No 

No. 98-119

IN THE SUPREME COURT OF THE STATE OF MONTANA

1999 MT 41

ROY W. STANLEY and CAROL A. STANLEY, individually 

and ROY W. STANLEY, CAROL A. STANLEY, LIBBY 

STANLEY, HOLLY STANLEY and CARRIE STANLEY 

as the assignees of ROY STANLEY CHEVROLET COMPANY,

Plaintiffs and Respondents,

v.

ALLAN G. HOLMS, AGH, INC., a/k/a ALLAN G. HOLMS, 

INC., a Washington corporation or any successor, entity or 

assignees of the assets of HOLMS MOTORS, INC., and THE 

ALLAN G. HOLMS TRUST, Roger Crist, Trustee,

Defendants and Appellants. 

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APPEAL FROM: District Court of the Eleventh Judicial District,

In and for the County of Flathead,

The Honorable Katherine R. Curtis, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Lee C. Henning; Henning & Keedy, Kalispell, Montana

Frank B. Morrison; Morrisons, McCarthy & Baraban, Whitefish,

Montana

For Respondents:

Gary R. Christiansen; Warden, Christiansen, Johnson & Berg, 

Kalispell, Montana

Submitted on Briefs: February 24, 1999 

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Decided: March 12, 1999

Filed:

__________________________________________

Clerk

Justice Karla M. Gray delivered the Opinion of the Court.

¶1. This is an appeal from the Eleventh Judicial District Court, Flathead County. 

The District Court granted the plaintiffs' second motion for summary judgment, and 

denied the defendants' motion to amend the judgment. The defendants appeal. We 

affirm.

¶2. We address the following dispositive issues:

¶3. 1. Did the District Court abuse its discretion when it ruled on the motion for 

summary judgment without allowing Holms the opportunity to conduct further 

discovery?

¶4. 2. Did the District Court err by failing to consider the second affidavit of Allan 

Holms when deciding the motion for summary judgment?

¶5. 3. Do genuine issues of material fact exist concerning fraud and economic duress 

which precluded summary judgment on Holms' counterclaims? 

FACTUAL AND PROCEDURAL BACKGROUND 

¶6. The following facts are taken primarily from the two affidavits of Allan Holms 

filed in opposition to the plaintiffs' motion for summary judgment. In 1992, Allan G. 

Holms and affiliated entities (collectively, Holms) purchased an automobile 

dealership located in Kalispell, Montana, from Roy W. Stanley, Carol A. Stanley and 

other assignees of the Roy Stanley Chevrolet Company (collectively, the Stanleys). 

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The purchase agreement contained a provision giving Holms the option to purchase 

the real property on which the dealership was located. In 1994, Holms and the 

Stanleys entered into negotiations to sell the dealership to a third party because 

Holms was developing another dealership in Spokane, Washington, and needed cash 

from the sale of the Kalispell dealership to fund it. 

¶7. Holms received two offers from third parties to purchase the Kalispell dealership. 

Pursuant to the first offer, Holms would exercise the option in the 1992 agreement to 

purchase the real property underlying the dealership for $1.5 million which by 1994 

appraised for $2.45 million. The terms of the first offer allowed Holms to pay the 

Stanleys monies owed under the 1992 agreement. Holms received a second offer from 

an entity known as the Corwin-Eisinger group. Under the second offer, the Stanleys 

would retain ownership of the land, but the purchasers would lease it for 10 years for 

an ultimate payment of $1.7 million. This second offer would provide tax advantages 

to the Stanleys and the capital needed by Holms to invest in the Spokane dealership. 

The Stanleys decided that Holms should sell the dealership to the Corwin-Eisinger 

group.

¶8. On September 19, 1994, Holms sent the Stanleys a letter and memorandum, 

outlining the terms of the proposed agreement with the Corwin-Eisinger group; 

Holms and the Corwin-Eisinger group entered into an Asset Sale Agreement 

according to the terms and conditions allegedly agreed to by the Stanleys on 

September 23, 1994. The closing date for the sale was set for November 1, 1994.

¶9. Later in the day on September 23, 1994, Holms received a letter from the 

Stanleys purporting to clarify the status of Holms' proposal to sell the dealership. In 

Holms' view, however, the letter contained significant differences from the prior 

agreement, which already had been incorporated into the Asset Sale Agreement. 

After receiving the letter, Holms contacted the first prospective purchaser, who 

renewed his earlier offer. The Stanleys, however, informed Holms that the dealership 

could not be sold under the terms of the first offer, because Holms had defaulted on 

the 1992 purchase agreement and, as a result, no longer had the option to purchase 

the underlying real property.

¶10. In the meantime, the Stanleys sent the Corwin-Eisinger group a letter dated 

September 29, 1994, which purported to outline an agreement between the Stanleys 

and the Corwin-Eisinger group. The letter states that it is "a letter of intent, not a 

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legal contract, [and] is subject to the approval of all parties, attorneys, General 

Motors, GMAC, etc." Holms claims that this letter confirmed the terms of the Asset 

Sale Agreement, even though the Stanleys had informed Holms that they were no 

longer agreeing to the terms which had been incorporated into that agreement. 

Holms also claims that over the next 60 days, the Stanleys took inconsistent positions 

between Holms and the Corwin-Eisinger group, in an effort to negotiate more 

favorable terms on their own behalf.

¶11. Holms further asserts that, during this time frame, the Stanleys disrupted 

Holms' business. For example, Allan Holms' second affidavit states that the Stanleys 

publicly disclosed the fact that Holms was in the process of selling the dealership. 

They also sent Holms a notice claiming Holms had defaulted on the 1992 purchase 

agreement, and sent copies of the default notice to Holms' financing sources and 

various automobile manufacturers. Holms testified that this disruption caused 

financial loss and resulted in the near cessation of the Kalispell business.

¶12. Eventually, Holms and the Corwin-Eisinger group entered into a final closing 

agreement dated November 30, 1994. The Stanleys and other entities such as Like-Nu 

corporation, to whom Holms owed certain monies, also signed the agreement. Holms 

alleges that the terms of that agreement differed materially from the agreement 

entered into with the Stanleys in September of 1994. In particular, the final 

agreement included a release waiving "all claims for all damages arising out of acts, 

representations, or matters known or unknown each may have against the 

other . . . ," except for claims against Holms for monies owed relating to the 1992 

purchase of the Kalispell dealership. Holms testified by affidavit that the Stanleys 

presented the final agreement containing the release on a take it or leave it basis. 

Holms also testified to a shortfall in operating cash exceeding half a million dollars 

that would have been obtained had the Stanleys fulfilled their September of 1994 

agreement. Ultimately, Holms was not able to make the Spokane dealership a success.

¶13. On August 25, 1995, the Stanleys filed a complaint and, on September 18, 1995, 

they filed an amended complaint against Holms to recover monies due pursuant to 

various contractual agreements, guarantees, and promissory notes relating to the 

1992 purchase of the Kalispell dealership. On December 1, 1995, three days prior to 

the deadline for answers to the Stanleys' first discovery requests, Holms' counsel 

filed a motion to withdraw. Neither Holms nor counsel filed a response to the 

discovery requests. On December 8, 1995, the Stanleys filed a motion for summary 

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judgment based primarily on matters deemed admitted by Holms' failure to respond 

to the request for admissions. 

¶14. Holms' present counsel undertook to represent Holms on January 9, 1996, and, 

on January 10, 1996, Holms filed various motions, including a motion to amend to 

assert counterclaims against the Stanleys. Holms sought to bring claims for breach of 

the implied covenant of good faith and fair dealing, breach of contract, and fraud. 

Holms essentially claimed that the Stanleys had entered into an agreement in 

September of 1994, but subsequently reneged on that agreement, causing harm. On 

January 23, 1996, Holms also served objections and answers to the Stanleys' first 

discovery requests. The District Court granted the Stanleys' motion for summary 

judgment on April 26, 1996. 

¶15. On appeal, this Court reversed and remanded. We directed the District Court to 

rule on Holms' motion to amend the pleadings pursuant to the criteria set forth in 

Rule 15(a), M.R.Civ.P., and to consider the Stanleys' motion for summary judgment 

in light of any amended pleadings the court permitted to be filed, Holms' discovery 

responses, and the state of the record at the time the motion for summary judgment 

was heard. See Stanley v. Holms (1997), 281 Mont. 329, 340, 934 P.2d 196, 203.

¶16. Following remand, the Stanleys filed a reply to Holms' counterclaims on April 

24, 1997, alleging as an affirmative defense that Holms had executed a release 

waiving all claims against them. The Stanleys also filed a second motion for summary 

judgment on both the amended complaint and the counterclaims. On October 27, 

1997, the District Court entered an order granting Holms' motion to amend the 

pleadings to assert counterclaims against the Stanleys. The court also granted the 

Stanleys' motion for summary judgment on both the amended complaint and on the 

counterclaims. The District Court entered judgment in favor of the Stanleys on 

October 30, 1997, and on December 30, 1997, denied Holms' motion to amend the 

judgment. This appeal followed. 

ISSUE ONE

¶17. Did the District Court abuse its discretion when it ruled on the motion for 

summary judgment without allowing Holms the opportunity to conduct further 

discovery? 

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¶18. Holms contends that the motion for summary judgment was premature because 

of an inadequate opportunity to conduct discovery. Specifically, the arguments are: 

1) there were fewer than 45 days during which the case was not subject to either an 

appeal or a dispositive summary judgment motion in which to conduct discovery; 2) 

because the District Court simultaneously granted Holms' motion to file the 

counterclaims and granted summary judgment on those counterclaims, no adequate 

opportunity was allowed to conduct discovery on those claims; and 3) the summary 

judgment was premature because the court granted the motion in spite of the 

Stanleys' refusal to fully answer requests for production of documents. In the latter 

regard, Holms notes that there was a pending motion to compel the Stanleys to 

produce documents, after which deposition of various individuals were planned.

¶19. District courts have inherent discretionary power to control discovery. J.L. v. 

Kienenberger (1993), 257 Mont. 113, 119, 848 P.2d 472, 476 (citation omitted). This 

discretionary power extends to deciding whether to deny or to continue a motion for 

summary judgment pursuant to Rule 56(f), M.R.Civ.P., on the basis that the party 

opposing the motion needs further discovery. Kienenberger, 257 Mont. at 120, 848 

P.2d at 477; Howell v. Glacier General Assur. Co. (1989), 240 Mont. 383, 386, 785 

P.2d 1018, 1019, 1020. In urging the court to deny the motion for summary judgment 

on the basis that it was premature, Holms' argument was based on the standards set 

forth in Rule 56(f), M.R.Civ.P., which provides as follows:

Should it appear from the affidavits of a party opposing the motion that the party cannot 

for reasons stated present by affidavit facts essential to justify the party's opposition, the 

court may refuse the application for judgment or may order a continuance to permit 

affidavits to be obtained or depositions to be taken or discovery to be had or may make 

such other order as is just.

This Court has stated that a district court does not abuse its discretion in denying a Rule 56

(f), M.R.Civ.P., motion where the party opposing a motion for summary judgment does 

not establish how the proposed discovery could preclude summary judgment. 

Kienenberger, 257 Mont. at 120, 848 P.2d at 477; Howell, 240 Mont. at 386, 785 P.2d at 

1019, 1020.

¶20. Although Holms has detailed the sequence of events in this case and vigorously 

argues that more time was needed to obtain documents and take depositions, neither 

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Holms' briefs nor the supporting affidavits in the District Court establish how the 

proposed discovery could preclude summary judgment. The only evidence Holms 

hoped to obtain was a letter written by the Stanleys to the Corwin-Eisinger group in 

September of 1994. However, a copy of that letter was obtained through other means 

and attached to Holms' affidavit in opposition to the Stanleys' motion for summary 

judgment. Thus, the District Court reviewed the letter in deciding the motion. 

Furthermore, Allan Holms testified in two affidavits that the Stanleys had reneged 

on commitments they made in September of 1994. Holms fails to explain what new 

facts could have been obtained through further discovery which could defeat the 

Stanleys' motion.

¶21. We hold that the District Court did not abuse its discretion in conducting the 

summary judgment hearing and ruling on the Stanleys' motion without allowing 

Holms the opportunity to conduct further discovery.

ISSUE TWO

¶22. Did the District Court err by failing to consider the second affidavit of Allan 

Holms when deciding the motion for summary judgment?

¶23. When the Stanleys filed their second motion for summary judgment after 

remand from this Court, Allan Holms prepared a second affidavit in opposition to 

the motion. Holms contends that the District Court failed to consider this affidavit 

and that it erred in failing to do so. In support of the contention that the court failed 

to consider the second affidavit, Holms points to the following portion of the District 

Court's order:

Concerning the fraud allegation, Plaintiffs have shown, through supporting affidavits and 

the release and accompanying documentation, the absence of any genuine issue of 

material fact that the release bars the counterclaim. Defendants' responsive affidavit, filed 

in connection with the initial motion for summary judgment (the only substantive affidavit 

submitted in connection with Defendants' opposition to the renewed motion was a 

facsimile of an Allan Holms affidavit, which was not followed by the original within five 

(5) business days, or ever, as required by Rule 5, M.R.Civ.P., so it cannot be considered), 

sets forth no more than vague, conclusory allegations concerning the fraud. 

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¶24. It appears, however, that the District Court did review and consider Allan 

Holms' second affidavit. At the hearing on the summary judgment motion, the court 

stated: "I have read your briefs; I have read your affidavits, Mr. Henning. I even 

read the affidavits I got yesterday afternoon and the exhibits." Furthermore, in its 

order denying Holms' post-summary judgment motion to amend the judgment, the 

District Court clarified that it had considered the second affidavit:

The Court file does not reflect the original affidavit having been filed until November. 

Nonetheless, the Court's Order on the Motion for Summary Judgment makes it clear that 

the faxed affidavit of Alan G. Holms was reviewed and considered, and that the Court 

found it to be vague and conclusory, while failing to raise any genuine issues of material 

fact.

¶25. On this record, we reject Holms' contention that the District Court failed to 

evaluate the second affidavit, and therefore we need not address Holms' additional 

arguments as to why justice demanded its consideration. We hold that the District 

Court did not fail to consider the second affidavit of Allan Holms and, as a result, 

that Holms has not established any error in this regard. 

ISSUE THREE

¶26. Do genuine issues of material fact exist concerning fraud and economic duress 

which precluded summary judgment on Holms' counterclaims? 

¶27. Holms does not contest the allegations in the Stanleys' amended complaint that 

certain monies were owed pursuant to the 1992 agreement to purchase the Kalispell 

dealership. In fact, Holms admitted--in discovery responses and at the summary 

judgment hearing--having defaulted on various agreements, guarantees and 

promissory notes by failing to make certain payments. Accordingly, summary 

judgment on the Stanleys' amended complaint was appropriate.

¶28. Holms' only substantive "defense" involves the Stanleys allegedly acting in bad 

faith and failing to fulfill a commitment made in September of 1994 when the parties 

negotiated to sell the Kalispell dealership to a third party. These alleged actions by 

the Stanleys form the basis for Holms' counterclaims for breach of the implied 

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covenant of good faith and fair dealing, and for fraud and to provide a set off to the 

Stanleys' claims. 

¶29. The Stanleys, in turn, point to the release signed by Holms in the final closing 

agreement in November of 1994, wherein both parties waived "all claims" each had 

against the other except for the debts owed by Holms relating to the 1992 purchase of 

the Kalispell dealership. The Stanleys contend that the release is clear and 

unambiguous and, as a result, that they were entitled to summary judgment on 

Holms' counterclaims. 

¶30. Holms does not dispute that the release of "all claims" purports to release the 

counterclaims against the Stanleys. Instead, Holms contends that the release was 

obtained through fraud and economic duress and is, therefore, unenforceable. From 

this premise, Holms reasons that the counterclaims for breach of the implied 

covenant of good faith and fair dealing and fraud must be submitted to a jury. Thus, 

the issue is whether Holms has raised genuine issues of material fact in support of the 

argument that the release is unenforceable.

¶31. We review a district court's order granting summary judgment de novo, using 

the same Rule 56, M.R.Civ.P., criteria as the district court. Stanley, 281 Mont. at 332-

33, 934 P.2d at 198-99. 

The movant must demonstrate that no genuine issues of material fact exist. Once this has 

been accomplished, the burden then shifts to the non-moving party to prove, by more than 

mere denial and speculation, that a genuine issue does exist. Having determined that 

genuine issues of fact do not exist, the court must then determine whether the moving 

party is entitled to judgment as a matter of law. We review the legal determinations made 

by a district court as to whether the court erred.

Bruner v. Yellowstone County (1995), 272 Mont. 261, 264-65, 900 P.2d 901, 903 

(citations omitted). 

¶32. Conclusory statements are insufficient to create genuine issues of material fact. 

Sprunk v. First Bank System (Sprunk II) (1992), 252 Mont. 463, 466-67, 830 P.2d 

103, 105. The party opposing a summary judgment motion must, therefore, "set 

forth specific facts and cannot rely on speculative, fanciful, or conclusory 

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statements." Sprunk II, 252 Mont. at 466, 830 P.2d at 105 (citation omitted). 

Moreover, disagreement over the interpretation of facts does not amount to a 

genuine issue of material fact. Sprunk II, 252 Mont. at 466, 830 P.2d at 105. In the 

present case, we conclude that Holms has failed to set forth specific facts showing the 

existence of a genuine factual issue that the release is unenforceable due to fraud or 

economic duress. 

¶33. It is well settled that a release may be set aside if it was obtained fraudulently. 

Sprunk v. First Bank Western M. Missoula (Sprunk I) (1987), 228 Mont. 168, 173, 

741 P.2d 766, 769 (citation omitted). A mere suspicion of fraud is insufficient. Sprunk 

I, 228 Mont. at 173, 741 P.2d at 769. To survive a motion for summary judgment, a 

party alleging fraud must establish a prima facie case by providing evidence of the 

following elements:

1. a representation;

2. its falsity;

3. its materiality;

4. the speaker's knowledge of its falsity or ignorance of its truth;

5. the speaker's intent that it should be acted upon by the person and in the manner 

reasonably contemplated;

6. the hearer's ignorance of its falsity;

7. the hearer's reliance upon its truth;

8. the right of the hearer to rely upon it;

9. the hearer's consequent and proximate injury or damage.

Sprunk I, 228 Mont. at 174, 741 P.2d at 769 (citation omitted).

¶34. Even after drawing all reasonable inferences in favor of Holms as the party 

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opposing the motion for summary judgment, we conclude that Holms has not raised 

a genuine issue of material fact regarding fraud. While Holms' affidavits present 

conclusory allegations that the Stanleys backed out of commitments they made in 

September 1994, they do not set forth specific facts establishing the elements of 

fraud. Specifically, Holms failed to set forth any specific false representations made 

by the Stanleys, specific facts relating to the materiality of any such representations, 

and facts indicating that the Stanleys intended Holms to rely on such representations. 

On the other hand, the Stanleys have shown that the release is clear and 

unambiguous, thereby establishing the absence of any genuine issue of material fact 

that the release bars the counterclaims.

¶35. Holms also claims that the release was signed under economic duress. A party 

claiming economic duress must show that the release was signed under 

circumstances "evincing a lack of free will on the part of the contracting parties." 

Hoven v. First Bank (N.A.)-Billings (1990), 244 Mont. 229, 235, 797 P.2d 915, 919 

(citing Aldrich & Co. v. Donovan (1989), 238 Mont. 431, 437, 778 P.2d 397, 401). "It 

is not sufficient to show that consent was secured by the pressure of financial 

circumstances. . . ." Hoven, 244 Mont. at 235, 797 P.2d at 919. 

¶36. Here, Holms argues economic distress resulting from the Stanleys having 

reneged on a promise in the September of 1994 negotiations to sell the business to a 

third party and, instead, having continued to negotiate more favorable terms for 

themselves at Holms' expense. The Stanleys, on the other hand, admit that the parties 

made changes from the time the Asset Sale Agreement was negotiated between 

Holms and the Corwin-Eisinger group and the time the closing agreement was finally 

signed by those two parties, by them, and by other entities to whom Holms also owed 

money, such as Like-Nu corporation and Farmers and Merchants Bank. For 

example, the Stanleys note that, in the final closing agreement, they had to accept a 

promissory note from the buyers as a novation, rather than receive cash. Moreover, 

they contend that any changes in the agreement resulted from financial problems 

that Holms--rather than the Stanleys--created. Thus, the Stanleys insist that Holms 

bargained for the changes and, as part of the negotiation process, signed the release 

now alleged to be unenforceable; having accepted the benefits of the bargain, the 

Stanleys urge that Holms should not now be allowed to deprive the Stanleys of their 

part of the bargain. Finally, the Stanleys point out that Holms was represented by 

counsel during the drafting of the release, yet Holms presented no evidence via 

affidavits that the Stanleys exerted any undue pressure on Holms to sign the release. 

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¶37. Based on the record before it, the District Court concluded that any economic 

duress suffered by Holms was of Holms' own making. As partial security for the 

purchase of the Kalispell dealership in 1992, Holms had pledged two promissory 

notes from the Healthco Corporation as collateral. The District Court noted that 

Holms was under financial pressure because the Healthco Corporation had declared 

bankruptcy. Additionally, Holms needed capital for the Spokane dealership and it 

was solely Holms' idea to sell the Kalispell dealership to a third party. Thus, any 

economic pressure that led to--or was created by--those efforts was attributable to 

Holms and not the Stanleys. We agree with the District Court.

¶38. After reviewing Holms' affidavits and the transcript of the hearing on the 

motion for summary judgment, it appears clear that Holms suffered from economic 

pressure. However, proof that the release was secured by the pressure of financial 

circumstances is insufficient. Rather, to substantiate the allegation of economic 

duress, Holms was required to present facts indicating that the Stanleys produced 

Holms' financial distress and that Holms was the victim of a wrongful act which 

resulted in a deprivation of free will. Here, the record reflects that Holms suffered 

from economic pressure because of defaults in making certain payments due on the 

purchase of the Kalispell dealership, and because capital was needed for the Spokane 

dealership. Holms presented no evidence, however, that the Stanleys created these 

financial problems. To the contrary, it appears that Holms had total control over the 

Kalispell dealership for two years. Holms obviously hoped to pay off the debts to the 

Stanleys and to rescue the business opportunity in Spokane by selling the Kalispell 

dealership. While Holms is clearly disappointed at being ultimately unable to sell the 

Kalispell dealership under more favorable terms, no evidence was produced that the 

Stanleys caused any circumstances which deprived Holms of free will. 

¶39. Holms cites various cases in support of the argument that the release was signed 

under economic duress, contending that Litten v. Jonathan Logan, Inc. (Pa. Super. 

Ct. 1971), 286 A.2d 913 is the most analogous to the present case. In Litten, the 

plaintiffs had entered into an oral agreement with the defendant to sell two 

corporations. In exchange for the stock of the corporations, the defendant agreed to 

pay the corporations' creditors, pay off the corporations' bank loans, pay plaintiffs 

any monies in excess of such payments from the assets of the corporations, employ 

the plaintiffs for a one-year term at a stipulated salary, and give one of the plaintiffs 

an option to purchase 5,000 shares of the stock during the one-year employment. 

Litten, 286 A.2d at 915-16. At the time the plaintiffs entered into the agreement, they 

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were not in drastic financial difficulties, but rather were solvent, had a solid net 

worth, and had many other business and financial options. Litten, 286 A.2d at 915. In 

reliance on the oral agreement, the plaintiffs transferred the stock of the two 

corporations to the defendant. The defendant, however, refused to carry out its oral 

promises. Not surprisingly, when the defendant refused to pay the plaintiffs' 

creditors and bank loans as promised, the creditors immediately threatened the 

plaintiffs with bankruptcy. Faced with immediate financial disaster, the plaintiffs 

signed a written agreement with the defendant which differed from the oral 

agreement in significant respects, such as the absence of a provision for return of 

excess monies from liquidation and of the one-year employment clause. Indeed, the 

plaintiffs who had begun working for the defendant were fired within two months. 

Litten, 286 A.2d at 916. 

¶40. The plaintiffs in Litten filed a lawsuit against the defendant to recover money 

damages and an accounting on the basis of the oral contract. The defendant defended 

the action based on its contention that the later written contract, not the oral 

contract, governed the parties' rights and obligations. The plaintiffs countered that 

they were compelled to sign the written agreement under economic duress and 

coercion, because the defendant had maneuvered them into an untenable economic 

crisis. The case was submitted to a jury, which found for the plaintiffs. Litten, 286 

A.2d at 914-15. Following the adverse jury verdict, the defendant filed a motion for a 

judgment notwithstanding the verdict or for a new trial. The trial court denied the 

motions. Litten, 286 A.2d at 914.

¶41. The defendant appealed, and the Superior Court of Pennsylvania concluded 

that ample evidence supported the jury's verdict that the plaintiffs executed the 

written agreement under economic duress created by the defendant. Litten, 286 A.2d 

at 915. According to the evidence, it was the defendant who had placed the plaintiffs 

in an "inextricable financial crisis" by breaching their oral agreement and, at that 

point, the plaintiffs' only recourse to avoid bankruptcy was to sign the written 

agreement. The Litten court concluded that this was precisely the kind of duress 

contemplated by the cases discussing the concept of "economic duress." Litten, 286 

A.2d at 917. 

¶42. The present case differs from Litten in significant respects. In Litten, the 

defendant's actions pushed the plaintiffs into dire financial circumstances. The 

plaintiffs were solvent and had many financial options prior to their oral agreement 

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with the defendant, but the defendant's wrongful actions in failing to honor the oral 

agreement forced the plaintiffs to the brink of bankruptcy leaving them with no 

alternative but to sign the written agreement. In the present case, the Stanleys 

neither contributed to nor caused Holms' financial crisis. Holms' financial difficulties 

existed independently of--and, indeed, predated--the sale of the Kalispell dealership. 

As discussed above, there is no evidence on the record before us that the Stanleys 

created Holms' financial difficulties in making the payments on the Kalispell 

dealership or Holms' need for additional capital for the Spokane dealership. As a 

result, Litten is readily distinguishable from the present case.

¶43. We conclude that Holms failed to present facts indicating that the Stanleys 

obtained the release through fraud or economic duress. We hold, therefore, that no 

genuine issues of material fact exist which precluded summary judgment on Holms' 

counterclaims. 

¶44. Affirmed.

/S/ KARLA M. GRAY

We concur:

/S/ J. A. TURNAGE

/S/ JAMES C. NELSON

/S/ W. WILLIAM LEAPHART

Justice William E. Hunt, Sr., concurring in part and dissenting in part. 

¶45 I concur as to issues one and two of the majority opinion. 

¶46 I dissent from issue three of the majority opinion which holds that there were no 

genuine issues of material fact concerning fraud and economic duress which precluded 

summary judgment on Holms' counterclaims. Instead, I would hold that the issue as to 

whether the release was obtained through fraud and economic duress is a factual question 

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No 

that should have been decided by the jury.

¶47 Holms has set forth specific facts establishing that in September of 1994, the Stanleys 

entered into a binding agreement with them, allowing them to sell the dealership to a third 

party. He also set forth specific facts establishing that in reliance upon that agreement, 

Holms entered into a contract to sell the dealership to the Corwin-Eisinger group. Finally, 

Holms sets forth specific facts establishing that had the Stanleys honored their initial 

contract, Holms would have been able to make all his payments on the Kalispell 

dealership and also obtain the necessary capital to successfully operate the Spokane 

dealership. 

¶48 Holms was entitled to rely upon the Stanleys' initial agreement. I would hold that 

there is a genuine factual issue as to whether the Stanleys' failure to honor the terms of that 

initial agreement constituted fraud and as to whether it was that failure that also caused 

Holms his financial duress. That is a question that should have been decided by a trier of 

fact. 

¶49 For the foregoing reasons, I would reverse the District Court and hold that there were 

genuine issues of material fact which precluded summary judgment. 

¶50 I concur in part and dissent in part.

/S/ WILLIAM E. HUNT, SR.

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