No. 85-419 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1986 

NORTHWESTERPI NATIONAL BANK OF GREAT 

FALLS, a National Banking association, 

Plaintiff and Appellant, 

WEAVER-MAXWELL, INC., a corporation, 

et al. , 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable John McCarvel, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Church, Harris, Johnson & Williams; Milton Wordal 

argued, Great Falls, Montana 

For Respondent: 

Graybill, Ostrem, Warner & Crotty; Turner C. Graybill 

argued, Great Falls, Montana 

Submitted: August 121 1986 

Decided: November 13, 1986 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Norwest Bank Great Falls, N.A. (the Bank) appeals a 

$2,659,671 judgment entered against it in Cascade County 

District Court after a jury trial. The Bank brought the 

action as a foreclosure suit and to obtain a deficiency 

judgment. Defendants prevailed on their counterclaims for 

breach of contract, tortious interference with their franchise agreement, fraud, negligent misrepresentation, and bad 

faith in liquidation of the Weavers' collateral. The Court 

also granted defendants equitable relief. We reverse and 

remand for a new trial. 

The dispositive issue is whether the District Court 

erred in giving the jury a special verdict form which presented the issue of breach of contract in terms that adopted 

the defendants' view of substantial disputed facts. For the 

guidance of the court and counsel on remand, we will consider 

briefly the other issues raised on appeal. They are: 

2. Did the District Court err in the manner in which it 

submitted the issue of tortious interference with contract to 

the jury? 

3. Did the District Court err in entering judgment upon 

the special verdict: 

a. by entering judgment on the jury's findings of 

damages both for breach of contract and for tort; and 

b. because the special verdict's award of punitive 

damages conflicted with the jury's finding that the Bank had 

acted in good faith? 

4. Did the District Court err in its resolution of the 

issues reserved for its decision by: 
a. denying the Bank's claim for a deficiency judgment; 

b. ordering the Bank to surrender to defendants the 

proceeds of liquidation of collateral; 

c. awarding prejudgment interest at a rate of 18%; and 

d. basing an award of attorney fees to defendants on 

their recovery on both their contract and torts claims? 

Weaver-Maxwell, Inc. was an International Harvester (IH) 

truck and farm equipment dealership. Its stockholders are 

the other defendants in this action. Beginning in 1977, it 

entered a series of transactions with the Bank. As of April 

1980 Weaver-Maxwell owed the Bank slightly over $700,000 in 

principal and accrued interest on two SBA guaranteed loans 

and on its floor plan and accounts receivable lines of credit. The banker in charge of the Weaver-Maxwell account was 

Paul Hoffman. 

As is typical of floor plan financing , Weaver-Maxwell ' s 

floor plan arrangements with both IH and the Rank provided 

that the lenders had a security interest in all items of 

inventory financed and in the specific proceeds of sale of 

each item. Weaver-Maxwell had agreed to hold the proceeds of 

each sale, as well as the inventory, in trust for the respective lender, and it was required to remit a portion of these 

proceeds to the lender promptly upon receiving them, without 

demand or notice. When Weaver-Maxwell failed to account for 

such proceeds, the sale was "out-of-trust." 

In March 1980, for the second time within a year, 

Weaver-Maxwell was in default of its payments on the two SBA 

loans. Mr. Weaver approached Mr. Hoffman at the Bank seeking 

another loan for Weaver-Maxwell. Mr. Hoffman refused to make 

a loan to Weaver-Maxwell. However, the Bank did agree to 

make a personal loan to Mr. and Mrs. Weaver in the amount of 
$84,291.69. The loan was secured by personal assets of the 

Weavers. 

The terms of the loan were in dispute at trial. Mr. 

Hoffman testified that the amount was precisely calculated 

and all of its proceeds were earmarked for specific purposes. 

He testified that the $84,291.69 was to be applied as follows: $22,000 was to cover two IH trucks sold out-of-trust; 

$23,060 was to bring current delinquent payments to the Bank 

on an SBA-guaranteed loan; $17,492 was to bring the other SBA 

guaranteed Bank loan current; $21,669.04 was for the balance 

due the Bank on a 1979 individual loan to Elr. Weaver; and 

$70.65 was for interest. Mr. Weaver, on the other hand, 

testified that the loan was earmarked only to the extent 

necessary to cover the $22,000 in out-of-trust IH sales, and 

that the rest was to be used for Weaver-Maxwell's general 

business needs. The loan was documented March 24, 1980, in a 

promissory note from the Weavers to the Bank. There was 

nothing in writing signed by the Weavers which mentioned any 

specific purpose or purposes for the loan. The cash was not 

immediately a.dvanced to the Weavers, pending filing of documents showing the Bank's security interest in Weaver assets. 

On April 3, 1980, the Bank advanced $26,848.45 on the 

March 24 note, to cover the $22,000 IH out-of-trust previously disclosed and another $4,848.45 out-of-trust which had not 

been disclosed to the Bank previously and was not included in 

Mr. Hoffman's calculation. The next day, (a Friday) Mr. 

Weaver requested another $47,000, to cover yet another 

out-of-trust amount owed to IH on a sale made several months 

earlier. The Bank had not been informed of this out-of-trust 

sale before this time. Mr. Weaver was to return to the Bank 

on Monday, according to his testimony, to receive the $47,000 
out of the sums available from the March 24 note. He testified that when he went to the Bank to pick up the $47,000 on 

Monday morning, Mr. Hoffman told him, "We're not going to 

advance you the money," and that Mr. Hoffman would not say 

more than that. Mr. Hoffman's testimony was substantially 

d.ifferent. He testified that the $47,000 was a new loan 

request, and that he told Mr. Weaver a decision whether to 

grant it would be made by Monday. Mr. Hoffman testified that 

on Monday morning he concluded after talking with his supervisor that the $47,000 loan request should be declined because "I had lost my confidence in our borrower." 

IH immediately notified Mr. Weaver that it was terminating Weaver-Maxwell's dealership because of the out-of-trust 

situation. To prevent IH from quickly repossessing 

Weaver-Maxwell's assets, Mr. Weaver signed a document entitled "Peaceful Possession of Collateral Property." The 

document allowed the Bank to take possession of the assets. 

The Bank viewed this as a means of protecting its security 

interests. That evening, the Bank changed the locks on the 

Weaver-Maxwell buildings. It thereafter excluded Mr. Weaver 

from the property except during business hours, when he was 

accompanied by bank representatives. After April 9, the Bank 

also seized and opened all mail addressed to Weaver-Maxwell. 

Defendants presented testimony that the Bank destroyed truckloads of Weaver-Maxwell records by hauling them to the Great 

Falls dump. Approximately two months later, the Bank held an 

auction of Weaver-Maxwell assets. The defendants argued that 

the auction was not well-run. The proceeds of the auction 

were applied to Weaver-Maxwell's debts to the Bank, but they 

did not cover all the debts. The Bank also collected personal assets of the Weavers in which it had security interests. 
The Bank commenced this action to collect sums remaining 

due on its loans to Weaver-Maxwell and the Weavers. The 

defendants asserted counterclaims based on their contention 

that the Biink had breached its March 24, 1980 contract to 

loan money to Mr. and Mrs. Weaver. They also raised claims 

arising from the Bank's liquidation of their assets. The 

case was tried to a jury over a three-week period. The jury 

awarded damages to defendants of $300,000 for breach of 

contract, $800,000 on tort theories, and $40,000 for bad 

faith in the liquidation of the Weavers' personal assets. It 

also awarded the defendants $140,000 in punitive damages. 

The District Court entered judgment on both the breach of 

contract and. tort damages. It denied the Bank's claim for a 

deficiency judgment of $377,702.73. It ordered the Bank to 

remit to defendants $729,073.74 from liquidation of the loan 

collateral. It also a.warded defendants $266,597.26 in prejudgment interest and $384,000 in attorney fees, for a total 

judgment of $2,659,671 plus interest. 

I 

Did the District Court err in giving the jury a special 

verdict form which presented the issue of breach of contract 

in terms that adopted defendants' view of substantial disputed facts? 

The evidence on whether Mr. Weaver's request for $47,000 

should have been considered as part of the $84,291.69 loan 

was lengthy and conflicting. Both sides presented expert and 

lay opinion testimony on whether the Bank wa.s obligated to 

advance the $47,000. The testimony of Mr. Weaver and of Mr. 

Hoffman also directly conflicted on whether Mr. Weaver requested the $47,000 as a disbursement of part of the 
$84,291.69 Loan or as a new loan. This testimony was admitted into evidence without objection. 

The jury was not asked whether Mr. Weaver was entitled 

to $47,000 cash out of the note for this application. Instead, the District Court adopted the defendants' proposed 

special interrogatory as jury instruction number 1: 

1. A. On April 4 or 7, 1980, did Art Weaver 

request Northwestern National Bank to advance 

approximately $47,000 on the Weavers' note of March 

24, 1980, in order to pay a debt of Weaver-Maxwell, 

Inc. to International Harvester? 

Answer : (yes or no) 

B. If your answer to question No. 1 is "yes," 

please state the total amount of damages which the 

Bank's breach of contract proximately caused each 

of the defendants to suffer when the Bank refused 

to advance such funds? 

Answer: Weaver-Maxwell, Inc. $ 

Art & Grace Weaver $ 

Darlow & Ruth Maxwell $ 

In substance, this required the jury to determine whether Mr. 

Weaver asked the Bank to advance $47,000 on the March 24 

note. If they answered "yes" then the next determination was 

the amount of damages which the breach caused the defendants. 

"While it is within the trial court's discretion to 

structure the form and frame the questions of a special 

verdict, the interrogatories must be adequate to enable the 

jury to determine the factual issues essential to judgment." 

Kinjerski v. Lamey (Mont. 1981), 635 P.2d 566, 567, 38 

St.Rep. 1703, 1705, citing Glick v. Knoll (1959), 136 Mont. 

176, 346 P.2d 987; Coburn Cattle Co. v. Small (1907), 35 

Mont. 288, 88 P. 953. We conclude that the special verdict 

submitted on this record was inadequate. In fact, the Bank 

agrees that Mr. Weaver was still entitled to $47,000 out of 

the $84,291.69 loan. However, it was the province of the 
jury to decide if Mr. Weaver was entitled to apply $47,000 on 

the new out-of-trust obligation to IH. That central issue 

was not submitted to the jury. Under this record, it was 

essential that the judge leave the factual determination of 

the nature of the agreement to the jury. Instead, the District Court reached the conclusion that the Bank was obligated to loan the $84,291.69 for any purpose Mr. Weaver desired 

and therefore only left the jury to determine whether Mr. 

Weaver asked for the $47,000. This totally disregarded the 

conflict in the evidence. 

The dissent suggests that the note and mortgage are 

facially clear and that no par01 evidence should have been 

admitted which would contradict the instruments. As previously pointed out, no objections were made to the admission 

of the Bank's evidence in this regard. Further, the note and 

mortgage on their faces do not prove an obligation on the 

part of the Bank to deliver cash in any amount to Mr. Weaver. 

As an exampl-el they would be appropriate as evidence of a 

debt already owed and past due. Clearly, it is necessary to 

go outside the terms of the instruments to determine what 

amount, if any, Mr. Weaver was entitled to apply on the 

$47,000 out-of-trust obligation to IH. 

We hold that special interrogatory #1 was fatally deficient, and we remand for a new trial. For the guidance of 

court and counsel on remand, we will briefly consider the 

other issues raised on appeal. 

I1 

Did the District Court err in the manner in which it 

submitted the issue of tortious interference with contract to 

the jury? 
Over the Bank's objection, the court instructed the jury 

that: 

The elements of interference with contract are that 

(1) there be a valid business relationship or 

reasonable expectation of economic advantage, (2) 

knowledge of the relationship on the part of the 

party interfering, (3) intentional interference 

inducing or causing a breach or termination of the 

relationship or expectancy, (4) resultant damage. 

The Bank contends that this instruction omits the element of 

unjustifiability or impropriety of the alleged tortious 

actions. 

In Bolz v. Myers (Mont. 1982), 651 P.2d 606, 611, 39 

St.?.ep. 1747, 1752, this Court set forth the elements of 

interference with contract: 

In order to establish a prima facie case of interference with contractual or business relations, it 

must be shown that the acts (1) were intentional 

and willful, (2) were calculated to cause damage to 

the plaintiff in his or her business, (3) were done 

with the unlawful purpose of causing damage or 

loss, without right or justifiable cause on the 

part of the actor, and (4) that actual damage and 

loss resulted. Bermil Corp. v. Sawyer (Fla.App. 

3rd Cir. 1977), 353 So.2d 579. 

The instruction given to the jury omits the requirement that 

the act is done "without right or justifiable cause on the 

part of the actor." The instruction given ignores the Bank's 

position that its refusal of the $47,000 loan, which led to 

the termination of the IH franchise, was not tortious because 

the refusal was justified and within the Bank's rights. We 

conclude that an instruction on interference with contract 

must provide that the act is "without right or justifiable 

cause on the part of the actor." 
111 a. 

Did the District Court err in entering judgment upon the 

special verdict by entering judgment on the jury's findings 

of damages both for breach of contract and for tort? 

In addition to the special interrogatory mentioned in 

Issue I, the jury considered special interrogatories on 

several tort and statutory claims. The jury found that the 

Rank did not breach a duty of good faith and fair dealing to 

the defendants when it refused to advance $47,000. It found 

that the Bank did intentionally and wrongfully interfere with 

the franchise contract between Weaver-Maxwell and IH; that 

the Bank committed fraud, deceit, or constructive fraud 

causing Weaver-Maxwell loss of the IH franchise; that the 

Bank made negligent misrepresentations causing the loss of 

the franchise; and that the Bank liquidated Weaver assets in 

bad faith. The jury set the amount of damages to 

Weaver-Maxwell for the tort causes of action at $800,000. 

Under the contract theory, the jury found that damages to 

Weaver-Maxwell were $300,000. The Bank's position is that 

$800,000 should be awarded as the larger of the alternative 

damage findings. However, the District Court found that the 

contract and tort damages were cumulative. 

We conclude that the jury's verdict on the tort claims 

is unclear because the special interrogatories do not state 

which acts of the Bank were considered under each theory. 

The instructions should be revised on remand to show which 

acts of the Bank should be considered under each theory. 

Then it can be determined which tort damages are cumulative 

to contract damages and which are alternative. 
I11 b. 

Did the District Court err in entering judgment upon the 

special verdict because the special verdict's award of punitive damages conflicted with the jury's finding that the Bank 

had acted in good faith? 

The jury found that the Bank did not breach its duty to 

act in good faith and deal fairly when it refused to advance 

$47,000 to the Weavers, but it did find that the Bank committed other torts - interference with contract, fraud, negligent misrepresentation, and bad faith in liquidating the 

Weavers' collateral. Punitive damages could have been awarded un.der any of the tort theories presented, if the Bank was 

found guilty of oppression, fraud, or malice, actua.1 or 

presumed. Section 27-1-221 (1) , MCA. The jury instructions 

should be revised on retrial so that the jury can state under 

which tort theory or theories it awards punitive damages. 

IV a. 

Did the District Court err in its resolution of the 

issues reserved for its decision, by denying the Bank's claim 

for a deficiency judgment? 

The Bank's suit was for sums remaining due on unpaid 

notes after sale of the collateral, together with costs of 

preparing and liquidating the collateral. The District Court 

concluded that the Bank's "liquidation of the assets and 

collateral . . . was not commercially reasonable and that the 

Bank is not entitled to any deficiency judgment." It concluded that the Bank was not entitled to declare a default in 

the indebtedness of Weaver-Maxwell because the Bank had 

breached its loan agreement and destroyed Weaver-Maxwell's 

franchise. It also concluded that because of its tortious 
acts toward the defendants, the Bank had no right to recover 

the principal amounts of its loans outstanding to 

Weaver-Maxwell. The court concluded that the rights of the 

Bank to any claim for a deficiency were extinguished. 

The Bank argues that neither the amount remaining owing 

on the loans nor the fact that it had not been paid was 

disputed. It asserts that it was entitled as a matter of law 

to a judgment for the $377,702.73 remaining due. 

We conclude there is nothing in the record to justify 

denial of a deficiency judgment to the Bank. The court's 

conclusion that the liquidation of collateral was not commercially reasonable contradicts the jury's finding in special 

interrogatory #4b that the liquidation of the assets was 

commercially reasonable. Whether the Bank breached the 

underlying loan agreements was never an issue before the 

court. No cases or statutes have been cited which lead 

reasonably to the conclusion that the Bank's tortious conduct 

prohibited it from collecting on the underlying loans. In 

the absence of facts or legal theory beyond those in the 

present record, it would appear that the Bank is entitled to 

a deficiency judgment. 3 

--IV *b. , ,. . 

Did the District Court err in its resolution d,f the 

issues reserved for its decision by ordering the Bank to 

surrender to defendants the proceeds of liquidation of 

collateral? 

The District Court concluded that these proceeds should 

be surrendered on equitable grounds. No issue was raised by 

the defendants and no evidence was presented on a theory that 

the Bank should be required to surrender the proceeds of 
liquidation of collateral. We conclude that the jury's 

verdict was intended to fully compensate the defendants for 

tortious actions of the Bank. The record demonstrates no 

basis to require that the Bank surrender the proceeds. 

Did the District Court err in its resolutions of the 

issues reserved for its decision by awarding prejudgment 

interest at a rate of 18%? 

The District Court awarded prejudgment interest on the 

$300,000 dama.ges for breach of contract at a rate of 18%, the 

rate of interest on Weaver-Maxwell's loans. The Bank argues 

that no prejudgment interest should have been allowed because 

the amount of contract damages was not subject to calculation 

prior to judgment. 

Section 27-1-211, MCA, provides: 

Right to interest. Every person who is entitled to 

recover damages certain or capable of being made 

certain by calculation and the right to recover 

which is vested in him upon a particular day is 

entitled also to recover interest thereon from that 

day except during such time as the debtor is prevented by law or by the act of the creditor from 

paying the debt. 

The defendants argue that the amount of contract damages is 

reasonably certain of calculation. They assert that the 

amount the jury awarded represents the amount of working 

capital of Weaver-Maxwell. In their counterclaim, the defendants claimed contract damages of $2,000,000. At trial, they 

asked for $3,000,000. The jury awarded $300,000 in contract 

damages. We conclude these were not the type of damages 

which are "certain or capable of being made certain by calculation," and that therefore prejudgment interest is not 
available. See - Swenson v. Buffalo Bldg. Co. (Mont. 1981) , 

635 P.2d 978, 985, 38 St.Rep. 1588, 1597. 

IV d. 

Did the District Court err in its resolutions of the 

issues reserved for its decision by basing an award of attorney fees to defendants on their recovery on both their contra.ct and tort claims? 

The parties' loan contracts provided for reasonable 

attorney fees in actions for their enforcement. Section 

28-3-704, MCA, makes the right to attorney fees reciprocal. 

The District Court awarded defendants attorney fees of 

$384,000, or 30% of the total amount awarded by the jury. 

Attorney fees are awardable only where statute or contract provides for their recovery. Sliters v. Lee (1982), 

197 Mont. 182, 641 P.2d 475. In a lawsuit involving multiple 

claims or multiple theories, an award of attorney fees must 

be based on the time spent by the prevailing party's attorney 

on the claim or theory under which attorney fees are allowable. Kadillak ~7. Montana Dept. of State Lands (1982), 198 

Mont. 70, 74, 643 P.2d 1178, 1181. We conclude that in this 

case, attorney fees are awardable only on the contract claim. 

Reversed and remanded. 

We Concur: 

Chief Justice 
Justices 
Mr. Justice Frank B. Morrison dissents as follows: 

It seems to me the majority opinion incorrectly decides 

all of the jury issues in this case. 

The jury in this case was submitted special 

interrogatories with respect to various damage issues 

presented by way of counter-claim on the part of defendants. 

Plaintiff's foreclosure issues were reserved by the parties 

for decision through bench determination. 

Assuming arguendo that the District Court erred in 

instructing the jury on the brea.ch of contract action, then 

that special interrogatory to the jury should he set aside. 

However, such a finding does not infiltrate the tort case. 

Compensatory damages and punitive damages awarded by the jury 

should be affirmed and entry of judgment directed on those 

amounts totalling $980,000. 

In any event, the majority incorrectly decides the 

breach of contract issue and. that too should be affirmed. 

The crux of majority's position relies upon an assumption 

that bank officials could create a breach of contract issue 

by testifying the loan was for specific purposes. These 

purposes were from parol evidence in the form of scratch pad 

notations and verbal testimony. This evidence should have 

been excluded from the jury as it violated the parol evidence 

rule. 

Section 28-2-904, MCA, provides as follows: 

Effective written contract on oral agreements. The 

execution of a contract in writing, whether the law 

requires it to be written or not, supersedes all 

the oral negotiations or stipulations concerning 

its matter which preceded or accompanied the 

execution of the instrument. 

The note and mortgage here at issue appear to be 

facially clear. The only exceptions, under these 
circumstances, to the parol evidence rule are stated in 

S 28-2-905(1), MCA, which provides: 

When extrisic evidence concerning a written 

agreement may be considered. 

(1) Whenever the terms of an agreement have been 

reduced to writing by the parties, it is to be 

considered as containing all those terms. 

Therefore, there can be between the parties and 

their representatives or successors in interest no 

evidence of the terms of the agreement other than 

the contents of the writing except in the following 

cases: 

(a) when a mistake or imperfection of the 

writing is put in issue by the pleadings; 

(b) when the validity of the agreement is the 

fact in dispute. 

Neither of the two conditions set forth in 

S 28-2-905 (I), MCA, is present in this case. Even if there 

were an ambiguity in the instruments, the Bank, having 

drafted the same, could not raise the ambiguity to allow for 

the introduction of parol evidence. Section 28-3-206, MCA, 

provides : 

Uncertainty to be resolved against party causing 

it. In cases of uncertainty not removed by parts 1 

through 5 of this chapter, language of a contract 

should be interpreted most strongly against the 

party who caused the uncertainly to exist. The 

promissor is presumed to be such party, except that 

in the case of a contract between a public officer 

or body, as such, and a private party, it is 

presumed that all uncertainty was caused by the 

private party. 

Furthermore, the intention of the parties with respect 

to the note and mortgage must be ascertained only from the 

instruments themselves unless such intention is impossible to 

ascertain by reference to the agreements. Section 28-3-303, 

MCA. The majority opinion reverses court's Instruction No. 1 

by simply stating that there was a conflict in the evidence. 

There was in fact no conflict. Although plaintiff did not 

object to introduction of the parol evidence the trial court 

was perfectly justified, after hearing all evidence, to rule 
that such evidence could create no fact issue on the contract 

obligation to pay the $84,291.69. 

The majority seems to feel the note and security 

agreement are not a complete contract and the parole evidence 

rule has no application. There is abundant authority that 

the parol evidence rule applies to negotiable instruments. 

In Perez-Lizano v. Ayers (Mont. 1985), 695 P.2d 467, 42 

St.Rep. 208, a similar issue was before the court. Ayers 

contended on appeal that his note to Perez-Lizano was 

conditioned by oral agreement. This Court held such 

representations violated the parol evidence rule. Lest there 

be any doubt that the rule applies to notes, this Court said: 

Section 28-2-905, MCA, provides that when the terms 

of an agreement have been reduced to writing by the 

parties, it is to be considered as containing all 

the terms, and there can be no evidence of the 

terms of the agreement other than the contents of 

the writing except when a mistake or an 

imperfection of the writing, is at issue, or when 

the validity of the agreement is the fact in 

dispute. 

Summary judgment in this case was proper. Ayers' 

assertion that there is a material question of fact 

about the fraudulent purpose of the contract is 

immaterial because even if his assertions are true, 

the extrinsic evidence would be inadmissible under 

the parol evidence rule. 

Numerous cases hold that a negotiable instrument which is 

clear on its face cannot be altered by parol agreements or 

representations. See Evenson v. Hlebechuk (N.D. 1981), 305 

N.W.2d 13; Daniel1 Motor Co. Inc. v. Northwest Bank (Tex.App. 

Instruction No. 1, given by the trial court, was proper 

because the instruments at issue were clear on their face. 

Upon demand by defendants, the Bank had an affirmative duty 
to pay that which they were obligated to pay. When the Bank 

refused, it breached its contract to defendants. 

The balance of the majority's position with respect to 

the jury verdict appears to be a cumulation of afterthoughts 

which would not have required reversal of the damage portion 

of the case. However, the majority is wrong on all counts. 

The instruction on intentional interference is a correct 

one. The record supports separate damages for breach of 

contract and for tort. There is no indication that these 

damages duplicate or overlap. There is no legal requirement 

for the jury to be instructed that punitive damages relate to 

the contract or tort portion of the case. They were properly 

instructed that punitive damages are awarded for oppression, 

fraud or malice. Having found compensatory damages in tort, 

the jury was entitled to award punitive damages. The 

majority simply fails to adequately address or understand the 

issues in this case. 

Next, the majority addresses whether the court erred in 

entering a judgment for defendants denying the Bank a 

deficiency judgment. The majority finds fault with the trial 

court's determination that liquidation was not commercially 

reasonable by boldly stating there was nothing in the record 

to justify such a finding and that, in any event, it 

contradicts the special finding of the jury. 

Obviously the jury was entitled to choose from 

alternative theories and chose fraud instead of other 

theories given to them. This is perfectly permissible and is 

so well established a citation of authority is unnecessary. 

Foreclosure issues were, by stipulation, reserved for 

the court. The court specifically found that the method of 
liquidation was commercially unreasonable. This fact was 

properly decided by the court in its portion of the case. 

The trial court found that Weaver-Maxwell, was not in 

default on the loans at issue on A.pril 7, 1980. Only after 

the Bank's tortious conduct caused Weaver-Maxwell to lose its 

franchises did the Bank seize upon these same losses to deem 

itself insecure. Consequently, in the foreclosure action, 

the court found the Bank's reason for accelerating the loans 

to be commercially unreasonable. Abundant evidence in the 

record supported this finding. 

Even if there had been a default on the part of 

Weaver-Maxwell, the trial court was justified in finding that 

liquidation was not commercially reasonable. As a part of 

its burden, the secured party must establish that it realized 

the full value of its collateral by means of a commercially 

reasonable disposition. Hubbard v. Farmers Bank Union Point 

(Ga.App. 1980), 272 S.E.2d 510, aff'd 276 S.E.2d 622 (1980). 

To do this, the secured party must prove the value of the 

collateral at the time of repossession as well as a 

reasonable method of sale. Wood v. First National Bank of 

Commerce (Ga.App. 1983), 305 S.E.2d 852. When a secured 

party fails to prove the value of the collateral liquidated, 

the law presumes the value of the collateral equaled the 

value of the underlying debt plus all expenses. Savoy v. 

Beneficial Consumer Discount Co., (Pa. 1983) , 468 A. 2d 465; 

Lincoln First Bank v. Salvaterra (1980), 431 N.Y.S.2d 302, 

106 Misc.2d 51, aff'd 437 N.Y.S.2d 611, 108 Misc.2d 453 

(1980) ; First National Bank of Denver v. Cillessen (Col.App. 

The issue of "commercially reasonable" was for the trial 

court. In the absence of evidence proving that liquidation 
was commercially reasonable the Bank should suffer by not 

being permitted a deficiency judgment. 

At the the time it took possession of Weaver-Maxwell's 

assets, the Bank took no inventory of what it received. Nor 

did the Bank make any appraisals of the most valuable 

equipment or inventory. The Bank did not even keep a 

meaningful list of what it sold. 

Based upon the evidence before it the trial court found: 

The Bank's failure to maintain an inventory of what 

was sold or to make any appraisals of the more 

valuable pieces of collateral precludes this court 

from determining . . . the amount of any value lost 

as a result of the Bank's negligence. 

Finding of Fact, No. 15. 

At the time of trial the Bank had collected $729,000 in 

liquidation proceeds against a total debt of $726,000. 

Actually the Rank owes defendants $3,000. All of the 

essential facts and applicable law are omitted in the 

majority's discussion. 

In my opinion the trial court did err in cancelling the 

indebtedness and ordering return of the liquidation proceeds 

to defendants. This action by the court goes beyond the 

equitable remedies available to the judge here and may well 

duplicate the damages awarded by the jury. I also disagree 

with the trial court's determination allowing interest 

because the amount was not liquidated. Attorneys' fees are 

allowable on the contract action but not the tort action and 

in this respect I agree with the majority opinion. 

The banking industry in Montana has complained to 

everyone within ear shot about obligations imposed upon the 

banks by this Court. At least in theory we have created 
obligations designed to assure bank customers fair treatment 

when they deal with the banking industry in this state. 

The facts of this case illustrate the kind of banking 

practices which Court-imposed obligations were designed to 

correct. Weavers' wished to borrow $84,291.69. The Bank 

wanted more security on the Weaver-Maxwell corporate debt. 

The Bank agreed to lend Weavers the money but demanded that 

Art Weaver personally collateralize the loan with a 

substantial portion of his family's personal assets. The 

Bank did not inform the Weavers that the Bank had arranged 

for the security on this personal note to cross-collateralize 

the debt of Weaver-Maxwell, Inc. After obtaining the 

additional security on the corporate debt, the Bank 

breached its contract to Weavers and failed to advance the 

$84,291. Instead the Bank foreclosed and liquidated the 

security. 

There are many fine bankers and banking institutions in 

the State of Montana. I can personally attest to that from 

having done business with them. However, the kind of 

practice which was engaged by the Norwest Bank of Great Falls 

in this case should not be countenanced. It is exactly the 

kind of business practice which the new legal duties seek to 

stop. 

This case represents a blatant attempt by the majority 

of this Court to bail the Bank out where the Bank has caused 

serious and irreparable damage to a Montana business and its 

owners. This kind of banking practice creates an unfavorable 

business climate in Montana and should not be shielded by the 

majority's result orientated judicial fiats. 
There is no error in the jury trial and judgment should 

be entered on the jury verdict. The judgment entered by the 

trial court on the equity issues should be amended to reflect 

the views herein expressed. 

Mr. Justice John C. Sheehy and Mr. Justice William E. Hunt, 

Sr. : 

We join in the dissent of Mr. Justice Morrison.