PARKHILL v FUSELIER

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No. 80-402 IN THE SUPREME COURT OF THE STATE OF MONTANA 1981 JOHN GARY PARKHILL and JANE L. PARKHILL, Plaintiff and Respondent, GARY L. FUSELIER and BETH FUSELIER, Defendant and Appellant. Appeal from: District Court of the Eleventh Judicial District, In and for the County of K d - b p S H . l ; ~ v u h c ~ Honorable Robert Sykes, Judge presiding. Counsel of Record: For Appellant: Warden, Christiansen & Johnson, Kalispell, Montana For Respondent: Keller & Gilmer, Kalispell, Montana Submitted on briefs: May 28, 1981 Decided: August 31, 1981 AUG 3 1 1981 Mr. J u s t i c e Fred J. Weber d e l i v e r e d t h e Opinion of t h e C o u r t . Respondents John and J a n e P a r k h i l l b r o u g h t a n a c t i o n i n t h e ~ i s t r i c C o u r t of t h e E l e v e n t h J u d i c i a l D i s t r i c t , F l a t h e a d t County, a l l e g i n g i n n o c e n t m i s r e p r e s e n t a t i o n a s t o t h e w a t e r s u p p l y i n t h e s a l e of r e a l p r o p e r t y by t h e s e l l e r s Gary and Beth F u s e l i e r . The c a s e was t r i e d w i t h o u t a j u r y , and t h e D i s t r i c t C o u r t found f o r t h e P a r k h i l l s . a p p e a l from t h e judgment. The F u s e l i e r s W e affirm. Gary and Beth F u s e l i e r owned p r o p e r t y i n F l a t h e a d County, Montana, c o n s i s t i n g of a p p r o x i m a t e l y one a c r e of l a n d w i t h a mobile home l o c a t e d upon i t . The w a t e r s u p p l y f o r t h e p r o p e r t y came from a w e l l on a n e i g h b o r i n g t r a c t of The owner of t h e n e i g h b o r i n g t r a c t owned t h e w e l l , land. had a l l r i g h t s t o t h e w e l l , and r e c e i v e d $8 p e r month from t h e F u s e l i e r s f o r s u p p l y i n g them w i t h w a t e r . There was no w r i t t e n agreement between t h e F u s e l i e r s and t h e i r n e i g h b o r concerning t h e water supply. On October 1 0 , 1977, t h e F u s e l i e r s l i s t e d t h e i r p r o p e r t y w i t h T r i - C i t y Real E s t a t e i n K a l i s p e l l , Montana. c o n t r a c t c o n t a i n e d a d e s c r i p t i o n of t h e p r o p e r t y . The l i s t i n g I n the s p a c e f o l l o w i n g t h e p r i n t e d word "Water", t h e words "community $8/mo. " were i n s e r t e d . The P a r k h i l l s responded t o a n a d v e r t i s e m e n t f o r t h e F u s e l i e r p r o p e r t y and c o n t a c t e d T r i - C i t y R e a l E s t a t e . A Tri-City agent brought the P a r k h i l l s o u t t o t h e F u s e l i e r property. Gary F u s e l i e r was on t h e p r o p e r t y when i t was f i r s t shown and t o l d t h e P a r k h i l l s t h a t t h e w a t e r came from " a k i n d of community w a t e r system." He a l s o t o l d them t h a t h e d i d n o t a n t i c i p a t e any problems w i t h t h e w a t e r s u p p l y . The r e a l e s t a t e a g e n t who b r o u g h t t h e P a r k h i l l s o u t t o t h e p r o p e r t y t w i c e made r e f e r e n c e t o t h e n o t a t i o n on t h e l i s t i n g agreement which s t a t e d t h a t t h e w a t e r w a s " cornmuni t y $8/mo. " The a g e n t d i d t h i s i n r e s p o n s e t o q u e s t i o n s from t h e P a r k h i l l s concerning t h e water supply. L a t e r , another Tri-City a g e n t t o l d t h e P a r k h i l l s t h a t t h e y s h o u l d have no problems w i t h t h e i r water supply. J a n e P a r k h i l l was s t i l l concerned a b o u t t h e w a t e r s u p p l y and d e s i r e d w r i t t e n v e r i f i c a t i o n of t h e i n t e r e s t i n t h e "community w a t e r system." She asked a T r i - City agent about t h i s during a negotiation f o r the s a l e . The a g e n t t o l d t h e P a r k h i l l s t h e r e would b e a r e g i s t e r e d r e c o r d of t h e community w e l l and t h a t he would o b t a i n a copy of t h e r e g i s t e r of t h e w e l l f o r them. Jane P a r k h i l l asked t h e a g e n t a b o u t t h e w e l l r e g i s t e r a g a i n a t t h e time of s i g n i n g t h e c o n t r a c t f o r deed f o r t h e p r o p e r t y . r e p l i e d t h a t he had n o t y e t o b t a i n e d a copy. The a g e n t He told the P a r k h i l l s t h a t t h e w e l l r e g i s t e r was n o t n e c e s s a r y t o t h e s i g n i n g of t h e c o n t r a c t f o r d e e d , which made no r e f e r e n c e t o water supply. The c o n t r a c t f o r deed had been p r e p a r e d by an a t t o r n e y f o r T r i - C i t y Real E s t a t e w i t h o u t c o n s u l t a t i o n w i t h the Parkhills. The P a r k h i l l s d i d n o t employ a n a t t o r n e y f o r t h i s transaction. The c o n t r a c t f o r deed c o n t a i n e d t h e following clause: "INDEPENDENT INVESTIGATION: The P u r c h a s e r a g r e e s and r e p r e s e n t s t h a t s a i d P u r c h a s e r h a s conducted * a n i n d e p e n d e n t i n v e s t i g a t i o n and i n s p e c t i o n of s a i d l a n d and p r e m i s e s , and h a s e n t e r e d i n t o t h i s C o n t r a c t i n f u l l r e l i a n c e t h e r e o n , and t h a t t h e r e a r e no o t h e r a g r e e m e n t s , v e r b a l o r o t h e r w i s e , modif y i n g o r a f f e c t i n g t h e terms h e r e o f , and t h a t P u r c h a s e r i s n o t r e l y i n g on o r a l r e p r e s e n t a t i o n s made by S e l l e r o r S e l l e r ' s a g e n t . " J a n e P a r k h i l l c a l l e d t h e a g e n t a b o u t two weeks a f t e r t h e c o n t r a c t was s i g n e d t o a s k him i f he was g o i n g t o send t h e r e g i s t e r of t h e well. y e t o b t a i n e d it. Parkhills. The a g e n t r e p l i e d t h a t he had n o t N such document was e v e r p r o v i d e d t o t h e o Ten months a f t e r t h e P a r k h i l l s e n t e r e d i n t o t h e c o n t r a c t , t h e neighbor who owned t h e w e l l n o t i f i e d them t h a t h e would no l o n g e r p r o v i d e t h e w a t e r f o r t h e i r p r o p e r t y . The P a r k h i l l s w e r e f o r c e d t o j o i n w i t h a n o t h e r neighbor i n d r i l l i n g a new w e l l . The P a r k h i l l s ' f o r t h e w e l l was $2,743.75. s h a r e of t h e expense They b r o u g h t s u i t a g a i n s t t h e F u s e l i e r s and s o u g h t r e c o v e r y of t h i s sum based upon t h e i n n o c e n t m i s r e p r e s e n t a t i o n s of t h e F u s e l i e r s and t h e i r agents a s t o the water supply f o r t h e property. The D i s t r i c t C o u r t found f o r t h e P a r k h i l l s and e n t e r e d judgment i n t h e amount of t h e i r c o s t f o r t h e new w e l l . The F u s e l i e r s r a i s e t h r e e i s s u e s on a p p e a l : 1. Did t h e D i s t r i c t C o u r t e r r i n h o l d i n g t h a t t h e P a r k h i l l s r e l i e d on t h e r e p r e s e n t a t i o n s of t h e F u s e l i e r s ' a g e n t s where t h e F u s e l i e r s d i s c l a i m e d r e l i a n c e by t h e e x p r e s s t e r m s of t h e c o n t r a c t ? 2. Were t h e f i n d i n g s of t h e D i s t r i c t C o u r t s u p p o r t e d by s u b s t a n t i a l c r e d i b l e evidence? 3. Can t h e P a r k h i l l s p r e v a i l where t h e y f a i l e d t o discover t h e t r u t h about t h e water supply? On t h e f i r s t i s s u e , t h e F u s e l . i e r s a r g u e t h a t j u s t i f i a b l e r e l i a n c e i s a n e c e s s a r y e l e m e n t of t h e t o r t o f m i s r e p r e s e n t a t i o n , and t h a t t h e P a r k h i l l s d i s c l a i m e d any r e l i a n c e upon p o s s i b l e m i s r e p r e s e n t a t i o n by t h e ~ u s e l i e r so r t h e i r a g e n t s when t h e y e x e c u t e d a c o n t r a c t c o n t a i n i n g t h e " i n d e p e n d e n t investigation" clause. The F u s e l i e r s r e l y upon two r e c e n t c a s e s , McCarty v . L i n c o l n Green, I n c . P.2d 1221, 37 St.Rep. Mont. Mont. - 620 (1980), , 2007, and S c h u l z v . Peake ( 1 9 7 8 ) , 178 261, 583 P.2d 425. By i t s t e r m s , t h e " i n d e p e n d e n t i n v e s t i g a t i o n " c l a u s e s t a t e s t h a t t h e P a r k h i l l s made an i n d e p e n d e n t i n v e s t i g a t i o n and e n t e r e d i n t o t h e c o n t r a c t i n r e l i a n c e t h e r e o n , t h a t t h e r e a r e no o t h e r agreements modifying o r a f f e c t i n g t h e t e r m s and t h a t t h e P a r k h i l l s a r e n o t r e l y i n g on o r a l r e p r e s e n t a t i o n s made by t h e F u s e l i e r s o r F u s e l i e r s ' a g e n t s . However, t h e f a c t s do n o t j u s t i f y a r e l i a n c e upon such "independent i n v e s t i g a t i o n " clause. The t r i a l c o u r t found t h a t t h e P a r k h i l l s r e l i e d upon t h e r e p r e s e n t a t i o n s of t h e community w a t e r a s a p p e a r e d i n t h e w r i t t e n l i s t i n g agreement which had been p r e p a r e d by t h e r e a l t o r s , and a l s o upon t h e s t a t e m e n t s of t h e v a r i o u s a g e n t s of t h e r e a l t o r p r i o r t o and a t t h e t i m e of t h e e x e c u t i o n of t h e c o n t r a c t f o r deed. The c o u r t found t h a t a l l of t h e r e p r e s e n t a t i o n s by t h e r e a l t o r s were made a s a g e n t s of t h e F u s e l i e r s . t o t h e McCarty c a s e . T h i s c a s e i s comparable I n t h e McCarty c a s e , t h e c o u r t d i s - t i n g u i s h e d from S c h u l z by p o i n t i n g o u t t h a t t h e McCartys had i n s p e c t e d t h e wrong p r o p e r t y and t h a t t h e i n s p e c t i o n of t h e wrong p r o p e r t y was b r o u g h t a b o u t by t h e f a i l u r e of t h e r e a l estate agent t o properly i d e n t i f y t h e property. A s a result, McCarty h e l d t h a t t h e s e l l e r i n c u r r e d a l i a b i l i t y b e c a u s e t h e s e l l e r i s bound by t h e m i s r e p r e s e n t a t i o n s made by r e a l e s t a t e b r o k e r o r a g e n t a s t o t h e l o c a t i o n of t h e p r o p e r t y . T h i s c a s e i s d i r e c t l y comparable t o McCarty, i n t h a t t h e P a r k h i l l s were m i s l e d by t h e l i s t i n g agreement and by t h e v a r i o u s o r a l s t a t e m e n t s of t h e r e a l t o r s , i n c l u d i n g t h e s t a t e m e n t by t h e r e a l t o r a t t h e t i m e of c o n t r a c t e x e c u t i o n t h a t a copy of t h e w e l l r e g i s t e r would be o b t a i n e d and d e l i v e r e d t o them and was n o t n e c e s s a r y t o t h e s i g n i n g of the contract. W e f u r t h e r n o t e t h a t t h e c o n t r a c t f o r deed and t h e l i s t i n g agreement w e r e p r e p a r e d by t h e r e a l t o r s and t h e o r a l s t a t e m e n t s a s t o t h e community w e l l w e r e a l s o made by t h e r e a l t o r s , a l l w i t h o u t l e g a l a s s i s t a n c e on t h e p a r t of the Parkhills. The w r i t t e n i n s t r u m e n t s p r o p e r l y a r e t o be c o n s t r u e d a g a i n s t t h e p a r t y who caused any u n c e r t a i n t y . L a u t e r j u n g v. Johnson ( 1 9 7 7 ) , 175 Mont. 74, 572 P.2d 511; s e c t i o n 28-3-206, MCA. W h o l d t h a t under s e c t i o n 28-10-602, e MCA, the Fuseliers a r e responsible t o t h e P a r k h i l l s f o r t h e negligence of t h e i r a g e n t s i n t h e s a l e t r a n s a c t i o n a s r e l a t e d t o t h e community water i n t e r e s t . W hold t h a t the "independent i n v e s t i g a t i o n " e c l a u s e of t h e c o n t r a c t d o e s n o t p r e c l u d e a h o l d i n g t h a t t h e P a r k h i l l s j u s t i f i a b l y r e l i e d upon t h e r e p r e s e n t a t i o n s of t h e a g e n t s of t h e F u s e l i e r s . The F u s e l i e r s ' second i s s u e c o n c e r n s t h e s u f f i c i e n c y of t h e e v i d e n c e t o s u p p o r t t h e f i n d i n g s and judgment below. They a r g u e t h a t t h e f a c t s d o n o t s u p p o r t a f i n d i n g of j u s t i f i a b l e r e l i a n c e by t h e P a r k h i l l s . When t h i s C o u r t r e v i e w s e v i d e n c e , i t w i l l be viewed i n t h e l i g h t most f a v o r a b l e t o t h e p a r t y who p r e v a i l e d i n t h e D i s t r i c t C o u r t , and t h e c r e d i b i l i t y of w i t n e s s e s and t h e w e i g h t a s s i g n e d t o t h e i r t e s t i m o n y i s f o r t h e d e t e r m i n a t i o n of t h e D i s t r i c t C o u r t i n a nonjury t r i a l . Luppold v . Lewis ( 1 9 7 7 ) , 172 Mont. 563 P.2d 538, 540-541. 280, 284, The f i n d i n g s of f a c t and c o n c l u s i o n s o f law of t h e D i s t r i c t C o u r t w i l l n o t be d i s t u r b e d i f s u p p o r t e d by s u b s t a n t i a l e v i d e n c e and by t h e law. a t 77, 572 P.2d a t 512-513. L a u t e r j u n g , 175 Mont. W e have reviewed t h e r e c o r d and h o l d t h a t t h e r e was s u f f i c i e n t c r e d i b i l e e v i d e n c e t o s u p p o r t t h e f i n d i n g s of t h e D i s t r i c t C o u r t . F i n a l l y , t h e F u s e l i e r s contend t h a t t h e P a r k h i l l s c a n n o t p r e v a i l b e c a u s e t h e P a r k h i l l s made no e f f o r t s t o discover t h e t r u t h regarding t h e water supply. The P a r k h i l l s i n q u i r e d a number of t i m e s a b o u t t h e w a t e r s u p p l y . The t r i a l c o u r t found: " 4 . A f t e r t h e showing of t h e p r o p e r t y and p r i o r t o t h e s i g n i n g of t h e b u y / s e l l agreement, M r s . P a r k h i l l c o n t a c t e d Edward F. McAuley, b r o k e r and a member of t h e c o r p o r a t i o n known a s T r i - C i t y R e a l t o r s c o n c e r n i n g t h e w a t e r and community w e l l . A t t h a t t i m e , M r . McAuley a d v i s e d h e r t h e r e was a community w a t e r system and t h a t s h e would have no d i f f i c u l t i e s c o n c e r n i n g same. " 7 . A t t h e t i m e t h e P l a i n t i f f s s i g n e d t h e cont r a c t , b o t h Defendants had a l r e a d y s i g n e d t h e cont r a c t f o r deed. P r i o r t o t h e P l a i n t i f f s ' s i g n i n g same, M r s . P a r k h i l l asked a b o u t t h e community w e l l and t h e r e g i s t r a t i o n of same; and was a d v i s e d by M r . McAuley t h a t a s soon a s he o b t a i n e d a copy, he would forward i t t o h e r . " The P a r k h i l l s r e a c h e d t h e i r e r r o n e o u s c o n c l u s i o n b e c a u s e of t h e m i s r e p r e s e n t a t i o n s of t h e a g e n t s of t h e F u s e l i e r s . The P a r k h i l l s a t t e m p t e d t o i n q u i r e f u r t h e r , b u t were a s s u r e d t h a t t h e v e r i f i c a t i o n t h e y d e s i r e d was b e i n g o b t a i n e d . We h o l d t h a t under t h e f a c t s of t h i s c a s e , no a d d i t i o n a l d u t y t o discover the t r u t h arose. The judgment of t h e D i s t r i c t C o u r t i s a f f i r m e d .

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