No. 13642
IN THE SUPREME COURT OF THE STAT OF MONTANA
1977
EDWARD V. BRABENDER and FRANCES
BRABENDER, husband and wife,
Plaintiffs and Appellants,
KIT MANUFACTURING COMPANY, a
corporation, and FALLS MOBILE HOME
CENTER, INC.,
Defendants and Respondents.
Appeal from: District Court of the Eighth Judicial District,
Honorable Truman G. Bradford, Judge presiding.
Counsel of Record:
For Appellants:
John R. Christensen argued, Stanford, Montana
For Respondents:
John Atkins argued, Helena, Montana
Submitted: June 3, 1977
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Filed Nc 3 C. 1977
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Clerk
Mr. Justice Frank I. Haswell delivered the Opinion of the Court.
Plaintiffs appeal from a summary judgment granted to
defendant in which the court refused to rescind a purchase con-
tract and awarded defendant attorney fees.
Plaintiffs Edward V. Brabender and his wife entered into
a purchase contract with Falls lobile Home Center, Inc. (Falls)
of Great Falls, Montana, on September 21, 1971 for the purchase
of a new 1972 Golden State Mobile home to be manufactured by Kit
Manufacturing Company (Kit) of Caldwell, Idaho. The purchase
contract referred to an attached Kit Manufacturing Company Order
form which designated the specifications the Brabenders desired
included on their new mobile home. On November 16, 1971, plain-
tiffs and Falls executed a retail installment contract which Falls
assigned to the First National Bank of Great Falls. After a
down payment and trade-in allowance on their old mobile home, the
plaintiffs owed $1,604.22 which was to be paid in six equal con-
secutive installments beginning in January, 1972, and ending in
June, 1972. In case of a delinquent installment, the retail in-
stallment contract provided for a late charge plus a reasonable
attorney fee if the matter was referred to an attorney.
On November 25, 1971, the mobile home was delivered to
plaintiffs at Green Acres Trailer Park, Lewistown, Montana.
Plaintiffs inspected the mobile home and found fault with it in
various particulars. In a letter to Kit dated November 29, 1971,
plaintiffs complained among other things that the frame of the
mobile home was bent, that the roof was buckled and banging, that
the siding and trim were loose and rattling, that the floor boards
were loose and nails were coming through, that there was an un-
patched hole in the underflooring, that the rear bedroom window
screen was torn, and that the kitchen countertops were not joined
properly. They concluded their letter stating:
"We cannot and will not accept this mobile home
and we want immediate action from you on this or
we will be obliged to take action ourselves."
That same day A1 Lawson, the president of Falls and Gene
Bumgarner, sales manager of Kit, inspected the mobile home. On
December 7, 1971, Gene Bumgarner responded to plaintiffs' Novem-
ber 29 letter, stating that he did not see any structural damage
to the mobile home's frame, but that he would send a serviceman
to perform the other necessary repairs to plaintiffs' home. Kit's
serviceman arrived December 13, 1971 to make the repairs, but
plaintiffs, contrary to the advice of their then counsel, refused
to let the serviceman make them. On December 30, 1971 Gene Bum-
garner sent a letter to plaintiffs by certified mail reciting the
prior events and informing them that Kit still stood ready to
perform warranty repair, but because plaintiffs refused to allow
Kit to make the repairs, they would not assume responsibility for
damages which might occur due to nonrepair of existing warranty
claims.
Plaintiffs did not communicate further with either Falls
or Kit until the filing of this law suit over four years later.
On the advice of their then counsel, plaintiffs paid on schedule
the installments due First National Bank of Great Falls, as
assignee of the retail installment contract. That contract was
fully executed with the payment of the June, 1972 installment.
Plaintiffs continued to live intermittently in the mobile home
from the time of its delivery to the Green Acres Trailer Park
until May, 1973. From 1973 to present the mobile home has re-
mained at the trailer park unoccupied.
On February 20, 1976 plaintiffs filed suit against Falls
and Kit seeking rescission of the purchase contract and a refund
of the purchase price plus interest, or in the alternative, seek-
ing damages in the amount of $7,000 plus interest.
Defendant Falls answered alleging several affirmative
defenses, among other things. Falls alleged that the attempted
rescission was ineffective and that plaintiffs had not acted
soon enough in bringing suit and should not, more than four
years later, be heard to complain of the defects in the mobile
home. As a counterclaim Falls claimed attorney fees under the
contract. Defendant Falls filed affidavits, requests for ad-
missions, and interrogatories. It then filed a motion for sum-
mary judgment on the grounds that plaintiffs had failed to comply
with the statutory requirements for rescission, that the purchase
contract was fully executed and that plaintiffs had accepted the
mobile home. Later it filed supplemental grounds alleging that
the suit was not commenced within four years after the cause of
action accrued and therefore plaintiffs' claims were barred by
section 87A-2-725, R.C.M. 1947.
Defendant Kit answered plaintiffs' complaint alleging as
defenses that plaintiffs' claims were barred by section 87A-2-725,
and by laches, waiver and estoppel. Defendant Kit was granted
summary judgment.
Defendant Falls was later granted summary judgment. Follow-
ing a further hearing, the district court granted defendant Falls
judgment against plaintiffs for $1,200 attorney fees. Plaintiffs
appealed from the judgment in favor of defendant Falls.
The district court based summary judgment in favor of
defendant Falls on its findings and conclusions that; (1) Plain-
tiffs did not comply with the statutes governing rescission of
contracts; (2) plaintiffs waived their objections to the alleged
defects in the mobile home by their wrongful refusal to allow de-
fendant Kit's repairman to remedy their objections; (3) plaintiffs
accepted the mobile home by their continued use and occupancy of
it and by their full payment of the contract; (4) plaintiffs suit
to rescind the contract was barred by laches and estoppel; and
(5) the amount and existence of damages claimed was purely
speculative and conjectural. The district court's award of
attorney fees to defendant Falls was based on its findings
and conclusions that: (1) There was a single integrated contract
consisting of the purchase contract, the Kit order form, and the
retail installment contract; (2) the retail installment contract
provided for attorney fees in case of default; and (3) this pro-
vision was reciprocal under section 93-8601.1, R.C.M. 1947.
Plaintiffs raise two issues on appeal:
1. Whether the pleadings, interrogatories, affidavits,
and records show any genuine issues of material fact precluding
summary judgment; and
2. Whether the award of attorney fees to defendant Falls
was proper.
Summary judgment is not a substitute for trial; it can
only be granted where the record discloses no genuine issue of
material fact and that the moving party is entitled to judgment
as a matter of law. Where the absence of any genuine issue of
material fact is disclosed by the record, the burden is on the
party opposing summary judgment to come forward with evidence
creating a genuine issue of material fact to be determined at
trial. Johnson v. Johnson, Mont . , 561 P.2d 917, 919,
34 St.Rep. 162 (1977); Harland v. Anderson, 169 Mont. 447, 548
P.2d 613, 615, 33 St.Rep. 363 (1976). The party opposing the
motion will be indulged to the extent of all inferences which may
be reasonably drawn from the offered proof. Harland v. Anderson,
548 P.2d at 615.
We turn our attention to the defense of laches. Laches
is negligence in the assertion of a right. It exists when there
has been an unexplained delay of such duration or character as
to render the enforcement of an asserted right inequitable.
Quoting from Johnson we stated:
" * * * Considerations of public policy and
the difficulty of doing justice between the
parties are sufficient to warrant a court of
equity in refusing to institute an investi-
gation where the lapse of time in the assertion
of the claim is such as to show inexcusable
neglect on the part of the plaintiff, no matter
how apparently just his claim may be; and this
is particularly so where the relations of the
parties have been materially altered in the
meantime." Johnson v. Johnson, 561 P.2d 920;
Riley v. Blacker, 51 Mont. 364, 152 P. 758 (1915).
Prior to the filing of this law suit, the record shows that the
last written communication from the plaintiffs to either defen-
dant was plaintiffs' letter of November 29, 1971 to defendant
Kit. The last oral communication between the parties was on
December 7, 1971. After defendant Kit's letter of December 30,
to plaintiffs, plaintiffs had no further contact with either
defendant until this suit was filed on February 20, 1976. The
record is barren of any excuse for this long delay. The applic-
able statute of limitations, section 87A-2-725(1), R.C.M. 1947,
provides :
"An action for the breach of any contract for
sale must be commenced within four years after
the cause of action has accrued. * * *"
In Shell v. Strong, 151 F.2d 909, 911 (10th Cir. (1945), .
it is stated:
"A court of equity is not bound by the statute
of limitations, but, in the absence of extra-
ordinary circumstances, it will usually grant
or withhold relief in analogy to the statute
of limitations relating to actions at law of like
character. Under ordinary circumstances, a suit
in equity will not be stayed for laches before,
and will be stayed after, the time fixed by the
analogous statute, but if unusual conditions or
extraordinary circumstances make it inequitable
to allow the prosecution of a suit after a
briefer, or to forbid its maintenance after a
longer, period than that fixed by the analogous
statute, a court of equity will not be bound by
the statute, but will determine the extraordinary
case in accordance with the equities which con-
dition it. When a suit is brought within the
time fixed by the analogous statute, the burden
is on the defendant to show, either from the
face of the complaint or by his answer, that
extraordinary circumstances exist which require
the application of the doctrine of laches. On
the other hand, when the suit is brought after
the statutory time has elapsed, the burden is on
the complainant to aver and prove circumstances
making it inequitable to apply laches to his
case." 151 F.2d 911.
Plaintiffs did not bring this suit within the time fixed
by the analogous statute of limitations, nor have they given any
reason for their delay in bringing suit. To the contrary, they
used the mobile home for 1-1/2 years after it was delivered to
them, and after moving out of it, they left it unoccupied. De-
fendant Kit notified plaintiffs that in light of plaintiffs re-
fusal to allow Kit to make the requested repairs, it would not
assume responsibility for damages resulting from failure to make
those repairs. In view of these facts, we hold that it would now
be inequitable to allow plaintiffs to attempt to rescind the
contract. Plaintiffs' suit for rescission is barred by their
laches.
Plaintiffs' second claim seeks damages for breach of
contract. This claim is now barred by the applicable four year
statute of limitations. Section 87A-2-725(1).
Plaintiffs contend that defendant Falls may not rely on
the affirmative defenses of laches and the statute of limitations
to bar plaintiffs' suit because they were not affirmatively plead
in its answer as required by Rule 8(c), M.R.Civ.P. Rule 8(c)
must be read in connection with Rule 8(e), M.R.Civ.P., which
states that no technical forms of pleading or motion are required,
and with Rule 8(f), M.R.Civ.P., which requires that all pleadings
be construed so as to do substantial justice. Defendant Falls'
answer denominates three affirmative defenses which in substance
are: (1) Failure to state a claim for relief, (2) ineffective
rescission and waiver of the defects, and (3) estoppel, laches
and statute of limitations. Although defendant Falls did not
specifically denominate his defenses as laches or statute of
limitations, the allegations of the second and third affirma-
tive defenses, which are detailed at length, contain certain
dates of all oral and written communications between plaintiffs
and defendants, show that more than four years elapsed between
the signing of both the purchase and retail installment con-
tracts and plaintiffs' filing of the law suit, and state:
"Plaintiffs should be estopped by their conduct,
both their affirmative acts and subsequent inaction,
and the lapse of time, from now attempting to re-
pudiate or rescind the contract * * * or to seek any
of the relief asked for in the complaint."
A reading of defendant Falls affirmative defenses reveals that
plaintiffs had adequate notice that defendant Falls intended to
raise the defenses of laches and statute of limitations. In light
of Rules 8 (e) and 8 (f), M.R. Civ.P. , we hold that those defenses
were adequately plead in defendant Falls' answer.
Plaintiffs' second issue on appeal is whether defendant
Falls was entitled to an award of attorney fees. The purchase
contract between plaintiffs and defendant Falls made no provision
for attorney fees in case of suit on the contract. The retail
installment contract between plaintiffs and defendant Falls provided
for attorney fees in case suit was brought to recover delinquent
payments. Section 93-8601.1, R.C.M. 1947, states:
"Whenever by virtue of the provisions of any
contract or obligation in the nature of a
contract, made and entered into at any time after
the effective date of this act, one party to such
contract or obligation has an express right to
recover attorney fees from any other party to
the contract or obligation in the event the party
having that right shall bring an action upon the
contract or obligation, then in any action on
Such contract or obligation all parties to the
contract or obligation shall be deemed to have
the same right to recover attorney fees, and the
prevailing party in any such action, whether by
virtue of the express contractual right, or by
virtue of this act, shall be entitled to recover
his reasonable attorney fees from the losing party
or parties."
Plaintiffs contend that the provision in the retail in-
stallment contract cannot be made a basis for an award of
attorney fees under section 93-8601.1 where the retail install-
ment contract has been fully executed. Defendants argue that
the purchase contract and the retail installment contract
should be read together as an integrated contract.
The purchase contract did not specifically incorporate
the terms of this retail installment contract, but provided
that in case the purchase contract was not a cash transaction,
the purchaser " * * * before, or at the time of delivery of the
trailer, mobilehome or vehicle ordered * * * will either execute
a chattel mortgage, conditional sales contract, or such other
form of agreement as may be required by law." Nor were the two
contracts executed contemporaneously. The purchase contract was
signed September 21, 1971; the retail installment contract was
signed November 16, 1971. Most significantly, the retail install-
ment contract was fully executed in July 1972, over 3-1/2 years
prior to the filing of this suit. In light of these facts we
deem it inequitable to award defendant Falls attorney fees in
plaintiffs' action to rescind the purchase contract.
Defendant Falls contends that this case is indistinguish-
able from Compton v. Alcorn, Mont . , 557 P.2d 292, 33 St.
Rep. 1185 (1976), in which defendant, the seller of a mobile
home, was awarded attorney fees in the purchasers1 suit to rescind
a retail installment contract. Compton is distinguishable on
two bases: (1) It was on suit to rescind a retail installment
contract, not a purchase contract; (2) the retail installment
contract was not fully executed, whereas here it was.
The portion of the summary judgment awarding defendant
Falls attorney fees is reversed. The award of summary judgment
in favor of defendant Falls is affirmed.
Justice
We concur:
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