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Kenyon-Noble Lumber Co. v. Dependant Foundations, Inc.

Supreme Court of Montana

December 18, 2018

KENYON-NOBLE LUMBER COMPANY, d/b/a KENYON NOBLE LUMBER CO INC. and KENYON NOBLE READY MIX, Plaintiff and Appellant,
v.
DEPENDANT FOUNDATIONS, INC. and MARK MARKOVICH, MARCO MARKOVICH, individually and d/b/a DEPENDANT FOUNDATIONS, DEPENDANT FOUNDATIONS AND FLATWORK, LLC, and JOHN DOES 1 THROUGH 5, Defendants and Appellees.

          Submitted on Briefs: September 26, 2018

          APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-14-199C Honorable John C. Brown, Presiding Judge

          For Appellant:

          Jessica Penkal Hodges, Hodges Law Group PLLC, Bozeman, Montana

          Amanda R. Knuteson, Knuteson Law PLLC, Bozeman, Montana

          For Appellee:

          Matthew A. Dodd, Dodd Law Firm, P.C., Bozeman, Montana

          Roger James Dodd, Dodd and Burnham, P.C., Valdosta, Georgia

          OPINION

          BETH BAKER JUSTICE

         ¶1 Kenyon-Noble Lumber Company ("Kenyon Noble") appeals an order of the Eighteenth Judicial District Court, Gallatin County, holding that Kenyon Noble had breached its contract with Dependant Foundations, Inc. ("DF Inc.") by allowing a former authorized agent to charge on DF Inc.'s credit account after DF Inc. notified Kenyon Noble that it had ceased operations. The court awarded DF Inc. attorney fees. Kenyon Noble argues that because it lacked notice of the agent's termination, it could not have breached the contract. Kenyon Noble also contests the award of attorney fees. We affirm and award the Defendants their attorney fees for this appeal.

         PROCEDURAL AND FACTUAL BACKGROUND

         ¶2 Mark Markovich founded DF Inc. in Michigan. In 2007, Mark formed Dependant Foundations, LLC ("DF LLC") in Montana. At that time, Mark continued to operate DF Inc. in Michigan, and Shawn Karczewski operated DF LLC in Montana. Mark's son, Marco Markovich, worked for DF LLC.

         ¶3 Kenyon Noble operates a building supply store. It allows customers to establish credit accounts to purchase building materials and concrete on a credit basis.[1] Kenyon Noble requires an individual personally to guarantee payment for the debts of companies that hold credit accounts. In 2007, DF LLC entered into a credit agreement with Kenyon Noble that allowed DF LLC to purchase building materials and concrete on credit. The contract included Mark's signed personal guaranty for the debts incurred.

         ¶4 When Karczewski left DF LLC in 2008, he removed himself as an authorized user on DF LLC's credit account and added Marco as a new authorized user. In 2011, when Mark relocated to Montana, he merged DF Inc. and DF LLC. DF Inc. became the successor-by-merger. Marco continued as an employee and authorized agent of DF Inc. DF Inc. did not notify Kenyon Noble that it merged with DF LLC, but continued to use DF LLC's credit account.

         ¶5 In 2012, Mark told Marco that he intended to wind down DF Inc. and that Marco would need to start his own company. Marco organized Dependant Foundations and Flatwork, LLC ("Foundations and Flatwork"). Mark decided to send a letter to DF Inc.'s Montana-based suppliers to ensure that they knew Foundations and Flatwork was a separate and distinct company from DF Inc. and that Mark was not responsible for Marco's debt. On September 20, 2012, JoEllen Markovich, Mark's wife and DF Inc.'s bookkeeper, sent a letter to DF ...


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