No. 85-342 INTHE SUPREME COURT OF THE STATE OF MONTANA 1987

CRYSTAL SPRINGSTROUT COMPANY, a Montanacorporation; THOPAS NYQUIST and VIRGINIANYQUIST, husband andwife; KENNETH NYQUIST and KATHLEEN NYQUIST, husband and wife; RONALD PRESTON; ROBERT MOORE and PEGGY MOORE, husband a.nd wife; and EARL BRADFORD and ALICE BRADFORD, husband and wife, Plaintiffsand Respondents,

FIRST STATE BANK OF FFOID, a banking corporation, and JERRY R. WALLANDER, Defendants and Appellants.

APPEAL FROM: DistrictCourtof the FirstJudicial District, Inand forthe Countyof Broad.water, TheHonorable GordonRennett, Judge presiding.

COUNSEL OF RECORD:

For Appellant: Goetz, Madden & Dunn; JamesH. Goetzargued, Bozeman, Montana For Respondent: Gough, Shanahan, Johnson & Wa-terman; RonaldWaterman argued, Helena, Montana Garrity, Keegan & Brown; DonaldGarrity, Helena., Montana

Submitted: October 21, 1986 Decided: January 15, 1987

I 

# i2kz*0-ClerkMr. Justice John C. Sheehy delivered the Opinion of the Court.

The First State Ba~kof Froid (Bank) appeals the judgment of the District Court, First Judicial District, County of Broadwater, awa.rding compensatory and punitive damages to plaintiffs Crystal Springs Trout Company (CSTC) and its shareholders for breach of an oral contract to loan money and for negligent misrepresentation. Plaintiffs have cross-appealed on two issues concerning the terms of the final judgment. We affirm inpart and.reverse in part. TheBank raises eight issues: 1. Whether the DistrictCourt erred.when it found Froid Bank liable for the tortious acts of its agent, Jerry B. Wallander, but concluded that Wallander had. no personal liability? r 2. Whether the District Court's damage award was erroneous because theDistrictCourt failed to determine that plaintiffs' damages were proximately caused by any of Froid Bank's acts? 3. Whether the District Court applied an incorrect

measure of damages when it awarded the individual shareholders their entire initial investment plus interest for Froid Bank'sbreach of commitment to provide financingto CSTC?4. Whether the District Court erred when it awarded damages to the individual shareholders for losses sufferedby the corporation? 5. Whether the District Court. erred in refusing to permit comparison of Jerry Wallander's misconduct with that of the CSTCprincipals?6. Whether Jerry F7alland.er's conduct was sufficiently culpable to support punitivedamages? 7. Whether the District Court erred in awarding defendant Froid Bank all of plaintiffs' assets and concomitant liabilities as an offset to damages awarded against both CSTC and the individual plaintiffswhere CSTC's liabilitiesexceeded thevalue of its assets? 8. Whether the District Court erred in awarding the individual shareholders interest on their loss of investment at the rate of ten percent forperiods prior to July 1, 1979? The plaintiffs raise two issues on cross-appeal: 1. Whether JerryB. Wallander is jointly liable for the judgment againsttheBank? 2. Whether the damage award received by CSTC and its shareholderswas inadequate? FACTUALBACKGROUND Plaintiff CSTC is aMontana corporation,incorporated in 1977 for the purpose of raising trout for commercial sale. Itwas initially capitalized through the saleof common stock to Ron Preston,TomNyquist,and other members of the Nyquist family

# . The other plaintiffs in this case are the shareholders of CSTC: 1) Tom andVirginia Nyquist; 2) Ken and Kathleen Nyquist, Tom's father and mother; 3) Robert and Peggy Moore, Tom's sister and brother-in-law; 

### 4) Earl and Alice Bradford, Tom's wife's parents; 5) Ron Preston, Tom's business school friend and associate. Defendants are the First State Bank of Froid and Jerry Wallander, former Bank president. Wallander succeeded his father as Rank president in 1969, and held that position until 1982 when he was asked to resign by the family. TheFroid Bank is essentially a family-owned Bank, with the Wallanders owning over 90% of the stock in the Bank corporation. Jerry Wallander and Ken Nyquist grew up together in Froid, and Wallander was also Ken's lawyer and business advisor. CSTC was incorporated in May, 1977, and was the brain child of Tom Nyquist and Ron Preston, two 1973University of Montana business school graduates. Its operations were located at Big Springs, a series of natural springs downstream from the dam at Toston,Montana. In the summer of 1977, Tom Nyquist began acquiring water and land leases for the trout farm. By the fall of 1977, construction was underway. Plaintiffs built a hatchery building and several dirt raceways. They continued to expand through the winter months,and by spring of 1978had approximately 825,000young fish in the racewaysand 200,000 fingerlings in the hatchery. OnMay 20, 1978,an earthen ditchwhich carriedwater to theproject areabreached. Approximately 700,000 fish in the raceways were destroyed. Prior to this washout, plaintiffs had planned to line the ditchwith gunnite to strengthen it. Rs there had been no previous record of a washout on this ditch, they had planned to line the ditch after the upcoming 1978 season,financing theprojectwith money from sales made during 1978. CSTC was initially capitalized at $167,283. In February, 1978, Ken Nyquist bought $100,002 worth of stock bringing total shareholders' equity to $267,285. In addition,Tom Nyquist sought a Small Business Administration

(SBA) loan from the Montana Bank of Missoula in the fall of 1977. A loanguaranty of $260,000was issued inMarch, 1978. The loan package was then transferred to theMontana Rank ofHelena, but was never drawn upon due to the circumstances surrounding the washout. The loan guaranty was then allowed to lapse. After the washout, the shareholders regrouped to determine a course of action. They ultimately decided to sell the project and simultaneously refinance it on a larger scale. Refinancing was sought through the Farmers Home Administration (FmHA) which had higher lending limits than the SBA. The attempted sale of CSTC was abandoned after an FmHA official reprimanded the principals forplacing CSTC on the market and representing that a $950,000 loan commitment had been made by FmHA. (FmHA loans are contingent on the applicant's ongoing commitment to the proposed business.) CSTC sought a $900,000 loan from FmHA for long term financing. Interim financing for construction and operating capital had to be raised by theborrower. However, in order to obtain interim financing, the borrower must obtain a "conditional Commitment for Guarantee" from the FmHA, which is issued only if certain FmHA requirements aremet. Thus, until the permanent loan guaranty is issued,the borrower and his banker are liable for the entire investment. This means the borrower's bank must. he willing and able to provide interim money, risking that all will go well until the conditional and finally the permanent loan guaranties issue. Both plaintiffs and defendants were aware of these requirements. By August, 1978,Froid Bank was identified as the prospective lender for CSTC. Wallander, inhis capacity

as Ken Nyquist's lawyer, had first been contacted by Ken in February, 1978, when Ken asked his advice on buying stock in CSTC. In May, 1978, Ron Preston wrote to Wallander urging him to become involved with CSTC, saying the Bank'si-nvolvementwould be mutually beneficial to them both. In August, 1978,Wallander became involvedby reviewing the FmHA application papers and indicating the Bank would act as the interim financier. The FmHA applicationwaspartially completedby theCSTC principals and delivered to Wallander for completion and signingon October 19,1978. The applicationwas keptby him until after January 5, 1979, despite Wallander's claim to CSTC that he had filed the applicationwith the FmHA office in Bozeman. On January 5,Wallander and the CSTC principals met to discuss interim financing and the 1979 construction

season. At themeeting,Wallander stated that there would be "no problem" in getting financing from another overlining bank. The first cash advance was issued, secured by a promissory note signedby CSTC,and co-signed by Ken,Tom and Ron. From January 5 through the summer of 1979, Wallander continued to assure CSTC principals that there was "no problem" with the interim financing. The Bank's customer lending limitwas $160,000. A total of $260,000was advanced by the Bank to CSTC between January 5 and June 23, 1979. Plaintiffs repeatedly questioned Wallander on the financing arrangements and he repeatedly answered that financing was "no problem.

### " On June 2, when the $160,000 limit was reached,Wallander finally contacted First Bank Minneapolis, the bank he had represented as the overlining bank. First Kinneapolis contacted Ron Preston in mid-June for "pre-loan" information, which confused Ron since he thought the participation of FirstMinneapolishad already been arranged. On June 25, E.on received a letter from First Minneapolis rejecting the offer to participate as an overlining bank.In response to this letter, Wallander assured the CSTC principals he could line up several small banks to participate in the financing. Thisnever came to pass and on August 3, 1979,Wallander indicated to Ron Preston that CSTC would have to cease operations. Throughout the next few months, Ron Preston and Tom Nyquist tried to find other financiers for the project. Wallander never followed up on the leadswhich they gavehim. CSTC's creditors began demanding payment and threatening repossession of equipment. Wallander proposed that Ken Nyquist borrowmoney onKen'spersonal account to pay off the debts on a Peterbilt truck and a mobile home. Wallander would then transfer the titles of these items from CSTC to Ken, and the items would be pledged as security for Ken's loan. Ken signed a $8,000 note for the truck February 21, 1980, and a $9,640.11 note May 1, 1980 for the mobile home. Wallander never transferred title, and the truck was seized and so1.dby a CSTC creditor. Wallander, Ken, Tom and Ron met one final time in the winter of 1980 to review thepotential for refinancing. They agreed the situation was hopeless. Wallander assured them the Bank would take no action on notes owed eitherby Ken or CSTC. Communications between the parties ceased at this point. CSTC filed its original complaint.against the Bank andKallander inApril, 1981. PERSONAL LIABILITY OF AN AGENT The first issue raised by both the Bank and CSTC is whether Jerry Wallander shouldbe held liableon the judgment assessed against the Bank. The District Court held, in its conclusionof lawno. 

### I:The conductofdefendantJerry R. Wallander,acting at all times as agent of the First State Bank of Froid and with the acquiescence and tacit approval of the directors of the bank, constitutedwillful and wanton misconduct consisting of conscious breach of trust and fiduciary duty, intentional deception, flagrant breach of the ethical cannons

[sicl of both the legal and banking profession, a studied and extended course of fraudulent misrepresentation and knowing betrayal of a lifetime friendship, all with reckless disregard for the rights and interest of the plaintiffs herein, unjustified by any circumstance and "malicious"and "oppressive"within the meaning of those termsasapplied 

### in the lawof torts. However, in its conclusion of law no. 11, the court held, "Plaintiffs are not entitled to recover damages from defendant JerryB. Wallander." By statute inMontana.,an agent is jointly 'nd severally liable with his principal to third parties forwrongful acts committed in the course ofhis agency. Section 28-10-702(3), MCA; See also Greening v. Mutual Life Ins. of New York (D. 

### -- Mont. 1983), 558 F.Supp. 988, 991. In order to hold a corporate agent personally liable, the court must find that the agent was personally negligent or that the agent's actionswere tortious in nature. Thepersonal nature of the agent's actions forms the narrow exception to the general policy th.at officers and agents of a corporation must be shielded from personal liability for acts taken onbehalf of the corporation. Little 

### v. Grizzly Mfg. (Mont. 1981), 636

The strong language of the District Court's conclusion of law no. 1 indicatesWallander's breach of fiduciary duty and fraudulent misrepresentation was intentional and very personal, given his longstanding relationship with the Nyquist family. In light of this finding, we hold the District Court's failure to hold Jerry Wallander jointly and severally liable with the Bank was clearly erroneous, and wereverse the court's decision on this point. 

### - See S 28-10-?02(3)

## ,MCA. PROXIMATECAUSE,CORRECTMEASURE OF DAMAGES & INDIVIDUAL SHAREHOLDER RECOVERY The next issues raised by the Rank concernwhether the District Court's award to the CSTC shareholders of their capital investments plus interest was erroneous. The Bank argues that the loss of initial shareholder investment was not proximately caused by the Bank's breach of commitment to provide interim financing. The Bank claims the initial shareholder equity capital was wiped out by the May, 1978, washout and the expenditures of the 1978 summer construction

season. The Eank also claims its commitment to financing did not occur until January 5, 1979,when the first cash advance

was issued from the Bank to CSTC and therefore the individual shareholders are not entitled to recovery apart from the corporation. The District Court found actions of the Bank in failing to provide interim financing proximately caused damage to CSTC and its shareholders. The court also found that while CSTCwas in serious financial straits after the 1978washout, the company had been infused.with an additional $260,000, a great deal of work and planning, and was a 'Vifferent" business which collapsed for failure of credit one year later. From the evidencehere,CSTC's failure in the fall of 1979 was directly caused by the lack of the promised financing. There is sufficient evidence to support a finding that the plaintiff shareholders would not have refinanced CSTC unless they ha.d guaranteed financial backing. The CTSC principals repeatedly sought assurances fromWallander as towhether the interim financing arrangements were in place. Wallander repeatedly assured them that financing was "no problem," and CSTC continued to receive cash advances upon request. The CSTC shareholders entered into the rebuilding and refinancing of the corporation in reliance on the Rank's misrepresentations that financing was available, and these misrepresentationswere thedirect andproximate causeof the failure of CSTC in August, 1979,and the loss of investment of the shareholders. The District Court properly found that

a causal connection existed between the Bank

### 's misrepresentations and the shareholders' reliance on those misrepresentations in embarking on a plan of refinancing. It is clear that the District Court found, beyond breaching a contract, that the Bank had committed a tort. That the Bank's tort had proximately caused d-amagesto the plaintiffs is inescapable. The District Court wrestled mightily with theproblems ofdamageshere. The District Court assessed the "battleof the experts" in connection with the trout industry. The Bank had produced a trout industry expert ("a captain of the trout industry," said the DistrictCourt)who appraised the project at CSTC and gave his opinion that it had no chance of success. The plaintiffs produced another expert,though less formidableon the subject than theRank's expert, who prognosticated a modest chance of success. The District Court also heard from experts in accounting, and it weighed thebusiness experienceof the plaintiffs, themarket research thathad been done,and the technical expertise that

was necessary. The District Court concluded that it could not determine that the enterprise would undoubtedly succeed,

nor that itwould certainly fail.When the factofdamages is established in the evidence, leeway is given to the trier of fact to determine the amount of thedamages. Courts indicate that there is adistinction between the quality of proof necessary to establish the fact that the plaintiff has sustained some damage and the measure of proof necessary to enable the jury to fix the amount. Although formerly the tendency was to restrict the recovery to such matters as were susceptible of having attached to them an exact pecuniary value, it is now generally held that the uncertaintywhich prevents a recovery is uncertaintyas to the fact of thedamageand not as to its amount and that where it is reasonably certain that damage has resulted,mere uncertainty as to the amount will not preclude the right of recovery or prevent a jury decision awarding damages. This view has been sustained where, from the nature of the case, the extent of the injury and the amount of damage are not capable of exact and accurate proof. Under such circumstances,all that canbe required is that the evidence-with such certainty as the nature of theparticular casemay permit-lay a foundation whichwil.1enable the trier of facts to make a fair and reasonable estimate of the amount of damage. The plaintiff will not be denied a substantial recovery if he has produced the best evidence availableand it is sufficientto afford a reasonable basis for estimatinghis loss. 22Am.Jur.2d Damages, The statutory limitations which circumscribe the tri.er of fact in determining damages are that they must in all

cases be reasonable,S 27-1.-302,MCA, and in cases ofbreach of contract, be no greater than the other party could.have gained by full performance unless a greater recovery is specifiedby statute. Section 27-1-303,MCA. Themeasure of damages for the commissionof a tort is the amountwhich will compensate the other party for all the detriment proximately caused thereby, whether it could have been anticipated or not. Section 27-1-317,MCA. The statute on the measure of damages for breach of contract, 27-1-311, MCA, includes the limitation that such damages "which are not clearly ascertainable in both theirnature and origin cannot be recovered." No such limitation appears in the statute on the measure of damages for tort. Section 27-I--317, MCA. Tort damages specifically are allowable forproximately causeddamages, "whether they could be anticipated. or not.I' This Court, nevertheless, has recognized and adopted the proposition that in a contract action once a plaintiff establishes a right to damages, the defendant is liable for damages calculated in a reasonable way. We said in Laas v. Montana Highway Comm'n (1971)

## , 157 Mont. 130-131, 483 P.2d 699, 704: 5 Corbin on Contracts, 1029, provides as an alternative measure of damages where the profits presented are toouncertain: "Where it is clear that the defendant's breach of contract has prevented the plaintiff from making profits the amount of which cannot be proved with reasonable certainty, it should be remembered that this situation has been brought about by the wrongful conduct of the defendant. Fe should not he allowed to escape by merely paying nominal damages if there is any reasonableway in which the amount that he should pay as damages can be determined. There are a few alternative rules for determining this amount. Their purpose is tomake compensation for the profits prevented and losses caused, measuring the amount by a method that is reasonablydefinite,and that isnot likely to give compensation in excess of the profits that would have been made, and the losses that have been suffered. Thus,where the breach by the defendant has prevented the use and operation ofproperty by the plaintiff fromwhich useprofits would probably have been made, the damages to be recovered may be measured by the rental value of theproperty,orby interest on the reasonable value of theproperty as an investment." There appears no reason why the liberal view as to damages for contract breach expressed in Laas, should not also apply to tort actions. We a.renot, asLaas suggests,in tort actions required to turn to the reasonable rental value of the property, nor to the interest itwould have gained as

an investment, because the action of the Bank's agent here d.estroyedthosevalues.As we indicated in the foregoing statement of facts, before the plaintiffs got involved with the Bank in this case, but after the ditch washout of May 20, 1978, the shareholders nevertheless had a project of value which they could sell. In fact they had placed the project on the market a.t the same time as they were seeking refinancing through the FmHA and were required to desist from attempting to sell the project because of FmHA regulations. Irrespective of the washout, it was the investment of the sha.reholders in the corporation that have brought about whatever value the project had after the wa-shout. Any attempt by the District Court to fix a value on the project after thewashout would have ofcoursebeen speculation. The District Court therefore, recognizing that d-amages had occurred, and that the plaintiffs were entitled to damages, resorted to the known figures that the evidence presented, that is the investment that had been made by the original shareholders. In the situationthatpresented itself to the District Court--the lack of any other certainway to fix the plaintiffs' damages--the District Court in this case acted properly and reasonably in determining that the damages suffered by the plaintiffs was the amount of their investments 

### in the project at the time the Bank entered the picture. Through its subsequent tortious acts the Bank brought about the demise of the project as a financial venture. We find that the District Court acted properly in this rega.rd. COMPARATIVE FAULT The Bank argues that theDistrict Court erred in failing to compare Wallander's conduct with that of the CSTC principals. It contends the depiction of the trout farm'scommercial success as represented to Wallander in the feasibility study prepared by Tom Nyquist and Ron Prestonwas an equally misleading attempt to deceive Wallander and the Bank into financing the enterprise. However, the District Court found FJallander's conduct "malici-ous"and "oppressive," such that it precluded any comparative negligence on the plaintiffs1part. The court noted plaintiffs' inexperience in the business of trout farming, but did not find this inexperience rose to the level ofWallander's fraudulentmisrepresentations. blontanals comparative negligence statute does not contemplate a comparison between ordinary negligence and willful or wanton misconduct. Derenberger v. Lutey (Mont. 1983), 674P.2d 485, 487, 40 St.Rep. 902,904. In this case, therewas no findingofnegligenceon theplaintiffs1part a-t all. TheDistrict Court noted indetail theCSTCprincipal's 1-ackof sophisticated technical and business expertise, but also noted that despite the b1ea.k testimony of the Bank's trout farmexpert,the potentialof establishinga successful trout farm was not beyond their reach. The principals of CSTC did hire an accountant, an appraiser and.an engineer to assist them in making theirbusinessdecisions. While taking on the responsibility of a new high-risk business such as trout farming by inexperienced entrepreneurs may have been imprudent, such an action did not rise to the level of negligence. On the other hand, the actions of Jerry Wallander added up to much more than ordinary negligence: 1. Misrepresenting to a borrower a bank's lending ability as that ability may be enhanced by the overliningof anotherbank.2. Representing there would be "no problem" in obtaining overline support from another bank without having inquired of thatbank. 3. Failing to advise aprospective overlinebank of the existence of a FmHA conditional commitment forpermanent financingwhen seeking constructionor interim funds for

a borrower in excess of the lender's lending limit. 4. Lying to a borrower about negotiations or commitments for interim financing, or about securing those commitments. 5. Withdrawing an assured line of creditwithout cause

on thepart of theborrower. We find no legal error in the District Court's precluding consideration of comparative negligence on the part of the pla.intiffs,where there is insufficient evidence in the record to indicate any negligent action on the part of the plaintiffs. PUNITIVE DAMAGES In this case,Wallander and the Bank not only owed CSTC and its shareholders the duty to fulfill its obligation to advance interim financing money, but also the d.uty to truthfully apprise the investors of the status of the financing. Investors have a right to rely on a lending institution's representations as to the availability of funds. F?here in addition the institution fraudulently or maliciously represents that funds are available and will be advanced,and begins a seriesof cash advancements to finance

a project, investorsmay recover punitive damages for their good faith reliance on the fraudulent misrepresenta.tion.s. The District Court found that Wallander, as the Bank's agent, engaged in "a studied and extended course offraudulent misrepresentation

# .

# ..unjustified by any circumstance and 'malicious' and 'oppressive' within the meaning of those terms as applied in the law of torts." Punitive damages are properly awarded where there is a sufficient showing of fraud and misrepresentation. Castillo

v. Franks (Mont. 19841, 690 P.2d 425, 430, 41 St.Rep. 2071, 2077. We uphold the District Court's award of punitive damages. AWAR.DOF CSTC'SLIAEILITIES After awarding damages toCSTC and its shareholders,the District Court awarded to the Bank all of CSTC1sproperty except for amobile home, as anoffset to the damages awarded to the plaintiffs. The property included equipment, buildings, ditches, and leases to water and state land. The leases were subject to lease payments, reclamation costs and property taxes. The Bank contends this award 

### of assets not listed as collateral in the Eank's security agreement violates its secured creditor rights under the Uniform Commercial Code. The Bank argues that under SS 30-9-501 through -511,MCA, it is entitled to a variety of options in enforcing its security interest,and itmay notbe forced to satisfy its claimby taking possessionof theproperty. In its final judgment of June 18, 1985, the District Court cancelled a.11of thepromissory notes from CSTC to the Bank. These sixnoteswere oneswhichwere givenby CSTC and co-signed by the CSTC principals in reliance on Wallander's misrepresentations as to the availability of interim financing. By cancelling the promissory notes, the court erased the Bank's specific security interests. Under S 30-1-103, MCA, the Uniform Commercial Code may be suppl-ementedby principles of law and equity, includingthe law relative to fraud and misrepresentation. Rased on Wallander's misrepresentations and the plaintiffs' reliance thereon,we find the court did not abuse its discretion in cancelling thepromissory notes. Having cancelled the notes, the court, sitting in equity, had a great deal of leeway in fashioning a remedy. Link v. State,Dept. of Fish and Game (1979), 180Mont. 469, 483, 591 P.2d 214, 222. TheDistrict Courtproperly selected

a damage award which gave the Bank certain benefits and options which would otherwise have been unavailable if the award against the Bank merely had been for money damages, without allowing for an offset. The remedy chosen by the court allowed the Bank to mitigate its losses. We find no
error in the court's choiceof remedy. THEAWARD OF INTEREST The Bank argues that the DistrictCourt awarded interest on the CSTC shareholders' investments from the date of thejr initial investments. This is amisstatement of the District Court's final judgment. While the District Court first awarded interest to shareholders from the date of their initial investments, this award was modified in the final judgmentof June 18, 1985. The District Court has awarded interest on each shareholders' investment from January 28, 1985--the date the findings of fact and conclusions of lawwere entered. This is the date the court fixed the amount of damages, and interest is recoverable when the amount of damages is made certain by the trial court. Section 27-1-211, MCA; Castillo



### v. Franks (Mont. 1984), 690 P.2d 425, 431, 41 St.Rep. 2071, 2078; Carriger v. Ballenger (Mont. 1981), 628 P.2d 1106, 1110, 

### -St.Rep. 

### - 

# . Therefore,argumentsby the Bank andplaintiffs as to the propriety of prejudgment interest are moot. ADEQUACY OF THEAWARD TO CSTC On cross-appeal, plaintiffs argue the District Court's judgment should be increased to include three more elements of damages. They are: 1. Damages done to CSTC, destroying its economic life and solvency; 2. Salaries earned and owing to Ron Preston and Ken Nyquist from August, 1979, to April, 1981; 3. General damages for the disruption of cred.it, loss of job opportunities, general humiliation and embarrassment, and the overall mental pain and anguish suffered by Ken Nyquist, Tom Nyquist and Ron Preston. Plaintiffs argue the District Court failed to add.ress the value of the corporation, despite Ken Nyquist's and Ron Preston's testimony that CSTC had a value of $3,000,000 to $6,000,000. They argue that an owner may properly express his opinion as to the value of his property. They also contend loss of salariesand the general damages listed above

were foreseeable results of the Bank's failure to provide funding forCSTC,and as such,the DistrictCourt should have awarded these damages to plaintiffs. In order to recover consequentialdamages for breach of contract, the nature and origin of the damages must be est.ablishedwith reasonable certainty. Ehly v. Cady (Mont. 19841, 687 P.2d 687, 695, 41 St.Rep. 1611, 1619; Stensvad v. Miners & Merchants Bank (1982), 196 Mont. 193, 206, 640 P.2d 1303, 1310. The District Court found that an estimation of CSTC's future financial success or failure called for "an impermissibly large measure of pure speculation." The court heard testimony from expert witnesses on both sides,and was presented with "a veritable blizzard of facts, figures andexhibits" intended to demonstrate the nonviability of the trout farming enterprise. Neither side succeeded in convincing the court that CSTC was either doomed to faj-lure

or bound for unqualified success. Under these facts, the court properly rejected the plaintiffs' request for damages to CSTC's economic life, where evidence of CSTC's future

successwas tenuous atbest. For similar reasons, the court's rejection of plaintiffs' claimforlostsalariesfortheperiod of August, 1979, toApril, 1981, was alsoproper. Since theplaintiffs failed to establish the future profitability of CSTC, an award of future salaries would also be overly speculative. We also find insufficient evidence on which to reverse the District Court's denial of general damages to Ken Nyquist, Ron Preston and Tom Nyquist. Plaintiffshave not established to the satisfaction of the Court a clearly ascertainable standard by which tomeasure these alleged losses. The judgment of the District Court is reversed and remanded for the District Court to enter the same judgment against Jerry B. Wallander, and is affirmed as tothe award of damages.

WeConcur:

Chief Justice hMr. Justice Frank B. Morrison,Jr. dissents as follows:

I respectfully dissent from themajority opinion on the damage issue. The trial court was faced with a difficult decision respecting an award of 

### dams-ges in this case. The proper

measure of damages required the District Court to evaluate the value of this business after the "washout" and compare that value to a value for the business had the funds been advanced. Thedifference invalues should be themeasure of damage. The investment of the individualplainti-ffsis not the correctmeasure ofdamages. The trial court faced the difficult task of determining damages in the absence of proof relating to the proper

measure. Since the plaintiffs were representedby able and experienced trial counsel I can only assume that it was virtually impossible to establish the appropriatevalueswith expert testimony. Nevertheless, the burden of proof on damages resideswith the plaintiff and if there is a failure theplaintiff's case must fall. Iwould reverse and remand this case for a new trial on damages requiring the plaintiff to go forward with proof relating to the change invalue causedby the bank's failure to advance funds.

Mr. Justice Fred 

### J. Weber and Mr. Justice 

### L. C. Gulbrandson: We concur in the foregoing dissent of

### Mr. JusticeMorrison.