*1 SAM DOBLE, d/b/a DOBLE LOGGING, Appellant,
Plaintiff and v.
CECIL BERNHARD, BERNHARD
BUSINESS TRUST,
Rеspondent.
Defendant and
No. 97-470.
January 8,
Submitted on Briefs
1998.
Rehearing
Denied June
1998.
May 20,
Decided
1998.
MT
124.
St.Rep.
For Libby. Warden, Christiansen, Bostock; R. Respondent: Thomas
For Berg, PLLP; Kalispell. & Johnson of the Court. opinion delivered the REGNIER
JUSTICE April plaintiff Doble, and appellant Sam d/b/a Doble Logging, filed an action in District Court for the Nineteenth Judi- County Bernhard, cial against District Lincoln Cecil Bernhard Doble, contractor, Business Trust. a logging suit brought against alleging of a logging breach breach the im- plied good covenant faith and fair dealing. subsequently summary filed a motion for judgment, which the District Court granted an April order. Doble filed a motion alter or judgment, amend the court’s which the court denied on June It is from the court’s order granting Bernhard’s for summary motion judgment, as well as from the court’s order denying Doble’s motion to amend, presently alter or that Doble appeals. For the reasons stated below, we reverse. Generally at appeal issue on is whether the District Court erred
in granting Bernhard’s motion for judgment. specifi- More cally, following we find the issues dispositive: 1. Did the District err in concluding Court that the logging con- tract entered into Doble and Bernhard expired 1989? the District err concluding Did Court the parties had not en- tered into an enforceable oral altering the terms of the log- ging contract? *3 3. Did the District err in concluding law, Court as matter of a had not good breached covenant of fair faith and deal-
ing?
FACTUAL AND PROCEDURAL BACKGROUND Doble, Sam independent On December an contract log- ger, uncle, into a logging Bernhard, entered with his Cecil County, who owned acrеs of timberland located in Lincoln Montana. The logging December contract set forth the pursuant log portions terms to which Doble was to of Bernhard’s property. provided, pertinent part, The as follows:
LOGGING AGREEMENT December, Agreement day made on the 31 of 1987 between Cecil Trust, and a Bernhard Business Montana Business Trust, organized existing and under laws of State of Montana, an “Company” herein referred to as and Sam Doble indi- of herein doing Logging vidual business under the name Doble re- as ferred to “contractor.” stated, com- promises of the mutual hereinafter
In consideration agree follows: and contractor as pany
LOCATION log following timber from the de- designated shall Contractor being described on the at- property: property real said scribed part made a hereof. Par- “A”and this reference tached Exhibit to be to the contractor for pieces of these areas are issued cels as contractor and Com- agreed upon company. between logging approval log- to right limit area or volume pany reserves advanсed to time job bond ging completed performance job. complete need to contractor will TERM OF CONTRACT (18) period contract shall extend for a months but The made on af- progress days considerable must be as An approval ter FSLIC time is essence. extension of six (6) company. months can be obtained at discretion of
STARTING DATE (30) begin logging thirty Contractor shall within from approval agreed par- date of of FSLIC unless otherwise ties.
MISCELLANEOUS 4.Time is the essence of this contract. Doble, Savings and Accоrding to the Federal Loan Insurance (FSLIC) approved the contract sometime the late sum-
Company spent completing logging project, fall another mer of begin property approxi- until logging and thus did not Bernhard’s 15,1988 mately Between November November $264,800 roughly generated Doble’s efforts total of proceeds. gross *4 yet 1989, logging project another avail- In June learned
¶8 mid-June, in Montana. In Doble met Big Sandy, near eastern able attorney. Paskell, Gregory Bernhard’s Kalispell with Bernhard during meeting, this he told both Bernhard Doble asserts pursuing Big Sandy Paskell of his interest in logging project, but him urged and Paskell complete project that Bernhard Bernhard’s property July instead. Doble continued on Bernhard’s until 14,1989, Bernhard mailed a terminating when Doble written notice the contract. Court, Doble filed an action in District a seeking preliminary in- attempt in an Bernhard from him
junction prevent removing from project. temporary The District Court denied Doble’s motion for 3,1989, injunctive August subsequently relief on and Doble vacated рroperty. Bernhard’s April 28,1992, initiated the present asserting action on against
claims Bernhard for breach of contract and breach of the cov- good dealing. Roughly years enant of faith and fair two and one-half 22, 1994, later, a on November Bernhard filed motion to dismiss for 30, 1996, developed, Little and on October prosecute. ap- failure to years complaint, four and one-half after Doble filed his proximately prosecute. Bernhard filed a second motion to dismiss for failure to publiс policy favoring disputes resolution of on their mer- light case, its, pursuing renewed light and in of Doble’s efforts 29,1997, January Bernhard’s motion to dismiss in a or- court denied der. summary for on March judgment Bernhard filed a motion 14,1997, entered order April granting On the District Court an 16, 1997, summary On judgment. April
Bernhard’s motion for order, its earlier and entered document ex- supplemented court support grant the rationale in of its decision to Bernhard’s plaining summary subsequently filed a motion to judgment. motion for summary ruling, which the court judgment or amend the court’s alter timely appeal filed a notice of denied in a June order. Doble
DISCUSSION appeals from Court’s standard of review This Treichel v.State Farm Mut. Auto. Ins. Co. rulings is de novo. judgment (1997), 443, 446, 930 663 (citing Motarie v.North P.2d Dist. 274 Mont. Disposal Montana Joint ern Refuse M.S.B., Inc. 465, 470, 872 154, 156; v. P.2d Mead summary judgment order en Court reviews a This ap the same criteria Rule based on tered pursuant M.R.Civ.P. Treichel, P.2d at 663 280 Mont. at court. plied the district
85 261, 264, 272 Mont. 900 (citing County v. Yellowstone Bruner 901, P.2d summary is judgment appropriate: In that proving genuine no issues of material
The must demonstrate thаt movant shifts burden then accomplished, Once this has been the fact exist. by more than mere denial and non-moving prove to the party determined Having a exist. speculation genuine that issue does exist, not the must genuine that issues of material fact do court the entitled to moving party judgment then is determine determinations legal a law. reviews the [This Court] as matter of as made the district court to whether the court erred. 264-65, Bruner, at at 903. 900 P.2d 272 Moreover, the the of a com- “moving party showing has burden ¶ any genuine аll material of issue as to facts considered plete absence principles moving party substantive that entitle the light in of the matter law and are to be judgment as a of all reasonable inferences opposing summary judgment.” of the Kolar v. party drawn in favor 869. Bergo
ISSUE 1 Court the con concluding logging Did the District err in that ¶ July 1, expired into on 1989? tract entered Doble Bernhard summary judgment, In Bernhard’s motion for the Dis granting the at effect trict Court concluded that contract issue took on Decem months, 31,1987, period eighteen and extended for a of terminat ber terms July on The court determined that the of the con ing rejected unambiguous point, tract were clear and on this Doble’s approval by not its the assertion that the contract did take effect until FSLIC. concluding erred in the con- appeal, argues On the court July 1, 1989, that the of expired asserting
tract on instead commenced, it expired, contract and when constitutes when the summary fact precluding judgment of material genuine issue portiоns of logging favor. Doble asserts that those the Bernhard’s are govern starting the contract’s term and its date agreement which and, therefore, ambiguous. specifically, argues conflict More the the which term of contract “shall portion provides contract (18) months,” por- with that eighteen conflicts period extend for a shall within mandating begin “[contractor the tion (30) it argues thirty approval from the date of FSLIC.” approved the not take effect until parties’ intent that contract was FSLIC. by Dоble asserts the FSLIC not approve did until late summer of and correspondingly argues eigh- that the did not expire July teen-month term until well after the date upon relied the District Court. Doble thus maintains whether the parties intended the contract to take effect on FSLIC, it was signed, upon approval by date is a question of fact precluding judgment material Bernhard’s favor. contrast, argues terms were clear, and asserts the contract took effect when entered expired December months later on Because the terms of the contract are clear on this point, asserts, parol evidence rule precludes court from *6 looking beyond the ofthe for terms contract itself evidence of the par- intent. ties’ by It is “[w]here well-settled this Court the language
¶19
and,
result,
suscepti
of an
is clear
as a
unambiguous
only
interpretation,
duty
ble to
one
the
ofthe court is to apply the lan
(1996),
202, 209, 926
as written.”
v.Hall
guage
Carelli
279 Mont.
P.2d
Services,
756, 761
(1992),
62, 65,
(citing
Systad
Audit
Inc. v.
252 Mont.
549, 551).
question
P.2d
Whether or not an
exists is a
of
ambiguity
826
Cаrelli,
209,
for the
at
law
court to decide.
279 Mont.
ISSUE concluding Did the District Court err in had not agreement altering entered into an enforceable oral the terms of the logging contract? contracts, respect With to the modification of written MCA, 28-2-1602, provides writing specifically “[a]
§ writing agree- a contract an executed orаl may be altered *7 ment, agreement, For an oral such as the one al- and not otherwise.” case, effectively the to alter the terms of a leged by present Doble in contract, fully must be executed “on both agreement that oral written Nelcon, (1994), Co. v. Inc. 265 agreement.” the Const. sides of Westfork (1992), 402-03, 481, 398, (citing 877 P.2d v. Hodson Mont. Kraft 1236.) 264, 1234, that 262, recognized 836 P.2d We have Mont. is executed modifying agreement a written agreement oral “[a]n Investments, fully performed.” Eagle Watch terms have been when its 257, 261 187, 194-95, 924 (quoting Inc. v.Smith 659 P.2d Lemley v.Allen concluding Court erred in argues Doble the District appeal, On Agree- Logging modification of the “no enforceable oral there existed asserts the contract.” Doble extend the term of would ment which July 1, if the contract as drafted have expired even would parties agreement pursuant the entered into an oral to which they effectively altered the date which the contract would expire. specifically, during meeting More Doble asserts his with attorney Bernhard and Bernhard’s in June both Bеrnhard and attorney “orally agreed modify to in such manner as Sandy job require Big complete [Doble] to forsake the to the Thus, Court, as he did the District job.” argues Bernhard before contract, orally modified the terms of the written he and Bernhard agreement permit the to Doble to continue extending the term of Bernhard until all of Bernhard’s timber had been har- working with argues Bernhard then “breached the contract vested. terminating performance” by way [Doble’s] of the wrongfully foregoing, In light notice of terminatiоn. of the Doble asserts parties of material fact as to whether the genuine there exists a issue that altered the terms of the written agreement executed an oral con- tract, extending the date which it would terminate. thereby contrast, Bernhard, neither a argues there exists written agreement an executed oral which would serve to ef- agreement nor as written. fectively agreement originally alter the terms the that Bernhard and his argues simply alleges Bernhard “Doble attor- Logging Agreemеnt originally he as ney perform insisted that written,” raise a of fact as to and has therefore failed to even original eigh- altered and extended only term. Bernhard concedes that “the oral teen-month any difference to the outcome of this that would make agreements to extend the term orally agreed if Bernhard were to have case were contract,” allege Doble has failed to even the existence argues but Rather, argues that effect. Bernhard Doble has agrеement of an extending eigh- conceded that the two never discussed himself term, allegefd] Doble has “not even asserts teen-month modify Bernhard to but sub- an express vague amount to no more than and unsubstanti- allegations mits ated inferences.” effectively ex- noted, orally agreed Bernhard argues As job” the Bernhard “complete Doble to permit the contract term
tend Thus, although timber. remaining all harvestable by removing otherwise, alleged the exis- Doble has indeed concludes effectively extending agreement with tence of an oral must pending appeal, we purposes For term of the contract.
89 “with sub allegation this supported has Doble determine issue of material raising genuine evidence material stantial P.2d Mont. 943 284 Hospital v. Columbus fact.” Herron Inc. 279 Eagle Systems, v. 1272, 1274 (citing Clark 998). evidence, we will the offered evaluating 927 Herron, P.2d at favor. in Doble’s inferences all reasonable draw P.2d at Clark, at (citing testimony, has following deposition by the As reflected discussed extend- specifically never and Bernhard that he conceded contract term: eighteen-month ing agree to your specifically Did uncle ever attorney]:
Q [Bernhard’s out in the con- beyond what’s set of the contract the term extend tract? “extend the term”? you do mean
A What [Doble]: months, unless ex- that a term of 18 Q: provides The contract an extension of a any regarding discussion there ever tended. Was contract?
A: No. during which he al- Instead, described the conversation modify the contract so that it would agreеd he and Bernhard leges harvested from Bernhard’s all timber had been in effect until remain follows: as property you told them about
Q attorney]: So the first time that [Bernhard’s in June of in Mr. Paskell’s office Sandy job would have been Big time you had this discussion? present at the 1989. Who was Paskell, said, Mr. Mr. there was Like Mr. Bernhard A [Doble]: waiting out in the My office. wife was myself in his we was we came out and But she remembers when waiting room. does, conversation, she remembers everybody like finishing up stay- my was with Cecil priority me that main said to Paskell know, if I wanted to off. You paid that debt getting there and ing could, just stick to I but otherwise completely, sign off it. left. Just finish right look nor it and don’t you had limit to the contract Q: there was time knew that You Cecil, you? didn’t with way ahead of schedule. I that I was Oh, yes. And knew
A: — after December 18 months Q: expire was due to The contract by FSLIC. accepted had been A: After it specifi- never that he and Bernhard Doble conceded Although term, extending eighteen-month cally discussed attorney asserted Bernhard and his nevertheless led him to believe they effectively would extend the contract until all the trees had been property: harvested from Bernhard’s
Q: attorney]: I you’re [Bernhard’s So as understand what saying, it *9 was a statement made Cecil statement made Greg during Paskell the course of you conversation that had in Paskell’s — you officein June of 1989 to the effect stay were to stay project? focused on Cecil’s
A Right. [Doble]:
Q: statement, you And because of that felt that they promis- were ing —that Cecil promising you job was the rest ofthe comрle- until tion?
A: Cecil and Paskell.
Q: Okay. Anything other than that statement? They A: led to they perfectly [were] me believe that happy way the things going, timber, were the amount of volume of everything, ex- know, cept they money. wanted more You until up everything then — rosy, then was and there was then it became a things few minor clipper you got with the and have to more take and more of this stay your small job right timber focused on here. Thus, although Doble concedes neither he nor Bernhard
specifically extending eighteen-month term, discussed thе contract attorney he nevertheless asserts Bernhard and his led him to believe they beyond 1,1989, wished him to work pending July contract’s termination date. For example, alleges they asked him to forego Sandy Big job complete instead the Bernhard project, which interpreted Doble asserts he as an logging invitation to continue until Moreover, all of the harvestable timber had although been removed. agrees they specifically never extending discussed the con- date, precise expiration attorney tract’s he asserts Bernhard and his they way led him to believe were happy things going, with were stay urged project. him to focused on the Bernhard Whether Bernhard attorney agreed permit and his Doble to continue removed, until all property thereby harvestable timber had been effectively term, agreeing question extend is a ofmate- precluding summary judgment rial fact in Bernhard’s favor. him additionally argues that the fact that Bernhard sent notice, terminating a written dated the contract means time still in effect at the Bernhard himself believed contract was and, therefore, his assertion that he and Bernhard had in supports an oral agreement amending fact entered enforceable the logging termination argues Doble also contract. notice’s reference to agreements” “other oral amounts to a concession Bernhard that orally the written contract was in fact modified. response, maintains he sent the written notice of
contract termination simply get property, Doble off of his and as- agreements” serts the reference to “other oral was to conversations he and during specifically which Doble had identified the parcels of log. land Doble was to Whether sent Doble written notice terminating he believed because the contract was still in effect pursuant alleged agreement,
to their oral or whether merely he did so because way land, think of no other get he could to Doble off his a question is Moreover, fact. notiсe’s reference to agree- “other oral alleged ments” was intended to refer to their oral to ex- tend the term of the or to during conversations which he and specifically Doble had identified the parcels of land Doble log, was to is an additional of fact precluding summary judgment Bernhard’s favor. *10 foregoing, Based on the we
¶34 conclude there exists a question of fact as to whether Doble and Bernhard entered into an enforceable oral agreement altering contract, the terms of the logging and accord- ingly hold the District Court erred in granting Bernhard’s motion for summary judgment on this issue.
ISSUE 3 Did the concluding that, District Court err in ¶35 as a matter of law, Bernhard had not good breached the covenant of faith and fair dealing? granting Bernhard’s motion summary judgment, for
¶36 the Dis- trict Court concluded “[o]nce the contract between parties July on expired there was no contractual relationship be- tween the and therefore no by breach cove- good dealing.” noted, nant of faith and fair theAs court Doble allegеd pretrial “[t]he in his order that termination Defendants logging [Doble’s] of the timber was a breach the Defendants of the which, turn, implied good dealing covenant of faith and fair consti- tuted a breach Defendants of the altered contract.” The rec- court that, although “a breach of the covenant of ognized good faith and fair necessarily not dealing require does that there first be a breach of the the covenant require does that there be a contract in exis- tence in the first instance.” Because the
¶37 court the logging concluded contract had expired July 1, 1989, on it accordingly concluded there was no contract be- tween the parties at the time Bernhard terminated logging Doble’s ef- forts on The court thus held that “Doble’s cause of ac- tion for breach of the covenant of good faith and fair dealing must nec- essarily fail with the ruling Court’s that the term of the contract expired, and there was no oral contract to extend the written con- tract.” light 8 In of our conclusion that the District Court erred in deter-
mining Doble failed to question establish a of fact regarding the pres- ence of an agreement executed oral extending the eighteen-month term, we conclude the court erred in granting summary judgment in Bernhard’s favor with respect to Doble’s claim for breach implied good covenant of faith and fair dealing. Based on the foregoing, we reverse the District Court’s order granting summary judgment in Bernhard’s favor and remand to the District Court for further proceedings consistent with this opinion. TURNAGE,
CHIEF JUSTICE JUSTICES HUNT and GRAY con- cur. LEAPHART,
JUSTICE specially concurring. I concur in reversing the Court’s judgment under issues number two and three since there exists a of fact as to whether the parties entered into an enforceable oral alter- ing the terms of the logging disagree, however, contract. I with the Court’s holding one; is, issue number that there was an ambiguity as to when the commenced. contended, agrees, and the Court
provided “[t]he that: contract shall extend for a period months ...” and that this language clearly meant the term com- Doble, menced upon signing. hand, on the other focused on the con- language tract progress “considerable must be made on the con- tract approval by after FSLIC as time is of the essence.” As out, points provides the contract further “Contractor shall be- *11 (30) gin logging thirty days approval within from the date of of FSLIC unless agreed parties.” upon otherwise to Based these pro- two approval, visions which reference FSLIC Doble asserts that there ambiguity was an as to whethеr the term commenced upon signing (December 1987) (summer or upon approval FSLIC of oflaw for the court to ambiguity an exists is a Whether 202, 209, 926 P.2d v.Hall 279 Mont. decide. Carelli “clearly months and un- specified that the term of 18 The Court holds signed that the contract took effect when establishes ambiguously 31, 1987, period was to extend for a on December and hold, as does the disagree. incongruous I I find it months.” before Court, term commenced some 6 months begin logging. FSLIC When approval Doble received approval, within 30 of FSLIC begin logging Doble to required trigger the event which would commencement of was approval FSLIC term. the 18-month event, of the term any despite my view that commencement that can be said clearly approval, tied to FSLIC the most
was reasonably subject interpreta- to two different is that it is case, exists, ambiguity Wray an see v. State being tions. That 879 P.2d and Comp. Ins. Fund entering summary judgment. Accordingly, I would the court erred third reverse on the first as well the second and issues. concurring part dissenting TRIEWEILER JUSTICE part. majority’s tо reverse the judgment I concur with the decision Court; however, majority’s do- disagree District I with reasons for opinion Leaphart I concur with the of Justice
ing Specifically, so. the date on ambiguous regard contract is at least with which However, majority’s I with the dis- disagree the contract commenced. 2. Doble concedes there was no to extend position of Issue allegedly said the defendant nothing the term of the attorney effectively the contract so as to extend its modified expiration. date of joins foregoing dissenting opinion. in the
JUSTICE NELSON