Stanley v. Holms

No

No. 98-119

IN THE SUPREME COURT OF THE STATE OF MONTANA

1999 MT 41

ROY W. STANLEY and CAROL A. STANLEY, individually

and ROY W. STANLEY, CAROL A. STANLEY, LIBBY

STANLEY, HOLLY STANLEY and CARRIE STANLEY

as the assignees of ROY STANLEY CHEVROLET COMPANY,

Plaintiffs and Respondents,

v.

ALLAN G. HOLMS, AGH, INC., a/k/a ALLAN G. HOLMS,

INC., a Washington corporation or any successor, entity or

assignees of the assets of HOLMS MOTORS, INC., and THE

ALLAN G. HOLMS TRUST, Roger Crist, Trustee,

Defendants and Appellants.

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APPEAL FROM: District Court of the Eleventh Judicial District,

In and for the County of Flathead,

The Honorable Katherine R. Curtis, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Lee C. Henning; Henning & Keedy, Kalispell, Montana

Frank B. Morrison; Morrisons, McCarthy & Baraban, Whitefish,

Montana

For Respondents:

Gary R. Christiansen; Warden, Christiansen, Johnson & Berg,

Kalispell, Montana

Submitted on Briefs: February 24, 1999

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Decided: March 12, 1999

Filed:

__________________________________________

Clerk

Justice Karla M. Gray delivered the Opinion of the Court.

¶1. This is an appeal from the Eleventh Judicial District Court, Flathead County.
The District Court granted the plaintiffs' second motion for summary judgment, and
denied the defendants' motion to amend the judgment. The defendants appeal. We
affirm.

¶2. We address the following dispositive issues:

¶3. 1. Did the District Court abuse its discretion when it ruled on the motion for
summary judgment without allowing Holms the opportunity to conduct further
discovery?

¶4. 2. Did the District Court err by failing to consider the second affidavit of Allan
Holms when deciding the motion for summary judgment?

¶5. 3. Do genuine issues of material fact exist concerning fraud and economic duress
which precluded summary judgment on Holms' counterclaims?

FACTUAL AND PROCEDURAL BACKGROUND

¶6. The following facts are taken primarily from the two affidavits of Allan Holms
filed in opposition to the plaintiffs' motion for summary judgment. In 1992, Allan G.
Holms and affiliated entities (collectively, Holms) purchased an automobile
dealership located in Kalispell, Montana, from Roy W. Stanley, Carol A. Stanley and
other assignees of the Roy Stanley Chevrolet Company (collectively, the Stanleys).

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The purchase agreement contained a provision giving Holms the option to purchase
the real property on which the dealership was located. In 1994, Holms and the
Stanleys entered into negotiations to sell the dealership to a third party because
Holms was developing another dealership in Spokane, Washington, and needed cash
from the sale of the Kalispell dealership to fund it.

¶7. Holms received two offers from third parties to purchase the Kalispell dealership.
Pursuant to the first offer, Holms would exercise the option in the 1992 agreement to
purchase the real property underlying the dealership for $1.5 million which by 1994
appraised for $2.45 million. The terms of the first offer allowed Holms to pay the
Stanleys monies owed under the 1992 agreement. Holms received a second offer from
an entity known as the Corwin-Eisinger group. Under the second offer, the Stanleys
would retain ownership of the land, but the purchasers would lease it for 10 years for
an ultimate payment of $1.7 million. This second offer would provide tax advantages
to the Stanleys and the capital needed by Holms to invest in the Spokane dealership.
The Stanleys decided that Holms should sell the dealership to the Corwin-Eisinger
group.

¶8. On September 19, 1994, Holms sent the Stanleys a letter and memorandum,
outlining the terms of the proposed agreement with the Corwin-Eisinger group;
Holms and the Corwin-Eisinger group entered into an Asset Sale Agreement
according to the terms and conditions allegedly agreed to by the Stanleys on
September 23, 1994. The closing date for the sale was set for November 1, 1994.

¶9. Later in the day on September 23, 1994, Holms received a letter from the
Stanleys purporting to clarify the status of Holms' proposal to sell the dealership. In
Holms' view, however, the letter contained significant differences from the prior
agreement, which already had been incorporated into the Asset Sale Agreement.
After receiving the letter, Holms contacted the first prospective purchaser, who
renewed his earlier offer. The Stanleys, however, informed Holms that the dealership
could not be sold under the terms of the first offer, because Holms had defaulted on
the 1992 purchase agreement and, as a result, no longer had the option to purchase
the underlying real property.

¶10. In the meantime, the Stanleys sent the Corwin-Eisinger group a letter dated
September 29, 1994, which purported to outline an agreement between the Stanleys
and the Corwin-Eisinger group. The letter states that it is "a letter of intent, not a

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legal contract, [and] is subject to the approval of all parties, attorneys, General
Motors, GMAC, etc." Holms claims that this letter confirmed the terms of the Asset
Sale Agreement, even though the Stanleys had informed Holms that they were no
longer agreeing to the terms which had been incorporated into that agreement.
Holms also claims that over the next 60 days, the Stanleys took inconsistent positions
between Holms and the Corwin-Eisinger group, in an effort to negotiate more
favorable terms on their own behalf.

¶11. Holms further asserts that, during this time frame, the Stanleys disrupted
Holms' business. For example, Allan Holms' second affidavit states that the Stanleys
publicly disclosed the fact that Holms was in the process of selling the dealership.
They also sent Holms a notice claiming Holms had defaulted on the 1992 purchase
agreement, and sent copies of the default notice to Holms' financing sources and
various automobile manufacturers. Holms testified that this disruption caused
financial loss and resulted in the near cessation of the Kalispell business.

¶12. Eventually, Holms and the Corwin-Eisinger group entered into a final closing
agreement dated November 30, 1994. The Stanleys and other entities such as Like-Nu
corporation, to whom Holms owed certain monies, also signed the agreement. Holms
alleges that the terms of that agreement differed materially from the agreement
entered into with the Stanleys in September of 1994. In particular, the final
agreement included a release waiving "all claims for all damages arising out of acts,
representations, or matters known or unknown each may have against the
other . . . ," except for claims against Holms for monies owed relating to the 1992
purchase of the Kalispell dealership. Holms testified by affidavit that the Stanleys
presented the final agreement containing the release on a take it or leave it basis.
Holms also testified to a shortfall in operating cash exceeding half a million dollars
that would have been obtained had the Stanleys fulfilled their September of 1994
agreement. Ultimately, Holms was not able to make the Spokane dealership a success.

¶13. On August 25, 1995, the Stanleys filed a complaint and, on September 18, 1995,
they filed an amended complaint against Holms to recover monies due pursuant to
various contractual agreements, guarantees, and promissory notes relating to the
1992 purchase of the Kalispell dealership. On December 1, 1995, three days prior to
the deadline for answers to the Stanleys' first discovery requests, Holms' counsel
filed a motion to withdraw. Neither Holms nor counsel filed a response to the
discovery requests. On December 8, 1995, the Stanleys filed a motion for summary

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judgment based primarily on matters deemed admitted by Holms' failure to respond
to the request for admissions.

¶14. Holms' present counsel undertook to represent Holms on January 9, 1996, and,
on January 10, 1996, Holms filed various motions, including a motion to amend to
assert counterclaims against the Stanleys. Holms sought to bring claims for breach of
the implied covenant of good faith and fair dealing, breach of contract, and fraud.
Holms essentially claimed that the Stanleys had entered into an agreement in
September of 1994, but subsequently reneged on that agreement, causing harm. On
January 23, 1996, Holms also served objections and answers to the Stanleys' first
discovery requests. The District Court granted the Stanleys' motion for summary
judgment on April 26, 1996.

¶15. On appeal, this Court reversed and remanded. We directed the District Court to
rule on Holms' motion to amend the pleadings pursuant to the criteria set forth in
Rule 15(a), M.R.Civ.P., and to consider the Stanleys' motion for summary judgment
in light of any amended pleadings the court permitted to be filed, Holms' discovery
responses, and the state of the record at the time the motion for summary judgment
was heard. See Stanley v. Holms (1997), 281 Mont. 329, 340, 934 P.2d 196, 203.

¶16. Following remand, the Stanleys filed a reply to Holms' counterclaims on April
24, 1997, alleging as an affirmative defense that Holms had executed a release
waiving all claims against them. The Stanleys also filed a second motion for summary
judgment on both the amended complaint and the counterclaims. On October 27,
1997, the District Court entered an order granting Holms' motion to amend the
pleadings to assert counterclaims against the Stanleys. The court also granted the
Stanleys' motion for summary judgment on both the amended complaint and on the
counterclaims. The District Court entered judgment in favor of the Stanleys on
October 30, 1997, and on December 30, 1997, denied Holms' motion to amend the
judgment. This appeal followed.

ISSUE ONE

¶17. Did the District Court abuse its discretion when it ruled on the motion for
summary judgment without allowing Holms the opportunity to conduct further
discovery?

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¶18. Holms contends that the motion for summary judgment was premature because
of an inadequate opportunity to conduct discovery. Specifically, the arguments are:
1) there were fewer than 45 days during which the case was not subject to either an
appeal or a dispositive summary judgment motion in which to conduct discovery; 2)
because the District Court simultaneously granted Holms' motion to file the
counterclaims and granted summary judgment on those counterclaims, no adequate
opportunity was allowed to conduct discovery on those claims; and 3) the summary
judgment was premature because the court granted the motion in spite of the
Stanleys' refusal to fully answer requests for production of documents. In the latter
regard, Holms notes that there was a pending motion to compel the Stanleys to
produce documents, after which deposition of various individuals were planned.

¶19. District courts have inherent discretionary power to control discovery. J.L. v.
Kienenberger (1993), 257 Mont. 113, 119, 848 P.2d 472, 476 (citation omitted). This
discretionary power extends to deciding whether to deny or to continue a motion for
summary judgment pursuant to Rule 56(f), M.R.Civ.P., on the basis that the party
opposing the motion needs further discovery. Kienenberger, 257 Mont. at 120, 848
P.2d at 477; Howell v. Glacier General Assur. Co. (1989), 240 Mont. 383, 386, 785
P.2d 1018, 1019, 1020. In urging the court to deny the motion for summary judgment
on the basis that it was premature, Holms' argument was based on the standards set
forth in Rule 56(f), M.R.Civ.P., which provides as follows:

Should it appear from the affidavits of a party opposing the motion that the party cannot
for reasons stated present by affidavit facts essential to justify the party's opposition, the
court may refuse the application for judgment or may order a continuance to permit
affidavits to be obtained or depositions to be taken or discovery to be had or may make
such other order as is just.

This Court has stated that a district court does not abuse its discretion in denying a Rule 56
(f), M.R.Civ.P., motion where the party opposing a motion for summary judgment does
not establish how the proposed discovery could preclude summary judgment.
Kienenberger, 257 Mont. at 120, 848 P.2d at 477; Howell, 240 Mont. at 386, 785 P.2d at
1019, 1020.

¶20. Although Holms has detailed the sequence of events in this case and vigorously
argues that more time was needed to obtain documents and take depositions, neither

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Holms' briefs nor the supporting affidavits in the District Court establish how the
proposed discovery could preclude summary judgment. The only evidence Holms
hoped to obtain was a letter written by the Stanleys to the Corwin-Eisinger group in
September of 1994. However, a copy of that letter was obtained through other means
and attached to Holms' affidavit in opposition to the Stanleys' motion for summary
judgment. Thus, the District Court reviewed the letter in deciding the motion.
Furthermore, Allan Holms testified in two affidavits that the Stanleys had reneged
on commitments they made in September of 1994. Holms fails to explain what new
facts could have been obtained through further discovery which could defeat the
Stanleys' motion.

¶21. We hold that the District Court did not abuse its discretion in conducting the
summary judgment hearing and ruling on the Stanleys' motion without allowing
Holms the opportunity to conduct further discovery.

ISSUE TWO

¶22. Did the District Court err by failing to consider the second affidavit of Allan
Holms when deciding the motion for summary judgment?

¶23. When the Stanleys filed their second motion for summary judgment after
remand from this Court, Allan Holms prepared a second affidavit in opposition to
the motion. Holms contends that the District Court failed to consider this affidavit
and that it erred in failing to do so. In support of the contention that the court failed
to consider the second affidavit, Holms points to the following portion of the District
Court's order:

Concerning the fraud allegation, Plaintiffs have shown, through supporting affidavits and
the release and accompanying documentation, the absence of any genuine issue of
material fact that the release bars the counterclaim. Defendants' responsive affidavit, filed
in connection with the initial motion for summary judgment (the only substantive affidavit
submitted in connection with Defendants' opposition to the renewed motion was a
facsimile of an Allan Holms affidavit, which was not followed by the original within five
(5) business days, or ever, as required by Rule 5, M.R.Civ.P., so it cannot be considered),
sets forth no more than vague, conclusory allegations concerning the fraud.

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¶24. It appears, however, that the District Court did review and consider Allan
Holms' second affidavit. At the hearing on the summary judgment motion, the court
stated: "I have read your briefs; I have read your affidavits, Mr. Henning. I even
read the affidavits I got yesterday afternoon and the exhibits." Furthermore, in its
order denying Holms' post-summary judgment motion to amend the judgment, the
District Court clarified that it had considered the second affidavit:

The Court file does not reflect the original affidavit having been filed until November.
Nonetheless, the Court's Order on the Motion for Summary Judgment makes it clear that
the faxed affidavit of Alan G. Holms was reviewed and considered, and that the Court
found it to be vague and conclusory, while failing to raise any genuine issues of material
fact.

¶25. On this record, we reject Holms' contention that the District Court failed to
evaluate the second affidavit, and therefore we need not address Holms' additional
arguments as to why justice demanded its consideration. We hold that the District
Court did not fail to consider the second affidavit of Allan Holms and, as a result,
that Holms has not established any error in this regard.

ISSUE THREE

¶26. Do genuine issues of material fact exist concerning fraud and economic duress
which precluded summary judgment on Holms' counterclaims?

¶27. Holms does not contest the allegations in the Stanleys' amended complaint that
certain monies were owed pursuant to the 1992 agreement to purchase the Kalispell
dealership. In fact, Holms admitted--in discovery responses and at the summary
judgment hearing--having defaulted on various agreements, guarantees and
promissory notes by failing to make certain payments. Accordingly, summary
judgment on the Stanleys' amended complaint was appropriate.

¶28. Holms' only substantive "defense" involves the Stanleys allegedly acting in bad
faith and failing to fulfill a commitment made in September of 1994 when the parties
negotiated to sell the Kalispell dealership to a third party. These alleged actions by
the Stanleys form the basis for Holms' counterclaims for breach of the implied

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covenant of good faith and fair dealing, and for fraud and to provide a set off to the
Stanleys' claims.

¶29. The Stanleys, in turn, point to the release signed by Holms in the final closing
agreement in November of 1994, wherein both parties waived "all claims" each had
against the other except for the debts owed by Holms relating to the 1992 purchase of
the Kalispell dealership. The Stanleys contend that the release is clear and
unambiguous and, as a result, that they were entitled to summary judgment on
Holms' counterclaims.

¶30. Holms does not dispute that the release of "all claims" purports to release the
counterclaims against the Stanleys. Instead, Holms contends that the release was
obtained through fraud and economic duress and is, therefore, unenforceable. From
this premise, Holms reasons that the counterclaims for breach of the implied
covenant of good faith and fair dealing and fraud must be submitted to a jury. Thus,
the issue is whether Holms has raised genuine issues of material fact in support of the
argument that the release is unenforceable.

¶31. We review a district court's order granting summary judgment de novo, using
the same Rule 56, M.R.Civ.P., criteria as the district court. Stanley, 281 Mont. at 332-
33, 934 P.2d at 198-99.

The movant must demonstrate that no genuine issues of material fact exist. Once this has
been accomplished, the burden then shifts to the non-moving party to prove, by more than
mere denial and speculation, that a genuine issue does exist. Having determined that
genuine issues of fact do not exist, the court must then determine whether the moving
party is entitled to judgment as a matter of law. We review the legal determinations made
by a district court as to whether the court erred.

Bruner v. Yellowstone County (1995), 272 Mont. 261, 264-65, 900 P.2d 901, 903
(citations omitted).

¶32. Conclusory statements are insufficient to create genuine issues of material fact.
Sprunk v. First Bank System (Sprunk II) (1992), 252 Mont. 463, 466-67, 830 P.2d
103, 105. The party opposing a summary judgment motion must, therefore, "set
forth specific facts and cannot rely on speculative, fanciful, or conclusory

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statements." Sprunk II, 252 Mont. at 466, 830 P.2d at 105 (citation omitted).
Moreover, disagreement over the interpretation of facts does not amount to a
genuine issue of material fact. Sprunk II, 252 Mont. at 466, 830 P.2d at 105. In the
present case, we conclude that Holms has failed to set forth specific facts showing the
existence of a genuine factual issue that the release is unenforceable due to fraud or
economic duress.

¶33. It is well settled that a release may be set aside if it was obtained fraudulently.
Sprunk v. First Bank Western M. Missoula (Sprunk I) (1987), 228 Mont. 168, 173,
741 P.2d 766, 769 (citation omitted). A mere suspicion of fraud is insufficient. Sprunk
I, 228 Mont. at 173, 741 P.2d at 769. To survive a motion for summary judgment, a
party alleging fraud must establish a prima facie case by providing evidence of the
following elements:

1. a representation;

2. its falsity;

3. its materiality;

4. the speaker's knowledge of its falsity or ignorance of its truth;

5. the speaker's intent that it should be acted upon by the person and in the manner
reasonably contemplated;

6. the hearer's ignorance of its falsity;

7. the hearer's reliance upon its truth;

8. the right of the hearer to rely upon it;

9. the hearer's consequent and proximate injury or damage.

Sprunk I, 228 Mont. at 174, 741 P.2d at 769 (citation omitted).

¶34. Even after drawing all reasonable inferences in favor of Holms as the party

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opposing the motion for summary judgment, we conclude that Holms has not raised
a genuine issue of material fact regarding fraud. While Holms' affidavits present
conclusory allegations that the Stanleys backed out of commitments they made in
September 1994, they do not set forth specific facts establishing the elements of
fraud. Specifically, Holms failed to set forth any specific false representations made
by the Stanleys, specific facts relating to the materiality of any such representations,
and facts indicating that the Stanleys intended Holms to rely on such representations.
On the other hand, the Stanleys have shown that the release is clear and
unambiguous, thereby establishing the absence of any genuine issue of material fact
that the release bars the counterclaims.

¶35. Holms also claims that the release was signed under economic duress. A party
claiming economic duress must show that the release was signed under
circumstances "evincing a lack of free will on the part of the contracting parties."
Hoven v. First Bank (N.A.)-Billings (1990), 244 Mont. 229, 235, 797 P.2d 915, 919
(citing Aldrich & Co. v. Donovan (1989), 238 Mont. 431, 437, 778 P.2d 397, 401). "It
is not sufficient to show that consent was secured by the pressure of financial
circumstances. . . ." Hoven, 244 Mont. at 235, 797 P.2d at 919.

¶36. Here, Holms argues economic distress resulting from the Stanleys having
reneged on a promise in the September of 1994 negotiations to sell the business to a
third party and, instead, having continued to negotiate more favorable terms for
themselves at Holms' expense. The Stanleys, on the other hand, admit that the parties
made changes from the time the Asset Sale Agreement was negotiated between
Holms and the Corwin-Eisinger group and the time the closing agreement was finally
signed by those two parties, by them, and by other entities to whom Holms also owed
money, such as Like-Nu corporation and Farmers and Merchants Bank. For
example, the Stanleys note that, in the final closing agreement, they had to accept a
promissory note from the buyers as a novation, rather than receive cash. Moreover,
they contend that any changes in the agreement resulted from financial problems
that Holms--rather than the Stanleys--created. Thus, the Stanleys insist that Holms
bargained for the changes and, as part of the negotiation process, signed the release
now alleged to be unenforceable; having accepted the benefits of the bargain, the
Stanleys urge that Holms should not now be allowed to deprive the Stanleys of their
part of the bargain. Finally, the Stanleys point out that Holms was represented by
counsel during the drafting of the release, yet Holms presented no evidence via
affidavits that the Stanleys exerted any undue pressure on Holms to sign the release.

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¶37. Based on the record before it, the District Court concluded that any economic
duress suffered by Holms was of Holms' own making. As partial security for the
purchase of the Kalispell dealership in 1992, Holms had pledged two promissory
notes from the Healthco Corporation as collateral. The District Court noted that
Holms was under financial pressure because the Healthco Corporation had declared
bankruptcy. Additionally, Holms needed capital for the Spokane dealership and it
was solely Holms' idea to sell the Kalispell dealership to a third party. Thus, any
economic pressure that led to--or was created by--those efforts was attributable to
Holms and not the Stanleys. We agree with the District Court.

¶38. After reviewing Holms' affidavits and the transcript of the hearing on the
motion for summary judgment, it appears clear that Holms suffered from economic
pressure. However, proof that the release was secured by the pressure of financial
circumstances is insufficient. Rather, to substantiate the allegation of economic
duress, Holms was required to present facts indicating that the Stanleys produced
Holms' financial distress and that Holms was the victim of a wrongful act which
resulted in a deprivation of free will. Here, the record reflects that Holms suffered
from economic pressure because of defaults in making certain payments due on the
purchase of the Kalispell dealership, and because capital was needed for the Spokane
dealership. Holms presented no evidence, however, that the Stanleys created these
financial problems. To the contrary, it appears that Holms had total control over the
Kalispell dealership for two years. Holms obviously hoped to pay off the debts to the
Stanleys and to rescue the business opportunity in Spokane by selling the Kalispell
dealership. While Holms is clearly disappointed at being ultimately unable to sell the
Kalispell dealership under more favorable terms, no evidence was produced that the
Stanleys caused any circumstances which deprived Holms of free will.

¶39. Holms cites various cases in support of the argument that the release was signed
under economic duress, contending that Litten v. Jonathan Logan, Inc. (Pa. Super.
Ct. 1971), 286 A.2d 913 is the most analogous to the present case. In Litten, the
plaintiffs had entered into an oral agreement with the defendant to sell two
corporations. In exchange for the stock of the corporations, the defendant agreed to
pay the corporations' creditors, pay off the corporations' bank loans, pay plaintiffs
any monies in excess of such payments from the assets of the corporations, employ
the plaintiffs for a one-year term at a stipulated salary, and give one of the plaintiffs
an option to purchase 5,000 shares of the stock during the one-year employment.
Litten, 286 A.2d at 915-16. At the time the plaintiffs entered into the agreement, they

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were not in drastic financial difficulties, but rather were solvent, had a solid net
worth, and had many other business and financial options. Litten, 286 A.2d at 915. In
reliance on the oral agreement, the plaintiffs transferred the stock of the two
corporations to the defendant. The defendant, however, refused to carry out its oral
promises. Not surprisingly, when the defendant refused to pay the plaintiffs'
creditors and bank loans as promised, the creditors immediately threatened the
plaintiffs with bankruptcy. Faced with immediate financial disaster, the plaintiffs
signed a written agreement with the defendant which differed from the oral
agreement in significant respects, such as the absence of a provision for return of
excess monies from liquidation and of the one-year employment clause. Indeed, the
plaintiffs who had begun working for the defendant were fired within two months.
Litten, 286 A.2d at 916.

¶40. The plaintiffs in Litten filed a lawsuit against the defendant to recover money
damages and an accounting on the basis of the oral contract. The defendant defended
the action based on its contention that the later written contract, not the oral
contract, governed the parties' rights and obligations. The plaintiffs countered that
they were compelled to sign the written agreement under economic duress and
coercion, because the defendant had maneuvered them into an untenable economic
crisis. The case was submitted to a jury, which found for the plaintiffs. Litten, 286
A.2d at 914-15. Following the adverse jury verdict, the defendant filed a motion for a
judgment notwithstanding the verdict or for a new trial. The trial court denied the
motions. Litten, 286 A.2d at 914.

¶41. The defendant appealed, and the Superior Court of Pennsylvania concluded
that ample evidence supported the jury's verdict that the plaintiffs executed the
written agreement under economic duress created by the defendant. Litten, 286 A.2d
at 915. According to the evidence, it was the defendant who had placed the plaintiffs
in an "inextricable financial crisis" by breaching their oral agreement and, at that
point, the plaintiffs' only recourse to avoid bankruptcy was to sign the written
agreement. The Litten court concluded that this was precisely the kind of duress
contemplated by the cases discussing the concept of "economic duress." Litten, 286
A.2d at 917.

¶42. The present case differs from Litten in significant respects. In Litten, the
defendant's actions pushed the plaintiffs into dire financial circumstances. The
plaintiffs were solvent and had many financial options prior to their oral agreement

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with the defendant, but the defendant's wrongful actions in failing to honor the oral
agreement forced the plaintiffs to the brink of bankruptcy leaving them with no
alternative but to sign the written agreement. In the present case, the Stanleys
neither contributed to nor caused Holms' financial crisis. Holms' financial difficulties
existed independently of--and, indeed, predated--the sale of the Kalispell dealership.
As discussed above, there is no evidence on the record before us that the Stanleys
created Holms' financial difficulties in making the payments on the Kalispell
dealership or Holms' need for additional capital for the Spokane dealership. As a
result, Litten is readily distinguishable from the present case.

¶43. We conclude that Holms failed to present facts indicating that the Stanleys
obtained the release through fraud or economic duress. We hold, therefore, that no
genuine issues of material fact exist which precluded summary judgment on Holms'
counterclaims.

¶44. Affirmed.

/S/ KARLA M. GRAY

We concur:

/S/ J. A. TURNAGE

/S/ JAMES C. NELSON

/S/ W. WILLIAM LEAPHART

Justice William E. Hunt, Sr., concurring in part and dissenting in part.

¶45 I concur as to issues one and two of the majority opinion.

¶46 I dissent from issue three of the majority opinion which holds that there were no
genuine issues of material fact concerning fraud and economic duress which precluded
summary judgment on Holms' counterclaims. Instead, I would hold that the issue as to
whether the release was obtained through fraud and economic duress is a factual question

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 No

that should have been decided by the jury.

¶47 Holms has set forth specific facts establishing that in September of 1994, the Stanleys
entered into a binding agreement with them, allowing them to sell the dealership to a third
party. He also set forth specific facts establishing that in reliance upon that agreement,
Holms entered into a contract to sell the dealership to the Corwin-Eisinger group. Finally,
Holms sets forth specific facts establishing that had the Stanleys honored their initial
contract, Holms would have been able to make all his payments on the Kalispell
dealership and also obtain the necessary capital to successfully operate the Spokane
dealership.

¶48 Holms was entitled to rely upon the Stanleys' initial agreement. I would hold that
there is a genuine factual issue as to whether the Stanleys' failure to honor the terms of that
initial agreement constituted fraud and as to whether it was that failure that also caused
Holms his financial duress. That is a question that should have been decided by a trier of
fact.

¶49 For the foregoing reasons, I would reverse the District Court and hold that there were
genuine issues of material fact which precluded summary judgment.

¶50 I concur in part and dissent in part.

/S/ WILLIAM E. HUNT, SR.

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