KOSMERL v BARBOUR
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No. 14217 IN THE SUPREME COURT OF THE STATE OF MONTANA 1379 ALLAN J. KOSMERL, d/b/a AL IS ELECTRIC, Plaintiff and Appellant, TIMOTHY C. BARBOUR and JAMES E. NELSON, d/b/a T.J.'S POOL AND GAME ROOM, Defendant and Respondent. Appeal from: District Court of the Eighth Judicial District, Honorable Truman Bradford, Judge presiding. Counsel of Record: For Appellant: Graybill, Ostrem, Warner and Crotty, Great Falls, Montana For Respondent : Alexander, Kuenning, Miller and Ugrin, Great Falls, Montana Submitted on briefs: December 20, 1978 ~ecidedfAN 2 lgfg J u s t i c e John Conway H a r r i s o n d e l i v e r e d t h e Opinion of t h e Court. Mr. T h i s i s an a p p e a l from a judgment on a c a s e t r i e d i n t h e E i g h t h J u d i c i a l D i s t r i c t Court, Cascade County, t h e Honorable Truman G. Bradford, s i t t i n g w i t h o u t a j u r y . P l a i n t i f f sued on a c o n t r a c t f o r c e r t a i n e l e c t r i c a l work done on premises belonging t o r e s p o n d e n t s i n t h e amount of $1,761.25. From a judgment i n f a v o r of defendant-respondents, p l a i n t i f f appeals. Respondents Barbour and Nelson formed a p a r t n e r s h i p and l e a s e d a b u i l d i n g t o house a b u s i n e s s c a l l e d T J ' s Pool Game Room. & They employed a c o n t r a c t o r , Gordon S a y l e r , t o u n d e r t a k e remodeling n e c e s s a r y t o t r a n s f o r m t h e l e a s e d premises i n t o s p a c e s u i t a b l e f o r a b i l l i a r d and game room business. S a y l e r was a g e n e r a l c o n t r a c t o r who had done t h i s t y p e of work i n s e v e r a l o t h e r e s t a b l i s h m e n t s i n G r e a t F a l l s . During h i s remodeling j o b s , he h i r e s l a b o r and s u b c o n t r a c t o r s t o a s s i s t him i n t h e n e c e s s a r y a l t e r a t i o n s . Appellant, A l l a n J. Kosmerl, doing b u s i n e s s a s A l ' s E l e c t r i c , was h i r e d by S a y l e r t o do t h e e l e c t r i c a l work a t T J ' s . Testimony i n d i c a t e d t h a t S a y l e r had p r e v i o u s l y worked w i t h A l ' s Elect r i c i n o t h e r remodeling jobs and t h a t t h e i r way of doing b u s i n e s s was t h a t S a y l e r would pay A l ' s a t t h e completion of t h e e l e c t r i c a l job. During t h e c o u r s e of remodeling Barbour, who managed t h e b u s i n e s s , l e a r n e d t h a t S a y l e r , w a s n o t making payment t o h i s employees o r s u b c o n t r a c t o r s . Some of t h e s e employees t h r e a t e n e d t o walk o f f t h e job and some of t h e subcontract o r s went d i r e c t l y t o Barbour and r e q u e s t e d t h a t he make payments t o them. Arrangements were made t o f i n i s h t h e job under t h i s s o r t of a f i s c a l arrangement. U t o t h a t time p Barbour had p a i d d i r e c t l y t o S a y l e r a p o r t i o n of t h e cont r a c t price. T h e r e a f t e r , a f t e r t a l k i n g t o S a y l e r , Barbour made payments d i r e c t l y t o c e r t a i n i n d i v i d u a l s . Sayler s t a y e d on t h e job u n t i l completion, t h e f i s c a l arrangements b e i n g made a s above s e t f o r t h w i t h c e r t a i n of t h e employees and s u b c o n t r a c t o r s . A p p e l l a n t contends t h a t , a f t e r t a l k i n g t o Barbour, he f e l t t h a t S a y l e r would pay him. However, he a l s o f e l t t h a t under t h e arrangements Barbour had made t o t a k e over t h e job, t h a t he would be i n c l u d e d a s o t h e r s u b c o n t r a c t o r s w e r e and be p a i d by Barbour. Barbour, on t h e o t h e r hand, t e s t i - f i e d and took t h e p o s i t i o n t h a t a l t h o u g h he p a i d many of t h e s u b c o n t r a c t o r s i n f u l l , a p p e l l a n t had agreed t o look o n l y t o S a y l e r f o r payment. A s a r e s u l t , he d i d n o t f e e l r e s p o n s i b l e f o r work done by a p p e l l a n t . A d d i t i o n a l l y , one month a f t e r t h e completion of a l l t h e work and n e a r l y two and one-half months a f t e r a p p e l l a n t s t a t e d t h a t he understood he would look t o Barbour f o r payment, a p p e l l a n t submitted a b i l l t o S a y l e r f o r h i s s e r vices. S a y l e r w a s u n a b l e t o pay t h i s and a p p e l l a n t now l o o k s t o Barbour and t h e p a r t n e r s h i p f o r payment. The i s s u e s p r e s e n t e d f o r review a r e : 1. Whether t h e D i s t r i c t Court was c o r r e c t i n making i t s F i n d i n g of F a c t No. 3, which r e a d : "Gordon S a y l e r was p a i d a l l moneys he had coming under h i s c o n t r a c t w i t h T J ' s . " 2. Whether t h e D i s t r i c t Court was c o r r e c t i n making i t s F i n d i n g of F a c t No. 4 , which r e a d : "Gordon S a y l e r h i r e d A l l a n Kosmerl t o do c e r t a i n e l e c t r i c work on t h e premises." 3. Whether t h e D i s t r i c t Court was c o r r e c t i n making i t s F i n d i n g of F a c t No. 6 , which r e a d : "That Gordon S a y l e r was n o t t h e a g e n t of T J ' s b u t an independent c o n t r a c t o r . " 4. Whether t h e D i s t r i c t Court was c o r r e c t i n making i t s F i n d i n g of F a c t No. 8 , which r e a d : "That Defendant Barbour d i d n o t e n t e r i n t o any s e p a r a t e c o n t r a c t w i t h Kosmerl, d i d n o t c r e a t e any e s t o p p e l which would e n t i t l e him t o payment b u t merely a d v i s e d Kosmerl on one o c c a s i o n t h a t he o u g h t t o look o u t f o r h i s own (Kosmerl's) i n t e r e s t i n h i s d e a l i n g s w i t h Gordon S a y l e r . " 5. Whether t h e D i s t r i c t Court was c o r r e c t i n making Conclusions of Law Nos. 1, 2 and 3, based on t h e above f i n d i n g s of f a c t : "1. Nelson and Barbour, d/b/a T J ' s , do n o t owe any money t o Kosmerl f o r work performed under t h e o r i g i n a l c o n t r a c t between Kosmerl and Gordon S a y l e r . "2. That t h e r e i s no b a s i s i n law f o r h o l d i n g t h a t Barbour and Nelson, d/b/a T J ' s , owes any money t o Kosmerl a s a r e s u l t of t h e work o r i g i n a l l y contemp l a t e d and agreed t o be performed under t h e KosmerlSayler contract. "3. Based on t h e testimony of t h e p a r t i e s , b u t p a r t i c u l a r l y t h a t of t h e d e f e n d a n t Barbour it i s found t h a t Barbour and Nelson, d/b/a T J ' s , owes Kosmerl t h e sum of One Hundred E i g h t y and 60/100 D o l l a r s ($180.60) based on a new and s e p a r a t e agreement w i t h Kosmerl." While f i v e i s s u e s a r e s e t f o r t h , t h e a c t u a l i s s u e b e f o r e t h i s Court i s whether t h e t r i a l c o u r t ' s f i n d i n g s of f a c t , c o n c l u s i o n s of law, and judgment a r e supported by s u b s t a n t i a l evidence. Rule 5 2 ( a ) , M.R.Civ.P., states in pertinent part: " F i n d i n g s of f a c t s h a l l n o t be 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 , and due r e g a r d s h a l l be g i v e n t o t h e o p p o r t u n i t y of t h e t r i a l c o u r t t o judge t h e c r e d i b i l i t y of t h e w i t n e s s e s . " T h i s C o u r t , i n d e s c r i b i n g i t s f u n c t i o n i n reviewing 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 t r i e d by a D i s t r i c t Court without a jury, s e t f o r t h t h e f o l l o w i n g i n Montana Farm S e r v i c e Co. v. Marquart ( 1 9 7 8 ) , 315, 316, 35 St-Rep. 631, 633-34: Mont. , 578 P.2d . . . We have c o n s i s t e n t l y h e l d u n d e r such circumstances t h a t t h i s Court cannot s u b s t i t u t e i t s weighing of t h e e v i d e n c e f o r t h a t o f t h e t r i a l c o u r t . When t h e r e i s a c o n f l i c t i n t h e e v i d e n c e , t h e f i n d i n g s of t h e t r i a l c o u r t a r e presumed t o be c o r r e c t i f s u p p o r t e d by s u b s t a n t i a l evidence.' S e d l a c e k v . Ahrens ( 1 9 7 4 ) , 165 Mont. 479, 485, 530 P.2d 424. II I "We have a l s o h e l d t h a t t h e f i n d i n g s of t h e t r i a l c o u r t , i n a n o n j u r y t r i a l , w i l l n o t be r e v e r s e d on a p p e a l , u n l e s s t h e r e i s a c l e a r preponderance of evidence a g a i n s t t h e f i n d i n g s . Keneco v. C a n t r e l l , ( 1 9 7 7 ) , Mont. I 568 P.2d 1225, 34 St.Rep. 1 0 6 3 " .. I n d e f i n i n g s u b s t a n t i a l evidence t h i s Court s t a t e d i n Olson v . Westfork P r o p e r t i e s , I n c . (1976) , Mont . " S u b s t a n t i a l e v i d e n c e h a s been d e f i n e d by t h i s C o u r t a s s u c h a s w i l l c o n v i n c e r e a s o n a b l e men and on which s u c h men may n o t r e a s o n a b l y d i f f e r a s t o whether i t e s t a b l i s h e s t h e p l a i n t i f f ' s case, a n d , i f a l l r e a s o n a b l e men must c o n c l u d e t h a t t h e e v i d e n c e d o e s n o t e s t a b l i s h s u c h case, t h e n it i s n o t s u b s t a n t i a l e v i d e n c e . The e v i d e n c e may be i n h e r e n t l y weak and s t i l l b e deemed ' s u b s t a n t i a l ' , and one w i t n e s s may b e s u f f i c i e n t (Citat o e s t a b l i s h t h e p r e p o n d e r a n c e of a c a s e . t i o n s omitted.)" A p p e l l a n t acknowledges t h e g e n e r a l p r e s u m p t i o n of c o r r e c t n e s s of t h e above s t a t e d r u l e s and case a u t h o r i t y b u t a r g u e s t h e r u l i n g s made by t h e c o u r t h e r e w e r e n o t s u p p o r t e d by t h e e v i d e n c e . W e have c a r e f u l l y reviewed e a c h f i n d i n g of f a c t s e t f o r t h as a n i s s u e i n t h i s c a s e and f i n d no e r r o r . I s s u e 1 i s d i r e c t e d a t F i n d i n g of F a c t No. 3 , i n which t h e c o u r t found t h a t "Gordon S a y l e r was p a i d a l l moneys h e had coming under h i s c o n t r a c t w i t h T J ' s . " Here, t h e con- t r a c t w a s f o r t h e amount of $24,000 and t h e c o u r t c o r r e c t l y found S a y l e r had r e c e i v e d t h e e n t i r e sum d u e under t h e contract. P a r t o f t h e payment was i n t h e form of m a t e r i a l s p u r c h a s e d o r s a l a r i e s p a i d d i r e c t l y by Barbour t o s u b c o n t r a c t o r s and employees, done w i t h S a y l e r ' s knowledge and c o n s e n t . T h i s d o e s n o t change t h e f a c t t h a t S a y l e r w a s f u l l y p a i d f o r t h e c o n t r a c t , a s t h i s was an arrangement made between S a y l e r and Barbour when S a y l e r g o t i n t o f i n a n c i a l d i f f i c u l t i e s and was t h r e a t e n e d w i t h a walkout by b o t h employees and subcontractors. Barbour f u l l y complied w i t h h i s p a r t of t h e t e r m s of t h e v a l i d c o n t r a c t and S a y l e r , having r e c e i v e d a l l sums due h i m , was t h e s o l e r e s p o n s i b l e p a r t y f o r paying t h e e l e c t r i c a l c o n t r a c t o r ' s claim. I s s u e 2 i s d i r e c t e d t o Finding of F a c t No. 4 which found t h a t S a y l e r h i r e d Kosmerl t o do t h e e l e c t r i c a l work. The o n l y d i s p u t e a p p e l l a n t h a s h e r e concerns t h e conversat i o n between Barbour and a p p e l l a n t concerning S a y l e r f s i n a b i l i t y t o pay. Testimony i n d i c a t e s t h a t Barbour t o l d a p p e l l a n t t h a t he d i d n o t b e l i e v e S a y l e r would pay him and t h a t he should make c e r t a i n t h a t he r e c e i v e d h i s money. A p p e l l a n t r e p l i e d t h a t he was c e r t a i n he would g e t h i s money from S a y l e r and t h a t t h e r e would be no problem. Appellant now a r g u e s t h a t even i f Barbour's v e r s i o n of t h a t conversat i o n i s c o r r e c t , t h e most t h a t could be expected was t h a t he would f i r s t t r y t o c o l l e c t from S a y l e r . A t t h e t i m e of t h e c o n v e r s a t i o n , however, a p p e l l a n t understood t h a t v a r i o u s p e o p l e had n o t been p a i d and Barbour i n d i c a t e d t h a t he (Barbour) would n o t be making any more payments and t h a t a p p e l l a n t should make c e r t a i n t h a t he r e c e i v e payment from Sayler. The evidence c l e a r l y i n d i c a t e s t h a t Kosmerl looked t o S a y l e r f o r payment i n i t i a l l y and t h e c o u r t chose t o b e l i e v e Barbour's r e c i t a t i o n of t h e c o n v e r s a t i o n t o show t h a t he d i d nothing t o i n c u r r e s p o n s i b i l i t y f o r S a y l e r ' s obligations t o appellant. The f i n d i n g of f a c t of t h e c o u r t i n t h i s i s s u e i s c o r r e c t based on t h e evidence. I s s u e 3 i s d i r e c t e d a t Finding of F a c t No. 6 which found S a y l e r t o be an independent c o n t r a c t o r , n o t an a g e n t of T J ' s . A p p e l l a n t a r g u e s t h e r e were c e r t a i n i s o l a t e d i n c i d e n t s which e s t a b l i s h e d t h e f a c t t h a t t h e independent c o n t r a c t o r s t a t u s of S a y l e r ceased t o e x i s t when he became involved i n t h e f i n a n c i a l d i f f i c u l t i e s h e r e i n b e f o r e r e f e r r e d to. A p p e l l a n t a l l e g e s t h a t t h e element of c o n t r o l o v e r t h e work s h i f t e d t o Barbour a t t h i s p o i n t . However, t h e r e i s no evidence of c o n t r o l over S a y l e r , h i s employees, o r subcont r a c t o r s by e i t h e r Barbour o r Nelson. Nor does a p p e l l a n t s e t f o r t h any a u t h o r i t y f o r h i s p r o p o s i t i o n t h a t t h e independent c o n t r a c t o r s t a t u s of S a y l e r was d e s t r o y e d o r a l t e r e d by t h e f i n a n c i a l arrangements made d u r i n g t h e c o n s t r u c t i o n period. T h i s Court r e c e n t l y s e t f o r t h t h e f a c t o r s r e q u i r e d i n e s t a b l i s h i n g a n independent c o n t r a c t o r s t a t u s . v . Hoerner-Waldorf Mont. , Corp. & I n Sharp Aetna C a s u a l t y I n s . Co. 584 P.2d 1298, 1301, 35 St.Rep. (1978), 1430, 1434, t h e Court, i n c o n s t r u i n g t h e Workers' Compensation p r o v i s i o n i n f i n d i n g an independent s t a t u s , s t a t e d : 1947, r e i t e r a t e s t h e " S e c t i o n 92-438.1(1), R.C.M. b a s i c t e s t i n Montana f o r d e t e r m i n i n g independent c o n t r a c t o r s t a t u s , namely, t h e r i g h t of c o n t r o l o v e r t h e person doing t h e work i n v o l v e d . 'The v i t a l t e s t i n d e t e r m i n i n g whether a person employed t o do a c e r t a i n p i e c e of work i s a c o n t r a c t o r o r a mere s e r v a n t , i s t h e c o n t r o l o v e r t h e work which i s r e s e r v e d by t h e employer.' Kimbal v . I n d u s t r i a l Accident Board ( 1 9 6 0 ) , 138 Mont. 445, 449, 357 P.2d 688. 'The t e s t t o determine whether o r n o t an em. is the so ployer-employee r e l a t i o n s h i p e x i s t s c a l l e d c o n t r o l t e s t . Under t h a t t e s t an i n d i v i d u a l i s i n t h e s e r v i c e of a n o t h e r when t h a t o t h e r has t h e r i g h t t o c o n t r o l t h e d e t a i l s of t h e i n d i v i d u a l ' s work.' S t a t e ex r e l . Ferguson v . D i s t r i c t Court (1974), 164 Mont. 84, 88, 519 P. 2d 151. Respondent has argued an employer must c o n t r o l t h e d e t a i l s of a performance b e f o r e t h e performer i s cons i d e r e d an employee. However, t h e d e t e r m i n a t i v e t e s t i s based on t h e r i g h t , n o t j u s t t h e e x e r c i s e , of c o n t r o l . Larson, Workmen's Compensation Law, Vol. l A , Sec. 44.10, p. 8-19; Ferguson, s u p r a . " .. Here, a p p e l l a n t admits t h a t Barbour d i d n o t c o n t r o l t h e d e t a i l s o r manner of h i s work. conduct of t h e work. There was no d i r e c t i o n a s t o I t was S a y l e r who was i n c h a r g e of t h e work and remained i n c h a r g e u n t i l t h e completion of t h e job. under t h e s e c i r c u m s t a n c e s t h e r e i s no q u e s t i o n t h a t S a y l e r was an independent c o n t r a c t o r . See Kimball v. I n d u s t r i a l ~ccident Board ( 1 9 6 0 ) , 138 Mont. 445, 357 P.2d 688; S t . egis Paper Company v. U.C.C. of Montana ( 1 9 7 1 ) , 157 Mont. 5 4 8 , 487 P.2d 5 2 4 . I s s u e No. 4 concerns Finding of F a c t No. 8. The c o u r t found t h a t Barbour d i d n o t e n t e r i n t o a s e p a r a t e c o n t r a c t w i t h Kosmerl, d i d n o t c r e a t e any e s t o p p e l which e n t i t l e d him t o payment, b u t merely t o l d a p p e l l a n t on one o c c a s s i o n t h a t he should look o u t f o r h i s i n t e r e s t s i n d e a l i n g w i t h S a y l e r . A p p e l l a n t ' s argument i s d i r e c t e d t o t h e f a c t t h a t Barbour induced a p p e l l a n t t o c o n t i n u e w i t h t h e e l e c t r i c w i r i n g and by t h a t c o n v e r s a t i o n d i r e c t e d t h e conduct of a p p e l l a n t ' s work. A t best, t h e evidence i n d i c a t e s t h a t a p p e l l a n t asked Barbour where c e r t a i n o u t l e t s should be p l a c e d . This cer- t a i n l y i s not d i r e c t i n g the actual e l e c t r i c a l supervision f o r t h e remodeling job. From t h e time t h e f i s c a l problems began, t h e evidence i s c l e a r t h a t a p p e l l a n t was aware t h a t S a y l e r was n o t making payments t o h i s workers and t h a t r e s p o n d e n t would n o t make any more payments t o S a y l e r . Such evidence does n o t show inducement on t h e p a r t of Barbour t o have a p p e l l a n t c o n t i n u e t h e work. I s s u e 5 i s d i r e c t e d a t Conclusions of Law 1, 2 and 3. A p p e l l a n t a r g u e s t h a t he completed t h e e l e c t r i c a l work a f t e r h i s c o n v e r s a t i o n w i t h Barbour and w h i l e Barbour was paying o t h e r s f o r t h e i r work and t h a t respondent agreed t h a t t h e e l e c t r i c a l work was w e l l done and t h a t t h e s e r v i c e s and m a t e r i a l s claimed on a p p e l l a n t ' s b i l l s were performed and installed. This e v i d e n c e , however, does n o t r e f l e c t an t abuse of d i s c r e t i o n on t h e p a r t of t h e ~ i s t r i c Court. he c o u r t found t h a t r e s p o n d e n t s Barbour and Nelson had cont r a c t e d w i t h S a y l e r , t h a t S a y l e r employed a p p e l l a n t and t h a t t h e r e was no r e l a t i o n s h i p o r l e g a l t h e o r y which j u s t i f i e d holding respondents responsible f o r a p p e l l a n t ' s l o s s . A p p e l l a n t ' s c o n t e n t i o n t h a t he completed t h e work and t h a t r e s p o n d e n t Barbour was making payments t o o t h e r s h a s no b e a r i n g on t h e c a s e . I t i g n o r e s t h e f a c t t h a t he was warned a b o u t p o s s i b l e nonpayment and t h a t he t o l d Barbour he looked t o S a y l e r a s t h e r e s p o n s i b l e p a r t y i n paying f o r h i s s e r vices. I n a d d i t i o n , t h e r e i s no evidence i n d i c a t i n g t h a t Barbour e v e r took over t h e d i r e c t i o n of t h e job a s a p p e l l a n t asserts. Those s t a t e m e n t s a r e n o t supported by t h e r e c o r d . A p p e l l a n t f a i l e d i n h i s a t t e m p t t o prove by c o n t r o v e r t e d evidence t h a t t h e t r i a l c o u r t e r r e d i n 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 a s p r e v i o u s l y s e t f o r t h . The r e c o r d amply s u p p o r t s t h e f i n d i n g s , c o n c l u s i o n s , and judgment of t h e D i s t r i c t Court and t h e c a s e i s a f f i r m e d . W Concur: e
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