Court Opinion

ID: 883633
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:32:29.154484+00
Date Added: 2024-06-11T12:38:52.770423
License: Public Domain

NO. 95-013
          IN THE SUPREME COURT OF THE STATE OF MONTANa
                                 1995

FERGUS FARMING PARTNERSHIP,
         Plaintiff and Appellant,

FIRST CONTINENTAL CORPORATION,
a Montana corporation, et al.,
         Defendants and Respondents.

APPEAL FROM:   District Court of the Tenth Judicial District,
               In and for the County of Fergus,
               The Honorable Peter L. Rapkoch, Judge presiding.

COUNSEL OF RECORD:
          For Appellant:
               Charles F. Moses; Moses Law Firm,
               Billings, Montana
          For Respondents:
               Norman L. Newhall; Linnell, Newhall      &   Martin,
               Great Falls, Montana

                                 Submitted on Briefs:       June 15, 1995
                                            Decided:        July 6, 1995
Filed:
Justice Karla M. Gray delivered the Opinion of the Court

     Fergus Farming Partnership appeals from the judgment entered
on findings of fact and conclusions of law by the Tenth Judicial
District Court, Fergus County, and from the court's order denying
its post-judgment motions.   We affirm.
     We restate the issues on appeal as follows:
     1.   Are certain of the District Court's findings of fact
clearly erroneous?
     2.   Did the District Court err in concluding that First
Continental Corporation is the real party in interest?
     3.   Did the District Court err in concluding that First
Continental Corporation is entitled to recover attorney fees?
                 FACTUAL AND PROCEDURAL BACKGROUND
     This case centers on an agreement in the nature of a contract
for deed (Contract) and a lease (Lease). The convoluted facts are
set forth in an abbreviated and simplified manner to set the stage
for our analysis of the relatively narrow issues raised in this
appeal.
     The Contract was entered into in 1979 between Fox Grain     &

Cattle Company   (Fox Grain) as seller, and First Continental
Corporation (FCC) as buyer, for the sale and purchase of real
property (the property) located in Fergus County, Montana.      The
Contract provided that, in the event of assignment by FCC, FCC
would remain liable for performance.
     In 1987, FCC assigned all of its right, title and interest in
the Contract to numerous farming partnerships formed by John Parker
and Marvin Brown, including Fergus Farming Partnership (FFP). The
assignee    farming partnerships,     including   FFP, assigned     their
interests in    the   Contract   to   Ron Miller      (Miller).   Miller
subsequently assigned his interest in the Contract to Agri-West,
Inc . , now known as WEZCO (WEZCO).
     Shortly after FCC assigned its interest in the Contract, it
executed a lease (Lease) of the real property, subject to the
Contract, to FFP.     FFP took possession of the property as 1-essee
and hired Top Gun, Inc.       (Top Gun) to perform custom farming
services.    FCC subsequently assigned its interest in the Lease to
Miller.
     FCC did not make the annual payment due under the Contract on
May 15, 1988.     Fox Grain sent a notice of default to FCC, the
assignee    farming   partnerships    and   Miller,   the   partnerships'
assignee. Pursuant to the notice of default, Fox Grain evicted FFP
and took possession of the property in July of 1988.
     Fox Grain filed an action against FCC, FFP and the other
farming partnerships, John Parker and Ron Miller.           It sought to
enjoin the defendants from selling or encumbering the growing crops
on the property and to clear title to the property by an order
declaring it to be the owner by reason of FCC's breach of the
Contract. The various defendants filed numerous counterclaims and
cross-claims. FFP cross-claimed against FCC and Miller, alleging
breach of the Lease's covenant of peaceful possession.         FCC denied
the claims against it by FFP and, as Top Gun's assignee, alleged a
counter cross-claim against FFP for the amounts due on Top Gun's
custom farming service contract.
     All claims involving Fox Grain, the original plaintiff in what
had become a complex series of claims among and between the
parties, settled prior to trial.        The cross-claims of John Parker
and FFP against FCC, Miller and WE2CO for breach of the Lease, and
FCC's   counter cross-claim against FFP regarding the Top Gun
contract, were tried to the court.
     The   District   Court   entered    extensive   findings of   fact,
conclusions of law and an order in favor of FCC on FFP's claims
against it and also on its counter cross-claim against FFP.         The
court concluded that the Lease terminated by its terms at the end
of 1988 and was not enforceable thereafter.           It also concluded
that, although FCC breached the Lease's covenant of peaceful
possession when Fox Grain repossessed the property in July of 1988,
the breach did not damage FFP because the repossession saved FFP
from losses which exceeded damages recoverable against FCC for the
breach. The court awarded FCC $81,834.43 on its claim against FFP
on the Top Gun account, plus interest thereon, and attorney fees.
     Judgment subsequently was entered for FCC against FFP in the
total amount of $ 153,632.10. FFP's post-judgment motions to alter
or amend, for a new trial, and for amendment of findings of fact
and conclusions of law were denied.       FFP appeals.
                         STANDARDS OF REVIEW
     Our standard in reviewing a district court's findings of fact
is whether those findings are clearly erroneous.           Rule 52(a),
M.R.Civ.P.    Findings are clearly erroneous if they are not
supported by substantial credible evidence; in the event findings
are supported by such evidence, they may still be clearly erroneous
if the district court misapprehended the effect of the evidence or
if this Court is left with the definite and firm conviction that a
mistake has been committed.    Y A Bar Livestock Co. v. Harkness
(Mont. 1994), 887 P.2d 1211, 1213, 51 St.Rep. 1517, 1519 (citation
omitted).
     We review a district court's conclusions of law to determine
whether they are correct.     Steiner v. Dep't of Highways (Mont.
1994), 887 P.2d 1228, 1232, 51 St.Rep. 1496, 1499        (citation
omitted).

     1. Are certain of the District Court's findings of fact
     clearly erroneous?
     FFP challenges certain of the District Court's findings of
fact and, assuming that they are erroneous, presents a plethora of
law which it asserts would apply if the facts were found in FFP's
favor.   Because we conclude that the challenged findings of fact
are not clearly erroneous, we do not address the legal arguments
associated with the challenged findings.
     a. Is the District Court's Finding of Fact No. 20
     supported by substantial credible evidence?
     Finding of Fact No. 20 states:
     The lease of the Property from FCC to FFP provided, among
     other matters, that the Lease is "subject to the property
     qualifying for the ASCS government program." The parties
     to the Lease knew, understood and intended that the term
     "qualifying for the ASCS government program" meant that
     the   partnership    must   qualify    for   multi-person
     determination under the ASCS government program.
FFP contends that the court's interpretation of the quoted Lease
language is erroneous. It asserts that the Lease language is clear
and unambiguous in its meaning that the parties intended merely
that the property itself must qualify for farm subsidy programs,
rather than that FFP, the farming partnership, must qualify for the
multi-person determination.
     The record establishes the existence of more than one "ASCS
government program," thus rendering the language of the Lease
ambiguous here.     As   a   result, the   District   Court   properly
considered the parties' intent with regard to the quoted Lease
language and entered the challenged Finding of Fact.
     The record is replete with evidence supporting the court's
finding regarding the parties' intent. That evidence includes the
testimony of Marvin Brown--who, with John Parker, formed the
farming partnerships--that neither the farms nor the leases were
economically viable unless the farming partnerships qualified for
multi-person participation in the farm program and that such
qualification was a condition to the validity of the leases.
Parker also testified that achieving multi-person determination was
necessary for the farms to be viable. We conclude that substantial
credible evidence supports the District Court's Finding of Fact No.

     b.   Is the District Court's Finding of Fact No. 32
     supported by substantial credible evidence?
     The Lease between FCC and FFP provided that FFP would notify
FCC by February 1, 1988, if it was unable to obtain crop financing
for the 1989 crop; in that eventuality, "LESSOR and LESSEE agree to
                                  6
cancel" the Lease in 1988, with FFP remaining liable for the land
rent   on October 1, 1988.           In conjunction with       these Lease
provisions, the District Court's Finding of Fact No. 32 states that
"As clearly indicated by the foregoing, FFP did not obtain crop
financing for the 1989 crop by February 1, 1988." This Finding is
the basis of the court's conclusion that the Lease terminated by

its terms at the end of 1988.
       FFP contends that the Finding is not supported by substantial
evidence. Its argument, however, relates to a different question;
namely, whether FFP actually needed the crop financing required by
the Lease. That question is irrelevant in determining whether FFP
complied with the Lease provision that it have 1989 crop financing
in place by February 1, 1988.
       The record contains substantial evidence that financing for
the 1989 crop was not timely obtained.           Indeed, an April, 1988,
letter from John Parker reflects that FFP was still attempting to
obtain financing for the expenses necessary to harvest the 1988
crop. We conclude that substantial credible evidence supports the
District Court's Finding of Fact No. 32.
       c. Are the District Court's Findings of Fact No. 49
       through No. 51 supported by substantial credible
       evidence?
       The   challenged   Findings   determine    that   FFP   would   have
experienced a net loss in 1988 of $140,743.04 (income minus costs
and expenses) if Fox Grain had not repossessed the property due to
FCC's default under the Contract and that its loss as of the time
of repossession was $33,607.01;therefore, the repossession--rather
than causing FFP damages--actually saved it from greater losses.
These Findings relate to whether FFP proved its entitlement to
damages for FCC's breach of the Lease when 5           27-1-303, MCA,
generally limits recovery for the breach of an obligation to the
amount the nonbreaching party could have gained by full performance
of the obligation by both sides.
     k F advances evidence of record pursuant to which the court
      'P
could have determined that certain of FFP's expenses were less than
those found, and aggregated, by the court'to determine the amount
of   losses   FFP    would   have   experienced   absent   Fox   Grain's
repossession.   It also argues that evidence supported its claim
that FFP would have shown a profit for 1988.
     These arguments ignore our standard of review.           We do not
examine the record to determine whether it supports findings
different from, or contrary to, those made by the court; such an
approach would amount to substituting our judgment for that of the
factfinder with regard to the credibility of witnesses and the
weight to be given to the evidence. Those assessments must remain
firmly lodged in the province of the trier of fact.        See Tonack v.
Montana Bank of Billings (1993), 258 Mont. 247, 854 P.2d 326.
     Evidence of record estabLishes that, even if FFP had received
the value of the 1988 crops, its costs and expenses for 1988--even
excluding the Lease paymenE due October 1--would have exceeded its
1988 income.        Moreover, additional expenses would have been
incurred without additional income prior to the end of 1988,
including payment of the Top Gun account and the $104,500 October
Lease payment.   We conclude that the District Court's Findings of
Fact No. 49 through No. 51 are supported by substantial credible
evidence.
     d. Are the District Court's Findings of Fact No. 45 and
     No. 46 supported by substantial credible evidence?
     Findings of Fact No. 45 and No. 46 relate to FCC's counter
cross-claim against FFP under Top Gun's assignment of its claim for
the amount due on its custom farming service account with FFP. The
District Court found that, after deducting certain credits and
payments on the account, FFP owed Top Gun $81,834.43, and that Top
Gun's claim had been assigned to FCC.
     FFP does not dispute the assignment of Top Gun's claim to FCC.
It contends, however, that Top Gun's billing statements for 1987
and 1988, supported by underlying documentation, establish that the

total amount due was $35,291.82, and that no evidence supports the
court's finding of fact in the higher amount.     We disagree.
     FCC introduced evidence supporting different amounts with
reference to the Top Gun account than those contained in FFP's
evidence.     FCC's   evidence indicated   that   FFP   owed   Top   Gun
$81,834.43.
     The District Court, faced with conflicting evidence, accepted
that offered by FCC.     It was within the court's province as the
trier of fact to do so. See Tonack, 854 P.2d at 329. We conclude
that the District Court's Findings of Fact No. 45 and No. 46 are
supported by substantial credible evidence.
     Having concluded that all of the Findings of Fact challenged
by FFP are supported by substantial credible evidence, we further
                                 9
conclude that the District Court did not misapprehend the effect of
the evidence; nor are we left with a definite and firm conviction
that a mistake has been committed.    Therefore, we hold that the
District Court's Findings of Fact are not clearly erroneous.

     2.  Did the District Court err in concluding that FCC,
     rather than Ron Miller or WE2C0, is the real party in
     interest?
     This issue relates to FFP's effort to recover damages for
breach of the Lease.    Our conclusion that the District Court's
Findings of Fact--which supported its conclusions and judgment in
FCC's favor--are not clearly erroneous precludes any entitlement by
FFP to damages for the breach.    Thus, we need not address this
issue.
     3. Did the District Court err in concluding that FCC is
     entitled to recover its attorney fees?
     FFP agrees that the Lease provides for the recovery of
attorney fees; nor does it dispute that 5 28-3-704, MCA, provides
for reciprocal attorney fees such that the prevailing party in an
action on the Lease may recover attorney fees.   FFP relies on the
District Court's conclusion that FCC breached the lease in arguing
that FCC cannot recover attorney fees under either the Lease or the
statute.   FFP also argues that its agreement with Top Gun, upon
which FCC recovered damages against it, does not provide for
attorney fees and, therefore, no attorney fees could be awarded to
FCC for legal work associated with that portion of the case.
     FFP's arguments regarding FCC's entitlement to attorney fees
under either the Lease or the statute ignore the fact that, while
FCC breached the Lease, it succeeded in defending against        FFP'S

breach claim because its breach did not cause FFP any recoverable
damages.    Thus, FCC was entitled to attorney fees pursuant to the
Lease in defending against that claim.
    With regard to attorney fees relating to FCC's claim against
FFP on the Top Gun account, it is true that the agreement between
Top Gun and FFP did not provide for attorney fees and, absent
contractual    or   statutory   authority, no   such   fees   could   be
recovered. It is also clear, via affidavit on the fee issue, that
FCC made a good faith attempt to include in its attorney fee
request only those fees which it incurred in defense of FFP's
claim.     Of the $34,223.45 in total attorney fees incurred, FCC
requested an award of $28,223.70, its counsel's estimate of fees
related to defending against FFP's claim.       Moreover, deposition
testimony in support of the amount of fees requested by FCC
indicated that the time expenditure in proving the Top Gun account
"would have been very nominal compared to the balance of the
defense of the case . . . " and, indeed, that the preparation of
the necessary documentation and the admission of the related
evidence at trial would have required "very little time."             The
court    awarded attorney fees in the amount of         $23,129.25, a
reduction from the requested amount of approximately $5,000.
     We conclude that the District Court did not err in determining
that FCC was entitled to attorney fees for successfully defending
against FFP's claim.
     AFFIRMED.
     Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as

precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter and West Publishing Company.

We concur:

          Justice's /