                                              No. 13018

          I N THE SUPREME COURT OF THE STATE Oh' M N A A
                                                  OTN

                                                  1975



GYKION CONSTKUCTION CO                    . , .TNC. ,
                                      P l a i n t i f f and R e s p o n d e n t ,

          -vs -

KOBEKT J . SANDERS,

                                      D e f e l ~ d a n tand A p p e l l a n t .



Appeal from:                 D i s t r i c t Court of t h e Eleventh J u d i c i a l D i s t r i c t ,
                             Honorable R o b e r t Sykes, J u d g e p r e s i d i n g .

Counsel of Record:

     For Appellant :

                H. James Oleson a r g u e d , K a l i s p e l l , Montana

     F o r Respondent:

                Hash, J e l l i s o n and O ' B r i e n , K a l i s p e l l , Montana
                Kenneth E. O ' B r i e n a r g u e d , K a l i s p e l l , Montana



                                                                Submitted:          September 8 , 1975

                                                                    Decided :       2:; 2 0
Filed :     I      c.   e,
M r . J u s t i c e Gene B . Daly d e l i v e r e d t h e Opinion o f t h e C o u r t .

              T h i s i s a n a p p e a l from a judgment o f t h e d i s t r i c t c o u r t ,

F l a t h e a d County, i n f a v o r o f p l a i n t i f f Gyrion C o n s t r u c t i o n Co.,
I n c . i n t h e amount o f $1,200.

              On F e b r u a r y 1 7 , 1971, t h e r e s i d e n c e of d e f e n d a n t R o b e r t
J. Sanders s u f f e r e d e x t e n s i v e f i r e damage.            Sanders' insurance

a g e n t proceeded t o a d j u s t t h e l o s s .             In      view o f t h e c o l d w e a t h e r

and t h e need f o r immediate r e p a i r o f t h e r e s i d e n c e , t h e a d j u s t o r

contacted p l a i n t i f f , a c o n t r a c t o r , w i t h t h e consent of Sanders.

On F e b r u a r y 1 8 , 1971, Gyrion began r e s t o r a t i o n work on t h e Sanders
home.      S a n d e r s t e s t i f i e d t h a t he was u n d e r t h e i m p r e s s i o n t h a t
Gyrion had been h i r e d by t h e a d j u s t o r , b u t t h e d i s t r i c t c o u r t found
t h a t S a n d e r s , by a l l o w i n g Gyri-on t o b e g i n work on h i s home, had

i n f a c t h i r e d Gyrion.

              A t t h e t i m e o f t h e f i r e t h e Sanders home was i n s u r e d f o r
a maximum $20,000 f i r e l o s s .             Because t h e e x t e n t o f damage t o t h e
home was unknown u n t i l t o r n down, no e s t i m a t e s were made o r r e -

quested.        A t t h e t i m e Gyrion was employed a l l p a r t i e s b e l i e v e d
t h e e n t i r e c o s t o f r e p a i r would b e under t h e maximum f i r e l o s s

coverage.        Gyrion a g r e e d t o r e p a i r t h e f i r e damage on t h e b a s i s

o f c o s t of l a b o r and m a t e r i a l s p l u s 15%.          It a l s o a g r e e d t h a t
Sanders c o u l d perform work on t h e r e s i d e n c e and be c r e d i t e d by

Gyrion f o r t h a t work.

              Sanders t e s t i f i e d t h a t a s work p r o g r e s s e d h e informed

Gyrion n o t t o exceed t h e $20,000 l i m i t .                 Gyrion d e n i e d t h i s .

The d i s t r i c t c o u r t made no f i n d i n g on S a n d e r s ' a l l e g e d g e n e r a l
l i m i t a t i o n o f c o s t , b u t d i d f i n d t h a t p r i o r t o t h e p a i n t i n g of
t h e p r e m i s e s Sanders had n o t i f i e d Gyrion t h a t any p a i n t i n g
s h o u l d b e done by Gyrion o n l y i f t h e p a i n t i n g would come w i t h i n
t h e maximum c o v e r a g e o f t h e p o l i c y .
               The r e p a i r work was completed on about A p r i l 30, 1971.
During t h e period of r e p a i r i n g t h e home Sanders on s e v e r a l o c c a s i o n s ,
t o g e t h e r w i t h h i s w i f e , requested information a s t o t h e amount and
c o s t of t h e r e p a i r s .    However Gyrion f a i l e d t o f u r n i s h any
itemized l i s t o r accounting of expenses u n t i l November 1971.
A d r a f t from t h e i n s u r a n c e c a r r i e r i n t h e amount of $20,000 was
d e l i v e r e d t o Sanders i n June 1971, who immediately endorsed i t and
d e l i v e r e d i t t o Gyrion.
               When Gyrion f i n a l l y d i d send t h e b i l l , i t exceeded t h e
maximum i n s u r a n c e coverage ($20,000) i n t h e amount of $4,284.69.
Sanders was c r e d i t e d w i t h t h e sum of $939.55 f o r l a b o r performed
by him, and was a l s o given c e r t a i n o t h e r u n s p e c i f i e d c r e d i t s ,
l e a v i n g a b a l a n c e claimed by p l a i n t i f f of $2,914.71, a s due and
owing over and above t h e $20,000 i n s u r a n c e coverage.
               The d i s t r i c t c o u r t found on a quantum meruit b a s i s t h a t
p l a i n t i f f was e n t i t l e d t o $1,200 a s t h e r e a s o n a b l e v a l u e of t h e
p a i n t i n g , and c o s t s .
               Defendant a p p e a l s and p l a i n t i f f c r o s s a p p e a l s .
             A p o r t i o n of t h e d i s t r i c t c o u r t ' s opening s t a t e m e n t and

response by both counsel d e f i n e s t h e i s s u e t r i e d t o t h e c o u r t :
               ''THE COURT: k A k The i s s u e t o be determined h e r e
                                   ; 4b ;
               is        whether o r n o t any work done i n excess of t h e
               i n s u r a n c e coverage was by agreement and understanding
               of t h e p a r t i e s t o b e covered by t h e f i r s i n s u r a n c e
               maximum l i m i t s , o r i f any a d d i t i o n a l amount was t o b e
               paid by t h e Defendant. N w i s t h a t a c o r r e c t statement
                                                  o
               of t h e i s s u e s ?
                     O'BRIE'N:    Your Honor, 1 b e l i e v e t h a t i s a c o r r e c t
               statement of t h e i s s u e s a s we d i s c u s s e d them, I b e l i e v e ,
               i n Chambers, t h a t t h e r e i s no q u a r r e l a s t o t h e amount
               of work t h a t was done, t h e i s s u e i s whether o r n o t t h e
               Defendant was l i a b l e t o pay for i t o r whether t h e r e was
               a $20,000 l i m i t on t h e sum t h e P l a i n t i f f was t o r e c e i v e .
               "MR. OLESON:          That i s c o r r e c t , w i t h what M. 0 ' ~ r i e n u s t
                                                                            r              j
               stated.
               "THE COURT: Very w e l l , l e t t h e r e c o r d show and on t h a t
               b a s i s , c a l l your f i r s t w i t n e s s . I t
             A p o r t i o n of t h e c o u r t ' s f i n d i n g of f a c t No. 3 , f i n d s :

              h hat p l a i n t i f f agreed t o r e p a i r s a i d home from
             t h e f i r e l o s s on t h e b a s i s o f c o s t of l a b o r and
             m a t e r i a l s p l u s 15%.I '
             I t s f i n d i n g of f a c t .No. 7 . s t a t e s :
             II
               That p r i o r t o i n s t a l l a t i o n of c e r t a i n bathroom
             f i x t u r e s , and p r i o r t o t h e p a i n t i n g of s a i d
             premises, t h e defendant had n o t i f i e d t h e p l a i n t i f f
             t h a t any p a i n t i n g should be done by t h e p l a i n t i f f
             only i f t h e same would come w i t h i n t h e maximum
             coverage of s a i d p o l i c y . 11
             The c o u r t ' s f i n d i n g No. 1 2 s e t s f o r t h :
                  hat t h e b i l l i n g exceeded t h e maximum i n s u r a n c e
             coverage i n t h e amount of $4,284.69. That defendant
             was c r e d i t e d w i t h t h e sum of $939.55 f o r work and
             l a b o r performed a s c a r r i e d on p l a i n t i f f ' s r e c o r d s .
             That i n a d d i t i o n t h e r e t o , defendant was given c e r t a i n
             o t h e r c r e d i t s , l e a v i n g a b a l a n c e claimed by t h e p l a i n -
             t i f f of $2,914.71 a s due and owing, and t h e amount over
             and above t h e maximum $20,000 f i r e l o s s coverage. 1'
             The d i s t r i c t c o u r t then made t h e s e conclusions of law:
             "2. That i n view of t h e circumstances, p l a i n t i f f
             and defendant d i d n o t have an e x p r e s s o r implied con-
             t r a c t f o r any d e f i n i t e amount, n o r could any such
             c o n t r a c t have been e n t e r e d i n t o .
              "3. That a l l c o s t s i n excess of p o l i c y l i m i t s were
              f o r r e a s o n a b l e and necessary m a t e r i a l s and l a b o r ;
              b u t t h a t t h e p l a i n t i f f i s e n t i t l e d t o be paid on a
              quantum meruit b a s i s . That t h e defendant would be
              u n j u s t l y e n r i c h e d i f he were permitted t o enjoy t h e
              r e s u l t of a l l of such s e r v i c e s and l a b o r without paying
              a reasonable and n e c e s s a r y sum f o r same. That a
            r e a s o n a b l e v a l u e of t h e p a i n t i n g on a quantum meruit
              b a s i s i s t h e sum o f $2,139.55.                That defendant i s
              e n t i t l e d t o t h e work and l a b o r performed by t h e de-
              fendant f o r p l a i n t i f f of $939.55, l e a v i n g an amount
              due and owing p l a i n t i f f by defendant of t h e sum of
              $1,200."
             The p a r t i e s a g r e e t h a t p l a i n t i f f proceeded t o work under
a c o s t p l u s c o n t r a c t f o r m a t e r i a l and l a b o r p l u s 15%. The d i s t r i c t
c o u r t s o found i n i t s f i n d i n g No. 3.          Then, t h e c o u r t found i n i t s
f i n d i n g N o . 7 t h a t p l a i n t i f f had been n o t i f i e d by defendant n o t t o
do t h e p a i n t i n g i f i t would i n c r e a s e t h e c o s t i n excess of p o l i c y
limits.      The c o u r t f u r t h e r found i n i t s f i n d i n g N o . 12 t h a t defendant
had been given a l l c r e d i t s due him by p l a i n t i f f ' s r e c o r d s and r e -
duced t h e b i l l i n g from $4,284.69 t o $2,914.71. The amount $2,914.71
was i n excess of t h e p o l i c y l i m i t .
             The c o u r t ' s conclusion of law No. 2 seems t o s a y , i n view
of t h e i s s u e being t r i e d , t h a t t h e r e was no top amount on t h e c o s t
plus contract.            The l a s t phrase of conclusion of law No. 2, a s
t o t h e p o s s i b i l i t y of such a c o n t r a c t , seems t o b e s u r p l u s a g e a s i t
would c e r t a i n l y have been p o s s i b l e t o r e s t r i c t t h e c o n t r a c t t o a
t o t a l sum of $20,000.
               Conclusion of law No. 3 f l i e s i n t h e f a c e of t h e
f i n d i n g s of t h e c o u r t .    W cannot apply quantum meruit t o a l l c o s t s
                                         e
i n excess of t h e i n s u r a n c e coverage because i t has been determined
t h a t t h e p a r t i e s have a c o n t r a c t [ c o s t p l u s 15%] w i t h no agreed
upper l i m i t .      W e cannot now imply a c o n t r a c t by law.                        A recovery
                                                                                       II
on t h e t h e o r y of quantum meruit (which simply means                                  a s much a s
he deserves")            i s based on a c o n t r a c t implied i n law o r q u a s i -
contract.         The o b l i g a t i o n i n such a c o n t r a c t a r i s e s n o t from consent
of t h e p a r t i e s b u t from t h e law of n a t u r a l j u s t i c e and e q u i t y , and
i s based on t h e d o c t r i n e of u n j u s t enrichment.                   Brown v. Thornton,
150 Mont. 150, 156, 432 P.2d 386.
              The t r i a l c o u r t found i n i t s f i n d i n g No. 7 , t h a t
p l a i n t i f f was s p e c i f i c a l l y i n s t r u c t e d by defendant n o t t o p a i n t
t h e premises i f t h e c o s t would overrun t h e $20,000 i n s u r a n c e
coverage. There can be no c o n t r a c t implied by law a s t o t h e
p a i n t i n g , under t h e p r e s e n t f i n d i n g s of t h e t r i a l c o u r t .
              W a r e unable t o determine from t h e r e c o r d b e f o r e t h i s
               e
Court t h e amount, excluding t h e painting, of t h e g e n e r a l c o n t r a c t
overrun which should be p a i d i n f u l l by defendant.                              The r e c o r d does
n o t r e v e a l whether o r n o t t h e $939.55 p l u s $330.43 c r e d i t s given
t o defendant by p l a i n t i f f should p r o p e r l y b e a p p l i e d t o reduce
t h e c o s t of p a i n t i n g o r t h e g e n e r a l c o n s t r u c t i o n c o n t r a c t , o r b o t h .
Therefore we cannot reform t h e judgment h e r e .
               The judgment of t h e d i s t r i c t c o u r t i s r e v e r s e d w i t h
i n s t r u c t i o n s t o r e c a l c u l a t e t h e amount of t h e judgment i n con-
formity with t h i s opinion.            This may be done by a h e a r i n g by t h e
d i s t r i c t c o u r t o r a new t r i a l , whichever i n t h e d i s c r e t i o n of t h e




W Concur:
 e



       Chief J u s t i c e
