Glacier Bear Retreat, LLC v. Dusek
| Decision Date | 17 January 2023 |
| Docket Number | CV 22-19-M-KLD |
| Parties | GLACIER BEAR RETREAT, LLC, GAIL L. GOODWIN, and DARRYL C. SLATTENGREN, Plaintiffs/Counterclaim Defendants, v. MATT DUSEK AND RACHEL DUSEK, Defendants/Counterclaimants. |
| Court | U.S. District Court — District of Montana |
This suit for specific performance for breach of a buy-sell agreement for the sale of real property in Glacier National Park comes before the Court on cross-motions for summary judgment by Plaintiffs/Counterclaim Defendants Glacier Bear Retreat, LLC, Gail Goodwin, and Darryl Slattengren (collectively, “Glacier Bear”) and Defendants/Counterclaimants Matt and Rachel Dusek (“the Duseks”). (Docs. 25 and 32). For the reasons set forth below, Glacier Bear's motion is granted and the Duseks' cross-motion is denied.
Glacier Bear Retreat, LLC owns the parcel of real property at issue in this case, located at 348 Grist Road in West Glacier Flathead County, Montana, within the exterior boundaries of Glacier National Park (“the Property”). (Doc. 29 ¶ 1). Individual plaintiffs, Goodwin and Slattengren, a married couple and the sole members of Glacier Bear Retreat (Doc. 29, ¶ 2), listed the Property for sale on September 1, 2021, with real estate broker Scott Darkenwald of Glacier Sotheby's International Realty. (Doc. 29, ¶ 3).
On October 5, 2021, the parties entered into a buy-sell agreement (“BSA”) and the Duseks deposited a portion of the purchase price into escrow with the balance due in cash at closing on or before November 9, 2021. (Doc. 29, ¶ 4). Darkenwald and Tracey Rossi, also of Glacier Sotheby's, acted as dual agents, representing both the Duseks (“Buyer”) and Glacier Bear (“Seller”) in the transaction. (Docs. 36, ¶ 29).
The BSA included a number of contingencies to closing, several of which are at issue in this case. The following general “Contingencies” paragraph applied to all contingencies in the BSA:
The contingencies set forth in this Agreement or on attached addenda shall be deemed to have been released, waived, or satisfied, and the Agreement shall continue to closing, unless, by 5:00 p.m. (Mountain Time) on the date specified for each contingency, the party requesting that contingency has notified the other party or the other party's Broker/Salesperson in writing that the contingency is not released, waived, or satisfied. If a party has notified the other party on or before the release date that a contingency is not released, waived, or satisfied, this Agreement is terminated, and the earnest money will be returned to the Buyer, unless the Parties negotiate other terms or provisions.
Under the general Contingencies umbrella, the BSA included the following “Inspection Contingency”:
This Agreement is contingent upon Buyer's acceptance of any Property conditions that Buyer deems appropriate, including but not limited to any inspections or advice listed below. Buyer agrees to acquire, at Buyer's own expense, independent inspections or advice from qualified inspectors or advisors of Buyer's choice ....
(Doc. 27-4, at 3-4). Listed below and relevant to this dispute, the Inspection Contingency expressly applied to inspections or advice regarding home/property inspection, mold, and water rights. (Doc. 27-4, at 3-4). The Inspection Contingency further provided:
(Doc. 27-4, at 4) (emphasis in original).
Also under the general Contingencies umbrella in the BSA, the parties added a contingency to account for outstanding issues related to the Property's well and water rights, which arose when Goodwin discovered, after listing the Property, that the well log had not been recorded and water rights had not been filed for when the well was drilled in 2013. (Doc. 29-5, at 9-10). This water rights and well-related contingency stated, “This Agreement is contingent upon All well related permitting, well log recording, and any associated water rights to be in place prior to closing,” and noted a “Release Date” of November 3, 2021, at 5:00 p.m. (MST). (Doc. 27-4, at 5).
On October 12, 2021, the Montana Department of Natural Resources and Conservation (“DNRC”) issued Goodwin a provisional water rights permit with an enforceable priority date of September 3, 2021. (Doc. 36, ¶ 97). Goodwin testified that when she inquired about the term “provisional,” she was told by a DNRC representative that all water rights permits issued after 1973 are provisional. (Doc. 36-1, ¶ 6). Darkenwald forwarded the water right “General Abstract” to the Duseks that same day. (Doc. 36, ¶ 98). The Duseks testified that they did not receive the actual provisional permit, the accompanying cover letter, or additional instructions from the DNRC until discovery in this litigation. (Docs. 36, ¶¶ 98, 101).
The Duseks retained D. Quinn Construction, Inc., of Kalispell, to perform a property condition inspection and tests for radon and drinking water quality. (Doc. 36, ¶ 42). On October 13, 2021, Kelly Quinn provided a report (“First Inspection Report”), which identified nine property conditions requiring immediate attention, including “Evidence of moisture” and “Mold build-up” under the stairs in the main level closet, “possibly caused by inadequate siding flashing although unable to confirm without further testing.” (Doc. 36, ¶¶ 43-44). The report suggested “consulting a licenced Certified (AmIAQ) Mold Inspector,” noted “this visual inspection does not include surface fungal growth, which are not visible at time of inspection,” and recommended “contacting a qualified mold remediation contractor at this time for further evaluation.” (Doc. 36, ¶ 44).
On October 15, 2021, the Duseks signed an “Inspection Notice,” giving Glacier Bear written notice of their disapproval of the property conditions noted in the First Inspection Report and intent to negotiate a resolution of the conditions noted. (Doc. 36, ¶ 45). The Inspection Notice specified disapproval of all nine items identified in the First Inspection Report, including drainage issues, the siding condition, flashing, evidence of moisture, mold build-up, stairs, valley flashing, insulation, and evidence of a leaking waste pipe. (Doc. 36, ¶ 46). Water rights were not listed among the disapproved of property conditions in the Inspection Notice. (Doc. 29, ¶ 12). Regarding the issues of mold and moisture retention, the Inspection Notice required Glacier Bear to “remedy [the evidence of moisture] to suggestion in inspection report” and required “[a]ll mold to be remediated and pass a clearance test,” specifying Cory Rensmon of Advanced Restoration and Maintenance should complete the work. (Doc. 36, ¶¶ 48-49).
The Inspection Notice stated, “If the Seller and Buyer agree to the remedies specified above, this document shall constitute an amendment to the Buy-Sell Agreement referred to above and shall be an integral part of this transaction.” The Inspection Notice provided Glacier Bear until 5:00 p.m. on November 5, 2021, to “complete all agreed upon resolution(s) to the condition(s) and problem(s) identified above.” (Doc. 27-8, at 2).
After discussing the problems and remedies articulated in the Inspection Notice, Goodwin directed Darkenwald to “fix whatever needs to be fixed, or we'll - we will fix whatever needs to be fixed.” (Doc. 29, ¶ 14). Goodwin and Slattengren signed and dated the Inspection Notice on October 17, 2021, and the Duseks received the fully-executed document on October 18, 2021. (Doc. 29, ¶ 15). Glacier Bear hired Rensmon to address the mold and moisture problems, as well as the issues related to the siding and flashing, which seemed to be the likely causes of the moisture infiltration. (Doc. 36, ¶ 56). Other contractors were hired to address problems not at issue in this case. (Doc. 36, ¶ 55).
Rensmon began working at the Property on October 19, 2021. (Doc. 36-2, ¶ 4). Certified AmIAQ mold inspector David Quinn of D. Quinn Construction, Inc. inspected the work on October 25, 2021, and informed Rensmon there was still evidence of moisture on some of the oriented strand board sheathing (“OSB”) in the closet under the stairs. (Docs. 36-2, ¶ 6; 36-4, ¶ 5). On October 26, 2021, Advanced Restoration and Maintenance returned to the Property. (Doc. 36-2, ¶ 7). Rensmon testified as follows:
After being notified by David Quinn that there was still moisture in the OSB, over the course of approximately 27 hours from the morning of October 26, 2021[,] to the morning of October 27, 2021, Advanced...
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