Erban v. Monforton

No. 86-510
I N THE SUPREME COURT OF THE S T A T E O F MONTANA
1987
ELMER A . ERBAN,
P l a i n t i f f and R e s p o n d e n t ,
-vs-
J O S E P H F . MONFORTON,
D e f e n d a n t and A p p e l l a n t .
A P P E A L FROM: 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 ,
I n and f o r t h e C o u n t y of G a l l a t i n ,
T h e H o n o r a b l e T h o m a s O l s o n , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
M o r r o w , Sedivy & B e n n e t t ; Lyman H. Bennett, 111,
Bozeman, Montana
For R e s p o n d e n t :
J. D a v i d P e n w e l l , Bozeman, Montana
S u b m i t t e d on B r i e f s : M a r c h 1 9 , 1987
Decided:Auqust 3, 1987
AUG 3 - 1987
Filed:
Clerk
Mr. Justice L. C. Gulbrandson delivered the Opinion of the
Court.
Joseph Monforton appeals a decision from Gallatin
County District Court finding him liable for unjust
enrichment as a result of unreasonably withholding written
consent to an assignment of respondent Elmer Erban's interest
in a tract of land. The issue on appeal is whether there is
substantial credible evidence to sustain the decision of the
District Court. We affirm.
In 1979, Erban entered into a contract for deed with
Monforton for the purchase of real property located in
Gallatin County, Montana. The total purchase price was
$162,500. Erban made a downpayment of $8,382.12 when the
contract was signed, a payment of $5,000 in early 1980, and
in October 1980, a payment of $10,849.13, to bring the total
payments to $24,231.25. Erban also made improvements to the
property in the amount of $3,889.77. Erban purchased the
property for use and occupancy by his daughter and her
husband, Ray McReynolds. The couple began occupancy in
October 1979 and the arrangement was that the couple would
begin making payments in 1981. The couple made the 1981
payment and were divorced in September 1982. McReynolds, the
son-in-law, decided to stay on the premises and expressed his
intentions to Erban. In August 1982, or one month before the
couple's divorce was completed, Erban executed an "assignment
and novation" with McReynolds and signed a quitclaim deed
conveying the property to McReynolds. The quitclaim deed was
delivered to the escrow agent by the attorney representing
Erban's daughter in the divorce proceedings. Erban
acknowledges that the attorney was acting on his behalf. In
July 1983, or nearly one year later, Erban asked for
Monforton's written consent to the assignment to McReynolds.
The 1979 contract between Erban and Monforton provided:
3. Assignment. This Agreement shall not
be assigned, nor shall the real property
which is the subject of this Agreement be
encumbered by the second party without
receiving written consent from the first
party, said written consent not to be
unreasonably withheld by the first party.
Monforton responded through his attorney saying that "consent
was not extended by Joe [Monforton]." No explanation was
given for Monforton's refusal to consent to the assignment.
Monforton alleges in his brief that he refused to consent
because McReynolds was late with the 1982 payment under the
Erban-Monforton contract and had been recently divorced.
Notices of default and acceleration were sent to Erban in
late 1983. Erban failed to respond, assuming that the
contract with Monforton had been cancelled. In March 1984,
Monforton accepted a $152,000 cash payment and a promissory
note for $22,341 from McReynolds. This allowed McReynolds to
break escrow and record the warranty deed from Monforton to
Erban, which, together with the deed from Erban to
McReynolds, provided for a clear chain of title from Erban to
McReynolds and allowed McReynolds to purchase the property at
a price of $174,341. Erban then filed suit against Monforton
for unreasonably withholding his consent to the assignment to
McReynolds. Erban also filed suit against McReynolds and
that suit is still pending. Monforton did not appear on the
trial date and his counsel made motions to withdraw as
counsel and for a continuance of trial proceedings. Both
motions were denied.
The District Court found that Monforton had
unreasonably withheld his consent to the assignment and that
Erban had been damaged in the amount of $28,120.96, Erban's
investment cost. The court also awarded Erban attorney fees
and costs totalling $2,045.17. If a contract states that
written consent shall not be unreasonably withheld, equity
principles will apply. The court stated that reasons of
sound business judgment, or where the justification for
refusing consent is clearly explained, would suffice. Here
the court found a provision in the Erban-Monforton contract
that written consent to an assignment could not be
unreasonably withheld; it concluded that Monforton breached
the contract with Erban by failing to provide sufficient
reason for refusing to consent to the assignment and
therefore was responsible for Erban's damages of $28,120.96.
The standard of review was stated in Lima School Dist.
No. 12 v. Simonsen (Mont. 1984), 683 P.2d 471, 476-477, 41
In reviewing findings of fact in a civil
action tried without a jury, this Court
may not substitute its judgment in place
of the trier of facts. Our function is
confined to determining whether there is
substantial credible evidence to support
the court's findings. We view the
evidence "in a light most favorable to
the prevailing party, recognizing that
substantial evidence may be weak or
conflicting with other evidence yet still
support the findings. " Lacey v. Herndon
(Mont. 1983), 668 P.2d 251, 255, 40
St.Rep. 1375, 1380.
Upon consideration of the contentions presented by both
parties, we conclude that there is substantial credible
evidence to support the decision of the lower court.
Affirmed.
We concur: ,A