No. 93-396 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

DICK LEWE 

DENISE HUYSER, ANTHONY HUYSER, BARBARA 

HUYSER, AIMEE HUYSER, JOHN C. 

MALPELI, JR., and BOB BIGGERSTAFF, "W. 

d/b/a BIGGERSTAFF CONSTRUCTION, 

Defendants and Respondents. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Thomas A. Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

James J. Screnar, Attorney at Law, 

Bozeman, Montana 

For Respondent: 

Wayne Jennings, Attorney at Law, 

Bozeman, Montana 

Filed: 

Submitted on Briefs: December 16, 1993 

~ecided: March 15, 1994 
Justice William E. Hunt, Sr., delivered the opinion of the Court. 

Plaintiff/appellant, Dick Lewis, appeals from a judgment of 

the Eighteenth Judicial District Court, Gallatin County, finding 

that his actions in refusing to continue the contract were a breach 

of the parties' construction contract and awarding respondent, 

Biggerstaff Construction, its costs, disbursements, attorney fees, 

and ordering release of its posted bond on the subject property. 

Affirmed and remanded for a determination and award of 

respondents1 additional attorney fees on this appeal. 

The dispositive issue is whether appellant breached his 

contract with respondent Biggerstaff Construction when he refused 

to continue work because of his belief that the work required of 

him would be in violation of Montana building codes, and his 

further belief that the parties1 contract was unlawful. 

Appellant Lewis is a licensed electrical contractor with his 

principal place of business in Big Sky, Gallatin County, Montana. 

Respondent Biggerstaff is a building contractor whose principal 

place of business is also in Big Sky. John Malpeli, Jr., is a 

developer of the property, San Marino Subdivision, at issue in this 

case. Denise, Anthony, Barbara, and Aimee Huyser are the current 

record owners of the San Marino Subdivision. The subdivision 

consists of eight residential lots, upon which Malpeli developed 

eight single-family log residences with common areas. The units in 

San Marino Subdivision are not commercial buildings or buildings to 

house five or more families. 
In 1989, Malpeli contracted with respondent to construct the 

homes. Respondent proceeded with construction of the units as 

needed by Malpeli, with several units under construction at one 

time. Later in 1989, respondent and appellant entered into a real 

estate improvement contract in which appellant was to provide 

electrical supplies and perform the electrical services on the 

units. Appellantts tasks included completing the "rough-inw phase 

of the electric wiring and ordering an inspection from the state 

electrical inspector when the wiring was completed. The rough-in 

phase consists of installing all of a building's meter services, 

wiring, and electrical boxes and circuits before installation of 

insulatian and interior walls. As the electrical contractor, 

appellant had the option of ordering a preliminary inspection of 

the rough-in phase of the wiring. Respondent and appellant agreed 

that their contract price was $5302. From 1989 to early 1990, 

appellant completed electrical work on four of the units. In March 

1990, appellant began work on the fifth unit. 

On about May 7, 1990, respondent's construction supervisor was 

asked by the purchaser of unit three to remove kitchen cabinets 

being stored there for later placement in unit five. In so doing, 

the construction supervisor hung the cabinets in unit five after 

installing tongue and groove boards and covering a portion of the 

wiring, despite appellant's warning not to do so. 

portions of the wiring in the first four units which appellant 

had completed also had been covered, but the electrical inspector 
had not required that all the wiring be visible upon inspection of 

the rough-in wiring. 

Appellant discussed the boards covering the wiring in unit 

five with several of respondent's employees. The employees 

suggested to appellant that the work in unit five remain covered 

until the state electrical inspector was ready to view the work. 

Appellant did not accept this proposal and refused to proceed with 

the job until respondent's employees removed all the wallboards 

covering the wiring in unit five. Appellant contended that if they 

did not remove the wallboards, he could lose his electrical 

contractor's license because the action was illegal. For several 

days and nights, appellant checkedto see if respondent's employees 

had removed the wallboards covering the rough-in wiring, but they 

had not. 

On May 12, 1990, appellant met with respondent and another of 

respondent's employees at respondent's office. Appellant had not 

contacted the state electrical inspector prior to this meeting. At 

the meeting, appellant became agitated and complained that the 

covered wires in unit five had jeopardized his electrical 

contractor's license. Respondent informed appellant that some of 

the wallboards had been removed. Respondent testified that 

throughout the meeting he attempted, without success, to work out 

a resolution with appellant in order to get him to finish the job. 

However, when appellant told respondent that he already had 

contacted an attorney about a construction lien for the work he had 

completed, respondent informed appellant that he should leave his 
office. Before leaving the office, appellant presented a prepared 

bill to respondent for the services he had provided on the project, 

stating that he had completed about 55 percent of the wiring for 

unit five and that he was through with the project. 

Appellant did not return to the job. He contacted the state 

electrical inspector to inform him of the conflict and to discuss 

the situation. The inspector told appellant that the covered 

wiring would not jeopardize the inspection or appellant's 

electrical contractor's license. 

Respondent gave appellant several weeks to cool down, but 

appellant did not return. Respondent then hired a substitute 

electrical contractor to finish the job. In order to complete the 

job, the substitute electrical contractor was required to determine 

where all the wires ended, locate dead shorts, supply the fixtures 

which appellant had retained, and complete the wiring. Their bill 

to respondent to complete work on unit five and the remaining units 

was $5344, or $42 more than the total of respondent's original 

contract with appellant. 

On May 16, 1990, after appellant left the project, he filed a 

notice of right to claim lien with the all at in County Clerk and 

Recorder for electrical services and electrical fixtures he had 

provided for unit five. The amount of the lien was $2916.10. 

Appellant testified that he had installed meter services to the 

unit as early as two months prior to May 12, 1990. The 

construction lien statutes required appellant to file his lien no 

later than 20 days after he first provided services or supplies. 
Appellant mailed the notice to Malpeli more than 20 days after he 

had begun work on the project. 

On December 5, 1990, and May 7, 1992, respondent posted two 

substitute bonds to replace and release appellant's lien on the 

subject property, totaling one and one-half times the amount of the 

lien. 

On May 3, 1993, the District Court found that appellant 

breached the parties' contract without justification because 

appellant left the project after the electrical inspector had 

informed him that if no other problems existed, appellant could 

complete the rough-in and the inspector would not order a 

compliance, and would approve it. In addition, the court found 

that nothing had prevented appellant from completing the rough-in 

and calling for an inspection of the wiring, other than his failure 

to keep his temper under control. On June 8, 1993, the court 

entered its judgment awarding respondent $42 in damages, $251 in 

costs and disbursements, and $3931.50 in attorney fees, pursuant to 

S 71-3-124, MCA. The court also awarded the Huysers and Malpeli 

$250 in costs and disbursements, and $810 in attorney fees. 

Further, the court ordered that respondent's posted bond, which had 

replaced and released appellant's construction lien, be released to 

respondent. 

On July 2, 1993, appellant filed this appeal from the judgment 

of the District Court. 

Did appellant breach his contract with respondent Biggerstaff 

Construction when he refused to continue work because of his belief 
that the work required of him would be in violation of Montana 

building codes, and his further belief that the parties' contract 

was unlawful? 

Appellant asserts that respondent flaunted the law and 

performed an illegal act when it covered up the rough-in wiring in 

unit five which in turn prevented him from future performance of 

the parties' contract. Appellant also asserts that respondent's 

actions violated his responsibility as an electrician and 

jeopardized his electrical contractor's license. 

Appellant contends that the effect of the District Court's 

decision is to allow general contractors to interfere with 

electrical contractors' responsibilities and legal duties. 

Montana's Building Code Bureau guides electrical contractors 

and electrical inspectors regarding rough-in inspections as 

follows : 

COVER (ROUGH-IN1 INSPECTIONS (1) Cover (rough-in) 

inspections are made by a state electrical inspector 

wherever ~ossible. Insulation and wallboard shall not be 

applied before inspection unless 48 hours, excluding 

Saturdays, Sundays, and holidays, have expired after 

notice to inspect has been received. 

(2) Whenever violations are found upon inspection, the 

inspector will notify the installer verbally or with a 

written compliance order as to the nature of the 

violations. [Emphasis added]. 

8.70.405, ARM. 

Appellant argues that the statute clearly prohibits covering 

the rough-in electrical wiring by insulation or wallboard before an 

inspector may waive a called-for inspection. Although the 

regulation provides that electrical wiring shall not be covered 
before inspection, a reasonable reading is that the rough-in cannot 

be covered at the time of the inspection, and that the electrical 

inspector, in his discretion, may waive an inspection of covered 

rough-in wiring. 

The record is clear that the parties had established a course 

of conduct allowing for the covering of some of the rough-in wiring 

in some of the other units completed before unit five, and that the 

electrical inspector approved. In addition, the former chief 

electrical inspector for the State of Montana, who was the 

inspector in the spring of 1990, when problems on unit five first 

arose, testified that an inspector must be given discretion in 

complying with the regulations: 

Q: Is it physically possible for Mr. Lamke [the 

electrical inspector in Gallatin County] within a forty 

to forty-five hour week to do every inspection called for 

in the code? 

A: I wish it were. No it isn't. 

Q: Okay. And that's understood right from the 

beginning, isn't it? 

A: Yes, sir. 

Q: Now, the administrative rule that Mr. Screnar read 

to you contemplates some discretion on the part of the 

inspector does it not? 

A: Yes, sir. 

At trial, appellant acknowledged that electrical inspectors 

are vested with discretion as to whether they will inspect all of 

the wiring prior to some of it being covered up. In addition, he 

testified that the wiring in the ceiling and all the wiring around 
the window and door openings in unit five had been covered prior to 

an inspection, based on a pre-agreement with the inspector. 

The record is clear that appellant had been assured by the 

Gallatin County Electrical Inspector that the covered work in unit 

five was not a problem, and he gave no indication that he would 

issue a verbal or written warning or compliance order to appellant. 

The inspector testified that the technical. violation by respondent 

in covering some of the rough-in wiring in unit five was not very 

serious. In fact, respondent removed some of the wallboards, as 

requested by appellant, in unit five before appellant left the job. 

Yet, appellant did not return. Because respondent cooperated by 

taking down the wallboards in unit five and attempted to resolve 

the problem by the time the parties met to discuss the situation on 

May 12, 1990, respondent did not interfere with appellant's 

responsibilities as an electrician. 

As to appellant's argument that respondent's actions 

jeopardized his electrical license, the regulations do not provide 

that an electrical contractorls license can be suspended or revoked 

because the wiring is covered prior to inspection. Reasons for 

which an electrical contractor's license may be suspended or 

revoked are: 

(1) violation of this chapter, the national 

electrical code, or the rules of the [state electrical] 

board [Title 30, chapter 681; 

(2) any cause for which issuance of the license 

could have been denied had it existed and been known to 

the board ; 

(3) commission of any act of gross negligence, 

incompetency, or misconduct as may be determined by the 

board in the practice of a master, journeyman, or 
residential electrician or the business of an electrical 

contractor; or 

(4) making a material misstatement, misrepresentation, or fraud in obtaining a license. 

Section 37-68-321, MCA. Respondent's actions did not jeopardize 

appellant's electrical contractor's license. 

Finally, appellant was not prevented from completing the 

project by any other of respondent's actions. Both appellant and 

respondent testified that no one at Biggerstaff Construction told 

him that he could not finish the project. The evidence is that 

respondent asked appellant to complete the job. No other evidence 

was presented at trial to indicate that respondent jeopardized 

appellant's electrical contractor's license. 

Appellant was not reasonable in his assumption that the 

situation as of May 12, 1990, prevented him from performing the 

contract and jeopardized his electrical contractor's license. 

After respondent removed the wallboards in unit five and offered 

solutions to the problem at the May 12 meeting, completion of the 

parties' contract was in appellant's hands alone. Appellant's 

obligation was to act in good faith and observe reasonable 

commercial standards of fair dealing in the trade. Section 

28-1-211, MCA; Kuhns v. Scott (1993), 259 Mont. 68, 75, 853 P.2d 

1200, 1205; Story v. City of Bozeman (1990), 242 Mont. 436, 450, 

791 P.2d 767, 775. After May 12, 1990, when appellant still 

refused to perform the remainder of the contract, he did not act in 

good faith. 
In addition to the foregoing arguments, appellant argues that 

the parties1 entire contract is void because the object of the 

contract was unlawful. He cites case law interpreting rules 

against unlawful contracts and the Montana Uniform Commercial Code 

to support this proposition. Appellant's application of the UCC, 

applicable to the sale of goods, is misplaced. Further, nothing in 

the partiesr contract was contrary to an express provision of law, 

contrary to the policy of express law though not expressly 

prohibited, or otherwise contrary to good morals. Sect ion 

28-2-701, MCA. We hold that the parties1 construction contract was 

not unlawful. 

In sum, we hold that appellant breached the contract and 

justified respondent's recovery and release from his posted bond. 

Affirmed and remanded for a determination and award of 

respondentsv additional attorney fees on this appeal. 

Justice 

We concur: 
I hereby 

named: 

that the 

March 15, 1994 

CERTIFICATE OF SERVICE 

following order was sent United States mail, prepaid, the following 

James J. Screnar 

Angel, Screnar, Coil & Bartlett 

125 West Mendenhall 

Bozeman, MT 59715 

Wayne Jennings 

Attorney at Law 

P.O. Box 1625 

Bozeman, MT 59715 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONT NA 

BY 

Depu