NO. 88-46 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

PIPE INDUSTRY INSURANCE FUND 

TRUST OF LOCAL 41, 

Plaintiff and Respondent, 

-vsCONSOLIDATED PIPE TRADES TRUST 

OF MONTANA, 

Defendant and Appellant. 

APPEAL FROM: District Court of the Second Judicial District, 

In and for the County of Silver Bow, 

The Honorable Arnold Olsen, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Anderson, Brown, Gerbase, Cebull, Fulton, Harman and 

Ross; Michael P. Heringer, Billings, Montana 

For Respondent: 

Burgess, Joyce & Whelan; Thomas F. Joyce, Butte, 

Montana 

Submitted on Briefs: May 19, 1988 

Decided: August 8, 1988 

Filed: RUG 8 1988' 

Clerk 
Mr. Justice R. C. McDonough delivered the Opinion of the 

Court. 

Consolidated Pipe Trades Trust of Montana 

(Consolidated) , appeals the Second Judicial District Court's 

decision in favor of Pipe Industry Insurance Fund Trust of 

Local 41, (Pipe Industry). We affirm. 

Consolidated presents the following issues for review: 

(1) Whether the Court erred when it instructed the jury 

that it could not consider any evidence outside the terms of 

the agreement? 

(2) Whether the Court erred when it refused testimony 

concerning the negotiations of the reciprocity agreement? 

(3) Whether the Court erred when it instructed the jury 

on the legal principal of waiver? 

(4) Whether the verdict is supported by substantial 

evidence? 

(5) Whether the Court erred when it awarded prejudgment 

interest? 

(6) Whether the prejudgment interest was calculated 

properly? 

The relevant facts are as follows: Both parties collect 

funds from employers of union members under the jurisdiction 

of their respective locals. The funds finance trusts used to 

provide insurance plans for union members. 
In 1980, members of the Butte local working under the 

jurisdiction of the Billings local faced ineligibility under 

both the Butte local's insurance and the Billings local's 

insurance. To solve this problem, Consolidated, representing 

the Billings local, agreed to collect funds for members of 

the Butte local working under the Billings local's 

jurisdiction. The funds collected by Consolidated were to be 

remitted to Pipe Industry for the trust fund. administered by 

Pipe Industry. Pipe Industry agreed to do the same for 

members of the Billings local working under the jurisdiction 

of the Butte local. 

To effectuate this agreement, the parties executed a 

written document. The pertinent parts of this document read 

as follows: 

2. Each Trust Fund party hereto shall collect 

and receive the Employer contributions due for the 

work of each Temporary Members who has signed and 

deposited a transfer authorization card with the 

transferring fund, and shall keep separate accounts 

of these collections. 

3. No party shall be liable to any other 

party for any sums whatsoever except to the extent 

of contributions made on Temporary Members that are 

in fact received. Each party shall bear all 

expenses of collection, administration or 

accounting which it shall incur hereunder, and 

shall charge no part thereof to any other party. 

4. Each Trust Fund party hereto shall make an 

accounting monthly of the monies received by it 

during the period just ended on behalf of any 

Temporary Members and shall remit to the Temporary 

Members' Home Fund all Employer contributions 

received by it on behalf of its Temporary Members. 

Said remittance must be made within thirty (30) 

days after the close of the calendar month and 

within thirty (30) days of termination of this 

Agreement as provided in Sections 11 and 12 hereof. 

However, any Temporary Member may direct the 
Transferring Fund in writing, with 30 days notice, 

that contributions on his behalf not be returned to 

his Home Fund. 

10. This Agreement may be modified or amended 

at any time by an instrument in writing executed by 

the parties hereto. Any party hereto may at any 

time withdraw from this Agreement by serving by 

Certified Mail on the other party hereto (at the 

address listed on the last page hereof) a notice of 

its intention to withdraw, not less than sixty (60) 

days prior to such date of withdrawal. Upon the 

effective date of withdrawal by any party hereto, 

this Agreement shall be terminated. 

In 1981, the parties began performance under the 

agreement. Consolidated collected funds from employers of 

Butte workers at the rate of $1 per hour of work. This rate 

equaled the rate Consolidated collected for the Billings 

local's members. However, Consolidated remitted only 85e of 

each dollar collected for Butte workers to Pipe Industry 

because this was the amount needed to maintain coverage under 

the trust administered by Pipe Industry. Clause four of the 

written contract, however, provides that all funds collected 

shall be remitted. 

On September 1, 1982, the amount needed to maintain 

coverage under Pipe Industry's trust increased to $1 per wage 

hour. Consolidated continued to collect $1, and increased 

the amount remitted to Pipe Industry from 85C to $1. Thus, 

during this period, Consolidated complied with clause four of 

the contract. 

On September 1, 1983, Consolidated's rate rose to $1.45, 

and employers of Butte workers under Consolidated's 

jurisdiction began to pay this rate. However, Consolidated 

continued to remit only $1 to Pipe Industry. 

On August 1, 1984, Pipe Industry's rate increased to 

$1.15, and Consolidated began to remit that amount from the 

$1.45 it continued to collect for Butte workers. After 
September 30, 1984, no members of the Butte local worked 

under the jurisdiction of the Billings local. Thus, no funds 

are disputed after that time. 

On March 28, 1986, Pipe Industry filed suit against 

Consolidated claiming that Consolidated breached the parties' 

agreement by not remitting the full amount it collected for 

Butte workers. The claim went to trial before a jury in 

Butte, and the jury verdict held Consolidated liable for the 

difference between the amounts collected and the amounts 

remitted. Consolidated unsuccessfully claimed that Pipe 

Industry had waived its right to the funds awarded by the 

jury. Consolidated also unsuccessfully claimed that an 

addendum to the agreement modified the contract to allow its 

collection procedures. An award of interest accompanied the 

judgment for Pipe Industry. 

I. 

Consolidated claims that the lower court erred by giving 

the following instruction: 

Whenever the terms of an agreement have been 

reduced to writing by the parties, it is to be 

considered as containing all those terms. 

Therefore there can be between the parties no 

evidence -- of the terms of the agreement other -- than 

the contents of the writing except that other 

evidence may be offered to explain an extrinsic 

ambiguity in the written agreement. It is for the 

judge to construe a written agreement giving effect 

to all of its terms and to determine if an 

extrinsic ambiguity exists. I have concluded that 

there is no extrinsic ambiguity in Exhibit 3, the 

original reciprocity agreement made by the parties, 

and that agreement required that all monies 

received from employers by the defendant trust were 

to be remitted within 30 calendar days after the 

close of each calendar month to the plaintiff 

trust. (Emphasis added. ) 
Consolidated argues that this instruction erroneously 

precluded the iury from considering extrinsic evidence 

regardless of its source. More specifically, Consolidated 

claims prejudice because the instruction prohibited the jury 

from considering extrinsic evidence of its waiver theory. 

Thus, according to Consolidated, the above instruction 

mislead the jury and prejudiced its case. Pipe Industry 

responds that evidence offered in the lower court on waiver 

was properly admitted to show waiver, and properly excluded 

to show variation of the contract terms. We agree. 

The instruction set out above paraphrases parts of S 

28-2-905, MCA. This Court's decisions interpreting § 

28-2-905, MCA, and the language of the statute itself, 

demonstrate that par01 evidence may be admitted for one 

purpose, but not for another. See, e .g., Martin v. Laurel 

Cable T.V., Inc. (Mont. 1985), 696 P.2d 454, 42 St.Rep. 314; 

Rase v. Castle Mountain Ranch, Inc. (Mont. 1981), 631 P.2d 

680, 38 St.Rep. 992. In this case, despite ~onsolidated's 

contentions to the contrary, extrinsic evidence was taken and 

argued at trial. During defendant's closing, Consolidated's 

counsel summarized this evidence: 

Billings has submitted evidence that shortly 

after the reciprocity began between these two 

people -- two trusts in 1981, it sent an addendum 

to the reciprocity agreement. And Butte maintains 

that out of the large volume of mail that it 

receives, including correspondence and numerous 

checks, that it did not receive this addendum. The 

evidence shows that Billings Trust sent this 

addendum, at the same time it sent it to 15 other 

Trusts who it had reciprocity agreements with at 

the same time. This is the only piece of mail that 

has been claimed to have never been received. The 

addendum clearly showed how much Billings planned 

to transfer to Butte. But even without the 

addendum, Billing's conduct showed that it was 

always going to pay the lower amount which Butte 
was fully aware and for which they accepted without 

complaint. 

Therefore, by its conduct, Butte assented to 

the change of the terms of the reciprocity 

agreement, and agreed to accept those terms. 

In summary, from day one, the Billings Trust 

paid the Butte Trust sufficient funds to provide 

insurance coverage for its members of local 41 in 

Butte when they worked within the jurisdiction of 

Local 30 in Billings. These payments almost 

amounted to $91,000 over a three-year period. 

And because the Plaintiff continued to accept 

these numerous payments without protest, they 

either waived their right to claim a higher 

contribution rate at the time, or they agreed to 

accept the change in the reciprocity agreement and, 

therefore, Billings was only required to remit the 

amount that it did. 

For these reasons, the Defendant, Consoldiated 

Pipe Trades Trust respectfully requests that you 

return a verdict in its favor and award no money to 

the Plaintiff. 

The foregoing shows that the dispute hinged not on parol 

evidence going to prove the effect of the agreement's terms. 

Rather, the dispute concerned whether the parol evidence, 

which was - admitted, showed either waiver on the part of Pipe 

Industry in enforcing the undisputed terms of the contract, 

or subsequent amendment of clause four by the addendum. 

This Court must review jury instructions keeping in mind 

the evidence offered. Baker National Bank v. Lestar (1969) , 

153 Mont. 45, 52, 453 P.2d 774, 777. Our review must also 

insure that the lower court provided instructions adaptable 

to the objecting party's theory on the case when credible 

evidence supports the theory. Rix v. General Motors Corp. 

(Mont. 1986), 723 P.2d 195, 198, 43 St.Rep. 1296, 1298. 

Jury instructions on appeal are to viewed in their 

entirety, and in light of the evidence in the case. Rushnell 

v. Cook (Mont. 1986), 718 P.2d 665, 669, 43 St.Rep. 825, 830. 

Viewing the instructions in this case in their entirety, we 
hold that: the lower court's instruction was compatible with 

the evidence in the case; that the arguments of counsel and 

the addition of instructions on waiver consistently presented 

the waiver issue apart from the prohibition on altering the 

terms of the contract by parol evidence; and that allowance 

of an instruction on waiver, and allowance of evidence on 

waiver, provided Consolidated with an adequate means to 

present its theory on waiver. More succinctly, our 

conclusion on this issue is that an instruction prohibiting 

consideration of parol evidence on what the contract language 

required for performance may coexist with an instruction and 

evidence on waiver. The closing argument of defense counsel 

demonstrates that this fact was not lost to appellant, and we 

must presume it was also not lost to the jury. See, e.g., 

Bass v. Barksdale (Tenn. App. 1984), 671 S.W.2d 476, 489 

(reviewing court presumes jury understood instructions). 

Thus, we affirm on this issue. 

Consolidated's argument on issue two is largely settled 

by issue one. The argument assigned by appellant as issue 

two is that the lower court erred in not allowing evidence on 

negotiations of the contract. Consolidated argues that the 

testimony of witness Cliff Powell should have been allowed as 

relevant to waiver. 

Consolidated's faulty logic fails to support this 

argument. Section 28-2-905, MCA, prohibits evidence of the 

terms of an agreement: 

except in the following cases: 

(a) when a mistake or imperfection of the 

writing is put in issue by the pleadings; 

(b) when the validity of the agreement is the 

fact in dispute. 
(2) This section does not exclude other 

evidence of the circumstances under which the 

agreement was made or to which it relates, as 

described in 1-4-102, or other evidence to explain 

an extrinsic ambiguity or to establish illegality 

or fraud. 

The objection in the lower court concerned a question 

solicitting information on contract negotiations. Defense 

counsel stated in the defense's offer of proof that: 

MR. HERINGER: Your Honor, in pre-trial 

agreement I provided the Court with the case law 

that parole evidence is admissible when there is a 

question of waiver before the Court. And this goes 

to the fact of what was waived and why it was 

possibly waived by them. 

That question simply asks what were the terms 

of the agreement as to what Mr. Powell understood 

of them. 

As shown by resolution of issue one, the distinction 

between waiver and par01 evidence allowed to establish a 

variance from the contract's terms explains and justifies the 

lower court's decision to sustain the objection to Mr. 

Powell's testimony on the contract negotiations. Thus, we 

affirm on issue two. 

Consolidated contends that the lower court erred by 

refusing to give one of the instructions on waiver offered by 

Consolidated, and by giving an instruction offered by Pipe 

Industry on waiver. The specific contention is that the two 

waiver instructions confused and mislead the jury. 

Pipe Industry's instruction on waiver reads as follows: 

You are instructed a party may waive a right 

afforded to him by contract. The party asserting a 
waiver, the defendant in this case, has the burden 

of proving waiver. 

A waiver is defined by law as a voluntary and 

intentional relinquishment of a known right. 

Waiver must be based on the words or conduct of the 

party against whom waiver is claimed, in this case, 

the plaintiff. The defendant must prove language 

or conduct by the plaintiff showing in an 

unequivocal manner that the plaintiff voluntarily 

and intentionally relinquished its right to receive 

the full payments as provided by the contract. 

Mere failure to take steps to enforce a legal right 

under a contract in a timely manner is not, by 

itself, sufficient to constitute proof of waiver. 

Consolidated objected to the above instruction 

contending that the last sentence inaccurately stated the law 

and effectively negated its waiver theory. The same 

assertions are made on appeal. Pipe Industry answers that 

the last sentence served the purpose of distinguishing 

between waiver and other defenses which preclude suits based 

on failure to bring them in a timely manner, i. e., laches or 

statute of limitations. 

The last sentence constitutes a correct statement on the 

law of waiver. See,e.g., Boles v. Ler (Mont. 1986), 719 P.2d 

793, 43 St.Rep. 1035 (vendor's mere failure to return late 

payments did not preclude vendor from enforcing foreclosure 

rights). Pipe Industry, as well as Consolidated, has the 

right to instructions supporting its theory of the case. 

Pipe Industry's theory was that Consolidated failed to prove 

waiver. Evidence supported this contention, and 

distinguishing waiver from other prohibitions on bringing 

causes of action furthered understanding of this theory. 

Thus, under the circumstances of this case, the lower court 

acted within its discretion in giving the instruction. 

Consolidated argues that the lower court erred by 

failing to give the instruction on waiver it offered. The 
offered instruction was set out in Thiel v. Johnson (Mont. 

Industry responds that the instruction in Thiel was not 

approved by this Court because the issue in Thiel on this 

instruction was settled by the appellant's failure in Thiel 

to object to the instruction in the lower court. See Thiel. 

711 P.2d at 832. We agree that a variation from the 

instruction set out in Thiel is not a violation of any rule 

from Thiel. This Court in Thiel specifically refused to 

review the validity of part of the instruction. Thus, Thiel 

does not control. 

The refused instruction reads as follows: 

You are instructed that when a payment for a sum 

certain is due pursuant to a contract, that payment 

may be waived by one who is to receive the payment. 

The waiver may be either express or implied. 

An implied waiver occurs when a contract payment is 

received and the amount paid is less than contract 

terms call for and the person who is to receive the 

payment makes no attempt to collect the full amount 

within the [sic] reasonable time. A reasonable 

time is presumable a short time after payment is 

due, and before the next payment is due. 

An express waiver occurs when one who is to receive 

payment tells the one who is to make the payment 

either orally or in writing, that the full amount 

of the payment need not be made. An express waiver 

must continue for the period of time specified by 

the one who is to receive the payment. 

The District Court gave two instructions on waiver which 

adequately covered the applicable law. The District Court 

refused the instruction offered by appellant holding it 

inapplicable to the case. 

No error may be predicated on the trial court's failure 

to give an instruction when other instructions adequately 
cover the applicable law, or where the pleadings and evidence 

show that the offered instruction is inapplicable. Doble v. 

Lincoln County Title Co. (Mont. 1985), 692 P.2d 1267, 1271, 

42 St.Rep. 128, 132. We refuse to pass on the sufficiency of 

the Thiel instruction offered in this case because the two 

waiver instructions given by the Court adequately address the 

law on waiver in light of the evidence presented at trial. 

A further contention on this issue concerns the giving 

of two waiver instructions. Consolidated claims that the 

lower court erred because the two instructions conflict and 

confuse on a material issue. Consolidated also claims they 

are repetitive. 

These two contentions by Consolidated appear to be 

mutually exclusive, i.e., the presence of facts supporting 

the one appears to exclude facts supporting the other. We 

have reviewed both contentions and find merit in neither. 

We have already set out the instruction on waiver 

offered by Pipe Industry, and given by the trial court. The 

second instruction on waiver, offered by Consolidated, and 

given by the lower court, reads as follows: 

A party may waive the benefit of a contract. 

Waiver means that a person is precluded from 

asserting a right, a claim or privilege because he 

has previously knowingly, voluntarily and 

intentionally given up that right, claim or 

privilege. 

Waiver must be a voluntary act and implies a 

knowing choice by a person to give up something of 

value or forego a right or advantage which he might 

have demanded and insisted upon. It only involves 

the conduct of the party against whom the waiver is 

asserted and consideration is not necessary for the 

doctrine to apply, nor need there be a detriment or 

harm to the party claiming the waiver. 

A person may waive a right, claim or privilege only 

if he has knowledge of the facts which are material 
or important to his decision. This knowledge may 

either be actual or constructive. Constructive 

knowledge is knowledge which one has the 

opportunity to acquire by the exercise of ordinary 

care and diligence, whether or not such knowledge 

is, in fact, acquired. If a person is ignorant of 

a material or important fact, that is, if he lacks 

actual or constructive knowledge, a waiver is not 

possible. 

This instruction properly covers areas left out of the 

instruction offered by Pipe Industry. Conversely, the 

instruction offered by Pipe Industry covers areas left out of 

this instruction. As pointed out by Consolidated, other 

portions are simply repetitive, not conflicting. See,e.g., 

Pizza v. Wolf Creek Ski Development Corp. (Colo. 1986), 711 

P.2d 671, 681 (instructions not essentially identical are not 

unduly repetitive). Thus, this contention fails, and we 

affirm on this issue. 

IV. 

Consolidated contends that substantial evidence does not 

support the jury's verdict. In particular, Consolidated 

contends that evidence it presented conclusively demonstrates 

that Pipe Industry waived its rights under the contract. 

We disagree. To counter Consolidated's argument that 

Pipe Industry knowingly and intentionally relinquished the 

right to a portion of payments guaranteed under the contract, 

Pipe Industry presented evidence showing that other 

considerations influenced its decision to forestall 

prosecution for payment. The verdict demonstrates that the 

jury rejected Consolidated's argument on the basis of this 

evidence. Inasmuch as substantial credible evidence supports 

the verdict, we must affirm on this issue. Clark v. Norris 

(Mont. 1987), 734 P.2d 182, 184-85, 44 St.Rep. 444, 445. 
v. 

Consolidated claims that the lower court erred by 

awarding prejudgment interest. To support this contention, 

Consolidated cites portions of § 28-1-1202(2), MCA, and 

§ 27-1-114, MCA. 

Section 28-1-1202(2), MCA, reads as follows: 

An offer of payment or other performance duly made 

stops the running of interest on the obligation and 

has the same effect upon all incidents of the 

obligation as a performance thereof, whether or not 

the title to anything offered is transferred to the 

creditor. 

Consolidated contends this statute avails it of a defense to 

interest on the difference between the amount due under the 

contract, and the amount actually paid under the contract. 

The specific contention is that: 

Consolidated offered and Pipe Industry accepted 

these payments as payments in full. 

This thinly disguised repetition of Consolidated's faulty 

waiver argument fails to persuade this Court to reverse on 

this issue. 

Consolidated makes the same argument in regard to 5 

27-1-214, MCA, which reads: 

Accepting payment of the whole principal, as such, 

waives all claim to interest. 

This assertion also fails because the jurv verdict found that 

Consolidated did not pay the whole principal. 

We hold interest was properly awarded under § 27-1-211, 

MCA . See Price Building Services, Inc. v. Holms (Mont. 

1985), 693 P.2d 553, 42 St.Rep. 84. Thus, we affirm on this 

issue. 
VI . Consolidated contends that the lower court improperly 

calculated the interest, and Pipe Industry concedes the 

point. Thus, we remand only for the purpose of a proper 

calculation as agreed by the parties. 

Justice