No. 91-478 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1992 

JOE KRAFT d/b/a HOLIDAY REALTY, 

Plaintiff and Appellant, 

-vsINEZ F. HODSON, individually, and as 

Personal Representative of the Estate of 

Charles G. Hodson. ELKRIDGE LIVESTOCK CO.. 

a Montana corp., and HODSON RANCH COMPANY; 

a co-partnership, CLERK OF S~pr;.ici~ C;TM'rE ob- ~J.D~~-A~A 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Joel G. Roth, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Douglas C. Allen, Attorney at Law, Great Falls, 

Montana 

A. Clifford Edwards & David R. Paoli, Edwards & 

Paoli, Billings, Montana 

For Respondent: 

Keith Strong, Dorsey & Whitney, Great Falls, Montana 

Filed: 

Submitted on Briefs: August 13, 1992 

~ecided: September 1, 1992 
Justice R. C. McDonough delivered the Opinion of the Court. 

This is an appeal from an order of the District Court of the 

Eighth ~udicial ~istrict, Cascade County, dismissingthe plaintiffappellant Joe Kraftls d/b/a Holiday Realty (Kraft) complaint 

against the defendants-respondents Inez F. Hodson, et al. (Hodson) . 

We affirm. 

The disposing issue is: 

Did the District Court err in dismissing Kraft's complaint 

with prejudice on Hodson's motion to dismiss for failure to state 

a claim? 

The complaint alleges Hodson, on behalf of herself and the 

other respondents, entered into a real estate listing agreement 

with Kraft, a real estate agent, to sell the Hodson Ranch, 

machinery and livestock. Such agreement was incorporated into the 

complaint. Under the agreement, if Kraft negotiated a sale he was 

to receive a commission of three percent of the gross sales price. 

This agreement was to expire on July 1, 1987. The agreement 

excluded sales to Chase Hibbard and Thomas E. Lane, among others 

with whom Hodson had previously negotiated. Hodson maintained the 

option to sell the ranch herself to parties other than those 

procured by Kraft. 

Kraft alleges he was thereafter contacted by Chase Hibbard who 

reexpressed considerable interest in buying a portion of the ranch. 

Kraft asked Hodson what she wanted him to do. Kraft alleges he was 

specifically requested and authorized to carry on negotiations for 
Hodson. This alleged authorization and request was oral, not 

written. 

Kraft also alleges that Hodson authorized him to negotiate 

with Tom Lane (Lane) for the sale of the property. This 

authorization was also oral. Kraft alleges he negotiated with 

Lane. However, Kraft was later informed by Hodson that Lane drove 

up to her place and bought the ranch. Kraft alleges that Hodson's 

attorney called and obtained from him the details and terms of the 

sale to Lane, and assured Kraft he would get his fee. The 

negotiations and sale of the ranch to Lane occurred subsequent to 

the termination date of the listing agreement. 

The basis of Kraft's complaint is as follows: 

1. Hodson orally modified the agreement to pay Kraft a 

commission even if she sold the property. 

2. Hodson orally modified the agreement to pay Kraft a 

commission even if the property was sold to Tom Lane. 

3. Hodson orally modified the agreement to pay Kraft a 

commission after the listing expired. 

A court, in reviewing a motion to dismiss under Rule 12(b), 

M.R.Civ.P., must assume all allegations of the complaint are true. 

Contway v. Camp (1989), 236 Mont. 169, 768 P.2d 1377. The 

resolution of whether the complaint states a claim is a matter of 

law. Our review of a district court's ruling of law is plenary 

and we determine if the district court's determination as to the 

law is correct. See Steer Inc., v. Dept. of Revenue (1990), 245 

Mont. 470, 803 P.2d 601. 
A real estate listing agreement is within and covered by the 

statute of frauds. Section 28-2-903(1)(e), MCA, provides: 

The following agreements are invalid unlessthe same 

or some note or memorandum thereof is in writing and 

subscribed by the party to be charged or his agent; . . 

(e) an agreement authorizing or employing an agent 

or broker to purchase or sell real estate for 

compensation or a commission. 

Such statute applies here. See Carnell v. Watson, 176 Mont. 344, 

578 P.2d 308. The District Court in considering the issue held as 

follows: 

In Carnell, supra 176 Mont. at 348 the Montana Supreme 

Court disposed completely of Plaintifffs argument. The 

Court held as a matter of public policy that oral consent 

does not validate material alterations of written listing 

agreement [s j . The Carnell court also held as a matter of 

law and public policy that a real estate broker must 

deliver a copy of any modified agreement in writing to 

the seller or forfeit his right to a commission. Ibid. at 

349-50. None exists here. 

Kraftqs alleged oral modifications above stated are invalid. There 

is no allegation or proof of a note or memorandum signed by Hodson. 

Kraft also contends the oral modifications were fully executed 

and therefore are governed by § 28-2-1602, MCA, which provides as 

follows: 

A contract in writing may be altered by a contract 

in writing or by an executed oral agreement and not 

otherwise. 

XraEt states his performance complied with this statute and 

the oral modification is fully executed. Kraft is in error for we 

have consistently held that executed oral agreements mean full 

execution by both sides. See Hart v. Billings Public Stockyards 

(2971), 157 Mont. 345, 486 P.2d 120. Hodson had not paid him his 
alleged commission. The consideration from her to him has not been 

executed. 

Kraft also asserts that allowing Hodson to rely on the statute 

of frauds perpetuates a fraud against Kraft. It amounts to 

"gaining an unconscionable advantage inflict[ing] an unjust and 

unconscionable loss upon the plaintiff." 

The District Court considered this assertion and disposed of 

it as follows: 

The purpose of section 13-606 [now 28-2-903 (1) (e) 1 is to 

prevent fraud by disallowing parol evidence of an 

agreement to pay a real estate commission, and requiring 

instead written proof of such agreement signed by the 

party to be charged thereunder. To permit parol proof of 

the existence of such agreement and proof of complete 

execution thereof by proof of sale, is to circumvent the 

positive requirements of the statute of frauds and render 

it a nullity. 

We conclude the motion to dismiss was properly granted. 

Aff inned. 

@&- 
September 1, 1992 

CERTIFICATE OF SERVICE 

I hereby certify that the following order was sent by United States mail, prepaid, to the following 

named: 

Douglas C. Allen 

Attorney at Law 

P.O. Box 2886 

Great Falls, MT 59403 

A. Clifford Edwards and David R. Paoli 

Edwards & Paoli 

P.O. Box 20039 

Billings, MT 59104-0039 

Keith Strong 

Dorsey & Whitney 

P.O. Box 1566 

Great Falls, MT 59403 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA 

BY: bfk 

Depu