No. 84-362 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

E.F. MATELICH CONSTRUCTION CO., 

a Montana corp., 

Plaintiff and Respondent, 

-vsGOODFELLOW BROTHERS, INC., 

Defendant? and Appellants, 

-vsSTATE OF MONTANA, 

Cross-Claimant and Respondent. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Mineral, 

The Honorable Douglas Harkin, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Wellcome & Frost; Page Wellcome argued, Bozeman, 

Montana 

For Respondents: 

Murphy, Robinson, Heckathorn & Phillips; Donald R. 

Murray, Kalispell, Montana 

W. D. Hutchison argued, Dept. of Highways, Helena, 

Montana 

Submitted: April 11, 1985 

Decided: ~uly 8, 1985 

Filed: t ua- 8 5985 

.- Clerk 
Mr. Justice John C. Sheehy, delivered the Opinion of the 

Court. 

This appeal by Goodfell-ow Brothers, Inc. from a judgment 

of the Fourth Judicial District, Mineral County, raises the 

following: 

I. Is Goodfellow entitled to recover from the State 

sums it was required to pay to a subcontractor, Matelich, on 

a highway construction project that was redesigned while 

construction was in progress? 

2. Was the delay of the District Court in making a 

decision in this case from the hearing date of September 30, 

1983 to March 23, 1984, a denial of fundamental due process 

to Goodfellow under Art. 11, 5 16, of the Montana 

Constitution? 

On November 23, 1970, Goodfellow, as a general 

contractor, contracted with the defendant, State of Montana, 

to construct a segment of interstate highway. Thereafter, 

Goodfellow contracted with E. F. Matelich Construction 

Company, a subcontractor, for the construction of certain 

bridges and concrete work on the project. 

Matelich, prior to submitting its bid to Goodfellow, 

abtained a bid for the concrete work required on the 

construction project from Robert OIConner. The bid submitted 

by OIConner stated that the estimates given were conditioned 

upon concrete being available at the job site. Matelich 

accepted OIConner's sub-bid on April 12, 1971. 

In certain portions of the highway project, cuts were 

designed by the State through the mountainous area. Several 

of the cuts were designed with a steep backslope. It was 

found that some of the cuts were unstable. Some of these 
cuts were redesigned by the State to provide for a less steep 

backslope but the changes in design required further 

excavation in excess of 125% of the original contract 

specification. All sides admit that the increa.sed excavation 

delayed or postponed the hoped for date of completion of the 

project. 

On November 6, 1972, Goodfellow and the State entered 

into a supplemental agreement described as a "novation 

covering the said excess quantities and work items affected 

by such excess." The supplemental agreement contained the 

following language: 

"(6) The CONTRACTOR waives any and all claims for 

payment in excess of those contemplated by said 

contract of November 23, 1970, and this novation, 

except those claims which may be based upon 

conditions not presently within the knowledge of 

either party or which are not within the ability of 

either party to anticipate." 

Goodfellow, because of the delay, did not complete the 

necessary preparatory work until September 1973. When the 

preparatory work was finally done, there was no longer a 

source of concrete a-vailable at the jobsite. By reason 

thereof, O'Conner refused to perform the concrete work under 

his agreement with Matelich. There had been a source of 

concrete available at the jobsite during the 1971 work season 

and for most of the 1972 season. Since OIConner refused to 

perform the work under his bid, Matelich was forced to 

comp1et.e the concrete work under another arrangement. 

After the work was completed, Matelich brought suit 

against Goodfellow and the State of Montana in the District 

Court of Mineral County. Matelich alleged it was prevented 

from performing its work within a time limit specified in its 

subcontract with Goodfellow because the work schedule for the 

project had been changed by Goodfellow and the State. 
Matelich sought damages for the increased costs which were 

caused by the delay in the performance of the preparatory 

work within the time limit specified in its subcontract. 

Goodfellow cross-claimed against the State for 

indemnification on Matelich's claim. 

Originally, the District Court dismissed Matelich's 

claim. In the first trial, the District Court refused to 

permit damages to be established on the basis of O1Conner's 

bid because O'Conner had not prequalified with the Montana 

State Department of Highways as required by the 

specifications. That decision was appealed to this Court, 

and in E. I?. Matelich Construction Company v. Goodfellow 

Brothers and State of Montana (Mont. 1982), 645 P.2d 391, 39 

St.Rep. 831, this Court reversed and remanded for further 

proceedings. 

At the second trial, the District Court found that 

PJlatelich was entitled to a judgment of $19,153.19 against 

Goodfellow but that Goodfellow was not entitled to 

reimbursement from the State of Montana because of the waiver 

of the November 6, 1972 supplemental agreement. Goodfellow 

paid the Matelich judgment, and now contends that it is 

entitled to reimbursement from the State notwithstanding the 

waiver clause. 

Goodfellow, on appeal, claims it is entitled to 

reimbursement or indemnity from the State essentially on two 

grounds : (1 the waiver clause in the supplemental 

agreement of November 6, 1972 did not operate to bar its 

claim under the Matelich subcontract, and (2) the issue of 

wa.iver has been decided adversely against the State in 

another District Court action in the same district, involving 

the same project. Goodfellow claims that the State is barred 
by res judicata and collateral estoppel from disputing 

Goodfellow's right to indemnity reimbursement. 

The companion action on which Goodfellow claims either 

res judicata or collateral estoppel is Goodfellow, Inc. v. 

State of Montana, through its Highway Commission, cause no. 

41911 in the Missoula District Court. There, Goodfellow sued 

for and on behalf of its subcontractor, Yardley Drilling 

Company for $52,060.00 and for itself $10,412.00 for costs 

brought about because of additional excavation required 

between stations 573 plus and 577 plus on the highway 

project. Yardley Drilling Company was the drilling and 

blasting subcontractor for Goodfellow. The District Court in 

that case concluded that the November 6, 1972 supplemental 

agreement referred only to excavation required at the "400 

cut" and that any waiver contained in the supplemental 

agreement could not affect the delay and changes in design 

that were required between stations 573 and 577. The 

District Court entered judgment in favor of Goodfellow and 

its subcontractor, Yardley. 

It i.s not necessary for us to decide the contentions 

with respect to res judicata and collateral estoppel because 

we determine that the waiver clause contained in the 

supplemental agreement of November 6, 1972 does not pertain 

to the difficulty that Matelich faced when the subcontractor, 

O'Conner, refused to go through with his subcontract because 

no concrete was available at the jobsite. Waiver is a 

voluntary relinquishment of a known right, Rase v. Cattle 

Mountain Ranch, Inc. (Mont. 19811, 38 St.Rep. 992, 631 P.2d 

680; Kelly v. Lovejoy (Mont. 19771, 172 Mont. 516, 565 P.2d 

321. Waiver is an affirmative defense (~ule 8(c), 

M.R.Civ.P.) and thus the burden of proof is on the party 
raising the affirmative defense. The waiver clause itself in 

the supplemental agreement excepts "those claims which may be 

based on conditions not presently within the knowledge of 

either party or are not within the ability of either party to 

anticipate." Although the record is clear that at the time 

of the execution of the supplemental agreement on November 6, 

1972, Goodfellow knew that there would be delays in the 

completion of the contract, nothing in the record indicates 

that either party anticipated that concrete would not be 

available to O'Conner when, some 10 months later, he was 

called upon to complete his subcontract with Matelich. Nor 

does the State dispute anywhere in the record that if the 

project had not been redesigned, and the project carried on 

according to schedule, that OIConner would have had the 

concrete available to perform his subcontract. 

We therefore hold that the District Court was clearly 

erroneous, Rule 52(b), M.R.Civ.P., in finding that Goodfellow 

is precluded by the waiver clause in the supplemental 

agreement from indemnity reimbursement from the State. 

Any judgment against the State, of course, is subject to 

the provisions of S 18-1-404, MCA, that the State is not 

liable for interest prior to or after judgment or for 

punitive damages. 

We turn next to the issue raised by Goodfellow that the 

delay of the District Court of approximately nine months from 

the time of hearing to the time of decision was a denial of 

due process to Goodfellow. Because we have otherwise 

determined that Goodfellow should prevail on this appeal, we 

have no occasion to examine the issue whether a District 

Court delay of such duration had the effect of 
unconstitutionally denying due process. The issue has become 

moot. 

Accordingly, we reverse the District Court and remand 

the cause for entry of judgment in favor of Goodfellow and 

against the State of Montana in accordance with this opinion. 

We Concur: 

Chief' Justice 
Mr. Justice L. C. Gulbrandson, dissenting. 

I respectfully dissent. 

The majority has, in effect, ruled that as a matter of 

law Goodfellow did not have the ability to anticipate that 

concrete would not be available at the job site. In my view, 

the record is clear that at the time Goodfellow executed the 

supplemental agreement on November 6, 1972, Matelich's 270 

day construction period had already ended. It is also clear 

that Matelich had not entered a subcontract with O'Conner, 

but was relying on a bid proposal from OIConner dated 

November 5, 1970, which was conditioned upon concrete being 

available at the job site. O'Conner testified that his bid 

proposal would have been good through the 1971 period. When 

he was asked by Matelich to perform the final concrete work 

in September, 1973, he advised Matelich that his quoted 

figures were no longer adequate, and he and his crew were 

then employed by Matelich to complete the work. O'Conner had 

no legal obligation of any kind to Goodfellow, and Goodfellow 

was not aware of the conditional language in OIConner's 

proposal to Matelich. 

In my opinion, Goodfellow, in November, 1972, having 

negotiated the supplemental agreement for additional 

services, for which Goodfellow was to receive an additional 

$624,418, knew that the concrete work had to be performed as 

the last stage of the project. Goodfellow also would have 

known that a1 1 other concrete projects in the area had been 

completed and there was no reason for a concrete batch plant 

operation to remain in the area. 

I would, therefore, affirm the judgment of the trial 

judge that Goodfellow was not entitled to recover from the '7 

State of Montana. 

Justice / 

,/'