NO. 93-489 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1994 

WESTFORK CONSTRUCTION COMPANY, 

Plaintiff and Appellant, 

NELCON, INC., and UNITED STATES 

FIDELITY AND GUARANTY COMPANY, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Missoula, 

The Honorable John S. Henson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James C. Bartlett, Hash, O'Brien & Bartlett, 

Kalispell, Montana 

For Respondents: 

Robert J. Phillips, Phillips & Williams, 

Missoula, Montana 

Filed: 

Submitted on Briefs: ~pril 14, 1994 

Decided: June 28, 1994 
Justice William E. Hunt, Sr., delivered the opinion of the Court. 

Subcontractor Westfork Construction Company filed an action in 

the Fourth Judicial District, Missoula County, for contract damages 

against contractor Nelcon, Inc., and its bonding company, United 

States Fidelity and Guaranty (Fidelity). Westfork alleged that it 

was entitled to damages arising out of its subcontract agreement 

with Nelcon for Westfork to clear acreage and retain the timber on 

the acreage, and the subsequent discovery that timber had been 

removed. Westfork appeals the directed verdict and judgment and 

attorney fee award entered for Nelcon and Fidelity. 

We affirm. 

The sole issue on appeal is whether the District Court erred 

when it granted respondentst motion for a directed verdict on the 

basis that the evidence established that appellant received all the 

payment it was entitled to under the written agreement. 

On October 5, 1987, Nelcon entered an agreement with the State 

of Montana to complete a highway construction project known as Elk 

Hills-Lyon Springs in Lincoln County, and granting Nelcon the 

standing timber within the right-of-way. The project required the 

highway to be straightened and widened. Prior to this agreement, 

in mid-September 1987, Nelcon inspected the project and found 

timber to be standing on the site. 

Westfork placed a bid for a subcontract with Nelcon to clear 

and grub the project grounds in preparation for excavation. 

Westforkts written bid dated October 2, 1987, offered a price of 
$1200 per acre on the approximately 70 acre project area, plus the 

right-of-way timber. 

As a result of the bid, Nelcon and Westfork entered into a 

subcontract dated October 5, 1987, providing for payment of $84,000 

for clearing and grubbing the approximately 70 acre area at $1200 

per acre. The subcontract did not refer to the timber. However, 

Nelcon concedes that its representatives agreed that Westfork 

"could do with the timbertt as it "pleased." 

In mid-October 1987, it became known to the State, Nelcon, and 

Westfork that the timber was owned by Champion International and 

had been removed from the area. In response to this information, 

Westfork sent a letter to Nelcon stating that it would complete the 

job for $1700 per acre due to the absence of timber. Although the 

letter was received by Nelcon, no response was ever given. 

Westfork commenced the job and completedthe clearing and grubbing. 

At about the same time that Westfork sent the letter to 

Nelcon, Nelcon filed a claim with the State concerning the missing 

timber. After negotiations, the State offered to settle the issue 

with Nelcon by paying them $22,359.63 for the missing timber, which 

included the value of the timber, plus Nelcon's costs in 

determining the amount of missing timber in the area. Of the 

$22,359.63 timber settlement, Nelcon paid Westfork $19,859.63 after 

retaining $2500 as markup costs. 

Westfork filed an action against Nelcon and Fidelity alleging 

damages due to the modified contract terms wherein Nelcon agreed to 

pay at the rate of $1700 per acre due to the absence of timber, 
thus owing Westfork $15,277.47, plus interest. In the alternative, 

if the contract was found to have not been modified, then Westfork 

alleged it was entitled to receive damages for the missing 

right-of-way timber under the subcontract agreement with Nelcon. 

A jury trial began February 10, 1993. At the close of 

Westfork's case-in-chief, the District Court granted Nelcon's and 

Fidelity's motion for a directed verdict. In granting the directed 

verdict, the court noted that Westfork did not argue that the 

agreement should not be enforced because it was unconscionable or 

fraudulent, and found that the subcontract between Nelcon and 

Westfork constituted the entire agreement. The court found that 

Sections 7 and 8 of the subcontract between Nelcon and Westfork 

specifically provided for the resolution of any changed 

circumstances or construction claims, and Section 8 specifically 

provided that Westfork was bound to Nelcon to the same extent that 

Nelcon was bound to the State whenever any claims or disputes arise 

out of the performance of the contract. The court also found that 

the subcontract provided that Nelcon could not be liable to 

Westfork for its work on the project for any amount greater than 

the amount recovered from the State by Nelcon, less markup, and 

that Westfork received all the payments it was entitled to under 

the subcontract. Judgment was entered on March 22, 1993. 

Did the District Court err when it granted respondent's motion 

for a directed verdict on the basis that the evidence established 

that appellant received all the payment entitled to under the 

written agreement? 
When this Court reviews a directed verdict granted pursuant to 

Rule 50(a), M.R.Civ.P., it looks to see if the evidence leads to 

only one conclusion. "If only one conclusion is reasonably proper, 

then the directed verdict is proper." Semenza v. Leitzke (1988), 

232 Mont. 15, 18, 754 P.2d 509, 511 (quoting Cremer v. Cremer Rodeo 

Land & Livestock Co. (1979), 181 Mont. 87, 92, 592 P.2d 485, 488). 

A directed verdict is properly granted when the "evidence is so 

insufficient in fact to be insufficient in law. Semenza, 754 P.2d 

at 511 (quoting Parini v. Lanch (l966), 148 Mont. 188, 191, 418 

P.2d 861, 863). In our review of a directed verdict for a 

defendant, we will view the evidence in the light most favorable to 

the plaintiff, and if the evidence tends to establish the case 

according to the plaintiff's pleading, this Court will reverse the 

district court's order. Cremer, 592 P.2d at 488. 

Both Westfork and Nelcon agree that although there is no 

written agreement concerning the grant of timber to Westfork, both 

parties understood that the main contract between Nelcon and the 

State provided that Nelcon could retain any merchantable timber on 

the right-of-way, and Nelcon conceded that Westfork we could do with 

the timber" as it "pleased." Westfork argues that the parties 

resolved their dispute concerning the missing timber by modifying 

the subcontract price from $1200 per acre to $1700 per acre, as 

evidenced by the letter Westfork sent to Nelcon on October 28, 

1987. Westfork also contends that Nelcon representatives were 

aware that Westfork was performing the job, and therefore, Nelcon 

impliedly accepted the $1700 modification by its failure to 
respond. Therefore, Westfork asserts that there was sufficient 

evidence for the jury to conclude that the parties resolved their 

dispute concerning the absent timber and agreed that the job would 

be completed for $1700 per acre. 

Nelcon, on the other hand, argues that the written contract 

was clear and unambiguous and provided all the terms of the 

agreement between the parties, and that both Westfork and Nelcon 

are experienced in the area of bidding and contracting construction 

jobs. Nelcon also argues that there is no evidence in the record 

that Nelcon executed any acceptance of Westfork's letter to modify 

the subcontract price terms. 

A written contract may be altered by another written contract 

or by an executed oral agreement. Section 28-2-1602, MCA. The 

record reveals that during the trial the District Court did not 

allow Westfork's offer of the October 28, 1987, letter as evidence 

that the parties modified their agreement price to $1700 per acre. 

The court limited the letter's relevance to show the parties were 

aware the timber was gone and were negotiating the value of the 

timber. The court also determined that the letter was evidence of 

a proposal, not a modification. Westfork does not argue that the 

court erred when it limited the letter's relevance, and our search 

of the record provides no evidence of written acknowledgement or 

acceptance by Nelcon to Westfork's proposal. 

An oral agreement modifying the written agreement must be 

fully executed to meet with the provision within 5 28-2-1602, MCA. 

Additionally, an executed oral agreement requires full execution on 
both sides of the agreement. Kraft v. Hodson (1992), 254 Mont. 

262, 264, 836 P.2d 1234, 1236. Here, Nelcon paid Westfork $1200 

per acre for the clearing and grubbing completed, the amount 

specified in the written subcontract--not the alleged modified 

amount of $1700 per acre. Therefore, the alleged modification 

amount was not fully executed by both parties. 

The District Court found that the subcontract between Nelcon 

and Westfork provided all the terms of the agreement. The 

following provision in the agreement provides for disputes 

concerning changes and extra work: 

7A. Contractor [Nelcon] may at any time by written order 

of Contractor's authorized representative, and without 

notice to the Subcontractor's [Westforkls] sureties, make 

changes in, additions to, and deletions fromthe work to 

be performed under this Subcontract and Subcontractor 

shall promptly proceed with the performance of this 

Subcontract so changed. Any increase or decrease of the 

Subcontract price or time resulting from such change or 

extra work shall be agreed upon in writing by the parties 

hereto and, if mutual agreement is not possible, the 

questions of entitlement to additional time or to a 

change in compensation and the amount thereof shall be 

determined as provided in the Disputes Clause of this 

Agreement . . . . 

The provision in Section 8 is titled I1Disputes1l and states in 

pertinent part: 

8A. In the event of any dispute or claim between the 

Contractor [Nelcon] and the Owner [the State] which 

directly or indirectly involves the work required to be 

performed by Subcontractor [Westfork] under this 

subcontract, or in the event of any dispute or claim 

between Contractor and Subcontractor which directlv or 

indirectlv involves a claim aaainst the Owner for either 

additional com~ensation and/or an extension of time under 

the Contract Documents. Subcontractor aarees to be bound 

to Contractor and Contractor asrees to be bound to 

Subcontractor to the same extent that Contractor is bound 

to the Owner bv the terms of the Prime Contract and bv 

anv and all ~rocedures and resultins decisions, findinas 
or determinations made thereunder by the person so 

authorized in the Prime Contract or by an administrative 

agency, board or court of competent jurisdiction, whether 

or not Subcontractor is a party to the proceedings before 

said person, agency, board or court. . . . It is 

expressly understood and agreed in connection with the 

determination of such claims or disputes that as to any 

work done by the Subcontractor. . . . Contractor shall 

never be liable to Subcontractor to any ureater extent 

than Owner is liable to Contractor, less any markups on 

costs incurred bv Contractor. 

8C. In the event either party institutes suit in court 

against the other party, or against the surety of such 

party, in connection with any dispute or matter arising 

under this Subcontract, the prevailing party shall be 

entitled to recover its attorneys' fees, in addition to 

other relief granted by the court. [Emphasis added]. 

Where the language of the subcontract terms relative to the 

dispute resolution and recovery limits was plain and its meaning 

apparent, the trial court had the duty to declare that meaning and 

not leave it to the speculation of the jury. Section 1-4-101, MCA; 

Martin v. Community Gas and Oil Co., Inc. (1983), 205 Mont. 394, 

399, 668 P. 2d 243, 245. Where contract provisions are unambiguous, 

the courts have no authority to insert provisions in, or delete 

provisions from, the contract. In re Marriage of McKeon (1992), 

252 Mont. 15, 826 P.2d 537. In the interpretation of contracts, 

each provision within the contract must be given effect. First 

Security Bank of Anaconda v. Vander Pas (1991), 250 Mont. 148, 818 

P.2d 384. 

The language of Section 7 was not ambiguous or vague, but 

provided for any dispute contingency in the work to be done or 

payments to be made, to be resolved by the procedure in Section 8. 

Section 8 was not ambiguous or vague, but provided that the parties 
were bound to each other to the same extent that Nelcon is bound to 

the State by the prime contract terms, and by all procedures and 

resulting decisions, findings, or determinations made thereunder, 

and that Westfork could not recover more from Nelcon than Nelcon 

could recover from the State. Section 8 also provided that the 

party who prevails in a court proceeding shall be awarded attorney 

fees. 

Westfork contends that Section 8 does not apply because Nelcon 

never invoked the claim procedure provided within the subcontract. 

However, the record shows Nelcon submitted a Notice of Potential 

Claim to the State and subsequently entered negotiations and 

resolved the timber dispute. After the State paid Nelcon the 

$22,359.63 timber settlement, pursuant to the agreement terns, 

Nelcon paid Westfork $19,859.63--the entire settlement amount less 

Nelcongs markup total of $2500. 

We hold that the record supports the District Court Is 

interpretation of the subcontract and the evidence was legally 

sufficient to withdraw the case from the jury. The evidence within 

the record provides only one reasonable conclusion--that the 

written subcontract provided the terms of the agreement between the 

parties. 

We hold that the District Court properly granted the directed 

verdict in favor of Nelcon and ~idelity, and properly granted 

attorney fees. 

Af f imed . 
we concur: