No. 85-10 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1985 

LLOYD MELAND, 

PLaintiff and F-espondent, 

INTERMOUNTAIN SYSTEMS, INC., a Mont. 

corp., and RUSSELL RAPP, 

Defendants and Appellants. 

APPEAL FF-OM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Thomas McKittrick, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Stephens Law Firm; Robert L. Stephens, Jr., Billings, 

Montana 

For Respondent : 

Robert M. Kampfer, Great Falls, Montana 

Submitted on Briefs: Oct. 31, 1985 

Decided: December 31, 1985 

Filed. DEC 3 1 7985 

Clerk 
Mr. Justice William E. Hunt, Sr., delivered the Opinion of 

the Court. 

The respondent, Lloyd Meland, filed a complaint in 

District Court against the appellant, Intermountain Systems, 

Inc., and the appellant's sales representative, Russell Rapp, 

alleging breach of a contract for the sale of goods and 

fraudulent misrepresentation. Russell Rapp defaulted. A 

District Court nonjury trial resulted in a finding that the 

appellant committed no fraud, but did breach the sales 

contract. The respondent was awarded damages and attorney 

fees. This appeal followed. 

We affirm the award of damages but reverse on the award 

of attorney fees. 

The issue in this case is whether the District Court's 

conclusions of law are in accord with the Uniform Commercial 

Code provisions on sales, particularly in the area of 

acceptance of non-conforming goods and damages therefore. 

The respondent, Lloyd Meland, is engaged in wheat 

farming in the Vaughn area in Cascade County, Montana. He 

agreed in a written contract to purchase a metal, 

quonset-type "curvette," building kit from the appellant, 

Intermountain Systems, Inc., a business located in Billings, 

Montana, engaged in selling farm buildings. There is some 

factual dispute as to exactly what the respondent stated that 

he required as far as building dimensions and the need for a 

specified height of the completed structure, but the terms of 

the written sales contract clearly demonstrate that the 

building was to be 50 feet wide, 60 feet long, and 18 feet 

high. Beyond the contract terms, which are sufficient in 

themselves to establish the agreed dimensions, there is 
strong indication that the respondent expressed a need for 

the 18 feet height to accommodate certain machinery storage 

and the dumping of grain in the building. The contract price 

was $6,950. The respondent paid $2,000 down and $4,950 on 

delivery of the component parts. 

Under the terms of the agreement the respondent was 

purchasing the component parts of the building. He ha.d the 

responsibility of assembling the structure and selecting and 

laying a foundation for the building. The respondent was 

aware that his choice of a foundation type could vary the 

overall building height. There is reference in the record 

tha.t the respondent chose a trough-type foundation that would 

lower the overall building height from the specified 18 feet. 

The record shows that this type foundation lowered the 

building overall height approximately 8 inches. 

Upon receipt of the component parts the respondent began 

construction. He learned then that the overall height of the 

completed structure was going to be less than 18 feet. He 

determined that the building would only be slightly over 15 

feet high. The District Court determined that the building 

as delivered would be 16 feet 5 inches high if completed 

according to the included instructions. The District Court's 

calculation is based on measurements from the top rib to the 

bottom steel which the parties agree is the accepted way to 

measure such building. 

Respondent called the appellant and notified them of the 

problem. He was informed. by the appellant that if the 

building was constructed according to instructions it would 

turn out fine. The respondent did not agree and then altered 

the construction sequence by using panels out of the 

specified order of assembly to obtain the desired height. Me 
was later told, after running out of panels, to reassemble 

tlze building correctly and he would have enough material. 

The appellant made no inspection of the construction. 

The respondent then ordered additional panels 

factory-direct from Arch Technology Corporation in 11-linois. 

He also purchased several temporary grain storage facilities 

because the building would not be completed in time for 

harvest. The cost of the additional panels and labor and the 

temporary storage facilities was $4,085. 

The respondent then filed suit against the appellant 

alleging breach of the sales contract and fraud. The 

District Court at a non-jury trial found no fraud but did 

find that the appellant had breached the sales contract. It 

awarded the respondent $4,085 as damages as an amount that 

the respondent was forced to spend as a result of the 

appellant's delivery of non-conforming goods. Costs were 

awarded as were attorney fees in the amount of $500. This 

appeal fol-lowed. 

Substantial credible evidence exists to support the 

District Court's determination that the goods delivered hy 

the appellant to the respondent were non-conforming goods. 

Under section 30-2-106, MCA, goods are "conforming" when they 

are in accordance with the obligations under the contract. 

The component parts of the delivered building kit, if 

assembled according to the instructions, would have resulted 

in a completed structure 16 feet 5 inches high. The terms of 

the written contract between the parties required the 

building to be 18 feet high at completion. The delivered 

goods were not "conforming" goods as they were not in accord 

with the obligations of the contract. 
Substantial credible evidence also exists to support a 

determination that the respondent accepted the goods. The 

respondent received the goods on July 7, 1981. About ten 

days later he began assembling the building and discovered 

the non-conformity. He contacted the appellant to notify 

them of the problem. He then went ahead with construction 

and used the component parts in a fashion that would produce 

a building height that he desired. Section 30-2-606 (1) (c) , 

MCA, provides that acceptance of goods occurs when the buyer 

does any act inconsistent with the seller's ownership. Use 

of the delivered goods to construct a building was 

inconsistent with the seller's ownership and constituted 

acceptance of the goods. 

The appellant relies heavily on an argument that once 

there is acceptance no damages may be had. Acceptance of 

non-conforming goods does not preclude recovery for damages 

due. Acceptance precludes rejection of the goods or 

revocation if made with the knowledge of the non-conformity 

unless there is a reasonable assumption that the 

non-conformity may be reasonably cured. Section 30-2-607(2), 

MCA . Where the buyer has accepted goods and given 

notification he may recover damages for any non-conformity. 

Section 30-2-71.4 (I), MCA. The notification required by this 

section is that contained in section 30-2-607 (3), MCA. It 

requires that the buyer must, within a reasonable time after 

he discovers any breach, notify the seller. Here the 

respondent notified the appellant immediately upon discovery 

of the non-conformity. That is sufficient notice. 

The proper award of damages in this case is set forth in 

statute. Section 30-1-106(1), MCA, provides that remedies 

under the Uniform Commercial Code shal.1 be liberally 
administered to the end that the aggrieved party may be put 

in as good a position as if the other party had fully 

performed but neither consequential or special nor penal 

damages may be had except as specifically provided in the 

Uniform Commercial Code or by other rule of law. Section 

30-2-714 (1) , MCA, provides that where a buyer has accepted 

goods and given notice he may recover damages from the 

seller's breach as determined in any manner which is 

reasonable. Section 30-2-714(3), MCA, provides that where 

accepted goods are in issue, in a proper case incidental and 

consequential damages may also be recovered. Section 

30-2-715, MCA, governs incidental and consequential damages 

awardable in this case. In relevant part, it defines 

incidental damages as any commercially reasonable charges or 

expenses in connection with effecting cover and any other 

reasonable expense incident to delay or other breach. It 

defines consequential damages as including any loss resulting 

from general or particular requirements and needs of which 

the seller at the time of contracting had reason to know and 

which could not reasonably be prevented by cover or 

otherwise. 

The District Court awarded the respondent $4,085 in 

damages as an amount the respondent was forced to expend as a 

result of the appellant's delivery of non-conforming goods. 

This amount represents the cost of materials and labor for 

completing the building and for temporary grain storage 

facilities necessitated by the harvest and delay in 

completion of the building. 

The appellant argues that these damages are excessive 

and that there were reasonable alternatives available to the 

respondent that would have minimized the cost of completing 
the structure. There is little merit in the appellant's 

argument. Respondent informed the appellant of the problem 

that existed and gave the appellant reasonable notice and the 

time required to take note of the problem and make an 

interested effort to remedy it. The appellant however took a 

rather disinterested approach initially by only expressing 

its thoughts that everything would be fine if the assembly 

instructions were followed. No active participation or 

sincere interest was expressed initially. By the time that 

the appellant did take the problem seriously it was too late 

to require the respondent to delay in anticipation of a 

resolution. The respondent. was justified in taking a 

reasonable approach to remedying the problem. We will not 

now criticize it simply because there may have been a better 

approach in the eyes of the appellant. We hold that the 

damages as awarded are proper under the Uniform Commercial 

Code and the facts of this case. 

The District Court awarded attorney fees to the 

respondent. No reason was stated. It i.s the law in Montana 

that absent statute or contract provisions on attorney fees, 

with the exception of particular circumstances not relevant 

here, attorney fees are not allowed as costs or damages. 

Martin v. Crown Life Insurance Company (Mont. 1983), 658 P.2d 

1099, 1104, 40 St.F.ep. 216, 221. There is no statute or 

contract provision here. The attorney fees are not 

allowable. 

Affirmed with the exception of the award of attorney 

fees. The award of attorney fees is reversed. 
We Concur: