Empire Steel Mfg. Co. v. Carlson, 80-243
| Decision Date | 27 January 1981 |
| Docket Number | No. 80-243,80-243 |
| Citation | 191 Mont. 189,38 St.Rep. 101,622 P.2d 1016 |
| Parties | EMPIRE STEEL MANUFACTURING COMPANY, a Corporation, Plaintiff and Respondent, v. R. E. CARLSON, doing business as Burleson Transportation, and Frank V. Burleson, Defendants and Appellants, Frank V. BURLESON, Defendant and Third-Party Plaintiff, and Co-Respondent, v. R. E. CARLSON, doing business as Burleson Transportation, Third-Party Defendant and Appellant. |
| Court | Montana Supreme Court |
Olsen, Christensen & Gannett, Billings, for appellant.
Crowley, Haughey, Hanson, Toole & Dietrich, Gary Beiswanger, Billings, for respondent.
Empire Steel Manufacturing Company (Empire) filed its complaint in the District Court, Thirteenth Judicial District, Yellowstone County, alleging in the alternative, that it had a contract for the haulage of coal silos with either R. E. Carlson, d/b/a Burleson Transportation or Frank Burleson; that the contract for haulage had not been performed by either; and that it had incurred damages thereby. Carlson denied the haulage contract, and cross-claimed against Burleson for indemnity should Carlson be held liable to Empire. Burleson denied the haulage contract with Empire and cross-claimed against Carlson for indemnity should Burleson be held liable to Empire. The District Court entered judgment in favor of Empire and against Carlson for $17,723.55, plus accrued interest; against Carlson on his cross-claim against Burleson; and dismissed Burleson's cross-claim against Carlson.
Carlson appeals from the judgment of the District Court.
In essence, the District Court, sitting without a jury, found that Carlson through his employees had entered into a contract to haul coal silos for Empire for the sum of $250 per section of silo. Because Carlson refused to perform the contract, Empire had to procure another transportation carrier to do the hauling, resulting in the damages awarded to Empire.
Carlson raises these issues for our determination:
(1) The date of the alleged contract for haulage was August 17, 1972, and Carlson was not legally authorized to transport goods until August 28, 1972.
(2) The memorandum of Carlson's employee Lindner is insufficient to provide a basis for a valid contract.
(3) In any event, Empire did not accept Carlson's offer to contract nor rely on that offer in making its bid for the fabrication of the coal silos.
(4) The employment relationship between Burleson and Carlson was insufficient to bind Carlson to any contract with Empire.
We begin the discussion by noting, as we have in the past, that this Court, on appeal, may not set aside the findings of a District Court unless they are clearly erroneous. Rule 52(a), Mont.R.Civ.P. We do not substitute our judgment for that of the trier of fact, but only consider whether substantial credible evidence supports the findings. We view the evidence in the light most favorable to the prevailing party, recognizing that substantial evidence may be weak or conflicting with other evidence, yet still support the findings. If credibility of witnesses is involved, the determination of the weight given to the testimony is the primary function of the trial judge sitting without a jury, and not that of this Court. Heintz v. Vestall (1980), Mont., 605 P.2d 606, 609, 37 St.Rep. 99, 102, Cameron v. Cameron (1978), Mont., 587 P.2d 939, 945, 35 St.Rep. 1723, 1729.
In early 1972, Empire was planning to bid for the fabrication of coal silos to be supplied to Bechtel Corporation at Colstrip, Montana. At that time, Burleson was a certificated Class 3 (now C) motor carrier, doing business as Burleson Transportation. Empire sought from Burleson a bid for the cost of the transportation of the silos from Billings to Colstrip. Burleson came to the Empire plant to review the blueprints and plans of the silos. Based on that examination, his knowledge of the route, his desire for a "back haul", and a system he would devise to transport the silo sections over the highways to avoid obstructions, he gave Empire a bid of $250 per section for the transportation. Moreover, Burleson wrote up his bid and placed it in his "quote file" for later reference if Empire turned out to be the successful bidder.
The District Court found that Empire relied on Burleson's transportation bid in making up Empire's bid to Bechtel.
On July 3, 1972, Burleson entered into an agreement with Carlson to sell him the motor carrier business, including the authority to operate as a Class C carrier under a certificate issued by Montana's Public Service Commission. Carlson applied to the commission for transfer of the certificate, stating that the parties desired the transfer to become effective on July 8, 1972. On August 14, 1972, the Public Service Commission approved the transfer, but the certificate itself was not delivered to Carlson until he received it in the mail on August 28, 1972.
After signing the sales agreement, and while the application for certificate was pending, Carlson employed Burleson at a monthly salary of $1,000. Burleson was employed from July 1972, until December 31, 1972, to assist in the orderly transfer of the business from one owner to the other, and to introduce the new management to Burleson's business contacts. Carlson also employed Morris Lindner to assist in running the business.
In August 1972, Empire sought a firm written commitment for the silo hauling contract. Empire's employee, Greer, got in touch with Burleson on August 17, 1972, seeking a written confirmation of the $250 bid per section of silo. Greer went to Carlson's office and received a written memorandum, from Lindner, which stated:
Before Empire obtained the written memorandum, Burleson had informed Greer by telephone that the business had been sold to Carlson but that Greer should have "no problem" obtaining the written bid from Lindner, who was in Carlson's office. The bid was prepared by Lindner from Burleson's "quote file." At the time he received the memorandum, Greer told Lindner that Empire would let him know when they were ready to begin transportation of the silos. Greer understood that the bid he received from Lindner was on Carlson's behalf.
Empire was the successful bidder on the coal silos. In November 1972, Empire called Lindner to inform him that the first silo section was ready for transportation to Colstrip. Lindner then went to the Empire plant, viewed the silos, and informed Empire that Carlson would not transport the silos for the price set out in the memorandum. This refusal was later confirmed by letter and subsequently Carlson offered to transport the silo sections at a different price. Empire made other arrangements for the transportation. It issued a purchase order to Getter Trucking, which company transported the silos for a total price of $25,223.55. The District Court determined that if Carlson had honored the written bid, the total costs for transportation to Empire would have been $7,500. On that basis, the court awarded Empire damages in the amount of $17,723.55, plus interest and costs.
Carlson's first issue is that he had no authority from the state prior to August 28, 1972, to enter into transportation contracts. He argues that the date the transportation company was sold to Carlson was July 13, 1972, but that approval was not secured from the Public Service Commission until it was received in the mail on August 28, 1972. Since the memorandum was executed by Lindner on August 17, 1972, Carlson contends the memorandum predates his authority to haul goods in Montana. Carlson further contends that it was Burleson's contract, not Carlson's, and that the agreement between Burleson and Carlson for the sale of the trucking business did not include work or contracts in progress while the application for certificate is pending.
Carlson points out that under the rules of the Public Service Commission, no application for the transfer of a Class C certificate may be retroactive, nor may it be effective until approved by the commission. He also points to section 69-12-313(1), MCA, which states in applicable part "No Class C motor carrier ... shall operate for the distribution, delivery, or collection of goods, wares, merchandise, or commodities or for the transportation of persons on any public highway in this state without first having obtained from the commission, under the provisions of this chapter, a certificate that public convenience and necessity require such operation."
It is undisputed that the application for transfer of certificate to Carlson was approved by the commission on August 14, 1972, although the certificate itself was not reissued and delivered to Carlson until August 28. Under the rules of the commission, the transfer was at least effective as of August 14. Nothing in section 69-12-313(1), MCA, prevents an applicant from contracting, pending issuance of the certificate, for the transportation of goods. In fact, it is contemplated in section 69-12-313(4), MCA, that such contracts as are in existence...
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