Bails v. Wheeler Richardson

Opinion

No. 13322 IN THE SUPREME COURT OF THE STATE OF MONTANA

RICHARD J. BAILS and PATRICIA J. BAILS, husband and wife, plaintiffs and Appellants,

NORMAN C. WHEELER and V7ILLIAP4 RICHARDSON, Defendants and Respondents.

Appeal from: District Court of the Eighteenth Judicial District Honorable W. W. Lessley Judge presiding Counsel of Record : For Appellants:

Berg, Angel, Andriolo and Morgan, Bozeman, Montana Ben E. Berg argued, Bozeman, Montana For Respondents:

Landoe and Gary, Bozeman, Montana Hjalmar Landoe argued, Bozeman, Montana Bennett and Bennett, Bozeman, Montana Lyman Bennett, Jr. araued and Lyman Bennett, I11 appeared, Bozeman, ~ o n t a n a

Submitted: January 10, 1977

Filed: Mr. ~usticeFrank I . Haswell d e l i v e r e d t h e Opinion of t h e C o u r t .

T h i s i s a n a c t i o n f o r damages by t h e p u r c h a s e r of a

r a n c h a g a i n s t two r e a l e s t a t e a g e n t s based on a l l e g e d f r a u d u l e n t

r e p r e s e n t a t i o n s whereby he was induced t o e n t e r i n t o t h e p u r c h a s e

contract. The d i s t r i c t c o u r t o f G a l l a t i n County e n t e r e d summary

judgment f o r d e f e n d a n t s . P l a i n t i f f purchaser appeals.

A s y n o p s i s o f t h e t r a n s a c t i o n forming t h e b a s i s o f t h i s

s u i t a p p e a r s i n o u r o p i n i o n i n B a i l s v . Gar, Mont . I

P. 2d , 33 St.Rep. 1256. T h a t c a s e w a s a s u i t by t h e pur-

c h a s e r o f t h e r a n c h a g a i n s t t h e s e l l e r based on a l l e g e d f a l s e

r e p r e s e n t a t i o n s inducing t h e purchaser t o e n t e r i n t o t h e c o n t r a c t ;

t h e i n s t a n t c a s e i s a s u i t by t h e p u r c h a s e r a g a i n s t t h e two r e a l

e s t a t e a g e n t s based upon s u b s t a n t i a l l y t h e same r e p r e s e n t a t i o n s .

W e v a c a t e t h e summary judgment h e r e f o r t h e same r e a s o n s we v a c a t e d supra, it i n B a i l s v . G a r / v i z . t h a t t h e r e a r e genuine i s s u e s of m a t e r i a l

f a c t p r e c l u d i n g summary judgment.

The a l l e g e d f a l s e r e p r e s e n t a t i o n s i n t h e i n s t a n t s u i t

a r e t h a t t h e r a n c h c o n t a i n s 5,200 deeded a c r e s ; t h a t it would

r a i s e and s u s t a i n 400 a n i m a l u n i t s ; t h a t t h e r e w e r e 300 a c r e s o f

hay l a n d which produced 900 t o n s o f hay p e r y e a r ; t h a t t h e r e were

6 0 acres of c r o p b n d which produced 2 1 b u s h e l s of g r a i n p e r acre;

and t h a t t h e p r o p e r t y would produce a n income of a t l e a s t $80,000

per year.

A so-called "brochure" appears t o c o n t a i n t h e p r i n c i p a l

r e p r e s e n t a t i o n s on which t h e i n s t a n t c a s e i s b a s e d , and t h e r e a l

s o u r c e of f a c t u a l i s s u e s . I t i s b o t h i d e n t i f i e d a s " E x h i b i t A"

a t t a c h e d t o t h e c o m p l a i n t which c o n t a i n s t h e f i r s t f o u r r e p r e s e n -

t a t i o n s complained o f , and a t one p o i n t it i s r e f e r r e d t o by a

defense a t t o r n e y a s t h e "missing brochure". There i s much con-

f u s i o n s u r r o u n d i n g it.

B a i l s s a y s he r e c e i v e d a " b r o c h u r e " , a p p a r e n t l y from

Richardson, d e s c r i b i n g t h e r a n c h and c o n t a i n i n g most of t h e m i s r e p r e s e n t a t i o n s complained o f . Although h e d o e s n o t i d e n -

t i f y " E x h i b i t A" a s t h e document he r e c e i v e d , h e s a y s it i s

v e r y s i m i l a r t o it. Richardson s a y s he r e c e i v e d t h e "brochure"

from Wheeler and s i m p l y r e l a y e d it t o B a i l s . Wheeler a r g u e s

R i c h a r d s o n must have changed it b e c a u s e B a i l s d o e s n o t i d e n t i f y

t h e o n e Wheeler s e n t a s t h e o n e h e r e c e i v e d .

These c o n f l i c t i n g c o n t e n t i o n s c o n c e r n i n g t h e " b r o c h u r e "

t o g e t h e r w i t h o u r d i s c u s s i o n i n B a i l s v . Gar, s u p r a , i n d i c a t e

i s s u e s o f f a c t p r e c l u d i n g summary judgment.

A s t o t h e f i f t h representation, defendants argue t h e

r e p r e s e n t a t i o n t h e r a n c h would p r o d u c e $80,000 income i s a n

o p i n i o n and n o t a c t i o n a b l e a s f r a u d . T h i s r e p r e s e n t a t i o n ap-

p a r e n t l y came o u t o f a d i s c u s s i o n among t h e p a r t i e s w h i l e B a i l s

was b e i n g shown t h e r a n c h . B a i l s s a y s Richardson s t a t e d t h e

r a n c h would p r o d u c e $100,000 income and Wheeler r e d u c e d t h a t

f i g u r e t o $80,000. B a i l s s a y s he b e l i e v e d t h e s e men t o b e h o n e s t

and t r u s t e d them.

A l l p a r t i e s c i t e t h e following r u l e as c o n t r o l l i n g :

" * * * I f t h e party expressing t h e opinion possesses s u p e r i o r knowledge, s u c h a s would r e a s o n a b l y j u s t i f y t h e conclusion t h a t h i s opinion c a r r i e s w i t h it t h e i m p l i e d a s s e r t i o n t h a t h e knows t h e f a c t s which j u s t i f y i t , h i s s t a t e m e n t i s a c t i o n - a b l e i f h e knows t h a t h e d o e s n o t h o n e s t l y e n t e r - t a i n t h e opinion because it i s c o n t r a r y t o t h e f a c t s . " Como Orchard Land Co. v . Markham, 54 Mont. 438, 443, 1 7 1 P. 274.

The o p i n i o n o f t h e C o u r t i n Como c o n t i n u e s :

"So, l i k e w i s e , a n o p i n i o n may b e s o b l e n d e d w i t h f a c t s t h a t it amounts t o a s t a t e m e n t o f f a c t s . "

W e h o l d t h e income r e p r e s e n t a t i o n may b e a c t i o n a b l e w i t h -

i n e i t h e r o f t h e above r u l e s d e p e n d i n g on d e t e r m i n a t i o n o f i s s u e s

of fact. I n d i c a t i o n s a r e t h e r e a l e s t a t e b r o k e r s had s u p e r i o r

knowledge o f r a n c h i n g and o n e o f them had s u p e r i o r knowledge o f

t h e p a r t i c u l a r ranch i n question. A c a s h f l o w e s t i m a t e had been

p r e p a r e d t h a t y e a r i n d i c a t i n g a much lower income. F o r t h e f o r e g o i n g r e a s o n s , t h e summary judgment i s

v a c a t e d a n d t h e c a u s e remanded t o t h e d i s t r i c t c o u r t , G a l l a t i n

County, f o r f u r t h e r p r o c e e d i n g s c o n s i s t e n t w i t h t h i s o p i n i o n .

Justice