Court Opinion

ID: 881905
Source: CourtListenerOpinion
Date Created: 2013-06-05 00:51:35.682636+00
Date Added: 2024-06-11T09:07:41.277267
License: Public Domain

I N T7'I-IF: SUPRBMF; COURT OF' ?'HE: S T A T E O F MONTANA

DONA1,D E .    PARE AND L O I S M. P A R E ,

                      P l a i n t i f f s and    appellant.^,
          -VS-

M.   C . MORRISON AND DOROTHY MORRISON,

                      D e f e n d a n t s and R e s p o n d e n t s .

A P P E A L FROM:     D i s t r i c t C o u r t of t h e F i r s t J u d i c i a l D i s t r i c t ,
                      I n and f o r t h e C o u n t y o f L e w i s & C l a r k ,
                      T h e H o n o r a b l e J e f f r e y S h e r l o c k , Judge p r e s i d i n g .

COUNSEL O F RECORD:

          For A p p e l l a n t :

                      C h a r l e s A.   Graveley, Helena, Montana

          For R e s p o n d e n t :

                      R i c h a r d TI. P a r i s h ; H a r l e n ,     Thompson      &    Parish, Helena,
                      Montana

                                                                        --------    - - - -------
                                                      S u b m i t t e d on B r i e f s :     Dec.    14, 1989

                                                                        ;      F e b r u a r y 5, 1 9 9 0
Justice Diane G. Barz delivered the Opinion of the Court.

     Donald E. and Lois M. Pare, plaintiffs, appeal the decision
of the District Court of the First Judicial District, Lewis and
Clark County, finding that M.C. and Dorothy Morrison, defendants,
did not   fraudulently induce the plaintiffs to purchase      real
property from them.   We affirm.
     Donald E. and Lois M. Pare owned and operated an auto wrecking
service in Helena, Montana.   The Pares operated this business out
of their home on North Harris Street. Dhring the end of the summer
in 1985, the Pares wanted to expand their business and began
investigating the purchase of property located on Kerr Drive. This
property, located in the Hiltabrand subdivision, Lewis and Clark
County, was subject to restrictive covenants that were first
recorded on February 14, 1958.     The restrictive covenant that
applies to this case states in pertinent part that
           1. [N]o lot or building plot shall be used
          except for strictly residential purposes, and
          no business, trade or manufacture of any sort
          or nature shall be conducted thereon.  ..

          These covenants are to run with the land and
          shall be binding on all parties and all
          persons claiming under them for a period of
          twenty-five (25) years from the date these
          covenants are recorded, after which time said
          covenants automatically shall be extended for
          successive periods of ten (10) years unless
          changed in whole or part as hereafter stated.

These covenants were recorded in Book 63, pages 180-82 in the
Office of the Clerk and Recorder, Lewis and Clark County.
     The property on Kerr Drive was owned by M.C. and Dorothy
Morrison    at the time the Pares investigated purchasing the
property.    The Pares inspected the property and talked with the
Morrisons regarding the sale of the property.   The Pares returned
later with family members and inspected the property for a second
and third time.   During these visits, the parties negotiated the
price and terms of a potential sale.
     The parties agreed to a price for the property and the Pares
began to move their home and business onto the property prior to
the closing date. As they were moving onto the property, the Pares
discovered a problem with the plumbing.       The Pares called an
appraiser to look at the property and the parties agreed to reduce
the purchase price by $6,000 due to the defective plumbing.    The
final purchase price agreed upon between the parties was $109,500.
Prior to signing the final papers, an officer of Helena Abstract
and Title Company showed the Pares a title commitment that
referenced the restrictive covenants by book and page. The officer
also showed them a document that set out the covenants in
substantial form, stating specifically that no business shall be
operated on the premises and that the restrictions shall last for
twenty-five years and shall automatically renew in ten years,
unless otherwise modified.   The Pares nonetheless signed the final
papers on November 29, 1985, transferring the deed and closing the
transaction.
     Shortly after the closing, Bruce Lanthorn noted that the Pares
were attempting to operate an auto wrecking business on the
premises and informed them that the restrictive covenants that
bound the property would prohibit such a business.       The Pares
received a follow-up letter from an attorney representing various
neighbors and informing the Pares to cease operation of their
business.   After consulting with their own attorney, the Pares
realized that the restrictive covenants on the property would
prevent them from operating their business as intended. They moved
out of the Kerr Drive property and back to their former residence
and place of business on North Harris Street. The Pares attempted
to restore themselves to status quo through negotiations with the
Morrisons, butthose negotiations failed. The Pares then attempted
to sell the Kerr Drive property and were unsuccessful until January
21, 1987, when they sold it for $75,000.

     On November 18, 1987, the Pares filed a complaint in the
District Court of the First Judicial District, Lewis and Clark
County, alleging that the Morrisons fraudulently induced them into
buying the property on Kerr Drive. The matter was tried before the
District Court, sitting without a jury, on May 15 and 16, 1989.
The court returned a judgment in favor of the Morrisons. The Pares
then filed a motion pursuant to Rule 59(g), M.R.Civ.P., to alter
or amend the judgment.   The District Court denied the motion and
the Pares appealed.
     The sole issue raised on appeal is whether the District Court
erred in determining that the Morrisons did not fraudulently induce
the Pares into entering a contract for the sale and purchase of the
Kerr Drive property.
     The Pares primary allegation is that the Morrisons committed
fraud by falsely representing to them that the Kerr Drive property
was not subject to any restrictions as to a business and therefore
induced them into signing a contract for the sale and purchase of
the property.      In particular, the Pares argue that the Morrisons
knew of the restrictive covenants, but failed to reveal the
covenants so as to gain an unfair advantage over them.
     The   Pares    in   this   case have     the   burden    of     proof   of
establishing by a preponderance of evidence the nine elements that
constitute fraud.     These nine elements are:
           1.   a representation;
           2.   the falsity of the representation;
           3.   the materiality of the representation;
           4.   the speaker's knowledge of the falsity of
           the representation or the speaker's ignorance
           of its truth;
           5.   the speaker's intent that the                false
           representation should be relied upon;
           6.   the hearer's ignorance of the falsity of
           the representation;
           7.   the hearer's       reliance    on   the      false
           representation;
           8.   the hearer's right to rely on the false
           representation; and
           9.   the consequent and proximate injury
           caused by the reliance on the false represen-
           tation.
Wortman v. Griff (1982), 200 Mont. 528, 531-32, 651 P.2d 998, 1000;
Van Ettinger v. Pappin (1978), 180 Mont. 1, 10, 588 P.2d 988, 994.
The District Court found that the Pares failed to meet their burden
of proof. When a district court functions as a trier of fact, this
Court will not substitute its judgment for that of a district
court.   On review, this Court will uphold a district courtts
decision when substantial credible evidence supports its findings
of fact. Lorenz v. Estate of Schilling (Mont. 1989), 768 P.2d 869,
870, 46 St.Rep. 198, 200; Meridian Minerals Co. v. Nicor Minerals,
Inc. (Mont. 1987), 742 P.2d 456, 461, 44 St.Rep. 1516, 1523-24.
     In concluding that the Pares did not meet their burden of
proof, the District Court noted the conflicting stories presented
by the Pares and the Morrisons, and concluded that no reason
existed why it should accept the Parest version of events over the
Morrisonst or vice versa.    The District Court also concluded that
the Pares did not successfully satisfy all of the nine elements
that constitute fraud.      In particular, the court noted that in
attempting to establish fraudulent conduct by the Morrisons, the
Pares primarily relied upon a statement by the Morrisons in which
they stated that they operated a business on the property for four
years and had no problems.    The court noted, however, that this is
a true statement and therefore cannot be the basis for an action
in fraud.   The court also noted that prior to signing the final
papers, the Pares were presented with documents specifying the
existence of the restrictive covenants and stating their substance
in unambiguous terms. The District Court therefore concluded that
the Pares did not meet their burden of establishing fraudulent
intent by the Morrisons.
     In light of the above, we hold that substantial credible
evidence supports the District Court's findings and conclusions
that the Morrisons did not fraudulently induce the Pares into
entering a contract for the sale and purchase of the Kerr Drive
property.
     The Pares also mention in their briefs that the Morrisons
"misleadtt
         them by not informing them that the property was subject
to flooding and that the wiring and plumbing did not meet code.
However, the Pares did not argue to this Court that these were the
bases for the fraud action.   This Court therefore does not need to
address them on appeal.
     Affirmed.

We concur:         /'
                    :   /'

    rC

         'chief Justice