                                               No.    81-185

                     I N THE SUPREME COURT O THE STATE O M N A A
                                            F           F O T N

                                                      1982




E. F. MATELICH CONTRUCTION C M A YO P N
a Montana C o r p o r a t i o n ,

                     P l a i n t i f f and A p p e l l a n t ,

           -vs-

GOODFELLOW BROTHERS, I N C . ,             et al.,

                     Defendants and Respondents.



STATE O MONTANA,
       F                     Cross-Claimant.




Appeal from:         D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t ,
                     I n a n d f o r t h e County o f M i n e r a l , The H o n o r a b l e
                     James B. W h e e i i s , J u d g e p r e s i d i n g .


C o u n s e l o f Record:

         For Appellant:

                     Donald R. Murray; Murphy, R o b i n s o n , H e c k a t h o r n
                     and P h i l l i p s , K a l i s p e l l , Montana

         For Respondents:

                     Page Wellcome, Bozeman, Montana
                     Donald A. D o u g l a s , Highway L e g a l D e p t . ,      Helena,
                     Xontana




                                               Submitted on B r i e f s :    February 18, 1982

                                                                 Decided :
                                                                                MAY 6    1982


Filed:     .*   0
                    '1982
M r . Chief J u s t i c e Frank I . H a s w e l l d e l i v e r e d t h e Opinion of t h e
Court.

            P l a i n t i f f s u b c o n t r a c t o r s u e d t h e g e n e r a l c o n t r a c t o r and t h e
S t a t e f o r damages f o r b r e a c h o f i t s s u b c o n t r a c t t o c o n t r u c t
b r i d g e s and c o n c r e t e work on a highway p r o j e c t .                   A t t h e conclu-

s i o n of t h e s u b c o n t r a c t o r I   s    case-in-chief       ,   the District Court
d i s m i s s e d t h e a c t i o n o n t h e g r o u n d t h a t p l a i n t i f f had shown no
r i g h t t o r e l i e f u n d e r t h e f a c t s and l a w .           Following d e n i a l of i t s
m o t i o n f o r a new t r i a l , t h e s u b c o n t r a c t o r a p p e a l s .       We reverse.

            On November 2 3 , 1 9 7 0 , d e f e n d a n t G o o d f e l l o w Bros.,               Inc.,
t h e g e n e r a l c o n t r a c t o r , c o n t r a c t e d w i t h d e f e n d a n t S t a t e of
Montana to c o n s t r u c t a s e g m e n t o f i n t e r s t a t e highway i n M i n e r a l
C o u n t y , Montana.         T h e r e a f t e r Good f e l l o w c o n t r a c t e d w i t h E.     F.
Matelich C o n s t r u c t i o n Co.,              the subcontractor, f o r the construc-

t i o n o f c e r t a i n b r i d g e s and c o n c r e t e work o n t h e p r o j e c t .

           P r i o r t o s u b m i t t i n g i t s b i d to G o o d f e l l o w , M a t e l i c h
o b t a i n e d a b i d f o r t h e c o n c r e t e work from R o b e r t O I C o n n e r , a s p e -
c i a l i s t i n t h e c o n s t r u c t i o n o f c u r b s and s i d e w a l k s .       The b i d s u b -

m i t t e d by O I C o n n e r s t a t e d t h a t t h e estimates g i v e n were con-

t i n g e n t upon c o n c r e t e b e i n g a v a i l a b l e a t t h e j o b s i t e .         Matelich
a c c e p t e d O I C o n n e r l s b i d on A p r i l 1 2 , 1971.

           The c o n t r a c t b e t w e e n M a t e l i c h and Good f e l l o w p r o v i d e d t h a t
t h e work was t o be c o m p l e t e d i n 270 c a l e n d a r d a y s .                 The c o n s t r u c -
t i o n work b e g a n i n t h e s p r i n g o f 1 9 7 1 b u t t h e c o n c r e t e work was
n o t completed u n t i l l a t e f a l l of 1973 because n e c e s s a r y prepara-
t o r y work had n o t b e e n c o m p l e t e d b y G o o d f e l l o w u n t i l S e p t e m b e r ,

1973.      When t h e p r e p a r a t o r y work w a s f i n a l l y d o n e , t h e r e w a s n o
l o n g e r a s o u r c e of c o n c r e t e a v a i l a b l e a t t h e job s i t e .           By r e a s o n
t h e r e o f , O I C o n n e r r e f u s e d to p e r f o r m t h e c o n c r e t e work u n d e r h i s
agreement with Matelich.                       T h e r e had b e e n a s o u r c e o f c o n c r e t e
a v a i l a b l e a t t h e j o b s i t e d u r i n g t h e 1 9 7 1 w o r k s e a s o n and f o r
m o s t o f t h e 1972 s e a s o n .           S i n c e O t C o n n e r r e f u s e d to p e r f o r m t h e

w o r k , M a t e l i c h was f o r c e d t o c o m p l e t e t h e c o n c r e t e work i t s e l f .
            Af t e r t h e work was c o m p l e t e d       ,   Mate1i c h b r o u g h t s u i t
a g a i n s t G o o d f e l l o w and t h e S t a t e o f Montana i n t h e D i s t r i c t C o u r t
o f Mineral County.               M a t e l i c h a l l e g e d t h a t i t was p r e v e n t e d from

p e r f o r m i n g i t s work w i t h i n t h e t i m e p e r i o d s p e c i f i e d i n i t s
s u b c o n t r a c t w i t h G o o d f e l l o w b e c a u s e t h e work s c h e d u l e f o r t h e

p r o j e c t had b e e n c h a n g e d b y G o o d f e l l o w and t h e S t a t e .         Matelich

s o u g h t damages f o r i n c r e a s e d costs a l l e g e d l y c a u s e d b y
Good f e l l o w ' s b r e a c h o f i t s s u b c o n t r a c t i n n o t p e r f o r m i n g t h e p r e -
p a r a t o r y work w i t h i n t h e t i m e p e r i o d s p e c i f i e d i n i t s

subcontract.            M a t e l i c h s o u g h t damages to t h e e x t e n t o f t h e d i f -
f e r e n c e b e t w e e n t h e a c t u a l c o s t s it i n c u r r e d i n c o m p l e t i n g t h e
c o n c r e t e work and t h e b i d p r i c e s u b m i t t e d by O ' C o n n e r .          Matelich

d i s m i s s e d i t s claim a g a i n s t t h e S t a t e p r i o r to t r i a l , b u t t h e
S t a t e r e m a i n e d a p a r t y on Good f e l l o w ' s cross-claim f o r i n d e m n i f i-
c a t i o n a g a i n s t it.

            A b e n c h t r i a l was h e l d on A u g u s t 21,           1980.       O'Conner
t e s t i f i e d as a w i t n e s s f o r M a t e l i c h , and t h e a g r e e m e n t e n t e r e d
i n t o b e t w e e n M a t e l i c h and O I C o n n e r was a d m i t t e d i n t o e v i d e n c e .

E v i d e n c e was a l s o p r e s e n t e d r e g a r d i n g t h e a c t u a l c o s t s i n c u r r e d
b y M a t e l i c h i n c o m p l e t i n g t h e c o n c r e t e work.       A t t h e c l o s e of

Matelich' s case-in-chief                 t h e District Court granted t h e
d e f e n d a n t s ' m o t i o n to d i s m i s s b e c a u s e i t found t h a t t h e r e w a s no

v a l i d e v i d e n c e b e f o r e t h e c o u r t to e s t a b l i s h damages.
           The D i s t r i c t C o u r t d e t e r m i n e d t h a t t h e e v i d e n c e p e r t a i n -
i n g t o O ' C o n n e r l s b i d p r i c e c o u l d n o t be used to e s t a b l i s h damages

b e c a u s e O I C o n n e r had n o t p r e q u a l i f i e d w i t h t h e Montana S t a t e
D e p a r t m e n t o f Highways a s r e q u i r e d b y s p e c i f i c a t i o n s a d o p t e d by

t h e Montana S t a t e Highway Commission which were i n c o r p o r a t e d i n t o
t h e c o n t r a c t b e t w e e n t h e S t a t e of Montana and G o o d f e l l o w .            The
terms o f t h a t c o n t r a c t were i n t u r n i n c o r p o r a t e d i n t o t h e

c o n t r a c t b e t w e e n Good f e l l o w and M a t e l i c h .
           The s o l e i s s u e is w h e t h e r t h e D i s t r i c t C o u r t e r r e d i n
d i s m i s s i n g t h e a c t i o n b a s e d upon i t s d e t e r m i n a t i o n t h a t t h e e v i -
d e n c e was i n s u f f i c i e n t t o e s t a b l i s h damages.

           The p a r t i e s d i s a g r e e as t o w h e t h e r O I C o n n e r was r e q u i r e d
t o p r e q u a l i f y under t h e c i r c u m s t a n c e s of t h i s c a s e .        W f i n d it
                                                                                           e

unnecessary t o r e s o l v e t h a t i s s u e i n deciding whether t h e evi-
d e n c e p r e s e n t e d b y M a t e l i c h was s u f f i c i e n t to e s t a b l i s h damages.
           The f o l l o w i n g s t a t u t e e s t a b l i s h e s t h e m e a s u r e o f damages

f o r breach of contract:
           " F o r t h e b r e a c h o f a n o b l i g a t i o n a r i s i n g from
           c o n t r a c t , t h e m e a s u r e o f d a m a g e s , e x c e p t when
           o t h e r w i s e e x p r e s s l y p r o v i d e d by t h i s c o d e , i s t h e
           amount w h i c h 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 m a t e l y
           c a u s e d t h e r e b y o r i n t h e o r d i n a r y c o u r s e of
           t h i n g s would be l i k e l y to r e s u l t t h e r e f r o m .
           Damages which a r e n o t c l e a r l y a s c e r t a i n a b l e i n
           b o t h t h e i r n a t u r e and o r i g i n c a n n o t be r e c o v e r e d
           f o r a breach of contract."                       S e c t i o n 27-1-311,
           MCA.

           W i t h r e g a r d to e v i d e n c e of damages w e h a v e s t a t e d :               "While
e x a c t p r o o f o f damage i s n o t n e c e s s a r y t h e r e m u s t be some e v i -

d e n c e f r o m w h i c h t h e amount may be d e t e r m i n e d          ."    Brown v. F i r s t

Fed. Sav.       & L.     A s s l n o f Great F a l l s ( 1 9 6 9 ) , 1 5 4 Mont. 7 9 , 8 8 , 4 6 0
P.2d 9 7 , 1 0 2 .       I n t h i s case t h e r e w a s e v i d e n c e from w h i c h t h e

a m o u n t o f damages c o u l d h a v e b e e n e s t a b l i s h e d .
           0 ' C o n n e r l s t e s t i m o n y and t h e a g r e e m e n t b e t w e e n 0 ' C o n n e r

a n d M a t e l i c h were e v i d e n c e o f t h e r e a s o n a b l e c o s t a t which t h e

work c o u l d h a v e b e e n p e r f o r m e d had i t b e e n d o n e a t a n e a r l i e r
d a t e when t h e r e was s t i l l a s o u r c e o f c o n c r e t e a v a i l a b l e a t t h e
construction site.               Additionally,Matelich t e s t i f i e d t h a t

G o o d f e l l o w p a i d him o n t h e b a s i s o f O I C o n n e r l s b i d w h i c h i s some
i n d i c a t i o n o f t h e r e a s o n a b l e c o s t o f t h e c o n c r e t e work.        The

d e f e n d a n t s do n o t contend t h a t t h i s e v i d e n c e should n o t have been
admitted.         T h e i r o n l y argument is t h a t because OIConner w a s n o t
p r e q u a l i f i e d e v i d e n c e o f h i s b i d p r i c e c o u l d n o t be used to
e s t a b l i s h damages.       The D i s t r i c t C o u r t a g r e e d w i t h t h i s c o n t e n -

t i o n and h e l d as a m a t t e r o f l a w t h a t t h e e v i d e n c e c o u l d n o t be
u s e d t o d e t e r m i n e damages.
           The D i s t r i c t C o u r t e r r e d i n t h i s d e t e r m i n a t i o n .      0' C o n n e r
was a s p e c i a l i s t i n c u r b , s i d e w a l k s and f l a t c o n c r e t e work w i t h

26 y e a r s e x p e r i e n c e .   H i s e x p e r t o p i n i o n e v i d e n c e was a d m i s s i b l e

t o e s t a b l i s h t h e r e a s o n a b l e c o s t of t h e c o n c r e t e work u n d e r t h e

s u b c o n t r a c t w i t h o u t r e g a r d to w h e t h e r he was p r e q u a l i f i e d t o per-
f o r m t h e c o n c r e t e work h i m s e l f .     O I C o n n e r l s t e s t i m o n y and b i d
c r e a t e d a f a c t u a l i s s u e on damages f o r d e t e r m i n a t i o n by t h e

District Court.              Such e v i d e n c e p r e c l u d e d d i s m i s s a l u n d e r R u l e
4 1 ( b ) , M.R.Civ.P.,          f o r f a i l u r e of p r o o f o f damages.
            R e v e r s e d and remanded f o r a new t r i a l .




                                                 Chief J u s t i c e



W e concur:
                                                 -
