NO. 82-242
I N T H E S U P R E M E C O U R T O F T H E S T A T E O F MONTANA
1983
EDWARD M A T O S ,
Plaintiff and A p p e l l a n t ,
vs.
DANN D. ROHRER and
PAULA ROHRER, I N D I V I D U A L L Y
a n d A S H U S B A N D AND W I F E ;
J O E L A. RUCKER e t a l . ,
D e f e n d a n t s and R e s p o n d e n t s .
Appeal from: D i s t r i c t C o u r t of t h e N i n e t e e n t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of L i n c o l n
H o n o r a b l e R o b e r t M. H o l t e r , J u d g e p r e s i d i n g
C o u n s e l of Record:
For A p p e l l a n t :
Ann German, Missoula, Montana
J a m e s P. T a y l o r , M i s s o u l a , M o n t a n a
F o r Respondents:
S c o t t B. Spencer, Libby, Montana
S u b m i t t e d on b r i e f s : December 16, 1982
Decided: March 2 4 , 1983
Filed: MAR 2 4 1983
Mr. Justice Fred J. Weber delivered the Opinion of the
Court.
Plaintiff appeals from a judgment in the Nineteenth
Judicial District Court, Lincoln County, in this action for
lien foreclosure. We affirm the District Court, but remand
for a redetermination of fees and costs.
Plaintiff presents the following issues for review:
1. Whether the District Court erred in admitting par01
evidence to "modify" the written agreement between the
parties.
2. Whether Matos is entitled to an equitable quantum
meruit for services and materials of which respondents
received the benefit.
3. Whether the District Court erred in ruling that
Matos' mechanic's lien was insufficient.
4. Whether the trial court's findings of fact and
conclusions of law are supported by substantial credible
evidence.
Defendants seek attorney's fees on appeal. Plaintiff
seeks to have the fees and costs assessed against him
overturned.
In the winter and spring of 1980, defendants Dann and
Paula Rohrer (Rohrers) discussed with plaintiff Edward Matos
(Matos), a local building contractor, the possibility of his
building them a passive solar home. Matos began construction
on the Rohrer home in May of 1980. On June 23, 1980, at
Rohrers' request, Matos prepared a proposal, which stated in
pertinent part:
"Rohrers agree on a cost & $16,000
with $86,000 as a total cost in mind
using attached cost guide-lines
Rohrer agrees to do complete plumbing and
electrical work
Contractor to buy materials
All of the above - - - completed in a
- - - work to be
substantial and workmanlike manner - - -sum 0
for the - 7
cost ~ l u s
L
$16.000 . . .
'
Payments to be made each as the work
progresses to the value of (95%) per cent of
all work completed. The entire amount of contract
to be paid within 10 days after completion.
alteration or deviation - - above fo
;m the
specifications extra - -of material or
cost
labor will only be executed upon written orders - for
same,and will become an extra charge - - - over the sum
mentioned - - in this contyact. All agreements - -bemust
m a d e r i t i n g . " (Emphasis added)
- - ,
Included with the contract was a list of cost guidelines,
which the parties accept as part of the contract, and which
stated in pertinent part:
"cost guide lines to < [less than] $86,000
- - exceed
not to
Fireplace 4,000
Plumbing & electrical mat. 4,500
Roof $65 @ square $65 @ sq.
Siding $700 M $700 M
Grhouse. siding $400 M $400 M
F1. covering $12 yds.
Cabinets (kit. & bath) $4,000
Built-ins kept moderate
Interior ceiling
(Emphasis in original)
The parties signed the contract on June 30, 1980.
During the summer of 1980, the Rohrers talked with Matos
on several occasions. Matos repeatedly assured them that the
costs of lumber and certain other materials were lower than
anticipated. Durinq this period, the Rohrers requested a
number of items for the home, which included extra built-in
cabinets, a bay window, hard-core instead of hollow-core
doors, additional or more costly lighting and plumbing
fixtures, various changes in windows and ceiling, and
additional masonry work. There was no written agreement to
charge extra for additional work, nor was there evidence of
an explicit agreement, written or oral, to waive the contract
provision requiring such a written agreement. Rohrers
testified that they orally agreed to pay Matos $500 more to
cover the extra cost of the electrical fixtures and doors,
but that there were no other additional charges agreed upon.
As the building of the house progressed, Matos paid most
of the bills for labor and materials and was paid in turn by
Rohrers, "when needed".
In September of 1980, Matos informed Rohrers that the
house was costing more than anticipated, and that the final
price wou3.d be between $95,000 and $100,000. Rohrers were
very upset, and indicated they did not know where they would
get the additional money. Matos insists the Rohrers neither
ordered him to stop working nor put a ceiling on costs.
Rohrers are equally adamant in their claim that they told
Matos if he couldn't finish the house for between $90,000 and
$91,000, then "he and the workmen should just quit, and we
would finish it as we could afford to." According to
Rohrers, Matos said "he would try and see what he could do."
There was no further contact between the parties until
the second week in October, when, upon Rohrers' return from a
trip to Chicago, Matos informed them the house would cost
over $100,000. At that time, Rohrers ordered Matos to quit
working on the house. Matos' final price on the home was
$103,544.45. Rohrers paid Matos a total of $86,500. The
parties agree that the total cost of labor and materials for
the house was $84,881.13.
On December 23, 1980, Matos filed a mechanic's lien
against Rohrers' property in the amount of $18,525.00. The
lien provided in pertinent part:
"That it is the intention of EDWARD MATOS, of
Libby, Montana, claimant herein, to claim -and
- - - a lien upon that certain traFt or parcel
hold
- - hereinafter described, for the sum of
of land
$18,525.00 with interest thereon at the rate
of 10% per annum from 10/24/80 until paid.
"That the names of the owners of said premises
described above at the date of this instrument
according to the real estate records of
Lincoln County, Montana, are Dann D. Rohrer
and Paula Rohrer, of Libby, Montana."
(Emphasis added)
The lien incorporated by reference two attachments, the first
being a legal description of the parcel of land upon which
the improvements were made, the second being a specific list
of additional costs amounting to $18,525.00.
On February 19, 1981, Matos filed a complaint, seeking
judgment against Rohrers in the amount of $18,525.00, to be
derived from the proceeds of a sheriff Is sale of the Rohrer
property. Matos also sought judgment that his lien had
priority over liens established by several material men,
named as defendants in this action.
Rohrers answered that (1) the lien wa.s invalid for
failing to describe the "building structure or improvement"
to which it attached; (2) under the contract and in
accordance with Matos' subsequent verbal assurances, the
ceiling price of the house was $86,000; and (3) Matos was
responsible for any unpaid obligations from the construction
of the house. Rohrers also counterclaimed, seeking damages
for breach of contract, judgment that Matos was responsible
for unpaid construction debts, and judgment removing all
liens and quieting title to the real property involved.
On December 15, 1981, Matos moved in limine for
exclusion of "any and all evidence sought to be admitted to
alter, vary, or interpret the terms of" the June 23, 1980
agreement. The motion was denied.
On December 21, 1981, the claim of defendant Loveless
and Company, d/b/a Larry's Furniture, was dismissed by
stipulation of the parties as being fully settled.
Trial was held January 19, 1982 before the District
Court judge sitting without a jury. Judgment for defendants
was entered March 16, 1982. Matos was ordered to pay
defendants the sum of $8,651.90, which included payment made
by Rohrers, to unpaid material men for supplies for the
house. The court also awarded Rohrers costs in the amount of
$187.50 and attorney's fees amounting to $2,230.00. All
liens against the Rohrer property were discharged. Matos'
motion for new trial or, alternatively to amend findings, was
denied. Plaintiff Matos appeals.
Matos maintains that the terms of the June 23, 1980
contract were clear and unambiguous; that the contract was a.
simple "cost-plus" contract; and that the District Court
erred in admitting parol evidence to "modify and contradict"
its terms.
We do not agree. The parol evidence rule, as codified
in section 28-2-905, MCA, provides:
"When extrinsic evidence concerning a written
agreement may be considered. (1) whenever the
terms of an agreement have been reduced to writing
by the parties, it is to be considered as
containing all those terms. Therefore, there can
be between the parties and their representatives or
successors in interest no evidence of the terms of
the agreement other than the contents of the
writinq except in the following cases:
(a) when a mistake or imperfection - - writing
--- of the
is put in issue 2 t G pleadings;
-
(b) wheythe validity of the agreement is the fact
in dispute.
(2) This section - - exclude other evidence
does not
n- -- circumstances under which the aareement was
- f the - -- - --- - - - -- - - - - - --- - -- - -
- -- -
- -or to which - - ates, as described in
made - it re1
1-4-102, -
'
or other evidence - explyin - extrinsic to - .
an -
ambiauitv - to establish illeaalitv or fraud.
- - or
(3) he^ term 'rgreement' , for the of this
section, includes deeds and wills as well as
contracts between parties." (Emphasis added)
See Dussault v. Hjelm (1981) Mont . , 627 P.2d 1237,
1239-40, 38 St.Rep. 738, 741, where this Court, relying upon
section 28-2-905, MCA, upheld the District Court's acceptance
of parol evidence regarding a lease agreement to resolve the
ambiguity which existed in the instrument. See also Downs v.
Smyk (1982) Mont . , 651 P.2d 1238, 1244, 39 St.Rep.
1786, 1794.
In the case at bar, the contract, in one place, refers
to "cost & $16,000--with $86,000 as a total cost in mind"; in
another place it states, "All of the above work to be
completed ... for the sum of cost plus $16,000"; and in yet
another (the attached guidelines), is found the phrase "cost
guide lines to ([less than] $86,000", followed by the words,
- -to exceed. "
"not These additional terms imply, but do not
positively establish, a definite ceiling price. The contract
is unclear as to whether "total cost" is meant to include the
contractor's fee of $16,000. There is no way that scrutiny
of the contract itself will render these terms certain and
unambiguous. Therefore, we find tha.t the District Court
properly admitted parol evidence to aid it in interpreting
the June 23, 1980 contract.
The question then becomes a factual one: Whether the
District Court, as fact-finder, wrongly determined that the
June 23, 1980 agreement involved a ceiling price of $86,000,
including the contractor's fee.
"In reviewing findings of fact in a civil action
tried by the District Court without a jury, this
Court is confined to determining whether there is
substantial credible evidence to support those
findings. Hornung v. Estate - ~ a g e r ~ i i s (1970),
of t
155 Mont. 412, 473P.2d 541. Although conflicts
may exist in the evidence presented, it is the duty
and function of the trial judge to resolve such
conflicts. His findings will not be disturbed on
appeal where they are based on substantial though
conflicting evidence. Fausett - Blanchard (1969),
v.
154 Mont. 301, 463 P.2d 319. Finally, in
determining whether the trial court's findings are
supported by substantial evidence this Court must
view the evidence in the light most favorable to
the prevailing party. Hellickson v. Barrett Mobile
Home Transport, Inc. (1973), 161-~ont. 455, 507
P.2d 523." Bauer v. Cook (1979) 182 Mont. 221,
Here, the evidence is conflicting. Matos testified that
the parties had agreed on a cost-plus contract with no
ceiling because the Rohrers wanted to be free to choose
suitable fixtures and decorations for the interior of their
house. Dann Rohrer testified:
"We said, 'We couldn't spend over Eighty-six', and
he said, 'Well, if everything goes okay, it should
be between Eighty and Eighty-Six. It could be as
much as Eighty-six.'
"Q. Then, you did tell Mr. Matos that there was a
limit on the price?
"A. Yes--yeah. We told him that there was no way
that we could go over Eighty-six, and that would
have to be the total cost--maximum, total cost.
"The one thing that we had told him we wanted, and
that was, a ceiling ...
"Q. Was it your understanding at, that time, that
there was a limit on the contract?
"A. Oh, definitely. We never went into it any
other way.
"Q. Did Mr. Rohrer--did Mr. Matos lead you to
believe that there was a ceiling on that contract?
"A. That's why we have it written in the total
cost, not to exceed the total means--that's what
the total means."
Paula Rohrer testified that she and her husband had "made it
very clear to [Matos] that we had to have a ceiling." The
transcript includes the following testimony of Paula Rohrer:
"Q. Okay. Paula, did you then enter into an
agreement to build a house?
"A. Yes, we did.
"Q. And was there a ceiling?
"A. Yes, there was.
"Q. And what was the ceiling?
"A. Eighty-six Thousand Dollars.
"Q. Did you have the Contract explained by
anybody?
"A. Ed Matos.
"Q. And did he tell you that there was a ceiling
on the Contract?
"A. Yes."
The District Court's findings included the following:
"7. During negotiations, the Rohrers had several
conversations with Matos about the cost of the
home. Matos assured the Rohrers the cost would not
exceed $86,000.00.
9. At the time [the contract] was signed, the
Rohrers had Matos explain the terms of the
contract. Matos told the Rohrers the contract
provided that the house would cost no more than
$86,000.00.
We hold that there is substantial evidence supporting
those findings, as well as the District Court's conclusion
that" [tjhe contract between the parties was a cost plus
$16,000.00 fee contract, with a maximum guaranteed price of
Matos claims that the District Court "ignored all
aspects of the case concerning [his] equitable rights as a
lienholder". He also maintains that, regardless of the terms
of the contract, he is entitled to a reasonable guantum
meruit for supplying services and materials of which Rohrers
received the benefits. Matos relies primarily upon this
Court's holdings in Smith v. Gunniss (1944) 115 Mont. 362,
144 P . 2 d 186, and Maxwell v. Anderson (1979) 181 Mont. 21.5,
593 P.2d 29. We do not find those cases dispositive although
both indicate that:
" ... under proper circumstances an award can be
made based on the reasonable cost of labor and
materials furnished by the lienholder, in disregard
of the original contract." Maxwell, 181 Mont. at
221, 593 P.2d at 32.
In Maxwell this Court held that, where the total price
was an estimate, and thus there was never a firm ceiling to
the contract, it was unnecessary to modify the contract to
allow for a total higher price caused by the owners' numerous
changes in plans during construction. The case may be
distinguished from the case at bar, where there - a
was
definite ceiling.
In Smith, defendant owners appealed from the foreclosure
of a contractor's mechanic's lien on their house. Defendants
had ordered the contractor to cease his work after more than
two months, because they felt the price was getting too high.
They had paid him nothing and refused to pay him. This Court
held that, although the maximum cost of the contract appeared
to be fixed at $2,500 because the Federal Housing Note out of
which payment was to be made was limited to no more than
$2,500, that was not the case for several reasons. First,
the contract was a cost-plus contract without - fixed
a
ceiling; second, the owners had acquiesced in the continued
construction, knowing the cost was already well over $2,500;
and third, the owners' changes in the plans necessarily
changed the cost of construction.
There are significant differences between Smith and the
case at bar. First, the contract was, as the District Court
found and we herein affirm, not a simple cost-plus contract,
but a cost-plus contract with a definite ceiling of $86,000.
Second, the Rohrers did not just acquiesce in the continued
building, upon learning that the estimated total price of the
house would far exceed the ceiling price. They told Matos to
cease construction at once if he could not complete the
project for less than $91,000. Matos said he would see what
he could do, continued the construction, and, a month later,
with no further contact between the parties, informed Rohrers
that the total cost was now over $100,000. There is no
"acquiescence" here, by the Rohrers; there is, instead,
Matos' failure to abide by the terms of an implied,
conditional agreement to waive the contract's ceiling price.
Finally, although the record indicates that Rohrer did
request numerous changes in the plans, Matos has failed to
establish the additional costs, if any, of those changes.
The District Court concluded that "the parties agreed to
extras in said construction at a cost of $500." The record
supports this conclusion. This Court has long observed the
doctrine of implied findings, i.e., that we will imply
findings which are supported by the evidence and necessary to
the District Court's judgment. Berry v. Romain (1981)
Mont . , 632 P.2d 1127, 1132, 38 St.Rep. 1434, 1439-40.
The finding implicit in the above conclusion is that Matos
failed to establish agreement between the parties involving
additional costs above the agreed-upon $500 and that he
failed to establish the cost of those other extras. It is
true that according to the pre-trial order, the stipulated
total cost of labor and materials, exclusive of Matos'
contractor's fee, was $84,881.13. But that does not indicate
the additional cost, if any, of each change in the plans.
Nor, without further evidence, is additional cost established
by Matos' list of such costs attached to the lien upon the
Rohrer property.
The Rohrers testified that they agreed with Matos to pay
$500 extra for solid-core doors and additional lighting
fixtures. The contract required that:
"Any alteration or deviation from the above
specifications involving extra cost of material or
la.bor 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."
The record contains no such written orders or
agreements, nor evidence of any explicit agreement, written
or oral, to waive the above provision. The considerable
evidence of the parties' oral agreement to pay $500 extra for
solid-core doors and additional light fixtures was properly
treated as waiving the provision - - - particular
as to that
agreement. The evidence establishes the nature of the
alteration and the agreed cost of the alteration. There is
no such compelling evidence to establish the extra costs of
other deviations from the plans. Steve Logan, a supervising
worker on the construction job, testified that he told
Rohrers that changing the downstairs closets would be
"relatively expensive", and the different light fixtures
would involve labor. And Rohrers admit that Matos had told
them certain changes would drive up the cost of construction.
But when asked. whether they had paid for those changes, Dann
Rohrer answered, "That's why we paid the Five Hundred Dollars
more--beca.use we did change a couple of things."
Matos testified that the cost guidelines were exceeded
by certain extras, e.g., the fireplace and the built-in
cabinets. Rut he did not present specific evidence
concerning the amount of overruns. Indeed, he testified
that, because he considered the contract a cost-plus
contract, he did not keep a close tally of costs; he "didn't
take specific bills and go back and refer to some other
document or estimate on price of sheetrock." Instead he paid
most bills as they came in and requested money from the
Rohrers when he needed it.
We note also that, in both Smith and Maxwell, we
affirmed the District Court. In Maxwell we held that "the
findings of the District Court were never challenged by
substantial evidence to the contrary and must stand
affirmed." 181 Mont. at 222, 593 P.2d at 33. Smith, too,
turned on certain "undisputed facts" which established among
other things that "as the work progressed, changes were made
in the plans from time to time by the defendants which
changes would necessarily change the cost of the
construction." 115 Mont. at 384, 144 P.2d at 193.
Here, appellant Matos would have us overturn a district
court judgment which turns in large part upon factual
determinations by the District Court. We do not find Smith
and Maxwell govern the outcome of this issue.
A mechanic's lien is recognized in this state as "a
creature of statute, remedial in nature, with its foundation
in equity and natural justice." Beck v. Hanson (1979) 1-80
Mont. 82, 87, 589 P.2d 141, 144. The trial court's findings
of fact will not be disturbed by this Court, on the appeal of
equity cases where the evidence does not preponderate
decidedly against those findings. Rase v. Castle Mountain
Ranch (1981) Mont . , 631 P.2d 680, 684, 38 St.Rep.
992, 996. The evidence must be viewed in the light most
favorable to the prevailing party in the District Court.
Hagfeldt v. Mahaffey (1978) 176 Mont. 16, 18, 575 P.2d 915,
916-17.
A review of the record discloses that there is not a
preponderance of the evidence indicating that, contrary to
the conclusions of the District Court, Matos is entitled, in
equity, to a sum in excess of the contract sum of $86,000
plus the $500 paid for changes requested by the Rohrers.
111.
We may deal summarily with other issues raised. The
District Court, in its memo accompanying its findings and
conclusions, noted that Matos' lien was defective for failure
to describe the building or improvements upon which the lien
was claimed; that a mere legal description of the property
was not sufficient. Here, since this Court has affirmed the
District Court in its determination that Matos is not
entitled to the additional costs which are the basis for his
lien, we deem it unnecessary to consider the technical
validity of that lien. Without a debt there can be no lien.
Pittsburgh Plate Glass Co. v. Culbertson Hotel Co. (1922) 62
Mont. 605, 609, 205 P .957, 959.
Matos maintains that the judgement must be reversed,
because of numerous technical inconsistencies in the District
Court's findings, which indicate that the District Court
failed to fairly consider the evidence and carefully make its
own findings .
Where findings and conclusions, which are proposed by
the parties and adopted by the trial court, are supported by
the evidence and are sufficiently comprehensive and pertinent
to the issues to provide a basis for decision, their adoption
will not provide grounds for reversal. See In re Marriage of
Hunter (1982) Mont . , 639 P.2d 489, 495, 39 St.Rep.
59, 67; In re Marriage of Jensen (1981) Mont . , 631-
P.2d 700, 703-04, 38 St.Rep. 1109 1113. Here, although there
is technical merit in several of the points raised by
appellant Matos, we do not consider any of the points
significant enough to affect the District Court's conclusion.
We hold, therefore, that the several minor discrepancies in
the District Court's findings do not warrant our remanding
this case for reconsideration.
We do note a mathematical error in the court's
determination of the amount due Rohrers. The court failed to
consider the $500 increase for extras in the total price.
Therefore, the judgment for Rohrers should amount to
$8,151.90 rather than $8,651.90, as ordered.
Rohrers seek attorney fees on appeal, while Matos seeks
to have this Court overturn the District Court's award of
attorney fees and costs to Rohrers.
"A party who successfully defends against a
foreclosure action must be allowed a reasonable
attorney fee in both the District Court and the
Supreme Court. Section 7-3-124, MCA.
"There is no statutory provision for an award of
attorney fees in successfully prosecuting the
counterclaim for damages. Costs are recoverable on
the counterclaim, sections 25-10-101(3), 25-10-102,
and 25-10-201, MCA; but attorney fees are not
recoverable costs in the absence of statute or
contractual agreement of the parties. Winer v.
Jonal Corp. (1976), 169 Mont. 247, 545 P.2d 1094,
and cases therein cited. " Carkeek v. Aver (1980)
Mont .
, 613 P.2d 1013, 1015, 37 St.Rep.
1274, 1275-76.
The findings and judgment indicate the District Court
did not distinguish between or separate those fees incurred
by Rohrers in defending against the lien and those incurred
in prosecuting their counterclaim. We therefore remand this
cause for a determination of the attorney fees in the
District Court and the Supreme Court to which Rohrers are
entitled under the above statutes and the rule stated in
Carkeek, and for correction of the amount of damages awarded
Rohrers to $8,165.90.
With the above-noted exceptions, the judgment is
affirmed.
W e concur:
Chief J u s t i c e