No. 87-44 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1987 

ELLINGSON AGENCY, INC., 

Plaintiff and Respondent, 

OTTO BALTRUSCF, JR., and CARL 

BALTRUSCH, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, 

The Honorable Michael Keedy, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Astle & Astle; David L. Astle, Kalispell, Montana 

For Respondent: 

Jeffrey D. Ellingson; Trieweiler Law Firm; Whitefish, 

Montana 

Warden, Christiansen, Johnson & Berg; Stephen C. Berg, 

Kalispell, Montana 

Submitted on Briefs: July 1, 1987 

Decided: September 15, 1987 

Clerk 
Mr. Chief Justice J. A. Turnage delivered the Opinion of the 

Court. 

Defendants Carl and Otto Baltrusch appeal the judgment 

of the Eleventh Judicial District Court, Flathead County, 

which awarded to plaintiff Ellingson Agency, Inc., a broker's 

commission, attorney fees and interest in the total amount of 

$148,308.91 and dismissed defendants' counterclaim. F7e 

affirm in part and reverse in part. 

Three issues are presented for our review: 

1. Did the District Court err when it granted summary 

judgment in favor of Ellingson? 

2. Did the District Court err when it granted 

Ellingson's motion for summary judgment dismissing the 

Baltrusches' counterclaim? 

3. Did the District Court err when it compounded 

interest in violation of S 25-9-205, MCA? 

This is an action for a real estate commission based on 

an exclusive listing agreement between Ellingson Agency, Inc. 

(Ellingson), and Carl and Otto Baltrusch. Prior to November 

6, 1979, the Baltrusch brothers had entered into a contract 

for deed to purchase the Gibson Shopping Center in Kalispell 

from Stephen and Patricia McAfee. On November 6, 1979, Carl 

Baltrusch, representing himself and his brother, signed two 

exclusive one-year listing agreements with Ellingson covering 

the sale of the Gibson property. (The listing agreements 

were identical but covered different portions of the Gibson 

property; hereinafter, they will be referred to as a singular 

document.) Marvin Bethea, who was to be the sales agent for 

the sale, signed the agreement on behalf of Ellingson. 

From November 1979 through June 1980, Bethea devoted 

substantial time and expense attempting to locate buyers for 

the Gibson property. On January 11, 1980, the Baltrusch 

brothers received a notice of default from the McAfees 
requesting the Baltrusch brothers bring current their taxes 

and special improvement district assessments on the Gibson 

property or face cancellation or specific performance. In 

February 1980, the Baltrusch brothers informed Ellingson of 

McAfees' notice of default. Ellingson was aware that the 

Baltrusches were being pressured to transfer title in lieu of 

foreclosure. However, Ellingson did not inform the Baltrusch 

brothers that upon transfer in lieu of foreclosure, Ellingson 

would seek a brokerage fee. 

Prior to June 3, 1980, the Baltrusches informed 

Ellingson that they planned to transfer the property in lieu 

of foreclosure. Ellingson requested that the Baltrusches get 

a ten-day extension before transferring the property. The 

Baltrusches deeded the property contingent upon such a 

ten-day extension. However, Ellingson failed to obtain a 

buyer. 

On June 3, 1980, the Baltrusch brothers by quitclaim 

deed conveyed the Gibson property back to the McAfees in lieu 

of cancellation or specific performance and the McAfees 

released them of all further liability under the contract. 

On May 4, 1982, Ellingson filed suit against the Baltrusch 

brothers alleging it was entitled to a commission under the 

exclusive listing agreement on the conveyance to the McAfees. 

On September 20, 1983, Ellingson moved for summary judgment. 

Seventeen months later, on March 25, 1985, the District Court 

entered summary judgment in favor of Ellingson. The court 

found the listing agreement to be clear and unambiguous and 

that Ellingson was entitled to commission on the conveyance 

of the Gibson property under the terms of the listing agreement. The court awarded Ellingson a commission of $86,862.84 

plus interest from June 3, 1980, and costs of suit. 

Following summary judgment the District Court granted 

the Baltrusches leave to amend and file a counterclaim. In 
the counterclaim, the Baltrusch brothers alleged that 

Ellingson had violated the Montana Real Estate Brokers and 

Salesman Act and breached its duty of good faith and fair 

dealing. The Baltrusches alleged Ellingson knew of the 

impending return conveyance of the Gibson property but failed 

in its duty to inform the Baltrusches it would demand a 

commission on the conveyance. After further discovery, both 

parties moved for summary judgment on the counterclaim. On 

August 26, 1986, the court granted summary judgment in favor 

of Ellingson and dismissed Baltrusches' counterclaim. Final 

judgment was entered on October 9, 1986, in the total amount 

of $148,308.91, which included interest at 10 percent on the 

amount of judgment entered March 25, 1985. Baltrusches' 

motion to alter or amend the judgment was deemed denied, and 

this appeal followed. 

Issue 1 

Did the District Court err when it granted summary 

judgment in favor of Ellingson? 

The first issue is whether summary judgment in favor of 

Ellingson on the issue of its entitlement to a commission was 

proper. Pursuant to Rule 56 (c) , M.R.Civ.P., if there is no 

genuine issue of material fact and the evidence before the 

court shows the moving party is entitled to judgment as a 

matter of law, summary judgment is proper. In this instance, 

the District Court found the exclusive listing agreement to 

be clear and unambiguous, that Ellingson was entitled to its 

commission under the contract, and that the Baltrusches 

raised no affirmative defenses to the contract. We disagree 

with the District Court that there was no genuine issue of 

material fact and that Ellingson was entitled to judgment as 

a matter of law. 
The exclusivity provision in the listing agreement 

executed by the parties provides: 

This listing is an exclusive listing and 

you hereby are granted the absolute, 

sole and exclusive right to sell or 

exchange the said described property. 

In the event of any sale, by me or any 

other person, or of exchange or conveyance of said property, or any part 

thereof, during the term of your exclusive employment, or in the case I withdraw the authority hereby given prior to 

said expiration date, I agree to pay you 

the same commission, just the same as if 

a sale had actually been consummated by 

you. [Emphasis added. ] 

The listing agreement covered the period from November 6, 

1979, to November 6, 1980. 

On January 11, 1980, the Baltrusches received notice of 

default from sellers, Stephen and Patricia McAfee. The 

McAfees continued to pressure the Baltrusches to transfer the 

property in lieu of foreclosure. The Baltrusch brothers 

notified Ellingson in February 1980 that the McAfees had 

served notice of default. The Baltrusches also notified 

Ellingson that the McAfees were pressuring them to "give the 

property back." On June 3, 1980, the Baltrusch brothers 

transferred quitclaim title to the McAfees in lieu of foreclosure. It appears from the partial transcript of Otto 

Baltrusch, Jr.'s deposition that prior to June 3, 1980, 

Ellingson requested that Baltrusches obtain a ten-day extension from McAfees to enable Ellingson to find a buyer for the 

Baltrusch property. Additionally, it appears that the 

McAfees by letter dated June 3, 1980, granted a ten-day 

extension. However, Ellingson was unable to find a buyer. 

The District Court found "the Baltrusches conveyed the 

Gibson property thereby effectively withdrawing the authority 

of the Ellingson agency to continue to try to sell the 
property . . ." On review we are presented with the question 

of whether the District Court erred when it held that a 

transfer of title in lieu of foreclosure constitutes a sale, 

exchange or conveyance within the intended meaning of the 

listing agreement, thereby entitling Ellingson to a 

commission. 

This Court has previously examined exclusive listing 

agreements identical to the agreement in the present case. 

In Payne v. Buechler (Mont. 1981), 628 P.2d 646, 38 St.Rep. 

799, the owner unilaterally terminated an exclusive listing 

agreement, then twelve days later sold the property which had 

been covered under the agreement. In finding the broker 

entitled to his commission, we stated: 

. . . once the broker began performance 

under the written agreement by expenditure of time, efforts and money to 

attract a purchaser on the owner's 

terms, the written agreement became 

bilateral and binding on both parties. 

It could not be unilaterally terminated 

by the owner without payment of the 

brokers' commission. 

Payne, 628 P.2d at 650, 38 St.Rep. at 804. 

In Nardi v. Smalley (1982), 197 Mont. 321, 643 P.2d 

228, this Court held the owner bound by the terms of the 

exclusive listing agreement and the broker entitled to his 

commission. In Nardi, the owners executed documents for the 

sale of the property seventy days after the listing agreement 

expired but to a buyer found by the broker. The listing 

agreement provided for the broker's commission on a sale to a 

buyer found by the broker, at the agreed price, within ninety 

days of the termination of the listing agreement. We held 

the terms of the listing agreement entitled the broker to his 

commission and that the broker had not breached his fiduciary 

duty to disclose all material terms. 
In John Whiteman & Co. v. Fidei (pa. 1954), 106 ~.2d 

644, 646, the Superior Court of Pennsylvania held a buyer's 

receipt of $1,000 coupled with the transfer of title in lieu 

of foreclosure constituted a "sale or exchange." Whiteman 

was later distinguished by Felbinger and Co. v. Traitoros 

(Ill. 1979), 34 N.E.2d 1283, 1288. In Felbinger, the Illinois Appellate Court held that when an exclusive realtor's 

listing contract does not state whether a transfer of title 

in lieu of foreclosure constitutes a sale, the term sale is 

susceptible to differing interpretations. Felbinger reversed 

and remanded the case to the District Court and ordered the 

court to admit par01 evidence of the parties' intent. 

"Where an ambiguous term is used, the intent of the 

parties will govern its construction and extrinsic evidence 

can be used to discover that intent." Adams v. Chilcott 

(1979), 182 Mont. 511, 517, 597 P.2d 1140, 1144. A court 

should look at the whole contract and its purpose in determining intent and is not bound by any single provision or 

expression. Gropp v. Lotton (1972), 160 Mont. 415, 421, 503 

P.2d 661, 664-665. When uncertainty in a written instrument 

exists, the provisions should properly be construed against 

the party causing the uncertainty. St. Paul Fire & Marine 

Ins. Co. v. Cumiskey (1983), 665 P.2d 223, 229, 40 St.Rep. 

891. 

Implicit in the District Court's findings of fact and 

conclusions of law is the finding that it was the intention 

of the parties to the contract that the terms sale, exchange 

or conveyance would include a deed in lieu of foreclosure. A 

sale is defined by 5 30-11-101, MCA, which provides: 

Sale defined. Sale is a contract by 

which, for a pecuniary consideration 

called a price, one transfers to another 

an interest in property. 
In the case at hand, the Baltrusch brothers gave up 

their entire interest in the Gibson property and forfeited 

all payments made to the McAfees. Accordingly, we hold the 

Baltrusches' transfer of title does not constitute a sale 

pursuant to § 30-11-101, MCA. 

Exchange has been defined as a "contract by the terms 

of which specific property is given in consideration of the 

receipt of property other than money." Capps v. Mines Service (Or. 1944), 152 P.2d 414, 416; see also, $ 30-11-112, 

MCA. Black's Law Dictionary defines conveyance as a "transfer of title to land from one person, or class of persons, to 

another by deed." The District Court found the Baltrusches 

conveyed the Gibson property, thereby violating the exclusive 

listing agreement. It is arguable that a technical conveyance occurred when the Baltrusches transferred the property 

in lieu of foreclosure. However, the record is replete with 

evidence that the term conveyance had different meanings to 

respondent and appellants. Both testimony and actions of the 

parties support this premise. 

It follows that the term "conveyance" has no fixed or 

invariable meaning, but is to be interpreted in accord with 

the manifest intention of the parties. Parol evidence is 

therefore necessarily admissible to demonstrate and explain 

the ambiguity. We have held that "summary judgment is usually inappropriate where the intent of the contracting parties 

is an important consideration." Twite v. First Bank (N.A.) , 

Western Montana (Mont. 1984), 692 P.2d 471, 472, 41 St.Rep. 

2518, citing Fulton v. Clark (1975), 167 Mont. 399, 404, 538 

P.2d 1371, 1374. 

In the case at bar, the record reflects that the 

Baltrusches were unaware that a transfer of title in lieu of 

foreclosure would constitute a conveyance entitling Ellingson 

to a commission. Respondent Ellingson did not inform the 
Baltrusches of that fact despite its fiduciary duty to disclose, until the filing of this lawsuit. Lyle v. Moore 

(1979), 183 Mont. 274, 277, 599 P.2d 336, 338. Therefore, a 

latent ambiguity exists, and par01 evidence is necessary to 

determine the intention of the parties. Section 28-3-301, 

MCA. We reverse and remand this issue to the District Court 

with instructions to vacate summary judgment granted in favor 

of respondent Ellingson. 

Issue 2 

Did the District Court err when it granted summary 

judgment dismissing the Baltrusches' counterclaim? 

After granting respondent Ellingson's initial motion 

for summary judgment, the District Court granted appellants 

leave to amend and file a counterclaim. The Baltrusch brothers alleged in their counterclaim that Ellingson violated its 

fiduciary duty owed by a broker to a customer to disclose all 

material facts. On August 26, 1986, the District Court 

granted Ellingson's motion for summary judgment against the 

Baltrusches' counterclaim. 

A fiduciary relation exists between a real estate 

broker and his client. Carnell v. Watson (19781, 176 Mont. 

344, 350, 578 P.2d 308, 312; Lyle v. Moore ((1979), 183 Mont. 

274, 277, 599 P.2d 336, 337. A real estate broker holds the 

affirmative duty to disclose all material facts. Flemmer v. 

Ming (Mont. 1980), 621 P.2d 1038, 1043, 37 St.Rep. 1916. 

The District Court, in its August 26, 1986, findings of 

fact and conclusions of law found that the contract was clear 

and unambiguous and that Ellingson had "no duty to advise 

[the Baltrusches]." Earlier, we held that the District Court 

erred when it found the listing agreement was clear and 

unambiguous. We conclude there may have been a genuine issue 
of material fact as to whether Ellingson breached a fiduciary 

duty to disclose. Rule 56(a), M.R.Civ.P. 

The District Court erred when it granted respondent's 

motion for summary judgment, thereby dismissing the 

Baltrusches' counterclaim. We reverse and remand this issue 

and instruct the District Court to deny Ellingson's motion 

for summary judgment against the Baltrusches' counterclaim. 

Issue 3 

Did the District Court err when it compounded interest 

in violation of § 25-9-205, MCA? 

Although we are not required to review this issue, we 

choose to address it for judicial economy and to assist the 

parties in the event of further judicial proceedings involving this issue. 

In its March 25, 1985, summary judgment order, the 

court awarded Ellingson its commission of $86,862.84 plus 

interest at 6 percent on that amount from the date of breach 

to the date of judgment. The total judgment amount entered 

on March 25, 1985, was $111,936.45. The second summary 

judgment dismissing Baltrusches' counterclaim was entered 

August 26, 1986. The court found Ellingson entitled to 

judgment at 10 percent on the $111,936.45 judgment. The 

Baltrusches contend the interest at 10 percent on the initial 

judgment, which included a 6 percent interest award, is in 

violation of § 25-9-205, MCA. Section 25-9-205, MCA, 

provides : 

(1) Except as provided in subsection 

(2), interest is payable on judgments 

recovered in the courts of this state at 

the rate of 10 percent per annum and no 

greater rate. Such interest must not be 

compounded in any manner or form. 
(2) Interest on a judgment recovered in 

the courts of this state involving a 

contractual obligation that specifies an 

interest rate must be paid at the rate 

specified in the contractual obligation. 

In this case, Ellingson's damages were ascertainable on 

the date of breach, and it was entitled to interest thereon 

pursuant to 27-1-211, MCA. The legal interest rate was 6 

percent pursuant to former S 31-1-106, MCA. The District 

Court correctly included 6 percent interest from the date of 

the breach to the March 25, 1985, judgment. Section 

25-9-204, MCA; Gallatin Valley Elec. Ry. v. Neible (1919), 57 

Mont. 27, 186 P. 689. On that date a judgment amount was 

entered, and Ellingson was entitled to 10 percent interest on 

the judgment under 5 25-9-205, MCA. This is not compound 

interest; rather, it is interest on the judgment, and the 

District Court did not err in making the award. See, Ehly v. 

Cady (Mont. 1984), 687 P.2d 687, 696, 41 St.Rep. 1611, 1621. 

The method used by the District Court in calculating 

interest is correct. Summary judgment motions granted by the 

District Court (1) in favor of respondent Ellingson's claim 

and (2) denying appellant Baltrusches' counterclaim are 

reversed and remanded with instructions to vacate. 

We concur: 1 

I dissent to the majority's decision on Issues 1 and 2. 

The terms of the listing agreement entitle Ellingson to a 

commission upon exchange of the contract property. The 

pertinent part of the agreement reads: "In the event . . . of exchange or conveyance of said property, . . . during the 

term of your exclusive employment . . . I agree to pay . . .I1. Thus, the outcome of the commission issue depends on 

whether or not an exchange has occurred. Section 30-11-112, 

MCA, defines an exchange as follows: 

Exchange is a contract by which the parties 

mutually give or agree to give one thing for 

another, neither thing nor both things being money 

only. 

Here the Baltrusches conveyed their vendee's or 

equitable interest in the property to McAfees. In exchange 

the McAfees released them from substantial monetary payments, 

due currently and in the future, under the contract. McAfees 

obtained the property back and Baltrusches obtained the 

release. Under Montana law, an exchange occurred. They gave 

one thing for another, neither thing being money. The 

exchange triggered the commission provided for by the 

agreement. 

The terms of the listing agreement are clear. The 

signed listing agreement was the final contract between the 

parties. There is no ambiguity as to its terms. The 

Baltrusches are experienced businessmen. The admission of 

parol evidence to determine the intent of the parties 

violates the parol evidence rule. Any agreement reduced to 

writing is the final agreement of the parties and if not 

ambiguous should stand. 

As to the second issue, Baltrusche's counterclaim should 

have been dismissed. Ellingson did not owe a fiduciary duty 

as broker to affirmatively disclose to Baltrusches that a 
commission would be due in event of an exchange or conveyance 

back to McAfees. The listing agreement already provided for 

the commission. 

A fiduciary duty between broker and seller is breached 

when the seller is fooled or deceived by the contract or does 

not understand its content. Nardi v. Smalley (Mont. 1982), 

643 P.2d 228, 39 St.Rep. 606. None of these elements appear 

here. With the myriad of real estate transactions involving 

pecuniary sales or exchanges including not only real property 

but personal and mixed property, and all of the various 

combinations thereof, an expansion of the fiduciary duty to 

affirmatively disclose when it is clear in the parties' 

written agreement, opens the door to extensive uncertainty of 

the law. The District Court was correct in dismissing 

Baltrusches' counterclaim.