113. S-2
:62
I?i THE SUPREXE COCRT OF THE STATE OF MCSTAKA
1994
FOX G F S I X AND CATTLE CO.,
Plaintiff and Respondent,
-vs-
FRAKK F. MAXYELL,
Derendant and Appellant.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter L. Rapkoch, Judge presiding
COCYSEL OF RECORD:
For Appellant:
Donald A. Ranstrom; Sias & Ranstrom, Chinook,
Montana
For Respondent:
Jaaes A. Wubble, John R. Christensen; Christensen
& Hubble, Stanford, Montana
,--5:- '
LILA> LS a n a p p e a l and c r o s s - a c p e z l fron a jury verdict i n the
Tenth J u d i c i a l G i s t r i c t C c u r t i n v c l v i r L g the t s r ~ i n a t i o no f a f . a r 3
lease. By s p e c i a l v e r d i c t t h e j u r y f o u n d t h a t F r a n k F . Maxwell
( a e l l did not naterially breach the farm ].ease which he
enkerec? w i t h Fox Grair. E; Cattle Co. (Fox a ) The jury,
h w d e v e r , f o u n d t h a t Maxwell owed Fox G r a i n $ 3 8 , 7 7 9 . 6 0 f o r farming
expenses; it t h e n awarded P!axr~:ell $23,013.42, p l u s 7 5 p e r c e n t of
t h e n e t F e d e r a l Crop I n s u r a n c e P a y a e n t , f o r Fox G r a i n ' s f a i l u r e t o
mitigate its daxages, and found in favor of Ifaxgel1 on his
counterclaims: 1) $ 1 6 , 7 2 1 . 1 5 for his s h a r e of t h e Conservation
R e s e r v e Program (CRP) p r o c e e d s ; and 2 ) $16,500 f o r hi.s l o s s of
nachinery claim. The j u r y a l s o asrarded Maxwell $ 9 5 , 0 0 0 f o r Fox
G r a i n ' s breach of the inplied covenant of gocd f a i t h ar.d fair
dealing.
The District Court granted judgment riatwitfistanding the
verdict eliminating the jury's award of $95,000 to Maxwell.
N a x ~ c e l l a p p e a l s t h e D i s t r i c t C o u r t ' s d e c i s i o n t o g r a n t judgment
notwithstanding t h e verdict. Fox G r a i n c r o s s - a p p e a l s : 1) t h e
j u r . 1 3 s f i n d i n g s on t h e b r e a c h issue; 2) t h e coiurt's failure t o
g r a n t it a judgnent n o t x i t h s t a n Z i n g t h e v e r d i c t on t h e i s s ~ e f
o
?%ax:gell's other danages; and 3j the court's grant of surznary
judgment t o Maxwell on t h e i s s u e o f t?ie v o l u n t e e r c r o p o w i e r s h i p .
W a f f i r n i n p a r t a n d remand.
e
The issaes on a p p e a l a r e :
i. DL-: ~ i s t r i c CO:;-+ err b y g r a n t i n g Fcx G r a i n ' s n o t i c i ?
t ,_,
f a r judgment n o t v i t h s t a n d i n g t h e v e r d i c t on t h e j u r y ' s award of
--- f o r ?ox G r a i n ' s v i o l a t i o n
+?=,000 o f t h e c o v e n a n t o f good f a i t h a n d
- . " 0 - 7'"'-
--L-I..g .
'
2. D i 5 t h e 3 i s t r i c t C c u , r t e r r by d e n y i n g Fcx G r a i n ' s a c t i o n
for
- ;uc!grnent n o t ; ; i t h s t a n d i n g tee v e r d i c t on t h e i s s u e o f Ma:vdell's
o t h e r damages?
3. Was t h e r e s u f f i c i e n t e v i d e n c e i n t h e r e c o r d t o s u p p o r t
the jury's f i n d i n g s t h a t Maxwell d i d n o t b r e a c h t h e l e a s e ?
4. Did t h e D i s t r i c t C o u r t e r r by g r a n t i n g Haxwell summary
judgnect on Fox G r a i n ' s o w n e r s h i p c l a i m o f t h e volunteer winter
wheat crop?
:.:axwell entered a three-year f a r m l e a s e w i t h Fox G r a i n on
February 17, 1989.
The lease agreexent entered i n t o bet:.;een the parties gave
?aIaxwell t h e r i g h t t o f a r m Fox G r a i n ' s l a n d d u r i n g t h e c r o p s e a s o n s
o f 1989, 1490, and 1991. A s p a r t o f t h a t a g r e e m e n t , Maxwell a g r e e d
that h e 'would o c c u p y a n d c u l t i v a t e the land in a "farxer-like
manner" a n d would n o t p e r m i t damage t o t h e l a n d . I n r e t u r n , h e was
e n t i t l e d t o a l l o f t h e 1989 c r o p a n d 75 p e r c e n t o f t h e 1990 a n d
1991 crops. M a x x e l l a l s o a g r e e d t h a t a l l a c r e s would b e c u l t i v a t e d
e i t h e r by p l a n t i n g c r o p , o r b y s,;-- . t . t ~ e r 1iow
c~ fa .
Fox G r a i n t e r a i n a t e d t h e l e a s e b a s e d on i t s claim t h a t Maxwell
b r e a c h e d t h e l e a s e agreement: by n o t m l t i v a t i n g t h e e n t i r e p r o p e r t y
a n d by f a i l i n g t o c a r e for t h e p r o p e r t y i n a " f a r m e r - l i k e m a n n e r . "
E:'r:*;e;-er, a f r e r l i s t e n i n g t-.t h r s e and c i i e - h a l f :leeks of t e s t i m o n y ,
i n c l u r i i n q s e v e r a l e:.:perts i?ho t e s t i f i e d on b e h a l f cf Fox G r a i n , t h e
j u r y concluded t h a t :.laxveil's f a i l u r e t o c u l t i - l a t e 1 0 0 a c r e s of t h e
p r o p e r t y ;\ms n o t a a a t e r i a l b r e a c h and a p p a r e n t l y a l s o f o u n d t h a t
h e had p e r f o r m e d i n a " f a r m e r - l i k e 3.annern a ~ h a 3 n o t allcxed t h e
d
p r o p e r t y t o b e dap.age3.
,
n
T 22 ef fcrrt tr, p r c v e t h e v z l u e c f i t s d a ~ . a g e sfrom M a x w e l l ' s
alleged f a i l u r e t o properly c a r e f o r t h e farm l a n d , Fox G r a i n
o f f e r e d testimony f r o e s e v e r a l neighboring landowners t o e s t a b l i s h
what t h e l a n d would h a v e been c a p a b l e o f p r o d u c i n g h a d it been
p r o p e r l y c u l t i v a t e d and c a r e d f o r .
F o r e x a ~ p l e ,L a r r y K a l i n a t e s t i f i e d t h a t h e farmed 1300 a c r e s
o f l a n d a b o u t f o u r miles n o r t h o f t h e Fox G r a i n p r o p e r t y ; t h a t h e
x a s f a m i l i a r w i t h t h e Fox G r a i n p r o p e r t y ; and t h a t h i s p r o p e r t y and
t h e Fox G r a i n p r o p e r t y w e r e q u i t e s i m i l a r . I n t h e f a l l o f 1990
( a f t e r Maxwell had been evicted from t h e Fox G r a i n p r o p e r t y ) ,
K a l i n a p l a n t e d a w i n t e r w h e a t c r o p on h i s l a n d which p r o d u c e d a
1 9 9 i h a r v e s t o f 3 0 t o 35 b u s h e l s p e r a c r e .
Jess K n e r r f a r a s 2800 a c r e s o f l a n d a d j o i n i n g t h e Fox G r a i n
property. He t e s t i f i e d t h a t h i s p r o p e r t y i s l i k e w i s e s i m i l a r t o
Fox G r a i n ' s l a n d . I n 1 9 9 1 , h e p r o d u c e d 3 7 b u s h e l s o f w i n t e r wheat
p e r a c r e and 2 0 b u s h e l s o f s p r i n g w h e a t p e r a c r e . Ee t e s t i f i e d
t h z t L99i x a s a b e t t e r - t h a n - a v e r a g e y e a r &&e t o i n c r e a s e d n o i s t u r e .
Kyle Grimsrud f a r m s 1 4 0 0 a c r e s o f p r o p e r t y t e n m i l e s from t h e
Fox G r a i n Land. H e t e s t i f i e d t h a t h e was f a n i l i a r w i t h t h e Fox
G r a i n p r o p e r t y and c o n s i d e r e d it s i m i l a r t o t h e p r o p e r t y t h a t h e
tarrs. I n 1391, h e r a i s e d 4 3 b u s h e l s o f x i n t e r w h e a t p e r a c r e and
2s buskels of spring yJ;:?-at per acre. Iiis production in 1091
exceeded that for either of the two previous years. It was his
cpicizn that the Fox Grain prcperty, if properly cared for, was
capable of producing siailar yields.
Alex Smith, who farxs land scuth of Le>~istoxn,
was called as
an expert witness to testify on behalf cf Fox Grain. Ee testified
that in 1991 it cost $12 an acre to harvest wheat. He estiaated
the price of wheat during 1991 was $2.80 a bushel.
Fex Grain served notice on Maxwell that the lease was being
termi-natedon July 23, 1990. i"ixwel1 actually left the property on
August 23--one lonth later. Yecause he was wrongfully evicted from
the property and %as unable to plant a winter or spring crop for
1991, M a w e l ? was denied the opportunity to realize a profit from
whatever crep he could have produced. The testimony was that had
he renained on the property he could have seeded 1503.9 acres.
Did the District Cou.rt err by granting Fox Grain's notion
for judyment notwithstanding the verdict on the jury's
award of $95,000 for Fox Grain's violation of the
covenant of good faith and fair dealing?
It is %ell settled that this Court will review a district
court's grant of a J?WV with the identical standard used to reviev
a rotion for directed verdict. S 'i.,,chuk
- v. Angel Island Community
Ass'n (1992), 253 Xont. 221, 225, 833 P.2d 153, 160
[ A ] directed -~erdict
may be granted only -,e loss of that tractor. The record, however, dilutes Fox
Grain's argunant.
Even though Tom purchased the tractor in his name, Xaxwell's
property--worth $14,300--was used as a down payment, and Masvell
was responsible fcr the paperits. Tom only assisted Haxwell in
obtzining financing for the tractor, Fcrther, two other itens of
~ a c h i r'1 - ~
s were lcst, a pcsthole digger and rotary cuzter valaed
between $2,500 and $2,750. After an extensive review of the
record, T:
te ccnclude that the District Court properly denied Fox
Grain's n : c
cin f=r a J!:gC ,.,czb:.,nery damrjes.
as to the ---s: We hold
that ths recorc: contains sufficient pr3of to justify the jury's
conclusion that Fox Grain failed to rnitiqate its daz.ages--
$2?,C13.42--and owed Maxwell $16,500 for Maxiellis loss of
nackinery. The District Court is affimed on Issue 11.
Was there sufficient evidence in the record to scpport
the jury's findings that Maxweii dld not breach the
lease?
The jury concluded that P1axwel.l had not breached the lease and
the Lease was in effect for 1991. Fox Grain contends that the
jury,- conclusion on the breach issue is unsupported by the
evidence. Moreover, Fox Grain argues that the District Court erred
by granting Maxwell's motion in limine relating to negotiations or
discussions which predated the execntion of the lease agreement.
We will not disturb a district court's evidentiary rulings
absent an abuse of discretion. Haines Pipeline Construction, Inc.
v. Kontana Power Co. (1991)' 251 Mont. 422, 427, 830 P.2d 1230,
1234. In this case, the District Court's order in limine excluded
parcl evidence of the lezse agreement. Tox Grain contends that
parol evidence should have been adaitted to exglain aabigcities in
the lease. See Eliingson Agency, Inc. v. Baltrusch (1937), 228
Mont. 360, 366, 742 P.2d 1009, 1013. Fox Grain contends that the
foLloaing previsions are ambignous:
I) Maxwell agreed to "occupy-,till axi in all res-;?ects
cultivate the premises 3bove nentioced during the tsrzt
aforesaici, in a farmer-like manner, and according to the
usnal course of farning practiced in the neighborhood;"
and
2) MaxweLl and Fox Grain "agreed that nc? less than all
acres skall bs c~~itivatei. each year of this Lease, ef"' n-r
-n--
by being in crop or suamerfallow, except that Xzxwell is
allmied tc stubble in approxiaately- 1,000 acres of
sunr.erfallov and will leave 1,OCO acres of sunnerfallow
at the end o f t h e Lease."
Fox Grain arques that the terzs "farmer-like manner," "usual course
of farming practiced in the neighborhood," acd "not less than all
acres snail be cultivated each year of this lease" were ambiguous
and required parol evidence to explain their xeaning. Further, the
tern "Eaxb:ell is alloxed to stubble in approximately 1,000 acres of
summerfallow" is ambiguous, since any farmer knows that a person
cannct "stubble in" summerfallow.
When ambiguous terms exist in a contract, parol evidence is
admissible to explain the ambiguous terms. Ellinason Aqency, 742
P.2d at 1013. In Ellinqscn Aoencv, i e examined ~shetherthe tern
r
3, c3nveyance" under a real estate broker's exclusive listing
2greemer.t inclucied a transfer of title in lieu cf foreclosure. We
concluded that summary judgment was improper because genuine issues
of fact existed since the term "conveyance" did not have a fixed
meaning. Ellinqson Aqency, 542!:;.?I at 1013. C e helci that parcl
i
evidence was necessary to interpret the parties' intention of
inclcding that tern in the agreenent. u n a s c n Aqencv, 742 P.2d
at 1013.
Fox traifi contends that. the District Court should have allowed
it t, testify as to the meaning of the t e r m
: of the lease.
14
According ts Fox Grain, it was unable to explain to the jury that
the Lease reqoired "axwell to spray for weeds and snmnerfaiiow the
pro~erty. 3"
. , :else, however, did not pra-iide that Haxweli was
zeqak-ed to spray cr su-m?rfallox the prcperty. Tkn lease di2
pr""irJe ";t]hat Fox [Grain: is to be consult& by Y a m e l l as to the
farcing decisions, however, the final. decisicn of Maxlcell shall be
binding upcn Pcx [Grain]." Even though the court refused to allow
Fox Grain to testify about the xeaning of the terns, the court did
allow neighboring farmers' testimony on the issue of farming
practices. We conclude that the court did not abuse its discretion
when it limited Fox Grain's testimony as to what it felt the lease
required of Maxwell.
Fox Grain also argues that the jury's f i n d k g that i"ixwell did
rtot breach the lease was not supported by substantial evidence.
Fox Grain extensively argues the facts of this case and concludes
that Maxwell breached the lease. When conflicting evidence exists,
the jury must judge the credibility and ~geightof the evidence and
we will not retry the case nor will F e reweigh the evidence on
i
appeal. Whisher v. Higgs (1993), 257 Mont. 132, 146, 849 P.2d 152,
160. After an extensive review of the record, we conclude that the
jury's finding that Maxwell did not breach the lease was supported
by substantial ex:idence. We affirm the jury verdict on Issue 111.
Did the District Court err by granting Maxwell summary
judgnent on Fox Grain's ownership claim of the volunteer
winter wheat crop?
Ol~r standard of review on a grant of surzaar'j judgaent is
i d e n t i c a l t? that cf t h e t r i a l c o u r t . Mimic v . C i t y o f Rcundup
-'
( 1 9 9J , , 2 5 5 ~ o c t .4 2 3 , 431, 849 P . Z ~ 1 2 ,
2 214. F i r s t , we e x a a i n e
the record to determine whether genuine issues of fact exist.
., l n ~ i e ,249 P.Z? a t 2 1 4 ,
a 1 I f no g e n u i n e i s s u e s o f f a c t e x i s t , t h e n
;hen it
s e n t N a x x e l l t h e Lease c a n c e l l e t i o n n o t i c e - - t o c l a i n an ownership
i n t e r e s t ic t h a t cr3p. We h a l e t h a t t h e D i s t r i c t C o u r t p r o p e r l y
We concur: A i \