No. 81-264
IN THE SUPREME COURT OF THE STATE OF MONTANA
1981
ADRIAN 0 MATHIS, d/b/a A-M
.
ELECTRIC SERVICE,
Plaintiff and Appellant,
VS .
CLAIR W DAINES, et al.,
.
Defendants and Respondents.
Appeal from: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin.
Honorable Joseph B. Gary, Judge presiding.
Counsel of Record:
For Appellant:
Wellcome and Frost, Bozeman, Montana
For Respondents:
Landoe, Brown Law Firm, Bozeman, Montana
Berg, Coil, Stokes and Tollefsen, Bozeman, Montana
Submitted on briefs: September 3, 1981
Decided: January 14, 1982
Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
This is an appeal from a judgment of the District Court
of the Eighteenth Judicial District, holding (1) the defendants
not indebted to the plaintiff for labor, materials, and work
performed in the construction of defendant$' building, Plaza
11, (2) invalidating plaintiff's mechanic's lien on the real
property, (3) granting judgment to the defendants on their
counterclaim in the amount of $675.98, and (4) awarding
defendants costs and attorneys fees.
On April 3, 1980, plaintiff Adrian 0 Mathis, doing
.
business as A-M Electric Service, filed a mechanic's lien on
the subject real property for labor, material and work
performed by the plaintiff in the construction of Plaza 11,
a dentist and office complex. On April 21, plaintiff filed
his complaint and named as defendants .(hereinafterDaines)
the general partners in Plaza 11, a Montana partnership,
Clair W. Daines, Donald R. Ferron and Stephen L. Black, the
general contractor on the project, Clair W. Daines Incorporated,
the financing institutions, First National Bank in Bozeman
and State of Montana Public Employees' Retirement System,
and American Land Title Company as the trustee named in the
Deed of Trust securing the amounts financed.
The District Court, sitting without a jury, heard the
case beginning on July 21, and on February 5, 1981, made
written findings of fact and conclusions of law and entered
judgment thereon Mathis now appeals, raising the following
issues:
1. Whether plaintiffs "proposal and contract" is void
for vagueness as a matter of law.
2. If plaintiff's "proposal and contract" is not void
as a matter of law, whether plaintiff's requests for payment
for extra material and labor furnished in connection with
Plaza I1 can be sustained on any other theory of recovery.
The facts as found by the District Court are these:
Mathis is an electrical subcontractor who had performed
numerous contract jobs for Daines for a period of approxi-
mately three years. Daines is a general contractor engaged
in residential and commercial building in the Bozeman area.
Most of the jobs performed by Mathis for Daines were
residential, but later contracts involved the construction
of dental and office complexes, including the Spain Building
and Plaza I, the latter adjacent to Plaza 11. Mathis and
Daines contracted on these two buildings following the
custom they had established on previous jobs. By that
custom, Mathis would make an informal oral bid for the
wiring of a residence and Daines would orally accept.
Problems arose when, on the Spain and Plaza I contracts,
Mathis claimed numerous "extras" that substantially exceeded
his original bid. In order to avoid this on the Plaza I1
job, Daines told Mathis that any bid would have to be made
in writing. There were no architect's drawings for Plaza
11, but the parties did discuss what type of building it
would be. Essentially, it was to be of the same kind as
Plaza I but approximately twice the size. Mathis had worked
on Plaza I and he made his bid for Plaza I1 on that basis.
On October 10, 1979, Mathis submitted a bid of $21,400.00,
roughly two times what he had bid on Plaza I. This written
bid was titled "Proposal and Contract" and contained the
following provision:
"Any alteration or deviation from the above
specifications involving extra cost of material
or labor will only be executed upon written orders
for same, and will become an extra charge over the
sum mentioned in this contract. All agreements
must be made in writing."
All subcontractors, including Mathis, were informed
that any extra work requested by a tenant of Plaza I1 beyond
the preliminary plans modeled on Plaza I would have to be
paid for by that tenant.
Mathis was awarded the bid and construction commenced
in November of 1979. In accordance with their contract,
Daines paid to Mathis $5,000.00 per month in the months of
November, December and January. The next draw was made on
January 31, 1981, but $2,000.00 was held back by Daines
because Mathis had started to fail to show up for work.
Included in the draw was payment of a $249.00 claim for
extras ordered by a tenant, which made the total draw
$2,249.00.
Mathis did not work after February 23, 1980. It was
on that day that he contacted Daines demanding payment for a
number of extras claimed in connection with several Plaza
I1 tenants and also unrelated jobs. On March 10, after
Mathis was terminated, he submitted a bill detailing additional
light fixtures and other extras which brought his total
claim to $14,398.48.
Daines approved a total of $697.20 in extras, all in
connection with Plaza I1 tenants. That sum, when added to
the $21,400.00 originally bid, made the total contract job
worth $22,097.20. Mathis was paid $18,249.00 and a second
electrical contractor hired to complete the job was paid
$4,523.98. In total, Daines paid $22,772.98 to complete the
job, $675.98 above what it should have cost. This difference
represents the amount the District Court awarded Daines on
his counterclaim.
-4-
In addition, the court held that the mechanic's lien
filed against Plaza I1 by Mathis was not valid and ordered
it removed, awarding Daines costs and attorneys fees.
We find no error in the ruling of the District Court.
Although we use slightly different figures in our computations,
the result is the same except for a $.20 miscalculation by
the District Court. If $22,772.98 is the total amount paid
for the job by Daines, and $22,097.20 is the amount of the
bid plus approved extras, Daines' counterclaim is worth
$675.78, $.20 less than the District Court awarded. We
disregard this as - minimis.
de
Appellant's primary argument is that the "Proposal and
Contract" entered into by the parties is void for vagueness
as a matter of law. The District Court considered this
argument, stating that it "might buy the argument about
ambiguities and uncertainties if the background of the
parties had not been testified to so completely by both
parties." In this regard, it cited section 28-3-402, MCA,
which states:
"A contract may be explained by reference to
the circumstances under which it was made and
the matter to which it relates."
The most important circumstance in this case is the
long course of dealings between the parties. They had
worked together on various projects for a period of nearly
three years. They had completed two dental office buildings
similar to Plaza 11. One of them, Plaza I, served as the
model for Plaza 11. In fact, Mathis knew that Plaza I1 was
to be approximately twice the size of Plaza I, and it is
instructive to note that his bid on Plaza I1 was almost
exactly two times the amount he bid on Plaza I.
It is not difficult to determine the intent of the
parties to this contract. Daines wanted to avoid paying for
the extra charges that he had come to expect from Mathis,
absent some prior approval. He requested a written bid and
that bid, as found by the District Court, "was not on so
----
many lights, - -
so many openings, but was based upon-
-- - the
understanding between the parties - - Plaza - would be
that the I1 -
comparable - - Plaza I
to - This is the critical element
to consider in an examination of the following relevant
language from the bid:
"A-M Electric propose to furnish all materials
and perform all labor necessary to complete the
-
following: All wiring, -- - 8 meters and
50 cans,
necessary fluorescent lights for Plaza -
I1 ...
"All of the above work to be completed in a
substantial and workmanlike manner according to
standard practices for the sum of $21,400 ...
"Any alteration or deviation from the above
specifications involving extra cost of material
or labor will only be executed upon written orders
for same, and will become an extra charge over
the sum mentioned in this contract. All agreements
must be made in writing." (Handwritten portions
underlined.)
In McDonald v. McNinch (1922), 63 Mont. 308, 313, 206
P. 1096, 1097, a similar question was raised as to whether a
lease was void for uncertainty. There, we said:
"It is not material to inquire whether the
terms of this contract might or might not
have been expressed more definitely. It
may be conceded that there are ambiguities
and uncertainties present, but this court
is not authorized to declare the lease void
unless the conclusion is compelled that its
object is 'wholly unascertainable.'" (See
section 28-2-603, MCA.)
We are not compelled to conclude here that the object
of the written bid was "wholly unascertainahle." In its
construction the District Court was guided by what we stated
in Kintner v. Harr (1965), 146 Mont. 461, 472, 473, 408 ~ . 2 d
"It is a fundamental rule that in the con-
struction of contracts the courts may look not
only to the language employed, but to the subject-
matter and the surrounding circumstances, and may
avail themselves of the same light which the parties
possessed when the contract was made. (Citation
omitted.) To ascertain the intention, regard must
be had to the nature of the instrument itself, the
condition of the parties executing it, and the
objects which they had in view. The words employed,
if capable of more than one meaning, are to be
given that meaning which it is apparent the parties
intended them to have."
The appellant also comes face to face with the provisions
of section 28-3-206, MCA:
"In cases of uncertainty not removed by parts
1 through 5 of this chapter, the language of
a contract should be interpreted most strongly
against the party who caused the uncertainty
to exist. The promisor is presumed to be such
party . . ."
Here, Mathis is the promisor and also the party who
drafted the contract. Any uncertainty in a contract must be
resolved against the person drafting it. Shanahan v.
Universal Tavern Corp. (1978), - Mont. , 585 P.2d
Mathis further argues that, even if the contract is not
void, the provision for written orders was waived or modified
by executed oral agreement. In this regard, he cites
Matzinger v. Remco, Inc. (1976), 171 Mont. 383, 387, 558
"This Court in Dalakow v. -
- Geery, 132 Mont. 457,
464, 465, 318 P.2d 253, 257, summarized the law
in Montana and said:
"Roberts v. Sinnott, 55 Mont. 369, 177 P. 252,
is strikingly similar to the present case.
"That case involved a written contract to furnish
certain materials and perform the work necessary
for the erection of a dwelling. The plaintiff-
contractor brought action upon the original agree-
ment and each of twenty-five oral contracts
supplemental thereto. The original contract
contained a stipulation that no charges for extra
work would be allowed unless ordered in writing,
so the defendant contended there could be no
recovery on the oral agreements. But this court
... said:
"'The provision of the contract above was manifestly
intended for the protection and benefit of the owner,
and no reason can be suggested why it might not be
waived. The authorities are quite uniform in holding
that, notwithstanding such a provision, the parties
may make subsequent independent oral agreements which,
when executed, have the effect of modifying the
original contract, and the rule has been recognized
in this jurisdiction.'"
Mathis' case does not quite meet this authority.
There is ample justification in the record for the District
Court's determination that the contract in this case "was
waived as far as the small amount of extras are concerned
but was not waived as concerns the extras in the bill of
March 31, 1979." Waiver is generally defined as a voluntary
and intentional relinquishment of a known right. Mundt v.
Mallon (1938), 106 Mont. 242, 248, 76 P.2d 326, 328.
Waiver may be proved by express declarations or by a course
of conduct so as to induce the belief that the intention and
purpose was to waive. Northwestern Fire & Marine Ins.
Co. v. Pollard (1925), 74 Mont. 142, 149, 238 P. 594, 596.
Lacking in the evidence here is any indication of a voluntary
relinquishment by Daines of his right to object to the
extras contained in the bill of March 31, 1979. The District
Court's finding on this point must be sustained unless
clearly erroneous. Rule 52(a), M.R.Civ.P. We find no error.
Mathis' lien not being established, Daines must be
allowed reasonable attorneys fees. Section 71-3-124, MCA.
Af firmed.
Justice
We Concur: