NO. 81-44 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1981 

LARRY L. UNRUH, H. JAMES OLESON, 

and ALFRED WALLNER, M.D., 

Plaintiffs and Appellants, 

-vsBUFFALO BUILDING COMPANY, 

Defendant and Respondent. 

Appeal from: District Court of the Eleventh Judicial District, 

In and for the County of Flathead, The Honorable 

Robert C. Sykes, Judge presiding. 

Counsel of Record: 

For Appellants: 

E. Eugene Atherton, Kalispell, Montana 

For Respondent : 

Merritt N. Warden, Kalispell, Montana 

Submitted on Briefs: April 15, 1981 

Decided : &A- 2 2 1981 

Filed : NL.. 2 2 1981 
Mr. Daniel J. Shea delivered the Opinion of the Court. 

Plaintiffs Larry L. Unruh, H. James Oleson and Alfred 

Wallner appeal from the order of summary judgment of the 

Flathead County ~istrict Court granting summary judgment to 

the defendant Buffalo Building Company. In its order, the 

court held that plaintiffs' claim was barred by the statute 

of limitations applicable to tort actions. We hold that the 

claims are governed by the contract statute of limitations 

and therefore reverse. 

Plaintiffs leased office space from defendant on the 

second floor of the Buffalo Building, a renovated commercial 

office building in Kalispell, Montana. In September 1976, 

the Buffalo Building caught fire. This fire gutted the 

building, destroying the plaintiffs' offices. In September 

1980, almost four years later, plaintiffs Unruh and Oleson 

brought this lawsuit against defendant by filing a complaint 

claiming property and business loss damages. This complaint 

was amended one month later to include plaintiff Wallner in 

the lawsuit. The amended complaint alleged that defendant 

breached an implied warranty of plaintiffs' lease agreements 

providing for the peaceful and quiet enjoyment of their 

office space leaseholds. 

The plaintiffs alleged the breaches occurred because 

the defendant leased another portion of the Buffalo ~uilding 

to a tenant who stored highly flammable material on his 

premises, and because, when the building was remodeled the 

defendant failed to use fireproof building materials and to 

install fire extinguishing equipment. 

Defendant answered plaintiffs' amended complaint by 

asserting that the claim was barred by the two-year statute 
of limitations set out in section 27-2-207, MCA, and that 

the complaint failed to state a legal claim. In its brief 

supporting its motion for summary judgment, defendant argued 

that because plaintiffs were seeking recovery for injury to 

property, that the action must be covered by the two-year 

statute of limitations. In making this argument, defendant 

relied on language from Quitmeyer v. Theroux (1964) , 144 

Mont. 302, 395 P.2d 965, holding that "the statute of limitation 

applicable must necessarily be in conformity with the basis 

of the action," and that it must then be determined whether 

the essence of the claimed breach arises from a breach of 

contract or arises from the commission of a tort. 

The District Court reasoned that the essence of the 

action is based on a tort violation and therefore that the 

two-year statute of limitations provided for in section 27- 

2-207, MCA, applies. Accordingly, the District Court granted 

summary judgment based on the affirmative defense of statute 

of limitation, and entered judgment for defendant. From that 

order, plaintiffs appeal. 

The trial court's reliance on the rule in Quitmeyer, 

supra, is misplaced, for we have specifically adopted a rule 

to apply to situations falling within the "twilight zone" of 

contract and tort law. In Garden City Floral Co. v. Hunt 

(1953), 126 Mont. 537, 255 P.2d 352, this Court set out the 

following rule to follow: 

"Under certain circumstances, a ground of 

liability in tort may coexist with a liability 

in contract, giving the injured party the right 

to elect which form of action he will pursue. 

Ordinarily, where there is no duty except such as 

the contract creates, the plaintiff's remedy 

is for breach of contract, but when the breach 

of duty alleged arises out a liability 

independently of the personal obligation 
undertaken by contract, it is a tort. (Citation 

omitted.) 'As a general rule, there must be 

some active negligence or misfeasance to support 

tort. There must be some breach of duty distinct 

from breach of contract.' (Citation omitted.) 

". . . 'But even if the question be regarded as 

a doubtful one, the doubt must be resolved in 

favor of an action ex contractu.' 

"When the facts warrant either form of action 

plaintiff may elect as to which he will pursue. 

(Citations omitted.)" 126 Mont. at 543, 544. 

Here, the trial court specifically noted that the claim 

does not contend that the defendant was guilty of active 

negligence, and with this assessment, we must agree. In 

applying Garden City Floral, however, we must reach the 

conclusion that the eight-year statute of limitation applicable 

to contract actions governs this action framed by plaintiffs 

as a claim for breach of a covenant of quiet enjoyment, 

implied from the term of the parties' lease agreements. 

Plaintiffs' claim here is entirely different from the claim 

presented in Quitmeyer, where we found that the claim "was 

based strictly upon defendant's negligence." Plaintiffs had 

a right to base their claim on breach of contract. 

The judgment is vacated and this cause is remanded to 

the District Court for further proceedings. 

We concur: 

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Chief Jnstice 

Justices