Court Opinion

ID: 4167351
Source: CourtListenerOpinion
Date Created: 2017-05-09 23:12:48.124528+00
Date Added: 2024-06-11T07:46:58.246778
License: Public Domain

05/09/2017

                                         DA 16-0338
                                                                                           Case Number: DA 16-0338

              IN THE SUPREME COURT OF THE STATE OF MONTANA
                                         2017 MT 109

VINTAGE CONSTRUCTION, INC.,

               Plaintiff, Appellee, and Cross-Appellant,

         v.

JENNIFER A. FEIGHNER and ROBERT C. MYERS,

               Defendants, Appellants, and Cross Appellees.

APPEAL FROM:           District Court of the Twenty-First Judicial District,
                       In and For the County of Ravalli, Cause No. DV 14-382
                       Honorable James A. Haynes, Presiding Judge

COUNSEL OF RECORD:

                For Appellants:

                       Robert C. Myers, self-represented, Hamilton, Montana

                For Appellee:

                       Richard A. Weber, Richard A. Weber, P.C., Hamilton, Montana

                       Amanda Z. Duman, Nicholas J. Pagnotta, Williams Law Firm, Missoula,
                       Montana

                                                   Submitted on Briefs: January 11, 2017

                                                              Decided: May 9, 2017

Filed:

                       __________________________________________
                                         Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.

¶1     After litigating a home construction contract dispute, Defendant Appellants Robert

C. Myers and Jennifer Feighner (together, Myers1) appeal the decision following a bench

trial at the Twenty-First Judicial District Court that awarded contractual damages to

Plaintiff Appellee Vintage Construction (Vintage) and dismissed Myers’ counterclaims for

damages and attorney’s fees. Vintage appeals the District Court’s decision to deny its right

to foreclose its construction lien placed on Myers’ real property and the court’s decision to

deny Vintage attorney’s fees pursuant to the lien foreclosure statute, § 71-3-124, MCA.

We affirm the District Court’s decision to award Vintage damages and dismiss Myers’

counterclaims, but reverse and remand the court’s decision to deny Vintage the right to

foreclose and collect attorney’s fees, based on our reasoning and disposition of the

following issues:

       1. Whether the District Court erred by awarding contractual damages to Vintage.

       2. Whether the District Court erred as a matter of law by denying Vintage an award
       of attorney’s fees and the right to foreclose upon its lien.

                    FACTUAL AND PROCEDURAL BACKGROUND

¶2     Robert Myers is an attorney. He and his wife Jennifer Feighner, M.D., borrowed

funds from U.S. Bank to construct a million-dollar home in Ravalli County. To facilitate

construction, Myers hired two successive contractors. The second contractor, Vintage

1
 Robert Myers is both a party and counsel for defendants. Solely for ease of reading, Myers and
Feighner are abbreviated as Myers.
                                               2
Construction, agreed to finish the job after the first contractor quit, following a

disagreement with Myers over project costs and the filing of a construction lien. Myers

settled the dispute and resolved the lien with the first contractor. The dispute and lien

between Myers and Vintage, however, led to litigation and this appeal.

¶3    This appeal began as a Complaint to Foreclose a Construction Lien in August of

2014. Following a bench trial, the District Court determined in its Findings of Fact,

Conclusions of Law and Order that, sometime between February and April of 2013, Myers

and Vintage had “entered into some form of a construction contract,” premised upon verbal

promises and Vintage’s written bid proposal. Vintage was to complete the unfinished

construction of the home left undone by the first contractor, along with related

improvements. Myers’ obligation was to pay the costs of labor and materials, plus a 10%

contractor’s fee to Vintage, based upon actual costs. There was no signed writing between

the parties, only Vintage’s written estimate for $398,880.46. This overall estimate formed

the basis of the contract between the parties and the categories of construction work

Vintage agreed to oversee.      The overall estimate included masonry/stonework and

driveway work as two of its categories. Sisson Stone (Sisson) provided an estimate of

$44,518 to complete the masonry and stonework. Gabe Leonardi (Leonardi) estimated

$40,888 to complete the driveway. Vintage and Myers agreed that the 10% contractor’s

fee would apply to both the Sisson and Leonardi estimates. Vintage intended for these

figures to be somewhat variable in order to address the unexpected costs likely to arise

when taking over a project “in the middle.” Vintage included language to that effect in its
                                            3
estimates. Vintage’s language proved prescient after the discovery of a rattlesnake den on

the property siphoned away $32,712 from the driveway budget for abatement measures,

including a “snake fence.” Consequently, Leonardi later agreed to reduce his driveway

estimate downward to $9,000.

¶4    Vintage began supplying materials and labor for the project on February 28, 2013.

As construction neared completion in September of 2013, Myers asked Vintage to provide

a current estimate for final completion costs so that Myers could finish the financing

arrangements with U.S. Bank. Vintage gathered bids from its subcontractors and delivered

a completion estimate of $91,107.50 to Myers and U.S. Bank. The completion estimate

included stonework and masonry costs from Sisson, but with a hidden problem. In April

of 2013, Vintage had relied on Sisson’s estimate of $44,518 to complete the stonework and

masonry. Vintage, relying again in September on the original estimate Sisson made in

April, believed that the accordant amount for the remaining masonry and stonework

completion would be $24,059. But by the time Sisson actually began working in the

summer of 2013, the masonry parameters of the project had changed—unbeknownst to

Vintage or Myers. When he wrote the completion estimate, Sisson believed that financial

constraints were a problem for Myers. Sisson thus created the September completion

estimate believing that Myers could not afford to have each stone individually sealed and

could only afford to pay for 757 square feet of additional work. As a result, Sisson’s

September completion estimate was lower than Vintage’s projection, which was based on

Sisson’s original April estimate: Sisson’s September completion estimate projected only
                                            4
$15,300 in completion costs, not $24,059. Neither Vintage nor Myers realized that

Sisson’s September completion estimate was low in part because it had contemplated only

757 square feet of remaining work. Even though he did not know the reason why,

Vintage’s president, Doug Banks (Banks), did recognize that Sisson’s bid was too low to

cover what remained on the project. Banks cautioned Myers that the $15,300 completion

estimate provided by Sisson was lower than it should have been and that Myers could have

to pay the additional $9,000 to finish the masonry and stonework. Myers chose to not heed

the warning, stating, “we’ll just see how it falls out[,]” and directed Banks to accept the

lower estimate from Sisson. Sisson and his crew later walked off the job, telling Banks,

“I’m not working for that man [Myers] again. Ain’t gonna happen.”

¶5     After Sisson left the job, stonework and masonry at the site remained unfinished.

Sisson had ordered a pallet of Bighorn stone, personally selected by Myers, that was

delivered to the site for a cost of $2,973, which Vintage paid. Myers asked Banks if Myers

could act as the general contractor for the balance of the stonework so that they could save

the 10% in contractor’s fees. Banks agreed to the contractor fee reduction, but did not

agree to any additional deduction off of the amount Myers owed Vintage. Myers hired

Buckie Brawley to complete the stonework. Brawley used the Bighorn stone already onsite

to complete the work, but Myers never paid Vintage for the pallet. Myers paid Brawley

$4,310 to complete the stonework and masonry and was satisfied with Brawley’s work, but

not Sisson’s. Brawley had stacked his stones using mortar joints, which he testified work

just as well as individually sealing each stone, but disparaged “dry stacking.” Brawley
                                             5
testified that he will not warrant a dry stacking job because it lacks the proper mortar joints

and will not fare well in the elements. Myers complained that Sisson’s stonework had no

grout or few joint walls and that the stone appeared to be dry stacked.

¶6     Myers sent Vintage a letter on December 12, 2013, detailing the balances they

refused to pay Vintage. These disputed balances constitute the bulk of what Vintage

claimed as damages, and upon which the construction lien was based. When Myers later

met with Robin Barker, bookkeeper for Vintage, Myers refused to acknowledge a 10%

contractor’s fee due on the $10,260 paid to Leonardi for roadwork. Myers contended

Leonardi was their direct hire, despite Leonardi’s bid for $40,888 being part of Vintage’s

original contract estimate. Leonardi’s driveway work, however, was never discussed for

direct hire release from the contract and was never released from the 10% contractor’s fee.

Similarly, although Vintage had agreed that Myers could hire Brawley to complete the

masonry work and avoid the 10% contractor’s fee, Vintage never agreed to any additional

deduction off of the amount Myers owed Vintage. Myers nonetheless deducted the $4,310

from the remaining amount owed to Vintage, in addition to refusing to pay for the pallet of

Bighorn stone that cost $2,973.

¶7     In their First Amended Answer and Counterclaims, Myers complained about the

quality of Sisson’s masonry stonework on the exterior walls of the home. Myers alleged,

in part, that Sisson failed to properly seal the masonry/stonework, incorrectly installed

stone, caused other damages by the staining that resulted from unsealed rock, and

necessitated the hiring of another stonemason after walking off the job. Myers failed to
                                              6
comply with the disclosure requirements in the case scheduling order issued by the District

Court, prompting the court to rule that testimony from their expert witnesses would be

excluded or limited at trial. Myers had the option of amending their pleadings to cure these

deficiencies, but did not seek to amend their pleadings until the first day of trial. On

November 24, 2015, the District Court issued an Opinion and Order excluding and limiting

the proposed testimony of Myers’ expert witnesses. The court had also scheduled a

preliminary pretrial conference on March 17, 2016, which directed the parties to bring

exhibit lists, exhibit books, witness lists, and proposed findings and conclusions to the

conference. Vintage complied, but Myers did not. The court gave Myers until March 21

to comply, but Myers missed this deadline also. The court disallowed the use at trial of

any untimely disclosed opinions, which encompassed testimony Myers had planned to use

regarding remediation costs and expert testimony with respect to whether Vintage and

Sisson performed in a workmanlike manner.

¶8     Dr. Feighner alleged that the $30,000 paid to Sisson Stone was an overpayment,

considering the poor quality of Sisson’s work. Myers, however, presented no evidence of

the amount overpaid. At trial, the District Court allowed Myers to introduce photographs

taken by Myers’ expert that showed flaking stones, rust stains running across stones and

the driveway, and spaces between stones that required grouting. The court permitted

Myers’ expert to testify only to facts she observed, but not provide any opinion testimony.

Myers’ final witness was an established concrete contractor with an excellent reputation

who was called to testify about the cost of repairing concrete in the driveway that had been
                                             7
stained by rust leeching from improperly installed masonry stones. Myers had failed to

disclose this expert witness’s testimony for nine months, until 5 p.m. the night before the

pretrial conference on March 17th. The court thus excluded this witness’s testimony after

Vintage objected. After the witness testified and Vintage’s objection was sustained, the

court explained the consequences of Myers’ procedural errors and omissions overall:

       [B]ecause of your either delayed disclosures, extremely delayed disclosure
       that I found to be prejudicial, or non-disclosures at all of a lot of your
       monetary amounts for damages, you’re not able to prove them. . . . And you,
       through your own actions, have caused the damage part, or inactions, to be
       excluded. So even though I can see that there’s something wrong, there’s no
       monetary amount to attach to it.

The District Court concluded that Myers had failed to meet the burden of proof relating to

their counterclaims because Myers had presented no direct causal evidence, or even an

offer of proof regarding Sisson’s unsatisfactory work. Although the court ultimately

inferred cause, the court also found that Myers had presented no evidence regarding

specific damage amounts; no offer of proof of damages; and no evidence to support the

costs of remediation or repair to the home. The court reasoned that the “complete absence

of any evidence of damages defeats Myers’ counterclaims[.]”

¶9     Although the District Court found that Vintage had properly filed and perfected its

construction lien pursuant to § 71-3-521, et seq., MCA, it did not permit Vintage to

foreclose on the lien. The court determined that, under the statute, Vintage was required

to show (1) the work was satisfactorily completed; and (2) Myers failed to pay for the work.

Since the court had found the exterior masonry work by Sisson was unsatisfactory, the

                                             8
court concluded there was insufficient evidence to support a judgment in favor of Vintage

for the foreclosure of the construction lien. Consequently, the court did not permit Vintage

to recover attorney’s fees as it would have been otherwise entitled to do under § 71-3-124,

MCA.

¶10    The District Court did award contract damages to Vintage, however. The court

awarded Vintage a total of $8,317, stemming from three areas: (1) the contractor’s fee

owed on Leonardi’s roadwork, which amounted to $1,034 (10% of $10,340); (2) the $4,310

impermissibly withheld by Myers stemming from the payment to Buck Brawley; and

(3) the $2,973 that Myers owed for the pallet of Bighorn stone Brawley had installed. 2 The

court reasoned that Leonardi’s $40,888 bid for roadwork was part of the original estimate

underlying the agreement between Myers and Vintage. Myers had paid Vintage the 10%

contractor’s fee on the $32,712 expended from this category to fund the snake fence, and

had never executed a release from Vintage regarding Leonardi’s work. Myers thus owed

the 10% contractor’s fee on the remaining $9,000 estimated as well, which ended up as

$10,340 in actual costs paid to Leonardi.

¶11    The rationale for the remaining damages stemmed from the fact that Vintage never

agreed to a deduction of $4,310 from the amount Myers owed. Both parties knew in

September of 2013 that Vintage projected $24,000 as the cost of completing the masonry

and stonework and that the $15,300 completion estimate from Sisson was too low to fully

2
 Vintage’s Entry of Judgment and Myers’ brief reference the total damages awarded as $8,309.
Yet, this Court’s math calculates 1,034 + 4,310 + 2,973 to equal 8,317.
                                                9
complete it.    Myers had agreed from the outset to pay the costs of completing the

construction of their home and never secured a release for this obligation from Vintage.

Vintage had only released Myers from the 10% contractor’s fee for the cost to complete

the exterior masonry. The payment to Brawley for $4,310 fell within the $24,000 range of

the completion estimate Vintage had provided in September of 2013. The court determined

that Myers was therefore not entitled to deduct Brawley’s payment from other amounts

owed to Vintage. Vintage, the court concluded, was thus owed the $4,310 Myers had

withheld. The court employed the same rationale to determine that Myers owed Vintage

$2,973 for the Bighorn stone pallet, concluding the stone had been paid for by Vintage,

incorporated into the project, and never released from the amount Myers owed.

¶12    Myers appealed to this Court, arguing that the District Court erred by awarding

damages to Vintage,3 and that the court erred by not awarding Myers attorney’s fees when

Vintage failed to prove its lien. Vintage argues the District Court considered sufficient

evidence to merit its award for damages, but that the court erred as a matter of law when it

did not permit foreclosure of the lien and award Vintage attorney’s fees pursuant to

Montana’s lien foreclosure statutes.

3
  Myers’ brief crafts the issue statements as whether the trial court erred by awarding damages to
Vintage and not awarding damages to Myers on their counterclaim. But Myers presented no
argument or authority in the body of the brief to support a contention that the District Court’s
denial of damages for their counterclaim merited consideration on appeal. This Court is not
obliged to develop analysis, surmise a position, or conduct research to support a party’s
contentions. Johnston v. Palmer, 2007 MT 99, ¶ 30, 337 Mont. 101, 158 P.3d 998. We therefore
consider here only whether Vintage was entitled to its award of damages.
                                                10
                               STANDARD OF REVIEW

¶13    We review a district court’s interpretation of a statute de novo, to determine whether

the court’s interpretation is correct. dck Worldwide Holdings v. CH SP Acquisition, LLC,

2015 MT 225, ¶ 15, 380 Mont. 215, 355 P.3d 724.

¶14    We review an award of damages to determine whether the trial court abused its

discretion. A district court’s determination of damages is a factual finding that must be

upheld if it is supported by substantial evidence. We will not overturn a district court’s

award of damages unless it is clearly erroneous. A district court’s factual findings are

clearly erroneous if they are not supported by substantial evidence, if the court

misapprehended the effect of the evidence, or if a review of the record leaves this Court

with a definite and firm conviction that a mistake was made. When determining whether

substantial evidence supports the district court’s findings, we will review the evidence in

the light most favorable to the prevailing party. Mt. W. Bank, N.A. v. Cherrad, LLC, 2013
MT 99, ¶¶ 26-27, 369 Mont. 492, 301 P.3d 796. Substantial evidence is evidence that a

reasonable mind might accept as adequate to support a conclusion. Substantial evidence

is greater than a mere scintilla of evidence, but may be less than a preponderance. Johnston

v. Palmer, 2007 MT 99, ¶ 26, 337 Mont. 101, 158 P.3d 998.

¶15    A district court is in the best position to judge the credibility of testimony and

proffered evidence. We will defer to a district court’s resolution of conflicting evidence if

the evidence sufficiently supports a factual finding, even where evidence in the record

supports a contrary finding. Cherrad, LLC, ¶ 38.
                                             11
                                      DISCUSSION

¶16 1. Whether there was substantial evidence to support the District Court’s award of
damages to Vintage.

¶17    We discern Myers’ argument regarding damages awarded to Vintage to be that there

was insufficient evidence to support the District Court’s finding that the contract between

Myers and Vintage encompassed Leonardi’s driveway work, and that there was insufficient

evidence for the court to find that Vintage was entitled to the $4,310 that Myers deducted

from the balance owed. Lastly, Myers argues that the purchase of “the extra stone,” which

we interpret to be the pallet of Bighorn stone, was “beyond the agreement that was

accepted[.]”

¶18    A contract is enforceable when there are identifiable parties capable of contracting,

a lawful object, consideration, and consent. Section 28-2-102, MCA; Hayes v. Hartelius,

215 Mont. 391, 396, 697 P.2d 1349, 1352-53 (1985). Consent can be communicated “by

some act or omission of the party contracting by which he intends to communicate it or

which necessarily tends to such communication.” Hayes, 215 Mont. at 395, 697 P.2d at

1352 (quoting § 28-2-501(1), MCA). Here, Vintage and Myers are identifiable parties with

the capacity to contract. Construction of a home is a lawful object of a contract. The

District Court found that Vintage and Myers had a contract reduced to writing in the form

of Vintage’s written estimate for $398,880.46, albeit missing some important terms. This

estimate established the basis of the contract between the parties, formulating as terms the

categories of construction and the approximate costs entailed through completion. The

                                            12
record reflects that paying for those approximate costs formed the basis of Myers’

obligation, while the completion of the home was Vintage’s. There was thus sufficient

consideration between them. We infer the parties’ consent to contract from the record,

which shows that Vintage commenced the work contemplated and received payments from

Myers without dispute until September of 2013. Although the 10% contractor’s fee was

premised upon an oral agreement, a written contract may be modified by an executed oral

agreement. Section 28-2-1602, MCA; AAA Constr. of Missoula, LLC v. Choice Land

Corp., 2011 MT 262, ¶ 27, 362 Mont. 264, 264 P.3d 709. Since Myers paid the 10%

contractor’s fee on portions of the contract, like the snake fence, there was sufficient

evidence for the District Court to find the 10% fee was a valid term sufficiently executed

and applicable to the contract as a whole.

¶19    We therefore must determine whether there was sufficient evidence for the District

Court to find the contractor’s fee term applied to Leonardi’s driveway work. We conclude

there was. The driveway work was included in the original estimate, which the parties had

agreed would overall be subject to the payment of the contractor’s fee. Further, when funds

were required for the snake fence and abatement measures, those funds were drawn from

the driveway budget. Myers paid the contractor’s fee on the funds taken from the driveway

budget pool that were used for the snake fence and abatement. On that basis, which we

find to be more than a mere scintilla of evidence, the District Court reasonably concluded

that Myers had also agreed to pay the contractor’s fee on the funds remaining from the

same pool that was slated for driveway work. Myers argues that Leonardi’s testimony at
                                             13
trial controverts such a conclusion, but the District Court was in the best position to judge

the evidence and weigh credibility. Since there was sufficient evidence to support the

court’s finding, Leonardi’s conflicting testimony alone does not serve to upend that finding

on appeal. Vintage is thus entitled to retain the District Court’s award of damages in the

amount of $1,034—10% of the $10,340 paid to Leonardi for his work on the driveway.

¶20    The District Court entertained similarly sufficient evidence to conclude that Myers

was not entitled to withhold $4,310 from the amount owed to Vintage, and was obligated

to pay for the pallet of Bighorn stone used in the home. The court, after hearing witnesses

and reviewing exhibits, concluded that Vintage never agreed to a $4,310 deduction from

the amount Myers owed under the contract. Myers, the court found, had agreed from the

outset to pay Vintage the costs of completing the construction of their home. Vintage never

released Myers from this agreement. Vintage had only agreed to release Myers from the

payment of the 10% contractor’s fee for the masonry work, not the cost of the work itself.

The District Court found that Myers never provided any legal rationale at trial to support

such a deduction. On appeal, Myers argues Vintage breached the contract, causing Myers

damages that Myers should have been permitted to deduct from the amount owed to

Vintage. The District Court was in the best position to weigh the evidence and testimony,

however, and find that Myers was not entitled under the contract to unilaterally deduct

from the balance owed without Vintage’s consent. Yet, there was sufficient evidence for

the court to find that both parties knew in September of 2013 that the remaining masonry

work would cost approximately $24,000, not $15,000. Indeed, the evidence showed that
                                             14
Banks had informed Myers that Sisson’s bid was too low to complete the project, and that

Myers might be obligated to pay upwards of an additional $9,000. Myers’ statement that

“we’ll see how it falls out,” which prefaced his directing Banks to accept the flawed bid,

provided sufficient evidence for the District Court to conclude that Myers was aware he

could be obliged to pay more—up to $9,000 more, as Banks had warned—to complete the

masonry work, and thus was not entitled to a deduction from the amount he owed Vintage

under the contract. We do not find the court clearly erred by reasoning so. Additionally,

the evidence at trial sufficiently supported the District Court’s conclusion that Myers was

obligated to pay Vintage for the pallet of Bighorn stone Brawley used to complete the

masonry work. The court did not clearly err by finding these stones were used as part of

the materials purchased to complete the masonry work, and that Myers was therefore

obligated to pay Vintage $2,973 for them.

¶21 2. Whether the District Court erred as a matter of law by denying Vintage an award
of attorney’s fees and the right to foreclose upon its lien.

¶22    Although the District Court determined Vintage’s lien was valid, the court reasoned

in its Findings of Fact, Conclusions of Law and Order that Vintage was not entitled to a

favorable judgment for the foreclosure of the construction lien because the masonry and

stonework by Sisson was unsatisfactory to Myers. The District Court therefore denied

Vintage recovery of its attorney’s fees. On appeal, Vintage argues the court erred by not

foreclosing the lien and awarding the attorney’s fees because the statutory standard for

foreclosure of a construction lien is not whether the work is satisfactory, but whether the

                                            15
work was completed or substantially completed. Vintage offers § 71-3-535(4), MCA,

Johnston and dck Worldwide as legal authority to support its argument. We agree with

Vintage.

¶23    Construction liens protect the equitable interests of those who increase the value of

property through their labor or materials. dck Worldwide, ¶ 25 (citing 56 C.J.S. Mechanics’

Liens § 3 (2007)). To create a construction lien, a lien claimant must substantially furnish

services or materials pursuant to a real estate improvement contract prior to filing the lien

notice. Section 71-3-535(4), MCA. It is “the use of the materials furnished and the work

and labor expended by the contractor [that] gives the material man and laborer his lien

under the statute.” dck Worldwide, ¶ 25 (quoting Van Stone v. Stillwell & Bierce Mfg. Co.,

142 U.S. 128, 136, 12 S. Ct. 181, 183 (1891)). A construction lien therefore arises upon

completion or substantial completion of the contracted work. Gwynn v. Cummins, 2006
MT 239, ¶ 17, 333 Mont. 522, 144 P.3d 82. Liens are thus generally limited to services

actually performed and materials actually supplied. Lienable materials are those that are

supplied “with the intent that they be used in the course of construction of or incorporated

into the improvement[;]” and that are actually “incorporated in the improvement or

consumed as normal wastage in construction operations[.]” Section 71-3-524, MCA; dck

Worldwide, ¶ 23. A presumption that materials were incorporated arises when the materials

are delivered to the site of the improvement. LHC, Inc. v. Alvarez, 2007 MT 123, ¶ 24,

337 Mont. 294, 160 P.3d 502. Montana’s lien statutes do not authorize liens for the total

amount of a construction contract, but rather for the amount of contractual services and
                                             16
materials left unpaid, subject to § 71-3-524, MCA. dck Worldwide, ¶¶ 22-23; § 71-3-526,

MCA. Although we strictly construe the procedural requirements of the construction lien

statutes, we liberally construe the statutes so as to give effect to their remedial purpose.

Johnston, ¶ 40.

¶24    A district court “shall allow as costs the money paid and attorney fees incurred for

filing and recording the lien and reasonable attorney fees in the district and supreme courts.

The costs and attorney fees must be allowed to each claimant whose lien is established[.]”

Lewistown Miller Constr. Co. v. Martin, 2011 MT 325, ¶ 30, 363 Mont. 208, 271 P.3d 48

(quoting § 71-3-124(1), MCA). A district court is not empowered with discretion to

determine whether a party with an established lien is entitled to attorney’s fees—the

language of the statute is mandatory. A district court errs if it fails to award attorney’s fees

to a party with an established lien. Lewistown Miller, ¶ 30. Section 71-3-124, MCA, does

not require the award of attorney’s fees to be reduced if the judgment is for an amount less

than what was claimed in the lien. LHC, Inc., ¶ 35.

¶25    Although the District Court disallowed Vintage to foreclose on the lien and recover

its attorney’s fees, the court did so on the basis of Myers’ dissatisfaction with the work

performed. This basis of judgment was in error, however, as the equitable principles

underlying the lien statutes would be undermined if owners could avoid foreclosure of a

construction lien by simply expressing their dissatisfaction with a contractor’s work

performed. The rule instead, which we articulated in Cummins, is that work completed or

substantially completed, in addition to lienable materials, establishes the lien. Here,
                                              17
Vintage contended it was entitled to foreclose its lien for $14,174.25 in unpaid construction

contract work and materials. The District Court found that Vintage was in fact entitled to

recover $8,317. The record sufficiently establishes that this amount was for work Vintage

completed or substantially completed, and for materials that were incorporated into the

property. The District Court found that Leonardi completed the driveway work and that

Vintage was entitled to 10% of the amount paid to him as a contractor’s fee. The court

concluded that the masonry and stonework was completed, and that the Bighorn stone

pallet had been actually incorporated into the project. Myers’ complaints about the quality

of work possibly entitled them to other avenues of recovery that they did not adequately

pursue at trial, but the complaints do not abrogate Vintage’s right to foreclose the lien.

Further, in no way could Myers’ complaints about the quality of work performed

undermine the lien or amount owed on the pallet of stone Brawley used to complete the

masonry work. Regardless of any complaints or deficiencies in other areas, the pallet of

Bighorn stone, personally selected by Myers, was intended to be incorporated into the site.

The District Court found that Brawley installed it as intended. Vintage’s lien concerning

the stone therefore clearly complied with the statutory requirements of § 71-3-524, MCA.

The District Court consequently erred as a matter of law when it reasoned that Myers’

dissatisfaction with the completed work would abrogate Vintage’s right to collect

attorney’s fees for its valid lien.

                                             18
                                    CONCLUSION

¶26    The judgment of the District Court awarding Vintage $8,317 in contractual damages

and denying Myers recovery on their counterclaims is affirmed. The judgment of the

District Court denying Vintage its attorney’s fees pursuant to § 71-3-124, MCA, is reversed

and remanded for proceedings consistent with this opinion.

                                                 /S/ LAURIE McKINNON

We concur:

/S/ MIKE McGRATH
/S/ MICHAEL E WHEAT
/S/ BETH BAKER
/S/ DIRK M. SANDEFUR

                                            19