Tindall v. Negaard

• Court: Montana Supreme Court
• Decided: March 1, 1973
• Docket: 12331
• Status: Published

Opinion

No. 12331

I N T E SUPREME C U T O THE STATE O M N A A H OR F F OTN

FRANCIS TINDALL ,

P l a i n t i f f and Respondent,

OLAF NEGAARD and PHYLLIS E. NEGAARD, h i s wife,

Defendants and A p p e l l a n t s ,

and

VERNE MCWILLIAMS and L R Y MCWILLIAMS , AR

Defendants.

Appeal from: District Court of t h e Tenth J u d i c i a l D i s t r i c t , Honorable LeRoy L. McKinnon, Judge p r e s i d i n g .

Counsel of Record:

For Appellants :

Leonard H. McKinney argued, Lewistown, Montana

For Respondent :

Robert L. Johnson argued and William E. Berger, Lewistown, Montana.

Submitted: March 1, 1973

Decided : MAR 14

Filed : 1 4 1975, M r . Justice Wesley C a s t l e s d e l i v e r e d t h e Opinion of t h e Court.

'This i s an appeal from a judgment f o r p l a i n t i f f e n t e r e d on f i n d i n g s of f a c t and c o n c l u s i o n s of law of t h e d i s t r i c t c o u r t of t h e t e n t h j u d i c i a l d i s t r i c t , County of Fergus, a f t e r t r i a l by t h e court without a jury. Judgment was f o r $2,800,25, t h e f u l l amount prayed f o r and a t t o r n e y f e e s were a s s e s s e d a s f o r a f o r e c l o s u r e of a l i e n . P l a i n t i f f F r a n c i s T i n d a l l was i n t h e ready mix c o n c r e t e b u s i n e s s and f u r n i s h e d m a t e r i a l s used upon defendant ~ e g a a r d s ' premises. Negaards a r e husband and w i f e and w i l l be r e f e r r e d t o h e r e i n a s Negaard. The o t h e r two named defendants a r e Verne McWilliams and Larry McWilliams. However, t h i s a p p e a l a f f e c t s only t h e r i g h t s between T i n d a l l and Negaard. Larry McWilliams was served b u t d e f a u l t e d . Verne McWilliams was never found n o r served. The d i s t r i c t c o u r t found a s f a c t s , so f a r a s p e r t i n e n t h e r e : a) That p l a i n t i f f f u r n i s h e d m a t e r i a l s t o t h e o r d e r of Vern McWilliams and d e l i v e r e d them t o t h e p r o p e r t y of Negaard a t i n t e r - v a l s d u r i n g t h e p e r i o d May 20 t o J u l y 9 , 1968. b) That p l a i n t i f f f u r n i s h e d m a t e r i a l s t o t h e o r d e r of L a r r y YcWilliams and d e l i v e r e d them t o t h e p r o p e r t y of Negaard a t i n t e r v a l s d u r i n g t h e p e r i o d from September 1 t o September 26, 1968. 1

c) That Negaard had a w r i t t e n c o n t r a c t w i t h Verne McWilliams co make c e r t a i n improvements.

d) That Verne and Larry McWilliams a r e f a t h e r and son, and t h a t they d i d work t o g e t h e r ; t h a t i n f a c t they worked t o g e t h e r on the Negaard job from May 20 through J u l y 9 , 1968.

e) That a mechanic's l i e n was f i l e d on December 26, 1968. The d i s t r i c t c o u r t concluded a s a m a t t e r of law t h a t t h e Lien was v a l i d , and judgment should b e e n t e r e d . The i s s u e s r a i s e d by a p p e l l a n t Negaard a r e : 1. P l a i n t i f f f a i l e d t o s u s t a i n t h e burden of proof neces- s a r y t o e s t a b l i s h a v a l i d l i e n capable of b e i n g f o r e c l o s e d , 2. The conclusion of law t h a t p l a i n t i f f had a v a l i d l i e n was erroneous i n t h a t t h e c o u r t allowed t a c k i n g of two s e p a r a t e contracts t o create a valid lien. 3. That a proper f i n d i n g and conclusion would r e s u l t i n a d i s m i s s a l of t h e l i e n s u i t . Negaard c o n t r a c t e d , i n w r i t i n g , w i t h Verne t o b u i l d a foundation f o r a t r a i l e r house.Verne d i d t h e job, o r d e r i n g and r e c e i v i n g t h e c o n c r e t e from T i n d a l l . T i n d a l l b i l l e d Verne. Verne was paid i n two payments by Negaard, one i n cash on J u l y 10 and t h e o t h e r by check on J u l y 26,1968. O the r e c e i p t dated n J u l y 26, 1968, signed by Verne, i t i s noted '"d i n full". Verne d i d n o t make any payments t o T i n d a l l f o r t h e c o n c r e t e or other materials. A t t h a t time, t h e accounts of T i n d a l l showed due and owing from Verne t h e sum of $991.50 f o r m a t e r i a l s d e l i v e r e d t o t h e Negaard job. On September 11, 1968, Larry ordered and r e c e i v e d c o n c r e t e a t t h e Negaard p r o p e r t y . Larry continued t o r e c e i v e c o n c r e t e u n t i l September 26. Larry w a s b i l l e d by T i n d a l l , Larry d i d n o t pay f o r any of t h e c o n c r e t e . Larry had made an o r a l c o n t r a c t w i t h Negaard t o b u i l d a s l a b around a f i s h house. He a l s o poured and f i n i s h e d a sidewalk a t t h e t r a i l e r house where h i s f a t h e r Verne had done t h e work from May t o J u l y . Negaard p a i d Larry i n two payments, $1500 on September 28, and $1400 on October 18,1968. W have s a i d h e r e t o f o r e t h a t T i n d a l l b i l l e d Verne and Larry e separately. They had s e p a r a t e a d d r e s s e s . On October 31, 1968, T i n d a l l combined t h e two accounts i n t h e t o t a l amount of $2800.25 and b i l l e d Verne and Larry PicWilliams, C o n t r a c t o r s . Also, a t about t h i s time, f o r t h e f i r s t time, T i n d a l l c a l l e d Negaard informing him t h a t h e had n o t been p a i d f o r t h e c o n c r e t e . Regarding t h e o r a l c o n t r a c t found by t h e t r i a l c o u r t t o have e x i s t e d between Negaard and Larry McWilliams, Negaard t e s t i f i e d t h a t he c o n t a c t e d s e v e r a l people, and Verne McWilliams g o t t h e b i d t o b u i l d t h e s l a b around t h e f i s h house. Verne, however, then asked Negaard whether h i s son Larry could do t h e job. Negaard agreed and Larry d i d t h e job. A p p e l l a n t , Negaard, a t t e m p t s i n h i s b r i e f t o show t h a t t h e l a s t m a t e r i a l s were d e l i v e r e d on September 24 under t h e proof. He t h e n argues t h a t s i n c e t h e l i e n was n o t f i l e d u n t i l December 26, t h a t i t was n o t t i m e l y under s e c t i o n 45-502, R.C.M. 1947, because i t was n o t f i l e d w i t h i n 90 days of f u r n i s h i n g t h e l a s t item i n

such account, W e have examined t h e r e c o r d c a r e f u l l y and f i n d t h e r e i s s u b s t a n t i a l c r e d i b l e evidence t o uphold t h e t r i a l c o u r t ' s f i n d i n g t h a t September 26 was t h e l a s t d a t e of d e l i v e r y . However, t h e problem remains whether t h e r e was one account o r two accounts. The t r i a l c o u r t found two s e p a r a t e c o n t r a c t s a s shown above, b u t then went on t o f i n d t h a t Verne and Larry were f a t h e r and son, o f t e n worked t o g e t h e r , and d i d work t o g e t h e r between May 20 and J u l y 9. Based on t h i s a l o n e , t h e t r i a l c o u r t "tacked" t h e two jobs t o g e t h e r , S e c t i o n 45-502, R.C.M. 1947, d i s c u s s e s p e r f e c t i o n of l i e n s i n terms of accounts. C l e a r l y h e r e , t h e r e c o r d s of T i n d a l l handled Verne and Larry i n two d i s t i n c t i n d i v i d u a l accounts, Not only were they kept s e p a r a t e by name, b u t t h e a d d r e s s e s on t h e l e d g e r s h e e t s were d i f f e r e n t . Thus we have, a s t h e t r i a l c o u r t found, two d i s t i n c t c o n t r a c t s ; and a s t h e r e c o r d c l e a r l y shows, two s e p a r a t e and d i s t i n c t accounts, The e a r l i e r account of ~ e r n e ' s was complete and t h e l a s t item f u r n i s h e d on J u l y 11, s o t h a t a l i e n f i l e d on December 26 was n d t t i m e l y and t o t h i s e x t e n t t h e judgment i s i n e r r o r . However, a p p e l l a n t argues t h a t i f p a r t of t h e i t e m s f o r which t h e l i e n was f i l e d a r e i n v a l i d , t h e e n t i r e l i e n f a i l s and i s void. He p r e d i c a t e s t h i s theory on t h i s argument expressed i n h i s brief : " ~ i n d a l l ' s testimony c l e a r l y r e v e a l s he made no e f f o r t t o a s c e r t a i n any d i f f e r e n c e s . He never made i n q u i r y of Negaard o r e i t h e r of t h e McWilliams concerning t h e r e l a t i o n s h i p s involved. He always b i l l e d t h e c o n t r a c t s i n d i v i d u a l l y y e t when i t comes time t o a s s e r t a l i e n r i g h t , he a r b i t r a r i l y changes h i s treatment of t h e s e two c o n t r a c t o r s , b i l l s them j o i n t l y a s i f a p a r t n e r s h i p f o r t h e f i r s t time on October 31, 1968 and on t h i s b a s i s f i l e s h i s s i n g l e l i e n on December 26, 1968. This i n d i c a t e s a d e l i b - a t e n e s s of mind and purpose on t h e p a r t of T i n d a l l t o attempt t o v a l i d a t e t h e e n t i r e account through t h e f i l i n g of a s i n g l e l i e n . 11 Appellant c i t e s Duval v. Fuchs, 141 Mont, 123, 127, 375 P.2d 541, where t h e Court s a i d : "The r u l e i n Montana a s elsewhere i s w e l l - s e t t l e d t h a t a w i l l f u l and knowing exaggeration of t h e amount due w i l l void an otherwise v a l i d mechanic's 1 lien. Of c o u r s e , i f fraud i s shown i n t h e f i l i n g , t h e l i e n i s v i t i a t e d . f o r f r a u d c u t s down everv- thinpl' . Eskestrand c. Wunder, 94 Mont. 57, 2 0 ' ~ .2d 622. In Duval, an exaggeration i n amount of some t e n times appeared

and f r a u d was s p e c i f i c a l l y found by t h e t r i a l c o u r t . I n t h e i n s t a n t c a s e , t h e r e was no f r a u d found. In fact, t h e t r i a l c o u r t found t h a t t h e r e l a t i o n s h i p of f a t h e r and son, being t o g e t h e r on t h e job, having worked t o g e t h e r on o t h e r j o b s , and Negaard having ordered c o n c r e t e once by telephone p l u s o t h e r f a c t s , put a s much d u t y on Negaard a s on T i n d a l l . Negaard never bothered t o check materialmen, even though he admitted t o having previous experience w i t h Liens. Also, no d i s p u t e a s t o t h e amount o f m a t e r i a l d e l i v e r e d o r p r i c e appears h e r e .

W conclude, a s t h e t r i a l c o u r t d i d i n e f f e c t , t h a t no e w i l l f u l o r knowing exaggeration e x i s t s h e r e . Thus t h e r u l e t h a t where t h e l i e n i n c l u d e s n o n l i e n a b l e items t h e proof l i m i t s t h e recovery. See: Cole v. Hunt, 123 Mont. 256, 211 P,2d 417; Hammond v. Knievel, 141 Mont. 433, 378 P.2d 388; Caird Engineering Works v. Seven-Up Gold Mining Co., 1 1 Mont. 471, 1 1 P.2d 267. 1 1 W e hold then t h a t t h e l i e n i s v a l i d a s t o t h e m a t e r i a l s

f u r n i s h e d t o Larry McWilliams. The judgment on t h e m a t e r i a l s f u r n i s h e d Verne McWilliams i s s e t a s i d e . The m a t t e r i s r e t u r n e d t o t h e d i s t r i c t c o u r t f o r e n t r y of judgment i n accordance herewith. One f u r t h e r i s s u e i s involved, Attorney f e e s were awarded on t h e b a s i s of t h e recovery amount. I t i s obvious t h a t a t t o r n e y fees will need reconsideration by the district court since the new judgment involves a lesser amount. For consideration of this matter, attention of the district court is called to Luebben v. Metlen, 110 Mont. 350, 100 P.2d 935; Thompson v. Cure, 133 Mont. 273, 322 P.2d 323; and Section 93-8614, R.C.M. 1947, Since the judgment is reversed in part and returned to the district court for modification, under Montana Rules Civil Appellate Procedure, Rule 33, each party shall bear its own costs on appeal.

/ Chief Justice