No. 13227 INTHE 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 FifthJudicial 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

## 27 1976 Filed:

## SEC5.7876Mr. 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 forbreach of contract. Kirby asserts thejudgment 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 tobuild a home on their property near Ennis, Montana. The contractor's work was tobe completed on or about December 1, 1969. The contract provided for Kirby topay $18,883.45 and to furnish the excavation forthe foundation and todo the wiring, plumbing, floorcovering, and painting. The contractorwas required toprovide allmaterials including wiring material and alllabor required inconstruction 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 

### 1deadline, and inJanuary 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 thehouse Kirby advised the contractor that Topels' work was not satisfactory. InMarch 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 inthe home. InMay 1970, Kirby moved into the home.Pursuant to the contract, Kirby paid the contractor $17,298 but did not make the finalpayment of $1,585.45- This actionwas brought indistrict court torecover damages forbreach of the building contract against the contractor. Ina separate action, Topels sought to foreclose a mechanic's lien forpayment for labor and material used during theirwork 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 trialcourt found the contractor breached his contract and that thework done on the Kirby home was defective. Numerous defects in thebuilding were listed inthe court's findings including: a roof which must be removed and replaced tobe proper; interior partitions and exterior walls out of plumb; windows and doors improperly installed and out of plumb; defective foundation and improperly poured basement floorwith drain inhighest point; unlevel ceilings and floors; and crooked siding. The trialcourt further found: "That by reason of the deficiencies in the construction and by the breach of contract on behalf of Corporation and Ogle, and theirnegligent acts and omissions, the fairmarket 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 toa Judgment against the Defendants Kenyon-Noble Lumber Company, William V. Ogle inthe sum of TWO THOUSAND EIGHTY-FIVE DOLLARS AND EIGHTY-FIVE CENTS ($2,085-85) together with interest thereolr from and afterMay 1, 1970." Kirby filed exceptions tothe 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 leaveno 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, exceptwhere 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 inbreach of construction contracts. InMitchell v. Carlson, 132Mont. 1, 7, 313 P.2d 717, the Court applied section 17-301where a homeowner sued for damages as a result of a.poorlybuilt home to establish the rule for damages to be awarded: "Applying the statutory rule of damages to this case it is apparent that plaintiffswill be compensated only for the 'detrimentproximately caused' by the breach,viz., the cost ofmaking the repairs necessary to complete the house in accordancewith the parties' agreement." (Emphasis added.) The Mitchell rulewas reaffirmedby this Court inHaggerty v. Selsco, 166 Mont. 492, 499, 534 P.2d 874. 11Williston 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 sumwhich 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 generallywill be based on the market price of

### completing or correcting the performance,and this will generally be shownby the cost of getting work done or completed,byanother person." (Emphasis added.) See: 

### 5 Corbin on Contracts, 51089;Restatement, Contracts, $346; Anno. 

### 76 ALR2d 805; Schmauchv. Johnston, 274Or. 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 itmeet the requirements set forth for an award in a case involving a breach of a building contract. Thismatter is remanded to the district court for a new trial on the issue of damages.

r-qeConcur: 

# f

ief Justice



# .Robert 

### C. ~y%es,District Judge, sitting"TorJustice Wesley Castles.