Title: CREDIT COUNSELLORS INC v JONES
Citation: N/A
Docket Number: 13137
State: Montana
Issuer: Montana Supreme Court
Date: February 6, 1976

No. 13137 I N T H E S U P R E M E C O U R T O F THE STATE O F MONTANA CREDIT COUNSELLORS, INC., a corporation, p l a i n t i f f , -VS - FRED JONES dlb /a ROCKING J. MOTEL, and MRS. FRED JONES, h i s wife, Defendants. -----------------I---------------------- HARRIET JONES d /b /a ROCKING J . MOTEL, and F R E D JONES, SR. , Third Party P l a i n t i f f s and Respondents, -vs - P E T R O L A N E STEELGAS, INC., a corporation, Third Party Defendant and Appellant. Appeal from: D i s t r i c t Court of the Eighth J u d i c i a l D i s t r i c t , Honorable Truman Bradford, Judge presiding. Counsel of ~ e c o r d : For Appellant : S. M. Swanberg argued, Great F a l l s , Montana For Respondents : Church, Harris, Johnson & Williams, Great F a l l s , Montana Milton 0. Wordal argued, Great F a l l s , Montana L LJ . Filed : - - Submitted : December 2, 1975 Decided : F'B - 6 M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. This is an appeal from a judgment entered i n t h e d i s t r i c t court, Cascade County, i n an action on an account. The judgment allowed p l a i n t i f f the amount asked f o r i n its complaint, and de- fendants the sum of $2,825.58 f o r damages suffered a s s e t f o r t h i n t h e i r cross complaint. Defendants and t h i r d party p l a i n t i f f s , Fred Jones, Sr. and Harriet Jones, d/b/a Rocking J. Motel, hereinafter referred t o a s Jones, contracted with Petrolane Steelgas Inc., herein- a f t e r referred t o a s Petrolane, i n July 1969 f o r the purchase and i n s t a l l a t i o n of 5 Peerless Propane Gas-Fired wall heaters f o r the sum of $809.47, including i n s t a l l a t i o n . I n addition, they signed a lease f o r a propane storage tank t o s t o r e the f u e l f o r the heaters which provided f o r a r e n t a l of $35 per year. The heaters were i n s t a l l e d i n cabins of the Rocking J. Motel which is owned and operated by Jones i n Monarch, Montana. Soon a f t e r the heaters were i n s t a l l e d by a representative of Petrolane, together with the storage tank and the necessary piping t o connect the cabins, Jones experienced problems i n the operation of the heaters. Occupants of t h e cabins complained they could not control the l e v e l of heat produced by the heaters, the odor of gas and t h e i n a b i l i t y t o keep the heaters lighted. Petro- lane made numerous e f f o r t s t o remedy the defects, including a t l e a s t ten round t r i p s of over 100 miles each, f o r which no charge was made. The problems continued i n s p i t e of ~ e t r o l a n e ' s e f f o r t s . Jones continued t o use the heaters and Petrolane periodic- a l l y delivered propane gas a s the needs required. Jones t e s t i f i e d t h a t on one occasion the motel was closed f o r a month. Fred Jones t e s t i f i e d t h a t he l o s t some 300 gallons of propane due t o leakage i n the l i n e . - 2 - Throughout the period from July 1969 u n t i l Noverriber 1972, when Jones ordered t h e heaters removed, Jones refused t o pay f o r t h e h e a t e r s u n t i l they were operating i n a s a t i s f a c t o r y manner. Jones did make periodic payments f o r gas delivered by Petrolane. Petrolane argues t h e h e a t e r s were removed because they were not paid f o r by Jones. Testimony i n d i c a t e s t h a t during t h e t h r e e years t h e r e w a s a running account between the p a r t i e s covering t h e h e a t e r s , the i n s t a l l a t i o n , and t h e storage tank and i n s t a l l a t i o n of it. Evidence revealed t h a t Jones paid Petrolane approximately $1,390 on t h i s running account f o r gas delivered plus tank r e n t a l , and t h a t Jones was given a c r e d i t of $375 a t t h e t i m e t h e h e a t e r s were removed. ~ e t r o l a n e ' s evidence indicated t h a t following t h e c r e d i t , the account balance owed by Jones was $764.70, c o n s i s t i n g of these amounts: Unpaid portion f o r heaters and i n s t a l l a t i o n $434.47 One vear tank r e n t a l 35.00 propane gas delivered 295.23 Total $164. i0. When Jones refused t o pay t h e account Petrolane turned t h e account over t o p l a i n t i f f Credit Counsellors, Inc. f o r c o l l e c t i o n . Jones denies he owed t h e sum alleged due because of the f a u l t y operation of the heaters and t h e l o s s of business suffered. Fred Jones t e s t i f i e d t h a t he replaced t h e gas h e a t e r s with 220 v o l t baseboard e l e c t r i c heaters and they provided adequate heat, and t h e r e was no s u b s t a n t i a l increase i n the c o s t of heat f o r t h e motel. H e f u r t h e r t e s t i f i e d t h a t during t h e period the gas heaters were i n t h e cabins he l o s t numerous motel guests due t o t h e defective h e a t e r s , and t h a t t h e smell of gas alarmed t h e guests. Schedules from ones ' income tax r e t u r n s were introduced i n t o evidence t o show t h e gross and n e t income f i g u r e s f o r t h e motel's operation during t h e years 1969 t o 1972, t h e years t h e gas h e a t e r s were i n operation. Year Gross Net . . - Expense For the two years a f t e r t h e gas heaters were removed and the e l e c t r i c heaters i n s t a l l e d the tax returns indicated: Year Gross Net - O n the b a s i s of the above f a c t s and figures, t h e t r i a l court concluded: "I. The JONESES f a i l e d t o r e j e c t the f a u l t y gas heaters within a reasonable time and a r e therefore obligated under t h e i r contract f o r the purchase and i n s t a l l a t i o n of the heaters and f o r the unpaid portion of the account r e l a t i n g t o d e l i v e r i e s of propane gas and t o storage tank r e n t a l . JONESES owe t o P l a i n t i f f , CREDIT COUNSELLORS, I N C . , the account balance of S E V E N HUNDRED SIXTY-FOUR D O L L A R S AND S E V E N T Y CENTS ($764.70) together with i n t e r e s t thereon a t the r a t e of SIX P E R CENT (6%) per annum from and a f t e r November 1, 1972, the approximate date of t h e removal of the f a u l t y heaters by PETROLANE. I I 2. P E T R O L A N E owes t o the JONESES the c o s t of the l o s t propane gas (300 gallons times $.235 equals $70.50) to- gether with damages suffered by the JONESES*due t o 3 t h e f a u l t y operation of the heaters. The Court concludes t h a t the JONESES a r e e n t i t l e d t o recover the amount of t h e i r operating l o s s f o r the f i r s t year during which the heaters were i n s t a l l e d , 1969, i n t h e amount of TWO THOUS- AND S E V E N HUNDRED FIFTY-FIVE D O L L A R S AND EIGHT CENTS ($2,755.08), but t o have no recovery f o r the losses suf- fered i n subsequent years because of t h e i r f a i l u r e t o mitigate damages by removing the heaters a t the end of the f i r s t year. I I In view of the f a c t t h i s cause i s being returned t o the t r i a l court, we note t h a t the above conclusions of the t r i a l court a r e , i n our opinion, contradictory and would r e q u i r e ' r e v e r s a l because of the speculative nature of the damages found i n the counterclaim. On appeal t h i s Court i s asked t o consider whether there was s u f f i c i e n t evidence t o allow the t r i a l court t o find f o r Jones on the counterclaim i n the amount of $2,825.58. The above amount comprises a recovery f o r $70.50 f o r l o s t propane gas and $2,755.08 f o r loss of business i n the motel during t h e f i r s t year, 1969-70, t h a t the heaters were i n s t a l l e d . We find, based on the evidence introduced by Jones, t h a t t h i s f i r s t y e a r ' s l o s s f i g u r e i s too speculative and too remote t o come within t h e general r u l e a s s e t f o r t h i n Harrington v. Moore Land Co., 59 Mont. 421, 423, 196 P. 975: 'I I For the breach of an obligation a r i s i n g from c o n t r a c t , t h e measure of damages, except where otherwise expressly provided by t h i s Code, i s t h e amount which w i l l compensate t h e p a r t y aggrieved for a l l t h e detriment proximately caused thereby, o r which i n t h e ordinary course of t h i n s would be Likely t o r e s u l t therefrom. * * * ' N o damages can be recovered f o r a breach of c o n t r a c t which a r e n o t c l e a r l y a s c e r t a i n a b l e i n both t h e i r nature and o r i g i n . I 11 This Court r e c e n t l y i n Lovely v. Burroughs Corporation, 165 Mont. 209, 527 P.2d 557, 562, 31 St.Rep. 824, 829, speaking t o t h e general r u l e , held: "Damages may properly be awarded when they serve t o compensate t h e p l a i n t i f f f o r detriment proximately caused by t h e defendant. Section 17-301, R.C.M. 1947. Before an award can be made, t h e damages must be c l e a r l y ascertainable i n both t h e i r nature and o r i g i n . Section 17-b302, R.C.M. 1947. Damages which a r e a matter of mere speculation cannot be t h e b a s i s of recovery. Laas v. Mont. Hwy.~omrn'n, 157 Mont. 121, 483 P.2d 699; Cruse v. Clawson, 137 Mont. 439, 352 P.2d 989; Jurec v. Raznik, 1.04 Mont. 45, 64 P.2d 1076." The judgment i s reversed and t h e cause remanded f o r a new t r i a l . # / 9 ' ~ J u s t i c e s . C" Mr. J u s t i c e Gene B. Daly did not p a r t i c i p a t e i n t h i s Opinion. L