## Facts

- A Montana ranch held for generations was placed in a testamentary trust; the settlor’s widow held a life income interest, and the children held remainder interests.
- After a change in trustees, the trustee received erroneous, conflict-tainted advice that failure to sell the ranch before the widow’s death would cause substantial tax liability.
- Relying on that advice, the trustee entered a December 1989 buy-sell agreement to convey the ranch to Double AA Corporation in exchange for a purchase price and a substantial deposit, and obtained court approval for the transaction.
- The buyer’s principal was an experienced real-estate investor; the trustee had comparatively limited business experience.
- Evidence supported that the buyer knew or strongly suspected the trustee’s tax premise for selling was wrong but did not correct the misunderstanding.
- The trustee later learned the sale would itself trigger a large tax liability and sought rescission; the buyer refused and demanded performance.
- Double AA sued the successor trustee for breach and sought specific performance; an intervenor with a claimed interest in the ranch opposed specific performance.
- After trial, the district court denied specific performance and awarded Double AA money damages.

## Issues

1. Whether the district court abused its discretion by denying specific performance of the buy-sell agreement for the ranch.
2. Whether the district court’s challenged findings of fact and related equitable conclusions were clearly erroneous.

## Decision

- The Montana Supreme Court affirmed.
- The district court did not abuse its discretion in denying specific performance and awarding damages.
- The district court’s key findings regarding mistake, the parties’ relative sophistication, and equitable hardship were supported by substantial evidence and not clearly erroneous.

## Legal Principles

- Specific performance is an equitable remedy granted in the trial court’s discretion, based on the totality of circumstances, and is not automatic even for contracts involving land.
- A court of equity may deny specific performance when enforcement would be unfair, oppressive, or unconscionable in light of mistake, nondisclosure, and disproportionate hardship.
- Where one party acts under a serious mistake affecting the economic basis of the transaction and the counterparty is aware and remains silent, equity may withhold specific performance while permitting monetary relief.
- Denial or grant of specific performance is reviewed for abuse of discretion; factual findings are upheld unless clearly erroneous when supported by substantial evidence.
- If damages can adequately protect the buyer’s primarily financial interest, and specific performance would impose greater noncompensable harm on the seller or beneficiaries, equity favors damages over compelled conveyance.

## Conclusion

The court upheld damages but refused to compel conveyance of the family ranch because the sale was driven by a serious tax-related mistake, the buyer knowingly benefited from the trustee’s misunderstanding, and specific performance would impose disproportionate hardship on the trust beneficiaries.


Double AA Corp. v. Newland & Co., 273 Mont. 486 (1995)