No. 02-209
IN THE SUPREME COURT OF THE STATE OF MONTANA
2002 MT 272N
EARTHWORKS WEST, INC., and JAY C. SANDELIN,
Plaintiffs and Respondents,
v.
ELAINE COMFORT WALDHER, KEVIN WALDHER,
GREENPOINT CREDIT CORP., FLATHEAD COUNTY
TITLE COMPANY, and WASHINGTON INTERNATIONAL
INSURANCE COMPANY,
Defendants and Appellants.
APPEAL FROM: District Court of the Eleventh Judicial District,
In and for the County of Flathead,
The Honorable Ted O. Lympus, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
James C. Bartlett, Attorney at Law, Kalispell, Montana
For Respondents:
Michael A. Ferrington, Attorney at Law, Whitefish, Montana
Submitted on Briefs: August 8, 2002
Decided: December 3, 2002
Filed:
__________________________________________
Clerk
Justice Jim Regnier delivered the Opinion of the Court.
¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1996 Internal
Operating Rules, the following decision shall not be cited as precedent but shall be filed as a
public document with the Clerk of the Supreme Court and shall be reported by case title,
Supreme Court cause number, and result to the State Reporter Publishing Company and to
West Group in the quarterly table of noncitable cases issued by this Court.
¶2 The Respondents, Earthworks West, Inc., and Jay Sandelin, entered into a verbal
agreement with Appellants Elaine and Kevin Waldher to perform certain work on the
Waldhers’ real property. A dispute subsequently ensued regarding the cost of Respondents’
services and Respondents filed a construction lien against the Waldhers for the purported
value of the work performed. Thereafter, Respondents filed a complaint in the Eleventh
Judicial District Court, Flathead County, to foreclose their construction lien. The District
Court entered judgment in favor of Respondents and the Waldhers appeal. We affirm.
¶3 The Waldhers present three issues on appeal:
¶4 1. Did the District Court err when it entered judgment in
favor of Jay Sandelin?
¶5 2. Did the District Court err when it declared the
construction lien valid and enforceable?
¶6 3. Did the District Court err in awarding a money judgment in
favor of Earthworks West, Inc.?
BACKGROUND
¶7 Earthworks West, Inc., a corporation located in Flathead
County, Montana, is “engaged in the business of performing and
supplying to the general public excavation, hauling, heavy
2
equipment and other work, labor, equipment, and materials.” At all
times relevant to this action, Jay Sandelin served as the president
of Earthworks. Appellants Elaine and Kevin Waldher, husband and
wife, own real property in Flathead County.
¶8 In April of 1999, the parties entered into an agreement for
the Respondents to perform certain work on the Waldhers' property.
The parties did not execute a written agreement so the details of
the arrangement are somewhat unclear. Purportedly, the agreement
contemplated the construction of a road and building pad on the
Waldhers’ property, as well as the installation of utilities.
¶9 This home improvement project was not the first time the
parties collaborated on a construction project. In the late 1990s,
Earthworks and Sandelin performed some work for Kevin Waldher on
what they refer to as the River Terraces project. Kevin did not
have enough money to finance the project so he executed an
assignment of a loader to “Jay Sandelin of Earthworks West, Inc.”
This assignment purportedly relieved Kevin of the remaining $50,000
due and owing on the River Terraces project. This assignment
ultimately became an issue in the present case as discussed in
greater detail below.
¶10 As for the home improvement project, Respondents performed the
arranged services from approximately the end of April 1999 through
June 7, 1999. A dispute subsequently ensued regarding the cost of
the services rendered. Respondents claimed they were entitled to
$13,230.79 for the work performed. The Waldhers tendered $2,000 to
Respondents but disputed the remaining charges. Therefore, on June
18, 1999, Kylanne Sandelin, Earthworks’ secretary and office
manager, filed a construction lien against the Waldhers for
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$11,235.79, representing the allegedly unpaid debt of $11,230.79
plus a $5.00 filing fee.
¶11 On August 27, 1999, Respondents filed a complaint in the
District Court to foreclose their lien. On October 1, 1999, the
Waldhers filed an answer which asserted: (1) that the alleged fees
exceeded the parties’ oral arrangement; (2) that the purported lien
was not filed in conformance with Montana law and, thus, void; and
(3) a counterclaim against Respondents for attorney fees incurred
in the action. On July 25, 2000, the Waldhers filed a motion for
summary judgment on the grounds that “the Construction Lien filed
by the plaintiffs is void as a matter of law and Jay Sandelin has
no cause of action against the defendants.”
¶12 Following a hearing, the District Court denied the Waldhers’
motion for summary judgment. The case proceeded to a non-jury
trial on February 12, 2001. On December 20, 2001, the District
Court issued its Findings of Fact, Conclusions of Law, and
Judgment. The District Court determined that the construction lien
was valid and enforceable, the arrangement constituted a verbal,
implied-in-fact agreement based upon time and cost, and that the amount of the lien
reflected “the reasonable value of the labor, services, material, and equipment provided by
Plaintiffs to Defendants.” Accordingly, the District Court awarded Respondents $11,235.79,
plus interest, as well as attorney fees and costs. On January 16, 2002, the Waldhers filed a
notice of appeal from the District Court’s judgment.
STANDARD OF REVIEW
¶13 We review a district court’s findings of fact to determine whether they are clearly
erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906. A finding is
4
clearly erroneous if it is not supported by substantial evidence, if the trial court
misapprehended the effect of the evidence, or if this Court is left with a definite and firm
conviction that the district court made a mistake. Daines, 269 Mont. at 325, 888 P.2d at 906.
We review a district court’s conclusions of law to determine whether the court’s
interpretation of the law is correct. Carbon County v. Union Reserve Coal Co., Inc. (1995),
271 Mont. 459, 469, 898 P.2d 680, 686.
DISCUSSION
ISSUE ONE
¶14 Did the District Court err when it entered judgment in favor of Jay Sandelin?
¶15 The Waldhers contend that the contracting parties for the improvement project were
themselves and Earthworks. They insist that no such contract existed between themselves
and Sandelin. As Sandelin was not a party to the contract, the Waldhers assert that he had no
cause of action against them and, therefore, “[t]he lawsuit brought by Jay Sandelin . . . was
without merit and . . . frivolous, warranting an award of attorney’s fees against him.”
¶16 The District Court implied that in performing the work on the
Waldhers' property, the Respondents utilized various pieces of
machinery, including the loader mentioned above. The District
Court noted the assignment drafted by Kevin Waldher stating that he
“hereby unconditionally and irrevocably assigns and transfers [the
loader to] Jay Sandelin of Earthworks West, Inc.” Further, the
court found that “the testimony confirms that the loader was used
to improve the real property.” Therefore, since Kevin Waldher
transferred the loader to Sandelin, and since the parties used the
loader on the home improvement project, the District Court
5
concluded that the expense incurred in using the loader was
properly included within the construction lien and Sandelin was
rightfully a party to the action.
¶17 Rule 23(a)(4), M.R.App.P., requires that an appellant present
a concise, cohesive argument which “contain[s] the contentions of
the appellant with respect to the issues presented, and the reasons
therefor, with citations to the authorities, statutes and pages of
the record relied on.” This Court has repeatedly held that we will
not consider unsupported issues or arguments. In re Custody of
Krause, 2001 MT 37, ¶ 32, 304 Mont. 202, ¶ 32, 19 P.3d 811, ¶ 32.
Likewise, this Court is under no obligation to locate authorities
or formulate arguments for a party in support of positions taken on
appeal. In re B.P., 2001 MT 219, ¶ 41, 306 Mont. 430, ¶ 41, 35
P.3d 291, ¶ 41.
¶18 The Waldhers’ argument on this issue in their opening brief
consists of four sentences which contain no citations to the record
or any authorities. Their reply brief expands somewhat on the
issue (two additional paragraphs) but again merely utilizes
conclusory language with no citations to authority in support of
their position. A district court’s decision is presumed correct
and it is the appellant who bears the burden of establishing error
by that court. Matter of M.J.W., 1998 MT 142, ¶ 18, 289 Mont.
232, ¶ 18, 961 P.2d 105, ¶ 18. In short, the Waldhers simply have
not met their burden. Therefore, we hold that the District Court did not
err when it entered judgment in favor of Jay Sandelin.
ISSUE TWO
¶19 Did the District Court err when it declared the construction lien valid and enforceable?
6
¶20 The Waldhers refer us to several aspects of the construction
lien which they insist renders the lien void. They indicate that
the Respondents utilized an individual acknowledgment form as
opposed to a corporate acknowledgment form. They insist that this
form resulted in the signor, Kylanne Sandelin, identifying herself
as the sole lien claimant, barring Earthworks or Jay Sandelin from
foreclosing on the lien. Further, the Waldhers appear to challenge
the address provided for “the party with whom person claiming the
lien contracted to furnish services or materials.”
¶21 As indicated above, the Waldhers filed a motion for summary
judgment based, in part, on the validity of the construction lien.
The District Court denied this motion. In so doing, the District
Court concluded:
Plaintiffs’ lien notice indisputably identifies the
correct legal owner with a full legal description of the
property and provides all other information as required
by Section 71-3-535, MCA. There is also no issue of fact
that the lien was both served upon and received at the
address where both Defendants Elaine and Kevin Waldher,
husband and wife, received their mail. Plaintiffs have
also identified a green certified mailing receipt card
without dispute by Defendants that the card was in fact
signed by Defendant Kevin Waldher after being addressed
and mailed to both Kevin and Elaine Waldher. . . .
Defendants also argue that the form of lien used and
the manner of filing [sic] in the acknowledgment, renders
the lien invalid. Specifically, Defendants contend that
the second page of the lien, which contains the name and
address of Kylanne Sandelin within the certification of
mailing as opposed to the name and address of the owner,
is incorrect. However, there is nothing within our lien
statutes that requires the use of a specific form of
lien, nor is there any requirement that the certification
identify to whom and where the lien was sent. The only
requirement is that “[t]he person claiming the lien shall
certify to the county clerk and recorder that a copy of
the lien has been served on the owner of record as
provided in 71-3-534(2).” Section 71-3-535(2)(b), MCA.
Such clearly appears on page 2 of the lien.
7
The District Court echoed this sentiment in its ultimate Findings
of Fact, Conclusions of Law, and Judgment. Therein, the District
Court further concluded:
[The] testimony [from the Clerk and Recorder’s Office]
did not establish that the failure to so identify the
representative capacity of the party signing the document
within the body of the acknowledgment affected the
validity of the document . . . .
. . . [T]he language of the lien form used by Plaintiffs
. . . is . . . sufficient under Sections 1-5-609 and -
610, MCA, notwithstanding Defendants’ contention that a
different form of acknowledgment should have been used.
The only other issue presented pertaining to the
validity of the lien was in connection with the address
used by Plaintiffs for the contracting parties . . . .
However, Plaintiffs testified that they had mailed some
38 prior billings and correspondence to such address as
shown on the face of the lien and none had been returned,
hence the address used by Plaintiffs would be deemed the
“last known address” of the Defendants; various invoices
offered as exhibits were mailed to “Kevin Waldher . . .”
and Defendant Kevin Waldher confirmed the receipt of
same; and, finally, it is undisputed that the lien was so
mailed and was received by Defendant Kevin Waldher, as
evidenced by Plaintiff’s Exhibit C-2, consisting of the
return receipt “green card” and postal mailing receipt,
each with matching identification numbers.
. . . .
Plaintiffs have met the requirements for their lien
pursuant to Sections 71-3-534, -535 and -536, MCA, and
their lien is thus valid and enforceable.
¶22 Pursuant to Montana’s construction lien statutes, a
person who furnishes services or materials pursuant to a real
estate improvement contract may claim a construction lien to secure
the payment of the contract price. Section 71-3-523, MCA. This
Court will strictly construe the procedural requirements of the
construction lien statutes, but once the procedure has been
fulfilled, we will liberally construe the statutes so as to give
effect to their remedial purpose. Swain v. Battershell, 1999 MT
8
101, ¶ 26, 294 Mont. 282, ¶ 26, 983 P.2d 873, ¶ 26. The procedural
requirements exist to notify the owner of real property that a lien
has been filed against his or her property, and to protect all
parties dealing with the property, including subsequent purchasers.
Swain, ¶ 26.
¶23 Section 71-3-535(3), MCA, articulates what information a
construction lien statement must include:
The lien statement must contain:
(a) the name and address of the person claiming the
lien;
(b) a description of the real property against
which the lien is claimed sufficient to identify it;
(c) the name of the contracting owner;
(d) the name and address of the party with whom the
person claiming the lien contracted to furnish services
or materials;
(e) a description of the services or materials
provided;
(f) the amount unpaid for services or materials or,
if no amount is fixed by the contract, a good faith
estimate of the amount unpaid, designated as an estimate;
(g) (i) the date on which the services or materials
were first furnished; and
(ii) the date on which the services or
materials were last furnished; and
(h) a declaration that a notice of a right to claim
a lien was given to the contracting owner or an
explanation of why the notice was not required.
Further, §§ 71-3-534 and -535(2), MCA, provide that a lien claimant
shall certify to the county clerk and recorder that he or she has
served the property owner of record with a copy of the lien.
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¶24 In the present case, Kylanne Sandelin, Earthworks’ secretary and office
manager, filled out, executed, and filed the construction lien in dispute. Kylanne included
the following information in the construction lien: the name and address of the claimants, Jay
Sandelin and Earthworks West, Inc.; a legal description of the real property subject to the
lien; the name of the real property owners, Elaine Comfort Waldher and Kevin Waldher; the
name and address of the persons the claimants contracted with, Elaine and Kevin; the dollar
amount in dispute, $11,235.79; the commencement and final date of services rendered; and
the reason why notice of the right to claim a lien was not given. Further, Kylanne certified
that “on [June 18, 1999], as an agent of and on behalf of Earthworks West, I served a copy of
the foregoing mechanic’s lien dated June 18, 1999, upon each owner of record named in the
lien, by mailing a copy of the lien to the owner’s last known addresses by certified mail,
return receipt requested . . . .”
¶25 Based on the foregoing, we conclude that the construction lien
in question contained all of the information required by the
relevant construction lien provisions. Further, the procedure to
which Kylanne and the Respondents were subjected served the
notification purpose referenced above. The Waldhers have not met
their burden of establishing that the District Court entered
clearly erroneous findings or misinterpreted the law. As such, we
conclude that the District Court did not err when it declared the
construction lien valid and enforceable.
ISSUE THREE
¶26 Did the District Court err in awarding a money judgment in favor of Earthworks West,
Inc.?
10
¶27 The Waldhers contend that they agreed to pay approximately $2500 for the
installation of utilities. As for the remaining work, building the road and pad, the Waldhers
insist that the parties contemplated a fixed rate of $2000. The Respondents agree with the
Waldhers regarding the charge for the utilities. However, the Respondents maintain that the
remainder of the work was to be charged on an hourly basis. The District Court found that
the “labor, services, materials, and equipment were provided by way of a verbal and implied-
in-fact agreement based upon time and cost of same . . . .” The Waldhers argue that the
District Court’s “findings are clearly erroneous, and this Court must conclude that they are
not supported by substantial evidence.”
¶28 As indicated above, § 71-3-523, MCA, provides that “[a] person
who furnishes services or materials pursuant to a real estate
improvement contract may claim a construction lien . . . to secure
the payment of his contract price.” Clearly, the parties' dispute
in this case revolves around the purported “contract price.” At
trial, the Waldhers presented evidence in support of their $2000
contention. Conversely, the Respondents presented evidence in
support of their hourly basis fee arrangement.
¶29 It is within the province of the finder of fact to weigh the
evidence presented and determine the credibility of the witnesses;
in the event of conflicting evidence on factual issues, the trier
of fact determines which will prevail. State v. Weitzel, 2000 MT
86, ¶ 20, 299 Mont. 192, ¶ 20, 998 P.2d 1154, ¶ 20. Although the
parties presented conflicting evidence regarding the contract
price, there is certainly sufficient evidence in the record to
support the District Court’s “hourly basis” determination.
11
However, once the District Court determined that the agreement
contemplated an hourly basis fee arrangement, the court still had
to determine whether the alleged costs of the services rendered
were reasonable given the verbal agreement’s silence on the issue.
¶30 Section 71-3-522(3)(b), MCA, provides that “[i]f no price is
agreed upon by the contracting parties, the contract price means
the reasonable value of all services or materials covered by the
contract.” Further, § 71-3-524, MCA, provides in pertinent part:
(1) A lien for furnishing materials arises only if:
. . . .
(b) the materials are:
. . . .
(iv) tools, appliances, or machinery used on the
particular improvement. However, a lien for supplying
tools, appliances, or machinery used on the improvement
is limited as provided by subsection (3).
. . . .
(3) A lien arising for the supplying of tools,
appliances, or machinery under subsection (1)(b)(iv) is
limited as follows:
(a) if they are rented, the lien is for the
reasonable rental value for the period of actual use,
including any reasonable periods of nonuse provided for
in the rental contract . . . .
¶31 In an apparent effort to reduce costs on the improvement
project, Kevin Waldher used Sandelin’s loader, with his permission,
to perform some of the necessary work. Therefore, the construction
lien not only included the hourly fee for the work performed by the
Respondents, but also included a rental value for Kevin’s use of
the loader. Upon consideration of all of the evidence submitted at
trial, the District Court found that the construction lien
12
contemplated “the reasonable value of the labor, services,
materials, and equipment provided by Plaintiffs to
Defendants . . . .” We conclude that there is sufficient evidence
in the record to support this finding. Therefore, we hold that the
District Court did not err when it entered judgment for the
Respondents in the amount of $11,235.79.
¶32 Affirmed.
/S/ JIM REGNIER
We Concur:
/S/ KARLA M. GRAY
/S/ TERRY N. TRIEWEILER
/S/ PATRICIA COTTER
/S/ W. WILLIAM LEAPHART
/S/ JIM RICE
13
Justice James C. Nelson concurs and dissents.
¶33 I concur in the Court's resolution of Issue 1. I dissent
with respect to the Court's resolution of Issue 2. I concur in the
result of Issue 3, but not in the analysis. Since this opinion
will not be published and may not serve as precedent, my dissenting
opinion will be brief.
¶34 As observed by the majority, our decision in Swain v.
Battershell, 1999 MT 101, 294 Mont. 282, 983 P.2d 873, requires
that we strictly construe the procedural requirements of the
construction lien statutes. That obligation, in my view, should
dispose of Issue 2 in favor of the Waldhers. The construction lien
at issue here--a "fill in the blanks" form--was void on its face as
a matter of law.
¶35 It is undisputed that the lien claimant, Kylanne
Sandelin, furnished no services or materials to nor did she have
any claim against the Waldhers. Thus, she could not be the lien
claimant under and as required by §§ 71-3-523, MCA, and 71-3-
535(3)(a), MCA. Yet, it was Kylanne Sandelin individually who
signed the lien. She did not sign the lien in any sort of a
representative capacity on behalf of Earthworks West, Inc., or for
Jay Sandelin as required by §§ 70-21-203, 1-5-602(2), and 1-5-
610(2), MCA. Indeed, she is not even named as a plaintiff in the
suit brought to foreclose the lien. In short, no construction lien
was filed of record by or on behalf of Earthworks West Inc., or Jay
Sandelin, the plaintiffs in the foreclosure suit.
14
¶36 Moreover, § 71-3-535(2)(b), MCA, requires that the lien
claimant certify to the county clerk and recorder that a copy of
the lien has been served on the owner of record of the property
named in the lien. Section 71-3-534(2), MCA, requires that the
county clerk not file the lien unless this certification by the
lien claimant is attached. The construction lien at issue here
contains no such certification. Kylanne Sandelin certifies that
she served herself; but the lien completely fails to contain the
statutorily required certification that she served the owner of
record. The county clerk erred in even filing the purported lien.
¶37 These are just two of the procedural flaws in the construction
lien. The Waldhers detail more in their briefs on appeal. It has
long been a fundamental principle of the law of Montana that a
construction lien is perfected only after full compliance with the
lien statutes. Varco-Pruden v. Nelson (1979), 181 Mont. 252, 255,
593 P.2d 48, 49-50 (citation omitted). Suffice it to say that,
here, there was not even minimal, much less full compliance with
the lien statutes. The two failures mentioned above are enough to
defeat the claim that a construction lien was perfected by
Earthworks West, Inc., and by Jay C. Sandelin.
¶38 As to Issue 3, I concur in the result. I do not agree with
the majority grounding its decision in the construction lien
statutes, as there was, in my view, no construction lien. While
Earthworks West, Inc., and Jay C. Sandelin may well have been
entitled to damages on a contract or quantum meruit theory, they
certainly were not on the basis of a construction lien.
15
¶39 I would reverse on Issue 2 and award the Waldhers their costs
and attorney fees under § 71-3-124(1), MCA, for defeating the
construction lien. I dissent from our failure to do so.
/S/ JAMES C. NELSON
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Earthworks v. Waldher
Combined Opinion