No. 85-338 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

VERNON WESTLAKE, Personal Representative 

of the Estate of Harry D.R. Larson, 

Decea-sed, 

Plaintiff and Appellant, 

CHARLES R. OSBORNE and LOIS MARIE 

OSBORNE, husband and wife, and 

DENNIS HARDIN, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighteenth ~udicial ~istrict, 

In and for the County of Gallatin, 

The Honorable Frank M. Davis, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

H. A. Bolinger, Bozeman, Montana 

For Respondent : 

Gregory 0. Morgan,(Osborne), Bozeman, Montana 

Corette, Smith, Pohlm.a.n, & Allen; Karshal L. 

Mickelson, (Hardin) , Butte, Montana 

- 

Submitted on Briefs: Nov. 29, 1985 

Decided: February 5, 1986 

Filed: Ftb 5 i986 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

Appellant, Vernon Westlake, personal representative of 

the Estate of Henry Larson, appeals from the judgment of the 

District Court, Eighteenth Judicial District, County of 

Gal latin, entered following the court's order granting the 

motions for summary judgment of respondents, Charles and 

Marie Osborne, and Dennis Hardin. We affirm. 

The record of this case, as contained in the depositions 

on file, shows that Charles Osborne and the deceased, Harry 

Larson, were friends. The two agreed that they would enter 

into sale and lease back agreements with regard to real 

property owned by Larson and used as his residence. 

Sometime ir, the latter part of February 1982, the two 

men sought the assistance of Dennis Hardin, licensed real 

estate broker and investment counselor to assist them in the 

transaction. Both men had dealt with Hardin in the past. 

They told Hardin tha-t they had struck a bargain with regard 

to the sale of the Itarson residence. Hardin then elicited 

the details of the transaction from them and explained that 

they would need title insurance and proper agreements drafted 

by an attorney. Hardin then relayed the details of the 

transaction to Ed Sedivy, the attorney who drafted the 

agreements. The documents prepared by Sedivy were thoroughly 

reviewed by Larson and Osborne. 

Larson's titl-e was subject to an unpaid balance of 

$3,200 on a $6,000 mortgage owing to Larson's sister, Ella 

Westlake. Appellant, Vern Westlake, is the son of Ella 

Westlake and the nephew of Larson. 
Due to the existing mortgage on the property, Hardin 

telephoned Ella Westlake prior to closing the tramsaction. 

She told Hardin to consult her son. After learning of the 

transaction from Hardin, Vern Westlake contacted Larson and 

Larson told him that he wanted to sell his house to get his 

financial affairs straightened out and that it wasn't really 

any of Westlake's business. 

Prior to closing, Larson, Vern Westlake, Ella Westlake 

and Hardin met in Hardin's office. At that time Vern 

Westlake asked Larson if he was sure he knew what he was 

doing and explained that if he was in a financial bind Ella 

Westlake would refinance the note and mortgage she held on 

the property. Larson told Vern Westlake that all he was 

really interested in was getting his sister's mortgage off 

the property. 

The sale and lease back agreements were signed. on March 

1, 1982. The terms of the sale were as follows: 

1. Purchase Price. Buyer agrees to pay and Seller 

agrees to accept, as payment in full- for the 

property above referred to, the total sum of 

$16,650.00 which sum shall be paid as follows: 

A. The sum of $4,050.00, the receipt whereof is 

hereby acknowledged. 

B. The balance in the sum of $12,600.00 shall he 

paid at the rate of $350.00 per month for 

thirty-six (36) months, which shall be satisfied by 

Seller's leasing said property and remaining in 

possession for thirty-six (36) months. A copy of 

said lease is attached as Exhibit "A". It is 

understood that this lease is not assignable by 

Seller as Tenant, and shall terminate upon death of 

Tenant. In the event -- of such termination, if prior 

-- to the thirty-six month period, the unpaidbalance 

-- of this purchase price shall - be deemed satisfied. 

(Emphasis added. ) 

The closing of the transaction took place on March -5, 

1982. At that time, Larson was 78 years old and in poor 

health., having suffered from heart difficulties since 1979. 
The closing itself was handled by Teddy Annear of Gallatin 

Title Company. The day before the closing, Larson asked 

Annear to conduct the closing in such a manner that the 

Mestlakes would not know about the terms of the sale. Thus, 

the closing was a bifurcated transaction. First, Ella 

Westlake was paid the balance of her debt which was secured 

by Larson's property and then the actual closing of the 

transaction took place. 

At the closing Annear observed that Larson was alert and 

aware of what was going on around him, that he did not appear 

to be confused or upset about the transaction, and that he 

appeared to understand what he was doing. Hardin was also of 

the opinion that Larson's age and health had no effect on his 

mental state. 

Both Ella Westlake and Vern Westlake learned of the 

transaction prior to Larson's death on November 9, 1982. 

After Larson's funeral Charles Osborne called Vern Westlake 

and asked when Larson's personal property would be removed 

from the residence, as he intended to take possession 

pursuant to the agreement. Vern Westlake refused Osborne 

access to the property. 

Thereafter, Vern West lake, as Larson ' s personalrepresentative, brought this action to set aside the contract 

of sale, deed and lease hack alleging fraud, undue influence 

and unconscionability. Following discovery, motions for 

summary judgment were filed by both the Osbornes and Hardin. 

Orders granting both motions for summary judgment were 

granted and a final entry of judgment was entered whereupon 

Westlake appealed. 

Westlake raises two issues on appeal: 
1. Whether the District Court erred in granting summary 

judgment to respondent, Dennis Hardin; and 

2. Whether the District Court erred in gracting summary 

judgment to the respondents, Charles and Lois Osborne. 

With regard to all the respondents, Westlake claims that 

summary judgment was improper because of factual issues 

present in the case. It is true that the party moving for 

summary judgment has the burden of est.ablishing the absence 

of any genuine issue of material fact, and the party opposing 

the motion must supply evidence supporting the existence of a 

genuine issue of material fact.. Pretty on Top v. City of 

Eardin (1.979), 182 Mont. 311, 315, 597 P.2d 58, 60. The 

general purpose of Rule 56, M.R.Civ.P., is to eliminate 

unnecessary trial, delay and expense. The purpose of the 

hearing on the motion is not to resolve factual issues, but 

to determine whether there is any genuine issue of material 

fact in dispute. The opposing party's facts must be material 

and of a substantial nature, not fanciful, frivolous, gauzy 

nor merely suspicions. Silloway v. Jorgenson (1965), 146 

Mont. 307, 310, 406 P.2d 1-67, 169. Implications based upon 

what Vern Kestlake thought are not enough. Cheyenne Western 

Bank v. Young (1978), 179 Mont. 492, 497, 587 P.2d 401, 404. 

With regard. to both the Osbornes and Hardin, Westlake 

raises no genuine issue of material fact. Vern westlake's 

own deposition removed all doubt as to whether there was a 

genuine issue of fact. The deposition reveals the following 

with regmd to Hardin: 

Q. Do you have any testimony or any evidence that 

you can tell me about here or refer me to that lead 

you to conclude that Mr. Hardin acted in some sort 

of a conspiracy with the Osbornes to cheat or 

defraud Harry Larson? A. Honestly I can't say 

that I have any more than an opinion derived from 

reading the agreement, knowing that Mr. Hardin 
acted as an agent or an arranger for the Osbornes 

and for Harry to get my mother and I in there to do 

the final settlement. Now that's my basis. 

With regard to the Osbornes, Westlake's deposition contains 

the following questions and. answers: 

Q. So, would it be fair to say that the basis of 

your complaint against the Osbornes is an opinion 

derived from reading the agreement. A. Based on 

the agreement. 

Q. Okay. As I recall your testimony with Mr. 

Pohlma-n, and I think I'm quoting it accurately 

because I wrote it down here. "I'm basing 

everything on the fact that this is a poor, 

unethical contract." Would that be fair? A. That 

would be fair. 

Aside from Westlake's "opinion" there is no genuine issue of 

material fact that appea.rs of record. Westlake, however, 

does list several factual issues in conclusory fashion in his 

brief. As stated above, this is not an appropriate means of 

opposing a motion for sun?mary judgment. We hold. that the 

District Court did not err in granting summary judgment.. 

Having determined that summary judgment was proper, we 

must now determine whether the respondents were entitled to 

judgment as a matter of law. 

Westlake first contends that the transaction in this 

case should. be set aside under theories of constructive fraud 

and undue influence. Montana has codified th.e common law 

principles of constructive fraud at section 28-2-406, MCA, 

which provides: 

Constructive fraud consists in: 

(1) any breach of duty which, without a.n actual 

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. 
What constitutes undue influence is stated at section 

28-2-407, MCA, which provides: 

Undue influence consists in: 

(1) the use by one in whom a confidence is reposed 

by another or who holds a real or apparent 

authority over him of such confidence or authority 

for the purpose of obtaining an unfair advantage 

over him; 

(2) taking an unfair advantage of another's 

weakness of mind; or 

(3) taking a grossly oppressive and unfair 

advantage of another's necessities or distress. 

We hold that both of Westlake's claims--constructive 

fraud and. undue influence--have no basis in fact in this ca.se 

as to any of the respondents. See Turley v. Turley (19821, 

199 Mont. 265, 274-75, 649 P.2d 434, 438-39. 

Westl-ake next contends that the sales agreement between 

Larson and the Osbornes was unconscionabbe. Westlake bases 

his contention on the language of the agreement, cited above, 

that cancelled the Osbornes' monthly installment payments of 

$350.00 upon the death of Larson. 

This Court in the past has looked to the official 

comrr~ent to section 2-302 of the U.C.C. for the basic test for 

unconscionability. All State Leasing v. Top Hat Lounge 

(1982), 198 Mont. 1, 6, 649 P.2d 1250, 1252-53. The official 

comment to section 2-302 of the U.C.C. suggest the following 

test: 

[Wlhether, in light of the general commercial 

background and the commercial needs of the 

particular trade or case, the clauses involved are 

so one-sided as to be unconscion.ahle under the 

circumstances existing at the time of the making of 

the contract . . . The principle ---- is one of the 

prevention - of oppression and unfair surprise. 

There is no evidence in this case outside of Vern Westlake's 

"opinion" that points to any oppression, prejudice, or unfair 

surprise. It appears that what Westl-ake is really 
challenqing Is the sufficiency of consideration for the 

cancellation of the Osborne's indebtedness upon Larson's 

death. But insufficient consideration or inadequacy of 

consideration are not grounds for setting aside or refusing 

to enforce a contract. Hodgkiss v. Northland Petroleum 

Consol. (1937), 104 Mont. 328, 334, 67 P.2d 811, 814; 

Pederson v. Thoeny (1930), 88 Mont. 569, 576, 295 P. 250, 

252. Westlake had the burden to raise facts from which 

reasonable men might conclude that there was oppression, 

prejudice or unfair surprise. Having failed to do this, 

summary judgment against Westlake and in favor of respondents 

was proper on this issue. 

Westlake last contends that the District Court 

considered improper evidence in qrznting Hardin's motion for 

summary judgment. Westlake argues that the District Court 

relied on improper hearsay testimony of Hardin to conclude 

that Larson and Osborne had an agreement negotiated and 

finalized prior to Hardin's involvement-. We find this 

argument unavailing because, as Hardin points out, there was 

other testimony by Charles Osborne by which the District 

Court could have reached the same conclusion. Osborne's 

testimony was not subject to a hearsay objection. 

We affirm the District Court. 

Me Concur: