November 4 2010
DA 10-0097
IN THE SUPREME COURT OF THE STATE OF MONTANA
2010 MT 231
LARRY DIMARZIO,
Plaintiff and Appellant,
v.
CRAZY MOUNTAIN CONSTRUCTION, INC.,
a Montana corporation, F. L. DYE COMPANY,
a Montana close corporation, BRIDGER GLASS
& WINDOWS, INC., a Montana corporation,
Defendants, Appellees and Cross-Appellants.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and For the County of Gallatin, Cause No. DV 04-596
Honorable Mike Salvagni, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
John M. Kauffman, Kasting, Kauffman & Mersen, Bozeman, Montana
For Appellees:
William A. D’Alton, D’Alton Law Firm, Billings, Montana
(Crazy Mountain Construction, Inc.)
Edward J. Guza, Guza, Williams & Nesbitt, Bozeman, Montana
(F.L. Dye Company)
Submitted on Briefs: September 15, 2010
Decided: November 4, 2010
Filed:
__________________________________________
Clerk
Justice Michael E Wheat delivered the Opinion of the Court.
¶1 Plaintiff Larry DiMarzio (DiMarzio) appeals from a jury verdict from the Eighteenth
Judicial District, Gallatin County, finding he breached his contract with both Defendants
Crazy Mountain Construction, Inc. (“CMC”) and F.L. Dye Company. The jury also found
CMC was negligent in its work for DiMarzio and awarded damages to DiMarzio. DiMarzio
also appeals certain evidentiary rulings. CMC cross-appeals the denial of most of its
attorney’s fees. F.L. Dye cross-appeals the denial of prejudgment interest. We affirm.
BACKGROUND
¶2 DiMarzio wanted to add a new kitchen and a glass atrium to his home in Bozeman,
Montana, and hired CMC as a general contractor for the project on May 14, 2003. F.L. Dye
was hired to install the air conditioning and humidification systems at DiMarzio’s home.
During the course of the project, disputes arose between DiMarzio, CMC, and F.L. Dye
about the quality of the work and air conditioning and humidification systems. These
disputes resulted in the termination of the business relationships between CMC, F.L. Dye,
and DiMarzio in the spring of 2004.
¶3 In October 2004, DiMarzio filed suit against CMC and F.L. Dye. 1 In his Amended
Complaint, DiMarzio alleged CMC was negligent and breached its contract with him by
failing to perform its work in a workmanlike manner and by its failure to properly supervise
subcontractors, including F.L. Dye. DiMarzio alleged F.L. Dye was negligent in the design
and installation of the air conditioning and humidification systems. CMC filed a counter-
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DiMarzio also sued Bridger Glass & Windows, Inc. and S.L. Pynn Plumbing & Heating. They
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claim against DiMarzio for breach of contract. F.L. Dye filed a counter-claim against
DiMarzio for breach of contract and unjust enrichment.
¶4 Pursuant to the District Court’s scheduling order, DiMarzio timely filed the expert
disclosure of Kevin Amende. In June 2007, nearly six months after the District Court’s
expert disclosure deadline, DiMarzio filed what he titled a “Supplemental Expert Disclosure”
of William Lynch. F.L. Dye moved to strike the supplement as untimely (after the disclosure
deadline) and because it was filed without leave of court (the disclosure was not made
pursuant to a motion). DiMarzio responded that new information had been discovered and
he was required to supplement, and that since there was no trial date, final pretrial order, or
mediation, F.L. Dye was not surprised or prejudiced. DiMarzio also moved the District
Court to amend the scheduling order to permit him to use Lynch at trial.
¶5 In a November 21, 2007, order, the District Court denied DiMarzio’s request to
amend the scheduling order, reserved judgment on the motion to strike, and offered to
consider whether Lynch could testify to new matters as a rebuttal witness.
¶6 In response to the District Court’s invitation, DiMarzio moved to substitute Lynch for
Amende because Amende developed a conflict with DiMarzio and refused to testify at trial.
On February 15, 2008, the District Court issued an order refusing to substitute Lynch for
Amende and precluding DiMarzio from calling Lynch during his case in chief, but allowing
DiMarzio to call Lynch as a rebuttal witness.
are not part of this appeal.
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¶7 On May 13, 2009, DiMarzio again moved the District Court for an order allowing him
to call Lynch during his case in chief. The District Court was not persuaded to alter its prior
ruling and DiMarzio’s motion was again denied by order dated June 26, 2009.
¶8 The case was tried before a jury from August 25, 2009, through September 1, 2009.
The jury found as follows:
On DiMarzio’s claims: CMC did not breach the contract, but CMC was negligent
and awarded DiMarzio $7,902.44. F.L. Dye was not negligent;
On CMC’s counter-claims: DiMarzio breached the contract and awarded CMC
$5,361.78;
On F.L. Dye’s counter-claims: DiMarzio breached the contract and awarded F.L.
Dye $10,740.00, but DiMarzio was not unjustly enriched.
¶9 After the verdict, CMC requested attorney’s fees and F.L. Dye requested prejudgment
interest. The District Court awarded CMC attorney’s fees for time spent on the contract
claim only. CMC appeals from this order. The District Court denied F.L. Dye’s request for
prejudgment interest, concluding F.L. Dye’s right to damages did not vest until the jury
returned its verdict as to whether a contract existed between F.L. Dye and DiMarzio. F.L.
Dye appeals from this order.
¶10 We restate the issues as follows:
¶11 DiMarzio raises the following issues on appeal:
¶12 Issue 1: Did the District Court abuse its discretion when it refused to allow DiMarzio
to call William Lynch as an expert during his case in chief?
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¶13 Issue 2: Did the District Court err when it denied DiMarzio’s motion for directed
verdict and allowed the jury to consider whether a contract existed between DiMarzio and
F.L. Dye?
¶14 Issue 3: Did the District Court err in instructing the jury?
¶15 CMC raises the following issue on cross-appeal:
¶16 Issue 4: Did the District Court err in denying most of CMC’s attorney’s fees?
¶17 F.L. Dye raises the following issue on cross-appeal:
¶18 Issue 5: Did the District Court err when it denied F.L. Dye’s request for prejudgment
interest?
STANDARDS OF REVIEW
¶19 The district court’s ruling on the admissibility of expert testimony is reviewed for an
abuse of discretion. Sunburst School Dist. No. 2 v. Texaco, Inc., 2007 MT 183, ¶ 68, 338
Mont. 259, 165 P.3d 1079 (citing State v. Vernes, 2006 MT 32, ¶ 14, 331 Mont. 129, 130
P.3d 169).
¶20 The denial of a motion for directed verdict is reviewed de novo. Tacke v. Energy
West, Inc., 2010 MT 39, ¶ 16, 355 Mont. 243, 227 P.3d 601; Tucker v. Farmers Ins. Exch.,
2009 MT 247, ¶ 23, 351 Mont. 448, 215 P.3d 1.
¶21 The giving of jury instructions is reviewed for an abuse of discretion. Vincent v.
BNSF Ry. Co., 2010 MT 57, ¶ 14, 355 Mont. 348, 228 P.3d 1123; Edie v. Gray, 2005 MT
224, ¶ 12, 328 Mont. 354, 121 P.3d 516.
¶22 The award of attorney’s fees is reviewed for an abuse of discretion. Tacke, ¶ 17.
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¶23 The decision to grant or deny prejudgment interest is reviewed to determine whether
the district court correctly interpreted the law. Swank Enterprises, Inc. v. All Purpose
Services, Ltd., 2007 MT 57, ¶ 14, 336 Mont. 197, 154 P.3d 52.
DISCUSSION
¶24 Issue 1: Did the District Court abuse its discretion when it refused to allow DiMarzio
to call William Lynch as an expert during his case in chief?
¶25 The District Court set a deadline of December 31, 2006, for the parties to disclose
expert witnesses. DiMarzio timely disclosed expert witness, Kevin Amende. On June 20,
2007, DiMarzio filed a “Supplemental Expert Disclosure” which, in reality, disclosed an
entirely new expert, William Lynch. Amende developed a conflict with DiMarzio and
would not testify at trial; therefore, DiMarzio sought to replace Amende with Lynch.
Because of the untimely disclosure of the new expert Lynch, the District Court did not allow
DiMarzio to call Lynch in his case in chief, but allowed Lynch to testify in rebuttal.
¶26 DiMarzio alleges the District Court erred in refusing to allow Lynch to testify as an
expert in his case in chief because there was no prejudice to F.L. Dye, and DiMarzio was not
allowed to present the complete story to the jury.
¶27 The trial court is vested with great latitude in ruling on the admissibility of expert
testimony. Nelson v. Nelson, 2005 MT 263, ¶ 31, 329 Mont. 85, 122 P.3d 1196 (emphasis in
original). The district court has the authority to exclude expert testimony when the expert
witness was not properly disclosed. Id. at ¶ 32; First Citizens Bank v. Sullivan, 2008 MT
428, ¶ 29, 347 Mont. 452, 200 P.3d 39. This Court views “with favor” sanctions for failure
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to comply with the rules of discovery. Seal v. Woodrows Pharmacy, 1999 MT 247, ¶ 22,
296 Mont. 197, 988 P.2d 1230.
¶28 Absent a showing that the district court abused its discretion, this Court will not
overturn a district court’s decision on the admissibility of evidence, including expert
testimony. Nelson, ¶ 31; Sunburst, ¶ 68. A district court abuses its discretion when it acts
“arbitrarily without employment of conscientious judgment or exceed[s] the bounds of
reason resulting in substantial injustice.” Circle S Seeds of Montana, Inc. v. T & M
Transporting, Inc., 2006 MT 25, ¶ 14, 331 Mont. 76, 130 P.3d 150.
¶29 The District Court did not err when it refused to allow Lynch to testify in DiMarzio’s
case in chief. DiMarzio’s disclosure of Lynch as an expert witness was not proper as it did
not comply with the District Court’s scheduling order. The District Court did not act
arbitrarily nor did it exceed the bounds of reason. It considered the issue thoroughly and on
several occasions – in November 2007, February 2008, and June 2009. The District Court
acted within its wide discretion in precluding Lynch’s testimony during DiMarzio’s case in
chief but allowing it during rebuttal. Nelson, ¶¶ 32-34; First Citizens Bank, ¶¶ 29-32.
¶30 Issue 2: Did the District Court err when it denied DiMarzio’s motion for directed
verdict and allowed the jury to consider whether a contract existed between DiMarzio and
F.L. Dye?
¶31 The jury found that DiMarzio had a contract with F.L. Dye regarding the air
conditioning and humidification systems, and that DiMarzio breached that contract.
DiMarzio maintains it was CMC who was responsible for hiring all subcontractors, such as
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F.L. Dye, and any contract was between CMC and F.L. Dye. He alleges that all billing went
through CMC and that he paid CMC for F.L. Dye’s work.
¶32 F.L. Dye contends that the contract was with DiMarzio. At trial, F.L. Dye’s
representative, Schaeffer, testified that the contract was with CMC. CMC’s representative,
Keyes, testified that CMC hired F. L. Dye. However, F.L. Dye also introduced evidence that
it presented DiMarzio with an offer to install the air conditioning and humidification systems
and that DiMarzio accepted by signing two proposals. Additionally, there was evidence that
DiMarzio contacted F. L. Dye personally to discuss F. L. Dye’s ongoing work on the project.
¶33 DiMarzio moved for a directed verdict on the issue of whether a contract existed
between him and F.L. Dye. The motion was based upon the testimony of Schaeffer and
Keyes that the contract was between CMC and F. L. Dye. The District Court denied
DiMarzio’s motion.
¶34 Motions for directed verdict are properly granted when there is a complete absence of
any evidence to warrant submission to a jury, such evidence and all inferences being
considered in the light most favorable to the party opposing the motion. Allison v. Town of
Clyde Park, 2000 MT 267, ¶ 27, 302 Mont. 55, 11 P.3d 544.
¶35 The District Court did not err in denying DiMarzio’s motion for directed verdict.
Drawing all inferences in favor of F.L. Dye, the party opposing DiMarzio’s motion, it was
proper to submit the contract issue to the jury. While Schaeffer testified the contract was
between CMC and F. L. Dye, other evidence presented supported F. L. Dye’s theory that the
contract was between it and DiMarzio, which is precisely what the jury found. Because of
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the conflicting evidence presented at trial, it cannot be said that there was a complete absence
of any evidence to warrant submitting the contract issue to the jury. The District Court
properly denied DiMarzio’s motion for directed verdict.
¶36 Issue 3: Did the District Court err in instructing the jury?
¶37 The giving of jury instructions is reviewed for an abuse of discretion. Vincent, ¶ 14;
Edie, ¶ 12. A district court abuses its discretion when it acts “arbitrarily without
employment of conscientious judgment or exceed[s] the bounds of reason” resulting in
substantial injustice. Clark v. Bell, 2009 MT 390, ¶ 16, 353 Mont. 331, 220 P.3d 650.
District courts are given “great leeway” in instructing the jury. Vincent, ¶ 14 (citing Payne v.
Knutson, 2004 MT 271, ¶ 14, 323 Mont. 165, 99 P.3d 200). In reviewing whether a
particular jury instruction was properly given or refused, we consider the instruction in its
entirety and in connection with the other instructions given and the evidence presented at
trial. Vincent, ¶ 14; Kiely Constr., LLC v. City of Red Lodge, 2002 MT 241, ¶ 62, 312 Mont.
52, 57 P.3d 836. “The party assigning error to a district court’s instruction must show
prejudice in order to prevail, and prejudice will not be found if the jury instructions in their
entirety state the applicable law of the case.” Kiely, ¶ 62.
¶38 The jury was given three instructions to which DiMarzio objects: Instruction numbers
22, 23, and 24. Instruction 22 states:
An agreement may be established by the conduct of the parties without any
words being expressed in writing or orally, if, from such conduct, it appears
that the parties mutually intended to agree on all the terms. The same
elements are essential to an implied contract as are essential to an express
contract.
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¶39 DiMarzio objected to this instruction, arguing it was unsupported by the evidence and
inconsistent with F.L. Dye’s unjust enrichment claim.
¶40 DiMarzio’s argument regarding Instruction 22 is essentially the same as his argument
regarding the denial of his motion for directed verdict. Because the evidence presented at
trial was conflicting on the issue of whether there was a contract between DiMarzio and F.L.
Dye, giving Instruction 22 was not an abuse of discretion.
¶41 Instruction 23 states:
Performance by a contractor of a construction contract in accordance with the
provisions of a contract entitles a contractor to payment from the owner.
¶42 DiMarzio objected, and argues that this instruction “unfairly prejudiced” him by
giving the jury “the incorrect impression that contractors have some higher status than
owners” in breach of contract cases.
¶43 The District Court did not err in giving Instruction 23. It was for the jury to decide
whether the contractor had performed or not, and was entitled to payment or not. The
instructions, read as a whole, adequately state the law applicable to this case. Instruction 23
favored neither party, and DiMarzio has shown no prejudice.
¶44 Instruction 24 states:
A subcontractor is a person who is hired to produce a specific result but who is
not subject to the right of control of the general contractor as to the way he
brings about that result. Generally, a person who hires an independent
contractor is not liable for his actions.
¶45 DiMarzio objected that Instruction 24 was contrary to CMC’s testimony, misleading,
and an improper comment on the evidence.
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¶46 The District Court did not err in giving Instruction 24. Conflicting evidence was
presented at trial about who hired F.L. Dye. It cannot be said, on the record before the
Court, that giving this instruction was an abuse of discretion.
¶47 Issue 4: Did the District Court err in denying most of CMC’s attorney’s fees?
¶48 After the jury returned its verdict, CMC moved for attorney’s fees claiming it was the
prevailing party. The contract between CMC and DiMarzio provided “[i]n the event any
dispute arises between the parties to this agreement, the prevailing party shall be entitled to
their costs and attorney’s fees.” The District Court determined that CMC was the prevailing
party and was entitled to attorney’s fees, but only on the contract claim. A hearing was held
December 17, 2009, to determine the amount and reasonableness of attorney’s fees related to
the contract claim.
¶49 CMC and DiMarzio agreed that it was impossible to segregate the attorney’s fees
between the contract and negligence claims. CMC argued that because it was impossible to
separate fees related to the contract claim from the negligence claim, and because CMC was
the prevailing party, it was therefore entitled to all its attorney’s fees.
¶50 However, the District Court found that because CMC’s insurer defended the action
and was only obligated to defend the negligence claim, a majority of the attorney’s fees were
for the negligence claim. Additionally, the District Court denied a majority of CMC’s
attorney’s fees on equitable grounds, stating that if CMC or its insurer recovered the
attorney’s fees, they would receive a windfall.
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¶51 CMC renews its argument on appeal, urging that because the attorney’s fees could not
be segregated between the negligence and contract claims, and because it was the prevailing
party, it should have been awarded all its attorney’s fees.
¶52 The award of attorney’s fees is reviewed for an abuse of discretion. Tacke, ¶ 17.
¶53 The District Court did not abuse its discretion when determining the amount of
attorney’s fees to award CMC. While CMC is correct that the district court is bound by the
contract between CMC and DiMarzio which entitles the prevailing party to attorney’s fees,
Doig v. Cascaddan, 282 Mont. 105, 112, 935 P.2d 268, 272 (1997), that does not mean CMC
is entitled to all attorney’s fees. The reasonable amount of attorney’s fees awarded is left to
the discretion of the district court. See Plath v. Schonrock, 2003 MT 21, ¶ 40, 314 Mont.
101, 64 P.3d 984. What constitutes reasonable attorney’s fees is for the district court to
determine under the facts of each case. Id. at ¶ 36. An award of attorney’s fees must be
based on competent evidence. Id. at ¶ 39. “In a lawsuit involving multiple claims or
multiple theories, an award of attorney’s fees must be based on the time spent by the
prevailing party’s attorney on the claim or theory under which attorney fees are allowable.”
Emmerson v. Walker, 2010 MT 167, ¶ 32, 357 Mont. 166, 236 P.3d 598.
¶54 The District Court found CMC was entitled to attorney’s fees, as required by the
contract. Then, it thoroughly considered the amount of attorney’s fees to award. It held a
hearing and considered testimony and evidence submitted by the parties. It considered the
seven Plath factors and noted that Plath allows the court to consider other factors. It found
that based upon the unique circumstances of this case (CMC’s insurer paid most of the
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attorney’s fees), it was reasonable to award only a portion of the attorney’s fees CMC
sought. The district court has such discretion - what constitutes reasonable attorney’s fees is
for the district court to determine under the facts of each case. Plath, ¶ 36. The District
Court determined that only a portion of the fees sought were reasonable. Considering all the
evidence of record, the District Court acted within its discretion in awarding partial
attorney’s fees to CMC based upon the particular circumstances of the case before it.
¶55 Issue 5: Did the District Court err when it denied F.L. Dye’s request for prejudgment
interest?
¶56 F.L. Dye sought prejudgment interest on the jury’s award of $10,740.00, the exact
amount of two unpaid invoices it previously submitted to DiMarzio. The District Court
denied F.L. Dye prejudgment interest, finding that F.L. Dye’s right to recover did not vest
until the day the jury returned its verdict. F.L. Dye appeals, arguing that its right to recover
vested on the date of the last unpaid invoice.
¶57 The decision to grant or deny prejudgment interest is reviewed to determine whether
the district court correctly interpreted the law. Swank, ¶ 14.
¶58 A party is entitled to prejudgment interest when three criteria are met: (1) the
existence of an underlying monetary obligation; (2) the amount of recovery is certain or
capable of being made certain by calculation; and (3) the right to recover the obligation vests
on a particular day. Section 27-1-211, MCA; James Talcott Constr., Inc. v. P & D Land
Enterprises, 2006 MT 188, ¶ 40, 333 Mont. 107, 141 P.3d 1200; Montana Petroleum Tank
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Release Compensation Board v. Crumleys, Inc., 2008 MT 2, ¶ 99, 341 Mont. 33, 174 P.3d
948.
¶59 A party is not entitled to prejudgment interest when the amount of that party’s
damages is uncertain or disputed. Mont. Petroleum, ¶ 99. We have consistently refused to
award prejudgment interest when the amount of damages due upon breach of contract was
not clearly ascertainable until determined by the trial court. Id. at ¶ 100.
¶60 The District Court did not err when it refused to award prejudgment interest. At issue
was first, whether a contract even existed between F. L. Dye and DiMarzio; second, if so,
whether DiMarzio breached the contract; and third, if there was a breach, whether F. L. Dye
was damaged and in what amount. Contrary to F.L. Dye’s assertion, this was not an action
for the definite unpaid balance of a contract. Until the jury returned its verdict, neither party
knew if a contract even existed, let alone a certain sum of damages. See Carriger v.
Ballenger, 192 Mont. 479, 486, 628 P.2d 1106, 1110 (1981). The District Court correctly
found F.L. Dye was not entitled to prejudgment interest.
CONCLUSION
¶61 We affirm the District Court.
/S/ MICHAEL E WHEAT
We Concur:
/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ JAMES C. NELSON
/S/ BRIAN MORRIS
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