Opinion ID: 885584
Heading Depth: 1
Heading Rank: 4

Heading: issues

Text: Did the District Court err in adopting findings of fact, which were essential to SDI's burden of proof, even though no evidence was offered to support those findings? ¶ 38 Having reviewed the record, we agree with Norwood that the District Court's findings and conclusions are essentially the very same findings and conclusions proposed by SDI prior to trial. Norwood claims that SDI did not offer any evidence at trial in support of several of these proposed findings, nor did it file any post-trial findings omitting or modifying the pretrial proposed findings, which were not supported by substantial evidence. We conclude that Norwood is correct in these contentions as well. ¶ 39 We have discussed a trial court's verbatim adoption of proposed findings of fact and conclusions of law many times. See, e.g., Baer v. Baer (1982), 199 Mont. 21, 31, 647 P.2d 835, 841 (citing cases). While we have voiced stern disapproval of a court's wholesale adoption of proposed findings and conclusions, we have also acknowledged that we are governed by Rule 52(a) M.R.Civ.P. (stating that unless clearly erroneous, findings shall not be set aside, and a court may adopt any such proposed findings or conclusions so long as they are supported by the evidence and law of the case). See Baer, 199 Mont. at 31, 647 P.2d at 841. Accordingly, we must determine whether SDI's findings adopted essentially verbatim by the District Court are supported by substantial evidence in the record. ¶ 40 Norwood contends that no evidence supports the court's finding that he made no effort to secure the written distributorship for the Dreyers food products as he had helped Ultrafoods obtain the Haagen-Dazs distributorship. We agree. No testimony or other evidence alludes to, let alone supports this finding. It is not clear whether a Haagen-Dazs distributorship agreementwhich included the same non-assignability provisionwas ever assigned or transferred by Norwood to Ultrafoods at closing. Further, the evidence clearly shows that Norwood successfully arranged for meetings between the representatives of SDI and both Dreyer's and Haagen-Dazs, and SDI later refused Norwood's offer to assist with obtaining the written agreement with Dreyer's. The evidence additionally shows that SDI was made aware of the assignment-restriction provisions found in the respective distributorship agreements well in advance of signing the buy-sell agreements on September 13, 1993, and the October 15, 1993 closing date. ¶ 41 Likewise, no evidence supports the finding that Dreyer's notified SDI that it would no longer allow SDI to distribute its products. The exact nature of the relationship between Dreyer's and SDI remains shrouded in mystery due to SDI's failure to support its affirmative defense and counterclaims with any evidence at trial. Therefore, the court's findings and conclusion that SDI never received ... a written distributorship agreement from Dreyer's, and the business relationship or operating privileges ended without a written distributorship ever being obtained by [SDI], is not supported by substantial evidence, and is therefore clearly erroneous and legally incorrect. ¶ 42 Although we have already affirmed the conclusion that the consulting agreement was nothing more than a promissory note, the District Court nevertheless erred in concluding that this loan of money was for the purchase of a distributorship right which was not delivered. The evidence clearly shows that the promissory note for $200,000 covered the remaining balance of the entire $575,000 transaction, which included three distributorships, involving numerous business assets. In particular, the uncontested evidence shows that the only item missing from the transfer of the Dreyer's distributorship was one document, which would have guaranteed SDI's distribution rights for at the most 30 days, and that this document was not accorded any monetary value in the purchase and sale agreement. Therefore, the District Court's findings and conclusions suggesting that the $200,000 promissory note resulted from the purchase of a distributorship right is also clearly erroneous and legally incorrect. ¶ 43 We also fault the District Court's findings and conclusion that there was a failure of consideration due to Norwood's promise to deliver that which he had no right to deliver; namely, the Dreyer's distributorship. The evidence clearly shows that there was a distinct difference between selling and thereby transferring the interest in the Dreyer's distributorship and merely assigning the written Dreyer's distributor agreement. The evidence shows that SDI agreed to purchase, and Norwood agreed to sell, all right, title and interest in and to the assets of Kay's Novelties, Inc.'s Dreyer's distributorship. In addition to a written agreement with Dreyer's, the distributorship included furnishings, equipment, supplies, goodwill, contract rights, accounts receivable, inventory, and leaseholds. The $125,000 purchase price for the Dreyer's and Dove distributorships was expressly allocated between Equipment valued at $43,000, and Inventory valued at $82,000. That the right, title and interest of what was transferred somehow was rendered valueless without the one written document is clearly contradicted by the admitted fact that SDI distributed Dreyer's ice cream for more than two years following the transfer of the distributorship assets. ¶ 44 In accordance with the foregoing, we hold that, to the extent they have been addressed above, the District Court's findings of fact are not supported by substantial evidence and are therefore clearly erroneous, and that its legal conclusions based on these findings are incorrect.