No. 14336 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1978 

RAY C. MAXWELL, 

Plaintiff, Respondent and Cross-Appellant, 

G. C. ANDERSON, JR., and CAROLE J. 

ANDERSON, husband and wife, 

Defendants and Appellants. 

Appeal from: District Court of the Thirteenth Judicial 

District, 

Honorable Jack Shanstrom, Judge presiding. 

Counsel of Record: 

For Appellants: 

Ayers and Alterowitz, Red Lodge, Montana 

Michael G. Alterowit argued, Red Lodge, Montana 

For Respondent: 

Meglen, Murray and Bassett, Billings, Montana 

J. F. Meglen argued and Chares A. Murray, Jr. 

argued, Billings, Montana 

Submitted: December 19, 1978 

Decided: MAR 2 8 1979 

Filedr , 2, 19f9 
Mr. Justice Gene B. Daly delivered the Opinion of the Court. 

This action involves the foreclosure of a mechanic's 

lien by respondent Ray C. Maxwell on a house which he contracted to build for appellants Anderson. The District 

Court, Thirteenth Judicial District, ordered the Andersons 

to pay Maxwell, the contractor, $15,038.88 on his lien and a 

total of $9,223.41 to other suppliers who also held liens 

for materials in the house. In addition, the District Court 

ordered Andersons to pay the contractor's attorney's fees in 

the amount of $3,500. From the final judgment, Andersons 

appeal. 

In May 1976, G. C. Anderson, Jr., prepared and entered 

into a written agreement with Ray Maxwell to have Maxwell 

build a house for the Andersons. The writing, entitled a 

"construction agreement," provided a recitation of an "estimated 

ceiling -- cost of $46,500" and allowing for a 10 percent 

margin. During the course of construction, Anderson requested 

numerous changes or additions, which totaled in cost some 

$14,157.40. The construction agreement provided that Maxwell 

was to be paid on a monthly basis for his materials and on a 

bi-weekly basis for labor. 

The construction proceeded normally and Andersons made 

their payments on schedule until September 13, 1976, when 

Mr. Anderson told Maxwell he did not have enough money to 

make the next payment. Maxwell considered himself terminated on the 17th of September and withdrew his crew from 

the project. Anderson contacted Maxwell on the 23rd to 

arrange his return to the job, but on the following day no 

workmen were on the job. Maxwell filed a mechanic's lien to 

protect his interest and the materials for which he had not 

been paid. 
At trial Maxwell limited his proof to the issue of how 

much money he had put into the project by the time his lien 

was filed and the amount he had actually been paid. 

Following September 1976, three other business firms, 

Marchello Hardware, Sherwin Williams, and American Appliance 

Co., also filed liens on materials used on the project. By 

the pleadings, the parties had put into issue the question 

of which party, the Andersons or Maxwell, was responsible 

for this payment. (The American Appliance lien was included 

in Maxwell's lien, and Maxwell has acknowledged its payment 

prior to appeal.) 

At the conclusion of trial without a jury, the court 

entered the following conclusions and judgment: 

"1. Mr. Maxwell has filed a mechanic's lien in 

accordance with Section 45-502, Revised Codes of 

Montana, 1947, as amended. 

"2. The mechanic's lien was properly foreclosed 

and recovers the value of labor and material as 

set forth in the lien. 

"3. Mr. Maxwell substantially completed construction of the defendants' dwelling. 

"4. The defendants are legally responsible for 

additional liens and charges against the defendants, individually or against the property. 

"5. The term 'estimates' as used in the May 15, 

1976, agreement does not limit the amount of money 

that the plaintiff may recover. 

"6. That the defendant, G. C. Anderson, is not 

entitled to any damages based on loss of wages. 

"7. That Mr. Maxwell is not a general contractor 

as a matter of law. 

"8. The plaintiff is entitled to reasonable attorneys' fees as provided by Section 93-8614, Revised 

Codes of Montana, 1947, as amended. 

"JUDGMENT 

"Pursuant to the foregoing Findings of Fact and Conclusions of Law, judgment is entered in plaintiff's 

favor as follows: 
"1. The defendants shall pay to the plaintiff the 

sum of Fifteen Thousand Six Hundred Thirty-Six and 

38/100 Dollars, ($15,636.38), minus the following 

set-offs, for a total of Fifteen Thousand ThirtyEight and 88/100 Dollars ($15,038.88): 

"a. Bypass Valve----------- $70.00 

"b. Correction of Wall----- 7.50 

"c. Correction of Stairwell 20.00 

"d. Correction of Crawl 

Space ---------------- 500.00 

$597.50 

"2. The defendants shall pay to the plaintiff 

interest on the above amount from September 23, 

1976, until the entire debt has been paid in full. 

"3. That in the event the defendants are unable 

to pay the amount of the judgment, the Court shall 

supervise the sale of any and all assets of defendants which may be held to satisfy said judgment. 

"4. That plaintiff have judgment against defendants 

for any deficiency remaining in the event the proceeds from the sale do not satisfy plaintiff's 

claim. 

"5. That the defendants pay any and all additional 

liens against the property. 

"6. The defendants shall pay reasonable attorneys' 

fees in the amount of Thirty Five Hundred Dollars 

($3500.00), and the plaintiff shall pay the balance 

of Fifteen Hundred Two Dollars ($1502.00). 

"7. That defendants shall pay all costs of suit." 

Appellants present five issues for review by this 

Court: 

1. Is a lienholder entitled to judgment on his mechanic's 

lien without reference to an estimated price stated in the 

contract upon which the lien is based? 

2. Is the defendant in a lien foreclosure action 

entitled to a directed verdict when the lienholder fails to 

show by the parties' contract that he was in fact entitled 

to the amount on which he intends to foreclose? 
3. Is an award of attorney's fees properly made when 

(a) the prevailing party failed to present evidence on 

fees its case-in-chief? and, 

(b) the losing party had no opportunity to crossexamine as to the amount of fees involved? 

4. May a District Court properly order a party in a 

lien foreclosure action to pay off liens held by other 

lienholders who are not parties to the foreclosure? 

5. Is an appellant entitled to attorney's fees in the 

event that he prevails on appeal? 

The first two issues involve the same basic question 

and can be treated as one issue. 

Appellants' position is that the maximum price they 

could be expected to pay under the facts is the "total 

ceiling cost" of $51,150 plus additional costs for their 

alterations, amounting to $14,157.40. Although appellants 

do not state this figure in their brief, it appears that the 

total they consider themselves to owe Maxwell under any 

circumstance is $65,307.40. Appellants do not consider 

themselves responsible for the payment of $9,223.41 to other 

contractors. The District Court specifically found the 

Andersons "legally responsible for additional liens and 

charges." 

Maxwell contends that because he chose to proceed under 

the lien statutes, rather than contract law, the lien law 

governs this case. Under the applicable lien law, he contends, he is entitled to an equitable quantum meruit for 

materials and labor put into the project without regard to 

any underlying contract or agreement. He further argues 

that, even if the matter were to be decided under contract 

law, the estimated price indicated in the construction 
agreement would not act as a limit on the contractor's 

recovery. 

The Montana mechanic's liens statute does not specifically say what role the contract between the owner and 

lienholder plays in determining the amount of the lien. 

Section 45-501, R.C.M. 1947, now section 71-3-501 MCA, 

simply provides: 

"Every . . . builder . . . performing any work 

and labor upon, or furnishing any material . . . for, any building . . . upon complying with the 

provisions of this chapter, for his work or labor 

alone, or material . . . furnished, has a lien 

upon the property upon which the work or labor 

is done or material is furnished." 

While an agreement is necessary as a prerequisite to a 

lien's existence, the right is statutory and not dependent 

on whether the contract with the owners of the property is 

written, oral, express or implied. Nontana decisions are 

less clear as to how the total contract price affects the 

amount of the lien. The particular question raised by appellants here was addressed in Smith v. Gunniss (1943), 115 

Mont. 362, 383-84, 144 P.2d 186, 193. In Gunniss the owners 

had contracted for work to be done on their home, but had 

not agreed upon a total price. Instead, the owners had 

agreed to pay for the remodeling by signing "a Title One 

Federal Housing note in the amount due" at the completion of 

the project. Such notes were limited to $2500 by law. 

Therefore, the owners argued that they had limited their 

obligation to that amount. The Court noted, however, that 

the owners had been apprised during the remodeling that the 

costs were going over $2900 and that the owners permitted 

the work to continue beyond that point. Thus, it ruled that 

the owners had acquiesced in an abandonment of that contract 

provision. 
Gunniss is not our case on all points but does demonstrate that under proper circumstances an award can be made 

based on the reasonable cost of labor and materials furnished by the lienholder, in disregard of the original 

contract. 

Maxwell is in a stronger position because he was 

building under an agreement drawn by the owner which was 

based on an "estimated" cost of material and labor for a 

certain structure. The estimated cost was further subject 

to a number of variables, i.e., 10 percent original error, 

owner permitted to furnish all labor possible to hold down 

costs and the absolute right of the owner to change plans 

and specifications at will. In any event, other courts have 

determined estimated costs to mean: 

"The 'estimated cost' of a building means the reasonable cost of a building erected in accordance 

with plans and specifications referred to and not 

necessarily the amount agreed upon by the parties 

or an offer accepted by defendant. . . An estimate 

is equivalent of 'more or less' and does not pretend to be based on absolute calculations. Use of 

the word precludes accuracy. 'To make an estimate' 

ordinarily means to calculate roughly or to form 

an opinion as to amount from imperfect data. See 

Beeler v. Miller, Mo. App., 254 S.W.2d 986, 990, 

and authorities cited; 15 Words and Phrases, 'Estimate', pp. 373-380; Black, Law Dictionary (Fourth 

Ed. 1951), 648; Ballentine's Law Dictionary (Third 

Ed. 1969), 420." Denniston and Partridge Co. v. 

Mingus (Iowa 1970), 179 N.W.2d 748, 752-53. 

Appellants admit that all material and labor claimed by 

Maxwell were in fact used in the construction of the house, 

and that appellants changed the plans many times during 

construction. The District Court found that the owners 

"acted independently and for their own benefit when they 

purchased material and secured services from other contractors." 

Appellants do not attempt to show evidence contrary to 

the District Court's conclusion. They rely instead upon the 
contractor's failure to show a modification in the construction agreement allowing for a higher total price. In this 

kind of situation, it is not necessary to prove a modification of the contract by Maxwell. The parties never had a 

"firm" ceiling. Therefore, the District Court properly 

determined the value of the lien which Maxwell held on 

Andersons' house. Additionally, the findings of the District Court on this issue were never challenged by substantial evidence to the contrary and must stand affirmed. 

Morrison v. City of Butte (1967), 150 Mont. 106, 112, 431 

P.2d 79. 

The remaining issues may be treated summarily. First, 

appellants contend that the District Court wrongly awarded 

Maxwell attorney's fees because Maxwell failed to put on 

evidence of fees during his case-in-chief and because appellants were denied an opportunity to cross-examine as to 

their reasonableness. 

As to the first objection, appellants focus primarily 

on the District Court's failure to offer an explanation for 

permitting Maxwell to reopen his case-in-chief and present 

evidence of attorney's fees. Appellants concede that the 

matter of permitting a litigant to reopen his case-in-chief 

is placed within the discretion of the trial court. Section 

93-5101(4), R.C.M. 1947, now section 25-7-301(4) MCA. They 

contend, however, that they were injured by the court's 

action by the mere fact that Maxwell was permitted to put on 

evidence and received an award. This has nothing to do with 

the injury that might result from a disorderly presentation 

of evidence. No showing is made that appellants were injured by the manner in which the evidence was presented. 
While reopening a case-in-chief may not be desirable, a more 

substantial showing of harm should be made before this is 

declared reversible error. 

As to the second contention, the District Court ordered 

Maxwell to present an itemized statement within twenty days, 

which he did. Some two months later the District Court 

issued its findings, conclusions, and judgment. Appellants 

could have obtained a copy and entered their objections at 

any time during the interim. They should not now be permitted to raise the issue as reversible error. 

Appellants' next issue concerns the District Court's 

jurisdiction to order them to pay debts and liens to entities not parties to the foreclosure action. The District 

Court did not order appellants to make payments of any 

specific sums to specific businesses. Instead, it found 

appellants legally responsible for other liens and charges 

and ordered generally that appellants pay those. 

The issue of other liens and charges arose from the 

actions of the parties. Maxwell included the lien of American Appliance Co. in his amended lien. Appellants, on 

November 2, 1977, submitted a motion to amend their answer 

and counterclaim. In their amended counterclaim they asked 

the District Court to order Maxwell to pay the debts to 

Marchello Hardware and Sherwin Williams Co. Thus, the 

parties asked the District Court to determine which of them 

owed various separate businesses and thereby submitted 

themselves to its jurisdiction. On this basis there appears 

no reason to reverse the District Court's determination of 

which party owes these other debts. 

Appellants' last issue involves attorney's fees. heir 

argument is very brief on this point. They note first that 
they requested reasonable attorney's fees in their answer 

and counterclaim. Second, they point to the evidence of 

attorney's fees which they presented at trial. Third, they 

note that on April 15, 1977, they made an offer of judgment 

to plaintiff, conditioned upon plaintiff's paying off all 

the other mechanic's liens which had been filed on the 

house. Their argument then is: 

"Given the failure of proof on the part of 

Respondent, as well as Appellants' willingness to settle this matter early on, it is 

submitted that Appellants were entitled to be 

awarded attorney fees as prayed for and that 

the Supreme Court should either order the 

payment of such attorney fees to Appellants 

or remand the issue of attorney fees to the 

District Court for further testimony in connection therewith. " 

Section 93-8614, R.C.M. 1947, now section 71-3-124 NCA, 

establishes the principle of when attorney's fees are recoverable on a lien foreclosure action. They are recoverable in 

a reasonable amount "to each claimant whose lien is established" and "to the defendant against whose property a lien 

is claimed, if such lien be not established." The statute 

makes attorney's fees recoverable to the prevailing party. 

If the defendants, appellants in this case, do not win, they 

are not entitled to attorney's fees. 

We concur: 

Jpstices 4