### No. 92-303 

### IN THE SUPREME COURT OF THE STATE OF MONTANA 1993

EDWARD NICHOLS, JR., JULIA A. BRUMMEL, NICHOLE A. BRUMMEL, a Minor Child, and * 

### JULIA A. 

### BRUMMEL, as Mother and Natural Guardian of NICHOLE A. BRUMMEL, Plaintiffs and Appellants, 2 i

.J

### -vDAVID CORNTASSEL and DAVID BALLOU, Defendants and Respondents.

APPEAL FROM: District Court In and for the of the Fourth Judicial District, County of Missoula, The Honorable John S. 

### Henson, Judgepresiding.

COUNSEL OF RECORD: For Appellant: Arthur D. Agnellino, Missoula, Montana For Respondent: DanSpoon,Missoula, Montana, forDavidBallou;Paul Meismer, Missoula, Montana for David Corntassel

Filed: Submitted: March 4, 

### 1993 Decided: May 6, 1993Justice Fred J. Weber delivered the Opinion of the Court. Plaintiffs appeal the summary judgment order of the District Court oftheFourthJudicialDistrict, Missoula County, which ruled in favor of defendant David Ballou based on the "accepted work" doctrine of contractor nonliability. We reverse and remand to the District Court for reconsideration. The sole issue for review is whether the District Court erred in granting summary judgment to defendant Ballou. Appellants Edward Nichols, Jr., Julia A. Brummel and Nichole A. Brummel, by JuliaA. Brummel as her Mother and Natural Guardian

(plaintiffs) filed complaints alleging that they suffered carbon monoxide poisoning while residing in a rental property located in Missoula, Montana. The amended complaint alleged numerous claims against several defendants. Plaintiffs have settled their claims with and stipulated to dismiss defendants John Schubert, Cole MacPherson, Don Beaver Heating and Air Conditioning and Thomas Plumbing and Heating. Claims against two defendants remain. Plaintiffs' claim against defendant David Corntassel is rooted in the Montana Residential Landlord and Tenant Act and is not a part of thisappeal. Thisappeal relates solelyto the DistrictCourt's summary judgment dismissal of plaintiffs8 claim against defendant David Ballou (Ballou), a Missoula heating and air conditioning contractor and owner of Ballou Heating and Air Conditioning. In their Second Amended Complaint, plaintiffs alleged the following: In 1988,plaintiffs rented a residence located at 2120 South 14th Street in Missoula owned by David Corntassel. 2Corntasselhad purchased the residence in 1986 from John Schubert. Tomeet FHA financing requirements, Schubert raised the foundation of the house approximately two feet. When thiswas done, the vent pipes from the furnace had to be modified accordingly. Schubert contracted with Ballou to perform themodifications to the furnace exhaust system. Ballou performed the work in July or August of 1986. In April 1988, shortly after plaintiffs moved into the house, the exhaust vent pipe leading from the furnace to the chimney separated because thevent had neverbeen securely fastened by Ballou. Plaintiffs alleged that when the vent pipe separated, carbon monoxide gas escaped, causing them to suffer carbon monoxide poisoning. They further alleged that Ballou negligently reconnected the furnace exhaust vent in the residence. InhisAnswer,Balloudeniedplaintiffs allegationsexcept as follows: He admitted that Schubert was the owner of the premises at the time that Ballou Heating and Air Conditioning performed the work. He admitted that he was in the business of installing and repairing heating and air conditioning systems. He also admitted that there are city and county codes relating to the installation of furnaces. Did the District Court err in granting summary judgment in favor of Ballou? The District Court determined that sufficient facts were presented to grant summary judgment to Ballou on the basis of the "acceptedworkwdoctrine as an affirmative defense. The "accepted

### worktt doctrine is a rule of contractor nonliability most recently approved by this Court in Harrington v. LaBellef s of Colo. Inc. (1988), 235 Mont. 80, 765 P.2d 732. -- 

### See also Olson 

### v. Kayser (l973), 161 Mont. 241, 505 P.2d 394; Hannifin v. Cahill-Mooney Constr. Co. (1972), 159 Mont. 413, 498 P.2d 1214; and Ulman v. Schwieger (1932), 92Mont. 331, 12 P.2d 856. Under the "accepted work" doctrine, the contractor owes no duty to a third party who is subsequently injured on the premises. The property owner (contractee) is substituted for the contractor

as the responsible party when the work is accepted. Harrinaton, 765 P.2d at 734. Theprimary rationale is that the injured person is not in privity of contract with the contractor. Under the doctrine, Schubert,as the owner who employed Ballou, would become the responsibleparty after he accepted thework done by Ballou to reconnect the exhaust vent, if all five elements of the "accepted work" doctrine were met. Contractornonliabilityprinciplesinitiallyparallelledthose 

### of product liability. Product liability law, unlike its counterpart, has changed significantly over the years as exemplified by the landmark case MacPherson v. Buick Motor Co.

(N.Y. App. 1916), 111N.E. 1050. MacPherson initiated a shift in product liability law subjecting manufacturers or suppliers to liability for negligence. Annotation, Nealiaence of buildins or construction contractor as around of liability upon his part for iniurv or damaae to third person occurrina after completion and acceptance of thework. 58 A.L.R.2d 865, 869-70. The general ruleof nonliability for contractors did not experience a similar metamorphosis. However,a gradual trend away fromnonliability for negligence developed around a group of exceptions to the general rule instead of an outright repudiation of the "accepted workw doctrine in those jurisdictions which had previously adopted the doctrine. Strakos v. Gehring (Tex. 1962), 360 S.W.2d 787, 790. One of the numerous exceptionswhich evolved is the "latentdefect" exception which plaintiffs urge this Court to adopt. Authors of the Restatement (Second) of Torts at 

### 5 385 recommended that contractors should be placed on the same footing

as manufacturers fornegligence liability. 58A.L.R.2d at 871. In Strakos, the court completely overruled itsprior ruling which had approved the "accepted workw doctrine, noting that the effect of the decision was to bring the defendant within general rules of tort litigation, restoring logic and simplicity to the law. Strakos, 360 S.W.2d at 790-91. A number of courts have expressed dissatisfaction with the rule, favoring a more direct approach such as that of the Texas court in Strakos. 13 Am. Jur. 2d Buildina and Construction Contracts 5 140 (1964). Instead of applyingthenonliabilityrule, these courts have established a rule that a contractor is liable for injuries to or death of third persons after acceptance by the contractee where the work is reasonably certain to endanger third persons if negligently completed. 

## - Id. This view adopts a rationale that there are no sufficient grounds to differentiate between liability of amanufacturer of goods and that of a building

### or construction contractor. 

### Id. The 

### building contractor's liabilityunder thisreasoning is notabsolute,but

### predicated upon 

### negligence. Thus, a contractor following plans 

### or specifications given to him will not be liable if a 

### reasonableperson would have 

### followed them, 

### Id. See, 

### e.s., Menendez v. 

### Paddock Pool Constr. Co. 

### (Ariz.App, lggl), 836 P.

### 2d 968 

### (nonliabilityrule appliesonly when contractorhas no discretionand 

### ismerely following plans and specifications provided by 

### the employer) ; 

### and Hanna v. Fletcher (D.C.Cir, 19561, 231 F.2d 469 (the leading case 

### rejecting the 

### "acceptedworkw doctrine). In this

### appeal, plaintiffs have asked thisCourt toreview the 

### '*accepted work" doctrine and 

### considerwhether it is 

### appropriate to 

### continue to 

### blindly exempt contractors from liability when the elements of 

### the doctrine are present. They do 

### not argue that this 

### Court should follow the example of the many jurisdictions which have completely abandoned the 

### doctrine as this Court has already done for products liability actions against manufacturers and others previously 

### exempt 

### from liability. 

### See Brandenburger 

### v. ToyotaMotor Sales,U. S. A., 

### Inc. (1973), 162

### Mont. 506, 513 P.2d 268. 

### Instead, they urge us to adopt the Iflatentdefect" exception to the doctrine and argue that the facts of 

### this case clearly demonstrate that a 

### latent defect 

### existedwhen Ballou performed the 

### work and turned it over to Schubert some twenty months prior to their injury. Based on the arguments presented in the briefs, the 

### court concluded that 

### it was appropriate to 

### consider the lVacceptedworkwdoctrine and the possible application of the "latent defect" exceptionto thatdoctrine. Bothparties' briefs before thisCourt indicated therewere no genuine issues of fact relating tothe five elements of the 'Iacceptedwork" doctrine. Argument was presented

on that theory. This Court has now made a careful review of the entire record before the District Court. The record,as submitted to thisCourt, contains no affidavits of any kind, no depositions, no interrogatories, and no separate admissions which could be considered. The Clerk of the District Court verified that its entire record had been submitted to this Court for the appeal. As previouslypointed out, thedefendant Ballouhas denied, generally and specifically, all of the allegations on the part of the plaintiff in the amended complaint with the exception only of an admission that Schubert owned the premises at the timewhen Ballou performed work, that Ballou was in the business of repairing heating and air conditioning systems and that there are city and county codes. As a result, the pleadings themselves fail to establish any factspertinent to the issues before this Court. As theparty moving for summary judgment,Ballouwas required to comply with the provisions of Rule 56(c), M.R.Civ.P., which in pertinent part provides: Motion and proceedings thereon. 

# . . . The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file,together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. 

# .

# . .

### Rule 56(c) has been the subject of many cases decided by this Court. In the great majority of cases, the question raised is whether or not the party opposing summary judgment has properly submitted facts todemonstratean issue ofmaterial fact. Parties continue to argue that facts alleged in the pleadings must be accepted as correct. In such cases,we have held as follows:



# . . . Drug Fair argues that the facts alleged in its complaint must be accepted as correct. That is not correct. As pointed out in Mayer Brothers v. Daniel Richard Jewelers, Inc. (1986), [223 

### Mont. 3971, 726 

### P.2d 815, a party opposing a motion for summary judgmentmay not rest upon themere allegations of pleadings, and has an affirmative duty to respond by affidavits or sworn testimony with specific facts that showthere is genuine issue of fact for trial. 

# . . . Drug Fair Northwest v. Hooper Enters., Inc. (1987), 226 Mont. 31,

The essential question here, however, is whether or not defendant Ballou has submitted sufficient facts to trigger the court's considerationunder Rule 56(c), M.R.Civ.P. In describing the cases where a summary judgment is proper, this Court stated in Gamble Robinson Co. v. Carousel Properties (1984), 212 Mont. 305, 688 P.2d 283, 286-87, as follows: Summary judgment is not a substitute for trial. 

# . . . Rule 56(c)

## , M0nt.R.Civ.P. permits summary judgment to issue only when there is no genuine issue of material fact,and themovingparty is entitled to the judgmentas a matter of law. 

# . . . In Cereck 

### v. Albertson's, Inc.

(1981), 195 Mont. 409, 637 P.2d 509,we stated the test for granting summary judgment: "It is well established that a party moving for summary judgmenthas the burden of showing a complete absence of any genuine issue as to all facts deemed material in light of the substantiveprinciples that entitle thatparty to a judgment as a matter of law. [Citationsomitted.] All reasonable inferences that may be drawn from the offered proof are to be drawn in favor of the party opposing summary judgment. [Citationsomitted.] Themoving partyIs initialburden is two-fold. First, it must show the absence of anygenuine issue as tomaterial fact. Second,thatpartvmust also show that this set of facts entitles it to the iudcnnent as a matter of law. Thisnecessarily impliesthearticulation of cosent lesal srounds to which the facts apply. (Emphasis supplied.)

(Citationsomitted.) The foregoing is the test which must be applied in the present

case.As pointed out above in Gamble Robinson, it was the burden of defendant Ballou here to first show the absence of any genuine issue of material fact, and second, to show that this set of facts entitled Ballou to judgment as a matter of law. Both defendant Ballou andplaintiffshave failedtoestablish facts which entitled any of them to judgment as a matter of law. As noted, the pleadings fail to establish as matters of fact the key facts regarding the furnace, furnace pipe, separation of the pipe, and resultant injury. Theparties domake reference intheir briefs to various depositions, but none of those depositions are 

### a part of the record before us. We conclude that defendant Ballou has completely failed to set forth a set of facts which entitlehim to judgment as a matter of law. We also emphasize that plaintiffs in turn have failed to set forth factswhich entitle them to judgment

as a matter of law. As a result,we hold that defendant Ballou as the moving party has failed to establish a set of facts which entitled him to judgment as a matter of law under Rule 56(c),We, therefore, hold that the District Court erred in granting summary judgment to defendant Ballou. We remand this case for further consideration in a manner consistent with this opinion. Reversed and remanded.

-

We Concur:

JusticesJustice Terry N. Trieweiler concurring in part and dissenting in part.I concur with the decision of the majority to reverse the judgment of the District Court. However, Iwould do so for reasons different from those of the majority. Iwould reverse the judgment of the District Court because it

was based on the "accepted work doctrinewwhich I conclude should no longer be followed in Montana. Idisagree that there is an inadequate record onwhich tobase

a decision whether to follow this antiquated theory, and believe that it is a disservice to theparties and to the DistrictCourt to require that they jump through further hoops before addressing the legal issue raised by this appeal. InHaniizgtonv. LaBe~lelsof Colorado (1988), 235 Mont. 80, 765 P.2d 732, this Court held 

### in a five to two decision that 

### it would continue to follow the accepted work doctrine first adopted in Montana in me?z

### v. Schwieger (19321, 92 Mont. 331, 12 P.2d 856. However, two members of the five person majority are no longer members of this Court, and Idid not participate in that decision. However, 3agreewith the dissenting opinion in that case whichwas authored by

### Mr. JusticeWeber and concurred in by 

### Mr. Justice

### Hunt. The issue of whether the accepted work doctrine bars recovery by the plaintiff against the defendant Ballou has been squarely framed by the pleadings in this case, by the testimony of the parties, and by the stipulations of the parties, as presented intheir appellate briefs. Itmakes no sense to consume further time and expense of the parties andwastevaluable time and resourcesof the District Court to add unnecessary information 

### to the record before indicating how the seventh member of this Court would vote

on the issue of retaining the "accepted work doctrine." While it is correct that the record is inadequate for purposes of determining whether this is an appropriate case in which to apply a "latent defectw exception to the doctrine, it is unnecessary to consider the latent defect exception if this Court decides to no longer follow the accepted work doctrine. Iagreewith the Circuit Court ofAppeals for the District of Columbia when it held inHaizna v.Fletcher (D.C. Cir. 1956)

### , 231 F,2d 469, that the antiquated reasons for the accepted work doctrine based 

### on lack of privity have no place in modern theories of liability, as set forth inMacPherson v.BuickMotorCompany (1916),217 N.Y. 382, 111 N.E. 1050. I agree with the Supreme Court for the State of Texas when it held in 

### Strakos v. Gehring (Tex. 1962), 360 S.W.2d 787, 791, that elimination of the accepted work doctrine would restore logic and simplicity to the 

### law of liability. The accepted 

### work doctrine can only accomplish one 

### of two undesirable results. It either shifts liability from thenegligent party to an innocent property owner who, in most cases, has insufficient expertise with which to discover defects, or eliminates 

### liability 

### on the 

### part af anyone. 

### In that event, 

### itshifts the burden of a negligent party's conduct to the innocent victim. Neither of these results are desirable in light of modern theories of liability, and this Court should say so. Themajority avoids discussing the legal issues raised in this appeal by concluding thatbothplaintiffs and defendant Ballouhave failed toprovide this Courtwith factswhichwould entitle them to judgment as a matter 

### of law. However, I disagree. The parties have stipulated to an adequate factual record on which to review the issue of whether this Court will. continue to follow the accepted work doctrine. 

### InHarnhgton, we indicated that five factors were critical in

our application of the accepted work doctrine in that case. They

were: 1. That the work had been turned over to the owner; 2. That the owner had accepted the work; 3. That upon completion the owner paid the contractor; 4. That the contractor completely removed itself from the premises prior to the accident; and 5. That there was no follow-upwork or any complaintsabout the contractor's work. 

### In his appellate brief, Ballou points out that there was deposition testimony from thedefendant and fromJohnSchubert, the former owner of the premises, establishing each of these five elements. He includes references to thepages in those depositions atwhich point those elements were established. While it is true that the depositions have not been filedwith this Court on appeal, 13their absence is insignificant because in their reply brief, plaintiffs concede that all five elements have been established. They specifically state that: Appellants do not dispute criteria 1 through 4, however, addressing separately criteria 5, Appellants state that although there was not follow up work performed

### by Respondent Ballou, therewas no other person inthe 20-monthperiod fromthe timeRespondent completed his work until the Appellants1 injuries occurred, who worked on the unit. In other words, the parties stipulate that all five criteria which were found necessary inHarriqtan for the application of the accepted work doctrine are present 

### in this case. To remand this case to the District Court for further factual development and to supplement the record without indicating to the parties and to the ~istrict Court how the seventh member of this Court would vote 

### on the issue of retaining the I1acceptedwork doctrinetv is a complete waste of everyone's time and money. It is because of unnecessary academic exercises like this that people become frustratedwith the judicial process. For these reasons, I dissent from that

### part of themajority opinion which suggests that further factual development is necessary before we can address the dispositive issue in this case. I would decline to follow the accepted work doctrine,and therefore, Iwould reverse the ~istrict Court's summary judgment on that basis.~usticeWilliam E. Hunt, Sr., joins in the foregoing

concurrence and dissent.May 6,1993 CERTIFICATEOFSERVICE Ihereby certifythat thefollowingorderwas sentby UnitedStatesmail, prepaid,tothefollowing named:

ArthurD. Agnellino AttorneyatLaw 200EastPine Missoula,MT 59802 DanL.Spoon Reep, Spoon&Gordon P.O. Box9019 Missoula,MT 59807-9019 PaulC.Meismer Garlington,Lohn&Robinson P.O. Box7909 Missoula,MT 59807 EDSMITH CLERKOFTHESUPREMECOURT STAWOFMONTANA