No. 86-495
INTHE SUPREME COURT OF THE STATE OF MONTANA
1987

ROBERT A. HILLSTROM and PATRICIA A. HILLSTR.OM,
Plaintiffs and Respondents,-vsSTEVEN J. O'NEILL,
Defendantand Appellant.

APPEAL FROM: DistrictCourtof the EighteenthJudicial District, Inand for the Countyof Gallatin, TheHonorableJoseph Gary, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Peter M. Meloy, Helena, Montana For Respondent:

J. Robert Planalp, Bozeman, Montana

Submittedon Briefs: March 12, 1987
Decided: April 21, 1987
Filed:

### APk i

9570 ClerkMr. Justice JohnConway Harrison delivered the Opinion of the Court.

Defendant Steven O'Neil appeals the October 29, 1985, order of the Eighteenth Judicial District Court granting summary judgment in favor of plaintiffs Robert and Patricia Hillstrom. We affirm. This case involves breach of a buy-sell contract. Robert and Patricia Hillstrom were the sellers and Steven OINeilthe buyer. Hillstroms desired to sell a ten acre tract of land located in Gallatin County, Montana. OINeil sought land in the area fordevelopmentpurposes. On June 2, 1983, O'Neil executed a document entitled "Earnest Money Receipt and Agreement to Sell and Purchase". Hillstroms signed the agreementon June 9,1983. The buy-sell agreement provided for a purchase price of $225,000 with $6,000 in earnest money due upon execution of the contract, $69,000 due at the time of closing,assumption of an $18,000 underlying contract, and the balance of $132,000 due in monthly installments with interest accruing from the date of closing at 10%. The contract further provided for two partial releases. Upon Hillstroms' receipt of $100,000 of principal from OINeil,Hillstroms would "deed property east of road and west of river" to OINeil. Upon receipt of $50,000 of the principal amount, Hillstroms were required to deed propertywest of the road to O'Neil. OINeil had choice of first release and was required to pay for all costsof releasesand surveys. The buy-sell contract was drawn by O'Neil's real estate agent and contained wording in large print, "THIS IS A LEGALLY BINDING CONTRACT, IF NOT UNDERSTOOD, SEEK COMPETENT ADVICE". Closingwas set forAugust 1, 1983. O'Neil wired a telegram to Hillstroms stating, "Your acceptance on June 9,1983, is considered by me to create a valid and binding agreement." Prior to closing O'Neil became concerned about securing the necessary approval of county authorities regarding his subdivision plans. The closing date was extended to August 4, 1983, by agreement of the parties. On August 4, 1983, O'Neil refused to close. O'Neil proposed that closing be postponed until a survey of the tract could be performed. O'Neil also requested documents showing consent by Corcoran and Spain to O'Neil's assumption of the contract, and transferring all appurtenant water rights to O'Neil. Hillstroms provided O'Neil with Corcoran and Spain's consent to assignment but refused to delay closing to allow survey as requested by O'Neil. The parties were unable to come to terms and Hillstroms filed an action for specific performance August 19, 1983. Following discovery, both parties filedmotions for summary judgment. Hearingwasheld and the District Court entered its order October 30, 1985, granting summary judgment in favor of Hillstroms. O'Neil appeals and raises the following issues: 1) Whether the DistrictCourt erred in granting summary judgment? 2) Whether the District Court erred in granting specific performance? 3) Whether rescission was proper for failure of Hillstroms topermit surveyingto be completed? 4) Whether there was a mutual mistake of fact as to subdivisibilityof the land coveredby the contract? 5) Whether the District Court erred in granting specific performance of the buy-sell agreement without reference to the proposed closing agreement? O'Neil contends there were genuine issues of material fact precluding summary judgment in this case. Pursuant toRule 56(c)

## , Mont.R.Civ.P.

## , summary judgment is proper where the record discloses no genuine issue of material fact and themoving party is entitled to judgmentas amatter of law. All reasonable inferences thatmay be drawn from the offered proof are to be drawn in favor of theparty opposing summary judgment. Abell v. Travelers InsuranceCo. (Mont. 1983), 663 P.2d 335, 40 St.Rep. 738. A review of the record in this
case reveals no genuine issue of material fact and supports the summary judgment in favor ofHillstroms. O'Neil next contends that specific performance should not have been granted because Hillstroms had not fully complied with their obligations under the contract. Section 27-1-416, MCA, requires a party to perform all material conditions precedent before specific performance may be enforced. O'Neil claims Hillstroms failed to satisfy 3 conditions prior to closing: 1) failure to allow O'Neil to perform a survey; 2) failure to secure a consent to assignment from Corcoran and Spain; 3) failure to provide title insurance. As notedby theDistrict Court,none of theseprovisions

are listed in the contractas conditionsprecedent. Of these 3 items only title insurance is mentioned but there is no requirement that it be due upon closing. In fact, it was O'Neillsrealestate agent whowas involved in securing title insurance and it was completed July 29, 1983,and delivered to O'Neil August 5, 1983. We find no support for OINeills contention that failure to have title insurance in hand on August 4, 1983, excused his performance nor were there any conditions precedent which Hillstroms failed to perform. Section 27-1-411(4), MCA, provides that specific performance may be compelled when the parties to a contract have expressly agreed in writing that specific performance shall be an available remedy. The buy-sell agreement signedby the parties expressly provided for a remedy of specific performance and Hillstroms were entitled to pursue this remedy. The third issue is whether O'Neil was entitled to rescission due to Hillstroms' refusal to permit survey prior to closing. O'Neil asserts that subdivisibility of the tract is a contractual condition implied by the partial release clause of the buy-sell agreement. The release clause allows OfNeilto acquire deed to a portion of the land upon payment of a percentage of the entireprincipal owing to Hillstroms. However,before partial releasecan occur, state law requires the land to be surveyed, platted, and approved for subdivision. This issue is merely a rephrasing of O'Neil's previous argument that survey was a condition precedent to closing. There isno language in the contract indicating completion of

a survey to be a conditionprecedent. We find no support in the record for O'Neilfscontention that closing should have been delayed topermit a survey tobe accomplished. The fourth issue is whether there was a mutual mistake of fact as to subdivisibility of the land covered by the contract. TheDistrictCourt found O'Neil's claim ofmistake of fact tobemeritlessbecause O'Neil has never attempted to have the property subdivided. We agree. Mistake of fact as found in S 28-2-409(1),MCA,requires, "Unconscious ignorance

or forgetfulnessof a fact,past orpresent, material to the contract." To succeed on a mistake of fact defense, OfNeil would have to show that the land cannot be subdivided. O'Neil admitshe hasnotmade sucha showing. O'Neil contends that mistake of fact is applicable because neither party understood the extent and complexity of the regulations concerning subdivision approval. While Hillstroms contend O'Neil raises this argument for the firsttime on appeal, we find it was presented in O'Neil's supplemental brief filed with the District Court. At any rate,O'Neil's argument failson itsmerits. O'Neil was under the duty to execute the buy-sell agreement with the prudence and care of a reasonable and cautiousbusinessman. Quinnv. Briggs (1977),172Mont. 468, 565 P.2d 297. The record shows O'Neil is an experienced businessman who has operated 6 silver companies including the largest silver recycling company in the country, purchased and sold numerous homes, and he is the sole stockholderof a corporation which owns a ranch inGallatinCounty adjacent to the land under dispute in thiscase. O'Neil's deposition testimony reveals that he was aware of the obstacles to subdivision approval because he was experiencing difficulties obtaining subdivision approval for the ranch at the time he negotiated the contract with Hillstroms. He cannot now claim thathe entered thebuy-sell agreement intending to develop the land yet was unaware of the requirementsof subdivisionapproval. The final issue is whether the District Court erred in granting specific performance of the buy-sell agreement without reference to theproposed closingagreement. We find

no error. The proposed closing agreementwas never signedby O'Neil and is not enforceable without his consent. Section 28-2-102, MCA. The District Court order granted specific performance of the buy-sell agreement and does not mention theproposed closingagreement. O'Neil argues both sides on this issue, stating that he refused to sign the closing contract yet he is entitled to the protections of a closing contract. In this instance,we find the essential terms of the parties' agreement are contained in the buy-sell agreement and it is specifically enforceable. This Court has previously upheld specificenforcement ofbuy-sell agreements. See Chadwick

### v. Giberson (Mont. 1980), 618P.2d 1213, 37 St.Rep. 1723; ~alcro v. Moon, (Mont. 1987), 

### -P.2d 

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## ,44 St.Rep. 504. The District Court is affirmed.

Justices