No. 13227 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1976 

JACK KIRBY, 

Plaintiff and Appellant, 

-vs - 

KENYON-NOBLE LUMBER CO. , WILLIAM V. OGLE, 

FRED HOFFMAN, HERBERT C. TOPER and DICK TEPEL, 

Defendants and Respondent, 

and 

HERBERT C. TOPEL, 

Plaintiff and Respondent, 

-VS - 

JACK A. KIRBY and BARBARA A. KIRBY, 

Defendants and Appellants. 

Appeal from: District Court of the Fifth Judicial District, 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellants : 

Drysdale, McLean and Screnar, Bozeman, Montana 

Douglas Drysdale argued, Bozeman, Montana 

For Respondents: 

Berg, Angel, Andriolo and Morgan, Bozeman, Montana 

Ben E. Berg argued, Bozeman, Montana 

Submitted: October 14, 1976 

Decided : DEC 2 7 1976 

Filed : SEC 5.7 876 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

Plaintiff Jack Kirby appeals from a judgment of the district 

court, Gallatin County, awarding damages for breach of contract. 

Kirby asserts the judgment awarded is inadequate and conflicts 

with the court's own findings and conclusions. 

Jack and Barbara Kirby (Kirby), entered into a contract 

with Kenyon-Noble Lumber Co., Bozeman, Montana (contractor), on 

October 20, 1969 to build a home on their property near Ennis, 

Montana. The contractor's work was to be completed on or about 

December 1, 1969. The contract provided for Kirby to pay $18,883.45 

and to furnish the excavation for the foundation and to do the 

wiring, plumbing, floorcovering, and painting. The contractor was 

required to provide all materials including wiring material and 

all labor required in construction of the home. 

An employee of the contractor, Fred Hoffman, began work on 

the home. From the start, Kirby complained about the quality of 

Hoffman's work. The home was not finished by the December 1 deadline, 

and in January 1970, the contractor removed Hoffman from the 

project and hired Herbert and Dick Tope1 to correct defects and 

complete the home and bring it within minimum requirements of the 

FHA for the sum of $2,000. After Topels had worked on the house 

Kirby advised the contractor that Topels' work was not satisfactory. 

In March 1970, Kirby through counsel, informed the contractor and 

Topels they were through, terminated the contract and hired a local 

carpenter to correct some of the minor defects in the home. In May 

1970, Kirby moved into the home. 
Pursuant to the contract, Kirby paid the contractor 

$17,298 but did not make the final payment of $1,585.45- This 

action was brought in district court to recover damages for breach 

of the building contract against the contractor. In a separate 

action, Topels sought to foreclose a mechanic's lien for payment 

for labor and material used during their work on the Kirby home. 

The two actions were consolidated for trial and this appeal is 

only from the amount of the award given Kirby against the contractor, 

Kenyon-Noble Lumber Co. 

The trial court found the contractor breached his contract 

and that the work done on the Kirby home was defective. Numerous 

defects in the building were listed in the court's findings including: a roof which must be removed and replaced to be proper; 

interior partitions and exterior walls out of plumb; windows and 

doors improperly installed and out of plumb; defective foundation 

and improperly poured basement floor with drain in highest point; 

unlevel ceilings and floors; and crooked siding. The trial court 

further found : 

"That by reason of the deficiencies in the construction 

and by the breach of contract on behalf of Corporation 

and Ogle, and their negligent acts and omissions, the 

fair market value of the completed house was reduced to 

the amount of TWO THOUSAND EIGHTY-FIVE DOLLARS AND EIGHTYFIVE CENTS ($2,085.85). 

Based on these findings, the court concluded: 

"Plaintiff Kirby is entitled to a Judgment against 

the Defendants Kenyon-Noble Lumber Company, William V. 

Ogle in the sum of TWO THOUSAND EIGHTY-FIVE DOLLARS 

AND EIGHTY-FIVE CENTS ($2,085-85) together with interest 

thereolr from and after May 1, 1970." 

Kirby filed exceptions to the court's findings of fact and 

conclusions of law and a motion to amend, which was denied by 

the trial court. 
The findings of fact and conclusions of law of the district 

court leave no doubt the Kirby home was defective. The court's 

determination of the value of the completed structure is fully 

supported by evidence presented at trial. Kirby asserts the award 

of damages is grossly inadequate and has no basis in law or fact. 

Section 17-301, R.C.M. 1947, provides the measure of 

damages for breach of contract: 

"For the breach of an obligation arising from contract, 

the measure of damages, except where otherwise expressly 

provided by this code, is the amount which will compensate 

the party aggrieved for all the detriment proximately 

caused thereby, or which, in the ordinary course of things; 

would be likely to result therefrom." 

Although Montana codes specify damages for breaches of other types 

of contract, there is no express provision for damages in breach 

of construction contracts. 

In Mitchell v. Carlson, 132 Mont. 1, 7, 313 P.2d 717, the 

Court applied section 17-301 where a homeowner sued for damages as 

a result of a.poorly built home to establish the rule for damages 

to be awarded: 

"Applying the statutory rule of damages to this case 

it is apparent that plaintiffs will be compensated 

only for the 'detriment proximately caused' by the 

breach, viz., the cost of making the repairs necessary to 

complete the house in accordance with the parties' 

agreement." (Emphasis added.) 

The Mitchell rule was reaffirmed by this Court in Haggerty v. 

Selsco, 166 Mont. 492, 499, 534 P.2d 874. 

11 Williston on Contracts, Third Edition, Section 1363, p.344, 

states the rule as: 

"Where the contractor fails to keep his agreement, 

the measure of the employer's damages, whether sought 

in an independent action or by recoupment or counterclaim, is always the sum which will put him in as good 

a position as if the contract had been performed. If 

the defect is remediable from a practical standpoint, 

recovery generally will be based on the market price of 
completing or correcting the performance, and this 

will generally be shown by the cost of getting work 

done or completed,by another person." (Emphasis added.) 

See: 5 Corbin on Contracts, 51089; Restatement, Contracts, $346; 

Anno. 76 ALR2d 805; Schmauch v. Johnston, 274 Or. 441, 547 P.2d 

The district court upon consideration of all the evidence 

presented determined the completed house to be worth only $2,085.85. 

The court's award of that amount as damages is neither logical nor 

does it meet the requirements set forth for an award in a case 

involving a breach of a building contract. 

This matter is remanded to the district court for a new 

trial on the issue of damages. 

r-qe Concur: f 

ief Justice 

. Robert C. ~y%es, District 

Judge, sitting "Tor Justice 

Wesley Castles.