No. 87-77 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

ARLYN McJUNKIN and LORRAINE 

Mc JUNKIN, 

Plaintiffs and Appellants, 

-VSKAUFMAN and BROAD HOME SYSTEMS, INC., 

a California Corp., and PONDEROSA HOMES, 

a Montana Corporation, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Thomas Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Larry W. Moran, Bozeman, Montana 

For Respondent: 

Herndon, Harper & Munro; Rodney T. Hartman, Billings, 

Montana 

Berg, Coil, Stokes & Tollefsen; Gig A. Tollefsen, 

Bozeman , Montana 

Filed: 

Submitted on Briefs: Nov. 13, 1987 

Decided: December 22, 1987 

Clerk 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Following trial by jury in the Eighteenth Judicial 

District, Gallatin County, judgment was entered against 

Kaufman and Broad Homes (K & B) on a claim of negligence and 

against Ponderosa Homes (Ponderosa) on a claim of negligent 

misrepresentation. All litigants allege error. FJe affirm. 

The parties present the following issues for review: 

1. Did the District Court properly refuse to instruct 

the jury on strict liability, the covenant of good faith and 

fair dealing and punitive damages? 

2. Did the District Court properly grant directed 

verdicts dismissing claims of breach of the implied warranty 

of habitability, breach of the implied warranty of 

merchantability, express warranty and constructive fraud? 

3. Did the District Court properly allow the jury to 

view the mobile home at issue? 

4. Did the District Court properly refuse to grant a 

directed verdict on the claims of negligence and negligent 

misrepresentation? 

Ponderosa is engaged in the business of selling mobile 

homes, including those manufactured by K & B. The 

controversy at hand arose from the McJunkins' purchase of a K 

& B mobile home from Ponderosa. 

In December, 1982, the McJunkins met with Ponderosa 

salesman Vern Gusick concerning the purchase of a K & B 

mobile home. The McJunkins subsequently returned to 

Ponderosa and ordered a K & B mobile home with a number of 

special features. It arrived in Belgrade on or about 

December 21, 1982. 
The McJunkins first inspected their mobile home on 

December 23, 1982. At that time, Mr. McJunkin noted that the 

mobile home did not conform to their specifications in 

certain areas. The McJunkins allege that they told Gusick 

they were not going to take the mobile home. Gusick is 

alleged to have responded that the trailer was a special 

order and they had to take it. In any event, it is 

uncontested that Gusick informed the McJunkins not to worry, 

that everything will be taken care of. Thereafter, the 

McJunkins entered an installment contract for the purchase of 

the mobile home. 

Ponderosa transported the trailer to the McJunkins' home 

in Sheridan, Wyoming, and set it in place. Mrs. McJunkin 

testified that she observed the mobile home fishtail wildly 

during the trip on an icy curve near Crow Agency. The stress 

placed on the trailer during this incident is alleged to be 

partially responsible for problems the McJunkins later had 

with the trailer. 

Immediately upon moving in, the McJunkins noted problems 

with the mobile home. A significant problem was that the 

trailer was not level. The serviceman who attempted to 

relevel the trailer discovered that it could not be leveled 

because of the frame. Mr. McJunkin was advised by the 

serviceman not to move the trailer as a result. At various 

times, the McJunkins also discovered that the doors fit 

poorly; the carpet was coming loose; the floor plan had not 

been changed; there were not copper pipes as ordered; 

shutters were missing; the ceiling fan was defective; there 

was not an outside faucet as ordered; the furnace was noisy; 

the vent was in the wrong place; the shower heads were not 

positioned as ordered; the wrong materials had been used in 

the bathroom door casings; the paneling was coming off the 

bath wall; the door trim had been incorrectly installed; a 
special order cabinet was damaged; shingles came off the 

roof; the floor tile was coming up around the toilet; the 

front door lock broke; the door bell was installed on the 

wrong side; and other problems. 

Although Ponderosa and K & B made efforts to remedy some 

of the defects, the McJunkins received very little relief. 

Efforts to correct defects often resulted in further damage 

or more sloppy work. As a result, the McJunkins sent a 

revocation of acceptance on December 10, 1984, but continued 

to live in the trailer. 

Prior to trial, both parties had engineers examine the 

mobile home for structural defects. The engineer who 

examined the trailer at the request of the McJunkins found 

that the wooden frame had been overstressed at some point. 

He agreed with the serviceman that the trailer should not be 

moved. Defendants' engineer examined the mobile home after 

it had been returned to Belgrade. In his opinion, the frame 

had not suffered excessive stress and could safely be moved. 

Both engineers agreed that the mobile home was habitable. 

The jury was also allowed to view the mobile home to make 

their own determination. Many of the alleged errors revolve 

around the sufficiency of the complaint filed on December 21, 

1984, as amended by the pretrial order of October 6, 1986. 

The liberal pleading philosophy of the Montana Rules of 

Civil Procedure has superseded the highly technical theory of 

code pleading which often resulted in substantial injustice 

to the injured party. "Ancestor worship in the form of 

ritualistic pleadings has no more disciples. The time when 

the slip of an [attorney's] quill pen could spell death for a 

plaintiff Is cause of action is past." Thompson v. Allstate 

Insurance Company (5th Cir. 1973), 476 F.2d 746, 749. A 

pleading will be liberally construed in order to achieve 
substantial justice. Johnson v. Herring (19311, 89 Mont. 

1.56, 173, 295 P. 1100, 1105; Rule 8 (£1, M.R.Civ.P. 

Generally, a pleading need only provide "a short and 

plain statement of the claim that will give the defendant 

prior notice of what the plaintiff's claim is and the grounds 

upon which it rests." Conley v. Gibson (1957), 355 U.S. 41, 

47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80, 85. Discovery procedures 

and the pretrial conference under Rule 16 are the primary 

means of formulating and clarifying the issues so that the 

only real function of pleadings is that of giving notice. 2A 

Moore's Federal Practice 5 8.13 at 8-71. However, "it is 

not enough to indicate merely that the plaintiff has a 

grievance . . . sufficient detail must be given so that the 

defendant, and the court, can obtain a fair idea of what the 

plaintiff is complaining and can see that there is some legal 

basis for recovery." Davis v. Passman (1979), 442 U.S. 226, 

238 n.15, 99 S.Ct. 2264, 2273, 60 L.Ed.2d 846, 858, 2A 

Moore's Federal Practice 5 8.13 at 8-13. 

The failure to set forth all claims initially is not 

fatal. Under Rule 15 (b) , M. R.Civ. P., when issues not raised 

hy the pleadings or amended by the pretrial order are tried 

by the express or implied consent of the parties, they shall 

be treated as if raised in the pleading. The general rule is 

that such amendments shall be freely granted. Union 

Exchange, Inc. v. Parker (1960), 138 Mont. 348, 357 P.2d 339. 

However, liberal construction and amendment of pleadings 

does not grant counsel carte blanche to advance new theories 

on an unsuspecting opponent. In Brothers v. Surplus Tractor 

Parts Corp. (1973), 161 Mont. 412, 506 P.2d 1362, we 

cautioned counsel in this state that any reliance on the 

liberality of the courts in granting amendments was at their 

peril. 
It is generally accepted that the appellant cannot 

recover beyond the case stated by him in his 

complaint . . . . This Court believes that fair 

notice to the other party remains essential, and 

pleadings will not be deemed amended to conform to 

the evidence because of "implied consent" where the 

circumstances were such that the other party was 

not put on notice that a new issues was being 

raised . . .. (Citations omitted.) 

Rule 15 (b) , M. R.Civ. P. should be applied liberally 

to avoid the old requirements of formalism and to 

allow litigants to proceed efficiently on the 

merits of the case. However, leave to amend 

pleading under Rule 15 (b) , cannot be granted 

arbitrarily or perfunctorily because the result 

would create a question of due process in cases 

where the defendant may not have an adequate 

opportunity to prepare his case on the new issues 

raised by the amended pleading, therefore the facts 

attendant to each case become controlling. 

161 Mont. at 417-418, 506 P.2d at 1365. 

The McJunkins allege that the District Court improperly 

granted a directed verdict on the express warranty claim. It 

is alleged that the District Court based its decision on the 

McJunkins' failure to plead the claim against Ponderosa. We 

disagree. A review of the trial transcript indicates that 

Ponderosa did not request, nor did the court grant, a 

directed verdict on the express warranty claim. Rather, the 

court properly found that the claim was not pleaded. 

As noted above, the purpose of pleading is to provide 

notice. See Conley, supra. The McJunkins had two and 

one-half years to amend their complaint. In addition, the 

pretrial order signed by the parties specifically states that 

the express warranty claim applied only to K & B. Under 

these facts, we cannot say the District Court clearly abused 

its discretion. We hold that the District Court properly 

refused to submit the issue to the jury. 
Implied Covenant -- of Good faith -- and Fair Dealing 

The District Court also refused to instruct the jury on 

the implied covenant of good faith and fair dealing. 

Although the claim had not been plead, the ~c~unkins 

submitted a jury instruction defining good faith "as honesty 

in fact in the conduct or transaction concerned." We find 

that the instruction inadequately defines the tort. 

The seminal case on the issue of the implied covenant of 

good faith and fair dealing is Nicholson v. United Pacific 

Insurance Co. (Mont. 1985), 710 P.2d 1342, 42 St.Rep. 1822. 

In Nicholson, this Court engaged in an exhaustive examination 

of the nature of the duty of good faith and fair dealing. We 

stated: 

The nature and extent of an implied covenant of 

good faith and fair dealing is measured in a 

particular contract by the justifiable expectations 

of the parties. Where one party acts arbitrarily, 

capriciously or unreasonably, that conduct exceeds 

the justifiable expectations of the second party. 

The second party then should be compensated for 

damages resulting from the other' s culpable 

conduct. 

The issue before us is not novel. In McGregor v. Momrner 

(Mont. 1986), 714 P.2d 536, 43 St.Rep. 206 and Dunfee v. 

Raskin-Robbins, Inc. (Mont. 1986), 720 P.2d 1148, 43 St.Rep. 

964, we rejected similar instructions which defined good 

faith and fair dealing as "honesty in fact." As Nicholson 

indicates, the covenant of good faith and fair dealing is 

more than "honesty in fact." Dunfee, 720 P.2d at 1152, 43 

St.Rep. at 969. "It requires, at a minimum, that defendants' 

actions were arbitrary, capricious or unreasonable and 

exceeded plaintiffs' justifiable expectations." McGregor, 

714 P.2d at 543, 43 St.Rep. at 214. 
We hold the District Court correctly refused to give the 

instruction. 

Fraud 

The District Court granted a directed verdict in favor 

of the defendants on the McJunkins claim of constructive 

fraud . The McJunkins contend that the District Court 

incorrectly determined that a fiduciary duty is necessary for 

a constructive fraud claim to lie. We agree with the 

McJunkins. However, we find the error to be harmless. 

Constructive fraud is defined in 5 28-2-406, MCA. It 

provides : 

Constructive fraud consists in: 

(1) any breach of duty which, without an actually 

fraudulent intent, gains an advantage to the person 

in fault or anyone claiming under him by misleading 

another to his prejudice or to the prejudice of 

anyone claiming under him; or 

(2) any such act or omission as the law especially 

declares to be fraudulent, without respect to 

actual fraud. 

By its terms, the statute does not require that the 

plaintiff demonstrate a fiduciary relationship. It merely 

requires the establishment of a duty. We have recognized 

that a sufficient duty can arise in a commercial transaction 

such as the one at hand. Woodahl v. Mathews (1982), 196 

Mont. 445, 639 P.2d 1165; Mends v. Dykstra (1981), 195 Mont. 

440, 637 P.2d 502; Moschelle v. Hulse (1980), 622 P.2d 155, 

37 St.Rep. 1506. We find the defendants had a duty to 

refrain from intentionally or negligently creating a false 

impression by words or conduct. Moschelle, 622 P.2d at 159, 

37 St.Rep. 1509. 

In the instant case, the McJunkins' complaint stated 

that Ponderosa's representations constituted negligent 

misrepresentation. The next count contends that the same 
representations also constituted constructive fraud. Had the 

jury been instructed on both theories, the damages would have 

been the same. Thus, the error is harmless. 

As the McJunkins' brief only refers to Ponderosa, we do 

not address the issue as to K & B. Nor do we reach the issue 

of actual fraud. The District Court did not address the 

issue because actual fraud was not pleaded or raised by the 

McJunkins. 

Implied Warrant - of Habitability 

The McJunkins allege the District Court improperly 

granted a directed verdict on the implied warranty of 

habitability because the defects precluded "realisticw 

habitation. In Chandler v. Madison (1982), 197 Mont. 234, 

642 P.2d 1028, we recognized that the doctrine of caveat 

emptor no longer reflects the realities of the modern home 

market. 197 Mont. at 239, 642 P.2d at 1031. We therefore 

held that the builder-vendor of a new home impliedly warrants 

that the residence is constructed in such a manner as to be 

suitable for habitation. Chandler, 197 Mont. at 239, 642 

P.2d at 1031. The implied warranty of habitability does not 

require that the home be defect free, however. 

In the instant case, the District Court found that the 

mobile home was habitable. We agree. The trailer did not 

constitute a health or safety hazard. Nor was the mobile 

home so riddled with defects as to reasonably preclude its 

use as a residence. The critical determination for a breach 

of habitability is whether the defects relate to the useful 

occupancy of the house. Although the problems were a 

constant source of irritation for the McJunkins, the experts 

for both parties agreed that the trailer was habitable. The 

warranty of habitability is not so broad as to provide a 

remedy for minor defects and annoyances. See Klos v. Gockey 

(Wash. 1976), 554 P.2d 1349. 
Merchantabilitv 

The District Court also granted a directed verdict on 

the McJunkinsl claim of breach of the implied warranty of 

merchantability because "it is excluded by the express 

language of the sales document." The language in question 

provides : 

8. WARRANTIES: THE DEALER SHALL GIVE OVER TO THE 

BUYER COPIES OF ANY AND ALL WRITTEN WARRANTIES 

COVERING THE WITHIN DESCRIBED UNIT, OR ANY 

APPLIANCE OR COMPONENT THEREIN, WHICH HAVE BEEN 

PROVIDED BY THE MANUFACTURER OF THE UNIT OR 

APPLIANCE OR COMPONENT, RESPECTIVELY. IT - IS 

UNDERSTOOD AND AGREED THAT EXCEPT AS MS BE 

REQUIRED UNDER APPLICABL-TATE LAW THE DEAL= 

MAKES NO WARRANTIES WHATSOEVER REG~~TRT~INGTHE UNIT 

-- OR ANY-APPLIANCE OR COMPONENT CONTAINED THERETK 

- THE DEALER EXPR~SLY DISCLAIMS ANY IMPLIED 

WARRANTIES, INCLUDING THE IMPLIED W~ANTIES OF 

MERCHANTABILITY - OR FITN~ -- FOR USE. (Em~hasis . A in 

original.) 

The McJunkins contend that the "disclaimer" is invalid 

because there is no evidence they ever saw or were made aware 

of the disclaimer, nor were they made aware of its 

significance. Section 30-2-316, MCA, does not require that a 

disclaimer of implied warranties be specifically pointed out 

to the consumer. In order to "exclude or modify the implied 

warranty of merchantability or any part of it the language 

must mention merchantability and in case of a writing must be 

conspicuous. . .." Section 30-2-316(2), MCA. 

In the instant case, the disclaimer was not hidden in 

the fine print. The language was in larger, darker, bolder 

type. It was also capitalized and underlined. The fact that 

the disclaimer appeared on the back of the purchase agreement 

is not per se sufficient to render the disclaimer 

ineffective. It is fundamental that a person is presumed to 

have read the contractual agreements that they enter into. 

We find that the disclaimer at issue satisfies the 
requirements of 5 30-2-316(2), MCA. See Schlenz v. John Deer 

Co. (D. Mont. 1981), 511 F.Supp. 224, 228. 

Strict Liability 

The McJunkins contend that the District Court should 

have instructed the jury on the theory of strict liability. 

Defendants contend that the McJunkins failed to plead strict 

liability as a theory of recovery. The issue requires two 

considerations, whether the evidence justified such 

instructions, and whether the failure to plead strict 

liability constituted such a lack of notice of the issues to 

the defendants that such instructions would be improper or no 

amendment to the pleadings could be granted. 

In Brandenburger v. Toyota Motor Sales (1973), 162 Mont. 

506, 513 P.2d 268, this Court joined a growing number of 

states which had adopted strict liability as defined by 2 

Restatement (Second) of Torts, 5 402A. Mr. Justice Harrison, 

speaking for the Court, indicated that the essential 

rationale behind the theory of strict liability was to afford 

the consuming public maximum protection from defective 

products by requiring the manufacturer who reaps the profit 

of sales to also bear the burden of injuries and loss. 162 

Mont. at 517, 513 P.2d at 275. For, "it is apparent from a 

reading of the Restatement, and the leading cases on this 

subject, that the doctrine of strict liability was evolved to 

place liability on the party primarily responsible for [an! 

injury occurring, that is, the manufacturer of the defective 

product." 162 Mont. at 514, 513 P.2d at 273. 

In the nearly 15 years since Brandenburger, this Court 

has repeatedly returned to the source of Montana's theory of 

strict liability. In Thompson v. Nebraska Mobile Homes 

(1982), 198 Mont. 461, 647 P.2d 334, we were confronted with 

whether a claim for strict liability in tort would lie where 

the only harm was to the consumer's property. Thompson also 
involved a "lemon" mobile home. Mrs. Thompson was plagued by 

cold air blowing through the home's outlets, cupboards and 

closets. After several phone calls during a two year period, 

a factory man visited the home and caulked the bedroom closet 

floor. The caulking was insufficient, however. Mrs. 

Thompson found it necessary to install a gas heater as well 

as several electrical heaters in an effort to keep warm. 

Sometime after the caulking was performed, Mrs. Thompson 

noticed that the living room ceiling was sagging 

approximately four inches and that the walls of the mobile 

home were bowed. Her pleas for assistance fell on dea.f ears. 

Consistent with the Brandenburger rationale, an 

unanimous court found strict liability applicable: 

The rationale [cited] in Brandenburger also applies 

under these circumstances. The public remains in 

an unfair bargaining position as compared to the 

manufacturer. In the case of damage arising only 

out of loss of the product, this inequality in 

bargaining position becomes more pronounced. 

Warranties are easily disclaimed. Negligence is 

difficult, it not impossible, to prove. The 

consumer does not generally have large damages to 

attract the attention of lawyers who must handle 

these cases on a contingent fee. We feel that the 

consumer should be protected by affording a legal 

remedy which causes the manufacturer to bear the 

cost of its own defective products. By allowing a 

claim for strict liability in tort we are joining 

with the jurisdictions of New Jersey, Wisconsin, 

Michigan, Minnesota and Colorado in affording legal 

recourse to all victims damaged by defects 

resulting from the manufacturing process. 

198 Mont at 466-67, 647 P.2d at 337. 

In the instant case, we are confronted with a situation 

very similar to Thompson. The District Court found that the 

McJunkins failed to satisfy the elements of 5 402A, however. 

It provides: 

(1) One who sells any product in a defective 

condition unreasonably dangerous to the user or 
consumer or to his property is subject to liability 

for physical harm thereby caused to the ultimate 

user or consumer, or to his property, if 

(a) the seller is engaged in the business of 

selling such a product, and 

(b) it is expected to and does reach the user or 

consumer without substantial change in the 

condition in which it is sold. 

(2) The rule stated in Subsection (1) applies 

although 

(a) the seller has exercised all possible care in 

the preparation and sale of his product, and 

(b) the user or consumer has not bought the 

product from or entered into any contractual 

relation with the seller. 

The defendants contend that the McJunkins failed to 

establish that the mobile home was in a "defective condition 

unreasonably dangerous." (Emphasis added.) Thus, the first 

question for determination is whether a plaintiff is required 

to show that the product is defective and also that it was 

unreasonably dangerous. 

The dual test propounded by the commentaries to Section 

402A of the Restatement (Second) of Torts has been criticized 

as "vague and very imprecise." See Keeton, Product Liability 

-- and the Meaning - of Defect, 5 St. Mary's L. J. 30, 32 (1973). 

It is unfortunate perhaps that Section 402A of the 

Restatement (Second) of Torts provides that as a 

basis for recovery it must be found that the 

product was both "defective" and "unreasonably 

dangerous" when as a matter of fact the term 

"unreasonably dangerous" was meant only as a 

definition of defect. The phrase was not intended 

as setting forth two requirements but only 

one . . . 

Keeton, 5 St. Mary's L. J. at 32. Professor Keeton ' s 

argument has merit. We agree with the drafters of the 
Uniform Products Liability Act that a modified approach is 

needed. The position taken in the commentaries is not 

consistent with the mandate of Brandenburger and Thompson. 

We have stated that this Court shall not blindly follow the 

dictates of the Restatement commentaries. 

We emphasize that this Court adopted the rule as 

set out in the Restatement, but we did not and do 

not intend the restraints in the comments to this 

rule to hamstring us in developing and refining the 

rule of strict liability. To the extent that the 

comments are helpful in our development of the law, 

we shall accept them; but we will reject them where 

we believe a more appropriate explanation of the 

rule of strict liability can be provided. 

Stenberg v. Beatrice Foods Co. (19781, 176 Monte 1231 

128-129, 576 P.2d 725, 729. We believe the central issue is 

whether the product is defective. We therefore chart a 

separate course. 

In Rix v. General Motors Corp. (Mont. 1986), 723 ~.2d 

195, 43 St.Rep. 1296, we distinguished a design defect from a 

manufacturing defect. Under a manufacturing defect theory, 

the central question is whether the product is flawed due to 

improper construction. 

[MI anufacturing defects, by definition, are 

"imperfections that inevitably occur in a typically 

small percentage of products of a given design as a 

result of the fallibility of the manufacturing 

process. A [defectively manufactured] product does 

not conform in some significant aspect to the 

intended design, nor does it conform to the great 

majority of products manufactured in accordance 

with that design. " . . . Stated differently, a 

defectively manufactured product is flawed because 

it is misconstructed without regard to whether the 

intended design of the manufacturer was safe or 

not. Such defects result from some mishap in the 

manufacturing process itself, improper workmanship, 

or because defective materials were used in 

construction . . .. (Emphasis added.) 
In contrast, a design defect is one which "presents 

an unreasonable risk of harm, notwithstanding that 

it was meticulously made according to [the] 

detailed plans and specifications" of the 

manufacturer. Thus, unlike manufacturing defects, 

design defects involve products which are made in 

precise conformity with the manufacturer's design 

but nevertheless result in injury to the user 

because the design itself was improper. 

723 P.2d at 200, 43 St.Rep. at 1301-02. 

Naturally, a product is defective it if is unreasonably 

dangerous. Rost v. C. F. & I. Steel Corp. (1980), 189 Mont. 

485, 488, 616 P.2d 383, 385. The lack of a dangerous aspect 

does not automatically preclude a finding that the product is 

defective, however. As Thompson demonstrates, the 

Brandenburqer rationale is equally appropriate in situations 

of purely economic loss without a finding of unreasonable 

danger. 

We do not adopt a theory of absolute liability for all 

defects. As - Rix indicates, in order for a product to be 

"defective" within the meaning of a manufacturing defect 

theory, the defect must be significant. Strict liability is 

not intended to replace a breach of contract action for minor 

defects. However, defining strict liability solely in terms 

of unreasonably dangerous does not adequately set forth the 

concept enunciated in Brandenburger. The proper test of a 

defective product is whether the product was unreasonably 

unsuitable for its intended or foreseeable purpose. If a 

product fails this test, it will be deemed defective. 

In the instant case, the McJunkins failed to demonstrate 

the product was defective or unreasonably dangerous. The 

testimony of the experts indicated that the trailer was in 

fact habitable. Consequently, we find that the trailer was 

fit, suitable, and safe for its intended purpose i.e. a 
residence. We need not decide defendants' contention that: 

the McJunkins failed to plead strict liability. 

Punitive Damaaes 

The McJunkins contend that the District Court 

erroneously determined that "there's insufficient proof to 

justify the giving of such an instruction." We hold the 

District Court was correct. 

At the time of trial, S 27-1-221, MCA (1985), delineated 

when punitive damages were proper. It provides, in pertinent 

part: 

When exem lary damages allowed. (1) Subject to 

- subsection +, in any action for a breach of an 

obligation not arising from contract where the 

defendant has been guilty of oppression, fraud, or 

malice, actual or presumed, the jury, in addition 

to the actual damages, may give damages for the 

sake of example and by way of punishing the 

defendant. 

(2) The jury may not award exemplary or punitive 

damages unless the plaintiff has proved all 

elements of the claim for exemplary or punitive 

damages by clear and convincing evidence. Clear 

and convincing evidence means evidence in which 

there is no serious or substantial doubt about the 

correctness of the conclusions drawn from the 

evidence. It is more than a preponderance of 

evidence, but less than beyond a reasonable doubt. 

(3) Presumed malice exists when a person has 

knowledge of facts, intentionally avoids learning 

of facts, or recklessly disregards facts, knowledge 

of which may be proven by direct or circumstantial 

evidence, which creates a high degree of risk of 

harm to the substantial interests of another, and 

either deliberately proceeds to act in conscious 

disregard of or indifference to that risk or 

recklessly proceeds in unreasonable disregard of or 

indifference to that risk. 

(4) The plaintiff may not present, with respect to 

the issue of exemplary or punitive damages, any 

evidence to the jury regarding the defendant's 

financial affairs or net worth unless the judge 
first rules, outside the presence of the jury, that 

the plaintiff has presented a prima facie claim for 

exemplary or punitive damages. 

(5) A defendant is guilty of oppression if he 

intentionally causes cruel and unjust hardship by: 

(a) misuse or abuse of authority or power; or 

(b) taking advantage of some weakness, disability, 

or misfortune of another person. 

We find that the McJunkins failed to demonstrate 

oppression, fraud, or malice, actual or presumed by clear and 

convincing evidence. At most, the McJunkins showed that the 

defendant ' s repeated attempts to repair the defects were 

ineffective. We hold the District Court correctly refused to 

instruct on punitive damages. 

Jury View 

Prior to the time of trial, Ponderosa added furniture, 

drapes, and minor decorations to the mobile home in question. 

Lt is alleged that permitting the jury to view the property 

in this altered state prejudiced the McJunkins' case. We 

disagree. 

The decision to permit or deny a jury view of the 

property in question is left to the sound discretion of the 

trial court. Section 25-7-401, MCA, provides, in pertinent 

part: 

When in the opinion of the Court, it is proper for 

the jury to have a view of the property which is 

the subject of the litigation . . . , it may order 

the jurors to he conducted in a body, under charge 

of an officer and one person representing each 

party . . . . 

The addition of furniture or minor cosmetic changes is 

not dispositive. It is generally held that even where there 

has been changes in the condition of the object of litgation, 

a jury view is still within the discretion of the court. 
Clark v. Worrall (1965), 146 Mont. 374, 379, 406 P.2d 822, 

824. It is not an abuse of discretion to allow the jury to 

view the premises where the changes are not material. Clark, 

146 Mont. at 379, 406 P.2d at 825. In the instant case, the 

changes were not material. We find the District Court did 

not abuse its discretion. 

Negligence - and Negligent Misrepresentation 

Ponderosa contends that the District Court incorrectly 

refused to grant a directed verdict on the negligent 

misrepresentation claim. When deciding whether a motion for 

directed verdict is proper, a case should not be withdrawn 

from the jury if reasonable men may differ as to the 

conclusions drawn from the evidence. Solich v. Hale (1967) , 

150 Mont. 358, 435 P.2d 883. The evidence showed that Gusick 

told the McJunkins not to worry, that all the problems would 

be taken care of. The numerous problems were not in fact 

remedied. When the McJunkins complained about the problems 

and ineffective repairs, Ponderosa often answered it was K & 

B's problem. We hold the issue was properly submitted to the 

jury. 

Similarly, K & B contends that there was insufficient 

evidence to submit the negligence claim to the jury. We find 

K & B's claim frivolous. It is not necessary to repeat the 

laundry list of defects which riddled the mobile home. 

The judgment of the District Court is affirmed. 

f-\ 

/ Justice