Stovall v. Watt

610 P.2d 164, 187 Mont. 439, 1980 Mont. LEXIS 725
CourtMontana Supreme Court
DecidedApril 30, 1980
Docket14712
StatusPublished
Cited by5 cases

This text of 610 P.2d 164 (Stovall v. Watt) 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
Stovall v. Watt, 610 P.2d 164, 187 Mont. 439, 1980 Mont. LEXIS 725 (Mo. 1980).

Opinions

MR. JUSTICE SHEA

delivered the opinion of the Court.

The Stovalls, plaintiffs below, appeal from a judgment and order of the Big Horn County District Court denying their request for specific performance of an option to purchase clause contained in a lease which the Stovalls had entered into with Lillian I. Watt. Defendant Lillian Watt also cross-appeals from an award to the Stovalls of $9,600 in damages for her breach of agreement to convey the real property involved. The trial court determined that defendants Dan M. Hardy and Fern A. Hardy had superior equitable claims to the purchase of the land involved as a result of a lease option to purchase agreement which they also had entered into with defendant Lillian Watt.

The essential contention of the Stovalls is that the trial court abused its discretion by not granting their claim for specific per[441]*441formance of the option to purchase clause contained in a lease dated March 3, 1969. The primary contention of defendant Watt in her cross-appeal seeking to avoid damages awarded to the Stovalls, is that the Stovall lease had no inception in fact and that the lease was also subject to a condition precedent that the Hardys vacate the land involved, and that the Hardys never did vacate the land.

The problems began with the death of Edmund Andrett who owned the property in question until his death in June 1966. Andrett had previously used C. D. Wolfe of Farm and Ranch Management Co. of Billings to act as his agent in leasing the land involved. Through a continuing series of leases the Hardys had leased the land from the agency since 1951. The problems began when the leasing agency dealt directly with the Hardys after the death of Edmund Andrett but where Lillian Watt dealt, through her attorney, primarily, with the Stovalls.

Lillian Watt, an elderly Seattle, Washington resident, became the owner of the property involved by virtue of a decree of distribution entered on July 18, 1967. The property was then subject to an existing Hardy lease. She retained Missoula attorney, Dwight N. Mason, to handle her affairs concerning the property. During all of the proceedings or transactions in relation to the land, she had never gone to see the land in this state located in Big Horn County. The Hardy lease was to expire on March 1, 1968. Prior to this time, however, Lillian Watt and the Hardys were disputing lease rental payments. For some reason, Lillian Watt believed that the Hardy lease had expired and that the Hardys were in default on rental payments. For this reason, she contacted attorney Mason and asked him to find a new tenant. Unknown to Lillian Watt or to attorney Mason, however, the leasing agency managed by Wolfe, had entered into a renewal lease with the Hardys on March 1, 1968. This lease was recorded on November 22, 1969. The problem became complicated then because attorney Mason had, pursuant to Lillian Watt’s instructions, found another tenant for the farmland and entered into a lease and purchase option with the Stovalls.

[442]*442The following circumstances led to the Stovall-Lillian Watt lease option to purchase agreement. Attorney Mason wrote a letter to the father of Jay Stovall and solicited him as a tenant. Jay Stovall’s father had died however, and the letter was passed along to Jay Stovall, who was ranching property adjacent to the Lillian Watt property occupied by the Hardys. Jay Stovall and his wife met with attorney Mason in Missoula in early February 1969, and expressed their interests in leasing the property. Mason told the Stovalls that Lillian Watt would be receptive to an offer to lease the land involved because she was then having problems with the Hardys and did not want to continue leasing to them. After returning home, the Stovalls sent a written offer for lease terms, negotiations ensued, and finally attorney Mason prepared a lease dated March 3, 1969 and Lillian Watt and the Stovalls signed it. This lease was recorded on September 22, 1969, a month before the Hardys recorded their lease from the leasing agency managed by Wolfe.

The Stovall lease was for a three year term starting March 3, 1969 and it also included a preferential right of renewal and an option “to meet the purchase price offered” in the event of any sale during the term of the lease. Another clause recited that “. . . possession thereof to be given as soon as present tenant (the Hardys) vacates same ...” The Hardy lease also contained an option to purchase clause similar to that contained in the Stovall lease. Although the Stovalls knew that the Hardys were occupying the land attorney Mason told them that if any problem arose as to possession that he would evict the Hardys and place the Stovalls on the land as the tenants.

Problems erupted almost immediately because of the two competing leases and claims made by the respective parties. Upon receiving a signed copy of their lease the Stovalls immediately proceeded to claim possession of the land. They rebuilt some fences, opened up gates, and moved their cattle from adjoining land onto the Lillian Watt property. This sparked action by the Hardys, who were occupying the land. They moved the cattle off the property and locked the gates. These acts triggered a series of communica[443]*443tions between attorney Mason, the Hardys, Lillian Watt, and Wolfe, the manager of the leasing agency who had signed the lease with the Hardys. From these communications it was learned that the Hardys were not actually in default on the rental payments, and that the Hardys had entered into the March 1, 1968 renewal lease with agent Wolfe. The Hardys had paid the rental money to agent Wolfe.

Wolfe then tried to settle the rents with Lillian Watt on March 21, 1969, but she rejected his offer, returned his check, and told Wolfe that she would not accept any rent from the Hardys for 1969. On April 5, 1969 Lillian Watt wrote to attorney Mason and told him she would not ratify the Hardy lease. Lillian Watt and attorney Mason then suggested a compromise agreement between the competing lessees whereby the Hardys would be allowed to have the cropland through the 1969 crop season and the Stovalls would use the grazing land. The Stovalls did not need the grass until fall, and they felt that under customary practice the Hardys would, in any event, be entitled to the 1969 crop which the Hardys had planted. It appears however, that neither the Hardys nor the Sto-valls ever specifically agreed to this compromise agreement. In any event, the attitude of Lillian Watt toward the Hardys changed markedly after she decided to let the Hardys stay on the property through 1969.

Although she apparently believed at that time that the Hardys did not have a valid lease, Lillian Watt accepted the grazing rental from the Hardys. In September 1969, Lillian Watt decided to sell the property, and in June 1970, she sold the property to the Hardys. As a result of this sale to the Hardys, the Stovalls filed suit seeking specific performance from Lillian Watt, and that they were entitled to purchase the land rather than, the Hardys.

In entering its order denying specific performance the trial court determined that Lillian Watt had relied in good faith on attorney Mason’s advice, and that out of this reliance flowed a series of factual and legal misapprehensions. The trial court decided that under the total circumstances of the case, equity would [444]*444not permit the Stovalls to obtain the property by specific performance against Lillian Watt, and that damages awarded against Lillian Watt, would, under the circumstances, be the proper remedy.

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Stovall v. Watt
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Cite This Page — Counsel Stack

Bluebook (online)
610 P.2d 164, 187 Mont. 439, 1980 Mont. LEXIS 725, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stovall-v-watt-mont-1980.