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No. 85-125
IN THE SUPREME COURT OF THE STATE OF MONTANA
1986

KATHRYN ANN BUSHNELL,

Plaintiff and Appellant,

GENE E. COOK, FRED BELL, COOK-BELL
REAL ESTATE, STORY HILLS EAST, a
Montana partnership, and JAMES A. BOS,
CLARANCE R. BROWN, KENNETH R. BR.OWN,
WILLIAM H. ERWIN, DONN R. ERWIN, et al.,

Defendants and Respondents.

APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Joseph B. Gary, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Nash, Wellcome, Frost, Guenther & Zimrner; Page Wellcome argued, Bozeman, Montana
For Respondent:

Morrow, Sedivy & Bennett; Edmund P. Sedivy argued,
Rozeman, Montana
Landoe-Brown Law Firm; Allan McGarvey argued, Bozeman,
Montana

Submitted: April 22, 1986

Decided: May 15, 1986

Clerk

Mr. Justice John C. Sheehy delivered the Opinion of the
Court.

The appellant, Kathy Bushnell, brought an action in the
District Court of the Eighteenth Judicial District, Gallatin
County against Gene Cook, Fred Bell, Cook-Bell Real Estate
and the Story Hills East (SHE) partnership. The jury
returned a verdict in favor of the defendants and judgment
was entered in accordance with the verdict. The plaintiff
moved for new trial. The District Court denied the motion.
Plaintiff appeals from the judgment and denial of motion for
new trial. We affirm.

Appellant raises five issues in this case.

1.
Are the verdict and judgment supported by the
evidence?


2.
Did the court err in failing to instruct the jury on
the breach of the implied covenant of good faith and fair
dealing?


3.
Did the court err in failing to instruct the jury on
negligent misrepresentation?


4.
Did the court err in failing to grant a new trial?


5.
Did the court err in instructing the jury generally?





Respondent raises one issue on cross-appeal: did the
court err in failing to award SHE partnership its reasonable
attorney's fees?

When Kathy Bushnell, the appellant in this case, was 22
years old, she received a settlement of about $40,000 from a
car accident. Her athletics trainer put her in contact with
Gene Cook of Cook-Bell Real Estate. Cook understood she
wanted an investment for her money and she was relying on him
to recommend a good investment. He showed her several

properties, including Lot 45 of Story Hills East. The Story

Hills East (SHE) development was a partnership, formed in
1973 to buy land from Winston Cox and subdivide it. Cox
hired Overturf, Strand, and Associates, an architectural firm
to assist him with planning and zoning. Overturf was managing
partner of the SHE partnership from 1973-75 and Overturf and
Cook shared the management from 1975-78. Strand was also a
member of SHE partnership. In the course of getting the
planned unit development approved by the Bozeman Zoning
Commission, SHE hired Dr. John Montagne, a geologist to study
the geology and soils of the area. Dr. Montagne warned of
unstable soils in the area. However, Montagne and other
experts testified that homes could be built on the soils, if
special precautions were taken.

Kathy Bushnell decided to buy lot 45 of Story Hills
East. She paid a total of $28,000, $20,000 down and $8,000
in installments over ten years. Cook advised Kathy that by
subdividing the lot and selling it, she would maximize her
investment. So in 1.979, Cook put Kathy in contact with
Robert Babb, Gallatin County Surveyor, to do the subdivision
work. As a result the lot was divided into two lots, 45A and
45B. Thereafter, Kathy listed the lots with Radcliff Realty.
Radcliff sold Lot 45A to Blackwood on April 13, 1981 for
$19,000. In the fall of 1982, Ra.dcliff received a telephone
call and letter from Blackwood indicating there had been soil
slippage on his lot, that he felt there were no suitable
building sites on the lot and wanted his money back. As a
result of this, Bushnell, Blackwood, Radcliff and Gary
France, managing partner of the SHE partnership, met on
December 31, 1982. They discussed various ways to settle the
dispute. Eventually, they agreed to a compromise. Blackwood

got his money back from the developer, and was released from
his contract. Bushnell got the land back, and she was
released from the final payments of $5,582.80 owed to the
partnership. She was also allowed to keep the payments and
downpayment made by Blackwood.

In August, 1983, Bushnell filed a complaint against SHE
partnership alleging damages for breach of contract or right
to rescission and return of all money paid. At trial, she
dropped the rescission claim and elected to keep the lot and
sue for damages on the breach of contract claim.

The damages alleged by Bushnell were that the defendants
failed to discover a fault line that ran through the
property. However, at trial Dr. Montagne testified no fault
line runs through the property. A fault does exist in the
near vicinity, but Montagne testified a home properly built
would not be damaged unless it was directly over or within
fifty feet of the fault line.

The soil on Lot 45 has slipped downhill in places,
however experts testified there were still suitable building
sites on the property if adequate precautions were taken in
building a home.

Bushnell alleged she was damaged because SHE partnership
pastured cattle and horses on her land without paying her.
However, at trial checks for pasture rent paid to Bushnell
were introduced showing she had been paid for 1978, 1981,
1982. The lands were not used for pasture in 1979 or 1980.

Bushnell also alleged that the contract was breached
because the SHE partnership did not finish the roads as
required by the sales agreement by November 1, 1979. Cook
testified that not all the roads were completed by November
1, 1979. He wrote to Bushnell in December, 1981, saying the

roads had not been completed because of slowness in selling

the lots. He indicated that if Bushnell decided to build a
home or found a buyer, to let him know and he would tell the
contractor to finish that portion of the road. Rushnell did
not contact him to ask that the road be finished.

Finally, Bushnell contended that the SHE partnership
encumbered her title by leasing her lot for oil and gas
exploration. The leasing agent testified at trial that he
approached France about leasing the area in May, 1983.
France explained that the ownership of Lot 45 was in dispute.
The agent requested both SHE and Bushnell sign leases, and
that both would be paid. He stated the company would release
the party that didn't end up with title, but that party could
keep the lease rental money. France agreed to this top
leasing, but Bushnell did not. She later complained that
France had encumbered her title by agreeing to the oil and
gas lease.

After jury trial on issues, the jury returned a verdict
in favor of defendants Cook, Bell, Cook-Bell Real Estate, and
SHE partnership and against Bushnell on all issues.

Appellant's first contention on appeal is that the
judgment and verdict are not supported by the evidence.
Although it is not listed as an issue, counsel also contends
in his argument that the District Court erred in refusing his
motion for new trial based on lack of substantial evidence to
support the verdict. In reviewing the claim that the verdict
and judgment were not supported by evidence, we are aware
that the evidence must be viewed in the light most favorable
to the prevailing party. The standard of review is whether
there is substantial evidence to support the verdict. Powers
Manufacturing Co. v. Leon Jacobs Enterprises (Mont. 1985),

701 P.2d 1377, 1379, 42 St.Rep. 906, 908. "Substantial
evidence is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion." State v.
Plouffe (1982), 198 Mont. 379, 389, 646 P.2d 533, 538.
Contrary to Bushnell's assertion that the evidence of damage
to her was "basically uncontradicted," the evidence in this
case was hotly disputed throughout trial and on appeal.
However, in reading the transcript in the light most
favorable to the defendants it is clear that there was
sufficient evidence for the jury to decide in favor of the
defendants on all counts. Likewise, we find the District
Court was correct in refusing to grant a new trial on the
basis of lack of sufficient evidence to support the verdict.

Next appellant argues the District Court erred in
refusing to instruct the jury on breach of the implied
covenant of good faith and fair dealing. Appellant argues
the covenant of good faith and fair dealing should be applied
to Cook-Bell as real estate agents and to SHE partnership, as
developers.

It was not error to refuse to give the instruction as
against Cook-Bell Real Estate because it was not shown at
trial that Cook had actual knowledge of claimed defects in
the land necessary to constitute bad faith. Further, while
knowledge may be imputed to Cook as a member of the SHE
partnership, it cannot be imputed from the SHE partnership to
the Cook-Bell Real Estate partnership.

It was also not error for the District Court to refuse
to give the bad faith instruction against the SHE
partnership. In this case, the court instructed the jury on
constructive fraud as follows:

Constructive fraud is a breach of duty which,
without an actual fraudulent intent, gains
advantage to the persons in fault by misleading
another to her prejudice.

The jury found no breach of duty by SHE partnership under
this instruction which does not require a showing of
fraudulent intent. An instruction on bad faith would require
the plaintiff prove intentional concealment. If the
pla.intiff could not meet her burden of proof on constructive
fraud, she could not meet the higher burden of proof on bad
faith. Thus the instruction would have been superfluous.

Appellant also contends the District Court erred in
failing to instruct on negligent misrepresentation. While
the court did not instruct on negligent misrepresentation, it
did instruct on constructive fraud. In Montana an action for
negligent misrepresentation is an action for fraud, so the
jury was adequately instructed. Falls Sand and Gravel Co. v.
Western Concrete, Inc. (D. Mont. 1967), 270 F.Supp. 495, 502.

Appellant contends the District Court erred in not
granting a new trial. There were two bases for a new trial.
First, appellant contends the District Court erred in
allowing the jury to view the property prior to the time
plaintiff rested her case, and in not giving a cautionary

instruction.  The record shows counsel for plaintiff made no  
objection  to  jury view  and  did  not  request  a  cautionary  
instruction.  This Court will not put a district court in  
error  for  a  procedure to which appellant did not object.  

State ex rel. Department of Highways v. DeTienne (Mont.
1985), 707 P.2d 534, 537, 42 St-Rep. 1557, 1559.

Second, appellant contends the District Court should
have granted a new trial on the basis of newly discovered
evidence as to the correct survey corner of Lot 45. She

alleges that if the ma-rker was wrong, the property line was

wrong and the jury was shown the wrong lot.

The standard for determining whether newly-discovered evidence is sufficient reason for a new trial is governed by the statute, section 25-11-102 (4) , MCA, which provides that the newly-d.iscovered evidence must be that which the applicant could not with reasonable diligence have discovered and produced at the trial. Whether to grant or deny a new trial is within the sound discretion of the trial court. Fredricksen. v. Fredericksen (Mont. 1980), 605 P.2d 1135, 1137, 37 St.Rep. 191, 193, and will not be overturned absent a showing of manifest abuse of that discretion. Giles v. Flint Valley Forest Products (1979), 179 Mont. 382, 588 P.2d 535, 538. Every presumption is indulged that the movant for a new trial on the ground of newly-discovered evidence could have secured the testimony for the former trial, and the movant must negative any negligence on his part. In Re Colbert's Estate (19041, 31 Mont. 461, 80 P. 248. The movant must show that such evidence came to his knowledge since the trial and that even through diligence it was not discovered earlier; it must also appear that its materiality will proba.bly produce a different result on trial and it is not merely cumulative or only tending to impeach. State v. Estep (1936), 103 Mont. 78, 61 P.2d 830.
Walter v. Evans Products Co. (Mont. 19831, 672 P.2d 613, 616,

In this case appellant did not show that she could not

have discovered the new evidence with reasonable diligence,

and that the new evidence would produce a materially

different result. We hold the District Court did not abuse

its discretion in refusing to grant a new trial.

Appellant cl-aims the District Court erred in instructing

the jury generally. In reviewing the jury instructions, we

must consider them in their entirety and in light of the

evidence introduced at trial. Brown v. North American

Manufacturing Co. (Mont. 1978), 176 Mont. 98, 114, 576 P.2d

711, 721. Viewed in their entirety, the instructions fairly

instructed the jury on the issues presented by the evidence.

Finally we turn to the issue on cross-appeal. Did the
District Court err in failing to award attorneys fees to SHE
partnership? SHE partnership sought attorneys fees under the
election of remedies paragraph of the contract for deed
between Bushnell and SHE partnership. It states:

It is understood and agreed that the forfeiture
privilege, a remedy in case of default above, under
paragraph 9-a-c, shall not be exclusive and. the
Seller reserves the right to sue for specific
performance or breach of contract if it elects not
to exercise the forfeiture or foreclosure clauses
above. In the event of litigation under this
paragraph, the Buyer agrees to pay a reasonable
attorney's fee for an [sic] on behalf of the
Seller's attorney.

Attorneys fees are not available to SHE partnership under
this section because this action was not instituted pursuant
to the default provision of the contract.

We affirm the judgment of District Court in all
respects.

We Concur: fl

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