Baskett v. Goldammer

No. 96-636
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
RICHARD M. BASKETT and KATHLEEN T. BASKETT,
Plaintiffs and Respondents,
v.
RONALD W. GOLDAMMER, d/b/a GOLDAMMER
CONSTRUCTION & DESIGN,
Defendant and Appellant.
and
WILLIAM HOFF, d/b/a CUSTOM CABINETS UNLIMITED,
Plaintiff and Respondent,
RONALD W. GOLDAMMER, d/b/a GOLDAMMER
CONSTRUCTION AND DESIGN, and RICHARD M. BASKETT
and KATHLEEN T. BASKETT, Husband and Wife,
Defendants and Respondents
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
The Honorable Ed McLean, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Don Torgenrud; Attorney at Law;
St. Ignatius, Montana
For Respondents:
Milton Datsopoulos; Datsopoulos, MacDonald
& Lind; Missoula, Montana
Submitted on Briefs: February 20, 1997
Decided: March 25, 1997
Filed:
Justice Jim Regnier delivered the opinion of the Court.
Pursuant to Section I, Paragraph 3(c), Montana Supreme Court
1995 Internal Operating Rules, the following decision shall not be
cited as precedent and shall be published by its filing as a public
document with the Clerk of the Supreme Court and by a report of its
result to State Reporter Publishing Company and West Publishing
Company.
Richard and Kathleen Baskett filed a motion in the Fourth
Judicial District Court, Missoula County, for an order entering
judgment pursuant to the settlement agreement. On August 15, 1996,
after hearing testimony, the Fourth Judicial District Court entered
its order granting the Basketts' motion, ordering Goldammer to
remove his construction lien, and dismissing the case with
prejudice. Goldammer appeals. We affirm.
The issues on appeal are:
1. Was the settlement agreement an agreement for arbitration
under the Montana Uniform Arbitration Act, § 27-5-101 through
-324, MCA?
2. If the settlement agreement was not a formal agreement
for arbitration under the Montana Uniform Arbitration Act, did the
District Court err in concluding that the agreement was properly
executed and awarding judgment in favor of the Basketts?
FACTUAL BACKGROUND
In 1991, the Basketts purchased a house in Missoula and
entered into a written contract with Goldammer by which Goldammer
agreed to renovate the home. The Basketts originally intended to
2
remodel the home and sell it for a profit or keep the property as
a rental home. The written contract provided that the renovations
would be completed in accordance with the detailed specifications
for a fixed sum of $35,000. During the performance of the original
contract the Basketts decided they wanted to live in the home after
the construction was completed. They therefore requested upgraded
materials and additional work to be completed by Goldammer.
The additional changes were not reduced to writing but were
agreed upon orally by the Basketts and Goldammer. As the work
progressed, disagreements arose between the parties involving what
items of construction had been completed, the value of the extra
work completed, and which items of work could be credited to the
original written contract. The Basketts prepared a proposed
written change order and submitted it to Goldammer. In response to
this change order, Goldammer submitted a proposal to the Basketts.
The proposal was rejected by the Basketts as it proposed a change
from a fixed contract price to a time and materials contract.
On November 27, 1991, Goldammer advised the Basketts that the
job would cost at least $87,000, and that figure did not include
several thousands of dollars of bills he anticipated from
subcontractors. The Basketts had a meeting with Goldammer on
November 29, 1991, and advised him that any additional payments
they made would have to be jointly made to subcontractors and
himself since the figures he provided showed substantial sums
unpaid to subcontractors. Goldammer stated he could not complete
the job under those circumstances and performed no additional work.
The Basketts hired another builder and retained Goldammer's work
crew to complete the work. On December 19, 1991, Goldammer filed
a construction lien on the Basketts ' property for amounts allegedly
owed by the Basketts. The Basketts brought suit to require
Goldammer to remove the lien and Goldammer countersued. One of the
subcontractors, William Hoff, d/b/a Custom Cabinets Unlimited,
brought suit against Goldammer and the Basketts. The suit by Hoff
was dismissed with the subcontractor assigning his claim to the
Basketts .
The parties then participated in several settlement
conferences. Eventually, the Basketts offered to Goldammer that
they jointly employ an architect to make the determination of how
much of the final project consisted of work that was provided by
the contract, and how much consisted of work attributable to
changes to the contract. The Basketts further offered that if the
architect determined that any amount was owed by them to Goldammer,
they would pay that amount and, on the other hand, if the architect
determined that the Basketts had paid more than what was required
of them, Goldammer would not have to pay the Basketts, but would be
required only to remove his construction lien. This offer was
reduced to a settlement agreement entered into by both parties.
The settlement agreement provided that a Missoula-based architect,
Eric Hefty, was to be employed to complete the terms of the
agreement. On July 6, 1995, the District Court entered an order
approving the parties' agreement and requiring that the parties
complete the agreement and report back to the court within thirty
days of the architect's report.
The parties had the opportunity to meet with Hefty, discuss
the work that had been completed, and answer any questions Hefty
had. Hefty issued his report on October 20, 1995, which
recommended that the construction lien be released. This report
was supplemented by his report on November 3, 1995, in which Hefty
included certain additional amounts that had been paid by the
Basketts, showing that their total payments exceeded the amounts
claimed by Goldammer. Hefty issued a third and final report on
February 29, 1996, which affirmed his earlier reports.
On July 29, 1996, the District Court held an evidentiary
hearing and heard testimony from Eric Hefty, George Bingham, an
expert witness for Goldammer, and from Goldammer himself. Upon
considering the evidence and testimony presented, and the briefs
filed by the parties, the District Court entered its order granting
the Basketts' motion and entered judgment in favor of the Basketts,
and required Goldammer to remove his construction lien. Goldammer
appeals this order.
ISSUE 1
Was the settlement agreement an agreement for arbitration
under the Montana Uniform Arbitration Act, § 27-5-101 through
-324, MCA?
Goldammer asserts that the District Court abused its
discretion in confirming the arbitrator's award and in failing to
find and conclude that the arbitrator exceeded his powers granted
Goldammer fails to base his assertions upon the determination
of the District Court to enforce the terms of the settlement
agreement, and instead asserts that he is not bound by the results
of the arbitration conducted by the architect. The settlement
agreement was not drafted pursuant to the arbitration requirements
under the Montana Uniform Arbitration Act. The judgment was not
entered by Hefty but by the District Court. Goldammer's appeal of
Hefty's determination is misplaced, as no formal arbitration
pursuant to the Montana Uniform Arbitration Act was conducted.
ISSUE 2
If the settlement agreement was not a formal agreement for
arbitration, did the District Court err in concluding that the
agreement was properly executed and awarding judgment in favor of
the Basketts?
The District Court did not clearly define the architect's role
as an arbitrator or master. The parties and the court referred to
Hefty both as a arbitrator and a settlement master. An overview of
the facts and procedure followed, however, seem to best correspond
to those of a master. We therefore review the District Court's
actions in approving the master's report and concluding that the
agreement was properly executed under the standards of review for
Rule 53, M.R.Civ.P.,which sets forth the authority of a master and
the procedures to be followed by the trial court and the master.
A review of the District Court's order demonstrates that the
District Court did consider the master's findings set forth in his
report in light of the settlement agreement's terms. Rule
7
53(e)(2), M.R.Civ.P., states that the trial court shall accept the
master's findings of fact unless they are clearly erroneous.
At the hearing on the master's report, Goldammer contended
that Hefty inappropriately relied upon the market value of the
house in making his findings and therefore exceeded the scope of
his authority. Goldammer raises this issue again on appeal and
argues that the District Court incorrectly determined that Hefty
did not rely on a market value analysis. Hefty testified at the
hearing that he did not rely upon a market value analysis in
reaching his final determination. Goldammer also contends on
appeal that the District Court did not consider the testimony of
his expert witness, Bingham, as to Hefty's possible reliance on a
market value analysis. The District Court made a specific finding
that Hefty relied upon market value only for informational purposes
and did not use market value in determining the value of the change
orders provided to the Basketts. This finding is supported by
substantial evidence in the record. This Court will not substitute
its judgment for that of the trial court when the issue relates to
the credibility of the witness or the weight given to certain
evidence. Wunderlich v. Lumbermens Mut. Cas. Co. (1995), 270 Mont.
404, 409, 892 P.2d 563, 566.
Absent any clear error, the master's findings of fact were
properly accepted by the District Court. See Fiedler v. Fiedler
(l994), 266 Mont. 133, 879 P.2d 675. The District Court did not
find that the master's report contained anything clearly erroneous
and therefore correctly concluded that the settlement agreement was
binding upon the parties and should be enforced. Although the
District Court erred by not following all of the procedures
outlined in Rule 53, M.R.Civ.P., we conclude that the error was
harmless and does not warrant reversal as it did not materially
affect the rights of the party. In re Marriage of Dreesbach
(1994), 265 Mont. 216, 226, 875 P.2d 1018, 1024.
After reviewing the record we determine that the District
Court's finding that the settlement agreement was complied with was
supported by substantial evidence in the record. Furthermore, we
determine that the District Court has not misapprehended the effect
of the evidence, and our review of the record has not left us with
a definite and firm conviction that a mistake has been made.
Interstate Prod. Credit Ass'n v. DeSaye (1991), 250 Mont. 320, 322,
820 P.2d 1285, 1287.
We affirm.
We Concur: