CHANDLER v MADSEN

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No. 81-265 IN THE SUPREME COURT OF THE STATE OF MONTANA SHELDON CHANDLER and MARILYN CHANDLER, husband and wife, Plaintiffs land Respondents, ROBERT H. MADSEN, Defendant and Appellant. Appeal from: District Court of the Thirteenth Judicial District, In and for the County of Yellowstone Honorable Robert Wilson, Judge presiding. Counsel of Record: For Appellant: Hibbs, Sweeney, Colberg, Jensen and Koessler, Billings, Montana Maurice Colberg argued, Billings, Montana For Respondents: Crowley, Haughey, Hanson, Toole & Dietrich, Billings, Montana Bruce Toole argued, Billings, Montana Submitted: Decided: MAR Filed. 15 7982 December 4, 1981 nRp1 5 @tl 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 the Court. 'This a p p e a l Marilyn Chandler, arises from a husband complaint and w i f e , s e e k i n g damages f o r n e g l i g e n c e , the of Opinion by Sheldon and a g a i n s t R o b e r t Yladsen, b r e a c h of implied warranty of h a b i t a b i l i t y and s t r i c t l i a b i l i t y i n t o r t . In into a the respondents, agreement a house, Billings, $90,280, At 1977, buy-sell purchase near April built Montana. the with the by him, at The Chandlers, appellant, entered Madsen, to 3203 S i l v e r w o o d S t r e e t agreed purchase price was which was p a i d when t h e b u i l d i n g was t r a n s f e r r e d . t i m e of this agreement, t h e framework on t h e h o u s e was i n p l a c e , b u t t h e b u i l d i n g was n o t c o m p l e t e d . Madsen, a civil engineer working for the United S t a t e s Government, had c o n s t r u c t e d a number of b u i l d i n g s f o r s a l e on h i s own, i n c l u d i n g s i n g l e f a m i l y r e s i d e n c e s . In pleted the the summer final. and f a l l of landscaping of 1977, the t h e Chandlers lot and com- installed a swimming p o o l and s p r i n k l i n g s y s t e m . I n J u n e 1 9 7 7 , t h e C h a n d l e r s moved i n t o t h e h o u s e and immediately sticking experienced and locks problems failing to with doors operate. and The windows Chandlers n o t i c e d c r a c k s i n t h e bedroom w a l l s and a hump i n t h e l i v i n g room floor basement. which was above a supporting partition in the Through h i s e m p l o y e e s , Madsen made a d j u s t m e n t s t o the doors, but they continued t o s t i c k . By cracks the May i n most floors, locks, 1978, additional rooms o f broken settling t h e house, windows, had bending inoperative bowed d e c o r a t i v e room d i v i d e r s , c r a c k e d basement w a l l s and f l o o r s , caused severe and b u l g i n g o f doors and b e n t plumbing, door badly s e p a r a t i o n between f i r e - place tiles, masonry and the separation house between structure, bathtubs cracked and bathroom walls, uneven b a s e m e n t f l o o r s and g e n e r a l u n s i g h t l y i n t e r i o r o f t h e h o u s e . The s e t t l e m e n t d e v e l o p e d s o t h a t p a r t s of t h e f o u n d a t i o n on t h e w e s t s i d e o f t h e h o u s e were a s much a s 3 . 6 i n c h e s l o w e r t h a n t h e f o u n d a t i o n on t h e e a s t s i d e . A depression extends along in question in c o l l e c t s water an east-west periodically t h e n o r t h end o f t h e l o t direction. and h a s done t h e C h a n d l e r s took p o s s e s s i o n of door n e i g h b o r s of tion that prevent depression The so since before t h e house. Former next- t h e Chandler house t e s t i f i e d v i a deposi- t h e y had t o r e f r a i n from w a t e r i n g t h e i r "ponding" i n t h e depression both during lawn t o and after c o n s t r u c t i o n of t h e C h a n d l e r h o u s e and t h a t w a t e r c o l l e c t e d periodically done. i n t h e depression before According to the any l a n d s c a p i n g landscaper, Jim Sturn, c h a n g e i n g r a d e h e made n e a r t h e n o r t h end o f t h e removal of some e a r t h n e a r t h e deck, the was only t h e l o t was which would h a v e t e n d e d t o improve d r a i n a g e o u t o f t h e d e p r e s s i o n . Piadsen testified he created e a s t and west t o c o l l e c t w a t e r a depression extending and c o n s t r u c t e d a s w a l e on t h e e a s t s i d e of t h e h o u s e t o d r a i n t h e a r e a . The d e p r e s - s i o n Madsen c r e a t e d was s u c h t h a t i t would be d i f f i c u l t t o observe with the naked eye. He did not use any survey i n s t r u m e n t o r t r a n s i t t o d e t e r m i n e i f i n f a c t t h e a r e a would drain, nor d i d h e i n f o r m t h e C h a n d l e r s t h e y s h o u l d p r o c e e d t o create drainage. The house which, when wet, is located becomes on moisture-sensitive compressible. w a t e r i n t h e s o i l c a u s e d s e t t l i n g of soil The p r e s e n c e the footings, of founda- t i o n s , and o t h e r p a r t s o f t h e h o u s e which i n t u r n c a u s e d t h e e x t e n s i v e damage t o t h e s t r u c t u r e . T e s t i m o n y showed a n e s t i m a t e d c o s t o f repairing the h o u s e was $ 6 5 , 0 0 0 . T h i s e s t i m a t e was c a l c u l a t e d on a c o s t plus with overhead basis c e r t a i n p o r t i o n s of however, that a a 12% contingency t h e work. firm price Further contract Chandlers to t h e work. move out of The for the repair home would considering the r e p a i r s would their for testimony revealed, c o s t 50% more t h a n t h e e s t i m a t e , o r $ 9 7 , 5 0 0 , c o n t i n g e n c i e s of allowance for require three to the four months. The case a jury. without was heard by On J a n u a r y issued findings of Madsen liable to fact District the 15, and t h e Chandlers 1981, the sitting t h e D i s t r i c t Court conclusions on Court of law holding t h e o r i e s of implied w a r r a n t y and n e g l i g e n c e and a w a r d i n g damages of $ 1 0 7 , 4 6 2 . 5 1 . m o t i o n s t h e D i s t r i c t C o u r t amended i t s Following p o s t - t r i a l o r d e r on F e b r u a r y 2 6 , gence and reduction rental reducing deleted and storage. 1981, d e l e t i n g t h e f i n d i n g of the damage $4,000 $3,487.51 award previously previously to $99,975.00. awarded awarded negli- for for The temporary moving and From t h i s o r d e r , b o t h p a r t i e s a p p e a l . The i s s u e s b e f o r e t h i s C o u r t a r e : 1. Whether appellant, as a builder-vendor of a r e s i d e n c e which he s o l d t o r e s p o n d e n t s , may be h e l d l i a b l e to respondents under the doctrine of implied warranty of habitability? 2. Whether t h e D i s t r i c t C o u r t e r r e d i n n o t a l l o w i n g a p p e l l a n t t o r e c o v e r t h e amount c l a i m e d on h i s c o u n t e r c l a i m ? 3. Whether t h e D i s t r i c t C o u r t e r r e d i n d e l e t i n g i t s finding that the appellant's negligence was the proximate cause of respondents' damages? Whether appellant is liable unJer the doctrine of 4. strict liability in tort? 5. Whether the District Court erred in the award of damages? IMPLIED WARRANTY OF HABITABILITY The question of the liability of a builder-vendor of a new residence to the first purchaser under an implied warranty of habitability is one of first impression before this Court. Caveat emptor, which traditionally has applied to sal.es of real estate, developed at a time when a buyer and seller were in equal bargaining positions. comparable skill and They were of knowledge and eacn could protect himself in a transaction. In the modern marketplace that equality of position no longer necessarily exists, and a growing number of jurisdictions have abandoned caveat emptor in favor of implied warranties where a builder-vendor Yepsen v. Pollard v. Cal.Rptr. Saxe & Yoll- 269 Or. 635, 525 Development Co. =. P.2d 1019; (1974), 115 648, 12 Cal.3d 374, 525 P.2d 88; Hanavan v. Dye (1972), 4 Bechtel (1974), Burgess sells a new residence. Ill.App.3d (1966), 576, 281 N.E.2d 91 Idaho 55, 415 P.2d 398; Bethlahmy v. 698; Carpenter v. Donohoe (1964), 154 Colo. 78, 388 P.2d 399. We agree with the Oregon Supreme Court which stated in Yepsen that the essence of the transaction between a builder-vendor and a buyer is an implicit agreement that the seller w i l l transfer tion. i s n o t i n an e q u a l b a r g a i n i n g p o s i t i o n and The b u y e r is e s s e n t i a l l y knowledge is s u i t a b l e f o r h a b i t a - a h o u s e which forced regarding to rely the on the habitability seller's of the and skill house. In a d d i t i o n , t h e b u i l d e r i s i n a b e t t e r p o s i t i o n t o e x a m i n e and discover defects. The Yepsen v . B u r g e s s , doctrine r e a l i t i e s of c a v e a t emptor the marketplace. builder-vendor of is residence of a 525 P.2d a t 1 0 2 2 . new in longer Therefore, home constructed no serves we h o l d t h a t t h e impliedly warrants a the that the and is implied warranty of workmanlike manner suitable for habitation. Madsen a r g u e s t h a t habitability is adopted, because defect the even if the it should not apply i n t h i s c a s e which caused the damage is here not s t r u c t u r a l b u t r a t h e r is i n h e r e n t i n t h e l a n d . I n t h i s c l a i m , Madsen r e l i e s p r i m a r i l y on B e r i , v. Salishan Properties, 173, the where the plaintiffs d e f e n d a n t on eroding. apply Inc. ( 1 9 7 8 ) , 282 Or. leased oceanfront lots buildings which 569, Inc. 580 P.2d constructed by s u b s e q u e n t l y began The Oregon c o u r t found a n i m p l i e d w a r r a n t y d i d n o t because the defect--susceptibility s o l e l y t o do w i t h t h e i n h e r e n t n a t u r e of to erosion--had t h e land and was n o t a p r o d u c t of t h e b u i l d e r ' s work on t h e l a n d . In Beri, supra, the land o c e a n f r o n t where t h e p r o s p e c t o f if not certain, at least lessees as to seller-lessors. gives no indication that in question was on the e r o s i o n s h o u l d have been, equally as apparent to buyer- In addition, the Beri opinion the erosion was furthered by a n y t h i n g o t h e r t h a n t h e n a t u r a l a c t i o n of t h e ocean. That is not so in the present case. Here, the District Court found Chandler h o u s e was the cause of of the presence settling water damage in " p o o l i n g " of wa t e r part of s o i l was n o t a t t h e n o r t h end o f the defective condition. if the water collected The f a c t o f sole defect. The t h e h o u s e was also The D i s t r i c t at the the moisture- s e n s i t i v e s o i l upon which t h e h o u s e was b u i l t . the moisture-sensitive to the north Court a l s o found that, end of the house, it d i d s o b e f o r e any l a n d s c a p i n g by t h e C h a n d l e r s and was n o t c a u s e d by t h e C h a n d l e r s . A basic whether concern i n applying t h e implied warranty the defect of t h e house. 599 P . 2 d tial to r e l a t e s e s s e n t i a l l y t o u s e f u l occupancy Mazurek v . N i e l s e n 269; Yepsen, occupancy Yepsen, supra septic tank is but 1 9 7 5 ) , 542 P.2d ( 1 9 7 9 ) , 42 Colo.App. not strictly involved drainfield); 291, structural. improper Tavares v. 1275 ( s e p t i c d r a i n f i e l d c l a y s o i t would n o t d r a i n ) ; F o r b e s v . Or. 583 P.2d 552 386, Sometimes a d e f e c t i s e s s e n - supra. (defect and is ( w e l l water See: construction Horstman installed Mercado of (Wyo. i n gumbo ( 1 9 7 8 ) , 283 u n u s a b l e because of h i g h iron content). Madsen a r g u e s h e had no r e a s o n t o s u s p e c t t h e r e was a moisture-sensitive s o i l which would c a u s e s e t t l i n g . But t h a t is not the issue. The c o n c e p t h e r e i s n o t o n e o f wrong-doing but, rather, where o n e of f a u l t or two i n n o c e n t p a r t i e s w i l l s u f f e r , which was i n t h e b e t t e r p o s i t i o n t o p r e v e n t t h e harm? Whether o r n o t t h e r e was r e a s o n f o r Madsen t o s u s p e c t the problem, better as position the to builder-vendor prevent the he c l e a r l y was problem. We, in the therefore, a f f i r m t h e D i s t r i c t Court r e g a r d i n g Madsen's l i a b i l i t y under t h e implied warranty. COUNTERCLAIM Madsen agree counterclaimed remained Madsen. unpaid for 'The D i s t r i c t entitled to the consideration. because the for $637 specific which "extras" Court concluded counterclaim the Chandlers completed by t h a t Madsen was n o t because of failure of Madsen a r g u e s t h i s c o n c l u s i o n was i n c o r r e c t defense of failure of consideration was not a l l e g e d by t h e C h a n d l e r s a s an a f f i r m a t i v e d e f e n s e o r r a i s e d in their pretrial order and because i s no e v i d e n c e there t h a t Madsen d i d n o t p e r f o r m t h e work f o r t h o s e e x t r a s . Failure which m u s t If an consideration be p l e a a affirmative waived. Inc. of is an affirmatively. is defense not Rule plead, Cir. defense 8 ( c ) , M.R.Civ.P. it is g e n e r a l l y I n c . v . Madison H o t e l , C a m a l i e r & Buckley-Madison, (D.C. affirmative 1 9 7 5 ) , 5 1 3 F.2d 407. The key t o d e t e r m i n i n g t h e s u f f i c i e n c y of t h e p l e a d i n g of an a f f i r m a t i v e d e f e n s e i s w h e t h e r i t g i v e s f a i r n o t i c e of t h e d e f e n s e . N a t i o n a l Bank ( 9 t h C i r . 1 9 7 9 ) , 607 F.2d Wyshak v . C i t y 824. H e r e , t h e C h a n d l e r s d i d n o t s p e c i f y t h e i r r e l i a n c e on f a i l u r e of c o n s i d e r a t i o n a s a d e f e n s e t o Madsen's counter- claim e i t h e r Sheldon i n t h e p l e a d i n g s o r t h e i r p r e t r i a l memorandum. Chandler testified at trial that among the items purchased f o r t h e house i n a d d i t i o n t o t h o s e included i n t h e purchase price testified $637. that The were he "extras" had evidence paid does from Madsen not Madsen. $1,500 specify what Chandler and also s t i l l owed "extras" were i n v o l v e d nor d o e s i t e s t a b l i s h t h a t t h o s e " e x t r a s " w e r e n o t supplied. W e find consideration the Chandlers' here was failure fatal to to that plead failure defense, and of the D i s t r i c t C o u r t ' s c o n c l u s i o n i s u n s u p p o r t e d by t h e e v i d e n c e . NEGLIGENCE I n i t s o r i g i n a l f i n d i n g s of law the bility District of Court providing found f a c t and c o n c l u s i o n s o f that drainage Madsen around the had a house responsito prevent damage t o t h e h o u s e and t h a t Madsen n e g l i g e n t l y f a i l e d t o d o so. t h e D i s t r i c t Court Further, caused or contributed to found Pladsen's the cause negligence enter the stated the water to s u b s o i l and t h e h o u s e t o s e t t l e . The amended Chandlers Madsen's failed findings to carry and conclusions their burden of n e g l i g e n c e was t h e p r o x i m a t e c a u s e of proof that t h e damage. The C h a n d l e r s a r g u e t h a t g i v e n t h e D i s t r i c t C o u r t ' s f i n d i n g t h a t t h e m o s t p r o b a b l e c a u s e o f t h e damage t o t h e h o u s e was water under the footings, t h e o n l y e x p l a n a t i o n i s Pladsen's conduct. On r e v i e w , District Court's t h e s t a n d a r d w e m u s t a p p l y is whether conclusion c r e d i b l e e v i d e n c e and t h e l a w . d i s t u r b it. , P . 2d Mont. is supported If substantial s o , t h i s Court w i l l n o t Woodahl v . Matthews ( 1 9 8 2 ) , 39 S t . R e p . by the - Mont. -, - 238; L a u t e r j u n g v . J o h n s o n ( 1 9 7 7 ) , 1 7 5 74, 572 P.2d 511. Although resulted Court ' s in a our weighing different findings and of the conclusion, conclusions we facts find regarding might the have District negligence are s u p p o r t e d by s u b s t a n t i a l e v i d e n c e t h a t t h e C h a n d l e r s f a i l e d t o prove Madsen's n e g l i g e n c e . STRICT L I A B I L I T Y S i n c e w e h a v e d e t e r m i n e d l i a b i l i t y h e r e on t h e t h e o r y of we f i n d i t u n n e c e s s a r y t o d i s c u s s t h e implied warranty, s t r i c t l i a b i l i t y doctrine. DANAGES Macisen cost of claims repairs the at District is punitive, $97,500 u n s u p p o r t e d by t h e e v i d e n c e . on Spackman v . 414 P.2d resulting property. 918, from R a l p h M. in sewage finding of the speculative and H e r e l i e s heavily i n h i s claim P a r s o n s Co. which Court's the ( 1 9 6 6 ) , 147 Mont. plaintiff flooding to sought personal 500, damages and real Madsen a r g u e s t h a t Spackman f o r g e s a s t r i c t r u l e of law i n Montana t h a t t h e m e a s u r e o f damages is t h e c o s t o f repair if t h e c o s t i s less t h a n t h e d i m i n u t i o n i n v a l u e of property but i n no c a s e w i l l t h e r e c o v e r y e x c e e d t h e v a l u e of t h e p r o p e r t y b e f o r e i n j u r y . Spackman d o e s n o t s e t t h i s p r i n c i p l e o u t , h o w e v e r , a s a hard-and-fast rule but, rather, as a guide to common sense: "Where damage t o p r o p e r t y i s c o n c e r n e d , t h e p u r p o s e of a w a r d i n g damages i s t o r e t u r n t h e p a r t y i n j u r e d t o t h e same, o r a s n e a r l y a s p o s s i b l e t h e same, c o n d i t i o n a s he e n j o y e d before the injury t o h i s property ... " I n g e n i o u s men h a v e p r o p o u n d e d i n g e n i o u s m e t h o d s , s y s t e m s and f o r m u l a s f o r d e t e r m i n i n g i n monetary t e r m s t h e v a l u e of p r o p e r t y p a r t i a l l y damaged o r d e s t r o y e d . h h i l e such methods s e r v e a s u s e f u l g u i d e s , t h e f i n a l answer must r e s t i n good s e n s e r a t h e r t h a n mechanical a p p l i c a t i o n of such formulas." Spackman, 1 4 7 M o n t . a t 5 0 6 , 414 P.2d a t 921-922. I n Bos v . D o l a j a k ( 1 9 7 5 ) , 1 6 7 Mont. 1 , 534 P . 2 d 1 2 5 8 , t h i s Court recognized t h a t t h e Spackman r u l e c a n n o t a l w a y s In - t h e defendants contracted with Bos c l e a r l y be a p p l i e d . p l a i n t i f f s t o e r e c t f o r $ 6 , 5 0 0 a g r a i n s i l o which p l a i n t i f f s had p u r c h a s e d s e c o n d h a n d b u t which was t h e e q u i v a l e n t o f new silo. jacks the Defendants secured the raised s i l o with a fewer t h a n r e q u i r e d by t h e c o n s t r u c t i o n manual and a l l o w e d silo During twist to the it so process, a could not windstorm readily threw the be lowered. silo its off f o u n d a t i o n and v i r t u a l l y d e s t r o y e d i t . trial A t $25,274.61: and plaintiffs $15,342.61 $9,932 cost presented damages totaling was t h e c o s t o f loss from replacing the s i l o The use. of jury awarded $17,626.75. T h i s C o u r t a p p r o v e d t h e d e t e r m i n a t i o n o f damages and n o t e d t h a t t h e Spackman r u l e d e a l t w i t h r e a d i l y r e p l a c e a b l e i t e m s w i t h an e s t a b l i s h e d m a r k e t v a l u e . not readily replaceable, value, d i d n o t h a v e an e s t a b l i s h e d m a r k e t and was i n t e g r a l t o plaintiffs' dairy farm, c o n s i d e r a t i o n s were vJhere a n i t e m was a larger this appropriate o p e r a t i o n such a s t h e Court held including that other compensation for l o s s of u s e . In the contractor, would case before testified require that drying out us, Claude repair the of Gerbase, the subsoil, a Billings Chandler cutting the house house l o o s e from i t s f o u n d a t i o n and b r i n g i n g i t t o a l e v e l g r a d e . Once the house was made level and secure, additional c o s m e t i c and s t r u c t u r a l r e p a i r s would be r e q u i r e d i n c l u d i n g replacement of s h e e t r o c k . Gerbase t e s t i f i e d h i s estimated c o s t of r e p a i r of t h e h o u s e was $ 6 5 , 0 0 0 , factor. He which further included a 12 percent contingency testified that because of the c o m p l i c a t e d and u n c e r t a i n n a t u r e o f t h e j o b he would c h a r g e $91,500 to repairs. enter into a fixed price contract for the The D i s t r i c t C o u r t awarded damages o f $ 9 7 , 5 0 0 . Madsen a r g u e s t h e f i n d i n g i s p u n i t i v e and c o n t r a r y t o law i n p a r t b e c a u s e t h e h o u s e was o r i g i n a l l y s o l d f o r t h a n t h e damage a w a r d . Madsen damages repair W disagree. e also claims that proper the less if amount is $65,000 is liable which he was for any Gerbase's Madsen a r g u e s t h e $ 9 7 , 5 0 0 i s s p e c u l a t i v e estimate. i n t h a t i t was q u o t e d by G e r b a s e a s h i s f i x e d c o n t r a c t p r i c e o n l y t o g u a r a n t e e h e would l o s e no money on t h e job. W e disagree. estimate, An particularly subject to where, revision by its as here, it as very nature, the job is is progresses. speculative, complicated and would of It be q u e s t i o n a b l e v a l u e t o t h e C h a n d l e r s t o r e c e i v e $65,000 r e p a i r s only t o discover, once would be s i g n i f i c a n t l y more. into the project, for the cost G i v e n t h e n a t u r e of t h e damage t o t h e C h a n d l e r home and t h e r e p a i r s r e q u i r e d , w e a f f i r m t h e D i s t r i c t C o u r t ' s award f o r r e p a i r s . The Chandlers argue that the District Court erred when i t d e l e t e d t h e c o s t s o f t e m p o r a r y r e n t a l and moving and s t o r a g e from t h e damage a w a r d . The whether a initial breach question of an c o n t r a c t obligation or mination will implied resolving warranty some o t h e r establish r e s u l t of b re a c h . in what P.2d 915, damages S e c t i o n s 27-1-311 this Court found arises obligation. I n F e r g u s o n v . Town Pump, I n c . 580 this are out available a as a MCA. ( 1 9 7 8 ) , 177 Mont. oral of That d e t e r - and 27-1-317, an is issue contract 122, for c o n s t r u c t i o n o f g a s o l i n e s t a t i o n t o c a r r y w i t h i t an i m p l i e d term that skillful the and negligent resulted work would workmanlike be performed manner. in a also It reasonably found that f a i l u r e t o perform according t o t h e implied i n a breach of contract a s w e l l a term as a tort. 177 a t 1 3 1 , 580 P.2d a t 920. Mont. A l t h o u g h h e r e w e do n o t h a v e t h e n e g l i g e n c e component which sustained the tort theory Madsen's breach b r e a c h of an i m p l i e d term of t h e c o n t r a c t . of i m p l i e d w a r r a n t y is a b r e a c h of the provisions sets the of measure section of c o n t r a c t and s u b j e c t t o 27-1-311, damages w e do h a v e a i n Ferguson, for That IJICA. breach of provision an obligation a r i s i n g f r o m a c o n t r a c t a s " t h e amount which w i l l c o m p e n s a t e t h e p a r t y a g g r i e v e d f o r a l l t h e d e t r i m e n t which was p r o x i mately caused thereby or i n t h e o r d i n a r y c o u r s e of things would be l i k e l y t o r e s u l t t h e r e f r o m . " It i s a p p a r e n t t h a t t h e n e c e s s i t y o f moving residence undergoing irlassive repairs and from a renting of a t e m p o r a r y r e s i d e n c e i s l i k e l y t o r e s u l t from major damage t o a structure. We, s t o r a g e and therefore, temporary f i n d t h a t c o s t s f o r moving and rental were improperly deleted from t h e damage award. M a r i l y n C h a n d l e r t e s t i f i e d s h e had o b t a i n e d e s t i m a t e s from a B i l l i n g s r e a l e s t a t e o f f i c e t h a t a s u i t a b l e t e m p o r a r y r e n t a l f o r t h e C h a n d l e r s would c o s t b e t w e e n $600 and $ 1 , 0 0 0 per month. e s t i m a t e of In She testified $3,487.51 addition, Gerbase that f o r moving testified she also had obtained the Chandlers' the Chandlers an furniture. would be r e q u i r e d t o move from t h e i r h o u s e f o r t h r e e t o f o u r months during repairs. Since the disparity appears $3,200 establishes in rental a $400-per-month an award of testimony t h e middle f i g u r e figures, appropriate. we Therefore, award the Chandlers ( $ 8 0 0 p e r month f o r f o u r m o n t h s ) f o r t e m p o r a r y r e n t a l and r e i n s t a t e t h e award o f $ 3 , 4 8 7 . 5 1 f o r moving and s t o r a g e . The C h a n d l e r s a l s o a r g u e t h e D i s t r i c t C o u r t e r r e d i n Since we f a i l i n g t o g r a n t damages f o r e m o t i o n a l d i s t r e s s . have found no l i a b i l i t y f o r n e g l i g e n c e o r s t r i c t 1 - i a b i l i t y , s u c h damages need n o t be c o n s i d e r e d h e r e . SURPRISE Madsen damage issue requests on the that on the an he has and 25-11-103, affidavit extensive a new t r i a l grounds s e c t i o n s 25-11-102(3) based that of Madsen's discussion with be g r a n t e d been surprised under This request MCA. attorney, Claude on t h e which Gerbase, is states had in l i e u of d e p o s i t i o n on December 6 , 1 9 8 0 , i n d i c a t e d G e r b a s e ' s e s t i m a t e f o r c o s t of 9, 1980, r e p a i r would be $ 6 5 , 0 0 0 . a t t h e r e q u e s t of Madsen's a t t o r n e y , m i t t e d a d e t a i l e d breakdown of t h e e s t i m a t e . according another taped to the a£f i d a v i t , Madsen's c o n t r a c t o r who examined evidence and concluded On December Gerbase subSubsequently, attorney contacted t h e d o c u m e n t a r y and v i d e o his estimate would not be surprise is s i g n i f i c a n t l y l e s s t h a n $65,000. The unfounded. refer Chandlers In argue support of the their t o a l e t t e r of October 29, t o Madsen's a t t o r n e y which claim of position, the 1.980, from t h e i r stated: "Another Chandlers attorney item t o i n t o account i s t h a t t h e Gerbase e s t i m a t e is only t h a t . is n o t an agreement t o r e s t o r e t h e house. take It The C h a n d l e r s a r e e n t i t l e d t o have their house restored and if a contractor r e q u i r e s an a d d i t i o n a l sum of money f o r c o n t i n g e n c i e s , s u c h a s h e would regularly charge in the his trade, affidavit, stated course of t h e n we w i l l want t o add t h a t o n . " In addition, Claude Gerbase, by t h a t a c c o r d i n g t o h i s r e c o l l e c t i o n o f t h e December 6 , 1 9 8 0 , meeting with the attorneys for both parties, t h o s e p r e s e n t t h a t he would n o t e n t e r he told all into a firm contract f o r t h e amount o f h i s e s t i m a t e . S u r p r i s e h a s o n l y o n c e been a c c e p t e d a s t h e b a s i s f o r granting a new P r i n t i n g Co. P. had 67. trial in Montana. ( 1 9 0 1 ) , 26 Mont. Porter 1 7 0 , 66 P . v. Industrial 839, m o d i f i e d , 67 The C o u r t found s u c h s u r p r i s e where t h e t r i a l c o u r t granted default against the plaintiff reply t o the defendant's counterclaim. for At trial failure to t h e defen- d a n t p r e s e n t e d no p r o o f i n s u p p o r t o f i t s c o u n t e r c l a i m . The C o u r t l a t e r d e c l a r e d o n l y t h r e e of t h e c o u n t e r c l a i m s s t a t e d causes of action and entered judgment for the plaintiff. T h i s C o u r t found s u r p r i s e which " o r d i n a r y p r u d e n c e c o u l d n o t have guarded a g a i n s t . " P o r t e r , 26 Mont. 1 8 2 , 66 P. a t 8 4 1 . W e do n o t have s u c h a s i t u a t i o n h e r e . iv"e f i n d t h e r e was s u f f i c i e n t r e f e r e n c e t o t h e f a c t a f i x e d - p r i c e contract would be d i f f e r e n t t h a n t h e e s t i m a t e and would be r e l i e d o n by t h e C h a n d l e r s t o p r e c l u d e s u r p r i s e . This case is remanded to i n s t r u c t i o n s t o amend i t s judgment opinion. the District Court with i n accordance with t h i s W concur: e Chief J u s t i c e Mr. J u s t i c e John C. Sheehy, c o n c u r r i n g s p e c i a l l y : I agree with t h e r e s u l t here. I a f f i r m t h e damages award o f $97,500 f o r r e p a i r o f t h e h o u s e b e c a u s e w e a r e bound by t h e a p p e l l a t e r u l e t h a t t h e f i n d i n g s o f a d i s t r i c t c o u r t may n o t b e s e t a s i d e u n l e s s c l e a r l y e r r o n e o u s . M.R.Civ.P. Rule 5 2 ( a ) , A f i n d i n g i s " c l e a r l y e r r o n e o u s " when, although t h e r e i s e v i d e n c e t o s u p p o r t i t , t h e r e v i e w i n g c o u r t on t h e e n t i r e e v i d e n c e i s l e f t w i t h t h e d e f i n i t e and f i r m c o n v i c t i o n t h a t a m i s t a k e h a s b e e n committed. Co. ( 1 9 4 8 ) , 333 U.S. 364, 394-395, U n i t e d S t a t e s v . Gypsum 68 S.Ct. 525, 92 L.Ed. 746. I am p u r s u a d e d on t h i s p o i n t by t h e e v i d e n c e o f t h e c o n t r a c t o r t h a t h e would n o t e n t e r i n t o a f i r m c o n t r a c t f o r r e p a i r a t t h e f i g u r e o f $67,500. The b u r d e n o f p r o o f o n t h e p l a i n t i f f s was by a p r e p o n d e r a n c e o f t h e e v i d e n c e . The G e r b a s e e v i d e n c e , b e i n g c r e d i b l e , i s s u b s t a n t i a l and t h e r e f o r e i t overcomes t h e "clearly erroneous" rule. (5th C i r . S e e W e s t e r n C o t t o n o i l Co. v. Hodges 1 9 5 4 ) , 218 F.2d 1 5 8 . 4J u s t,,L?hkiL7 ; ice

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