Court Opinion

ID: 883743
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:35:56.820711+00
Date Added: 2024-06-11T10:23:28.988925
License: Public Domain

NO.    94-396
           IN THE SUPREME COURT OF THE STATE OF MONTANA
                                  1995

EDWARD J. WRIGHT,
          Plaintiff and Respondent,

     v.
RALPH MERSDORF and DENNIS MERSDORF,
          Defendants and Appellants.

APPEAL FROM:   District Court of the Fifth Judicial District,
               In and for the County of Madison,
               The Honorable Frank M. Davis, Judge presiding.

COUNSEL OF RECORD:
          For Appellants:
               Michael J. Lilly, Berg, Lilly, Andriolo
               & Tollefsen, Bozeman, Montana
          For Respondent:
               James D. McKenna, Lineberger, Walsh & McKenna,
               Bozeman, Montana
Justice William E. Hunt, Sr., delivered the opinion of the Court.

       Appellants Ralph Mersdorf and Dennis Mersdorf appeal from a
judgment of the Fifth Judicial District Court, Madison County, in

favor of respondent Edward J. Wright entitling him to recover the

amount of the unpaid balance of a sales agreement, interest, and

costs,        and against appellants' claim for reformation of the sales

agreement.

         Affirmed.

         Appellants raise the following issues:

         1.      Did the District Court err in concluding, as a matter of

law,     that respondent was entitled to the amount of the suspended

installment        payments?

         2.      Did the District Court err in concluding, as a matter of

law,     that appellants were not entitled to a reformation of the

parties'        sales   agreement?

         Respondent and appellants are both licensed in Montana as

professional guides and outfitters.              In 1987, respondent   purchased

the assets of Hidden Lake Outfitters from Robert Bovee, a licensed

Montana        outfitter.       The total purchase price was           $135,000.

Respondent made a down payment of $65,000, with the balance to be

paid     semi-annually.        The balance was secured by a filed security

agreement        which    created    a   lien   on   outfitting   equipment   and

livestock in favor of Bovee.

         In the fall of 1990,        respondent decided to sell most of the

assets he was purchasing from Bovee.             Respondent and appellants met

at     respondent's      ranch and executed a written contract whereby
respondent agreed to sell his "right, title and interest" in a

Forest Service lease, a Burlington Northern lease, livestock, and

outfitter     equipment.        The    Burlington    Northern    lease    remained    in

Bovee's name and was not assignable.                 Bovee retained his secured
interest in some of the outfitter equipment and livestock.                     Neither
party was advised or represented by counsel.                     The     contract    was

typed by respondent's            wife     and witnessed by an            employee of
respondent.      The parties agreed on a purchase price of $150,000.
Appellants made an $80,000 down payment with the balance to be paid

in   equal     monthly       installments.          Appellants    performed until
October 1, 1991.           Thereafter,    they made no further payments.
     Respondent filed a complaint on December 18, 1991, alleging

breach of contract and seeking judgment in the amount of the unpaid

purchase     price   and     interest.      Appellants    answered       by   generally

denying the allegations               set forth in respondent's complaint.

Appellants counterclaimed for the right to reformation of the

contract, alleging fraud and mutual mistake.

     On May 10, 1994,          the District Court entered its findings of

fact and conclusions of law.               The District Court concluded that

appellants breached the contract by failing to make the installment

payment due on October 1,                1991,   and all subsequent payments

thereafter.          The    District     Court   concluded   that    respondent      was

entitled to the amount of the suspended installment payments with

interest.      The District Court dismissed appellants' counterclaim.

It is from the District Court's findings, conclusions, and judgment

that appellants appeal.

                                            3
                                    ISSUE 1
       Did the District Court err in concluding, as a matter of law,

that respondent was          entitled to the amount of the suspended

installment    payments?

       We review a district court's conclusions of law to determine

whether the district court's interpretation of the law was correct.

In re Marriage of Schara (Mont. 1994), 878 P.2d 908, 910, 51 St.

Rep.   676, 677; In re Marriage of Barnard (Mont. 1994) 870 P.2d 91,

93,    51 St. Rep. 173, 174.

       Appellants argue that respondent was not entitled to the
amount of the suspended installment payments because respondent was

the first      to materially breach the contract.                     Specifically,

appellants assert that respondent did not fulfill his promise to

secure a      conveyance     of the Burlington Northern permit.                     In

addition, appellants contend that respondent did not convey clear

title to the equipment and livestock, and that he did not convey

title to sufficient and adequate equipment and livestock to operate

the Forest Service permit.

       The testimony of the parties concerning the transferability of

the Burlington Northern permit and Bovee's lien on the equipment
and livestock was diametrically opposed.                 The parties agreed that

respondent    notified     appellants     that   Bovee    retained    title   to   the

Burlington Northern permit.         However, respondent testified that he

informed     appellants      that   the       permit     was    not   transferable.

Appellants,    on the other hand, testified              that   respondent    claimed

that he would be able to effect a transfer of title from Bovee to

                                          4
appellants.        As to Bovee's lien on the equipment and livestock,
respondent testified that appellants were informed of Bovee's lien

during a         four-way   telephone    conversation     with     Bovee   during

negotiations between the parties.            Appellants deny taking part in

this conversation. Given the conflicting testimony of the parties,

the District Court was forced to determine which party presented

the more credible testimony.            The District Court determined that

respondent's testimony was more credible than that of appellants.
     When reviewing the findings of fact of a district court in a

civil action sitting without a jury, this Court will not substitute

its judgment for the district court's, but rather we are confined

to determining whether the findings of fact are clearly erroneous.

Rule 52(a), M.R.Civ.P.           When conflicting evidence is presented at

trial,    it is the function of the district court to resolve such

conflicts.       The district court's findings will not be disturbed on

appeal when supported by substantial, though conflicting, evidence.

Pare v. Morrison (1991), 241 Mont. 218, 221, 786 P.2d 655, 657;

Meridian Minerals Company v. Nycore Minerals,                Inc. (1987),    228
Mont. 274, 203, 742 P.2d 456, 461.

         There    is   nothing   in the record to demonstrate that the

District Court's factual determinations as to the Burlington

Northern permit and the Bovee lien on the equipment and livestock

are clearly erroneous.
         Appellants argue that respondent did not convey title to

sufficient equipment and livestock to operate the Forest Service

permit.       As a result,         appellants   were    required    to purchase

                                         5
additional equipment and livestock in order to meet Forest Service

requirements.        Appellants contend that respondent's failure to
transfer adequate equipment and livestock constitutes a material

breach of contract.

        The record reveals that in response to a question about what
steps appellants took to assure the validity of the Forest Service

permit,    appellant Dennis Mersdorf testified that prior to signing

the contract they "went down to the Forest Service and talked to

them."     He also testified that prior to signing the contract they

inspected the outfitting equipment and livestock they were about to

purchase    from    respondent.      Appellants both testified that upon

inspection they discovered that the equipment was used and of

little value.      It is not clear from the record whether the quantity

or quality of the equipment and livestock was inadequate for

purposes of        operating   the   Forest   Service   permit.      However,
appellants inspected the equipment and livestock prior to purchase,

and they were well aware of its quality.          The sales agreement was
specific as to the quantity of the equipment and livestock for

sale.     Appellants discussed the validity of the permit with the

Forest     Service prior to signing the contract.                 During that
discussion,     appellants had the opportunity to find out what

equipment and livestock was needed to operate a Forest Service

permit.    Appellants exercised their right to inspect the equipment

and livestock under 5 30-z-513, MCA.               Appellants cannot now
complain that defects in either the quantity or the quality of the

equipment for purposes of operating under the Forest Service permit

                                        6
constitute material breach by respondent.           See § 30-2-316(3) (b),
MCA.

        We hold that the District Court did not err in concluding, as

a matter of law, that respondent was entitled to the amount of the
suspended    installment   payments.

                                  ISSUE 2

        Did the District Court err in concluding, as a matter of law,

that appellants were not entitled to a reformation of the parties'

sales    agreement?

        We apply the same     standard of review to Issue 2 that we

applied to Issue 1.

        Appellants argue that they are entitled to a reformation of

the contract due to mutual mistake of fact.            Appellants   contend

that both parties shared a mistaken assumption that the Burlington

Northern lease was transferable from Bovee to appellants. In

Issue 1 we affirmed the District Court's finding that there was no

credible evidence to show that respondent represented to appellants

that the Burlington Northern lease was transferable from Bovee to

appellants.     If there was a mistake as to the Burlington Northern

lease it was unilateral on the part of appellants.          As opposed to

mutual    mistake,    unilateral mistake is not normally grounds for

relief for the mistaken party.         Carney v. Wallner (1986), 223 Mont.
260, 266, 725 P.2d 557, 560.
        We hold that the District Court did not err, as a matter of

law, in concluding that appellants were not entitled to reformation

of the parties' sales agreement.

                                        7
     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:
                                         March 16, 1995

                                  CERTIFICATE OF SERVICE

I hereby certify that the following certified order was sent by United States mail, prepaid, to the
following named:

Michael J. Lilly
Berg, Lilly, Andriolo & Tollefsen
910 Technology Blvd., Suite A
Bozeman, MT 59715

James D. McKenna
Lineberger, Walsh, McKenna
P.O. Box 6400
Bozeman, MT 59771/6400

                                                     ED SMITH
                                                      CLERK OF THE SUPREME COURT
                                                     ,STATE OF MONTANA