Case Title: PRESTON v MCDONNELL

Citation: 

Docket Number: 82-319

State: montana

Court: Montana Supreme Court

Date: 1983-02-24T00:00:00Z

Document:
N O . 82-319 I N THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 3 JAMES E . PRESTON a n d ELIZABETH PRESTON, P l a i n t i f f s a n d A p p e l l a n t s , V S . SIDNEY G . McDONNELL, D e f e n d a n t a n d R e s p o n d e n t . A p p e a l f r o m : D i s t r i c t C o u r t o f t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e C o u n t y o f Y e l l o w s t o n e H o n o r a b l e W i l l i a m J S p e a r e , J u d g e p r e s i d i n g . C o u n s e l o f R e c o r d : F o r A p p e l l a n t s : Whalen & Whalen, B i l l i n g s , Montana Hauf a n d F o r s y t h e , B i l l i n g s , Montana F o r R e s p o n d e n t : M o u l t o n , B e l l i n g h a m , Longo & M a t h e r , B i l l i n g s , Montana F i l e d : S u b m i t t e d on b r i e f s : J a n u a r y 6 , 1 9 8 3 S u b m i t t e d : February 2 4 , 1 9 8 3 M r . J u s t i c e L . C. Gulbrandson d e l i v e r e d t h e Opinion of the Court. E l i z a b e t h P r e s t o n and James P r e s t o n , mother and s o n , brought t h i s a c t i o n t o r e s c i n d two c o n t r a c t s they had with the d e f e n d a n t , Sidney McDonnell. Upon a s p e c i a l j u r y v e r d i c t f i n d i n g n e i t h e r f r a u d nor f a i l u r e of c o n s i d e r a t i o n , t h e D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l District, Yellowstone County, e n t e r e d judgment f o r McDonnell . McDonnell was t h e r e a f t e r awarded $9,500 i n a t t o r n e y f e e s and $210 i n c o s t s . I n e a r l y 1977, James P r e s t o n and h i s mother E l i z a b e t h P r e s t o n bought a bakery i n B i l l i n g s , Montana. I n 1978 t h e y became i n t e r e s t e d i n buying a n o t h e r bakery i n Red Lodge, Montana. James P r e s t o n i n s p e c t e d t h e Red Lodge bakery, noting t h a t it needed c l e a n i n g and minor r e p a i r s . On J a n u a r y 5 , 1979, P r e s t o n s bought t h e Red Lodge bakery. Two c o n t r a c t s were s i g n e d , one f o r the purchase of t h e b u s i n e s s , t h e o t h e r f o r t h e r e a l p r o p e r t y . I n t h e c o n t r a c t f o r t h e s a l e of t h e b u s i n e s s , t h e s e l l e r , McDonnell , e x p r e s s l y r e p r e s e n t e d t h a t t o h i s knowledge, he had complied w i t h a l l government r u l e s and r e g u l a t i o n s . The c o n t r o v e r s y h e r e c e n t e r s upon t h e d i f f i c u l t y t h e P r e s t o n s t h e n had i n o b t a i n i n g a l i c e n s e from t h e Montana Department of Health . On J a n u a r y 3 0 , 1979, two i n s p e c t o r s from the Department of Health attempted to i n s p e c t the bakery, b u t were refused e n t r y by t h e P r e s t o n s . The i n s p e c t o r s r e t u r n e d on February 1 and were allowed t o complete t h e i r i n s p e c t i o n . The i n s p e c t o r s noted many v i o l a t i o n s of t h e s t a t e ' s h e a l t h s t a n d a r d s . These v i o l a t i o n s , o r d e f i c i e n c i e s , r e s u l t e d m o s t l y from inadequate c l e a n i n g . Other d e f i c i e n c i e s included l a c k of adequate l i g h t i n g , s t o r a g e of food t o o close t o the f l o o r , no f a n i n t h e l a v a t o r y , and a two-compartment r a t h e r t h a n a t h r e e - compartment s i n k . The Health Department t h e n requested t h e P r e s t o n s to make a " p l a n of c o r r e c t i o n , " o u t l i n i n g when and how they would c o r r e c t t h e d e f i c i e n c i e s . The Department wanted t h i s p l a n w i t h i n t e n d a y s . The P r e s t o n s d i d n o t submit a p l a n , c l a i m i n g t h a t it would b e t o o e x p e n s i v e to c o r r e c t a l l of t h e d e f i c i e n c i e s a t once. A t t r i a l , James P r e s t o n e s t i m a t e d t h a t it would cost between $40,000 and $60,000 to b r i n g t h e bakery up to s t a n d a r d s . P r e s t o n s c o n t i n u e d t o have problems w i t h t h e H e a l t h Department throughout t h a t y e a r . A h e a r i n g was h e l d b e f o r e a Department h e a r i n g ' s o f f i c e r , w i t h no s a t i s f a c t o r y r e s u l t s . While t h e P r e s t o n s were never g i v e n a l i c e n s e , they were also n e v e r e x p r e s s l y denied o n e . Meanwhile, t h e bakery w a s open and o p e r a t i n g . F r u s t r a t e d by t h e i r i n a b i l i t y to o b t a i n a h e a l t h l i c e n s e , t h e P r e s t o n s s e n t a n o t i c e of r e s c i s s i o n to McDonnell i n J a n u a r y 1980. T h i s was t h e f i r s t t i m e McDonnell knew t h a t P r e s t o n s were having d i f f i c u l t y g e t t i n g a l i c e n s e . P r e s t o n s c l o s e d t h e bakery on F e b r u a r y 27, 1980, r e t u r n i n g t h e i r keys t o McDonnell. McDonnell took p o s s e s s i o n of t h e bakery on March 1 0 , 1980. A f t e r spending a p p r o x i m a t e l y $4,200 to c o r r e c t t h e d e f i c i e n c i e s l i s t e d by t h e H e a l t h Department, he o b t a i n e d a h e a l t h l i c e n s e and reopened t h e bakery. P r e s t o n s brought t h i s a c t i o n f o r r e s c i s s i o n on t h e grounds t h a t McDonnell f r a u d u l e n t l y r e p r e s e n t e d t h a t t h e bakery w a s i n f u l l compliance w i t h Department of H e a l t h s t a n d a r d s . McDonnell had o p e r a t e d t h e bakery f o r n e a r l y s e v e n t e e n y e a r s . H e had o b t a i n e d a h e a l t h l i c e n s e f o r t h e y e a r s 1973, 1975, 1976, 1977, and 1978. The District Court r e f u s e d to admit i n t o e v i - dence two c o n d i t i o n a l h e a l t h l i c e n s e s McDonnell r e c e i v e d i n 1968 and 1969. The P r e s t o n s have r a i s e d two i s s u e s on appeal: 1. Whether t h e D i s t r i c t Court e r r e d by n o t a d m i t t i n g i n t o e v i d e n c e t h e two c o n d i t i o n a l h e a l t h l i c e n s e s g i v e n t o McDonnell i n 1968 and 1969. 2. Whether t h e D i s t r i c t Court e r r e d by awarding a t t o r n e y f e e s and costs to McDonnell. I n t h e f i r s t i s s u e : a p p e l l a n t s argue t h a t t h e c o n d i t i o n a l h e a l t h l i c e n s e s a r e r e l e v a n t because t h e y tend t o show t h a t McDonnell knew t h e bakery would n o t meet h e a l t h s t a n d a r d s . Respondent claims, and t h e District Court d e c i d e d , t h a t t h e con- d i t i o n a l l i c e n s e s were so remote i n t i m e t h a t they had l i t t l e , i f any, p r o b a t i v e v a l u e and were t h e r e f o r e not r e l e v a n t . I n d e t e r m i n i n g whether e v i d e n c e is t o o remote to be r e l e v a n t , a t r i a l c o u r t is n o t guided by any f i x e d r u l e s . R a t h e r , t h e n a t u r e of t h e e v i d e n c e and t h e c i r c u m s t a n c e s of t h e p a r t i c u l a r c a s e must c o n t r o l , 2 Wigmore, Evidence S437 (Chadbourn r e v . 1 9 7 9 ) . For t h i s r e a s o n , t h e d e t e r m i n a t i o n of remoteness is l e f t i n g r e a t p a r t t o t h e t r i a l c o u r t ' s d i s c r e t i o n . --- Wigmore, s u p r a ; Courtney v. Courtney ( 1 9 7 5 ) , - - - . Alaska .- , 542 P.2d 164; G i l l i l a n d v. Rhoads ( 1 9 7 5 ) , - Wyo. , 539 P.2d 1221; Blankenship v. B r o o k s h i e r ( 1 9 6 6 ) , 9 1 I d a . 317, 420 P.2d 800; and Morrison v. Bradley ( 1 9 8 0 ) , .- - Colo .App. - -- , 622 P.2d 8 1 , c e r t . g r a n t e d Dec. 1 5 , 1980. The t r i a l c o u r t ' s d e t e r m i n a t i o n of r e l e v a n c y is s u b j e c t t o review o n l y i n t h e c a s e of m a n i f e s t a b u s e . See a l s o Gunderson v. Brewster ( 1 9 7 0 ) , 154 Mont. 405, 466 P.2d 589; Cech v. S t a t e ( 1 9 7 9 ) , - Mont. -- -- , 604 P.2d 97, 36 St.Rep. 2185. Here, t h e District Court d i d n o t abuse its d i s c r e t i o n . The c o n d i t i o n of t h e bakery t e n y e a r s p r i o r to its sale could e a s i l y be c o n s i d e r e d t o o remote and i r r e l e v a n t . Many o l d d e f i c i e n c i e s may have been c o r r e c t e d , while new, y e t similar, d e f i c i e n c i e s may have a r i s e n . The District Court d i d n o t err by r e f u s i n g admission of t h e c o n d i t i o n a l h e a l t h l i c e n s e s . A p p e l l a n t s argue i n t h e n e x t i s s u e t h a t McDonnell should n o t be awarded a t t o r n e y f e e s and costs. They claim t h a t t h e c o n t r a c t p r o v i s i o n s a l l o w i n g a t t o r n e y f e e s a p p l y o n l y t o en£ orcement and n o t r e s c i s s i o n of t h e c o n t r a c t . T h i s c o n t e n t i o n l a c k s merit. An argument similar t o a p p e l l a n t s ' c o n t e n t i o n was r a i s e d i n Winer v. J o n a l C o r p o r a t i o n ( 1 9 7 6 ) , 169 Mont. 247, 545 P.2d 1094. I n Winer, t h e a p p e l l a n t s claimed t h e i r a c t i o n t o r e c o v e r damages f o r breach of c o n t r a c t , f r a u d , and c o n s p i r a c y , was grounded i n t o r t and n o t i n c o n t r a c t l a w , and t h e r e f o r e no a t t o r n e y f e e s s h o u l d be awarded. T h i s Court summarily concluded t h a t t h i s argument had no m e r i t , e s p e c i a l l y i n view of a p p e l l a n t s ' r e q u e s t s f o r a t t o r n e y f e e s i n a l l c o u n t s of t h e i r p l e a d i n g s . S i m i l a r l y , h e r e , a p p e l l a n t s amended t h e i r c o m p l a i n t seeking a t t o r n e y f e e s , and o n l y o b j e c t e d t o an award of a t t o r n e y f e e s a f t e r McDonnell p r e v a i l e d i n t h e a c t i o n . Moreover, i n Compton v. Alcorn ( 1 9 7 6 ) r 1 7 1 Mont. 230, 557 P.2d 292, t h i s Court allowed a t t o r n e y f e e s i n an a c t i o n f o r r e s c i s s i o n . W e reasoned t h a t s e c t i o n 28-3-704, MCA, p r o v i d e s a r e c i p r o c a l r i g h t t o a t t o r n e y f e e s t o a l l p a r t i e s to t h e c o n t r a c t i n any a c t i o n on t h e c o n t r a c t . Using t h e same r e a s o n i n g , i n Bartmegs v. Bourassa ( 1 9 8 2 ) , -- .--. Mont. - . , 639 P.2d 1147, 39 St.Rep. 5 6 , we allowed a t t o r n e y f e e s based on a c o n t r a c t t h a t was v o i d a b i n i t i o . Here, because t h e c o n t r a c t s p r o v i d e f o r t h e -- - - award of a t t o r n e y f e e s and c o s t s t o t h e p r e v a i l i n g p a r t y , t h e award of f e e s and c o s t s was p r o p e r . Finding no e r r o r , t h e District We concur: