Court Opinion

ID: 880037
Source: CourtListenerOpinion
Date Created: 2013-06-04 23:55:51.099556+00
Date Added: 2024-06-11T12:35:10.257786
License: Public Domain

No. 87-359
                 IN THE SUPREME COURT OF THE STATE OF MONTANA

                                     1988

VERNON WESTLAKE, Personal Representative
of the Estate of HARRY D.R. LARSON, Deceased,
                  Plaintiff and Appellant,
          -vs-
CHARLES R. OSBORNE and LOIS MARIE OSBORNE,
Husband and Wife, and DENNIS HARDIN,
                  Defendants, Respondents and
                  Cross-Appellants.

APPEAL FROM:      District Court of the Eighteenth Judicial District,
                  In and for the County of Gallatin,
                  The Honorable Nat Allen, Judge presiding.
COUNSEL OF RECORD:
          For Appellant:
                  McKinley Anderson, Bozeman, Montana
                  H. A. Bolinger, Jr., Bozeman, Montana
          For Respondent:
                  Greg Morgan, Bozeman, Montana

                                    -       --     -      -    - -

                                    Submitted on Briefs:       Nov. 1 9 , 1 9 8 7
                                        Decided:       February 16, 1988
Filed :    FEB 1 6 1988

                                    Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.

      Vernon Westlake appeals an Eighteenth Judicial District
Court judgment awarding damages and attorneys' fees to the
Osbornes. The facts surrounding Westlake's initial complaint
are more fully set forth in Westlake v. Osborne (Mont. 1986),
713 P.2d 548, 43 St.Rep. 200.    In the first appeal of this
case, this Court affirmed the District Court's grant of
partial summary judgment to the Osbornes on Westlake's
complaint.
      This appeal concerns the District Court's judgment on
the Osbornes' remaining counterclaims.    The District Court
found Westlake individually liable pursuant to 5 72-3-612,
MCA, and as personal representative of the estate, for
unlawfully withholding possession of real property and
awarded $8,265 in lost rental income to the Osbornes.     The
District Court also awarded $4,058.78 in costs and attorneys'
fees pursuant to a clause contained in the original contract
for sale. Westlake appeals the District Court judgment and
the Osbornes cross-appeal. We affirm.
      The facts pertinent to this appeal are undisputed.
Before his death, Harry Larson sold his house to the
Osbornes. The Osbornes paid some money down with the balance
to be paid in monthly installments over a thirty-six month
period.   The Osbornes in turn leased the premises back to
Larson.    Larson's lease payments satisfied the Osbornes'
monthly installment payments.   The balance of the purchase
price was to be deemed satisfied in the event Larson died
before the end of the thirty-six month period. Larson died
eight months after the transaction was closed. Westlake, as
personal representative of Larson's estate, immediately took
possession of the property after Larson's death and denied
access to the Osbornes.
      Westlake brought this action on behalf of the estate of
Harry Larson to set aside the contract of sale, deed and
lease-back based on allegations of fraud, misrepresentation,
undue influence, and unconscionability.         The Osbornes
counterclaimed for attorneys' fees and for lost rent during
the period they were denied possession of their property.
The Osbornes' counterclaim alleged that Westlake was liable
as an individual and as personal representative of the
estate. Westlake completely distributed the estate's assets
despite the existence of the counterclaims.
      In this appeal regarding the Osbornes' counterclaims,
Westlake raises the following issues for our review:
      1. Did the District Court err in not dismissing the
Osbornes' counterclaims on the basis that this Court's
previous ruling in Westlake v. Osborne (Mont. 1986), 713 P.2d
548, 43 St.Rep.     200, rendered such counterclaims res
judicata?
      2. Did the District Court err in holding Westlake
personally liable for his acts as the personal representative
of the estate of Harry D. Larson?
      3. Did the District Court err in awarding attorneys'
fees to the Osbornes?
      4. Is there substantial credible evidence to support
the Osbornes' action for unlawful detainer?
      The Osbornes cross-appeal and raise two issues:
      5. Did the District Court err in refusing to treble
damages?
        6.   Did the District Court err in computing attorneys'
fees?
      Westlake   first   contends   that   the   Osbornes '
counterclaims were rendered res judicata by our holding in
Westlake v. Osborne (Mont. 1986), 713 P.2d 548, 43 St.Rep.
200.   We note that it was Westlake who moved the District
Court to certify the partial summary judgment as a final
judgment so he could pursue the first appeal to this Court.
Thereafter, the Osbornes filed a memorandum to request that
the District Court certify the partial summary judgment
pursuant to Rule 54(b), M.R.Civ.P., so Westlake could appeal.
The District Court certified the partial summary judgment as
final and specifically retained jurisdiction of the Osbornes'
counterclaims pending the outcome of the first appeal.
Westlake appealed and our review was limited to the question
of whether the District Court erred in granting the motions
for partial summary judgment. We affirmed the District Court
and did not address the merits of the Osbornes' counterclaims
at that time.
      Westlake now claims that because the first appeal was
premature, the counterclaims were rendered res judicata by
our decision in Westlake, supra.      Westlake's argument is
without merit. In Roy v. Neibauer (1980), 188 Mont. 81, 86,
610 P.2d 1185, 1189, we stated that "Rule 54(b) [M.R.Civ.P.]
requires that before a certification be made the trial court
must find that there be 'no just reason for delay."'      The
District Court expressly and carefully considered our
decision in Roy, the factors contained therein, found no just
reason for delay, and concluded that Rule 54(b) certification
was proper. Certification was not contested by either of the
parties or by this Court.
      The District Court specifically retained jurisdiction
of the counterclaims pending the first appeal. The partial
summary judgment was properly certified for appeal and our
decision in Westlake did not consider the merits of the
Osbornes' counterclaims.      The counterclaims were not,
therefore, res judicata and the District Court did not err in
denying Westlake's motion to dismiss.
      The second issue presented for our review concerns
Westlake's individual liability for his actions as personal
representative of the estate. Westlake first argues that he
was not properly joined in this action in an individual
capacity. The Osbornes counterclaimed against Westlake both
individually and as personal representative.        Westlake
answered the counterclaim and alleged that he was not liable
in his individual capacity. It was not until trial of the
counterclaims that Westlake's counsel moved for dismissal of
claims against him in an individual capacity. The Osbornes'
attorney, though not conceding that it was necessary, also
moved that Westlake be joined in his individual capacity,
The District Court took both motions under advisement and
eventually entered judgment against Westlake as an individual
and as personal representative of the estate.
      Joinder of parties under Rule 21, M.R.Civ.P.,        is
discretionary with the district court.        State ex rel.
Stenberg v. Nelson (1971), 157 Mont. 310, 486 P . 2 d 870. We
will not reverse the District Court's decision to join
Westlake in his individual capacity absent a clear showing of
an abuse of discretion. Our review of the District Court's
decision to join Westlake as an individual is governed by the
liberal standards applicable to amendments under Rule 15,
M.R.Civ,P.    White v. Lobdell (Mont. 1984), 678 P.2d 637,
641, 41 St.Rep. 346, 351.
      It is clear to this Court that Westlake was on notice
from the counterclaim that the Osbornes sought to hold him
individually liable.    The action against Westlake as an
individual arose from the same occurrences as did the action
against the estate.   The District Court did not abuse its
discretion in allowing Westlake      to   be   joined   in   his
individual capacity during trial.
      Westlake also contests his individual liability by
asserting that the requirments of § 72-3-612, MCA, have not
been met.    Section 72-3-612(2), MCA, provides as follows:
           A personal representative is individually
           liable for obligations arising from
           ownership or control of the estate for
           torts   committed   in  the   course   of
           administration of the estate only if he
           is personally at fault.
Westlake does not cite any authority to support his position
but merely contends that he has done nothing which would
warrant individual liability.
      Westlake apparently overlooks his actions in wrongfully
withholding possession of the Osbornesl property for over
twenty-nine months. That these actions constitute a tort for
which Westlake is personally at fault cannot be seriously
disputed.   The Osbornes were entitled to possession of the
property upon Harry Larson's death. We previously determined
that the Osbornes did not improperly acquire the property
through   fraud, undue    influence, or unconscionability.
Westlake, supra.    The record reveals substantial credible
evidence to support the District Court's decision to hold
Westlake individually liable.
      Westlake's third contention of error is that attorneys'
fees are not recoverable in this suit.       In his original
complaint, Westlake alleged that he was entitled to
attorneys1 fees pursuant to the following clause contained in
the contract for sale, deed and lease-back:
           8.   Enforcement.   In the event either
           party shall bring legal proceedings to
           enforce any obligations hereunder or for
           the breach thereof, the prevailing party
           shall be entitled to recover attorneys'
           fees and costs paid or incurred therein
           in good faith.
In the complaint, Westlake sought to have the deed declared
null and void and to set the deed aside.       The Osbornes
counterclaimed for unlawful withholding of the property and
for attorneys' fees and costs pursuant to the same contract
clause.   Westlake now claims that he brought an action in
tort and that this is not a contract action for which
attorneys' fees are recoverable.
      Westlake's argument regarding attorneys' fees is
similar to the argument presented by the appellants in Winer
v. Jonal Corporation (1376), 169 Mont. 247, 250, 545 P.2d
1094, 1096. Plaintiffs in Winer brought an action to recover
damages and to rescind a contract based on allegations of
fraud and conspiracy.    Plaintiffs also claimed attorneys'
fees pursuant to a contract clause. The District Court ruled
in favor of the defendants and awarded attorneys' fees
pursuant to the contract clause. Plaintiffs appealed to this
Court and alleged that they brought an action in tort based
on allegations of fraud under which an award of attorneys'
fees was not authorized. This Court found no merit to this
argument and affirmed the award of attorneys' fees. Winer,
545 P.2d at 1097.
      Westlake's complaint, the subject of the first appeal,
alleges claims in contract to rescind the deed and in tort
for damages.   The basis for both actions is the Osbornes'
alleged misrepresentations, fraud and undue influence. Such
alleged behavior, although not present in the instant case,
may give rise to an action either in tort or in contract.
Farnsworth, in his treatise on contract law, explains the
similarities and differences between the two actions as
follows:
          In a system of contract law based on
          supposedly informed assent, it is in the
          interest of society as well as of the
          parties to discourage misleading conduct
          in the bargaining process.    To this end
          both tort and contract law provide
          remedies for misrepresentation.       The
          relevant rules of tort law trace their
          origins to the common law action of
          deceit. They allow the recipient of the
          misrepresentation to recover from its
          maker   damages that, at their most
          generous, are based on the value that the
          bargain would have had to the recipient
          had it been as represented. Most of the
          relevant rules of contract law are
          derived from the action for recision that
          was originally brought in equity.    They
          allow     the     recipient     of    the
          misrepresentation to undo the transaction
          by avoiding it, and they seek to restore
          the parties to the positions in which
          they found themselves before    they made
          the agreement.      In contrast to tort
          rules, they ask only what types of
          behavior are not tolerable as a basis of
          a bargain, not what types are actionable
          in damages.
E.   Farnsworth,   Contracts,   §   4.9   at   232-233   (1982).
Westlake's allegations of fraud and misrepresentation sound
both in tort and in contract. Having sought to rescind the
contract for sale, deed, and lease-back, Westlake cannot now
claim that this is not an action in contract. Attorneys'
fees and costs were properly awarded pursuant to the contract
clause regarding such expenses.    Winer, 545 P.2d at 1096.
      Westlake's final issue pertains to the Osbornes'
counterclaim for Westlake's unlawful withholding of the
property for twenty-nine months.      In his opening brief,
Westlake characterizes the Osbornes' action as one for
unlawful detainer under 5 70-27-108, MCA, and argues that he
was not given notice as required by that statute and by
  70-27-104, MCA.      However, the Osbornes' counterclaim
characterizes the action as one for unlawful possession and
recovery of rent. The District Court's findings of fact and
conclusions of law similarly describe the relief granted
under the counterclaim.
      Although counsel for both parties confused the matter
by referring to unlawful detainer and forcible detainer
interchangeably throughout the litigation, it is clear that
the District Court disregarded these misnomers and awarded
judgment to the Osbornes on a theory of wrongful occupation
of real property. The measure of damages for an action for
wrongful occupation includes "the value of the use of the
property for the time of such occupation  ...   " -- in this
case, lost rent. Section 27-1-318, MCA.
      The Osbornes' answer and counterclaims were filed more
than four years before this appeal was filed. It is entirely
too late to argue the form of the counterclaim on this
appeal. Issues raised for the first time on appeal will not
be considered. Shaffer v. Champion Home Builders Co. (Mont.
1987)       P.2d -1       ,
                      - 44 St.Rep. 2196, 2199.
      The final two issues in this appeal are raised by the
Osbornes. The Osbornes first contend that the District Court
erred in refusing to award treble damages in this case. On
the basis of that argument, the Osbornes go on to argue in
their second issue that the award of attorneys' fees should
be raised to reflect the trebling of damages. The Osbornes'
argument on the first issue must fail because damages may not
be trebled absent statutory authority.     Section 27-1-318,
MCA, only authorizes an award of lost rent in this case.
There is no statutory authority for treble damages under the
facts as presented.
      The Osbornes argue that S 70-27-205(2), MCA, authorizes
an award of treble damages in an action for forcible
detainer.   As previously mentioned, the District Court did
not award judgment to the Osbornes under the forcible
detainer statute. Accordingly, we hold that $ 70-27-205(2),
MCA, does not apply and the District Court did not err in
refusing to treble damages.    Because of the disposition of
the Osbornes' first issue, we need not address the Osbornes'
second issue regarding reconsideration of the attorneys' fees
award.
       The Osbornes' counterclaims were not rendered res
judicata by our decision in the first appeal of this case.
Judgment on these counterclaims, including an award of
attorneys' fees and costs, was properly rendered against
Westlake as an individual and as personal representative of
the estate of Harry D. Larson. In addition, damage cannot be
trebled under the facts and law of this case.
      Affirmed.                                 /'

                                  Justice '

We concur:
                                         i
  ief 'Justice

Justices