Title: KIRBY v KENYON-NOBLE LUMBER CO

State: montana

Issuer: Montana Supreme Court

Document:

No. 13227 I N T H E SUPREME C O U R T O F T H E STATE O F M O N T A N A 1976 JACK KIRBY, P l a i n t i f f and Appellant, -vs - KENYON-NOBLE L U M B E R CO. , WILLIAM V. OGLE, FRED HOFFMAN, HERBERT C. TOPER and DICK TEPEL, Defendants and Respondent, and HERBERT C. TOPEL, P l a i n t i f f and Respondent, -VS - JACK A. KIRBY and B A R B A R A A. KIRBY, Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e F i f t h J u d i c i a l D i s t r i c t , Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellants : Drysdale, McLean and Screnar, Bozeman, Montana Douglas Drysdale argued, Bozeman, Montana For Respondents: Berg, Angel, Andriolo and Morgan, Bozeman, Montana Ben E. Berg argued, Bozeman, Montana Submitted: October 14, 1976 Decided : DEC 2 7 1976 Filed : S E C 5.7 876 M r . J u s t i c e Gene B. Daly delivered the Opinion of the Court. P l a i n t i f f Jack Kirby appeals from a judgment of t h e d i s t r i c t court, Gallatin County, awarding damages f o r breach of contract. Kirby a s s e r t s the judgment awarded is inadequate and c o n f l i c t s with the c o u r t ' s own findings and conclusions. Jack and Barbara Kirby (Kirby), entered i n t o a contract with Kenyon-Noble Lumber Co., Bozeman, Montana (contractor), on October 20, 1969 t o build a home on t h e i r property near Ennis, Montana. The contractor's work was t o be completed on o r about December 1, 1969. The contract provided f o r Kirby t o pay $18,883.45 and t o furnish the excavation f o r the foundation and t o do the wiring, plumbing, floorcovering, and painting. The contractor was required t o provide a l l materials including wiring material and a l l labor required i n construction of the home. A n employee of t h e contractor, Fred Hoffman, began work on the home. From the s t a r t , Kirby complained about the quality of Hoffman's work. The home was not finished by the December 1 deadline, and i n January 1970, the contractor removed Hoffman from t h e project and hired Herbert and Dick Tope1 t o correct defects and complete the home and bring it within minimum requirements of t h e FHA f o r the sum of $2,000. After Topels had worked on the house Kirby advised the contractor t h a t Topels' work was not satisfactory. In March 1970, Kirby through counsel, informed the contractor and Topels they were through, terminated the contract and hired a l o c a l carpenter t o correct some of the minor defects i n the home. I n May 1970, Kirby moved i n t o the home. Pursuant t o the contract, Kirby paid the contractor $17,298 but did not make t h e f i n a l payment of $1,585.45- This action was brought i n d i s t r i c t court t o recover damages f o r breach of the building contract against the contractor. I n a separate action, Topels sought t o foreclose a mechanic's l i e n f o r payment f o r labor and material used during t h e i r work on the Kirby home. The two actions were consolidated f o r t r i a l and t h i s appeal i s only from the amount of t h e award given Kirby against t h e contractor, Kenyon-Noble Lumber Co. The t r i a l court found the contractor breached h i s contract and t h a t the work done on the Kirby home was defective. Numerous defects i n the building were l i s t e d i n the c o u r t ' s findings in- cluding: a roof which must be removed and replaced t o be proper; i n t e r i o r p a r t i t i o n s and exterior walls out of plumb; windows and doors improperly i n s t a l l e d and out of plumb; defective foundation and improperly poured basement floor with drain i n highest point; unlevel c e i l i n g s and f l o o r s ; and crooked siding. The t r i a l court further found : "That by reason of the deficiencies i n the construction and by the breach of contract on behalf of Corporation and Ogle, and t h e i r negligent a c t s and omissions, the f a i r market value of the completed house was reduced t o the amount of TWO T H O U S A N D EIGHTY-FIVE D O L L A R S AND EIGHTY- FIVE C E N T S ($2,085.85). Based on these findings, the court concluded: " P l a i n t i f f Kirby is e n t i t l e d t o a Judgment against the Defendants Kenyon-Noble Lumber Company, William V. Ogle i n the sum of TWO T H O U S A N D EIGHTY-FIVE D O L L A R S AND EIGHTY-FIVE C E N T S ($2,085-85) together with i n t e r e s t thereolr from and a f t e r May 1, 1970." Kirby f i l e d exceptions t o the c o u r t ' s findings of f a c t and conclusions of law and a motion t o amend, which was denied by the t r i a l court. The findings of fact and conclusions of law of the district court leave no doubt the Kirby home was defective. The court's determination of the value of the completed structure is fully supported by evidence presented at trial. Kirby asserts the award of damages is grossly inadequate and has no basis in law or fact. Section 17-301, R.C.M. 1947, provides the measure of damages for breach of contract: "For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things; would be likely to result therefrom." Although Montana codes specify damages for breaches of other types of contract, there is no express provision for damages in breach of construction contracts. In Mitchell v. Carlson, 132 Mont. 1, 7, 313 P.2d 717, the Court applied section 17-301 where a homeowner sued for damages as a result of a.poorly built home to establish the rule for damages to be awarded: "Applying the statutory rule of damages to this case it is apparent that plaintiffs will be compensated only for the 'detriment proximately caused' by the breach, viz., the cost of making the repairs necessary to complete the house in accordance with the parties' agreement." (Emphasis added.) The Mitchell rule was reaffirmed by this Court in Haggerty v. Selsco, 166 Mont. 492, 499, 534 P.2d 874. 11 Williston on Contracts, Third Edition, Section 1363, p.344, states the rule as: "Where the contractor fails to keep his agreement, the measure of the employer's damages, whether sought in an independent action or by recoupment or counter- claim, is always the sum which will put him in as good a position as if the contract had been performed. If the defect is remediable from a practical standpoint, recovery generally will be based on the market price of completing or correcting the performance, and this will generally be shown by the cost of getting work done or completed,by another person." (Emphasis added.) See: 5 Corbin on Contracts, 51089; Restatement, Contracts, $346; Anno. 76 ALR2d 805; Schmauch v. Johnston, 274 Or. 441, 547 P.2d The district court upon consideration of all the evidence presented determined the completed house to be worth only $2,085.85. The court's award of that amount as damages is neither logical nor does it meet the requirements set forth for an award in a case involving a breach of a building contract. This matter is remanded to the district court for a new trial on the issue of damages. r - q e Concur: f ief Justice . Robert C. ~y%es, District Judge, sitting "Tor Justice Wesley Castles.