Opinion ID: 882280
Heading Depth: 1
Heading Rank: 3

Heading: bank's claims

Text: The Bank asserts four claims. First, the Bank correctly asserts that a disputed factual issue exists concerning whether Brown manufactured reasons not to complete the purchase, thereby preventing the Bank's performance of the buy-sell agreement. Bank President, Bruce Erickson, testified in his affidavit that when Brown requested changes in the mortgage terms, the Bank accommodated Brown's requests by amending terms at variance with the buy-sell agreement. For example, the Bank agreed to Brown's demand that the deficiency judgment clause be removed from the mortgage. Erickson supplied the court with evidence indicating that at the closing scheduled for October 1, 1988, Brown told the Bank he had become disenchanted with the property. Erickson testified that the Bank made numerous attempts to ascertain the nature of Brown's objections to the completion of the sale, but that both Brown and his attorney refused to identify or discuss objections at the closing on October 1, 1988, or at any of the subsequently scheduled meetings. Erickson testified that the Bank granted an extension of the October 1, 1988, closing date to Brown so that his counsel could review the financing documents; and that Brown contacted the Realtor on October 2, 1988, without notice to the Bank, and demanded the return of the earnest money. Brown contacted the Realtor again on October 5, 1988, asking for the return of the earnest money. The Bank did not hear from Brown on the last scheduled closing date of October 11, 1988. Brown did not indicate to the Bank his objections to the financing documents until nearly three weeks after three closing dates had passed. On October 31, 1988, twenty days after the final closing date, Brown's attorney finally wrote to the Bank and listed Brown's objections to the mortgage terms. The Bank's attorney, Sid Thomas (Thomas), testified that he responded to the letter from Brown's attorney and asked: [a]ssuming all of the items in your letter are resolved, is he [Brown] still willing to proceed with the transaction? Thomas testified that Brown's attorney indicated Brown was unwilling to proceed. The Bank President testified by affidavit that the Bank at all times stood ready, willing and able to complete the transaction upon the terms set forth in the buy-sell agreement, and that the Bank was willing to accommodate any of Brown's reasonable concerns. Despite the Bank's efforts to answer Brown's needs, Brown refused to complete the purchase. The Bank's legal assertion is correct: it is well-settled in Montana that one cannot prevent performance of a contract and then avail oneself of its non-performance. Williams Bros. Construction v. Vaughn (1981), 193 Mont. 224, 227, 631 P.2d 688, 690. Brown cannot object to the completion of the sale and refuse to discuss his objections with the Bank, and then claim that the Bank would not perform. Second, there is a disputed factual issue regarding whether Brown breached the covenant of good faith and fair dealing. A party can breach the covenant of good faith and fair dealing without breaching any express term in the contract by failing to deal honestly in fact and failing to observe reasonable commercial standards of fair dealing in the trade. Story v. City of Bozeman (1990), 242 Mont. 436, 450, 791 P.2d 767, 775. If a party breaches the covenant of good faith and fair dealing, it constitutes a breach of the contract itself. Story, 791 P.2d at 775. The Bank alleges that a significant factual dispute exists concerning whether Brown had good faith intentions to complete the sale. A reasonable inference from Erickson's testimony is that the Bank was ready, willing, and able to accommodate Brown's concerns and amend the inconsistent terms (i.e., conflicting assumption of mortgage clause and due on sale clause) to bring the closing to fruition. Brown did not raise objections, but indicated that he did not wish to proceed with the transaction. Drawing inferences from these facts in a light most favorable to the Bank, we determine that the Bank has raised an issue of disputed fact as to Brown's good faith intentions. Third, there is a genuine issue of material fact concerning the Bank's claim of promissory estoppel. The Bank asserts that, by his words and actions, Brown was estopped from raising objections to the completion of the purchase. To establish promissory estoppel in Montana, the following elements must be present: (1) a promise clear and unambiguous in its terms; (2) reliance on the promise by the party to whom the promise is made; (3) reasonableness and foreseeability of the reliance; and (4) the party asserting the reliance must be injured by the reliance. Keesun Partners v. Ferdig Oil Co., Inc. (1991), 249 Mont. 331, 339, 816 P.2d 417, 422. The Bank contends that by entering into the buy-sell agreement, signing the agreement, and insisting on an early closing, Brown lead the Bank to believe he would close the transaction. Brown's actions and representations caused the Bank to incur substantial expenses in preparing the property for Brown. The Bank moved the current tenants off the property, by buying out their leasehold interest for approximately $17,000. Further, at Brown's request, the Bank removed a complex irrigation/sprinkler system at a cost of $45,000. In a case similar to ours, the Connecticut Supreme Court held that a purchaser's obligation to perform would not be excused on the basis of a failure to obtain financing on purchaser's terms when sellers had evicted tenants and had taken the property off the market in reliance upon the purchaser's promise to close. Loda v. H.K. Sargeant & Assoc. Inc. (1982), 448 A.2d 812. The Bank in our case has established there is a factual dispute with regards to its claim of promissory estoppel. Based on the record he submitted to the court, we conclude that Brown has not established an absence of factual issues with regard to his allegation that the buy-sell agreement was not binding; or that if the contract was binding, the Bank was the breaching party. The Bank has submitted evidence from the record that factually disputes Brown's two claims. We further conclude that there are factual issues regarding the Bank's claims that Brown (1) prevented the Bank from performing the contract; (2) breached the covenant of good faith and fair dealing; (3) should be estopped from avoiding his obligation under the contract; and (4) negligently misrepresented his intentions. The parties have offered contradictory evidence about how willing the Bank was to revise nonconforming terms to complete the real estate transaction. It is not clear whether Brown wished to abandon the contract or whether the Bank refused to tender financial terms consistent with the buy-sell agreement. Because there are contradictory facts on material issues, we hold that Summary Judgment is inappropriate. In light of our holding above, we will not address the issue concerning the exclusion of paralegal fees raised by Brown on this appeal. The order of the District Court is reversed and remanded for resolution of the factual issues. TURNAGE, C.J., and HARRISON and WEBER, JJ., concur.