Survco v. Kenyon Noble Ready-Mix ( 1983 )

NO. 83-78
IN THE SUPREME: COURT OF THE STATE OF MONTANA
1983
SURVCO, a Montana Corporation,
Plaintiff and Appellant,
KENYON NOBLE READY-MIX, a Montana
Corporation,
Defendant and Respondent.
Appeal from: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin
Honorable W. W. Lessley, Judge presiding.
Counsel of Record:
For Appellant:
Ron Burgess, Pro Se, Bozeman, Montana
For Respondent:
Kirwan and Barrett, Bozeman, Montana
Submitted.on briefs: May 5, 1983
Decided: June 16, 1983
Filed :
.'' 1 1 5 1983
Mr. J u s t i c e J o h n Conway H a r r i s o n d e l i v e r e d t h e O p i n i o n of the
Court.
Survco brought this action in the District Court of the
Eighteenth J u d i c i a l D i s t r i c t , G a l l a t i n County, seeking payment
f o r photographic services. The D i s t r i c t C o u r t found S u r v c o d i d
n o t s u b s t a n t i a t e i t s c l a i m a g a i n s t Kenyon Noble and judgment was
e n t e r e d i n f a v o r of Kenyon N o b l e . Survco appeals.
I n May 1 9 8 0 , W i l l i a m O g l e , owner of Kenyon Noble contacted
Ron Burgess of Survco to discuss the availability of aerial
p h o t o g r a p h s of Kenyon N o b l e ' s gravel p i t located near Belgrade,
Montana. Burgess informed Ogle aerial photographs of the p i t
c o u l d be o b t a i n e d t h r o u g h P r o f e s s i o n a l C o n s u l t a n t ' s , Inc., (PCI),
an aerial photographing service located in Missoula, Montana.
B u r g e s s a d v i s e d O g l e s i n c e PC1 would h a v e t o f l y t o Bozeman from
Missoula, the cost would be reduced if PC1 had other aerial
mapping p r o j e c t s on t h e same flight. Ogle then discussed the
p o s s i b i l i t y of o b t a i n i n g a e r i a l p h o t o g r a p h s of O g l e ' s l u m b e r y a r d
l o c a t e d on N o r t h Rouse i n Bozeman.
Burgess estimated PCI's cost to f l y t o Bozeman t o be $ 3 0 0 .
B u r g e s s e x p l a i n e d O g l e would a l s o have t o pay f o r t h e f i e l d work
necessary to place control points for the aerial photography ,
film, and f i l m r e p r o d u c t i o n c o s t s . Burgess t e s t i f i e d he e s t i -
mated t h e t o t a l c o s t f o r t h e B e l g r a d e and N o r t h Rouse s i t e s a t
$1,000. A t that time Ogle a l s o ordered four c o l o r enlargements
o f e x i s t i n g a e r i a l p h o t o g r a p h s of c o m m e r c i a l p r o p e r t y l o c a t e d i n
Livingston. B u r g e s s t e s t i f i e d he c a l l e d PC1 and o b t a i n e d a q u o t e
o f a b o u t $270 f o r t h e f o u r p r i n t s . Ogle t e s t i f i e d he u n d e r s t o o d
the prints were to cost about $30 apiece. In addition, he
t e s t i f i e d he a g r e e d t o h a v e B u r g e s s p e r f o r m t h e work and a s k e d t o
b e a d v i s e d of any c o s t i n c r e a s e s o v e r t h e e s t i m a t e s .
From May t o October 1980, Ogle made numerous unsuccessful
a t t e m p t s t o c o n t a c t B u r g e s s r e g a r d i n g t h e p r o g r e s s of t h e a e r i a l
photography. In October 1980, Ogle met with an employee of
Survco, Mike F o l e y , regarding additional a e r i a l photography of
Kenyon N o b l e ' s Sourdough g r a v e l p i t l o c a t e d i n Bozeman and its
Logan g r a v e l p i t l o c a t e d i n Logan, Montana. Ogle d i d n o t o b t a i n
a n e s t i m a t e of t h e c o s t of t h e S o u r d o u g h and Logan p h o t o g r a p h s .
Foley testified he expressed his concern to Burgess that the
s c o p e of O g l e ' s work had i n c r e a s e d c o n s i d e r a b l y b u t B u r g e s s t o l d
him t o p r o c e e d w i t h t h e work.
I n J a n u a r y 1 9 8 1 , PC1 c o n d u c t e d t h e a e r i a l p h o t o g r a p h y of t h e
B e l g r a d e , S o u r d o u g h , and N o r t h Rouse l u m b e r y a r d . The PC1 f l i g h t
was made s p e c i f i c a l l y f o r O g l e ' s work and n o t i n c o n j u n c t i o n w i t h
any other p r o j e c t s . A f t e r PC1 t o o k t h e a e r i a l p h o t o g r a p h s , F o l e y
received contact prints from PCI. Ogle then selected several
p r i n t s and o r d e r e d e n l a r g e m e n t s .
On March 5 , 1 9 8 1 , S u r v c o s e n t Ogle two b i l l i n g statements.
The f i r s t is e n t i t l e d " G r a v e l P i t - B e l g r a d e " and shows a t o t a l
amount d u e of $887. The s e c o n d d e s c r i b e d " P h o t o E n l a r g e m e n t s @
Livingston, MT." and shows a t o t a l amount due of $270. These
b i l l s were p a i d by O g l e i n f u l l .
I n May 1 9 8 1 , Ogle o r d e r e d more p h o t o e n l a r g e m e n t s of t h e f o u r
aerial projects. Ogle t e s t i f i e d he u n d e r s t o o d t h e c o s t of the
a d d i t i o n a l p r i n t s was n o t included i n t h e March b i l l i n g state-
m e n t s which were a l r e a d y p a i d . S u b s e q u e n t l y , Ogle r e c e i v e d t h e
additional prints. On A u g u s t 2 8 , 1 9 8 1 , S u r v c o s e n t O g l e a t h i r d
b i l l s e e k i n g payment of $ 2 , 0 5 5 f o r work d o n e on t h e f o u r p h o t o
projects. S u r v c o c l a i m e d $ 2 , 0 5 5 had b e e n p a i d t o PC1 b y S u r v c o
f o r t h e Ogle p r o j e c t s . Ogle r e f u s e d t o pay. S u r v c o t h e n com-
menced t h i s a c t i o n s e e k i n g payment from O g l e i n t h e amount of
$2,055. A t r i a l was h e l d on November 8 , 1 9 8 2 , and on November
23, 1982, the D i s t r i c t Court entered i t s 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. The D i s t r i c t Court found Survco did not
s u b s t a n t i a t e i t s c l a i m by a p r e p o n d e r a n c e of t h e e v i d e n c e . The
District Court entered judgment on December 6, 1 9 8 2 . Survco
appeals .
Survco's first claim of error stems from the following
c o n c l u s i o n of t h e D i s t r i c t C o u r t :
" P l a i n t i f f p l e a d a n a c t i o n b a s e d upon a n
e x p r e s s c o n t r a c t b u t attempted t o prove a
c a u s e of a c t i o n i n quantum m e r u i t ; i t i s f a t a l
t o p l a i n t i f f ' s c a u s e t o a l l e g e and p r o v e a n
e x p r e s s c o n t r a c t and t o a t t e m p t t o r e c o v e r
judgment b a s e d upon a t h e o r y of quantum m e r u i t
b e c a u s e t h e t e r m s of t h e c o n t r a c t l i m i t s u c h
recovery t o t h e agreed p r i c e f o r t h e s e r v i c e s
rendered."
Survco argues this i s a m i s s t a t e m e n t of Montana law. The
District Court, in a memorandum, explained its position as
follows:
" T h i s is b a s i c a l l y a c a s e c e n t e r i n g a r o u n d t h e
f a c t s t o d e t e r m i n e t h e i n t e n t of t h e p a r t i e s
and t h e t e r m s of t h e a g r e e m e n t a l l e g e d t o have
occurred.
" T h e r e is no d i s p u t e t h a t t h e y e n t e r e d i n t o a
c o n t r a c t f o r a e r i a l survey photography. The
r e a l c r u x of t h e d i f f e r e n c e i s t h e p r i c e f o r
such s e r v i c e s . P l a i n t i f f apparently takes the
p o s i t i o n of an e x p r e s s c o n t r a c t and t h e n moves
i n t o a n a r e a of quantum m e r u i t . T h i s is where
it g e t s its d i f f i c u l t y . K e n e a l l y v. O r g a i n ,
37 S t . R p t r . 1 5 4 , 606 P.2d 127 ( 1 9 8 0 ) .
I1 I
. . . ( T ) h e r e c a n be no e x p r e s s o r i m p l i e d
c o n t r a c t f o r t h e same t h i n g e x i s t i n g a t t h e
same time.' Weston v. Montana S t a t e Hwy.
Com'n, 37 S t . R p t r . 236, 2 3 8 , 606 P.2d 1 5 0 , 1 5 2
(1980).
"Even a l l o w i n g quantum m e r u i t , t o go f u r t h e r
and a l l o w a d d i t i o n a l c o s t s when t h o s e a d d i -
t i o n a l e x p e n s e s s h o u l d have b e e n f o r e s e e n , w e
run into r e a l d i f f i c u l t y i n contract for-
mation. Modern B u i l d e r s , I n c . of Tacoma v.
Manke, 27 Wash.App. 8 6 , 615 P.2d 1 3 3 2 ( 1 9 8 0 ) .
"The p l a i n t i f f h e r e is by i t s a c t s bound by
i t s own s t a k e s and e v e n i f we s h o u l d go t o the
f u r t h e r s t e p and i g n o r e t h e c o n t r a c t law the
p l a i n t i f f f a i l e d t o p r o v e t h e c o s t of the
e x t r a expenses."
Contracts are either express or implied, a n e x p r e s s is one
the t e r m s of which a r e s t a t e d i n words, an implied is one t h e
e x i s t e n c e and t e r m s of which a r e m a n i f e s t e d by c o n d u c t . Section
28-2-103, MCA. H e r e , t h e r e i s no q u e s t i o n B u r g e s s and O g l e made
a n e x p r e s s c o n t r a c t t o o b t a i n a e r i a l p h o t o g r a p h s of t h e B e l g r a d e
gravel p i t , t h e N o r t h Rouse l u m b e r y a r d , and t h e c o m m e r c i a l p r o -
perty in Livingston. In October 1980, Ogle contracted with
S u r v c o t o o b t a i n a e r i a l p h o t o g r a p h s of t h e Sourdough and Logan
gravel pits. I n May 1 9 8 1 , Ogle o r d e r e d a d d i t i o n a l p h o t o e n l a r g e -
m e n t s of the four a e r i a l projects. In these projects the cost
was not expressly stated but the District Court found Ogle
assumed t h a t t h i s s e r v i c e would be s i m i l a r t o t h e a e r i a l p h o t o -
graphy ordered previously. Thus, t h e D i s t r i c t Court appears t o
h a v e f o u n d t h e a d d i t i o n a l work requested after the initial was
g o v e r n e d by a n i m p l i e d c o n t r a c t , t h e t e r m s b e i n g s i m i l a r t o t h a t
of the express c o n t r a c t .
The D i s t r i c t C o u r t l i m i t e d S u r v c o ' s r e c o v e r y t o t h e March 5 ,
1981, billing statement because, "it is fatal to plaintiff's
c a u s e t o a l l e g e and p r o v e an e x p r e s s c o n t r a c t and t o a t t e m p t t o
r e c o v e r judgment b a s e d on a t h e o r y of q u a n t u m m e r u i t b e c a u s e t h e
t e r m s of t h e c o n t r a c t l i m i t s u c h r e c o v e r y t o t h e a g r e e d p r i c e f o r
t h e s e r v i c e s rendered." W i n t e r p r e t t h i s s t a t e m e n t t o mean t h e
e
District Court o n l y allowed recovery for what it found to be
payment under the express contract. It is f a t a l t o a l l e g e a n
implied contract and prove an express contract, however, one
having an e x p r e s s contract which he has performed may sue in
quantum m e r u i t and u s e t h e c o n t r a c t a s p r o o f of the reasonable
v a l u e of his services. K e n e a l l y v. Orgain (1980), Mont.
---- , 606 P.2d 1 2 7 , 1 2 9 , 37 S t . R e p . 154. T h i s is what S u r v c o
attempted. S u r v c o a r g u e s t h e l i m i t a t i o n of i t s r e c o v e r y b a s e d on
the D i s t r i c t Court's i n t e r p r e t a t i o n of c o n t r a c t law c o n s t i t u t e s
reversible error. W agree.
e
Ogle testified he did not think the March 5, 1981, bill
i n c l u d e d a l l t h e a m o u n t s owing on t h e a e r i a l p h o t o g r a p h s , he j u s t
did not b e l i e v e S u r v c o was e n t i t l e d t o a n e x t r a $ 2 , 0 5 5 . Ogle
d o e s n o t a p p e a r t o d i s p u t e t h e e x i s t e n c e of a n i m p l i e d c o n t r a c t
for the additional work. He has a c c e p t e d t h e b e n e f i t s of the
c o n t r a c t by o b t a i n i n g p r i n t s of a l l t h e a e r i a l p h o t o g r a p h pro-
jects. W f i n d O g l e m u s t be r e q u i r e d
e t o pay f o r t h a t which he
h a s r e c e i v e d and t h a t t h e D i s t r i c t C o u r t ' s l i m i t a t i o n of S u r v c o ' s
r e c o v e r y was i n e r r o r .
Survco has a l s o a l l e g e d a s e r r o r t h e District C o u r t ' s r e f u s a l
t o a d m i t p l a i n t i f f ' s e x h i b i t number 5 w h i c h i s an i t e m i z e d s t a t e -
ment prepared by Survco showing costs and disbursements con-
cerning t h e a e r i a l photography. Ogle o b j e c t e d t o t h e a d m i s si o n
of this exhibit claiming it contains hearsay statements con-
cerning PCI's total and itemized charges. Ogle contends an
employee of PC1 m u s t be c a l l e d a s a w i t n e s s t o t e s t i f y a s t o t h e
amounts it b i l l e d Su rv c o f o r t h e a e r i a l photography, prints, and
enlargements. W f i n d no e r r o r i n a l l o w i n g S u r v c o ' s r e c o r d k e e p e r
e
t o t e s t i f y a s t o t h e amounts S u r v c o c l a i m s i t h a s p a i d t o PC1 f o r
t h e photography. T h e s e r e c o r d s were k e p t i n S u r v c o ' s r e g u l a r l y -
conducted business activity and admissible under R u l e 8 0 3 (6),
M.R.Evid. S u r v c o c o u l d p r o v i d e s t r o n g e r f o u n d a t i o n by c a l l i n g a
w i t n e s s from PC1 t o e s t a b l i s h c r e d i b i l i t y f o r t h e c h a r g e s . We
f i n d no need f o r f u r t h e r comment upon t h i s i s s u e f o r p u r p o s e s of
retrial.
R e v e r s e d and remanded f o r a new t r i a l .
W e concur:
~AJw&&
Chief J u s t i c e