O'NEIL v. Lipinski

No. 13313 IN TEE SUPREME COURT OF THE STATE OF MONTANA 1977 LAWRENCE E. O'NEIL, CHARLES H. O'NEIL and WYNONA M. O'NEIL, Plaintiffs and Respondents, JOHN 2. LIPINSKI and ANN LIPINSKI, Defendants and Appellants. Appeal from: District Court of the Eleventh Judicial District, Honorable Robert C. Sykes, Judge presiding. Counsel of Record: For Appellants: Hash, Jellison and O'Brien, Kalispell, Montana M. Dean Jellison argued, Kalispell, Montana For Respondents: Warden, Walterskirchen and Christiansen, Kalispell, Montana William C. Walterskirchen argued, Kalispell, Montana Submitted: May 4, 1977 Decided : tjuf 1$ ,jf-: ;, Filed: Clerk M r . J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. T h i s i s a n appeal by defendants L i p i n s k i from a judgment of t h e d i s t r i c t c o u r t , Flathead County, f o r p l a i n t i f f s 0 ' ~ e i l g r a n t i n g s p e c i f i c performance of an agreement t o r e p a i r an i r r i g a t i o n dam and t o r e p l a c e c e r t a i n pipe. L i p i n s k i p r e s e n t s t h r e e i s s u e s on appeal: I. bfiether s p e c i f i c performance of a c o n t r a c t should b e g r a n t e d where a l l e g e d unreasonable d e l a y by p l a i n t i f f r e n d e r s t i m e l y performance of t h i s c o n t r a c t impossible and d e f e a t s t h e primary c o n s i d e r a t i o n f o r t h e c o n t r a c t ? 2. Whether p l a i n t i f f had an adequate remedy a t law? 3. Whether s p e c i f i c performance i s a n adequate remedy t o compel performance of a c o n s t r u c t i o n c o n t r a c t ? P l a i n t i f f 0 ' N e i l owns a g r i c u l t u r a l land i n Flathead County i r r i g a t e d by t h e waters of Ashley Creek. I n a d d i t i o n , he owns a w a t e r r i g h t and a d i t c h r i g h t over and a c r o s s l a n d s purchased by defendant L i p i n s k i . O ' N e i l ' s water i s d i v e r t e d by a c o n c r e t e dam and c o n c r e t e p i p e s over land L i p i n s k i purchased. Following t h e purchase of t h e p r o p e r t y by L i p i n s k i a d i s p u t e a r o s e between t h e p a r t i e s and L i p i n s k i denied OINeil a c c e s s t o t h e dam and a l l e g e d O'Neil d i d n o t own e i t h e r t h e water r i g h t o r t h e d i t c h r i g h t . O'Neil f i l e d s u i t i n 1968 a g a i n s t L i p i n s k i seeking t o e s t a b l i s h h i s water r i g h t , d i t c h r i g h t and t o recover $7,415.05 f o r damages caused by L i p i n s k i ' s d e n i a l of w a t e r and $5,000.00 punative damages. That c a s e was s e t t l e d on t h e >day s e t ,for t r i a l . S t i p u l a t e d f i n d i n g s of f a c t s and conclusions of law were e n t e r e d and signed by a l l p a r t i e s and a judgment e n t e r e d . A t t h e same time, June 16, 1969, t h e memorandum agreement involved i n t h e i n s t a n t c a s e was e n t e r e d i n t o between t h e p a r t i e s . That agreement, among o t h e r t h i n g s , s e t t l e d O ' N e i l ' s c l a i m f o r damages a g a i n s t L i p i n s k i and s e t up t h e method and manner of r e p a i r i n g t h e dam and t h e d i s t r i b u t i o n l i n e s . It provided O f N e i l was t o s e e and approve t h e p l a n s and s p e c i f i c a - t i o n s , and t h e p r o j e c t was t o be completed by December 10, 1969. On November 21, 1969, L i p i n s k i discharged h i s counsel and o b t a i n e d new counsel who advised O'Neil t h a t L i p i n s k i r e f u s e d t o comply w i t h t h e agreement. The c o u r t found according t o t h e agreement t h a t (1) L i p i n s k i d e s i r e d t o have a l l of t h e p i p e l i n e underground, (2) L i p i n s k i was t o have f u l l c o n t r o l and s u p e r v i s i o n o f t h e r e p a i r p r o j e c t , s u b j e c t t o O'Neilt s approval o f t h e p l a n s and s p e c i f i c a t i o n s , (3) on June 16, 1969 LZpinski employed a n engineering f i r m t o draw up such p l a n s b u t t h e f i r m f a i l e d t o do s o , (4) on August 1 5 , 1969 a n o t h e r e n g i n e e r was employed who submitted p l a n s and s p e c i f i c a t i o n s t o O ' N e i l ' s a t t o r n e y on August 26, 1969, (5) t h e s e were submitted t o O ' N e i l t s engineer on o r about September 19, 1969, and a f t e r a conference c e r t a i n changes were proposed, and (6) t h a t t h e s e changes were i n c o r p o r a t e d i n t o t h e p l a n s by L i p i n s k i ' s e n g i n e e r and resubmitted t o O'Neil who r e q u e s t e d n i n e f u r t h e r changes. On November 21, 1969, L i p i n s k i discharged h i s a t t o r n e y and e n g i n e e r and terminated t h e agreement.' The c o u r t f u r t h e r found t h e n i n e changes were a l l i n accord w i t h accepted e n g i n e e r i n g p r a c t i c e s , save and except t h e r e q u i r i n g of a lowering o f t h e i n t a k e e n t r y 12 inches below t h e s p i l l w a y s l a b and t h e requirement of 12 r a t h e r than 6 inches of fill. These l a t t e r two requirements were found t o be s u b s t a n t i a l and unreasonable b u t t h e o t h e r 7 were reasonable. I n addition, t h e c o u r t found t h a t had t h e work been done i n 1969, t h e c o s t would have been approximately $9,000 and a t t h e time of t h i s t r i a l i n 1975, t h e c o s t had i n c r e a s e d t o $19,710.00. The t r i a l c o u r t found a breach o f t h e agreement by L i p i n s k i and ordered t h e r e p a i r s be made, e x c e p t i n g t h e two above r e f e r r e d t o e x c e p t i o n s by December 1, 1976. L i p i n s k i a p p e a l s from t h a t judgment. During t h e p e r i o d from December 1969 t o t h e t r i a l on December 26, 1975, c e r t a i n n e g o t i a t i o n s took p l a c e between counsel and on September 20, 1974, by agreement o f t h e p a r t i e s , t h e c o u r t appointed Douglas Daniels a s a s p e c i a l master and he submitted a r e p o r t t o t h e c o u r t and t e s t i f i e d a t t h e t r i a l . I s s u e 1. W n o t e a p p e l l a n t argues t h a t he was excused e from performing because d e l a y s by respondent prevented work completion by December 10, 1969. W f i n d no m e r i t t o t h i s e argument. The s e t t l e m e n t agreement was signed on June 1 6 , no e n g i n e e r was h i r e d by a p p e l l a n t u n t i l August 15; t h e r e v i s e d p l a n o f a p p e l l a n t ' s engineer Marquardt was n o t given t o respondent u n t i l October 15 and t h a t p l a n was n o t i n accord w i t h accepted engineering p r a c t i c e s . Respondent's e n g i n e e r Wiedenman had h i s r e v i s e d p l a n b e f o r e a p p e l l a n t by October 28, b u t he d i d n o t respond u n t i l November 21 when h i s new a t t o r n e y n o t i f i e d respondent t h e agreement would n o t be performed. W note e Marquardt t e s t i f i e d i f h i s Plan B , d a t e d October 1 5 , had been immediately approved he could n o t have met t h e December 10 deadline. Obviously, t h e recommended changes of Wiedenman would have extended t h a t d a t e . Marquardt was n o t i f i e d by a p p e l l a n t t o c e a s e work on November 6. The record speaks f o r itself. I f anyone i s t o be charged w i t h d e l a y , i t i s a p p e l l a n t n o t respondent. L i p i n s k i a t t r i a l on cross-examination r e v e a l e d h i s r e a l reason when he s a i d : 'I* ** i n h i n d s i g h t t h a t was a poor d e c i s i o n because I wouldn't do i t today, make t h a t agree- ment * Jc Jc." I s s u e 2. Did respondent have an adequate remedy a t law and t h e r e f o r e i s n o t e n t i t l e d t o e q u i t a b l e r e l i e f ? Appellant argues t h a t respondent's l e g a l remedy i s o f such a c h a r a c t e r a s t o p r e c l u d e r e l i e f by way o f s p e c i f i c performance. In support he c i t e s P h i l b r i c k v. American Bank and T r u s t Co., 58 Mont. 376, 193 P. 59; J e f f r i e s Coal Co. v. I n d u s t r i a l Acc~Board 126 Mont. 411, 252 P.2d 1046, b u t t h e s e c a s e s a r e n o t a p p l i c a b l e factually. He argues h e wrote respondent a l e t t e r a u t h o r i z i n g the him t o proceed w i t h t h e work and t h a t t h e c o s t s of doing/work would be t h e same i f one o r t h e o t h e r d i d i t . However, a s noted i n 7 1 Am.Jur.2dY S p e c i f i c Performance 59: "* * 2k I t i s c l e a r , however, t h a t t h e mere f a c t t h a t a p a r t y can a v a i l . h i m s e l f of some r e l i e f a t law does n o t p r e c l u d e o r d e f e a t t h e j u r i s d i c t i o n of e q u i t y t o d e c r e e s p e c i f i c performance. * * *" Such i s t h e c a s e h e r e where t h e t r i a l c o u r t found respondent had no p l a i n , speedy o r adequate remedy a t law. This i s t h e second law s u i t over t h e water and d i t c h r i g h t s and some 8 y e a r s have passed t o t h e detriment of respondent. The-court h e r e :was "eonfronted w i t h a m u l t i p l i c i t y of s u i t s , t h e f a c t s i t u a - t i o n i s unique,so t h e c o u r t p r o p e r l y e x e r c i s e d i t s e q u i t a b l e powers. I n t h e s e t t l e m e n t agreement o f 1969 L i p i n s k i i n s i s t e d on having a b s o l u t e c o n t r o l and management of t h e r e p a i r s and i n s t a l l a t i o n because i t was on h i s p r o p e r t y . I n t h e years leading up t o 1969, he had t h r e a t e n e d t o r e s t r a i n O'Neil from coming onto h i s p r o p e r t y t o make r e p a i r s and had ordered workmen o f f t h e property. The t r i a l c o u r t g r a n t e d h i s demands i n t h e 1969 agreement and i n i t s e f f o r t s t o avoid continued l i t i g a t i o n t h e c o u r t had a u t h o r i t y t o g r a n t t h e e q u i t a b l e r e l i e f h e r e . W find e no e r r o r . I s s u e 3. The f i n a l i s s u e q u e s t i o n s whether s p e c i f i c performance i s an a v a i l a b l e remedy t o e n f o r c e a c o n s t r u c t i o n contract. To support h i s p o s i t i o n a p p e l l a n t c i t e s Lubin v . Lubin, 144 C.A.'2d'781, 302 P.2d 49 and Moklofsky v. Moklofsky, 79 C.A.2d 259, 179 P.2d 628. These c a s e s a r e n o t on p o i n t and can be d i s t i n g u i s h e d . Lubin i s a p r o p e r t y s e t t l e m e n t i n a d i v o r c e a c t i o n and h a s nothing t o do w i t h a c o n s t r u c t i o n c o n t r a c t . Moklofsky d e a l s w i t h an agreement t o c o n s t r u c t an o u t s i d e s t a i r - c a s e , b u t t h i s was n o t t h e c o n t r o l l i n g i s s u e i n t h e c a s e . Here, t h e c o u r t d i d n o t g r a n t s p e c i f i c performance n o r d i d t h e complaint, a s k f o r i t . The c o u r t ordered L i p i n s k i t o r e p a i r and r e p l a c e t h e dam and p i p e l i n e i n accord w i t h t h e p l a n s o r i n t h e a l t e r n a t i v e , i f he f a i l e d t o do so w i t h i n a s p e c i f i c time, 0 ' ~ e i l could do t h e work under t h e s u p e r v i s i o n 6f a n e n g i n e e r appointed by t h e c o u r t and he would have judgment f o r t h e c o s t s . Contrary t o L i p i n s k i ' s p o s i t i o n , t h e c o u r t could have ordered f u l l and complete s p e c i f i c performance of t h e c o n s t r u c t i o n c o n t r a c t . While t h e r e a r e d i v e r s e views on t h e s p e c i f i c performance of c o n s t r u c t i o n c o n t r a c t s , we f i n d and adopt t h e p o s i t i o n taken by t h e Massachusetts Court i n Jones v. P a r k e r , 163 Mass. 564, 40 N.E. 1044,1045, where M r . J u s t i c e Holmes s t a t e d : "There i s no u n i v e r s a l r u l e t h a t c o u r t s of e q u i t y never w i l l e n f o r c e a c o n t r a c t which r e q u i r e s some b u i l d i n g t o b e done. They have enforced such con- t r a c t s from t h e e a r l i e s t days t o t h e p r e s e n t time." That;view was adopted i n a more r e c e n t c a s e , Grayson-Robinson S t o r e s , I n c . v . I r i s Const. Corp., 8 N.Y.2d 133, 202 N.Y.Supp.2d 303, 168 N.E.2d 377,379. There t h e c o u r t i n reviewing t h e problem of s p e c i f i c performance of c o n s t r u c t i o n c o n t r a c t s s a i d : "Tbere i s of c o u r s e , an o l d t r a d i t i o n o r approach according t o which c o u r t s have been r e l u c t a n t t o e n f o r c e ' C o n t r a c t s which r e q u i r e t h e performance of v a r i e d and continuous a c t s , o r t h e e x e r c i s e of s p e c i a l s k i l l , t a s t e , and judgment' because 1 t h e e x e c u t i o n o f t h e d e c r e e would r e q u i r e such c o n s t a n t superintendence a s t o make j u d i c i a l c o n t r o l a m a t t e r of extreme d i f f i c u l t y ' . Standard Fashion Co. v. Siegel-Cooper Co., 157 N.Y. 60,66, 5 1 N.E. 408,409, 43 L.R.A. 854. I n some i n s t a n c e s c o u r t s o f e q u i t y i n o t h e r S t a t e s have f o r some such reasons r e f u s e d t o o r d e r s p e c i f i c performance of b u i l d i n g c o n t r a c t s . [ C i t i n g c a s e s ] Other c o u r t s o f e q u i t y have gone t h e o t h e r way ( s e e Jones v. P a r k e r , 163 Mass. 564, 40 N.E. 1044, which a l s o was a c o n t r a c t t o b u i l d f o r a l e s s e e ) . 'There i s no u n i v e r s a l r u l e t h a t c o u r t s o f e q u i t y never w i l l e n f o r c e a c o n t r a c t which r e q u i r e s some b u i l d i n g t o be done. They have enforced such c o n t r a c t s from t h e e a r l i e s t days t o t h e p r e s e n t time' (Jones v . P a r k e r , s u p r a , 163 Mass. a t page 567, 40 N.E. a t page 1045). On v a r y i n g f a c t s o u r New York d e c i s i o n s t a k e one o r t h e o t h e r p o s i t i o n . [ C i t i n g c a s e s ] . Modern w r i t e r s t h i n k t h a t t h e ' d i f f i - c u l t y of enforcement' i d e a i s exaggerated and t h a t t h e t r e n d i s toward s p e c i f i c performance (5 Corbin, C o n t r a c t s [ I 9 5 1 e d . ] , 5 1172; 5 W i l l i s t o n , C o n t r a c t s [ r e v . e d . ] , p. 3977; Restatement, C o n t r a c t s , 5 371, comment a ) . C l e a r l y t h e r e i s no binding r u l e t h a t d e p r i v e s e q u i t y of j u r i s d i c t i o n t o o r d e r s p e c i f i c performance of a b u i l d i n g c o n t r a c t . A t most t h e r e i s d i s c r e t i o n i n t h e c o u r t t o r e f u s e such a decree. And h e r e we do n o t even have an e q u i t y s u i t b u t a motion made a s of r i g h t t o confirm a completely v a l i d a r b i t r a t i o n award con- forming i n a l l r e s p e c t s t o t h e e x p r e s s c o n f e r r a l o f a u t h o r i t y on t h e a r b i t r a t o r s and meeting a l l s t a t u t o r y requirements f o r confirmation ** *.I1 While n o t r a i s e d a s an i s s u e on a p p e a l t h e s p l i t t i n g o f t h e c o s t s over $9,000 was c l e a r l y e r r o r i n view of t h e r e c o r d and must be r e v e r s e d . The t r i a l c o u r t i n i t s conclusion of law No. 7 found L i p i n s k i should pay t h e f i r s t $9,000 and t h a t t h e r e a f t e r t h e , two p a r t i e s would s h a r e a l l expenses over and above t h a t f i g u r e . W f i n d t h e c o u r t e r r e d i n t h i s holding and d i r e c t a l l c o s t s be e paid by a p p e l l a n t i n t h e c o n s t r u c t i o n and i n s t a l l a t i o n of t h e i r r i g a t i o n system a s proposed by t h e Marquardt p l a n s and s p e c i f i - c a t i o n s , i n c o r p o r a t i n g i n same t h e recommended changes of Wiedenman a s r e f e r r e d t o i n t h e f i n d i n g s o f f a c t and conclusions o f law of t h e t r i a l court. To hold ~othenrcSiee would be t o p e n a l i z e respon- d e n t O'Neil who d i d what he could t o g e t t h e 1969 agreement c a r r i e d o u t i n 1969. He h a s been deprived o f t h e use of h i s water f o r over 8 y e a r s , due t o l i t i g a t i o n and o b s t i n a n c e o f appellant Lipinski. The judgment o f t h e t r i a l c o u r t i s a f f i r m e d and t h e cause remanded t o t h e t r i a l c o u r t w i t h d i r e c t i o n s t o c o r r e c t i t s conclusion of law No. 7 i n accordance w i t h t h i s opinion. I W Concur: e Chief J u s t i c e