Cechovic v. Hardin & Associates, Inc.

NO. 94-028
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995

BERNARD F. CECHOVIC and JUNE C. CECHOVIC,
Plaintiffs and Respondents,
77
.

HARDIN & ASSOCIATES, INC., W. EDWARD HARDIN,
and DIXIE BULLOCK,
Defendants and Appellants,
and
PAMELA B. SAVILLE, n/k/a PAMELA SPRINGALL,
Defendant, Respondent, and Cross-Appellant.

APPEAL FROM: District Court of the Sixth Judicial District,
In and for the County of Park,
The Honorable Byron L. Robb, Judge presiding.

COUNSEL OF RECORD:
For Appellants:
Terry F. Schaplow, Attorney at Law, Bozeman,
Montana; James H. Goetz and Robert K. Baldwin,
Goetz, Madden & Dunn, Bozeman, Montana
(for Hardin & Assoc, W. E. Hardin, and Bullock)
Brenda R. Cole and Kent R. Douglass, Swandal,
Douglass, Frazier & Cole, Livingston, Montana
(for Springall)
For Respondents:
Calvin L. Braaksma, Landoe, Brown, Planalp
& Braaksma, Bozeman, Montana (for Cechovics)
For Amicus Montana Association of Realtors:
John K. Tabaracci, Sullivan, Tabaracci,
& O'Rourke-Mullins, Missoula, Montana

Submitted on Briefs: March 16, 1995
Decided: August 24, 1995
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.

The plaintiffs, Bernard and June Cechovic, filed a complaint,

and later an amended complaint, in the District Court for the Sixth

Judicial District in Park County in which Dixie Bullock, Edward

Hardin, Pamela Saville (n/k/a Pamela Springall), and Hardin and

Associates were named as defendants. The Cechovics alleged that

they sustained damages as a result of Bullock's negligent

misrepresentation regarding the boundary for property they

purchased from Saville. Saville filed a cross-claim against Hardin

and Bullock in which she sought indemnification for any damages she

might be obligated to pay, plus her costs and attorney fees.

Following trial, the jury returned a verdict in favor of the

Cechovics. The District Court entered its judgment and an

indemnification order in favor of Saville against Hardin and
Bullock. The District Court denied Hardin and Bullock's post-trial

motions which were filed pursuant to Rules 50 and 59, M.R.Civ.P.,

and denied Saville's motion for an award of attorney fees and

costs. Hardin and Bullock appeal from the judgment and post-trial

orders. Saville appeals from the post-judgment order denying her

attorney fees. We affirm the judgment of the District Court and

its denial of the parties' post-trial motions.

We rephrase the issues on appeal as follows:

1. Was there substantial evidence to support the jury's

verdict in favor of the Cechovics?
 2. Did the District Court abuse its discretion when it

refused Hardin and Bullock's proposed jury instructions?

3. Did the District Court err when it denied Hardin and

Bullock's motion for summary judgment based on the statute of

limitations, or when it declined to instruct the jury on that

subject?

4. Was the jury's damage award supported by substantial

credible evidence?

5. Did the jury properly award Pamela Saville damages?

Saville raises the following issue on cross-appeal:

Did the District Court err when it denied Pamela Saville's

motion to award attorney fees?

FACTUAL BACKGROUND

In 1977, James Grizzard divided a parcel of land located in

Park County and sold Tract 4, a ZO-acre parcel, to Pamela Saville

and her late husband. Grizzard retained Tract 5, which was located

to the west of Tract 4. Saville, who was not a Montana resident,

had minimal involvement with Tract 4 after it was purchased. She

and her husband divided their 20-acre parcel into two lo-acre

parcels--an east tract and a west tract. In 1980, the Savilles

sold the east Tract, 4B, to Jim and Gwen Hand1 and kept the west

Tract, 4A. Sometime in the early 198Os, Mr. Saville informed Hand1

that he could graze horses on Tract 4A if he would put up a

temporary fence to keep them off the neighboring property.
 Hand1 spoke to Grizzard about building a fence, and Grizzard

agreed to allow Hand1 to construct the fence. Grizzard indicated
the approximate location of the boundary pins that divided his land

from the Savilles. Hand1 constructed the fence between two

surveyor pins and pastured his horses on Tracts 4A and 4B.

However, the pin to which the south end of the fence was anchored

was not the actual boundary pin. As a result, the fence that Hand1

believed to be the boundary between Tract 4A and Grizzard's
property included property that actually belonged to Grizzard.

Shortly after Mr. Saville's death in 1987, Dixie Bullock, a

real estate salesperson who had recently received her real estate

license and was employed by Edward Hardin, a broker, contacted

Pamela Saville to request permission to show Tract 4A to a

potential buyer. Bullock testified that Hardin obtained a
certificate of survey that included Tract 4A and sent it to the

potential buyer. Later Bullock decided to show the property to the

Cechovics whom Bullock knew were interested in river front

property.
On September 8 or 9, 1987, Cechovics met Bullock at her office

located in Hardin's brokerage firm in Livingston, Montana. The

three of them then viewed Tract 4A, which was bounded by the

Yellowstone River to the south, a county road to the north,

Grizzard's property to the west, and the Handls' property to the

east. Because the fence Hand1 had constructed on the west end of

the property was not located on the actual western boundary, a

4
promontory that overlooked the Yellowstone River was located within

the western fence, but was actually part of Grizzard's land.

The parties disagree what was actually said by Bullock while

they toured the property.

Mr. Cechovic testified that while standing on the promontory

Bullock stated it would be a beautiful location for the

construction of the Cechovics home. He also testified that Bullock

showed them a yellow pin on the west property line and told him
that the pin was the west property line pin. Mr. Cechovic also

testified that Bullock showed him a pin on the eastern boundary

that divided the property from the Handls' property.

Mrs. Cechovic testified that while standing on the promontory

Bullock said, "[H]ow's this for a place to build your house?" Mrs.

Cechovic added that Bullock pointed to the yellow pin at the

southwest corner and then walked with Mr. Cechovic to the southeast

pin. As a result of Bullock's alleged statements, the Cechovics

stated they believed that the western fence was the boundary

between Tract 4A and Grizzard's property.

Bullock testified that she did not represent that the western
fence was the boundary and did not point out any survey pins.

Bullock did not recall the substance of any conversations that

occurred while on the promontory. However, she admitted that she

assumed the western fence was the boundary and that the promontory

was located on Tract 4A. She also recalled discussing the view
from the promontory. Finally, Bullock acknowledged that she had
not asked Saville about property boundaries.

After viewing the property, Bullock and the Cechovics returned

to Hardin's office. Hardin testified that Cechovics were concerned

about the location of the promontory so he, Bullock, and Mr.

Cechovic examined Certificate of Survey No. 491, which was a survey

that included Tract 4A. Bullock also testified that the Cechovics

were concerned about the property boundary.

Cechovics, however, testified that they were not concerned

about the boundaries because Bullock had pointed them out. Mr.

Cechovic did state that he obtained a copy of a portion of
Certificate of Survey No. 491 from the county clerk and recorder

and visited the property several times.
The Cechovics decided that they wanted to purchase the

property and made several offers. Finally, after other offers were

rejected, Hardin and Bullock prepared and mailed Saville a buy-sell

agreement which she signed on September 14, 1987.

Saville testified that after she learned the Cechovics were

interested she suggested to Bullock that they obtain a survey

before finalizing their purchase. Hardin and Bullock testified

that they told the Cechovics to obtain a survey if they were

uncertain about the boundaries. Cechovics denied that they were

told to obtain a survey. They did not have the property surveyed.

The transaction closed on approximately November 9, 1987.

Cechovics built their home near the location on the promontory that

6
Bullock allegedly represented was located on Tract 4A, and moved
into their new home by August 1988.

Sometime in the spring of 1991, Grizzard decided to sell that

part of his property which was adjacent to the Cechovics' property.

In order to divide his property, Grizzard had Survco survey his

land. The proper corner pin was located underneath some land in

the Cechovics' yard. The survey indicated that the true eastern

boundary of Grizzard's land was located to the east of the

Cechovics' home. Their home, in other words, was actually located

on Grizzard's property.

Mr. Cechovic testified that after he learned of the boundary
discrepancy, he was told that Grizzard would sue Cechovics if the

pending sale of Grizzard's property was interfered with by the

location of their home. They were also advised that John Tecca,

the purchaser, would not purchase the land if the problem was not

resolved. Cechovics, therefore, contacted Tecca and agreed to move

their home in consideration of payment by Tecca in the amount of

$10,000.

On July 12, 1991, Cechovics filed a complaint, and later an

amended complaint, in which they alleged that Bullock, Hardin,

Hardin and Associates, Inc., and Saville had negligently

misrepresented the boundary of the land they purchased. Saville

was named on the basis of her status as principal in an agency

relationship with Hardin and Bullock. Saville filed a cross-claim

against Hardin and Bullock for indemnification from liability for
Hardin and Bullock's conduct, and sought a statutory penalty, as
well as her attorney fees and costs.

Before the case came to trial, Hardin and Bullock moved for

summary judgment based on the statute of limitations. The District
Court denied that motion. Following a jury trial, the jury
returned a verdict in favor of the Cechovics and awarded damages in

the amount of $65,733.22. The jury also found the Cechovics

contributorily negligent and apportioned one percent of fault to
them, and 99 percent to Hardin and Bullock. The jury also awarded

Saville damages in an amount equal to three times Hardin and

Bullock's commission for the sale. The District Court entered its

judgment and an indemnification order in favor of Saville and

against Hardin and Bullock.

Hardin and Bullock filed motions for a new trial or a judgment

as a matter of law pursuant to Rules 50 and 59, M.R.Civ.P. Saville

filed a post-trial motion for an award of her attorney fees and

costs based on her successful cross-claim. The District Court

denied the parties' post-trial motions. Hardin and Bullock appeal

from the District Court's judgment and denial of their post-trial

motions. Saville appeals from the District Court's denial of her

post-trial motion.

ISSUE 1

Was there substantial evidence to support the jury's verdict

in favor of the Cechovics?
 We will affirm the jury's verdict if there is substantial

credible evidence to support the verdict. Interstate Production Credit Ass’n

v.DeSuye (1991), 250 Mont. 320, 322-23, 820 P.2d 1285, 1287. This

Court's role is not to agree or disagree with a jury's verdict.

Silvisv. Hobbs (19921, 251 Mont. 407, 411, 824 P.2d 1013, 1015 (citing

Grz@lv. Faust (1983), 205 Mont. 372, 376, 668 P.2d 247, 249). Once

we conclude that substantial evidence supports the verdict, our

inquiry is complete. Silvis, 824 P.2d at 1015 (citing Grzfil, 668 P.2d

at 249). Substantial evidence has been defined as evidence a

reasonable mind might accept as true and can be based on weak and

conflicting evidence. Silvis, 824 P.2d at 1015 (citing Buskirkv. Nelson

(19911, 250 Mont. 92, 97, 818 P.2d 375, 378). When we determine

whether substantial evidence supports the jury's verdict, we review

the evidence in a light most favorable to the party who prevailed

at trial. If the evidence at trial conflicts, the jury's role is

to determine the weight and credibility of the evidence. silvis, 824

P.2d at 1015-16.
As Hardin and Bullock indicate, the elements of negligent

representation are set forth in Barrettv. Holland& Hurt (1992), 256

Mont. 101, 107, 845 P.2d 714, 717-18. There, we stated that a

claim for negligent misrepresentation requires proof of the

following elements:

1. the defendant made a representation as to a past 01^
existing material fact;

9
 2. the representation must have been untrue;

3. regardless of [his or her] actual belief, the
defendant must have made the representation without any
reasonable ground for believing it to be true;

4. the representation must have been made with the
intent to induce the plaintiff to rely on it;

5. the plaintiff must have been unaware of the falsity
of the representation and he must have been justified in
relying upon the representation;

6. the plaintiff, as a result of his reliance, must
sustain damage.

Barrett, 845 P.2d at 717-18 (citing Kitchen Krafrers, Inc. v. Eastside Bank of

Montana (1990), 242 Mont. 155, 165, 789 P.2d 567, 573). Although

Hardin and Bullock do not concede that Bullock misrepresented the

property boundaries, the thrust of their argument is that a realtor

cannot be held negligent for failing to discover that an apparent

boundary was not the actual boundary. They focus on the third

element and contend that if Bullock made a misrepresentation, she

had reasonable grounds to believe it was true.

In StateBankofTownsendv.Maryann’s, Inc. (1983)) 204 Mont. 21, 33, 664

P.2d 295, 301, we recognized the definition of negligent
misrepresentation found at Restatement (Second) of Torts § 552 and

stated that it requires a showing of the failure to exercise the

care or competence of a reasonable person in obtaining or

communicating information. Relying on a comment to § 552, we added

that what is reasonable, as with other negligence claims, is

dependent upon the circumstances. Generally the level of care and

competence the recipient of information is entitled to expect is

10
determined in light of the circumstances and will vary, dependent

upon many factors. Finally, we stated, V [tlhe question is one for

the jury, unless the facts are so clear as to permit only one

conclusion." State Bank of Townsend, 664 P.2d at 302 (quoting 5 552

c m t . a).

In this case, the evidence relevant to the elements of
negligent misrepresentation was disputed. Mr. Cechovic testified
that Bullock indicated that the pin at the southern end of the

western fence marked the boundary. Bullock testified that she

assumed the pin was the accurate boundary and assumed that the

promontory was on Tract 4A. Saville testified that she supplied

written documentation to Bullock and suggested to Bullock that the

buyers have the property surveyed before finalizing the sale.

According to the Cechovics, Bullock did not convey this information

to them.

Testimony indicated that Hardin and Bullock obtained a

certificate of survey before Bullock showed the property to the

Cechovics. Although Hardin and Bullock claim that the Cechovics

should have discovered the discrepancy between the certificate of

survey and the fence, Hardin and Bullock either did not discover

the discrepancy themselves, or failed to indicate the discrepancy

to the Cechovics.

Finally, expert testimony indicated that fences are not
reliable as boundaries and that boundary lines are only determined

by surveys or from personal knowledge of an informed owner. David

11
Viers, a real estate broker, testified that without accurate
information from a seller he would not represent a boundary to a

potential buyer. He added that a sales agent or broker has a duty

to disclose information and suggestions from the seller, e.g., that

a survey be obtained, to potential buyers. Tony Wastcoat, another
expert, testified that regulations require licensees to gather all

pertinent facts and prohibits misrepresentations. He added that if

he was showing rural property similar to the property in this case

that he would not rely on a fence as a boundary, even if it was

marked by a pin. He added that if the facts as stated in Cechovics

prior depositions were true that the Cechovics established a breach

of duty.

It was the jury's role to apply these facts to the

instructions. Interpreting the evidence in a light most favorable

to the Cechovics, we conclude that substantial evidence supports

the jury's verdict that Bullock did not have reasonable grounds to

believe her representations were true. Therefore, the third

element of negligent misrepresentation was established.

Hardin and Bullock next argue that the fifth element was not

satisfied because the Cechovics neither relied, nor could they

justifiably rely on, any alleged misrepresentation. They argue,

based on cases from other jurisdictions and cases which are

distinguishable, that a buyer cannot rely on an alleged

misrepresentation if the buyer undertakes an independent

investigation because the buyer is deemed to rely on his or her own

12
investigation. Finally, they contend that an independent investi-
gation clause, similar to the one in the contract in this case,
bars a claim based on negligent misrepresentation according to our

decisions in Lowev.Root (1975), 166 Mont. 150, 531 P.2d 674, and Lee

v. Stockmen’sNationalBank (1922), 63 Mont. 262, 286, 207 P. 623, 630.

We note that the issue of whether the Cechovics relied on, and
were reasonable in relying on, Bullock's alleged misrepresentation
was also a question for the jury. Based on the evidence set forth
above, and the elements of negligent misrepresentation, the jury
could have decided that the Cechovics relied on Bullock's
representations. We will not reweigh the evidence and second-guess
the jury's determination on this issue.
Next, we must determine whether the independent investigation

clause bars the Cechovics' claim. Although Lee did not involve the

duties of real estate licensees, Hardin and Bullock rely on
language from Lee which stated that if a party that claims to have

been deceived has done his or her own independent investigation, or
had the means to ascertain the truth, reliance on a representation,
however false, affords no ground for complaint. However, the point
of Lee was that the plaintiff could not recover for fraud or

misrepresentation for the defendant's failure to disclose facts
that the plaintiff knew to exist. Lee, 207 P. at 630.

Although the Cechovics did visit the property several times
before the sale, and did obtain a certificate of survey from the

13
county clerk and recorder's office, Mr. Cechovic testified that he
did not attempt to compare the plat to the boundaries because he

relied on Bullock's representations regarding the western boundary.

Nor did he have the property surveyed. Unlike Lee and Lowe, the

Cechovics did not undertake an independent investigation. As we

more recently stated, an "'independent investigation' clause does

not preclude justifiable reliance by a buyer on misrepresentations

of the seller and its realtor." Wagner v. Cutler (19881, 232 Mont.

332, 336, 757 P.2d 779, 782 (citing Parkhillv.Fuselier (19811, 194 Mont.

415, 419, 632 P.2d 1132, 1135. We added in Wagner that where a

plaintiff relied on a realtor's misrepresentations, the seller is

liable based on agency principles set forth in 5 28-10-602, MCA.

Wagner, 757 P.2d at 702.

Substantial evidence indicates that the Cechovics justifiably

relied on Bullock's representations regarding the property boundary
and that the promontory where the Cechovics ultimately built their

home was on the property Bullock represented for sale on behalf of

her principal. Mr. Cechovic stated that he did not conduct an

independent investigation because he was confident that Bullock's

representations were accurate.

Hardin and Bullock claim that the error was obvious because

the records indicate over 160 feet less river frontage than the

fence boundary would have indicated. However, they do not explain

how their oversight in this regard was reasonable if the

14
discrepancy was so obvious. In light of the fact that Hardin and
Bullock, who are licensed real estate professionals, did not

discover the error, it would be unjust to impose that requirement

on the Cechovics who claim they relied on Bullock's
representations.

We conclude that substantial evidence supports the jury's

determination that the Cechovics relied on, and were justified when
they relied on, Bullock's misrepresentations. Contrary to Hardin
and Bullock's assertions, and assertions made by the Montana

Association of Realtors, our decision does not mean that a broker

is responsible to have property surveyed in every case. We merely

conclude that, based on the evidence presented in this case, there

was an adequate factual basis for the jury's finding that these

defendants negligently misrepresented the boundary of the property

purchased by Bernard and June Cechovic.

ISSUE 2

Did the District Court abuse its discretion when it refused

Hardin and Bullock's proposed jury instructions?

The District Court has discretion when it decides how to

instruct the jury, taking into consideration the parties' theories,

and we will not overturn the court's decision absent an abuse of

discretion. Arnoldv.BoiseCascadeCorp. (1993), 259 Mont. 259, 267, 856

P.2d 217, 222. When we examine whether jury instructions were

properly given or refused, we consider the instructions in their

entirety, as well as in connection with the other instructions

15
given and the evidence at trial. Story v. City of Bozeman (1993) , 259

Mont. 207, 222, 856 P.2d 202, 211 (citing Fellerv. Fox (1989), 237

Mont. 150, 156, 772 P.2d 842, 846).

Hardin and Bullock contend that the District Court erred when

it failed to instruct the jury about the Cechovics' duty to

investigate, their actual investigation, and their right to rely on

representations of the boundary location. Their arguments are

similar to arguments made regarding the first issue and will not be

repeated at length.
Hardin and Bullock contend that the District Court erred when

it refused their proposed instructions H-8 and H-10. Proposed

instruction H-8 stated:
A purchaser of property is under a duty to make a
reasonable investigation of the property prior to
purchasing it.

Proposed instruction H-10 stated:

The buy/sell signed by the Plaintiffs contained an
independent investigation clause which reads as follows:
"Purchaser enters into this agreement in full
reliance upon his independent investigation and judgment.
Prior verbal representations or agreements do not modify
or affect this agreement."
If YOU find that the Plaintiffs had ample
opportunity to investigate the property for themselves,
they may not rely on any alleged misrepresentation of the
Defendants.

The District Court refused H-8 because it concluded that Battenv. Watts

Cycle&Marine, Inc. (1989), 240 Mont. 113, 783 P.2d 378, which was

cited by defendants as authority for that instruction, did not

stand for the principle stated in the instruction. The District

16
Court refused H-10 after concluding that it was a comment on the

evidence.

Hardin and Bullock claim that the court removed from the

jury's consideration the question of whether the Cechovics had the

opportunity to, or did engage in, an independent inquiry, and
whether they actually or reasonably relied on the alleged

misrepresentation in light of their own investigation. That

argument is belied by the facts that the jury was instructed

regarding contributory negligence; that issue was argued to the

jury; and, it found the Cechovics partially at fault for their own

damages.

We agree with the District Court's conclusion that Batten does

not stand for the proposition set forth in proposed instruction

H-8. in Batten, we recognized that the defects complained of were

discoverable upon a reasonable inspection and concluded that the

plaintiff failed to indicate sufficient facts that any
representations were false. Therefore, we concluded that the core

element of fraud, constructive fraud, and negligent

misrepresentation was missing. Batten, 783 P.2d at 381-82. Our

statement that the defects were discoverable was not the basis for

our holding in Batten since we concluded that factual misrepresenta-

tions were not proven. Even if Batten had stood for the proposition

for which it was cited by Hardin and Bullock, we have held that

language from this Court's opinions is not intended for use as jury

17
instructions. Hunsacker v. Bozeman Deaconess Foundation ( 19 7 8 ) , 17 9 Mont .

305, 333, 588 P.2d 493, 509. We conclude that the District Court

did not abuse its discretion when it refused proposed instruction

H-8.

Hardin and Bullock also claim that the District Court erred

when it refused their proposed instruction H-10. That instruction

contained a direct quote from the buy-sell agreement Cechovics

signed. Cechovics objected, and the District Court agreed, that
H-10 commented on the evidence. The District Court stated that

Hardin and Bullock were entitled to argue to the jury about the

contractual language in support of their contention that the

Cechovics should have inquired, but stated that it would be

improper for the court to comment on the evidence. We agree with

the District Court.
If the District Court allowed the instruction it would have

repeated and emphasized a direct quote from the buy-sell agreement

that was admitted as an exhibit at trial. To have done so would

have violated principles that prohibit a district court from

impermissible comments on the evidence. See Rule 614(b), M.R.Evid.,

Clarkv. Norris (1987), 226 Mont. 43, 53, 734 P.2d 182, 188 (stating

that the District Court cannot comment on the evidence).

We hold that the District Court did not abuse its discretion

when it refused Hardin and Bullock's proposed instructions H-8 and

H-10. After examining the instructions in their entirety, and as

18
a whole, we conclude that the District Court adequately explained
the legal principles advanced by the parties at trial.

ISSUE 3

Did the District Court err when it denied Hardin and Bullock's

motion for summary judgment based on the statute of limitations, or

when it declined to instruct the jury on that subject?

A summary judgment order is interlocutory, but is appealable

after a final judgment is rendered. Riley v. Curl (1981), 191 Mont.

128, 131, 622 P.2d 228, 230. Our standard of review of a district

court's summary judgment ruling is denovo. Spain-Morrow Ranch, Inc. v. West

(1994), 264 Mont. 441, 444, 872 P.2d 330, 331 (citing Minniev. Cityof

Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214).

Hardin and Bullock contend that the Cechovics' claim is barred

by the three-year statute of limitations for negligence which

should apply to this case. Section 27-2-204(l), MCA. They assert

that the elements necessary for a claim of negligent misrepresenta-

tion accrued in 1987 when the property was purchased, and since

suit was not filed until 1991, the District Court erred when it

denied their motion for summary judgment. In the alternative, they

claim that the statute of limitations raised a factual issue about

which the jury should have been instructed.

Cechovics respond that their claim was not barred by any

statute of limitations because the elements of their claim did not

occur until they were damaged in March 1991. They argue that the

two-year statute of limitations for fraud set forth at § 27-2-203,

19
MCA, applies, and the discovery rule tolls the statute until the
fraud or misrepresentation is discovered. Since the boundary
problem was not discovered until the spring of 1991, they contend

that their complaint was filed on time.
Neither party's position is entirely correct. We have, in the

past, applied the two-year statute where it was either directly, or

by inference, agreed upon by the parties. See Williams v. DeVinney

(19931, 259 Mont. 354, 362-63, 856 P.2d 546, 551-52; R.H. Grover, Inc.

v. FlynnIns. Co. (1989), 238 Mont. 278, 286, 777 P.2d 338, 343; Whitev.

Lobdell (1984), 208 Mont. 295, 306, 678 P.2d 637, 642. We have also

previously stated that in Montana an action for negligent

misrepresentation is an action for fraud. Bushnell v. Cook (1986) , 221

Mont. 296, 301, 718 P.2d 665, 668. Finally, as the Cechovics

indicate, the Federal District Court for the District of Montana

has stated that a claim for negligent misrepresentation is governed

by the two-year statute of limitations. Shupak v. New York Life Ins. Co.

(D. Mont. 1991), 780 F. Supp. 1328, 1333.

However, these statements in our previous cases are
inconsistent with our recognition that negligent misrepresentation

is similar to other negligence causes of action. See Barrett, 845

P.2d at 717-18. Negligent misrepresentation requires proof of

elements that are obviously different than the elements required to

prove fraud. Indeed, as we have stated, negligent misrepresen-
tation involves breach of a reasonable standard of care, not

20
intentional misrepresentation. Because negligent misrepresentation
is couched in terms of negligence, we conclude that the three-year

statute of limitations for negligence applies.

However, we also conclude that the District Court correctly

denied Hardin and Bullock's motion for summary judgment because
damages were not sustained in this case until 1991; a cause of

action does not accrue until all elements of the claim have

occurred; and the period of limitations begins to run when the

cause accrues. Section 27-2-102(l) (a) and (2), MCA. In Montana,
a claim or cause of action arises when all elements exist or have

occurred. We recently reiterated this principle and recognized

that in negligence cases the earliest date a cause of action could

accrue is when a person suffers damages from the alleged negligent

conduct. Uhlerv. Doak (Mont. 1994), 885 P.2d 1297, 1303, 51 St. Rep.

1315, 1319.

The Survco survey in 1991 revealed that the property on which

the Cechovics built their home in fact belonged to Grizzard. At

that point, the Cechovics were forced to move their home. Prior to

that time, Cechovics had no cause of action against Bullock. Uhler ,

885 P.2d at 1303. Their complaint was filed later in 1991, well

within the three-year statute of limitations.

We hold that the District Court was correct when it denied

Hardin and Bullock's motion for summary judgment based on the

statute of limitations.

21
 Hardin and Bullock claim, in the alternative, that the
District Court erred because it failed to instruct the jury
regarding the statute of limitations. They contend that when

evidence conflicts, the issue of whether a cause of action is

barred by a statute of limitations is a question for the jury.

&?gg V. %agg (1931), 90 Mont. 180, 300 P. 539; Hill v. Squibb & Sons

(1979), 181 Mont. 199, 592 P.2d 1383.

However, based on our previous discussion, we conclude that

there was no conflict in the evidence. We conclude that the
District Court did not abuse its discretion when it refused to give

Hardin and Bullock's proposed jury instructions regarding the

statute of limitations.
ISSUE 4

Was the jury's damage award supported by substantial credible

evidence?
The amount of damages awarded is properly left to the jury and

this Court will not substitute its judgment for the jury's unless

the amount awarded is so grossly out of proportion that it shocks

the conscience of this Court. Simchuck v. Angel Island Comm. Ass’n ( 19 9 2 ) ,

253 Mont. 221, 230, 833 P.2d 158, 163 (citing Gunning v. General Motors

Corp. (1989), 239 Mont. 104, 107, 779 P.2d 64, 66). In Simchuck, we

also reiterated the principle that this Court will review the

record in the light most favorable to the prevailing party to

determine if substantial evidence supports the jury's verdict.

Simchuck, 833 P.2d at 163 (citing Gunning, 779 P.2d at 67).

22
 Hardin and Bullock contend that the jury improperly awarded

damages for lost river frontage based on testimony from Jim Burke,

the Cechovics' expert appraiser. They assert that the Cechovics

received the exact acreage and amount of river frontage that they

thought they were getting, based on the plat of the land they

reviewed, and therefore, have sustained no damages for lost river

frontage. Saville joins in this contention. We disagree.
In Montana, every person who suffers detriment from another's

unlawful act or omission may recover damages. Section 27-l-202,

MCA. Detriment is defined as a loss or harm suffered in person or

property. Section 27-l-201, MCA.

Cechovics point out that a primary attraction of the land was

Bullock's representation that the river front promontory was

included, and that there is no comparable location on the property

they eventually received. Jim Burke testified that the most

valuable feature of the property was the river frontage. He stated

that when parties purchase river front property they buy it for the

river frontage, not the acreage behind it. In addition, the jury

viewed the property pursuant to § 25-7-401, MCA. As a result, the

jury not only heard expert testimony, but observed the views and

quality of the Cechovics' homesite before and after they moved

their home.
Interpreting the evidence in a light most favorable to the

Cechovics, we conclude that substantial evidence supports the

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jury's damage award and the award does not shock this Court's
conscience

ISSUE 5

Did the jury properly award Pamela Saville damages?

The jury's verdict and damage award in favor of Saville

against Hardin and Bullock must be upheld if supported by

substantial evidence. Simchuck, 833 P.2d at 163. Saville filed a

cross-claim against Hardin and Bullock in which she claimed damages

based on §§ 37-51-321, and -323(2), MCA. The District Court
instructed the jury on this issue and the jury awarded Saville

$7110, which was three times the amount of Hardin and Bullock's

commission for sale of her property.

Hardin and Bullock contend that the court erred when it

instructed the jury on this issue and, in the alternative, that the
jury's verdict and judgment are not supported by the evidence

They claim that Saville was not a "person aggrieved" pursuant to

§ 37-51-323(2), MCA, and that a real estate licensee is not liable

for honest or natural mistakes. Van&fingerv. Puppin (1978), 180 Mont

1, 13, 588 P.2d 988, 996.

Section 37-51-323(2), MCA, provides:

In case any person in a civil action is found guilty of
having received any money or the equivalent thereof as a
fee, commission, compensation, or profit by or in
consequence of a violation of any provision of this
chapter, he shall in addition be liable to a penalty of
not less than the amount of the sum of money so received
and not more than three times the sum so received, as may
be determined by the court, which oenaltv mav be

24
 recovered in any court of competent jurisdiction by any
person aqqrieved.

(Emphasis added.) Violations which are forbidden are listed in

§ 37-51-321(l), MCA. The jury was instructed about the following

violations:

(b) making any false promises of a character likely
to influence, persuade, or induce;

iii 'offering real property for sale or lease
without the knowledge and consent of the owner or the
owner's authorized agent or on terms other than those
authorized by the owner or the owner's authorized agent
.

The District Court's Instruction No. 33 stated that if the jury

found that Bullock or Hardin engaged in conduct prohibited by

either of the above two enumerated subsections, then Saville was

entitled to recover a penalty of one to three times the commission

she paid to the realtors.
Hardin and Bullock claim that based on our decision in Van

Ettinger , Saville was not a "person aggrieved" pursuant to

5 37-51-323, MCA. In Van Ettinger, the buyer sued the broker who

represented to the buyer that an easement appurtenant with the

property for sale included the right to use a swimming pool.

However, prior to closing, the buyer discovered that the neighbor,

upon whose property the pool was located, refused to allow the

buyer to use the pool. The buyer filed suit against the broker for

fraud for representing the easement for use of the pool. This

Court held that the buyer could not recover because he had waived

his rights and had independent knowledge, before closing, which

25
precluded reliance on the broker's statements. Van Ettinger, 588 P. 2d

at 995. We also stated that the buyers were not aggrieved persons

under the Real Estate License Act because they failed to establish

that the easement did not exist and added that the buyers could not

recover because they closed the transaction with knowledge of

problems concerning the easement. Finally, we stated that while

the Real Estate License Act should be construed to lend maximum

efficacy to the enforcement of fiduciary relationships in the real

estate profession, penalty provisions would certainly envision

willful misconduct as opposed to a natural or honest mistake.

Van Ettinger , 588 P.Zd at 996.

Here, unlike Van Ettinger, the Cechovics did not know about the

misrepresentations before closing the transaction, and did not

waive their rights to rely on Bullock's statements. In addition,

the evidence in this case warrants the jury's finding that Bullock

breached fiduciary duties she owed to Saville, her principal.

Furthermore, we conclude that the Montana Real Estate License

Act envisions penalties without proof of willful misconduct. The

Act states that any person aggrieved may recover a statutory

penalty from the licensee. Section 37-51-323(2), MCA. Likewise,

that Act prohibits a licensee from making any false promises of a

character likely to influence, persuade, or induce a buyer and from

offering real property for sale without the knowledge and consent
of the owner or on terms other than those authorized by the owner.

Section 37-51-321, MCA. Evidence was introduced that a jury could

26
interpret to be violative of these provisions. Accordingly, the
District Court did not abuse its discretion when it instructed the

jury on this issue.

We also conclude that Saville was a person aggrieved under the

plain language of the statute. Hardin and Bullock are subject to

provisions of the Montana Real Estate License Act. We have held

that the Real Estate License Act provisions set a standard of

conduct that licensees must conform to, and a violation is

sufficient reason to deny a broker a commission. Lyle v. Moore

(1979), 183 Mont. 274, 599 P.2d 336; Carnellv. Watson (1978), 176 Mont.

344, 349, 578 P.2d 308, 311. Substantial evidence was introduced

to indicate that Hardin and Bullock violated the Real Estate

License Act and their duty to Saville. After their misrepresen-

tation was discovered, Cechovics' complaints named Saville as a

party who should be held liable for Bullock's alleged misrepresen-

tation. We have already concluded that the Cechovics' misrepresen-
tation claim was supported by substantial evidence and caused

Cechovics' damages. Therefore, we conclude that Saville was a

person aggrieved from a licensee's violation of provisions of the

Montana Real Estate License Act.

We also conclude that, contrary to our statement in VanEttinger,

in order to recover the statutory penalty, Saville was not required

to prove an intentional or malicious violation of the Act's

provisions. We affirm the District Court's decision to instruct

27
the jury regarding this issue and its judgment in accordance with

the jury's verdict.

CROSS-APPEAL ISSUE

Did the District Court err when it denied Pamela Saville's

motion for her attorney fees?

Saville filed a cross-claim against Hardin and Bullock in

which she requested her attorney fees. This Court has stated that

attorney fees are not normally recoverable unless a specific

statute or contractual provision provides for recovery of attorney

fees. Lanev.Smith (1992), 255 Mont. 218, 226, 841 P.2d 1143, 1148.

Saville has not indicated a statute which mandates that she recover

her attorney fees. She does, however, claim that a contractual

provision in the listing agreement she signed with Hardin and

Bullock provides for recovery of attorney fees. The relevant

language of the listing agreement states:
In the event of any suit or action on this contract, it
is agreed between us that the court, whether trial or
appellate, may allow the prevailing party therein such
sum as may be adjudged that party's reasonable attorney's
fees.

Use of the word "may" ordinarily renders a court's award of

attorney fees to a prevailing party discretionary. See Gaustad v. City

ofColumbus (19941, 265 Mont. 379, 383, 877 P.2d 470, 472. Here,

however, the District Court determined that, while Saville

prevailed, the action was not "on the contract;" on that basis, the

court concluded that the attorney fee provision was inapplicable.

We review a court's legal conclusions to determine whether they are

28
correct. InreMarriageofBarnard (19941, 264 Mont. 103, 106, 870 P.2d

91, 93.

Saville asserts that she is entitled to fees based on our

prior decision in Lane, 841 P.2d at 1148. In Lane, the underlying

claim was based on a breach of the listing agreement. On that
basis, the district court awarded attorney fees to the prevailing

party under a contract provision substantially similar to that at

issue here. We affirmed.

The District Court in this case rejected Saville's claim for

attorney fees because the action was not for breach of the listing

agreement. In her cross-claim, Saville did allege that she entered

a contract with Hardin and Bullock who breached fiduciary duties,

as well as statutory provisions of the Montana Real Estate License

Act, and requested statutory penalties, as well as her attorney

fees. However, the Cechovics' underlying claim was based on

misrepresentation. In her cross-claim, Saville pleaded that if the

Cechovics' allegations of misrepresentation were true, then Hardin

and Bullock breached duties they owed her. Her claims are
necessarily based on the Cechovics' claims which sound in tort, not

contract. Therefore, we affirm the District Court's decision not

to award Saville's attorney fees.
We affirm the judgment of the District Court. For the reasons

set forth above, we also conclude that the District Court did not

abuse its discretion when it denied Hardin and Bullock's motion for

29
a new trial and judgment as a matter of law pursuant to Rules 50
and 59, M.R.Civ.P.

We concur:

30