No. 13322

IN THE SUPREME COURT OF THE STATE OF MONTANA RICHARD J. BAILS and PATRICIA J. BAILS, husband and wife,

plaintiffs and Appellants, NORMAN C. WHEELER and V7ILLIAP4 RICHARDSON,

Defendants and Respondents. Appeal from: District Court of the Eighteenth Judicial

District

Honorable W. W. Lessley Judge presiding Counsel of Record :

For Appellants:

Berg, Angel, Andriolo and Morgan, Bozeman, Montana

Ben E. Berg argued, Bozeman, Montana

For Respondents:

Landoe and Gary, Bozeman, Montana

Hjalmar Landoe argued, Bozeman, Montana

Bennett and Bennett, Bozeman, Montana

Lyman Bennett, Jr. araued and Lyman Bennett, I11

appeared, Bozeman, ~ o n t a n a

Submitted: January 10, 1977 Filed: Mr. ~usticeFrank I . Haswell d e l i v e r e d t h e Opinion of t h e C o u r t .

T h i s i s a n a c t i o n f o r damages by t h e p u r c h a s e r of a r a n c h a g a i n s t two r e a l e s t a t e a g e n t s based on a l l e g e d f r a u d u l e n t r e p r e s e n t a t i o n s whereby he was induced t o e n t e r i n t o t h e p u r c h a s e contract. The d i s t r i c t c o u r t o f G a l l a t i n County e n t e r e d summary judgment f o r d e f e n d a n t s . P l a i n t i f f purchaser appeals.

A s y n o p s i s o f t h e t r a n s a c t i o n forming t h e b a s i s o f t h i s s u i t a p p e a r s i n o u r o p i n i o n i n B a i l s v . Gar, Mont . I

P. 2d , 33 St.Rep. 1256. T h a t c a s e w a s a s u i t by t h e pur- c h a s e r o f t h e r a n c h a g a i n s t t h e s e l l e r based on a l l e g e d f a l s e r e p r e s e n t a t i o n s inducing t h e purchaser t o e n t e r i n t o t h e c o n t r a c t ; t h e i n s t a n t c a s e i s a s u i t by t h e p u r c h a s e r a g a i n s t t h e two r e a l e s t a t e a g e n t s based upon s u b s t a n t i a l l y t h e same r e p r e s e n t a t i o n s . W e v a c a t e t h e summary judgment h e r e f o r t h e same r e a s o n s we v a c a t e d

supra, it i n B a i l s v . G a r / v i z . t h a t t h e r e a r e genuine i s s u e s of m a t e r i a l f a c t p r e c l u d i n g summary judgment.

The a l l e g e d f a l s e r e p r e s e n t a t i o n s i n t h e i n s t a n t s u i t a r e t h a t t h e r a n c h c o n t a i n s 5,200 deeded a c r e s ; t h a t it would r a i s e and s u s t a i n 400 a n i m a l u n i t s ; t h a t t h e r e w e r e 300 a c r e s o f hay l a n d which produced 900 t o n s o f hay p e r y e a r ; t h a t t h e r e were 6 0 acres of c r o p b n d which produced 2 1 b u s h e l s of g r a i n p e r acre; and t h a t t h e p r o p e r t y would produce a n income of a t l e a s t $80,000 per year.

A so-called "brochure" appears t o c o n t a i n t h e p r i n c i p a l r e p r e s e n t a t i o n s on which t h e i n s t a n t c a s e i s b a s e d , and t h e r e a l s o u r c e of f a c t u a l i s s u e s . I t i s b o t h i d e n t i f i e d a s " E x h i b i t A" a t t a c h e d t o t h e c o m p l a i n t which c o n t a i n s t h e f i r s t f o u r r e p r e s e n - t a t i o n s complained o f , and a t one p o i n t it i s r e f e r r e d t o by a defense a t t o r n e y a s t h e "missing brochure". There i s much con- f u s i o n s u r r o u n d i n g it.

B a i l s s a y s he r e c e i v e d a " b r o c h u r e " , a p p a r e n t l y from Richardson, d e s c r i b i n g t h e r a n c h and c o n t a i n i n g most of t h e m i s r e p r e s e n t a t i o n s complained o f . Although h e d o e s n o t i d e n - t i f y " E x h i b i t A" a s t h e document he r e c e i v e d , h e s a y s it i s v e r y s i m i l a r t o it. Richardson s a y s he r e c e i v e d t h e "brochure" from Wheeler and s i m p l y r e l a y e d it t o B a i l s . Wheeler a r g u e s R i c h a r d s o n must have changed it b e c a u s e B a i l s d o e s n o t i d e n t i f y t h e o n e Wheeler s e n t a s t h e o n e h e r e c e i v e d .

These c o n f l i c t i n g c o n t e n t i o n s c o n c e r n i n g t h e " b r o c h u r e " t o g e t h e r w i t h o u r d i s c u s s i o n i n B a i l s v . Gar, s u p r a , i n d i c a t e i s s u e s o f f a c t p r e c l u d i n g summary judgment.

A s t o t h e f i f t h representation, defendants argue t h e r e p r e s e n t a t i o n t h e r a n c h would p r o d u c e $80,000 income i s a n o p i n i o n and n o t a c t i o n a b l e a s f r a u d . T h i s r e p r e s e n t a t i o n ap- p a r e n t l y came o u t o f a d i s c u s s i o n among t h e p a r t i e s w h i l e B a i l s was b e i n g shown t h e r a n c h . B a i l s s a y s Richardson s t a t e d t h e r a n c h would p r o d u c e $100,000 income and Wheeler r e d u c e d t h a t f i g u r e t o $80,000. B a i l s s a y s he b e l i e v e d t h e s e men t o b e h o n e s t and t r u s t e d them.

A l l p a r t i e s c i t e t h e following r u l e as c o n t r o l l i n g :

" * * * I f t h e party expressing t h e opinion possesses

s u p e r i o r knowledge, s u c h a s would r e a s o n a b l y

j u s t i f y t h e conclusion t h a t h i s opinion c a r r i e s

w i t h it t h e i m p l i e d a s s e r t i o n t h a t h e knows t h e

f a c t s which j u s t i f y i t , h i s s t a t e m e n t i s a c t i o n -

a b l e i f h e knows t h a t h e d o e s n o t h o n e s t l y e n t e r -

t a i n t h e opinion because it i s c o n t r a r y t o t h e f a c t s . "

Como Orchard Land Co. v . Markham, 54 Mont. 438, 443, 1 7 1 P. 274. The o p i n i o n o f t h e C o u r t i n Como c o n t i n u e s :

"So, l i k e w i s e , a n o p i n i o n may b e s o b l e n d e d w i t h

f a c t s t h a t it amounts t o a s t a t e m e n t o f f a c t s . "

W e h o l d t h e income r e p r e s e n t a t i o n may b e a c t i o n a b l e w i t h - i n e i t h e r o f t h e above r u l e s d e p e n d i n g on d e t e r m i n a t i o n o f i s s u e s of fact. I n d i c a t i o n s a r e t h e r e a l e s t a t e b r o k e r s had s u p e r i o r knowledge o f r a n c h i n g and o n e o f them had s u p e r i o r knowledge o f t h e p a r t i c u l a r ranch i n question. A c a s h f l o w e s t i m a t e had been p r e p a r e d t h a t y e a r i n d i c a t i n g a much lower income.

F o r t h e f o r e g o i n g r e a s o n s , t h e summary judgment i s v a c a t e d a n d t h e c a u s e remanded t o t h e d i s t r i c t c o u r t , G a l l a t i n County, f o r f u r t h e r p r o c e e d i n g s c o n s i s t e n t w i t h t h i s o p i n i o n .

Justice