No. 83-513 INTHE SUPREME COURT OF THE STATE OF MONTANA 1984

FLOYD M. SACK, d/b/a EMPIRE DEVELOPMETJT COMPANY Plaintiff and Respondent,

-VSA. V. DESIGN, INC., a corp., Defendant and Appellant.

APPEAL FROM: DistrictCourtof theThirteenthJudicial District, Inand fortheCounty of Yellowstone, The Honorable RobertH. Wilson, Judgepresiding.

COUNSEL OF RECORD:

For Appellant: Hendrickson & Everson; JimRagain, Billings, Montana Porterfield & Wheatley; Wendell B. PorterfFeld, JE-:,- Denver, Colorado For Respondent: James P. Murphy, Billings, Montana

Submittedon Briefs: April 12, 1984 Decided: July 3, 1984

.-.-- Clerk

### Mr. Justice John Conway Harrison delivered the Opinion of the Court.
This appeal concerns a 

### construction contract dispute between the owner of a commercial officebuilding erected in Billings, Montana, and the subcontractor corporation that furnished the heating, ventilating and air conditioning systems for the building. The matter was tried in the Thirteenth Judicial District, in and for the County of Yellowstone, before Judge Robert H. \4ilson, presiding without a jury. The District Court found appellant A.V. Design liable for breach of contract and awarded respondent FloydM. Sackdamages in the amount of $11,424.61. From the findings of fact and conclusions of law and judgment, A.V. Designappeals. Floyd M. Sack, d/b/a Empire Development Co. is the

owner of several commercial buildings in Colorado, Utah Virginia and Montana. The subjectmatter of this action is

abuilding owned by Sack inBillings. Acting as the general contractor, Sack requested A.V. Design to submit a bid on the heating, ventilating and air conditioning systems for this building. A.V. Design is a Denver based corporation with whom Sack had prior business dealings. Following preliminary discussions between the parties, a written contract dated August 27, 

### 1980, was entered into between A.V. Design as subcontractor and Empire Development Company as the general contractor. The contract provided that the work was to be performed "continuously and uninterruptedly" until theproject was completed. A.V. Design's bid wasbased on a 

### system designedby it and submitted to Sack, called a variable air volume system

### (V.A.V.). 

### This type of system was new to Sack and had not been utilizedby him in any other buildingshe owned. After the 

### system was completed and the building occupied, Sack began receiving complaints from the tenants that the building was alternately too hot or too cold. Sack made several trips from his home inDenver toBillings to examine the system and the building, after which he determined that the system was not properly "balanced." Sack contactedA.V. 

### Design and attempted topersuade them to complete the jobby balancing the system. Despite Sack's efforts A.V. 

### Design did not balance the system and eventually Sackwas forced to have the system balanced by a Billings professional engineer. In the course of his repairs, the engineer found

numerous problems; the return air system was improperly installed, thermostats and V.A.V. 

### boxes were improperly installed, air diffusers were either not installed or improperly installed, V.A.V. 

### coils were sticking open or closed, the hot water circulating pump was improperly installed, outside air sensors for the hotwater pumps were not hooked up and static pressure sensorswere installed in the wrong places. Themajor problemwas that becauseof the defective equipment and improper installation, the system was forcing both hot and cold air into the building at the

same time. As a result the temperature in the building fluctuated sometimesover 20' 

### during awork day,and thegas bills (which were paid by Sack, not the tenants) were astronomical. The system was finally repaired and balanced after Sack made several trips from Denver to oversee the work and contractwith qualified repairmen.InJuly 1982, Sack brought suitagainstA.V. Design to

recover damages for breach of the contract. The complaint sought damages based upon the failure of A.V. Design to complete the installation of the system and adequately balance the systemafterrepeated demands. This inturnwas based on thewarranty language contained inthesubcontract, which also allowed Sack to repair or replace any defects covered by the warranty at A.V. Design's expense. Specifically, Sack claimed damages for the amounts paid other contractors or suppliers tocomplete the installation and adjustment of the system, the amount paid for excess natural gas consumed by the system and travel expenses incurred inshuttlingbetween Denver and Billings. Following a trial before the District Court sitting without ajury, findingsof factand conclusions of lawwere entered. A.V. Design was found tobe inbreach of contract and Sack was awarded $15,146.39 as damages for the above mentioned claims. This amount was set off by a $3,722.78 retainage held by Sack, and judgment for $11,424.61 was entered. A.V. Design filed a motion for new trial, which

was denied. This appeal follows. Appellant raises three issuesfor our consideration: (1)Are the findings of fact and conclusions of law supportedby thefactsof thiscase? (2)Did the trial court err in awarding damages for natural gasconsumption? (3) Did the trial court err in awarding Sack his travelexpenses? In reviewing the findings of fact made by a lower court, we may not substitute our judgment inplace of thatof the trier of facts. This Court's function rather, is to determine whether there is substantial credible evidence to support the findings of fact. Cameron v. Cameron (1978), 179Mont. 219, 587 P.2d 939. Inmaking that determination, the evidence is viewed in a light most favorable to the prevailing party. Cameron, supra. The DistrictCourt found thatA.V. Design had breached the contract by failing to make the necessary final adjustments tocomplete thesystem. The courtfound thisin breach of the warranty provisions and also thatA.V. Design had simply not completed the contract. Despite appellant's contentions, these conclusions aresupportedby theevidence brought forthattrial. Sack presented the testimony of a professional engineer, whose specialtywas testingand balancing heating, air conditioning and ventilating systems such as the one installed here. The engineer enumerated several defects in the system as installed and several 

### items missing from the system which made it incomplete. He testified that these deficiencies in the system caused theproblems of which the tenants complained. Appellant presented some conflicting evidence, contending that thework done by Sack's repairmen

was "tenant finish" work not required by the contract. However this "tenant finish"work alluded toby A.V. Design did not cure the problems enumerated by the engineer. The changes suggested by the engineer cured defects in either the design or installationof the system; such asplacement of thermostats and static pressure sensors, mechanical failureof equipment and missing parts. The fact thatthese changes were necessary to correct the problems with the

### system was not rebutted by appellant's testimony. Also, there being a marked decrease in complaints after these adjustments were made lends credence to the engineer's testimony that the defects uncovered by him were the cause of the problem. There is clearly sufficient evidence to support the findingsof the trial court. The final two issues concern the award of damages made by theDistrict Court. For abreach of contract, the amount of damages allowed "[Ils the amount which will compensate the party aggrieved for all the detriment which was proximately caused thereby or in the ordinary course of things would be likely to result therefrom. Damages which are not clearly ascertainable in both their nature and origin cannot be recovered for a breach of contract." Section 27-1-311,MCA. "Where the contractor fails to keep his agreement, the measure of the employer's damages

# .

# .. is always the sum which will put him in as good aposition

as if the contract had been performed." Kirby v. Kenyon-Noble Lumber Co. (1976)

## , 171 Mont. 329 at 332, 558 P.2d 452at 454. Appellant first contends that it was error to award Sack damages to compensate for the excess naturalgas usage caused by the defects in the system. There was ample testimony to establish that during the five summer months when the system was improperly adjusted (May through September, 1981), the heating and cooling systems were operating at the same time, working against each other. This caused the energy bills for the building to skyrocket. Sack testified that the energy costs for the building were
over twenty cents per square foot per annum, when theyshould have been between five and sixcentsper square foot per annum. Based on these figures, the court apparently reasoned that the defects in the system were causing it to

consume eighty percent more natural gas than it would have if ithad been properly adjusted. Therefore itawarded Sack damages in the amount of $2,493.18, which represents eighty percent of the total natural gas bills for May through September of 1981. Appellant contends that theDistrict Court should not have awarded any amount for excess gas usage, and if it awarded any damages, the eightypercent figurewas inerror

as too speculative. As noted above, there was sufficient evidence to establish that an award of damages for excess natural gasusage 

### isproper. A plaintiff willnotbe denied recovery simply because it is difficult to ascertain the amount of hisdamages, aslong as the amount can be proven with a reasonable degree of certainty. Smith v. Zepp (1977), 173Mont. 358, 567 P.2d 923. Asnoted inSmith, the plaintiff must provide the trial judge with, "A reasonable basis forcomputation and thebestevidenceobtainableunder the circumstances 

# .. . which will enable the judge to arriveata reasonably closeestimateof the loss.

# . ." 173 Pl0nt. at370, 567 P.2d at 930, citing Brown v. Homestake Exploration Co. (1934), 98 Mont. 305 at337, 39 P.2d 168 at 179. Here, Sack presented the court with utility bills covering the period for which he was claiming damages, and bills covering the same months for the following year when the system was properly working. This clearlyprovided the judge with a reasonable basis for computation of his

### damages. Appellant simply claims the award is speculative, and offersno alternativemethod for computingdamages. Any award of damages is grounded to a certain degree upon speculation. Sikorski v. 01in (1977), 174 Mont. 107, 568 P.2d 571. However, the award of damages to Sack for excess natural gas usage is grounded upon the best available evidence and is a reasonably close estimate of the loss suffered. The award was not in error. Finally, appellant contends that the District Court erred by awarding Sack damages for the travel expenses incurred when he traveled from his home in Denver to Billings to oversee the repairs. Upon reviewof the record it is impossible to determine how this damage figure was arrived at by the DistrictCourt. The figures submittedby Sack to support these damages do not total the amount granted by the court, and also it appears most of the expenses claimed were included in a settlement paid by appellant's insurance company. The cause must be remanded for redeterminationof the findings of fact and conclusions of law,as they relate to the award of travel expenses. Affirmed inpart, remanded inpart for redetermination of the findings of fact and conclusions of law as they relate to the award of travelexpenses.

We 

### concur: 

# %A.~*Q{~ 

# 44 Chief Justice