NO. 95-064 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1995 

DOUBLE AA CORPORATION, a Delaware corporation, 

Plaintiff, Appellant, and Cross-Respondent, 

v. 

NEWLAND & COMPANY, Successor Trustee 

of the Raymond W. George Trust, 

Defendant and Respondent, 

and 

JAMES W. SIEVERS, 

Intervenor Defendant, Respondent, 

and Cross-Appellant. 

APPEAL FROM: District Court of the Sixth Judicial District, 

In and for the County of Park, 

The Honorable Mark P. Sullivan, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Joseph T. Swindlehurst, Huppert & Swindlehurst, 

Livingston, Montana 

For Respondent: 

James P. Harrington, Attorney at Law, 

Butte, Montana (for Newland & Company) 

John T. Jones and Harlan B. Krogh, 

Moulton, Qellingham, Longo & Mather, 

Billings, Montana (for James W. Sievers) 

For Amicus: 

Rockwood Brown, Brown, Gerbase, Cebull, 

Harman & Ross, Billings, Montana 

(for Kenneth D. George and Shirley G. Bragg) 

Submitted on Briefs: May 25, 1995 

Decided: October 24, 1995 

Filed: 
Justice Terry N. Trieweiler delivered the opinion of the Court. 

Plaintiff Double AA Corporation filed a complaint in the 

District Court for the Sixth Judicial District in Park County, in 

which it alleged that Shirley Bragg, trustee of the Raymond W. 

George Trust, who has been succeeded as trustee by Newland & 

Company, breached a buy-sell agreement for the sale of a ranch held 

by the trust and that it was entitled to specific performance. The 

trustee, as well as James W. Sievers, the intervenor, opposed 

Double AA's request for specific performance. After a trial, the 

District Court entered its findings, conclusions, and judgment, 

which denied Double AA's request for specific performance but 

awarded it damages. Double AA appeals the District Court's 

findings, conclusions, and judgment, and Sievers cross-appeals 

specific findings. We affirm the judgment of the District Court. 

The issue on appeal is whether the District Court abused its 

discretion when it denied Double AA's request for specific 

performance. 

The issue raised on cross-appeal is whether the District Court 

erred when it made findings of fact numbered 73 and 74. 

FACTUAL BACKGROUND 

The ranch, which is the subject of the dispute, formerly 

belonged to Raymond George. Raymond died in 1974 and, as provided 

in his will, left the ranch in a testamentary trust for his family. 

His daughter Maxine was designated the trustee. The trust provided 

that his wife, Olga George, would receive income from the trust for 

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her life and that the George children held remainder interests as 

follows: Maxine George--three-ninths, as well as a first option to 

purchase from the other remaindermen; Leo George--two-ninths; 

Kenneth George--two-ninths; and Shirley Bragg--two-ninths, Maxine 

died in 1980, and eventually the remaindermen agreed with her 

surviving husband, Cleto McPherson, that he would be entitled to 

her share and first option. Shirley Bragg became the trustee 

following Maxine's death. 

On December 13, 1989, Double AA Corporation, a Delaware 

Corporation whose sole shareholders are Charles Allmon and Gwen 

Allmon, agreed with Shirley Bragg, who at that time was the trustee 

of the Raymond W. George trust, to purchase the George family's 

ranch in the Paradise Valley south of Livingston. Shirley agreed 

on behalf of the trust to convey the property, and a substantial 

deposit was transferred. 

At trial, Shirley testified that in 1988 she had received 

advice from Wes Johnson, a financial planner for Investment 

Diversified Services (IDS), that if the trust did not sell the 

ranch there would be tax consequences in an amount between $200,000 

and $300,000 at the time of Olga's death. Olga was nearly 90 years 

old when Shirley received this advice. Wes Johnson admitted he had 

little knowledge about taxes and was not qualified to render tax 

advice. He also testified that he was paid on a commission basis, 

and as a result felt pressure to locate investors for IDS. He 

encouraged that the ranch be sold and the proceeds be invested with 

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IDS. Shirley testified that she reluctantly agreed to sell because 

of Johnson's tax advice. 

Shirley petitioned the District Court to approve the sale of 

the ranch. Sievers intervened and objected on the basis that he 

had purchased a five-ninths remainder and a first option to buy 

from the other remaindermen. In September 1990, District Court 

Judge Byron Robb, granted the petition to confirm the sale and 

dismissed Sievers' objection. He specifically found that: 

While the testator here gave his daughter Maxine a right 

to purchase the interest of the other children in the 

ranch, I find it obvious this was personal to her because 

she remained on the place while the others left. I thus 

conclude it doubtful such option passed to Maxine's 

husband and sole heir, Cleto McPherson, and although the 

other children made agreements with him to have such 

privilege at a different value than Mr. George 

contemplated, Cleto never exercised such right and now 

has no ability to do so or to keep the ranch in the 

family, and I find it most tenuous that Grandpa George 

ever intended that such option to purchase would pass to 

or be enforceable by a stranger as Mr. Sievers contends. 

Further, the trustee was not a party to such option 

agreements and is not bound by them. 

In November 1990, an attorney from Livingston informed Shirley 

that no taxes would be due as a result of Olga's death. On 

December 2, 1990, Shirley sent Charles Allmon a letter in which she 

advised him that she wanted to rescind the agreement with 

Double AA. On April 2, 1991, Shirley filed a motion to dismiss her 

petition for a declaration of her right and authority to sell the 

trust property and to cancel the sale to Double AA. The District 

Court denied her motion and ordered the sale to proceed. We 

affirmed the District Court's conclusion that Shirley had the right 

4 
and authority to sell the ranch andsaffirmed the District Court's 

finding that the sale was fair and reasonable. In re Raymond W. George 

Trust (1992), 253 Mont. 341, 834 P.2d 1378. However, we reversed 

that part of the District Court's decision which granted specific 

performance because that issue had not been raised or litigated. 

InreGeorge Trust, 834 P.2d at 1381-82. 

After our decision in In re George Trust, Double AA filed this 

action for specific performance. Sievers intervened and opposed 

specific performance because he claimed that in April 1988 he 

purchased a three-ninths remainder interest from Cleto, in addition 

to Cleto's first option to purchase from the other remaindermen. 

He added that in August 1988 he purchased Leo's two-ninths 

remainder interest. 

A nonjury trial was held on June 22 and 23, 1994. Shirley 

testified that the erroneous information she had received from 

Johnson was confirmed by Legal Tech, a Billings accounting firm. 

However, she was informed in November 1990 that Olga's death would 

not result in any immediate tax consequences. Instead, she learned 

that capital gains tax in the amount of $400,000 would be due upon 

sale of the ranch to Double AA. She testified that the attorney 

who represented her prior to the sale had not advised her that 

Johnson's advice was incorrect. There was also contradicted 

testimony that her previous attorney was to receive a percentage of 

the broker's commission which was to be paid by Double AA. 

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In October 1994, the District Court entered its findings of 

fact, conclusions of law, and judgment. The District Court held 

that specific performance was improper, but awarded Double AA money 

damages for breach of contract. The court further found that 

Sievers did not obtain a binding first option to purchase the ranch 

from the remaining beneficiaries. 

Double AA appeals from the District Court's decision, and 

Sievers cross-appeals from the District Court's findings that he 

did not have a valid first option to purchase. 

ISSUE 1 

Did the District Court abuse its discretion when it denied 

Double AA's request for specific performance? 

We review a district court's denial of a request for specific 

performance to determine whether the district court abused its 

discretion. Larsonv. Undem (1990), 246 Mont. 336, 342-43, 805 P.2d 

1318, 1322. 

Double A?+ acknowledges that specific performance is an 

equitable remedy within the District Court's discretion but 

suggests that the court's discretion is narrow. It contends that 

the District Court did not exercise sound discretion. 

The trustee claims, and Sievers agrees, that under the 

circumstances the District Court did not abuse its discretion. 

Specific performance is an equitable remedy which requires 

performance of a contract based on the precise terms contained in 

6 
the contract. Siefert v. Siefert ( 19 7 7 ) , 173 Mont. 501, 504, 568 P.2d 155, 

156. 

1’ [SJpecifc performance will be ordered only on equitable grounds in view of all the 

conditions surrounding the particular case. I’ 

‘A bill in equity for specific performance is an appeal to the conscience of the court, 

and generally, in such a proceeding, the inquiry must be whether, in equity and good 

conscience, the court should specifically enforce the contract. Accordingly, 

specific performance will be granted when it is apparent 

from a view of all the circumstances of the particular 

case that it will serve the ends of justice, and it will 

be withheld when, from a like view, it appears that it 

will produce hardships or injustice to either party II 

. . . . 

Siefert, 568 P.2d at 157 (quoting 81 C.J.S. SpecificPerformance § 3) . In 

Siefert , we acknowledged that the appropriateness of specific 

performance depends on the facts and circumstances of the case. 

Siefert , 568 P.2d at 157. 

In determining whether a contract should be specifically 

enforced, courts look at the contract, as well as the relationship 

of the parties, and will determine if the contract to be enforced 

is fair and reasonab1e.l Factors courts consider include execution 

1 In InreGeorgeTrust, we upheld the District Court's finding that 

Double AA'S offer of $1,300,000, along with the other benefits, was 

fair and reasonable. We noted that: 

The validity of the contract between the trust and Double 

AA and any rights of the parties resulting from the 

contract were not the subject of the litigation. The 

evidence presented only regarded the fairness and 

reasonableness of Double AA's offer and the agreement 

that the parties entered. 

In re George Trust, 834 P.2d at 1381. We do not construe the above 

language to mean that, as to whether specific performance was 

appropriate, the contract was fair and reasonable because we did 

not address whether it would be fair and reasonable to specifically 

enforce the contract. 

7 
of a contract under circumstances unfavorable to the defendant 

because of lack of advice, and the difference in the parties' 

business experience and knowledge. 81 C . J . S . Specific Performance § 4 9 

(1977). 

In addition to the above guidelines, Montana statutes identify 

some situations in which specific performance is appropriate. 

Specific performance may be necessary when pecuniary compensation 

for a defendant's failure to perform pursuant to the terms of a 

contract does not afford adequate relief. Section 27-l-411(2), 

MCA. More specifically, in contracts involving the sale of land, 

l'[i]t is to be presumed that the breach of an agreement to transfer 

real property cannot be adequately relieved by pecuniary 

compensation . . . .'I Section 27-l-419, MCA. 

Section 27-1-415, MCA, however, provides circumstances in 

which a party cannot be compelled to specifically perform. 

Specific performance cannot be enforced against a 

party to a contract in any of the following cases: 

i2i . if . it is not, as to him, just and reasonable; 

(3) if his assent was obtained by the misrepresentations, concealment, circumvention, or unfair practices 

of any party to whom performance would become due under 

the contract or by any promise of such party which has 

not been substantially fulfilled; or 

(4) if his assent was given under the influence of 

mistake, misapprehension, or surprise . . . . 

Section 27-1-415, MCA. 

The District Court made specific findings, which are supported 

by substantial evidence, in relation to the above-listed equitable 

a 
considerations and statutes. The court found: (1) Double AA knew, 

or should have known, before the sale, that Shirley misapprehended 

facts material to the contract and Shirley testified she told 

Charles that she felt pressured to sell because of her erroneous 

belief regarding the potential tax liability; (2) Shirley was a 

victim of mistaken information and inaccurate advice. The 

"mistaken fact [regarding taxes] more than anything else was the 

reason Shirley consented to [the] sale [of] the George family 

ranch"; (3) Charles and Shirley had extremely divergent backgrounds 

in business transactions. Charles was a well-known professional 

investor, had experience in multi-million dollar transactions, and 

had extensive education, background, and experience in business. 

To the contrary, Shirley was a somewhat unsophisticated trustee who 

was neither prepared for her position as trustee nor educated in 

business nor business transactions, negotiations, or taxes. 

Finally, the court found that the land was not unique to 

Double AA. Charles testified that the ranch was no more unique 

than land that he already had except that it was contiguous with 

property he owned in the Paradise Valley. The court found that the 

loss would impose a greater hardship on the George Family Trust 

than Double AA because Shirley's decision to sell was a direct 

result of the incorrect tax advice, and the ranch had been in the 

George family for over 100 years. 

Based on its findings, the court concluded that, in light of 

the circumstances surrounding the execution of the contract, 

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specific performance was not appropriate because the contract was 

not fair, just, and reasonable, and Shirley's assent was based on 

a mistake or misapprehension. Section 27-1-415, MCA. 

Double AA argues that a misunderstanding or mistake regarding 

tax consequences is not a sufficient reason to avoid the 

transaction and that the exceptions to specific performance 

codified in § 27-l-415, MCA, do not apply. 

While a misapprehension or mistake regarding taxes is 

insufficient to avoid a contract, Quinnv.Briggs (1977), 172 Mont. 468, 

475, 565 P.2d 297, 301, such a misunderstanding or mistake, in 

light of the surrounding circumstances, may be a sufficient reason 

to deny specific performance as an equitable remedy. See 11 Samuel 

Williston, Williston on Contracts 5 1427 (3d ed. 1968); Corbin on 

Contracts § 1166 (1964). 

Moreover, we have upheld the denial of specific performance 

where the defendant relied on advice from her attorney which 

produced factual and legal misapprehensions. Stovull v. Waft (1980) , 

187 Mont. 439, 610 P.2d 164. In Stovall, we recognized that specific 

performance is improper if there is a mistake as set forth in 

§ 27-l-415(4), MCA, or if the circumstances show that specific 

performance would impose a considerable hardship. Stovall, 610 P.2d 

at 167 (citing Siefert, 568 P.2d at 157). Based on the total 

circumstances, and balancing the equities, we upheld the district 

10 
court's denial of a request for specific performance against the 

seller. Stovall, 610 P.2d at 167-68. 

The facts in Stovall are distinguishable from this case. 

Nonetheless, the principles on which we relied in Stow11 apply. 

Here, the District Court found that specific performance would 

impose a greater hardship on the seller than denial would impose on 

the buyer. 

Double AA also challenges the District Court's findings 

regarding Shirley's mistake or misapprehension because testimony 

indicated that other factors motivated her to sell, and evidence 

contradicts her position. In the exercise of its discretion, part 

of the District Court's responsibility was to weigh conflicting 

testimony. The district court is in a better position to observe 

the credibility and demeanor of witnesses than this Court. We will 

not second guess the district court's determination regarding the 

strength and weight of conflicting testimony. See In re Marriage of Newton 

(1992), 255 Mont. 463, 466, 844 P.2d 47, 49. 

Based on the equitable principles and statutory criteria set 

forth above, evidence in the record, and the District Court's 

findings, including the parties' unequal positions and the mistaken 

information on which the trustee relied, we hold that the District 

Court did not abuse its discretion. We affirm the District Court's 

denial of Double AA's request for specific performance. 

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ISSUE 2 

Did the District Court err when it made findings of fact 

numbered 73 and 74? 

Our standard of review of a district court's findings of fact 

is whether they are clearly erroneous. Columbia Grain Int? v. Cereck 

(1993), 258 Mont. 414, 417, 052 P.2d 676, 678. 

Sievers contends that we should vacate the District Court's 

findings of fact numbered 73 and 74 because the court improperly 

found that Sievers did not acquire a first option against Shirley 

Bragg, Kenneth George, and Leo George. Sievers contends that the 

findings were not relevant to Double AA's request for specific 

performance, and he has not had an adequate opportunity to 

introduce evidence in support of his position. Sievers adds that 

the District Court was not empowered to enter a judgment which 

affected the property rights of individuals who were not parties to 

the litigation. In making that argument, he relies on 5 25-p-201, 

MCA, and Warnackv. Coneen Family Trust (1994), 266 Mont. 203, 879 P.2d 

715. 

After Sievers raised this issue by cross-appeal, we allowed 

Shirley Bragg and Kenneth George to file an amicus brief in support 

of their position. They contend that unlike the nonparty in 

Warnack , they are not complete strangers to the litigation. 

In the initial proceeding before Judge Robb, Sievers 

intervened and asserted he had a first option. Judge Robb rejected 

12 
Sievers' position. He asserted the same argument when he 

intervened in the present case; Judge Sullivan also rejected 

Sievers' contention. In findings of fact numbered 73 and 74, the 

court reaffirmed Judge Robb's prior determination that the option 

did not pass to Sievers. In finding of fact number 74, the court 

found specifically that Sievers did not purchase a first option 

which is binding on the other remaindermen. 

Sievers now contends, after two district court judges have 

found contrary to the position he asserted by intervening, that 

those courts were without authority to make the challenged findings 

because the other remaindermen were not parties to the present 

action. We disagree and conclude that Sievers' reliance on 

procedural flaws is an insufficient basis on which to set aside the 

District Court's findings. 

Section 25-g-201, MCA, states that subject to Rule 54(b), 

M.R.Civ.P., a judgment may be given for or against one or more of 

several plaintiffs and for or against one or more of several 

defendants. In Warnack, we held that the District Court erred when 

it awarded a prescriptive easement to a nonparty. We stated that: 

[1]t is a fundamental principle of our jurisprudence that 

it is only against a party to the action that a judgment 

can be taken and that the judgment is not binding against 

a stranger to the action. 

Warnack, 879 P.2d at 718 (quoting Moore v. Capitol GasCorp. (19451, 117 

Mont. 148, 156, 158 P.2d 302, 306). In Warnack, we recognized that 

13 
the above rule applied where a judgment was awarded in favor of a 

nonparty. 

However, this case is distinguishable. Section 25-g-201, MCA, 

does not preclude a party who voluntarily intervenes from having an 

adverse judgment entered against him or her. See Rule 54(b), 

M.R.Civ.P. (stating that a final judgment may grant relief to which 

the party is entitled). Sievers voluntarily intervened and 

asserted that he purchased a valid first option. The interested 

remaindermen did not intervene to protect their interests. 

However, unlike Warnack, the remaindermen were aligned with the 

trustee's position. Additionally, the remaindermen were not 

strangers to the action; they are heirs of the trustor and have an 

ownership interest in the trust. A decision against the trustee 

would adversely affect the remaindermen. 

Sievers contends that it would be unfair to allow parties to 

benefit from a judgment if they did not appear to litigate the 

merits. The logical conclusion of Sievers' position is that he may 

intervene and assert a position contrary to the remaindermen, but 

if he loses, claim the adverse decision was not binding. Sievers 

has merely asserted a procedural flaw from which he claims he 

should benefit because he is dissatisfied with the outcome. 

Despite the fact that the remaindermen did not intervene to protect 

their position, they were aligned with the trustee. Sievers 

introduced evidence in support of his position and must abide by 

14 
the District Court's decision. Absent a specific indication of how 

the District Court's findings were clearly erroneous, or an 

indication that the court erred as a matter of law, we 

the District Court's findings. Sievers has failed 

that the District court 0 s findings were clearly 

Therefore, we affirm the District Court's findings. 

The judgment of the District Court is affirmed. 

must affirm 

to indicate 

erroneous. 

We concur: 

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