MOBLEY v HALL
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No. 82-257 I N THE SUPREME COURT O F THE S T A T E O F MONTANA 1983 JOHN R . MOBLEY, DELORES W . MOBLEX, a n d MOBLEY LAND, I N C . , a c o r p o r a t i o n , P l a i n t i f f and A p p e l l a n t , NEWMAN R. HALL, M A R J O R I E A. HALL, EASTERN BROKERAGE S E R V I C E , AL "BUCK" MURI and E D KIMBALL, D e f e n d a n t s and R e s p o n d e n i s . Appeal from: D i s t r i c t C o u r t of t h e S i x t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e C o u n t y of C u s t e r H o n o r a b l e A. B . M a r t i n , J u d g e p r e s i d i n g . C o u n s e l of R e c o r d : For A p p e l l a n t : Gene Huntley, Baker, Montana For R e s p o n d e n t s : L u c a s and M o n a g h a n , M i l e s C i t y , M o n t a n a Thomas Monaghan, M i l e s C i t y , Montana S u b m i t t e d on b r i e f s : N o v e m b e r Decided: Filed: JAN 2 o 1983 5, 1 9 8 2 January 2 0 , 1 9 8 3 M r . Justice John C. Sheehy delivered the Opinion of the Court. This is an appeal from an order of the District Court of the Sixteenth Judicial District, Custer County, granting defendants' motion for sunranary judgment on the ground that p l a i n t i f f s ' claim was barred by the statute of limitations. W affirm the order of the D i s t r i c t Court e and remand the case for further consideration. On Novemkr 3, 1975, defendants, Newman and Marjorie Hall, entered into a l i s t i n g agreement with defendants Eastern Brokerage Service (Eastern) and F Kimball, Eastern's agent. A The Halls told Kimba.11 that the c a t t l e ranch they wished t o s e l l included approximately 470 acres of winter wheat and s m r fallowed cropland, 700 acres of i n t e m d i a t e wheat grass and 360 acres of diked a l f a l f a with a t o t a l of 400 acres of developed dikes. In h i s deposition M r . Hall stated that these figures were based on crop yield and information he received from h i s s e l l e r when he purchased the land i n 1956. Based on these representations, Eastern printed and distributed a brochure t h a t detailed the crop acreage. M r . Hall told both M r . Mobley, p l a i n t i f f , and Eastern t h a t the figures were approximate but the brochure did not indicate t h a t they were. M r . Wbley contacted Eastern and was advised by defendant Al Muri, Eastern's agent, t h a t the Hall property w s for sale. a brochure and requested o f f i c i a l naps of the property. Hall received a H did not receive e complete maps of the property a t the time of the sale because no such maps existed. Halls l e f t p a r t i a l maps of the a l f a l f a crop only, i.n the residence sold t o the Mobleys. These maps shmed t h a t M r . Hall had miscalculated the alfalfa crop and had overstated the crop acreage by a t l e a s t 115.6 acres. M r . Hall t e s t i f i e d that these maps w e r e delivered t o M r . Mobley before the sale. On March 29, 1976, the Mnbleys signed a contract for deed for the purchase of the ranch lands. The contract provided t h a t there w e r e "4,179.19 acres, more or l e s s , " but did not expressly s e t forth +he exact acreage for each type of land. M r . Mobley began planting grain i n April of 1976. A t this t i n e his d r i l l acreage measuremnt device did not correspond w i t h the acreage shown on Eastern's brochure but M r . Hall assured him t h a t the acreage a specified w s correct. In the f a l l of 1976, M r . Mobley sumner fallowed, t h i s time he used a borrmed d r i l l . Again the d r i l l masur~mentdid not correspond with the acreage l i s t e d on the brochure. In June of 1977, Mr. Mobley asked the Agriculture Soil Conservation Service (ASC) t o take acreage masurements. On June 28, 1977, the A S C responded: "Enclosed find a copy of the f i e l d s you drew i n yesterday. W only came up with 336.8 acres of e wheat--164.5 acres of barley plus 405.4 acres of s m e fallow. Do you think samething is wrong? u mr I t i s short of your estimate. Dot Nalley" On August 29, measurements. costs. 1977, 1W. Mobley paid the ASC $46.81 for acreage H e received a masurement service record detailing the The record indicated t h a t there were 438.9 acres of wheat, 188.3 u mr acres of barley and 393.0 acres of s m e fallow. W i t h another check dated November 29, 1977, Mrs. Mobley paid the ASC $15.00 for additional f i e l d measuring. The ASC a e r i a l survey was ccgnpleted November 1, 1977. This survey showed t h a t there were 386.1 acres of w i n t e r wheat and sunmer fallowed cropland not 470; 434.4 acres of i n t e m i a t e wheat grass not 700 acres; 244 acres of diked a l f a l f a not 360 and 364.9 acres of developed dikes not 400 acres a s represemted on Eastern's brochure. After the survey was completed M r . Mobley called Eastern and discussed. the discrepancy w i t h Ed Kimball. Kimball told Mr. Mobley to wait u n t i l spring when the snow was off the ground, and t h a t i f there were any shortages they could be determined at that time and that Hall would "make it right." In the spring of 1978, Kimball and Hall did go to the Mobley ranch. They looked at the ASC maps and inspected the property. In May of 1978, Kimball and Hall met with Mr. Mobley and refused to make any adjustments in the purchase price because they felt the land was sold in gross as a cattle ranch. On October 18, 1979, the Mobleys filed a complaint in the District Court seeking $100,000 in actual damages and $150,000 in punitive damages for fraud based on the overstatemnt of cropland. On Julv 17, 1981, the Mobleys suhnitted to the District Court a mtion for partial surmnary judgment on the issue of liability against the Halls. On March 31, 1982, the defendants moved for sumnary judgment claiming that the Mobleys' action was barred by the two year statute of limitations for actions based on fraud. Section 27-2-203, MCA, provides: "Actions for relief on ground of fraud or mistake. The period prescribed for the commencement of an action for relief on the ground of fraud or mistake is within 2 years, the cause of action i such case not to be n deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake. " Mobleys contend that they fall within the discovery exception and that the alleged fraud was not discovered by them until the survey was completed on November 1, 1977, within two Years of the filing of the action. The defendants' mtion was argued orally and the District Court entered its memorandum and order granting defendants' motion on May 24, 1982. The summary judgment was entered on May 26, 1982. The clerk of court served notice of entry of judgment on May 26, 1982. The Mobleys served their motion for new trial and affidavit in support of motion for new trial on June 9, 1982. The Mobleys did not notice their motion for new txial at the tine it was served but secured an order from another District Court judge continuing the hearing. Mobleys' counsel filed notice of appeal on June 24, 1982. In its memorandum and order, the District Court outlined the circumstances pertaining to the Halls' suspicion, knowledge or discovery of acreage shortages. 1. Plaintiffs (Mobleys) discovered a acreage shortage when they n drilled the fields i the spring of 1976. n 2 Plaintiffs discovered or suspected shortage of intermediate . wheat grass in 1976. Plaintiffs discussed with Hall in 1976 his concern about an 3. acreage shortage in three fields comprising more than one-half of the acreage of cropland. 4 Plaintiffs found ASC maps in the ranch house shortly after . taking possession in 1976 showing acreage of cropland. In the spring of 1977, plaintiff requested an acreage 5. measurement which was furnished and paid for by the ASC on or before August 29, 1977, showing an acreage shortage. Plaintiff then requested measurement of intermediate wheat grass which was furnished on November 1, 1977. In response, Mobleys assert that circumstances nuhers 1 and 2 cannot be called discovery, within the meaning of the statute, because for at least one of the masuremnts, Mobley used a borrowed drill acre device and that Mr. Hall reassured Mr. Mobley that Hall's drill device had s h m the fields as represented. Mobleys state that circumstance r & n 3 is not supported by the record and is not determinative of whether discovery had been made; that it was M r . Mobley who contacted Mr. Hall and not the "plaintj.ffs;" that Mr. Hall reassured Mr. Mobley and allayed his fears and that the acreage shortage is nowhere near one-half but is 5 percent- of the acres purchased or 18 percent of the improved acreage. With regard to circumstance no. 4, Mobleys assert that the ASC maps were outdated, incomplete and unreliable rendering them virtually useless i n calculating the acreage of t i l l a b l e cropland. Furthermore, with regard t o c i r a m t a n c e no. 5, Mobleys argue t h a t i order for them n t o determine where there was an acreage shortage, justifying an action against the defendants, it was necessary t o have a l l of the crop acreage measured. Finally, the court's order did not include Delores Mobley o r Mobley, Inc. and is therefore invalid. Moblevs raise only one issue for review, whether they discovered facts sufficient t o constitute knowledge of fraud more than two years prior t o the f i l i n g of the canplaint. Mobleys contend t h a t discovery occurred November 1, 1977, when the ASC a e r i a l survey was completed. The defendants contend t h a t discovery occurred sometime before October 18, 1977, two years prior t o the f i l i n g of the complaint. This C o u r t has held that: " I t is not enough for the plaintiff merely t o say t h a t he was ignorant of the facts a t the time of t h e i r occurrence, and has not come into knowledge s of them u n t i l within two years. 'He ~ m s t h m t h a t the acts of fraud were comnitted under such circumstances t h a t he would not be presumd t o have knowledge of them, it being the rule that i f he has "notice o r information of circumstances which would put him on inquiry which i f followed would lead t o knowledge, o r that the facts were p r e s q t i v e l y within h i s knowledge, he w i l l be deemed t o have had actual knowledge of the facts."' Davis v. Hibernia - -&- Society, 2 1 Cal. App. S. -444, 132 Pac. 462; Lady Washington C. Co. v. Wood, 113 Cal. 482, 45 Pac. 809; Truett v ~ h d e r d o n ~ k erri is v. OIMeara 120 C a l . 581, 53 Pac. 26.)" (1924), 71Mont. 1, 8, 227 P. 819, 822; Lasbv v. Burgess (1930), 88 Writ. 49, 65-66, 289 P. lb28, 1033. On June 28, 1977, Mobley received a l e t t e r from the A C office S stating t h a t the acreage was not as he had thought. On August 29, 1977, Ylbley received the requested acre m e a s u r m t showing a discrepancy. M~bleysdo not deny the knowledge of such information but assert t h a t they did not have knowledge of such a nature a s t o foreclose them from pursuing t h i s matter by s u i t f i l e d October 18, 1979. Flhile M r . Mobley was d i l i g e n t in h i s e f f o r t s t o ascertain the exact acreage, he had s u f f i c i e n t notice of information of ciramstances t h a t put him on inquiry and therefore had actual knowledge of the f a c t s . there is ample While mere suspicion may not constitute d i s c o ~ ~ e r y evidence i n the record t o support the D i s t r i c t Court's determination of discovery within t h e meaning of the s t a t u t e . "The l a w does not contemplate such discovery a s would give positive knowledge of the fraud, but such discoverv a s would lead a prudent man t o inquiry o r action. To hold that discovery must amount t o absolute knowledge of the f a c t of fraud would be t o render the s t a t u t e practically inoperative, since such knowledge is r a r e l y had before the f a c t s are established by Fraud & Deceit S 410, a t 556. adjudication." 37 Am.Jur. -In Montana: "'Discovery' and 'knowledge' are not convertible terms, and whether there has been a discovery of the f a c t s constituting t h e fraud within the meaning of the s t a t u t e i s a question of law t o be determined from t h e f a c t s proved." Kerrigan, 71 Mont. 1, 8, 227 P. 819, 822; Pay v. Divers (1928), 81 Jbnt. 552, 558, 264 P. 673; Lasby, 88 Monk. 49, 65, 289 P. 1028. Therefore where the f a c t s established point t o discovery a s defined under the s t a t u t e , surnnary judgment is appropriate. The case is remanded and the D i s t r i c t Court is ordered t o dismiss the cause on the ground of fraud. The p a r t i e s should not be precluded fram amending the complaint t o include a cause of action f o r breach of contract. L i a b i l i t y and the f a c t s of the case a r e not deemed proved by t h i s opinion. The only issue decided herein is whether the Mobleys a r e precluded from proceeding on the theory of fraud based on t h e expiration of the s t a t u t e of 1-imitations. ' W Concur: e i Justice U M r . Justice Frank B. Pbrrison, Jr., dissenting: I respectfully dissent. The complaint in this action was f i l e d October 18, 1979. plaintiff For t o be barred by the statute of limitations, discovery would have had t o occur more than two years prior t o the date of filing. The ASC a e r i a l survey was completed November 1, 1977. survey indicated an acreage shortage. This After completion of the survey Mobley called t o discuss the discrepancy w i t h Ed K h b a l l who asked Mobley t o wait u n t i l ground. spring when the snow was off the Kinhall stated that i f there were any shortages they could be determined a t t h a t time and that Hall would "make it right". In m opinion there i s a jury question wj-th reference t o both y date of discovery of the fraud and the question of Ximball's s t a t m t t o Mohley created an estoppel. whether I f plaintiff w s induced t o refrain from f i l i n g based upon an assurance t h a t any a shortages would be taken care of, then defendant could well be estopped from asserting the statute of 1-imitations as a bar. I would reverse the order of summary judgment and remand for trial.. the D i s t r i c t Court granting
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