No. 13620 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

CARL LAUTERJUNG, 

Plaintiff and Appellant, 

CARLTON J. JOHNSON, 

Defendant and Respondent. 

Appeal from: District Court of the Eighteenth Judicial 

District, 

Honorable W. W. Lessley, Judge presiding. 

Counsel of Record: 

For Appellant: 

Vadala, Schwickert & Hanson, Kalispell, Montana 

Randy Schwickert argued, Kalispell, Montana 

For Respondent: 

Brown, Pepper and Kommers, Bozeman, Montana 

William L. Pepper arqued, Bozeman, Montana 

Submitted: October 3, 1977 

Decided: QEC 18 @fl 

Filed: a~o 2 $ IE~ 
Mr. Justice Frank I. Haswell delivered the Opinion of the Court. 

This case concerns the interpretation and effect of a 

partnership dissolution agreement entered into by appellant and 

respondent. Appellant brought this action to recover damages 

alleged to have been due him under the partnership dissolution 

agreement. Respondent counterclaimed for the sum of $2,000. 

The District Court entered judgment in favor of respondent for the sum of $2,000 on the grounds that the agreement was 

ambiguous and that the ambiguity should be construed against the 

appellant in light of the fact that he prepared the agreement. 

The District Court found that the damages claimed by 

appellant were not of a type for which respondent agreed to be 

responsible and were incurred prior to a final testing or inspection of certain work the partnership was obligated to perform. 

The court concluded that respondent was only responsible for extraordinary expenses of the partnership incurred subsequent to 

the final testing or inspection. The court further concluded 

that damages incurred by appellant subsequent to the said final 

testing or inspection were not extraordinary and that appellant 

owed respondent the sun of $2,00O,together with interest from 

December, 1974. 

Following the entry of judgment, appellant moved to amend 

the findings of fact, conclusions of law and judgment. Appellant's 

motion was denied and he now appeals to this Court. 

In the summer, 1973, appellant and respondent entered into 

an oral partnership agreement creating the Trails End Construction Company. The partnership was engaged in the business of constructing water, sewer and sanitary sewer lines. In November, 

1973, the partnership entered into a contract with Rural Special 

Improvement District No. 305 at Big Sky, Montana, to install a 

sanitary sewer line. Respondent undertook the responsibility of 
supervising all field work involved in installing the sewer 

line. Appellant assumed the administrative and managerial duties 

on behalf of the partnership. 

The partnership began work on the sewer line in November, 

1973. By April, 1974, the sewer line was approximately 92% completed. On April 13, 1974, appellant and respondent agreed to 

dissolve their partnership and the agreement in question was signed. 

Appellant prepared the dissolution agreement. Prior to the dissolution appellant had expressed concern with the quality of the 

work on the Big Sky project. 

Under the terms of the dissolution agreement, appellant 

agreed to complete the construction of the sewer line and to pay 

respondent the sum of $5,000. $3,000 of this amount was paid at 

the time the agreement was signed and the remaining $2,000 was to 

have been paid at the time the partnership received final payment 

from Rural Special Improvement ~istrict No. 305. The $2,000 payment was not made and is the basis for respondent's counterclaim. 

The agreement provided as follows in regard to the completion of Rural Special Improvement District No. 305: 

"It is further agreed that Lauterjung will be 

solely responsible for all existing liabilities 

of the partnership with the exception of Rural 

Special Improvement District #305 located in 

Gallatin and Madison Counties, Montana. With 

regard to R.S.I.D. 305 it is agreed that Lauterjung will complete the work required on said 

project but due to the fact that Johnson has 

previously been primarily involved in the project 

and due to the fact that there may be required a 

testing of the installation involved in this project; if such testing or inspection shows a deficiency which results in expense which normally 

would not have been incurred as a part of said 

project, it is agreed that the parties shall share 

such expense equally." 

As a result of the continuing testing and inspection of 

the project, deficiencies were revealed which allegedly resulted 

in abnormal expenses totaling $15,791.64. Appellant demanded 

one-half of this amount or $7,895.82 from respondent on March 22, 
1975. Following respondent's failure to respond this action 

was commenced. 

Two issues are before this Court upon appeal: 

(1) Whether the evidence supports the ~istrict Court's 

finding of fact and conclusion of law that the dissolution agreement was ambiguous concerning the meaning of the terms "testing 

or inspection". 

(2) Whether the evidence supports the District Court's 

findings of fact and conclusions of law that respondent's liability under the dissolution agreement was only for certain extraordinary partnership expenses arising as a result of a final 

testing or inspection. 

This Court recently stated in Luppold v. Lewis, 

Mont. , 563 P.2d 538, 540, 34 St.Rep. 227 (1977), that: 

"When reviewing findings of fact and conclusions of 

law of a district court, sitting without a jury, 

this Court has repeatedly held such findings and 

conclusions will not be disturbed if supported by 

substantial evidence and by the law. Compton v. 

Alcorn, 140 n t . , 557 P.2d 292, 33 St.Rep. 

1186 (1976); Brady v. State Highway Cornm'n, 163 

Mont. 416, 517 P.2d 738; Timerman v. Gabriel, 

155 Mont. 294, 470 P.2d 528; Wash. Water Power Co. 

v. Morgan Electric Co., 152 Mont. 126, 448 P.2d 

683. When reviewing evidence it will be viewed 

in the light most favorable to the prevailing 

party in the district court, and the credibility 

of witnesses and the weight assigned to their testimony is for the determination of the district court 

in a nonjury trial. (Citations omitted.) " 

The crux of appellant's first issue is a determination of 

whether that portion of the dissolution agreement dealing with the 

testing and inspection of the Big Sky job is ambiguous. Appellant specifically takes issue with the District Court's finding 

that the phrase " * * * if such testing or inspection shows a deficiency which results in expense which normally would not have 

been incurred as a part of said project, it is agreed that the 

parties shall share such expense equally" is ambiguous. Appellant 
argues that the testing or inspection referred to is the interim 

testing. Respondent, however, argues that his liability, if any, 

arose as a result of a final testing of the project. 

We find an abundance of substantial evidence in the record 

which supports the District Court's finding of ambiguity. Appellant's Exhibit W1 is a copy of the job specifications prepared for 

the Big Sky job. A reading of these specifications clearly reveals that periodic tests and inspections as well as a final test 

were contemplated. Several types of tests were required to be 

performed at various stages in the construction. Appellant himself testified that his understanding of the term inspection meant 

that the owner or his engineer had the right to inspect the materials and workmanship at any time during construction. It is clear 

therefore that the dissolution agreement is ambiguous in regard 

to defining which inspection triggered respondent's duty to share 

the cost of modifications or corrections to the sewer line. 

The core of appellant's second issue is a determination 

of whether the District Court correctly ruled that respondent was 

responsible for extraordinary partnership expenses arising as a 

result of the final test or inspection only. 

In cases of uncertainty as to the meaning of a contract 

this Court has repeatedly followed the rule that the contract 

should be interpreted most strongly against the party who caused 

the uncertainty to exist. Section 13-720, R.C.M. 1947; Miller 

v. Walter, 165 Mont. 221, 527 P.2d 240; Miller v. Meredith, ill 

and Whitfield, 149 Mont. 125, 423 P.2d 595. Appellant drafted 

the dissolution agreement so we must construe its terms most 

strongly against him in determining the intent of the parties. 

The District Court ruled that the parties intended that 

appellant and respondent share the cost of modification or repair 

of the sewer line which was required after final inspection. 
Appellant's argument that the testing and inspection contemplated 

by the parties was an interim testing simply was not accepted 

by the District Court. Substantial evidence is found in the 

record to support this ruling. Respondent testified concerning 

his understanding of the dissolution agreement: 

"Q. Did you have any discussions with the Plaintiff concerning the meaning of that language at 

the time you signed it? A. I asked him about it 

and he just clarified what I had already thought. 

"Q. What were the substances of those discussions? 

Just summarize it. A. Well, I asked him what it 

meant and what it involved. And he said that we 

had to do a lot of work after the final inspection. 

He expected me to help him do half of it, which I 

agreed to do. 

"Q. Was it your understanding that he agreed to 

finish the job? A. Yes. 

"Q. And the words 'Testing and Inspection' used 

in that paragraph, what did Mr. Lauterjung indicate 

to you that they meant? A. Well, the testing and 

final inspection before he sold it to Big Sky. 

"Q. Did he state that to you? A. Yes. It has 

been a long time, but I am positive it was." 

Furthermore, on cross-examination, appellant himself admitted that: 

"Q. he language 'testing', Mr. Lauterjung, that 

implies a final testing; is that not correct? A. 

Yes. I' 

The judgment of the District Court is affirmed. 

Justice