Ehly v. Cady

687 P.2d 687, 212 Mont. 82, 50 A.L.R. 4th 429, 1984 Mont. LEXIS 1025
CourtMontana Supreme Court
DecidedAugust 28, 1984
Docket83-065
StatusPublished
Cited by45 cases

This text of 687 P.2d 687 (Ehly v. Cady) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ehly v. Cady, 687 P.2d 687, 212 Mont. 82, 50 A.L.R. 4th 429, 1984 Mont. LEXIS 1025 (Mo. 1984).

Opinions

MR. CHIEF JUSTICE HASWELL

delivered the Opinion of the Court.

[86]*86Dorothy, Bruce and Cassandra Cady appeal judgments entered in the District Court of the Fourteenth Judicial District, Meagher County, in favor of Ray Ehly and James Us-sin. We affirm in part and reverse in part.

Ehly filed a complaint seeking specific performance of a buy/sell agreement executed by the Cadys and him, an immediate preliminary restraining order restraining the Cadys from selling, encumbrancing or transferring the property involved, a hearing on the merits of the case, and $500,000 in general and special damages. The preliminary injunction was granted on September 15,1981. An amended complaint filed October 8,1981, sought additional relief in the form of reformation of the contract and exemplary damages. A second amended complaint added James Ussin, the Cadys’ realtor, as a defendant and a prayer for $500,000 in damages from Ussin in the event the court found that the Cadys were excused because of Ussin’s conduct.

Ussin cross-claimed in his answer against the Cadys, alleging entitlement to his commission. The Cadys, in response, made affirmative claims against Ehly and Ussin.

Before the trial, Ehly abandoned his claim for specific performance. A nonjury trial was held July 26 through 30, 1982. At the conclusion of Ehly’s case-in-chief, the District Court granted the Cadys’ motion to dismiss Ehly’s claim for punitive damages and the injunction was vacated.

The District Court filed findings of fact and conclusions of law on October 26, 1982, and adopted virtually verbatim Ehly’s and Ussin’s proposed findings and conclusions. Ussin was awarded his commission and judgment against the Cadys and Ehly on the various other claims. The Cadys filed a notice of appeal of the Ussin judgment on November 15, 1982.

By judgment entered November 18, 1982, Ehly was awarded approximately $245,000 in damages from the Cadys and his attorney fees and expenses. A notice of appeal of this judgment was filed on December 8, 1982.

After a hearing held December 8, 1982, the District Court [87]*87filed supplemental findings and conclusions regarding attorney fees and expenses. Ehly was allowed almost $52,000 in attorney fees and $350 in additional costs. Final judgment was entered on January 19, 1983, and the Cadys appeal the judgments in favor of Ehly and Ussin.

The Cadys own a livestock ranch located in Meagher County of approximately 10,000 acres. The property was listed for sale with James Ussin, d/b/a U Bar S Real Estate, early in April 1981. According to the listing agreement, the selling price was $2,250,000, 5 percent of which Ussin was to receive as a commission “upon effecting a sale of the whole or any part of said property.”

Bruce Cady holds a college degree in accounting, as well as one in psychology. Dorothy Cady received a business degree and has done graduate work in business education. Bruce Cady worked as an accountant before he became a farmer, and Dorothy Cady worked as a legal secretary.

Ray Ehly, a contractor from California, was interested in buying a Montana ranch for investment and tax purposes. Ehly was shown the Cady ranch in early April 1981 by Us-sin. Ehly’s first two offers of $2,100,000 and $2,220,000 were summarily rejected by Cady as not providing the full purchase price. Ehly decided he wanted to make a final offer to the Cadys in person, so he arranged a meeting with Ussin in Harlowton on April 20, 1981. Ehly met Ussin and another realtor, Lewis, in Harlowton. As they were driving toward the Cady ranch, they stopped to prepare a written offer. As they were typing an earnest money receipt and agreement to sell and purchase in one of the vehicles, Ussin advised Ehly that Cady would not accept his offer of $2,230,000, but that Ussin would be willing to reduce his commission by $20,000 to make a sale. Ehly and Ussin did not work out the details of the commission reduction at that time, but agreed that the offer to Cady should read $2,250,000 and Ussin’s reduction should make up the difference between what Ehly would pay and what Cady would get. Ehly signed the agreement which quoted a $2,250,000 [88]*88purchase price, and provided a check for $100,000 earnest money.

Upon arrival at the Cady ranch, the parties discussed the agreement for approximately two hours. Following the discussion, Ehly left the Cady ranch to attend a wedding and the Cadys, Ussin and Lewis drove to Lewistown to meet with Marvin Stephens, the Cadys’ accountant. Stephens first met with the Cadys, and later the realtors joined the meeting. For three to four hours the agreement was discussed and after certain changes were made, the Cadys signed and initialed the agreement. On April 21, 1981, Ehly agreed to the changes made at the Lewistown meeting.

The agreement provided that Ehly pay $370,000 (including the $100,000 earnest money) as a downpayment upon closing of the chattel sale. He was to pay $50,000 on November 1, 1981, and $350,000 on January 8, 1982. Title to the livestock and other ranch chattels was to be transferred in May 1981, but title to the property was not to be transferred until January, 1982, to facilitate Ehly’s income tax plans. It was known by the Cadys that Ehly was purchasing the ranch at least partially for income tax reasons.

Ehly also agreed to transfer to the Cadys ten acres of land in the Gallatin Valley, with a value of $75,000. Ehly would assume a $60,000 mortgage on the Cady property and would be ready to pay $200,000 cash if the Cadys needed the money to make a tax-free exchange. There was no issue as to Ehly’s ability to fulfill his obligations under the agreement.

The Cadys insisted that their attorney, Leonard McKinney, prepare the closing documents. When Ehly received the documents prepared by McKinney, Ehly’s attorney, Jim McLean reviewed them and found that they contained terms substantially different from those in the April 20 agreement. On May 11, 1981, McLean informed McKinney about the discrepancies and stated that Ehly was prepared to close the sale as soon as accurate documents were prepared.

[89]*89In anticipation of the sale, Ehly purchased livestock and ranch equipment. He arranged with Cady to place the livestock and equipment on the ranch, as well as to have his son and daughter-in-law move from California to the ranch. He also hired a ranch manager.

On May 15, 1981, at a meeting attended by the parties in Lewistown, Ehly was given another set of closing documents. These also did not comply with the April 20 agreement. While discussing the agreement and sale of the ranch, Bruce Cady became angry and left the room. Testimony at trial indicated that before leaving the room, Cady made a comment about his not wanting to comply with the April 20 agreement and about there being no sale unless it was done his way.

After a break, Cady returned to the meeting and the parties discussed the release clause of the agreement, which reads as follows:

“Buyer may request a release of a parcel of land for building purposes. Seller shall grant said release if buyer will pay the sum of $1,000.00 per acre for said release.

“Principal payment shall apply towards the $1,000.00 per acre. Buyer shall have the right to release 320 acres as of the date of closing of the real property.”

As the Cadys were interpreting the language differently from Ehly, discussion was conducted and the differences were resolved.

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Cite This Page — Counsel Stack

Bluebook (online)
687 P.2d 687, 212 Mont. 82, 50 A.L.R. 4th 429, 1984 Mont. LEXIS 1025, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ehly-v-cady-mont-1984.