EDWARD MATOS, 

vs. 

NO. 82-242 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1983 

Plaintiff and Appellant, 

DANN D. ROHRER and 

PAULA ROHRER, INDIVIDUALLY 

and AS HUSBAND AND WIFE; 

JOEL A. RUCKER et al., 

Defendants and Respondents. 

Appeal from: District Court of the Nineteenth Judicial District, 

In and for the County of Lincoln 

Honorable Robert M. Holter, Judge presiding 

Counsel of Record: 

For Appellant: 

Ann German, Missoula, Montana 

James P. Taylor, Missoula, Montana 

For Respondents: 

Scott B. Spencer, Libby, Montana 

Submitted on briefs: December 16, 1982 

Decided: March 24, 1983 

Filed: MAR 2 4 1983 
Mr. Justice Fred J. Weber delivered the Opinion of the 

Court. 

Plaintiff appeals from a judgment in the Nineteenth 

Judicial District Court, Lincoln County, in this action for 

lien foreclosure. We affirm the District Court, but remand 

for a redetermination of fees and costs. 

Plaintiff presents the following issues for review: 

1. Whether the District Court erred in admitting par01 

evidence to "modify" the written agreement between the 

parties. 

2. Whether Matos is entitled to an equitable quantum 

meruit for services and materials of which respondents 

received the benefit. 

3. Whether the District Court erred in ruling that 

Matos' mechanic's lien was insufficient. 

4. Whether the trial court's findings of fact and 

conclusions of law are supported by substantial credible 

evidence. 

Defendants seek attorney's fees on appeal. Plaintiff 

seeks to have the fees and costs assessed against him 

overturned. 

In the winter and spring of 1980, defendants Dann and 

Paula Rohrer (Rohrers) discussed with plaintiff Edward Matos 

(Matos), a local building contractor, the possibility of his 

building them a passive solar home. Matos began construction 

on the Rohrer home in May of 1980. On June 23, 1980, at 

Rohrers' request, Matos prepared a proposal, which stated in 

pertinent part: 
"Rohrers agree on a cost & $16,000 

with $86,000 as a total cost in mind 

using attached cost guide-lines 

Rohrer agrees to do complete plumbing and 

electrical work 

Contractor to buy materials 

--- All of the above work - - to - be completed in a 

substantial and workmanlike manner ---- for the sum 07 L' 

cost ~lus $16.000 . . . Payments to be made each as the work 

progresses to the value of (95%) per cent of 

all work completed. The entire amount of contract 

to be paid within 10 days after completion. 

alteration or deviation - f;om - the above 

specifications extra -- cost of material or 

labor will only be executed upon written orders - for 

same,and will become an extra charge --- over the sum 

mentioned -- in this contyact. All agreements -- must be 

maderiting. --, " (Emphasis added) 

Included with the contract was a list of cost guidelines, 

which the parties accept as part of the contract, and which 

stated in pertinent part: 

"cost guide lines to < [less than] $86,000 

Fireplace 

Plumbing & electrical mat. 

Roof $65 @ square 

Siding $700 M 

Grhouse. siding $400 M 

F1. covering 

Cabinets (kit. & bath) 

Built-ins kept moderate 

Interior ceiling 

(Emphasis in original) 

-- not to exceed 

4,000 

4,500 

$65 @ sq. 

$700 M 

$400 M 

$12 yds. 

$4,000 

The parties signed the contract on June 30, 1980. 

During the summer of 1980, the Rohrers talked with Matos 

on several occasions. Matos repeatedly assured them that the 

costs of lumber and certain other materials were lower than 

anticipated. Durinq this period, the Rohrers requested a 

number of items for the home, which included extra built-in 

cabinets, a bay window, hard-core instead of hollow-core 

doors, additional or more costly lighting and plumbing 

fixtures, various changes in windows and ceiling, and 

additional masonry work. There was no written agreement to 
charge extra for additional work, nor was there evidence of 

an explicit agreement, written or oral, to waive the contract 

provision requiring such a written agreement. Rohrers 

testified that they orally agreed to pay Matos $500 more to 

cover the extra cost of the electrical fixtures and doors, 

but that there were no other additional charges agreed upon. 

As the building of the house progressed, Matos paid most 

of the bills for labor and materials and was paid in turn by 

Rohrers, "when needed". 

In September of 1980, Matos informed Rohrers that the 

house was costing more than anticipated, and that the final 

price wou3.d be between $95,000 and $100,000. Rohrers were 

very upset, and indicated they did not know where they would 

get the additional money. Matos insists the Rohrers neither 

ordered him to stop working nor put a ceiling on costs. 

Rohrers are equally adamant in their claim that they told 

Matos if he couldn't finish the house for between $90,000 and 

$91,000, then "he and the workmen should just quit, and we 

would finish it as we could afford to." According to 

Rohrers, Matos said "he would try and see what he could do." 

There was no further contact between the parties until 

the second week in October, when, upon Rohrers' return from a 

trip to Chicago, Matos informed them the house would cost 

over $100,000. At that time, Rohrers ordered Matos to quit 

working on the house. Matos' final price on the home was 

$103,544.45. Rohrers paid Matos a total of $86,500. The 

parties agree that the total cost of labor and materials for 

the house was $84,881.13. 

On December 23, 1980, Matos filed a mechanic's lien 

against Rohrers' property in the amount of $18,525.00. The 

lien provided in pertinent part: 
"That it is the intention of EDWARD MATOS, of 

Libby, Montana, claimant herein, to claim - and 

--- hold a lien upon that certain traFt or parcel 

-- of land hereinafter described, for the sum of 

$18,525.00 with interest thereon at the rate 

of 10% per annum from 10/24/80 until paid. 

"That the names of the owners of said premises 

described above at the date of this instrument 

according to the real estate records of 

Lincoln County, Montana, are Dann D. Rohrer 

and Paula Rohrer, of Libby, Montana." 

(Emphasis added) 

The lien incorporated by reference two attachments, the first 

being a legal description of the parcel of land upon which 

the improvements were made, the second being a specific list 

of additional costs amounting to $18,525.00. 

On February 19, 1981, Matos filed a complaint, seeking 

judgment against Rohrers in the amount of $18,525.00, to be 

derived from the proceeds of a sheriff Is sale of the Rohrer 

property. Matos also sought judgment that his lien had 

priority over liens established by several material men, 

named as defendants in this action. 

Rohrers answered that (1) the lien wa.s invalid for 

failing to describe the "building structure or improvement" 

to which it attached; (2) under the contract and in 

accordance with Matos' subsequent verbal assurances, the 

ceiling price of the house was $86,000; and (3) Matos was 

responsible for any unpaid obligations from the construction 

of the house. Rohrers also counterclaimed, seeking damages 

for breach of contract, judgment that Matos was responsible 

for unpaid construction debts, and judgment removing all 

liens and quieting title to the real property involved. 

On December 15, 1981, Matos moved in limine for 

exclusion of "any and all evidence sought to be admitted to 

alter, vary, or interpret the terms of" the June 23, 1980 

agreement. The motion was denied. 
On December 21, 1981, the claim of defendant Loveless 

and Company, d/b/a Larry's Furniture, was dismissed by 

stipulation of the parties as being fully settled. 

Trial was held January 19, 1982 before the District 

Court judge sitting without a jury. Judgment for defendants 

was entered March 16, 1982. Matos was ordered to pay 

defendants the sum of $8,651.90, which included payment made 

by Rohrers, to unpaid material men for supplies for the 

house. The court also awarded Rohrers costs in the amount of 

$187.50 and attorney's fees amounting to $2,230.00. All 

liens against the Rohrer property were discharged. Matos' 

motion for new trial or, alternatively to amend findings, was 

denied. Plaintiff Matos appeals. 

Matos maintains that the terms of the June 23, 1980 

contract were clear and unambiguous; that the contract was a. 

simple "cost-plus" contract; and that the District Court 

erred in admitting parol evidence to "modify and contradict" 

its terms. 

We do not agree. The parol evidence rule, as codified 

in section 28-2-905, MCA, provides: 

"When extrinsic evidence concerning a written 

agreement may be considered. (1) whenever the 

terms of an agreement have been reduced to writing 

by the parties, it is to be considered as 

containing all those terms. Therefore, there can 

be between the parties and their representatives or 

successors in interest no evidence of the terms of 

the agreement other than the contents of the 

writinq except in the following cases: 

--- (a) when a mistake or imperfection -- of the writing 

- is put in issue 2 tG pleadings; 

(b) wheythe validity of the agreement is the fact 

in dispute. 

(2) This section does not exclude other evidence -- 

-- nf - - the - - - - circumstances under - - - - - - - - - - -- - - - - - -- - - - - - - which the aareement was 

--- made or to which -- it re1 

1-4-102, '- or other evidence 

ambiauitv or to establish 

ates, as described in 

- to explyin an extrinsic -. - - 

- - - illeaalitv or fraud. 

(3) he^ term 'rgreement ' , for the of this 

section, includes deeds and wills as well as 

contracts between parties." (Emphasis added) 
See Dussault v. Hjelm (1981) Mont . , 627 P.2d 1237, 

1239-40, 38 St.Rep. 738, 741, where this Court, relying upon 

section 28-2-905, MCA, upheld the District Court's acceptance 

of parol evidence regarding a lease agreement to resolve the 

ambiguity which existed in the instrument. See also Downs v. 

Smyk (1982) Mont . , 651 P.2d 1238, 1244, 39 St.Rep. 

1786, 1794. 

In the case at bar, the contract, in one place, refers 

to "cost & $16,000--with $86,000 as a total cost in mind"; in 

another place it states, "All of the above work to be 

completed . . . for the sum of cost plus $16,000"; and in yet 

another (the attached guidelines) , is found the phrase "cost 

guide lines to ([less than] $86,000", followed by the words, 

-- "not to exceed. " These additional terms imply, but do not 

positively establish, a definite ceiling price. The contract 

is unclear as to whether "total cost" is meant to include the 

contractor's fee of $16,000. There is no way that scrutiny 

of the contract itself will render these terms certain and 

unambiguous. Therefore, we find tha.t the District Court 

properly admitted parol evidence to aid it in interpreting 

the June 23, 1980 contract. 

The question then becomes a factual one: Whether the 

District Court, as fact-finder, wrongly determined that the 

June 23, 1980 agreement involved a ceiling price of $86,000, 

including the contractor's fee. 

"In reviewing findings of fact in a civil action 

tried by the District Court without a jury, this 

Court is confined to determining whether there is 

substantial credible evidence to support those 

findings. Hornung v. Estate - of ~ager~iist (1970) , 155 Mont. 412, 473P.2d 541. Although conflicts 

may exist in the evidence presented, it is the duty 

and function of the trial judge to resolve such 

conflicts. His findings will not be disturbed on 

appeal where they are based on substantial though 

conflicting evidence. Fausett - v. Blanchard (1969) , 154 Mont. 301, 463 P.2d 319. Finally, in 

determining whether the trial court's findings are 
supported by substantial evidence this Court must 

view the evidence in the light most favorable to 

the prevailing party. Hellickson v. Barrett Mobile 

Home Transport, Inc. (1973), 161-~ont. 455, 507 

P.2d 523." Bauer v. Cook (1979) 182 Mont. 221, 

Here, the evidence is conflicting. Matos testified that 

the parties had agreed on a cost-plus contract with no 

ceiling because the Rohrers wanted to be free to choose 

suitable fixtures and decorations for the interior of their 

house. Dann Rohrer testified: 

"We said, 'We couldn't spend over Eighty-six', and 

he said, 'Well, if everything goes okay, it should 

be between Eighty and Eighty-Six. It could be as 

much as Eighty-six.' 

"Q. Then, you did tell Mr. Matos that there was a 

limit on the price? 

"A. Yes--yeah. We told him that there was no way 

that we could go over Eighty-six, and that would 

have to be the total cost--maximum, total cost. 

"The one thing that we had told him we wanted, and 

that was, a ceiling . . . 

"Q. Was it your understanding at, that time, that 

there was a limit on the contract? 

"A. Oh, definitely. We never went into it any 

other way. 

"Q. Did Mr. Rohrer--did Mr. Matos lead you to 

believe that there was a ceiling on that contract? 

"A. That's why we have it written in the total 

cost, not to exceed the total means--that's what 

the total means." 

Paula Rohrer testified that she and her husband had "made it 

very clear to [Matos] that we had to have a ceiling." The 

transcript includes the following testimony of Paula Rohrer: 

"Q. Okay. Paula, did you then enter into an 

agreement to build a house? 

"A. Yes, we did. 

"Q. And was there a ceiling? 
"A. Yes, there was. 

"Q. And what was the ceiling? 

"A. Eighty-six Thousand Dollars. 

"Q. Did you have the Contract explained by 

anybody? 

"A. Ed Matos. 

"Q. And did he tell you that there was a ceiling 

on the Contract? 

"A. Yes." 

The District Court's findings included the following: 

"7. During negotiations, the Rohrers had several 

conversations with Matos about the cost of the 

home. Matos assured the Rohrers the cost would not 

exceed $86,000.00. 

9. At the time [the contract] was signed, the 

Rohrers had Matos explain the terms of the 

contract. Matos told the Rohrers the contract 

provided that the house would cost no more than 

$86,000.00. 

We hold that there is substantial evidence supporting 

those findings, as well as the District Court's conclusion 

that" [tjhe contract between the parties was a cost plus 

$16,000.00 fee contract, with a maximum guaranteed price of 

Matos claims that the District Court "ignored all 

aspects of the case concerning [his] equitable rights as a 

lienholder". He also maintains that, regardless of the terms 

of the contract, he is entitled to a reasonable guantum 

meruit for supplying services and materials of which Rohrers 

received the benefits. Matos relies primarily upon this 

Court's holdings in Smith v. Gunniss (1944) 115 Mont. 362, 

144 P.2d 186, and Maxwell v. Anderson (1979) 181 Mont. 21.5, 
593 P.2d 29. We do not find those cases dispositive although 

both indicate that: 

" . . . under proper circumstances an award can be 

made based on the reasonable cost of labor and 

materials furnished by the lienholder, in disregard 

of the original contract." Maxwell, 181 Mont. at 

221, 593 P.2d at 32. 

In Maxwell this Court held that, where the total price 

was an estimate, and thus there was never a firm ceiling to 

the contract, it was unnecessary to modify the contract to 

allow for a total higher price caused by the owners' numerous 

changes in plans during construction. The case may be 

distinguished from the case at bar, where there - was a 

definite ceiling. 

In Smith, defendant owners appealed from the foreclosure 

of a contractor's mechanic's lien on their house. Defendants 

had ordered the contractor to cease his work after more than 

two months, because they felt the price was getting too high. 

They had paid him nothing and refused to pay him. This Court 

held that, although the maximum cost of the contract appeared 

to be fixed at $2,500 because the Federal Housing Note out of 

which payment was to be made was limited to no more than 

$2,500, that was not the case for several reasons. First, 

the contract was a cost-plus contract without - a fixed 

ceiling; second, the owners had acquiesced in the continued 

construction, knowing the cost was already well over $2,500; 

and third, the owners' changes in the plans necessarily 

changed the cost of construction. 

There are significant differences between Smith and the 

case at bar. First, the contract was, as the District Court 

found and we herein affirm, not a simple cost-plus contract, 

but a cost-plus contract with a definite ceiling of $86,000. 

Second, the Rohrers did not just acquiesce in the continued 

building, upon learning that the estimated total price of the 
house would far exceed the ceiling price. They told Matos to 

cease construction at once if he could not complete the 

project for less than $91,000. Matos said he would see what 

he could do, continued the construction, and, a month later, 

with no further contact between the parties, informed Rohrers 

that the total cost was now over $100,000. There is no 

"acquiescence" here, by the Rohrers; there is, instead, 

Matos' failure to abide by the terms of an implied, 

conditional agreement to waive the contract's ceiling price. 

Finally, although the record indicates that Rohrer did 

request numerous changes in the plans, Matos has failed to 

establish the additional costs, if any, of those changes. 

The District Court concluded that "the parties agreed to 

extras in said construction at a cost of $500." The record 

supports this conclusion. This Court has long observed the 

doctrine of implied findings, i.e., that we will imply 

findings which are supported by the evidence and necessary to 

the District Court's judgment. Berry v. Romain (1981) 

Mont . , 632 P.2d 1127, 1132, 38 St.Rep. 1434, 1439-40. 

The finding implicit in the above conclusion is that Matos 

failed to establish agreement between the parties involving 

additional costs above the agreed-upon $500 and that he 

failed to establish the cost of those other extras. It is 

true that according to the pre-trial order, the stipulated 

total cost of labor and materials, exclusive of Matos' 

contractor's fee, was $84,881.13. But that does not indicate 

the additional cost, if any, of each change in the plans. 

Nor, without further evidence, is additional cost established 

by Matos' list of such costs attached to the lien upon the 

Rohrer property. 
The Rohrers testified that they agreed with Matos to pay 

$500 extra for solid-core doors and additional lighting 

fixtures. The contract required that: 

"Any alteration or deviation from the above 

specifications involving extra cost of material or 

la.bor will only be executed upon written orders for 

same, and will become an extra charge over the sum 

mentioned in this contract. All agreements must be 

made in writing." 

The record contains no such written orders or 

agreements, nor evidence of any explicit agreement, written 

or oral, to waive the above provision. The considerable 

evidence of the parties' oral agreement to pay $500 extra for 

solid-core doors and additional light fixtures was properly 

treated as waiving the provision - as - to - that particular 

agreement. The evidence establishes the nature of the 

alteration and the agreed cost of the alteration. There is 

no such compelling evidence to establish the extra costs of 

other deviations from the plans. Steve Logan, a supervising 

worker on the construction job, testified that he told 

Rohrers that changing the downstairs closets would be 

"relatively expensive", and the different light fixtures 

would involve labor. And Rohrers admit that Matos had told 

them certain changes would drive up the cost of construction. 

But when asked. whether they had paid for those changes, Dann 

Rohrer answered, "That's why we paid the Five Hundred Dollars 

more--beca.use we did change a couple of things." 

Matos testified that the cost guidelines were exceeded 

by certain extras, e.g., the fireplace and the built-in 

cabinets. Rut he did not present specific evidence 

concerning the amount of overruns. Indeed, he testified 

that, because he considered the contract a cost-plus 

contract, he did not keep a close tally of costs; he "didn't 

take specific bills and go back and refer to some other 
document or estimate on price of sheetrock." Instead he paid 

most bills as they came in and requested money from the 

Rohrers when he needed it. 

We note also that, in both Smith and Maxwell, we 

affirmed the District Court. In Maxwell we held that "the 

findings of the District Court were never challenged by 

substantial evidence to the contrary and must stand 

affirmed." 181 Mont. at 222, 593 P.2d at 33. Smith, too, 

turned on certain "undisputed facts" which established among 

other things that "as the work progressed, changes were made 

in the plans from time to time by the defendants which 

changes would necessarily change the cost of the 

construction." 115 Mont. at 384, 144 P.2d at 193. 

Here, appellant Matos would have us overturn a district 

court judgment which turns in large part upon factual 

determinations by the District Court. We do not find Smith 

and Maxwell govern the outcome of this issue. 

A mechanic's lien is recognized in this state as "a 

creature of statute, remedial in nature, with its foundation 

in equity and natural justice." Beck v. Hanson (1979) 1-80 

Mont. 82, 87, 589 P.2d 141, 144. The trial court's findings 

of fact will not be disturbed by this Court, on the appeal of 

equity cases where the evidence does not preponderate 

decidedly against those findings. Rase v. Castle Mountain 

Ranch (1981) Mont . , 631 P.2d 680, 684, 38 St.Rep. 

992, 996. The evidence must be viewed in the light most 

favorable to the prevailing party in the District Court. 

Hagfeldt v. Mahaffey (1978) 176 Mont. 16, 18, 575 P.2d 915, 

916-17. 

A review of the record discloses that there is not a 

preponderance of the evidence indicating that, contrary to 

the conclusions of the District Court, Matos is entitled, in 
equity, to a sum in excess of the contract sum of $86,000 

plus the $500 paid for changes requested by the Rohrers. 

111. 

We may deal summarily with other issues raised. The 

District Court, in its memo accompanying its findings and 

conclusions, noted that Matos' lien was defective for failure 

to describe the building or improvements upon which the lien 

was claimed; that a mere legal description of the property 

was not sufficient. Here, since this Court has affirmed the 

District Court in its determination that Matos is not 

entitled to the additional costs which are the basis for his 

lien, we deem it unnecessary to consider the technical 

validity of that lien. Without a debt there can be no lien. 

Pittsburgh Plate Glass Co. v. Culbertson Hotel Co. (1922) 62 

Mont. 605, 609, 205 P .957, 959. 

Matos maintains that the judgement must be reversed, 

because of numerous technical inconsistencies in the District 

Court's findings, which indicate that the District Court 

failed to fairly consider the evidence and carefully make its 

own findings . 

Where findings and conclusions, which are proposed by 

the parties and adopted by the trial court, are supported by 

the evidence and are sufficiently comprehensive and pertinent 

to the issues to provide a basis for decision, their adoption 

will not provide grounds for reversal. See In re Marriage of 

Hunter (1982) Mont . , 639 P.2d 489, 495, 39 St.Rep. 

59, 67; In re Marriage of Jensen (1981) Mont . , 631- 

P.2d 700, 703-04, 38 St.Rep. 1109 1113. Here, although there 

is technical merit in several of the points raised by 

appellant Matos, we do not consider any of the points 

significant enough to affect the District Court's conclusion. 

We hold, therefore, that the several minor discrepancies in 
the District Court's findings do not warrant our remanding 

this case for reconsideration. 

We do note a mathematical error in the court's 

determination of the amount due Rohrers. The court failed to 

consider the $500 increase for extras in the total price. 

Therefore, the judgment for Rohrers should amount to 

$8,151.90 rather than $8,651.90, as ordered. 

Rohrers seek attorney fees on appeal, while Matos seeks 

to have this Court overturn the District Court's award of 

attorney fees and costs to Rohrers. 

"A party who successfully defends against a 

foreclosure action must be allowed a reasonable 

attorney fee in both the District Court and the 

Supreme Court. Section 7-3-124, MCA. 

"There is no statutory provision for an award of 

attorney fees in successfully prosecuting the 

counterclaim for damages. Costs are recoverable on 

the counterclaim, sections 25-10-101(3), 25-10-102, 

and 25-10-201, MCA; but attorney fees are not 

recoverable costs in the absence of statute or 

contractual agreement of the parties. Winer v. 

Jonal Corp. (1976), 169 Mont. 247, 545 P.2d 1094, 

and cases therein cited. " Carkeek v. Aver (1980) 

Mont . , 613 P.2d 1013, 1015, 37 St.Rep. 

1274, 1275-76. 

The findings and judgment indicate the District Court 

did not distinguish between or separate those fees incurred 

by Rohrers in defending against the lien and those incurred 

in prosecuting their counterclaim. We therefore remand this 

cause for a determination of the attorney fees in the 

District Court and the Supreme Court to which Rohrers are 

entitled under the above statutes and the rule stated in 

Carkeek, and for correction of the amount of damages awarded 

Rohrers to $8,165.90. 

With the above-noted exceptions, the judgment is 

affirmed. 
We concur: 

Chief Justice