United States District Court, D. Montana, Billings Division
BRYAN M. TARTER, Plaintiff,
THRONE LAW OFFICE, P.C. and JACOB T. HASEMAN, Defendant.
OPINION AND ORDER
P. WATTERS UNITED STATES DISTRICT JUDGE
Bryan Tarter filed this action against the Defendants, his
former lawyers, Throne Law Office and Jacob Haseman, for
legal malpractice. (Doc. 1-2). Now pending before the court
is Defendants' motion for summary judgment on three of
Tarter's damage claims and his claim for attorney's
fees related to the underlying action in which Tarter alleges
the legal malpractice occurred. (Doc. 17).
Statement of Facts
and his family have a ranch in southeastern Montana. (Doc.
1-2 at ¶ 9). The ranch consists of approximately two
pieces of land: the first piece the Tarters refer to as
"Section 12," which consists of 640 acres; the
second they refer to as "Section 6" which consists
of 660 acres. (Doc. 22-5 at 45:6-20). Tarter used Section 12
and Section 6 to grow hay and graze cattle. (Id.) He
also holds several grazing permits on the Custer National
Forest, encompassing 7, 000 acres adjacent to his property.
(Id. at 184:24-190:1; 202:2-6).
2010, Arch Coal, Inc. planned to develop a coal mine, known
as the Otter Creek mine, near Tarter's ranch. (Doc. 8 at
¶ 7). Arch Coal's real estate arm, Ark Land Company,
approached Tarter about surface access use and a water
monitoring agreement on Tarter's Section 12 property for
the mine. (Id.) After some discussion with Arch Coal
representative Doug Downing, Tarter suggested that Arch Coal
"skip" the access angle and consider purchasing
Section 12 instead. (Doc. 20-1 at 25).
December 2010, at Arch Coal's suggestion, Tarter had
retained Jacob Haseman from the Throne Law Office to
represent him during the Section 12 sale. (Id. at
26). In March 2011, Arch Coal offered to purchase Section 12
for two million dollars. The offer included $500, 000 down
and annual installments of $100, 000 over fifteen years.
(Doc. 8 at ¶ 15). In addition, Arch Coal also offered
Tarter: (1) a grazing lease on Section 12 so that Tarter
could continue to use the property for a period of time; and
(2) a repurchase option giving him the exclusive right to
re-purchase Section 12. (Id.)
January 2011 to May 2011, Downing and Tarter negotiated the
"main parts of the deal," without involving their
lawyers, which was to "sell Section 12, lease it back
til mining, and then repurchase it when [Arch] was through
with it." (Docs. 22-5 at 117:16-23, 118:10-23; 22-12 at
35-36; 8 at ¶ 14). In May, Arch Coal's attorney,
Alan Bryan, provided Haseman the draft agreements regarding
the proposed sale. (Doc. 8 at ¶ 15). After Haseman
forwarded the documents to Tarter, Tarter reviewed and
commented on various drafts. (Doc. 20-5 at 133:4-134:6,
156:20-160:2). According to their billing records, Throne Law
Office spent nearly 20 hours reviewing and revising the
proposed sale documents. (See Doc. 22-8). Haseman
communicated his impressions of the provisions in the
agreements to Tarter, and Tarter provided input to Haseman on
the provisions that were important to him. (Doc. 22-5 at
to Haseman's notes of his conversations with Tarter in
May and June, the two million purchase price and the down
payment were acceptable to Tarter, but Tarter preferred the
balance paid over nine years, not fifteen. (Doc. 22-7 at 19).
Also Haseman's notes state that, according to Tarter,
some "situations aren't described correctly" in
the drafts, that the "lease-back" and
"buy-back" options "were there,"
(id. at 17), but that "Downing represented
Tarter would get it back at minimal cost" and the
"current proposal was contrary to this
21, 2011, Tarter, Haseman, Downing, and Bryan met in person
at the Throne Law Office in Sheridan, Wyoming. (Doc. 22-5 at
169:9-170:10). They discussed the sale agreements
line-by-line. (Id. at 169:9-170:10). The meeting
lasted eight hours and a Sale and Purchase Agreement, Grazing
Lease, and Purchase Option were finalized and executed that
day. (Doc. 8 at ¶¶ 19-20). Arch Coal paid Tarter
the $500, 000 down payment on July 1, 2011. (Doc. 8 at ¶
23). The closing was completed by July 15, 2011.
The Sale Documents
The Sale and Purchase Agreement
to the Sale and Purchase Agreement, the final agreed upon
purchase price was $2 million, or $3, 125 per acre, with
$500, 000 cash due on the closing date. (Doc. 22-9). Annual
installments of $166, 666.67, were to be paid over the next
nine years until paid in full. (Id.) The purchase
price was not secured by a deed of trust or mortgage.
(Id.) The parties dispute whether Haseman or anyone
from the Throne Law Firm discussed securing the property with
Tarter at or before the sale. (Doc. 22-5 at2:13:8-215:10,
239:7-241:1; Doc. 20-3 at 56:1-21; Doc. 20-4 at
Paragraph 9 of the Sale and Purchase Agreement, Tarter also
received the first right to lease additional property that
Arch Coal owned and leased to Tarter's neighbors, Keith
and KP Stevens, as well as certain lands elsewhere in Powder
River County, if the land became available after the Sale and
Purchase Agreement, if Arch Coal decided to lease the land,
and if the land was used for agricultural purposes. (Doc. 4
at ¶ 32; Doc. 20-2 at 176:20-178:2; Doc. 22-9). Arch
Coal retained full discretion whether to lease the land to
Tarter should it become available. (Doc. 20-3 at 47:8-15;
48:12-49:9). From the time the Sale and Purchase Agreement
was signed, none of the land leased to the Stevens has come
up for lease, nor has the chance to lease any of the other
land identified in Paragraph 9 arisen. (Doc. 20-2 at
27:23-28:5, 182:25-183:2; 189:7-19).
Paragraph 9 of the Sale and Purchase Agreement, Arch Coal
agreed to execute and deliver a Grazing Lease for Section 12
after closing. Under Paragraph 10, Arch agreed to grant
Tarter the option to purchase Section 12 upon the terms and
conditions of a Purchase Option. Both documents are discussed
in more detail below.
The Grazing Lease
Grazing Lease grants Tarter the right to continue to ranch
Section 12 for a ten-year term post sale. (Doc. 22-11). The
Grazing Lease is renewable for an additional ten years, after
the first ten years, until 2031, and then terminates with no
provision for an additional renewal. (Id.) If the
mine is developed before 2031, Arch Coal may terminate the
lease by providing Tarter written notice that it has a mining
permit for the land. (Id. at 2). Tarter's lease
terminates nine months after service of that written notice.
(Id. at 3).
The Purchase Option
Purchase Option grants Tarter the exclusive right to
repurchase Section 12. (Doc. 22-10). Tarter has one year from
the date Arch Coal serves him with a Notice of Right to
Exercise Option to make the purchase. (Id. at 1).
The Purchase Option anticipates that Arch Coal will serve
notice on Tarter after all bonding for Section 12 under the
applicable mining permits is released, provided however, that
the timing is in Arch Coal's "sole and absolute
discretion." (Id.). If Tarter exercises the
Option, Arch Coal is required to convey the property to him
by quitclaim deed for $250 an acre. (Id. at 2). The
parties dispute whether the form of the ...