Court Opinion

ID: 883350
Source: CourtListenerOpinion
Date Created: 2013-06-05 02:17:03.801972+00
Date Added: 2024-06-11T15:11:54.372314
License: Public Domain

NO.    93-457

                 IN THE SUPREME COURT OF THE STATE OF MONTANA
                                                    1994

HALL & HALL, INC. a,
Montana Corporation,
     Plaintiff and Appellant,

HENRY B. HYDE and FRANCIS B.
BESSENYEY, as co-executors of
the Estate of Margit S. Bessenyey
and the ESTATE OF MhRGIT S.
BESSENYEY,
     Defendants and Respondents.

APPEAL FROM: District Court of the Twenty-First Judicial District,
              In and for the County of Ravalli,
              The Honorable Jeffrey H. Langton, Judge presiding.

COUNSEL OF RECORD:
                 For Appellant:
                           Rodney T. Hartman, Herndon, Hartman, Sweeney &
                           Halverson, Billings, Montana
                 For Respondent:
                           Patrick G. Frank and W. Carl Mendenhall, Worden,
                           Thane & Haines, Missoula, Montana

                                               Submitted on Briefs:      January   7,   1994
            MAR 2 2 1994
                                                              Decided:   March 22, 1994
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               OF
Justice Fred J. Weber delivered the Opinion of the Court.

     This is an appeal by Hall & Hall, Inc. (Hall     &   Hall) from an
order of the District Court of the Twenty-First Judicial District,
Ravalli County, which granted summary judgment to defendants.       We
affirm.
     The issue presented for our review is whether the District
Court properly granted defendants1 motion for summary judgment.
     The facts underlying this action are as follows:        Margit S.
Bessenyey died in 1984, leaving a considerable estate, part of
which included property in Ravalli County, Montana.         The Ravalli
County property included one piece of property known as the "Bitter
Root Stock Farm" (Stock Farm) constituting approximately 19,097
acres and another piece of property known as the "Brick Barn," a
smaller parcel.      This action concerns the real estate commission
paid to Hall   &   Hall following the sale of the Stock Farm to Harold
Mildenberger and his son Bradley Mildenberger.
     Francis B. Bessenyey (Bessenyey) was Margit S. Bessenyeyls

stepson and is co-executor of her estate along with Henry B. Hyde,
a New York attorney.      Bessenyey was also a neighbor and long-time
friend of Harold Mildenberger.      Harold Mildenberger stated in his
affidavit that in late 1984, after the death of Margit Bessenyey,
he discussed purchasing some or all of her estate's property in
Ravalli County.      He again approached Bessenyey in early 1985 and
yet another time in August of 1986 about purchasing property of the
Margit S. Bessenyey estate (the Estate).        Each time, Bessenyey
responded that the Estate was not in a position to consider a sale

                                    2
at that time.
      The affidavits of Francis Bessenyey and Harold Mildenberger
state that they were friends and neighbors for many years. Harold
Mildenberger purchased the land his home is built on from Margit S.
Bessenyey in 1979.    Roy Rose, the manager of the Stock Farm, also
testified by deposition that he was aware of an approximate thirty-
year friendship between Francis Bessenyey and Harold Mildenberger.
Throughout the years, these two friends and other members of their
families were involved in various real estate transactions and
discussions over other possible sales of real property.
      Clearly, the sale of the Stock Farm--the subject of this
action--did not occur in isolation and must be viewed in light of
this longstanding relationship between the Mildenbergers and the
Bessenyeys.     As an example, in June and July of 1989, the Estate
and   the   Mildenberger   family   were   involved   in   a   series   of
transactions whereby the Estate conveyed forty acres in Ravalli
County to Mrs. Harold Mildenberger in exchange for an easement
granted by Harold Mildenberger to the Estate to run pipe over the
Mildenbergers' property to irrigate Estate property.
      Bessenyey stated in his affidavit that it became apparent in
late 1989 that the Estate would have to sell some or all of its
Ravalli County real estate holdings to settle the estate's tax
liabilities and to provide for specific bequests to legatees. Both
Harold Mildenberger and Bessenyey stated that they also discussed
a possible sale of an 80-acre parcel but that they did not reach an
agreement in regard to that property.
     In early March of 1990, Bessenyey met with Harold Mildenberger
and advised him of the intended sale of the Stock Farm.         Although
Mildenberger remained interested in purchasing the property, he
indicated that he was not financially able to do so at that time as
his money was tied up with a deal he was working on in Russia.
Both Bessenyey and Harold Mildenberger stated in their affidavits
that they agreed to and in fact did stay in touch with one another
concerning the sale of the Stock Farm, which was ultimately sold to
Harold and Bradley Mildenberger in 1992.
     In April of 1990, after Harold Mildenberger indicated he would
not then be able to obtain financing to purchase the property, Hyde
and Bessenyey, as co-executors of the estate, entered into an
agreement appointing Hall   &   Hall as the Estate's "exclusive agentN
for selling the Stock Farm and the Brick Barn properties.               The
agreement provided for a four percent commission for a sale to a
purchascr procured "by or through" Hall       &   Hall.   However, the
listing agreement also provided the following reservation:
     7.   Owner reserves the riqht LO sell to any purchaser
     not ~roduced by or through [Hall & Hal_ll, i s (sic)
     aaents sub or co-brokers. without beina liable for the
     payment of a commission or fee to [Hall i Hall] except as
     set forth in this paragraph 7.
     (a) If Owner sells the Propertv to any of the
     individuals/entities set forth in Exhibit H annexed
     hereto, pursuant to a contract entered into within six
     (6) months of the date [Hall & Hall] delivers fifteen
     brochures to Owner pursuant to paragraph 3 , Owner shall
     pav to [Hall & Hall1 a fee equal to one half of one
     percent ( . 5 % ) of the sales price.
     (b) If Owner sells the Propertv to a purchaser (other
     than one set forth in Schedule H pursuant to a contract
     entered into within the time limit set forth in naraaranh
                                                          -   3 - - &

     7 (a)) not produced by or through [Hall & ~ali], Owner
    shall pay to lHall & Halll a fee equal to one and one
    half percent (1.5%) of the sales rice less the amount
    expended by Owner for advertisina and brochures pursuant
    to Paraaraph 3.

    (c) The parties acknowledge the possibility of a dispute
    as to whether or not a purchaser was produced by Owner or
    by or through [Hall & Hall]. Therefore, the parties will
    endeavor to keep each other informed as to any
    communications or negotiations concerning the Property.
     ...  Further, Owner agrees to keep [Hall & Hall] advised
    as to any independent (i.e. non-broker) inquiries
    concerning the property.

     (d) Except for those prospective purchasers set forth in
     Schedule H, Owner agrees not to actively solicit offers
     for the Property.
     (e) Owner shall consult with [Hall & Hall] on a regular
     basis with regard to any negotiations for a sale of the
     Property to any of those persons set forth in Schedule H
     or to any purchaser not produced by or through [Hall &
     Hall J.
    (f) It shall be a rebuttable presumption that any
    prospective purchaser who in the contract of sale,
    warrants and represents that such purchaser (i) did not
    contact any broker in connection with the sale of the
    Property, and (ii) did not learn about the availability
    of the Property throuqh any promotional efforts of [Hall
    & Halll and who indemnifies Owner with respect to any
    breach of such a representation, is not a purchaser
    produced by or throuqh [Hall & Halll and the provisions
    of this paragraph 7 shall apply with respect to the
    commission to be paid to [Hall & Hall]. .            .
                                                     . It is
    understood and agreed that in connection with any sale to
    the individuals/entities set forth in Exhibit H, such a
    purchaser will be deemed to be produced by Owner . . . .
    (Emphasis supplied.)
     On October 1, 1992, the date of closing the sale to Harold and
Bradley Mildenberger, the Estate paid Hall   &   Hall   $83,705.35.       This
amount represented one and one half percent of the sales price less
$23,544.65 in advertising expenses previously paid to Hall            &   Hall
by the Estate.    The Estate paid the one and one half percent
commission to Hall & Hall based on its position that the buyers
were not "produced by or through" Hall                &    Hall as required by the
contract which would allow them a higher commission.
     The Estate contends that the Mildenbergers were neither found
by nor introduced to the estate by Hall           &       Hall and, therefore, Hall
&   Hall was not the "procuring cause" of the sale.                         Harold
Mildenberger's affidavit states that Francis Bessenyey's original
offers to sell estate property came at a time when he was
financially unable to purchase the property and that his subsequent
purchase of the property came at a time when his financial position
had changed. The affidavits of both Mildenbergers state that they
are willing to sign a document to comply with Paragraph 7(f)
stating they   did      not       learn   about   the       property   through   any
promotional effort of Hall          &   Hall, did not contact any broker in
connection with the sale and that they are willing to indemnify the
Estate in the context of that paragraph.
      In contrast, Hall       &   Hall claims to have been the "procuring
cause" of the sale and, therefore, that the four percent commission
should have been paid to them--a difference of $178,750. According
to Hall & Hall, since the affidavits of the parties directly
contradict each other, a jury should determine which version of the
facts is more credible.            Hall & Hall argues that it transformed
Harold Mildenberger from a mere friend of Francis Bessenyey into a
serious player who eventually bought the property.                      It further
argues that the District Court improperly chose between competing
versions of fact.
      Under Rule   56   (c), M.R. Civ.P., the issues before a district
court on a summary judgment motion are (1) whether there is any
genuine issue of material fact in the case, and (2) if not, whether
the moving party is entitled to judgment as a matter of law.         See
Cereck v. Albertsonls, Inc. (1981), 195 Mont. 409, 411, 637 P.2d
509, 510. The District Court concluded that there were no material

factual issues and granted summary judgment to defendants on the
basis that Hall   &   Hall was not the "procuring cause" of the sale.
       This Court's standard of review of a summary judgment ruling
is the same as that of a district court. We determine whether the
record discloses genuine issues of material fact, and, if not,
whether the moving party is entitled to judgment as a matter of
law.    Rule 56(c), M.R.Civ.P.; Knight v. City of Missoula (1992),
252 Mont. 232, 243, 827 P.2d       1270, 1276-77.       Further, a party
opposing summary judgment is to be indulged to the extent of all
inferences which may reasonably be drawn from the record.        Jenkins
v. Hillard (1982), 199 Mont. 1, 5, 647 P.2d 354, 356.
       Thus, our review must initially determine whether there are
any genuine issues of material fact here. Hall      &   Hall contend that
the record, in the form of Roy Rose's deposition testimony,
establishes that there was a team effort being exerted by Hall         &

Hall, the Estate, and Roy Rose to bring about a sale to the
Mildenbergers.    Hall & Hall further contends that the absence of
Mildenberger's name on Exhibit "H"      is further proof that Hall     &

Hall was the "procuring cause" of the sale.
       There is no conflict in the record that Roy Rose, as manager
of the Stock Farm and himself a real estate agent, worked together
with Hall   &   Hall and the co-executors in an effort to effect a sale
to the Mildenbergers. However, the uncontradicted evidence in the
affidavits of Harold Mildenberger and Francis Bessenyey indicates
that the two long-time friends had discussed a sale of the property
years before the Estate entered into the agreement between Hall            &

Hall.    Mildenberger stated that he initially approached Bessenyey
as early as 1984 about buying the property from the Estate, but
that the Estate was not in a position at that time to sell. Later,
when the Estate was in a position to sell the property, Francis
Bessenyey first contacted his long-time friend Harold Mildenberger,
but Mildenberger could not come up with the necessary financing at
that time.
        It was only after Bessenyey determined that his friend Harold
Mildenberger could not then purchase the property that the Estate
decided to list the property with a real estate agent.              ~xhibit
"H,"   appended to the agreement between the Estate and Hall        &   Hall,
is a short list of potential buyers identified by the Estate.
Under the terms of the agreement, if the Estate sold to one of
those buyers within six months of the date Hall       &   Hall delivered a
copy of the brochure to the Estate, Hall     &   Hall would receive only
a commission of one half percent.          If such a buyer later was
procured by the estate, the commission paid to Hall          &   Hall would
still be substantial at one and one half percent.          The most likely
inference to be made from the failure to list Mildenberger on
Exhibit "H" is that the Estate did not believe Mildenberger could
come up with the necessary financing within six months.            Clearly,
Hall   &   Hall did not bring the parties together, when the historical
backdrop of this case is reviewed.
       Francis    Bessenyey   and   Harold   Mildenberger         subsequently
negotiated the terms of the sale directly between themselves over
a number of weeks in 1992 and Mildenberger sent an offer directly
to Bessenyey. These facts are not disputed by Hall           &   Hall and Hall
&   Hall has not identified any other material facts which are in
dispute.      We conclude that Hall & Hall has failed to come forward
with any genuine issues of material fact which would preclude
summary judgment    .
           The question then becomes whether Hall        &       Hall was the
"procuring cause" of the sale under Montana law.                 In its order
granting summary judgment to defendants, the District Court stated:
       Both Harold and Bradley Mildenberger have stated in their
       affidavits that their knowledge of the availability of
       the Stock Farm for sale did not in any way come from Hall
       & Hall, any advertising due for the estate by Hall &
       Hall, any promotional efforts of Hall & Hall, nor from
       any brochure prepared by Hall & Hall.      .
                                                 . .
       In Lane v. Smith (l992), 2 5 5 Mont. 218, 841 P.2d 1143, we
discussed the "procuring causen doctrine in the context of an
exclusive listing agreement.        We pointed out that the doctrine is
not confined to non-exclusive listing agreements, but applies in
a11 situations unless the parties agree otherwise in the listing

contract.      Lane, 841 P.2d at 1147.    We stated:
       The procuring cause doctrine permits a broker to show
       that his or her part of the contract was performed and
       that the principal reaped a benefit from the efforts. D.
       Burke, Jr., The Law of Real Estate Brokers, 3 3.4 ( 1 9 9 2 ) .
Lane, 841 P.2d at 1146-47.          The listing contract here does not
contain an agreement to preclude application of the doctrine; thus,
we must ascertain whether the District Court correctly determined
whether Hall    &   Hall was not a "procuring causeu of the sale of the
Stock Farm.         Further, as also noted by the District Court, the
agreement here was an exclusive asency agreement, not an exclusive
right to sell agreement. The Estate reserved certain rights in the
agreement as provided in detail above.
     One of these rights expressly reserved by the Estate was the
right to sell the property directly to a buyer who was "not
produced by or through Hall & Hall."                  In such a case, Hall   &   Hall
would still receive a commission, but the percentage would be one
and one half percent of the selling price rather that the four
percent of the selling price provided for if Hall                 &   Hall procured
the purchaser. The District Court concluded that this language was
essentially the same as the procuring cause doctrine, and that
under previous Montana cases, Hall              &   Hall had to establish that it
found and introduced the Mildenbergers to the Estate, that the
parties were brought together by Hall & Hall and that the sale
resulted. See, e q ,Barrett v. Ballard (1980), 191 Mont. 39, 47,
                ..

622 P.2d 180, 185; Flinders v. Gilbert (1963), 141 Mont 442, 448,
378 P.2d 385, 388; and Shober v. Blackford (1912), 46 Mont. 194,
208-09, 127 P. 329, 332.
     The District Court then concluded that the undisputed facts
showed   that       Hall   &   Hall   was   not        responsible    for   finding,
introducing or bringing the parties together, and further, that the
undisputed facts showed that Hall           &       Hall's actions were not even   a
cause of the sale, let alone the procuring cause.
      The record supports these conclusions made by the District
Court. Harold Mildenberger already knew of the availability of the
Stock Farm before Hall     &       Hall signed the agreement with the Estate.
His knowledge arose from his longstanding relationship with Francis
Bessenyey and his conversations with him. In order for Hall            &   Hall
to recover the full four percent commission under the procuring
cause doctrine, Hall           &     Hall must have been, at a minimum,
responsible for bringing the buyer and seller together.              Barrett,
622 P.2d at 186. There is nothing in the record to support even an
inkling that the Mildenbergers were produced by or through Hall               &

Hall.
       Nonetheless, Hall       &    Hall claims to have worked together with
Roy Rose in keeping Harold Mildenberger informed of all activity
and interest which occurred or was generated during the time the
property was listed with it up until the sale.                As part of its
agreement with the Estate, Hall            &   Hall was active in advertising
and attempting to procure a buyer for the property. Its efforts in
keeping Harold Mildenbergerrs interest peaked in the property do
not indicate that it considered itself the procuring cause.                Hall
&   Hall wanted to effect a sale. For a property advertised at over
$10 million which eventually sold for $7,150,000, even a sale to

Mildenberger generated a considerable commission for the broker
here at the one and one half percent rate.                  As noted by the
~istrictCourt, "it seems clear that this transaction would have
taken place without any of the efforts attributable to Hall                   &
Hall. 'I
       Roy Rose had a contract with the Estate to manage the Stock
Farm and also initially had a 90-day exclusive listing contract
should the Estate wish to sell the property. From his testimony in
his deposition, this listing contract could have "muddied the
waters" as far as a future sale was concerned. Therefore, as part
of the deal arranged with Hall          &   Hall, Rose negotiated an agreement
with Hall       &   Hall for ten percent of Hall        &   Hall's commission in
exchange for giving up his 90-day listing.                  The Estate also paid
Rose a considerable amount ($500,000) to relinquish Rose's 90-day
exclusive listing so that it could enter into the agreement with
Hall   &   Hall.
       Rose testified that he was in fact aware of the longstanding
relationship between Francis Bessenyey and Harold Mildenberger.
Although Roy Rose had numerous contacts with the Mildenbergers
while he was the property manager of the Stock Farm, Harold
Mildenberger's name was omitted from Exhibit "HI1 and Hall                     &   Hall
occasionally listed Mildenberger on their reports to the Estate, we
conclude that these facts are not sufficient to demonstrate that
Hall       &   Hall    was    the procuring     cause    of    the    sale    to    the
Mildenbergers.
       In addition to these facts, we note also that there were other
interactions          which     transpired    between    the    Estate       and    the
Mildenbergers          during    the   duration   of    Hall    &    Hall's    agency
agreement.          Some of these resulted in real property transactions.
       Hall    &    Hall agents attended an annual party given by Bessenyey
in Hamilton for social and business acquaintances shortly after the
beginning of their agreement with the Estate.              Harold Mildenberger
was present at this social gathering.            Douglas Hart of Hall   &   Hall
stated in his affidavit that he identified Mildenberger as a
potential buyer at that time and that Hall           &   Hall mailed a copy of
their brochure to Mildenberger.         This mailing of a copy of the
brochure, however, was in connection with a possible listing of
Mildenberger's property in eastern Montana.               In addition to this
contact, another representative of Hall             &    Hall spoke once with
Mildenberger over the telephone: at that time Mildenberger advised
him that he was not in a position to purchase the property, just as
he had done when first approached by Bessenyey when the Estate
decided to sell the property in 1990. We conclude that the direct
contacts    between   Hall   &   Hall      and    Harold    Mildenberger     are
inconsequential and irrelevant in this case.               We further conclude
that Hall   &   Hall was not the procuring cause of the sale of the
Stock Farm to the Mildenbergers.
     We hold the District Court properly granted summary judgment
to the defendants.
     Af firmed.

                                 .Lzvv\/
                                         March 22, 1994

                                  CERTIFICATE OF SERVICE

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

Rodney T. Hartman, Esq.
Herndon, Hartman, Sweeney & Halverson, P.C.
P.O. Box 80270
Billings, MT 59108-0270

Patrick G. Frank and W. Carl Mendenhall
Worden, Thane & Haines, P.C.
P.O. Box 4747
Missoula, MT 59806

                                                     ED SMITH
                                                     CLERK OF THE SUPREME COURT
                                                     STA- OF YONTANA

                                                     BY:
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