No. 90-599 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1991 

ELIZABETH EISELEIN, 

Plaintiff and Appellant, 

v. 

MONTANA BANK OF ROUNDUP, SF? S -" 1ggj 

MONTANA BANCSYSTEMS, 1NC.r 

Defendant and Respondent. cF SUPREME CO~JR-~ 5 (AYE ?ti)& rAivA 

APPEAL FROM: District Court of the Fourteenth Judicial District, 

In and for the County of Musselshell, 

The Honorable Roy C. Rodeghiero, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Patrick F. Hooks; Hooks Law Firm, Townsend, Montana 

Thomas A. Budewitz, Attorney at Law, Helena, Montana 

Robert D. Moore; Moore, McDonough & Norton, Salt 

Lake City, Utah 

For Respondent: 

James A. Ragain and Kyle A. Gray; Holland & Hart, 

Billings, Montana 

Filed: 

Submitted on briefs: June 271 1991 

Decided: September 9, 1991 

a - 

Clerk 
Chief Justice J. A. Turnage delivered the Opinion of the Court. 

Plaintiff Eiselein appeals from a summary judgment granted to 

defendants by the Montana Fourteenth Judicial District Court, 

Musselshell County. We affirm. 

The issues are: 

1. Did the District Court err in denying Eiselein's motion 

for partial summary judgment? 

2. Was summary judgment for defendants improper because there 

are genuine issues of material fact or the defendants are not 

entitled to judgment as a matter of law? 

Plaintiff Eiselein is the assignee for several persons who 

operated the Eiselein Ranch (Ranch) in Musselshell County, Montana. 

The Ranch borrowed operating funds from defendant Montana Bank of 

Roundup (Bank) for a number of years. Defendant Montana Bancsystem, Inc., is the Bank's holding company. 

Plaintiff contends that in January 1987, the Bank's president, 

Richard Swanz, told the manager of the Ranch, Lou Grosskop, that 

the Bank would lend $30,000 to the Ranch in 1987 for "anything we 

wished to buy." Plaintiff also contends that in April 1987, Swanz 

made a verbal commitment to Grosskop to lend the Ranch approximately $150,000 to buy 200 to 250 head of cattle. 

In June of 1987, the Bank made a $35,000 loan to the Ranch. 

That loan was memorialized in a promissory note. The Ranch bought 
swine with the loan proceeds, granting the Bank a security interest 

in sixty-four pigs. 

In September of 1988, following financial difficulties, plaintiff filed this lawsuit on behalf of the Ranch, claiming damages 

for the Bank's failure to keep a commitment to loan the Ranch 

$150,000. Her complaint includes counts of breach of warranty, 

fraud, negligent misrepresentation, promissory estoppel, breach of 

the obligation of good faith imposed under the Uniform Commercial 

Code, and breach of an implied covenant of good faith and fair 

dealing. The District Court dismissed the claim for breach of 

warranty and Eiselein has conceded judgment on her claim for 

tortious breach of the covenant of good faith and fair dealing. 

In the order from which this appeal is taken, the District 

Court denied Eiseleinls motion for partial summary judgment that 

the Bank committed to loan the Ranch $150,000. The court granted 

defendants1 motion for summary judgment, ruling, inter alia, that 

even if the alleged April 1987 commitment was made, it was 

extinguished by the June promissory note pursuant to the doctrine 

of merger. 

I 

Did the District Court err in denying Eiseleinls motion for 

partial summary judgment? 

Summary judgment is proper only when the pleadings, depositions, answers to interrogatories, and admissions, together with 
any affidavits filed, show that there are no genuine issues of 

material fact and that the moving party is entitled to judgment as 

a matter of law. Rule 56(c), M.R.Civ.P. In arguing for partial 

summary judgment, ~iselein cites the testimony of Jon Eiselein and 

Ranch manager Grosskop that, on or about April 6, Bank president 

Swanz told Grosskop to go ahead and start buying cattle and told 

Jon Eiselein that the loan would go through. She also cites 

Swanzls deposition testimony that he did not recall the conversations in question and that they could have occurred. 

Eiselein argues thatSwanzls affidavit submitted in connection 

with the motions for summary judgment is too conclusory to serve 

as a reason to deny her motion for summary judgment. In his 

affidavit, Swanz stated that 

Although Ms. Grosskop may conceivably have 

made such a request, I did not make a commitment to loan approximately $150,000.00 to the 

Eiselein Ranch in 1987. . . . The only amount 

I committed to loan to the Eiselein Ranch in 

1987 was $35,000.00. 

Attached to his affidavit was a copy of the $35,000 promissory 

note. 

We conclude that Swanzls affidavit is sufficient to demonstrate that there is a genuine dispute of fact as to whether an 

oral commitment was made to make the $150,000 loan. This precludes 

Eiseleinls request for summary judgment on this issue. See Reaves 

v. Reinbold (1980), 189 Mont. 284, 615 P.2d 896. We hold that the 
District Court did not err in denying Eiselein8s motion for summary 

judgment . 

I1 

Was summary judgment for defendants improper because there are 

genuine issues of material fact or the defendants are not entitled 

to judgment as a matter of law? 

In granting defendants8 motion for summary judgment, the 

District Court relied on the doctrine of merger: evidence of prior 

oral agreements is inadmissible where there is a subsequent written 

agreement as to the same subject, into which it is assumed all 

prior oral agreements are merged. First Nat. Mont. Bank of 

Missoula v. McGuiness (1985), 217 Mont. 409, 417, 705 P.2d 579, 

584. The court ruled that any verbal obligation to loan $150,000 

to the Ranch was merged into the subsequent written agreement to 

loan the Ranch $35,000. Under the doctrine of merger, the factual 

dispute about whether Swanz made a verbal commitment to loan 

$150,000 is irrelevant, because any evidence as to such a verbal 

commitment would be inadmissible in court. 

Eiselein argues that the doctrine of merger does not apply in 

this case. She cites this Court8s opinion in Blome v. First Nat. 

Bank of Miles City (1989), 238 Mont. 181, 776 P.2d 525. In one 

part of that opinion, this Court stated that Itno oral representations by any bank officers may be found which would bind the Bank 

to perform as the Blomes contend." Blome, 776 P.2d at 528. But, 
as defendants point out, that statement did not appear within and 

was not relevant to this Court's discussion of the doctrine of 

merger. 

Eiselein also argues that the Bank's commitment to make a 

$150,000 loan to the Ranch was for cattle and was completely 

separate and distinct from its commitment to make the loan for hogs 

consummated in the June promissory note. She asserts that the 

doctrine of merger does not, therefore, apply. 

We disagree. In Blome, the Blomes brought suit against their 

bank for failure to comply with an agreement to provide them with 

financing for their farming operation as long as they needed it 

with repayment to be made when they were able. This Court ruled 

that the doctrine of merger applied and that it barred the Blomesl 

claims, even though the alleged oral promise was for the purchase 

of feeder cattle and the later loans into which that promise was 

merged were for such things as a grain hopper and a truck. Blome, 

776 P.2d at 527, 528. In the present case, ranch manager Grosskop 

characterized all funds sought from the Bank as for I1our yearls 

operation.I1 She also admitted that she was aware at least by May 

11, 1987, that the $150,000 loan would not be made. She nevertheless accepted and signed the promissory note for $35,000. 

We agree with the District Court that the alleged $150,000 

commitment and the $35,000 promissory note both dealt with financing for operation of the Eiselein Ranch. We also agree with the 
District Court's statement that Iv[t]o argue that the existence of 

an oral representation can preclude merger is contradictory and 

insupportable." We hold that the District Court did not err in 

granting summary judgment for defendants. 

Af f inned. 

We concur: 
Justice Terry N. Trieweiler specially concurring. 

I agree that the District Court was correct when it denied 

plaintiff's motion for partial summary judgment. I also concur 

with the majority that the ~istrict Court's order granting the 

defendants motion for summary judgment should be affirmed. 

However, I disagree with the reasons set forth by the majority for 

their decision. 

This is clearly not a case where the undisputed facts bar 

plaintiff's claim pursuant to the doctrine merger. 

It is correct that evidence of prior oral agreements is not 

admissible to alter a subsequent written agreement so long as the 

written agreement deals with the same subject matter. However, a 

written agreement will not preclude evidence of a prior oral 

agreement that deals with a different subject matter and which was 

not merged in the written agreement. That rule is clear from the 

concluding language in First National Bank of Missoula v. McGuiness (1985) , 

217 Mont. 409, 705 P.2d 579, where we stated: 

Under case law in Montana, it is clear that evidence of 

prior oral agreements is not admissible for the purpose 

of altering subsequent written agreements dealina with 

the same subject, and that the prior oral agreements and 

the written agreement will merge into the subsequent 

written agreement unless they are distinct and can stand 

independentlv of one another. Reaves v. Reinbol[d] (Mont . 1980), 615 P.2d 896, 899, 37 St.Rep. 1500, 1504. 

McGuiness, 705 P.2d at 584 (emphasis added). 

In this case there was clear evidence from the testimony of the 

plaintiff's ranch manager, Mrs. Lou Grosskop, that the promise that 
plaintiff sought to enforce was different and independent from the 

promise which became the subject of plaintiffls written loan 

agreement with the defendant. Plaintiff sought to enforce a 

promise to loan her $150,000 for the purchase of cattle. The 

promise which became the subject of the written agreement relied 

upon by the majority was to loan the plaintiff approximately 

$30,000 for the purchase of pigs. 

The deposition testimony of Mrs. Grosskop which was offered 

in opposition to the defendants1 motion for summary judgment is 

replete with testimony describing the difference between the two 

promises. She gave the following answers to the following 

questions regarding the loan for the hog operation: 

Q. My first question I would like to ask is, in 1987, 

did the Montana Bank of Roundup ever make any 

unconditional promise or commitment that it would 

continue to provide money forthe operating expenses 

of the Eiselein Ranch? 

A. Yes. 

Q. Who made that promise? 

A. Dick Swanz. 

Q. And when did Mr. Swanz make that? 

A. January. 

Q. January of 1987? 

A. Yes. 

Q. Tell me what Mr. Swanz said. 
A. We received a $30,000 line of loan at that time. 

I can't repeat the exact words. 

Q. To the best of your recollection. 

A. We received $30,000 to start an operation to do with 

some of the things weld talked about in the past. 

We had talked of putting in a hog operation, a sheep 

operation, and these were just talking about 

different types of projections we were going to work 

on. That's basically it. 

Mrs. Grosskop gave the following testimony regarding a second 

promise to loan money for a cattle operation: 

Q. At any other time in 1987 did anyone at the Montana 

Bank of Roundup make an unconditional promise or 

commitment to continue to provide money to the 

Ranch? 

A. Yes. 

Q. Okay. Who was that? 

A. Dick Swanz. 

Q. And when? 

Q. April 1987? 

A. Yes. 

Q. Tell me what Mr. Swanz said during this conversation. 

A. We had been working with a budget projection of 

buying cattle, and I had called and asked if he had 

reviewed it and we were going to go ahead with this, 

and he said yes, held okay it. 

Q. How much was that budget for? 

A. That particular budget, we was looking at buying 

about 200 to 250 head of cattle at that time. 
Q. Okay. In terms of a dollar amount, what were you 

asking for? 

A. Around the $150,000 mark. We hadn't set an exact 

figure, depending on the price of cattle. 

(Emphasis added.) 

Mrs. Grosskop testified that in order to obtain the loan for 

the pig operation, she submitted a budget proposal pertaining to 

that operation. However, when applying for the cattle operation, 

she had to submit an entirely different budget proposal. The 

following testimony is illustrative of how independent the two loan 

transactions were: 

Q. Now in light of what you've told me, did the new 

budget that you prepared only relate to the cattle 

purchase, or did it also relate to these other 

aspects of your total program that you were talking 

about, the swine and the sheep, et cetera? 

A. The swine budget he already had because we already 

had the money for that. This proposal would have 

pertained basically to the 150 head run at that 

time. 

The fact that the loan promised in January was intended solely 

for the operation further evidenced from the fact that the 

security agreement entered into as part of that loan secured "64 

pigsw and made no mention of any other collateral. 

In Reaves v. Reinbold (1980), 189 Mont. 284, 615 P.2d 896, we 

reaffirmed that, 

This Court has consistently held that the party moving 

for summary judgment has the burden of showing the 

complete absence of any genuine issue as to all the facts 

which are deemed material in light of those substantive 
principles which entitle him to judgment as a matter of 

law. 

Reaves, 615 p.2d at 898 (citations omitted). 

We further stated that: 

It is clear that the party opposing a motion for summary 

judgment will be afforded the benefit of all reasonable 

inferences which may be drawn from the offered proof. 

Mally v. Asanovich (1967), 149 Mont. 99, 423 P.2d 294; 

Harland v. Anderson, supra. 

Reaves, 615 P.2d at 898. 

Based upon these principles, we held that a plaintiff in that 

case relying on a written agreement was not entitled to summary 

judgment where the defendant asserted contrary rights based on an 

alleged oral agreement. We stated: 

Plaintiff Is argument is based on the allegation that the 

written agreements entered into on November 21, 1975, 

which included the "Submitted Annualized Commission 

Agreement,I1 superseded any prior oral negotiations or 

agreement between the parties. In support of this 

argument, plaintiff cites sections 28-2-904 and 28-3-203, 

MCA . 

As stated in plaintifffs brief, there is abundant case 

law in Montana which holds that prior oral agreements or 

conditions are not admissible to alter or vary the terms 

of a later written contract. Davihon v. Casebolt (1969), 154 

Mont. 125, 461 P.2d 2; Heckman andShellv. Wilson (1971), 158 

Mont. 47, 487 P.2d 1141; Kingerskiv. Lame- (1979), [I85 Mont. 

1111 , 604 P.2d 782. It should be noted, however, that 

such case law has only dealt with an application of the 

rule as to prior oral agreements and subsequent contracts 

between the same parties in regard to the same matter. 

It should also be noted that distinct collateral agreements even as between the same parties, will not merge 

so as to preclude a prior oral agreement. See Story v. 

Monforton (1941), 112 Mont. 24, 113 P.2d 507; 17 C.J.S. 

Contracts 381 at 451. 
In reviewing the relationship of the two agreements in 

a light most favorable to defendant we note that the 

alleged oral agreement is collateral as opposed to 

ancillary. Both agreements were entered into at approximately the same time and deal with an arrangement 

whereby defendant is to receive monies for selling 

insurance. One agreement, however, is with Lincoln 

Benefit Life Company and provides for a repayment of 

advances made. The other separate agreement is with 

plaintiff and allegedly provides that he personally will 

guarantee a set salary no matter how much defendant is 

required to repay the insurance company. Each agreement 

is distinct, separate, involves a different party and is 

able to stand independent of the other. With this being 

the case, we cannot find as a matter of law that the 

written agreement would supersede the alleged oral 

agreement. 

Reaves, 615 P.2d at 899. 

The testimony of one witness which is disputed by another is 

sufficient to raise an issue of fact which precludes summary 

judgment on that issue. In this case, the testimony of Mrs. 

Grosskop was sufficient, if believed, to establish that defendants' 

January promise to loan money for pigs was separate and independent from its April promise to loan money for cattle. If that 

fact was established, then the written agreement which resulted 

from the January promise did not merge with the April promise and 

did not preclude the evidence which plaintiff sought to offer. 

I believe, however, that defendants were entitled to summary 

judgment for different reasons. Assuming that the testimony of 

Mrs. Grosskop is true and that the defendant did promise to loan 

her $150,000 to finance the purchase of cattle, that promise alone 
is not sufficient to form the basis for plaintiffls cause of 

action. We have previously stated that "there is no legal duty 

requiring a bank to loan money to a customer absent a clear 

contractual ~ommitment.~~ Mann Farms, Inc. v. Traders State Bank of Poplar 

(Mont. 1990), 801 P.2d 73, 77, 47 St.Rep. 2094, 2099. 

Under 5 28-2-102, MCA, the essential elements of a contract 

are: 

(1) identifiable parties capable of contracting; 

(2) their consent; 

(3) a lawful object; and 

(4) sufficient cause or consideration. 

In this case, the specific elements of a contract were neither 

alleged nor proven by the plaintiff. Specifically, there was no 

consideration extended from the plaintiff to the defendant which 

would establish a binding contract. 

Plaintiff in her complaint sought to enforce the defendants1 

oral promise based on the principle of promissory estoppel. 

However, in Keil v. GlacierPark, Inc. (1980), 188 Mont. 455, 462, 614 P.2d 

502, 506, we defined the elements of promissory estoppel as: 

(1) a promise clear and unambiguous in its terms; (2) 

reliance on the promise by the party to whom the promise 

is made; (3) reasonableness and foreseeability of the 

reliance; (4) the party asserting the reliance must be 

injured by the reliance. 

(Citations omitted.) 

In this case, there was no evidence that subsequent to April 

1987 the plaintiff suffered detriment by the reliance on the Bank's 

promise to loan her money. Plaintiff located no cattle, purchased 
no cattle, and incurred no expense which could be attributed to the 

defendants1 promise to loan her money for a cattle operation. In 

fact, within two weeks from the time that the Bank promised to loan 

her money, plaintiff was notified through Mrs. Grosskop that the 

promise was being reconsidered and that further financial 

information was necessary. At that point, all further plans to 

proceed with expansion of the cattle operation were put on hold. 

For these reasons, plaintiff suffered no detriment due to a 

justifiable reliance on defendants' promise and has not satisfied 

the elements of promissory estoppel. 

Because there was neither a binding contract nor sufficient 

detrimental reliance to establish promissory estoppel, I would 

affirm the District Court's order granting summary judgment to the 

defendants.