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Davidson v. Barstad

Supreme Court of Montana

February 26, 2019

GLENN DAVIDSON and TOM IDE, Plaintiffs, Counter-Defendants and Appellees,
v.
WOODROW BARSTAD and CHRISTINE BARSTAD, Defendants, Counter-Claimants, Third-Party Complainants and Appellants.

          Submitted on Briefs: August 8, 2018

          APPEAL FROM: District Court of the Third Judicial District, In and For the County of Powell, Cause No. DV-16-68 Honorable Ray Dayton, Presiding Judge

          For Appellant: Quentin M. Rhoades, Nicole L. Siefert, Rhoades Siefert & Erickson PLLC, Missoula, Montana

          For Appellees: J. Andrew Person, Alan F. McCormick, Garlington, Lohn & Robinson, PLLP, Missoula, Montana (for Glenn Davidson) Graham J. Coppes, Ferguson Law Office, PLLC, Missoula, Montana (for Tom Ide)

          OPINION

          Dirk Sandefur Justice

         ¶1 Woodrow and Christine Barstad (Sellers) appeal from the judgment of the Montana Third Judicial District Court, Powell County, granting summary judgment specifically enforcing post-auction real property buy-sell agreements between Sellers and respective auction purchasers, Glenn Davidson and Tom Ide (Buyers). We affirm.

         ¶2 We find the following restated issues dispositive on appeal:

1. Whether the District Court erroneously granted summary judgment specifically enforcing the parties' real estate buy-sell agreements despite genuine issues of material fact regarding conditions precedent to formation of the contracts?
2. Whether the District Court abused its discretion in not granting Sellers Rule 56(f) relief prior to rendering summary judgment?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶3 Sellers are residents of Tasmania, Australia, who owned a 320-acre ranch property near Ovando in Powell County, Montana.[1] By written agreement dated April 2, 2016, Sellers contracted with an Alabama auction company, Albert Burney, Inc. (Auctioneer) to sell their ranch property at an "absolute auction with no minimums or reserves . . . to the highest bidder(s) regardless of the bid price." In the listing agency agreement, Sellers "appointed" the Auctioneer as their "sole and exclusive agent" with the "exclusive right to sell" the property with their "written approval." Inter alia, the agency agreement specified that, upon sale, Sellers would convey the property by general warranty deed free and clear of all encumbrances, including but not limited to a then-outstanding mortgage debt in the amount of $550, 000. The agreement specified that the auction would take place on the property on June 30, 2016.

         ¶4 At all times pertinent, the Auctioneer acted by and through James Morgan, its employed project manager. Following execution of the agency agreement with the Auctioneer, Sellers acted through Woodrow Barstad personally and under Christine Barstad's power of attorney.

         ¶5 The Auctioneer marketed the ranch to the public via a published brochure and website. The brochure and website indicated that the Sellers would auction the ranch property either as a whole or in two separate 160-acre parcels (Parcels #1 and #2). On the day of the auction, the Auctioneer distributed a conforming property sheet noting that Parcel #1 (southern parcel) included certain existing improvements (modular home, 60' x 84' barn, and a 100' x 260' arena) and that Parcel #2 (northern parcel) was unimproved. The auction day property sheet also referenced a required preliminary bid deposit- $50, 000 to bid on the whole, $30, 000 to bid on Parcel #1, or $20, 000 to bid on Parcel #2.

         ¶6 The Auctioneer also prepared and published a two-page document, entitled Real Estate Auction Terms and Conditions (REATC), specifying the various terms and conditions of the auction and the subsequent real estate sales transaction(s). The introductory section of the REATC declared that, by bidding, all registered bidders agreed "to abide by [its] terms and conditions" which would "be attached to and become a part of" a subsequent written buy-sell agreement "represent[ing] the final contracted terms of the sale." The "Registration" section of the REATC specified that all bidders "must register and obtain a bid number." As a condition of registration, the REATC stated that, "[i]n order to bid, Bidders will be required to present a bid deposit in certified funds, or other funds acceptable to the Seller and/or Auction Company"-$50, 000 to bid on the whole, $30, 000 to bid on Parcel #1, or $20, 000 to bid on Parcel #2. (Emphasis added.) The REATC made no reference to a registration form or other documentation required for registration or bidding.

         ¶7 The "Terms of Sale" section of the REATC specified that the successful auction bidder(s) would "be required to execute" a written buy-sell agreement "immediately following the [a]uction" with "an Earnest Money Deposit equal to ten percent (10%) of the total purchase price with the Bid Deposit being in cash, certified funds, or other funds acceptable to the Seller and the balance of the 10% being by company or personal check." The "Defaults" section of the REATC specified that, if Sellers default under the post-auction buy-sell agreement, "Buyer shall have only the right of specific performance."

         ¶8 The Auctioneer and Woodrow Barstad were personally present on the property at the place and time of the auction. Prior to the auction, the Auctioneer administered the pre-auction registration of bidders in occasional consultation with Woodrow. Davidson appeared and sought to register with a $50, 000 bid deposit in the form of a personal check and a letter from an Ohio bank (FirstMerit Bank) stating that he "has $50, 000 available in his FirstMerit Bank accounts." The letter further stated that the undersigned Bank Branch Manager would be available for questions at a specified number. Finding the personal check and bank verification letter sufficient based on his experience and, as later-asserted, belief that Woodrow had personally authorized several other bidders to register "without required documentation," the Auctioneer accepted Davidson's bid deposit and issued him a bid number with an accompanying auction registration form.[2]

         ¶9 Tom Ide separately appeared and sought to register to bid at the auction. By subsequent affidavit, the Auctioneer attested that he allowed Ide to register and bid upon deposit of a $50, 000 "cashier's check." In a later affidavit, the Auctioneer attested that Ide made his bid deposit in the form of $50, 000 in cash.[3] The Auctioneer accepted Ide's bid deposit and issued him a bid number without an accompanying registration form.

         ¶10 At the auction, after determining that separate sales of Parcels #1 and #2 would yield the highest total sale price, the Auctioneer declared Davidson the highest and successful bidder on Parcel # 1 at $341, 000. The Auctioneer ...


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