Watson v. Fultz

782 P.2d 361, 239 Mont. 364, 1989 Mont. LEXIS 276
CourtMontana Supreme Court
DecidedOctober 17, 1989
Docket88-469
StatusPublished
Cited by5 cases

This text of 782 P.2d 361 (Watson v. Fultz) 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
Watson v. Fultz, 782 P.2d 361, 239 Mont. 364, 1989 Mont. LEXIS 276 (Mo. 1989).

Opinion

CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Plaintiff Watson sued defendant Fultz for a real estate commission on a sale of Fultz’s farm near Geraldine, Montana. Sitting without a jury, the District Court for the Eighth Judicial District, Cascade County, entered judgment for Fultz. Watson appeals. We affirm.

*366 The issues are:

1. Did the District Court err in ruling that Watson was not éntitled to a real estate commission from Fultz?

2. Did the District Court err in awarding Fultz attorney fees and costs?

In June 1984, Fultz placed an ad in the Great Falls Tribune for the sale of his 5,000-acre farm. He intended to exchange his farm on a tax-free basis for another farm where he might pursue a cattle operation in addition to growing grain. Although Fultz did not list his farm with any realtors, several realtors, including Watson, attempted to locate purchasers for the farm.

By November of 1984, Fultz, with the assistance of a realtor other than Watson, had located a farm and ranch in Big Horn County which he wished to purchase. Fultz signed a Buy/Sell Agreement on the Big Horn County property on December 4, 1984. He entered into a standard listing contract with Watson for the sale of the Fultz farm two days later. As the District Court found, the contract included the following pertinent provisions:

“a. The selling price shall be ‘One Million Nine Hundred Thousand Dollars net to Seller and One Hundred Thousand Dollars to Law Realty for a total of Two Million Dollars.’
“b. The selling price shall be ‘paid in cash at time of close.’
“c. The agreement ‘begins on 12-6-84 and expires at midnight on 1-6-85.’
“d. This listing is subject to Fultz being able to satisfactory [sic] trade the above lands for lands in Big Horn Co. on a tax free exchange.
“e. This sale includes all lands.”

The listing contract was on a form supplied by Watson. Watson crossed out the standard form language providing for exclusivity of contract and typed in the words, “this is a non-exclusive listing.”

By December 6 and 7, 1984, Watson had obtained written offers to purchase portions of Fultz’s farm from Dan Roddy and Gene Mc-Keever, whom he had located before getting the listing contract with Fultz. These offers differed from the terms of sale in the listing contract in several aspects. They were offers to purchase less than all of Fultz’s farm and they both required Fultz to allow thirty days beyond January 15, 1985, for completion of financing. The offers also were contingent upon the buyers being able to obtain loans. Fultz signed counteroffers on December 14, 1984, which made the following changes to the offers: they deleted the provision allowing thirty *367 days beyond January 15, 1985, for completion of financing; they inserted a provision that each sale was subject to all of Fultz’s farm land being sold; and they inserted a provision that the “Federal Land Bank must have a commitment from Spokane by December 31, 1984 [for financing].” McKeever refused to accept Fultz’s counteroffer.

On December 28 and 29, 1984, Watson obtained three new offers for a portion of the Fultz farm. The total acreage covered by these three offers did not include 800 acres of the farm. The offers, by their terms, were good for five days. Each of these provided that the offer was “subject to finance which will be confirmed by 15 Jan. 1985.” Fultz refused to accept the offers.

On January 4, 1985, Fultz called Watson’s office and left a message that he did not want Watson representing him any longer, that it was “taking too long.” Fultz met with Watson later that day.

On January 6, 1985, Watson was able to obtain an offer from John Bowman for the remaining 800 acres of the Fultz farm. The offer was contingent upon Watson taking a lesser commission on the sale and then making a resale of the property. This part of the agreement was not disclosed to Fultz. Watson was able to obtain extension agreements from two of his December 28 and 29 buyers, but the third buyer rescinded his offer in writing.

On January 8, 1985, Fultz met with his attorney and Watson. Fultz refused to sign the latest offers on his farm. This suit resulted. After a one-week trial, the District Court made comprehensive findings and conclusions and entered judgment for Fultz.

I

Did the District Court err in ruling that Watson was not entitled to a real estate commission from Fultz?

Watson makes several arguments under this issue. He first asserts that he is entitled to a commission because Fultz prematurely terminated his authority to sell Fultz’s farm.

The findings of the District Court contain nothing about Fultz’s call to Watson’s office on January 4, 1985, in which he allegedly terminated the contract. However, as Fultz points out, Watson testified that after his meeting with Fultz later that day, he went on with the understanding that the listing agreement was still in effect. Additionally, Fultz met with one of Watson’s buyers on January 6. *368 We conclude that the District Court did not err in omitting any finding that Watson’s authority had been prematurely terminated.

The listing contract between Watson and Fultz contained the following clause which Watson typed in:

“This listing is subject to Fultz being able to satisfactory [sic] trade the above lands for lands in Big Horn Co. on a tax free exchange.”

Watson argues that an objective standard for a satisfactory trade should be used. The District Court found that since the listing contract was drafted by Watson, any ambiguities must be construed against him and in favor of Fultz. It found that “[t]he term ‘satisfactory’ is a subjective standard rather than a reasonable man standard.” We agree. Fultz testified that the trade arranged by Watson was not satisfactory to him because his accountant told him that the tax consequences to him of the exchange would be in the range of $80,000 to $100,000. We conclude that Fultz’s testimony was sufficient to show that the trade arrangement was not satisfactory to him and thus did not meet the contract requirement set forth in the clause printed above.

Watson’s next argument is that he did not breach his fiduciary duty to Fultz by failing to disclose his side agreement with Bowman. Under that agreement, Watson would forego $30,000 of his sales commission on the portion of Fultz’s farm sold to Bowman until he resold that portion of the farm for Bowman. The District Court found that Watson thereby breached his fiduciary duty to Fultz because he acquired a personal stake in the sale by which his “personal interests became paramount to the interests to Fultz.” This finding is supported by this Court’s statement in Lyle v. Moore (1979), 183 Mont. 274, 277, 599 P.2d 336, 337:

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Bluebook (online)
782 P.2d 361, 239 Mont. 364, 1989 Mont. LEXIS 276, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watson-v-fultz-mont-1989.