Rothing v. Kallestad
337 Mont. 193, 159 P.3d 222
Supreme Court of Montana.
Peter and Tanya ROTHING, d/b/a Diamond R. Enterprises, Inc., Plaintiffs and
Mont.,2007
¶ 9 The Rothings conducted business near Belgrade, Montana, under the name
Diamond R Enterprises which included Diamond R Stables, Diamond R Kennels
and Diamond R Cattle Company. Diamond R Stables is involved in the breeding,
raised, and at times, he has advertised his hay for sale in the Bozeman Daily
Chronicle. Kallestad estimated that he sells between 300 and 1,000 tons of hay
annually.
¶ 11 Tanya Rothing’s father, Steven Howells, is in the trucking business and,
from a field that had been re-seeded approximately two years earlier. The hay
was cut with a swather and allowed to dry for two to four days depending on the
temperature. The hay was then twin-raked (wherein two rows are turned and
combined so that the bottom portion can also dry) and baled with a mid-size
Kallestad was unsure whether the ditch water came in contact with the hay, but
he indicated that the water “may have been up there an inch or so.”
¶ 14 On April 23, 2001, the Rothings received 45 to 48 large bales of hay from
Kallestad. Some of the hay was fed to the Rothings’ horses the same day it was
post mortem was performed by Dr. Bill Layton. The other yearling colt was
treated with charcoal, but died two days later.
¶ 15 On May 3, 2001, Dr. Layton contacted Dr. Robert Whitlock at the University
of Pennsylvania. Dr. Whitlock is an Associate Professor of Medicine and the
that the hay purchased from Kallestad may be the cause of the problem, hence
the remaining hay was removed from the feeding area.
¶ 17 Shortly thereafter, Dr. Whitlock shipped botulism antitoxin to the Rothings
and their veterinarians, but by the time the outbreak was over, nineteen animals
¶ 18 The Rothings filed suit against Kallestad on July 26, 2001. In their suit, the
Rothings pursued theories of recovery based upon strict liability, negligence and
breach of contract. As a result of this incident, the Rothings claimed that they
suffered significant damages, including veterinarian bills for services and
incident on their property, they are at a greater risk of a reoccurrence of botulism
poisoning in their horses and they should vaccinate all of their horses yearly for
as long as they own the property. Dr. Whitlock also recommended that the
Rothings warn all individuals who might bring mares to be bred on their property
motion, filed May 13, 2003, Kallestad argued that, under Montana law, hay is not
a product and he is not a manufacturer; therefore, he was entitled to summary
judgment on the Rothings’ strict products liability claim. In his second motion,
filed June 22, 2004, Kallestad argued that the Rothings’ remaining theories of
Motion for Protective Order; and sanctioned the Rothings by excluding evidence
including Dr. Whitlock’s report.
¶ 22 The Rothings appeal all of the orders entered by the District Court including
the court’s January 28, 2004, and August 18, 2004 orders on Kallestad’s Motions
M.R. Civ. P. 56, as the district court. Cole ex rel. Cole Revocable Trust v. Cole,
2003 MT 229, ¶ 8, 317 Mont. 197, ¶ 8, 75 P.3d 1280, ¶ 8 (citing Vivier v. State
Dept. of Transp., 2001 MT 221, ¶ 5, 306 Mont. 454, ¶ 5, 35 P.3d 958, ¶ 5). In this
regard, we have stated that
Cole, ¶ 8 (quoting Bruner v. Yellowstone County, 272 Mont. 261, 264-65, 900
P.2d 901, 903 (1995)). In addition, we review a district court’s legal conclusions
for correctness. Cole, ¶ 8.
Issue 3.
claims in Montana. Hence, the court granted Kallestad’s Motion for Summary
Judgment on the Rothings’ breach of contract claim on the basis that the injuries
to the Rothings’ horses were not foreseeable.
¶ 26 However, neither Martel nor Ehly dealt with a transaction in goods as in the
677-78. And in Ehly, the purchaser of a parcel of real property brought an action
against the sellers and the sellers’ broker over the breach of a buy-sell
agreement. Ehly, 212 Mont. at 86, 687 P.2d at 689.
¶ 27 In the instant case, the Rothings’ purchase of hay from Kallestad was a
transaction in goods, thus it may be governed by Montana’s Uniform Commercial
Code (UCC) pertaining to sales if it meets the other requirements of Title 30,
Chapter 2, Montana Code Annotated (1999).FN1 Section 30-2-102, MCA,
provides: “Unless the context otherwise requires, this chapter applies to
transactions in goods….” “Goods” are defined at § 30-2-105(1), MCA, to mean:
FN1. Because the sale of hay in this case took place on April 23, 2001, the 1999
version of the MCA applies and all references to the MCA are to the 1999 version
unless otherwise stated.
all things (including specially manufactured goods) which are movable at the time
of identification to the contract for sale other than the money in which the price is
to be paid, investment securities … and things in action. “Goods” also includes
the unborn young of animals and growing crops and other identified things
attached to realty…. [Emphasis added.]
Hence, as the Official Comment to § 30-2-105, MCA, provides: “The definition of
goods is based on the concept of movability…. It is not intended to deal with
things which are not fairly identifiable as movables before the contract is
preformed.” The hay in this case had been cut, baled and stacked and was
“movable” at the time the Rothings purchased it from Kallestad.
¶ 28 Furthermore, in Mogan v. Cargill, Inc., 259 Mont. 400, 403, 856 P.2d 973,
975 (1993), this Court determined that wheat fell within the definition of “goods.”
Murnion, 210 Mont. 417, 684 P.2d 1067 (1984) (loader); Little v. Grizzly Mfg.,
195 Mont. 419, 636 P.2d 839 (1981) (modular home); and Scott v. Hjelm, 188
Mont. 375, 613 P.2d 1385 (1980) (horses).
[4] Link to KeyCite Notes ¶ 29 In addition to the requirement that the transaction
(citing Dawkins & Co. v. L & L Planting Co., 602 So.2d 838, 843 (Miss.1992)).
We further stated in Smith that
[d]espite the split of authority on this issue, a majority of courts have held that
under the Uniform Commercial Code, a farmer may be included under the
UCC, and more specifically, the Implied Warranty of Merchantability, would apply
to this transaction. “Unless excluded or modified [ ], a warranty that the goods
shall be merchantable is implied in a contract for their sale if the seller is a
merchant with respect to goods of that kind.” Section 30-2-314(1), MCA.
See, e.g., Midwest Game Co. v. M.F.A. Milling Co., 320 S.W.2d 547, 550
(Mo.1959) (attaching implied warranty where the animal food “is not in its raw
state but has been processed and packaged by the manufacturer”).
¶ 32 The court in Larson applied the concept of implied warranty to the sale of
analysis, would have disclosed the presence of lead arsenate in the hay. As a
result, the court concluded that the seller was “liable as for an implied warranty
that the hay sold to [the buyer] was not only of the kind and quality ordered, but
was, as a lot, generally free from deleterious substances, poisonous to stock.”
attaching to the sale of animal feed. Seaton Ranch Co. v. Montana Vegetable Oil
& Feed Co., 123 Mont. 396, 217 P.2d 549 (1950). The buyer of oil cake pellets
brought an action against the seller when 474 sheep died after eating the pellets.
The buyer recovered a verdict in his favor and the seller appealed. A sharply
inspection short of a chemical analysis would have disclosed the poisonous
condition of the feed.” Seaton Ranch, 123 Mont. at 405, 217 P.2d at 554. See
also Valdosta Milling Co. v. Garretson, 217 F.2d 625 (5th Cir.1954) (applying
Florida law in determining that implied warranty attached to the sale of horse
¶ 9 The Rothings conducted business near Belgrade, Montana, under the name
Diamond R Enterprises which included Diamond R Stables, Diamond R Kennels
and Diamond R Cattle Company. Diamond R Stables is involved in the breeding,
raised, and at times, he has advertised his hay for sale in the Bozeman Daily
Chronicle. Kallestad estimated that he sells between 300 and 1,000 tons of hay
annually.
¶ 11 Tanya Rothing’s father, Steven Howells, is in the trucking business and,
from a field that had been re-seeded approximately two years earlier. The hay
was cut with a swather and allowed to dry for two to four days depending on the
temperature. The hay was then twin-raked (wherein two rows are turned and
combined so that the bottom portion can also dry) and baled with a mid-size
Kallestad was unsure whether the ditch water came in contact with the hay, but
he indicated that the water “may have been up there an inch or so.”
¶ 14 On April 23, 2001, the Rothings received 45 to 48 large bales of hay from
Kallestad. Some of the hay was fed to the Rothings’ horses the same day it was
post mortem was performed by Dr. Bill Layton. The other yearling colt was
treated with charcoal, but died two days later.
¶ 15 On May 3, 2001, Dr. Layton contacted Dr. Robert Whitlock at the University
of Pennsylvania. Dr. Whitlock is an Associate Professor of Medicine and the
that the hay purchased from Kallestad may be the cause of the problem, hence
the remaining hay was removed from the feeding area.
¶ 17 Shortly thereafter, Dr. Whitlock shipped botulism antitoxin to the Rothings
and their veterinarians, but by the time the outbreak was over, nineteen animals
¶ 18 The Rothings filed suit against Kallestad on July 26, 2001. In their suit, the
Rothings pursued theories of recovery based upon strict liability, negligence and
breach of contract. As a result of this incident, the Rothings claimed that they
suffered significant damages, including veterinarian bills for services and
incident on their property, they are at a greater risk of a reoccurrence of botulism
poisoning in their horses and they should vaccinate all of their horses yearly for
as long as they own the property. Dr. Whitlock also recommended that the
Rothings warn all individuals who might bring mares to be bred on their property
motion, filed May 13, 2003, Kallestad argued that, under Montana law, hay is not
a product and he is not a manufacturer; therefore, he was entitled to summary
judgment on the Rothings’ strict products liability claim. In his second motion,
filed June 22, 2004, Kallestad argued that the Rothings’ remaining theories of
Motion for Protective Order; and sanctioned the Rothings by excluding evidence
including Dr. Whitlock’s report.
¶ 22 The Rothings appeal all of the orders entered by the District Court including
the court’s January 28, 2004, and August 18, 2004 orders on Kallestad’s Motions
M.R. Civ. P. 56, as the district court. Cole ex rel. Cole Revocable Trust v. Cole,
2003 MT 229, ¶ 8, 317 Mont. 197, ¶ 8, 75 P.3d 1280, ¶ 8 (citing Vivier v. State
Dept. of Transp., 2001 MT 221, ¶ 5, 306 Mont. 454, ¶ 5, 35 P.3d 958, ¶ 5). In this
regard, we have stated that
Cole, ¶ 8 (quoting Bruner v. Yellowstone County, 272 Mont. 261, 264-65, 900
P.2d 901, 903 (1995)). In addition, we review a district court’s legal conclusions
for correctness. Cole, ¶ 8.
Issue 3.
claims in Montana. Hence, the court granted Kallestad’s Motion for Summary
Judgment on the Rothings’ breach of contract claim on the basis that the injuries
to the Rothings’ horses were not foreseeable.
¶ 26 However, neither Martel nor Ehly dealt with a transaction in goods as in the
677-78. And in Ehly, the purchaser of a parcel of real property brought an action
against the sellers and the sellers’ broker over the breach of a buy-sell
agreement. Ehly, 212 Mont. at 86, 687 P.2d at 689.
¶ 27 In the instant case, the Rothings’ purchase of hay from Kallestad was a
transaction in goods, thus it may be governed by Montana’s Uniform Commercial
Code (UCC) pertaining to sales if it meets the other requirements of Title 30,
Chapter 2, Montana Code Annotated (1999).FN1 Section 30-2-102, MCA,
provides: “Unless the context otherwise requires, this chapter applies to
transactions in goods….” “Goods” are defined at § 30-2-105(1), MCA, to mean:
FN1. Because the sale of hay in this case took place on April 23, 2001, the 1999
version of the MCA applies and all references to the MCA are to the 1999 version
unless otherwise stated.
all things (including specially manufactured goods) which are movable at the time
of identification to the contract for sale other than the money in which the price is
to be paid, investment securities … and things in action. “Goods” also includes
the unborn young of animals and growing crops and other identified things
attached to realty…. [Emphasis added.]
Hence, as the Official Comment to § 30-2-105, MCA, provides: “The definition of
goods is based on the concept of movability…. It is not intended to deal with
things which are not fairly identifiable as movables before the contract is
preformed.” The hay in this case had been cut, baled and stacked and was
“movable” at the time the Rothings purchased it from Kallestad.
¶ 28 Furthermore, in Mogan v. Cargill, Inc., 259 Mont. 400, 403, 856 P.2d 973,
975 (1993), this Court determined that wheat fell within the definition of “goods.”
Murnion, 210 Mont. 417, 684 P.2d 1067 (1984) (loader); Little v. Grizzly Mfg.,
195 Mont. 419, 636 P.2d 839 (1981) (modular home); and Scott v. Hjelm, 188
Mont. 375, 613 P.2d 1385 (1980) (horses).
[4] Link to KeyCite Notes ¶ 29 In addition to the requirement that the transaction
(citing Dawkins & Co. v. L & L Planting Co., 602 So.2d 838, 843 (Miss.1992)).
We further stated in Smith that
[d]espite the split of authority on this issue, a majority of courts have held that
under the Uniform Commercial Code, a farmer may be included under the
UCC, and more specifically, the Implied Warranty of Merchantability, would apply
to this transaction. “Unless excluded or modified [ ], a warranty that the goods
shall be merchantable is implied in a contract for their sale if the seller is a
merchant with respect to goods of that kind.” Section 30-2-314(1), MCA.
See, e.g., Midwest Game Co. v. M.F.A. Milling Co., 320 S.W.2d 547, 550
(Mo.1959) (attaching implied warranty where the animal food “is not in its raw
state but has been processed and packaged by the manufacturer”).
¶ 32 The court in Larson applied the concept of implied warranty to the sale of
analysis, would have disclosed the presence of lead arsenate in the hay. As a
result, the court concluded that the seller was “liable as for an implied warranty
that the hay sold to [the buyer] was not only of the kind and quality ordered, but
was, as a lot, generally free from deleterious substances, poisonous to stock.”
attaching to the sale of animal feed. Seaton Ranch Co. v. Montana Vegetable Oil
& Feed Co., 123 Mont. 396, 217 P.2d 549 (1950). The buyer of oil cake pellets
brought an action against the seller when 474 sheep died after eating the pellets.
The buyer recovered a verdict in his favor and the seller appealed. A sharply
inspection short of a chemical analysis would have disclosed the poisonous
condition of the feed.” Seaton Ranch, 123 Mont. at 405, 217 P.2d at 554. See
also Valdosta Milling Co. v. Garretson, 217 F.2d 625 (5th Cir.1954) (applying
Florida law in determining that implied warranty attached to the sale of horse