DOUBLE AA CORP v NEWLAND CO
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NO. 95-064 IN THE SUPREME COURT OF THE STATE OF MONTANA 1995 DOUBLE AA CORPORATION, Plaintiff, a Delaware Appellant, corporation, and Cross-Respondent, v. NEWLAND & COMPANY, Successor Trustee of the Raymond W. George Trust, Defendant and Respondent, and JAMES W. SIEVERS, Intervenor Defendant, and Cross-Appellant. APPEAL FROM: Respondent, District Court of the Sixth Judicial District, In and for the County of Park, The Honorable Mark P. Sullivan, Judge presiding. COUNSEL OF RECORD: For Appellant: Joseph T. Livingston, For Huppert P. Harrington, Montana (for John T. Moulton, Billings, Attorney Newland at Law, & Company) Jones and Harlan B. Krogh, Qellingham, Longo & Mather, Montana (for James W. Sievers) Amicus: Rockwood Brown, Brown, Harman & Ross, Billings, (for Kenneth D. George Submitted Filed: & Swindlehurst, Respondent: James Butte, For Swindlehurst, Montana Gerbase, Cebull, Montana and Shirley G. Bragg) on Briefs: Decided: May 25, October 1995 24, 1995 Justice Terry N. Trieweiler Plaintiff District Double Court which it George for that by the trust trustee, as well Double AA's District which denied awarded specific for entered succeeded as findings. was entitled specific AA's when it intervenor, the opposed a trial, District the the District cross-appeals Court request but Court's of the District AA's The performance and Sievers Double & and judgment, specific the judgment denied Raymond W. performance. After AA appeals is whether in by Newland conclusions, for the the sale of a ranch held the and judgment, on appeal the trustee performance. request We affirm of to specific findings, Double conclusions, discretion been its damages. The issue trustee for in in Park County, Bragg, agreement of the Court. a complaint District James W. Sievers, Double it findings, it as request Court Judicial a buy-sell and that filed Shirley who has Company, breached the opinion AA Corporation the Sixth alleged Trust, delivered Court. abused its for specific performance. The issue erred when it raised on cross-appeal made findings of fact is whether the District Court numbered 73 and 74. FACTUAL BACKGROUND which The ranch, belonged is to Raymond George. the subject Raymond died in his will, left His daughter Maxine was designated that his wife, of the the trustee. would receive 2 formerly in 1974 and, as provided the ranch in a testamentary Olga George, dispute, trust for his The trust family. provided income from the trust for her life and that the George children follows: from the other remaindermen; Kenneth George--two-ninths; died in surviving her husband, share Cleto and first following 1989, 13, whose sole agreed with of Raymond W. George Shirley in the Paradise on behalf deposit of Bragg, her be entitled to became the AA Corporation, are Charles who at that trust, Valley the trust to purchase south to convey Shirley trial, advice from Diversified trustee a Delaware Allmon and Gwen time was the trustee the George family's Shirley of Livingston. the property, there at knowledge He also and as a result encouraged a that that (IDS), that the if of Olga's time received about felt this taxes testified that pressure in financial would be tax consequences old when Shirley advice. testified Wes Johnson, Services and $300,000 little with agreed and a substantial was transferred. At ranch Maxine agreed he would Bragg Double shareholders Allmon, ranch Shirley to death. On December the option Bragg--two-ninths, that as George--two-ninths; remaindermen McPherson, option. Maxine's Corporation the interests as a first Leo and Shirley and eventually 1980, remainder as well Maxine George--three-ninths, purchase held 1988 she had received planner the trust for did Investment not sell in an amount between death. advice. $200,000 Olga was nearly 90 years Wes Johnson admitted and was not qualified he had to render he was paid on a commission to locate investors the ranch be sold and the proceeds 3 for the basis, IDS. be invested tax He with Shirley IDS. testified of Johnson's tax Shirley the ranch. the Sievers Judge Byron dismissed the District intervened a five-ninths other she reluctantly agreed to sell because advice. petitioned had purchased from that remainder Sievers' granted to approve and objected remaindermen. Robb, Court In the objection. on the basis and a first September petition the sale the He specifically found he to buy District confirm to that option 1990, of Court sale and that: While the testator here gave his daughter Maxine a right to purchase the interest of the other children in the ranch, I find it obvious this was personal to her because she remained on the place while the others left. I thus conclude it doubtful such option passed to Maxine's husband and sole heir, Cleto McPherson, and although the other children made agreements with him to have such privilege at a different value than Mr. George contemplated, Cleto never exercised such right and now has no ability to do so or to keep the ranch in the family, and I find it most tenuous that Grandpa George ever intended that such option to purchase would pass to or be enforceable by a stranger as Mr. Sievers contends. Further, the trustee was not a party to such option agreements and is not bound by them. In November 1990, an attorney that no taxes would be due as a result December 2, 1990, Shirley advised him Double AA. petition that On April for trust property Court denied affirmed she sent Charles wanted motion the filed a motion the sale conclusion 4 Olga's rescind and ordered Court's of informed Allmon a letter of her right and to cancel the District to 2, 1991, Shirley a declaration her from Livingston to Double AA. that sale death. to Shirley On in which agreement and authority the Shirley she with to dismiss her to sell the The District proceed. We had the right and authority finding to sell that the sale was fair Trust (1992), that 341, of the District performance because After our for andsaffirmed and reasonable. 834 P.2d Court's that issue decision in decision specific performance because purchased a three-ninths first added Sievers testified However, which we reversed granted specific or litigated. Double to purchase August 1988 intervened that interest April from Cleto, other purchased this and opposed in from the he AA filed 1988 he in addition remaindermen. Leo's two-ninths interest. A nonjury Johnson in he claimed remainder option that remainder However, had not been raised performance. He Court's In re Raymond W. George 1378. In re George Trust, specific to Cleto's the District 834 P.2d at 1381-82. InreGeorge Trust, action Mont. 253 part the ranch trial that was held the erroneous was confirmed capital gains sale of the ranch who represented Johnson's testimony the broker's that a Billings tax consequences. Olga's prior to the commission attorney 5 that firm. would she learned was to receive the attorney advised was also which was to be paid from would be due upon had not There was incorrect. her previous sale death Instead, She testified to Double AA. Shirley accounting tax in the amount of $400,000 her advice Tech, 1994. she had received in November 1990 that in any immediate that information by Legal she was informed not result on June 22 and 23, her that contradicted a percentage by Double AA. of In October conclusions fact, that specific of law, performance damages for Sievers the District 1994, breach of did not obtain from the remaining Double Sievers and judgment. was improper, contract. entered its findings The District Court of held but awarded Double AA money The court a binding first further option found to purchase that the ranch beneficiaries. AA appeals cross-appeals did not have a valid Court from the from the first District Court's District option Court's decision, findings and that he to purchase. ISSUE 1 Did the District Double AA's request We review performance 1318, for a district to discretion. Court determine abuse its specific discretion when it denied performance? court's denial whether the Larsonv. Undem (1990), of a request district 246 Mont. for court 336, specific abused 342-43, its 805 P.2d 1322. Double equitable suggests remedy that the District The trustee Specific within the court's Court circumstances performance that A?+ acknowledges the District discretion did not exercise claims, and the District Court performance is of a contract specific performance Court's discretion It is narrow. contends an but that sound discretion. Sievers agrees, that did not abuse its an equitable remedy based on the precise 6 is under the discretion. which terms requires contained in the contract. Siefert v. Siefert ( 19 7 7 ) , 173 Mont. 501, 504, 568 P.2d 155, 156. 1 [SJpecifc performance will be ordered only on equitable grounds in view of all the conditions surrounding the particular case. I A bill in equity for specific performance is an appeal to the conscience of the court, and generally, in such a proceeding, the inquiry must be whether, in equity and good conscience, the court should specifically enforce the contract. Accordingly, specific performance will be granted when it is apparent from a view of all the circumstances of the particular case that it will serve the ends of justice, and it will be withheld when, from a like view, it appears that it will produce hardships or injustice to either party . . . . II Siefert, 568 P.2d at Siefert , we performance 157 (quoting acknowledged depends Siefert , 568 P.2d at In enforced, of the parties, is fair that on the the SpecificPerformance § 3) . of and circumstances facts appropriateness of In specific the case. 157. determining courts 81 C.J.S. look whether determine Factors should as well at the contract, and will and reasonab1e.l a contract if courts specifically as the relationship the contract consider be to be enforced include execution 1 In InreGeorgeTrust, we upheld the District Court's finding that Double AA'S offer of $1,300,000, along with the other benefits, was fair and reasonable. We noted that: The validity of the contract between the trust and Double AA and any rights of the parties resulting from the contract were not the subject of the litigation. The fairness evidence presented only regarded the and reasonableness of Double AA's offer and the agreement that the parties entered. We do not construe the above In re George Trust, 834 P.2d at 1381. as to whether specific performance was language to mean that, appropriate, the contract was fair and reasonable because we did not address whether it would be fair and reasonable to specifically enforce the contract. 7 of a contract because of business under lack circumstances of advice, experience unfavorable and the and knowledge. to difference the in defendant the parties' 81 C . J . S . Specific Performance § 4 9 (1977). In addition to the above guidelines, some situations Specific for in which performance a defendant's contract specific afford adequate More specifically, l'[i]t is to be presumed that real property compensation . . . .'I Section 27-1-415, a party party cannot pursuant relief. in contracts cannot is to compensation the Section involving terms Section adequately the sale 27-l-419, MCA, however, be compelled relieved of a 27-l-411(2), the breach of an agreement be identify appropriate. when pecuniary to perform MCA. which performance may be necessary failure does not Montana statutes by of land, to transfer pecuniary MCA. provides to specifically circumstances in perform. Specific performance cannot be enforced against to a contract in any of the following cases: a i2i . if . it is not, as to him, just and reasonable; if his assent was obtained by the misrepresen(3) concealment, circumvention, or unfair practices tations, of any party to whom performance would become due under the contract or by any promise of such party which has not been substantially fulfilled; or (4) if his assent was given under the influence of misapprehension, or surprise . . . . mistake, Section 27-1-415, The District by substantial MCA. Court made specific evidence, in relation a findings, which are supported to the above-listed equitable considerations or should facts and statutes. have known, before material to that she felt Charles belief regarding of victim "mistaken ranch"; contract the that to sell potential tax information and (2) to [the] sale and Shirley had extremely Charles had experience was neither business prepared the Finally, land that would than Double her position court found testified George family AA because for Based on its circumstances over divergent backgrounds professional transactions, as trustee that the the had except hardship Shirley's tax advice, in unique it was contiguous on the to was no more unique The court decision who educated was not ranch Valley. trustee or taxes. land that and in business. nor negotiations, that a greater of the incorrect family and experience he already impose was the George dollar he owned in the Paradise loss else was a well-known transactions, Charles AA. The was a somewhat unsophisticated for nor business was a the background, Shirley erroneous Shirley anything [of] told advice. in multi-million education, To the contrary, more than she of her inaccurate consented transactions. misapprehended testified liability; taxes] had extensive property Shirley because [regarding (3) Charles Double (1) Double AA knew, and Shirley fact investor, the the sale, pressured mistaken in business result the found: Shirley reason than The court found that George to with sell Family the Trust was a direct and the ranch had been in the concluded in light 100 years. findings, the court surrounding the 9 execution that, of the contract, of specific not performance fair, just, a mistake was not appropriate and reasonable, tax consequences transaction that is and codified While a insufficient that misapprehension 297, 301, light of the surrounding to deny specific or Contracts to regarding to avoid specific mistake the performance regarding (1977), Quinnv.Briggs such a misunderstanding circumstances, performance Williston Williston, MCA. reason exceptions was based on or mistake sufficient to avoid a contract, P.2d 27-1-415, was MCA, do not apply. 565 is 172 Mont. 468, or mistake, may be a sufficient as an equitable on Contracts taxes remedy. in reason See 11 Samuel 5 1427 (3d ed. 1968); Corbin on § 1166 (1964). Moreover, the we have upheld defendant produced factual 187 Mont. 439, performance is performance and legal on advice Siefert, of specific from her misapprehensions. 610 P.2d 164. improper the denial if if 568 and balancing performance attorney there the is a mistake circumstances P.2d at the equities, 10 that as set show that hardship. 157). which Stovullv. Waft (1980) , In Stovall, we recognized would impose a considerable (citing circumstances, relied MCA, or § 27-l-415(4), 167 a the contract assent a misunderstanding the 475, at Section not in § 27-l-415, where and Shirley's or misapprehension. Double AA argues because Stovall, Based we upheld on specific forth in specific 610 P.2d the total the district court's denial of a request Stovall, seller. The in the the Here, specific performance against the 610 P.2d at 167-68. facts Nonetheless, for principles District impose a greater are Stovall on which Court hardship distinguishable found from we relied that in specific on the seller this case. Stow11 apply. performance than denial would would impose on the buyer. Double AA also regarding Shirley's indicated that contradicts of the mistake other District motivated Court's court 255 Mont. (1992), above, findings, Court denial evidence including information in a better of conflicting 463, 466, on which in testimony sell, and evidence discretion, to observe Court. determination part conflicting position than this testimony. We will regarding the SeeIn re Marriage of Newton 844 P.2d 47, 49. principles the and the unequal positions the trustee relied, discretion. of Double AA's request and statutory record, the parties' did not abuse its because was to weigh court's Based on the equitable forth is findings of its and demeanor of witnesses and weight Court's her to responsibility second guess the district strength District In the exercise The district the credibility the or misapprehension factors her position. testimony. not challenges we hold We affirm for 11 specific criteria District set Court's and the mistaken that the District the District performance. Court's ISSUE 2 Did the District Court err when it made findings of fact numbered 73 and 74? Our standard is whether they Sievers findings 414, contends of fact that Sievers findings did were not and performance, introduce affected he court's erroneous. 417, that we should not acquire of fact Columbia Grain Int? v. Cereck vacate the a first to has Double not rights had option AA's an of his improperly contends request Shirley that for the specific opportunity Sievers position. of individuals Court's against adequate empowered to In making that District the court Sievers and Leo George. was not the property findings 052 P.2d 676, 678. in support Court the litigation. clearly relevant evidence District of a district numbered 73 and 74 because Kenneth George, Bragg, the are 258 Mont. (1993), found of review enter to adds that a judgment which who were not parties he relies MCA, and Warnackv. Coneen Family Trust (1994), on 5 25-p-201, 266 Mont. argument, 203, to 879 P.2d 715. After Shirley of Sievers raised this issue by cross-appeal, Bragg and Kenneth George to file their position. Warnack , they In intervened They are not complete the initial and asserted contend proceeding he had a first 12 an amicus brief that strangers we allowed unlike the in support nonparty in to the litigation. before option. Judge Robb, Sievers Judge Robb rejected Sievers' position. intervened in Sievers' court He the present contention. reaffirmed is binding Sievers contrary those courts the action. on the other to the other District Court's M.R.Civ.P., several of fact not that the option number 74, the court purchase he asserted authority remaindermen a first court option judges were not conclude that basis have by intervening, to make the challenged is an insufficient parties to Sievers' that findings the present reliance on on which to set aside the findings. 25-g-201, MCA, states may be given plaintiffs defendants. rejected numbered 73 and 74, the two district a judgment Section he remaindermen. after and when also determination did position were without flaws prior argument Sullivan of fact Sievers We disagree procedural it that same Judge In finding now contends, found because case; Judge Robb's specifically which the In findings did not pass to Sievers. found asserted and for or In Warnack, we held awarded a prescriptive that for against that subject or against one or the District easement to a nonparty. to Rule 54(b), one or more of more of Court several erred We stated when that: [1]t is a fundamental principle of our jurisprudence that it is only against a party to the action that a judgment can be taken and that the judgment is not binding against a stranger to the action. Warnack, Mont. 879 P.2d 148, 156, at 718 (quoting Moore v. Capitol GasCorp. 158 P.2d 302, 306). 13 (19451, In Warnack, we recognized 117 that the above rule applied where a judgment was awarded in favor of a 25-g-201, MCA, nonparty. However, this case is distinguishable. does not preclude a party adverse entered judgment M.R.Civ.P. (stating the is party asserted that did a final position. ownership interest Sievers in contends benefit from merits. The logical intervene if claim he loses, has merely that their interests. aligned with the remaindermen the they did were not of the trustor the fact that he contrary and have an against the trustee is appear in support position from dissatisfied of his 14 to parties litigate which he may with the position but Sievers he claims the did not intervene with to the is that was not binding. flaw aligned to allow to the remaindermen, decision the remaindermen were not of Sievers' a procedural Despite evidence and The interested were would be unfair the adverse they to which intervened protect A decision a position because introduced it if benefit position, to 54(b), relief option. an the remaindermen. should their See Rule voluntarily are heirs conclusion asserted from having may grant first the trust. judgment and assert her. remaindermen they affect a a valid the or judgment Additionally, to the action; adversely him intervene Warnack, strangers would intervenes Sievers not unlike trustee's against he purchased remaindermen However, who voluntarily entitled). that Section trustee. he outcome. to protect Sievers and must abide by the the District Court's District indication the District that the Therefore, decision. Court's that the findings court Court's Absent erred a specific indication clearly erroneous, were as a matter findings. Sievers District court we affirm the District the District Court has Court's The judgment of 0s findings We concur: 15 of were law, failed clearly findings. is affirmed. of how or we must to affirm indicate erroneous. an
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