Case Title: GYRION CONSTR CO v SANDERS

Citation: 

Docket Number: 13018

State: montana

Court: Montana Supreme Court

Date: 1975-10-20T00:00:00Z

Document:
No. 13018 I N THE SUPREME COURT OF T H E STATE Oh' M O N T A N A 1975 GYKION CONSTKUCTION CO . , . TNC. , P l a i n t i f f and Respondent, -vs - KOBEKT J. SANDERS, Defel~dant and Appellant. Appeal from: D i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t , Honorable Robert Sykes, Judge presiding. Counsel of Record: For Appellant : H. James Oleson argued, K a l i s p e l l , Montana For Respondent: Hash, J e l l i s o n and O'Brien, K a l i s p e l l , Montana Kenneth E. O'Brien argued, K a l i s p e l l , Montana Submitted: September 8, 1975 Decided : 2:; 2 0 F i l e d : I c . , e M r . J u s t i c e Gene B. Daly delivered the Opinion of t h e Court. This i s an appeal from a judgment of t h e d i s t r i c t c o u r t , Flathead County, i n favor of p l a i n t i f f Gyrion Construction Co., Inc. i n t h e amount of $1,200. O n February 1 7 , 1971, t h e residence of defendant Robert J. Sanders suffered extensive f i r e damage. Sanders' insurance agent proceeded t o a d j u s t t h e l o s s . I n view of t h e cold weather and t h e need f o r immediate r e p a i r of t h e residence, t h e a d j u s t o r contacted p l a i n t i f f , a contractor, with the consent of Sanders. O n February 18, 1971, Gyrion began r e s t o r a t i o n work on t h e Sanders home. Sanders t e s t i f i e d t h a t he was under the impression t h a t Gyrion had been h i r e d by t h e a d j u s t o r , b u t t h e d i s t r i c t court found t h a t Sanders, by allowing Gyri-on t o begin work on h i s home, had i n f a c t hired Gyrion. A t t h e time of t h e f i r e t h e Sanders home was insured f o r a maximum $20,000 f i r e l o s s . Because t h e e x t e n t of damage t o the home was unknown u n t i l torn down, no estimates were made o r r e - quested. A t the time Gyrion was employed a l l p a r t i e s believed t h e e n t i r e c o s t of r e p a i r would be under t h e maximum f i r e l o s s coverage. Gyrion agreed t o r e p a i r the f i r e damage on t h e b a s i s of c o s t of labor and materials plus 15%. It a l s o agreed t h a t Sanders could perform work on t h e residence and be c r e d i t e d by Gyrion f o r t h a t work. Sanders t e s t i f i e d t h a t a s work progressed he informed Gyrion not t o exceed t h e $20,000 l i m i t . Gyrion denied t h i s . The d i s t r i c t court made no finding on Sanders' alleged general l i m i t a t i o n of c o s t , b u t d i d find t h a t p r i o r t o the painting of t h e premises Sanders had n o t i f i e d Gyrion t h a t any painting should be done by Gyrion only i f t h e painting would come within t h e maximum coverage of t h e policy. The r e p a i r work was completed on about April 30, 1971. During the period of repairing the home Sanders on several occasions, together with h i s wife, requested information a s t o the amount and cost of t h e repairs. However Gyrion f a i l e d t o furnish any itemized l i s t or accounting of expenses u n t i l November 1971. A d r a f t from the insurance c a r r i e r i n the amount of $20,000 was delivered t o Sanders i n June 1971, who immediately endorsed it and delivered it t o Gyrion. When Gyrion f i n a l l y did send the b i l l , it exceeded the maximum insurance coverage ($20,000) i n the amount of $4,284.69. Sanders was credited with the sum of $939.55 f o r labor performed by him, and was a l s o given c e r t a i n other unspecified c r e d i t s , leaving a balance claimed by p l a i n t i f f of $2,914.71, a s due and owing over and above the $20,000 insurance coverage. The d i s t r i c t court found on a quantum meruit basis t h a t p l a i n t i f f was e n t i t l e d t o $1,200 a s t h e reasonable value of the painting, and costs. Defendant appeals and p l a i n t i f f crossappeals. A portion of the d i s t r i c t c o u r t ' s opening statement and response by both counsel defines the issue t r i e d t o the court: 4b ; k The issue t o be determined here ''THE COURT: ; k A i s whether or not any work done i n excess of the insurance coverage was by agreement and understanding of the p a r t i e s t o be covered by the f i r s insurance maximum l i m i t s , o r i f any additional amount was t o be paid by the Defendant. N o w i s t h a t a correct statement of the issues? O'BRIE'N: Your Honor, 1 believe t h a t i s a correct statement of the issues a s we discussed them, I believe, i n Chambers, t h a t there i s no quarrel a s t o the amount of work t h a t was done, the issue i s whether o r not the Defendant was l i a b l e t o pay for i t o r whether there was a $20,000 l i m i t on the sum the P l a i n t i f f was t o receive. "MR. OLESON: That i s correct, with what M r . 0 ' ~ r i e n j u s t stated. "THE COURT: Very well, l e t the record show and on t h a t b a s i s , c a l l your f i r s t witness. I t A portion of the c o u r t ' s finding of f a c t No. 3, finds: h hat p l a i n t i f f agreed t o r e p a i r said home from the f i r e l o s s on the basis of cost of labor and materials plus 15%. I' Its finding of f a c t .No. 7 . s t a t e s : I I That prior t o i n s t a l l a t i o n of c e r t a i n bathroom f i x t u r e s , and p r i o r t o the painting of said premises, the defendant had n o t i f i e d the p l a i n t i f f t h a t any painting should be done by the p l a i n t i f f only i f the same would come within the maximum coverage of said policy. 11 The c o u r t ' s finding No. 1 2 s e t s f o r t h : hat the b i l l i n g exceeded the maximum insurance coverage i n the amount of $4,284.69. That defendant was credited with the sum of $939.55 f o r work and labor performed a s carried on p l a i n t i f f ' s records. That i n addition thereto, defendant was given c e r t a i n other c r e d i t s , leaving a balance claimed by t h e plain- t i f f of $2,914.71 a s due and owing, and the amount over and above the maximum $20,000 f i r e l o s s coverage. 1' The d i s t r i c t court then made these conclusions of law: "2. That i n view of the circumstances, p l a i n t i f f and defendant did not have an express or implied con- t r a c t f o r any d e f i n i t e amount, nor could any such contract have been entered into. "3. That a l l costs i n excess of policy l i m i t s were f o r reasonable and necessary materials and labor ; but t h a t the p l a i n t i f f i s e n t i t l e d t o be paid on a quantum meruit basis. That the defendant would be unjustly enriched i f he were permitted t o enjoy the r e s u l t of a l l of such services and labor without paying a reasonable and necessary sum f o r same. That a reasonable value of the painting on a quantum meruit basis i s the sum of $2,139.55. That defendant i s e n t i t l e d t o the work and labor performed by the de- fendant f o r p l a i n t i f f of $939.55, leaving an amount due and owing p l a i n t i f f by defendant of the sum of $1,200." The p a r t i e s agree t h a t p l a i n t i f f proceeded t o work under a cost plus contract f o r material and labor plus 15%. The d i s t r i c t court so found i n i t s finding No. 3. Then, the court found i n i t s finding No. 7 t h a t p l a i n t i f f had been n o t i f i e d by defendant not t o do the painting i f it would increase the cost i n excess of policy l i m i t s . The court further found i n i t s finding No. 12 t h a t defendant had been given a l l c r e d i t s due him by p l a i n t i f f ' s records and re- duced the b i l l i n g from $4,284.69 t o $2,914.71. The amount $2,914.71 was i n excess of the policy l i m i t . The court's conclusion of law No. 2 seems t o say, i n view of the i s s u e being t r i e d , t h a t there was no top amount on the cost plus contract. The l a s t phrase of conclusion of law No. 2, a s t o the p o s s i b i l i t y of such a contract, seems t o be surplusage a s it would c e r t a i n l y have been possible t o r e s t r i c t the contract t o a t o t a l sum of $20,000. Conclusion of law No. 3 f l i e s i n the face of the findings of the court. W e cannot apply quantum meruit t o a l l costs i n excess of the insurance coverage because it has been determined t h a t the p a r t i e s have a contract [cost plus 15%] with no agreed upper l i m i t . W e cannot now imply a contract by law. A recovery I I on the theory of quantum meruit (which simply means a s much a s he deserves") i s based on a contract implied i n law o r quasi- contract. The obligation i n such a contract a r i s e s not from consent of the p a r t i e s but from the law of n a t u r a l j u s t i c e and equity, and i s based on the doctrine of unjust enrichment. Brown v. Thornton, 150 Mont. 150, 156, 432 P.2d 386. The t r i a l court found i n i t s finding No. 7, t h a t p l a i n t i f f was specifically instructed by defendant not t o paint the premises i f t h e cost would overrun the $20,000 insurance coverage. There can be no contract implied by law a s t o the painting, under the present findings of t h e t r i a l court. W e a r e unable t o determine from the record before t h i s Court t h e amount, excluding the painting, of the general contract overrun which should be paid i n f u l l by defendant. The record does not reveal whether o r not the $939.55 plus $330.43 c r e d i t s given t o defendant by p l a i n t i f f should properly be applied t o reduce t h e cost of painting o r the general construction contract, o r both. Therefore we cannot reform the judgment here. The judgment of the d i s t r i c t court i s reversed with instructions t o recalculate the amount of t h e judgment i n con- formity with t h i s opinion. This may be done by a hearing by the d i s t r i c t court or a new t r i a l , whichever i n t h e discretion of the W e Concur: Chief J u s t i c e