Wendy's of Montana v. Larsen
| Decision Date | 11 February 1982 |
| Docket Number | No. 81-225,81-225 |
| Citation | 640 P.2d 464,196 Mont. 525 |
| Court | Montana Supreme Court |
| Parties | WENDY'S OF MONTANA, a Mont. Corp., Plaintiff and Appellant, v. William T. LARSEN and Helen J. Larsen, Defendants and Respondents. |
Hibbs, Sweeney, Colberg, Jensen & Koessler, Billings, for plaintiff and appellant.
Boone, Karlberg & Haddon, Missoula, for defendants and respondents.
Plaintiff, Wendy's of Montana, appeals from a summary judgment granted by Missoula District Court, the effect of which was to permit the defendants, William T. and Helen J. Larsen, to keep a $22,750 earnest money payment which Wendy's had paid to the Larsens under a contract to purchase land. The Larsens, in turn, were purchasing the land under a contract for deed from William and Dorothy Riggert and Anita Taylor.
Wendy's contends that summary judgment was improperly granted because the Larsens failed to perform a condition precedent to the contract. This contention is based on a contingency clause which Wendy's agent inserted into the buy-sell agreement. Wendy's also contends that summary judgment was improperly granted because a material fact exists as to whether the Larsens or Wendy's had the duty to obtain the consents of the Riggerts and Taylor.
In July 1979, Wendy's agent, Sam McDonald, an experienced businessman and real estate broker, approached the Larsens concerning the purchase of real property located in Missoula County. The Larsens indicated they were willing to sell, but told McDonald that their interest was subject to a contract for deed between themselves and the Riggerts and Taylor. This contract carried a balance of $120,000 with payments running until November 1986. The contract contained a clause prohibiting the Larsens from selling or assigning their interest in the property without first obtaining the written consent of the Riggerts and Taylor, and provided that such consent could not be unreasonably withheld.
McDonald proceeded with arrangements for a sale knowing that the consent of the Riggerts and Taylor would be required. Before this consent was obtained, the Larsens and Wendy's signed an earnest money receipt and agreement to sell and purchase real property. Wendy's paid the $22,750 as earnest money. This buy-sell agreement provided for a total purchase price of $342,750. The $200,000 was to be paid to the Larsens on or before October 15 in addition to the earnest money already paid and Wendy's was to assume the $120,000 outstanding on the Riggert-Taylor contract. McDonald inserted a typewritten clause into the buy-sell agreement stating that the agreement was contingent upon Wendy's obtaining a contract for deed from the Riggerts and Taylor in the amount of $120,000, at an annual interest rate of 81/2 percent for seven years.
The buy-sell agreement also contained a forfeiture clause which provided that, upon the sellers' tendering merchantable title, and the buyer's inability to pay the balance of the purchase price, the earnest money would be forfeited as liquidated damages and the buy-sell agreement would terminate.
The buy-sell agreement provided for a closing date of October 15, 1979, at which time Wendy's was to pay to the Larsens, in cash or certified check, in the amount of $200,000. Wendy's assumed responsibility for obtaining the consent of the Riggerts and Taylor. Sometime after this agreement was signed, McDonald met with Harry Haines, the attorney for the Riggerts. Haines told McDonald that the Riggerts would consent to the sale provided that the $120,000 would be paid off in one year, rather than the seven years set out in the buy-sell agreement. McDonald was satisfied with the terms proposed by Haines and proceeded to make arrangements to close the deal. Nothing in the record indicates that McDonald contacted Ms. Taylor. McDonald did tell Haines that there would be "no problem" with the Riggerts' proposal.
McDonald told the Larsens that he would be ready to close on or before October 15, but he was not ready on that date. The Larsens extended the agreement until November 15, without demanding additional consideration. The Larsens granted another extension, until December 15, again without additional consideration. McDonald was still unable to complete...
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...same amount whether they attempted to mitigate or not. Weber, 255 Mont. at 200-01, 841 P.2d at 537-38. Cf. Wendy's of Montana v. Larsen (1982), 196 Mont. 525, 529, 640 P.2d 464, 466 (bargained earnest money upheld as liquidated damages because buyer received benefit of the bargain when land......
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