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. 

CLERK OF SUPRCS:: CQLISTATE OF Ifr,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: 

Carl A. Hatch; Small, Hatch, Doubek & Pyfer; Helena, 

Montana 

For Respondent: 

John T. 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 Payne Realty (Realtor) on the grounds that 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 Lorash v. 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 

estate known as the Riverside Ranch, located in the Paradise Valley 

about 15 miles south of Livingston. The Buyer arranged with the 

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

Bank) , to view the property. While touring the property, the Buyer 

2 
was 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 later viewed a videotape of this property at 

the Bank. 

The Bank and Buyer entered into a buy/sell agreement for the 

Riverside Ranch on August 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 the closing date on October 1, the Buyer 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 a mortgage proposed 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, the Bank 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 court ruling concerning 

disposition of the earnest money. 

After discovery, the Bank and Buyer stipulated to the 
Realtor'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 review by setting forth the standard for summary 

judgment. Summary judgment is proper only if the record discloses 

no genuine issues of material fact and the moving party is entitled 

to judgment as a matter of law. Rule 56 (c) , M.R.Civ.P. ; Reaves v. 

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 the mortgage 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 

issues of material fact regarding whether the terms of the mortgage 

were agreed upon between the parties. 

We agree with the Buyer's contention that the terms of the 

mortgage are questionable. As such, it is unlikely that there was 

mutual assent or a "meeting of the minds" necessary to form a 

binding contract for the sale of Riverside Ranch. 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 exercise 
his 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 the motion was that 

the parties entered an llordinary, complete and unambiguous buy/sell 

agreement" which the Buyer was now seeking to avoid. The District 

Court also correctly concluded that Itthe contract 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 rate to be prime rate plus -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 acreage basis. 

At closing, however, the Bank presented the Buyer with a mortgage 

containing terms different then those set forth in the buy/sell. 

Specifically, the mortgage contained a "due on salegf clause making 

the entire balance due upon sale of the property. This effectively 

precludes the mortgage from being assumable, as required by the 

buy/sell agreement. 

Other alleged onerous terms include: (1) the mortgage provided 

that the Buyer's death would be a default, (2) the mortgage allows 
the Bank to declare a default whenever it deems itself insecure, 

and (3) the mortgage grants a security interest in all personal 

property attached to the premises even though no personal property 

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 the parties in the calculation of interest 

payments. 

In reversing the court's order, we note that the Buyer did not 

file a cross motion for summary judgment in this case. The 

interpretation of the buy/sell agreement involves questions of law; 

upon resolving these questions we conclude that the Bank was not 

entitled to summary judgment as a matter of law. However, we will 

not enter summary judgment in favor of the Buyer in addition to 

reversing this case due to the sparse record before us. Generally, 

no formal cross-motion is necessary at the district court level for 

the court to enter judgment for the non-moving party if the law so 

entitles it. However, the court must be careful that the original 

movant had a full and fair opportunity to meet the proposition 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; 6 Moore'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 second 
issue concerning attorney fees and costs raised by the buyer on 

this appeal. The order of the District Court is 

REVERSED. 

We Concur: / 

Chief Justice