### No. 80-313 INTHE SUPREME COURTOF THE STATEOF MONTANA 1981

KATHERNWe HUNSAKER RAGEN, Plaintiff,Cross-Defendant and Respondent,

ARLO B. 

### WESTONAND VERNETTA C. WESTON,Husband and wife, DefendantandAppellant.

Appeal from: District Courtof the First JudicialDistrict, Inand for the County of Broadwater, TheHonorable CardonBennett, Judgepresiding.

Counsel of Record: ForAppellant: Small,Hatch and Doubek, Helena,Montana

ForRespondent: IIooks & 

### Budewitz, Townsend,Nontana

Submittedon Briefs: January 22, 1981 Decided:

# MAR2

## 51981Mr. JusticeGene B. Daly delivered theOpinion of theCourt. This appeal arises from a partial summary judgment entered against the defendants and infavor of theplaintiff by theDistrictCourt of theFirstJudicialDistrict, inand for the County of Broadwater. Plaintiff, formerly Kathern Hunsaker, now Kathern Ragen, was the equitable owner of certain real property in Townsend, Montana, where she conducted a drygoods business. On July 20, 1978, Ragen entered into an agreement to sell the inventory of her business and to lease for $500 a month the real property to defendants, Arlo and Vernetta Weston. In the lease agreement, which expired on February 15, 1979, defendants were also granted an irrevocable option to purchase the building and fixtures for a sum of $75,000, less all rentals previously paid. The agreement further provided that, if the option was exercised, the Westons would pay toRagen 29 percent of the totalpurchase price in the year of the sale and the balance would be paid over a period of tenyears. The Westons, in an apparent effort to exercise the option, advised Ragen that they had forwarded a $17,000 check to the StateBank of Townsend tobe used as a portion of the downpayment. The parties then executed a contract for the saleof the real property, dated February 22, 1979, in accordance with the 

### terms provided in the lease and option to purchase. The Westons paid their first installment of $500 under the contract on or about March 1, 1979. However, when Ragen went to the State Bank of Townsend to pick up the $17,000 downpayment on March 9, 1979, she was informed that the check would not be honoredbecause there were insufficient funds in the account on which it was written. Failing toreceive the agreed upon downpayment, Ragen notified defendants in writing on March 13, 1979, that the contract was deemed rescinded and that she was treating the $500 alreadypaid asrent for themonth of March. Plaintiff further demanded that defendants vacate the premises on or before March 31, 1979. On November 7, 1979, Ragen filed a complaint against the Westons seeking payment for real property taxes levied and assessed againsttheproperty for and during the term of the lease as provided in the lease agreement; payment for the reasonable value of certain fixtures sold by defendants during their occupancy of the premises; and payment for the reasonable value of a typewriter defendants refused to return upon vacating the property. The Westons denied any indebtedness toplaintiff and filed a counterclaim alleging that Ragen had wrongfully rescinded the agreement to purchase the property which resulted in damages in the amount of $25,000. In addition, the Westons alleged that during the term of the lease they placed approximately $6,000 worth of fixtures in the building and thatby reason of the wrongful rescission and plaintiff's retention of these fixtures, they had been further damaged in that amount

# . Following discovery, plaintiff filed a motion for summary judgment on all liability issues. Defendants responded with their motion for summary judgment with respect to Ragen's claim for the real property taxes. The District Court, on May 22, 1980, granted Ragen's motion forsummary judgment as to her claim for the real property taxes, with the exact amount of the taxes tobe determined attrial or at an evidentiary hearing. The court further ordered thatthemotion for summaryjudgment on the issueof defendants' liability for the value of the typewriter and the fixturesbe denied in thatmaterial issuesof fact still remain. The court then granted summary judgment for plaintiff on both of defendants' claims for damages and ordered that the counterclaims be dismissed. Judgment was

soentered onMay 28, 1980, and defendantsnow appeal. The following issuesarepresented for our review: 1. Did theDistrictCourt err in grantingplaintiff summary judgment on the issue of defendants' liability for thepayment of the realproperty taxes? 2. Did the District Court err in rejecting defendants' counterclaims for damages resulting from a wrongful rescission of the purchase agreement and for damages resulting from a wrongful retention of certain fixtures? This Court has consistently held that the party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the movant 

### is entitled tojudgment as a matter of law. Reaves

v. Reinbold (1980), Mont. 

## , 615 P.2d 896, 37 St.Rep. 1500; Harland v. Anderson (1976), 169Mont. 447, 548 P.2d 613; Kober v. Stewart (1966), 148 Mont. 117, 417 P.2d 476. Here, the District Court could properly grant the summary judgment on the issue of defendants' liability for theproperty taxes onlyby findingthattheleaseand optiontopurchase agreement entered into by the parties required defendantstomake thepayments. The agreement 

### is clear and specificallyprovides asfollows: "By reason of concessions made by Hunsaker with respect totheoption topurchasebelow 

### set forth, Westons agree to pay the real property taxes levied and assessed against thepremisesduring the

### term of their lease, and also agree to pay Hunsaker's fire insurance for the period of said lease. Hunsaker shall be entitled upon receipt of taxnoticeor insurancepremiums orboth, to make demand of Westons for payment of these items, and Westons agreetopay the same." Defendants maintain that the agreement to pay the real property taxes was conditioned upon their exercising the option to purchase and that, as a result of this assertion, a material issue of factremains tobe resolved. Wemust disagree. It is fundamental that the language of a contract willgovern its interpretation if thatlanguage 

### is clear and explicit and does not result in an absurdity. See section 28-3-401, MCA; Danielson v. Danielson (1977), 172Mont. 55, 58, 560 P.2d 893, 894; Nelson v. Combined Insurance Company of America (1970), 155 Mont. 105, 113, 467 P.2d 707, 712. The pertinent language in this instance is unequivocal, unambiguous, and requires no interpretation. It specifically states that "Westons agree to pay the real property taxes levied and assessed against the premises during theterm of their lease." Nowhere inthecontract is there additional language indicating that thisprovision is qualified by a condition that the option topurchase first be exercised. The applicable provision must be given effect as written by the parties; thus, the District Court properlygranted plaintiff summary judgment on the issue of liability. The second issue concerns defendants1 claim of wrongful termination. Section28-2-1711, MCA, provides that

apartymay rescind a contract inthe following cases: "(1) if the consent of the party rescinding or of any party jointly contracting with him was given by mistake or obtained through duress, menace, fraud or undue influence exercised by or with the connivance of the party as towhom he rescinds or of any other party tothe contractjointly interestedwith such party; "(2)if, through the faultof theparty as to whom he rescinds, the consideration for his obligation failsinwhole or in part; "(3) if such consideration becomes entirely void from any cause;" In this instance, plaintiff, after being informed by defendants that the agreed downpayment on the option to purchase had been deposited atthe State Bank of Townsend, executed the contract atissue. This contractprovided that the $75,000 purchase pricewas tobe paid asfollows: "A. The sum of Three Thousand two hundred fifty Dollars ($3,250.00), the receipt of which 

### is hereby acknowledged by seller, said sum representing the credit given to buyers for rentals heretofore paid under the lease and option of July20, 1978. "B. The sum of Seventeen thousand Dollars ($17,000) upon execution of this agreement, the receipt thereof being hereby acknowledged by seller. "C. The balance of Fifty-four thousand seven hundred fifty Dollars ($54,750.00), together with interest 

# . . . to be paid in regular monthly installments, each in the amount of Five hundred Dollars ($500.00), the first monthly installment being due and payable on the 1stday of March, 1979." Upon reading the contract, it is obvious that the $17,000 check deposited in the StateBank of Townsend was anessential part of the consideration to be received by plaintiff and an inducement for executingthe agreement. It 

### is uncontroverted, however, that plaintiff never obtained thismoney because the check was dishonored due tothe lack of sufficient funds. Since the consideration failed, the remedy of rescissionwas properly available. Section 28-2-1713, MCA, specifies how rescission is accomplished: "Rescission, when not affected by consent, can be accomplished only by the use on the part of the party rescinding of reasonable diligence tocomply withthe followingrules: "(1) He must rescind promptly upon discovering the facts which entitle him to rescind if he is free from duress, menace, undue influence, or disability and is aware of hisrighttorescind. "(2) He must restore to the other party everything of value which he has received from him under the contract ormust offer to restore the same, upon condition that such party shalldo likewise, unless thelatter is unable or positively refusestodo so." Here, rescission was prompt. Within three days of having thedownpayment check dishonored, plaintiff delivered

a written notice of rescission to defendants and their attorney setting forth the grounds for the action. Furthermore, the status quo existing prior to the contract topurchase was preserved in that the $500 installment paid by defendants was credited asrent for March 1979, allowing them to remain on the premises until the end of the month. Section28-2-1713, MCA, must be deemed satisfied. Defendants argue that we should look solely to the default clause contained in the agreement to purchase in determining Ragen's proper remedy. In rejecting this argument, we note that this case does not involve a meredefault in the payment of an installment but concerns the totalfailureof considerationessential for thevalidityof the contract. The consideration having failed, the remedy of rescission was available and, when exercised, the contract, including the default clause, was extinguished. See section28-2-1701(2), MCA. Defendants further argue that the State Bank of Townsend erroneously refused to honor the $17,000 check; thus, it was the Bank's fault, not theirs, that this consideration failed. We acknowledge this contention but must conclude that any claim for damages based on this assertion lies against the Bank for wrongful dishonorment, not against plaintiff for wrongful termination of the contractatissue. We findno error intheDistrictCourt's dismissal of defendants' claims for damages based upon a wrongful rescission and termination of thecontract. The Westons' final claim for damages arises from plaintiff's allegedwrongful retention of fixturesplaced on the premises by defendants during their occupancy. The District Court dismissed this claim, finding it without basis. We agree with the court's conclusion. Defendants contend that plaintiff will be unjustly enriched if she is allowed to retain the fixtures. What defendants fail to realize, however, is that a fixture, by definition, is part of the real property tobe retained by the owner of the premises at the expiration of the lease. See sections70-15-101, 70-15-103, and 70-18-101, MCA. Defendants argue that even though the fixture is considered part of the realty, a tenant under certaincircumstances is still entitled to its removal, citing section70-18-102, MCA: "A tenant may remove from the demised premises, any timeduring the continuance of his term, anything affixed thereto for the purposes of trade, manufacture, ornament, or domestic use if the removal can be effected without injury to the premises unless the thing has, by the manner in which it is affixed, become an integral part of the premises." We agree that a tenant is generally accorded the right to remove certain trade fixtures; however, thisright 

### is not without limitation. As the above-cited statute indicates, the removal is to be accomplished during "the continuance of histerm." Defendants have alleged no effort being made to

remove the fixturesprior tovacating thepremises; nor have they alleged that plaintiff interfered with such an effort. In fact, defendants waited untilJanuary 2, 1980 (some nine months after leaving the premises), to assert any claim. Furthermore, the claim finally asserted was for the reasonable value of the fixturesbased upon an allegationof wrongful rescission and not for removal of the improvements

as trade fixtures. On the submitted record, section 70-18-102, MCA, has no application to this proceeding, and defendants' claimwas properly rejected. Thejudgment of theDistrictCourt 

### is affirmed. 

# J JusticeWe concur:

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