Case Title: KOSMERL v BARBOUR

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1979-01-29T00:00:00Z

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No. 14217 IN THE SUPREME COURT OF THE STATE OF MONTANA 1379 ALLAN J. KOSMERL, d/b/a AL I S ELECTRIC, Plaintiff and Appellant, TIMOTHY C . BARBOUR and JAMES E. NELSON, d/b/a T.J.'S POOL AND GAME ROOM, Defendant and Respondent. Appeal from: District Court of the Eighth Judicial District, Honorable Truman Bradford, Judge presiding. Counsel of Record: For Appellant: Graybill, Ostrem, Warner and Crotty, Great Falls, Montana For Respondent : Alexander, Kuenning, Miller and Ugrin, Great Falls, Montana Submitted on briefs: December 20, 1978 ~ecidedfAN 2 lgfg M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. This is an appeal from a judgment on a case t r i e d i n t h e Eighth J u d i c i a l D i s t r i c t Court, Cascade County, the Honorable Truman G. Bradford, s i t t i n g without a jury. P l a i n t i f f sued on a contract f o r c e r t a i n e l e c t r i c a l work done on premises belonging t o respondents i n the amount of $1,761.25. From a judgment i n favor of defendant-respondents, p l a i n t i f f appeals. Respondents Barbour and Nelson formed a partnership and leased a building t o house a business called T J ' s Pool & Game Room. They employed a contractor, Gordon Sayler, t o undertake remodeling necessary t o transform the leased premises i n t o space s u i t a b l e f o r a b i l l i a r d and game room business. Sayler was a general contractor who had done t h i s type of work i n several other establishments i n Great F a l l s . During h i s remodeling jobs, he h i r e s labor and subcontrac- t o r s t o a s s i s t him i n the necessary a l t e r a t i o n s . Appellant, Allan J. Kosmerl, doing business a s A l ' s E l e c t r i c , was hired by Sayler t o do the e l e c t r i c a l work a t T J ' s . Testimony indicated t h a t Sayler had previously worked with A l ' s Elec- t r i c i n other remodeling jobs and t h a t t h e i r way of doing business was t h a t Sayler would pay A l ' s a t the completion of the e l e c t r i c a l job. During the course of remodeling Barbour, who managed t h e business, learned t h a t Sayler,was not making payment t o h i s employees o r subcontractors. Some of these employees threatened t o walk off t h e job and some of the subcontrac- t o r s went d i r e c t l y t o Barbour and requested t h a t he make payments t o them. Arrangements were made t o f i n i s h the job under t h i s s o r t of a f i s c a l arrangement. U p t o t h a t time Barbour had paid d i r e c t l y t o Sayler a portion of the con- t r a c t price. Thereafter, a f t e r talking t o Sayler, Barbour made payments d i r e c t l y t o c e r t a i n individuals. Sayler stayed on the job u n t i l completion, the f i s c a l arrangements being made a s above set f o r t h with c e r t a i n of the employees and subcontractors. Appellant contends t h a t , a f t e r talking t o Barbour, he f e l t t h a t Sayler would pay him. However, he a l s o f e l t t h a t under the arrangements Barbour had made t o take over the job, t h a t he would be included a s other subcontractors w e r e and be paid by Barbour. Barbour, on the other hand, t e s t i - f i e d and took the position t h a t although he paid many of the subcontractors i n f u l l , appellant had agreed t o look only t o Sayler f o r payment. A s a r e s u l t , he did not f e e l responsible f o r work done by appellant. Additionally, one month a f t e r the completion of a l l the work and nearly two and one-half months a f t e r appellant s t a t e d t h a t he understood he would look t o Barbour f o r payment, appellant submitted a b i l l t o Sayler f o r h i s ser- vices. Sayler w a s unable t o pay t h i s and appellant now looks t o Barbour and the partnership f o r payment. The issues presented f o r review are: 1. Whether t h e D i s t r i c t Court was correct i n making i t s Finding of Fact No. 3, which read: "Gordon Sayler was paid a l l moneys he had coming under h i s contract with TJ's." 2. Whether the D i s t r i c t Court was correct i n making its Finding of Fact No. 4 , which read: "Gordon Sayler hired Allan Kosmerl t o do certain e l e c t r i c work on the premises." 3. Whether the D i s t r i c t Court was correct i n making i t s Finding of Fact No. 6 , which read: "That Gordon Sayler was not the agent of T J ' s but an independent contractor." 4. Whether t h e D i s t r i c t Court was c o r r e c t i n making i t s Finding of Fact No. 8, which read: "That Defendant Barbour did not enter i n t o any separate contract with Kosmerl, did not create any estoppel which would e n t i t l e him t o payment but merely advised Kosmerl on one occasion t h a t he ought t o look o u t f o r h i s own (Kosmerl's) i n t e r e s t i n h i s dealings with Gordon Sayler." 5. Whether the D i s t r i c t Court was c o r r e c t i n making Conclusions of Law Nos. 1, 2 and 3, based on the above findings of f a c t : "1. Nelson and Barbour, d/b/a T J ' s , do not owe any money t o Kosmerl f o r work performed under the orig- i n a l contract between Kosmerl and Gordon Sayler. "2. That there i s no basis i n law f o r holding t h a t Barbour and Nelson, d/b/a T J ' s , owes any money t o Kosmerl a s a r e s u l t of the work o r i g i n a l l y contem- plated and agreed t o be performed under the Kosmerl- Sayler contract. "3. Based on the testimony of the p a r t i e s , but p a r t i c u l a r l y t h a t of the defendant Barbour it is found t h a t Barbour and Nelson, d/b/a T J ' s , owes Kosmerl the sum of One Hundred Eighty and 60/100 Dollars ($180.60) based on a new and separate agreement with Kosmerl." While f i v e issues a r e set f o r t h , the actual i s s u e before t h i s Court i s whether the t r i a l c o u r t ' s findings of f a c t , conclusions of law, and judgment a r e supported by substantial evidence. Rule 5 2 ( a ) , M.R.Civ.P., s t a t e s i n p e r t i n e n t part: "Findings of f a c t s h a l l not be s e t aside unless c l e a r l y erroneous, and due regard s h a l l be given t o the opportunity of t h e t r i a l court t o judge the c r e d i b i l i t y of the witnesses." This Court, i n describing i t s function i n reviewing findings of f a c t and conclusions of law t r i e d by a D i s t r i c t Court without a jury, set f o r t h the following i n Montana Farm Service Co. v. Marquart (1978), Mont. , 578 P.2d 315, 316, 35 St-Rep. 631, 633-34: II I . . . W e have c o n s i s t e n t l y held under such circumstances t h a t t h i s Court cannot s u b s t i t u t e i t s weighing of t h e evidence f o r t h a t of the t r i a l court. When t h e r e is a c o n f l i c t i n t h e evidence, t h e findings of t h e t r i a l c o u r t a r e presumed t o be c o r r e c t i f supported by substan- t i a l evidence.' Sedlacek v. Ahrens (1974), 165 Mont. 479, 485, 530 P.2d 424. "We have a l s o held t h a t t h e findings of t h e t r i a l court, i n a nonjury t r i a l , w i l l n o t be reversed on appeal, unless t h e r e is a c l e a r preponderance of evidence a g a i n s t t h e findings. Keneco v. C a n t r e l l , (1977), Mont. I 568 P.2d 1225, 34 St.Rep. 1 0 6 3 . . " I n defining s u b s t a n t i a l evidence t h i s Court s t a t e d i n Olson v. Westfork P r o p e r t i e s , Inc. (1976) , Mont . "Substantial evidence has been defined by t h i s Court as such as w i l l convince reasonable men and on which such men may n o t reasonably d i f f e r a s t o whether it e s t a b l i s h e s t h e p l a i n t i f f ' s case, and, i f a l l reasonable men must conclude t h a t t h e evidence does not e s t a b l i s h such case, then it is n o t s u b s t a n t i a l evidence. The evi- dence may be inherently weak and s t i l l be deemed ' s u b s t a n t i a l ' , and one witness may be s u f f i c i e n t t o e s t a b l i s h t h e preponderance of a case. ( C i t a - t i o n s omitted.)" Appellant acknowledges t h e general presumption of correctness of t h e above s t a t e d r u l e s and case a u t h o r i t y b u t argues t h e r u l i n g s made by t h e c o u r t here w e r e n o t supported by t h e evidence. W e have c a r e f u l l y reviewed each finding of f a c t set f o r t h as an i s s u e i n t h i s case and f i n d no e r r o r . I s s u e 1 is d i r e c t e d a t Finding of F a c t No. 3, i n which t h e c o u r t found t h a t "Gordon Sayler was paid a l l moneys he had coming under h i s c o n t r a c t with TJ's." Here, t h e con- t r a c t w a s f o r t h e amount of $24,000 and t h e c o u r t c o r r e c t l y found Sayler had received t h e e n t i r e sum due under t h e c o n t r a c t . P a r t of t h e payment was i n t h e form of m a t e r i a l s purchased o r salaries paid d i r e c t l y by Barbour t o subcontrac- t o r s and employees, done with S a y l e r ' s knowledge and consent. This does n o t change t h e f a c t t h a t Sayler w a s f u l l y paid f o r t h e contract, a s t h i s was an arrangement made between Sayler and Barbour when Sayler g o t i n t o f i n a n c i a l d i f f i c u l t i e s and was threatened with a walkout by both employees and subcon- t r a c t o r s . Barbour f u l l y complied with h i s p a r t of the t e r m s of the valid contract and Sayler, having received a l l sums due h i m , was the s o l e responsible party f o r paying the e l e c t r i c a l contractor's claim. Issue 2 is directed t o Finding of Fact No. 4 which found t h a t Sayler hired Kosmerl t o do the e l e c t r i c a l work. The only dispute appellant has here concerns the conversa- t i o n between Barbour and appellant concerning S a y l e r f s i n a b i l i t y t o pay. Testimony indicates t h a t Barbour t o l d appellant t h a t he did not believe Sayler would pay him and t h a t he should make c e r t a i n t h a t he received h i s money. Appellant replied t h a t he was c e r t a i n he would g e t h i s money from Sayler and t h a t there would be no problem. Appellant now argues t h a t even i f Barbour's version of t h a t conversa- t i o n i s correct, the most t h a t could be expected was t h a t he would f i r s t t r y t o c o l l e c t from Sayler. A t the time of the conversation, however, appellant understood t h a t various people had not been paid and Barbour indicated t h a t he (Barbour) would not be making any more payments and t h a t appellant should make c e r t a i n t h a t he receive payment from Sayler. The evidence c l e a r l y indicates t h a t Kosmerl looked t o Sayler f o r payment i n i t i a l l y and the court chose t o believe Barbour's r e c i t a t i o n of the conversation t o show t h a t he did nothing t o incur responsibility f o r Sayler's obligations t o appellant. The finding of f a c t of the court i n t h i s issue i s c o r r e c t based on the evidence. Issue 3 is directed a t Finding of Fact No. 6 which found Sayler t o be an independent contractor, not an agent of T J ' s . Appellant argues there were c e r t a i n isolated incidents which established the f a c t t h a t the independent contractor s t a t u s of Sayler ceased t o e x i s t when he became involved i n the f i n a n c i a l d i f f i c u l t i e s hereinbefore referred to. Appellant a l l e g e s t h a t the element of control over the work shifted t o Barbour a t t h i s point. However, there is no evidence of control over Sayler, h i s employees, o r subcon- t r a c t o r s by e i t h e r Barbour o r Nelson. Nor does appellant s e t f o r t h any authority f o r h i s proposition t h a t the inde- pendent contractor s t a t u s of Sayler was destroyed o r a l t e r e d by the financial arrangements made during the construction period. This Court recently s e t f o r t h the f a c t o r s required i n establishing an independent contractor s t a t u s . I n Sharp v. Hoerner-Waldorf Corp. & Aetna Casualty Ins. Co. (1978), Mont. , 584 P.2d 1298, 1301, 35 St.Rep. 1430, 1434, the Court, i n construing the Workers' Compensation provision i n finding an independent s t a t u s , stated: "Section 92-438.1(1), R.C.M. 1947, r e i t e r a t e s the basic t e s t i n Montana f o r determining independent contractor s t a t u s , namely, the r i g h t of control over the person doing the work involved. 'The v i t a l test i n determining whether a person employed t o do a c e r t a i n piece of work is a contractor o r a mere servant, i s the control over t h e work which i s reserved by the employer.' Kimbal v. I n d u s t r i a l Accident Board (1960), 138 Mont. 445, 449, 357 P.2d 688. 'The test t o determine whether o r not an em- ployer-employee relationship e x i s t s . . . i s the so called control t e s t . Under t h a t t e s t an individual i s i n the service of another when t h a t other has the r i g h t t o control the d e t a i l s of the individual's work.' S t a t e ex r e l . Ferguson v. D i s t r i c t Court (1974), 164 Mont. 84, 88, 519 P. 2d 151. Respondent has argued an employer must control t h e d e t a i l s of a performance before the performer i s con- sidered an employee. However, the determinative t e s t is based on the r i g h t , not j u s t the exercise, of control. Larson, Workmen's Compensation Law, Vol. l A , Sec. 44.10, p. 8-19; Ferguson, supra." Here, appellant admits t h a t Barbour did not control the d e t a i l s o r manner of h i s work. There was no direction a s t o conduct of the work. It was Sayler who was i n charge of the work and remained i n charge u n t i l the completion of the job. under these circumstances there i s no question t h a t Sayler was an independent contractor. See Kimball v. I n d u s t r i a l ~ c c i d e n t Board (1960), 138 Mont. 445, 357 P.2d 688; S t . egis Paper Company v. U.C.C. of Montana (1971), 157 Mont. 548, 487 P.2d 524. Issue No. 4 concerns Finding of Fact No. 8. The court found t h a t Barbour did not enter i n t o a separate contract with Kosmerl, did not c r e a t e any estoppel which e n t i t l e d him t o payment, but merely t o l d appellant on one occassion t h a t he should look out f o r h i s i n t e r e s t s i n dealing with Sayler. Appellant's argument i s directed t o t h e f a c t t h a t Barbour induced appellant t o continue with the e l e c t r i c wiring and by t h a t conversation directed the conduct of appellant's work. A t best, the evidence indicates t h a t appellant asked Barbour where c e r t a i n o u t l e t s should be placed. This cer- t a i n l y i s not d i r e c t i n g the actual e l e c t r i c a l supervision f o r the remodeling job. From the time the f i s c a l problems began, the evidence is c l e a r t h a t appellant was aware t h a t Sayler was not making payments t o h i s workers and t h a t respondent would not make any more payments t o Sayler. Such evidence does not show inducement on the p a r t of Barbour t o have appellant continue t h e work. Issue 5 is directed a t Conclusions of Law 1, 2 and 3. Appellant argues t h a t he completed t h e e l e c t r i c a l work a f t e r h i s conversation with Barbour and while Barbour was paying others f o r t h e i r work and t h a t respondent agreed t h a t the e l e c t r i c a l work was w e l l done and t h a t the services and materials claimed on appellant's b i l l s were performed and i n s t a l l e d . This evidence, however, does not r e f l e c t an abuse of discretion on t h e p a r t of the ~ i s t r i c t Court. he court found t h a t respondents Barbour and Nelson had con- tracted with Sayler, t h a t Sayler employed appellant and t h a t t h e r e was no relationship o r l e g a l theory which j u s t i f i e d holding respondents responsible f o r a p p e l l a n t ' s loss. Appellant's contention t h a t he completed the work and t h a t respondent Barbour was making payments t o others has no bearing on the case. It ignores the f a c t t h a t he was warned about possible nonpayment and t h a t he t o l d Barbour he looked t o Sayler a s the responsible party i n paying f o r h i s ser- vices. I n addition, there is no evidence indicating t h a t Barbour ever took over the direction of the job a s appellant a s s e r t s . Those statements a r e not supported by the record. Appellant f a i l e d i n h i s attempt t o prove by controverted evidence t h a t t h e t r i a l court erred i n its findings of f a c t and conclusions of law a s previously s e t forth. The record amply supports the findings, conclusions, and judgment of t h e D i s t r i c t Court and the case is affirmed. W e Concur: