Title: PARKHILL v FUSELIER

State: montana

Issuer: Montana Supreme Court

Document:

No. 80-402 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 JOHN GARY PARKHILL and JANE L . PARKHILL, Plaintiff and Respondent, GARY L. FUSELIER and BETH FUSELIER, Defendant and Appellant. Appeal from: District Court of the Eleventh Judicial District, In and for the County of K d - b p S H . l ; ~ v u h c ~ Honorable Robert Sykes, Judge presiding. Counsel of Record: For Appellant: Warden, Christiansen & Johnson, Kalispell, Montana For Respondent: Keller & Gilmer, Kalispell, Montana Submitted on briefs: May 28, 1981 Decided: August 31, 1981 AUG 3 1 1981 M r . J u s t i c e Fred J. Weber delivered t h e Opinion of t h e Court. Respondents John and Jane P a r k h i l l brought an a c t i o n i n t h e ~ i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t , Flathead County, a l l e g i n g innocent misrepresentation a s t o t h e water supply i n the s a l e of r e a l property by t h e s e l l e r s Gary and Beth F u s e l i e r . The case was t r i e d without a jury, and t h e D i s t r i c t Court found f o r t h e P a r k h i l l s . The F u s e l i e r s appeal from t h e judgment. W e affirm. Gary and Beth F u s e l i e r owned property i n Flathead County, Montana, c o n s i s t i n g of approximately one a c r e of land with a mobile home located upon it. The water supply f o r the property came from a well on a neighboring t r a c t of land. The owner of the neighboring t r a c t owned t h e w e l l , had a l l r i g h t s t o t h e w e l l , and received $8 per month from t h e F u s e l i e r s f o r supplying them with water. There was no w r i t t e n agreement between t h e F u s e l i e r s and t h e i r neighbor concerning t h e water supply. O n October 1 0 , 1977, t h e F u s e l i e r s l i s t e d t h e i r property with Tri-City Real E s t a t e i n K a l i s p e l l , Montana. The l i s t i n g c o n t r a c t contained a d e s c r i p t i o n of t h e property. I n t h e space following t h e p r i n t e d word "Water", the words "community $8/mo. " were i n s e r t e d . The P a r k h i l l s responded t o an advertisement f o r t h e F u s e l i e r property and contacted Tri-City Real Estate. A Tri-City agent brought the P a r k h i l l s o u t t o t h e F u s e l i e r property. Gary F u s e l i e r was on the property when it was f i r s t shown and t o l d t h e P a r k h i l l s t h a t t h e water came from "a kind of community water system." He a l s o t o l d them t h a t he d i d n o t a n t i c i p a t e any problems with the water supply. The r e a l e s t a t e agent who brought t h e P a r k h i l l s o u t t o the property twice made reference t o t h e n o t a t i o n on t h e l i s t i n g agreement which s t a t e d t h a t the water w a s " cornmuni t y $8/mo. " The agent d i d t h i s i n response t o questions from t h e P a r k h i l l s concerning t h e water supply. Later, another Tri-City agent t o l d the P a r k h i l l s t h a t they should have no problems with t h e i r water supply. Jane P a r k h i l l was s t i l l concerned about t h e water supply and d e s i r e d w r i t t e n v e r i f i c a t i o n of the i n t e r e s t i n the "community water system." She asked a T r i - C i t y agent about t h i s during a negotiation f o r the s a l e . The agent t o l d t h e P a r k h i l l s t h e r e would be a r e g i s t e r e d record of t h e community well and t h a t he would o b t a i n a copy of the r e g i s t e r of t h e well f o r them. Jane P a r k h i l l asked t h e agent about t h e w e l l r e g i s t e r again a t t h e time of signing t h e c o n t r a c t f o r deed f o r t h e property. The agent r e p l i e d t h a t he had n o t y e t obtained a copy. H e t o l d t h e P a r k h i l l s t h a t t h e w e l l r e g i s t e r was n o t necessary t o t h e signing of t h e c o n t r a c t f o r deed, which made no reference t o water supply. The c o n t r a c t f o r deed had been prepared by an a t t o r n e y f o r Tri-City Real E s t a t e without c o n s u l t a t i o n with t h e P a r k h i l l s . The P a r k h i l l s d i d n o t employ an a t t o r n e y f o r t h i s transaction. The c o n t r a c t f o r deed contained t h e following clause: "INDEPENDENT INVESTIGATION: The Purchaser agrees and r e p r e s e n t s t h a t s a i d Purchaser has conducted * an independent i n v e s t i g a t i o n and inspection of s a i d land and premises, and has entered i n t o t h i s Contract i n f u l l r e l i a n c e thereon, and t h a t t h e r e are no o t h e r agreements, verbal o r otherwise, modi- fying o r a f f e c t i n g t h e terms hereof, and t h a t Purchaser i s n o t r e l y i n g on o r a l r e p r e s e n t a t i o n s made by S e l l e r o r S e l l e r ' s agent." Jane P a r k h i l l c a l l e d t h e agent about two weeks a f t e r t h e c o n t r a c t was signed t o ask him i f he was going t o send t h e r e g i s t e r of t h e well. The agent r e p l i e d t h a t he had n o t y e t obtained it. N o such document was ever provided t o t h e P a r k h i l l s . Ten months a f t e r the P a r k h i l l s entered i n t o t h e c o n t r a c t , t h e neighbor who owned t h e w e l l n o t i f i e d them t h a t he would no longer provide t h e water f o r t h e i r property. The P a r k h i l l s w e r e forced t o join with another neighbor i n d r i l l i n g a new w e l l . The P a r k h i l l s ' share of t h e expense f o r the w e l l was $2,743.75. They brought s u i t a g a i n s t t h e F u s e l i e r s and sought recovery of t h i s sum based upon t h e innocent misrepresentations of the F u s e l i e r s and t h e i r agents a s t o the water supply f o r t h e property. The D i s t r i c t Court found f o r t h e P a r k h i l l s and entered judgment i n t h e amount of t h e i r c o s t f o r t h e new w e l l . The F u s e l i e r s r a i s e t h r e e i s s u e s on appeal: 1. Did t h e D i s t r i c t Court e r r i n holding t h a t t h e P a r k h i l l s r e l i e d on t h e r e p r e s e n t a t i o n s of t h e F u s e l i e r s ' agents where t h e F u s e l i e r s disclaimed r e l i a n c e by t h e express t e r m s of t h e contract? 2. Were t h e f i n d i n g s of the D i s t r i c t Court supported by s u b s t a n t i a l c r e d i b l e evidence? 3. Can the P a r k h i l l s p r e v a i l where they f a i l e d t o discover t h e t r u t h about t h e water supply? On t h e f i r s t i s s u e , t h e Fusel.iers argue t h a t j u s t i f i a b l e r e l i a n c e i s a necessary element of t h e t o r t of misrepresenta- t i o n , and t h a t t h e P a r k h i l l s disclaimed any r e l i a n c e upon p o s s i b l e misrepresentation by the ~ u s e l i e r s o r t h e i r agents when they executed a c o n t r a c t containing t h e "independent i n v e s t i g a t i o n " clause. The F u s e l i e r s r e l y upon two r e c e n t Mont. cases, McCarty v. Lincoln Green, Inc. (1980), - - , 620 P.2d 1221, 37 St.Rep. 2007, and Schulz v. Peake (1978), 178 Mont. 261, 583 P.2d 425. By i t s terms, t h e "independent i n v e s t i g a t i o n " c l a u s e s t a t e s t h a t t h e P a r k h i l l s made an independent i n v e s t i g a t i o n and entered i n t o t h e c o n t r a c t i n r e l i a n c e thereon, t h a t t h e r e a r e no other agreements modifying o r a f f e c t i n g t h e t e r m s and t h a t t h e P a r k h i l l s a r e n o t r e l y i n g on o r a l repre- s e n t a t i o n s made by t h e F u s e l i e r s o r F u s e l i e r s ' agents. However, t h e f a c t s do n o t j u s t i f y a r e l i a n c e upon such "independent i n v e s t i g a t i o n " clause. The t r i a l c o u r t found t h a t the P a r k h i l l s r e l i e d upon t h e r e p r e s e n t a t i o n s of t h e community water a s appeared i n t h e w r i t t e n l i s t i n g agreement which had been prepared by the r e a l t o r s , and a l s o upon t h e statements of t h e various agents of the r e a l t o r p r i o r t o and a t t h e t i m e of t h e execution of the c o n t r a c t f o r deed. The c o u r t found t h a t a l l of t h e r e p r e s e n t a t i o n s by the r e a l t o r s were made a s agents of t h e F u s e l i e r s . This case i s comparable t o t h e McCarty case. I n the McCarty case, t h e c o u r t d i s - tinguished from Schulz by pointing o u t t h a t t h e McCartys had inspected t h e wrong property and t h a t t h e inspection of t h e wrong property was brought about by t h e f a i l u r e of t h e r e a l estate agent t o properly i d e n t i f y t h e property. A s a r e s u l t , McCarty held t h a t t h e seller incurred a l i a b i l i t y because t h e seller i s bound by t h e misrepresentations made by r e a l e s t a t e broker o r agent a s t o t h e l o c a t i o n of the property. This case i s d i r e c t l y comparable t o McCarty, i n t h a t t h e P a r k h i l l s were misled by t h e l i s t i n g agreement and by t h e various o r a l statements of t h e r e a l t o r s , including t h e statement by the r e a l t o r a t the t i m e of c o n t r a c t execution t h a t a copy of t h e well r e g i s t e r would be obtained and delivered t o them and was n o t necessary t o t h e signing of t h e c o n t r a c t . W e f u r t h e r note t h a t t h e c o n t r a c t f o r deed and the l i s t i n g agreement w e r e prepared by t h e r e a l t o r s and t h e o r a l statements a s t o t h e community w e l l w e r e a l s o made by t h e r e a l t o r s , a l l without l e g a l a s s i s t a n c e on t h e p a r t of t h e P a r k h i l l s . The w r i t t e n instruments properly a r e t o be construed a g a i n s t t h e p a r t y who caused any uncertainty. Lauterjung v. Johnson (1977), 175 Mont. 74, 572 P.2d 511; s e c t i o n 28-3-206, MCA. W e hold t h a t under s e c t i o n 28-10-602, MCA, t h e F u s e l i e r s a r e responsible t o t h e P a r k h i l l s f o r t h e negligence of t h e i r agents i n t h e s a l e t r a n s a c t i o n a s r e l a t e d t o the community water i n t e r e s t . W e hold t h a t the "independent i n v e s t i g a t i o n " c l a u s e of t h e c o n t r a c t does n o t preclude a holding t h a t t h e P a r k h i l l s j u s t i f i a b l y r e l i e d upon the r e p r e s e n t a t i o n s of the agents of t h e F u s e l i e r s . The F u s e l i e r s ' second i s s u e concerns the s u f f i c i e n c y of t h e evidence t o support the findings and judgment below. They argue t h a t t h e f a c t s do n o t support a finding of j u s t i f i - a b l e r e l i a n c e by t h e P a r k h i l l s . When t h i s Court reviews evidence, it w i l l be viewed i n t h e l i g h t most favorable t o t h e p a r t y who prevailed i n t h e D i s t r i c t Court, and the c r e d i b i l i t y of witnesses and the weight assigned t o t h e i r testimony i s f o r t h e determination of the D i s t r i c t Court i n a nonjury t r i a l . Luppold v. Lewis (1977), 172 Mont. 280, 284, 563 P.2d 538, 540-541. The f i n d i n g s of f a c t and conclusions of law of t h e D i s t r i c t Court w i l l n o t be disturbed i f supported by s u b s t a n t i a l evidence and by t h e law. Lauterjung, 175 Mont. a t 77, 572 P.2d a t 512-513. W e have reviewed t h e record and hold t h a t t h e r e was s u f f i c i e n t c r e d i b i l e evidence t o support t h e f i n d i n g s of t h e D i s t r i c t Court. F i n a l l y , the F u s e l i e r s contend t h a t t h e P a r k h i l l s cannot p r e v a i l because t h e P a r k h i l l s made no e f f o r t s t o discover t h e t r u t h regarding t h e water supply. The P a r k h i l l s inquired a number of times about t h e water supply. The t r i a l c o u r t found: "4. A f t e r t h e showing of the property and p r i o r t o t h e signing of t h e buy/sell agreement, M r s . P a r k h i l l contacted Edward F. McAuley, broker and a member of t h e corporation known a s Tri-City Realtors concerning t h e water and community w e l l . A t t h a t t i m e , M r . McAuley advised her t h e r e was a community water system and t h a t she would have no d i f f i c u l t i e s concerning same. " 7. A t the time the P l a i n t i f f s signed the con- t r a c t , both Defendants had already signed the con- t r a c t f o r deed. P r i o r t o the P l a i n t i f f s ' signing same, M r s . P a r k h i l l asked about t h e community w e l l and t h e r e g i s t r a t i o n of same; and was advised by M r . McAuley t h a t a s soon a s he obtained a copy, he would forward i t t o her. " The P a r k h i l l s reached t h e i r erroneous conclusion because of the misrepresentations of t h e agents of t h e F u s e l i e r s . The P a r k h i l l s attempted t o i n q u i r e f u r t h e r , b u t were assured t h a t the v e r i f i c a t i o n they desired was being obtained. W e hold t h a t under t h e f a c t s of t h i s case, no a d d i t i o n a l duty t o discover the t r u t h arose. The judgment of t h e D i s t r i c t Court i s affirmed.