Opinion ID: 883860
Heading Depth: 1
Heading Rank: 3

Heading: issues

Text: Did the District Court err when it concluded that the Gierkes took reasonable and appropriate steps to mitigate their damages? When we review a district court's findings of fact, the standard of review is whether those findings are clearly erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906. When we review a district court's conclusions of law, the standard of review is whether those conclusions are correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686. On appeal, Walker contends that, for the following reasons, the Gierkes failed to adequately mitigate their damages: (1) they failed to rent two units of the residence; and (2) they denied him access to the property, and did not allow him to make improvements. He also alleges that, as a result of their actions, he was unable to sell the property to a third party. We begin our analysis with the following well-established principles of Montana contract law: The rule in Montana is that a nondefaulting party in a contractual arrangement must act reasonably under the circumstances so as not to unnecessarily enlarge damages caused by default. Whether the injured party violated his duty to mitigate damages is a question for the trier of fact when there is conflicting evidence. Bronken's Good Time Co. v. J.W. Brown & Assoc. (1983), 203 Mont. 427, 432-33, 661 P.2d 861, 864 (citations omitted). Furthermore, we recognize that a damaged party is only expected to do what is reasonable under the circumstances and need not embark upon a course of action which may cause further detriment to him. Romain v. Earl Schwartz Co. (1989), 238 Mont. 500, 504, 779 P.2d 54, 56-7. At the conclusion of the trial on the issue of damages, the District Court directly addressed Walker's affirmative defense, and made the following findings of fact: 12. Gierkes give these reasons for not renting any of the units after [the scheduled closing date]: (a) If they rented the property, Mr. Walker might later dispute the condition of the property. (b) Mr. Walker led Gierkes to believe that he was either going to come up with the repurchase price or sell it to a third party. Gierkes wanted the residence to be ready for immediate occupancy. (c) They were concerned about the defective condition of the property, and possible injuries to tenants.... (d) Gierke's counsel requested a written proposal from Mr. Walker concerning the possible rental of the units, and no response was received. .... 14. The Gierkes offered three reasons why they would not allow Mr. Walker onto the property to make improvements to the residence [after the scheduled closing date]: (a) They were dissatisfied with the quality of his work. (b) They wanted Mr. Walker to repurchase the residence, not drag them into other transactions involving third parties. (c) They requested a written description of Mr. Walker's plan and received no response. 15. Mr. Walker cited a number of oral proposals made to the Gierkes including consent to the renting of units, and his making improvements to the residence to make it more saleable. Introduced, however, was an April 20, 1995 letter from Mr. Walker that he did not want tenants in place when he purchased it. Based on its findings of fact, and the application of those findings to the principles of contract law established by Bronken's Good Time and Romain, the District Court concluded that the Gierkes took reasonable and appropriate steps to mitigate their damages. Additionally, the District Court determined that: Under these circumstances, it would have been foolhardy for Gierkes to undertake work on the residence or to rent it out. It would invite disaster to rent the defective premises to unsuspecting tenants. Given Mr. Walker's unsatisfactory performance in making repairs or coming up with the repurchase price, it was reasonable for the Gierkes not to want him on the premises. It was also reasonable for the Gierkes to be wary of promised deals with third parties connected with Mr. Walker. After our review of the record, we conclude that there is substantial credible evidence to support the District Court's findings of fact. The District Court's findings of fact are not clearly erroneous, and its conclusions of law are correct. Accordingly, we hold that the District Court did not err when it concluded that the Gierkes took reasonable and appropriate steps to mitigate their damages. The judgment of the District Court is affirmed. TURNAGE, C.J., and NELSON, GRAY and ERDMANN, JJ., concur.