113. S:-622 I?iTHE 

### SUPREXE COCRT OF 

### THE STATE OF MCSTAKA 1994

FOX GFSIX AND CATTLE CO., Plaintiff and Respondent,

-vsFRAKK F. MAXYELL, Derendant and Appellant.

APPEAL FROM: District Court of the Tenth Judicial District, In and for the County of Fergus, The Honorable Peter L. Rapkoch, Judge presiding

COCYSEL OF RECORD: For Appellant: Donald A. Ranstrom; Sias & Ranstrom, Chinook, Montana For Respondent: Jaaes A. Wubble, John R. Christensen; Christensen & Hubble, Stanford,Montana,--5:- ' LILA> LS an appeal and cross-acpezl fron

### a jury verdict inthe Tenth Judicial Gistrict Ccurt invclvirLg

### the tsr~ination of 

### a f.ar3 lease. 

### By special verdict the jury found that Frank F. Maxwell (aell did not naterially breach the farm ].ease which he enkerec? with Fox Grair. E; Cattle Co. (Fox a) The jury, hwdever, found thatMaxwell owed Fox Grain $38,779.60 for farming expenses; it then awarded P!axr~:ell $23,013.42, plus 75 percent of the net Federal Crop Insurance Payaent, forFox Grain's failureto mitigate its daxages, and found in favor of Ifaxgel1 on his counterclaims: 1) $16,721.15 for his share of the Conservation Reserve Program (CRP) proceeds; and 2) $16,500 for hi.s loss of nachinery claim. The jury also asrarded Maxwell $95,000 for Fox Grain's breach of the inplied covenant of gocd faith ar.d fair dealing. The District Court granted judgment riatwitfistanding the verdict eliminating the jury's award of $95,000 to Maxwell. Nax~cellappeals the District Court's decision to grant judgment notwithstanding the verdict. Fox Grain cross-appeals: 1) the jur.13s findings on the breach issue; 2) the coiurt's failure to grant it a judgnent notxithstanZing the verdict on the iss~e of ?%ax:gell's other danages; and 3j the court's grant of surznary judgment toMaxwell on the issue of 

### t?ie volunteer crop owiership. We affirn inpart and remand. The issaes on appeal are:i. 

### DL-: ~istrict CO:;-+ ,_, 

### errby grantingFcx Grain'snotici? far judgment notvithstanding the verdict on the jury's award of 

# --- +?=,000for?ox Grain'sviolation of thecovenant of good faithand

-. "0-7 --L-I..g 

## '"'- .' 2. Di5the 3istrictCcu,rterrby denying Fcx Grain's action 

### for ;uc!grnent not;;ithstanding tee verdict on the issue of Ma:vdell's - other damages? 3. Was there sufficient evidence in the record to support thejury's findings that Maxwell did not breach the lease? 4. Did the District Court err by granting Haxwell summary judgnect on Fox Grain's ownership claim of the volunteer winter wheat crop? :.:axwell entered 

### a three-year farm lease with Fox Grain on February 17, 1989. The lease agreexent entered into bet:.;een the parties gave ?aIaxwelltheright tofarm Fox Grain's land duringthe crop seasons of 1989, 1490, and 1991. Aspartof thatagreement, Maxwell agreed that he 'would occupy and cultivate the land in a "farxer-like manner" and would notpermit damage totheland. Inreturn, hewas entitled t o a l l of the 1989 crop and 75 percent of the 1990 and 1991crops. Maxxell alsoagreedthatallacreswould be cultivated either by planting crop, orby s,;-- c~.t.t~er fa1 iow

## . Fox Grainterainatedthe leasebased on itsclaimthatMaxwell breached theleaseagreement: by not mltivatingt h e e n t i r eproperty and by failingtocare for theproperty 

### ina "farmer-like manner." E:'r:*;e;-er, afrerlistening 

### t-. thrse

### and ciie-half :leeks of testimony,incluriinq severale:.:perts i?hotestifiedon behalf cf Fox Grain, the jury concluded that:.laxveil's failuretoculti-late 100acresof the property ;\ms not a aaterial breach and apparently also found that he had performed ina "farmer-like 3.annern a~d ha3not 

### allcxed the property tobe dap.age3.

T ,n 22 effcrrt tr, prcve thevzlue cf its da~.ages from Maxwell's alleged failure to properly care for the farm land, Fox Grain offeredtestimony froeseveral neighboring landownerstoestablish what the land would have been capable of producing had 

### it been properly cultivated and cared for. For exa~ple, Larry Kalina testifiedthathe farmed 1300 acres of land about fourmiles north of the Fox Grain property; thathe

xas familiarwith theFox Grainproperty; and thathispropertyand the Fox Grain property were quite similar. In the fall of 1990 (after Maxwell had been evicted from the Fox Grain property), Kalina planted a winter wheat crop on his land which produced a 199iharvest of 30 to 35 bushels per acre. Jess Knerr faras 2800 acres of land adjoining the Fox Grain property. He testified thathis property is likewise similar to Fox Grain's land. In 1991, heproduced 37 bushels of winter wheat per acre and 20 bushels of spring wheat per acre. Ee testified thztL99i xas 

### a better-than-average year &&etoincreasednoisture. Kyle Grimsrud farms 1400acres of property tenmilesfrom the Fox Grain Land. He testified that he was faniliar with the Fox Grain property and considered 

### it similar tothe property that he tarrs. In 1391,he raised 43bushels of xinterwheat per acre and2s 

### buskels of spring yJ;:?-atper acre. Iiis production in 1091 exceeded that for either of the two previous years. It was his cpicizn 

### that the 

### Fox Grain prcperty, if properly cared for, was capable of producing siailar yields. Alex Smith, who farxs land scuth of Le>~istoxn, was called as
an expert witness to testify on behalf 

### cf Fox Grain. Ee testified that in 1991 it cost $12 an acre to harvest wheat. He estiaated the price of wheat during 1991 was $2.80 a 

### bushel. Fex Grain served notice on Maxwell that the lease was being termi-natedonJuly 23, 1990. i"ixwel1 actually left theproperty on August 23--onelonth later. Yecausehewas wrongfully evicted from the property and 

### %as unable to plant a winter or spring crop for 1991,Mawel? was denied the opportunity to realize a profit from whatever crep he could have produced. The testimony was that had he renained on the property he could have seeded 1503.9 acres.

Did theDistrictCou.rterrby granting 

### FoxGrain'snotion for judyment notwithstanding the verdict on the jury's award of $95,000 for Fox Grain's violation of the covenant of good faith and fair dealing? It is %ell settled that this Court will review a 

### district court's grant of a J?WV 

### with the identical standard used to reviev

a rotion for directed verdict. S'- 

### i.,,chuk v. 

### Angel Island Community Ass'n (1992), 253 

### Xont. 221, 225, 833 

### P.2d 153, 160 [A] 

### directed -~erdict may be granted only -,<here it appears as a nntter if Law that :the non-loving party; could not recover upon any view of the evidence, includingthe legitimate inferencestobe drawn from it. Si?chnk, 633 

### P.2d at 160. Further, adistrict COGT~ must ~ie% the evidence ina light most faxjorable to tire ~cr.-rs*~ing party tihen c-.r:si6erir!y a motio? fcr [JKOV]; the ccurtmust deny the motion if the non-zcving party built a prima facie case or if a s&stzmtiia conflict inthe evidence exists. Orly if the s;-idencepzesents 

### no rcox f3r an hc~est difference of opinion shoul3 a ZX07 be granted.

the evidence. The jury found thatFox Grain breached the implied covenant of good faith and fair dealing. Itwas establishedby Maxwell and his witnesses that Fox Grain only complained once about Maxwell's farming practices before Fox Grain evicted Maxwell frox the land. PIax~;ell argues that if Fox Grain had left hi- alone, hewould have planted and harvested wheat and nade a profit just like the neighbors in the area. Had Maxwell produced 35 bushels of winter wheat per acre (whichwaswell within the rangeofhis neighbors' production) ;and had he provided 25 percent of that crop to Fox Grain pursuant to the parties' lease agreement; and after deducting $12 per acre as the reasonable cost of harvesting the crop, he blould still have reallzed a prof~t of $95,618.04. FOX Grain argues that while it offered proof of what its praprty kas capable of prod~cinghad it beer! cared for in a farrer-like manner, zkeprcpertywzs not capable of producing that n?lci- .wheat ;.b.en Fcx Grair tcok it b.ck fro-,Marvell due to tne terrible condition inwhich Maxwell left it. However,according to


### our conclcsien under Issue IV,FOX Grain's evidence to that effect

### appa"r=_tlyraised, 

### at mast, 

### riestioi? of facc which the jury 

## - res-lved in fax;crofXaxweii. Ead the jury foundthat ?he property
was as unprod~ctiveas Fcx Grain and its witnesses alleged, the 3ury

### xould nezessarilyha7veha3 t3 

### find thatKaxweZl ha3per~~itted waste or daaage to the property and, thereby, breached the lease

Fox Grain argues that the crop it prod,~cedin 1991 was ~nprcductive, dze to the condition of its land. However, Maxwell's evidence was to the effect that he would have employed different farming techniques, which he felt vould have been more productive thdn those employed by 

### Fox Grain. The jury had a right to, and apparently did,believe Maxwell. The jury's verdict :]as further supported by the fact thzt in 1939, on the sane piece of land, i.iax:~ell realized income of $79,885.84fron a winter wheat crop which he had not even planted, but h-hichgrew fron seeds knocked from their stalks in 1988 as a resuit of hail damage. The jury had a right to find that if Yaxwell could realize net income of over $70,C00 

### from a volunteer winter wheat crop in 1989,he could earn subscantially more than that on the same land by e~ploying good farminy techniques in the fall cf 1990 and the growing season of 1991. 

### tihile there was substactial evidence produced by Fox Grain frcx hi the jury could have found that Maxwell's farming techniques wccld 

### not have beec profitable during the rexainder of his lease term with Fox Grain, itwas not the responsibility of the Cistrizt 

### Ccurt, a=_d

### is certainly not the appropriate faction ofeT~lcience, cr rcferences frcm the eyJ-rdence, siaply because the

pcinted out in Shchuk: A directedverdict xiybegranted only where it appears as anstter 

### af law that 

### . 

## . . [thenonmovingpartyj could not reco"zerupon any view of the evidence, including the 

### Legiti~ateinfererces 

### to be 

### drawn fron it, Si~chuk, 833 P.2d at 160 (quotingWilkerson v. School Dist. Xo. 15

In this case, the jury found that Fox Grain breached the covenant of good faith and fair dealing which was implied from its contract with Earnell. When a breach of that covenant occurs, contract dar?agesare appropriate. Storyv. City of Bozeman (1990), 242 Kont. 435, 450, 791 P.2d 767, 775. The purpose of contract dazages is to make the nonbreaching party whole, or put the nonbreaching party in a posirion as if the contract had been performed. Stensvadv. Miners and Merchants Bank (1982),196Mont. 193, 206, 640 P.2d 1303, 1310. Maxwell's contract dana~es for breach of the covenapt of good faith and fair dealingwere based on theprofits he lost from being unable to farn 

### Fox Grain's land pursuant to his lease agreement. Xhile damages for lost profits may not be speculative, it is orly required that they be proven with "the best evidence under the circunstances [which]will support a reasonably close estimate of the loss." Stensvad, 640 P.2d at 1310. The best evi6er.ce of the profits which Phx-dellcould have prcdzced, had he been allowed to continue farxing Fox Grain's land

## -. bULadant ,

# -.-,

## . to their lease aqreexent, !,:as evi3snce cf what farxers on =i-: ~-iar 

# - land in the area were able to produce.



## - in 

### this case, Fox Grain 

### introduced evidence 

### of 

### --" i,r:at neighboring farcerswere able topr.zdacein oreer toestablish its

cun daxages based on its allegation that Waxwell had danaged its land. The jury, however, fourd that Max-:lei1 hac! not daaage~3Fox Gram's land xben it found thatMax-xellhad not breach4the lease agreement. It is, therefore, only logical to conclude that had FTaxwelL been able to perfor~. under the lease agreement he would have been able to produce crops similar to those produced on adjoining and neighboring lands. We conclude that the jury's verdict on 

### this issue was supported by substantial credible evidence, that the District Caurt erred in granting a JNOV 

### on this iss~e, and reinstate the 

### jury verdict awarding Frank F. 

### Max-uell

Did the District Court err by denying Fox Grain's ~~otion for judginentnotwithstanding theverdict on the issue of Maxwell's other damages? The jury awarded Max'well: 1) $23,013.42, 

### plus 75 

### percent of the net federal crop insurance payment, for Fox Grain's failure to mitigate its damages; and 2) 

### $16,500 on his loss of machinery claia. According to FoxGrair,,there was absolutelyno evidence in tke reccrd to scpport these two iuw 

## . -1 

### awards. Fox Grain contends that the District Court improperly refused to grant a JNoV 

### as to thess awards First, Fox 

### Grain challenges the axard of 75 

### percent of the

### federal crcp ins-rance payaent. Fox Srain zrgues that the 

### award

was 

### unnecessary. Since the 

### j-ry ccncluAed that the lezse was iz effect during 1991, 

### pursl.ia3t tg t5e lease terxs Ma:ciell was entitled to 75 percent 

### of all government paynents, includixg crop insarance. Xe conclude that Maxwell &-asentitled tc 75 

### percent of 211 

### govercaent payments, including crop insurance. We remand this issue to the District Court to determine the types of government payments received by Fox Grain during 1991 and the aaounts due to ?faxwell under each program. Fox Grain furtherargxes that theaward of $23,013.42, 

### wasnot supported by acy evidence and thus,was speculative. Accordingly, the District Court should have granted a S?iOV 

### as to that award. A 

### review of the record, however,negates FoxGrain'sargurr.ent. Technically the award of $23,013.42was not an award but, rather, that miount represented an axount which Maxwell was not liable since Fox Grain failed to aitigate its damages. The jury determined that the leasewas in effectand,pursuant to the lease, Naxwell was liable for 75 

### percent of the farming expenses, or $38,779.60. The jury then determined that Fox Grain failed to ~.iti;.atethose farming expenses and conc?,udedthat if Fox Grain properly mitigated its damages, it would have saved Xaxvell $23,013.42. 

### The record reveals that evidence was elicited to prove that Fox Grain refused t,o

### sell stored grain, which resulted in $1,000of extra storaqe costs. Fi;-rther,Fox Grain refused to enter anagreenent with Xaxdell so that the Agriculture Stzbilizatior ac3 Conservation Service would release advance deficiency payments of

$i3,C13.42, Cn that basis, ;we ccncl~de chat the District Court properly denied 

### Fox Grain's nction for aJNOV as to the $23,013.42. Additixall;;,FoxGrain contends thatthe special verdict for3

xas pisleading. According to Fox Grain, the ~wording of question 2)b), is nonsensical, confusing, and the jury did notknow what the question was asking. The special verdict provided, in pertinent part: 2) Do you find against [Fox Grain] and in favor of [E4axxell], that no naterial breach of the lease occurred? Answer: YesL NoIf your answer is yes, resulting in reccgnition of the contlcu~ng validlty of the lease, then: a) Khat anount of farming expenses incurred sinceJuly 23, 1990,do you find [Max~ell] responsible for the payment of?

b) Taking into consicleration mitigation of damages, what anount of damages, if any, do you award to

[Hax-#ell j and against [Fox Grain]? $ 2?,C13.42

### + 75% of nec Fed Crqo ins pnt While questicn 2)b) is not a nodel question on the mitigation issue, :;e cczclude that the special verdict form coxporrswith the standards of Rule 45(a), M.R.Civ.P. In Story 

### v. City of Bozeman (1993)' 239 Mont. ZOil 229, 856 P.2d 202, 215-16, we exaained the three-part stan3ard to asternine the adeqaacy of a specialverdict1)

### w3ether,when read as a whole and in conj*~nction with the general charge, the i?terrogatcries arieqcately presented tke contested issues ta the jury; 2)

### rwhetber the s,kmissionof the 

### issues to the jury 

### vas fair; ax6 3) 

### whether the ultimate questions of fact were clearly suhitted 

### to the 

### jury. In the present case, whenquestion 2)b) 

### is read in context with the remainingportions of the special verdict form, the issue of nitigation was properly presented to the jury. The special verdict fairly and accurately subnitted the issues, and specifically the nitigation issue, to the jury. F~rther,the ultimate question of fact of whether Fox Grain mitigated its damages was logically and clearly presented to the jcry. We 

### hold that the specialverdict form compliedwith Rule 49(a), l4.R.Civ.P. Finally, Fox Grain maintains that the District Court should have overturned the jury award of $16,500 

### for loss of 

### machinery. Fox Grain contends that ?lam-ell'sfather, 

### TOP., purchased the tractor in his omname. Since Tom was not a party 

### to the lease, the loss of the tractor was Ton's, and not Xaxwell's. Fox Grain argues that the District Court improperly allowed Maxwell to
recovert>e loss of that tractor. The record, however,dilutes Fox Grain's argunant. Even 

### though Tom purchased the tractor in his name, Xaxwell's property--worth $14,300--was used as a down payment, and Masvell

was 

### responsible fcr the paperits. Tom only assisted Haxwell in obtzining financing for the tractor, Fcrther, two other itens of~achirs-~ '1 were lcst, a pcsthole digger and rotary cuzter valaed between $2,500 and $2,750. After an extensive review of the record, Tt:e ccnclude that the District Court properly denied Fox Grain's nc:icn f=ra J!:gC as to the ---s: ,.,czb:.,nery damrjes. We hold that ths recorc: contains sufficient pr3of to justify the jury's conclusion that Fox Grain failed to rnitiqate its daz.ages-- $2?,C13.42--and owed Maxwell $16,500 for Maxiellis loss of nackinery. The District Court is affimed on Issue 11.

Was there sufficient evidence in the record to scpport the jury's findings that Maxweii dld not breach the lease? The jury concluded thatP1axwel.l had not breached the lease and the Lease was in effect for 1991. Fox Grain contends that the jury,- conclusion on the breach issue is unsupported 

### by the evidence. Moreover, Fox Grain argues that the District Court erred by granting Maxwell'smotion in limine relating to negotiations or discussions which predated the execntion of the lease agreement. We will not disturb a district court's evidentiary rulings absent an abuse of discretion. Haines Pipeline Construction, Inc.

v. Kontana Power Co. (1991)' 251 Mont. 422, 427, 830 P.2d 1230, 1234. In this case,the District Court's order in limine excluded parcl evidence of the lezse agreement. Tox Grain contends that parol evidence should have been adaitted to exglain aabigcities in the lease. 

### See Eliingson Agency, Inc. v. Baltrusch (1937), 228 Mont. 360, 366, 742 P.2d 1009, 1013. Fox Grain contends that the foLloaingprevisions are ambignous:I) Maxwell agreed to "occupy-,till axi in all res-;?ects cultivate the premises 3bove nentioced during the tsrzt aforesaici,in a farmer-like manner, and according to the usnal course of farning practiced in the neighborhood;" and 2) MaxweLl and 

### Fox Grain "agreed that nc? less than all 

### -n-- acres skallbs c~~itivatei. eachyear of this Lease, ef"' n-r by being 

### in crop or suamerfallow, except that Xzxwell is allmied 

### tc stubble in approxiaately- 1,000 acres of sunr.erfallovand will leave 1,OCO acres of sunnerfallow at the end of the Lease." FoxGrain arques thattheterzs "farmer-likemanner," "usualcourse of farming practiced in the neighborhood," acd "not less than all

acres snail be cultivated each year of this lease" were ambiguous and requiredparol evidenceto explain theirxeaning. Further, the tern "Eaxb:ell is alloxed to stubble in approximately 1,000acres of summerfallow" is ambiguous, since any farmer knows that a person cannct "stubble in" summerfallow. When ambiguous terms exist in a contract, parol evidence is admissible to explain the ambiguous terms. Ellinason Aqency, 742 P.2d at 1013. In Ellinqscn Aoencv, ire examined ~shetherthe tern

3,c3nveyance" under a real estate broker's exclusive listing 2greemer.t inclucied a transfer of title in lieu cf foreclosure. We concluded that summary judgmentwas improper because genuine issues of fact existed since the term "conveyance" did not have a fixed meaning. Ellinqson Aqency, 542 

### I?.;:! at 1013. Cie helci that parcl evidence was necessary to interpret the parties' intention of inclcding that tern in the agreenent. unascnAqencv, 742 P.2d at 1013. Fox traifi contends that.the District Court should have allowed it t:, testify as to the meaning of the term of the lease. 14

### According ts Fox Grain, it was unable to explain to the jury that the 

### Lease reqoired "axwell to spray for weeds and snmnerfaiiow the

3." , 

### pro~erty. :else, however, did not pra-iide that Haxweli was zeqak-edto spray cr 

### su-m?rfallox the prcperty. Tkn 

### lease di2 

### pr""irJe ";t]hatFox [Grain: is tobe consult& 

### by Yamellas to the 

### farcingdecisions, however, the final.decisicn ofMaxlcell shall be binding upcn Pcx [Grain]

## ." Even though the court refused to allow Fox Grain to testify about the xeaning of the terns,the court did allow neighboring farmers' testimony on the issue of farming practices. We conclude that the courtdid not abuse its discretion when it limited Fox Grain's testimony as to what it felt the lease required of Maxwell. FoxGrainalso arguesthat the jury's findkgthati"ixwell did rtotbreach the lease was not supported by substantial evidence. Fox Grain extensively argues the facts of this case and concludes thatMaxwell breached the lease. When conflicting evidence exists, the jury must judge the credibility and ~geight of the evidence and

we will not retry the case nor will Fie reweigh the evidence on appeal. Whisher v. Higgs (1993), 257

### Mont. 132, 146, 849 

### P.2d 152, 160. 

### After an extensive review of the record,we conclude that the jury's findingthatMaxwell did not breach the leasewas supported by 

### substantialex:idence. We 

### affirm the jury verdict on Issue 111.



### Did the District Court err by granting Maxwell summary judgnent on Fox Grain's ownership claim of thevolunteer winter wheat crop? Ol~rstandard 

### of review on a 

### grant 

### of surzaar'j 

### judgaent isidentical t? 

### that cf the trial court. Mimic v. City of Rcundup (199- J,,

' 255 ~oct. 423, 431, 849 P.Z~ 212, 214. First, 

### we exaaine the record to determine whether genuine issues of fact exist.

., aln~ie,
1 249 P.Z? at214, If no genuine issues of fact exist, then

<verust deter~ine xhether thenoving party is entitledtojudgcent

as 2 natter of ia~x, -t Minnte 249 P.22 

### ac 214. The lease provisions stated that Maxijell would lease the prenises duringthe 1989, 1990, and 1991crop seasons. Maxwell was to deliver to Fox Grain one-fourth of all crops produced on the land, except thatMaxwell was toreceive the entire 1939 crop ard Fox Grain was not to share inthat crcp. Fox Grain concedes that the volunteer crop was harvested in 1929, but contends that an issue of fact exists as towhich year the crop began growing. Fox Grab contends that the crop was actuallyplanted in 1987 forharvest in 1988. However, due tothe hail storm in 1988, thevolunteer crop sprouted in 1939. We conclude that no genuine issue of fact exists and tke agreexent is clear on its face that since the volunteer crcp was harvested in 1989, Maxwell had a right toreceive the entire crop. At the beginning of the lease, the parties were a-dare of the existence of the volurteer crop, but chose not to address the ownership of that crcp intheiragree~~ent. Moreover, ."$henMaxwell harvested thevolunteer crop in 1989, Fox Grain didnct claiothat it owned the crop. Ratker, Fox Grain wait& until 1996-->;hen it sent Naxxell the Lease cancelletion notice--to clain an ownership interest ic that cr3p. 

### We hale that the District Court properlyWe 

### concur: A 

### i 

## \