No. 90-083
IN THE SUPREME COURT OF THE STATE OF MONTANA
FAY LARSON,
Plaintiff and Respondent,
-v-
JACK UNDEM and LYDIA UNDEM,
Defendants and Appellants.
. r'
APPEAL FROM: District Court of the Fourth Judicial ~ i s t r i c E
In and for the County of Missoula, r4f-
. I .
< 1
0
The Honorable Jack L. Green, Judge presifing.
COUNSEL OF RECORD:
For Appellant:
Raymond P. Tipp; Tipp, Frizzell & Buley; Missoula,
Montana
For Respondent:
Noel K. Larrivee; Larrivee Law Offices; Missoula,
Montana
Submitted on Briefs: August 23, 1990
Decided: November 8, 1990
Filed:
Justice Fred J. Weber delivered the Opinion of the Court.
This is an action for breach of contract covering the sale of
real estate. Defendants appeal from the judgment entered by the
District Court for the Fourth Judicial District, Missoula County,
granting plaintiff specific performance of the contract, surveying
costs and attorney fees and emotional distress damages. We reverse
the award of emotional distress damages and otherwise affirm the
District Court.
The issues for our consideration are:
1. Whether Larsongs claim is barred by the statute of
limitations or laches?
2. Whether the District Court erred in awarding Larson
emotional distress damages?
3. Whether the District Court erred in granting Larson
specific performance of the contract?
In a bench trial, the District Court found the following facts
which are supported by substantial evidence in the record: In June
of 1972, plaintiff (Larson) entered into a written contract with
defendants (Undems) whereby Larson sold Undems a parcel of land
reserving seven acres of the parcel for Larsong personal use. The
s
contract for deed and other necessary documents were prepared by
Larsongs attorney. Although Mr. Undem is not a licensed surveyor,
the parties agreed that Mr. Undem would prepare the property
description including the description of the seven acres reserved
by Larson.
The parties together examined the land to be sold including
the boundaries of the tract which Larson desired to reserve for
herself. Mr. Undem then prepared the first description which was
used in the preparation of the contract and deed. The first
description was inaccurate. The description of the seven acre
reservation contained land which was a part of the Burlington
Northern Railroad (BN) right-of-way, and the metes and bounds
description did not close. The District Court specifically found:
"The legal description contained in the real property transfer
documents . . . was supplied by Defendant Jack Undeml1 and I1Larson
relied upon the legal description provided by Undem when she
executed the contract documents and Warranty Deed1'.
After the execution of the contract and deed, Larson
discovered that the legal description was incorrect, and requested
that Mr. Undem prepare a proper description. Mr. Undem
acknowledged that the first description was incorrect. Mr. Undem
obtained the help of an engineer to prepare the second description
of the land. They referred to public records, Montana Highway
plats and BN plats. They prepared a second description and made
a diagram of that description, and delivered the same to Larson and
her attorney. At that time none of the parties realized that the
second description was incorrect because it still included a
portion of the BN right-of-way and failed to accurately describe
the reserved seven acre parcel.
In April or May of 1973, Larson and her sons measured the land
and discovered that the second description was inaccurate and did
not encompass the property she reserved. Larson so informed Mr.
Undem. Mr. Undem failed to prepare a third description. The
District Court concluded: I1Larson had at all times relied upon
Undem to pr'ovide a valid legal description for the seven acre
parcel of land which was reserved by her. Undems failure to
provide such a legal descripton .. . constitutes a breach of said
contract."
The contract also provided that Undems were not to sell or
convey the property purchased from Larson without Larsonlswritten
consent. Nonetheless, on October 29, 1984, approximately 26 months
before the last payment was made to Larson, Undems sold and
conveyed the property purchased from Larson to a third party
purchaser (Olsons). Undems did not obtain the required consent
from Larson. In the Olson contract Mr. Undem used the second
description which he knew to be incorrect. The District Court
found that Mr. I1Undemknew that the legal description contained in
[the] contract was inaccurate and invalid and entered into the
third-party contract with [such] knowledge.I1
The last payment on the Larson-Undems contract was made in
December of 1986. The deed was obtained from escrow and recorded
in January, 1987. Several months after receiving the last payment,
Larson hired a surveyor to provide a legal description for the
reserved land, at a cost of $700. In October 1987, Larson filed
suit against Undems requesting specific performance of the
contract; emotional distress damages; and sought to quiet title
against the Olsons for her seven acres. She also requested her
costs and attorney's fees.
The District Court concluded that Undems breached the contract
when they sold the property on October 29, 1984, without first
obtaining the written consent of Larson. The court further found
that the Undems breached the contract when they failed to provide
an accurate legal description of the reserved seven acre tract.
Undems appeal.
I
Whether Larsonrsclaim is barred by the statute of limitations
or laches?
Undems maintain that Larsonrs claims are barred by the statute
of limitations. They raised this issue before the District Court
in a motion for summary judgment. The District Court denied their
motion. They argue that the statute of limitations started to run
in 1973 when Larson discovered that the second legal description
prepared by Mr. Undem was erroneous. They urge that by not
immediately acting upon that discovery she waived any right to
raise the claim later.
An action for breach of a written contract must be brought
within eight years under 5 27-2-202, MCA. A contract for deed has
been construed as a contract in writing to which the eight year
statute applies. Neils v. Deist (1979), 180 Mont. 542, 591 P.2d
652. The eight year statute of limitations begins to run when the
cause of action accrues. McWilliams v. Clem (1987), 228 Mont. 297,
743 P.2d 577. We conclude that the first cause of action accrued
on October 29, 1984, when the Undems contracted with the Olsons to
sell the property purchased from Larson using the second property
description known by the Undems to be inaccurate, and also without
first obtaining the written consent of Larson. We conclude that
the action was brought by Larson within the eight year statute of
limitations.
Undems also argue that Larsonts cause of action was barred by
laches. Laches exists where there has been an unexplainable delay
of such duration or character as to render the enforcement of an
asserted right inequitable, and is appropriate when a party is
actually or presumptively aware of his rights but fails to act.
Sperry v. Montana State Univ. (1989), 239 Mont. 25, 778 P.2d 895;
Smithers v. Hagerman (Mont. 1990), - P . 2 d 1 47 St.Rep. 1483.
Undems sold the property without Larsonts consent in October of
1984. The last payment on the contract was tendered in December
of 1986 and Larson filed suit in October of 1987. We agree with
the District Court conclusion that the facts do not demonstrate an
inequitable delay on the part of Larson.
We affirm the District Court's holding that Larson's claim
was not barred by either the statute of limitations or laches.
I1
Whether the District Court erred in awarding Larson emotional
distress damages?
The District Court awarded Larson $10,000 in emotional
distress damages. Undems maintain that emotional distress damages
are not recoverable in a contract action. They argue that contract
damages allow the injured to receive the benefit of the bargain,
no more, no less. They urge that emotional distress damages are
not damages within the reasonable contemplation of the parties at
the time the contract was entered, and are therefore unrecoverable.
Undems urge that there is not sufficient evidence to support a
claim for emotional distress. They contend the only evidence was
Larsonls testimony that she lost sleep on some nights and was very
upset.
Larson maintains that her repeated attempts to obtain the
correct legal description of the reserved property, and the
subsequent discovery that the property had been sold without her
consent, caused her stress, anxiety and frustration. She contends
that the amount of damages awarded her was reasonable under the
circumstances.
It is important that we distinguish the present emotional
distress claim in a breach of contract action from emotional
distress damage claims in tort actions. Section 27-1-303, MCA,
contains a limitation on damages for breach of obligation. It
states:
27-1-303. Limitation of damages for breach of
obligation. No person can recover a greater amount in
damages for the breach of an obligation than he could
have gained by the full performance thereof on both sides
unless a greater recovery is specified by statute.
By its wording this statute limits the recovery to the amount the
plaintiff could have gained by full performance of the contract.
That rule applies unless there is a greater recovery specified in
some other statute.
section 27-1-311, MCA, sets forth the key provisions with
regard to breach of contract:
27-1-311. Breach of contract. For the breach of
an obligation arising from contract, the measure of
damages, except when otherwise expressly provided by this
code, is the amount which will compensate the party
aggrieved for all the detriment which was proximately
caused thereby or in the ordinary course of things would
be likely to result therefrom. Damages which are not
clearly ascertainable in both their nature and origin
cannot be recovered for a breach of contract.
It is important that we also look at the same time at the damage
section applying to obligations not arising from contract, which
states:
27-1-317. Breach of obligation other than contract.
For the breach of an obligation not arising from contact,
the measure of damages, except where otherwise expressly
provided by this code, is the amount which will
compensate for all the detriment proximately caused
thereby, whether it could have been anticipated or not.
We note that under 5 27-1-317, MCA, for breach of an obligation not
arising from contract, the measure is the amount which will
compensate for all the detriment proximately caused, whether it
could have been anticipated or not. This is the measure of damages
to be used in a tort action. That tort measure of damages is to
be distinguished from the measure under 5 27-1-311, MCA, which
provides that for a breach of contract a party may collect damages
for all the detriment proximately caused thereby (which is similar
to the wording in 5 27-1-317) but contains the additional
limitation that the detriment must in the ordinary course of things
be likely to result therefrom and the damages must be clearly
ascertainable in nature and origin. These code sections were not
discussed in the lower court opinion. We have carefully reviewed
the transcript to determine if there was a basis for emotional
distress damages.
We conclude that the evidence does not show that in the
ordinary course of things, emotional distress damages were likely
to result from the defendant's breach of contract. We further
conclude that the evidence presented fails to establish that the
emotional distress damages were clearly ascertainable in origin.
We hold that the District Court erred in awarding Larson emotional
distress damages.
I11
Whether the District Court erred in granting Larson specific
performance of the contract?
Undems sold their land to Olsons in 1984. Larson did not file
her complaint until 1987. Undems maintain that the District Court
erred in granting specific performance because they cannot transfer
title they no longer have.
Larson maintains that in a contract for deed legal title to
the property remains vested in the sellers. Therefore, Larson
contends that specific performance was proper. We agree.
Specific performance is an equitable remedy and is a matter
of discretion for the District Court. Seifert v. Seifert (1977),
173 Mont. 501, 568 P.2d 155; Myhre v. Myhre (1976), 170 Mont. 410,
554 P.2d 276. Upon reviewing the record, we conclude the District
Court did not abuse its discretion in granting specific
performance. Therefore, we hold that the District Court correctly
granted Larson specific performance.
We reverse the portion of the judgment granting emotional
distress damages to the plaintiff and affirm the balance of the
judgment .
We Concur:
/
i Justices l
IN THE SUPREME COURT OF THE STATE OF MONTANA
No. 90-083
FAY LARSON,
Plaintiff and Respondent,
-v- O R D E
JACK UNDEM and LYDIA UNDEM,
Defendants and Appellants.
The defendants/appellants have filed a petition for rehearing
and plaintiff/respondent has filed a response. After considering
the same, we order that the following change be made in our opinion
in this matter.
Delete the last paragraph on page 4 which reads as follows:
The last payment on the Larson-Undems contract was
made in December of 1986. The deed was obtained from
escrow and recorded in January, 1987. Several months
after receiving the last payment, Larson hired a surveyor
to provide a legal description for the reserved land, at
a cost of $700. In October 1987, Larson filed suit
against Undems requesting specific performance of the
contract; emotional distress damages; and sought to quiet
title against the Olsons for her seven acres. She also
requested her costs and attorney's fees.
The name NUndemsll
should have been used rather than "Olsons."
Replace the last paragraph on page 4 with the following:
The last payment on the Larson-Undems contract was
made in December of 1986. The deed was obtained from
escrow and recorded in January 1987. Several months
after receiving the last payment, Larson hired a surveyor
to provide a legal description for the reserved land, at
a cost of $700. In October 1987, Larson filed suit
against Undems requesting specific performance of the
contract; emotional distress damages; and sought to quiet
title against the Undems for her seven acres. She also
requested her costs and attorney's fees.
In all other respects, our opinion shall remain unchanged.
Petition for is denied.
DATED this