SAS PARTNERSHIP, ETC. v. Schafer

No. 82-109

I N THE SUPREME COURT O THE STATE O M N A A
F F OTN

1982

SAS PARTNERSHIP, a p a r t n e r s h i p ,
by a n d t h r o u g h WILLIAM E. STEIN,
a general partner,

P l a i n t i f f and A p p e l l a n t ,

FRED F. SCHAFER AND
GAIL F. SCHAFER,

D e f e n d a n t s and R e s p o n d e n t s .

Appeal from: District Court of t h e Eleventh J u d i c i a l D i s t r i c t ,
I n a n d f o r t h e County o f F l a t h e a d
H o n o r a b l e J . M. S a l a n s k y , J u d g e p r e s i d i n g .

C o u n s e l o f Record:

For P l a i n t i f f :

E. Eugene A t h e r t o n , K a l i s p e l l , Montana

For Defendants:

J a r d i n e , S t e p h e n s o n , B l e w e t t & Weaver; A l e x a n d e r B l e w e t t ,
Great F a l l s , Montana

S u b m i t t e d on b r i e f s : August 1 9 , 1 9 8 2

Decided: October 4 , 1982

Filed:
8CT 4 - ?982

i

Clerk-
Mr. Justice John Conway H a r r i s o n delivered the Opinion of the
Court.

This is a contract dispute on appeal from the Eleventh

Judicial District in and for the County o f Flathead. A t the

D i s t r i c t C o u r t t h e s e l l e r , SAS P a r t n e r s h i p , s o u g h t to r e q u i r e t h e

b u y e r s , F r e d and G a i l S c h a f e r , t o p a y a n a c c e l e r a t e d d e b t u n d e r a

c o n t r a c t f o r deed. The D i s t r i c t C o u r t e n t e r e d j u d g m e n t a g a i n s t

SAS. From that judgment SAS a p p e a l s . We reverse and remand.

On December 27, 1978, three parties entered into a real
estate exchange agreement; SAS P a r t n e r s h i p , the S c h a f e r s , and

P a u l M. Jackson. Mr. Jackson is n o t a party to t h i s a c t i o n .
SAS sold 3,000 feet of undeveloped lakefront property to M r .
J a c k s o n who t r a d e d t h e p r o p e r t y f o r o t h e r r e a l e s t a t e t h e n owned

by t h e S c h a f e r s . Under t h e terms of the contract, the Schafers

were to p a y SAS a t o t a l o f $1.4 million; $350,000 a s a dowrr-
payment, the balance t o be paid i n annual installments over a

period of n i n e y e a r s a t 85/4 p e r c e n t interest. A t or b e f o r e the

closing the Schafers paid the $350,000 down payment and took

possession of t h e p r o p e r t y and have r e t a i n e d possession to t h e
present time. W i t h i n t h e f i r s t y e a r t h e S c h a f e r s expended o v e r

$76,000 i n improvements.

The first installment payment of $100,471 became due on

December 27, 1 9 7 9 . The S c h a f e r s were u n a b l e t o make t h e p a y m e n t .

On January 14, 1980, SAS sent a notice of default to the

S c h a f e r s , and f a i l i n g t o r e c e i v e p a y m e n t , SAS s e n t a n o t h e r n o t i c e

o n F e b r u a r y 2 6 , 1 9 8 0 , d e m a n d i n g payment p l u s a p e n a l t y c h a r g e o f

$10,047. The S c h a f e r s c o u l d n o t meet t h e i r o b l i g a t i o n s and o n

March 1 4 , 1 9 8 0 , SAS g a v e n o t i c e of d e f a u l t and a n i n t e n t to ac-

celerate the entire unpaid balance. On May 13, 1980, the

Schafers tendered the sum of $110,853 which represented the

i n s t a l l m e n t payment, the penalty charge, attorney's f e e s , and a n

escrow c h a r g e . SAS r e f u s e d S c h a f e r ' s t e n d e r and o n May 2 2 f i l e d

t h e complaint with the District Court f o r s p e c i f i c performance;

praying for judgment of the entire balance of $l,050rOO0 p l u s
interest, for the penalty of $10,047 plus interest, and for
a t t o r n e y ' s f e e s and costs o f s u i t . During t h e pendency of this
a c t i o n t h e s e c o n d i n s t a l l m e n t became d u e on December 2 7 , 1 9 8 0 . N o
payment was made and SAS a g a i n sent default and acceleration

notices.
The c e n t r a l i s s u e a t t h e D i s t r i c t C o u r t i n v o l v e d i n t e r p r e t a -

tion of the contract's default clause. More s p e c i f i c a l l y , as
sub-issues , was SAS e n t i t l e d t o a c c e l e r a t e t h e p a y m e n t s , forcing
t h e S c h a f e r s t o i m m e d i a t e l y pay t h e o u t s t a n d i n g b a l a n c e of o v e r
$1,000,000; and, if SAS was w i t h i n its contractual rights by

demanding the entire balance, did it comply w i t h the notice
requirements of t h e c o n t r a c t ?
The D i s t r i c t C o u r t f o u n d a g a i n s t SAS; h o w e v e r , t h e judgment

ordered the Schafers to t e n d e r t h e 1979 and 1980 i n s t a l l m e n t s
p l u s p e n a l t i e s and interest. The S c h a f e r ' s o b l i g a t i o n to make
t e n d e r u n d e r t h e judgment was c o n d i t i o n a l ; i f SAS made a n y p o s t -

trial motions or filed an appeal , the obligation would not
attach. A c c o r d i n g l y , t o t h e p r e s e n t t i m e no i n s t a l l m e n t p a y m e n t s

h a v e b e e n made.
The a p p e l l a n t r a i s e s t h e f o l l o w i n g i s s u e s f o r o u r c o n s i d e r a -

tion:
1. Whether the District Court erred in consideration of

p r i n c i p l e s of c o n t r a c t i n t e r p r e t a t i o n ?
2. W h e t h e r t h e D i s t r i c t C o u r t e r r e d b y c o n c l u d i n g t h a t ac-

c e l e r a t i o n may be t a n t a m o u n t t o f o r f e i t u r e and s i n c e c o u r t s l o o k

w i t h d i s f a v o r on f o r f e i t u r e s , t h e c o n t r a c t m u s t be c o n s t r u e d i n
f a v o r of t h e S c h a f e r s ?
3. Whether t h e District Court e r r e d i n concluding t h a t the

d e f a u l t n o t i c e s were v a g u e and p r e m a t u r e ?
4. W h e t h e r t h e D i s t r i c t C o u r t e r r e d b y n o t making f i n d i n g s
and c o n c l u s i o n s on v a r i o u s i n s t a n c e s of d e f a u l t ?

5. Whether t h e District Court e r r e d i n awarding a t t o r n e y ' s

f e e s t o the Schafers?

The f i r s t two i s s u e s are o v e r l a p p i n g i n t h a t they question
t h e D i s t r i c t C o u r t vs i n t e r p r e t a t i o n of the contract. W e choose

t o d i s c u s s them a s a s i n g l e i s s u e .
Initially, we n o t e t h a t o u r s c o p e o f r e v i e w is s u c h t h a t w e
may c o n s i d e r t h e c o n t r a c t l a n g u a g e i n d e p e n d e n t l y . I t is t r u e t h a t

contract ambiguities are questions of fact; Dooling v. Casey
( 1 9 6 8 ) , 1 5 2 Mont. 267, 448 P.2d 749; S-W Company v. Schwenk

(1977), 1 7 3 Mont. 481, 568 P.2d 145. This Court stated in
McNussen v . Graybeal ( 1 9 6 5 ) r 1 4 6 Mont. 1 7 3 , 1 8 6 , 4 0 5 P.2d 447,
4 5 4 , " w h e r e t h e r e is a con£ l i c t of t e s t i m o n y as t o w h a t were t h e
i n t e n t i o n s of t h e p a r t i e s t o w a r d t h e u s e of t h e ambiguous word,

d e t e r m i n a t i o n o f t h e t r u e meaning is o n e of f a c t . . ." Thus, we
would o r d i n a r i l y be l i m i t e d t o t h e " c l e a r l y erroneous" standard
of review. Rule 5 2 ( a ) , M.R.Civ.P. However, it is a l s o w e l l

s e t t l e d t h a t t h e i n i t i a l d e t e r m i n a t i o n of w h e t h e r o r n o t a n ambi-
g u i t y e x i s t s is o n e o f law. McNussen,
--
- supra. " I t is a q u e s t i o n

o f l a w f o r t h e [ d i s t r i c t ] c o u r t to d e t e r m i n e f i r s t as to w h e t h e r

there exists ambiguity sufficient to submit the question of
intention to the trier of fact." Schell v. Peters (1966),
1 4 7 Mont. 2 1 , 2 7 , 410 P.2d 152, 155. T h u s , t h e d e t e r m i n a t i o n by
t h e District Court t h a t the d e f a u l t c l a u s e w a s ambiguous is a
c o n c l u s i o n of law f r e e l y r e v i e w a b l e by t h i s Court. M a r t i n v.
United States (9th Cir. 1981), 649 F.2d 701; United States

F i d e l i t y v. Newman (9th Cir. 1 9 8 1 ) r 6 5 6 F.2d 457. W do not
e

f i n d ambiguity i n t h e c o n t r a c t and r e l y o n o u r own i n t e r p r e t a -
tion.

The entire case revolves around the default clause. The
p e r t i n e n t language reads:
" 2 . DEFAULT: I n t h e e v e n t P u r c h a s e r f a i l s or
n e g l e c t s t o make a n y o f t h e p a y m e n t s of p r i n -
c i p a l o r i n t e r e s t when d u e , o r f a i l s o r
n e g l e c t s to perform any of t h e covenants
Purchaser has agreed t o perform, then S e l l e r
may, a t t h e i r o p t i o n , g i v e a w r i t t e n Notice o f
D e f a u l t , to P u c h a s e r s e t t i n g f o r t h t h e d e f a u l t
claimed by S e l l e r . The Notice s h a l l be s u f -
f i c i e n t i f it d e s c r i b e s t h e d e f a u l t i n g e n e r a l
terms.
" ( a ) I f w i t h i n 60 d a y s of t h e d a t e o f s e r v i c e
of s a i d N o t i c e o f D e f a u l t , the Purchaser
c o r r e c t s and makes good t h e p a y m e n t s and o b l i -
 g a t i o n s t h e n i n d e f a u l t as s e t f o r t h i n s a i d
Notice, t h e n P u r c h a s e r ' s r i g h t s u n d e r t h i s
c o n t r a c t s h a l l be f u l l y r e i n s t a t e d and t h i s
c o n t r a c t s h a l l c o n t i n u e t h e same as i f no
d e f a u l t had o c c u r r e d . P u r c h a s e r a g r e e s to
reimburse Seller for all l e g a l expenses
i n c u r r e d b y S e l l e r i n g i v i n g and s e r v i n g t h e
Notice of D e f a u l t . The amount o f s u c h e x p e n s e
s h a l l be s p e c i f i e d i n s a i d Notice of D e f a u l t
a n d s h a l l be p a i d b y P u r c h a s e r a t t h e t i m e o f
c o r r e c t i n g such d e f a u l t .
" ( b ) However, if the Purchaser f a i l s o r
n e g l e c t s t o p a y , c o r r e c t , o r make good s u c h
d e f a u l t , as s e t f o r t h i n s a i d N o t i c e , w i t h i n
60 d a y s f r o m t h e d a t e o f s e r v i c e o f s a i d
~ o t i c e - , t h e n , -- g i v i n g - f u r t h e r n o t i c e -
upon a of
60 - a y s , - S e l l e r may:
-- d
- the
" ( 1 ) Declare t h e e n t i r e u n p a i d b a l a n c e -- u e -
d on
t h e c o n t r a c t , - i n g p r i n c i p a l -a n d i n t e r e s t ,
-
-
i n c l u-
d -
i m m e d i a t e - --u e -.a n d p a y a b l e .
ly d I n such e v e n t ,
P u r c h a s e r a g r e e s to p a y S e l l e r a l l costs of
collection including a reasonable attorney's
fee.

" ( c ) I f t h e P u r c h a s e r f a i l s to pay t h e e n t i r e
unpaid principal balance plus accrued
interest, plus all costs and reasonable
a t t o r n e y ' s f e e s , w i t h i n t h e t i m e p e r i o d as s e t
f o r t h i n t h e second n o t i c e of d e f a u l t t h e n t h e
S e l l e r may a t i t s o p t i o n , w i t h o u t n o t i c e ,
either:
" ( 1 ) Proceed to e n f o r c e its r i g h t s under t h i s
contract f o r c o l l e c t i o n of t h e remaining
c o n t r a c t b a l a n c e , t o g e t h e r w i t h i n t e r e s t , and
together with a l l c o s t s including a reasonable
attorney's fee; o r
" ( 2 ) Declare t h i s contract,
m i n a t e d and c a n c e l l e d
supplied. )
. . i m." e d i a(t Elm p ht a sri-s
m e y e

The v i g o r o u s l y c o n t e s t e d p h r a s e a p p e a r s i n s e c t i o n 2 ( b ) and
( 1 ) : " t h e n , upon g i v i n g a f u r t h e r n o t i c e of 60 d a y s , t h e S e l l e r

may: (1) Declare t h e e n t i r e u n p a i d b a l a n c e d u e on t h e c o n t r a c t ,

including p r i n c i p a l and i n t e r e s t , i m m e d i a t e l y d u e and payable ."
The a p p e l l a n t ' s i n t e r p r e t a t i o n is t h i s : a f t e r f a i l u r e of t h e

b u y e r to c u r e w i t h i n t h e s i x t y - d a y p e r i o d s p e c i f i e d i n 2 ( a ) , t h e
s e l l e r may t h e n "upon g i v i n g a f u r t h e r n o t i c e of 60 d a y s " immedi-
ately declare the entire balance due. In other words, the
appellant argues t h a t t h e g i v i n g of the s e c o n d n o t i c e and the

declaration of the entire balance being due are concurrent

events. As a result, t h e buyer must pay o f f t h e a c c e l e r a t e d d e b t

within the second sixty-day period and failure to d o so w i l l
r e s u l t i n t h e s e l l e r choosing h i s remedies under s u b s e c t i o n 2 ( c ) .
The respondent offers another interpretation. Respondent
claims t h a t a f t e r h i s f a i l u r e to cure the default within sixty
days as specified in 2 ( a ) he must be given another sixty-day
p e r i o d t o c u r e , and o n l y af t e r t h e e x p i r a t i o n of a s e c o n d s i x t y -

day period will the seller be allowed to declare the entire
balance due. R e s p o n d e n t a r g u e s t h a t t h e g i v i n g of n o t i c e of t h e

s e c o n d s i x t y - d a y p e r i o d and t h e d e c l a r a t i o n of t h e e n t i r e b a l a n c e
being due a r e not c o n c u r r e n t events. The d e c l a r a t i o n c a n o c c u r
o n l y a f t e r e x p i r a t i o n of t h e s e c o n d s i x t y - d a y p e r i o d . Thus, the

buyer f e e l s e n t i t l e d to t w o sixty-day p e r i o d s to c u r e a d e f a u l t
and only after expiration of 120 days will the seller be

a u t h o r i z e d t o demand a c c e l e r a t i o n of t h e d e b t .

The r e s p o n d e n t ' s i n t e r p r e t a t i o n is s t r a i n e d . It is o b v i o u s
to us that the contract envisions only t w o sixty-day periods,
not three. The default clause is of the "double barreled"

variety. Any o t h e r i n t e r p r e t a t i o n is r i d i c u l o u s . A key word in
t h e p h r a s e is t h e word "upon." "The w o r d s of a c o n t r a c t a r e to
b e u n d e r s t o o d i n t h e i r o r d i n a r y and p o p u l a r s e n s e . . ." Section

28-3-501, MCA. Webster's Third New I n t e r n a t i o n a l D i c t i o n a r y , a t
p a g e 2518, d e f i n e s "upon" a s ". . .on t h e o c c a s i o n o f : a t the

t i m e of . . . I' T h u s , " o n t h e o c c a s i o n o f " or " a t t h e t i m e o f "
giving the second sixty-day notice the s e l l e r may d e c l a r e t h e
e n t i r e balance due.

F u r t h e r m o r e , l a n g u a g e i n 2 ( c ) l e n d s s u p p o r t to t h i s o b v i o u s

interpretation. I n p e r t i n e n t p a r t it s t a t e s : " [ i ]f t h e p u r c h a s e r
f a i l s to pay t h e e n t i r e unpaid . .. balance . . . within the

- i-m e p e r i o d a s s e t f o r t h i n t h e s e c o n d - o t i c e of d e f a u l t t h e n t h e
t n
S e l l e r may a t its o p t i o n . . . enforce its r i g h t s under this
c o n t r a c t f o r c o l l e c t i o n of t h e r e m a i n i n g c o n t r a c t b a l a n c e . . ."
(Emphasis added.) Even i f t h e D i s t r i c t C o u r t found a m b i g u i t y i n

the language "upon g i v i n g a further notice of s i x t y days" it

c o u l d e a s i l y have looked to t h e language of subsection ( c ) to
r e s o l v e its d i f f i c u l t y . "The whole of a c o n t r a c t is to be t a k e n
t o g e t h e r so as to g i v e e f f e c t t o e v e r y p a r t i f r e a s o n a b l y p r a c -

ticable, each clause helping - i n t e r p r e t - - ther."
to - the o - Section

28-3-202, MCA. (Emphasis added. )
It is apparent to us that the District Court, when it

r e n d e r e d its judgment, had i n mind t h e much c i t e d maxim, " t h e l a w

abhors forfeiture." We noted i n Yellowstone County v. Wight

( 1 9 4 3 ) , 1 1 5 Mont. 411, 417-4181 1 4 5 P.2d 516, 518, t h a t "[tlhe
c o u r t s have e s t a b l i s h e d . .. the policy . . . that both i n l a w

and i n e q u i t y f o r f e i t u r e s are a b h o r r e d . " See also P a r r o t t v.
Heller ( 1 9 7 6 ) r 1 7 1 Mont. 2 1 2 , 557 P.2d 819. I n its conclusions
of l a w t h e District Court stated: "acceleration may be tan-

tamount to forfeiture . . . Courts look with disfavor on
forfeitures. 'I The laws a b h o r r e n c e w i t h f o r f e i t u r e s p r i n g s from

the fact that they may cause extremely harsh results.

Consequently, many states have s t a t u t e s which a l l o w c o u r t s of
e q u i t y t o a v o i d t h e u n j u s t r e s u l t s of f o r f e i t u r e . M o n t a n a ' s sta-
t u t e reads:

"Whenever by t h e terms o f a n o b l i g a t i o n a
party thereto incurs a forfeiture o r a loss in
t h e n a t u r e o f a f o r f e i t u r e by r e a s o n of h i s
f a i l u r e t o comply w i t h i t s p r o v i s i o n s , he may
b e r e l i e v e d t h e r e f r o m upon making f u l l compen-
s a t i o n to t h e o t h e r p a r t y , e x c e p t i n c a s e of a
grossly negligent, willful, or f r a u d u l e n t
b r e a c h of d u t y . " S e c t i o n 28-1-104, MCA.
The r e s p o n d e n t would h a v e t h i s C o u r t r e c o g n i z e t h e s t a t u t e ' s

a p p l i c a b i l i t y to t h e s e facts. W e c a n n o t d o so. The c a u s e of
a c t i o n a t t h e D i s t r i c t C o u r t was o n e f o r s p e c i f i c p e r f o r m a n c e ,
not forfeiture. The d i s t i n c t i o n b e t w e e n t h e s e two r e m e d i e s is

c l e a r l y set f o r t h i n t h e d e f a u l t c l a u s e . With s p e c i f i c p e r f o r -
mance t h e s e l l e r is s e e k i n g t o a f f i r m or u p h o l d t h e p r o v i s i o n s of
the contract; whereas in forfeiture the seller is seeking to
d i s a f f i r m t h e c o n t r a c t and r e g a i n p o s s e s s i o n . W e have clearly
recognized this distinction before. I n G l a c i e r Campground v.

Wild Rivers, Inc. (1978), 1 8 2 Mont. 389, 400, 597 P.2d 689,

695, we s a i d :
"The s e l l e r h e r e is n o t e x e r c i s i n g h i s o p t i o n
t o d e c l a r e t h e c o n t r a c t a t a n e n d . I f he were
t o d o s o , t h e n h e would be p r e c l u d e d f r o m
 suing t o recover the purchase price or
payments p a s t due, f o r he c o u l d n o t r e c l a i m
t h e p r o p e r t y u n d e r a f o r f e i t u r e c l a u s e and a t
t h e same t i m e r e c o v e r a n y u n p a i d p o r t i o n o f
the sale price ."
The t w o r e m e d i e s are m u t u a l l y e x c l u s i v e . Even i f t h i s were a
f o r f e i t u r e a c t i o n t h e s t a t u t e could not h e l p the respondent. The
s t a t u t e r e l i e v e s a p a r t y from f o r f e i t u r e upon "making f u l l com-
p e n s a t i o n to t h e o t h e r p a r t y . " The r e s p o n d e n t h a s n e v e r o f f e r e d
full compensation; the entire outstanding balance. This is

exactly what the appellant is seeking. In Hares v. Nelson

(1981)I Mont . , 637 P.2d 1 9 , 38 S t . R e p . 2 0 3 6 , w e h e l d
the s t a t u t e inapplicable f o r precisely t h i s reason.

W e a r e n o t u n m i n d f u l t h a t o u r h o l d i n g may c a u s e t h e S c h a f e r ' s

financial hardship, but this Court cannot change the clear
meaning o f the contract. I n Glacier Campground w e q u o t e d and
--

approved of l a n g u a g e f r o m Renard v. A l l e n ( 1 9 6 4 ) , 237 O r . 406,
3 9 1 P.2d 777: " [ b ] y e n t e r i n g a decree f o r s p e c i f i c performance
t h e c o u r t h a s t r a n s f e r r e d a n o b l i g a t i o n assumed by c o n t r a c t i n t o

a judgment." G l a c i e r Campground, 1 8 2 Mont.
-- - a t 4 0 6 , 5 9 7 P.2d at

698. L i k e w i s e , o u r h o l d i n g h e r e d o e s n o t h i n g more t h a n e n f o r c e
a n o b l i g a t i o n v o l u n t a r i l y assumed by t h e S c h a f e r s . The R e n a r d

case a l s o w e n t on t o s a y " [ i ] f t h e p u r c h a s e r does n o t pay t h i s
obligation, it is r e a s o n a b l e t h a t t h e p r o p e r t y s h o u l d be sold;
the l i e n on t h e p r o p e r t y w a s c r e a t e d t o i n s u r e payment if the

purchaser did not pay t h i s obligation." 237 Or. a t 416, 391
P.2d a t 782. T h u s , w e h o l d t h a t it is p r o p e r f o r t h e D i s t r i c t

C o u r t on remand t o e n t e r a d e c r e e of s p e c i f i c p e r f o r m a n c e w i t h a
p r o v i s i o n t h a t i f t h e e n t i r e b a l a n c e is n o t p a i d w i t h i n a s p e c i -
fied t i m e period t h e p r o p e r t y s h o u l d be s o l d w i t h t h e n e t pro-
ceeds applied to satisfy the money obligation owed to SAS.
W e now r e a c h t h e t h i r d i s s u e r a i s e d by a p p e l l a n t ; w h e t h e r t h e
d e f a u l t n o t i c e s were g i v e n i n a c c o r d a n c e w i t h t h e c o n t r a c t . When

t h e i n s t a l l m e n t , d u e o n December 27, 1 9 7 9 , was n o t p a i d , SAS s e n t

n o t i c e of d e f a u l t postmarked J a n u a r y 1 4 , 1980. The n o t i c e s t a t e d
in part:
 "You w i l l please take notice that such
a g r e e m e n t is i n d e f a u l t and t h a t t h e a n n u a l
p a y m e n t i n t h e amount of $ 1 0 0 , 4 7 1 . 0 0 d u e o n
December 27, 1979, has not been paid.
P u r s u a n t t o t h e terms of s u c h a g r e e m e n t , SAS
P a r t n e r s h i p , b y and t h r o u g h i t s a t t o r n e y , is
h e r e b y g i v i n g your [ s i c ] n o t i c e as p e r t h e
terms o f P a r a g r a p h 2 r e l a t e d t o d e f a u l t . "
The trial court concluded that the notice was "vague and

failed to apprise the Schafers as to precise and exact time
calculations and payment deadlines." We fail to see how it

c o u l d be v a g u e . I t c l e a r l y i n f o r m e d t h e S c h a f e r s t h a t t h e y were

i n d e f a u l t o f t h e 1 9 7 9 i n s t a l l m e n t of $ 1 0 0 , 4 7 1 . The n o t i c e s p e c i -

f i c a l l y made r e f e r e n c e t o t h e d e f a u l t c l a u s e of t h e c o n t r a c t and

if t h e S c h a f e r s were u n a w a r e of precise " t i m e c a l c u l a t i o n s and

payment deadlines" they merely had to read their contract.

Furthermore, the contract states " [ t l h e Notice s h a l l be s u f -
ficient if it describes the default in general terms."

On March 1 4 , 1 9 8 0 , SAS s e n t a n o t h e r n o t i c e e n t i t l e d : -
"NOTICE

DEFAULT - -
AND INTENT - ACCELERATE."
- TO port ion t h a t not ice

reads:

"You h a v e f a i l e d t o correct y o u r d e f a u l t of
t h e a n n u a l payment as s e t f o r t h i n t h e o r i g i -
n a l J a n u a r y 1 4 , 1980, n o t i c e w i t h i n 60 d a y s
f r o m t h e d a t e of s u c h n o t i c e and p u r s u a n t t o
Paragraph 2 ( b ) of such c o n t r a c t . The S e l l e r ,
SAS P a r t n e r s h i p , b y and t h r o u g h i t s a t t o r n e y s ,
i s d e c l a r i n g t h e e n t i r e u n p a i d b a l a n c e due and
payable , together with interest, costs,
p e n a l t y , and a t t o r n e y ' s f e e s .

"You a r e h e r e b y n o t i f i e d t h a t s u c h sums a r e i n
t h e f o l l o w i n g amounts:

.
" P r i n c i p a l b a l a n c e t o 3/14/80 $1,155,383.99
.....
" D a i l y a c c r u a l of i n t e r e s t . .237.33

"Attorney fees. . . . . . . . . .. .. . .
" P e n a l t y as p e r P a r a g r a p h 2 ( b ) . 10,047.00
325.00

" S u c h sums a r e d u e and p a y a b l e w i t h i n 60 d a y s
o f t h e d a t e of t h i s n o t i c e . "

The trial court held t h a t t h e March 14, 1980, acceleration

n o t i c e was p r e m a t u r e . We again disagree. Respondents contend

t h a t t h e a c c e l e r a t i o n n o t i c e w a s mailed b e f o r e the sixty-day cure

p e r i o d e x p i r e d , making t h e n o t i c e d e f e c t i v e . The c o n t r a c t s p e c i -

f ies that " [ s l e r v i c e by mail s h a l l be c o m p l e t e . " The s i x t y - d a y

p e r i o d b e g a n t o r u n on J a n u a r y 1 5 , 1 9 8 0 , t h e f i r s t f u l l d a y a f t e r
t h e n o t i c e was p l a c e d i n t h e m a i l . Our r u l e s of c i v i l p r o c e d u r e

p r o v i d e t h e example. " I n c o m p u t i n g a n y p e r i o d of t i m e .. . the
d a y of the act . . . a f t e r which t h e d e s i g n a t e d p e r i o d of time

begins to run is not t o be included." R u l e 6 ( a ) , M.R.Civ.P.
Consequently, t h e b u y e r s had s e v e n t e e n d a y s i n J a n u a r y , twenty-
n i n e i n February, s i n c e 1980 was a l e a p y e a r , and f o u r t e e n d a y s
i n March f o r a t o t a l o f s i x t y d a y s t o c u r e t h e d e f a u l t by p a y i n g

the f i r s t installment. The r e s p o n d e n t s a r g u e t h a t t h e y d i d n o t

r e c e i v e t h e f u l l d a y of March 1 4 t o c u r e . They c o n t e n d t h a t t h e
a c c e l e r a t i o n n o t i c e s h o u l d n o t have been s e n t u n t i l a f t e r mid-

night on March 14. According to t h e example provided i n the
r u l e s of C i v i l P r o c e d u r e e v e n i f t h e n o t i c e were m a i l e d on March
1 4 , t h e f i r s t day is n o t i n c l u d e d . The n o t i c e was n o t e f f e c t i v e

u n t i l t h e n e x t day, March 1 5 . Thus, w e have a s i t u a t i o n where
t h e f i r s t sixty-day p e r i o d ended and t h e s e c o n d s i x t y - d a y period
b e g a n a t t h e same t i m e , on m i d n i g h t March 1 4 . T h i s i s s u e would
d e s e r v e more c o n s i d e r a t i o n i f t h e r e s p o n d e n t had t r i e d to t e n d e r

payment between 5:00 p.m. and m i d n i g h t on March 14. However,
s u c h is n o t t h e c a s e . Respondent d i d n o t t e n d e r t h e i n s t a l l m e n t
u n t i l May 1 3 , 1 9 8 0 , a p p r o x i m a t e l y two m o n t h s l a t e r . I t was too

l a t e then. SAS had a l r e a d y d e c l a r e d t h e e n t i r e b a l a n c e due and
p r o p e r l y r e f used t h e i n s u f f i c i e n t t e n d e r .
Next, appellant alleges error for the District Court's

failure to make findings and conclusions on various other
defaults; the Schafer's failure to pay taxes, the Schafer's
f a i l u r e t o name SAS a s c o - l o s s p a y e e on a n i n s u r a n c e p o l i c y , and
t h e S c h a f e r l s a s s i g n m e n t w i t h o u t t h e p e r m i s s i o n of SAS. W e note

t h a t t h e p l e a d i n g s o n l y s p e c i f i e d t h e i s s u e of a s s i g n m e n t and t h e
r e c o r d i n d i c a t e s t h a t t h i s d e f a u l t had b e e n c u r e d a t t h e t i m e of
trial. Also, the respondents s t a t e i n t h e i r brief t h a t a l l of
these "alleged d e f a u l t s were cured by the Schafers," and "no

n o t i c e u n d e r t h e c o n t r a c t was g i v e n by SAS and s u c h d e f a u l t s h a v e

n o b e a r i n g on t h i s l a w s u i t ... Nonetheless, on remand the
D i s t r i c t C o u r t s h o u l d c o n s i d e r t h e s e a l l e g e d b r e a c h e s i n l i g h t of
t h e c o n t r a c t and d e t e r m i n e i f SAS i s e n t i t l e d to a n y damages o r

costs .
Finally, the appellant alleges e r r o r i n the District Court's

award o f a t t o r n e y ' s f e e s t o t h e S c h a f e r s . The c o n t r a c t p r o v i d e s :
" I n t h e e v e n t e i t h e r p a r t y f a i l s to p e r f o r m ,
c o m p l y w i t h , o r a b i d e b y e a c h and e v e r y
a g r e e m e n t , c o n d i t i o n and c o v e n a n t i n t h i s
c o n t r a c t , s u c h d e f a u l t i n g p a r t y s h a l l pay a l l
c o s t s , c h a r g e s and e x p e n s e s , i n c l u d i n g r e a s o n -
a b l e a t t o r n e y f e e s , reasonably incurred by
t h e non-defaulting p a r t y because of such
default ."
The contract is c l e a r . The nondefaulting party, SAS, is
entitled to attorney's fees. The D i s t r i c t Court e r r e d . See,
-
H a r e s v. N e l s o n , s u p r a .

We reverse the District Court's judgment and remand with
d i r e c t i o n s t o e n t e r a d e c r e e o f s p e c i f i c p e r f o r m a n c e i n f a v o r of

the appellant, SAS. Such d e c r e e s h o u l d make p r o v i s i o n f o r s a l e
of the property if t h e e n t i r e b a l a n c e c a n n o t be p a i d within a
r e a s o n a b l e t i m e . The D i s t r i c t C o u r t is f u r t h e r i n s t r u c t e d to make

f i n d i n g s r e g a r d i n g t h e o t h e r a l l e g e d b r e a c h e s and o f reasonable
c o s t s and a t t o r n e y ' s f e e s owing to S
91
"