NO. 85-227
IN THE SUPREME COURT OF THE STATE OF MONTANA
1985
GORDON JULIAN and SARA WILLIAMS
JULIAN ,
Plaintiffs and Appellants,
Defendant and Respondent.
APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas Olson, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Larry W. Moran, Bozeman, Montana
For Respondent:
Gregory 0 Morgan, Rozeman, Montana
.
Submitted on Briefs: Oct. 10, 1985
Decided: December 13, 1985
DEI; 18 1985
Filed:
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
Appellants, Gordon Julian and Sara Williams Julian,
husband a.nd wife, appeal from the order of the District
Court, Eighteenth Judicial District, County of Gallatin,
granting the motion. for summary judgment of respondent,
George Mattson.
We affirm.
The Julian's brought this action In District Court to
recover damages for defects in construction alleged due under
an oral contract to supervise construction. The District
Court denied Mattson's motion for summary judgment based upon
the statute of limitation but granted Mattson's motion for
summary judgment because the activities for which recovery
was sought in, this case arose out of the same transaction or
occurrence as that litigated in Mattson v. Julian (Mont.
A review of Mattson is required here. The facts of that
case were as follows: On June 1, 1978, Mattson, Dick Prugh
and James Lenon, doing business as Design Construction,
entered into a "cost plus" contract for the construction of a
house for Gordon Julian in Bear Canyon, Gall-atin County,
Montana.. The contract provided that the contractor would be
compensated for services at 15% of the cost of the work.
Pursuant to the written contract Design Construction
performed services, supplied materials and submitted
statements to Julian on a regular basis from July 10, 1978 to
January 5, 1979. Julian made payments of $31,636.90 out of
$38,519.23 due under the contract. After extensive efforts
by Mattson and his associates to collect the amount due, the
Julians paid $500.00 on the account on April 30, 1980,
reducing the balance to $6,382.33. After receiving no
further payments, Mattson and his associates filed their
complaint on May 14, 1981, naming Gordon Julian as defendant.
On July 15, 1981, Julian filed an answer, generally denying
the claim of work and services performed pursuant to the
contract. The answer contained no specific denial of
conditions precedent nor any statement of counterclaim.
The case was heard by the District Court without a jury
on January 6, and 17, 1983. At trial Julian presented
evidence that some of the work performed by Design
Construction was defective. Admission of the evidence was
objected to because Julian had failed to plead defects as a
defense as required by the rules of Civil Procedure. Julian
never attempted to amend his pleadings or obtain a
continuance. The District Court ruled that failure to
specifically plead defects barred evidence of defects under
the Rules.
In Mattson, we said that because Julian d-id not plead or
otherwise give notice of his defects theory prior to trial,
it was not clear whether he was attempting to prove only
failure of a condition precedent or was also seekinq
recoupment. Mattson, 678 P.2d at 657-58, 41 St.Rep. at 548.
Whether Julian's evidence of alleged defective performance
was intended to support a counterclaim or was merely
defensive did not affect the outcome of that case, because in
either case Julian failed to follow the simple pleading
procedures set forth in Rule 9 and Rule 13(a), M.R.Civ.P.
For these reasons we held that the District Court properly
refused to admit the evidence of defective performance.
In the instant case, Julian filed a complaint naming
only Mattson as defendant, averring that on July 12, 1977,
the parties had entered into a prior oral agreement for the
design of the residence in Bear Canyon. Pursuant to the oral
agreement, Ma.ttson worked on designs for Julian, billing him
for architectural design work and the preparation of an
estimate of the cost of construction. Thereafter, on June 1,
1978, Julian and Nattson, together with his partners, entered
into the "cost plus" contract for the construction of the
resid.ence which was the subject of consideration in Mattson.
The District Court granted Mattson's motion for summary
judgment in the instant case, stating:
The activities for which recovery is sought arose
out of the same transaction or occurrence as that
litigated in Mattson vs. Julian. Both parties of
this suit were parties in Mattson vs. Julian, and
the issues in this case arose out of the same
transaction which was [the] basis of Mattson vs.
Julian. Therefore, the plaintiff is precluded from
litigation of those issues.
Julian raises one issue on appeal: whether the District
Court erred in granting Mattson's motion for summary
judgment .
The crux of Julian's contention is that the District
Court improperly granted Mattson's motion for summary
judgment on grounds of res judicata. We, however, do not
find res judicata per se applicable to the instant case, but
rather, Rule 13 (a), M.R.Civ.P. It is true that in Mattson we
said that it was unclear whether Julian's evidence of alleged
defective performance was merely defensive or intended to
support a counterclaim. Mattson, 678 P.2d at 656, 41 St.Rep.
at 546. But we also said that the evidence "appeared to be
an attempt to raise a counterclaim which had not been plead."
Mattson, 678 P.2d at 657, 41 St.Rep. at 547. Julian has now
laid his cards on the table. We find that Julian's claim in
the instant case amounts to a compulsory counterclaim that
should. have been plead in Mattson. As discussed above, it
was not plead and is therefore barred. from being raised in
this action. ,
Rule 13 (a-) M. R.Civ.P., provides in part:
A pleading shall state as a counterclaim any claim
which at the time of serving the pleading the
pleader h2s against any opposing party, if it
arises out of the transaction or occurrence that is
the subject matter of the opposing pa.rty1s claim
and does not require for its adjudication the
presence of third parties of whom the court cannot
acquire jurisdiction. (Emphasis added.)
The purpose of the compulsory counterclaim rul-e is to insure
that only one judicial proceeding he required to settle all
those matters determinable by the facts or law, that is, to
bring all logically related claims into a single litigation,
thereby avoiding a multiplicity of suits. 20 Am.Jur.2d
counterclaim, Recoupment, Etc. § 15.
Julian contends that this action does not arise out of
the same transaction or occurrence, as that involved in
Mattson, because Mattson arose out of the written
construction contract between Julian and Mattson, together
with his associates, and the instant case arose out of the
prior oral agreement between Julian and Nattson. We
disagree.
This Court has defined the term transaction as:
'that combination of acts and events, circumstances
and defaults, which, viewed in one aspect, resul-ts
in the plaintiff's right of action, and viewed in
another aspect, results in the defendant's right of
action' (cite omitted), and it 'applies to any
dealings of the parties resulting in wrong, without
regard to whether the wrong be done by violence,
neglect or breach of contract.' Scott v. Waggoner
/191.4), 48 Mont. 536, 545, 139 P. 454, 456.
We find tha.t the transaction in the instant case was the
construction of Julian's residence. Therefore, al-leged
defects in either the design or construction of the building
shou1.d have been raised by Julian as a compulsory
counterclaim in Mattson, regardless of which contract the
alleged defects arose out of. In reality, the alleged
defects for which Julian was prohibited from offering
evidence in Mattson for his failure to plead are the same
alleged defects for which he now seeks recovery. Hence,
since Julian failed to plead his compul.sory counterclaim in
Mattson, he is barred from maintaining the present action
against Mattson. We hold that the District Court properly
granted Plattson's motion for summary judgment.
Julian also contends that summary jud-gmentwas improper
because the parties in Mattson and the instant case were not
the same. Rule 13 (a), M. R..Civ.P., however, required Julian
to raise any counterclaim which he had "against any opposing
party." Both Julian and. Mattson were parties to Mattson. We
therefore find Julian's contention unavailing.
Mattson raises two issues on cross appeal which we shall
not d.iscuss, the above discussion being determinative of this
appeal.
We affirm the District Court.
a I?.&
\
Justice
We Concur:
7/d~ARq
Chlef'Justice