Adlington v. First Montana Title Insurance

No. 90-045
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
LORRAINE KATHLEEN ADLINGTON,
Plaintiff and Appellant,
FIRST MONTANA TITLE INSURANCE
COMPANY and reinsured by TITLE
INSURANCE COMPANY OF MINNESOTA, L2 S W i t L
CLERK O F SUPREME C011441f:
STATE OF MOfVTANA
Defendants and Respondents.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Leif B. Erickson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Richard DeJana, Esq., Kalispell, Montana
For Respondent:
James C. Bartlett, Hash, OtBrien & Bartlett,
Kalispell, Montana
submitted on briefs: September 6, 1990
pecided: November 15, 1990
Filed:
Justice William E. Hunt, Sr. delivered the Opinion of the Court.
Appellant Lorraine Adlington appeals from the order of the
~istrict Court, Eleventh ~udicial ~istrict, Flathead County,
dismissing her case against First Montana Title Insurance Company.
We affirm.
The issues raised on appeal are:
1. Is the pre-trial order determinative of issues that must
be proven at trial?
2. Did the District Court abuse its discretion by dismissing
the appellant's complaint at the close of her case-in-chief for
failure to prove her damages?
On July 23, 1982, the appellant purchased Lot 56 of Alpine
Acres in Flathead County, Montana. She secured a title insurance
policy from the respondent, First Montana Title Insurance Company
as reinsured by the Title Insurance Company of Minnesota. In the
non-jury lawsuit which commenced on September 12, 1989, the
appellant alleged that because the title company failed to disclose
a sanitary restriction, she was entitled to recover for the cost
of a new water well. At the close of appellant Adlington's case-
in-chief, First Montana moved to dismiss the lawsuit on the basis
that Adlington had failed to present evidence as to the cost of a
new well. The District Court invited both parties to file post-
trial briefs on the issue. Post-trial memoranda were filed and on
October 26, 1989, the court granted the motion to dismiss.
The agreed statement of facts in the pre-trial order did not
raise any specific contention as to the cost of a new well, or an
agreement as to what the cost would be. The court reasoned that
the burden of proof had therefore remained with the appellant
throughout the trial to present evidence as to the cost of the
well. While the appellant did not introduce specific evidence of
damages, she did testify that she could have had the well installed
in 1984 for the sum of $10,000 Canadian, or about $7,800 American.
On November 6, 1989, the appellant filed a motion for new
trial or relief from judgment order on the grounds that the pre-
trial order had failed to specify the cost of the well as a
particular issue of fact. On December 6, 1989, the District Court
denied the motion for a new trial for the same reason it had
granted respondent's motion for dismissal, i.e., the appellant's
failure to prove damages. The court stated that although damages
were not an issue to be proved in the pre-trial order, the order
likewise did not contain a stipulation as to the amount of damages.
On January 4, 1990, the appellant filed notice of appeal to this
Court.
The first issue on appeal is whether the pre-trial order
determines the issues that must be proven at trial. The appellant
contends that because the cost of the well was not an enumerated
"factual issue1' in the pre-trial order, it was not an issue on
which she had to present evidence. Although the cost of the well
was not enumerated, it was clearly a contested fact. In the
respondent's answer he denies paragraph 4 of the complaint, which
states, "That there exists upon the property as a condition on
title, sanitary restrictions which prohibit the use of the old
well. Because of the sanitary restrictions, the cost of the new
well will run approximately $7,500.00 to $10,000.00.'' Also,
paragraph 9 of the respondent's answer states, "The loss alleged
to have been sustained by Appellant, if it was sustained at all,
resulted from the matter or things in the exceptions in the policy
of insurance." Obviously the amount of loss was an issue which
should properly have been explored at trial; that it was not listed
in the pre-trial order is immaterial. Moreover, the damages were
listed as a plaintiff's contention. Since cost was a part of the
pleadings, it was indeed before the court.
The second issue is whether the District Court abused its
discretion by dismissing the appellant's complaint at the close of
her case-in-chief for failure to prove her damages. The District
Court's order of October 26, 1990, grantingthe respondent's motion
to dismiss states that the appellant failed to introduce anything
except her own hearsay statements as to the cost of the new well.
The court admitted the hearsay statements for . . . the purposes
of reliance, but not for the truth of the matters testified to."
Because the statement was inadmissible as proof of the cost of the
well, the court concluded that no evidence was presented on the
issue, and the case was therefore dismissed for failure to prove
damages.
The appellant contends that the District Court incorrectly
determined that her statement regarding the cost of the well was
inadmissible hearsay. She maintains that the complaint and pre-
trial order sought only an award of the amount necessary to install
the well--whatever that might be. She saw no need to put on proof
of the cost. The appellant cites Jarussi v. Board of Trustees, 204
Mont. 131, 664 P.2d 316 (1983), for authority to assert that a
plaintiff Is testimony as to the value of a potential loss when
unrebutted is sufficient to support a judgment. However, Jarussits
losses were actual, not potential. The court stated that the
amount of Jarussi s damages were "clear and uncontradicted.
Jarussi, 204 Mont. at 137, 664 P.2d at 319. Here an issue clearly
exists as to the cost of the well and the appellant's hearsay
statements are insufficient to meet the 'tsubstantial evidence1'
standard required for a judgment for damages. Johnson v. Murray,
201 Mont. 495, 506, 656 P.2d 170, 175 (1982).
The appellant's hearsay statement was insufficient to prove
the cost of the well. She had no qualifications, skill, or special
knowledge that would enable her to testify of her own knowledge
about the probable actual damages. The District Court properly
excluded her statement as to the truth of the subject matter of the
testimony, and granted the respondent's motion to dismiss.
Affirmed.
We Concur:
, 1
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Justices