Court Opinion

ID: 4029895
Source: CourtListenerOpinion
Date Created: 2016-08-30 22:08:11.494943+00
Date Added: 2024-06-11T12:59:18.050093
License: Public Domain

08/30/2016

                                     DA 15-0448
                                                                                    Case Number: DA 15-0448

             IN THE SUPREME COURT OF THE STATE OF MONTANA

                                     2016 MT 215

CHRIS WAGNER,

         Plaintiff and Appellant,

    v.

MSE TECHNOLOGY APPLICATIONS, INC.
MSE INFRASTRUCTURE SERVICES, INC.,
BUTTE LOCAL DEVELOPMENT CORPORATION,
and SHEA REALTORS, PLLC,

         Defendants and Appellees.

APPEAL FROM:       District Court of the Second Judicial District,
                   In and For the County of Butte-Silver Bow, Cause No. DV-10-298
                   Honorable Brad Newman, Presiding Judge

COUNSEL OF RECORD:

           For Appellant:

                   Todd A. Stubbs, Stubbs Law, P.C., Manhattan, Montana

           For Appellee MSE:

                   Cynthia L. Walker, Emma R. Armstrong, Poore, Roth & Robinson, P.C.,
                   Butte, Montana

           For Appellee Butte Local Development Corporation:

                   William M. O’Leary, Fleming & O’Leary, PLLP, Butte, Montana

           For Appellee Shea Realtors, PLLC:

                   William T. Wagner, Garlington, Lohn & Robinson, PLLP,
                   Missoula, Montana
                                 Submitted on Briefs: June 8, 2016

                                            Decided: August 30, 2016

Filed:

         __________________________________________
                           Clerk

                             2
Chief Justice Mike McGrath delivered the Opinion of the Court.

¶1    Chris Wagner appeals from the District Court’s dismissal of his claims at trial

pursuant to M. R. Civ. P. 50. We affirm in part and reverse in part.

¶2    We restate the issues on appeal as follows:

      Issue 1: Did the District Court err in dismissing Wagner’s intentional interference
      claims against all defendants and granting them judgment as a matter of law
      pursuant to M. R. Civ. P. 50(a)?

      Issue 2: Did the District Court err in dismissing Wagner’s claims by granting
      Shea Realtors summary judgment, and judgment as a matter of law pursuant to
      M. R. Civ. P. 50(a)?

                 FACTUAL AND PROCEDURAL BACKGROUND

¶3    In 2009 Wagner sought to buy land in Butte to establish a commercial nursery. He

hired Shea Realtors as his agent in purchasing approximately sixty acres of land from the

Montana Tech Foundation. Shea became the agent of both Wagner and the Foundation,

and in November 2009 Wagner and the Foundation entered a buy-sell agreement under

which Wagner would purchase the land. Shea agreed to not engage in negotiations with

any other persons or to show the property while the buy-sell agreement was in place. The

parties agreed to close the purchase on January 8, 2010.

¶4    Wagner inserted four contingencies into the buy-sell agreement with the

Foundation. Those were that he would not be required to bore underneath adjacent

railroad tracks for utility installation; that he not be required to use city water for

irrigation; that he could subdivide the property; and that his business would meet zoning

                                            3
requirements. There are numerous references in this case to an “easement” condition, but

no such condition appears on the face of the buy-sell.

¶5      In December 2009 Wagner hired Gaston Engineering to advise him about the

feasibility of subdividing the property and selling the majority of it to others. Gaston

identified access as an issue and concluded that the only feasible access was an existing

road that was on adjacent property owned by MSE. A Gaston representative spoke to

MSE Vice President Tretheway about securing an easement for use of the existing road.

Tretheway told Gaston that MSE “would not stand in the way” of Wagner’s purchase and

would not “throw monkey wrenches” into the process. After additional investigation

Gaston advised Wagner that it was feasible for him to subdivide the land into six parcels

and to sell five of them.

¶6      MSE requested that Gaston provide more information about Wagner’s plans for

the land. On January 5, 2010, Gaston responded with a simple “conceptual plan” that

showed possible boundaries for dividing the land into six lots. The Foundation agreed to

extend the closing date to January 29, 2010. Wagner waited to hear from MSE about an

easement and testified that his several attempts to contact MSE about this were

unsuccessful. The Foundation agreed to extend the closing date again, to February 15,

2010.

¶7      On January 29, 2010, representatives of the Butte Local Development Corporation

(BLDC), the Foundation and MSE met to discuss the property. During the meeting, Mr.

Kebe from MSE called Shea to ask whether Wagner would be interested in purchasing a

forty-seven-acre parcel owned by MSE adjacent to the land he was trying to buy from the

                                            4
Foundation. At Shea’s request Wagner visited the property and then told Shea that he

was not interested in it. While the forty-seven-acre parcel contained the existing road

that Wagner needed for access to the sixty acres, Wagner never knew this and never

obtained an easement from MSE.

¶8     On February 9, 2010, the same persons who were at the January 29 meeting met

again to work out an agreement for BLDC to buy the sixty acres from the Foundation and

for MSE to provide the necessary easements. On or after February 11, 2010, Shea began

working to implement BLDC’s purchase of the sixty acres from the Foundation. Wagner

knew nothing about the January 29 or February 9 meetings and knew nothing about

Shea’s involvement. Shea claimed at trial that on or about February 11 Wagner told him

he was no longer interested in buying the sixty acres. Wagner denied saying that.

¶9     The February 15, 2010 closing date on the Wagner-Foundation buy-sell agreement

passed and Wagner did not close. On February 26, 2010, BLDC purchased the land from

the Foundation for the same price contained in the buy-sell with Wagner, and MSE

granted easements over its land to BLDC.

¶10    In July 2010 Wagner sued the MSE entities and BLDC, contending that they had

improperly interfered with his attempt to purchase the sixty acres from the Foundation.

Wagner later amended the complaint to add Shea Realtors as a defendant. The case

stagnated and Wagner could not get the District Court to issue a scheduling order or to

rule on pending motions. In May 2014 Wagner applied to this Court for a writ of

supervisory control. This Court granted relief, ordering the District Court to rule on

pending motions and to issue a scheduling order, including a trial date. After the District

                                            5
Court’s rulings on motions and two more amendments to the complaint, Wagner’s claims

were distilled to intentional interference with his prospective economic advantage against

all defendants; constructive fraud against Shea and MSE; professional negligence against

Shea; breach of contract against Shea; and breach of the covenant of good faith and fair

dealing against Shea. Prior to trial the District Court granted partial summary judgment

against Wagner by dismissing the professional negligence claim against Shea because

Wagner did not have an expert to establish the standard of care for a realtor.

¶11    The case went to jury trial on the remaining claims in June 2015, and Wagner

presented his case-in-chief over four days. Witnesses who testified included defendant

Shea; Mike Johnson, former president of the Foundation; Jeremy Olson from Gaston

Engineering; Mr. Tretheway, former vice president of MSE; Jim Smitham, executive

director of BLDC; William Kebe, a member of the board of directors of both MSE and

BLDC; and Chris Wagner. At the close of Wagner’s case the District Court granted the

defendants’ M. R. Civ. P. 50 motions for judgment as a matter of law in their favor.

¶12    The District Court concluded that Wagner had not presented sufficient evidence to

allow the jury to reasonably find facts that would support a verdict against any of the

defendants. The District Court found that Wagner failed to present any evidence that any

of the defendants prevented him from purchasing the land from the Foundation. To the

contrary the District Court noted Wagner’s own testimony that he was free to purchase

the Foundation land up to the final closing date (February 15, 2010), and that none of the

defendants prohibited him from doing so. The District Court determined that Wagner

                                             6
presented insufficient evidence that any of the defendants intentionally interfered with his

prospective economic advantage and that the claims for tortious interference must fail.1

¶13    As to the breach of contract claim against Shea, the District Court found that while

Shea moved on to become the dual realtor in the BLDC-Foundation transaction for the

same land, this did not occur until after Wagner’s buy-sell with the Foundation expired.

The District Court also concluded that Wagner had failed to present sufficient evidence

that he was actually damaged and that the defendants were entitled to judgment as a

matter of law on that ground alone.

¶14    Wagner appeals.

                                STANDARD OF REVIEW

¶15    This Court reviews a district court’s M. R. Civ. P. 50 decision granting or denying

judgment de novo, as an issue of law, without special deference to the views of the trial

court. Johnson v. Costco Wholesale, 2007 MT 43, ¶ 18, 336 Mont. 105, 152 P.3d 727. A

district court should grant judgment as a matter of law only where there is a complete

lack of any evidence which would justify submitting an issue to the jury, considering all

evidence and any legitimate inferences that might be drawn from it in a light most

favorable to the opposing party. Deonier & Assoc. v. Paul Revere Life Ins. Co., 2004 MT
297, ¶ 18, 323 Mont. 387, 101 P.3d 742.

       1
         The District Court also found that Wagner failed to present sufficient evidence that any
defendant misrepresented any fact to him that was material to the land purchase agreement with
the Foundation. Absent a misrepresentation of material fact, the District Court determined that
Wagner’s claims for constructive fraud and negligent misrepresentation failed. Wagner did not
appeal that decision.
                                               7
¶16   This Court reviews a district court’s decision on summary judgment to determine

whether it is correct, using the same criteria under M. R. Civ. P. 56. Pilgeram v.

GreenPoint Mortgage, 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. The district court

must apply the facts in a way most favorable to the opposing party, and may not grant

summary judgment if there are genuine issues of material fact. Pilgeram, ¶ 12.

                                     DISCUSSION

¶17   Issue 1: Did the District Court err in dismissing Wagner’s intentional
      interference claims against all defendants and granting them judgment as a matter
      of law pursuant to M. R. Civ. P. 50(a)?

¶18   Montana Rule of Civil Procedure 50(a) provides:

             (1) If a party has been fully heard on an issue during a jury trial and
      the court finds that a reasonable jury would not have a legally sufficient
      evidentiary basis to find for the party on that issue, the court may:
             (A) resolve the issue against the party; and
             (B) grant a motion for judgment as a matter of law against the party
      on a claim or defense that, under the controlling law, can be maintained or
      defeated only with a favorable finding on that issue.

A district court should grant judgment as a matter of law under Rule 50(a) only where

there is a complete lack of any evidence which would justify submitting an issue to the

jury, considering all evidence and any legitimate inferences that might be drawn from it

in a light most favorable to the opposing party.       Deonier, ¶ 18.    In this case the

defendants invoked Rule 50(a) at the close of Wagner’s presentation of his evidence, and

the District Court granted judgment against Wagner on all his claims. The issue is

whether Wagner presented sufficient evidence of his claims to warrant allowing the jury

to determine the case.

                                            8
¶19    Wagner first claims on appeal that all the defendants should have been held liable

to him for intentionally interfering with his prospective economic advantage. This Court

has recognized the tort of intentional interference with contractual or business relations

under the Restatement (Second) of Torts. In Bolz v. Meyers, 200 Mont. 286, 292-93, 651
P.2d 606, 609 (1982), we adopted the language of the Restatement describing this tort:

       One who intentionally and improperly interferes with the performance of a
       contract (except a contract to marry) between another and a third person, by
       preventing the other from performing the contract or causing his
       performance to be more expensive and burdensome is subject to liability to
       the other for the pecuniary loss resulting to him.

Restatement (Second) of Torts 766A (1977). This tort may be maintained only against a

person who is a stranger to the contractual or business relationship at issue. Bolz, 200
Mont. at 293, 651 P.2d at 610. Establishing a prima facie claim requires evidence that

the defendant’s acts were intentional and willful; that they were calculated to cause

damage to the plaintiff or the plaintiff’s business; that they were done with the unlawful

purpose of causing damage or loss without right or justifiable cause; and that damage

resulted. Bolz, 200 Mont. at 295, 651 P.2d at 611; Emmerson v. Walker, 2010 MT 167,

¶ 23, 357 Mont. 166, 236 P.3d 598.

¶20    In this case the contract or relationship at issue is Wagner’s buy-sell agreement

with the Foundation for purchase of the sixty acres of land. The issue is whether Wagner

presented sufficient proof for a jury to find that any of the defendants prevented him from

completing his buy-sell agreement with the Foundation. The evidence presented at trial

during Wagner’s case-in-chief directly contradicted his premise. As the District Court

                                            9
noted, Wagner himself testified that no party had prevented him from following through

with the purchase of the property and that he could have done so up to the final extended

closing date of February 15, 2010. Wagner however chose not to complete the purchase,

apparently based upon the contingencies that he inserted into the agreement.

¶21   In Emmerson this Court upheld a district court’s decision that a third party

committed the tort of intentional interference with a property exchange agreement. In

that case, the third party decided that he needed to frustrate the exchange agreement to

obtain property that he desired. The defendant set about to entice one of the parties to

repudiate the agreement; offered the party substantially more money to repudiate the

agreement; connived to obtain legal advice for the party that would support his position

and ultimately filed a legal action seeking to invalidate the agreement. These actions

were improper and were sufficient to establish the tort of intentional interference.

Emmerson, ¶ 25. Nothing in the present case rises to the level of interference seen in

Emmerson.

¶22   Wagner waited for MSE to come to him with an offer of an easement, while

acknowledging in testimony that he had no right to an easement from MSE and had no

contract with MSE for an easement. While Wagner’s testimony established that he

believed that his purchase depended upon getting an easement from MSE, he did very

little to seek an easement and did not list obtaining an easement from MSE as a

contingency of the buy-sell. Wagner relies heavily upon a statement that MSE made to

Gaston that MSE would not stand in the way of the project and would not “monkey

wrench” it. While these statements may have encouraged Wagner in his project, they fall

                                           10
far short of imposing a legal obligation upon MSE to do anything at all, and certainly do

not support a claim that MSE had an obligation to take affirmative steps to provide an

easement across its property. An agreement to transfer an interest in real property must

be in writing, signed by the party to be charged with the obligation.             Section

28-2-903(1)(d), MCA; Hinebauch v. McRae, 2011 MT 270, ¶ 21, 362 Mont. 358, 264
P.3d 1098.

¶23   The District Court met the high standards required to grant a Rule 50 motion.

Based upon the evidence presented at trial, the District Court correctly granted judgment

for all defendants on Wagner’s claim for intentional interference with the buy-sell

contract with the Foundation.

¶24   Issue 2: Did the District Court err in dismissing Wagner’s claims by granting
      Shea Realtors summary judgment, and judgment as a matter of law pursuant to
      M. R. Civ. P. 50(a)?

¶25   Initially Wagner argues that the District Court improperly granted pre-trial

summary judgment to defendant Shea on Wagner’s claim of professional negligence.

Shea moved for summary judgment after Wagner announced that he did not intend to call

an expert witness to support his claim of professional negligence. Wagner argued that he

did not need to present an expert on the professional negligence claim because a realtor’s

duties under Montana law are specifically set out in § 37-51-313, MCA. The District

Court concluded that while a realtor’s duties may be defined by statute, expert testimony

is still required to show a breach of those duties because the “practice of real estate

professionals, and the manner in which they communicate with and act on behalf of their

clients are matters beyond the common experience of ordinary lay jurors.”

                                           11
¶26      Wagner’s Third Amended Complaint alleged claims against Shea.             Wagner

alleged that Gary Shea acted as a dual agent for him and for the Foundation in Wagner’s

attempt to purchase the property, and that Shea simultaneously acted as dual agent for the

Foundation and for the BLDC in its attempt to buy the same land. Wagner alleged that

after he entered the buy-sell agreement with the Foundation and developed a conceptual

plan for the property, Shea changed allegiances to break up the agreement. Finally

Wagner alleged that Shea’s acting simultaneously as his agent as well as the agent for the

BLDC constituted a conflict of interest and that Shea withheld and failed to communicate

information about BLDC’s plan to purchase the land. Wagner alleged that Shea’s actions

and his failure to communicate information interfered with his effort to obtain an

easement from MSE. Wagner alleged that Shea breached his professional duty to protect

his interests in the attempt to purchase the land from the Foundation and that Shea’s

actions were a direct cause of damages including emotional distress, lost profits, and

costs.

¶27      At the time that the District Court granted summary judgment against Wagner on

the professional negligence claim, it should have been clear that there were genuine

issues of material fact as to the allegations of negligence against Shea. The fundamental

factual issues of what Gary Shea knew about the BLDC transaction; of when he knew of

that transaction; and of the extent to which he participated in that transaction were all in

dispute. Summary judgment is not appropriate if there are genuine issues of material fact

concerning the dispute. Pilgeram, ¶ 12.

                                            12
¶28    Further, as a general rule a plaintiff must support a claim of professional

negligence with expert testimony as to the professional’s duty and as to breach of that

duty. May v. ERA Landmark, 2000 MT 299, ¶ 66, 302 Mont. 326, 15 P.3d 1179.

However, if the determination of professional negligence involves issues “easily within

the common experience and knowledge of lay jurors,” expert testimony may not be

necessary. Dulaney v. State Farm Fire and Cas., 2014 MT 127, ¶ 14, 375 Mont. 117,

324 P.3d 1211; M. R. Evid. 702. As to real estate professionals, Montana law specifies in

detail “the duties [that] govern the relationships between brokers and salespersons and

buyers or sellers and are intended to replace the duties of agents as provided elsewhere in

state law and replace the common law as applied to these relationships.”              Section

37-51-313(1), MCA (emphasis added).           Additionally § 37-51-102, MCA, provides

extensive and detailed definitions of the various relationships in real estate transactions.

¶29    Shea’s duties to Wagner were therefore provided by statute and expert testimony

may not have been necessary to establish those duties. Zuazua v. Tibbles, 2006 MT 342,

¶ 16, 335 Mont. 181, 150 P.3d 361. However, even if Shea’s duties were established by

statute, expert testimony may be required to explain to a jury whether or not Shea

breached that duty. As this Court has noted, § 37-51-313, MCA, is “not a model of

clarity.” Zuazua, ¶ 14. Nevertheless, in that case we answered questions posed by the

United States District Court by analyzing the facts and applying the statute to determine

the real estate professional’s duties without making reference to any need for expert

testimony. Zuazua, ¶ 4.

                                             13
¶30    In summary, when a plaintiff makes a claim of professional negligence against a

real estate professional, expert testimony may or may not be required to explain the

applicable statutory duty and whether that duty was breached. It is the responsibility of

the district court to analyze the claims and the evidence in each case to determine the

extent to which expert testimony may be required. It was error for the District Court in

this case to grant summary judgment to Shea solely because there was a claim of

professional negligence.

¶31    Wagner secondly argues on appeal that the District Court’s M. R. Civ. P. 50 order

was error, asserting that his claims of breach of contract and breach of the covenant of

good faith and fair dealing against Shea Realtors should have gone to the jury. The

parties agree that Shea acted as realtor for both Wagner and the Foundation for purposes

of buying the property from the Foundation. Shea and Wagner each signed a document

entitled “Relationships/Consents in Real Estate Transactions,” dated November 11, 2009.

This is clearly a contract, § 28-2-102, MCA, Chipman v. Northwest Healthcare Corp.,

2014 MT 15, ¶ 15, 373 Mont. 360, 317 P.3d 182, that binds Shea to a number of

obligations as to Wagner. Those include the obligation to act “solely in the best interests

of the buyer”; the obligation to not represent other buyers without Wagner’s written

consent; the obligation to “disclose all relevant and material information” about the

transaction; and the obligation to “exercise reasonable care, skill, and diligence in

pursuing the buyer’s objectives.”

¶32    Wagner presented sufficient evidence at trial that Shea may have acted contrary to

Wagner’s interests based upon his involvement in and knowledge of the sale of the

                                            14
property to BLDC. Wagner presented sufficient evidence at trial that Shea may have

acted contrary to Wagner’s interests and may have violated his disclosure obligation by

holding undisclosed information about a potential sale of the property to BLDC. These

were questions that, at the close of Wagner’s evidence, were sufficient to be presented to

the jury.

¶33    Wagner also contends that Shea violated the covenant of good faith and fair

dealing that is implied into “every contract, regardless of type” under Montana law.

Phelps v. Frampton, 2007 MT 263, ¶ 29, 339 Mont. 330, 170 P.3d 474. This covenant

requires that the parties deal with each other in good faith without any attempt to deprive

the other party of the benefits of the contract through dishonesty or abuse of discretion.

Phelps, ¶ 29.

¶34    Wagner’s trial testimony was somewhat equivocal in that he appeared to vouch for

Shea’s honesty and performance, but he still testified that there came a point in their

relationship when Shea became unresponsive to his communications. If the jury inferred

from the evidence that Shea was actually working on the sale of the property to BLDC

while the Foundation’s sale to Wagner was still pending, it could have found, based upon

evidence presented in Wagner’s case-in-chief, that Shea violated the covenant of good

faith and fair dealing.

¶35    Wagner next argues that the District Court dismissed his claims based upon an

improper finding that Wagner “failed to offer sufficient evidence” that he sustained actual

damages. As noted above, the standard to be applied in a Rule 50 motion is whether

there was a complete absence of any evidence on damages. It is clear that Wagner

                                            15
presented some evidence of damages. He testified that he paid Gaston Engineering

$6,937 for work on the project; that he had to buy another parcel of land at a higher cost

per acre; and that he lost between $300,000 and $350,000 because he was unable to

purchase the land from the Foundation. This was clearly some evidence of damages and

was sufficient to withstand the motions for a judgment as a matter of law. Casiano v.

Greenway, 2002 MT 93, ¶¶ 32-33, 309 Mont. 358, 47 P.3d 432.

¶36   We emphasize that the sole issue on appeal under M.R. Civ. P. 50 is whether there

was a “complete lack of any evidence which would justify submitting [Wagner’s claims

against Shea] to the jury.” Deonier, ¶ 18 (emphasis added). We are not called upon to

determine whether Wagner should ultimately prevail on his claims after a full trial, and

we express no view on whether Wagner can or should ultimately prevail in his claims

against Shea.

                                    CONCLUSION

¶37   We affirm the District Court’s decision granting judgment as a matter of law to

MSE Technology Applications, MSE Infrastructure Services, and Butte Local

Development Corporation. We reverse the District Court’s decisions granting summary

judgment to Shea Realtors and granting Shea’s motion for judgment as a matter of law

pursuant to M. R. Civ. P. 50.

¶38   Affirmed in part, reversed in part, and remanded for further proceedings consistent

with this Opinion.

                                                /S/ MIKE McGRATH

                                           16
We Concur:

/S/ PATRICIA COTTER
/S/ MICHAEL E WHEAT
/S/ BETH BAKER
/S/ JIM RICE

                      17