No. 89-622 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

ALEX E. SMITH and TRUDY 

L. SMITH, husband and wife, 

Plaintiffs and Respondents 

and Cross-Appellants, 

ROBERT L. JOHNSON and ANITA 

A. JOHNSON, husband and wife, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Tenth Judicial District, 

In and for the County of Fergus, 

The Honorable Byron L. Robb, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

James L. Stogsdill, Esq., Lewistown, Montana 

$or Respondents and Cross-Appellants: 

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2 g Thomas P. Meissner, Esq., Lewistown, Montana 

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u) a Submitted on Briefs: June 14, 1990 z 2 

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o Decided: September 6, 1990 

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Justice Diane G. Barz delivered the Opinion of the Court. 

The plaintiffs, Alex and Trudy Smith, initiated this action 

with a complaint for specific performance of a buy/sell agreement. 

The Smiths sought to compel defendants, Robert and Anita Johnson, 

to enter into a contract for deed in accordance with the terms of 

the buy/sell agreement. The District Court for the Tenth Judicial 

District, Fergus County, granted the Smiths' motion for partial 

summary judgment on the issue of specific performance of the 

buy/sell agreement. After a bench trial on the remaining issue of 

damages resulting from the Johnsons' failure to timely deliver 

possession of the real property, the District Court awarded the 

Smiths monetary damages in the amount of $3,594.05. The Johnsons 

appeal both the granting of partial summary judgment and the award 

of damages. The Smiths cross-appeal the amount of attorney's fees 

and costs awarded. We affirm and remand. 

The issues raised by the Johnsons on appeal are: 

1. Did the District Court err by granting the 

Smiths1 motion for partial summary judgment? 

2. Did the District Court improperly award specific 

performance in favor of the Smiths? 

3. Did the District Court err by awarding monetary 

damages to the Smiths? 

The Smiths present three additional issues on cross-appeal: 

1. Did the District Court err in fixing the amount 

of attorney's fees and costs awarded to the Smiths? 

2. Are the Smiths entitled to attorney's fees and 

costs on appeal? 

3. Should sanctions be imposed against the Johnsons 

pursuant to Rule 32, M.R.App.P., for bringing this 
appeal? 

Alex and Trudy Smith, the buyers, and Robert and Anita 

Johnson, the sellers, entered into two buy/sell agreements for the 

sale of two tracts of land near Lewistown, Montana. One agreement 

provided for the sale, by contract for deed, of a house and six 

acre tract. The transaction relating to the home tract has closed 

and is not part of the Smithst claim for specific performance. The 

other agreement provided for the sale, by contract for deed also, 

of 87.337 acres of crop, pasture and timber land which adjoined the 

six acres. The buy/sell agreement on the acreage tract provided 

for a price of $40,000 with nothing down, amortized payments over 

fifteen years, interest at 9%, and the first payment due on 

December 30, 1989. 

Both buy/sell agreements provided that the sales were to be 

closed on or before March 1, 1989. The parties agreed Mr. Johnson, 

who is a practicing attorney, was to prepare the contracts for deed 

and accompanying closing documents. However, Mr. Johnson did not 

submit anything for the Smithst review until March 1, and then only 

the proposed contracts for deed. 

During the month of March the parties corresponded and 

negotiated with each other in attempt to reach an agreement on 

additional or different terms of the contracts for deed than those 

provided in the buy/sell agreements. Revised drafts of contracts 

were exchanged but were found by the parties to be unacceptable. 

Disagreement over when interest and real estate prorations would 

commence on the acreage tract became a "bone of contention" between 
the parties. The Johnsons believed that interest and tax 

prorations should commence on March 1, as provided in the buy/sell 

agreement. The Smiths proposed that since closing did not occur 

on March 1, as agreed, interest and tax prorations should commence 

on the actual date of closing. 

On March 27, the Smiths, through their attorney, sent draft 

contracts to the Johnsons and conveyed to them through a letter 

that if the Johnsons did not wish to discuss any terms in addition 

to or beyond the buy/sell agreements, then both transactions should 

close in conformity with the buy/sell agreements. The Johnsons 

responded in a letter dated April 3 informing the Smiths that, due 

to what they perceived as an impasse on the financial aspects of 

the transaction, they were placing the acreage contract Ifon the 

back burner for awhile.I1 The Johnsons then re-leased the acreage 

tract to George Hamilton, the current tenant of the property, for 

a one-year term, beginning April 8. 

After further negotiations, during which time the Johnsons 

maintained their position that the acreage contract was "on the 

back burner, l1 the parties finally agreed on a contract for the home 

and six acres. The Smiths paid the required down payment, the 

parties executed a contract for deed and the transaction was closed 

on approximately April 17. The terms of the contract are not in 

dispute. 

On April 20, the Smiths filed their complaint in the District 

Court seeking: (1) a decree of specific performance, requiring the 

Johnsons to enter into a contract for deed for the acreage tract; 
and (2) money damages for loss of use of the property as a result 

of the Johnsons' failure to deliver possession of the property in 

accordance with the buy/sell agreement. 

I. Johnsons' Appeal 

Did the District Court err by granting the Smiths1 motion for 

partial summary judgment? 

Summary judgment is proper pursuant to 

Rule 56(c), Mont.R.Civ.P., where the record 

discloses no genuine issue of material fact 

and the moving party is entitled to judgment 

as a matter of law. All reasonable inferences 

that may be drawn from the offered proof are 

to be drawn in favor of the party opposing 

summary judgment. (Citation omitted.) 

Halcro v. Moon (1987), 226 Mont. 121, 123, 733 P.2d 1305, 1306. 

The Johnsons contend the District Court improperly granted 

summary judgment in favor of the Smiths because there was a 

material question of fact concerning the smiths' willingness to 

perform in accordance with the exact terms of the parties1 buy/sell 

agreement. The Johnsons allege that they presented a contract on 

March 6 that was in conformity with the buy/sell agreement and that 

the Smiths refused to sign the contract. The Johnsons further 

argue that the Smiths were unwilling to perform in accordance with 

the buy/sell agreement because of their insistence that the 

commencement of interest and the proration of taxes take place on 

the actual date of closing instead of March 1, as provided in the 

buy/sell agreement. We disagree. 

In directing the parties to enter into a contract strictly in 

accordance with the buy/sell agreement, including the term that 
commencement of interest and the proration of taxes would take 

place on March 1, the District Court noted that I1[t]he dispute over 

specific performance herein does not arise over the buy/sell 

agreement the parties acknowledge entering, but rather over 

supplemental terms and conditions in the contract for deed to 

execute and fulfill the buy/sell.I1 And in its explanatory comment 

accompanying the court's order denying the Johnsons1 motion to 

amend the judgment the court stated: 

In his own argument on the motions for summary 

judgment, Mr. Johnson acknowledged buy/sell 

agreements seldom contain all the terms that 

may go into a formal contract for deed, and 

that it is not uncommon for parties to do some 

negotiating about such additional terms after 

the execution of the buy/sell. Here both 

parties requested some other terms, and 

unfortunately could not reach agreement. 

The record clearly shows that the Johnsons breached the 

buy/sell agreement by placing the acreage contract "on the back 

burner," refusing to discuss it further or place the smiths in 

possession, and renewing the lease of the property to a third 

party. Contrary to the Johnsons' contention, the record reveals 

the Johnsons did not propose a contract conforming to the buy/sell 

agreement on March 6. The purchase price provision of that 

contract called for a total first payment of over $700 more than 

required in the buy/sell agreement. Moreover, although not as 

clear, the record shows that the smiths were not unwilling to 

perform in accordance with the buy/sell agreement, but rather were 

merely attempting to resolve the final form of the contract for 

deed. 
Negotiations of terms beyond the buy/sell agreement does not 

destroy the right to seek specific performance. In Somont Oil Co. 

v. Nutter (1987), 228 Mont. 467, 743 P.2d 1016, a party sought to 

avoid a contract, claiming the contract was merely "an agreement 

to agree" and that it was too vague to constitute a contract. This 

Court held that the agreement contained all the essential terms 

needed to constitute a contract and further stated: 

Admittedly, the agreement does not include 

every item that might have been included . . . However, I1a contract is not invalid 

simply because it does not contain all the 

provisions or conditions the parties might 

have incorporated into it. Wilkerson v. 

School District No. 15, Glacier County (Mont. 

1985), 700 P.2d 617, 621, 42 St.Rep. 745, 749. 

Somont Oil Co., 743 P.2d at 1019. 

Even though the parties here attempted negotiations of 

additional terms, such does not affect the validity of the buy/sell 

agreement and the ability to maintain a suit for specific 

performance upon a breach of that agreement. 

Furthermore, with regard to the commencement date of interest 

and the date of proration of taxes, the District Court could 

properly, as a matter of law, determine whether the buy/sell 

agreement contained an ambiguity. SAS Partnership v. Schafer 

(1982), 200 Mont. 478, 482, 653 P.2d 834, 836. During negotiations 

the Smiths proposed that since the transaction did not close on 

March 1, as agreed, interest and tax prorations should commence on 

the actual date of closing. In granting summary judgment and 

ordering that interest and the proration of taxes would commence 

on March 1, the District Court stated: 
While the printed part of the agreement states 

possession shall be on the date of closing 

"unless otherwise agreed," the typewritten 

part of the buy/sell plainly states, "First 

period payment will be from March lst, 1989, 

to December 30th, 198911, and section 1-4-105, 

MCA 1987, states, "when an instrument consists 

partly of written words and partly of a 

printed form and'the two are inconsistent, the 

former control the latter." 

The District Court, upon determining as a matter of law that an 

ambiguity does not exist, may properly grant summary judgment. 

See, Monte Vista Co. v. The Anaconda Co. (1988), 231 Mont. 522, 755 

We conclude the record in this case discloses no genuine issue 

of material fact and supports the award of partial summary judgment 

in favor of the Smiths. 

Did the District Court improperly grant specific performance 

in favor of the Smiths? 

In an argument nearly identical to their argument presented 

under the first issue, the Johnsons contend that the Smiths were 

not parties who could seek the remedy of specific performance. 

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 signed by the parties expressly provided for 

a remedy of specific performance. Having determined that the 

record shows the Johnsons did not propose a contract on March 6 

which conformed to the buy/sell agreement and that the Smiths were 

not unwilling to perform in accordance with the provisions of the 

buy/sell agreement, we conclude the Smiths were parties who could 
seek specific performance. 

We hold the District Court properly granted specific 

performance in favor of the Smiths. 

Did the District Court err by awarding monetary damages to the 

Smiths? 

The Johnsons assert that they were subjected to the Smiths1 

"whipsawing in the matter of damages1' and argue that the Smiths are 

responsible for their own damages, ''real or imagined," in that they 

failed to act. reasonably in preventing or mitigating those 

damages. 

The District Court 'found that the Johnsons' actions in 

unilaterally terminating the negotiations between the parties, 

placing the sale of the acreage property ''on the back burner,'' and 

renewing the lease on the property to a former tenant for another 

year constituted an unjustified refusal to complete the transaction 

or convey the property. Accordingly, the court awarded the Smiths 

damages for loss of use of the property for approximately one year 

in the sum of $1,600, plus attorney's fees and costs of $2,091.20, 

less an offset to the Johnsons of $97.15 for five-sixths of the 

1989 taxes, for a total damage award of $3,594.05. 

When reviewing the findings of fact in a civil action tried 

by a district court without a jury, this Court will not substitute 

its judgment for that of the trier of fact. Rather, our review is 

confined to determining whether the findings of fact are clearly 

erroneous. The court's findings of fact will be presumed correct 

if supported by substantial evidence. Meridian Minerals Co. v. 
Nicor Minerals, Inc. (1987)~ 228 Mont. 274, 282-83, 742 P.2d 456, 

461. We find the record contains substantial evidence justifying 

the award of damages. 

11. Smiths' Cross-Appeal 

Did the District Court err in fixing the amount of attorney's 

fees and costs awarded to the Smiths? 

The District Court's award of attorney's fees and costs is 

discussed in the court's Finding of Fact number 16, which states 

in part: 

Smiths also seek attorney fees and costs 

for the entire lawsuit. However, when the 

court granted partial summary judgment to 

plaintiffs it directed each side to pay its 

own fees and costs to that time, and now finds 

that such ruling was fair and equitable, and 

reaffirms it. However, as to additional time 

plaintiffs' counsel has spent on various 

motions, briefs, damage issues and trial, the 

court finds plaintiffs are entitled to recover 

the same pursuant to written provision of the 

buy/sell agreement . . . and plaintiffs are 

further entitled to allowable costs since 

summary judgment of $165.20 . . . Said costs 

are as follows: George Hamilton deposition 

$130.20; Witness fee $10.00; Judgment fee 

$25.00. 

The Smiths do not contest the award of attorney's fees from the 

time of partial summary judgment, but argue that attorney's fees 

incurred prior to such time should be awarded. 

The buy/sell agreement contains an attorney's fee provision 

which states: 

In any action brought by the Buyer or the 

Seller to enforce any of the terms of this 

agreement, the prevailing party in such action 

shall be entitled to such reasonable attorney 
fees as the court or arbitrator shall 

determine just. 

The fixing of attorney's fees is largely within the discretion of 

the district court and will not be disturbed absent a clear abuse 

of that discretion. In Re Marriage of Milanovich (1985) , 215 Mont. 

367, 370-71, 697 P.2d 927, 929. The record contains substantial 

evidence to support the conclusions of the District Court 

concerning attorney's fees. We find no abuse of discretion. 

The District Court awarded the Smiths costs from the time of 

partial summary judgment in the amount of $165.20. The total costs 

claimed by the Smiths are $345.20. Section 25-10-101(5), MCA, 

provides that "Costs are allowed, of course, to the plaintiff upon 

a judgment in his favor . . . in an action which involves the title 

or possession or right of possession of real estate . . ." Under 

§ 25-10-101, MCA, allowable costs are recoverable by the plaintiff 

upon timely application. See, Medhus v. Dutter (1979), 184 Mont. 

437, 447, 603 P.2d 669, 674; State v. Cronin (1978), 179 Mont. 481, 

491, 587 P.2d 395, 401. We therefore remand for determination of 

allowable costs incurred prior to the time of partial summary 

judgment . 

Are the Smiths entitled to attorney's fees and costs on 

appeal? 

The District Court made numerous findings regarding the 

assessment of attorney's fees and costs concluding that if the 

Johnsons' appeal is unsuccessful they should be subject to 

assessment of the Smiths1 costs and attorney's fees in defending 

such appeal. This Court has previously held that 'I [wlhere an award 

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of attorneys1 fees is based on a contract, the award includes 

attorneys fees generated on appeal. Lauderdale v. Grauman 

(1986), 223 Mont. 357, 359, 725 P.2d 1199, 1200. In regard to 

costs on appeal, such are automatically awarded to the successful 

party under Rule 33, M.R.App. P. Walker v. Warner (1987) , 228 Mont. 

162, 167, 740 P.2d 1147, 1150. We find that, as the prevailing 

party on appeal, the Smiths are entitled to reasonable attorney's 

fees and costs. 

Should sanctions be imposed against the Johnsons pursuant to 

Rule 32, M.R.App.P., for bringing this appeal? 

The Smiths contend they are entitled to an additional award 

of damages, arguing that the Johnsons' appeal on the issue of 

specific performance is frivolous. 

Rule 32, M.R.App.P., provides: 

If the supreme court is satisfied from 

the record and the presentation of the appeal 

in a civil case that the same was taken 

without substantial or reasonable grounds, 

such damages may be assessed on determination 

thereof as under the circumstances are deemed 

proper. 

Where a reasonable ground for appeal exists, sanctions or 

damages are not appropriate under Rule 32, M.R.App.P. Searight v. 

~imino (1988), 230 Mont. 96, 103-04, 748 P.2d 948, 952; Erdman v. 

C & C Sales, Inc. (1978), 176 Mont. 177, 184, 577 P.2d 55, 59. In 

the present case, the question of whether the District Court 

properly granted partial summary judgment was reasonably in issue. 

We find no basis for imposing sanctions against the Johnsons. 

We affirm and remand for determination of reasonable 
attorney's fees and costs on appeal and for determination of 

allowable costs pursuant to 3 25-10-101(5), MCA. 

- We concur: