No. 90-083 IN THE SUPREME COURT OF THE STATE OF MONTANA

FAY LARSON, Plaintiff and Respondent,-vJACK UNDEM and LYDIA UNDEM, Defendants and Appellants.



### . r' APPEAL FROM: District Court of the Fourth Judicial ~istricE In and for the County of Missoula, .I. < 1 r4f0 The Honorable Jack L. Green, Judge presifing.

COUNSEL OF RECORD: For Appellant: Raymond 

### P. Tipp; Tipp, Frizzell & Buley; Missoula, Montana For Respondent: Noel K. Larrivee; Larrivee Law Offices; Missoula, Montana

Filed: Submitted on Briefs: August 23, 1990 Decided: November 8, 1990Justice Fred J. Weber delivered the Opinion of the Court.

This is an action forbreach of contract covering the sale of real estate. Defendants appeal from the judgment entered by the District Court for the Fourth Judicial District, Missoula County, grantingplaintiff specificperformance of the contract, surveying costsand attorney feesand emotionaldistressdamages. We reverse the award of emotional distress damages and otherwise affirm the District Court. The issues for our consideration are: 1. Whether Larsongs claim is barred by the statute of limitations or laches? 2. Whether the District Court erred in awarding Larson emotional distress damages? 3. Whether the District Court erred in granting Larson specific performance of the contract? Inabench trial, theDistrictCourt found the following facts which are supportedby substantial evidence in the record: InJune of 1972, plaintiff (Larson) entered into a written contract with defendants (Undems) whereby Larson sold Undems a parcel of land reserving seven acresof theparcel forLarsong s personal use. The contract for deed and other necessary documents were prepared by Larsongsattorney. Although Mr. Undem is not a licensed surveyor, the parties agreed that Mr. Undem would prepare the property description including the description of the seven acres reserved by Larson.The parties together examined the land to be sold including the boundaries of the tract which Larson desired to reserve for herself. Mr. Undem then prepared the first description which was used in the preparation of the contract and deed. The first description was inaccurate. The description of the seven acre reservation contained land which was a part of the Burlington Northern Railroad (BN) right-of-way, and the metes and bounds descriptiondid not close. The District Court specifically found: "The legal description contained in the real property transfer documents 

# . . .was supplied by DefendantJack Undeml1and I1Larson relied upon the legal description provided by Undem when she executed the contract documents and Warranty Deed1'. After the execution of the contract and deed, Larson discovered that the legal descriptionwas incorrect,and requested that Mr. Undem prepare a proper description. Mr. Undem acknowledged that the first description was incorrect. Mr. Undem obtained thehelp of an engineer toprepare the second description of the land. They referred to public records, Montana Highway plats and BN plats. They prepared a second description and made

a diagram of that description,and delivered the same to Larson and her attorney. At that time none of the parties realized that the second description was incorrect because it still included a portion of the BN right-of-way and failed to accurately describe the reserved seven acre parcel. InApril orMay of 1973,Larson and her sonsmeasured the land and discovered that the second description was inaccurate and didnot encompass the property she reserved. Larson so informed Mr. Undem. Mr. Undem failed to prepare a third description. The District Court concluded: I1Larsonhad at all times relied upon Undem to pr'ovide a valid legal description for the seven acre parcel of land which was reserved by her. Undems failure to provide such a legal descripton 

# . . . constitutesa breach of said contract." The contract also provided that Undems were not to sell or convey theproperty purchased from Larsonwithout Larsonlswritten consent. Nonetheless,on October 29, 1984,approximately 26months before the last payment was made to Larson, Undems sold and conveyed the property purchased from Larson to a third party purchaser (Olsons). Undems did not obtain the required consent from Larson. In the Olson contract Mr. Undem used the second description which he knew to be incorrect. The District Court found thatMr. I1Undemknew that the legal description contained in [the] contract was inaccurate and invalid and entered into the third-party contract with [such] knowledge.I1 The last payment on the Larson-Undems contract was made in December of 1986. The deed was obtained from escrow and recorded inJanuary, 1987. Severalmonths after receiving the last payment, Larson hired a surveyor to provide a legal description for the reserved land, at a cost of $700. In October 1987, Larson filed suit against Undems requesting specific performance of the contract; emotional distress damages; and sought to quiet title against the Olsons for her seven acres. She also requested hercosts and attorney's fees. TheDistrict CourtconcludedthatUndemsbreached thecontract when they sold the property on October 29, 1984, without first obtaining the written consent of Larson. The court further found that the Undems breached the contract when they failed to provide

an accurate legal description of the reserved seven acre tract. Undems appeal. I Whether Larsonrsclaim is barred by the statuteof limitations

or laches? Undemsmaintain thatLarsonrsclaimsarebarred by the statute of limitations. They raised this issue before the District Court in a motion for summary judgment. The District Court denied their motion. They argue that the statuteof limitations started to run in 1973 when Larson discovered that the second legal description prepared by Mr. Undem was erroneous. They urge that by not immediately acting upon that discovery she waived any right to raise the claim later. An action for breach of a written contract must be brought within eightyearsunder 5 27-2-202, MCA. A contract for deed has been construed as a contract in writing to which the eight year statute applies. Neils 

### v. Deist (1979), 180 Mont. 542, 591 P.2d 652. The eightyear statute of limitationsbegins to runwhen the

cause of actionaccrues. McWilliams

### v. Clem (1987)

### , 228Mont. 297, 743 P.2d 577. We conclude that the first cause of action accrued

on October 29, 1984, when theUndems contracted with the Olsons tosell the property purchased from Larson using the second property descriptionknownby theUndems to be inaccurate, and alsowithout first obtaining the written consent of Larson. We conclude that the action was brought by Larson within the eight year statute of limitations. Undems also argue that Larsontscause of actionwas barred by laches. Laches exists where therehasbeen an unexplainabledelay of such duration or character as to render the enforcement of an asserted right inequitable, and is appropriate when a party is actually or presumptively aware of his rights but fails to act. Sperryv. Montana StateUniv. (1989), 239 Mont. 25, 778 P.2d 895; Smithersv. Hagerman (Mont. 1990), -P.2d147 St.Rep. 1483. Undems sold the property without Larsontsconsent in October of 1984. The last payment on the contractwas tendered in December of 1986 and Larson filed suit in October of 1987. We agree with the District Court conclusion that the factsdo not demonstrate an inequitable delay on the part of Larson. We affirm the District Court's holding that Larson's claim was not barred by either the statute of limitations or laches. I1 Whether the DistrictCourt erred in awarding Larson emotional distress damages? The District Court awarded Larson $10,000 in emotional distressdamages. Undemsmaintain that emotional distress damages are not recoverable in a contractaction. They argue thatcontract damages allow the injured to receive the benefit of the bargain,no more, no less. They urge that emotional distress damages are not damages within the reasonable contemplation of the parties at the time thecontractwas entered, and arethereforeunrecoverable. Undems urge that there is not sufficient evidence to support a claim for emotional distress. They contend the only evidence was Larsonlstestimony that she lost sleep on somenights and was very upset. Larson maintains that her repeated attempts to obtain the correct legal description of the reserved property, and the subsequent discovery that the property had been sold without her consent, caused her stress,anxiety and frustration. She contends that the amount of damages awarded her was reasonable under the circumstances. It is important that we distinguish the present emotional distress claim in a breach of contract action from emotional distress damage claims in tort actions. Section 27-1-303, MCA, contains a limitation on damages for breach of obligation. It states: 27-1-303. Limitation of damages for breach of obligation. No person can recover a greater amount in damages for the breach of an obligation than he could havegainedby the full performance thereofonboth sides unless a greater recovery is specified by statute. By its wording this statute limits the recovery to the amount the plaintiff could have gained by full performance of the contract. That rule applies unless there is a greater recovery specified in

some other statute. section 27-1-311, MCA, sets forth the key provisions withregard to breach of contract: 27-1-311. Breach of contract. For the breach of an obligation arising from contract, the measure of damages,exceptwhen otherwise expressly providedby this code, is the amount which will compensate the party aggrieved for all the detriment which was proximately causedthereby or in the ordinarycourseof thingswould be likely to result therefrom. Damages which are not clearly ascertainable in both their nature and origin cannot be recovered for a breach of contract. It is important that we also look at the same time at the damage section applying to obligations not arising from contract, which states: 27-1-317. Breach of obligation other than contract. Forthebreach of anobligationnotarising fromcontact, themeasure ofdamages, exceptwhere otherwiseexpressly provided by this code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not. We note thatunder 5 27-1-317,MCA, forbreach of an obligationnot arising from contract, the measure is the amount which will compensate for all the detriment proximately caused, whether it couldhavebeen anticipated ornot. This isthemeasure of damages to be used in a tort action. That tort measure of damages is to be distinguished from the measure under 

### 5 27-1-311, MCA, which provides that for a breach of contract a party may collect damages for all thedetrimentproximately caused thereby (which is similar to the wording in 5 27-1-317) but contains the additional limitation that thedetrimentmust in theordinary course of things be likely to result therefrom and the damages must be clearly ascertainable in nature and origin. These code sections were not discussed in the lower court opinion. We have carefully reviewed the transcript 

### to determine if there was a basis for emotionaldistress damages. We conclude that the evidence does not show that in the ordinary course of things, emotional distress damages were likely to result from the defendant's breach of contract. We further conclude that the evidence presented fails to establish that the emotional distress damages were clearly ascertainable in origin. We hold that the District Court erred in awarding Larson emotional distress damages. I11 Whether the District Court erred in granting Larson specific performance of the contract? Undems sold their land toOlsons in 1984. Larsondid not file her complaintuntil 1987. Undems maintain that the District Court erred in granting specific performancebecause they cannottransfer title they no longer have. Larson maintains that in a contract for deed legal title to the property remains vested in the sellers. Therefore, Larson contends that specific performancewas proper. We agree. Specific performance is an equitable remedy and is a matter of discretion for the District Court. Seifert v. Seifert (1977), 173 Mont. 501, 568 P.2d 155;Myhre v. Myhre (1976), 170Mont. 410, 554 P.2d 276. Upon reviewing the record,we conclude the District Court did not abuse its discretion in granting specific performance. Therefore,we hold that the District Court correctly granted Larson specific performance. We reverse the portion of the judgment granting emotionaldistress damages to the plaintiff and affirm the balance of the judgment

# .

We Concur:

/ i Justices lIN THE SUPREME COURT OF THE STATE OF MONTANA No. 90-083



### FAY LARSON, Plaintiff and Respondent,



### -vJACK UNDEM and LYDIA UNDEM, Defendants and Appellants. ORDE

The defendants/appellants have filed apetition for rehearing and plaintiff/respondent has filed a response. After considering the same,we order that the following change bemade in our opinion in this matter. Delete the last paragraph on page 4which reads as follows: The lastpayment on the Larson-Undems contract was made in December of 1986. The deed was obtained from escrow and recorded in January, 1987. Several months afterreceivingthe lastpayment, Larsonhired a surveyor toprovide a legal description for the reserved land,at a cost of $700. In October 1987, Larson filed suit against Undems requesting specific performance of the contract;emotional distress damages;and soughttoquiet title against the Olsons forher seven acres. She also requested her costs and attorney's fees.

The name NUndemsll should havebeen used rather than "Olsons." Replace the last paragraph on page 4with the following: The last payment on the Larson-Undems contract was made in December of 1986. The deed was obtained from escrow and recorded in January 1987. Several months afterreceivingthe lastpayment, Larsonhired a surveyor toprovide a legal description for the reserved land, at a cost of $700. In October 1987, Larson filed suit against Undems requesting specific performance of the contract;emotional distress damages;and soughttoquiet title against the Undems forher seven acres. She alsorequested her costs and attorney's fees. In all other respects, our opinion shall remain unchanged. Petition for is denied. DATED this