PRICE BUILDING SERVICE INC v HO
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No. 83-533 IN THE SUPREME COURT OF THE STATE OF MONTANA 1984 PRICE BUILDING SERVICE, INC ., Plaintiff and Respondent, A. J. HOLMS, and PHYLLIS C. HOLMS, his wife, ALLAN G. IIOLMS and MARILYN HOLMS, his wife, et al., Defendants and Appellants. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable John S. Henson, Judge presiding. COUNSEL OF RECORD: For Appellants: Datsopoulos, MacDonald Missoula, Montana & Lind; Edward A. Murphy, For Respondent : Snavely and Phillips; Montana Robert J. Phillips, Missoula, --Submitted on Briefs: April 26, 1984 Decided: January 4, 1985 Clerk - Mr. Justice Daniel J. Court. Shea delivered. the Opinion of the The defendants A. J. Holms, Phyllis C. Holms, Allan G. Holms and Marilyn Holrns, who are the contract owners and lessors of land and a commercial building, and Harol-d Rhines, James L. Rhines, and Gloria Rhines, who are the lessees of land and a commercial building, known as Sound West, appeal a judgment of the Missoula County District Court foreclosing a mechanics lien in favor of plaintiff, Price Building Service, the contractor who extensively remodeled the building on the land. Price Building Service (the contractor) cross-appeal s from the judgment, the effect of which was to deny recovery for prejudament interest and attorney fees. We affirm the judgment directing foreclosure of the mechanic's lien and reverse the judgment on interest and attorney fees, and remand for a determination of the interest and attorney fees. Defendants raise five issues, the first two involving the technical sufficiency of the mechanic's lien. First, they contend that the lien is deficient because although it contains a legal description of the land, it fails to describe the building itself. Second, they contend the lien is d-eficient because it fails to correctly identify either the lessors or lessees as the owners of the property to which the lien attached. Third, the lessors contend that although the contractor was not a party to the agreement, the lessors agreed with the lessees to pay for improvements up to $25,000.00 and that the contractor cannot recover any more from the lessor. Fourth, one of the lessees, Harold Rhines, contends that the trial court erred in holding that he and the other lessees were partners, and therefore that Rhines is liable as a partner. Fifth, the lessors argue that the trial court erred in refusing to admit for general evidentiary purposes two exhibits prepared with the objective of showing the actual value of the remodeling work performed by the contractor. In April, 1973, under a contract for deed, the Holms' purchased portions of several lots and a commercial building on those lots. Four months later, in August 1973, the Holms' in turn leased this property and a building, to Harold Rhines and his son, James L . Rhines, and daughter-in-law, Gloria A. Rhines. The lease contained an option to purchase and also contained a stipulatj-on that the Holms as lessors would pay the first $25,000.00 of anticipated remodeling expenses and the Rhines' as lessees, would pay all remodeling expenses beyond $25,000. The buildinq was to be extensively remodeled to house what is known as Sound West, a retail stereo equipment store. The parties, by oral contract, and without asking for a formal bid, employed Price Building Service to do the remodeling work. The contractor started work in late August, 1 - 9 7 3 , and finished it during the week ending January 2, 1974. Before the work was completed, the contractor became concerned over payment of the bill, and Harold Rhines assured the contractor that the bill would be paid when the remodeling was completed. When the remodeling was completed the contractor submitted a bill for $55,579.12. Two months later, on March 26, 1374, after the lessors and lessees had not paid anything on the bill, the contractor filed a mechanic's lien on the property. In describing the property, in addition to the legal description, the lien referred to ". . . that certain building and improvements erected upon" the described property. In addition, along with the formal lien, was filed a statement of account for "Sound West," the name of the business operating from the remodeled building. Six or eight months after the contractor filed the mechanic's lien, the Holms paid $22,000.00 to the contractor, but that is all. In September, 1974, after the mechanic's lien had been filed, James L. and Gloria A. Rhines exercised their option to purchase the property, subject of course, to the contractor's mechanic's lien. deed with the Holms'. They signed a contract for Harold Rhines, the father of James Rhines, provided the financing for James and Gloria Rhines to purchase the property. The case finally went to trial on the lien foreclosure action, and the Holms' and Rhines defended in part on the ground that the contractor had not performed according to requirements and therefore that the property was in some respects, defective. As part of the defense the Holms' and Rhines' offered in evidence two documents that consisted of construction estimates or bids prepared according to the remodeling plans, and figured in 1983 dollars, rather then in 1973 dollars when the remodeling was done. Witnesses who prepared those bids for purpose of trial testified that the bids did not include all of the ma-terials and labor provided by the contractor in actually doing the remodeling. The defendants also did not lay proper foundation concerning the inflation rate between 1973 and 1983--a ten year span. The trial court refused one exhibit and admitted one for the Limited purpose of showing the kind and quantity of materials necessary to perform the remodeling. The trial court ordered foreclosure of the lien in the amount of $33,579.12, but also ordered this amount to be offset in the sum of $2,740.00 for defects in the contractor ' s performance. The judgment failed to incl-ude prejudg- ment attorney interest and fees, and attorneys for the contractor moved to amend the findings and conclusions to include these items. The trial court, however, failed to rule on this motion within the time requirements specified by Rule 59(d), M.R.Civ.P., denied. and the motions were therefore deemed Although the trial court had no authority to do so because of the operation of Rule 59, the court amended the judgment to include prejudgment interest a-nd attorney fees. For purposes of appeal we therefore treat the motion to amend the findings and conclusions as being denied, and we consider this issue as part of the contractor's cross-appeal. The lessors and lessee's first attack the validity of the mechanic's lien by contending that it failed to describe the building and instead merely described the land. is not the case. But that The lien specifically referred to the building on the land, and the evidence disclosed that only one buil.ding was on the land, the one on which the contractor performed the work. Clearly this would enable one familiar with the locality to point the building out as the one corresponding to the description contained in the lien. Under Varco-Pruden v. Nelson (1979), 181 Mont. 252, 593 P.2d this was sufficient. 48, Furthermore, under our holding in General Electric Supply Company v. Bennett, (Mont.. 1981) 626 P.2d 844, 38 St.Rep. 553, the statement of account filed with the lien, and referring to "Sound West.," would leave little doubt as to the building referred to. Hon. D a n i e l J . S h e a J u s t i c e , Supreme C o u r t Room 414 J u s t i c e B u i l d i n g 215 N o r t h S a n d e r s H e l e n a , Montana 59620 CORRECTION. In preparing this opinion for publication, we noted in our verification of titles and citations the matters listed below. Corrections have been made on our copy of the opinion. F e b r u a r y 6 , 1985 P r i c e B u i l d i n g S e r v i c e , I n c . v . Holms, No. 83-533, Jan. 4, 1985 P a g e 6 , l i n e 8 f r o m b o t t o m --- Montana Farm S e r v i c e Co. v . M a r q u a r t s h o u l d r e a d Montana Farm S e r v i c e Co. v . M a r q u a r t . 4 P a g e 11, l i n e 6 f r o m b o t t o m --- 94 Mont. - s h o u l d r e a d 94 Mont. -. 97 57 P a g e 1 3 , l i n e 6 --- 1 0 8 Mont. 97, 20 P.2d 622 s h o u l d r e a d 1 0 8 Mont. -, 57 90 P . 2 d 4 8 9 . --q P a g e 15, l i n e --- - P.2d 4 5 5 s h o u l d r e a d 506 P . 2 d 4 5 5 . 406 -.-/ J Page 16, l i n e 10 --- § 71-13-124 - Page 16, l i n e 1 1 --- 1 7 1 Mont. - s h o u l d r e a d 1 7 1 Mont. 382 s h o u l d r e a d § 71-3-124. 383. WEST PUBLISHING COMPANY Box 43526 St. Paul, M N 55164 The second contention attack on the validity of the lien is a that the contractor failed t o correctly identify e i t h e r t h e Holms' o r t h e R h i n e s ' a s t h e owners o f t h e p r o p e r t y t o which t h e l i e n a t t a c h e d . v. Havre O i l and Gas Cornpany 738, A s t h i s Court held i n Blose ( 1 9 3 4 ) , 96 BKont. 450, 3 1 P.2d it i s i m p o r t a n t t h a t t h e l i e n i d e n t i f y t h e name o f t h e owner a g a i n s t whose p r o p e r t y t h e l i e n i s f i l e d s o t h a t t h i r d p a r t i e s e x a m i n i n g t h e p u b l i c r e c o r d s c a n f i n d an encumbrance more e a s i l y . Here t h e l i e n r e f e r r e d t o t h e H a r r i s o n s , whom t h e Holms were b u y i n g t h e p r o p e r t y , t h e c o n t r a c t f o r deed p u r c h a s e r s . from and t o t h e H c l m s ' The R h i n e s ' d i d n o t have t o b e m e n t i o n e d b e c a u s e a t t h e t i m e t h e l i e n was f i l e d t h e y had n o t y e t e x e r c i s e d t h e i r o p t i o n u n d e r t h e l e a s e a g r e e m e n t w i t h t h e Holms'. The l i e n , i n r e f e r r i n g t o t h e H a r r i s o n s and Holms' a s t h e owners o f t h e p r o p e r t y , was c o r r e c t . T h i r d , H a r o l d R h i n e s , a s one o f t h e l e s s e e s , c o n t e n d s h e was n o t a p a r t n e r i n t h e Sound West e n t e r p r i s e , and t h a t t h e t r i a l court's f i n d i n g t h a t h e was a p a r t n e r , and t h e r e f o r e l i a b l e t o t h e c o n t r a c t o r on t h e remoc7,eling c o n t r a c t , was i n error. One may become a p a r t n e r o f a f i r m , a s t o t h e t h i r d p e r s o n s , b ~ i t h o u t i n t e n d i n g t o , by words spoken o r w r i t t e n o r by c o n d u c t , and t h e r e b y became l i a b l e t o t h o s e who h a v e i n good. f a i t h g i v e n c r e d i t t o t h e a c t u a l o r a p p a r e n t p a r t n e r ship. a. Montana Farm S e r v i c e Co. v. Mar u a r t ( 1 9 7 8 ) , 176 Mont. 3 5 7 , 578 P.2d 315. D u r i n g c o n s t r u c t i o n , when the contractor e x p r e s s e d c o n c e r n o v e r t h e payment o f t h e b i l l , H a r o l d R h i n e s p e r s o n a l l y a s s u r e d him t h a t t h e b i l l would b e p a i d when t h e remodeling was completes. Harold Rhines also asked the c o n t r a c t o r f o r p e r s o n a l n o t i f i c a t i o n by r e g i s t e r e d m a i l when t h e remodeling e x p e n s e s e x c e e d e d $25,000.00. F u r t h e r , Harold R h i n e s s i g n e d t h e l e a s e and assumed i t s b e n e f i t s and b u r d e n s , i n c l u d i n g a p r o m i s e t o pay f o r any r e m o d e l i n g c o s t s e x c e e d i n g $25,000.00 notified The contractor him t h a t o v e r $25,000.00. testifed that Harold R h i n e s had t h e Rhj-nes would b e p a y i n g a l l e x p e n s e s Whether o r n o t H a r o l d R h i n e s was t e c h n i - c a l - l y a p a r t n e r of James R h i n e s , h i s words and c o n d u c t r e a sonably led the contractor to believe he was, and the c o n t r a c t o r t h e r e f o r e c o n t i n u e d t o remodel upon H a r o l d R h i n e ' s a s s u r a n c e of was a payment. partner, and As t o the contractor, therefore liable on Harold Rhines the remodeling contract. t h e l e s s o r s and lessees c o n t e n d t h e t r i a l c o u r t Fourth, e r r e d i n e x c l u d i n g two b i d - s t h a t w e r e o f f e r e d t o p r o v e t h a t the contractor overcharged for materials and labor. The c o u r t r u l e d t h e b i d s w e r e i r r e l e v a n t because they lacked t h e proper foundation and w e r e incomplete. The w i t n e s s e s who prepared t h e b i d s admitted t h a t t h e b i d s d i d n o t include a l l of the Further, materials the and lessors labor provided lessees and by the fa-iled t o f o u n d a t i o n a s t o t h e i n f l a . t . i o n r a t e between contractor. lay a proper 197-1, when the r e m o d e l i n g was p e r f o r m e d and 1983, when t h e b i d s w e r e p r e The b i d s w e r e prepared pared. One b i d was a d m i t t e d f o r t h e l i m i t e d p u r p o s e 1973 d o l l a r s . of i n 1.983 d o l l a r s r a t h e r t h a n showing t h e k i n d and q u a n t i t y o f m a t e r i a l s n e c e s s a r y t o perform t h e remodeling. The b i d s c l e e r l y l a c k e d t h e p r o p e r f o u n d a t i o n and were i n c o m p l e t e , and t h e t r i a l c o u r t d i d n o t err i n e x c l u d i n g them from e v i d e n c e . Fifth, the lessors ( t h e Holms'), in seeking t o limit t h e i r l i a b i l i t y , contend t h e y a r e l i a b l e o n l y t o t h e e x t e n t of $25,000.00 only the first because they agreed with t h e $25,000.00 remodeling c o s t s . lessees t o pay However, the c o n t r a c t o r was n o t a p a r t y t o t h i s c o n t r a c t a n d a t t h e t i m e the work was done the lessors were the contract owners of the property. The judqment is against the lessors and lessees, and the contractor can look to either or both in seeking to satisfy the judgment. The agreement between the lessors and lessees on sharing improvement. costs is a matter to be settled only between the lessors and lessees, as the contractor was not a party to that contract and is not bound by its terms. CROSS-APPEAL The contractor asked the trial court to award prejudgment interest based on S 27-1--211, MCA, and attorney fees based on S 71-3-124, MCA. conclusions, however, In the original findings and for reasons unexplained, the trial court expressly declined to rule on these requests but suggested that the contractor again raise these issues by filing a motion to amend the findings and conclusions. The contrac- tor did so, but the trizl court failed to rule on the motion within the fifteen-day cut-off limit of Rule 59, If.R.Civ.P., and therefore the motions were deemed denied as a matter of law. After it was too late to rule, the trial court did file amended findings and conclusions, together with a memorandum opinion, and awarded prejudgment interest and attorney fees. Rut this order had no effect because it came after the time to rule had expired. The contractor, therefore, has cross-appealed on these issues, contending t-hat prejudgment interest and attorney fees should be awarded. We aqree. PREJUDGMENT TMTEREST The contractor originally submitted a bid in the $36,000.00 ran.ge; however, the construction was not based on a bid price, but on a cost-plus arrangement. The lessor-lessees were to pay the contractor his costs for labor and m a t e r i a l s pl u s 12 p e r c e n t . Throughout t h e c o n s t r u c t i o n stages t h e contractor sent periodic statements detailing h i s l a b o r and material. c o s t s . However, b e f o r e c o n s t r u c t i o n was c o m p l e t e d , c e r t a i n c o n s t r u c t i o n c h a n g e s w e r e made. the lessor-lessees contended Although t h e c o n t r a c t o r caused t h e need f o r t h e changes, t h e t r i a l c o u r t found t h e y w e r e done a t t h e r e q u e s t o f t h e lessee. A t t h e end o f t h e p r o j e c t i n 19?4, t h e c o n t r a c t o r s e n t a f i n a l b i l l f o r $55,579.12. I t was n o t p a i d a n d a few months l a t e r i n 1974 t h e c o n t r a c t o r f i l e d a nechanics lien for the amount owed. Six t o e i g h t months a f t e r t h e l i e n was f i l e d , t h e l e s s o r p a i d $22,000.00 on t h e When no f u r t h e r payments w e r e made by 1 9 7 5 , account. contractor filed suit to foreclose on t h e mechanics the lien. N o t h i n g was done on t h e s u i t u n t i l 1979 when a d e p o s i - L i t t l e was done z f t e r t h i s a n d t h e c a s e d i d t i o n was t a k e n . n o t come t o t r i a l u n t i l 1983, almost nine years a f t e r t h e completion of t h e c o n s t r u c t i o n p r o j e c t . The r e c o r d r e v e a l s t h a t t h e c o n t r a c t o r d i d n o t d i l i a e n t l y pursue h i s claim b u t a l s o r e v e a l s t h a t t h e l e s s o r - l e s s e e s d i d n o t a s k f o r a speedy They were c o n t e n t t o l e t t h e c a s e r e s o l u t i o n of t h i s m a t t e r . remain i n a c t i v e . The trial $55,579.10, court less t h e found the $22,000.00 paid l i e n was f i l e d , a n d l e s s $2,740.00 lessor-lessees s i x months a f t e r t h e f o r d e f e c t i v e workmanship. The b a l a n c e found owing was d e t e r m i n e d t o b e s 3 0 , 8 9 3 . 1 2 should actua1l.y be $30,839.12) . owed In his c o n t r a c t o r c o n t e n d s t h a t u n d e r 5 27-1-211, cross-appeal MCA, (it the he i s enti- t l e d t o p r e j u d g m e n t i n t e r e s t on t h e $30,839.12 a t t h e s t a t u tory rate foreclosure MCA, of of 6 percent the lien t o attorney fees. ( he 31-1-106, MCA) , and is entitled, under that for 5 71-3-124, If a claim is certain or can be ascertained by calcula- tion, S 27-1-211, MCA, allows prejudgment interest. statute sets forth only two e:tceptional which interest need not be paid. The circumstances in The statute provides: "Every person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover which is vested in him upon a particular day is entitled also to recover interest lrom that day except during such - as - -time- the debtor is prevented by I-awor act of the - - & - - - creditor from paying the debt." Section 27-1-211, MCA. (Emphasis added. ) The contractor primarily argues that the claim was certain or capable of being made certain by calculation, and that the right to recover vested when the final bill was sent to the lessor-lessees. The lessor-lessees, on the other hand, advance several reasons to counter the contractor's certainty argument. In add-ition, they argue that interest should be dj-sallowed because the contractor failed to diligently prosecute his claim in court. They argue it is unfair to permit interest over all these years when it was the plaintiff who failed to prosecute h i . s claim to completion. We deal first with the failure to prosecute contention. The statute is clear. If the claim is certain or can be made certain by calculation, interest must be allowed unless the lessor-lessees were prevented by law from paying the debt or the contractor prevented them from paying the debt. These are the only conditions excusi-ng the payment of interest. Federal Land Bank v. Green (1939), 108 Mont. 56, 67, 90 P.2d 489. Neither of these conditions exists here. Nor can we accept the argument that as an equitable matter the contractor's lack of diligence in taking the case to trial must invalidate the operation of the prejudgment T h i s i s - o n e of t h e c o n d i t i o n s which not j-nterest s t a t u t e . e x c u s e t h e payment o f i n t e r e s t under t h e s t a t u t e . Further- more, t h e r e c o r d i s j u s t a s c l e a r t h a t t h e l e s s o r - l e s s e e s nothing t o o b t a i n a speedy r e s o l u t i o n of t h i s m a t t e r . did They were i n s t e a d c o n t e n t t o l e t t h e c a s e r e m a i n i n a c t i v e w i t h t h e result that they had the use of over $30,000.00 c o n t r a c t o r ' s money f o r a l m o s t t e n y e a r s . this money from any have financial been interest. And by n o t p r e s s i n g t h e c a s e t o t r i a l t h e m s e l v e s , year ( S 25-9-205, as rate of a t which t i m e a judgment i n t e r e s t a t t h e r a t e of MCP,), higher most would would h a v e c a r r i e d much they certainly t h e y h e l p e d d e l a y e n t r y of judgment, a the Had t h e y borrowed i.nstitution, paying of opposed to i n t e r e s t here of 6 percent per year. the LO percent per 1-egal. r a t e of They c l e a - r l y b e n e f i t e d from t h e d e l a y o f t r i a l and d e l a y o f judgment. The lessor-lessees a l s o argue several factors, which, t h e y c o n t e n d , made it i m p o s s i b l e f o r them t o d e t e r m i n e t h e damages clear or t h e a n o u n t owed whether they t o the contractor. contend any one of these s u f f i c i e n t t o d i s a l l o w prejudgment i n t e r e s t , It is not factors was o r whether t h e cumulative e f f e c t of t h e s e f a c t o r s r e q u i r e d a d i s a l l o w a n c e of prejudgment i n t e r e s t . First, t h e y seem t o a r g u e t h a t p r e - jud9men.t i n t e r e s t i s a l l o w e d o n l y where t h e r e i s a n a c c o u n t s t a t e d o r where a. f i x e d c o n t r a . c t p r i c e h a s b e e n s e t f o r ful.1 performance. They r e l y (and i m p r o p e r l y s o ) on E s k e s t r a n d v . 5' & Wunder ( 1 9 3 3 ) , 9 4 Mont. , 20 P.2d 6 2 2 . With t h i s a s t h e i r p r e m i s e , t h e y a r g u e t h a t p r e j u d g m e n t i n t e r e s t must h e d i s a l lowed h e r e b e c a u s e v a l u e of t h e c o m p l a i n t was i n s t e a d b a s e d on t h e t h e l a b o r and m a t e r i a l s p l u s 12 p e r c e n t . They c7,o not s a y why t h e y were u n a b l e t o d e t e r m i n e w h e t h e r t h e cont r a c t o r ' s h i l l f o r $55,579.12 was c o r r e c t - - a f i g u r e found by the trial court to be correct. Second, they argue that their $25,000.00 counterclaim for co~struction delay damages and their $7,000.00 counterclaim for defective performance damages, made it impossible for them to determine the amount Third and finall-y,they contend the owed to the contractor. contractor created the uncertainty of determining the final amount owed continuing because his fluctuation in faulty the increased the amount claimed. construction amount claimed created and a also They argue that uncertainty inheres in this situation because it remained for the trial court to expenses determine were performance of whether caused by by their the changes and additional the contractor's defective constant changes of the job specifications. Contrary to the lessor-lessees' assertions, Eskestrand v. Wunder, supra, does not hold interest can be awarded only where there is an account stated or where there is a fixed contract price at the inception of the construction which has not been changed. The statute merely requires that the damages be certain, or capable of ascertainment by calculation. Here the contract was for costs of labor and materials plus 12 percent. The total of this figure was $55,579.12, this was the bill given to the lessor-lessees, and this was the figure which the trial court found to he correct. Furthermore, the dispute over part of the claim here did not convert the contractor's claim into one on which prejudgment interest would not run. A dispute on the amount owed on part or all of a claim in the form of a denial of part or all of the amount owed, or in the form of a counterclaim for construction delay and defective performance, does not transform a plaintiff's claim into one that does not bear prejudgment interest. It is the nature of the complaint rather than the character of the defense that determines the right to preiudgment interest. City of Seattle v. Const., Inc. (Wash.App. 1977), 565 P.2d 423. Dyad In fact, this Court held in Federal Land Ea.nk v. Green (1939), 108 Mont. Lj fy .2d 622; that the right to prejudgment interest was not defeated where the amount stated in filing a lien was overstated, as long as the correct amount constituting the debt was ascertainable. 1959), 99 N.W.2d And in Farrington v. Freeman (Minn. 388, the court held a plaintiff's claim for prejudgment interest was not defeated because the defendant had filed an unliquidated counterclaim for costs of remedying defects in plaintiff's work. These cases expressly or impli-citly recognize that the right to prejudgment interest should not be cut off by the simple defensive move of claiming an offset or filing a counterclaim that directly or indirectly creates an issue as to the amount owed. The statute creating the right to prejudgment interest was not meant to be nullified by the mere existence of such defensive pleadings. The existence of a valid contest on the amount owed c a p , however, affect both the amount. awarded to the plaintiff on the main debt and the amount of prejudgment interest awarded. If the amount owed is reduced by a valid setoff or counterclaim, interest is then normally allowed only on the balance due after deductjons of the offsetting zmounts and payments that may already have been made. 1933), 24 P.2d 772. did in this case. Hanson v. Cove11 (Cal. In fact, that is what the trial court Jt found the amount owed to be $55,579.12, that S22,000.00 had already been paid, and that this amount should be further reduced by $2,740.00 allowed for defective performance. As we noted before, however, the trial court's decj-sion on the prejudgment interest question came too late to constitute a decision favoring an allowa.nce of prejudgment interest. The prejudgment interest statute, in existence since 1895, merely sets forth a broad area in which the 1-eqislature has determined prejudgment interest should be allowed as a matter of right with the exception that it need not be paid if a law has prevented the debtor from paying the debt or if the creditor has done something to prevent the debtor from paying the debt. It is merely part of the l.aw of damages that has, as its objective, that of making the injured person whole. Though the statute also reauires the amount to be certain or determinable by calculation, when considered with the other statute vesting discretionary power in the t.rier of fact to award prejudgment interest in almost all other situations ( 5 27-1-212, MCA) , it is clear that the legislature intended prejudgment interest under S 27-1-211, MCA, to be the rule rather than the exception. Section 27-1-212, on the other ha.nd, deals with an award of prejudgment interest in a l l - si-tuations "not arising out of contract." It provides: "In an action for the breach of an obligation not arising from contract - a.nd in oppression, fraud, or every ca-se malice. interest - be aiven. in mav the discretion - - jury. of the This section does not apply in actions for recovery of damages arising from injury to a person or property brought against a governmental entity under Title 3 , chapter 9, parts 1 through 3, as amended." (Emphasis added.) This statute clearly permits an award of prejudgment interest in al-most all other cases, but it requires the discretion of the jury or the judge if tried to the court. Tn contrast, 5 27-1-211, MCA, is not a discretionary statute. Rather, it mandates interest as long as the legal situation fits within the broad quidel-ines of the statute. Determining whether a cause of action fits within the framework of the statute, particularly the question of whether the claim is determined or can be determined by calculation, is not always an easy one. However, the overriding purpose of the statute can be best preserved if it is remembered that its purpose is to fully compensate the injured party for the loss of use of his money during the period j n which a valid claim was not paid. We believe, as did the court in Mitchell v. Flandro (Idaho 1972), p&t. compensating the P.2d 455, that the objective of injured party, and that fu1l.y is the primary objective of the prejudgment interest statute, should predominate over other equitable considerations. If the legisl-a- ture has chosen to provide a right to prejudament interest ( 5 7 - 1 - 2 1 ) , the primary objective of the courts, where possible, should be to award prejudgment interest. The statutory policy favoring an award of prejudgment interest to a plaintiff whose claim falls within the hroad framework of § 27-1-211 does not result in an iniustice to a defendant who has valid reason for not paying the entire claim, and who must resort to the courts to present his reason for not paying the entire claim. If the trial court reduces the plaintiff's claim because of' a valid offset or counterclaim that can be determined by calculation, prejudgment interest would be permitted under S 27-1-211. On the other hand, if the setoff or counterclaim cannot be d-etermined by cal.culation, it still may defendant may be awarded interest under discretion of the judge or jury. $ be such that a 27-1-212, in the An award of interest under either S 27-1-211 or 27-1-212 would further reduce the amount the plaintiff b~ould be ultimately awarded and would more nearly approximate a fair resolution of the controversy in recognition of a defendant's right to assert an offset or counterclaim. It may lead to a speedier resolution of a controversy if a plaintiff knows that a valid offset or counterclaim may al.so bear prejudgment interest. ATTORNEY FEES ..n The request for attorney fees in the J j e foreclosure is based on statute, S 7143-124, MCA. Remco, Inc. (1976), 171 Mont. z ? 5 5 8 In atz zinger v. P.2d 650, this Court held that the statute mandates an award of attorney fees to a cLeimant whose lien is successfully lessor-lessees do not argue otherwise. established. The As we have previously indicated, the trial court's ruling awarding attorney fees came too late to constitute part of a judgment favoring attorney fees, and therefore the plaintiff has filed his cross-appeal. The statute is clear, and it applies here. Plaintiff is entitled to an award of attorney fees. DISPOSITION In summary, we affirm the judgment forecl.osing a mechanic's lien in the amount of $33,579.12, Less the offset of $2,740.00 for defective performance. We reverse the order denying prejudgment interest and a.ttorney fees. We remand to the District Court for a hearing on the interest to be awarded and the attorney fees to be awarded. Plaintiff is enti- tled to prejudgment interest on the $33,579.12 net amount found to be due. mine, in However, the trial court must also deter- his discretion, whether the lessor-lessees are entitled to prejudgment interest on the $2,740.00 offset for defective performance. The t r i a l c o u r t a l s o found t h a t t h e l e s s o r i s n o t p e r s o n a l l y 1 i a b l . e beyond t h e $25,000.00 a g r e e d t o , and a l t h o u g h t h i s i s s u e i s n o t o n a p p e a l a s s u c h , we a f f i r m t h i s h o l d i n g so that the parties are s u r e of their rights during the remand for f u t u r e proceedings i n t h e t r i a l c o u r t . W e affirm in part, reverse in part, and f u r t h e r proceedings c o n s i s t e n t with t h i s opinion. W Concur: e Chief J u s t i c E
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