Thornton v. Songstad

NO. 93-236
IN THE SUPREME COURT OF THE STATE OF MONTANA
1994

DENNIS THORNTON,
Plaintiff/Appellant,
-v-
SUSAN NISWANGER SONGSTAD,
SALLY NISWANGER, MICHELLE
NISWANGER LYTLE, RITA LAWSON,
and NORWEST CAPITAL MANAGEMENT
TRUST CO., f/k/a/ UNION
BANK AND TRUST CO., as Trustee,
Defendants/Respondents.

APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Michael H. Keedy, Judge presiding.

COUNSEL OF RECORD:
For Appellant:
Chris Christensen, Kalispell, Montana
For Respondents:
James C. Bartlett, Hash, O'Brien & Bartlett,
Kalispell, Montana

Submitted on Briefs: December 16, 1993
Decided: February 15, 1994
Filed:
Justice James c. Nelson delivered the Opinion of the Court.

This is an appeal from an Eleventh Judicial District Court,

Flathead County order, granting the defendants' motion for summary

judgment. We affirm.

The sole issue on appeal is whether the District Court erred

in granting the defendants' motion for summary judgment.

According to Plaintiff/Appellant Dennis Thornton's

(Thornton's) deposition, he became interested in the property at
issue (160 acres - up Ashley Lake Road in Kalispell) in April of

1990. The property was shown to Thornton by Dave Bailey (Bailey),

a real estate agent for Glacier Realty, who also stated that he

could sell the property because it was listed through the Multiple

Listing Service. The property was owned by Norwest Capital

Management and Trust Company (Norwest), Trustee, as to an undivided
one-half and by Susan Niswanger Songstad, Sally Niswanger, Michelle

Niswanger Lytle and Rita Lawson (in undivided fractional shares) as

to the remaining undivided one-half.

Thornton sought out American Timber and proposed that he

borrow the money to purchase the land from that company and that he
deliver the timber to American in order to pay off the loan. When

Thornton secured the loan commitment for the property, he went to

Bailey's office to make an offer of $60,000. Bailey handwrote an

offer in the form of a proposed buy/sell agreement and told

Thornton that he would have to put up $500 in earnest money. The

offer also provided that the seller or agent would point out the

property corners to buyer's satisfaction and that the seller would

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demonstrate that roadway and utility easements to the property
existed. The offer was dated April 27, 1990. The offer was given
to Susan Niswanger Songstad (Songstad), one of the defendant/owners
of the land.
The offer was returned with some sections deleted and new
sections added, making a counteroffer. Songstad wanted $1,500
earnest money to which Thornton agreed if the listing agent would
take him to the property to ensure that he had been viewing the
correct property. Thornton signed the counteroffer on May 7, 1990
and closing was set for May 27, 1990. The sellers did not,
however, appear at the closing. Accordingly, the buy/sell
agreement/offer was rewritten on May 30, 1990. The proposed May 30
offer incorporated the terms of the previous offer along with some
new terms and was intended to supersede all prior agreements.
Thornton stated in his deposition that he wanted all the
signatures of the people involved on the May 30 agreement. At the
time Glacier Realty typed the May 30 agreement, Thornton gave
Bailey a check for $1,500. Bailey telephoned Songstad in
Washington, read the new agreement to her and, when she had agreed
to all the new terms, Thornton signed the agreement. The agreement
was then sent to Songstad for the signatures of all the owners.
The agreement was signed by Susan Niswanger Songstad, Sally
Niswanger, Rita Lawson and Michelle Niswanger Lytle, four of the
five co-owners of the 160 acres. Norwest did not sign the
agreement.
For a second time, the land sale did not close. Thornton then

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filed a six-count complaint against the defendants, alleging breach
of the May 30 buy/sell agreement and seeking specific performance
and damages against the four women who signed the agreement and
against Norwest. In due course, the defendants filed a motion for
summary judgment, which the District Court granted on February 10,
1993.
"Under Rule 56(c), M.R.Civ.P., summary judgment is proper if
the record discloses no genuine issues of material fact, and the
moving party is entitled to judgment as a matter of law." Lutey
Construction - The Craftsman v. State (Mont. 1993), 851 P.2d 1037,
1038, 50 St.Rep. 321, 321-22, citing Kaseta v. N. Western Agency of
Gr. Falls (1992), 252 Mont. 135, 138, 827 P.2d 804, 806. The
standard that this Court, as an appellate court, applies in
reviewing a grant of summary judgment is the same as that initially
utilized by the trial court under Rule 56, M.R.Civ.P. McCracken v.
City of Chinook (1990), 242 Mont. 21, 24, 788 P.2d 892, 894.
Thornton offered to purchase 160 acres of land from the
defendants. However, only four of the five co-owners signed the
buy/sell agreement. Thornton claims that the four owners who
signed the buy/sell agreement can bind the fifth co-owner, and he
demands specific performance - the sale of the entire 100%
ownership interest in the 160 acres. The defendants contend that
since all the owners of the real property did not sign the buy/sell
agreement, a valid contract does not exist, and Thornton cannot
compel the defendants to sell the property to him by the remedy of
specific performance. The District Court agreed with the

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defendants.
DISCUSSION
It is axiomatic that a purchaser may not be granted the remedy

of specific performance in connection with the claimed breach of a
purported agreement for the sale of land unless it is first
established that there is a valid contract in existence. In
Schwedes v. Romain (1978), 179 Mont. 466, 587 P.2d 388, we cited
with approval the general rule that:
[w]hile it is universally recognized that equitable
relief by way of specific performance does not follow as
a matter of course by establishing the existence and
validity of the contract, the performance of which is
sought, the existence of a valid contract is essential to
the remedy of specific performance. In order for equity
to decree specific performance, it is necessary that
there be in existence and in effect a contract valid at
law and binding upon the parties against whom performance
is sought, for specific performance is never applicable
where there is no obligation to perform. (Citation
omitted.

Schwedes, 587 P.2d at 391.
It is black-letter law that, essential to the existence of a
contract, there be:
(1) identifiable parties capable of contracting;
(2) their consent;
(3) a lawful object: and
(4) a sufficient cause or consideration.
Section 28-2-102, MCA. The element that defendants contend is
absent here is consent. The Agreement to Sell and Purchase dated
May 30, 1990 (the buy/sell agreement), contains the signature of
the four women co-owners but does not contain the signature of
Norwest, owner of the other 50% of the 160-acre tract.
If Thornton's offer was to purchase 100% ownership of the land
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but owners of only 50% of the ownership interest of the land signed
the contract and thus accepted his offer, then a valid contract did
not come into existence because Thornton did not have the consent
of all the owners of the title to the property which was the object
of the contract.
In Weigand v. Mt. Land & Real Estate Inv., Inc. (1986), 223
Mont. 137, 724 P.2d 194, we held that "[t]he Earnest Money Receipt
and Agreement to Sell and Purchase [was] not a legally enforceable
contract because sellers failed to sign it," noting that one of the
essential elements for a valid contract required by g 28-2-102,
MCA, -- consent -- was lacking. "Had sellers consented to the
Agreement, they needed only to sign it. They did not. There is
nothing in the record to show they consented to the Agreement."
Weisand, 724 P.2d at 196.
Accordingly, we must first determine the percentage of
ownership interest for which Thornton was contracting -- 100%
including the interest of Norwest or simply the 50% interest owned
by the four co-owners who signed the May 30 buy/sell agreement.
Thornton stated numerous times in his deposition that he
wanted the signatures of u the owners of the property. He stated
that he was "under the impression on the 27th of May that [he] was
going to be the owner of the property."
In his deposition Thornton testified:

Q. And there's no doubt in your mind that you gave
specific and explicit instructions to Mr. Bailey that
your offer needed to be signed by everyone who owned the
property and that he understood that?
A. Yes, I believe that is the way it was.
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Additionally, he stated:
A. I had told Dave Bailey that I wanted all of the
signatures of the owners of the property on the new
buy/sell agreement.

Q. What did he say in response?

A. Well, he had talked to them on the phone, and I had
told him that I wanted everybody to sign that and that I
was going to make a new -- that I would make a new offer
and that I wanted all the signatures on it. If I
remember right, after we had it typed up, Dave Bailey
called Susan Songstad and read it to her over the phone.

. . .

Q. But you explicitly told him you wanted all the owners
to sign the buy/sell?
A. YS, I did.

Thornton wanted to purchase the land so he could log it. That

would have been impossible without complete ownership of 100% of
the title to the property, or, at least, some authority from

Norwest, absent its agreement to sell. See 93 70-16-107 and 108,

MCA.

Further evidence that Thornton was contracting for 100% of the

ownership interest in the subject property is derived from the fact

that he was aware of Norwest's undivided 50% ownership interest

before he signed the May 30 buy/sell agreement. During his

deposition, Thornton stated that he received the commitment for

title insurance "somewhere around the 15th of May" and "learned

that title was held by more than Susan Songstad, the only

individual [he] had seen paperwork on...." The commitment for

title insurance states that:

Title to the Fee Simple estate or interest in said land
is at the effective date hereof vested in:

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 NORWEST CAPITAL MANAGEMENT AND TRUST COMPANY, formerly
the UNION BANK AND TRUST COMPANY, as Trustee, as to an
undivided l/2 interest.

SALLY NISWANGER, as to an undivided l/12 interest.
SUSAN NISWANGER SONGSTAD, as to an undivided l/12
interest.
MICHELLE NISWANGER LYTLE, as to an undivided l/12
interest.
RITA LAWSON, as to an undivided l/4 interest.

Thornton's deposition reveals that he knew or should have known

that Norwest was one of the co-owners of the land. However,
Norwest did not sign the buy/sell agreement, and Thornton did not

attempt to obtain its signature.

It is generally conceded that when someone purchases land
under circumstances which suggest outstanding equities in
third parties, there is imposed on the purchaser a duty
to make a reasonable investigation as to the existence of
outstanding claims against the property, and one who
fails to use due diligence to ascertain the facts within
his reach is not an innocent purchaser.

Rose v. Castle Mountain Ranch, Inc. (1981), 193 Mont. 209, 218, 631

P.2d 680, 685. Thornton did not use reasonable diligence and

investigate to determine who the co-owners of the land were and

ensure that all of the co-owners signed the buy/sell agreement.
Finally, the allegations by Thornton in his complaint lead

inescapably to the conclusion that his intention was to purchase

100% of the ownership interest in the property, and nothing less

than 100%. The general rule, applicable here, and in accord with

our decision in Weiqand, is set forth at 71 Am. Jur. 2d, Specific
Performance 9 175 as follows:

. . . In many cases the negotiations and the contract
prepared for execution are construed as contemplating a
joint sale only, or at least conditioned on all nominal
vendors becoming bound. Where such is the construction
it is considered that [when one or more vendors fail or

8
 refuse to sign] no contract of sale came into existence,
in which event, or course, the vendee cannot obtain a
decree of specific performance against any of the signers
nor recover damages as for the breach of a sales
contract.

Thornton, nevertheless, argues that his oral requests to have

a& of the co-owners sign the buy/sell agreement were superseded by

the written buy/sell agreement itself, which did not make any

provision requiring the signatures of all the owners. Although §

28-2-904, MCA, does provide that any oral negotiations or

stipulations which precede or accompany the execution of the

written instrument are superseded by the written instrument, parol

evidence can be considered if the validity of the agreement is the

matter which is in dispute. Section 28-2-905(1)(b), MCA. Here,

because the essential question is whether the agreement is a valid

contract, parol evidence can be considered. "'[Wlhere the validity

of the agreement is the fact in dispute,' par01 evidence is

admissible, not to vary the terms of the instrument, but to show

that what appears on its face as a valid, binding contract is, in

fact, no such thing." Smith v. Fergus County (1934), 98 Mont. 377,

390, 39 P.2d 193, 197.

Finally, Thornton states that he was under the impression that

the four women co-owners could bind the trust to the buy/sell

agreement, and that the manager of the trust told him that he [the

manager] would go along with any plan for the land the four women

decided. Thornton argues that those are material facts in dispute

which defeat summary judgment.

In support of their motion for summary judgment, the

9
defendants established: (1) that there was a written offer signed
by Thornton and accepted by the four women for the sale and
purchase of the 160 acres: (2) that the four women owned an
undivided 50% interest and that Norwest owned the remaining
undivided 50% interest as trustee: (3) that Thornton knew before
signing the buy/sell agreement that there were five undivided
owners and that to obtain 100% of the ownership interest he would
have to have all five co-owners sign the agreement; and (4) that
Thornton was contracting for 100% ownership interest in the
property.
Having established those material facts, the burden shifted to
Thornton to raise his claimed material factual issue -- namely that
Norwest, as trustee, was controlled by the four women co-owners and
that they could compel Norwest to sign the buy/sell agreement. That
was his theory: proving that theory would benefit his case and
defeat the defendants' motion for summary judgment; and,
accordingly, he had the affirmative duty to bring before the court
substantial evidence and specific material facts supporting his
theory by filing affidavits or through sworn deposition testimony
or interrogatory answers in the record. Gross v. Myers (1987), 229
Mont. 509, 514-15, 748 P.2d 459, 462-63.
Fatal to Thornton's claim in that regard, however, is his
failure to adequately raise, in opposition to defendants' motion
for summary judgment, any disputed material fact as to the four
women co-owners' exercise of control over the trust. "[W]hile the
initial burden of proof [on a summary judgment motion] must attach

10
to the movant, that burden shifts where the record discloses no

genuine issue of material fact. Under these circumstances, the

party opposing the motion must come forward with substantial

evidence raising the issue." (Citations omitted. Emphasis added.)

Downs v. Smyk (1979), 185 Mont. 16, 21, 604 P.2d 307, 310.

"Further, the non-moving party must set forth specific facts and

cannot simply rely upon their pleadings, nor upon speculative,

fanciful, or conclusorv statements." (Citations omitted. Emphasis

added.) Thomas v. Hale (1990), 246 Mont. 64, 67, 802 P.2d 1255,

1257.

In the instant case, Thornton did nothing more than offer his

own conclusory hearsay statements from his July 29, 1992 affidavit

claiming that the trust manager told him that he [the manager]

would agree to any decision of the four women co-owners. His

assertion that the manager would follow any decision of the four

women co-owners is not otherwise supported in the record. Kronen

v. Richter (1984), 211 Mont. 208, 213, 683 P.2d 1315, 1318.

Rule 56(e) M.R.Civ.P., provides in pertinent part that:

Supporting and opposing affidavits shall be made on
personal knowledge, shall set forth such facts as would
be admissible in evidence, and shall show affirmatively
that the affiant is competent to testify to the matters
stated therein. . . .

Thornton's affidavit dated July 29, 1992, filed in opposition to

defendants' motion for summary judgment consists almost entirely of

statements allegedly made to Thornton by other persons regarding

Susan Niswanger Songstad's supposed authority to sell the property

and the four women co-owners' control over the trust. Those

11
statements in Thornton's affidavit are not of his own personal
knowledge and fit within the definition of hearsay -- statements,

other than ones made by the declarant while testifying at the trial

or hearing, offered in evidence to prove the truth of the matters

asserted. Rule 801(c), M.R.Evid.

In Eberlv. Scofield (1990), 244 Mont. 515, 519, 798 P.2d 536,

538, we held that it was proper for the district court to strike

the affidavit of a party filed in a summary judgment proceeding,
noting that the statements made in the affidavit which related to

the issue on summary judgment were not of the affiant's personal

knowledge but were all hearsay.
While the statements attributed by Thornton to non-parties are

clearly hearsay and, therefore, inadmissible under Eberl, the

statements in Thornton's affidavit attributed to the trust manager

might, nevertheless, still be admissible as an exception to the

hearsay rule inasmuch as the trust was a party defendant to the

action. With respect to the trust, Thornton states as follows in

his affidavit:

. . .

5. After filing this lawsuit and being informed that
Norwest Capital Management and Trust Co. was not willing
to sell the property I found out the individual's name
and telephone number who was managing the trust interests
of Susan Niswanger Songstad, Sally Niswanger, Michelle
Niswanger Lytle, and Rita Lawson, (hereafter referred to
as the Niswangers).

6. I contacted the individual identified as the manager
of the Niswangers trust interests. Upon questioning him
about the sale of the property he informed me that Susan
Niswanger Songstad was in charge of the property and that
whatever the Niswangers agreed to do with the property
was fine with him as manager of the trust.

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 7. Subsequently, I made contacts with this trust
manager concerning terms to settle this matter but was
always told by him to contact Susan Niswanger Songstad,
that she was in charge of selling the property, that he
only did what she told him to do.

The statements purportedly made by the trust manager appear to be

admissions of a party-opponent, and therefore not considered

hearsay under Rule 801(d)(2), M.R.Evid., which states that a

statement is not hearsay if "[t]he statement is offered against a

party and is...(D) a statement by the party's agent or servant

concerning a matter within the scope of the agency or employment,

made during the existence of that relationship."
However, there is nothing in Thornton's affidavit or in the

record identifying the trust manager or demonstrating that the

person Thornton spoke with had the authority as an agent or

employee of the trust to make binding statements about the trust or

concerning the beneficiaries' control over the trust's management

of the property.
The court in Passovoy v. Nordstrom, Inc. (Wash. 1988), 758

P.2d 524, 527, dealt with an almost identical issue as that posed

here. There the appellate court held that the trial court properly

struck as hearsay and not as admissions of a party-opponent, that

portion of a summary judgment affidavit which contained statements

attributed by the affiant to the defendant-store's employee where

there was neither independent verification of the existence of the

agency between the party opponent and the employee nor independent

evidence as to the scope of the agency relationship. The

Washington court held that the fact and scope of the agency could

13
not be proved from the hearsay statements alone. PassovoY, 758
P.2d at 528.
Similarly, here, Thornton's affidavit fails to lay any
foundation for the use of the trust manager's statements as
substantive evidence. The affidavit contains no statements to
establish the actual identity of the trust manager or to establish
his authority to speak on behalf of the trust or its beneficiaries.
Thornton provided no more than his own bare assertion that he spoke
with the trust manager and that the manager stated that whatever
the four women "agreed to do with the property was fine with him."
The testimony provided in Thornton's affidavit does not provide a
sufficient indicia of credibility: "independent proof of the
existence of the agency and its scope must be shown." Passovov,
758 P.2d at 528. Clearly, the information concerning the manager's
statements found in Thornton's affidavit does not qualify as a
statement of a party-opponent, and therefore consists of hearsay to
which Thornton himself was not competent to testify. Accordingly,
we conclude that Thornton's affidavit does not meet the
requirements of Rule 56(e), M.R.Civ.P., and fails to properly raise
the disputed issues of material fact that he claims are critical to
his case.
Thornton could have deposed the manager of the trust or he
could have filed an affidavit from the manager establishing his
authority and stating that he [the manager] would agree with any
decision made by the four women co-owners. He did neither.
Thornton produced nothing in writing whereby Norwest authorized any

14
of the four women co-owners to act on its behalf or to sell its
interest in the property, or to bind the trust to the buy/sell.
See 55 28-2-903(1)(d) and 28-10-203, MCA. Thornton did not offer
the trust instrument of which the four women co-owners were
purportedly the beneficiaries which might have conceivably showed
their power or control over the trust.
While Thornton offered evidence of other transactions between
the trust and the four women co-owners, that evidence did nothing
in the way of proving the fact of their control over the trust in
the land sale at issue here and which Thornton claimed was material
and dispositive of defendants' motion for summary judgment.
In short, Thornton simply did not come forward with any
substantial evidence that would raise a genuine issue of material
fact as to the four women co-owners' control over the trust.
Kronen, 683 P.2d at 1318. See also -I 604 P.2d at 310. If
Downs
Thornton possessed such evidence, it was his burden to produce
it. He did not, and his hearsay affidavit statements were
inadequate to carry his burden.
Ultimately, the defendants carried their burden to show that
there were no genuine issues of material fact, and, when the burden
shifted to Thornton, he did not come forward with specific facts
and substantial evidence to support his theory of the case. The
District Court correctly concluded there was no genuine issue of
material fact concerning the four women's control over the trust.
Kronen, 683 P.2d at 1318. As we have previously stated,
[flailure of the party opposing the motion to either
raise or demonstrate the existence of a genuine issue of
15
 material fact, or to demonstrate that the legal issue
should not be determined in favor of the movant, is
evidence that the party's burden was not carried.
Summary judgment is then proper, the court being under no
duty to anticipate proof to establish a material and
substantial issue of fact.

Taylor v. Anaconda Federal Credit Union (1976), 170 Mont. 51, 57,

550 P.2d 151, 154.

The facts presented to the District Court demonstrate that

Thornton was contracting for 100% of the title to the land at issue

and that he knew that he must obtain the signature of the trust or

prove that the trust was under the control of the four other co-

owners. Thornton failed in his burden to establish material

disputed facts, and accordingly, we hold that the District Court
was correct in concluding that no contract was in existence, and
that defendants were entitled, as a matter of law, to summary

judgment in their favor.

Affirmed.

We Concur:
&k Justice

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