Glacier Bear Retreat, LLC et al v. Dusek et al

Filing 47

ORDER granting 25 Motion for Summary Judgment; denying 32 Motion for Summary Judgment. Signed by Magistrate Judge Kathleen L. DeSoto on 1/17/2023. (APP)

Case 9:22-cv-00019-KLD Document 47 Filed 01/17/23 Page 1 of 30

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MONTANA
MISSOULA DIVISION
GLACIER BEAR RETREAT,
LLC, GAIL L. GOODWIN, and
DARRYL C. SLATTENGREN,

CV 22-19-M-KLD
ORDER

Plaintiffs/
Counterclaim
Defendants,
vs.
MATT DUSEK AND
RACHEL DUSEK,
Defendants/
Counterclaimants.

This suit for specific performance for breach of a buy-sell agreement for the
sale of real property in Glacier National Park comes before the Court on crossmotions for summary judgment by Plaintiffs/Counterclaim Defendants Glacier
Bear Retreat, LLC, Gail Goodwin, and Darryl Slattengren (collectively, “Glacier
Bear”) and Defendants/Counterclaimants Matt and Rachel Dusek (“the Duseks”).
(Docs. 25 and 32). For the reasons set forth below, Glacier Bear’s motion is
granted and the Duseks’ cross-motion is denied.

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I. Background
Glacier Bear Retreat, LLC owns the parcel of real property at issue in this
case, located at 348 Grist Road in West Glacier, Flathead County, Montana, within
the exterior boundaries of Glacier National Park (“the Property”). (Doc. 29, ¶ 1).
Individual plaintiffs, Goodwin and Slattengren, a married couple and the sole
members of Glacier Bear Retreat (Doc. 29, ¶ 2), listed the Property for sale on
September 1, 2021, with real estate broker Scott Darkenwald of Glacier Sotheby’s
International Realty. (Doc. 29, ¶ 3).
On October 5, 2021, the parties entered into a buy-sell agreement (“BSA”)
and the Duseks deposited a portion of the purchase price into escrow with the
balance due in cash at closing on or before November 9, 2021. (Doc. 29, ¶ 4).
Darkenwald and Tracey Rossi, also of Glacier Sotheby’s, acted as dual agents,
representing both the Duseks (“Buyer”) and Glacier Bear (“Seller”) in the
transaction. (Docs. 36, ¶ 29).
The BSA included a number of contingencies to closing, several of which
are at issue in this case. The following general “Contingencies” paragraph applied
to all contingencies in the BSA:
The contingencies set forth in this Agreement or on attached addenda
shall be deemed to have been released, waived, or satisfied, and the
Agreement shall continue to closing, unless, by 5:00 p.m. (Mountain
Time) on the date specified for each contingency, the party requesting
that contingency has notified the other party or the other party’s
Broker/Salesperson in writing that the contingency is not released,
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waived, or satisfied. If a party has notified the other party on or before
the release date that a contingency is not released, waived, or satisfied,
this Agreement is terminated, and the earnest money will be returned
to the Buyer, unless the Parties negotiate other terms or provisions.
(Doc. 27-4, at 3).
Under the general Contingencies umbrella, the BSA included the following
“Inspection Contingency”:
This Agreement is contingent upon Buyer’s acceptance of any
Property conditions that Buyer deems appropriate, including but not
limited to any inspections or advice listed below. Buyer agrees to
acquire, at Buyer’s own expense, independent inspections or advice
from qualified inspectors or advisors of Buyer’s choice . . . .
(Doc. 27-4, at 3–4). Listed below and relevant to this dispute, the Inspection
Contingency expressly applied to inspections or advice regarding home/property
inspection, mold, and water rights. (Doc. 27-4, at 3–4). The Inspection
Contingency further provided:
Unless Buyer delivers written notice(s) of Buyer’s disapproval of the
Property conditions on or before (Notice Date) 10/26/2021 at 5:00
p.m. (Mountain Time), this inspection contingency shall be of no
further force or effect. If Buyer disapproves of the Property
condition, Buyer shall deliver written notice to the Seller or the
Seller’s Broker/Salesperson on or before the date specified above,
together with a copy of ONLY that portion of the inspection or report
upon which the disapproval is based. Buyer shall also state whether
Buyer elects to immediately terminate the Agreement or negotiate a
resolution of the conditions noted. If Buyer elects to negotiate a
resolution of the conditions noted, the notice must contain all of
Buyer’s objections and requested remedies.
If the parties enter into a written agreement in satisfaction of the
conditions noted, this contingency shall be of no further force or
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effect. If the parties cannot come to written agreement in satisfaction
of the conditions noted or if the Buyer does not withdraw, in writing,
his/her disapproval of the condition noted, on or before (Resolution
Date) 10/29/2021 at 5:00 p.m. (Mountain Time), the earnest money
shall be returned to the Buyer, and the Agreement then terminated.
(Doc. 27-4, at 4) (emphasis in original).
Also under the general Contingencies umbrella in the BSA, the parties added
a contingency to account for outstanding issues related to the Property’s well and
water rights, which arose when Goodwin discovered, after listing the Property, that
the well log had not been recorded and water rights had not been filed for when the
well was drilled in 2013. (Doc. 29-5, at 9–10). This water rights and well-related
contingency stated, “This Agreement is contingent upon All well related
permitting, well log recording, and any associated water rights to be in place prior
to closing,” and noted a “Release Date” of November 3, 2021, at 5:00 p.m. (MST).
(Doc. 27-4, at 5).
On October 12, 2021, the Montana Department of Natural Resources and
Conservation (“DNRC”) issued Goodwin a provisional water rights permit with an
enforceable priority date of September 3, 2021. (Doc. 36, ¶ 97). Goodwin testified
that when she inquired about the term “provisional,” she was told by a DNRC
representative that all water rights permits issued after 1973 are provisional. (Doc.
36-1, ¶ 6). Darkenwald forwarded the water right “General Abstract” to the Duseks
that same day. (Doc. 36, ¶ 98). The Duseks testified that they did not receive the
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actual provisional permit, the accompanying cover letter, or additional instructions
from the DNRC until discovery in this litigation. (Docs. 36, ¶¶ 98, 101).
The Duseks retained D. Quinn Construction, Inc., of Kalispell, to perform a
property condition inspection and tests for radon and drinking water quality. (Doc.
36, ¶ 42). On October 13, 2021, Kelly Quinn provided a report (“First Inspection
Report”), which identified nine property conditions requiring immediate attention,
including “Evidence of moisture” and “Mold build-up” under the stairs in the main
level closet, “possibly caused by inadequate siding flashing although unable to
confirm without further testing.” (Doc. 36, ¶¶ 43–44). The report suggested
“consulting a licenced Certified (AmIAQ) Mold Inspector,” noted “this visual
inspection does not include surface fungal growth, which are not visible at time of
inspection,” and recommended “contacting a qualified mold remediation contractor
at this time for further evaluation.” (Doc. 36, ¶ 44).
On October 15, 2021, the Duseks signed an “Inspection Notice,” giving
Glacier Bear written notice of their disapproval of the property conditions noted in
the First Inspection Report and intent to negotiate a resolution of the conditions
noted. (Doc. 36, ¶ 45). The Inspection Notice specified disapproval of all nine
items identified in the First Inspection Report, including drainage issues, the siding
condition, flashing, evidence of moisture, mold build-up, stairs, valley flashing,
insulation, and evidence of a leaking waste pipe. (Doc. 36, ¶ 46). Water rights were
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not listed among the disapproved of property conditions in the Inspection Notice.
(Doc. 29, ¶ 12). Regarding the issues of mold and moisture retention, the
Inspection Notice required Glacier Bear to “remedy [the evidence of moisture] to
suggestion in inspection report” and required “[a]ll mold to be remediated and pass
a clearance test,” specifying Cory Rensmon of Advanced Restoration and
Maintenance should complete the work. (Doc. 36, ¶¶ 48–49).
The Inspection Notice stated, “If the Seller and Buyer agree to the remedies
specified above, this document shall constitute an amendment to the Buy-Sell
Agreement referred to above and shall be an integral part of this transaction.” The
Inspection Notice provided Glacier Bear until 5:00 p.m. on November 5, 2021, to
“complete all agreed upon resolution(s) to the condition(s) and problem(s)
identified above.” (Doc. 27-8, at 2).
After discussing the problems and remedies articulated in the Inspection
Notice, Goodwin directed Darkenwald to “fix whatever needs to be fixed, or we’ll
– we will fix whatever needs to be fixed.” (Doc. 29, ¶ 14). Goodwin and
Slattengren signed and dated the Inspection Notice on October 17, 2021, and the
Duseks received the fully-executed document on October 18, 2021. (Doc. 29,
¶ 15). Glacier Bear hired Rensmon to address the mold and moisture problems, as
well as the issues related to the siding and flashing, which seemed to be the likely

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causes of the moisture infiltration. (Doc. 36, ¶ 56). Other contractors were hired to
address problems not at issue in this case. (Doc. 36, ¶ 55).
Rensmon began working at the Property on October 19, 2021. (Doc. 36-2,
¶ 4). Certified AmIAQ mold inspector David Quinn of D. Quinn Construction, Inc.
inspected the work on October 25, 2021, and informed Rensmon there was still
evidence of moisture on some of the oriented strand board sheathing (“OSB”) in
the closet under the stairs. (Docs. 36-2, ¶ 6; 36-4, ¶ 5). On October 26, 2021,
Advanced Restoration and Maintenance returned to the Property. (Doc. 36-2, ¶ 7).
Rensmon testified as follows:
After being notified by David Quinn that there was still moisture in the
OSB, over the course of approximately 27 hours from the morning of
October 26, 2021[,] to the morning of October 27, 2021, Advanced
Restoration and Maintenance was able to locate the source, missing
flashing on the roof wall joint. Advanced Restoration and Maintenance
installed the missing kick out flashing and sealed the area with
water/ice moisture membrane and tore out the OSB in which David
Quinn had found moisture and replaced it with new OSB and new
studs. This work completely removed and replaced all of the wood
material in which David Quinn had found elevated moisture readings.
(Doc. 36-2, ¶ 7).
David Quinn prepared his “Limited Microbial Investigation” report, dated
October 26, 2021. (Doc. 36, ¶ 65). The Duseks received the Limited Microbial
Investigation report on October 27, 2021. (Doc. 36, ¶ 68). The Limited Microbial
Investigation report concluded that there were “low levels of fungal spores” in the
air samples from the closet/storage and the living area near the stairs, noting
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“possible left-over accumulated dust and debris spores [are] frequently present in
high numbers after remediation.” (Doc. 34-1, at 69). Additionally, the report
concluded that the surface remediation process on the closet/storage exterior wall
system under stairs was “successful.” (Doc. 34-1, at 69).
Also on October 27, 2021, the Duseks received a copy of Kelly Quinn’s
second “Building Inspection Analysis Report” (“Reinspection Report”), dated
October 27, 2021, documenting the re-inspection he performed after Advanced
Restoration and Maintenance had completed its work on October 26, 2021. (Docs.
36, ¶ 68; 36-5, ¶ 5). Like the First Inspection Report, the Reinspection Report
disclaimed, “This is a visual evaluation of reasonably accessible areas of the
structure,” and notes the visual inspection does not include any surface mold not
visible at the time of inspection. (Doc. 36, ¶¶ 69–70) (emphasis in original). The
Reinspection Report concluded that “evidence of moisture and water stains located
main closet level under the stair area during the original inspection as [sic] been
corrected and was dry at time of inspection with flashing and siding issue having
been corrected.” (Doc. 36-5, ¶ 6). Further, the Reinspection Report stated, “the
water stains and possible surface fungal growth that was found at main level closet
under the stairs during the original inspection does appear to have been properly
treated and remidiated [sic].” (Doc. 36-5, ¶ 7). Both conditions were deemed

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“satisfactory,” meaning the “item condition is good to adequate for the age of
structure.” (Doc. 36-5, ¶¶ 6–7).
Finally, because the Duseks lived in California and had not visited the
Property prior to executing the BSA, the agreement included an “additional
provision” that reserved the Duseks “the right to visit the property in person during
the inspection period.” (Doc. 27-4, at 5). The Duseks personally visited the
property on October 19, 2021, several days after signing the Inspection Notice.
(Doc. 36, ¶ 63).
On October 30, 2021, Matt Dusek sent two letters via email to Darkenwald,
purporting to terminate the BSA and demanding a return of the Duseks’ earnest
money. (Doc. 29, ¶ 23). The first letter stated as follows:
As we are unable to come to a written agreement in satisfaction of
the conditions noted, and as we did not withdraw, in writing, our
disapproval of the conditions noted on or before the stipulated
Resolution Date (10/29/2021 at 5:00 PM MT), we expect that the
earnest money shall be returned to us and the Agreement then
terminated.
The second letter provided the following additional grounds for termination:
[W]e hereby serve notice of our disapproval of the Property
conditions and do not wish to proceed with the purchase –
we elect to immediately terminate the Agreement.
In this decision, we are specifically relying on our reserved
rights under the agreement to contingencies based on:
Well Related Permitting / Water Rights (line 273)
We don’t find the water rights of the property to our satisfaction.
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Additional Provisions – Personal Inspection/Property
Visitation (line 245)
We don’t find the visibility and noise of traffic on Camas Rd.
adjacent to the Property to our satisfaction.
(Doc. 27-6, 65–66). These letters were the first written notice to Glacier Bear that
the Duseks disapproved of the Property’s water rights and traffic noise/visibility
and that they intended not to close on the transaction. (Doc. 29, ¶¶ 23–25).
On November 1, 2021, legal counsel for Goodwin and Slattengren sent
Darkenwald an email expressing their intentions to proceed to closing. (Doc. 27-1).
The parties failed to close on the purchase of the Property on the closing date of
November 9, 2021. (Doc. 1-1, ¶ 12).
On December 22, 2021, Glacier Bear filed a complaint in state district court,
asserting the Duseks had breached by untimely withdrawing from the BSA and
seeking specific performance of the agreement. (Doc. 1-1). The Duseks removed
the case to federal court (Doc. 1), and lodged counterclaims for breach of contract
and breach of the implied covenant of good faith and fair dealing, asserting that as
a result of Glacier Bear’s failure to satisfy the contingencies in the BSA, the parties
did not close and the Duseks are entitled to the return of their earnest money under
the BSA, as amended.1 (Doc. 4). Both parties claim entitlement to costs and
attorney’s fees. (Docs. 1,¶ 16; 4, at 8).

The Duseks do not seek summary judgment on their counterclaim for breach of
the implied covenant of good faith and fair dealing. (Doc. 28, at 3).
1

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The Court will address each issue in turn and include additional facts
relevant to each issue as needed.
II. Legal Standard
Under Rule 56(c), a party is entitled to summary judgment “if the pleadings,
the discovery and disclosure materials on file, and any affidavits show that there is
no genuine issue as to any material fact and that the movant is entitled to judgment
as a matter of law.” A movant may satisfy this burden where the documentary
evidence produced by the parties permits only one conclusion. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251 (1986). Once the moving party has satisfied its
burden, it is entitled to summary judgment if the non-moving party fails to
designate by affidavits, depositions, answers to interrogatories or admissions on
file, “specific facts showing that there is a genuine issue for trial.” Celotex Corp. v.
Cattrett, 477 U.S. 317, 324 (1986).
“The mere existence of some alleged factual dispute between the parties will
not defeat an otherwise properly supported motion for summary judgment; the
requirement is that there be no genuine issue of material fact.” Anderson, 477 U.S.
at 247–48 (emphasis in original). The non-moving party may not rest upon the
mere allegations or denials of the pleadings. Anderson, 477 U.S. at 248. Further,
inadmissible hearsay is insufficient to raise a genuine issue of material fact.
Skillsky v. Lucky Stores, Inc., 893 F.2d 1088, 1091 (9th Cir. 1990).
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In considering a motion for summary judgment, the court “may not make
credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing
Prods., 530 U.S. 130, 150 (2000); Anderson, 477 U.S. at 249–50. The Court must
view the evidence in the light most favorable to the non-moving party and draw all
justifiable inferences in the non-moving party’s favor. Anderson, 477 U.S. at 255;
Betz v. Trainer Wortham & Co., Inc., 504 F.3d 1017, 1020–21 (9th Cir. 2007).
When presented with cross-motions for summary judgment on the same
matters, the court must “evaluate each motion separately, giving the non-moving
party the benefit of all reasonable inferences.” American Civil Liberties Union of
Nevada v. City of Las Vegas, 333 F.3d 1092, 1097 (9th Cir. 2003).
Where, as here, a contract dispute is in federal court based on diversity
jurisdiction, the Court applies the substantive law of Montana, the forum state. 28
U.S.C. § 1652; Med. Lab. Mgmt. Consultants v. Am. Broad. Cos., Inc., 306 F.3d
806, 812 (9th Cir. 2002).
III.

Discussion
A. Breach of Contract
The construction and interpretation of a written contract is a question of law.

Wurl v. Polson Sch. Dist. No. 23, 127 P.3d 436, 441 (Mont. 2006). “Where the
terms of a contract are clear and unambiguous, the duty of the court is to apply the
language as written to the facts of the case, and decide the case accordingly.” King
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Resources, Inc. v. Oliver, 59 P.3d 1172, 1177 (Mont. 2002). Mere disagreement by
the parties over the meaning of a contract does not necessarily create an ambiguity;
rather, “[a]n ambiguity exists where the language of a contract, as a whole,
reasonably is subject to two different interpretations.” Wurl, 127 P.3d at 442.
Here, the parties do not dispute the BSA, as amended by the Inspection
Notice, is a valid, binding contract. 2 Additionally, neither party claims the
language of the BSA, as amended by the Inspection Notice, is ambiguous. Rather,
this dispute centers around the interpretation of the BSA, which is a question of
law.
Glacier Bear argues it is entitled to summary judgment because the
undisputed facts in the record establish the Duseks breached the BSA by sending
written notice of their decision to terminate the agreement after all applicable
contingency deadlines had expired. The Duseks contend the BSA terminated on its
own terms when they gave Glacier Bear notice on October 30, 2021, that three
separate contingencies to the contract were not met.
The Court will address each disputed provision to the BSA in turn.
The Duseks point out that Goodwin and Slattengren signed the BSA and
Inspection Notice, not Glacier Bear; however, this distinction is immaterial. As
sole members of Glacier Bear, Goodwin and Slattengren, by initiating this lawsuit,
have offered to perform the contract. Ingalls v. Brady, 591 P.2d 200, 203 (Mont.
1979) (noting that Montana Code Annotated § 27-1-417 provides a party who has
not signed a contract may, by offering to perform, compel specific performance
from the party who has signed).
2

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1. Inspection Contingency
First, the Duseks argue that because David Quinn’s Moisture and Mold
report found evidence of fungal spores in two indoor air samples, the Property
failed to pass the “clearance test” required by the Inspection Notice. Relying on
language in Kelly Quinn’s Reinspection Report, which disclaims liability for any
surface fungal growth not visible at the time of inspection, the Duseks claim Kelly
Quinn’s report “expressly does not analyze the mold remediation.” They maintain
that, after a phone call with David Quinn during which he allegedly suggested the
Property might pass a mold clearance test if it were retested six months later, the
Duseks concluded that mold and moisture issues remained, despite the remediation
efforts. Based on these concerns, the Duseks decided to terminate the BSA
because, they argue, the Inspection Contingency was not satisfied, nor could it
have been satisfied by the release date of November 5, 2021.
Glacier Bear counters that the Duseks have failed to present any admissible
evidence sufficient to raise a genuine issue of material fact as to the adequacy of
the moisture and mold remediation work. Glacier Bear maintains the Inspection
Contingency in the BSA was resolved once the parties executed the Inspection
Notice, which established the parties had “enter[ed] into a written agreement in
satisfaction of the conditions noted” such that the Inspection Contingency “shall be
of no further force or effect.” Citing Halcro v. Moon, 733 P.2d 1305 (1987),
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Glacier Bear argues that as an issue “incidental and subordinate” to the main
purpose of the BSA, if the Duseks were concerned the mold and moisture
remediation was unsatisfactory, under the contract’s plain language, their remedy
was to seek damages, not to avoid their obligations to purchase the Property.
In Halcro, the Montana Supreme Court granted specific performance to the
seller after the buyer sought to rescind a contract to buy the seller’s home because
he believed the house had substantial plumbing problems; however, the undisputed
evidence established that was not the case. 733 P.2d at 1307. The court reasoned:
A breach which goes to only part of the consideration, is incidental
and subordinate to the main purpose of the contract, and may be
compensated in damages does not warrant a recission of the contract;
the injured party is still bound to perform his part of the agreement,
and his only remedy for the breach consists of the damages he has
suffered therefrom.
Halcro, 733 P.2d at 1307 (quoting Johnson v. Meiers, 164 P.2d 1012, 1014 (Mont.
1946)).
The Court agrees with Glacier Bear. The undisputed evidence shows that, in
accordance with the terms of the Inspection Contingency, the parties entered into a
“written agreement in satisfaction of the conditions noted” when they signed the
Inspection Notice containing all of the Duseks’ objections and requested remedies.
Therefore, as of October 17, 2021, the Inspection Contingency in the BSA was “of
no further force or effect.” The plain language of the Inspection Notice provided
Glacier Bear until November 5, 2021, to “remedy [the evidence of moisture] to
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suggestion in inspection report” and “[a]ll mold to be remediated and pass a
clearance test.” (Doc. 27-8, at 2). The Duseks’ decision to unilaterally terminate
the agreement prior to the November 5, 2021 deadline was a breach of the
amended BSA and the agreed upon terms set forth in the Inspection Notice.
Similar to the dispute in Halcro, the Duseks have not established the
moisture and mold issues in this case were so substantial as to warrant a recission
of the contract. Despite the Duseks’ claim to the contrary, the Court finds that
Kelly Quinn’s Reinspection Report did in fact analyze the surface mold at issue in
the Inspection Notice. The Inspection Notice plainly references the First Inspection
Report, which not only contains identical disclaimer language regarding hidden
evidence of surface mold (Doc. 29-1, at 21), but is also entirely premised on
evidence of moisture and water stains displaying visible surface fungal growth
discovered during Kelly Quinn’s first inspection. (Doc. 34-1, at 16–17).
The Duseks’ proposition that David Quinn’s Moisture and Mold report
could be the only relevant clearance test is similarly unpersuasive. Not only did
David Quinn conduct his mold inspection before Advanced Restoration and
Maintenance completed its restoration work, but his report explained that air
samples frequently record fungal spores in high numbers after remediation. (Doc.
34-1, at 69). Therefore, David Quinn’s inspection confirmed Kelly Quinn’s
conclusions, finding that low levels of fungal spores were indeed present, but his
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indoor air testing was unlikely to ever show no evidence of ambient fungal spores
under the Inspection Notice timeline, even if “all mold” was properly remediated.
Kelly Quinn’s initial visual inspection discovered the moisture and potential mold
issue, and his re-inspection is a relevant, valid analysis of whether that particular
issue was properly remediated under the terms of the Inspection Notice.
It is undisputed that Kelly Quinn’s Reinspection Report concluded “the
water stains and possible surface fungal growth . . . does appear to have been
properly treated and remidiated [sic],” and in the Moisture and Mold report, David
Quinn concluded that the surface remediation process on the area was
“successful.” (Docs. 34-1, at 69, 102–03). Affidavits from Rensmon, Kelly Quinn,
and David Quinn corroborate these conclusions. (Docs. 36-2, ¶ 11; 36-4, ¶ 6; 36-5,
¶¶ 6–7). To dispute that the moisture and mold issue was properly remediated, the
Duseks rely exclusively on hearsay statements David Quinn allegedly made during
a phone call with Matt Dusek. (Doc. 36, ¶ 89). As inadmissible evidence is
insufficient to raise a genuine issue of fact, Skillsky, 893 F.2d at 1091, even when
viewing the evidence in the light most favorable to the Duseks, the Duseks cannot
establish that the moisture and mold-related remediation work was a material
breach warranting their decision to unilaterally terminate the BSA prior to the
Inspection Notice’s November 5, 2021 deadline. Additionally, if the Duseks were

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unhappy with the moisture and mold remediation work, their remedy was to seek
damages, not avoid their obligations under the BSA. Halcro, 733 P.2d at 1307.
Accordingly, the Court finds that the Duseks’ decision to unilaterally
terminate the agreement prior to the Inspection Notice’s November 5, 2021
deadline was a breach of the BSA, and the Duseks have failed to raise a genuine
issue of material fact as to the adequacy of the moisture and mold remediation
work to justify their untimely withdrawal.
2. Water Rights and Well-related Contingency
Next, the Duseks contend the separate release date for the water rights and
well-related contingency provided them with the option to withdraw from the BSA
if they were not satisfied with any water rights or well-related issues until the
contingency’s express deadline of November 3, 2021. (Doc. 34, ¶ 121). The
Duseks further assert the provisional (i.e. not “permanent”) nature of the water
rights permit raised significant concerns. 3 (Doc. 34, ¶ 109).
The Duseks point out that Glacier Bear Retreat, LLC (“GBR”) was not a party to
the BSA, and DNRC issued the provisional water rights permit for the Property to
Gail Goodwin, individually, not to GBR. They imply that this discrepancy added to
their uncertainty about the water rights issue and contributed to their decision to
withdraw from the BSA. However, because “a water right is appurtenant to the
land where the water is used,” without an express reservation of that right by the
grantor, it “passes with the conveyance of the land.” Axtell v. M.S. Consulting, 955
P.2d 1362, 1368 (Mont. 1998). Here, it is undisputed that there was no express
reservation in the BSA, which stated, conversely, that “[a]ll water . . . and any legal
entitlement to water, including . . . certificates of water rights [and] permits to
appropriate water . . . are included with the Property.” (Doc. 27-4, at 6). Further,
3

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Glacier Bear argues the water rights and well-related contingency was
intended to provide Glacier Bear additional time to formalize the water rights
attendant on the Property, which was completed on October 12, 2021, when the
DNRC issued a provisional water rights permit. (Doc. 27, ¶ 7). Glacier Bear
maintains that the BSA did not mandate that any particular classification
(“permanent” as opposed to provisional) of water right be conveyed with the
Property, only that the Duseks were entitled to receive “any [water rights]
associated” with the Property. Finally, Glacier Bear argues the Duseks forfeited
their right to object to the Property’s water rights under the Inspection Contingency
when they failed to notify Glacier Bear that they were unhappy with that Property
condition in the Inspection Notice.
At the core of the parties’ dispute over water rights is the question of
whether the provisional water right issued by DNRC on October 12, 2021, meant
that “any associated water rights” for the Property were “in place” on October 30,
2021. The Court finds they undisputedly were.
“Generally, a water right is appurtenant to the land where it is used, ‘and, as
such, passes with the conveyance of the land . . . even though the grant does not

Goodwin testified that she stood ready and willing to transfer the entirety of the
Property and its associated water rights to the Duseks at closing. (Doc. 36-1, ¶ 3).
Thus, this water right ownership issue does not create a significant hurdle that
would justify the Duseks’ decision to untimely withdraw from the BSA.
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specifically mention the water right.’” Axtell, 955 P.2d at 1368 (quoting Maclay v.
Missoula Irrigation Dist., 3 P.2d 286, 290 (Mont. 1931)). Stated differently, “water
rights accompany the land if the property is transferred without an express
reservation of the appurtenant water rights.” Roland v. Davis, 302 P.3d 91, 94
(Mont. 2003). Under the Montana Water Use Act, Title 85, chapter 2 of the
Montana Code Annotated, all water rights permits issued after June 30, 1973, are
provisional until the basin has been fully adjudicated. Mont. Code Ann. § 85-2101(5)–(6). A provisional permit is subject to reduction, modification, or
revocation by the department once the general adjudication is complete. Mont.
Code Ann. § 85-2-101(5).
DNRC issued the water rights permit for the Property in this case pursuant to
the United States National Park Service–Montana water rights compact, Mont.
Code Ann. § 85-20-401, which was executed on January 31, 1994, and covers the
allocation of water rights for National Park Service lands, including within the
boundaries of Glacier National Park. (Doc. 36-1, at 9–11). The basins including
and surrounding Glacier National Park have yet to be fully adjudicated. Water
Adjudication Status, MONT. DNRC, https://dnrc.mt.gov/Water-Resources/WaterRights/Adjudication (last visited Jan. 13, 2023).
The Duseks argue that the limited information Glacier Bear provided them
“revealed significant water rights issues.” (Doc. 33, at 22). However, that argument
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is not supported by Montana law and a reasonable reading of the undisputed facts
in the record. The water rights and well-related contingency in the BSA required
Glacier Bear to ensure that “all well-related permitting, well log recording, and any
associated water rights” were in place prior to closing. (Doc. 27-4, at 5) (emphasis
added). Webster’s defines “any” as “one, some, or all indiscriminately of whatever
quantity[.]” Any, Webster’s International Dictionary, Third Ed. Nothing in the
BSA guaranteed the Duseks “permanent” water rights. The clear and unambiguous
terms of the BSA required that “any” water rights associated with the property be
in place prior to closing, and if Glacier Bear had learned that it would be unable to
put in place any water rights by the release date of November 3, 2021, the parties
agreed they could negotiate a reasonable extension. (Doc. 27-4, at 5).
The undisputed facts show that as of October 12, 2021, Goodwin received
confirmation of the only water rights that DNRC was able to grant under Montana
law, (Doc 36-1); as the basin has yet to be fully adjudicated, the only water rights
associated with the Property are provisional. Mont. Code Ann. § 85-2-101(6)(a)
(“all permits issued are provisional”). It is undisputed that Glacier Bear, through
Darkenwald, provided the Duseks with the DNRC water rights General Abstract
on October 12, 2021, and that the Duseks did not, in writing or otherwise, request
additional water rights documentation from Glacier Bear, or additional water rights
information from anyone other than Darkenwald. (Doc. 29, ¶ 8). As “water rights”
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were expressly included under the listed Property conditions in the Inspection
Contingency, as discussed above, the Duseks’ opportunity to disapprove of this
Property condition expired when they neglected to include it in the Inspection
Notice. (Doc. 27-4, at 5).
While not included as a justification in the Duseks’ letter withdrawing from
the BSA, the Duseks also take issue with the fact that they were not provided with
the well log. Glacier Bear argues that nothing in the BSA requires that the Duseks
be “provided with” the well log, only that the well log be “in place.”
The Court finds the Duseks’ argument on this point unavailing and
ultimately immaterial to the dispute. For one, the record contains multiple copies
of the well log recording, including one from Montana’s Ground-Water
Information Center with a date stamp of November 1, 2021, (Doc. 27-6, at 7–8),
and another that was attached to Goodwin’s water rights application filed with
DNRC on September 3, 2021. (Doc. 36-1, at 13–15). Further, the Duseks do not
respond to Glacier Bear’s assertion that, at all times relevant to this dispute, the
well log was available as a public document online. (Doc. 36, ¶¶ 136–38).
Additionally, it is undisputed that the Duseks never requested a copy of the well
log report before sending their termination letters on October 30, 2021 (Doc. 36, ¶¶
135–36, 140), and the water rights and well-related contingency provided a release
date of November 3, 2021, for Glacier Bear to have the well log recording in place
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(Doc. 27-4, at 5). Thus, the Duseks’ decision to terminate the agreement without
notice, based, in part, on new assertions of well log-related concerns prior to the
November 3, 2021 deadline was premature, and is insufficient to raise a genuine
issue material to this dispute.
Accordingly, because all well-related permitting, the well-log recording, and
any water rights associated with the Property were in place prior to closing, the
Duseks’ decision to withdrawal from the BSA based on allegedly unsatisfactory
water rights and well-related issues was a breach, and no genuine issues of material
fact exist to preclude summary judgment in favor of Glacier Bear on this issue.
3. Personal Visitation Provision
Finally, the Duseks contend the “Personal Visitation Contingency” was not
satisfied because, upon visiting the Property, they found it did not meet their
expectations. Glacier Bear argues the BSA plainly did not contain a Personal
Visitation Contingency. The Court agrees with Glacier Bear.
The plain language of the BSA establishes that, under a section entitled
“ADDITIONAL PROVISIONS,” the Duseks reserved the right to visit the
Property in-person “during the inspection period.” (Doc. 27-4, at 5). A reasonable
reading of that clause in the context of the BSA does not grant the Duseks the right
to withdraw from the BSA for any reason related to that in-person visit after the
Inspection Contingency expired. Considered in conjunction with the terms and
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timelines laid out under the general Contingencies and the Inspection Contingency
clauses, it is clear to the Court that the Duseks were able to withdraw from the
BSA due to finding unacceptable “any Property conditions” they deemed
“appropriate” until either electing to negotiate a resolution by delivering written
notice of all objections to Glacier Bear on or before October 26, 2021, or by
terminating the agreement if negotiations fail and the objections were not
withdrawn in writing by October 29, 2021. (Doc. 27-4, at 4–6).
As discussed above, this right to withdraw from the BSA based on any
property conditions expired when the parties executed the Inspection Notice, which
presumably contained “all of Buyer’s objections and requested remedies.” (Doc.
27-4, at 5) (emphasis added). As road noise and traffic visibility on Camas Road
were not included in the Dusek’s written objections in the Inspection Notice, their
attempt to withdraw from the BSA based on these concerns was untimely.
Accordingly, the Duseks’ decision to untimely withdraw based on
observations made during their personal visit breached the BSA, and no genuine
issues of material fact exist to preclude summary judgment in favor of Glacier Bear
on this issue.
B. Specific Performance
Glacier Bear argues it is entitled to specific performance of the Duseks’
obligation under the BSA to pay Glacier Bear the cash due at closing, plus the
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earnest money on deposit with the escrow agent in return for a warranty deed to the
Property. The Duseks do not advance any argument on this issue.
Under “Seller’s Remedies,” the BSA provides:
If the Seller accepts the offer contained in this Agreement and Buyer
refuses or neglects to consummate the transaction anticipated by this
Agreement within the time period provided in this Agreement, the
Seller may:
(1) Declare the earnest money paid by Buyer to be forfeited
whereupon the rights and duties of the Buyer and Seller under
this Agreement shall be terminated; OR
(2) Demand that Buyer specifically perform Buyer’s duties and
obligations under this Agreement; OR
(3) Demand that Buyer pay monetary damages for Buyer’s
failure to perform the terms of this Agreement.
(Doc. 29, ¶ 27) (emphasis in original).
Specific performance is an equitable remedy that requires performance of a
contract based on the contract’s precise terms. Double AA Corp. v. Newland & Co.,
905 P.2d 138, 141 (Mont. 1995) (citing Seifert v. Seifert, 568 P.2d 155, 156 (Mont.
1977). The inquiry must be “whether, in equity and good conscience, the court
should specifically enforce the contract” and “specific performance will be ordered
only on equitable grounds in view of all the conditions surrounding the particular
case.” Seifert, 568 P.2d at 156. The Montana Supreme Court has stated, “specific
performance will be granted when it is apparent . . . that it will serve the ends of
justice, and it will be withheld when . . . it appears that it will produce hardships or
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injustice to either party.” Double AA Corp., 905 P.2d at 141 (quoting Siefert, 568
P.2d at 157).
Contracts for the sale of real property are specifically enforceable.
McDonald v. Cosman, 6 P.3d 956, 958 (Mont. 2000) (citing Mont. Code Ann.
§ 27-1-419, which states, “It is to be presumed that the breach of an agreement to
transfer real property cannot be adequately relieved by pecuniary compensation
and that the breach of an agreement to transfer personal property can be thus
relieved.”); Boyne USA, Inc. v. Spanish Peaks Dev., LLC, 292 P.3d 432, 444
(Mont. 2013).
Before granting specific performance, a court must consider the contract
itself and the relationship of the parties, as well as other factors, such as whether
the execution of the contract was unfavorable to the defendant because of lack of
advice, and the difference in the parties’ business experience and knowledge.
Double AA Corp., 905 P.2d at 141. Additionally, Montana law requires a party to
perform all material conditions precedent before specific performance may be
enforced. Hillstrom v. O’Neill, 736 P.2d 126, 128 (Mont. 1987) (citing Mont. Code
Ann. § 27-1-416).
Montana Code Annotated § 27-1-415 forbids specific performance against a
party if “his assent was obtained by misrepresentations, concealment,
circumvention, or unfair practices of any party to whom performance would
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become due under the contract,” or “if his assent was given under the influence of
mistake, misapprehension, or surprise.” Specific performance is also improper if
the circumstances show that specific performance would impose a considerable
hardship. Stovall v. Watt, 610 P.2d 164, 167–68 (Mont. 1980).
In Double AA Corporation, the court denied specific performance against a
“somewhat unsophisticated trustee” who consented to the sale of her family ranch
because of her erroneous belief regarding potential tax liability, which the plaintiff
knew about, or should have known about, before the sale. 905 P.2d at 141–42. The
court recognized that, “[w]hile a misapprehension or mistake regarding taxes is
insufficient to avoid a contract, such a misunderstanding or mistake, in light of the
surrounding circumstances, may be a sufficient reason to deny specific
performance as an adequate remedy.” Double AA Corp., 905 P.2d at 142 (internal
citations omitted). The court concluded that, under the facts of the case, specific
performance would impose a greater hardship on the seller than denial would
impose on the buyer. Double AA Corp., 905 P.2d at 142.
On the other hand, in Halcro, the Montana Supreme Court affirmed the
district court’s grant of specific performance to the seller of real property when the
parties had expressly agreed in writing that specific performance was an available
remedy and the seller had materially performed under the contract. 733 P.2d at
1307. The court rejected the buyer’s arguments that he was entitled to rescind the
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contract due to mistake of fact and failure of consideration based on the water
problems in the house, because the court held those defenses, like the buyer’s
unsubstantiated claim that the seller had materially breached the contract by failing
to repair a problem with the plumbing, required the buyer to show “that the water
problems in the house were so substantial as to defeat the object of the contract.”
Halcro, 733 P.2d at 1306.
Here, the BSA, as written and signed by the parties, unambiguously supports
specific performance, as option (2) expressly provides, “the Seller may demand
that Buyer specifically perform.” (Doc. 29, ¶ 27). Like the seller in Halcro, as the
party seeking specific performance, Glacier Bear has shown it performed all
conditions precedent to the BSA and the Duseks’ untimely objections were not so
substantial as to defeat the object of the contract. Further, unlike the seller in
Double AA Corporation, the Duseks do not allege any hardship or dispute that they
have the financial resources to close on the purchase of the Property if so ordered
by the Court. (Doc. 29, ¶ 26).
Accordingly, the Court finds the essential terms of the parties’ agreement are
contained in the BSA and it is specifically enforceable. Hillstrom, 736 P.2d at 129.
As Glacier Bear stood ready and willing to perform under the specific terms of the
parties’ agreement and the Duseks, the breaching party, have not argued that they

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are unable to close on the purchase of the Property if so ordered by the Court,
Glacier Bear is entitled to specific performance under the BSA.
C. Attorney’s Fees
The Buy-Sell Agreement provides that “[i]n any action brought by the Buyer
or Seller to enforce any of the terms of this Agreement, the prevailing party in such
action shall be entitled to such reasonable attorney fees as the court or arbitrator
shall determine just.” (Doc. 27-4, at 9). The Duseks do not present any argument
on this issue. Accordingly, as the prevailing party in this action, Glacier Bear is
entitled to recover its reasonable attorney’s fees under the BSA.
IV.

Conclusion
For reasons discussed above, the Court concludes that the Duseks’ decision

to withdraw from the BSA after the expiration of the Inspection Contingency
resulted in a material breach of the agreement. Under the express terms of the
BSA, Glacier Bear is entitled to specific performance and reasonable attorney’s
fees. Accordingly,
IT IS ORDERED that Glacier Bear’s Motion for Summary Judgment (Doc.
25) is GRANTED and the Duseks’ Cross-Motion for Summary Judgment (Doc.
32) is DENIED.
IT IS FURTHER ORDERED that the final pretrial conference scheduled for
January 30, 2023, and the jury trial scheduled for February 13, 2023, are
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VACATED. All other pending motions and outstanding deadlines are terminated
as MOOT.
DATED this 17th day of January, 2023.
___________________________________
Kathleen L. DeSoto
United States Magistrate Judge

30