Price Building Service, Inc. v. Holms

                               No. 83-533

            IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1984



PRICE BUILDING SERVICE, INC   .,
                        Plaintiff and Respondent,


A. J. HOLMS, and PHYLLIS C. HOLMS,
his wife, ALLAN G. IIOLMS and
MARILYN HOLMS, his wife, et al.,

                        Defendants and Appellants.




APPEAL FROM:   District Court of the Fourth Judicial District,
               In and for the County of Missoula,
               The Honorable John S. Henson, Judge presiding.

COUNSEL OF RECORD:

      For Appellants:

            Datsopoulos, MacDonald     &   Lind; Edward A. Murphy,
            Missoula, Montana

      For Respondent :
            Snavely and Phillips;      Robert J. Phillips, Missoula,
            Montana


                                                                     ---
                                Submitted on Briefs:    April 26, 1984
                                               Decided: January 4, 1985




                                                       -
                               Clerk
Mr. Justice Daniel J.        Shea delivered. the Opinion of the
Court.


        The defendants A. J. Holms, Phyllis    C.   Holms, Allan G.
Holms and Marilyn Holrns, who are the contract owners and
lessors of land and a commercial building, and Harol-d Rhines,
James L. Rhines, and Gloria Rhines, who are the lessees of
land and a commercial building, known as Sound West, appeal a
judgment of the Missoula County District Court foreclosing a
mechanics lien in favor of plaintiff, Price Building Service,
the contractor who extensively remodeled the building on the
land.     Price Building Service (the contractor) cross-appeal s
from the judgment, the effect of which was to deny recovery
for prejudament interest and attorney fees.          We affirm the
judgment directing foreclosure of the mechanic's lien and
reverse the judgment on interest and          attorney   fees, and
remand for a determination of the interest and attorney fees.
    Defendants raise five issues, the first two involving
the technical sufficiency of the mechanic's lien.            First,
they contend that the lien is deficient because although it
contains a legal description of the land, it fails to de-
scribe the building itself.      Second, they contend the lien is
d-eficient because it fails to correctly identify either the
lessors or lessees as the owners of the property to which the
lien attached.     Third, the lessors contend that although the
contractor was not a party to the agreement, the lessors
agreed    with   the   lessees to   pay   for improvements up    to
$25,000.00 and that the contractor cannot recover any more
from the lessor.       Fourth, one of the lessees, Harold Rhines,
contends that the trial court erred in holding that he and
the other lessees were partners, and therefore that Rhines is
liable as a partner.       Fifth, the lessors argue that the trial
court erred in refusing to admit for general evidentiary
purposes two exhibits prepared with the objective of showing
the actual value of the remodeling work performed by the
contractor.
       In April, 1973, under a contract for deed, the Holms'
purchased portions of several lots and a commercial building
on those lots.        Four months later, in August 1973, the Holms'
in turn leased this property and a building, to Harold Rhines
and his son, James L . Rhines, and daughter-in-law, Gloria A.
Rhines.       The lease contained an option to purchase and also
contained a stipulatj-on that the Holms as lessors would pay
the first $25,000.00 of anticipated remodeling expenses and
the Rhines' as lessees, would pay all remodeling expenses
beyond $25,000.       The buildinq was to be extensively remodeled
to house what is known as Sound West, a retail stereo equip-
ment store.        The parties, by oral contract, and without
asking for a formal bid, employed Price Building Service to
do the remodeling work.
       The contractor started work in late August, 1 - 9 7 3 , and
finished it during the week ending January 2, 1974.              Before
the work was completed, the contractor became concerned over
payment of the bill, and Harold Rhines assured the contractor
that    the    bill    would   be   paid   when   the   remodeling   was
completed.
       When the remodeling was completed the contractor submit-
ted a bill for $55,579.12.           Two months later, on March 26,
1374, after the lessors and lessees had not paid anything on
the bill, the contractor filed a mechanic's lien on the
property.       In describing the property, in addition to the
legal description, the lien referred to           ". . .   that certain
building and improvements erected upon" the described proper-
ty.   In addition, along with the formal lien, was filed a
statement of account for "Sound West," the name of the busi-
ness operating from the remodeled building.
      Six or eight months after the contractor filed the
mechanic's lien, the Holms paid $22,000.00 to the contractor,
but that is all.    In September, 1974, after the mechanic's
lien had been filed, James L. and Gloria A. Rhines exercised
their option to purchase the property, subject of course, to
the contractor's mechanic's lien.   They signed a contract for
deed with the Holms'.      Harold Rhines, the father of James
Rhines, provided the financing for James and Gloria Rhines to
purchase the property.
      The case finally went to trial on the lien foreclosure
action, and the Holms' and Rhines defended in part on the
ground that the contractor had not performed according to
requirements and therefore that the property was in some
respects, defective.     As part of the defense the Holms' and
Rhines' offered in evidence two documents that consisted of
construction estimates or bids prepared according to the
remodeling plans, and figured in 1983 dollars, rather then in
1973 dollars when the remodeling was done.      Witnesses who
prepared those bids for purpose of trial testified that the
bids did not include all of the ma-terials and labor provided
by the contractor in actually doing the remodeling.        The
defendants also did not lay proper foundation concerning the
inflation rate between 1973 and 1983--a ten year span.    The
trial court refused one exhibit and admitted one for the
Limited purpose of showing the kind and quantity of materials
necessary to perform the remodeling.
       The trial court ordered foreclosure of the lien in the
amount of $33,579.12, but also ordered this amount to be
offset in the sum of $2,740.00 for defects in the contrac-
tor ' s performance.   The judgment failed to incl-ude prejudg-
ment   interest and    attorney   fees, and   attorneys   for the
contractor moved to amend the findings and conclusions to
include these items.       The trial court, however, failed to
rule on this motion within the time requirements specified by
Rule 59(d), M.R.Civ.P.,    and the motions were therefore deemed
denied.    Although the trial court had no authority to do so
because of the operation of Rule 59, the court amended the
judgment to include prejudgment interest a-nd attorney fees.
For purposes of appeal we therefore treat the motion to amend
the findings and conclusions as being denied, and we consider
this issue as part of the contractor's cross-appeal.
       The lessors and lessee's first attack the validity of
the mechanic's lien by contending that it failed to describe
the building and instead merely described the land.       But that
is not the case.       The lien specifically referred to the
building on the land, and the evidence disclosed that only
one buil.ding was on the land, the one on which the contractor
performed the work.       Clearly this would enable one familiar
with the locality to point the building out as the one corre-
sponding to the description contained in the lien.          Under
Varco-Pruden v. Nelson (1979), 181 Mont. 252, 593 P.2d         48,
this was    sufficient.     Furthermore, under our holding in
General Electric Supply Company v. Bennett, (Mont.. 1981) 626
P.2d 844, 38 St.Rep. 553, the statement of account filed with
the lien, and referring to "Sound West.," would leave little
doubt as to the building referred to.
                                                                       CORRECTION. In preparing this opinion for pub-
       Hon. D a n i e l J . S h e a                                    lication, we noted in our verification of titles and
       J u s t i c e , Supreme C o u r t                               citations the matters listed below. Corrections have
       Room 414 J u s t i c e B u i l d i n g                          been made on our copy of the opinion.
       215 N o r t h S a n d e r s
       H e l e n a , Montana 59620



               F e b r u a r y 6 , 1985

               P r i c e B u i l d i n g S e r v i c e , I n c . v . Holms, No.     83-533,         Jan.       4, 1985



    P a g e 6 , l i n e 8 f r o m b o t t o m --- Montana Farm S e r v i c e Co. v . M a r q u a r t
            s h o u l d r e a d Montana Farm S e r v i c e Co. v . M a r q u a r t .
  4 P a g e 11, l i n e 6 f r o m b o t t o m --- 94 Mont. - s h o u l d r e a d 94 Mont. -.
                                                              97                                57

    P a g e 1 3 , l i n e 6 --- 1 0 8 Mont. 97, 20 P.2d 622 s h o u l d r e a d 1 0 8 Mont. -,
                                                                                            57
            90 P . 2 d 4 8 9 .
--q P a g e 15, l i n e -      --- - P.2d 4 5 5 s h o u l d r e a d 506 P . 2 d 4 5 5 .
                                   406

-.-/   Page 16, l i n e 10       ---      § 71-13-124
                                               -          s h o u l d r e a d § 71-3-124.
                                                                                   -
-J     Page 16, l i n e 11       ---      1 7 1 Mont. - s h o u l d r e a d 1 7 1 Mont.
                                                      382                                               383.

                                                                        WEST PUBLISHING COMPANY
                                                                                       Box 43526
                                                                                  St. Paul, M N 55164
        The     second         attack      on    the     validity        of     the    lien     is   a

contention           that the contractor failed t o correctly identify

e i t h e r t h e Holms' o r t h e R h i n e s ' a s t h e owners o f t h e p r o p e r -

t y t o which t h e l i e n a t t a c h e d .            A s t h i s Court held i n Blose

v.   Havre O i l and Gas Cornpany                    ( 1 9 3 4 ) , 96 BKont. 450,          3 1 P.2d

738,    it i s i m p o r t a n t t h a t t h e l i e n i d e n t i f y t h e name o f t h e

owner a g a i n s t whose p r o p e r t y t h e l i e n i s f i l e d s o t h a t t h i r d

p a r t i e s e x a m i n i n g t h e p u b l i c r e c o r d s c a n f i n d an encumbrance

more e a s i l y .         Here t h e l i e n r e f e r r e d t o t h e H a r r i s o n s ,     from

whom t h e Holms were b u y i n g t h e p r o p e r t y ,                 and t o t h e H c l m s '

t h e c o n t r a c t f o r deed p u r c h a s e r s .        The R h i n e s '    d i d n o t have

t o b e m e n t i o n e d b e c a u s e a t t h e t i m e t h e l i e n was f i l e d t h e y

had n o t y e t e x e r c i s e d t h e i r o p t i o n u n d e r t h e l e a s e a g r e e m e n t

w i t h t h e Holms'.           The l i e n , i n r e f e r r i n g t o t h e H a r r i s o n s and

Holms' a s t h e owners o f t h e p r o p e r t y , was c o r r e c t .

        T h i r d , H a r o l d R h i n e s , a s one o f t h e l e s s e e s , c o n t e n d s h e

was n o t a p a r t n e r i n t h e Sound West e n t e r p r i s e , and t h a t t h e

t r i a l court's          f i n d i n g t h a t h e was a p a r t n e r ,        and t h e r e f o r e

l i a b l e t o t h e c o n t r a c t o r on t h e remoc7,eling c o n t r a c t , was i n

error.        One may become a p a r t n e r o f a f i r m , a s t o t h e t h i r d

p e r s o n s , b ~ i t h o u t i n t e n d i n g t o , by words spoken o r w r i t t e n o r

by c o n d u c t ,    and t h e r e b y became l i a b l e t o t h o s e who h a v e i n

good. f a i t h g i v e n c r e d i t t o t h e a c t u a l o r a p p a r e n t p a r t n e r -

ship.
                                                                 a.
           Montana Farm S e r v i c e Co. v. Mar u a r t ( 1 9 7 8 ) , 176 Mont.

3 5 7 , 578 P.2d 315.              D u r i n g c o n s t r u c t i o n , when     the contractor
e x p r e s s e d c o n c e r n o v e r t h e payment o f t h e b i l l , H a r o l d R h i n e s

p e r s o n a l l y a s s u r e d him t h a t t h e b i l l would b e p a i d when t h e

remodeling           was     completes.            Harold        Rhines         also   asked      the

c o n t r a c t o r f o r p e r s o n a l n o t i f i c a t i o n by r e g i s t e r e d m a i l when

t h e remodeling           e x p e n s e s e x c e e d e d $25,000.00.          F u r t h e r , Harold

R h i n e s s i g n e d t h e l e a s e and assumed i t s b e n e f i t s and b u r d e n s ,
i n c l u d i n g a p r o m i s e t o pay f o r any r e m o d e l i n g c o s t s e x c e e d i n g

$25,000.00         The       contractor          testifed        that      Harold        R h i n e s had

notified       him t h a t        t h e Rhj-nes would b e p a y i n g a l l e x p e n s e s

o v e r $25,000.00.              Whether o r n o t H a r o l d R h i n e s was t e c h n i -

c a l - l y a p a r t n e r of James R h i n e s , h i s words and c o n d u c t r e a -

sonably        led      the      contractor           to     believe         he    was,     and     the

c o n t r a c t o r t h e r e f o r e c o n t i n u e d t o remodel upon H a r o l d R h i n e ' s

a s s u r a n c e of    payment.          As     t o the contractor,               Harold Rhines

was     a    partner,           and      therefore          liable      on        the     remodeling

contract.

        Fourth,        t h e l e s s o r s and lessees c o n t e n d t h e t r i a l c o u r t

e r r e d i n e x c l u d i n g two b i d - s t h a t w e r e o f f e r e d t o p r o v e t h a t

the    contractor            overcharged           for     materials         and        labor.      The

c o u r t r u l e d t h e b i d s w e r e i r r e l e v a n t because they lacked t h e

proper      foundation           and w e r e       incomplete.             The w i t n e s s e s who

prepared t h e b i d s admitted t h a t t h e b i d s d i d n o t include a l l

of    the      materials           and    labor        provided         by    the        contractor.

Further,        the     lessors          and     lessees        fa-iled t o        lay     a     proper

f o u n d a t i o n a s t o t h e i n f l a . t . i o n r a t e between           197-1, when       the

r e m o d e l i n g was p e r f o r m e d and 1983, when t h e b i d s w e r e p r e -

pared.         The b i d s w e r e prepared                i n 1.983 d o l l a r s r a t h e r t h a n

1973 d o l l a r s .         One b i d was a d m i t t e d f o r t h e l i m i t e d p u r p o s e

of    showing t h e k i n d and q u a n t i t y o f m a t e r i a l s n e c e s s a r y t o

perform t h e remodeling.                      The b i d s c l e e r l y l a c k e d t h e p r o p e r

f o u n d a t i o n and were i n c o m p l e t e , and t h e t r i a l c o u r t d i d n o t

err i n e x c l u d i n g them from e v i d e n c e .
        Fifth,         the     lessors         ( t h e Holms'),       in     seeking t o          limit

t h e i r l i a b i l i t y , contend t h e y a r e l i a b l e o n l y t o t h e e x t e n t

of    $25,000.00         because         they agreed with t h e                   lessees t o pay

only     the     first        $25,000.00          remodeling c o s t s .            However,        the

c o n t r a c t o r was n o t a p a r t y t o t h i s c o n t r a c t a n d a t t h e t i m e
the work was done the lessors were the contract owners of the
property.       The judqment is against the lessors and lessees,
and the contractor can look to either or both in seeking to
satisfy the judgment.          The agreement between the lessors and
lessees on sharing improvement. costs is a matter to be set-
tled only between the lessors and lessees, as the contractor
was not a party to that contract and is not bound by its
terms.
CROSS-APPEAL
       The contractor asked the trial court to award prejudg-
ment interest based on S 27-1--211, MCA, and attorney fees
based on       S 71-3-124, MCA.         In the original findings and
conclusions, however,             for reasons unexplained, the          trial
court expressly declined to rule on these requests but sug-
gested that the contractor again raise these issues by filing
a motion to amend the findings and conclusions.              The contrac-
tor did so, but the trizl court failed to rule on the motion
within the fifteen-day cut-off limit of Rule 59, If.R.Civ.P.,
and therefore the motions were deemed denied as a matter of
law.    After it was too late to rule, the trial court did file
amended findings and conclusions, together with a memorandum
opinion, and awarded prejudgment interest and attorney fees.
Rut this order had no effect because it came after the time
to     rule    had     expired.      The   contractor,   therefore, has
cross-appealed on these issues, contending t-hat prejudgment
interest and attorney fees should be awarded.                  We aqree.
PREJUDGMENT TMTEREST
       The     contractor     originally    submitted    a   bid   in     the
$36,000.00 ran.ge; however, the construction was not based on
a    bid      price,    but   on    a   cost-plus   arrangement.         The
lessor-lessees were to pay the contractor his costs for labor
and m a t e r i a l s pl u s 12 p e r c e n t .               Throughout t h e c o n s t r u c t i o n

stages t h e contractor sent periodic statements detailing h i s

l a b o r and material. c o s t s .                 However, b e f o r e c o n s t r u c t i o n was

c o m p l e t e d , c e r t a i n c o n s t r u c t i o n c h a n g e s w e r e made.        Although

the lessor-lessees                  contended         t h e c o n t r a c t o r caused t h e need

f o r t h e changes, t h e t r i a l c o u r t found t h e y w e r e done a t t h e

r e q u e s t o f t h e lessee.            A t t h e end o f              t h e p r o j e c t i n 19?4,

t h e c o n t r a c t o r s e n t a f i n a l b i l l f o r $55,579.12.                   I t was n o t

p a i d a n d a few months l a t e r i n 1974 t h e c o n t r a c t o r f i l e d a

nechanics         lien     for      the    amount owed.                    Six t o e i g h t months
a f t e r t h e l i e n was f i l e d , t h e l e s s o r p a i d $22,000.00 on t h e

account.          When no f u r t h e r payments w e r e made by 1 9 7 5 ,                           the

contractor         filed        suit to         foreclose            on    t h e mechanics        lien.

        N o t h i n g was done on t h e s u i t u n t i l 1979 when a d e p o s i -

t i o n was t a k e n .        L i t t l e was done z f t e r t h i s a n d t h e c a s e d i d

n o t come t o t r i a l u n t i l             1983,      almost nine years a f t e r t h e

completion of t h e c o n s t r u c t i o n p r o j e c t .                  The r e c o r d r e v e a l s

t h a t t h e c o n t r a c t o r d i d n o t d i l i a e n t l y pursue h i s claim b u t

a l s o r e v e a l s t h a t t h e l e s s o r - l e s s e e s d i d n o t a s k f o r a speedy

r e s o l u t i o n of t h i s m a t t e r .        They were c o n t e n t t o l e t t h e c a s e

remain i n a c t i v e .

        The       trial          court         found           the        lessor-lessees           owed

$55,579.10,          less t h e        $22,000.00             paid        s i x months a f t e r t h e
l i e n was f i l e d , a n d l e s s $2,740.00                 f o r d e f e c t i v e workmanship.

The b a l a n c e found owing was d e t e r m i n e d t o b e s 3 0 , 8 9 3 . 1 2                     (it

should       actua1l.y         be    $30,839.12)          .       In      his   cross-appeal         the

c o n t r a c t o r c o n t e n d s t h a t u n d e r 5 27-1-211,               MCA,    he i s enti-

t l e d t o p r e j u d g m e n t i n t e r e s t on t h e $30,839.12 a t t h e s t a t u -

tory      rate      of     6    percent         (     31-1-106,            MCA) , and       that     for

foreclosure          of    the      lien       he     is entitled,              under    5 71-3-124,

MCA,    t o attorney fees.
       If a claim is certain or can be ascertained by calcula-
tion, S 27-1-211, MCA, allows prejudgment interest.           The
statute sets forth only two e:tceptional        circumstances in
which interest need not be paid.     The statute provides:
              "Every person who is entitled to recover
              damages certain or capable of being made
              certain by calculation and the right to
              recover which is vested in him upon a
              particular day is entitled also to recov-
              er interest lrom that day except during
              - -time- the debtor is prevented by
              such - as
              - - & - - - creditor from paying
              I-awor    act of the
              the -
              -    debt."      Section 27-1-211, MCA.
              (Emphasis added. )
       The   contractor primarily   argues that the    claim was
certain or capable of being made certain by calculation, and
that the right to recover vested when the final bill was sent
to the lessor-lessees.         The lessor-lessees, on the other
hand, advance several reasons to counter the contractor's
certainty argument.     In add-ition, they argue that interest
should be dj-sallowed because the contractor failed to dili-
gently prosecute his claim in court.     They argue it is unfair
to permit interest over all these years when it was the
plaintiff who failed to prosecute h i . s claim to completion.
We deal first with the failure to prosecute contention.
       The statute is clear.    If the claim is certain or can be
made certain by calculation, interest must be allowed unless
the lessor-lessees were prevented by law from paying the debt
or the contractor prevented them from paying the debt.       These
are the only conditions excusi-ng the payment of interest.
Federal Land Bank v. Green (1939), 108 Mont. 56, 67, 90 P.2d
489.   Neither of these conditions exists here.
       Nor can we accept the argument that as an equitable
matter the contractor's lack of diligence in taking the case
to trial must invalidate the operation of the prejudgment
j-nterest s t a t u t e .         T h i s i s - o n e of t h e c o n d i t i o n s which
                                              not

e x c u s e t h e payment o f           i n t e r e s t under t h e s t a t u t e .       Further-

more, t h e r e c o r d i s j u s t a s c l e a r t h a t t h e l e s s o r - l e s s e e s        did

nothing t o o b t a i n a speedy r e s o l u t i o n of t h i s m a t t e r .                     They

were i n s t e a d c o n t e n t t o l e t t h e c a s e r e m a i n i n a c t i v e w i t h t h e
result      that       they      had      the    use     of   over      $30,000.00           of    the

c o n t r a c t o r ' s money f o r a l m o s t t e n y e a r s .         Had t h e y borrowed

this      money        from       any      financial          i.nstitution,           they        most

certainly           would     have      been     paying       a    much      higher         rate     of

interest.           And by n o t p r e s s i n g t h e c a s e t o t r i a l t h e m s e l v e s ,

t h e y h e l p e d d e l a y e n t r y of judgment,          a t which t i m e a judgment

would h a v e c a r r i e d       i n t e r e s t a t t h e r a t e of         LO percent per

year     ( S 25-9-205,           MCP,),     as     opposed        to   the     1-egal. r a t e       of

i n t e r e s t here of 6 percent per year.                       They c l e a - r l y b e n e f i t e d

from t h e d e l a y o f t r i a l and d e l a y o f judgment.

        The     lessor-lessees             a l s o argue      several        factors,         which,

t h e y c o n t e n d , made it i m p o s s i b l e f o r them t o d e t e r m i n e t h e

damages        or    t h e a n o u n t owed       t o the contractor.                  It    is not

clear     whether         they     contend         any    one     of    these       factors        was

s u f f i c i e n t t o d i s a l l o w prejudgment i n t e r e s t ,          o r whether t h e

cumulative e f f e c t of t h e s e f a c t o r s r e q u i r e d a d i s a l l o w a n c e of

prejudgment i n t e r e s t .             First,     t h e y seem t o a r g u e t h a t p r e -

jud9men.t i n t e r e s t i s a l l o w e d o n l y where t h e r e i s a n a c c o u n t

s t a t e d o r where a. f i x e d c o n t r a . c t p r i c e h a s b e e n s e t f o r ful.1

performance.        They r e l y (and i m p r o p e r l y s o ) on E s k e s t r a n d v .
                                 5'
                                 &
Wunder ( 1 9 3 3 ) , 9 4 Mont.      , 20 P.2d 6 2 2 . With t h i s a s t h e i r
p r e m i s e , t h e y a r g u e t h a t p r e j u d g m e n t i n t e r e s t must h e d i s a l -

lowed h e r e b e c a u s e       t h e c o m p l a i n t was      i n s t e a d b a s e d on t h e

v a l u e of    t h e l a b o r and m a t e r i a l s p l u s 12 p e r c e n t .            They c7,o

not s a y why t h e y were u n a b l e t o d e t e r m i n e w h e t h e r t h e con-

t r a c t o r ' s h i l l f o r $55,579.12 was c o r r e c t - - a            f i g u r e found by
the trial court to be correct.             Second, they argue that their
$25,000.00 counterclaim for co~struction delay damages and
their       $7,000.00    counterclaim          for     defective     performance
damages, made it impossible for them to determine the amount
owed to the contractor.           Third and finall-y,they contend the
contractor created the uncertainty of determining the final
amount      owed     because     his    faulty       construction       created    a
continuing         fluctuation    in    the     amount     claimed      and    also
increased the amount claimed.                 They argue that uncertainty
inheres in this situation because it remained for the trial
court       to   determine     whether    the        changes   and      additional
expenses         were   caused     by     the        contractor's        defective
performance        of   by     their    constant       changes     of    the      job
specifications.
       Contrary to the lessor-lessees' assertions, Eskestrand
v. Wunder, supra, does not hold interest can be awarded only
where there is an account stated or where there is a fixed
contract price at the inception of the construction which has
not been changed.              The statute merely requires that the
damages be certain, or capable of ascertainment by calcula-
tion.    Here the contract was for costs of labor and materials
plus 12 percent.         The total of this figure was $55,579.12,
this was the bill given to the lessor-lessees, and this was
the figure which the trial court found to he correct.
       Furthermore, the dispute over part of the claim here did
not convert the contractor's claim into one on which prejudg-
ment interest would not run.             A dispute on the amount owed on
part or all of a claim in the form of a denial of part or all
of the amount owed, or in the form of a counterclaim for
construction delay and defective performance, does not trans-
form    a    plaintiff's       claim    into     one    that   does      not   bear
prejudgment interest.            It is the nature of the complaint
rather than the character of the defense that determines the
right to preiudgment interest.              City of Seattle v.   Dyad
Const., Inc. (Wash.App. 1977), 565 P.2d 423.            In fact, this
Court held in Federal Land Ea.nk v. Green (1939), 108 Mont.
                Lj   fy
          .2d 622; that the right to prejudgment interest was
not defeated where the amount stated in filing a lien was
overstated, as long as the correct amount constituting the
debt was ascertainable.           And in Farrington v. Freeman (Minn.
1959), 99 N.W.2d          388, the court held a plaintiff's claim for
prejudgment interest was not defeated because the defendant
had filed an unliquidated counterclaim for costs of remedying
defects    in   plaintiff's       work.    These cases expressly    or
impli-citly recognize that the right to prejudgment interest
should    not be          cut off by   the simple defensive move    of
claiming an offset or filing a counterclaim that directly or
indirectly creates an issue as to the amount owed.                 The
statute creating the right to prejudgment interest was not
meant to be nullified by the mere existence of such defensive
pleadings.
     The existence of a valid contest on the amount owed c a p ,
however, affect both the amount. awarded to the plaintiff on
the main debt and the amount of prejudgment interest awarded.
If the amount owed is reduced by a valid setoff or counter-
claim, interest is then normally allowed only on the balance
due after deductjons of the offsetting zmounts and payments
that may already have been made.              Hanson v. Cove11 (Cal.
1933), 24 P.2d 772.            In fact, that is what the trial court
did in this case.           Jt found the amount owed to be $55,579.12,
that S22,000.00 had already been paid, and that this amount
should be further reduced by $2,740.00 allowed for defective
performance.   As we noted before, however, the trial court's
decj-sion on the prejudgment interest question came too late
to constitute a decision favoring an allowa.nce of prejudgment
interest.
     The prejudgment interest statute, in existence since
1895, merely sets forth a broad area in which the 1-eqislature
has determined prejudgment interest should be allowed as a
matter of right with the exception that it need not be paid
if a law has prevented the debtor from paying the debt or if
the creditor has done something to prevent the debtor from
paying the debt.    It is merely part of the l.aw of damages
that has, as its objective, that of making the injured person
whole.
     Though the statute also reauires the amount to be cer-
tain or determinable by calculation, when considered with the
other statute vesting discretionary power in the t.rier of
fact to award prejudgment interest in almost all other situa-
tions ( 5 27-1-212, MCA) , it is clear that the legislature
intended prejudgment interest under S 27-1-211, MCA, to be
the rule rather than the exception.    Section 27-1-212, on the
other ha.nd, deals with an award of prejudgment interest in
a l l - si-tuations "not arising out of contract."   It provides:
            "In an action for the breach of an obli-
            gation not arising from contract - -
                                               a.nd in
            every ca-se       oppression, fraud, -  or
            malice. interest - be aiven. in -
                               mav                 the
            discretion - - jury.
                        of the          This section
            does not apply in actions for recovery of
            damages arising from injury to a person
            or property brought against a governmen-
            tal entity under Title 3 , chapter 9,
            parts 1 through 3, as amended." (Empha-
            sis added.)
     This statute clearly permits an award of prejudgment
interest in al-most all other cases, but it requires the
discretion of the jury or the judge if tried to the court.
Tn contrast, 5 27-1-211, MCA, is not a discretionary statute.

Rather, it mandates interest as long as the legal situation
fits within the broad quidel-ines of the statute.             Determining
whether a cause of action fits within the framework of the
statute, particularly the question of whether the claim is
determined or can be determined by calculation, is not always
an easy one.       However, the overriding purpose of the statute
can be best preserved if it is remembered that its purpose is
to fully compensate the injured party for the loss of use of
his money during the period j n which a valid claim was not
paid.     We believe, as did the court in Mitchell v. Flandro
                   p&t.
(Idaho 1972),             P.2d   455, that the objective of        fu1l.y
compensating the       injured party, and      that      is the primary
objective of the prejudgment interest statute, should predom-
inate over other equitable considerations.               If the legisl-a-
ture has chosen to provide a right to prejudament interest
( 5 7 - 1 - 2 1 ) , the primary    objective of the courts, where
possible, should be to award prejudgment interest.
        The statutory policy favoring an award of prejudgment
interest to a plaintiff whose claim falls within the hroad
framework of   §   27-1-211 does not result in an iniustice to a
defendant who has valid          reason for not paying the entire
claim, and who must resort to the courts to present his
reason for not paying the entire claim.             If the trial court
reduces the plaintiff's claim because of' a valid offset or
counterclaim       that    can    be   determined       by   calculation,
prejudgment interest would be permitted under S 27-1-211.             On
the other hand, if the setoff or counterclaim cannot be
d-etermined by      cal.culation, it still may          be   such that a
defendant may be awarded interest under             $   27-1-212, in the
discretion of the judge or jury.         An award of interest under
either S 27-1-211 or 27-1-212 would further reduce the amount
the plaintiff b~ould be ultimately awarded and would more
nearly approximate a fair resolution of the controversy in
recognition of a defendant's right to assert an offset or
counterclaim.        It may lead to a speedier resolution of a
controversy if a plaintiff knows that a valid offset or
counterclaim may al.so bear prejudgment interest.
ATTORNEY FEES
     The request for attorney fees in the J j e foreclosure
                                           ..n
is based on statute, S 7143-124, MCA.                 In     atz zinger   v.
Remco, Inc. (1976), 171 Mont. z ? 5 5 8           P.2d 650, this Court
held that the statute mandates an award of attorney fees to a
cLeimant     whose    lien   is   successfully     established.           The
lessor-lessees do not argue otherwise.           As we have previously
indicated, the trial court's ruling awarding attorney fees
came too late to constitute part of a judgment favoring
attorney fees, and therefore the plaintiff has filed his
cross-appeal.        The statute is clear, and it applies here.
Plaintiff is entitled to an award of attorney fees.
DISPOSITION
     In      summary,   we   affirm   the   judgment       forecl.osing a
mechanic's lien in the amount of $33,579.12, Less the offset
of $2,740.00 for defective performance.           We reverse the order
denying prejudgment interest and a.ttorney fees.            We remand to
the District Court for a hearing on the interest to be award-
ed and the attorney fees to be awarded.             Plaintiff is enti-
tled to prejudgment interest on the $33,579.12 net amount
found to be due.        However, the trial court must also deter-
mine,   in    his discretion, whether       the    lessor-lessees are
entitled to prejudgment interest on the $2,740.00 offset for
defective performance.
       The t r i a l c o u r t a l s o found t h a t t h e l e s s o r i s n o t p e r -

s o n a l l y 1 i a b l . e beyond t h e $25,000.00 a g r e e d t o , and a l t h o u g h

t h i s i s s u e i s n o t o n a p p e a l a s s u c h , we a f f i r m t h i s h o l d i n g

so   that     the    parties      are    s u r e of    their      rights     during      the

f u t u r e proceedings i n t h e t r i a l c o u r t .

       We    affirm      in   part,      reverse      in    part,     and    remand      for

f u r t h e r proceedings c o n s i s t e n t with t h i s opinion.




W Concur:
 e




     Chief J u s t i c E