Jeffery v. Neville

No. 80-116
IN THE SUPREME COURT OF THE STATE OF MONTANA
1980
DONALD L. JEFFERY,
Plaintiff and Appellant,
VS .
NORRIS M. NEVILLE,
Defendant and Respondent.
Appeal from: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin.
Honorable W. W. Lessley, Judge presiding.
Counsel of Record:
For Appellant:
Steven D. Nelson, Bozeman, Montana
For Respondent :
Landoe, Brown Law Firm, Bozeman, Montana
Submitted on briefs: November 19, 1980
Filed:
Clerk
Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of
t h e Court.
T h i s i s a n a p p e a l from a judgment i n a damage a c t i o n
e n t e r e d by t h e D i s t r i c t C o u r t of t h e E i g h t e e n t h J u d i c i a l
D i s t r i c t , G a l l a t i n County, t h e Honorable W. W. Lessley
presiding. P l a i n t i f f a l l e g e d he s u f f e r e d damages by d e f e n -
d a n t ' s b r e a c h of a n agreement t o s e l l a l o g c a b i n . The
D i s t r i c t C o u r t e n t e r e d judgment i n f a v o r of d e f e n d a n t , and
p l a i n t i f f appeals.
Respondent-defendant N e v i l l e p u r c h a s e d t h e P i n e Cone
Motel i n W e s t Y e l l o w s t o n e , Montana, i n t h e s p r i n g of 1978.
On t h e p r e m i s e s of t h e P i n e Cone Motel was a n o l d l o g c a b i n
a p p r o x i m a t e l y twenty by t h i r t y - t w o f e e t i n d i m e n s i o n s .
Respondent, i n a n e f f o r t t o s e l l t h e p r o p e r t y , d e c i d e d t h a t
t h e l o g c a b i n s h o u l d be removed from t h e p r o p e r t y . He
a d v e r t i s e d i n t h e W e s t Yellowstone a r e a t h a t he had a l o g
c a b i n t o be s o l d and removed, a s soon a s p o s s i b l e , s o t h a t
f u r t h e r c o n s t r u c t i o n could begin a t t h e motel.
P l a i n t i f f - a p p e l l a n t c o n t a c t e d r e s p o n d e n t a b o u t buying
t h e log cabin. On J u n e 20, 1978, t h e y e n t e r e d i n t o a n o r a l
agreement f o r t h e s a l e and p u r c h a s e of t h e l o g c a b i n .
A p p e l l a n t p a i d r e s p o n d e n t $500 f o r t h e c a b i n . Respondent
t o l d a p p e l l a n t t h a t t h e l o g c a b i n was t o be removed from t h e
l o t a s soon a s p o s s i b l e . A p p e l l a n t , soon a f t e r J u n e 20,
began t o t e a r down t h e l o g c a b i n and remove p a r t s of i t from
t h e property .
A p p e l l a n t and s e v e r a l employees removed a n e s t i m a t e d 40
t o 5 0 p e r c e n t of t h e l o g s from t h e p r o p e r t y a l o n g w i t h o t h e r
p a r t s of t h e c a b i n and t r a n s p o r t e d them t o a n o t h e r m o t e l
whose owner was t o p u r c h a s e t h e l o g s from a p p e l l a n t . For
some r e a s o n , a p e r i o d of t i m e e l a p s e d a f t e r t h i s i n i t i a l
removal in which no efforts were made to either remove or
clean up the remaining debris on the site. Respondent,
believing that appellant had removed the portions of the log
cabin for which he had use, thought that the rest of the
debris was to be destroyed.
Approximately a month after the agreement was made,
respondent sold the Pine Cone Motel to Boyd Williams of
Blackfoot, Idaho. At that time the debris and the remaining
portion of the log cabin were removed from the lot.
Approximately a week after respondent and appellant
entered into their agreement to sell the cabin, appellant
entered into an agreement with Tom Clark for the sale of the
log cabin for approximately $7,900. Appellant expected a
profit of at least $6,000 from this sale.
Appellant alleges that he suffered damages from the
loss of profits; from having to hire the logs hauled from
the cabin; and for the work of employees that he used to
tear down the cabin. There was no showing that respondent,
at the time he sold the cabin to appellant, had any knowl-
edge that appellant intended to resell the cabin; nor did
appellant notify respondent that he had entered into an
agreement to sell the cabin.
The District Court, sitting without a jury, found: (1)
that a condition of the June 20, 1978, agreement was that
the log cabin be removed by appellant as soon as possible;
(2) appellant breached the agreement of June 20, 1978; ( 3 )
respondent had no knowledge of the agreement between appel-
lant and Tom Clark for the resale of the log cabin; ( 4 )
respondent did not contemplate that if a breach occurred in
the June 20, 1978 agreement, a nondefaulting party would be
awarded a loss of profits; (5) the lost profits of appellant
from t h e c o l l a t e r a l c o n t r a c t w i t h C l a r k w e r e t o o s p e c u l a t i v e
and c o n t i n g e n t f o r a p p e l l a n t t o r e c o v e r a g a i n s t r e s p o n d e n t ;
and ( 6 ) t h e damages a p p e l l a n t a l l e g e d l y s u f f e r e d i n h i r i n g
~ i c k
Kountz t o h a u l t h e l o g s were t o o s p e c u l a t i v e f o r a p p e l -
l a n t to recover.
The f i r s t i s s u e p r e s e n t e d on t h i s a p p e a l i s whether
t h e r e was s u b s t a n t i a l e v i d e n c e t o s u p p o r t t h e D i s t r i c t
Court's finding t h a t a c o n d i t i o n of t h e s a l e r e q u i r e d
a p p e l l a n t t o remove t h e l o g s from t h e p r o p e r t y a s soon a s
possible.
I n d e t e r m i n i n g whether t h e t r i a l c o u r t ' s f i n d i n g s a r e
s u p p o r t e d by s u b s t a n t i a l c r e d i b l e e v i d e n c e , t h i s C o u r t must
view t h e e v i d e n c e i n t h e l i g h t most f a v o r a b l e t o t h e p r e -
vailing party. See Olson v . Westfork P r o p e r t i e s , I n c .
( 1 9 7 6 ) , 1 7 1 Mont. 154, 557 P.2d 821, 823, and Hornung v .
E s t a t e of L a g e r q u i s t ( 1 9 7 0 ) , 155 Mont. 4 1 2 , 420, 473 P.2d
541, 546.
I n viewing t h e e v i d e n c e we f i n d t h a t h e r e t h e n e g o t i a -
t i o n s were q u i c k and i n f o r m a l and n o t h i n g s p e c i f i c was s a i d
a b o u t t h e t i m e frame i n which t h e c a b i n was t o be removed.
Respondent t e s t i f i e d he w a s i n t h e p r o c e s s of r e f u r b i s h i n g
t h e motel. He wanted t h e c a b i n removed as soon a s p o s s i b l e
s o t h a t he c o u l d t a k e a d v a n t a g e of t h e good w e a t h e r i n any
r e b u i l d i n g of t h e m o t e l t h a t w a s t o be done. The c a b i n w a s
a t l e a s t s i x t y - f o u r y e a r s o l d and had n o t been used f o r a
number of y e a r s . I t had l i t t l e v a l u e t o t h e m o t e l a s i t w a s
b e i n g o p e r a t e d a t t h a t t i m e and c o u l d n o t c o n t r i b u t e t o t h e
value o r t h e appearance of t h e property.
W e f i n d here s u b s t a n t i a l evidence t o support t h e is-
t r i c t C o u r t ' s f i n d i n g t h a t a c o n d i t i o n of t h e s a l e was t h a t
t h e l o g s were t o b e removed as soon a s p o s s i b l e . W f i n d no
e
error.
The second issue raised by appellant is similar to the
first: whether there was substantial evidence to support
the ~istrictCourt's finding that appellant had terminated
his efforts in removing the logs from the Pine Cone Motel
property.
While there was conflicting testimony at the trial as
to whether appellant terminated his efforts to remove the
portion of the cabin he wanted, respondent's testimony
supported the court's findings that appellant had terminated
these efforts. Respondent testified that as of July 20,
1978, it appeared to him that all that was left of the cabin
was debris. Further, he testified that no remaining logs
were of any quality. The debris remaining was broken lumber
and old shingles. In addition, he testified that he had not
seen anyone working on the removal for several days prior to
July 20, nor did he see any long logs remaining on the site.
While this testimony conflicts with that of appellant, it
is, in our opinion, sufficient to support the court's find-
ings.
Appellant next raises the issue of whether there was
substantial evidence to support the District Court's finding
that the damages incurred by appellant in hiring Dick Kountz
to haul the logs from the cabin were too speculative for
appellant to recover.
Appellant's contention that he should be awarded dam-
ages for the alleged debt to Kountz is inconsistent with his
allegation of a breach. Had the court found that he did not
breach the agreement and, in fact, had moved soon enough to
remove the cabin, then most certainly the court would have
awarded appellant damages for the cost of removing the logs.
Assuming that appellant was entitled to damages, his
proof of those damages was speculative at best. Kountz did
not testify about any debt, nor did appellant produce any
bill or demand for payment. Over a year had lapsed since
the time the work was done for appellant. At the time of
trial, appellant had not received a bill nor had he made any
effort to pay the bill. We find it was within the court's
discretion, after hearing the testimony, to decide that
appellant's proof was too speculative for these alleged
damages.
The final issue presented by appellant is whether he
can recover for lost profits from the sale of the cabin to a
third party.
Appellant sued for $7,900, of which, according to his
testimony, $6,000 was lost profits in the sale of property
to Tom Clark. The District Court found that appellant could
not recover these alleged lost profits. Appellant and
respondent made an informal, oral agreement for the sale of
the cabin. They did not discuss the resale of the cabin by
appellant at the time of the sale. Appellant did not, at
that time, have an agreement to sell the cabin, nor did he
indicate to respondent that he wanted to resell the cabin or
was actually going to sell it.
The general rule set out in 25 C.J.S. Damages, S43 at
751, states that ". . . gains or profits of collateral
enterprises or subcontracts are, as a rule, too speculative
and contingent to afford an element of recovery in the case
of a breach of the primary contract." See Longview Con-
struction & Development, Inc. v. ~ogginsconstruction Co.,
(Tex.Civ.App. 1975), 523 S.W-2d 771-
W f i n d no t e s t i m o n y a t t r i a l which s u p p o r t s a p p e l -
e
l a n t ' s c o n t e n t i o n t h a t t h e s a l e of t h e c a b i n by a p p e l l a n t
c o u l d have been c o n t e m p l a t e d by r e s p o n d e n t . In fact, the
o n l y t e s t i m o n y c o n c e r n i n g t h e i n t e n t i o n of a p p e l l a n t when he
purchased t h e c a b i n w a s t h a t he was g o i n g t o move it t o t h e
Big Sky a r e a .
T h i s C o u r t , i n Zook B r o t h e r s C o n s t r u c t i o n Company v .
S t a t e ( 1 9 7 6 ) r 1 7 1 Mont. 64, 556 P.2d 911, 916, h e l d t h a t , t o
be r e c o v e r a b l e , damages must be w i t h i n t h e c o n t e m p l a t i o n of
t h e p a r t i e s when t h e y e n t e r e d i n t o t h e c o n t r a c t and be s u c h
damages a s m i g h t n a t u r a l l y be e x p e c t e d t o r e s u l t from a
b r e a c h of t h e c o n t r a c t . I n Zook t h i s C o u r t c i t e d Cruse v .
Clawson ( 1 9 6 0 ) , 137 Mont. 439, 448, 352 P.2d 989, 994,
h o l d i n g t h a t a p a r t y "may r e c o v e r f o r l o s s of p r o f i t s where
i t i s shown t h a t s u c h l o s s i s t h e n a t u r a l and d i r e c t r e s u l t
of t h e a c t of t h e d e f e n d a n t complained of and t h a t s u c h
amount i s c e r t a i n and n o t s p e c u l a t i v e . "
A s p r e v i o u s l y n o t e d , w e f i n d no t e s t i m o n y t o s u p p o r t
a p p e l l a n t ' s c o n t e n t i o n s t h a t r e s p o n d e n t s h o u l d have contem-
p l a t e d a r e s a l e of t h e c a b i n . Without s u c h t e s t i m o n y , w e
must a f f i r m 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 h a t a p p e l l a n t
c a n n o t r e c o v e r f o r t h e l o s s of p r o f i t s from a c o l l a t e r a l
contract.
Having examined a l l t h e i s s u e s r a i s e d by a p p e l l a n t , w e
affirm.
Justice /
We concur:
C u e £ Justice