### IN THE SUPREME COURT OF THE STATE OF MONTANA

360 RANCH CORP.,a Nevada Corporation, Plaintiff and Respondent,

APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Larry W. Moran, Judge presiding.

COUNSEL OF RECORD: For Appellant: Thomas R. Anacker,Anacker Law Office, Bozeman,Montana For Respondent: Karl Knuchel,Attorney at Law, Livingston,Montana

Filed: Submitted on Briefs: August 8, 1996 

### Decided: October 31, 1996Justice Terry N. Trieweiler delivered the opinion of the Court. The respondent,360 Ranch Corp. ("360Ranch")

### , filedan action for declaratory relief in the District Court of the Eighteenth Judicial District in Gallatin County. The District Court granted summary judgment in favor of 360 Ranch. The appellant, R & D Holding, appeals the order of the District Court. We reverse the District Court, and remand for resolution of the factual issues. The issue on appeal is whether the District Court erred when it granted summary judgment in favor of 360 Ranch Corp. FACTUAL BACKGROUND In January 1994, 360 Ranch, as seller, entered into a land sale contract with Patrick Lancione by which it agreed to sell a five-acreparcel for theamount of $260,000. Lancione subsequently contracted with David Williams1 to sell the parcel for $381,150. The simultaneous closings on the land sale contracts were held on April 28, 1994. Williams paid the sum of $381,150,and 360 Ranch received the sum of $260,000. At the time of closing, however, 360 Ranch was unable to convey title to the five-acreparcel. The five acres, as part of a larger twenty-acre tract, could not be conveyed until a survey of the land was conducted, and all of the applicable subdivision review requirements were satisfied. As a result, 360 Ranch conveyed to Williams a recordable deed for the entire twenty-acreparcel of land.

'In June 1994, Williams conveyed the property to R & D Holding. As a result, R & D Holding became the successor in interest to Williams, and is the appellant herein.Then, on April 29, 1994,Williams and 360 Ranch entered into a written option agreement. The agreement gave 360 Ranch the option to reacquire fifteen of the twenty acres conveyed to Williams at the closing. Inorder to exercise its option,however, 360Ranchwas required to prepare and file aminor subdivisionplat no later than one year following the date 

### of the option agreement. The agreement also stated that, if the contingencies in the option agreement were not met within the one-yearperiod, then "Williams

[would]retain the considerationpaid today as liquidateddamages, and this option [would] become null and void." 360 Ranch'sattempts to comply with the contingencies in the option agreementwere unsuccessful. In January 1995,they applied for minor subdivision review,but their application was denied on the ground that a conflict between the Bozeman Area Master Planand the Bozeman Area Zoning Map was discovered. The conflict was eventually resolved, but not until after the one-year period specified by the option agreement had expired. Ultimately, therefore,a minor subdivisionplat was not filed within one year of the option date. No additional consideration was paid to extend the option, and it expired on April 29, 1995. 360 Ranch filed an action for declaratory relief in which it requested the District Court to extend the one-year period specified in the parties' option agreement. 360 Ranch moved for summary judgment,and ahearingwas held before the District Court. At the conclusion of the hearing, the District Court made the

### following findings: (1)the clear intent of the parties was to contract for a five acre, and not a twenty acre, parcel of land; and (2)because of the conflict between the Bozeman Area Master Planand the Bozeman Area ZoningOrdinance,it was "impossible" for 360 Ranch to comply with the requirementsof the option agreement. Based on its findings, the District Court granted summary judgment in favor of 360 Ranch. The District Court determined that "equity and good conscience



### . . . requires that [360 Ranch] be given reasonable additional time" to fulfill the obligations imposedupon it by the optionagreement,and orderedR & 

### D Holding, as the "record owner of the 20-acre parcel," to sign the application for the minor subdivisionplat. DISCUSSION Did the District Court err when it granted summary judgment in favor of 360 Ranch Corp.? Summary judgment is governed by Rule 56

### (c) , 

### M. R.Civ.P.,which provides, in relevant part, as follows: The judgment sought shall be rendered forthwith if the pleadings, depositions,answers to interrogatories,and admissionson file,togetherwith theaffidavits,if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law



### . . . . The purpose of summary judgment is to encourage judicial economythrough the eliminationof anyunnecessarytrial. However, summary judgment is never to be a substitute for trial if there is

an issue of material fact. Reavesv.Reinbold 

### (1980) , 

### 189 Mont. 284,It is well established that the moving party is required to show a complete absence of any genuine factual issues. D'Agostinov. Swanson (1990),240 Mont. 435, 442, 784 P.2d 919, 924. To defeat the motion, the nonmoving party must set forth facts which demonstrate that a genuine factual issue exists. O'Bagvv.First Interstate BankofMissoula (1990),241 Mont. 44, 46, 785 P.2d 190, 191. All reasonable inferences that may be drawn from the offered proof must be resolved in favor of the nonmoving party. U'Agostino, 240 Mont. at 442, 784 P.2d at 924. Additionally, if there is any doubt regarding the propriety of the summary judgment motion, it should be denied. Whitehawkv.Clark (1989),238 Mont. 14, 18, 776 P.2d 484, 486-87. When the District Court granted 360Ranch'smotion for summary judgment, it concluded that "there are no genuine issues of material fact in dispute


### . . . and that [360Ranch] is entitled to judgment as a matter of law." R & D Holding, however, asserts on appeal that there are genuine issues of material fact,and that, therefore, the District Court erred when it granted 360 Ranch's motion for summary judgment. Specifically,R & D Holding claims that genuine factual disputes exist with regard to the following issues: (1)the intent of the parties with regard to the conveyance of the twenty acres and the execution of the option agreement; and (2) whether 360 Ranch's failure to perform, as required by the terms of theoptionagreement,canbe excused on the grounds of impossibility of performance. INTENT OF THE PARTIES The District Court determined that, "[cllearly,it never was within the contemplation of anyone involved in these transactions that [R & D Holding] would get a 20-acreparcel of real property



### ... ." The District Court found, instead, that the parties intended only to buy and sell a five-acreparcel. R & D Holding,however,contends that there is a genuine issue of material fact with regard to the parties' intent. To support their claim, they first point to the affidavit of David Williams, in which he asserts, "itwas [my] intent to purchase 20 acres for the sum of $381,150.00, subject to the 360 Ranch Corporation option, and to retain the entirety of said 20 acres if the option

was not exercised in accordance with its termjsl

### ." 360 Ranch claims that this affidavit is self-servingand was made only after the institutionof litigation. We recognize,however, that when a court determines whether summary judgment is appropriate, "the papers supporting [the]movant'sposition are closely scrutinized, while the opposing papers are indulgently treated.

### " PayneReallyv.Firs1 Sec.Bank (1992),256 Mont. 19, 25, 844 P.2d 90, 94. Even more significant, however, is the contract itself. The language of the option agreement states, " [ilf the option is not exercised on or before the above-specified date [oneyear from the date of the option agreement], DAVID WILLIAMS is to retain the

### consideration paid today as liquidated damages and this option shall become null and void." The option agreement clearly contemplates the possibility that Williams (and R & 

### D Holding as his successor in interest) could acquire the entire twenty acre parcel. InEngebretsonv.Pz~lnarn 

### (1977),174 Mont. 409, 413, 571 P.2d 368, 370,we held that "summaryjudgment is usually inappropriate where the intent of the contracting parties is an important consideration." Furthermore, all reasonable inferences must be drawn in favor of R & D 

### Holding, the nonmoving party. Therefore, we conclude that there is a genuine issue of material fact with regard to the intent of the parties. IMPOSSIBILITYOF 

### PERFORMANCE The District Court found that 360 Ranch's "effortsto divide the 20-acreparcel through the minor subdivision process were made impossibledue to the conflictbetween the Bozeman Area Master Plan and the Bozeman Area Zoning Ordinance." On that basis, the District Court excused 360 Ranch's failure to perform, and gave them "reasonableadditional time" to comply with the terms of the option agreement. R & D

### Holding, however,contends that there isa genuine issue of material fact with regard to whether 360 

### Ranch's failure to perform should be excused on the ground of impossibility of performance. In supportof its contention,R & D 

### Holdingmakes the followingassertions: 360Ranchdid not file its first applicationfor minor subdivision review until January 1995--morethan eight months after the term of the option commenced; the application contained errors which caused the Bozeman City Planning Office to reject the application; and as of March 1995,one month before the option expired,360 Ranch did not have a valid application on file with the proper authority. R & D Holding concedes that the conflict in the Bozeman area planning documents caused a delay, and that 360 Ranch was not responsible for either the conflict or the delay. Nonetheless, 

### R & 

### D Holding claims, on appeal, that the delay "would not have prevented [360 Ranch1 from obtaining minor subdivision review during the term of the one (1)year option period had it simply made a timely filing 

### of its minor subdivision application." In essence,

### R & 

### DHolding contends that the doctrine of laches,rather than impossibility of performance, should apply to the facts of this case. The starting point for our analysis is the principle that 

### " [ilmpossibilityof performance is a strict standard that can only be maintainedwhere the circumstances trulydictate impossibility." Barrettv.Ballard (l98O),191 Mont. 39, 44, 622 P.2d 180, 184. Therewill,undoubtedly,be contract cases inwhich adistrict court could grant summary judgment based on impossibility of performance. For example,where anAct of God physically destroys the subject matter of a contract, or where the subject matter of a contract is subsequently declared illegal, then it could be heldthat, as a matter of law, performance of the contract was impossible. In many other cases,however,whether performance of

a contract was impossiblewill be a question of fact, and summary judgment will not be appropriate. We conclude that this case falls into the latter category. Based on the facts alleged in this case, there are two possible interpretations. The first is that, as the District Court determined, due to the conflict in the Bozeman area planning documents and ensuing delay, it was impossible for 360 Ranch to file a minor subdivision plat within the one-year time period specified by the option agreement. The other is that, as R & D Holding contends,had 360 Ranch acted with proper diligence, their application for a minor subdivision plat could have been filed within the one-year time period, despite the conflict in the planning documents and ensuing delay. We conclude that,based on the facts alleged in this case,the question of impossibility of performance presents a genuine issue of material fact. Accordingly, we hold that the District Court erred when it granted summary judgment in favor of 360 Ranch. Finally, we note that when the District Court issued its order, it determined that "equity and good conscience



### . . . requires that [360 Ranch] be given reasonable additional time" to comply with the terms of the option agreement. We conclude thatthe District Court exceeded its authority when it modified the express terms of the parties' contract It is well established that a district court may only assert its equitable jurisdiction when no statutory or legal remedy is available. JefjiesCoalCo.v.Industrial Accident Board (1953 ) 

### , 126 Mont

### . 411, 252 P.2d 1046. In this case, the District Court modified the express terms of the parties' contract, and also failed to apply 5 28-2-603,MCA, which states: Where a contract has but a single object and such object is unlawful, whether in whole or in part, or wholly impossible of performance, or so vaguely expressed as to be wholly unascertainable, the entire contract is void. Thus, if after resolution of the pertinent factual issues it is determined that performance was, in fact, impossible, the District Court would be bound by the mandate of 5 28-2-603,MCA. The judgment of the District Court is reversed,and the case is remanded for resolution of the factual issues.

We concur: