Court Opinion

ID: 879224
Source: CourtListenerOpinion
Date Created: 2013-06-04 23:15:17.547768+00
Date Added: 2024-06-11T09:07:29.810744
License: Public Domain

No. 8 5 - 6 1 0
                  IN THE SUPREME COURT OF THE STATE OF MONTANA
                                       1986

DUANE ALEX POPP , JR. ,
                   Plaintiff and Respondent,
        -VS-

JOHN GOUNTANIS AND GEORGE FRANK,
                   Defendants and Appellants.

APPEAL FROM:       District Court of the Thirteenth Judicial District,
                   In and for the County of Yellowstone,
                   The Honorable Charles Luedke, Judge presiding.

COUNSEL OF RECORD:

        For Appellant:
                   Gerald J. Neely, Billings, Montana

        For Respondent :
                   Moses Law Firm; Stephen Moses, Billings, Montana

                                      Submitted on Briefs: March 28, 1 9 8 6
                                         Decided:   May 9, 1 9 8 6

Filed: F(ifiy 9   - 1986

                                      Clerk
Mr. Justice Frank B. Morrison, Jr. , delivered the Opinion of
the Court.

     Defendant George        Frank   appeals the     judgment of    the
Thirteenth District Court, County of Yellowstone, awarding
the sum of $50,082.20 plus interest to plaintiff Duane Popp
in a breach of contract action.         We affirm.
     In April, 1982, an oral lease was entered into by the
parties, whereby Popp was to plant and harvest crops upon
land owned by George Frank and John Gountanis.             Under the
terms of the agreement, two-thirds of the crops would. go to
Popp, one-third to Frank and Gountanis; Popp was to cover all
expenses, with the exception of fertilizer for which he would
contribute two-thirds of the cost.
     In May of 1982, Popp planted 800 acres of barley on the
land, which was harvested in August of 1982, with Frank and
Gountanis' share being delivered to a Billings elevator.             In
the fall of 1982, Popp planted 766 acres of winter wheat.
This crop was included as security for a loan Popp obtained
from the Yellowstone Bank of Laurel to cover his operating
expenses.
     In early 1983, the federal government established the
payment in kind program        (PIK).    The intent of PIK was to
reduce the nation's surplus of certain crops by awarding
benefits to farmers for not producing such crops.                  Popp
attempted to enroll the land under the lease from Frank and
Gountanis   in   the   PIK   proaram, but     was    informed by   the
Agricultural Stabilization and Conservation Service            (ASCS)
that he must have a written lease to be eligible.           On March
7, 1983, Frank and Gountanis filed an application with the

ASCS, and the land being farmed by Popp was approved for PIK
benefits.
      Sometime in early March, 1983, Popp became aware that
Frank and Gountanis had enrolled the land in the PIK program.
About the same time, Popp's doctor informed him that he had a
heart    condition and    recommended that        Popp quit       farming.
Shortly    thereafter, Popp      met    with    Gountanis    to   discuss
distribution of the PIK benefits and to inform Gountanis that
he would be quitting farming.       No agreement was reached as to
the PIK benefits, and Gountanis understood Popp to mean he
was immediately getting out of farming, which was not Popp's
intent.    Following the meeting, Popp contacted his lawyer and
the parties quit communicating.
      On April 25, 1983, ASCS sent notice to the parties that
1608 acres had been approved for PIK benefits, such amount
having been based upon the acreage farmed during 1980 and
1981- by the previous tenant.          One of the requirements under
the program was that the crop growing on the approved land be
destroyed by July 15, 1983.            Popp planned to hay the crop,
which was permissible under the regulations; Gountanis made
arrangements to have sheep graze the crop, under the belief
that Popp had quit farming and abandoned the lease.
      In early July, prior to the time Popp planned on haying
the wheat, he was informed that about 3500 head of sheep were
in grazing on the wheat.       Without Popp's knowledge, Gountanis
had     arranged   for   the   sheep     to    graze   the   crop,    and
subsequently a contractor was brought in to further destroy
the crop and disc the entire acreage at a cost of $11,579.46,
which was paid by Frank and Gountanis.
      Although ASCS was aware of the dispute between the
parties, Frank and Gountanis received the entirety of the PIK
benefits, which amounted to $82,465.07.                Popp filed suit,
alleging Frank and Gountanis breached the lease agreement,
and that he was entitled to two-thirds of the PIK benefits,
two-thirds of the amount received for permitting the sheep to
graze, and his costs in planting the crop.
     Following a bench           trial, the District Court entered
judgment    in   favor of      Popp.      The    findings of      fact and
conclusions of law reveal that Popp was awarded $50,082.20,
which included two-thirds of the PIK benefits plus two-thirds
of the grazing fee less the plowing expense incurred by Frank
and Gountanis.     Popp was also awarded $8,180.76 in interest
expenses which had accrued on his unpaid loan since the date
the PIIZ benefits were awarded to Frank and Gountanis.
     Defendant Frank appeals the District Court judgment, and
raises the following issues:
     1.    Whether as a matter of law, the failure of Popp to
appeal the decision of the government not to include him in
PIK payments can be collaterally attacked?
     2.    Whether as a matter of law, a lease which requires a
percentage of crops to go to a tenant, but which does not
contemplate later federal benefits, requires the tenant to
share in those federal benefits when the fruits of his labor
do not create any entitlements under the federal program?
     3.    Whether as a matter of law, accrued interest on
obligations not necessarily related to the farming of the
Frank/Gountanis       property     are   an     item   of    damages    upon
Frank/Gountanisls failure to pay over PIK proceeds?
    The first issue is whether Popp's failure to appeal the
decision of the ASCS           that he was not eligible for PIK
benefits    precluded    him     from    collaterally       attacking   that
determination    in    state district         court.    We     support the
District Court finding that the PIK program could not be used
to destroy Popp's contract rights.
     There is no dispute that Popp was entitled to some of
the PIK benefits.       The minutes of the ASCS County Committee
meeting     March       16, 1983, reflect that               fact, as does the
testimony        of     committee      director     Harold       Morrison,     who
testified        that    ASCS    was    uncertain       of    Popp's   share    and
determined that settlement between the parties was not ASCS1s
affair.      All of the PIK benefits were therefore awarded to
Frank and Gountanis.             Poppls subsequent filing of a lawsuit
was   not    a    collateral attack on            the ASCS       determination.
Rather    the     amended       complaint   shows       it was     a breach     of
contract action against Frank and Gountanis.
      The next issue raised by Frank is whether the oral lease
granting two-thirds of the crops to Popp also required that
Popp receive two-thirds of the PIK benefits.                       Both parties
agree that awards made under federal programs, such as PIK,
were not contemplated at the time the lease was executed.
Frank's contention is that the amount of PIK benefits was
determined by the acreage cultivated by the previous tenant,
1608 acres, and Popp received a windfall because he planted a
crop on only 766 acres.
      The    evidence      in    the    record reveals that Frank              and
Gountanis were landlords and Popp was their tenant.                            Popp
used his own equipment, paid his own expenses, furnished the
growing wheat as collateral for a loan, and had possession of
the land.        As a tenant, Popp had an estate in the land and
the right of possession to the entire crop until delivery was
made to the landlords.                 Davis v. Burton (1952), 126 Mont.
137, 246 P.2d 236; 21 Am.Jur.2d Crops               §   35.
      That Popp chose to plant wheat on only 766 acres does
not affect the fact he had an interest in the remainder of
the land.        PIK was designed to pay farmers for not producing
a crop.     In this case, PIK benefits were awarded to Frank and
Gountanis as record owners of the 1608 acres which did not
produce a crop.          However, Popp had an estate in the land for
the duration of his tena.ncy, and the award to Frank and
Gountanis was in derogation of Popp's interest.             We find no
error in the District Court determination that Popp was
entitled to two-thirds of the PIK benefits under the lease
terms.
      The District Court awarded Popp $8,180.76 to cover the
amount of accrued interest on his outstanding bank                  loan
dating from the failure of Frank and Gountanis to pay Popp
his two-thirds share of the PIK benefits.           Frank asserts this
was error because Popp maintained only one account which
covered living expenses as well as other farming operations.
Therefore, the loan balance was not solely attributable to
the   farming   of   the   Frank   and   Gountanis      property.     We
disagree.
      The   District   Court   found     that    Popp's   inability   to
satisfy the loan balance of $32,694.92 was directly related
to Frank and Gountanis' refusal to pay Popp his two-thirds
share of the PIK benefits.          Frank and Gountanis received
payment for their PIK bushels in December, 1983, at which
time Popp's share became certain.               Had Popp received his
proper   share, he would       have been    able to pay       the loan
entirely and! avoid further interest charges.              The accrued
interest on Popp's loan balance from that date was clearly
part of his damages and we uphold the District Court award.
      The judgment of the Distri

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