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Vintage Construction, Inc. v. Feighner

Supreme Court of Montana

May 9, 2017

VINTAGE CONSTRUCTION, INC., Plaintiff, Appellee, and Cross-Appellant,
v.
JENNIFER A. FEIGHNER and ROBERT C. MYERS, Defendants, Appellees, and Cross Appellees.

          Submitted on Briefs: January 11, 2017

         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.

          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.

          Laurie McKinnon Justice

         ¶1 After litigating a home construction contract dispute, Defendant Appellants Robert C. Myers and Jennifer Feighner (together, Myers[1]) 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 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 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 $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 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 ...


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