Ragen v. Weston

625 P.2d 557, 191 Mont. 546, 1981 Mont. LEXIS 683
Montana Supreme Court·Decided March 25, 1981·No. No. 80-313·Published·Cited by 2 cases

Opinion

MR. JUSTICE DALY

delivered the opinion of the Court.

This appeal arises from a partial summary judgment entered against the defendants and in favor of the plaintiff by the District Court of the First Judicial District, in and for the County of Broad-water.

Plaintiff, formerly Kathern Hunsaker, now Kathern Ragen, was the equitable owner of certain real property in Townsend, Montana, where she conducted a dry goods business. On July 20, 1978, Ragen entered into an agreement to sell the inventory of her business and to lease for $500 a month the real property to defendants, Arlo and Vernetta Weston. In the lease agreement, which expired on February 15, 1979, defendants were also granted an irrevocable option to purchase the building and fixtures for a sum of $75,000, less all rentals previously paid. The agreement further provided that, if the option was exercised, the Westons would pay to Ragen 29 percent of the total purchase price in the year of the sale and the balance would be paid over a period of ten years.

The Westons, in an apparent effort to exercise the option, advised Ragen that they had forwarded a $17,000 check to the State Bank [548] of Townsend to be used as a portion of the downpayment. The parties then executed a contract for the sale of the real property, dated February 22, 1979, in accordance with the terms provided in the lease and option to purchase. The Westons paid their first installment of $500 under the contract on or about March 1, 1979. However, when Ragen went to the State Bank of Townsend to pick up the $ 17,000 downpayment on March 9, 1979, she was informed that the check would not be honored because there were insufficient funds in the account on which it was written.

Failing to receive the agreed upon downpayment, Ragen notified defendants in writing on March 13, 1979, that the contract was deemed rescinded and that she was treating the $500 already paid as rent for the month of March. Plaintiff further demanded that defendants vacate the premises on or before March 31, 1979.

On November 7, 1979, Ragen filed a complaint against the Westons seeking payment for real property taxes levied and assessed against the property for and during the term of the lease as provided in the lease agreement; payment for the reasonable value of certain fixtures sold by defendants during their occupancy of the premises; and payment for the reasonable value of a typewriter defendants refused to return upon vacating the property. The Westons denied any indebtedness to plaintiff and filed a counterclaim alleging that Ragen had wrongfully rescinded the agreement to purchase the property which resulted in damages in the amount of $25,000. In addition, the Westons alleged that during the term of the lease they placed approximately $6,000 worth of fixtures in the building and that by reason of the wrongful rescission and plaintiff’s retention of these fixtures, they had been further damaged in that amount.

Following discovery, plaintiff filed a motion for summary judgment on all liability issues. Defendants responded with their motion for summary judgment with respect to Ragen’s claim for the real property taxes. The District Court, on May 22, 1980, granted Ragen’s motion for summary judgment as to her claim for the real property taxes, with the exact amount of the taxes to be [549] determined at trial or at an evidentiary hearing. The court further ordered that the motion for summary judgment on the issue of defendants’ liability for the value of the typewriter and the fixtures be denied in that material issues of fact still remain. The court then granted summary judgment for plaintiff on both of defendants’ claims for damages and ordered that the counterclaims be dismissed. Judgment was so entered on May 28, 1980, and defendants now appeal.

The following issues are presented for our review:

1. Did the District Court err in granting plaintiff summary judgment on the issue of defendants’ liability for the payment of the real property taxes?

2. Did the District Court err in rejecting defendants’ counterclaims for damages resulting from a wrongful rescission of the purchase agreement and for damages resulting from a wrongful retention of certain fixtures?

This Court has consistently held that the party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Reaves v. Reinhold (1980), 189 Mont. 284, 615 P.2d 896, 37 St.Rep. 1500; Harland v. Anderson (1976), 169 Mont. 447, 548 P.2d 613; Kober v. Stewart (1966), 148 Mont. 117, 417 P.2d 476.

Here, the District Court could properly grant the summary judgment on the issue of defendants’ liability for the property taxes only by finding that the lease and option to purchase agreement entered into by the parties required defendants to make the payments. The agreement is clear and specifically provides as follows:

“By reason of concessions made by Hunsaker with respect to the option to purchase below set forth, Westons agree to pay the real property taxes levied and assessed against the premises during the term of their lease, and also agree to pay Hunsaker’s fire insurance for the period of said lease. Hunsaker shall be entitled upon receipt of tax notice or insurance premiums or both, to make demand of [550] Westons for payment of these items, and Westons agree to pay the same.”

Defendants maintain that the agreement to pay the real property taxes was conditioned upon their exercising the option to purchase and that, as a result of this assertion, a material issue of fact remains to be resolved. We must disagree.

It is fundamental that the language of a contract will govern its interpretation if that language is clear and explicit and does not result in an absurdity. See section 28-3-401, MCA; Danielson v. Danielson (1977), 172 Mont. 55, 58, 560 P.2d 893, 894. Nelson v. Combined Insurance Company of America (1970), 155 Mont. 105, 113, 467 P.2d 707, 712. The pertinent language in this instance is unequivocal, unambiguous, and requires no interpretation. It specifically states that “Westons agree to pay the real property taxes levied and assessed against the premises during the term of their lease.” Nowhere in the contract is there additional language indicating that this provision is qualified by a condition that the option to purchase first be exercised.

The applicable provision must be given effect as written by the parties; thus, the District Court properly granted plaintiff summary judgment on the issue of liability.

The second issue concerns defendants’ claim of wrongful termination. Section 28-2-1711, MCA, provides that a party may rescind a contract in the following cases:

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Ragen v. Weston, 625 P.2d 557, 191 Mont. 546, 1981 Mont. LEXIS 683 (Mo. 1981).

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