No. 85-338
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986
VERNON WESTLAKE, Personal Representative
of the Estate of Harry D.R. Larson,
Decea-sed,
Plaintiff and Appellant,
CHARLES R. OSBORNE and LOIS MARIE
OSBORNE, husband and wife, and
DENNIS HARDIN,
Defendants and Respondents.
APPEAL FROM: District Court of the Eighteenth ~udicial~istrict,
In and for the County of Gallatin,
The Honorable Frank M. Davis, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
H. A. Bolinger, Bozeman, Montana
For Respondent :
Gregory 0 Morgan,(Osborne), Bozeman, Montana
.
Corette, Smith, Pohlm.a.n, Allen; Karshal L.
&
Mickelson, (Hardin), Butte, Montana
-
Submitted on Briefs: Nov. 29, 1985
Decided: February 5, 1986
Filed:
Ftb 5 i986
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Appellant, Vernon Westlake, personal representative of
the Estate of Henry Larson, appeals from the judgment of the
District Court, Eighteenth Judicial District, County of
Gal latin, entered following the court's order granting the
motions for summary judgment of respondents, Charles and
Marie Osborne, and Dennis Hardin. We affirm.
The record of this case, as contained in the depositions
on file, shows that Charles Osborne and the deceased, Harry
Larson, were friends. The two agreed that they would enter
into sale and lease back agreements with regard to real
property owned by Larson and used as his residence.
Sometime ir, the latter part of February 1982, the two
men sought the assistance of Dennis Hardin, licensed real
estate broker and investment counselor to assist them in the
transaction. Both men had dealt with Hardin in the past.
They told Hardin tha-t they had struck a bargain with regard
to the sale of the Itarson residence. Hardin then elicited
the details of the transaction from them and explained that
they would need title insurance and proper agreements drafted
by an attorney. Hardin then relayed the details of the
transaction to Ed Sedivy, the attorney who drafted the
agreements. The documents prepared by Sedivy were thoroughly
reviewed by Larson and Osborne.
Larson's titl-e was subject to an unpaid balance of
$3,200 on a $6,000 mortgage owing to Larson's sister, Ella
Westlake. Appellant, Vern Westlake, is the son of Ella
Westlake and the nephew of Larson.
Due to the existing mortgage on the property, Hardin
telephoned Ella Westlake prior to closing the tramsaction.
She told Hardin to consult her son. After learning of the
transaction from Hardin, Vern Westlake contacted Larson and
Larson told him that he wanted to sell his house to get his
financial affairs straightened out and that it wasn't really
any of Westlake's business.
Prior to closing, Larson, Vern Westlake, Ella Westlake
and Hardin met in Hardin's office. At that time Vern
Westlake asked Larson if he was sure he knew what he was
doing and explained that if he was in a financial bind Ella
Westlake would refinance the note and mortgage she held on
the property. Larson told Vern Westlake that all he was
really interested in was getting his sister's mortgage off
the property.
The sale and lease back agreements were signed. on March
1, 1982. The terms of the sale were as follows:
1. Purchase Price. Buyer agrees to pay and Seller
agrees to accept, as payment in full- for the
property above referred to, the total sum of
$16,650.00 which sum shall be paid as follows:
A. The sum of $4,050.00, the receipt whereof is
hereby acknowledged.
B. The balance in the sum of $12,600.00 shall he
paid at the rate of $350.00 per month for
thirty-six (36) months, which shall be satisfied by
Seller's leasing said property and remaining in
possession for thirty-six (36) months. A copy of
said lease is attached as Exhibit "A". It is
understood that this lease is not assignable by
Seller as Tenant, and shall terminate upon death of
Tenant. I the event - -
n of such termination, if prior
- - thirty-six month period, the unpaidbalance
to the
of this purchase price shall - deemed satisfied.
-- be
(Emphasis added. )
The closing of the transaction took place on March -5,
1982. At that time, Larson was 78 years old and in poor
health., having suffered from heart difficulties since 1979.
The closing itself was handled by Teddy Annear of Gallatin
Title Company. The day before the closing, Larson asked
Annear to conduct the closing in such a manner that the
Mestlakes would not know about the terms of the sale. Thus,
the closing was a bifurcated transaction. First, Ella
Westlake was paid the balance of her debt which was secured
by Larson's property and then the actual closing of the
transaction took place.
At the closing Annear observed that Larson was alert and
aware of what was going on around him, that he did not appear
to be confused or upset about the transaction, and that he
appeared to understand what he was doing. Hardin was also of
the opinion that Larson's age and health had no effect on his
mental state.
Both Ella Westlake and Vern Westlake learned of the
transaction prior to Larson's death on November 9, 1982.
After Larson's funeral Charles Osborne called Vern Westlake
and asked when Larson's personal property would be removed
from the residence, as he intended to take possession
pursuant to the agreement. Vern Westlake refused Osborne
access to the property.
Thereafter, Vern West lake, as Larson ' s personal-
representative, brought this action to set aside the contract
of sale, deed and lease hack alleging fraud, undue influence
and unconscionability. Following discovery, motions for
summary judgment were filed by both the Osbornes and Hardin.
Orders granting both motions for summary judgment were
granted and a final entry of judgment was entered whereupon
Westlake appealed.
Westlake raises two issues on appeal:
1. Whether the District Court erred in granting summary
judgment to respondent, Dennis Hardin; and
2. Whether the District Court erred in gracting summary
judgment to the respondents, Charles and Lois Osborne.
With regard to all the respondents, Westlake claims that
summary judgment was improper because of factual issues
present in the case. It is true that the party moving for
summary judgment has the burden of est.ablishing the absence
of any genuine issue of material fact, and the party opposing
the motion must supply evidence supporting the existence of a
genuine issue of material fact.. Pretty on Top v. City of
Eardin (1.979), 182 Mont. 311, 315, 597 P.2d 58, 60. The
general purpose of Rule 56, M.R.Civ.P., is to eliminate
unnecessary trial, delay and expense. The purpose of the
hearing on the motion is not to resolve factual issues, but
to determine whether there is any genuine issue of material
fact in dispute. The opposing party's facts must be material
and of a substantial nature, not fanciful, frivolous, gauzy
nor merely suspicions. Silloway v. Jorgenson (1965), 146
Mont. 307, 310, 406 P.2d 1-67, 169. Implications based upon
what Vern Kestlake thought are not enough. Cheyenne Western
Bank v. Young (1978), 179 Mont. 492, 497, 587 P.2d 401, 404.
With regard. to both the Osbornes and Hardin, Westlake
raises no genuine issue of material fact. Vern westlake's
own deposition removed all doubt as to whether there was a
genuine issue of fact. The deposition reveals the following
with r e g m d to Hardin:
Q. Do you have any testimony or any evidence that
you can tell me about here or refer me to that lead
you to conclude that Mr. Hardin acted in some sort
of a conspiracy with the Osbornes to cheat or
defraud Harry Larson? A. Honestly I can't say
that I have any more than an opinion derived from
reading the agreement, knowing that Mr. Hardin
acted as an agent or an arranger for the Osbornes
and for Harry to get my mother and I in there to do
the final settlement. Now that's my basis.
With regard to the Osbornes, Westlake's deposition contains
the following questions and. answers:
Q. So, would it be fair to say that the basis of
your complaint against the Osbornes is an opinion
derived from reading the agreement. A. Based on
the agreement.
Q. Okay. As I recall your testimony with Mr.
Pohlma-n, and I think I'm quoting it accurately
because I wrote it down here. "I'm basing
everything on the fact that this is a poor,
unethical contract." Would that be fair? A. That
would be fair.
Aside from Westlake's "opinion" there is no genuine issue of
material fact that appea.rs of record. Westlake, however,
does list several factual issues in conclusory fashion in his
brief. As stated above, this is not an appropriate means of
opposing a motion for sun?mary judgment. We hold. that the
District Court did not err in granting summary judgment..
Having determined that summary judgment was proper, we
must now determine whether the respondents were entitled to
judgment as a matter of law.
Westlake first contends that the transaction in this
case should. be set aside under theories of constructive fraud
and undue influence. Montana has codified th.e common law
principles of constructive fraud at section 28-2-406, MCA,
which provides:
Constructive fraud consists in:
(1) any breach of duty which, without a n actual
.
fraudulent intent, gains an advantage to the person
in fault or anyone claiming under him by misleading
another to his prejudice or to the prejudice of
anyone claiming under him; or
(2) any such act or omission as the law especially
declares to be fraudulent, without respect to
actual fraud.
What constitutes undue influence is stated at section
28-2-407, MCA, which provides:
Undue influence consists in:
(1) the use by one in whom a confidence is reposed
by another or who holds a real or apparent
authority over him of such confidence or authority
for the purpose of obtaining an unfair advantage
over him;
(2) taking an unfair advantage of another's
weakness of mind; or
(3) taking a grossly oppressive and unfair
advantage of another's necessities or distress.
We hold that both of Westlake's claims--constructive
fraud and. undue influence--have no basis in fact in this ca.se
as to any of the respondents. See Turley v. Turley (19821,
199 Mont. 265, 274-75, 649 P.2d 434, 438-39.
Westl-ake next contends that the sales agreement between
Larson and the Osbornes was unconscionabbe. Westlake bases
his contention on the language of the agreement, cited above,
that cancelled the Osbornes' monthly installment payments of
$350.00 upon the death of Larson.
This Court in the past has looked to the official
comrr~entto section 2-302 of the U.C.C. for the basic test for
unconscionability. All State Leasing v. Top Hat Lounge
(1982), 198 Mont. 1, 6, 649 P.2d 1250, 1252-53. The official
comment to section 2-302 of the U.C.C. suggest the following
test:
[Wlhether, in light of the general commercial
background and the commercial needs of the
particular trade or case, the clauses involved are
so one-sided as to be unconscion.ahle under the
circumstances existing at the time of the making of
the contract ... The principle - - - -
is one of the
prevention - oppression and unfair surprise.
of
There is no evidence in this case outside of Vern Westlake's
"opinion" that points to any oppression, prejudice, or unfair
surprise. It appears that what Westl-ake is really
challenqing Is the sufficiency of consideration for the
cancellation of the Osborne's indebtedness upon Larson's
death. But insufficient consideration or inadequacy of
consideration are not grounds for setting aside or refusing
to enforce a contract. Hodgkiss v. Northland Petroleum
Consol. (1937), 104 Mont. 328, 334, 67 P.2d 811, 814;
Pederson v. Thoeny (1930), 88 Mont. 569, 576, 295 P. 250,
252. Westlake had the burden to raise facts from which
reasonable men might conclude that there was oppression,
prejudice or unfair surprise. Having failed to do this,
summary judgment against Westlake and in favor of respondents
was proper on this issue.
Westlake last contends that the District Court
considered improper evidence in qrznting Hardin's motion for
summary judgment. Westlake argues that the District Court
relied on improper hearsay testimony of Hardin to conclude
that Larson and Osborne had an agreement negotiated and
finalized prior to Hardin's involvement-. We find this
argument unavailing because, as Hardin points out, there was
other testimony by Charles Osborne by which the District
Court could have reached the same conclusion. Osborne's
testimony was not subject to a hearsay objection.
We affirm the District Court.
Me Concur: