NO. 87-514
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
FIRST BANK (N.A.)-BILLINGS,
Plaintiff and Appellant,
-vs-
RUSSELL C. CLARK,
Defendant, Respondent and Cross-Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the the County of Yellowstone,
The Honorable Russell Fillner, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Moulton, Bellingham, Longo & Mather; Brad H. Anderson
argued and W.H. Bellingham argued, Billings, Montana
For Respondent:
Herndon, Harper & Munro; Rodney T. Hartman argued,
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~~Rillings, Montana
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! Submitted: December 29, 1988
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- -. Decided: February 21, 1989
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Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Plaintiff First Bank-Billings appeals from a jury
verdict and subsequent judgment entered October 1, 1987 in
the Thirteenth Judicial District Court, Yellowstone County,
awarding defendant Clark $16,398.95 for costs and reasonable
attorney's fees and $100,000 compensatory damages on his
counterclaim for damages resulting from the Bank's breach of
the covenant of good faith and fair dealing and commission of
constructive fraud. The Bank does not appeal the jury's
determination that defendant was not liable under a personal
guaranty for the Parker-Montana Company debts remaining after
its liquidation.
This Court entered a decision on December 16, 1988.
First Bank-Billings v. Clark (Mont. 1 9 8 8 ) , 45 St.Rep. 2294.
The Rank filed a timely Petition for Rehearing, pursuant to
Rule 34, M.R.App.P., following this decision. Having
considered the briefs filed by the parties on the petition,
we now with.draw the original opinion and issue this opinion
in its place.
Respondent raises the following issue on cross appeal:
1. Did the District Court err in refusing to submit
Clark's actual fraud claim to the jury?
Appellant raises the following issues on appeal:
1. Did the District Court erroneously allow attorneys
Everson and Ragain to testify that an oral agreement between
First Bank and Clark, releasing Clark from a guaranty
agreement, had been reached and breached?
2. Did the District Court erroneously admit lay
witness testimony as to the reason Clark signed a peaceful
repossession document?
3. Did the District Court erroneously instruct the
jury as to damages for lost income, damage to reputation, and
emotional distress?
4. Did the District Court err in instructing the jury
on the issue of a fiduciary duty owed?
5. Did substantial, credible evidence support the jury
verdict:
a. that First Bank breached the implied covenant of
good faith and fair dealing; and
b. that First Bank committed constructive fraud?
Russell Clark (Clark) was the president and majoritv
shareholder in the Parker-Montana Company (Company), a farm
equipment wholesale business, from 1970 until the liquidation
of the company in 1983. The Company maintained a goo?
relationship with First Bank Rill-ings (Rank), the Company's
chief bank affiliation, up until 1982 when the Company began
experiencing severe financial difficulties.
In late 1982, both parties agreed that the Company was
in dire financial straits and that either a reorganization or
dissolution of the Company was necessary. The Bank
recommended liquidation and the parties commenced liquidation
negotiations. Clark was primarily concerned during these
negotiations with obtaining a release from a personal
guaranty agreement that both he and his wife had executed on
July 23, 1979 to secure Bank loans made to the Company.
Dennis Hove, the Company Vice President, approached
Clark in the first week of February of 1983 and stated his
interest in purchasing the Companv. Hove subsequentlv
submitted a written buy-out proposal to the Bank, for
implementation upon the sale of Company assets for debts
outstanding. In this proposal, Hove offered to purchase all
Company assets and to assume all Company liabilities, and in
turn, Clark would be released from his personal guaranty.
This purchase proposal hinged upon an agreement between the
Rank and Company on the details of the intended liquidation.
Consequently, a meeting was held on February 24, 1983, at
which time the Bank set forth its proposal for liquidation of
the Company.
The following people were present at this meeting:
Russell Clark, James Ragain and Gary Everson (attorneys for
the Company), Doug Aden (head of the Bank's commercial loan
department), Bob Waller (Bank president and personal friend
to Clark), Gerald Murphy (attorney for the Bank), and Jack
Carpenter (Small Business Association representative). The
Bank at that time proposed to release the Clarks from their
personal guaranty if they would deed to the Bank all real
property used by the business in Billings, but owned by the
Clarks and the Clark Children's Trust, and if the Company
would grant First Bank peaceful possession of all the
Company's inventory and accounts receivable. Clark rejected
this proposal because he felt the collateral to be turned
over to the Bank exceeded the debts owed and because he did
not want to convey real estate held in trust for the benefit
of his children.
Another meeting with Murphy, Waller, Ragain, and Clark
was held on February 28, 1983. At this meeting, Waller
stated that the Bank would take a trust indenture, rather
than a deed, on all the above-mentioned property and in
return release the Clarks from their personal guaranty. The
parties differ as to whether Clark accepted this offer and
reached an agreement with the Rank.
Appellant contended that Clark did not accept this
offer for the same reasons previously outlined. Appellant
alternatively contended that if there was an agreement, that
Clark breached it when he failed to convey trust indentures
to - the property; respondent did not give the Bank a trust
all
indenture to lots 15, 16, 17 and 18.
Respondent, on the other hand, contended that he
accepted the modified offer, shook hands with Waller and
"congratulated him on getting the job done." This agreement,
however, was not reduced to writing. Yet, Hove testifiec?
that he struck a final deal with the Rank to purchase the
Company after he was notified that an agreement had been
reached between Clark and the Rank. Respondent further
alleged that he fulfilled this agreement by giving a trust
indenture to all the required lots. He was not required to
give the Bank a trust indenture to lots 15, 16, 1 7 and 18,
since Hove had secured an option to purchase these lots and
had arranged financing. Hove later decided against
purchasinq these four lots, althouqh his company did purchase
and give the Rank a trust indenture to lots 2, 3, 4, 5, 6,
19, 20, 21, 22 and 23.
Both parties agree that the Rank decided to finance
Hove's purchase of the Company's inventory and accounts
receivable. The Rank arranqed an April 7, 1983 auction of
this Company property, less $100,000 worth of inventory to
which Rorg-Warner had a superior security interest. The
auction followed Clark's execution of a peaceful repossession
agreement in favor of the Bank on March 4, 1983.
Hove bought all remaining inventory and accounts
receivable at the auction with a high bulk bid of $1 million.
Respondent alleged that this bid of $1 million was $100,000
less than that amount originally proposed and agreed upon by
the Bank. An attorney for the respondent testified, however,
that Doug Aden assured him over the phone just prior to the
auction that the Rank would treat the actual bid as a $1.1
million bid for purposes of eliminating Clark's debt to the
Bank.
The Salvation Army subsequently purchased lots 7, 8, 9
and 10 from the Clarks in April of 1984. Pursuant to an
agreement that Clark had with the Bank, Clark placed the net
proceeds from this sale ($62,000) in an interest bearing
account with the Bank. Clark later voluntarily awarded these
funds to the involuntary bankruptcy trustee pursuant to a
settlement agreement. (Borg-Warner and other creditors, not
including the Bank, had filed an involuntary bankruptcy
action against the Company on March 24, 1983.)
On November 8, 1984, the Rank filed suit against Clark
on his personal quarantjr i n order to col-lect on the alleged
.
Company debt of approximately $233,000 remaining after the
auction. Clark was asked to resign from his position on the
board of directors of First Interstate Bank in December of
1984. The decision to request Clark to resign was reached
after discussion, continuing over several months, of the
value of Clark's continued representation on the board given
his Company's severe financial problems. Each year he had
served as a director, Clark earned $5,000-$6,000.
A jury trial was held July 6 through July 11, 1987. The
jury determined that Clark was not obligated, under his
personal guaranty, for any Company debts. The iury awarded
Clark $100,000 on his counterclaim for damages due to the
Bank's bad faith and constructive fraud. However, the court
refused Clark's request to submit instructions on actual
fraud to the jury, and consequently, the jury determined that
Clark was not entitled to punitive damages.
This appeal and cross appeal followed.
I. JURY INSTRUCTION ON ACTUAL FRAUD
For purposes of convenience, we have chosen to discuss
the issue raised on cross appeal first. Respondent alleges
by way of a cross appeal that the court erred in refusing to
instruct the iury on the issue of actual fraud. Yet, a iury
inst.ruction on actual fraud is warranted onlv if defendant
raised a question of fact by presenting some evidence of each
of the following nine elements of actual fraud:
1.. A representation;
2. Falsity of the representation;
3. Materiality of the representation;
4. Speaker ' s knowledge of the falsity
of the representation or ignorance
of its truth;
5. Speaker's intent that it he relied
upon ;
6. The hearer's ignorance of the
falsity of the representation;
7. The hearer's reliance on the
representation;
8. The hearer's right to rely on the
representation; and
9. Consequent and proximate iniury
caused by the reliance on the
representation.
McGregor v. Mommer (Mont. 1986), 714 P.2d 536, 540, 4 3
St.Rep. 206, 211, citing Van Ettinger v. Pappin (1978), 180
Mont. 1, 10, 588 P.2d 988, 994.
The defendant failed to introduce any such evidence
that the Bank made a false representation, which it knew to
be false at the time, intending that Clark would rely on it
to his detriment. Absent any evidence of the Bank's actual
intent to defraud Clark during the meeting of February 28,
1983, we find that the court did not err in refusing to
instruct the jury ahout actual fraud.
11. LAY WITNESS TESTIMONY OF AN AGREEMENT AND BREACH
Appellant contends that the District Court erred in
allowing attorneys Everson and Ragain to testify that the
Bank and Clark had reached an agreement releasing Clark from
his personal guaranty. However, respondent contends that the
two attorneys' presence at the February 1983 negotiation
meetings qualified them to testify to their personal
perceptions as lay witnesses. Rule 701, M.R.Evid., permits a
lay witness to offer such an opinion if it is "rationally
based on the perception of the witness and . ..
helpful
to ...the determination of a fact in issue." Further, a
lay witness may even give an opinion on an ultimate factual
issue if it complies with the foundational requirements in
Rule 701, M.R.Evid., however, the opinion testimony must be
"confined to matters of fact." In re the Estate of Smith
(Mont. 1988), 749 P.2d 512, 517, 45 St.Rep. 93, 100, citing
Olson v. Coats (Or. 1986), 717 P.2d 176, 178; Rule 704,
M.R.Evid.
The contested testimony offered by Everson and Ragain,
that an agreement was reached and later breached, certainly
involved a fact in issue. (Both parties correctly conceded
this point in the pretrial order.) Moreover, this testimony
certainly could prove helpful to a jury determination, if
based upon personal observations, in light of all the
conflicting evidence presented as to whether an agreement was
in fact ever reached. However, Everson's testimony that the
parties reached an agreement was - based on his personal
not
perceptions. Rather, he relied upon information gathered
from conversations with others.
A lay witness may not testify to such evidence gathered
from interviews with other persons. State v. Clark (1984),
209 Mont. 473, 485, 682 P . 2 d 1339, 1345-40. Thus, in Clark,
this Court excluded an investigator's testimony that the
defendant had a legitimate alibi, because the investigator's
proposed testimony, determined by interviews with others, was
not based on his own perceptions. The Court further
concluded that evidence which is not based upon personal
perceptions is not helpful to a jury. A jury is qualified to
draw their own inferences and conclusions from those
witnesses who do testify to their personal perceptions.
Clark, 682 P.2d at 1346.
Everson's testimony of an agreement, based upon his
conversations with others, was similarly inadmissible. B\r
his own admission, Everson was uncertain whether he attended
the February 28, 1983 meeting during which the parties
reached the alleged agreement:
I do remember a meeting where it was all
discussed, and I can't recall for
positive, five years ago, if that was the
meeting that it was agreed to, or it was
discussed. . .
Clark, however, clearly remembered who was present at the
February 28, 1983 meeting, and he testified that Everson was
not present. Everson's opinion that an agreement was
reached thus could not be based on his own personal
perception of the meeting. Everson and Ragain's lay witness
testimony of a breach similarly was not based on personal
perceptions. The District Court thus erred in admitting this
lay witness testimony.
111. LAY WITNESS TESTIMONY REGARDING THE PEACEFUL
REPOSSESSION DOCUMENT
The District Court similarly erred in allowing Wayne
Fitzgerald, a member of the Company's management team, to
testify that Clark signed the peaceful repossession document
in exchange for Clark's release from his personal guaranty.
Fitzgerald based his opinion solely on hearsay statements
made by Clark. Respondent contends that this hearsay
testimony, however, was excepted from the hearsay rule and
thus was properly admissible under Rule 803, M.R.Evid., as a
statement of Clark's state of mind on February 28, 1983.
Rule 803 (3), M.R.Evid., states that the following are
exceptions to the hearsay rule:
A statement of the declarant's
then-existins state of mind, emotion,
; .
sensation, o physical condition.. , - but
not includinu a statement of memorv or
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belief to p o ~
;v - - remembered -
the fact or
blee.
eivd (Emphasis added.)
As stated in the Commission Comments, the hearsay rule would
effectively be destroyed if statements indicating a state of
mind were admissible to infer "the happening of the event
which produced the state of mind." Consequently, such
statements are expressly inadmissible as hearsay under Rule
803 (3), M.R.Evid. Clark's later statement to Fitzgerald of
his belief that he would be released from the guaranty if he
signed the peaceful repossession document similarly may not
be admitted to prove that the Bank did in fact release Clark
from the guaranty.
The testimony of Fitzgerald, as well as of Everson and
Ragain, related to a central issue of the case, namely,
whether the parties reached an agreement and subsequently
breached it. We hold that the admission of this testimony
was erroneous and highly prejudicial to the plaintiff's case.
LV. JURY INSTRUCTIONS ABOUT DAMAGES
Appellant contends that the evidence introduced at
trial was insufficient to warrant a jury instruction on loss
of income, damage to reputation, or emotional distress.
Unquestionably, the jury has a right to hear and decide all
questions of fact. Section 26-1.-202, MCA. However, the
trial judge is the one who must initially decide if a
question of fact exists which warrants a jury instruction.
See Ru1.e 51, M.R.Civ.P. If an~7evidence exists in the record
to warrant an instruction, the district court must offer a
jury instruction on the issue. E.g., State v. Grant (Mont.
1986), 717 P.2d 562, 569, 43 St.Rep. 685, 692, citing State
v. Buckley (1976), 171 Mont. 238, 242, 557 P . 2 d 283, 285.
A. LOST PROFITS AND REPTJTATION DAMAGES
Generally, a court should instruct a jury about damages
resulting from lost income only if the record reveals some
evidence that a wrongful act of one party caused the lost
income. 2 M. Minzer, Damages - -
in Tort Actions 5 10.11 (1988);
see generally Western Union Telegraph Co. v. Hall (1888), 124
U.S. 444, 8 S.Ct. 577, 31 1J.Ed. 479. In the present case,
the defendant alleged that the Bank's filing of this lawsuit
cost him his position as a board member of First Interstate
Rank-Billings, a position netting Clark an income of $5,000-
$6,000 per year. The defendant also alleged that his
reputation was damaged by the filed lawsuit. Even assuming
arguendo that the Bank's action in filing the instant suit
led to Clark's lost income and damaged reputation, Clark
still had to introduce some evidence indicating that the
Bank ' s action was wrongful. Without such evidence, the
defendant is not entitled to any recovery and the jury is not
entitled to even consider the issue. No such evidence was
introduced showing that the filing of the suit was wrongful.
Utilization of the legal process to resolve a good
faith controversy cannot constitute a basis for damages.
Heine v. Seibert (Mont. 1985), 703 P.2d 865, 868, 42 St.Rep.
1152, 1156. Resort to the legal process for resolution of a
controversy is wrongful only upon proof that prosecution of
the action was malicious. A charge of malicious prosecution
in turn requires some evidence of each of the following basic
elements:
1. A judicial proceeding commenced against the partv
alleging malicious prosecution;
2. the other party's responsibility for instigating
the proceeding;
3. a want of probable cause for the other party's
action;
4. the existence of malice as the motivator behind the
other party's action;
5. the termination of the proceeding in favor of the
alleqing party; and
6. damages suffered by the party alleging malicious
prosecution. McGuire v. Armitage (1979), 184 Mont. 407, 410,
603 P.2d 253, 255.
The fifth requirement of the termination of a judicial
proceeding in favor of the party alleging mal.i.cious
prosecution:
[ N l ecessarily implies that an action for
malicious prosecution may not be asserted
by way of a cross complaint or
counterclaim in the original proceeding.
McGuire, 603 P.2d at 255, citing Baker v. Littman (Cal.
1956), 292 P.2d 595. Yet, the defendant attempted to do just
that in this case. Defendant's assertion, that he was
entitled to jury instructions and damages for the lost income
and damaged reputation allegedly resulting from the Bank's
filed lawsuit, necessarily charged the Bank with wrongful
prosecution of this case. The defendant, however, failed to
introduce any evidence of a prior judicial proceeding
terminated in his favor. He erroneously asserted his claim
to a jury instruction for such damages by way of a
countercl-aim. Additionally, the defendant failed to
introduce any evidence of malice or lack of probable cause.
This lack of evidence of three of the kel~ elements for a
prima facie case of malicious prosecution, and thus of any
wrongful action bv the plaintiff in filing this action,
undermined the defendant's assertion that he was entitled to
a jury instruction on damages for lost income and a damaged
reputation. Accordingly, we hold that the District Court
erred in submitting an instruction on these damages to the
jury.
B. DAMAGES FOR EMOTIONAL DISTRESS
By statute, an injured party may recover an amount in
damages which will compensate him for all the detriment,
including emotional distress, proximately caused by the other
party's tortious conduct. Section 27-1-317, MCA; Gibson v.
Western Fire Ins. Co. (1984), 210 Mont. 267, 291, 682 P.?d
725, 738. However, the injured party must introduce some
evidence of the alleged damages from emotional distress
before a jury is entitled to decide the issue of compensation
for such damage. A jury instruction about damages for
emotional distress is warranted, in the absence of any
physical or mental injury, only if the defendant introduced
some proof that plaintiff's tortious conduct resulted in "a
substantial invasion of a legally protected interest and
... [caused] a significant impact on the person. " Johnson
v. Supersave Markets, Inc. (Mont. 1984), 686 P.2d 209, 213,
41 St.Rep. 1495, 1500; Noonan v. First Bank Butte (Mont.
1987), 740 P.2d 631, 635, 44 St.Rep. 1124, 1129.
We note that the interest legally protected by this
cause of action is the interest in freedom from emotional
distress. See Restatement (Second) of Torts S 46 comment b
(1965). However, because we do not live in "an 'eggshell
society' in which every harm ... gives rise to a right of
action for mental distress," this Court has held that a cause
of action arises only if the invasion of this interest is
substantial and the impact significant. Johnson, 6 8 6 P.2d at
213. The requirement of a significant impact indicates that
the emotional distress suffered by the victim must be severe.
This interpretation is in accord with the following portion
of the Restatement (Second) of Torts S 4 6 comment -j ( 1 9 6 5 ) ,
which we adopt and which states:
Emotional distress passes under various
names, such as mental suffering, mental
anguish, mental or nervous shock, or the
like. It includes all highly unpleasant
mental reactions, such as fright, horror,
grief, shame, humiliation, embarrassment,
anger, chagrin, disappointment, worry,
and nausea. It is only where it is
extreme that the liability arises.
Complete emotional tranquility is seldom
attainable in this world, and some degree
of transient and trivial emotional
distress is a part of the price of living
among people. The law intervenes only
where the distress inflicted is so severe
that no reasonable person could be
expected to endure it. The intensity and
the duration of the distress are factors
to be considered in determining its
severity .. . The distress must be
reasonable and justified under the
circumstances, and there is no liability
where the plaintiff has suffered
exaggerated and unreasonable emotional
distress, unless it results from a
peculiar susceptibility to such distress
of which the actor has knowledge .
. It .
is for the court to determine whether on
the evidence severe emotional distress
can be found; it is for the jury to
determine whether, on the evidence, it
has in fact existed.
See also Buckley v. Trenton Savings Fund (N.J. 1988), 544
A.2d 857 (holding that loss of sleep, aggravation,
embarrassment, some headaches and nervous tension were
insufficient to establish severe emotional distress);
Bethards v. Shivvers, Inc. (Iowa 1984), 355 N.W.2d 39
(holding that lost sleep, anger, quivering when the contested
subject arose, and worry over what other people would think
did not rise to the level of severe emotional distress).
A district court has the duty of determining the
threshold question of whether any proof of such severe
emotional distress exists sufficient to raise a question of
fact for the jury. Absent any such proof, a jury instruction
on damages for emotional distress is improper. E.9- I
Richardson v. Fairbanks North Star Borough (Alaska 1985), 705
P.2d 454, 456; Shivvers, 355 N.W.2d at 44.
A jury instruction on emotional distress damages was
improper in this case as the evidence introduced during the
District Court trial was insufficient to raise a question of
fact about the existence of severe emotional distress.
Defendant alleged only that he felt bad, lost sleep, and
became withdrawn as a result of the Bank's failure to release
him from his personal guaranty in violation of the alleged
agreement between the parties. We therefore hold that the
District Court erred in submitting the issue of emotional
distress damages to the jury.
Our endorsement of the severe emotional distress
standard found in the Restatement (Second) of Torts does not
amount to a sudden departure from prior law regarding
emotional distress damages. Severe emotional distress is
only a new interpretation of the existing "significant
impact" requirement. We therefore need not remand the case
for a new trial on the issue of emotional distress damaqes
under this new interpretation. The fact a party may he taken
by surprise by the ruling of a reviewing court does not
justify a remand when the reviewing court's ruling, even if
it is on an issue of first impression, does not constitute a
sudden departure from the established rule of law. E.g.,
Brodie v. Hawaii Automotive Retail Gasoline Dealers Ass'n
(Hawaii 1982), 655 P.2d 863, 864. Clark had a full and fair
opportunity to introduce all evidence of emotional distress
damages during the District Court trial. This Court has
previously held that a failure of proof after a fair
opportunity to introduce all evidence will be attributed to
an inability to prove such, rather than to any neglect by
counsel. State ex rel. La France Copper Co. v. District
Court (1909), 40 Mont. 206, 208, 105 P. 721, 733; Harrington
v. Montgomery Drug Co. (1941), 111 Mont. 564, 567, 111 P.2d
808, 810. We thus hold that Clark's failure to introduce
facts indicating severe emotional distress was due to his
inabilitv to do so, and a new trial on the issue thus would
be futile, as well as contrary to the foregoing rule of law.
V. JURY INSTRUCTION ON FIDIJCIARY RELATIONSHIP
Appellant also contends that the court erred in
submitting a jury instruction on fiduciary relationships as
the evidence introduced at trial failed to warrant such an
instruction. Generally, a court errs in offering a proposed
instruction if the subject matter of the instruction is not
supported by the evidence introduced at trial. See generally
Associated Agency of Bozeman, Inc. v. Pasha (Mont. 1981), 625
P.2d 38, 42, 38 St.Rep. 344, 348 (holding that it was not
error to refuse to offer a proposed instruction when the
evidence failed to support it). Consequently, we will
determine that the District Court erred in offering an
instruction on fiduciary relationships only if the record
indicates a lack of evidence of this type of a relationship.
A fiduciary relationship exists between a bank and its
creditor only if special circumstances indicate exclusive and
repeated dealings with the Bank. Pulse v. North American
Land Title Co. of Montana (Mont. 1985), 707 P.2d 1105, 42
St.Rep. 1578. This Court has recently interpreted the Pulse
case as requiring a bank to act as a financial advisor in
some capacity, other than that common in the usual
arms-length debtor/creditor relationship, in addition to
requiring a long history of dealings with the bank, to
establish a fiduciary relationship. Simmons v. Jenkins
(Mont. 1988), 750 P.2d 1067, 1070, 45 St.Rep. 328, 331.
Evidence introduced at trial attested to the long
standing business relationship between the Company and the
Bank. However, no evidence was introduced indicating that
the Bank had acted as a financial advisor to the Company in a
manner other than that common in the usual arms-length
dehtor/creditor relationship. Rather, the Company relied
upon its own management team to make its financial decisions.
An independent firm of attorneys routinely advised and
represented the Company. Attorneys Ragain and/or Everson.
were present during the final negotiation meetings with the
Bank; evidence of the long-standing friendship between Clark
and the Bank president was insufficient to show that the
Company relied upon the Bank as a financial advisor in such a
manner as mentioned above. We therefore hold that the
defendant failed to introduce any evidence showing that the
parties had other than the arms-length debtor/creditor
relationship which generally exists between a bank and its
creditor. See Deist v. Wachholz (1984), ? 0 8 Mont. 3 0 7 , ?16,
678 P.2d 188, 193. Consequently, the court erred in
submitting a fiduciary relationship instruction to the jurv.
VI. SUFFICIENCY OF THE EVIDENCE TO SUPPORT THE VERDICT
Appellant initially raised the issue of whether the
court erred in instructing the jury about the implied
covenant of good faith and fair dealing and constructive
fraud. The discussion in appellant's brief, however,
centered wholly on whether the evidence supported the jury
verdict on these two issues. We need not rule on the issue
of whether the evidence supported the jury's verdict of
breach of the implied covenant of good faith and constructive
fraud before dismissing this case. Even if these claims were
deemed to have merit, Clark would only be entitled to nominal
damages. We have held that Clark is not entitled to a
recovery under any of the damage theories presented (which
included damages for lost profits, damaged reputation and
emotional distress), and a party may not raise new issues on
retrial. This Court will not grant a new trial to permit a
party to obtain only such an award of nominal damages.
Bogovich v. Scandrett ( 1 9 4 5 ) , 1-17 Mont. 341, 350, 158 P.2d
637, 641. We therefore reverse the judgment of the District
Court, in accordance with the foreg
the court to dismiss this case.
We concur:
fs,
The ~ o n o r a m 'e r a n k T.- H a s w e l l ,
F
r e t i r e d C h i e f ~ u s t i c e ,s i t t i n g
f o r M r . J u s t i c e ,Tohn C . Sheehy