Anderson v. Applebury

Decision Date15 August 1977
Docket NumberNo. 13431,13431
Citation173 Mont. 411,34 St.Rep. 842,567 P.2d 951
PartiesCarl F. ANDERSON et al., Plaintiffs and Appellants, v. James S. APPLEBURY et al., Defendants and Respondents.
CourtMontana Supreme Court

William George Harris (argued), Missoula, for plaintiffs-appellants.

Boone, Karlberg & Haddon, Sam E. Haddon (argued), Missoula, Johnson & Greef, Hamilton, for defendants-respondents.

HARRISON, Justice.

This is an action wherein plaintiffs Carl F. and Joyce A. Anderson, husband and wife, by their amended complaint sought damages, statutory penalties and attorney fees against defendants Andrew T. Lund and Anvil R. Summers and their sureties under the provisions of the Montana Real Estate License Act. This action arose out of the purchase by plaintiffs of a motel from defendants James S. and Ruth M. Applebury. Following depositions of all parties, Lund and Summers separately moved for summary judgment. The motion was submitted upon briefs, oral arguments and depositions. The district court, Ravalli County, granted the motion and summary judgment was entered in favor of defendants Lund and Summers. Plaintiffs appeal.

The sole substantive issue presented for review by this Court is whether the district court erred in ruling that no genuine issue of material fact existed between the parties and that defendants Lund and Summers were entitled to judgment as a matter of law.

In the fall of 1971, plaintiffs contacted Anvil R. Summers, a real estate salesman employed by Western States, Inc. of Hamilton, Montana, to locate a business in Hamilton available for purchase. Two businesses were shown and rejected. Summers indicated the Sportsman Motel might be for sale. Andrew T. Lund, a real estate broker d/b/a Western States, Inc., contacted James and Ruth Applebury, then owners of the Sportsman Motel, concerning a possible sale. The Appleburys subsequently informed him of their desire to sell. They indicated their selling price and stated the motel stood on land leased from the Burlington Northern Railway Co. Summers informed the Andersons of the availability of the motel for purchase.

Plaintiffs were shown the motel, its supplies and the surrounding property by James Applebury, in the company of Lund and Summers. At no time did Lund or Summers make representations regarding the location of the building or related structures upon the leased premises, the condition of the motel, the potential profitability of the business, or the availability of title insurance. Plaintiffs later conducted a second brief inspection of the premises.

On November 8, 1971, plaintiffs agreed to purchase the Sportsman Motel, admittedly relying in substance upon their inspections of the premises and the small amount of information given them by James Applebury regarding the property. Lund and Summers represented both parties in drafting the resultant "Contract for Sale of Property" executed on December 20, 1971. Attached to the contract and included as an exhibit to plaintiffs' amended complaint, was a copy of the lease agreement between the Appleburys and Burlington Northern. The lease contained a legal description of the property and referred to its depiction in a related plat.

Plaintiffs took possession of the motel in January, 1972. Various problems with the physical structure of the building surfaced immediately, and the motel was promptly listed for sale. In 1974 plaintiffs were informed by the Montana Department of Highways that a portion of their motel parking lot, sign, and canopy encroached upon a highway right-of-way. Plaintiffs on July 3, 1975, filed their initial complaint against the Appleburys and Lund. Summers was added as a defendant by the amended complaint, filed on October 23, 1975. Plaintiffs alleged various violations of the Montana Real Estate License Act by Lund and Summers, specifically sections 66-1937 and 66-1940, R.C.M.1947. The alleged violations essentially involve elements of fraud and misrepresentation in the inducement of the contract to purchase the motel.

Here, we point out the district court, in granting summary judgment, failed to specify any grounds therefor, in its order, by memorandum or otherwise. Defendants maintain that summary judgment issued solely on the ground the statute of limitations had run. Plaintiffs however, argue a much broader range of issue, including questions of fraud and misrepresentation by Lund and Summers. Therefore, while the focus of our review relates to the propriety of summary judgment, the facts of the instant case suggest two areas of inquiry:

(1) Whether any acts of Lund and Summers constitute violations of the Montana Real Estate License Act, section 66-1937, R.C.M.1947?

(2) Whether plaintiffs' action based upon the alleged violations, if any, is barred by the running of the applicable statute of limitations?

The principles governing summary judgment under Rule 56(c), M.R.Civ.P., were recently detailed in Harland v. Anderson, Mont., 548 P.2d 613, 33 St.Rep. 363. Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. The initial burden of establishing the absence of any genuine issue of material fact is upon the movant. The party opposing the motion will be afforded the benefit of all reasonable inferences which may be drawn from his offered proof. Mally v. Asanovich, 149 Mont. 99, 423 P.2d 294; Johnson v. St. Patrick's Hospital,148 Mont. 125, 417 P.2d 469. However, where the record before the court discloses no genuine issue of material fact, the burden shifts to the party opposing the Rule 56(c) motion to come forward with proof establishing such a genuine factual issue. Harland v. Anderson, supra; Rickard v. Paradis,167 Mont. 450, 539 P.2d 718; Barich v. Ottenstror, Mont., 550 P.2d 395, 33 St.Rep. 481.

In determining the propriety of summary judgment within the above principles, we first look to the acts of defendants, Lund and Summers, the basis of plaintiffs' complaint. Plaintiffs, in their amended complaint, elected to ground their cause of action for damages against Lund and Summers not in fraud within the common acceptance of the term, but rather under the provisions of the Montana Real Estate License Act. The pertinent provision creates a cause of action in favor of one injured through certain acts of a real estate salesman or broker.

Section 66-1940(c) provides:

"(c) Any person sustaining damages by failure of a real estate broker or real estate salesman to comply with the provisions of this act, shall have the right to commence an action in his own name against the real estate broker and his surety, or the real estate salesman and his surety, or both the broker and any salesman employed directly or indirectly by such broker and their respective sureties, for the recovery of any damages sustained as a result of any act specified in section 66-1937 herein or as a result of the failure of the real estate broker or real estate salesman to comply with the provisions of this act. * * * "

The specific acts alleged to have been committed by Lund and Summers in violation of section 66-1937 include:

"(1) Intentionally misleading, untruthful, or inaccurate advertising, whether printed or by radio, display or other nature, which advertising in any material particular or in any material way misrepresents any property, terms, values, policies or services of the business conducted;

"(2) Making any false promises of a character likely to influence, persuade or induce;

"(3) Pursuing a continued and flagrant course of misrepresentation, or making false promises through agents or salesmen, or any medium of advertising, or otherwise;

" * * *sui

"(15) Failing voluntarily to furnish a copy of any written instrument to any party executing the same at the time of its execution;

" * * *ili

"(17) Intentionally violating any reasonable rule of regulation promulgated by the commission in the interests of the public and in conformance with the provisions of this act;

" * * *ten

"(19) Demonstrating his unworthiness or incompetency to act as a broker or salesman;

" * * * ".tra

Plaintiffs apparently abandoned reliance upon the latter three violations above mentioned, as the record contains no facts pertaining to such charges. They argue only their cause for fraud.

It is well settled that a prima facie case of fraud is not established unless plaintiff proves the making of a material misrepresentation, and reliance upon the truth of such misrepresentation. Dunlap v. Nelson, 165 Mont. 291, 529 P.2d 1394; Clough v. Jackson, 156 Mont. 272, 479 P.2d 266; Young v. Handrow, 151 Mont. 310, 443 P.2d 9.

In the instant case the question is the making of material misrepresentations and reliance thereon by plaintiffs. However, the record indicates the parties are in complete agreement, in all material respects, that virtually no representations were made by Lund and Summers regarding the motel or the property upon which it is situated. The deposition testimony of plaintiff Joyce A. Anderson is replete with statements supporting that conclusion. In her August 11, 1975 deposition, she testified:

"Q. In other words, at that point you and your husband felt that you had all the information that you needed to make up your minds to buy? A. We had all the information that we we had gotten, and we couldn't get, like I said, a financial...

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  • Hurney v. Lock
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    ...The scope of appellees' duty depends, among other things, on their knowledge of the information allegedly withheld. Anderson v. Applebury, 173 Mont. 411, 567 P.2d 951 (1977) (lack of knowledge concerning encroachment negated duty to disclose). Here, Locke admits knowing the consequences of ......
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    ...the majority then proceed to adopt the statute of limitations containing the longest time period. This Court in Anderson v. Applebury (1977), 173 Mont. 411, 567 P.2d 951 at 955 [p]laintiffs' amended complaint ... seeks recovery of damages and penalties for alleged statutory violations. Appl......
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