Andersen v. Schenk, DA 08-0123.

• Citation: 353 Mont. 424,220 P.3d 675,2009 MT 399
• Decision Date: 24 November 2009
• Docket Number: No. DA 08-0123.,DA 08-0123.
• Parties: Kermit ANDERSEN, Plaintiff and Appellant, v. N. Peter SCHENK, Defendant and Appellee.
• Court: United States State Supreme Court of Montana

220 P.3d 675

2009 MT 399

353 Mont. 424

Kermit ANDERSEN, Plaintiff and Appellant, v. N. Peter SCHENK, Defendant and Appellee.

No. DA 08-0123.

Supreme Court of Montana.

Submitted on Briefs January 7, 2009.

Decided November 24, 2009.

For Appellant: Robert K. Baldwin, Trent M. Gardner, Goetz, Gallik & Baldwin, P.C., Bozeman, Montana.

For Appellee: Charles E. Hansberry, Elena J. Zlatnik, Garlington, Lohn & Robinson, PLLP, Missoula, Montana.

Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Kermit Andersen is a licensed real estate broker. He filed the instant action in the Twentieth Judicial District Court, Sanders County, to collect a commission on the sale of N. Peter Schenk's 10,000-acre ranch, known as the Whiskey Trail Ranch. The problem is that Schenk's alleged promise to pay this commission was not made in writing, and Schenk thus asserted the statute of frauds (§ 28-2-903, MCA) as a defense to Andersen's claim. The District Court agreed with Schenk and entered judgment in his favor. Andersen now appeals. We affirm in part and remand for further proceedings.

BACKGROUND

¶ 2 This case was resolved in the District Court on cross-motions for summary judgment. In this connection, it is important to note that at the summary judgment stage, the court does not make findings of fact, weigh the evidence, choose one disputed fact over another, or assess the credibility of witnesses. Rather, the court examines the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits to determine whether there is a genuine issue as to any material fact relating to the legal issues raised and, if there is not, whether the moving party is entitled to judgment as a matter of law on the undisputed facts. See M.R. Civ. P. 56(c); Corporate Air v. Edwards Jet Center, 2008 MT 283, ¶ 28, 345 Mont. 336, 190 P.3d 1111. This Court employs the same approach in reviewing de novo a district court's decision on a motion for summary judgment. See Corporate Air, ¶ 24.

¶ 3 The record presented by the parties in support of their respective motions for summary judgment reflects the following. In 2002, Schenk's wife Jane initiated divorce proceedings in Illinois state court. One of the marital assets was the Whiskey Trail Ranch, which is located within the exterior boundaries of the Flathead Indian Reservation. Schenk preferred not to sell the ranch, which was titled in his name, and instead hoped to obtain an offer or valuation that he could then use for purposes of buying out Jane's marital interest. He determined that he would not sell the ranch unless he received an offer of at least $10 million.

¶ 4 Schenk decided to contact the Confederated Salish and Kootenai Tribes about the possible sale of the ranch. He had previously promised former Tribal Council Chairman Mickey Pablo that if he was ever considering selling the ranch, he would give the Tribes the first opportunity to purchase it. Pablo had since passed away, and Schenk had no other contacts with the Tribes, but he believed that Andersen did. Thus, Schenk contacted Andersen about introducing him to the current Tribal Council chairman so that Schenk could ascertain whether the Tribes were still interested in purchasing the ranch and, if so, what price they would offer.

¶ 5 Andersen has been a licensed real estate broker since the mid-1980s, though his experience in the real estate business dates back to the early 1960s. Andersen agreed to make the introduction, but there was no discussion between him and Schenk about compensation or a commission, and they did not enter into a listing agreement for the sale of the ranch. Andersen facilitated a few meetings between Schenk and several tribal members; however, the Tribes and Schenk ultimately dealt with each other directly.

¶ 6 Schenk's negotiations with the Tribes were unsuccessful, which he claims was due in large part to Jane's separate negotiations with the Tribes and her efforts in the Illinois divorce proceedings to force Schenk to sell the ranch for less than $10 million. The offers made by the Tribes to Schenk and Jane during this period were in the $4 to $5 million range, and Schenk concluded that the negotiations were going nowhere. He thus decided in the summer of 2005 to start marketing the property nationally. He retained a different real estate agent for this purpose.

¶ 7 Around this same time, Andersen called Schenk regarding an acquaintance, Michael Maddy, who might be interested in purchasing the ranch. Although Andersen had heard that Schenk was still negotiating with the Tribes, he inquired whether Schenk would be willing to sell to someone else. Schenk indicated that he would be, and he gave Andersen permission to show Maddy the ranch. According to Schenk, Andersen also inquired during this call whether Schenk would pay him a commission, and Schenk replied: "If you can get me $10 million, I will pay you a commission." No written contract to this effect was ever executed, however.

¶ 8 Andersen and Maddy viewed the ranch from a helicopter flyover. Thereafter, in mid-August 2005, Schenk, Maddy, and Andersen had several meetings to discuss the sale. According to Andersen, Schenk told him at the conclusion of one of these meetings that he would not pay Andersen a commission if the Tribes bought the property, but "if you put this deal together, you will get your commission and it will be a darn good one." Presumably, Schenk was referring to the deal with Maddy. Again, no written contract was executed.

¶ 9 On September 13, 2005, the Tribes made an offer of $5.7 million to Jane, who then filed a motion in the Illinois court requesting that Schenk be ordered to accept this offer. Meanwhile, on September 20, Maddy wrote up and handed Andersen an offer of $6.2 million. This offer, however, was not transmitted to Schenk. Rather, Andersen drove it 70 miles south to Missoula, where he presented it to Jane and her counsel, who in turn rejected the offer. Andersen reported back to Maddy, who then faxed an offer of $6.5 million directly to Schenk. The following day (September 21), the Illinois court ordered Schenk to accept Maddy's offer; and while Schenk questioned the enforceability of such an order, he nevertheless complied so as to avoid being held in contempt. He signed and faxed the papers directly to Maddy.

¶ 10 Maddy had difficulty financing the purchase, which Schenk evidently had been anticipating. Schenk figured that while Maddy was attempting to line up the financing, Schenk would search for a buyer willing to pay more than $6.5 million; thus, when the sale to Maddy fell through, Schenk could sell the ranch at or closer to his original asking price of $10 million. To that end, Schenk twice agreed to extend the closing. Notably, unbeknownst to Schenk, Andersen was assisting Maddy during this period in trying to either secure the necessary financing or sell the ranch to the Tribes. Ultimately, however, Maddy (through another broker) met an investor who was willing to finance the purchase in exchange for an equity position. Closing took place at the end of February 2006.

¶ 11 Andersen commenced the present action on June 13, 2006, raising six claims, all of which related to Schenk's alleged promise to pay Andersen a commission on the sale of the ranch to Maddy: breach of contract, breach of the implied covenant of good faith and fair dealing, actual fraud or negligent misrepresentation, constructive fraud, promissory estoppel, and unjust enrichment. (He subsequently dropped the promissory estoppel and unjust enrichment claims.) Andersen sought compensatory damages of not less than $325,000, as well as punitive damages. Schenk filed an answer denying Andersen's allegations and raising several affirmative defenses, including statute of frauds, unclean hands, condition precedent, and the economic loss doctrine. Schenk denied that Andersen was his broker and that the parties had an agreement for the payment of a commission. However, as an alternative pleading, if Andersen were found to be Schenk's agent, Schenk asserted two counterclaims: breach of fiduciary duty and constructive fraud. He also made a counterclaim for punitive damages.

¶ 12 The parties eventually filed cross-motions for summary judgment. Andersen sought partial summary judgment on his breach of contract claim, Schenk's statute of frauds, economic loss, and condition precedent defenses, and Schenk's counterclaims, while Schenk sought summary judgment as to all of Andersen's claims plus his unclean hands and economic loss defenses. Both sides filed numerous (and well-researched) briefs in support and opposition to these motions. The District Court held a hearing in November 2007 and, on February 6, 2008, entered an order granting Schenk's motion. The court reasoned that under the statute of frauds, an agreement authorizing or employing an agent or broker to sell real estate for compensation or a commission must be in writing, and since no such writing existed here, all of Andersen's claims failed. The court entered final judgment on February 15, 2008, dismissing Andersen's claims and Schenk's counterclaims with prejudice. Andersen now appeals.

ISSUES

¶ 13 There are two issues on appeal:

1. Is Schenk entitled to summary judgment on Andersen's contract claims?

2. Is Schenk entitled to summary judgment on Andersen's tort claims?

STANDARD OF REVIEW

¶ 14 As noted above, we review a district court's ruling on a motion for summary judgment de novo, applying the criteria set forth in M.R. Civ. P. 56. Arnold v. Yellowstone Mountain Club, LLC, 2004 MT 284, ¶ 12, 323 Mont. 295, 100 P.3d 137. Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." M.R. Civ. P. 56(c).

DISCUSSION

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