Title: CHANDLER v MADSEN

State: montana

Issuer: Montana Supreme Court

Document:

No. 81-265 IN THE SUPREME COURT OF THE STATE OF MONTANA SHELDON CHANDLER and MARILYN CHANDLER, husband and wife, Plaintiffs l a n d Respondents, ROBERT H. MADSEN, Defendant and Appellant. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone Honorable Robert Wilson, Judge presiding. Counsel of Record: For Appellant: Hibbs, Sweeney, Colberg, Jensen and Koessler, Billings, Montana Maurice Colberg argued, Billings, Montana For Respondents: Crowley, Haughey, Hanson, Toole & Dietrich, Billings, Montana Bruce Toole argued, Billings, Montana Submitted: December 4, 1981 Decided: nRp 1 5 @tl MAR 1 5 7982 Filed. Mr. J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. 'This appeal a r i s e s from a complaint by Sheldon and Marilyn Chandler, husband and w i f e , a g a i n s t Robert Yladsen, s e e k i n g damages f o r n e g l i g e n c e , breach of implied warranty of h a b i t a b i l i t y and s t r i c t l i a b i l i t y i n t o r t . I n A p r i l 1977, r e s p o n d e n t s , t h e Chandlers, e n t e r e d i n t o a b u y - s e l l agreement with t h e a p p e l l a n t , Madsen, t o purchase a house, b u i l t by him, a t 3203 Silverwood S t r e e t near B i l l i n g s , Montana. The agreed purchase p r i c e was $90,280, which was p a i d when t h e b u i l d i n g was t r a n s f e r r e d . A t t h e t i m e of t h i s agreement, t h e framework on t h e house was i n p l a c e , b u t t h e b u i l d i n g was n o t completed. Madsen, a c i v i l engineer working f o r t h e United S t a t e s Government, had c o n s t r u c t e d a number of b u i l d i n g s f o r s a l e on h i s own, i n c l u d i n g s i n g l e f a m i l y r e s i d e n c e s . I n t h e summer and f a l l of 1977, t h e Chandlers com- p l e t e d t h e final. landscaping of t h e l o t and i n s t a l l e d a swimming pool and s p r i n k l i n g system. I n June 1977, t h e Chandlers moved i n t o t h e house and immediately experienced problems w i t h d o o r s and windows s t i c k i n g and l o c k s f a i l i n g t o o p e r a t e . The Chandlers n o t i c e d c r a c k s i n t h e bedroom w a l l s and a hump i n t h e l i v i n g room f l o o r which was above a s u p p o r t i n g p a r t i t i o n i n t h e basement. Through h i s employees, Madsen made a d j u s t m e n t s t o t h e d o o r s , b u t t h e y continued t o s t i c k . By May 1978, a d d i t i o n a l s e t t l i n g had caused s e v e r e c r a c k s i n most rooms of t h e house, bending and bulging of t h e f l o o r s , broken windows, i n o p e r a t i v e d o o r s and door l o c k s , bowed d e c o r a t i v e room d i v i d e r s , b e n t plumbing, badly cracked basement w a l l s and f l o o r s , s e p a r a t i o n between f i r e - p l a c e masonry and t h e house s t r u c t u r e , cracked bathroom t i l e s , s e p a r a t i o n b e t w e e n b a t h t u b s and w a l l s , uneven basement f l o o r s and g e n e r a l u n s i g h t l y i n t e r i o r of t h e house. The s e t t l e m e n t developed s o t h a t p a r t s of t h e f o u n d a t i o n on t h e w e s t s i d e of t h e house were a s much a s 3 . 6 i n c h e s lower than t h e foundation on t h e e a s t s i d e . A d e p r e s s i o n e x t e n d s along t h e n o r t h end of t h e l o t i n q u e s t i o n i n an east-west d i r e c t i o n . The d e p r e s s i o n c o l l e c t s water p e r i o d i c a l l y and h a s done s o s i n c e b e f o r e t h e Chandlers took p o s s e s s i o n of t h e house. Former next- door neighbors of t h e Chandler house t e s t i f i e d v i a deposi- t i o n t h a t they had t o r e f r a i n from watering t h e i r lawn t o p r e v e n t "ponding" i n t h e d e p r e s s i o n both d u r i n g and a f t e r c o n s t r u c t i o n of t h e Chandler house and t h a t water c o l l e c t e d p e r i o d i c a l l y i n t h e d e p r e s s i o n b e f o r e any landscaping was done. According t o t h e l a n d s c a p e r , J i m S t u r n , t h e o n l y change i n grade he made near t h e n o r t h end of t h e l o t was t h e removal of some e a r t h near t h e deck, which would have tended t o improve d r a i n a g e o u t of t h e d e p r e s s i o n . Piadsen t e s t i f i e d he c r e a t e d a d e p r e s s i o n e x t e n d i n g e a s t and west t o c o l l e c t water and c o n s t r u c t e d a swale on t h e e a s t s i d e of t h e house t o d r a i n t h e a r e a . The depres- s i o n Madsen c r e a t e d was such t h a t it would be d i f f i c u l t t o observe with t h e naked eye. H e d i d n o t use any s u r v e y i n s t r u m e n t or t r a n s i t t o determine i f i n f a c t t h e a r e a would d r a i n , nor d i d he inform t h e Chandlers t h e y should proceed t o c r e a t e d r a i n a g e . The h o u s e i s l o c a t e d on m o i s t u r e - s e n s i t i v e s o i l which, when w e t , becomes compressible. The p r e s e n c e of water i n t h e s o i l caused s e t t l i n g of t h e f o o t i n g s , founda- t i o n s , and o t h e r p a r t s of t h e house which i n t u r n caused t h e e x t e n s i v e damage t o t h e s t r u c t u r e . Testimony showed an e s t i m a t e d c o s t of r e p a i r i n g t h e house was $65,000. T h i s e s t i m a t e was c a l c u l a t e d on a c o s t p l u s overhead b a s i s w i t h a 12% contingency allowance f o r c e r t a i n p o r t i o n s of t h e work. F u r t h e r testimony r e v e a l e d , however, t h a t a f i r m p r i c e c o n t r a c t f o r t h e r e p a i r would c o s t 50% more t h a n t h e e s t i m a t e , o r $97,500, c o n s i d e r i n g t h e c o n t i n g e n c i e s of t h e work. The r e p a i r s would r e q u i r e t h e Chandlers t o move o u t of t h e i r home f o r t h r e e t o four months. The c a s e was heard by t h e D i s t r i c t Court s i t t i n g without a j u r y . On January 15, 1981, t h e D i s t r i c t Court i s s u e d f i n d i n g s of f a c t and c o n c l u s i o n s of law holding Madsen l i a b l e t o t h e Chandlers on t h e t h e o r i e s of implied warranty and negligence and awarding damages of $107,462.51. Following p o s t - t r i a l motions t h e D i s t r i c t Court amended i t s o r d e r on February 26, 1981, d e l e t i n g t h e f i n d i n g of n e g l i - gence and reducing t h e damage award t o $99,975.00. The r e d u c t i o n d e l e t e d $4,000 p r e v i o u s l y awarded f o r temporary r e n t a l and $3,487.51 p r e v i o u s l y awarded f o r moving and s t o r a g e . From t h i s o r d e r , both p a r t i e s a p p e a l . The i s s u e s b e f o r e t h i s Court a r e : 1. Whether a p p e l l a n t , a s a builder-vendor of a r e s i d e n c e which he s o l d t o r e s p o n d e n t s , may be held l i a b l e t o respondents under t h e d o c t r i n e of implied warranty of h a b i t a b i l i t y ? 2. Whether t h e D i s t r i c t Court e r r e d i n n o t allowing a p p e l l a n t t o recover t h e amount claimed on h i s c o u n t e r c l a i m ? 3. Whether t h e D i s t r i c t Court e r r e d i n d e l e t i n g i t s finding that the appellant's negligence was the proximate cause of respondents' damages? 4. Whether appellant is liable unJer the doctrine of strict liability in tort? 5. Whether the District Court erred in the award of damages? IMPLIED WARRANTY OF HABITABILITY The question of the liability of a builder-vendor of a new residence to the first purchaser under an implied warranty of habitability is one of first impression before this Court. Caveat emptor, which traditionally has applied to sal.es of real estate, developed at a time when a buyer and seller were in equal bargaining positions. They were of comparable skill and knowledge and eacn could protect himself in a transaction. In the modern marketplace that equality of position no longer necessarily exists, and a growing number of juris- dictions have abandoned caveat emptor in favor of implied warranties where a builder-vendor sells a new residence. Yepsen v. Burgess (1974), 269 Or. 635, 525 P.2d 1019; Pollard v. Saxe & Yoll- Development Co. (1974), 115 = . Cal.Rptr. 648, 12 Cal.3d 374, 525 P.2d 88; Hanavan v. Dye (1972), 4 Ill.App.3d 576, 281 N.E.2d 398; Bethlahmy v. Bechtel ( 1 9 6 6 ) , 91 Idaho 55, 415 P.2d 698; Carpenter v. Donohoe (1964), 154 Colo. 78, 388 P.2d 399. We agree with the Oregon Supreme Court which stated in Yepsen that the essence of the transaction between a builder-vendor and a buyer is an implicit agreement that the s e l l e r w i l l t r a n s f e r a house which is s u i t a b l e f o r h a b i t a - t i o n . The buyer is n o t i n an e q u a l b a r g a i n i n g p o s i t i o n and is e s s e n t i a l l y f o r c e d t o r e l y on t h e s e l l e r ' s s k i l l and knowledge r e g a r d i n g t h e h a b i t a b i l i t y of t h e house. I n a d d i t i o n , t h e b u i l d e r is i n a b e t t e r p o s i t i o n t o examine and d i s c o v e r d e f e c t s . Yepsen v. Burgess, 525 P.2d a t 1022. The d o c t r i n e of c a v e a t emptor no longer s e r v e s t h e r e a l i t i e s of t h e marketplace. T h e r e f o r e , we hold t h a t t h e builder-vendor of a new home i m p l i e d l y w a r r a n t s t h a t t h e r e s i d e n c e is c o n s t r u c t e d i n a workmanlike manner and is s u i t a b l e f o r h a b i t a t i o n . Madsen a r g u e s t h a t even i f t h e implied warranty of h a b i t a b i l i t y is adopted, it should n o t apply i n t h i s c a s e because t h e d e f e c t which caused t h e damage h e r e is n o t s t r u c t u r a l b u t r a t h e r is i n h e r e n t i n t h e l a n d . I n t h i s c l a i m , Madsen r e l i e s p r i m a r i l y on B e r i , I n c . v. S a l i s h a n P r o p e r t i e s , I n c . ( 1 9 7 8 ) , 282 Or. 569, 580 P.2d 173, where t h e p l a i n t i f f s l e a s e d b u i l d i n g s c o n s t r u c t e d by t h e d e f e n d a n t on o c e a n f r o n t l o t s which s u b s e q u e n t l y began e r o d i n g . The Oregon c o u r t found an implied warranty d i d n o t apply because t h e d e f e c t - - s u s c e p t i b i l i t y t o erosion--had s o l e l y t o do w i t h t h e i n h e r e n t n a t u r e of t h e land and was n o t a product of t h e b u i l d e r ' s work on t h e land. I n B e r i , s u p r a , t h e land i n q u e s t i o n was on t h e o c e a n f r o n t where t h e p r o s p e c t of e r o s i o n should have been, i f n o t c e r t a i n , a t l e a s t e q u a l l y a s a p p a r e n t t o buyer- l e s s e e s a s t o s e l l e r - l e s s o r s . I n a d d i t i o n , t h e B e r i o p i n i o n g i v e s no i n d i c a t i o n t h a t t h e e r o s i o n was f u r t h e r e d by anything o t h e r t h a n t h e n a t u r a l a c t i o n of t h e ocean. That is n o t so i n t h e p r e s e n t c a s e . Here, t h e D i s t r i c t Court found t h e cause of s e t t l i n g damage t o t h e Chandler house was t h e presence of water i n t h e moisture- s e n s i t i v e s o i l upon which t h e house was b u i l t . The f a c t of t h e m o i s t u r e - s e n s i t i v e s o i l was n o t t h e s o l e d e f e c t . The " p o o l i n g " of water a t t h e n o r t h end of t h e house was a l s o p a r t of t h e d e f e c t i v e c o n d i t i o n . The D i s t r i c t Court a l s o found t h a t , i f water c o l l e c t e d a t t h e n o r t h end of t h e house, it d i d so b e f o r e any landscaping by t h e Chandlers and was n o t caused by t h e Chandlers. A b a s i c concern i n applying t h e implied warranty is whether t h e d e f e c t r e l a t e s e s s e n t i a l l y t o u s e f u l occupancy of t h e house. Mazurek v. N i e l s e n ( 1 9 7 9 ) , 42 Colo.App. 386, 599 P.2d 269; Yepsen, s u p r a . Sometimes a d e f e c t is essen- t i a l t o occupancy but is n o t s t r i c t l y s t r u c t u r a l . See: Yepsen, s u p r a ( d e f e c t involved improper c o n s t r u c t i o n of s e p t i c tank and d r a i n f i e l d ) ; Tavares v. Horstman (Wyo. 1 9 7 5 ) , 542 P.2d 1275 ( s e p t i c d r a i n f i e l d i n s t a l l e d i n gumbo c l a y s o it would n o t d r a i n ) ; Forbes v. Mercado ( 1 9 7 8 ) , 283 Or. 291, 583 P.2d 552 ( w e l l water unusable because of h i g h i r o n c o n t e n t ) . Madsen a r g u e s he had no reason t o s u s p e c t t h e r e was a m o i s t u r e - s e n s i t i v e s o i l which would cause s e t t l i n g . But t h a t is n o t t h e i s s u e . The concept h e r e is n o t one of f a u l t or wrong-doing b u t , r a t h e r , where one of two innocent p a r t i e s w i l l s u f f e r , which was i n t h e b e t t e r p o s i t i o n t o p r e v e n t t h e harm? Whether or n o t t h e r e was reason f o r Madsen t o s u s p e c t t h e problem, a s t h e builder-vendor he c l e a r l y was i n t h e b e t t e r p o s i t i o n t o p r e v e n t t h e problem. We, t h e r e f o r e , a f f i r m t h e D i s t r i c t Court r e g a r d i n g Madsen's l i a b i l i t y under t h e implied warranty. COUNTERCLAIM Madsen counterclaimed f o r $637 which t h e Chandlers a g r e e remained unpaid f o r s p e c i f i c " e x t r a s " completed by Madsen. 'The D i s t r i c t Court concluded t h a t Madsen was n o t e n t i t l e d t o t h e c o u n t e r c l a i m b e c a u s e o f f a i l u r e o f c o n s i d e r a t i o n . Madsen a r g u e s t h i s c o n c l u s i o n was i n c o r r e c t because t h e d e f e n s e of f a i l u r e of c o n s i d e r a t i o n was n o t a l l e g e d by t h e Chandlers a s an a f f i r m a t i v e d e f e n s e or r a i s e d i n t h e i r p r e t r i a l o r d e r and because t h e r e i s no evidence t h a t Madsen d i d n o t perform t h e work f o r t h o s e e x t r a s . F a i l u r e of c o n s i d e r a t i o n is an a f f i r m a t i v e d e f e n s e which m u s t be p l e a a a f f i r m a t i v e l y . Rule 8 ( c ) , M.R.Civ.P. I f an a f f i r m a t i v e d e f e n s e is n o t p l e a d , it is g e n e r a l l y waived. Camalier & Buckley-Madison, I n c . v. Madison H o t e l , I n c . (D.C. C i r . 1 9 7 5 ) , 513 F.2d 407. The key t o d e t e r m i n i n g t h e s u f f i c i e n c y of t h e p l e a d i n g of an a f f i r m a t i v e d e f e n s e is whether it g i v e s f a i r n o t i c e of t h e d e f e n s e . Wyshak v. C i t y N a t i o n a l Bank ( 9 t h C i r . 1 9 7 9 ) , 607 F.2d 824. Here, t h e Chandlers d i d n o t s p e c i f y t h e i r r e l i a n c e on f a i l u r e of c o n s i d e r a t i o n a s a d e f e n s e t o Madsen's counter- c l a i m e i t h e r i n t h e p l e a d i n g s or t h e i r p r e t r i a l memorandum. Sheldon Chandler t e s t i f i e d a t t r i a l t h a t among t h e items purchased f o r t h e house i n a d d i t i o n t o t h o s e included i n t h e purchase p r i c e were " e x t r a s " from Madsen. Chandler a l s o t e s t i f i e d t h a t he had p a i d Madsen $1,500 and s t i l l owed $637. The evidence does n o t s p e c i f y what " e x t r a s " were involved nor does it e s t a b l i s h t h a t t h o s e " e x t r a s " were n o t s u p p l i e d . W e f i n d t h e Chandlers' f a i l u r e t o plead f a i l u r e of c o n s i d e r a t i o n h e r e was f a t a l t o t h a t d e f e n s e , and t h e D i s t r i c t C o u r t ' s c o n c l u s i o n is unsupported by t h e e v i d e n c e . NEGLIGENCE I n its o r i g i n a l f i n d i n g s of f a c t and c o n c l u s i o n s of law t h e D i s t r i c t Court found t h a t Madsen had a r e s p o n s i - b i l i t y of p r o v i d i n g d r a i n a g e around t h e house t o p r e v e n t damage t o t h e house and t h a t Madsen n e g l i g e n t l y f a i l e d t o do s o . F u r t h e r , t h e D i s t r i c t Court found Pladsen's n e g l i g e n c e caused or c o n t r i b u t e d t o cause t h e water t o e n t e r t h e s u b s o i l and t h e house t o s e t t l e . The amended f i n d i n g s and c o n c l u s i o n s s t a t e d t h e C h a n d l e r s f a i l e d t o c a r r y t h e i r b u r d e n of p r o o f t h a t Madsen's n e g l i g e n c e was t h e proximate cause of t h e damage. The Chandlers argue t h a t given t h e D i s t r i c t C o u r t ' s f i n d i n g t h a t t h e most p r o b a b l e cause of t h e damage t o t h e house was water under t h e f o o t i n g s , t h e o n l y e x p l a n a t i o n is Pladsen's conduct. On review, t h e s t a n d a r d w e m u s t a p p l y is whether t h e D i s t r i c t C o u r t ' s c o n c l u s i o n is supported by s u b s t a n t i a l c r e d i b l e evidence and t h e law. I f s o , t h i s Court w i l l n o t d i s t u r b it. Woodahl v. Matthews ( 1 9 8 2 ) , - Mont. -, - P. 2d , 39 St.Rep. 238; Lauterjung v. Johnson ( 1 9 7 7 ) , 175 Mont. 74, 572 P.2d 511. A l t h o u g h o u r w e i g h i n g o f t h e f a c t s m i g h t h a v e r e s u l t e d i n a d i f f e r e n t c o n c l u s i o n , we f i n d t h e D i s t r i c t Court ' s f i n d i n g s and c o n c l u s i o n s r e g a r d i n g n e g l i g e n c e a r e supported by s u b s t a n t i a l evidence t h a t t h e Chandlers f a i l e d t o prove Madsen's n e g l i g e n c e . STRICT L I A B I L I T Y S i n c e w e have determined l i a b i l i t y h e r e on t h e t h e o r y of implied warranty, we f i n d it unnecessary t o d i s c u s s t h e s t r i c t l i a b i l i t y d o c t r i n e . DANAGES Macisen c l a i m s t h e D i s t r i c t C o u r t ' s f i n d i n g of t h e c o s t of r e p a i r s a t $97,500 is p u n i t i v e , s p e c u l a t i v e and unsupported by t h e evidence. H e r e l i e s h e a v i l y i n h i s c l a i m on Spackman v. Ralph M. Parsons Co. ( 1 9 6 6 ) , 147 Mont. 500, 414 P.2d 918, i n which t h e p l a i n t i f f s o u g h t damages r e s u l t i n g from sewage f l o o d i n g t o p e r s o n a l and r e a l p r o p e r t y . Madsen a r g u e s t h a t Spackman f o r g e s a s t r i c t r u l e of law i n Montana t h a t t h e measure of damages is t h e c o s t of r e p a i r i f t h e c o s t is less than t h e diminution i n v a l u e of p r o p e r t y b u t i n no c a s e w i l l t h e recovery exceed t h e v a l u e of t h e p r o p e r t y b e f o r e i n j u r y . Spackman does n o t s e t t h i s p r i n c i p l e o u t , however, a s a hard-and-fast r u l e b u t , r a t h e r , a s a g u i d e t o common s e n s e : "Where damage t o p r o p e r t y is concerned, t h e purpose of awarding damages is t o r e t u r n t h e p a r t y i n j u r e d t o t h e same, o r a s n e a r l y a s p o s s i b l e t h e same, c o n d i t i o n a s he enjoyed b e f o r e t h e i n j u r y t o h i s p r o p e r t y . . . " I n g e n i o u s men h a v e propounded i n g e n i o u s methods, systems and formulas f o r d e t e r m i n i n g i n monetary terms t h e v a l u e of p r o p e r t y par- t i a l l y damaged or d e s t r o y e d . h h i l e such methods s e r v e a s u s e f u l g u i d e s , t h e f i n a l answer must r e s t i n good s e n s e r a t h e r t h a n m e c h a n i c a l a p p l i c a t i o n o f s u c h f o r m u l a s . " Spackman, 1 4 7 M o n t . a t 506, 414 P.2d a t 921-922. I n Bos v. Dolajak ( 1 9 7 5 ) , 167 Mont. 1, 534 P.2d 1258, t h i s Court recognized t h a t t h e Spackman r u l e cannot always c l e a r l y be a p p l i e d . I n - Bos t h e d e f e n d a n t s c o n t r a c t e d w i t h p l a i n t i f f s t o e r e c t f o r $6,500 a g r a i n s i l o which p l a i n t i f f s had purchased secondhand b u t which was t h e e q u i v a l e n t of a new s i l o . Defendants secured t h e r a i s e d s i l o with fewer j a c k s t h a n r e q u i r e d by t h e c o n s t r u c t i o n manual and allowed t h e s i l o t o t w i s t so it could n o t r e a d i l y be lowered. During t h e p r o c e s s , a windstorm threw t h e s i l o o f f its foundation and v i r t u a l l y d e s t r o y e d it. A t t r i a l p l a i n t i f f s p r e s e n t e d damages t o t a l i n g $25,274.61: $15,342.61 was t h e c o s t of r e p l a c i n g t h e s i l o and $9,932 c o s t from l o s s of use. The j u r y awarded $17,626.75. T h i s Court approved t h e d e t e r m i n a t i o n of damages and noted t h a t t h e Spackman r u l e d e a l t with r e a d i l y r e p l a c e a b l e i t e m s w i t h an e s t a b l i s h e d market v a l u e . vJhere an item was n o t r e a d i l y r e p l a c e a b l e , d i d n o t have an e s t a b l i s h e d market v a l u e , and was i n t e g r a l t o a l a r g e r o p e r a t i o n such a s t h e p l a i n t i f f s ' d a i r y f a r m , t h i s C o u r t h e l d t h a t o t h e r c o n s i d e r a t i o n s were a p p r o p r i a t e i n c l u d i n g compensation f o r l o s s of u s e . I n t h e c a s e b e f o r e u s , Claude Gerbase, a B i l l i n g s c o n t r a c t o r , t e s t i f i e d t h a t r e p a i r of t h e Chandler house would r e q u i r e d r y i n g o u t t h e s u b s o i l , c u t t i n g t h e house l o o s e from its foundation and b r i n g i n g it t o a l e v e l g r a d e . Once t h e h o u s e was made l e v e l and s e c u r e , a d d i t i o n a l cosmetic and s t r u c t u r a l r e p a i r s would be r e q u i r e d i n c l uding replacement of s h e e t r o c k . Gerbase t e s t i f i e d h i s e s t i m a t e d c o s t of r e p a i r of t h e house was $65,000, which included a 12 p e r c e n t contingency f a c t o r . He f u r t h e r t e s t i f i e d t h a t b e c a u s e o f t h e complicated and u n c e r t a i n n a t u r e of t h e job he would charge $91,500 t o e n t e r i n t o a f i x e d p r i c e c o n t r a c t f o r t h e r e p a i r s . The D i s t r i c t Court awarded damages of $97,500. Madsen a r g u e s t h e f i n d i n g is p u n i t i v e and c o n t r a r y t o law i n p a r t because t h e house was o r i g i n a l l y s o l d f o r l e s s t h a n t h e damage award. W e d i s a g r e e . Madsen a l s o c l a i m s t h a t i f he is l i a b l e f o r any damages t h e proper amount is $65,000 which was G e r b a s e ' s r e p a i r e s t i m a t e . Madsen a r g u e s t h e $97,500 is s p e c u l a t i v e i n t h a t it was quoted by Gerbase a s h i s f i x e d c o n t r a c t p r i c e o n l y t o g u a r a n t e e he would l o s e no money on t h e job. W e d i s a g r e e . An e s t i m a t e , by its v e r y n a t u r e , is s p e c u l a t i v e , p a r t i c u l a r l y where, a s h e r e , t h e job is complicated and s u b j e c t t o r e v i s i o n a s it p r o g r e s s e s . I t would be of q u e s t i o n a b l e v a l u e t o t h e Chandlers t o r e c e i v e $65,000 f o r r e p a i r s o n l y t o d i s c o v e r , once i n t o t h e p r o j e c t , t h e c o s t would be s i g n i f i c a n t l y more. Given t h e n a t u r e of t h e damage t o t h e Chandler home and t h e r e p a i r s r e q u i r e d , w e a f f i r m t h e D i s t r i c t C o u r t ' s award f o r r e p a i r s . The Chandlers argue t h a t t h e D i s t r i c t Court e r r e d when it d e l e t e d t h e c o s t s of temporary r e n t a l and moving and s t o r a g e from t h e damage award. The i n i t i a l q u e s t i o n i n r e s o l v i n g t h i s i s s u e is whether a breach of an implied warranty a r i s e s o u t of a c o n t r a c t o b l i g a t i o n or some o t h e r o b l i g a t i o n . That d e t e r - mination w i l l e s t a b l i s h what damages a r e a v a i l a b l e a s a r e s u l t of breach. S e c t i o n s 27-1-311 and 27-1-317, MCA. I n Ferguson v. Town Pump, I n c . ( 1 9 7 8 ) , 177 Mont. 122, 5 8 0 P.2d 915, t h i s C o u r t found an o r a l c o n t r a c t f o r c o n s t r u c t i o n of g a s o l i n e s t a t i o n t o c a r r y w i t h it an implied term t h a t t h e work would be performed i n a r e a s o n a b l y s k i l l f u l and workmanlike manner. I t a l s o found t h a t a n e g l i g e n t f a i l u r e t o perform according t o t h e implied term r e s u l t e d i n a breach of c o n t r a c t a s w e l l a s a t o r t . 177 Mont. a t 131, 580 P.2d a t 920. Although h e r e w e do n o t have t h e n e g l i g e n c e component which s u s t a i n e d t h e t o r t t h e o r y i n Ferguson, w e do have a breach of an implied term of t h e c o n t r a c t . Madsen's breach of implied warranty is a breach of c o n t r a c t and s u b j e c t t o t h e p r o v i s i o n s of s e c t i o n 27-1-311, IJICA. That p r o v i s i o n s e t s t h e measure of damages f o r breach of an o b l i g a t i o n a r i s i n g from a c o n t r a c t a s " t h e amount which w i l l compensate t h e p a r t y aggrieved f o r a l l t h e d e t r i m e n t which was p r o x i - mately caused t h e r e b y or i n t h e o r d i n a r y c o u r s e of t h i n g s would be l i k e l y t o r e s u l t therefrom." I t is a p p a r e n t t h a t t h e n e c e s s i t y of moving from a r e s i d e n c e u n d e r g o i n g irlassive r e p a i r s and of r e n t i n g a temporary r e s i d e n c e is l i k e l y t o r e s u l t from major damage t o a s t r u c t u r e . We, t h e r e f o r e , f i n d t h a t c o s t s f o r moving and s t o r a g e and temporary r e n t a l were improperly d e l e t e d from t h e damage award. Marilyn Chandler t e s t i f i e d s h e had o b t a i n e d e s t i m a t e s from a B i l l i n g s r e a l e s t a t e o f f i c e t h a t a s u i t a b l e temporary r e n t a l f o r t h e Chandlers would c o s t between $600 and $1,000 per month. She t e s t i f i e d t h a t she a l s o had o b t a i n e d an e s t i m a t e of $3,487.51 f o r moving t h e Chandlers' f u r n i t u r e . I n a d d i t i o n , G e r b a s e t e s t i f i e d t h e C h a n d l e r s would b e r e q u i r e d t o move from t h e i r house f o r t h r e e t o four months d u r i n g r e p a i r s . S i n c e t h e t e s t i m o n y e s t a b l i s h e s a $400-per-month d i s p a r i t y i n r e n t a l f i g u r e s , an award of t h e middle f i g u r e a p p e a r s a p p r o p r i a t e . T h e r e f o r e , w e award t h e Chandlers $3,200 ($800 per month f o r four months) f o r temporary r e n t a l and r e i n s t a t e t h e award of $3,487.51 f o r moving and s t o r a g e . The Chandlers a l s o argue t h e D i s t r i c t Court e r r e d i n f a i l i n g t o g r a n t damages f o r emotional d i s t r e s s . S i n c e w e have found no l i a b i l i t y f o r negligence or s t r i c t 1 - i a b i l i t y , such damages need n o t be c o n s i d e r e d h e r e . SURPRISE Madsen r e q u e s t s t h a t a new t r i a l be g r a n t e d on t h e damage i s s u e on t h e grounds he has been s u r p r i s e d under s e c t i o n s 25-11-102(3) and 25-11-103, MCA. T h i s r e q u e s t is based on t h e a f f i d a v i t of Madsen's a t t o r n e y , which s t a t e s t h a t an e x t e n s i v e d i s c u s s i o n w i t h Claude Gerbase, had i n l i e u of d e p o s i t i o n on December 6, 1980, i n d i c a t e d G e r b a s e ' s e s t i m a t e f o r c o s t of r e p a i r would be $65,000. On December 9, 1980, a t t h e r e q u e s t of Madsen's a t t o r n e y , Gerbase sub- m i t t e d a d e t a i l e d breakdown of t h e e s t i m a t e . Subsequently, according t o t h e a£ f i d a v i t , Madsen's a t t o r n e y c o n t a c t e d another c o n t r a c t o r who examined t h e documentary and video- taped evidence and concluded h i s e s t i m a t e would n o t be s i g n i f i c a n t l y l e s s t h a n $65,000. The C h a n d l e r s a r g u e t h e c l a i m of s u r p r i s e i s unfounded. I n s u p p o r t of t h e i r p o s i t i o n , t h e Chandlers r e f e r t o a l e t t e r of October 29, 1.980, from t h e i r a t t o r n e y t o Madsen's a t t o r n e y which s t a t e d : "Another item t o t a k e i n t o account is t h a t t h e Gerbase e s t i m a t e is o n l y t h a t . It is n o t an agreement t o r e s t o r e t h e house. The Chandlers a r e e n t i t l e d t o have t h e i r house r e s t o r e d and i f a c o n t r a c t o r r e q u i r e s an a d d i t i o n a l sum of money f o r c o n t i n g e n c i e s , such a s he would r e g u l a r l y charge i n t h e c o u r s e of h i s t r a d e , then we w i l l want t o add t h a t on." I n a d d i t i o n , Claude Gerbase, by a f f i d a v i t , s t a t e d t h a t according t o h i s r e c o l l e c t i o n of t h e December 6, 1980, meeting w i t h t h e a t t o r n e y s f o r both p a r t i e s , he t o l d a l l t h o s e p r e s e n t t h a t he would not e n t e r i n t o a f i r m c o n t r a c t f o r t h e amount of h i s e s t i m a t e . S u r p r i s e h a s o n l y once been accepted a s t h e b a s i s f o r g r a n t i n g a new t r i a l i n Montana. P o r t e r v. I n d u s t r i a l P r i n t i n g Co. ( 1 9 0 1 ) , 26 Mont. 170, 66 P. 839, modified, 67 P. 67. The Court found such s u r p r i s e where t h e t r i a l c o u r t had g r a n t e d d e f a u l t a g a i n s t t h e p l a i n t i f f f o r f a i l u r e t o r e p l y t o t h e d e f e n d a n t ' s c o u n t e r c l a i m . A t t r i a l t h e defen- d a n t p r e s e n t e d no proof i n s u p p o r t of its c o u n t e r c l a i m . The Court l a t e r d e c l a r e d o n l y t h r e e of t h e c o u n t e r c l a i m s s t a t e d c a u s e s of a c t i o n and e n t e r e d judgment f o r t h e p l a i n t i f f . T h i s Court found s u r p r i s e which " o r d i n a r y prudence could n o t have guarded a g a i n s t . " P o r t e r , 26 Mont. 182, 66 P. a t 841. W e do n o t have such a s i t u a t i o n h e r e . i v " e f i n d t h e r e was s u f f i c i e n t r e f e r e n c e t o t h e f a c t a f i x e d - p r i c e c o n t r a c t would be d i f f e r e n t t h a n t h e e s t i m a t e and would be r e l i e d on by t h e Chandlers t o p r e c l u d e s u r p r i s e . T h i s c a s e is remanded t o t h e D i s t r i c t Court w i t h i n s t r u c t i o n s t o amend i t s judgment i n accordance w i t h t h i s o p i n i o n . W e c o n c u r : C h i e f J u s t i c e M r . J u s t i c e John C. Sheehy, concurring s p e c i a l l y : I agree w i t h t h e r e s u l t here. I a f f i r m t h e damages award of $97,500 f o r r e p a i r of t h e house because w e a r e bound by t h e a p p e l l a t e r u l e t h a t t h e f i n d i n g s o f a d i s t r i c t c o u r t may n o t be set a s i d e u n l e s s c l e a r l y erroneous. Rule 5 2 ( a ) , M.R.Civ.P. A f i n d i n g i s " c l e a r l y erroneous" when, although t h e r e is evidence to support it, t h e reviewing c o u r t on t h e e n t i r e evidence is l e f t w i t h t h e d e f i n i t e and f i r m c o n v i c t i o n t h a t a mistake has been committed. United S t a t e s v. Gypsum Co. (1948), 333 U.S. 364, 394-395, 68 S.Ct. 525, 92 L.Ed. 746. I am pursuaded on t h i s p o i n t by t h e evidence of t h e c o n t r a c t o r t h a t he would n o t e n t e r i n t o a f i r m c o n t r a c t f o r r e p a i r a t t h e f i g u r e o f $67,500. The burden of proof on t h e p l a i n t i f f s was by a preponderance of t h e evidence. The Gerbase evidence, b e i n g c r e d i b l e , i s s u b s t a n t i a l and t h e r e f o r e it overcomes t h e " c l e a r l y erroneous" r u l e . See Western C o t t o n o i l Co. v. Hodges ( 5 t h C i r . 1 9 5 4 ) , 218 F.2d 158. 4 ; ,,L?hkiL7 J u s t i c e