Title: SURVCO v KENYON NOBLE READY-MIX

State: montana

Issuer: Montana Supreme Court

Document:

NO. 83-78 IN THE SUPREME: COURT OF THE STATE OF MONTANA 1983 SURVCO, a Montana Corporation, Plaintiff and Appellant, KENYON NOBLE READY-MIX, a Montana Corporation, Defendant and Respondent. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellant: Ron Burgess, Pro Se, Bozeman, Montana For Respondent: Kirwan and Barrett, Bozeman, Montana Submitted. on briefs: May 5, 1983 Decided: June 16, 1983 Filed : . ' ' 1 1 5 1983 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. Survco brought t h i s a c t i o n i n t h e D i s t r i c t Court of t h e E i g h t e e n t h J u d i c i a l D i s t r i c t , G a l l a t i n County, seeking payment f o r photographic s e r v i c e s . The D i s t r i c t Court found Survco d i d n o t s u b s t a n t i a t e its c l a i m a g a i n s t Kenyon Noble and judgment was e n t e r e d i n favor of Kenyon Noble. Survco a p p e a l s . I n May 1980, William Ogle, owner of Kenyon Noble c o n t a c t e d Ron Burgess of Survco t o d i s c u s s t h e a v a i l a b i l i t y of a e r i a l photographs of Kenyon Noble's g r a v e l p i t l o c a t e d near Belgrade, Montana. Burgess informed Ogle a e r i a l photographs of t h e p i t c o u l d be obtained through P r o f e s s i o n a l C o n s u l t a n t ' s , I n c . , (PCI) , an a e r i a l photographing s e r v i c e l o c a t e d i n Missoula, Montana. Burgess advised Ogle s i n c e PC1 would have t o f l y t o Bozeman from Missoula, t h e c o s t would be reduced i f PC1 had o t h e r a e r i a l mapping p r o j e c t s on t h e same f l i g h t . Ogle t h e n d i s c u s s e d t h e p o s s i b i l i t y of o b t a i n i n g a e r i a l photographs of O g l e ' s lumberyard l o c a t e d on North Rouse i n Bozeman. Burgess e s t i m a t e d P C I ' s c o s t t o f l y t o Bozeman t o be $300. Burgess explained Ogle would a l s o have t o pay f o r t h e f i e l d work n e c e s s a r y t o p l a c e c o n t r o l p o i n t s f o r t h e a e r i a l photography , f i l m , and f i l m r e p r o d u c t i o n c o s t s . Burgess t e s t i f i e d he esti- mated t h e t o t a l c o s t f o r t h e Belgrade and North Rouse s i t e s a t $1,000. A t t h a t time Ogle a l s o ordered four c o l o r enlargements of e x i s t i n g a e r i a l photographs of commercial p r o p e r t y l o c a t e d i n L i v i n g s t o n . Burgess t e s t i f i e d he c a l l e d PC1 and obtained a q u o t e of about $270 f o r t h e four p r i n t s . Ogle t e s t i f i e d he understood t h e p r i n t s were t o c o s t about $30 a p i e c e . I n a d d i t i o n , he t e s t i f i e d he agreed t o have Burgess perform t h e work and asked t o be advised of any c o s t i n c r e a s e s over t h e e s t i m a t e s . From May t o October 1980, Ogle made numerous u n s u c c e s s f u l a t t e m p t s t o c o n t a c t Burgess regarding t h e p r o g r e s s of t h e a e r i a l photography. I n October 1980, Ogle met w i t h an employee of Survco, Mike Foley, regarding a d d i t i o n a l a e r i a l photography of Kenyon Noble's Sourdough g r a v e l p i t l o c a t e d i n Bozeman and its Logan g r a v e l p i t l o c a t e d i n Logan, Montana. Ogle d i d not o b t a i n an e s t i m a t e of t h e c o s t of t h e Sourdough and Logan photographs. Foley t e s t i f i e d he expressed h i s concern t o Burgess t h a t t h e scope of O g l e ' s work had i n c r e a s e d c o n s i d e r a b l y but Burgess t o l d him t o proceed with t h e work. I n J a n u a r y 1981, PC1 conducted t h e a e r i a l photography of t h e B e l g r a d e , Sourdough, and North Rouse lumberyard. The PC1 f l i g h t was made s p e c i f i c a l l y f o r O g l e ' s work and not i n c o n j u n c t i o n w i t h any o t h e r p r o j e c t s . A f t e r PC1 took t h e a e r i a l photographs, Foley r e c e i v e d c o n t a c t p r i n t s from PCI. Ogle t h e n s e l e c t e d s e v e r a l p r i n t s and ordered enlargements. On March 5 , 1981, Survco s e n t Ogle two b i l l i n g s t a t e m e n t s . The f i r s t is e n t i t l e d "Gravel P i t - Belgrade" and shows a t o t a l amount due of $887. The second d e s c r i b e d "Photo Enlargements @ L i v i n g s t o n , MT." and shows a t o t a l amount due of $270. These b i l l s were paid by Ogle i n f u l l . I n May 1981, Ogle ordered more photo enlargements of t h e four a e r i a l p r o j e c t s . Ogle t e s t i f i e d he understood t h e c o s t of t h e a d d i t i o n a l p r i n t s was not included i n t h e March b i l l i n g s t a t e - ments which were a l r e a d y paid. Subsequently, Ogle r e c e i v e d t h e a d d i t i o n a l p r i n t s . On August 28, 1981, Survco s e n t Ogle a t h i r d b i l l seeking payment of $2,055 f o r work done on t h e four photo p r o j e c t s . Survco claimed $2,055 had been paid t o PC1 b y Survco f o r t h e Ogle p r o j e c t s . Ogle refused t o pay. Survco t h e n com- menced t h i s a c t i o n seeking payment from Ogle i n t h e amount of $2,055. A t r i a l was held on November 8 , 1982, and on November 23, 1982, t h e D i s t r i c t Court e n t e r e d its 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. The D i s t r i c t Court found Survco d i d not s u b s t a n t i a t e its c l a i m by a preponderance of t h e evidence. The D i s t r i c t Court e n t e r e d judgment on December 6, 1982. Survco a p p e a l s . S u r v c o ' s f i r s t c l a i m of e r r o r stems from t h e following c o n c l u s i o n of t h e D i s t r i c t Court: " P l a i n t i f f plead an a c t i o n based upon an e x p r e s s c o n t r a c t b u t attempted t o prove a c a u s e of a c t i o n i n quantum meruit; it is f a t a l t o p l a i n t i f f ' s cause to a l l e g e and prove an e x p r e s s c o n t r a c t and t o a t t e m p t t o recover judgment based upon a theory of quantum m e r u i t because t h e terms of t h e c o n t r a c t l i m i t such r e c o v e r y t o t h e agreed p r i c e f o r t h e s e r v i c e s rendered." Survco argues t h i s is a misstatement of Montana law. The D i s t r i c t Court, i n a memorandum, explained its p o s i t i o n a s f o l l o w s : "This is b a s i c a l l y a case c e n t e r i n g around t h e f a c t s t o determine t h e i n t e n t of t h e p a r t i e s and t h e terms of t h e agreement a l l e g e d t o have o c c u r r e d . "There is no d i s p u t e t h a t they e n t e r e d i n t o a c o n t r a c t f o r a e r i a l survey photography. The r e a l crux of t h e d i f f e r e n c e is t h e p r i c e f o r such s e r v i c e s . P l a i n t i f f a p p a r e n t l y t a k e s t h e p o s i t i o n of an e x p r e s s c o n t r a c t and t h e n moves i n t o an a r e a of quantum m e r u i t . T h i s is where it g e t s its d i f f i c u l t y . Keneally v. Orgain, 37 S t . R p t r . 154, 606 P.2d 127 (1980). I1 I . . . ( T ) h e r e can be no e x p r e s s or implied c o n t r a c t f o r t h e same t h i n g e x i s t i n g a t t h e same time.' Weston v. Montana S t a t e Hwy. Com'n, 37 S t . R p t r . 236, 238, 606 P.2d 150, 152 ( 1 9 8 0 ) . "Even allowing quantum m e r u i t , t o go f u r t h e r and a l l o w a d d i t i o n a l c o s t s when t h o s e addi- t i o n a l expenses should have been f o r e s e e n , we run i n t o r e a l d i f f i c u l t y i n c o n t r a c t for- mation. Modern B u i l d e r s , I n c . of Tacoma v. Manke, 27 Wash.App. 86, 615 P.2d 1332 (1980). "The p l a i n t i f f h e r e is by its a c t s bound by its own s t a k e s and even i f we should go t o t h e f u r t h e r s t e p and i g n o r e t h e c o n t r a c t law t h e p l a i n t i f f f a i l e d t o prove t h e c o s t of t h e e x t r a expenses." C o n t r a c t s a r e e i t h e r e x p r e s s o r implied, an e x p r e s s is one t h e terms of which a r e s t a t e d i n words, an implied is one t h e e x i s t e n c e and terms of which a r e manifested by conduct. S e c t i o n 28-2-103, MCA. Here, t h e r e is no q u e s t i o n Burgess and Ogle made an e x p r e s s c o n t r a c t t o o b t a i n a e r i a l photographs of t h e Belgrade g r a v e l p i t , t h e North Rouse lumberyard, and t h e commercial pro- p e r t y i n L i v i n g s t o n . I n October 1980, Ogle c o n t r a c t e d w i t h Survco t o o b t a i n a e r i a l photographs of t h e Sourdough and Logan g r a v e l p i t s . I n May 1981, Ogle ordered a d d i t i o n a l photo enlarge- ments of t h e four a e r i a l p r o j e c t s . I n t h e s e p r o j e c t s t h e c o s t was n o t e x p r e s s l y s t a t e d b u t t h e District Court found Ogle assumed t h a t t h i s s e r v i c e would be s i m i l a r t o t h e a e r i a l photo- graphy ordered p r e v i o u s l y . Thus, t h e D i s t r i c t Court appears t o have found t h e a d d i t i o n a l work requested a f t e r t h e i n i t i a l was governed by an implied c o n t r a c t , t h e terms being s i m i l a r t o t h a t of t h e e x p r e s s c o n t r a c t . The D i s t r i c t Court l i m i t e d S u r v c o ' s recovery t o t h e March 5 , 1981, b i l l i n g s t a t e m e n t because, " i t is f a t a l t o p l a i n t i f f ' s c a u s e t o a l l e g e and prove an e x p r e s s c o n t r a c t and t o a t t e m p t t o r e c o v e r judgment based on a t h e o r y of quantum m e r u i t because t h e t e r m s of t h e c o n t r a c t l i m i t such recovery t o t h e agreed p r i c e f o r t h e s e r v i c e s rendered." W e i n t e r p r e t t h i s s t a t e m e n t t o mean t h e D i s t r i c t Court o n l y allowed recovery f o r what it found t o be payment under t h e e x p r e s s c o n t r a c t . I t is f a t a l t o a l l e g e an implied c o n t r a c t and prove an e x p r e s s c o n t r a c t , however, one having an e x p r e s s c o n t r a c t which he has performed may sue i n quantum m e r u i t and use t h e c o n t r a c t a s proof of t h e r e a s o n a b l e v a l u e of h i s s e r v i c e s . K e n e a l l y v. Orgain ( 1 9 8 0 ) , Mont. ---- , 606 P.2d 1 2 7 , 1 2 9 , 37 St.Rep. 154. T h i s is what Survco a t t e m p t e d . Survco a r g u e s t h e l i m i t a t i o n of its recovery based on t h e D i s t r i c t C o u r t ' s i n t e r p r e t a t i o n of c o n t r a c t law c o n s t i t u t e s r e v e r s i b l e e r r o r . W e a g r e e . Ogle t e s t i f i e d he d i d not t h i n k t h e March 5 , 1981, b i l l i n c l u d e d a l l t h e amounts owing on t h e a e r i a l photographs, he j u s t d i d n o t b e l i e v e Survco was e n t i t l e d t o an e x t r a $2,055. Ogle does not appear t o d i s p u t e t h e e x i s t e n c e of an implied c o n t r a c t f o r t h e a d d i t i o n a l work. He has accepted t h e b e n e f i t s of t h e c o n t r a c t by o b t a i n i n g p r i n t s of a l l t h e a e r i a l photograph pro- j e c t s . W e f i n d Ogle must be r e q u i r e d t o pay f o r t h a t which he h a s r e c e i v e d and t h a t t h e D i s t r i c t C o u r t ' s l i m i t a t i o n of S u r v c o ' s r e c o v e r y was i n e r r o r . Survco has a l s o a l l e g e d a s e r r o r t h e District C o u r t ' s r e f u s a l t o admit p l a i n t i f f ' s e x h i b i t number 5 which is an itemized s t a t e - ment prepared by Survco showing c o s t s and d i s b u r s e m e n t s con- c e r n i n g t h e a e r i a l photography. Ogle o b j e c t e d t o t h e admission of t h i s e x h i b i t claiming it c o n t a i n s hearsay s t a t e m e n t s con- c e r n i n g P C I ' s t o t a l and itemized charges. Ogle contends an employee of PC1 must be c a l l e d a s a w i t n e s s t o t e s t i f y a s t o t h e amounts it b i l l e d Survco f o r t h e a e r i a l photography, p r i n t s , and enlargements. W e f i n d no e r r o r i n allowing S u r v c o ' s recordkeeper t o t e s t i f y a s t o t h e amounts Survco c l a i m s it h a s paid t o PC1 f o r t h e photography. These r e c o r d s were kept i n S u r v c o ' s r e g u l a r l y - conducted b u s i n e s s a c t i v i t y and a d m i s s i b l e under Rule 803 (6), M.R.Evid. Survco could provide s t r o n g e r foundation by c a l l i n g a w i t n e s s from PC1 t o e s t a b l i s h c r e d i b i l i t y f o r t h e charges. W e f i n d no need f o r f u r t h e r comment upon t h i s i s s u e f o r purposes of r e t r i a l . Reversed and remanded f o r a new t r i a l . W e concur: ~AJw&& Chief J u s t i c e