Fox Grain and Cattle Co. v. Maxwell

• Decision Date: 15 December 1994
• Docket Number: No. 91-622,91-622
• Parties: FOX GRAIN AND CATTLE CO., Plaintiff and Respondent, v. Frank F. MAXWELL, Defendant and Appellant.
• Court: Montana Supreme Court

Page 432

885 P.2d 432

267 Mont. 528

FOX GRAIN AND CATTLE CO., Plaintiff and Respondent, v. Frank F. MAXWELL, Defendant and Appellant.

No. 91-622.

Supreme Court of Montana.

Submitted on Briefs Feb. 17, 1994.

Decided Nov. 21, 1994.

Rehearing Denied Dec. 15, 1994.

Donald A. Ranstrom, Sias & Ranstrom, Chinook, for appellant.

James A. Hubble, John R. Christensen, Christensen & Hubble, Stanford, for respondent.

HARRISON, Justice.

This is an appeal and cross-appeal from a jury verdict in the Tenth Judicial District Court involving the termination of a farm lease. By special verdict the jury found that Frank F. Maxwell (Maxwell), did not materially breach the farm lease which he entered with Fox Grain & Cattle Co. (Fox Grain). The jury, however, found that Maxwell owed Fox Grain $38,779.60 for farming expenses; it then awarded Maxwell $23,013.42, plus 75 percent of the net Federal Crop Insurance Payment, for Fox Grain's failure to mitigate its damages, and found in favor of Maxwell on his counterclaims: 1) $16,721.15 for his share of the Conservation Reserve Program (CRP) proceeds; and 2) $16,500 for his loss of machinery claim. The jury also awarded Maxwell $95,000 for Fox Grain's breach of the implied covenant of good faith and fair dealing.

The District Court granted judgment notwithstanding the verdict eliminating the jury's award of $95,000 to Maxwell. Maxwell appeals the District Court's decision to grant judgment notwithstanding the verdict. Fox Grain cross-appeals: 1) the jury's findings on the breach issue; 2) the court's failure to grant it a judgment notwithstanding the verdict on the issue of Maxwell's other damages; and 3) the court's grant of summary judgment to Maxwell on the issue of the volunteer crop ownership. We affirm in part and remand.

The issues on appeal are:

1. Did the District Court err by granting Fox Grain's motion for judgment notwithstanding the verdict on the jury's award of $95,000 for Fox Grain's violation of the covenant of good faith and fair dealing?

2. Did the District Court err by denying Fox Grain's motion for judgment notwithstanding the verdict on the issue of Maxwell's other damages?

3. Was there sufficient evidence in the record to support the jury's findings that Maxwell did not breach the lease?

4. Did the District Court err by granting Maxwell summary judgment on Fox Grain's ownership claim of the volunteer winter wheat crop?

Maxwell entered a three-year farm lease with Fox Grain on February 17, 1989.

The lease agreement entered into between the parties gave Maxwell the right to farm Fox Grain's land during the crop seasons of 1989, 1990, and 1991. As part of that agreement, Maxwell agreed that he would occupy and cultivate the land in a "farmer-like manner" and would not permit damage to the land. In return, he was entitled to all of the 1989 crop and 75 percent of the 1990 and 1991 crops. Maxwell also agreed that all acres would be cultivated either by planting crop, or by summer fallow.

Fox Grain terminated the lease based on its claim that Maxwell breached the lease agreement by not cultivating the entire property and by failing to care for the property in a "farmer-like manner." However, after listening to three and one-half weeks of testimony, including several experts who testified on behalf of Fox Grain, the jury concluded that Maxwell's failure to cultivate 100 acres of the property was not a material breach and apparently also found that he had performed in a "farmer-like manner" and had not allowed the property to be damaged.

In an effort to prove the value of its damages from Maxwell's alleged failure to properly care for the farm land, Fox Grain offered testimony from several neighboring landowners to establish what the land would have been capable of producing had it been properly cultivated and cared for.

For example, Larry Kalina testified that he farmed 1300 acres of land about four miles north of the Fox Grain property; that he was familiar with the Fox Grain property; and that his property and the Fox Grain property were quite similar. In the fall of 1990 (after Maxwell had been evicted from the Fox Grain property), Kalina planted a winter wheat crop on his land which produced a 1991 harvest of 30 to 35 bushels per acre.

Jess Knerr farms 2800 acres of land adjoining the Fox Grain property. He testified that his property is likewise similar to Fox Grain's land. In 1991, he produced 37 bushels of winter wheat per acre and 20 bushels of spring wheat per acre. He testified that 1991 was a better-than-average year due to increased moisture.

Kyle Grimsrud farms 1400 acres of property ten miles from the Fox Grain land. He testified that he was familiar with the Fox Grain property and considered it similar to the property that he farms. In 1991, he raised 43 bushels of winter wheat per acre and 29 bushels of spring wheat per acre. His production in 1991 exceeded that for either of the two previous years. It was his opinion that the Fox Grain property, if properly cared for, was capable of producing similar yields.

Alex Smith, who farms land south of Lewistown, was called as an expert witness to testify on behalf of Fox Grain. He testified that in 1991 it cost $12 an acre to harvest wheat. He estimated the price of wheat during 1991 was $2.80 a bushel.

Fox Grain served notice on Maxwell that the lease was being terminated on July 23, 1990. Maxwell actually left the property on August 23--one month later. Because he was wrongfully evicted from the property and was unable to plant a winter or spring crop for 1991, Maxwell was denied the opportunity to realize a profit from whatever crop he could have produced. The testimony was that had he remained on the property he could have seeded 1503.9 acres.

I

Did the District Court err by granting Fox Grain's motion for judgment notwithstanding the verdict on the jury's award of $95,000 for Fox Grain's violation of the covenant of good faith and fair dealing?

It is well settled that this Court will review a district court's grant of a JNOV with the identical standard used to review a motion for directed verdict. Simchuk v. Angel Island Community Ass'n (1992), 253 Mont. 221, 225, 833 P.2d 158, 160.

[A] directed verdict may be granted only where it appears as a matter of law that ... [the non-moving party] could not recover upon any view of the evidence, including the legitimate inferences to be drawn from it.

Simchuk, 833 P.2d at 160. Further, a

district court must view the evidence in a light most favorable to the non-moving party when considering a motion for [JNOV]; the court must deny the motion if the non-moving party built a prima facie case or if a substantial conflict in the evidence exists. Only if the evidence presents no room for an honest difference of opinion should a JNOV be granted.

Simchuk, 833 P.2d at 162 (citations omitted). Accordingly, this Court must examine whether Maxwell could recover upon any view of the evidence.

The jury found that Fox Grain breached the implied covenant of good faith and fair dealing. It was established by Maxwell and his witnesses that Fox Grain only complained once about Maxwell's farming practices before Fox Grain evicted Maxwell from the land. Maxwell argues that if Fox Grain had left him alone, he would have planted and harvested wheat and made a profit just like the neighbors in the area.

Had Maxwell produced 36 bushels of winter wheat per acre (which was well within the range of his neighbors' production); and had he provided 25 percent of that crop to Fox Grain pursuant to the parties' lease agreement; and after deducting $12 per acre as the reasonable cost of harvesting the crop, he would still have realized a profit of $95,648.04.

Fox Grain argues that while it offered proof of what its property was capable of producing had it been cared for in a farmer-like manner, the property was not capable of producing that much wheat when Fox Grain took it back from Maxwell due to the terrible condition in which Maxwell left it. However, according to our conclusion under Issue IV, Fox Grain's evidence to that effect apparently raised, at most, a question of fact which the jury resolved in favor of Maxwell. Had the jury found that the property was as unproductive as Fox Grain and its witnesses alleged, the jury would necessarily have had to find that Maxwell had permitted waste or damage to the property and, thereby, breached the lease agreement. The jury's finding was to the contrary.

Fox Grain argues that the crop it produced in 1991 was unproductive, due to the condition of its land. However, Maxwell's evidence was to the effect that he would have employed different farming techniques, which he felt would have been more productive than those employed by Fox Grain. The jury had a right to, and apparently did, believe Maxwell.

The jury's verdict was further supported by the fact that in 1989, on the same piece of land, Maxwell realized income of $79,885.84 from a winter wheat crop which he had not even planted, but which grew from seeds knocked from their stalks in 1988 as a result of hail damage. The jury had a right to find that if Maxwell could realize net income of over $70,000 from a volunteer winter wheat crop in 1989, he could earn substantially more than that on the same land by employing good farming techniques in the fall of 1990 and the growing season of 1991.

While there was substantial evidence produced by Fox Grain from which the jury could have found that Maxwell's farming techniques would not have been profitable during the remainder of his lease term with Fox Grain, it was not the responsibility of the District Court, and is certainly not the appropriate function of this Court, to ignore a jury verdict which is supported by evidence, or inferences from the evidence, simply because the District Court found plaintiff's evidence more persuasive. As we pointed out in Simchuk:

[A] directed verdict may be granted only where it...