Terry Danelson Inc. v. Juel v. Fi

No. 92-381
IN THE SUPREME COURT OF THE STATE OF MONTANA
TERRY DANELSON, INC. and TERRY L. DANELSON,
Plaintiffs and Appellants,
ROGER JUEL and NANCY JUEL; DANIELS-SHERIDAN FEDERAL
CREDIT UNION; and DR. MERLE D. FITZ, et al.,
Defendants and Respondents.
DANIELS-SHERIDAN FEDERAL CREDIT UNION,
Cross-Claim and Third-Party Plaintiff,
ROGER JUEL and NANCY JUEL, husband and wife,
Cross-Claim Defendants,
and
MERLE D. FITZ and JEAN E. FITZ, husband and wife,
Third-Party Defendants.
MERLE D. FITZ and JEAN E. FITZ, husband and wife,
Third-Party Defendants and
Cross-Claim Plaintiffs,
TERRY DANELSON, INC., and TERRY DANELSON, CIC dAm
?*'I/ c
CLERK OF S U P R E M E Q U R ~ ~
C
Plaintiffs and Cross-Claim Defendants. STATE OF MONTANA
APPEAL FROM: District Court of the Fifteenth Judicial District,
In and for the County of Daniels,
The Honorable Richard G. Phillips, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Loren J. O'Toole, OIToole & OIToole,
Plentywood, Montana
For Respondents:
Laura Christoffersen, Christoffersen & Knierim,
Wolf Point, Montana (Juels);
Carol Johns, Attorney at Law, Wolf Point,
Montana and Paul W. Jacobson, Attorney at Law,
Williston, North Dakota (Daniels-Sheridan
Federal Credit Union)
Submitted on Briefs: February 4, 1993
Decided: May 25, 1993
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
Appellant Terry Danelson appeals from an order of the
Fifteenth Judicial District Court, Daniels County, granting summary
judgment and ordering the parties to specifically perform a
contract for deed. The court granted respondents Roger and Nancy
Juel possession of the premises and ordered appellant to withdraw
his sign-up with the ASCS farm program.
We affirm.
This Court will consider the following two issues for the
appeal.
1. Did the District Court err in granting summary judgment
for specific performance on the contract for deed to respondents?
2. Did the District Court err in refusing to consider
appellants' Rule 56(f), M.R.Civ.P., affidavit?
In 1990, Terry Danelson entered negotiations with Roger and
Nancy Juel who were interested in purchasing Danelsonls farm
located near Scobey. The parties initially entered a lease
agreement by which the Juels agreed to farm the land for the 1990
crop season with a one-half share of the crop as a lease payment to
Danelson.
After lengthy negotiations, the parties executed a contract
for deed for the farm. The relevant provisions of the contract for
deed provided that Danelson was to surrender possession of the
property to the Juels immediately upon execution of the contract.
The contract also contained a 30-day grace period after notice to
cure any default payment by the Juels.
On April 16, 1991, the Juelst attorney wrote Danelsonls
attorney stating that he would deposit the Juelst check for
$42,944.75 in a special account when all the parties signed the
necessary papers. On April 16, 1991, the Juels executed the
contract for deed. The contract purported the inception date to be
April 1, 1990. The payment schedule required that the Juels make
the first annual payment on January 1, 1991, and the amortization
schedule computed interest from January 1, 1991. It appears that
upon execution of the contract, those matters that had not yet been
performed, and were known by the parties not to have been
performed, made it appear that the Juels were in default.
Also on April 16, 1991, Danelson signed up the property for
Agricultural Stabilization and Conservation Service (ASCS) farm
payments for 1991. He specified that the payments should be
divided with one-half going to himself and the other half going to
the Juels. In a separate agreement, but referred to as a down
payment in the contract for deed, the Juels bought certain farm
machinery from Danelson for $75,000. Danelson executed a bill of
sale for the machinery but he never delivered it to the Juels.
A few days later the Juels discovered that Danelson had signed
up the farm for ASCS payments and that he was entitled to one-half
of those payments. Upon this discovery, the Juels refused to place
the $42,944.75 into the special account. Danelson refused to
modify the ASCS arrangement. Because the Juels did not place the
money into the special account, Danelson sent them the 30-day
notice of default, but they still refused to make the payment.
On July 18, 1991, Danelson filed a complaint against the Juels
for breach of contract. On February 4, 1992, the Juels filed a
motion for summary judgment. On March 20, 1992, Danelson filed a
Rule 56(f), M.R.Civ.P., affidavit contending that ruling on summary
judgment would be improper without additional discovery. On
April 14, 1992, the District Court granted summary judgment in
favor of the Juels. Danelson appeals the decision of the District
Court,
I.
Did the District Court err in granting summary judgment for
specific performance on the contract for deed to respondents?
We will not overturn a district court's decision granting
summary judgment if under the record before the court there is no
genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.;
Palin v. Gebert Logging, Inc. (1986), 220 Mont. 405, 716 P.2d 200.
The granting of summary judgment is proper if the party opposing
the motion fails to prove that a genuine issue of material fact
exists or fails to show that a legal issue should not be resolved
in favor of the movant. Palin, 716 P.2d at 202.
The District Court granted specific performance of the
contract for deed, despite the actions of both parties. Danelson
contends the Juels fraudulently induced him into entering the
contract for deed by misrepresenting that they were about to
deliver a check for $42,944.75 into a special account. Danelson
further argues that by failing to deliver the $42,944.75 into the
special account, the Juels were first to breach because they had
been in default since January 1, 1991. The Juels counter that
Danelson was not entitled to sign up for the ASCS payments and that
by doing so he failed to deliver full possession of the property
immediately upon execution of the contract, and therefore, he was
the first breach the contract.
We have stated that specific performance is
an equitable remedy which compels the performance of a
contract in the precise terms agreed on. The foundation
of a suit for specific performance of a contract is that,
by compelling the parties to do the very things they
agreed to do, more complete and perfect justice is
attained than by giving damages for breach of a contract.
Specific performance is purely an equitable remedy;
presenting a purely equitable controversy and is governed
by equitable principles. 81 C.J.S. Specific Performance
9 1, p. 408. See also: Statearel. Victor~sInc.v.DistrictCourt,
169 Mont. 110, 545 P.2d 1098.
In 81 C.J.S. Specific Performance 9 3, p. 411, it is
stated:
.. specific pe?fomance will be ordered only on equitable grounak
It.
in view of all the conditions surrounding the particular case. . . .
A bill in equity for spec@c pe?fomance is an appeal to the
conscience of the court, and generally, in such a proceeding, the inquiry
must be whether, in equity and good conscience, the court should
specifically enforce the contract. Accordingly, specific
performance will be granted when it is apparent
from a view of all the circumstances of the
particular case that it will serve the ends of
justice, and it will be withheld when, from a like
view, it appears that it will produce hardships or
injustice to either party .... *t
Seifert v. Seifert (1977), 173 Mont. 501, 504, 568 P.2d 155,
Section 27-1-416, MCA, states that specific performance will
not be enforced in favor of a party to a contract if that party has
not I1fullyand fairly performed all the conditions precedent on his
part to the obligation of the other party .. .I1 except where the
party's failure to perform is only partial and capable of being
fully compensated. Therefore, this Court is required to examine
the facts and circumstances of this case to determine whether the
Juels fully and fairly performed their obligations under the
contract, and if not, whether their failure is only partial and
capable of being fully compensated.
When executing the contract for deed, Danelson retained legal
title to the property and is only entitled to receive payments and
possibly receive the property back if the Juels defaulted.
Danelson can only retain an interest in the use of the property if
he specifically reserves that use by the terms of the contract for
deed. In the contract for deed, Danelson only reserved mineral
rights. The contract for deed does not mention reserving any right
to share in the ASCS payments. After the execution of the
contract, Danelson did not have any right or interest in receiving
ASCS payments.
The Juels did partially perform the contract for deed by
providing a $75,000 down payment as stated in the contract for deed
and by executing the contract. The Juels defaulted on the contract
when they did not tender the $42,944.75. The contract for deed
provided that the Juels had a 30-day grace period after notice in
which to cure any default. The Juels received their notice and
failed to cure the default. It was only then that the Juels
breached the contract.
The District Court concluded that both parties had spent a
considerable amount time and effort to enter into the contract and
took considerable steps in trying to place the contract into
effect. Both parties partially performed the contract for deed and
their breach is capable of being fully compensated. We agree with
the court that in the interest of justice and equity the
appropriate remedy is specific performance. In this instance, that
would be to place the parties in the same position as they would
have been had neither party breached and reinstate the contract for
deed. We hold that the District Court did not err in granting
summary judgment for specific performance in favor of the Juels.
Because of our holding we need not address issue two.
We affirm.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1988 Internal Operating Rules, this decision shall not be cited as
precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter and West Publishing Company.
/
We concur:
Chief Justice
Justices