No. 13819 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1978 

STANLEY W. FERGUSON et al., 

Plaintiffs, 

-vsTOWN PUMP, INC., and BOZEMAN TOWN PUMP, 

INC . 

Defendants and Third Party Plaintiffs and 

Appellants, 

-vsWALLACE DITEMEN, INC., et al., 

Defendants and Third Party Defendants and 

Appellants. 

Appeal from: District Court of the Eighteenth Judicial District, 

Honorable Jack D. Shanstrom, Judge presiding. 

Counsel of Record: 

For Appellants: 

Bolinger and Wellcome, Bozeman, Montana 

G. Page Wellcome argued, Bozeman, Montana 

Brown, Pepper and Kommers, Bozeman, Montana 

Gene Brown argued, Bozeman, Montana 

For Respondents: 

Goetz and Madden, Bozeman, Montana 

James Goetz argued, Bozeman, Montana 

Submitted: April 28, 1978 

Decided: JUN 1 3 1978 

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Filed: .L 
Mr. Justice John C. Harrison delivered the Opinion of the Court. 

Plaintiffs instituted this action against Town Pump, Inc. 

and Bozeman Town Pump, Inc. (hereinafter referred to as Town Pump) 

to recover damages resulting from the gasoline contamination of 

their household water wells. Town Pump filed a third party complaint for indemnification against Wallace Diteman, Inc. Plaintiffs thereafter amended their complaint to include Diteman as 

a joint defendant. 

A jury trial was held in the District Court, Gallatin 

County, commencing December 6, 1976. At the close of the evidence, the court granted a directed verdict on the issue of liability against Town Pump and Diteman as joint tortfeasors. Town 

Pump's third party action against Diteman was dismissed. The 

jury was instructed only to determine the amount of plaintiffs' 

damages. 

The jury returned a verdict totaling $60,656.00 and judgment was entered in that amount. Plaintiffs subsequently moved 

that the court either substitute a higher damage award or grant 

a new trial on the issue of damages. The court granted the motion for a new trial on the damages issue. 

Defendants Town Pump and Diteman appeal from the granting 

of the motion for a new trial. Town Pump appeals from the dismissal of its indemnification claim against Diteman. Plaintiffs 

cross-appeal from the denial of their motion to mathematically 

increase the damage award, and also from the denial of their 

offered instruction regarding punitive damages. 

Briefly summarized, the facts adduced at trial are: In 

the fall of 1972, Town Pump entered into an oral cost-plus labor 

contract with Diteman Construction Co. for the construction of a 

gasoline station on the west end of Bozeman, Montana. Diteman 
was given general plans but there was little or no supervision 

of the construction by Town Pump. The work included the installation of two underground storage tanks and lines running from the 

tanks to the gas pumps. Diteman completed the job, and Town Pump 

leased the station to Richard and Patricia Hawkins for operation. 

Plaintiff Ferguson, as well as the other plaintiffs, lives 

immediately north of the Town Pump station just outside the City 

of Bozeman and receives his household water from an underground 

well. In April 1974, Ferguson began noticing the odor and taste 

of gasoline in his water. Gradually over that spring and summer 

the other plaintiffs in the vicinity had similar problems with 

their water. In varying degrees with respect to the various 

households, the water became increasingly impotable. A trailer 

park in the area, Ponderosa Trailer Park, found gasoline in one 

of its three wells. (The residents of the trailer park have assigned their claims to the "Ponderosa Trust" for the purposes of 

this action.) Since that time, the plaintiffs, with the exception 

of the trailer park residents, have had to haul water from other 

sources for any uses requiring potable water. 

In November 1974, the State Water Quality Bureau was notified. Its agents visited the area and conducted various tests 

in December, confirmed that there was gasoline contamination, and 

that the Town Pump Station was the probable source. In January 

1975 standpipe tests were conducted revealing the likelihood of 

a leak in a gasoline line. The Department of Health issued an 

abatement order to Town Pump on January 25, 1975, after which 

the pumps connected to the suspected lines were shut down. The 

tanks and lines were excavated in March 1975 and the leak was 

found . 

A union in one of the lines was cross-threaded causing the 

leakage. Large delivery trucks had been driving over the area 
where the lines were covered, and settlement of the fill materials 

had occurred, apparently putting pressure on the faulty union. 

It was also found that double swing joints had not been used, 

contrary to industry standards. Such joints allow for some flexibility in the lines so that they better withstand any pressure. 

Five issues are presented for review: 

1. Whether plaintiffs' cross-appeal should be dismissed. 

2. Whether the District Court erred in granting plaintiff s ' motion for a new trial. 

3. Whether plaintiffs' damages may be mathematically recalculated by this Court. 

4. Whether the Court erred in directing a verdict against 

Town Pump on its indemnification claim against Diteman. 

5. Whether the court erred in refusing plaintiffs' 

offered instruction on punitive damages. 

Pending appeal, plaintiffs have executed on the judgment 

and obtained partial satisfaction from Town Pump in the amount 

of approximately $33,000. Diteman argues that plaintiffs have 

therefore waived their right to cross-appeal in this case, and 

moves that this Court dismiss plaintiffs' cross-appeal for that 

reason. This Court recently stated in Niles v. Carbon County, 

(1977), Mont . , 568 P.2d 524, 34 St.Rep. 827, 829: 

"* * * The general rule is: 

"'* * * the right to accept the fruits of a 

judgment and at the same time to prosecute an 

appeal from it are not concurrent; on the contrary, they are wholly inconsistent rights. 

The election of one necessarily excludes the 

enjoyment of the other.' Peck v. Bersanti, 

101 Mont. 6, 8, 52 P.2d 168, 169; In re Black's 

Estate, 32 Mont. 51, 53, 79 P. 554. 

"This rule is subject to the exception that: 

"I* * * where the reversal of a judgment cannot possibly affect an appellant's right to 

the benefit accepted under a judyment, then 

appeal may be taken and will be sustained 
despite the fact that the appellant has 

sought and secured such benefit.' Peck v. 

Bersanti, 101 Mont. 6, 9, 52 P.2d 168, 169; 

In re Black's Estate, 32 Mont. 51, 79 P. 554." 

The instant appeal falls squarely within the exception to 

the general rule. Plaintiffs have been awarded a new trial at the 

District Court level, and the question of whether they are entitled 

to keep the fruits of their judgment in light of that fact is not 

before this Court. Here plaintiffs have asked on appeal only that 

the damage award be increased mathematically. Where the only possible outcome of a successful appeal by a plaintiff is an increase 

in the damage award, then there is nothing inconsistent about accepting the fruits of the original judgment and appealing from it, 

and such an appeal may properly be taken. Peck v. ~ersanti, (1935), 

101 Mont. 6, 9, 52 P.2d 168, 169. 

Diteman's motion to dismiss plaintiffs' cross-appeal is 

denied. 

Turning to the merits of the case, we first consider 

whether the District Court erred in granting a new trial on the 

issue of damages. 

Apparently plaintiffs' present wells have been permanently 

contaminated by gasoline. Defendants contended throughout the 

trial and presented some evidence to show that plaintiffs could 

obtain relief by the installation of charcoal filters in their 

water systems to filter out the gasoline. However, this method 

was offered as no more than a temporary measure. There was conflicting evidence regarding its efficacy and safety. 

Expert witnesses presented by plaintiffs postulated two 

possible permanent solutions: (1) the digging of new, deeper 

wells, and (2) annexation to the city and connections to city 

water and sewer services. Estimated costs of new wells totaled 

about $86,000 for all the individual plaintiffs and $16,500 for 

the Ponderosa Trailer Park. City water and sewer services, in- 
cluding landscaping and individual hookups were estimated to cost 

approximately $69,500 for all the individual plaintiffs and 

$129,500 for the trailer park. 

The jury awarded approximately $43,500 in actual damages 

to the individual plaintiffs and $15,000 to the Ponderosa Trust. 

It is clear from the record that the District Court 

granted a new trial on the issue of damages on the ground stated 

in section 93-5603(6), R.C.M. 1947: "Insufficiency of the evidence to justify the verdict * * *." It has long been the law 

of this state that: 

"* * * the District Court has broad discretion 

in granting or denying motions for a new trial. 

The District Court ruling will not be disturbed 

on appeal in the absence of a clear showing of 

manifest abuse of discretion." Yerkich v. Opsta, 

(19781, Mont . - P.2d , 35 St.Rep. 

465, 467. 

See also: Davis v. Smith, (1968), 152 Mont. 170, 175, 448 P.2d 

133; State Highway Comm'n v. Greenfield, (1965), 145 Mont. 164, 

171, 399 P.2d 989. Such an abuse of discretion is established if 

the testimony was conflicting and the District Court merely chose 

to follow a different line of testimony than what the jury followed. Yerkich v. Opsta, supra. 

Defendants attempt to justify the jury verdict by reference 

to some of the costs of city services testified to by plaintiffs' 

witnesses. They argue the jury must have awarded the individual 

plaintiffs the costs of city water services only; the installation 

costs of a charcoal filter; the costs associated with individual 

hookups to city water; and costs of landscaping. It is further 

argued that the $15,000 actual damage award to the Ponderosa Trust 

at least approximates the testimony that a new well could be dug 

for them at a cost of $16,500. 

Even if it were possible to accurately reconstruct a jury 

verdict in this manner, then it would have to be concluded that 

the jury : 
(1) Refused to award city sewer services along with city 

water, when the undisputed testimony was that the city would not 

provide water without installing a sewer. 

(2) Awarded the installation costs of charcoal filters 

without regard to costs associated with their maintenance. 

(3) Ignored undisputed testimony that it would take two 

years to provide city services, and that the inflation factor in 

the industry is 15 percent per year. 

(4) Ignored the fact that since the Ponderosa Trailer Park / 

lies between the individual households and the city, that the 

individual households would not be annexed without annexation of 

the trailer park. 

The District Court instructed the jury in accordance with 

section 17-401, R.C.M. 1947, that the measure of damages "is the 

amount which will compensate for all the detriment proximately 

caused thereby, whether it could have been anticipated or not." 

While the jury could have considered other factors, such 

as the possibility of imminent annexation of the area regardless 

of the gasoline problem, as going to the issue of "proximate cause" 

this would not explain the inadequacy and inconsistency of the verdict in the light of uncontradicted testimony. Accordingly, we 

are unable to find a manifest abuse of discretion by the District 

Court in awarding a new trial. 

We decline, however, plaintiffs' invitation to simply make 

a mathematical recalculation of damages. Plaintiffs rely on Zook 

Brothers Construction Co. v. State of Montana, (1976), - Mont . 

, 556 P.2d 911, 33 St.Rep. 809, 818, wherein such a recalculation was made. In Zook Brothers the Court said: 

"Where a verdict does not appear to have resulted from passion and prejudice, and any error 

may be ascertained by mathematical calculation, 

this Court may properly modify the judgment 

without reversing it." 33 St.Rep. 818. 
The question of additur, at the appellate level, has not 

been previously ruled on by this Court, although Zook Brothers 

raised the trial court award. 

While we are returning the instant case to the trial 

court for a new trial on damages, we find the rule adopted by the 

Supreme Court of Minnesota and cited in Seydel v. Reuber, (1959), 

254 Minn. 168, 94 N.W.2d 265, 268, should be adopted in this state. 

There the court held: 

"The increase by additur was made on the 

grounds that the verdict was entirely inadequate. 

In that respect the trial court followed a recently adopted rule announced by this court that 

additur--the practice of the court to condition 

a denial of a new trial on the defendant's consent to an increase in the verdict--is within 

the constitutional power of the court. Genzel 

v. Halvorson, 248 Minn. 527, 80 N.W.2d 854. 

However, unless the use of additur increases 

the verdict, if entirely inadequate, to the 

extent that it reasonably comports with the 

proof in the record, a better result would be 

reached by granting a new trial." 94 N.W.2d 268. 

In Zook Brothers the Court dealt with damages for breach 

of a construction contract, and the damages fixed by this Court 

involved relatively certain amounts as established by the business 

records of Zook Brothers, plus a claim for lost profits calculable 

on a percentage basis. The instant case, on the other hand, involves estimates of future costs in a highly inflationary industry, 

various alternative solutions to consider, and questions regarding 

the proximate cause of various costs which may be incurred. There 

are also questions of special damages and an issue of whether such 

damages were properly mitigated. While we agree the jury verdict 

was unreasonable, these questions are still questions that are 

properly within the province of a jury. We find the District 

Court did not abuse its discretion in ordering a new trial on the 

issue of special and general damages. 

Next we consider the dismissal by the District Court of 

Town Pump's indemnification claim against Diteman. The court 
ordered a directed verdict against Town Pump on the theory that 

Town Pump and Diteman were joint tortfeasors, and therefore no 

contribution should be allowed. 

It should be noted that Town Pump's third party complaint 

includes counts for breach of contract and breach of implied warranty against item an. It was established at trial that Town 

Pump had an oral contract with Diteman for construction of the 

station on a cost-plus labor and materials basis. In this state, 

such a contract implies that the contractor will perform the work 

in a reasonably skillful and workmanlike manner, and the negligent 

failure to do so is a breach of contract as well as a tort. Garden City Floral Co., Inc. v. Hunt, (1953), 126 Mont. 537, 541, 255 

P.2d 252. 

With respect to an indemnification claim based on a tort, 

resort can be had to consideration of whether the negligence of 

each is "active" or "passive", or "primary" or "secondary", to 

determine whether the difference in the gravity of the fault of 

the participants is sufficient to justify burdening one party 

with the entire loss. Great Northern Railway Company v. United 

States, (D. Mont. 1960), 187 F.Supp. 690, 693; Fletcher v. City 

of Helena, (1973), 163 Mont. 337, 517 P.2d 365. 

However, these cases do not apply to a theory of indemnity 

based upon contract. In an indemnity action arising out of contract, the "application of the theories of 'active' or 'passive' 

as well as 'primary' and 'secondary1 negligence is inappropriate." 

Weyerhaeuser S.S. Co. v. Nacirema Operating Co., (1958), 355 U.S. 

563, 569, 78 S.Ct. 438, 442, 2 L Ed 2d 491, 495; Hill v. George 

Engine Company, (1961), 190 F.Supp. 417. 

In reviewing a directed verdict all evidence is viewed in 

a light most favorable to the party against whom the verdict was 

directed. LaVelle v. Kenneally, (1974), 165 Mont. 418, 529 ~.2d 
788. Viewed in this manner, the record indicates that Town Pump 

and Diteman had a contract for the construction of the station 

and that the work was performed in violation of an implied duty 

to do the work in a reasonably skillful and workmanlike manner. 

Therefore, the order of the District Court granting Diteman a 

directed verdict on the indemnity claim should be set aside and 

a new trial ordered on this issue. This does not, of course, a£- 

fect the liability of both Town Pump and Diteman as joint tortfeasors to plaintiffs, the negligence of both with respect to 

plaintiffs has been determined and is not contested on this appeal. 

The final issue is whether the District Court erred in 

refusing plaintiffs' offered instruction regarding punitive damages 

against Town Pump. Section 17-208, R.C.M. 1947, provides: 

"In any action for a breach of an obligation 

not arising from contract, where the defendant 

has been guilty of oppression, fraud, or malice, 

actual or presumed, the jury, in addition to the 

actual damages, may give damages for the sake of 

example, and by way of punishing the defendant." 

Under this statute, it is necessary to prove more than 

mere negligence; such willful disregard of duty amounting to actual 

or implied malice must be shown. Spackman v. Ralph M. Parsons Co., 

(1966), 147 Mont. 500, 414 P.2d 918. Implied malice may be shown 

by proof that defendant engaged in a course of conduct knowing it 

to be harmful and unlawful. Miller v. Fox, (1977), Mont . 

, 571 P.2d 804, 34 St.Rep. 1367; Cashin v. Northern Pacific 

Ry. Co., (1934), 96 Mont. 92, 28 P.2d 862. 

Plaintiffs contend that Town Pump knew the leak existed in 

the summer of 1974, but did nothing to remedy the problem until 

ordered to do so by the Department of Health in January 1975. In 

this context, Patricia Hawkins, lessee of the station, testified 

that she was informed of a gas line leakage by a resident of the 

neighborhood in the summer of 1974 and that she conveyed this 
information to Town Pump authorities. There is also evidence of 

other indications of a possible leakage, including hesitating 

pumps and minus inventory figures. 

While these factors are certainly indicators of the negligence of Town Pump, we do not find they support a finding of actual or implied malice. The record indicates that no one, not 

even the Department of Health authorities, knew for certain that 

Town Pump was the source of the gasoline contamination until January 1975; after that time Department of Health officials received 

the full cooperation of Town Pump. While there is evidence from 

which it may be inferred that Town Punp should have discovered the 

problem earlier, there is no evidence that Town Pump knowingly 

continued to dump gasoline into the ground. The District Court 

correctly refused plaintiffs' instruction regarding punitive damages, 

since there was no evidence of actual or implied malice on the part 

of Town Pump. 

Diteman's motion to dismiss plaintiffs' appeal is denied. 

The District Court order of a new trial on the issue of actual and 

special damages is affirmed. The dismissal of Town Pump's indemnification claim against Diteman is reversed, and a new trial is 

ordered on that issue. The District Court's denial of plaintiffs' 

offered instruction regarding punitive damages is affirmed. 

We Concur: u 

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