No. 90-451 IN THE SUPREME COURT OF THE STATE OF MONTANA 1991

PAYNE REALTY AND HOUSING, INC, Plaintiff,-vFIRST SECURITY BANK OF LIVINGSTON, A Montana Corporation, Defendant and Respondent, and HARRY JOE BROWN, JR., Defendant and Appellant. CLERKOF SUPRCS:: CQLISTATE OFIfr,g,t;:ii

APPEAL FROM: District Court of the Sixth Judicial District, In and for the County of Park, The Honorable Byron Robb, Judge presiding.

COUNSEL OF RECORD: For Appellant: CarlA. Hatch;Small, Hatch,Doubek & Pyfer; Helena, Montana For Respondent: JohnT. Jones;Moulton, Bellingham,Longo & Mather; ~illings, Montana

Submitted on Briefs: January 17, 1991 Decided: March 4, 1991 Filed:~ustice R. C. McDonough delivered the opinion of the Court.

This is an appeal from the Montana Sixth Judicial District Court, Park County involving a real estate transaction. Harry Joe Brown (Buyer) appeals the order of the District Court granting summary judgment to First Security Bank of Livingston (Bank) and ordering that the Buyer forfeit $50,000.00 in earnest money deposited with PayneRealty (Realtor)on thegroundsthat the Buyer breached a buy-sell agreement. We reverse and remand for further proceedings. The Buyer raises the following issues on appeal:

(1) Did the District Court err in granting summary judgment to the Bank and ordering a forfeiture of Buyer's earnest money to the Bank and dismissing all other claims raised by the pleadings? (2) Did the District Court err in awarding the Bank its attorney fees and costs as prevailing party? In reviewing a motion for summary judgment, we view the evidence in the light most favorable to the party opposing the motion, the Buyer in this case. See Lorashv. Epstein (1989), 236 Mont. 21, 24, 767 P.2d 1335, 1337; Cerek v. Albertson's, Inc.

(1981), 195 Mont. 409, 411, 637 P.2d 509, 511. The evidence indicates that after reviewing some properties listed with Payne Realty (the Realtor), the Buyer became interested in some real estateknownas theRiverside Ranch, located in the ParadiseValley about 15 miles south of Livingston. The Buyer arranged with the

owner of Riverside Ranch, First Security Bank of Livingston (the Bank)

### , toview theproperty. While touring theproperty, the Buyer 2was told of another piece of property, the Elkhorn ~idge Ranch, located about 32 miles northeast of Bozeman, which the Bank also had for sale. Buyer laterviewed a videotape of thisproperty at the Bank. The Bank and Buyer entered into a buy/sell agreement for the RiversideRanch onAugust 29, 1988. Buyer deposited $50,000.00 in earnest money with the Realtor. The agreement provided that the Bank would provide financing for the Buyer. It also provided the Buyer with an option to the buy the Elkhorn Ridge Ranch. The Bank's sole remedy for breach of the agreement by the Buyer was forfeiture of the earnest money. Finally, the agreement provided for a closing date on the sale on October 1, 1988. At theclosingdate onOctober 1,theBuyer allegedly informed the Bank that he was "disenchantedvv with the sale. A one-day extension of the closing date was requested by Buyer and granted by the Bank so that the Buyer's counsel could review the closing documents, including amortgageproposed by the Bank. A second one -week extension was also granted so that the Buyer could have Montana counsel review the documents. Meanwhile, on October 4, 1988,theBank provided Buyer with a title commitment. Twenty days after the last extension of the closing date, the Buyer's attorney requested the return of the earnest money and listed objections to the Bank-furnished mortgage documents. The Realtor eventually filed this interpleader action to obtain a courtruling concerning disposition of the earnest money. After discovery, the Bank and Buyer stipulated to theRealtor's dismissal from the suit and the realignment of the parties with Buyer as plaintiff and Bank as defendant. The Bank filed a motion for summary judgment requesting forfeiture of the earnest money which the court granted in Bank1 s favor on May 23, 1989. The court also awarded the Bank its costs and attorney fees. The Buyer now appeals. We begin our reviewby setting forth the standard for summary judgment. Summary judgment isproper only if the record discloses no genuine issues ofmaterial factand themoving party is entitled to judgment as amatter of law. Rule 56(c)

### , M.R.Civ.P. ;Reavesv. Reinbold (1980), 189 Mont. 284, 287, 615 P.2d 896, 898. While it is true that the purpose of summary judgment is to encourage judicial economy, it is also true that the procedure is never to be a substitute for trial if a material factual controversy exists. Reaves, 615 P.2d at 898. The Buyer contends that the terms of themortgage offered by the Bank are onerous and excuse him from completing the sale as set forth in the buy/sell. He alleges that there are genuine issuesofmaterial fact regardingwhether the terms of themortgage

were agreed upon between the parties. We agree with the Buyer's contention that the terms of the mortgage are questionable. As such, it isunlikely that therewas mutual assent or a "meeting of the minds" necessary to form a binding contract for the sale of RiversideRanch. See Chadwick

### v. Giberson (1980), 190 Mont. 88, 92, 618 P.2d 1213, 1215. In this regard, Buyer's argument that he was denied his right to exercisehis option to purchase Elkhorn Ridge rather than Riverside Ranch is immaterial. Regardless of whether exercising this option was contingent upon first purchasing Riverside Ranch, the option provides that its terms are the same as those for the Riverside Ranch purchase, and if there was no "meeting of the mindsv1 as to the first transaction, there was likewise no agreement on the option. The courtls principal ground for granting themotion was that theparties enteredan llordinary, completeandunambiguousbuy/sell agreement"which the Buyer was now seeking to avoid. The District Court also correctly concluded that Itthecontract specifically obligated the Bank to finance the purchase upon certain terms if Brown wished to finance it there. 

# . . .II Those terms provided

as follows: First Security Bank to carry a note mortgage over 10 years, interest ratetobe prime rateplus -0- with a cap rate of 12%,no cap on floor, & no points. Buyer to pay monthly payments. Prime Rate is fixed by City Bank of New York. Said mortgages are assumable on sale of all, or if in part, pro rata on acreagebasis. At closing, however, the Bank presented the Buyer with a mortgage containing terms different then those set forth in the buy/sell. Specifically, themortgage contained a "due on salegf clausemaking the entirebalance due upon sale of theproperty. This effectively precludes the mortgage from being assumable, as required by the buy/sell agreement. Otherallegedonerous terms include: (1)themortgageprovided that the Buyer's deathwould be a default, (2)the mortgage allowsthe Bank to declare a default whenever it deems itself insecure, and (3) the mortgage grants a security interest in all personal property attached to thepremises even though nopersonalproperty

was to be sold by the Bank to Mr. Brown. Furthermore, the financing terms provided in the buy/sell are silent regarding amortization of the payments or equal principal payments on the loan. Thus, there is at least a question of material fact regarding the intent of theparties in the calculation of interest payments. Inreversing the court's order,wenote that the Buyer did not file a cross motion for summary judgment in this case. The interpretation of thebuy/sell agreement involves questions of law; upon resolving these questions we conclude that the Bank was not entitled to summary judgment as amatter of law. However,we will not enter summary judgment in favor of the Buyer in addition to reversing this case due to the sparserecordbefore us. Generally,

no formal cross-motion is necessary at thedistrict court level for the court to enter judgment for the non-movingparty if the law so entitles it. However, the courtmust be careful that the original movant had a full and fairopportunity tomeet theproposition that there is no genuine issue of material fact and the other party is entitled to judgment as a matter of law. Hereford v. Hereford (1979), 183 Mont. 104,107-08,598 P.2d 600,602;6Moore's Federal Practice, 

### 5 56.12,pp. 56-331 and 56-334. Accordingly we reverse and remand this case for further proceedings. In light of our holding above,we need not address the secondissue concerning attorney fees and costs raised by the buyer on this appeal. The order of the District Court is REVERSED.

We Concur: 

### /

Chief Justice