No. 96-099 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1997 

BORDER STATES PAVING, INC., 

ECKART TRUCKING, INC., and 

FISHER SAND & GRAVEL, 

Plaintiffs and Appellants, 

THE STATE OF MONTANA, ACTING 

THROUGH THE MONTANA DEPARTMENT 

OF TRANSPORTATION, 

Defendant, Respondent and 

Cross-Appellant. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Dorothy McCarter, Judge presiding. 

COlJNSEL OF RECORD: 

For Appellant: 

Ronald G. Schmidt, Schmidt, Schroyer, Colwill & Moreno, Pierre. South 

Dakota; Patrick E. Melby. Luxan & Murfitt. Helena, Montana 

For Respondent: 

Stephen F. Garrison, Lyle Manley, Montana Department of Transportation, 

Helena. Montana 

Filed: 

Submitted on Briefs: October 3 1. 19% 

Decided: April 15, 1997 
Justice James C. Nelson delivered the Opinion of the Court. 

Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1995 Internal 

Operating Rules, the following decision shall not be cited as precedent and shall be published 

by its filing as a public document with the Clerk of the Supreme Court and by a report of its 

result to State Reporter Publishing Company and West Publishing Company. 

Appellants Border States Paving, Inc. (BSP), Eckart Trucking, Inc. (Eckart), and 

Fisher Sand & Gravel (Fisher) filed a complaint against the Montana Department of 

Transportation (MDT) over a project to reconstruct aportion of Interstate 90 within the Crow 

Indian Reservation. Appellants alleged damages of more than $2,000,000. The District 

Court for the First Judicial District, Lewis and Clark County, awarded damages to BSP in 

the amount of $5,634.75 and to Fisher in the amount of $1 1,000. BSP, Eckart and Fisher 

appeal this jud,ment along wlth several post-trial motions denied by the District Court. We 

affirm in part and remand in part. 

Respondent MDT has consolidated Appellants' 11 lengthy and confusing issues into 

the following 8 issues, which we address on appeal: 

1. Whether the District Court erred in holding that the Tribai EmpIoynent Rights 

Office (TERO) ordinance could be enforced by the Crow Tribe in this case. 

2. Whether the District Court erred in ruling that the contractor had a duty to 

provlde notice to MDT of Tribal interference. 
3. Whether the District Court erred in ruling that MDT did not breach the implied 

covenant of good faith and fair dealing. 

4. Whether the District Court denied Appellants' right to due process by adhering 

to a six-day trial schedule. 

5. Whether the District Court erred in ruling that MDT's notice provision is not 

void, unenforceable, contrary to public policy, or unconscionable. 

6. Whether the District Court erred in not reforming the contract to exclude the 

notice provision. 

7. Whether the District Court erred in allowing MDT to introduce into evidence 

earlier versions of Appellants' claims. 

8. Whether the District Court erred in not re-opening the trial for evidence on 

Appellants' claims of "unlitigated final quantities." 

In addition, MDT presents the following issue on cross-appeal: 

Whether the District Court erred by not ruling on the issue of Appellants' alleged 

violation of the False Claims Act, 5 17-8-231, MCA. 

Factual and Procedural Background 

In 1990, MDT prepared plans for reconstruction of a portion of Interstate 90 within 

the Crow Indian Reservation. MDT solicited bids for the project and included within the bid 

package a "Notice" to all potential bidders which stated: 

For your information, some or all of this project will take place on the Crow 

Indian Reservation. The Crow Tribe has enacted an ordinance requiring all 
employers subject to thc Tribe's jurisdiction to gi>e preference in training, 

employment, contracting and subcontracting to Indians. Contract fees may 

also be imposed. For more information about these requirements, contact: 

Crow TERO Office . . . . 

Please note that the State is not a party to Indian preference or contract fee 

requirements. These are matters solely between the Tribe and the contractor. 

The State will not assist the Tribe to enforce these requirements, nor will it 

assist a contractor who has been charged by the Tribe with violating these 

requirements, nor will it consider requests for contract modifications to cover 

additional costs incurred because of such violations. 

The ordinance referred to in the "Notice" required of any contractor coming onto the 

reservation that at least 95% of its workforce be made up of Crow Indians. 

The 1-90 project covered an area almost 8 miles long and required an extensive 

amount of hauling material to and from the site. The project included an area approximately 

8500 feet long requiring excavation up to five feet deep. The excavated material was to be 

hauled away to a gravel pit and used as fill material, then new material hauled back to the site 

for placement. In addition, the old asphalt had to be "milled" off and hauled away to state 

stockpile areas. Hot bituminous pavement would then be hauled back to the site in 

preparation for paving. 

BSP submitted the low bid and was awarded the contract in November 1990. BSP 

owned 9 trucks which it planned to use for hauling away the old asphalt milled off the site 

and hauling back the new material used to repave the road. BSP subcontracted with Eckart 

for an additional 9 trucks to haul the fill material back and forth from the excavation site with 

assurances of being able to get up to 18 trucks if desired or needed to expedite the job. 
Substantial quantities of sand and gra-vel products were needed to complete the project 

so BSP subcontracted with Fisher who agreed to manufacture and furnish the materials to 

meet MDT specifications. Fisher was also dependent upon the availability of tr-ucks to haul 

the sand and gravel to the site. 

BSP began work on the project in April 1991. Eckart moved its trucks to the project 

by May 15, 1991, and contacted the TERO to send drivers for testing. Of the 13 drivers 

referred by TERO, Eckarl hired only 2, complaining that of the 13 drivers tested, most could 

not shift gears or back up. On Tuesday, May 2 1, 1991, four trucks were required for hauling, 

so Eckart, without a full staff of Crow drivers, sent out four of its own drivers. The TERO 

threatened to fine Eckart $5,000 a day for not complying with the Tribe's hiring ordinance. 

Eckart 's trucks are valued at $50,000 each. Eckart was concerned about damage to 

the trucks resulting from operation by unqualified drivers, but offered to hire Crow drivers 

it felt were unqualified if the Tribe would assure Eckart that the Tribe would pay for any 

damage to the trucks caused by their drivers. The TERO refused and filed an action in Crow 

Tribal Court to enjoin Eckart from further work until it complied with the requirements of 

the ordinance. Bill Eckart later testified that he was afraid the Tribe might confiscate his 

trucks which were his only livelihood. Rather than comply with the ordinance, Eckart 

abandoned the job. Neither Eckart nor BSP apprised MDT of the problems Eckart was 

experiencing and MDT was not aware of them until after Eckart left the project. 
BSP subsequently contracted with the Crow Tribal Council for trucking services. As 

of May 22, 1991, the Tribe did not have any trucks, mechanics, maintenance facilities or 

spare parts for trucks. The TERO bought four used trucks for use on the project. In the 

month it took the TERO to find and purchase these trucks, the loss of trucking impacted all 

other project work. In addition, the trucks furnished by the Tribe had a smaller load capacity 

than Eckart's hueks. Where Eckart could haul 27-28 tons per load, the Tribe's trucks could 

only haul 18-20 tons per load. Furthermore, where Eckart had subcontracted to furnish 

trucking at a rate of $52.96 per hour, the TERO subcontracted to furnish trucking at a rate 

of $68.75 per hour. 

The shortage in trucking caused BSP to fall further and tkrther behind on the project. 

Originally, BSP estimated that the project would begin in April 1991, and be completed by 

August IS, 1991, at the latest. Afier Eckart pulled out, BSP was forced to work up to 15 

hours a day, 6 days a week to try to meet their schedule and complete the project. 

On September 25, 1992, Appellants BSP, Eckart and Fisher sued MDT alleging, 

among other things, that MDT had breached its implied duty of good faith and fair dealing 

and that the "exculpatory" clause in the notice was void and unenforceable as it contravenes 

public policy and is unconscionable. Appellants alleged they were entitled to compensation 

for their extra costs amounting to more than $2,000,000. 

A bench trial lasting 5 days mas originally scheduled, but at a later scheduling 

conference, the time for trial was extended to 6 days. At the pre-trial hearing on the first day 
of trial, the District Court Judge announced that the 6 days would be split into 3% days for 

Appellants and 2% days for MDT. The trial actually lasted 6% days, with Appellants taking 

almost 4% days. After trial, the court issued its Findings of Fact, Conclusions of Law and 

Order awarding damages to BSP in the amount of SS,634.75 and to Fisher in the amount of 

$1 1,000. Appellants filed several post-trial motions, which the District Court subsequently 

denied, including a motion requesting more time to present evidence. Appellants now appeal 

the District Court's judgment as well as the court's orders denying their motions. MDT 

cross- appeals contending that Appellants violated the False Claims Act, 5 17-8-23 1, MCA. 

Standard of Review 

We review a district court's findings of fact to determine whether they are clearly 

erroneous. Daines v. Knight (1995), 269 Mont. 320, 324, 888 P.2d 904, 906 (citmg 

Columbia Grain Intern. v. Cereck (1993), 258 Mont. 414, 417, 852 P.2d 676, 678). We 

adopted a three part test in Interstate Production Credit Ass'n v. DeSaye (1991), 250 Mont. 

320,323,820 P.2d 1285, 1287, to determine whether the findings are clearly erroneous. This 

test provides that we review the record to see if the findings are supported by substantial 

evidence. If they are supported by substantial evidence, we will determine if the trial court 

has misapprehended the effect of the evidence. If substantial evidence exists and the effect 

of the evidence has not been misapprehended, we may still hold that a finding is clearly 

erroneous, when, although there is evidence to support it, a revtew of the record leaves this 

Court with a definite and firm conviction that a mistake has been made. 
In addition, u#e recently noted that it is within the province of the hicr of fact to weigh 

the evidence and assess the credibility of vvitnesses and we will not second-guess those 

determinations. Rafanelli v. Dale (1996), 924 P.2d 242, 245, 53 St.Rep. 746, 748 (citing 

Double AA Corp. v. Newland & Co. (1995), 273 Mont. 486,494,905 P.2d 138, 142). We 

will uphold a district court's findings when there is substantial evidence to support them even 

when there is also evidence supporting contrary findings. Rafanelli, 924 P.2d at 246 (citing 

Wiesner v. BBD Partnership (1993), 256 Mont. 158, 161, 845 P.2d 120, 122). 

Furthermore, we review a district court's conclusions of law to determine whether the 

court's interpretation of the law is correct. Carbon County v. Union Reserve Coal Co., Inc. 

(1995), 271 Mont. 459,469, 898 P.2d 680,686 (citing Steer, Inc. v. Department of Revenue 

(1990), 245 Mont. 470,474-75, 803 P.2d 601,603). 

Issue 1. 

Whether the District Court erred in holding that the TERO ordinance 

could be enforced by the Crow Tribe in this case. 

Contrary to Appellants' contentions, the District Court did not rule on whether the 

TERO ordinance could be enforced in this case. Moreover, the District Court does not have 

jurisdictio~ to decide this issue. Issues dealing with jurisdiction of a Tribe within its 

boundaries must he litigated and exhausted in Tribal court before other courts may have 

jurisdiction. National Fanners Union Ins. Co. v. Crow Tribe (1985), 471 U.S. 845, 857, 105 

S.Ct. 2447,2454, 85 L.Ed.2d 8i8, 828; Wellman v. Chevron U.S.A., inc. (1987), 815 F.2d 

577, 578-79. 
The TERO filed a complaint in Crow Tribal Court to enjoin Eckart from further work 

until it complied with the requirements of the ordinance. Rather than litigate the issuc in 

Tribal Court, Eckart stipulated to dismissal of the action agreeing that it would do no further 

work on the Crow Indian Reservation without full compliance with TERO resolutions and 

procedures. Eckart failed to litigate the issue in Tribal Court and thus exhaust Tribal Court 

jurisdiction prior to filing the complaint in the instant case. 

Moreover, BSP chose to bid for the project, knowing full well it would have to work 

on the Reservation and abide by the Tribe's ordinance, thus subjecting itself to Tribal Court 

jurisdiction. Besides the notice provision informing bidders of the TERO ordinance and 

directing bidders to contact the TERO to learn the rcquirements before tbcy submitted bids, 

MDT Standard Specification 107.01 provided that anyone bidding on the project was 

rcquired to keep informed of and comply with "all local laws, ordinances and regulations and 

all orders and decrees of bodies or tribunals having any jurisdiction or authority that affect 

those engaged or employed in the work or that affect the conduct of the work." 

Eckart, as a subcontractor to BSP, agreed to "be bound to the Contractor by terms of 

the General Contract [and] to conform to and comply with all of the terms of the General 

Contract . . . ." Thus Eckart was also bound by MDT Standard Specification 107.01 and 

required to keep informed of and comply with "all local laws, ordinances and regulations." 

Issues 2 and 3. 

Whether the District Court erred in ruling that the contractor had a duQ 

to provide notice to MDT of Tribal interference. 
Whether the District Court erred in rufing that MDT did not breach the 

implied covenant of good faith and fair dealing. 

A4ppe!lants contend that MDT breached the implied covenant of good faith and fair 

dealing in not negotiating with the TERO in advance to define specific requirements for 

contractors and employers working on the reservation. The District Court found insufficient 

evidence to support a finding that MDT failed to act in good faith by refusing to assist 

Appellants in resolving their problems with TERO and concluded that MDT's failure to 

negotiate with the TERO did not constitute a breach of the implied covenant of good faith 

and fair dealing. 

MDT had let several other projects on the Crow Indian Reservation in the past using 

the same notice provision. BSP had worked on some of these earlier projects without 

encountering any difficulties. On this occasion, neither Eckart nor BSP attempted to apprise 

MDT of the problems Eckart was having in working with the TERO to hire Crow drivers. 

MDT did not "refuse" to assist Appellants, as Appellants contend, because MDT was not 

aware of the problems until after Eckart had left the project. MDT cannot be expected to 

rectif5~ a situation of which it was unaware. 

Appellants also contend that the exculpatory clause in the notice provision clearly 

prohibited and precluded Appellants from notifying MDT of problems with the TERO. 

However, there is nothing in the clear language of the clause that states that MDT cannot be 

notzjkd of problems with the TERO. Rather, the clause declares that the State will not assist 
a contractor who has been "charged by the Tribe with violating" the ordinance. Accordingly, 

wc affinn the District Court on these issues. 

Issue 4. 

Whether the District Court denied Appellants' right to due process by 

adhering to a six-day trial schedule. 

Appellants contend that the pre-determined limitation of 6 days of trial and the 

District Court's daily trial schedule denied Appellants' right to due process and the full and 

fair presentation of their case. MDT maintains that Appellants did not raise this issue until 

after the District Court had issued its Order adverse to Appellants. 

On September 13, 1993, the District Court filed a Scheduling Minute Entry Order 

setting trial for August 15, 1994, and stating that the trial is anticipated to last 5 days That 

trial date was later vacated and on August 18, 1994, the court filed another Scheduling 

Minute Entry Order setting a new tnal date and stating that the tnal is anticipated to last 6 

days. Furthermore, in the District Court's February 15, 1995 Order, the court reiterates that 

trial will last no longer than 6 days. Nowhere in any of these orders does the court refer to 

any requests by Appellants' counsel for more time for trial or any objections by Appellants' 

cotmse! that the amount of time scheduled for trial was insufficient. 

In their brief, Appellants refer to several instances during trial where both sides were 

hampered by time constraints, however, the record does not indicate any objections by 

Appellants to the 6-day trial schedule. We will not put a district court in error for a ruling 

or procedure in which the appellant acquiesced, participated, or to which the appellant made 

11 
no objection. State ex. rcl. Ins. Fund v. Berg (1996), 927 P.2d 975,983,53 St.Rep. 1098, 

1103 (citing In re Pedersen (1993), 261 Mont. 284,287, 862 P.2d 41 1,413). Therefore. we 

affirm the District Court on this issue. 

Issue 5. 

Whether the District Court erred in ruling that MDT's notice provision 

is not void, unenforceable, contrary to public poficy, or unconscionable. 

Appellants contend that the notice provision violates $§ 28-2-701,28-2-702 and 49-3- 

207, MCA, and is thus void and unlawful. The District Court concluded that MDT's notice 

provision is clear and unambiguous, is not unconscionable and is not a violation of the 

policies of law set forth in the code sections cited by Appellants. Those sections of the 

Montana Code provide: 

28-2-701. What is unlawful. That is not lawful which is: 

(I) contrary to an express provision of law; 

(2) contrary to the policy of express law, though not expressly prohibited; or 

(3) otheiwise contrary to good morals. 

28-2-702. Contracts which violate policy of the law -- exemption 

from responsibility. All contracts which have for their object, directly or 

indirectly, to exempt anyone from responsibility for his own fraud, for willful 

injury to the person or property of another, or for violation of law, whether 

willful or negligent, are against the policy of the law. 

49-3-207. Nondiscrimination provision in all public contracts. 

Every state or local contract or subcontract for construction of public buildings 

or for other public work or for goods or services must contain a provision that 

all hiring must be on the basis of merit and qualifications and a provision that 

there may not be discrimination on the basis of race, color. religion, creed, 

political ideas, sex, age, marital status, physical or mental disability, or 

national origin by the persons performing the contract. 
The general contract for this project did contain a provision as mandated by § 49-3- 

207, MCA. Appellants contend that the contract provision conflicts with the notice 

provision. However, as the District Court pointed out, these provisions are not inconsistent 

and do not constitute a basis for recovery in this action. The Tribal ordinance only authorizes 

the TERO to prohibit qualifications criteria. There is no evidence that the TERO exercised 

that authority. TERO officials testified at trial that their drivers were qualified to perform 

the work. Moreover, Appellants own witnesses admitted that nothing in the contract, 

including the notice provision, forced them to hire incapable or incompetent employees. 

Nothing in the contract prevented hiring on the basis of merit and qualification. Accordingly, 

we affirm the District Court on this issue. 

Issue 6. 

U7hether the District Court erred in not reforming the contract to exclude 

the notice provision. 

Appellants contend that the contract should be revised to exclude the notice provision, 

pursuant to $5 28-2-161 1 and 1614, MCA, because the provision does not "truly express the 

intention of the parties . . . ." These sections of the Montana Code provide: 

28-2-1611, When written contract may be revised by court. When, 

through fraud or a mutual mistake of the parties or a mistake of one party 

while the other at the time knew or suspected, a written contract does not huly 

express the intention of the parties, it may be revised on the application of a 

party aggrieved so as to express that intention, so far as it can be done without 

prcjudice to rights acquired by third persons in good faith and for value. 

28-2-1614. Specific enforcement of revised contract. A contract 

may be first revised and then specifically enforced. 
There is no evidence that either party intended anything other than what the contract, 

including the notice provision, states. MDT sought bids on the project and the terms of the 

contract were clearly set forth to all interested bidders through the public bidding process. 

BSP bid on the project and the contract was let to BSP at the bid price. 

There was no meeting of the minds that Appellants need not comply with Tribal 

ordinances and laws. The clear, unambiguous language of the notice provision reflects just 

the opposite. Moreover, revising the contract to delete the notice provision would place an 

additional financial obligation on the State which was not contracted for. 

Appellants have failed to present any evidence of fraud or mistake that would require 

reformation of the contract. Accordingly, we affirm the District Court on this issue 

Issue 7. 

Whether the District Court erred in allowing MDT to introduce into 

evidence earlier versions of Appellants' claims. 

Appellants contend that the District Court, over Appellants' objections, allowed MDT 

to introduce several superseded versions of Appellants' claims into evidence and that this was 

highly prejudicial and confusing to the court. Despite Appellants' claim, a review of the 

record reveals that while Appellants' counsel did question the relevancy of the earlier 

versions of the claims, he voiced no exception to the exhibit after it was admitted. 

A district court has broad discretion to determine whether evidence is relevant and 

admissible, and absent a showing of abuse of discretion, the district court's determination will 
not be overturned. Galbreath v. Golden Sunlight Mines, Inc. (1995), 270 Mont. 19,22,890 

P.2d 382, 384. Appellants have failed to demonstrate that the District Court abused its 

discretion by admitting the superseded 'ersions of Appellants' claims, thus we affirm the 

District Court on this issue. Appellants suggest that the numerous versions of the claim 

confused the judge, however, the transcript of the proceedings reveals that the judge 

expressed her confusion with these matters long before this information was offered or 

admitted. 

Issue 8. 

Whether the District Court erred in not re-opening the trial for evidence 

on Appellants' claims of "nntitigated final quantities." 

Appellants moved the District Court pursuant to Rule 60(b)(3) and (6), M.R.Civ.P., 

for relief from the Judgment in order to present evidence on the issue of "unlitigated final 

quantities." Appellants contended in their motion that they reserved their rights during trial 

"to prosecute an additional claim should the parties fail to agree on the final quantities and 

payment due under the contract." The District Court denied Appellants' motion stating: 

The trial previously held in this matter adjudicated the merits of the 

claims before the Court. Nothing in the pretrial order or any other pleading 

presented to the Court indicated that the trial would be anything less. 

Although there was information presented to the Court that some of the 

contract costs were still being negotiated, counsel never indicated to the Court 

that the trial would not be a determination of the entire cause of action. 

We find nothing in the record to contradict the District Court, thus we affirm the 

District Court on this issue 
Cross-appeal Issue, 

Whether the District Court erred by not ruling on the issue of Appellants' 

alkged vio!ation of the Fake Claims Act, 5 17-8-231, MCA. 

In its Amended Answer to Second Amended Complaint, filed December 19, 1994. 

MDT raised as its Eleventh Defense that Appellants' claims are "false, fictitious or 

fraudulent", thus Appellants have forfeited their claims under 5 17-8-231, MCA, which 

provides: 

Liability for false claims. (I) A person who knowingly presents or 

causes to be presented a false, fictitious, or fraudulent claim for allowance or 

payment to any state agency or its contractors forfeits the claim, including any 

portion that may be legitimate, and in addition is subject to a penalty of not to 

exceed $2,000 plus double the damages sustained by the state as a result of the 

false claim, including all legal costs. 

(2) The forfeiture and the penalty may be sued for in the same suit. 

MDT raised this issue again in its trial brief, however, the District Court failed to address the 

issue in its Findings of Fact, Conclusions of Law and Order. 

Accordingly, we hold that the District Court erred by not ruling on the issue of 

Appellants' alleged violation of the False Claims Act, 5 17-8-23 1, MCA, and we remand to 

the District Court for entry of a decision on this issue. 

Affirmed in part and remanded in part for further proceedings consistent with this 

opinion.