                          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
                                                    2
                                           ~ecidedfAN    lgfg
Mr. 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.


        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 Elec-

t 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 subcontrac-
t 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 con-

t 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 contem-
        p l a t e d and agreed t o be performed under t h e Kosmerl-
        Sayler 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 ) ,               Mont.           ,   578 P.2d

315, 316, 35 St-Rep. 631, 633-34:
         II I   . . . 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.

        "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
        t 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 .   (Cita-
        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 subcon-

tractors.           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 conversa-

t 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 conversa-

t 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 subcon-
t 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 inde-

pendent 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 .        I n Sharp

v . Hoerner-Waldorf            Corp.     &   Aetna C a s u a l t y I n s . Co.        (1978),

       Mont.              ,   584 P.2d 1298, 1301, 35 St.Rep.                      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 :
       " S e c t i o n 92-438.1(1), R.C.M.             1947, r e i t e r a t e s t h e
       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-
       ployer-employee r e l a t i o n s h i p e x i s t s          ..  . is the so
       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 con-
       s 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.              There was no d i r e c t i o n a s t o

conduct of t h e work.              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
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.
                                                                     t                       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 con-

t 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 .




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