### No. 14217 IN THE SUPREME COURT OF THE STATE OF MONTANA 1379

ALLAN J. KOSMERL, d/b/a ALIS ELECTRIC, Plaintiff and Appellant,

TIMOTHY C. BARBOUR and JAMES E. NELSON, d/b/a T.J.'S POOL AND GAME ROOM, Defendant and Respondent.

Appeal from: District Court of the Eighth Judicial District, Honorable Truman Bradford, Judge presiding. Counsel of Record: For Appellant: Graybill, Ostrem, Warner and Crotty, Great Falls,

Montana For Respondent: 

### Alexander, Kuenning,Miller and Ugrin, Great Falls,

Montana

Submitted on briefs: December 20, 

### 1978 ~ecidedfAN 

### 2 lgfgMr. Justice John Conway Harrison delivered the Opinion of the Court.

This is an appeal from a judgment on a case tried in the Eighth Judicial District Court, Cascade County, the Honorable Truman G. Bradford, sittingwithout a jury. Plaintiff sued on a contract for certain electrical work done on premises belonging torespondents in the amount of $1,761.25. From a judgment infavor of defendant-respondents, plaintiff appeals. Respondents Barbour and Nelson formed 

### a partnership and leased a building to house a business called TJ's Pool & Game Room. They employed a contractor, Gordon Sayler, to undertake remodeling necessary to transform the leased premises into space suitable for a billiard and game room business. Sayler was a general contractor who had done this type of work in several other establishments inGreat Falls. During his remodeling jobs, he hires labor and subcontractors to assisthim inthe necessary alterations. Appellant, Allan J. Kosmerl, doing business as Al's Electric, was hired by Sayler todo the electricalwork atTJ's. Testimony indicated that Sayler had previously worked with Al's Electric inother remodeling jobs and that their way of doing business was that Sayler would pay Al's atthe completion of the electricaljob. During the course of remodeling Barbour, who managed the business, learned that Sayler,was not making payment to his employees or subcontractors. Some of these employees threatened towalk off thejob and some of the subcontractorswent directly toBarbour and requested that he make payments to them. Arrangements were made to finish the job under this sortof a fiscal arrangement. Up to that timeBarbour had paid directly to Sayler a portion of the contractprice. Thereafter, after talking to Sayler, Barbour made payments directly to certain individuals. Sayler stayed on thejob until completion, the fiscal arrangements being made asabove set forthwith certain of the employees and subcontractors. Appellant contends that, after talking toBarbour, he feltthat Sayler would pay him. However, he also feltthat under the arrangements Barbour had made to take over the job, that he would be included asother subcontractors 

### were and be paid by Barbour. Barbour, on the other hand, testified and took the position that although he paid many of the subcontractors infull, appellant had agreed to look only to Sayler for payment. As a result, he did not feel responsible forwork done by appellant. Additionally, one month after the completion of allthe work and nearly two and one-half months after appellant stated thathe understood he would look toBarbour for payment, appellant submitted a billto Sayler for his services. Sayler 

### was unable topay this and appellant now looks toBarbour and the partnership for payment. The issues presented for review are: 1. Whether the District Court was correct inmaking itsFinding of Fact No. 3, which read: "Gordon Sayler was paid allmoneys he had coming under his contractwith TJ's." 2. Whether the District Court was correct inmaking itsFinding of Fact No. 4, which read: "Gordon Sayler hired Allan Kosmerl to do certain electricwork on the premises." 3. Whether the District Court was correct inmaking itsFinding of Fact No. 6, which read:"That Gordon Sayler was not the agent of TJ's but an independent contractor." 4. Whether the District Court was correct inmaking itsFinding of Fact No. 8, which read: "That Defendant Barbour did not enter into any separatecontractwith Kosmerl, did not create any estoppel which would entitlehim topayment but merely advised Kosmerl on one occasion that he ought tolook out for his own (Kosmerl's) interest inhis dealings with Gordon Sayler." 5. Whether the District Court was correct inmaking Conclusions of Law Nos. 1, 2 and 3, based on the above findings of fact: "1. Nelson and Barbour, d/b/a TJ's, do not owe any money toKosmerl forwork performed under the original contract between Kosmerl and Gordon Sayler. "2. That there isno basis in law for holding that Barbour and Nelson, d/b/a TJ's, owes any money to Kosmerl as a result of the work originally contemplated and agreed tobe performed under the KosmerlSayler contract. "3. Based on the testimony of the parties, but particularly thatof the defendant Barbour it 

### is found that Barbour and Nelson, d/b/a TJ's, owes Kosmerl the 

### sum of One Hundred Eighty and 60/100 Dollars ($180.60) based on a new and separate agreement with Kosmerl." While five issues are set forth, the actual issue before this Court iswhether the trial court's findings of fact, conclusions of law, and judgment are supported by substantial evidence. Rule 52(a),M.R.Civ.P., states in pertinentpart: "Findings of fact shallnot be setasideunless clearly erroneous, and due regard shallbe given tothe opportunity of the trialcourt tojudge the credibility of thewitnesses." This Court, indescribing its function inreviewing findings of factand conclusions of law tried by a District Court without a jury, set forth the following inMontana Farm Service Co. v. Marquart (1978), Mont. 

## , 578 P.2d 315, 316, 35 St-Rep. 631, 633-34:II I

# .

# ..Wehave consistently held under such circumstances that this Court cannot substitute 

### itsweighing of the evidence for thatof the trialcourt. When there is a conflict inthe evidence, the findings of the trial court are presumed tobe correct if supported by substantial evidence.' Sedlacek v. Ahrens (1974), 165Mont. 479, 485, 530 P.2d 424. "We have alsoheld that the findings of the trial court, ina nonjury trial, 

### willnot be reversed on appeal, unless there is a clear preponderance of evidence against the findings. Keneco v. Cantrell, (1977), Mont. I 568 P.2d 1225, 34 St.Rep. 1063

# .. " Indefining substantial evidence this Court stated in Olson v. Westfork Properties, Inc. (1976)

## , Mont

# .

"Substantial evidence has been defined by this Court as such as

### willconvince reasonable men and on which suchmen may not reasonably differ as towhether it establishes the plaintiff's 

### case, and, if allreasonablemen must conclude that the evidence does not establish such case, then it is not substantial evidence. The evidence may be inherently weak and stillbe deemed 'substantial', and one witness may be sufficient toestablish thepreponderance of a case. (Citations omitted.)" Appellant acknowledges the general presumption of correctness of the above stated rules and case authority but argues the rulingsmade by the courthere werenot supported by the evidence. Wehave carefullyreviewed each finding of fact 

### set forth as an issue inthis case and find no error. Issue 1is directed atFinding of FactNo. 3, inwhich the court found that "Gordon Sayler was paid allmoneys he had coming under his contractwith TJ's." Here, the contractwas for the amount of $24,000 and the court correctly found Sayler had received the entire sum due under the contract. Part of the payment was inthe form of materials purchased or salaries paid directly by Barbour to subcontractors and employees, done with Sayler's knowledge and consent. This does not change the factthat Sayler was fullypaid forthe contract, as thiswas an arrangement made between Sayler and Barbour when Sayler got into financial difficulties and

was threatened with a walkout by both employees and subcontractors. Barbour fully complied with his part of the 

### terms of the valid contract and Sayler, having received all



### sums due him, was the soleresponsible party forpaying the electrical contractor's claim. Issue 2 is directed toFinding of Fact No. 4 which found that Sayler hired Kosmerl todo the electrical work. The only dispute appellant has here concerns the conversation between Barbour and appellant concerning Saylerfs inability topay. Testimony indicates that Barbour told appellant that he did not believe Sayler would pay him and thathe should make certain that he received his money. Appellant replied that he was certain he would get hismoney from Sayler and that there would be no problem. Appellant

now argues that even if Barbour's version of that conversation is correct, themost thatcould be expected was that he would firsttry tocollect from Sayler. Atthe time of the conversation, however, appellantunderstood thatvarious people had not been paid and Barbour indicated thathe (Barbour) would not be making any more payments and that appellant should make certain that he receive payment from Sayler. The evidence clearly indicates that Kosmerl looked toSayler forpayment initiallyand the court chose to believe Barbour's recitation of the conversation to show that he did nothing to incur responsibility for Sayler's obligations to appellant. The finding of factof the court in this issue is correctbased on the evidence. Issue 3 

### is directed atFinding of Fact No. 6 which found Sayler tobe an independent contractor, not an agentof TJ's. Appellant argues therewere certain isolated incidents which established the factthat the independent contractor status of Sayler ceased to existwhen he became involved inthe financial difficultieshereinbefore referred to. Appellant alleges that the element of control over the work shifted toBarbour atthispoint. However, there is no evidence of control over Sayler, his employees, or subcontractors by either Barbour orNelson. Nor does appellant set forth any authority for his proposition that the independent contractor statusof Sayler was destroyed or altered by the financial arrangements made during the construction period. This Court recently setforth the factors required in establishing an independent contractor status. In Sharp

v. Hoerner-Waldorf Corp. & Aetna Casualty Ins. Co. (1978), Mont. 

## , 584 P.2d 1298, 1301, 35 St.Rep. 1430, 1434, the Court, inconstruing theWorkers' Compensation provision in finding an independent status, stated: "Section 92-438.1(1), R.C.M. 1947, reiterates the basic test inMontana fordetermining independent contractor status, namely, the right of control over theperson doing thework involved. 'The vital test indetermining whether a person employed todo a certain piece of work is a contractor or a mere servant, is the control over the work which isreserved by the employer.' Kimbal v. Industrial Accident Board (1960), 138 Mont. 445, 449, 357 P.2d 688. 'The test todetermine whether or not an employer-employee relationship exists 

# .. . is the so called control test. Under that test an individual 

### is in the serviceof another when that other has the right tocontrol the details of the individual's work.' State ex rel. Ferguson v. District Court (1974), 164 Mont. 84, 88, 519 P.2d 151. Respondent has argued an employer must control the details of a performance before the performer is considered an employee. However, the determinative test isbased on the right, notjust the exercise, of control. Larson, Workmen's Compensation Law, Vol. lA, Sec. 44.10, p. 8-19; Ferguson, supra." Here, appellant admits that Barbour did not control the details ormanner of hiswork. There was no direction as to conduct of the work. It was Sayler who was incharge of thework and remained incharge until the completion of the job. under these circumstances there isno question that Sayler

was an independent contractor. See Kimball v. Industrial ~ccident Board (1960), 138 Mont. 445, 357 P.2d 688; St. egis Paper Company v. U.C.C. of Montana (1971), 157Mont. 548, 487 P.2d 524. Issue No. 4 concerns Finding of FactNo. 8. The court found thatBarbour did not enter into a separate contract with Kosmerl, did not create any estoppel which entitledhim topayment, but merely told appellant on one occassion that he should look out for his interests indealingwith Sayler. Appellant's argument isdirected to the factthat Barbour induced appellant tocontinue with the electricwiring and by that conversation directed the conduct of appellant's work. Atbest, the evidence indicates that appellant asked Barbour where certain outlets should be placed. This certainly isnot directing the actual electrical supervision for the remodeling job. From the time the fiscalproblems began, the evidence is clear that appellantwas aware that Sayler was not making payments tohis workers and that respondent would not make any more payments to Sayler. Such evidence does not show inducement on the part of Barbour to have appellant continue thework. Issue 5 isdirected atConclusions of Law 1, 2 and 3. Appellant argues thathe completed the electrical work after his conversation with Barbour and while Barbour was paying others for their work and thatrespondent agreed that the electrical work was 

### welldone and that the services and materials claimed on appellant's billswere performed and installed. This evidence, however, does not reflect an abuse of discretion on thepart of the ~istrict Court. hecourt found thatrespondents Barbour and Nelson had contracted with Sayler, that Sayler employed appellant and that therewas no relationship or legal theory which justified holding respondents responsible for appellant's loss. Appellant's contention that he completed the work and that respondent Barbour was making payments to others has no bearing on the case. It ignores the factthat he was warned about possible nonpayment and that he told Barbour he looked to Sayler as the responsible party inpaying for his services. In addition, there is no evidence indicating that Barbour ever took over the direction of the job as appellant asserts. Those statements arenot supported by the record. Appellant failed inhis attempt toprove by controverted evidence that the trialcourt erred in its findings of fact and conclusions of law aspreviously set forth. The record amply supports the findings, conclusions, and judgment of the District Court and the case is affirmed.

We Concur: