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Big Sky Civil and Environmental, Inc. v. Dunlavy

Supreme Court of Montana

September 25, 2018


          Submitted on Briefs: December 13, 2017

          APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDV 13-393 Honorable John A. Kutzman, Presiding Judge

          For Appellant: Steven T. Potts, Steven T. Potts, PLLC, Great Falls, Montana

          For Appellees: Kirk D. Evenson, Marra, Evenson & Levine, P.C., Great Falls, Montana


          Dirk Sandefur, Justice

         ¶1 Plaintiff Big Sky Civil & Environmental, Inc. (BSCE) appeals from judgments of the Montana Eighth Judicial District Court denying summary judgment to BSCE, and granting summary judgment to Wertzberger Architects, P.C. (WAPC) on BSCE's claim that Thomas Wertzberger is personally liable for certain professional services rendered by BSCE under a contract negotiated with WAPC, an agent of Allen Dunlavy, d/b/a Dunlavy Corp. We affirm.

         ¶2 The restated issues presented are:

1. Whether the District Court erroneously granted summary judgment that WAPC was not personally liable to BSCE pursuant to § 28-10-702(1), MCA?[1]
2. Whether the District Court erroneously disregarded an unqualified common-law agency rule that an agent who contracts on behalf of a non-existent principal is personally liable on the contract?
3. Whether the District Court erroneously interjected and applied judicial estoppel as an alternative basis for its grant of summary judgment to WAPC?


         ¶3 BSCE is a civil engineering firm based in Great Falls, Montana, engaged in the business of providing professional civil engineering services, primarily through its principal shareholder, Joseph Murphy, P.E. WAPC is an Iowa-based professional corporation engaged in providing professional architectural and design services, primarily through its principal shareholder, Thomas Wertzberger, AIA. In January 2013, Allen Dunlavy, d/b/a Dunlavy Corp., retained WAPC to perform professional architectural and design services on a building construction project in Shelby, Montana (Shelby Project). Unknown to WAPC, and for reasons not of record on appeal, Dunlavy Corp. did not actually exist as a separate corporate entity.

         ¶4 Incident to providing architectural and design services to Dunlavy, WAPC commissioned BSCE to provide onsite engineering services for the Shelby Project. By email dated Monday, January 14, 2014, WAPC authorized BSCE to proceed with a previously discussed scope of work, [2] to wit:

Please accept this email as your authorization to begin work on the Shelby [project] site.
You can proceed on an hourly basis per the schedule you sent me.
For now, you can invoice your time to [WAPC] as listed below. This may change as things proceed on the project.

(Emphasis added.) WAPC addressed and sent the email jointly to BSCE, Allen Dunlavy, and Dunlavy's construction contractor (Warren Barse). BSCE immediately replied "Thanks. We'll plan to meet Warren [Barse] onsite on Wednesday . . . ." BSCE emailed its response directly to Wertzberger, Barse, and Allen Dunlavy, with copies to various others. In a subsequent affidavit, WAPC, through Wertzberger, attested that WAPC clearly communicated to BSCE that WAPC was at all times acting on behalf and to the benefit of Dunlavy Corp. Wertzberger further attested that "BSCE met with [Dunlavy Corp.] personnel in Shelby in the early stages of the engagement to come up with the work plan."[3] By email dated Friday, January 18th, BSCE notified Wertzberger, Barse, and Allen Dunlavy of BSCE's preliminary communications with a contemplated geotechnical engineering subcontractor. The email advised that BSCE would forward the subcontractor's proposal later that day and requested that the recipients notify BSCE if they desired a sooner start date.

         ¶5 Several weeks later, on February 7, 2013, at 5:06 p.m., BSCE emailed an invoice to WAPC in the amount of $19, 610.86 for payment on BSCE's completed Shelby Project work. At 11:33 a.m. the next morning, WAPC replied by email, stating:

The owner would like you to bill him directly for your services. If you could modify the invoice so it is to him and send it there that would be great.

(Emphasis added.) The WAPC email further instructed BSCE to send the invoice to the referenced owner, "[Dunlavy Corp.] . . . Atten. Allen Dunlavy." Without objection or question, BSCE re-addressed the invoice as directed and sent it to the address specified in the WAPC email. In a subsequent affidavit, Murphy attested that BSCE re-invoiced Dunlavy Corp. based on BSCE's belief that WAPC and Wertzberger "were agents of [Dunlavy Corp.]" By correspondence on April 26, 2013, Allen Dunlavy instructed BSCE that "if [BSCE] [is] not paid by May 1st . . ." to "direct all collections towards [Dunlavy]" and that "the other parties have no part in this invoice."[4]

         ¶6 On May 20, 2013, after receiving no payment on the Dunlavy invoice, BSCE filed a complaint in the Montana Eighth Judicial District Court against Dunlavy Corp., Wertzberger, WAPC, and Barse for payment on the invoiced work. Four days later, BSCE amended its complaint to included named defendants Allen Dunlavy d/b/a Dunlavy Corp., WAPC, and Wertzberger. Following Dunlavy's failure to appear and answer, [5] BSCE ultimately obtained a default judgment against "Allen Dunlavy d/b/a [Dunlavy Corp.]" for the principal amount of the contract debt ($19, 610.86), plus costs and interest. On August 12, 2014, BSCE moved for summary judgment against WAPC for the same principal amount on asserted claims of account stated and breach of contract. In opposition to the motion, WAPC asserted that WAPC never assented to the BSCE invoice as a debt owed by WAPC and that WAPC was not liable in contract because BSCE was aware that WAPC was acting as an agent for Dunlavy d/b/a Dunlavy Corp. Finding that genuine issues of material ...

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