Court Opinion

ID: 884447
Source: CourtListenerOpinion
Date Created: 2013-06-05 03:07:17.855017+00
Date Added: 2024-06-11T15:11:43.468690
License: Public Domain

NO.    96-132
          IN THE SUPREME COURT OF THE STATE OF MONTANA
                                   1997

BRAUN INTERTEC CORPORATION,
a Minnesota corporation,

G & R RANCH, LTD.,                                   ;I   ji   1 .   I-(-.
a Montana corporation; and                                      ,
                                                                I    ,:j,) /
GENE ROSS,                                           ~. ,       L

                                                     2 ; .~.>.2;d:;;d
                                                            .
                                               ; ; , r2.y.
                                              i L I&     ,. . . . , <,.,,.
                                                           : . < : " , .."$"""'
                                                                      c
         Defendants and Appellants,               :e!?+ij:@: & ( j + & t        ".
FOX LAND & CATTLE COMPANY,
a Montana corporation; and
RICHARD W. FOX,
          Defendants.

APPEAL FROM:   District Court of the Thirteenth Judicial District,
               In and for the County of Yellowstone,
               The Honorable Robert W. Holmstrom, Judge presiding.

COUNSEL OF RECORD:
          For Appellants:
               Larry D. Herman, Herman Law Firm, Laurel, Montana ( G
               & R Ranch, LTD) ; Gene Ross, Billings, Montana, pro
               se
          For Respondent:
               Leonard H. Smith, Crowley, Haughey, Hanson, Toole                     &
               Dietrich, Billings, Montana

                              Submitted on Briefs: December 19, 1996
                                             Decided: February 18, 1997
Filed:
Justice William E. Hunt, Sr., delivered the Opinion of the Court.

     Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1995 Internal Operating Rules, this decision shall not be cited as
precedent and shall be published by its filing as a public document
with the Clerk of the Supreme Court and by a report of its result
to Montana Law Week, State Reporter and West Publishing Company.
     Appellants G   &   R Ranch, Ltd. (the Ranch) and Gene Ross (Ross)
appeal from the j udgment entered by               the Thirteenth Judicial
District Court, Yellowstone County, concluding that Respondent
Braun Intertec Corporation (Braun) filed a valid and enforceable
construction lien on real property owned by the Ranch, ordering
that Braun's lien be foreclosed, and awarding Braun attorney's
fees.
     We affirm.
     We restate the dispositive issues as follows:
     1.   Did   the     District   Court     err    by   relying   on   deemed
admissions in determining that Braun had a valid and enforceable
construction lien?
     2.   Did the District Court abuse its discretion in awarding
Braun attorney fees?
                               BACKGROUND

     In March 1993, Fox Land        &   Cattle Company owned a 79-acre
feedlot located in Yellowstone County, Montana. On March 23, 1993,
Richard Fox (Fox), acting in his individual capacity and also as
principal and agent of Fox Land         &   Cattle Company, and Gene Ross
entered into a contract with Braun whereby Braun agreed to conduct
a Phase I Environmental Assessment of the feedlot. The objective
of a Phase I Environmental Assessment is to identify and analyze
existing or potential surface or subsurface environmental hazards
at a site.   Because Ross knew a lending institution will often
require an environmental assessment of property before it will
disburse a loan to a potential purchaser of that property, he
wanted to arrange the environmental assessment as a preliminary
step towards the eventual purchase of the feedlot.
     On April 14, 1993, and again on April 22, Braun conducted an
on-site investigation of the feedlot.     The investigations included
the examination and analysis of soils and water sources for
potential environmental contamination.
     On April 26, 1993, Braun sent a draft report of its findings
to Ross and Fox. The draft report noted Braun's concerns regarding
problems with a drainage ditch and the need to replace a septic
tank.   It also noted that a cow carcass had been left on the
property and needed to be removed.      Ross and Fox made changes to
the feedlot that reflected Braun's environmental concerns: they
redesigned the drainage ditch, replaced the septic tank, and
removed the cow carcass. Ross then requested that Braun reexamine
the lot and revise its report to reflect the physical changes made
to the property.
     Meanwhile, during this same time period, Ross and Howard
Kluver (Kluver) were planning to purchase the feedlot. On May 26,
1993, the two men incorporated G   &   R Ranch, Ltd. (the Ranch).   On
June 17, 1993, the Ranch purchased the feedlot from Fox Land         &

Cattle Company.
      On June 24, 1993, Braun issued a revised Phase I Environmental
Assessment report.   The final cost of services and labor provided
by Braun was $2,522.25; however, Ross, Fox, the Ranch, and Fox Land
&   Cattle Company failed to pay Braun for its services.             As a
result, on September 20, 1993, Braun filed a construction lien on
the property.   On November 23, 1993, Braun instituted the present
action to enforce the construction lien, naming the Ranch, Fox Land
&   Cattle Company, Ross, and Fox as defendants.          On November 27,
1993, Fox and Fox Land   &   Cattle Company were properly served with
the summons and complaint, and on December 30, 1993, their defaults
were entered for their failure to plead or otherwise appear.
      Following a trial without a jury held December 12, 1994, the
District Court on April 11, 1994, entered its findings of fact,

conclusions of law and order, determining that Braun had a valid
and enforceable lien on the feedlot property.              Next, after a
hearing, the court on November 15, 1995, entered its findings of
fact, conclusions of     law    and   order   regarding    the   award   of
attorney's fees. Judgment was entered on November 17, 1995.          Ross
and the Ranch appeal from this judgment.
                               ISSUE ONE

      Did the District Court err by relying on deemed admissions in
determining that Braun had a valid and enforceable construction
lien?
      On April 18, 1994, Braun served the Ranch with "Plaintiff's
First Requests for Admission to Defendant G          &    R Ranch, Ltd."
Request for admission No. 2 states:
    REQUEST FOR ADMISSION NO. 2: Admit that Plaintiff, Braun
    Intertec Corporation, has a duly perfected, enforceable
    construction lien in accordance with Title 71, Chapter 3 ,
    Part 5, Montana Code Annotated, for services and labor
    supplied under a real estate improvement contract against
    the following described real property located in
    Yellowstone County:
     Parcel A: That part of the NW/4SW/4 Section 34, Township
     1 South, Range 25 East, P.M.M., Yellowstone County,
     Montana, otherwise described as Tract 1 of Certificate of
     Survey No. 1021 on file in the office of the Clerk and
     Recorder of said County under Document No. 778933.
     Parcel B: Lot 3 , SW/4SW/4 of Section 34, Township 1
     South, Range 25 East, P.M.M., Yellowstone County,
     Montana.
After the Ranch failed to respond to the requests for admission,
Braun filed a notice of deemed admissions on June 20, 1994.        Braun
argues that based on the Ranch's deemed admissions, the court
properly   concluded   that   Braun   had   a   valid   and   enforceable
construction lien. We agree.
     A   request for admission is deemed admitted if it is not
answered or objected to within thirty days after service of the
request. Rule 36(a), M.R.Civ.P.; Easton v. Cowie (1991), 247 Mont.
181, 183, 805 P.2d 573, 574. A request which is deemed admitted is
admitted for all purposes, Toavs v. Billings Federal Credit Union
(1986), 221 Mont. 473, 475, 719 P.2d 428, 429, even if the request
concerns the "central issue" in the case, Morast v. Auble (1974),
164 Mont. 100, 104-05, 519 P.2d 157, 159.          The law, therefore,
allows that which occurred here: the deemed admission of Braun's
unanswered   requests for admission, and         the District     Court's
reliance on those deemed admissions in reaching its decision.
     The Ranch contends, however, that the court should not have
deemed the requests admitted because the Ranch's failure to timely
respond to Braun's requests was not done in bad faith.              Citing
Heller v. Osburnsen (1973), 162 Mont. 182, 190-91, 510 P.2d 13, 17-
18,    the Ranch argues that where the failure to timely respond to
requests for admissions is not caused by lack of good faith, a
court is not bound to deem the requests admitted, but instead may
allow responses to be filed late.
       While the court could have allowed the Ranch to submit late
responses, pursuant to Heller, it was entirely appropriate for the
court to deem the requests admitted, pursuant to Easton, ?loavs, and
Rule 36(a), M.R.Civ.P.        A district court's decision regarding

requests for admission will not be disturbed on appeal "absent
manifest abuse of discretion."          Easton, 805 P.2d at 574.        In
deciding to deem admitted Braun's requests for admission, rather
than    allow   the   Ranch   to   submit   late   responses, the    court
appropriately exercised its discretion.
       The Ranch also argues, citing Marshall v. Vise (Tex. 1989),
767 S.W.2d 699, that by failing to object to evidence presented at
trial that contradicted the judicial admissions, Braun waived its
right to rely on the admissions.        In Marshall, the Texas Supreme
Court stated that
       a party relying upon an opponent's pleadings as judicial
       admissions of fact must protect the record by objecting
       to the introduction of controverting evidence and to the
       submission of any issue bearing on the facts admitted.
       [Citation omitted.I
            In the present case, Vise failed to object to the
       controverting testimony on the ground that he was relying
       on Marshall's deemed admissions. In fact, Vise actually
       elicited much of the contradictory evidence. Vise has
       waived, therefore, his right to rely on those admissions
       which were controverted by testimony admitted at trial
       without objection. [Citation omitted.] We hold that a
    party waives the right to rely upon an opponent's deemed
    admissions unless objection is made to the introduction
    of evidence contrary to those admissions.

Marshall, 767 S.W.2d at 700 (emphasis added). With respect to the
precise issue of the effect of a party's failure to object to the
introduction of     evidence    contrary   to     his   opponent's deemed
admission, there are no Montana cases directly on point.           We find
the Texas Supreme Court's reasoning in Marshall persuasive, and
employ that reasoning in this case.
     In its brief, the Ranch specifies what it alleges is evidence
contrary to the deemed admissions which was introduced at trial by
the Ranch without objection, or which was introduced by Braun
itself.    Braun,    however,    argues    that    it   objected   to   the
introduction of evidence contrary to the deemed admissions, and
that the evidence which was introduced without objection was not
contrary to the deemed admissions.
     The deemed admission at issue here establishes that Braun had
an enforceable construction lien for services and labor supplied
under a real estate improvement contract.          There was no evidence
introduced to dispute the existence or filing of the lien. Rather,
the parties dispute the effect of evidence which was introduced
regarding the existence of a real estate improvement contract, and,
therefore, the validity of the filed lien.
     Section 71-3-523, MCA, describes who may claim a construction
lien:
     A person who furnishes services or materials pursuant to
     a real estate improvement contract may claim a
     construction lien . . . .
Section    71-3-522, MCA,    defines   a   "real estate   improvement
contract:"
     (5)(a) "Real estate improvement contract" means an
     agreement to perform services, including labor, or to
     furnish materials for the purpose of producing a change
     in the physical condition of the real estate, including:
     (i) alteration of the surface by excavation, fill, change
     in grade, or change in a shore, bank, or flood plain of
     a stream, swamp or body of water;
     (ii) construction or installation on, above, or below the
     surface of the land;
     (iii) demolition, repair, remodeling, or removal of a
     structure previously constructed or installed;
        (iv) seeding, sodding, or other landscape operation;
     (v) surface or subsurface testing, boring, or analysis;
     and
     (vi) preparation of plans, surveys, or architectural or
     engineering plans or drawings for any change in the
     physical condition of the real estate, regardless of
     whether they are used to produce a change in the physical
     condition of the real estate.
Section 71-3-522(5)(a), MCA (emphasis added) .
     The Ranch asserts that the following evidence contradicts the
deemed admission of the existence of a "real estate improvement
contract," and, therefore, the existence of a valid construction
lien:
        (1) Testimony from Ross and from Braun that the purpose of an
environmental assessment     is to assist buyers and      sellers of
property in obtaining a loan;
        (2) Testimony from Kluver that there were no physical changes
made to the property as a result of the Braun reports;
        (3) Testimony from Ross that the removal of an animal carcass
was done according to normal clean up procedures; and,
     (4) Evidence that Braun did not do any testing, take any

samples, or otherwise undertake a subsurface investigation of the
property.
     Braun contends that it foiled the Ranch's overt attempt to
contradict the deemed admissions by objecting to the Ranch's motion
to admit into evidence the answers to the requests for admission
that Braun never received.       Braun also argues that none of the
evidence listed by the Ranch directly contradicts the deemed
admission of a "real estate improvement contract.'I        Braun contends,
therefore, that because none of the evidence contradicts the deemed
admission, its failure to object does not result in the waiver of
its right to rely on the deemed admission. We agree.
     Section 71-3-522(5)(a)(v), MCA, provides that a "surface . . .
analysis [of real estate]" is a service performed "for the purpose
of producing a change in the physical condition of the real
estate," and, therefore, constitutes a real estate improvement
contract.      Indeed, Braun's    scientists    conducted       a    "surface
analysis" of the feedlot: Braun's environmental geologist, Curtis
Padilla,     testified   that    his    investigation      of       potential
environmental hazards on the property included an examination and
analysis of surface deposits and bedrock on the feedlot, stream
bank stabilization, ground and surface water, and soils.
     None of the testimony specified by the Ranch contradicts the
deemed admission of a real estate improvement contract in the form
of the performance of a "surface analysis."          Testimony regarding
first,     Ross's   motivation   for    requesting    an    environmental
assessment,    second, whether     or   not   the    feedlot's physical
characteristics were changed, and third, what prompted the removal
of a cow carcass, is not relevant to the deemed admission.
Testimony that Braunls scientists did not perform a subsurface

analysis has little effect in light of additional, uncontradicted
testimony that Braun's scientists did perform a surface analysis;
evidence of either can establish a real estate improvement contract
under    §   71-3-522(5) (v), MCA.
                        (a)          Braun did not waive its right to
rely on the deemed admissions.
      We hold that the court properly deemed admitted the unanswered
requests for admission and properly relied on the deemed admissions
in reaching its decision in this case.
                               ISSUE TWO

      Did the District Court abuse its discretion in awarding
attorney fees?
      After a hearing, the District Court awarded Braun attorney
fees totaling $8,852.       The Ranch argues that this award was
unreasonable in light of the amount of the judgment on the lien,
$3,194.25.
        Section 71-3-124,MCA, provides that a party who forecloses on
a lien is entitled to reasonable attorney fees. In addition, "[ilf
...   statutory authority exists, the awarding of attorney's fees is
a matter of the district court's discretion."        Howell v. State
(1994), 263 Mont. 275, 285, 868 P.2d 568, 574.        Therefore, the
court's award of attorney fees will not be disturbed unless the
court has abused its discretion. Morning Star Enterprises, Inc. v.
R.H. Grover, Inc. (1991), 247 Mont. 105, 114, 805 P.2d 553, 559.
     The Ranch cites Carkeek v. Ayer (l98O), 188 Mont. 345, 613
P.2d 1013, to support its contention that a reasonable attorney fee
award is one which does not exceed the amount of the lien, and that
an attorney fee award nearly three times the amount of the lien is
therefore unreasonable. In Carkeek, this Court upheld the district
court's reduction of attorney fees for defending against a $6,200
lien from $5,773.20 to $3,000.           This Court stated that       "   [tlhe
defense simply is not worth a fee approaching 100% of the amount of
the lien." Carkeek, 613 P.2d at 1016.
     However,    in   Mornins    Star    Enterprises   we   clarified      the
misconception, based on our holding in Carkeek, that attorney fees
must never exceed the amount of the judgment:

     If Carkeek stands for anything, it stands for the concept
     that reasonableness of attorney's fees must be
     ascertained under the facts of each case. The "result
     securedN factor is only one of the factors which the
     district court should weigh in arriving at a reasonable
     fee.
Morning Star Enterprises, 805 P.2d at 558.         The "factors which the
district court should weigh in arriving at a reasonable fee" are:
(1) the amount and character of the services rendered; (2) the
labor, time, and trouble involved; ( 3 ) the character and importance
of the litigation in which the services were rendered; (4) the
professional skill and experience required; (5) the character and
standing of the attorneys in their profession; and (6) the result
secured   by    the   services   of     the   attorneys.    Mornina       Star
Enterprises, 805 P.2d at 558 (citing Majers v. Shining Mountains
(1988), 230 Mont. 373, 379-80, 750 P.2d 449, 453). In Morninq Star
Enterprises we affirmed the district court's attorney fee award,
nearly four times the amount of damages recovered, noting that the
district court specifically addressed each of the Maiers factors.
Mornins Star Enterprises, 805 P.2d at 558-59
     Here, the court addressed each of the factors, as revealed in
its findings of fact, conclusions of law and order issued after a
hearing on the matter of attorney fees:
          The Court finds that the labor and time spent by
          the law firm was reasonable, that because of the
          fact that the issue [of whether an environmental
          assessment constituted a "real estate improvement
          contract] was one of first impression in Montana
          the amount of time spent by the attorneys in
          researching the law from Montana and from other
          states was reasonable; further the attorneys
          possessed the necessary professional skill and
          experience to perform such services; that the
          character and standing in the profession of the
          attorneys is not questioned and the attorneys
          achieved a favorable result of a novel question;
          the Court therefore concludes that the total charge
          of $8,852.00 for attorney's fees is reasonable.
We hold that under the circumstances of this case the District
Court did not abuse its discretion in awarding attorney fees

We Concur:      I,

      Thief Justice   /