Minks v. Gerttula

June 4 2013
DA 12-0682
IN THE SUPREME COURT OF THE STATE OF MONTANA
2013 MT 151N
IVAN G. MINKS JR.,
Petitioner and Appellant,
v.
GORDON R. GERTTULA,
Respondent and Appellee.
APPEAL FROM: District Court of the Twenty-Second Judicial District,
In and For the County of Big Horn, Cause No. DV 12-22
Honorable Blair Jones, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Ivan G. Minks, Jr, self-represented; Billings, Montana
For Appellee:
Gordon R. Gerttula, self-represented; Billings, Montana
Submitted on Briefs: May 1, 2013
Decided: June 4, 2013
Filed:
__________________________________________
Clerk
Justice Beth Baker delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating
Rules, this case is decided by memorandum opinion and shall not be cited and does not
serve as precedent. Its case title, cause number, and disposition shall be included in this
Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana
Reports.
¶2 Ivan Minks appeals the judgment of the Twenty-Second Judicial District Court
awarding Gordon Gerttula $8,400 in damages for Minks’s breach of the parties’ lease
agreement and ordering Minks to vacate the premises within ten days. Minks argues that
the District Court erred by failing to consider his claim that the lease, which included an
option to purchase real property, was induced by fraud and therefore void and
unenforceable. We affirm.
¶3 Minks signed an agreement on November 5, 2011, to lease from Gerttula his
residential property and its accompanying eighteen acres near Pryor, Montana. Minks
was relocating to Billings to take a new job and needed a place where he and his wife
could have their livestock. The lease was for a one-year period and provided that Minks
would pay $1,200 per month rent with an option to purchase the property for $289,000.
The option was to be exercised during the lease period, upon which Minks and Gerttula
would enter into a buy-sell agreement. Disputes arose between the parties, culminating
in Gerttula’s March 3 and April 21, 2012 notices to vacate the premises due to non-
payment of rent.
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¶4 Self-represented, Minks filed a “Petition for Relief” in the District Court on
April 26, 2012, requesting the court to declare the lease option contract void and to order
restitution for damages alleged to have been incurred due to Minks’s expenses in moving
costs, utility fees, livestock transport costs, and other related expenses. Minks alleged in
his Petition that Gerttula failed to disclose his arrearages in payments on the property and
that three months after the lease was signed, Wells Fargo posted a notice of Trustee’s
Sale. Minks claimed that Gerttula’s non-disclosure amounted to fraud and that he never
would have signed the lease option agreement had he known about the delinquency and
impending foreclosure. Minks also alleged that the septic system was failing and that
Gerttula failed to make necessary repairs in order to have the property appraised so that
Minks could proceed with the purchase option. The Petition alleged unconscionability in
the rental agreement (§ 70-24-404, MCA) and other violations of the Montana
Residential Landlord Tenant Act, actual fraud in inducing Minks to enter the contract
(§ 28-2-405, MCA), and violation of the Montana Consumer Protection Act (§§ 30-14-
102(8) and -103, MCA). Minks sought treble damages pursuant to § 30-14-133, MCA.
¶5 Gerttula, also appearing without counsel, filed a response to the Petition. Gerttula
acknowledged the lease option agreement, but denied that he was in default in his
payments on the property at the time the lease was signed. Gerttula alleged that the
property had sustained extensive flood damage during the spring of 2011, resulting in
over $20,000 in expenses, as a result of which he was forced to seek a loan modification
to prevent the property from being foreclosed. Gerttula also claimed that septic repairs
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had been completed and that nothing in the lease option agreement allowed Minks to stop
paying rent while exercising his purchase option. Gerttula claimed that the notice to
vacate was sent because Minks had been living on the property without paying rent since
February 2012 and had indicated he would not be buying the property at the agreed
purchase price. Gerttula asked the District Court to remove Minks from the property and
to order him to pay rents due, along with Gerttula’s damages and “attorney and court
fees.”
¶6 Following an unsuccessful “binding mediation” ordered by the District Court, the
court held a hearing on September 18, 2012, and received testimony from both parties.
At the conclusion of the hearing, the court ruled in favor of Gerttula and ordered Minks
to vacate the premises by five o’clock p.m. on September 28, 2012. The court further
ordered that Minks was responsible for seven months’ rent, in the total amount of $8,400.
On October 17, 2012, the District Court entered written Findings of Fact, Conclusions of
Law and an Order confirming its bench rulings. The court found that Minks failed to
exercise the option to purchase partly because the property would not appraise for the
designated option price, attaching to its written findings an e-mail from Minks advising
Gerttula of the significantly lower estimate of value he had obtained for the property.
The District Court concluded that the terms of the lease unambiguously required Minks
to pay rent and provided for a specific option to purchase, which Minks had not
exercised. Accordingly, it entered judgment in Gerttula’s favor in accordance with its
oral rulings.
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¶7 We review a trial court’s findings of fact for clear error and the court’s
conclusions of law for correctness. Total Indus. Plant Servs. v. Turner Indus. Group,
LLC, 2013 MT 5, ¶ 22, 368 Mont. 189, 294 P.3d 363 (citing M. R. Civ. P. 52(a) and
Lewistown Miller Constr. Co. v. Martin, 2011 MT 325, ¶¶ 15, 17, 363 Mont. 208, 271
P.3d 48).
¶8 Minks alleges the District Court committed an error of law when it failed to
recognize that a contract induced by fraud is void. Montana law is clear that the element
of consent essential to the existence of a contract “is not real or free” when obtained
through fraud. Section 28-2-401(1)(c), MCA. A consent that is not free is not absolutely
void, but may be rescinded in the manner provided by law. Section 28-2-302, MCA. We
have held that, as a general rule, fraud will vitiate a contract. Bails v. Gar, 171 Mont.
342, 347, 558 P.2d 458, 461 (1976).
¶9 Minks correctly points out that the District Court’s written findings do not address
his claim of fraud. In reviewing a court’s findings of fact, however, we apply the
doctrine of implied findings, under which, “where ‘findings [of fact] are general in terms,
any findings not specifically made, but necessary to the [determination], are deemed to
have been implied, if supported by the evidence.’” In re Transfer of Location for Mont.
All-Alcoholic Bevs. Resort, 2008 MT 165, ¶ 29, 343 Mont. 331, 184 P.3d 324 (quoting
Caplis v. Caplis, 2004 MT 145, ¶ 32, 321 Mont. 450, 91 P.3d 1282, and State v. Wooster,
2001 MT 4, ¶ 18, 304 Mont. 56, 16 P.3d 409). At the hearing, the District Court
expressly indicated it understood Minks’s position that he was fraudulently induced into
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signing the contract and questioned him about his non-payment of rent and his
determination of whether to exercise the option. Also questioned by the court, Gerttula
testified that when he signed the lease with Minks he was not in default on his payments
to the bank, but that the bank had allowed deferral of payments because of flood damage
to his property. He further testified that the sales prices to which Minks agreed in the
lease option would have been sufficient to satisfy his loan to the bank. Gerttula testified
that he had been unable to complete his loan modification with the bank because Minks
was still on the property.
¶10 Necessary to the District Court’s determination that Minks was liable for rent was
its implicit rejection of his claim that the contract had been procured by fraud. Given
Gerttula’s testimony, there is sufficient evidence in the record to support a finding that
Gerttula did not engage in actual fraud, within the meaning of Montana contract law, at
the time the lease was signed. Section 28-2-405, MCA. Review of a trial court’s factual
determinations for clear error calls for considerable deference. “[W]e will reverse a
district court if its findings of fact are not based on substantial evidence, if the district
court has misapprehended the effect of the evidence, or if our review of the record leaves
us with ‘the definite and firm conviction that a mistake has been committed.’” In re
Szafryk, 2010 MT 90, ¶ 18, 356 Mont. 141, 232 P.3d 361. Reversal of a discretionary
ruling requires that the district court acted “arbitrarily without employment of
conscientious judgment or exceeded the bounds of reason resulting in substantial
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injustice.” Albrecht v. Albrecht, 2002 MT 227, ¶ 7, 311 Mont. 412, 56 P.3d 339 (quoting
In re Marriage of Kovarik, 1998 MT 33, ¶ 21, 287 Mont. 350, 954 P.2d 1147).
¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(d) of
our Internal Operating Rules, which provides for noncitable memorandum opinions. The
District Court’s express and implied findings of fact are supported by substantial
evidence, we are not left with a firm conviction that it made a mistake, and the court did
not commit an error of law. Its Order entered October 17, 2012, is affirmed.
/S/ BETH BAKER
We concur:
/S/ MIKE McGRATH
/S/ BRIAN MORRIS
/S/ JIM RICE
/S/ LAURIE McKINNON
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