No. 13322
IN THE SUPREME COURT OF THE STATE OF MONTANA
RICHARD J. BAILS and PATRICIA J.
BAILS, husband and wife,
plaintiffs and Appellants,
NORMAN C. WHEELER and V7ILLIAP4
RICHARDSON,
Defendants and Respondents.
Appeal from: District Court of the Eighteenth Judicial
District
Honorable W. W. Lessley Judge presiding
Counsel of Record :
For Appellants:
Berg, Angel, Andriolo and Morgan, Bozeman, Montana
Ben E. Berg argued, Bozeman, Montana
For Respondents:
Landoe and Gary, Bozeman, Montana
Hjalmar Landoe argued, Bozeman, Montana
Bennett and Bennett, Bozeman, Montana
Lyman Bennett, Jr. araued and Lyman Bennett, I11
appeared, Bozeman, ~ o n t a n a
Submitted: January 10, 1977
Filed:
Mr. ~usticeFrank I . Haswell d e l i v e r e d t h e Opinion of t h e C o u r t .
T h i s i s a n a c t i o n f o r damages by t h e p u r c h a s e r of a
r a n c h a g a i n s t two r e a l e s t a t e a g e n t s based on a l l e g e d f r a u d u l e n t
r e p r e s e n t a t i o n s whereby he was induced t o e n t e r i n t o t h e p u r c h a s e
contract. The d i s t r i c t c o u r t o f G a l l a t i n County e n t e r e d summary
judgment f o r d e f e n d a n t s . P l a i n t i f f purchaser appeals.
A s y n o p s i s o f t h e t r a n s a c t i o n forming t h e b a s i s o f t h i s
s u i t a p p e a r s i n o u r o p i n i o n i n B a i l s v . Gar, Mont . I
P. 2d , 33 St.Rep. 1256. T h a t c a s e w a s a s u i t by t h e pur-
c h a s e r o f t h e r a n c h a g a i n s t t h e s e l l e r based on a l l e g e d f a l s e
r e p r e s e n t a t i o n s inducing t h e purchaser t o e n t e r i n t o t h e c o n t r a c t ;
t h e i n s t a n t c a s e i s a s u i t by t h e p u r c h a s e r a g a i n s t t h e two r e a l
e s t a t e a g e n t s based upon s u b s t a n t i a l l y t h e same r e p r e s e n t a t i o n s .
W e v a c a t e t h e summary judgment h e r e f o r t h e same r e a s o n s we v a c a t e d
supra,
it i n B a i l s v . G a r / v i z . t h a t t h e r e a r e genuine i s s u e s of m a t e r i a l
f a c t p r e c l u d i n g summary judgment.
The a l l e g e d f a l s e r e p r e s e n t a t i o n s i n t h e i n s t a n t s u i t
a r e t h a t t h e r a n c h c o n t a i n s 5,200 deeded a c r e s ; t h a t it would
r a i s e and s u s t a i n 400 a n i m a l u n i t s ; t h a t t h e r e w e r e 300 a c r e s o f
hay l a n d which produced 900 t o n s o f hay p e r y e a r ; t h a t t h e r e were
6 0 acres of c r o p b n d which produced 2 1 b u s h e l s of g r a i n p e r acre;
and t h a t t h e p r o p e r t y would produce a n income of a t l e a s t $80,000
per year.
A so-called "brochure" appears t o c o n t a i n t h e p r i n c i p a l
r e p r e s e n t a t i o n s on which t h e i n s t a n t c a s e i s b a s e d , and t h e r e a l
s o u r c e of f a c t u a l i s s u e s . I t i s b o t h i d e n t i f i e d a s " E x h i b i t A"
a t t a c h e d t o t h e c o m p l a i n t which c o n t a i n s t h e f i r s t f o u r r e p r e s e n -
t a t i o n s complained o f , and a t one p o i n t it i s r e f e r r e d t o by a
defense a t t o r n e y a s t h e "missing brochure". There i s much con-
f u s i o n s u r r o u n d i n g it.
B a i l s s a y s he r e c e i v e d a " b r o c h u r e " , a p p a r e n t l y from
Richardson, d e s c r i b i n g t h e r a n c h and c o n t a i n i n g most of t h e
m i s r e p r e s e n t a t i o n s complained o f . Although h e d o e s n o t i d e n -
t i f y " E x h i b i t A" a s t h e document he r e c e i v e d , h e s a y s it i s
v e r y s i m i l a r t o it. Richardson s a y s he r e c e i v e d t h e "brochure"
from Wheeler and s i m p l y r e l a y e d it t o B a i l s . Wheeler a r g u e s
R i c h a r d s o n must have changed it b e c a u s e B a i l s d o e s n o t i d e n t i f y
t h e o n e Wheeler s e n t a s t h e o n e h e r e c e i v e d .
These c o n f l i c t i n g c o n t e n t i o n s c o n c e r n i n g t h e " b r o c h u r e "
t o g e t h e r w i t h o u r d i s c u s s i o n i n B a i l s v . Gar, s u p r a , i n d i c a t e
i s s u e s o f f a c t p r e c l u d i n g summary judgment.
A s t o t h e f i f t h representation, defendants argue t h e
r e p r e s e n t a t i o n t h e r a n c h would p r o d u c e $80,000 income i s a n
o p i n i o n and n o t a c t i o n a b l e a s f r a u d . T h i s r e p r e s e n t a t i o n ap-
p a r e n t l y came o u t o f a d i s c u s s i o n among t h e p a r t i e s w h i l e B a i l s
was b e i n g shown t h e r a n c h . B a i l s s a y s Richardson s t a t e d t h e
r a n c h would p r o d u c e $100,000 income and Wheeler r e d u c e d t h a t
f i g u r e t o $80,000. B a i l s s a y s he b e l i e v e d t h e s e men t o b e h o n e s t
and t r u s t e d them.
A l l p a r t i e s c i t e t h e following r u l e as c o n t r o l l i n g :
" * * * I f t h e party expressing t h e opinion possesses
s u p e r i o r knowledge, s u c h a s would r e a s o n a b l y
j u s t i f y t h e conclusion t h a t h i s opinion c a r r i e s
w i t h it t h e i m p l i e d a s s e r t i o n t h a t h e knows t h e
f a c t s which j u s t i f y i t , h i s s t a t e m e n t i s a c t i o n -
a b l e i f h e knows t h a t h e d o e s n o t h o n e s t l y e n t e r -
t a i n t h e opinion because it i s c o n t r a r y t o t h e f a c t s . "
Como Orchard Land Co. v . Markham, 54 Mont. 438,
443, 1 7 1 P. 274.
The o p i n i o n o f t h e C o u r t i n Como c o n t i n u e s :
"So, l i k e w i s e , a n o p i n i o n may b e s o b l e n d e d w i t h
f a c t s t h a t it amounts t o a s t a t e m e n t o f f a c t s . "
W e h o l d t h e income r e p r e s e n t a t i o n may b e a c t i o n a b l e w i t h -
i n e i t h e r o f t h e above r u l e s d e p e n d i n g on d e t e r m i n a t i o n o f i s s u e s
of fact. I n d i c a t i o n s a r e t h e r e a l e s t a t e b r o k e r s had s u p e r i o r
knowledge o f r a n c h i n g and o n e o f them had s u p e r i o r knowledge o f
t h e p a r t i c u l a r ranch i n question. A c a s h f l o w e s t i m a t e had been
p r e p a r e d t h a t y e a r i n d i c a t i n g a much lower income.
F o r t h e f o r e g o i n g r e a s o n s , t h e summary judgment i s
v a c a t e d a n d t h e c a u s e remanded t o t h e d i s t r i c t c o u r t , G a l l a t i n
County, f o r f u r t h e r p r o c e e d i n g s c o n s i s t e n t w i t h t h i s o p i n i o n .
Justice
Bails v. Wheeler Richardson
Combined Opinion