt in an factual contentions sets forth several Batten negligent misrepresentation. prove constructive fraud misrepresentations re summary, that there were Batten contends premises, ca the inventory; of the the condition garding “current” business; staff, the sales operation of the the the pabilities of business; sta business; the financial of the of the the value volume business; of business; inventory the unit sales the of the tus of the financing; the of the plan amount business and the floor the business, Bat Defendants maintain that of the rent the location any misrepresentations made prove there were ten failed to that defendants, intentional, negligent. We constructive or whether agree. presented no that there were facts
The District Court concluded false, and any representations were indicating that misrepresenta- only liability where a that since for fraud will attach material, agree. In a memo- We detailed tion is Batten’s claim fails. randum, carefully each of Batten’s the District Court considered misrepresentation material unless Noting that “a is not contentions. 347, 342, Bails Gar significant,” it is rep- if that of the District Court concluded even some Furthermore, false, significant. were none of them were resentations misrepresen- pointed alleged that the District Court out opinions. nothing subjective were than Statements tations more emptor. opinion subject law of caveat are to the common doctrine 362, 624 Imperial Dolson Co. v. Cattle Co. 191 Mont. complains Many which Batten the defects of upon inspection, superficial noticeable or “even a investi- reasonable gation” points as the District Court out. representa- showing
Batten failed to make factual Thus, fraud tions were false. the core element Dis- negligent misrepresentation missing. We hold that trict Court did err in favor of not defendants.
II attorney Did the District Court err in its award costs fees to the defendants? $24,743.75
The District attorney Court awarded Watts fees and $4,157.78 $28,901.53. in disbursements for a The total contract provided Court, noting reasonable fees and costs. that this high figure, explained was a rather that the were le- costs gitimate, and that it would not reduce the award one-half as re- quested by argues Batten. Batten that the award is unreasonable. argues He that the effect this award is it will policy among invoke a impossible courts that makes it for valid pursued by claims plaintiff to be who could bear such costs. points out that properly hearing the District Court held and considered parties the contract between the to determine the *6 Furthermore, reasonableness of the fees. the contends that District Court determining has broad discretion in what constitutes fees, attorney reasonable and that this Court shall not the disturb judgment lower court’s in the absence of an abuse of discretion. Majers Shining (Mont. v. 1988), 373,] Mountains Mont. 750 [230 449, 453, P.2d St.Rep. 283, agree. 45 288. We After reviewing fully arguments parties briefed on both this is- sue, specifically the District Court stated it the that considered con- parties tract between provided “any the expenses, which for costs or including attorney prior reasonable fees” to the court’s determina- tion. It acknowledged further that the high, amount awarded was however, the award is reasonable under the circumstances of this case, justifiably the being amount could not be reduced without arbitrary. Batten has failed to set forth facts to show that the District Court abused its discretion. We hold that there has been no abuse of discretion and affirm the District Court’s award of costs fees to the defendant.
Batten raises appeal additional significant issues on which could be However, at trial. light in of our judgment decision that proper, unnecessary it is to address those issues. Affirmed. * CHIEF JUSTICE TURNAGE and JUSTICES HARRISON and
McDonough concur. HUNT, JUSTICE dissenting:
I opinion dissent. This attempt judiciary another the the state of plaintiffs Montana to right jury. divest of their to reach the that, By stating that pointed “the District Court out alleged misrepresentations opin- nothing subjective more than 120
ions,” mo- possible for District Court in a majority it the the makes law whether a summary judgment as a matter of decide tion in Dolson Co. opinion fact. statement is one 993, 996, Imperial Cattle Co. Mont. proposition majority the case “[statements cited opinion subject doctrine of caveat are to the common law 79, 83-84, Spence v. Yocum emptor,” 1022, 1025, emphasized this Court trier fact representation constitutes position to whether a the best determine opinion. a statement of fact or a statement Spence Dolson appeals judgments of dis- from Both involved juries. This court where the district courts sat without trict trials case, hand, summary judg- appeal other involves an from a present did not sit as a fact District Court case ment. law, only Its was to determine issues issues finder. function granted. disputed not have been fact. should