NO. 96-180 IN THE SUPREME COURT OF THE STATE OF MONTANA

HAROLD SORENSON,d/b/a SORENSON FARMS, Plaintiff,Appellant and Cross-Respondent,

v. MASSEY-FERGUSON,INC.,a nonresident 

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### .. , W&L Defendant,Respondent L~~R~, OFsupkc. £c 

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APPEAL FROM: District Court of the Sixteenth Judicial District, In and for the County of Rosebud, The Honorable Joe L. Hegel, Judge presiding.

COUNSEL OF RECORD: For Appellant: John Houtz, Forsyth,Montana For Respondent: Kathleen H. Richardson,Havre,Montana

Filed: Submitted on Briefs: October 24, 1996 Decided: November 26, 1996

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# & gp $*AChief Justice J. A. Turnage delivered the Opinion of the Court. Harold Sorenson brought this action to recover damages from his purchase of a defective Massey-Ferguson combine. The District Court for the SixteenthJudicial District,Rosebud County,granted the motion of Massey-Ferguson, Inc., to dismiss Sorenson's complaint pursuant to Rule 12(b)(6),M.R.Civ.P. We affirm. The sole issue Sorenson raises on appeal is whether the doctrine of equitable tolling should have been invoked to toll the statutesof limitationonhis claims. Massey-Ferguson,Inc.,filed a cross-appeal in which it argues that this appeal was taken without substantial or reasonable grounds, meriting an award of damages under Rule 32,M.R.App.P. For purposes of ruling on the Rule 12(b)(6) motion, the District Court accepted as true the allegationspled in Sorenson's complaint. In September 1984, Sorenson purchased two MasseyFerguson combines from an implement dealer in Glasgow, Montana. The combines were represented as new, but were actually 1982 models. Sorenson obtained two-yearwarranties on the combines. One of the combines performed well, but the other combine repeatedly broke down, beginning almost immediately. Over the years, Sorenson sought warranty coverage for repairs, but he usually had to pay for them himself. In 1993, an improperly cast transmission was identified as the source of the repeated problems with the combine, and was repaired. InFebruary 1995,Sorenson filed his complaint claiming breach of warranty, failure of consideration and breach of contract,mistake, negligence,and unfair trade practices. Massey-Ferguson moved to dismisspursuant to Rule 12 (b)(6) , M.R.Civ. P., for failure to state a claim upon which relief can be granted. The District Court granted the motion as to all five counts of the complaint. The court's ruling was based upon the running of the applicable statutes of limitation on the first four claims and, as to the claim of unfair trade practices, the unavailability of that remedy for equipment purchased for business purposes. Issue 1 Should the doctrine of equitable tolling have been invoked to toll the statutes of limitation? The applicable statutesof limitation for the claimsdismissed due to passage of time are: four years for the breach of warranty claim and the claim of failure of consideration and breach of contract,under § 30-2-725,MCA; two years after discovery of the facts constitutinga claim of mutual mistake, under § 27-2-203,MCA

(the complaint alleged under this count that the combine was believed to be new and in proper working order when Sorenson purchased it); and three years on the negligence claimunder 5 27- 2-204, MCA. Although Sorenson became aware of defects in the combine shortly after purchasing it,he did not filehis complaint in District Court until over ten years later. The doctrine of equitable tolling arrests the running of statutes of limitation while the claimant reasonably and in good faithpursues one of several possible legal remedies. Harrison v. Chance (IggO),244 Mont. 215, 797 P.2d 200. The claimant must meetthree criteria: (1) timely notice to the defendant within the applicable statute of limitation in filing the first claim; (2) lack of prejudice to the defendant in gathering evidence to defend against the second claim;and (3) good faithand reasonable conduct by the claimant in filing the second claim. Harrison, 797 P.2dat 208. The District Court ruled that Sorenson'srequests to MasseyFerguson to repair the combine under warranty provisions did not constitute "'pursuitof a legal remedy' as is contemplated by the

cases discussing the doctrine of 'equitabletolling.'" Sorenson argues that the statutes of limitation should be equitably tolled in this case because he pursued his remedy of seeking warranty coverage fromMassey-Fergusonduring the warranty period and before any statute of limitation expired. He argues that the definition of "remedy"in the Uniform Commercial Code at 5 30-1-201 (34),MCA, should be used here. Section 30-1-201(341, MCA, defines "remedy"as any remedial right to which an aggrieved party is entitled with or without resort to a tribunal. Sorensonl s argument is off the mark. The UCC definition which he promotes defines "remedy, 

### " not "legal remedies.'I "Legal remedies" is not defined in Montana statutes. The term "legal remedies"hasbeen interpreted in Montana case law. In Hash v. U.S. West Communications Services (1994), 268 Mont. 326, 886 P.2d 442,Hash claimed that she had been wrongfully discharged from employment with U.S. West. The district courtdismissed her claim because the applicable statute of limitation had expired. Hash argued on appeal that the statute of limitationhad been equitably tolled while she filed a complaint before the Montana Human Rights Commission. This Court ruled that the doctrine of equitable tolling did not apply. We stated that Hash did not have

more than one legal remedyavailable to her. Instead,it was first her obligation to timely file her complaintbefore the Human Rights Commission, as a prerequisite to her filing in district court. While she also had the right topursue an intra-companyremedy,she was required to do so within the context of the time limitations imposed for filing before the Human Rights Commission. 

### Hash, 886 P.2d at 446. Implicit in 

### Hash is that the term "legal remedies" does not include self-helpmeasures such as informal efforts seeking intracompany remedies or warranty coverage. If it did, equitable tolling would virtually eradicate statutes of limitation. The Montana cases applying equitable tolling have dealt with "legal remedies"of filing court or administrativeproceedings seeking to enforce the plaintiff's legal rights. Chance v. Harrison (1995), 272 Mont. 52, 899 P.2d 537 (statute of limitation for filing a claim before the Montana Human Rights Commission was equitably tolled by the filing of a district court action for sexual harassment); Nicholson v. Cooney (l994),265 Mont. 406, 877 P.2d 486 (statuteof 

### limitation for filing a complaint of constitutionalviolations in a referendumwas equitably tolled by the filing of a petition for declaratory judgment as to the same subject). The case at bar is the first actionorproceeding, administrative or judicial, which Sorenson has filed to enforce his legal rights. We hold that Sorenson's self-helppursuit of his rights under warranty was not a "legal remedy" available to him for purposes of the doctrine of equitable tolling. While he may have had rights under warranty, he was required to pursue those rights within the context of the time limitations imposed for filing his legal claims. We hold that the District Court did not err in dismissing Sorenson'sclaimsbased on the lapsing of the applicable statutes of limitation. Issue 2 Is an award of damages merited under Rule 32,M.R.App.P.? Rule 32,M.R.App.P.,provides: If the supreme court is satisfied from the record and the presentation of the appeal in a civil case that the same was takenwithout substantialor reasonablegrounds, such damagesmay be assessed on determinationthereof asunder the circumstances are deemed proper. Massey-Ferguson asserts that damages are justified in this case because the appeal isnot warranted by existing law as expressed in 

### Hash, and Sorenson has not made a good faith argument for a change in existing law. While Sorenson'sargument for equitable tolling is unconvincing, there is no evidence that it was not made in good faith. Under the circumstances here presented, we are not persuaded that this appeal was taken without substantial or reasonable grounds,thereby justifying the assessment of damages. The request for damages under Rule 32, M.R.App.P.,is denied. A££irmed



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We 

### concur: