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No. 01-055 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

2001 MT 182 

EUGENE GEORGE KANE, d/b/a KANE 

WELL DRILLING & PUMP SERVICE,

Plaintiff and Appellant,

v.

JAMES M. MORGAN and

MARIAN H. MORGAN,

Defendants and Respondents.

APPEAL FROM: District Court of the Fourth Judicial District, 

In and for the County of Mineral,

The Honorable John W. Larson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Anthony L. Silvestri, Tipp & Buley, Missoula, Montana

For Respondents:

John H. Gilliam, Skjelset, Gilliam & Geer, P.L.L.P., Missoula, Montana

Submitted on Briefs: June 14, 2001 

Decided: September 6, 2001

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Filed:

__________________________________________

Clerk

Justice Jim Regnier delivered the Opinion of the Court.

¶1 Eugene Kane appeals from the Findings of Fact, Conclusions of Law, Order and 

Judgment issued by the Fourth Judicial District Court, Mineral County, granting judgment 

in his favor in the amount of $4,560 plus interest. Kane contends that the District Court's 

finding that he did not intend to charge the defendants for one of two wells that he drilled 

for them is clearly erroneous. We reverse and remand for proceedings consistent with this 

opinion.

BACKGROUND

¶2 The following facts are taken from the District Court's findings and have not been 

contested by either party on appeal: Eugene George Kane is an experienced and licensed 

well driller who resides in Superior, Montana, and is engaged in the water well drilling 

and pump supply business. Kane and his family run Kane Well Drilling & Pump Service. 

In 1998 Kane contracted with James M. Morgan to drill a well on property Morgan coowned with his mother, Marian H. Morgan, in Mineral County, Montana. During October 

and November 1998, Kane drilled two wells for Morgan. Morgan showed Kane a spot he 

had picked for the first well. Kane informed Morgan prior to drilling that he had 

previously drilled a test well nearby which had produced no water. Despite this 

information, Morgan decided to go ahead with drilling. Kane drilled a hole 400 feet deep, 

but found very little water. The hole was cased to 140 feet with steel casing and lined with 

slotted plastic casing to 150 feet. Kane only charged Morgan for the first 150 feet of this 

well. 

¶3 Approximately one week later, Morgan asked Kane to drill another well near the 

previous hole. Kane again informed Morgan that there might be little or no water, but 

Morgan insisted the drilling be done at that location. Kane drilled and cased the second 

hole to 240 feet. This hole produced very little water. Prior to drilling either well, Kane 

and Morgan agreed on a price of $19 per foot. Kane submitted a bill to Morgan for 150 

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feet of the first hole and the entire 240 feet of the second hole, for a total amount of 

$7,410. Although Morgan never paid the bill and kept putting Kane off when Kane 

inquired about payment, Morgan never objected to either the amount of drilling or the bill. 

¶4 On October 13, 1999, Kane filed a complaint against Morgan, seeking the contract 

amount plus interest. The District Court held a non-jury trial and subsequently issued 

Findings of Fact, Conclusions of Law, Order and Judgment awarding Kane $4,560 plus 

interest. The court did not grant Kane the entire contract amount because it found that 

Kane had relinquished his claim for payments with regard to the first well during his direct 

examination by his attorney. Kane appeals from this finding and the resulting judgment. 

STANDARD OF REVIEW

¶5 Findings of fact shall not be set aside unless clearly erroneous. We employ a three-part 

test when determining whether a district court's findings are clearly erroneous: 1) whether 

the findings are supported by substantial evidence in the record; 2) whether the trial court 

has misapprehended the effect of the evidence; and 3) if substantial evidence exists and 

the effect of the evidence has not been misapprehended, the Court may still find that the 

trial court's findings are clearly erroneous when, although there is evidence to support it, a 

review of the record leaves this Court with the definite and firm conviction that a mistake 

has been committed. In re Marriage of Kotecki, 2000 MT 254, ¶ 8, 301 Mont. 410, ¶ 8, 10 

P.3d 828, ¶ 8 (citations omitted). 

DISCUSSION

¶6 Did the District Court err when it found that Kane did not intend to charge Morgan for 

the first well he drilled?

¶7 The District Court found that at trial Kane testified he would not charge Morgan for the 

entire first well. This finding was entirely based on the following colloquy which occurred 

during Kane's direct examination by his counsel:

Q [Counsel for Kane]. Did you discuss with [Morgan] at that time that he still owed 

$19 a foot?

A [Kane]. He knew that before we ever moved to [the second well].

Q. Okay. So you started to drill.

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A. I didn't charge him for the whole 400 feet. I charged him for the first hole. I 

charged him for the 150 feet that I drilled.

Q. Okay.

A. I give him the rest of the hole.

Q. You just gave it to him?

A. Yeah, I give it to him. I think I'd give it all to him. 

¶8 Kane insists that the District Court misinterpreted his statements and that he did not 

intend to give Morgan the entire first well free of charge. Kane maintains that he intended 

to charge Morgan for the first 150 feet and only gave him the last 250 feet free of charge. 

With regard to his statement "I think I'd give it all to him", Kane contends that it was a 

light-hearted sarcastic remark. Kane notes that other witnesses, such as his son Gary Kane, 

testified that Morgan would be charged for the first 150 feet of the first well. Kane also 

observes that Morgan testified that he was charged for the first 150 feet and that Morgan 

never contested the amount of the bill until the commencement of this action. Lastly, Kane 

notes that his remark was not handled as a declaration that he was gifting Morgan the 

entire first well by either of the parties and was not followed up on direct or crossexamination.

¶9 Morgan argues that the District Court correctly determined that Kane gave him the 

entire first well free of charge. Morgan contends that Kane's own testimony supports this 

finding. Morgan also contends that his own testimony that he and Kane agreed that he 

would not be charged for the first well supports the District Court's finding. He asserts that 

there is no record evidence to support the conclusion that the District Court 

misapprehended the intent of Kane's remark. Citing In re Marriage of Brown (1997), 283 

Mont. 269, 274, 940 P.2d 122, 125, and In re Estate of Silver, 2000 MT 127, ¶ 41, 299 

Mont. 506, ¶ 41, 1 P.3d 358, ¶ 41, Morgan observes that it is the province of the trier of 

fact to judge a witness's appearance, demeanor, candor, and credibility. Thus, he asserts 

that whether Kane was serious or sarcastic when he said "I think I'd give it all to him" is a 

determination left to the District Court and should not be disturbed on appeal.

¶10 Standing alone, Kane's testimony that "I think I'd give it all to him" could support the 

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District Court's finding that Kane intended to give Morgan the entire first well. Coming as 

it does directly after Kane's acknowledgment that he gave Morgan the remaining 250 feet 

of the first well free of charge, however, the "all" that Kane was referring to could also 

easily be interpreted as referring to only that last 250 feet of the first well. Alternatively, 

Kane's statement could have been a light-hearted sarcastic remark as he insists.

¶11 Typically, we would defer to the trier of fact's interpretation of equivocal testimony. 

However, in the instant case there is absolutely no other evidence to support the District 

Court's interpretation of Kane's testimony as a gift of the entire first well. At the same 

time, the record contains substantial evidence indicating that the District Court 

misinterpreted Kane's statement. Significantly, shortly after Kane made the statement in 

question, counsel for Morgan cross-examined Kane as if the alleged gift of the first well 

had never occurred, and Kane continued to maintain that he was charging Morgan for the 

first 150 feet of that well:

Q [Counsel for Morgan]. Okay. So -- And you feel that he owes you how much 

money for that first well?

A [Kane]. For the first one? I don't know. I figured up the whole job come out to 

7,000-some dollars.

Q. Okay.

A. Anything past 150 feet on the 400-foot hole, I give him that.

Q. Okay.

¶12 Also, after Kane's alleged gift, counsel for both parties continued to examine other 

witnesses as if the question of whether Morgan was liable for the first 150 feet was still at 

issue. For instance, counsel for Morgan questioned Kane's son Gary extensively about the 

charges for the first well:

Q [Counsel for Morgan]. Okay. Did you tell them at that particular time what they 

owed on the first well?

A [Gary Kane]. They knew what --

Q. That's not the question, sir. Did you tell them at that time what they owed on the 

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first well?

A. I didn't tell them right out word for word as to how much they owed, but they 

knew it was so many feet at so many dollars.

Q. Okay. And you understood that it was $19 a foot for any amount that was drilled 

or any amount that was cased?

A. We billed it for any amount that was cased.

We fail to understand why Morgan's counsel would continue to question witnesses about 

how much was charged for the first well after Kane had already allegedly relinquished his 

claim to any charges associated with it by giving it entirely to Morgan.

¶13 A review of the record in the instant case leaves this Court with a definite and firm 

conviction that the District Court committed a mistake. See Marriage of Kotecki, ¶ 8. 

Significantly, it appears that neither party interpreted Kane's remark as a gift of the entire 

first well: It was not followed up by either party during direct or cross-examination of 

Kane. On cross-examination, counsel for Morgan questioned Kane as if the gift had never 

occurred and Kane continued to maintain that Morgan was liable for the first 150 feet. 

Counsel for Morgan questioned subsequent witnesses as if Kane had not relinquished his 

claim to damages for the first well. Remarkably, Morgan did not maintain in his proposed 

findings of fact and conclusions of law that Kane had relinquished his claim to contract 

damages with regard to the first well.

¶14 We can only conclude from the foregoing that the District Court misinterpreted Kane's 

testimony. Accordingly, we reverse the District Court's finding that Kane would not 

charge Morgan for the entire first well and remand for proceedings consistent with this 

opinion.

¶15 Reversed and remanded.

/S/ JIM REGNIER

We Concur:

/S/ KARLA M. GRAY

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/S/ JAMES C. NELSON

/S/ W. WILLIAM LEAPHART

/S/ TERRY N. TRIEWEILER

/S/ PATRICIA COTTER

/S/ JIM RICE

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