## Facts

- Kaufman Brothers (Kaufman), a partnership, owned a commercial building and agreed to sell it to Home Value Stores, Inc. (Home Value) under a contract for deed.
- The contract addressed seller remedies upon default. After notice and an opportunity to cure, the seller could pursue remedies described in the default provisions, including a provision stating the seller could enforce collection of the total amount due “or” terminate the agreement and retain payments as liquidated damages.
- Home Value made the down payment and monthly payments for nearly two years, then stopped making payments and did not pay property taxes as required by the contract.
- Kaufman sent Home Value a written notice of default giving 30 days to cure.
- When Home Value did not cure, Kaufman issued a notice of acceleration stating the remaining balance was immediately due and payable.
- Home Value still did not pay, and Kaufman retook possession of the building and sold the property after obtaining and recording the deed held in escrow.
- Kaufman then filed suit against Home Value (and related defendants) for breach of contract, seeking monetary damages. In its complaint, Kaufman alleged the contract was “considered terminated.”
- Home Value moved for summary judgment, arguing that Kaufman’s election to terminate the contract and retain payments as liquidated damages barred any later claim for additional contract damages.
- The district court ultimately granted summary judgment for Home Value on reconsideration, and Kaufman appealed.

## Issues

1. Did Kaufman’s election to terminate the contract for deed and retake possession preclude a subsequent breach-of-contract action for additional damages?
2. Did the contract’s disjunctive default language (“enforce collection … or terminate … retaining all payments … as liquidated damages”) create mutually exclusive remedies?
3. Did a general “cumulative remedies” clause allow Kaufman to both terminate and also recover further damages for the same default?

## Decision

- The Montana Supreme Court affirmed the grant of summary judgment for Home Value.
- The Court held the default provision’s “or” language set out alternative remedies: after acceleration and continued nonpayment, Kaufman could either enforce collection of the total amount due or terminate and keep prior payments as liquidated damages.
- Kaufman’s conduct and pleadings showed it chose termination: it retook possession, recorded the escrowed deed, sold the property, and alleged the contract was terminated.
- Because Kaufman elected the termination/liquidated-damages remedy, it could not also maintain a breach-of-contract suit seeking additional monetary relief arising from the same default.
- The Court rejected Kaufman’s reliance on the cumulative-remedies clause because the specific default provision controlled the remedy choice in these circumstances.

## Legal Principles

- Contract interpretation is a question of law when the language is clear; courts apply the plain meaning to give effect to the parties’ intent.
- When a contract expressly provides remedies in the disjunctive, the remedies are alternatives and cannot both be pursued if they are inconsistent.
- In a contract for deed, termination with retention of prior payments as liquidated damages is inconsistent with treating the contract as continuing for purposes of collecting the remaining purchase price or other contract damages tied to continued enforcement.
- A general statement that remedies are “cumulative” does not override a specific provision that sets out an either/or remedy scheme for a defined default scenario.
- The election-of-remedies doctrine bars a party from seeking a second, inconsistent remedy after the party has clearly chosen and acted on the first remedy.

## Conclusion

Because the contract’s default clause gave Kaufman a choice between enforcing collection of the accelerated balance or terminating the agreement and keeping prior payments as liquidated damages, and because Kaufman acted consistently with termination by retaking and selling the property and alleging termination in its complaint, Kaufman’s later breach-of-contract damages claims were barred, and summary judgment for Home Value was properly affirmed.


Kaufman Brothers v. Home Value Stores, Inc., 279 P.3d 157 (2012)