Garrison v. Averill

Decision Date21 December 1987
Citation938 P.2d 702,282 Mont. 508
PartiesGreg GARRISON, Plaintiff and Appellant, v. Dan L. AVERILL, Trails West Realty, Inc., and John J. Gainey, Jr., individually and as Trustee of the John J. Gainey, Jr, Trust u/t dated
CourtMontana Supreme Court

John R. Gordon; Reep, Spoon & Gordon, Missoula, for Plaintiff and Appellant.

Lane K. Bennett, Attorney at Law, Kalispell, for Defendant and Respondent John J. Gainey, Jr.

Gary L. Graham; Garlington, Lohn & Robinson, Missoula, for Defendants and Respondents Dan Averill and Trails West Realty.

GRAY, Justice.

Greg Garrison (Garrison) brought this action seeking rescission of a land purchase agreement under which he bought property from John J. Gainey, Jr. (Gainey). He also sought damages from the real estate broker, Dan L. Averill (Averill), and Trails West Realty, Inc. After a six-day bench trial, the Eleventh Judicial District Court, Flathead County, entered its findings of fact, conclusions of law and judgment for the defendants. Garrison appeals and Gainey cross-appeals. We affirm.

Garrison presents the following issues on appeal:

1. Did the District Court abuse its discretion in denying Garrison's motion for a mistrial?

2. Did the District Court err in finding that Averill and Gainey fully advised Garrison of the easement?

3. Are the District Court's findings that Averill met the standard of care in disclosing his agency relationship with Gainey to Garrison and in keeping Garrison properly informed clearly erroneous?

4. Did the District Court err in determining that Garrison had assumed the risk by not reading the easement?

5. Are the District Court's findings that Garrison was not damaged clearly erroneous?

The issue in Gainey's cross-appeal is whether the District Court erred in failing to award him attorney fees against Garrison.

Background

In 1989, Gainey acquired Lots 4, 5, and 6 (the property) in the Crag Moor Addition, a platted subdivision on Flathead Lake in Flathead County, Montana. Gainey constructed a large log home, a boat dock, and other improvements on the property. Gainey's deed provided that the property was subject to a perpetual easement in favor of the owners of Lots 5 through 19 of Crag Moor Addition,

over and across the existing roadways on Lots 3 and 4 of Block 1 of said Crag Moor (excepting private driveways) for ingress and egress to and from FLATHEAD LAKE and the perpetual right and easement to use the existing dock, parking lot, swimming areas and swimming deck thereon, which easement is not exclusive but must be exercised with respect to the rights of other persons lawfully using said lands and facilities.

The shoreline where the easement is located has large natural rocks which prevent launching anything other than a very lightweight boat or canoe. When the easement was created, a swimming platform and a large dock existed adjacent to Lots 3 and 4. Both the swimming platform and the dock had been destroyed by the time Gainey purchased the property.

Averill is the owner of Trails West Realty, Inc. He sells real estate on Flathead and Whitefish Lakes and other recreational property in the Flathead Valley. In the spring of 1992, Averill met Garrison at the Flathead Valley home of a mutual acquaintance. Garrison, a longtime resident of California, was interested in purchasing property in the Flathead Valley.

Through Averill, Garrison submitted an offer to purchase Flathead Valley property known as the Skaggs Lake property. Subsequent negotiations for his purchase of the Skaggs Lake property were unsuccessful.

In early May 1992, Averill showed Garrison Gainey's property on Flathead Lake. Averill did not have a listing agreement on Gainey's property at the time, but he knew that Gainey was interested in selling it. Through Averill, Garrison made a $1.2 million offer to purchase the property in a turn-key sale which would include most of the personal property on the premises. When Averill took the offer to Gainey, Gainey counteroffered to sell for $1.25 million. He also told Averill about the easement for the other lots in Crag Moor Addition, and about the dock and swimming platform which had existed at the time of the easement but had since washed out. Gainey told Averill he had never seen any of the lot owners using the easement.

That same evening, Averill conveyed Gainey's counteroffer and the information about the easement to Garrison. Averill told Garrison that, when Garrison received a title insurance policy, he would have an opportunity to review the easement and decide what to do about it. Averill advised Garrison that if he wanted to back out of the transaction because of the easement, he could do so. At the same time, Averill explained to Garrison that he worked for Gainey as the seller, that he had a fiduciary relationship with Gainey, and that Gainey would pay his commission. Garrison accepted Gainey's counteroffer.

Averill and Garrison returned to the Gainey property the following day. They went through the house in detail, with Gainey pointing out items of personal property he would be taking when he left. Outside, Gainey pointed out the boundary stakes for the property and explained that the other lot owners had an easement to come onto the area where the old dock had been. The access road for the easement, although somewhat grown over with weeds, was apparent. After that visit, Garrison returned to California.

Before the closing on June 1, Averill and Garrison communicated several times about the terms of the turn-key sale, and Averill gave Garrison a written inventory of the personal property to be included in the sale. Averill read the easement language to Garrison over the telephone and advised Garrison to consult an attorney regarding the extent of the easement and whether it could be extinguished, as Garrison was interested in doing. Garrison did not want to incur the cost of an attorney and, instead, asked Averill to get an informal opinion from his attorney. When Averill's attorney was unwilling to provide such an opinion without further research and study, Averill called the Flathead Regional Development Office. He was advised that, under local regulations, the lot owners might have difficulty in obtaining permission to build a new dock and, if they got permission, the dock would be limited in size. Averill conveyed this information to Garrison.

On June 1, just prior to the closing, Averill and Garrison again walked the property with Gainey. Averill had the copy of the deed showing the easement with him, and Gainey again informed both Averill and Garrison that, to his knowledge, the easement was not being used. The closing took place as planned.

Within a few weeks after the closing, some Crag Moor Addition lot owners held a barbeque and bonfire on the easement near the lake, placing a picnic table and stone fire circle on the easement. Garrison later discovered the evidence of this use. He also received a letter from an attorney representing the Hughes Bay Corporation, which provided water for the Crag Moor Addition lots, asserting the lot owners' rights to use the easement.

Garrison brought this suit seeking rescission of the purchase agreement under which he bought the property and damages. He alleged fraud and failure of consideration and requested rescission against Gainey, and alleged fraud, constructive fraud, negligence and negligent representation against the other defendants.

The District Court, sitting without a jury, issued detailed findings, conclusions and judgment in favor of the defendants. The court ordered that each party bear its own attorney fees, but that the defendants recover their costs of suit.

Issue 1

Did the District Court err in denying Garrison's motion for a mistrial?

Our standard in reviewing a district court's denial of a motion for a mistrial in a civil case is whether the district court abused its discretion. Dees v. American Nat. Fire Ins. Co. (1993), 260 Mont. 431, 443, 861 P.2d 141, 148.

Trial of this case began on March 14 and recessed on March 17, 1994, pending the setting of a date for its continuation. Trial subsequently was set to reconvene on October 31, 1994, but was rescheduled with the consent of all counsel to December 21, 1994. In November of 1994, Garrison moved for a mistrial because of the delay in completing the trial and because the reconvened trial would deal only with the defendants' cases; he had completed presentation of his case-in-chief during the four days of trial in March. He argued that this delay would substantially prejudice him.

The court denied Garrison's motion and trial resumed on December 21 and 22, 1994. Post-trial briefs and proposed findings were filed approximately one month later and the District Court's findings, conclusions and judgment were entered in April of 1996.

Garrison contends that the District Court's grasp of the issues and evidence was dulled by the delay in completing the trial. The only factual basis he asserts for this claim is that Averill's proposed findings and conclusions appear to have formed the pattern for the court's ultimate findings and conclusions.

It is clear that the time lapse between the opening of trial and the entry of judgment in this case was lengthy. The only time frame relevant to Garrison's mistrial motion, however, is the nine-month delay between the beginning and end of the trial, and Garrison contributed to, and expressly acquiesced in parts of, that delay. In its denial of Garrison's motion for a mistrial, the District Court noted that it had relied on counsel to estimate the number of days needed for the trial and had allotted the estimated amount of time, from March 14 through March 17, accordingly. Garrison's presentation of his case-in-chief consumed almost all of the four days originally allotted for the entire trial. In July of 1994,...

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