### 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 CharesA. Murray, Jr.

argued, Billings, Montana

Submitted: December 19, 1978 Decided:

## MAR2

## 81979 Filedr , 

## 2, 

## 19f9Mr. Justice Gene B. Daly delivered the Opinion of the Court. This action involves the foreclosure of 

### a mechanic's lienby respondent Ray C. Maxwell on a house which he contracted tobuild for appellants Anderson. The District Court, Thirteenth Judicial District, ordered theAndersons topay Maxwell, the contractor, $15,038.88 on his lien and a total of $9,223.41 toother supplierswho also held liens formaterials inthe house. In addition, the District Court ordered Andersons topay the contractor's attorney's fees in the amount of $3,500. From the finaljudgment, Andersons appeal. InMay 1976, G. C. Anderson, Jr., prepared and entered into a written agreement with Ray Maxwell tohave Maxwell build a house for theAndersons. 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 incost some $14,157.40. The construction agreement provided thatMaxwell

was tobe paid on a monthly basis for hismaterials 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 toldMaxwell he did not have enough money to make the next payment. Maxwell considered himself 

### terminated on the 17thof September and withdrew his crew from the project. Anderson contacted Maxwell on the 23rd to arrange his return tothe job, but on the following day no workmen 

### were on the job. Maxwell filed a mechanic's lien to protect his interest and thematerials for which he had not been paid.

### At trialMaxwell 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, theAndersons or Maxwell, was responsible for this payment. (TheAmerican Appliance lienwas 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 "Pursuantto the foregoing Findings of Fact and Conclusions of Law, judgment is entered in plaintiff's favor as follows:"1. The defendants shallpay tothe 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 shallpay totheplaintiff intereston the above amount from September 23, 1976, until the entire debt has been paid in full. "3. That inthe event the defendants areunable topay the amount of thejudgment, the Court shall supervisethe saleof any and allassets of defendants which may be held tosatisfy saidjudgment. 

### "4. That plaintiff have judgment against defendants for any deficiency remaining inthe event the proceeds from the saledo not satisfyplaintiff's claim. "5. That the defendants pay any and 

### all additional liens against theproperty. "6. The defendants shallpay reasonable attorneys' fees inthe amount of Thirty Five Hundred Dollars ($3500.00), and theplaintiff shallpay the balance of Fifteen Hundred Two Dollars ($1502.00). "7. That defendants shallpay all costs of suit." Appellants present five issues forreview by this Court: 1. Is a lienholder entitled tojudgment on hismechanic's lienwithout reference toan estimated price stated inthe contractupon which the lien 

### isbased? 2. 

### Is the defendant ina lien foreclosure action entitled toa directed verdictwhen the lienholder failsto show by the parties' contract that he 

### was infact entitled tothe amount on which he intends to foreclose?3. Is an award of attorney's fees properly made when (a) the prevailing party failed topresent evidence on fees 

### its case-in-chief? and, (b) the losing party had no opportunity to crossexamine as tothe amount of fees involved? 4. May a DistrictCourt properly order a party ina lien foreclosure action topay off liens held by other lienholders who 

### are not parties to the foreclosure? 5. 

### Is an appellant entitled toattorney's fees in the event that he prevails on appeal? The firsttwo issues involve the same basic question and can be treated 

### as one issue. Appellants' position 

### is that themaximum price they could be expected topay 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 intheir brief, 

### it appears that the total they consider themselves toowe 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 DistrictCourt specifically found the Andersons "legally responsible for additional liens and charges." Maxwell contends that because he chose toproceed under the lien statutes, rather than contract law, the lien law governs this case. Under the applicable lien law, he contends, he is entitled toan 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 tobe decided under contract law, the estimated price indicated inthe constructionagreement would not act

### as a 

### limiton the contractor's recovery. The Montana mechanic's liens statute does not specifically say what role the contract between the owner and lienholder plays indetermining 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 hiswork or labor alone, ormaterial 

# . 

# . . 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 theproperty 

### is written, oral, express or implied. Nontana decisions 

### are less clear astohow the total contract price affects the amount of the lien. The particular question raised by appellants here was addressed inSmith v. Gunniss (1943), 115 Mont. 362, 383-84, 144P.2d 186, 193. In Gunniss the owners had contracted forwork tobe done on their home, but had not agreed upon a totalprice. Instead, the owners had agreed topay for the remodeling by signing "a TitleOne Federal Housing note inthe amount due" atthe completion of the project. Such notes 

### were limited to $2500 by 

### law. Therefore, the owners argued that they had limited their obligation tothat 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 tocontinue beyond thatpoint. Thus, it ruled that the owners had acquiesced inan abandonment of that contract provision.Gunniss 

### is not our case on allpoints 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, indisregard of the original contract. Maxwell is ina 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 costwas further subject toa number of variables, 

### i.e., 10percent original error,

owner permitted to furnish alllabor possible tohold down costs and the absolute right of the owner to change plans and specifications atwill. In any event, other courts have determined estimated costs tomean: "The 'estimated cost' of a building means the 

### reasonable cost of a building erected inaccordance 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 tobe based on absolute calculations. Use of the word precludes accuracy. 'To make an estimate' ordinarilymeans to calculate roughly or to form an opinion as toamount from imperfect data. See Beelerv. Miller, Mo. App., 254 S.W.2d 986, 990, and authorities cited; 15Words 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 allmaterial and labor claimed by Maxwell were infactused inthe construction of the house, and that appellants changed the plans many 

### timesduring 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 DistrictCourt's conclusion. They rely instead upon the

### contractor's failure to show a modification inthe construction agreement allowing for a higher totalprice. In this kind of situation, it 

### isnot necessary toprove a 

### modification of the contract by Maxwell. The parties never had a 

### "firm" ceiling. Therefore, the DistrictCourt properly determined the value of the lienwhich Maxwell held on Andersons' house. Additionally, the findings of the Dis

### trictCourt on this issuewere never challenged by substan

### tial evidence to the contrary and must stand affirmed. Morrison v. City of Butte (1967), 150 Mont. 106, 112, 431 P.2d 79. The remaining issuesmay be treated summarily. First, appellants contend that the District Court wrongly awarded Maxwell attorney's fees because Maxwell failed toput on evidence of fees during his case-in-chief and because appellantswere denied an opportunity to cross-examine as to their reasonableness. As 

### to the firstobjection, appellants focus primarily

on the District

### Court's failure tooffer an explanation for permitting Maxwell toreopen his case-in-chief and present evidence of attorney's fees. Appellants concede that the matter of permitting a litiganttoreopen his case-in-chief 

### isplaced 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 actionby themere fact thatMaxwell was permitted toput on evidence and received an award. This has nothing to do with the injury thatmight result from a disorderly presentation of evidence. No showing is

### made that appellantswere injured by themanner inwhich 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 DistrictCourt ordered Maxwell topresent an itemized statement within twenty days, which he did. Some two months later the DistrictCourt 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 toraise the issue asreversible error. Appellants' next issue concerns the DistrictCourt's jurisdiction toorder them topay debts and liens toentities 

### not parties tothe foreclosure action. The District Court did not order appellants tomake payments of any specific sums to specific businesses. Instead, it 

### found appellants legallyresponsible 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 lienof Ameri

### can Appliance Co. inhis 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 toorder Maxwell topay the debts to Marchello Hardware and Sherwin Williams Co. Thus, the parties asked the DistrictCourt todetermine which of them owed various separatebusinesses and thereby submitted themselves to its

### jurisdiction. On this basis there appears

no reason toreverse theDistrictCourt's determination of which party owes these other debts. Appellants' lastissue involves attorney's fees. heir 

### argument is

### very brief on thispoint. They note firstthatthey requested reasonable attorney's fees in their answer and counterclaim. Second, they point tothe evidence of attorney's feeswhich they presented 

### attrial. Third, they note that on April 15, 1977, they made an offer of judgment toplaintiff, 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 failureof proof on the part of Respondent, as

### wellasAppellants' willingness to settlethismatter early on, 

### it is submitted thatAppellants 

### were entitled tobe awarded attorney fees asprayed for and that the Supreme Court should either order the payment of such attorney fees toAppellants or remand the issue of attorney fees to the DistrictCourt for further testimony inconnection therewith.

### " Section 93-8614, R.C.M. 1947, now section 71-3-124 NCA, establishes the principle of when attorney's fees arerecoverable on a lien foreclosure action. They arerecoverable in a reasonable amount "toeach claimant whose lien is established" and "to the defendant against whose property a lien 

### is claimed, if such lienbe not established." The statute makes attorney's fees recoverable to the prevailing party. If the defendants, appellants inthis case, do not win, they

are not entitled to attorney's fees.

We concur:



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