*1 EHLY, v. DOROTHY Respondent, RAY E. Plaintiff and CADY, Cady, Cady, Bruce M. V. and Joanne Cassandra Ussin, Appellants, U A. James Defendants d/b/a/ Cross-Claimant, Defendant, Estate, Bar S Real Respondent. No. 83-65. 24, May Submitted 1984. Aug. Decided 1984.
Rehearing
Sept.
Denied
Hooks Townsend, Patrick F. Hooks argued, Moore, Rice, Bozeman, O’Connell & Refling, for defendants appellants. Meloche,
McDougal, Eckis, Lynn McDougal Love & ar- gued, P.C., Cajon, Cal., Swindlehurst, El Huppert Living- & ston, Ehly. *4 Dietrich,
Crowley, Hanson, Haughey, Toole & George Dalthorp argued, Billings for Ussin. Opinion
MR. CHIEF JUSTICE HASWELL delivered of the Court. en-
Dorothy, Cady appeal judgments and Bruce Cassandra in Dis- tered the District Court of the Fourteenth Judicial trict, Meagher County, Ray Ehly in of and James Us- favor in part part. sin. We affirm in and reverse complaint seeking specific performance filed a of a him, im- buy/sell agreement Cadys and an executed restraining Cadys preliminary mediate order restraining in- selling, transferring property from encumbrancing $500,000 volved, case, in on the merits of the and hearing preliminary and general special damages. injunction 15,1981. complaint on An granted September amended 8,1981, in the form of sought filed October additional relief A exemplary damages. reformation of sec- the contract and Ussin, Cadys’ complaint James ond amended added $500,000 realtor, in dam- prayer defendant and a from in the court that the ages Ussin event the found were excused because of Ussin’s conduct. Cadys, alleg- against
Ussin cross-claimed his answer Cadys, response, his commission. ing entitlement Ussin. against made affirmative claims trial, specific per- Before the abandoned claim for 30, A July through formance. held nonjury trial was case-in-chief, Ehly’s 1982. At the of District conclusion Ehly’s granted Cadys’ Court motion to dismiss claim punitive and the vacated. damages injunction was of and conclusions findings
The District Court filed fact 26, 1982, virtually adopted law on verbatim October conclusions. Ussin proposed findings and Ussin’s against judgment was awarded his commission and Cadys and other claims. The Ehly on various a notice on November appeal judgment filed the Ussin 15, 1982. 1982, Ehly was
By judgment entered November approximately $245,000 damages from awarded ap- A attorney expenses. notice of and his fees and this peal judgment was filed December 8, 1982, Court After a held the District hearing December *5 supplemental filed findings regarding and conclusions attor- ney $52,000 and in expenses. Ehly fees was allowed almost attorney fees in and additional costs. Final judgment $350 was on January entered and appeal the the judgments in Ehly favor Ussin. and own a livestock ranch in Meagher located County approximately 10,000 property acres. The Ussin, Estate, listed for sale with James U S Real Bar d/b/a early April in 1981. the According listing agreement, the $2,250,000, selling price was percent of which Ussin towas receive a “upon commission effecting a sale of the whole or any part of property.” said Cady
Bruce holds in college degree accounting, a as well as in one psychology. Dorothy Cady degree received a business and graduate has done in work business education. Bruce Cady farmer, worked as an accountant before he a became Dorothy and Cady legal secretary. worked as a Ray Ehly, a California, contractor from was interested buying a Montana purposes. ranch investment tax and Ehly Cady early was shown the April ranch Us- sin. Ehly’s $2,100,000 $2,220,000 first two offers of and were summarily rejected by Cady providing as not the full purchase price. Ehly decided he wanted to make a of- final fer in person, arranged meeting so he a with Ussin in April 20, Harlowton Ehly met Ussin and realtor, Lewis, another they driving Harlowton. As were ranch, Cady they toward the stopped prepare a written offer. As typing money were an receipt earnest and agreement purchase vehicles, to sell and in one of Ussin Cady advised that accept would offer $2,230,000, but Ussin that would be to reduce his willing by $20,000 commission to make a sale. and Ussin did not work out at details the commission reduction time, but agreed Cady the offer to should read $2,250,000 and up Ussin’s reduction should make the differ- ence Cady between what and pay would what would get. Ehly signed $2,250,000 agreement quoted purchase $100,000 earnest price, provided a check for money. ranch,
Upon Cady parties at discussed the arrival agreement approximately Following two hours. dis- cussion, Ehly Cady wedding left ranch attend Cadys, drove Lewistown to meet Ussin and Lewis Stephens Cadys’ Stephens, with Marvin accountant. Cadys, joined first later the realtors met with meeting. four was dis- For three to hours the *6 made, changes Cadys cussed and after certain were the 1981, 21, agreement. April Ehly On signed and initialed the meeting. agreed changes to the made at the Lewistown $370,000 (includ- Ehly The agreement provided pay that $100,000 upon ing money) downpayment the as a earnest $50,000 closing pay the sale. He was on No- of chattel to 1981, $350,000 8, 1, January vember Title to and the was to transferred livestock other ranch chattels May in but not to be trans- property title the was Ehly’s January, ferred income until to facilitate tax plans. Cadys Ehly purchasing It was known was partially the ranch at least for income tax reasons. agreed also transfer to the ten acres of land $75,000. Ehly value would Valley, the Gallatin with a of $60,000 Cady property mortgage
assume a on the if ready $200,000 cash needed pay would be There nowas issue money exchange. to make a tax-free his under Ehly’s ability obligations as to to fulfill agreement. attorney, McKin- their Leonard insisted Ehly received
ney, closing When prepare documents. attorney, Jim by McKinney, prepared the documents found that contained McLean reviewed them and April from substantially terms different those 11, 1981, McKinney McLean informed agreement. May On prepared discrepancies about the stated that was were soon accurate documents to close the sale as as prepared. anticipation sale,
In of purchased livestock and ranch equipment. arranged Cady place He with the live- ranch, stock and equipment on the well as to have son and daughter-in-law move from California to the ranch. He also manager. hired a ranch 15, 1981,
On May at a meeting parties attended Lewistown, Ehly given closing another set of docu- ments. These also did not comply April agree- with the ment. While discussing the agreement and sale of the ranch, Bruce Cady angry became and left the room. Testi- mony at trial room, leaving Cady indicated that before made a comment wanting comply about his not with April and about there no being sale unless it way. was done his break,
After a Cady meeting returned par- and the ties discussed the release agreement, clause reads as follows:
“Buyer may request a a parcel release of land build- ing purposes. grant Seller shall if buyer pay said release will $1,000.00 the sum per acre for said release. “Principal payment $1,000.00 per shall apply towards the Buyer acre. shall right have the to release 320 acres as the date of closing property.” of the real *7 Cadys
As the were interpreting language differently the from Ehly, discussion was the conducted and differences were agreeing resolved. After any release of land ac- cording acres, to the above clause be to limited 320 no more parcels than three of not less than 40 acres each which would not integrity affect the of the “economic ranch,” the meeting interpretation ended. This of the clause was not consistent with interpretation, initial but he eager complete agreed was the sale and with the Cadys’ interpretation. 20, May 1981,
On Ehly a received .third set documents which accurately April did not reflect the terms of the agreed or the the clause clarification of release upon May meeting. Stephens at the the withdrew docu- papers by ments and the promised Ehly proper to send any June 1. not 1. On Ehly papers did receive June June 2, parties Cady he Cady met at the ranch. stated that buy/sell agree- not according would sell the ranch to the produced ment and and terms on a list new demands he sell. would of the to the real One of the new terms was transfer title 1982, property destroying Ehly’s than thus rather planned advantages. Cady tax that such income claimed permits cattle required grazing transfer was to maintain the Cady Cady adjacent held to Forest Service land regulations ranch. The claimed that Forest Service Ehly permits to unless prevented grazing the transfer of the Ehly acquired and to land in the title to the chattels year. same 3, 1981,
By Fager, letter a Forest Service dated June Carl that, Cady buyer usually a satis- although official informed permit requirements by taking fies the title to base property year, in the ex- and the chattels same alternatives (1) con- buy isted. could the livestock and execute a (2) permits purchase property; tract real use (3) year; one live- delay transfer of the title until when season ended. grazing stock November alternatives, any but willing take these land trans- demanded that both livestock and to lose sub- ferred 1981. Such a sale would cause on his income taxes. stantial investment tax credit 5, Ehly’s attorney meeting At the of another on June end buy/sell prepare April was to a contract based on agreements. the June 5 McLean agreement as modified 12, Ehly it signed and at- drafted the contract and on June downpayment tached check the remainder ($270,000) Canyon property. and a deed for the Gallatin contract, this suit was sign refused July 2, filed trial,
Following nonjury the District Court found that *8 validity April of the Cadys recognize had refused
91 buy/sell they agreement, partially per- 20 but that had by agreement accepting, through Ussin, formed the by money, allowing Ehly’s $100,000 earnest son move by allowing Ehly place ranch, onto the livestock They Ehly had, conduct, the ranch. their believe led they obligations that fulfill intended to their under the agreement, causing Ehly expenditures to make incur damages. Cadys
The District Court also found at received $2,500,000 least one verbal offer of from the ranch an- party they attempted April other and that to defeat the agreement advantage so could take of the offer. verbal agreement The court further found that the executed did jeopardize grazing permits, given not Service Forest existence of alternatives. April agreement
The court concluded that the was a Ehly upon valid enforceable contract could sue for nonperformance. understood the contract at the meeting execution, time of and there was a minds May meeting. According then and after the to the Dis- unambiguous Court, trict the release clause was and consti- peripheral part op- tuted a of the contract because it was ready, willing tional. was at all times able to perform obligations, but the breached the con- by failing perform. tract Thus, was entitled to the damages reasonably proximately foreseeable and caused Cadys’ breach. through Ussin,
As to that, the District Court found ef- performed Lewis, forts Ussin and U S its Bar Real Estate obligations listing agreement. under the It found Ussin guilty any wrongful making was not act him ei- liable to Cady any requested ther It relief. con- although cluded that Ussin did not tell the about the Ehly, commission reduction with he acted Cadys’ any fiduciary duty interest and did violate owed them. was, therefore,
Ussin to his commission. entitled *9 appeal following This considers the issues: April 1. Was a on valid and enforceable contract formed 20, 1981? valid,
2. impossible perform given Was the if to agreement, by the limited the could be grazing permits methods transferred? by prop- damages
3. Were allowed the District Court the erly computed and based on substantial evidence? commission? Is Ussin to his estate entitled real
I Agreement
April 20 contract Cadys contend that there was no enforceable as parties agreed parties. between the Because the never Ehly never meaning the the because of release clause and $2,250,000 no agreed price, the there was pay asking alternative, Cadys an the contend meeting of the minds. As rendering pay- Ehly by that not the breached the contract ment as May agreed. on 15
Ehly money receipt agreement and claims that the earnest April con- purchase, by parties to sell on signed the. evi- that the stituted an contract. He states enforceable voluntarily docu- signed shows the Cadys dence that the it, fully ment, to review and were ample opportunity with importance of capable terms and the understanding the obligations. their clause, language
As maintains the to the release that ambiguity should ambiguous, was not If ambiguous. contract, not a material have the clause was defeated the as central sub- collateral provision the contract but been could not have ject Cady’s matter. The interests addition, any ambigui- by In harmed exercise of the clause. May ties, during the 20 were cured April agreement in the up any cleared reached then meeting. agreement 15 the consent interpretation of the clauses and differences in April agreement. 20 May on ratified with basically same as Ussin’s contentions are formed, regard to this issue. He claims a valid contract was on agreement based mutual consent to the terms and May interpretation 15 to Ussin the release clause. agreement also contends an that was reached purchase price, as April evidenced stating $2,250,000. Ehly that obligated pay properly contract, performance given tendered readiness, willingness ability perform once the proper closing provided. documents were
The District finding buy/sell Court’s April agreement signed by was an enforcea ble supported by contract substantial evidence. It is un disputed capable were understanding *10 language the agreement of cognizant and were of their choice property. not to sell the It is also undisputed that there was much agreement discussion of the on April 20 the Cadys before signed the document. buy/sell agreement contained the essential elements
of a contract: parties capable identifiable of contracting; consent; their a lawful object; a sufficient cause or con- sideration. 28-2-102, Section MCA. The raise an is- sue as to their consent to the contract on the based asser- (1) tions that purchase the full price paid by was not to be (2) Ehly, and the release clause of ambigu- the contract was ous, leaving parties the varying interpretations. with
First, the fact that and Ussin agreement made an reduce Ussin’s commission did not affect obligation under the written agreement pay purchase price the of $2,250,000. In the end the would receive the same money amount of if $2,250,000, full pay were to the as the reduction in Ussin’s commission would not reduce the selling net price paid to be Cadys.
Second, the of language the release must in clause be terpreted by a court according general An contract rules. interpretation lawful, which would oper make the contract ative, definite, capable being reasonable and of carried into 28-3-201, effect favored. Section And language MCA. the govern interpretation is to if it is clear and does not the 28-3-401, absurdity. involve an Section MCA.
Here are following language: we concerned with the “Buyer may parcel a for build- request release of a land if ing purposes. buyer pay shall will grant Seller said release $1,000.00 per the sum of acre for said release. $1,000.00
“Principal payment apply per towards the shall Buyer right acre. as of shall have the to release acres closing property.” the date of of the real Initially, appears the as to what language unambiguous rights por- parties regard releasing are with a property. testimony varying tion There was as to the interpretations by but are not Cadys, of the clause by misrepresentation by substantiated evidence of real- Furthermore, clearly Ehly. tors or the evidence shows that expressed May differing interpretations during were meeting during meeting, and that that an interpreted. be reached as to how the clause should 28-2-304, MCA, Section “contract which is provides solely may voidable for want of due consent ratified subsequent there was no Cadys’ consent.” The claim that interpretations varying consent to the contract based given the release clause cannot stand the evidence parties agreement May reached an Ehly, the contract alleged
As to breach of evidence supported. District Court’s is also finding clearly initially to execute parties planned shows that *11 date, Ehly May On re closing documents on not conform to ceived a set of documents which did second April willingness He expressed 20 agreement. ability documents were perform conforming to as soon as set of erroneous docu receiving delivered. After another contract, up meeting, ments drew and another remainder of the it, Cadys it to with the signed and sent May 15 essence, nonpayment on downpayment. In perform, ability to but was not due to a lack of desire or prom- conforming documents was due to the absence of
95 Cadys. ised 52(a),
According M.R.Civ.P., to Rule the District Court’s findings regarding contract the existence of an enforceable findings clearly affirmed, since the are not erroneous.
II Impossibility of Performance April impossi- claim that the 20 perform endanger
ble because it would transfer grazing permits. Any Forest Service transfer of the title to permits the land to facilitate transfer of the would not be according April agreement. any Ussin maintain that three alternatives regulations, earlier,
described as allowed Forest Service April agreement, would have been with consistent Cadys’ and without risk or detriment to the interests. prove The burden rested with the im possibility they existed, and must have demonstrated that they everything powers perform did within con their (Mont. 1981), tract. Miller v. Titeca 628 P.2d St.Rep. (1977), Zepp 853; v. Smith 173 Mont. 567 P.2d they here, 923. did meet their burden did every they perform not show that took action could to they rejected any Rather, the contract. of the alternatives grazing permits transferring available for and insisted that title to the land be transferred 1981. That was the April one alternative which was inconsistent with agreement, Ehly’s plan facilitating in terms of realize tax credit. finding
The District Court’s not im- that the contract was possible perform require- grazing permit because ments is affirmed.
Ill Damages
A. Tax losses and benefits. *12 $183,080 General were damages the amount of awarded by damages allegedly the District as income tax suf- Court by figure fered Ehly because of the breach contract. his by by computing was arrived at first Ehly’s accountant subtracting federal then obligations, and California tax chattels, depreciation they bought. on the ranch had been By credits, allegedly he have claiming investment tax would $80,688 in an saved income taxes for 1981. then added pay damage amount he would on the for the taxes have award, coming getting awarded if he were successful $181,321 up with a total of due him. The District Court $183,080 him awarded on this basis. improper was because contend that award
(1) by loss of tax benefit was not foreseeable contract; (2) Ehly damages as for breach of the failed mitigate by property; and damages purchasing his similar (3) spec- damage was from and based award derived ulation, figures. rather than ascertainable foreseeable savings claims that the loss of tax for buying main knew that reason response In savings. the ranch was to tax obtain mitigated damages he have claim that should (1) the property, Ehly similar contends purchasing Cady property, unique piece ranch is a and remarkable (2) too late in easily not be it was replaced could (1981) year negotiate for another to search and piece property. con
Generally, damages the measure of a breach of tract case is: compensate party ag-
. . the amount which will proximately caused the detriment which was grieved for all likely thereby would be ordinary things in the course of clearly ascer- Damages result which are not therefrom. be recovered origin tainable in their nature and cannot both 27-1-311, MCA. for a breach of contract.” Section basis Certainty provides evidence a reasonable exists when Cremer Rodeo Cremer v. specific determining amount. (Mont. 1981), Land and Livestock Co. 627 P.2d St.Rep. (1977), Zepp 574; Smith v. 173 Mont. 567 P.2d 27-1-311, MCA, above,
An examination will of Section *13 damages reveal two kinds of recoverable from breach of Damages thereby” contract. “for all the detriment caused damages ordinary include all which in the and natural things proximately of course are the itself. caused breach damages These are the the natural result of breach. Dam ages may under the in statute also be recovered “which ordinary likely things course of would be to result there everywhere, recognize court, from.” Our and courts this provision consequential permitting recovery damages as contemplation parties within the when entered might expected naturally contract, into such be Myers (1913), to result from its v. Bender violation. damages 508, 129 Mont. P. 333. These the con are templated result of the breach. damages
All contract, for breach of whether natural or contemplated, subject causation, are of limitations cer tainty foreseeability. They clearly must be ascertaina origin. They in ble their 27-1-311, nature and Section MCA. must be 27-1-302, reasonable. Section MCA. regard Ehly’s gain upon
We of tax investment credit performance contemplation of the contract as within of parties reasonably Ehly no foreseeable. made secret savings objectives buying that a tax one of his property. perform obliga The failure of the their negated possibility tions under contract claiming the investment tax credits. It follows Cady’s nonperformance legal op was the cause of the lost portunity. opportunity This lost tax be can measured Ehly’s dollars and cents as accountant demonstrated. original performance specific contract called for within a year: upon tax the ranch chattels tax credit were based were be transferred in 1981. The tax credit was Ehly’s liability year. calculated basis of tax for that provide Ehly bargain, In order to of his we with the benefit uphold damages $80,688 on his based lost investment savings. reasonably damages tax foreseeable These were and ascertainable. requested damages also and received additional pay he have to on the award.
offset taxes claimed he would requested $181,321 when taxes based on his so that percent projected tax rate 55.5 state and federal total subtracted, $80,688. were his net return would be appreciate his client We the concern of counsel that damages for breach made whole. We also realize that the potentially income. contract will be considered taxable pro- authority, However, we nor has counsel know no savings any, whereby tax vided us with an award for lost may anticipation taxation. We be ballooned of additional precedent decline to create in this case. additional such monetary erroneously granted. relief was expenses
B. Interest and *14 Ehly prejudgment inter- The District Court also awarded (1) Ehly’s percent est the on: federal and state at rate (2) money; obligation; $100,000 and tax the earnest income (3) Ehly’s capital expenditures the ranch. on Ehly expenses after incurred
The District Court awarded legal action was filed losses related to lawsuit and legal and not related to the action. Ehly’s 27-1-211, MCA, interest, for for Section
As claim applies: damages
“Every person certain is to recover who entitled by capable being and the or certain calculations made particular right upon date is to which is in him a vested day from ex- entitled also to recover interest thereon by cept prevented during law the debtor is such time as by paying the debt.” act of the creditor from money $100,000
Here, on the earnest interest prejudgment Inter interest. is all that as should be allowed judgment amount accord est should then be allowed on the ing Prejudgment 27-1-211, interest should MCA. Section percent per according annum, 31-1-106, be 6 Section percent judgment MCA, and interest on the should be 10 per according annum, 25-9-205, MCA. Section Ehly’s refiling expenses postfiling
The award 25-10-101, exceeded amounts allowed law. Section plaintiff MCA, outlines when a costs are allowed to 25-10-201, MCA, Section are states what costs allowable. depositions during The cost of trial as evidence or not used Burroughs impeachment Lovely are v. Cor not allowed. poration (1974), Mont. P.2d 557. expenses capital expenditures claimed as made anticipation ranch, of the such as the sale
purchase of livestock. He also claimed various travel ex penditures trips California, based on his from his son and daughter-in-law’s wages paid move from California manage to his son to the ranch. Some do not fall of these within the allowable costs as not have been would chargeable performed. to the had contract been portion expenses of these should allowed any by Ehly expenditures capital loss suffered result of buy/sell agreement signed made from the time the April Cadys. 20, 1981, to the time of breach 12, 1981, breach occurred after June when tendered performance by drawing up signing contract, it, and send- ing downpayment, it, with the remainder of the Cadys. The losses occurred because of reliance on buy/sell agreement paid Ehly’s wages and include the payment son as and other insure care of the cattle live- capital expenditures. stock, listed as Attorney C. fees denying Cadys’ proceedings
After motion to abate attorney fees, to determine held a hear- the District Court *15 ing appeal testimony A of heard on the issues. notice to previously judgment this Court of the Ussin filed had been appeal Ehly judgment and a of notice of the was filed the day hearing same was awarded was held. attorney $51,979.65in fees. attorney
The improperly claim that fees were attorney was in provision writing awarded as there no applies fees there a allow them. nor is statute which to They that, law, according also contend to case the District Court hearing no at the time of on this jurisdiction had issue, had appealed as the case been this Court. specifically jurisdic- contends that the court retained tion attorney fees. And that this determine claims exception case is rule general regarding an allowance of inci- attorney necessary fees fees were dental obtaining possession property. cost of of rightful attorney
The fees should have been allowed. It is a statutory well-settled rule contractual or that absent grant, as as an attorney fees are not allowable costs or ele Foy Anderson v. ment 176 Mont. (1978), damages. applicable case here involved a urged P.2d 114. property. lessee attempting to of the leased possession take law, After the above this Court stated: stating rule of “. . precludes recovery attorneys’ paid . This rule fees contract, damages in an part action for breach as a of the However, here claimed is the breach. the small amount not for term is attorneys’ fees in the sense which that out, rule; used in inci- paid the above it is but an amount attorneys, posses- dentally plaintiff’s attempt get contract, proper sion of the land covered and under compensatory payment that such is an element of showing consequences legal damages, is to be treated as one Smith v. omitted.) (Citations wrongful the original act.” Fergus County 39 P.2d (1934), 377, 384, 98 Mont. for at-
There no evidence in this case that claim damages torney compensatory fees should allowed as and, thus, they should allowed at all. not be
IV
Ussin’s Commission listing in the language contend pre- them U Real Estate and between Bar S *16 commission, payment
eludes of Ussin’s as there was no sale pertinent of the reads: property. language first agrees pay “The Owner to to the broker out the of part of the purchase price, upon effecting the the sale of any whole or part property, compensation of the for ser- purchase vices of price.” 5% the They argue agreement, that the two of conditions there be a sale purchase price paid, and that the were not fulfilled.
In case, only agreement, this there was a listing a but in buy/sell clause agreement which stated: “For agree convey valuable consideration sell to I/we to the purchaser property above described on the terms and conditions agree pay hereinabove stated and to to above agent named a commission of amounting percent to 5 the above selling price mentioned for in services rendered this transaction.” portion buy/sell breached this
by not paying Ussin the stated services commission “for rendered.” According agreement, Ussin is entitled to his commission obligation and the must be met. Associates,
In Diehl & Inc. (1977), v. Houtchens 372, 377-379, Mont. 930, 933-935, 567 P.2d this Court stated: generally
“It accepted is law a is real estate broker to has, entitled pursuance commissions when he of his employment specified and within the time in the contract employment, able, of procured purchaser ready and will- ing purchase the seller’s property on the terms and con- specified ditions v. Roscow employment. contract of Bara, 921, 114 Mont. 364; 135 P.2d Bro- Am.Jur.2d kers Section 182. procures buyer When the broker who makes a counteroffer or agrees to terms at variance to specified contract, terms employment the seller has option accepting or If the rejecting counteroffer. accepts buyer, seller procured counteroffer of the broker, seller legally obligated pay commissions to the either under terms employment of the contract of mutually agreed terms of a sale. contract ability
“The broker’s is premised recover commissions ability on the accomplish broker’s he what undertook in his employment. do 32 A.L.R.3d contract Section compensation 2. The broker is not entitled to unsuccess- ful employment, irrespective efforts under contract how great his efforts how his services. were or meritorious Bara, v. Roscow supra. necessary generally It is to refer to *17 specific particular employment terms of the contract order to determine or not have whether the broker’s duties performed. been
“We note brokerage the distinction between a contract requires which a merely purchaser a broker to find a and sell, brokerage requires make or contract broker effect a sale. In the first earns commis- case the broker able, willing sion when procures buyer ready he purchase employed seller’s A to sell terms. broker effect a sale not until he com- does earn his commission sale, real pletes Completion property the sale. of the where involved, payment purchase price is amounts to of the Wall, conveyance of title. O’Neill v. 388, P.2d 103 Mont. 62 672.” Diehl, by buyer
In of the Court found a breach this buy/sell agreement which defeated a sale. Since there sale, no the realtor was not entitled to a commission. Bozeman, Agency Associated In subsequent case of 344, v. (Mont. 1981), 38, 43, Inc. Pasha St.Rep. P.2d 38 348-349, following: this Court stated the Court stated that a broker acknowledge
“We
this
had
(as
exchange
sale’
is the
employed
‘sell or effect a
here)
purchase
until the
case
does not earn his commission
completed.
is
price
paid,
conveyed
is
title is
and the sale
(1977), 173
Associates, Inc. v. Houtchens
Diehl and
See
372,
holding,
expansion
In
of this
Mont.
tied to his ready, if commission even the sale is not if a buyer willing procured and able and the failure to solely wrongful consummate was due to the acts or interfer Taylor Gaudy (1980), Or.App. ence of the seller. v. See (Colo. App.1975), 235, 336; 611 P.2d Fender v. Brunken Carpet 347; P.2d Aloha, Red Real Estate v. Inc. Huygens (1974), 46; 270 Or. 530 P.2d see Ells also (1967), Dobbs, worth Inc. v. Johnson 50 N.J. 236 A.2d 843. . . .”
The Court went on to find the realtor entitled to his com- (not here) ground pertinent listing mission, on the that the payment allowed for commission wrongful buyer. event of termination listing agreement In language case, this both the and the buy/sell agreement from the assume that the real estate paid commission would be when a sale was effected. The properly District Court found that a sale would have been wrongfully consummated had the refused to comply buy/sell agreement. according with the Thus, to As- Agency, supra, sociated Ussin is entitled to his commission on this basis also. also contend that Ussin is not entitled to fiduciary duty
a commission because he breached a owed *18 Cadys. agreement him to the The commission reduction be Ehly Cadys; tween Ussin and was not communicated to the Cadys fiduciary assert that this was a breach of Ussin’s duty. They (Mont. Smalley 1982), cite Nardi v. [197 Mont. Rep. 321,] 228, 606, 643 P.2d 39 St. and First Trust Co. v. (Mont. 1980), Rep. McKenna 614 P.2d 37 St. as describing appropriate standard for a broker-seller relationship. good help trying
Ussin claims that he exercised faith in Cadys fiduciary sell the ranch and that he breached no duty Cadys by reducing owed to the He commission. distinguishes fee-splitting arrangements, which have been by courts, declared void some from commission reduc- agreement argues agreement tion in this case. He that the Ehly was between and Ussin and thus did not affect the Cadys. points Cadys testify He out that the did not that they signed April agreement would not have had Ehly’s agreement. known about Ussin and fiduciary duty by owed to seller a broker is dis- supra. Co., cussed in Nardi and First Trust These cases propositions fiduciary duty stand for the is (1) by if breached a seller is foiled or deceived the contract (2) or does contract, not understand the full disclosure of pertinent by all facts is not made the broker. Neither of the completely point cases are with this case.
Arguably duty there was a breach of Ussin’s inform Cadys pertinent importantly, though, facts. More prove any damage resulting have failed to from the failure earlier, to inform. As noted would not monetarily have suffered or otherwise from the Ehly Ehly obligated between and Ussin. himself to the purchase by signing buy/sell agreement. $2,250,000 money Thus, flow of would still be the same. arguably prejudice suffered, there was no and Ussin should not be denied his commission on this basis. properly
The District Court Ussin’s commission to limited according agreement. $92,500, and Ussin’s judgment We affirm the of the District Court in favor of Ussin; we remand case for recalculation of Ehly’s damages opinion. in accordance Part III with of this party appeal. Each shall bear his or her own costs of HARRISON, WEBER, MR. JUSTICES MORRISON GULBRANDSON concur. concurring dissenting: SHEEHY,
MR. JUSTICE nearly opin- foregoing I concur all in the with said by ion, but its otherwise excellent content is flawed deter- mining the loss of an investment tax credit this case reasonably damages, foreseeable. As to that item of I dissent.
Loss of investment tax credit reason of breach *19 damages an of it not meet fails here as item because does causation, certainty foreseeability. Cady did the tests of liabil- liability; not cause income tax income tax money in ity Ehly making arose from fact that not an places. other investment tax credit is The loss of origin. item in damages clearly of nature and ascertainable depend frequently loss tax The would on laws change, circumstances, myriad other taxpayer’s and a of possibilities. damages consequences tax as injection of in Court present such case as this The District quagmire. a shelters, exemp- possible here was tax forced to consider tions, year complex vary in from tax laws which result year case, effect, to taxpayer taxpayer. and from This in turned from an to a tax case. action breach of contract year The District Court had to consider the tax laws for the breach, 1981, and in awarding damages additional possible award, cover on in judgment taxes the tax laws year of It the trial. should be a matter of notice judicial certitude, single there can be taxpayer, no even as a as to the income tax a consequences of breach contract purchase for the sale a farm ranch. No certain method of mitigating produced by such tax loss could be the defense to reduce the damages. claimed
The first example uncertainty Ehly if fact gained had an interest on small property, this even a downpayment tax he would have no investment necessary credit available. him title It was take ranching until 1982. He engaged farming never or Cady property so there certainty can no whether Ehly profit Cady would would not on the have made ranch. Although fig- in reaching damage accountant ure to which he testified on behalf of took into ac- return, count a filed Montana income tax had never pro- Montana depreciation income tax return. The schedule pounded by accountant behalf included $270,000, cost, although miles of replacement fence at existing replaced. depreciation projec- fences were not *20 tions building also took account of four projected into dams yardage and their and cost. The dams estimated cubic did exist Although Ehly agreed at the time of trial. had buy Cady per pair, from at the account- $600 cow/calves depreciation ant figure per pair used the for his $800 schedules, price sold in highest which cattle had been at depreci- in his per yearling 1981. The used $411 accountant schedule, been although price ation would have testimony apiece. $360 result of the accountant’s total $2,250,000, purchase price was that on the would $1,523,000. depreciation have claimed total testimony is the for the court’s accountant’s basis I damages award of of investment tax credit. insist loss speculative testimony vague, uncertain and too I reason, dis- any accorded relevance. For that would allow damages claimed item.