Eschenbacher v. Anderson

• Citation: 34 P.3d 87,2001 MT 206,306 Mont. 321
• Decision Date: 11 October 2001
• Docket Number: No. 01-034.,01-034.
• Parties: Stuart ESCHENBACHER, d/b/a Cascade Log Homes, Plaintiff/Counter-Defendant and Appellant, v. James C. ANDERSON, Defendant/Counterclaimant and Respondent.
• Court: United States State Supreme Court of Montana

34 P.3d 87

2001 MT 206

306 Mont. 321

Stuart ESCHENBACHER, d/b/a Cascade Log Homes, Plaintiff/Counter-Defendant and Appellant, v. James C. ANDERSON, Defendant/Counterclaimant and Respondent.

No. 01-034.

Supreme Court of Montana.

Submitted on Briefs July 12, 2001.

Decided October 11, 2001.

Patrick F. Flaherty, Great Falls, MT, for Appellant.

Douglas DiRe, Dayton Law Firm, Anaconda, MT, for Respondent.

Justice JIM REGNIER delivered the Opinion of the Court.

¶ 1 Stuart Eschenbacher appeals from the Findings of Fact, Conclusions of Law and Order of the Montana Eighth Judicial District Court, Cascade County, concluding that Eschenbacher breached a purchase contract between Eschenbacher (d/b/a Cascade Log Homes) and James C. Anderson and that the proper remedy is to rescind the contract. We affirm and remand for determination and award of Anderson's attorney's fees and costs on appeal.

¶ 2 We find the following issues are dispositive of this appeal:

¶ 3 Whether the District Court erred in failing to interpret the contract as requiring Anderson to provide the name of his boom truck operator?

¶ 4 Whether the District Court erred in failing to rule that Anderson must pay for completion of the log shell before Anderson can claim a breach of contract?

¶ 5 Whether the District Court erred in rescinding the contract?

BACKGROUND

¶ 6 This dispute traces back to early March 1999, when James C. Anderson contacted Stuart Eschenbacher about the construction of a log home. Eschenbacher, along with his wife Barbara Eschenbacher, operates Cascade Log Homes. Cascade Log Homes is in the business of designing and constructing log homes. Eschenbacher has built more than 20 log homes, which he typically constructs in his yard in Cascade, Montana. Almost all of these structures are then reassembled at their final building site, away from his yard in Cascade.

¶ 7 On March 19, 1999, Eschenbacher and Anderson entered into a written purchase contract for the construction of a log home. Eschenbacher drafted the agreement, and the two parties reviewed it together at some length in Eschenbacher's home prior to signing. The parties agreed to a total purchase price of $28,000, which Anderson was to pay in four installments. Under the terms of the contract, Eschenbacher was to construct the log home in his yard and then deliver the structure to Anderson's building site on Georgetown Lake, Montana. The contract required Anderson to have the building site ready for the log home at the time of delivery and "make arrangements for all persons necessary to erect the log structure at the site." Eschenbacher was to provide assistance and supervision during the assembly of the log structure.

¶ 8 Of particular importance were the following terms of the purchase contract concerning the transport and assembly of the log home:

¶ 9 BUYER will act as his own contractor and is responsible for obtaining all building permits, and ensuring compliance with all building codes and restrictions imposed by law or covenant. BUYER acknowledges that CASCADE LOG HOMES is acting soley [sic] as a manufacturer and that any advise [sic] provided by CASCADE LOG HOMES or its agents, during the erection of the prefabricated log structure at the property of the BUYER, is merely an assistance as the manufacturer and will not be construed as though CASCADE LOG HOMES were a contractor. CASCADE LOG HOMES agrees and will provide supervision, consultation, and assistance to BUYER during the erection of the log structure which is part of the contract price.

¶ 10 3. BUYER'S OBLIGATION UPON DELIVERY: BUYER will have the foundation ready for the log structure at the time the logs are delivered to the site, and also agree to provide insulation required for the assembly of the log structure at this time. BUYER will make arrangements for all persons necessary to erect the log structure at the site. BUYER will coordinate and assure availability of a boom truck to assemble the log structure at the building site, and will provide all other equipment necessary for the erection of the log structure at the BUYER'S expense. BUYER will be responsible for the layover charge, if any, for the transportation truck if the allotted time is exceeded.

¶ 11 Pursuant to the terms of the contract, Anderson made an initial down-payment on March 19, 1999, of $16,500 to Eschenbacher for the purchase of logs and made a second payment of $3,800 on June 7, 1999, as Eschenbacher began construction of the log home.

¶ 12 Eschenbacher testified that, in the past, he had constructed homes in his yard with a backhoe, tractor or bucket truck. This equipment, however, was not sufficient for constructing Anderson's home. Anderson's log home consists of three interior walls, a layout that Eschenbacher had never constructed before. In order to assemble such a home, and any future homes with a similar design, Eschenbacher purchased a boom truck for $17,000. This boom truck has a lift capability of six tons and a reach capability of sixty feet.

¶ 13 While Eschenbacher set about constructing the log home, Anderson built a foundation at Georgetown Lake at a cost of approximately $20,000 and purchased $11,093.59 worth of building supplies, including insulation, windows and doors. Apparently, these supplies still sit unused at the site on Georgetown Lake. Anderson also made arrangements with his four sons to assist him with assembling the log home. At no time during the construction did Eschenbacher ever inspect the site on Georgetown Lake.

¶ 14 In early June 1999, Anderson made arrangements with a boom truck operator, Woodrow Driver, to assemble his log home. Anderson told Driver the dimensions of his home, and Driver responded that his boom truck was capable of doing the job. Driver's truck had a lift capability of around 8,000 pounds without the boom extended and around 1,500 pounds with the lift extended. The reach capability of the boom truck was around 50 feet.

¶ 15 Sometime around June 25, 1999, a dispute arose over the adequacy of Driver's boom truck. Anderson claims that, prior to completion of the log home, Eschenbacher informed Anderson that he was going to use his newly acquired boom truck to assemble the log home at Georgetown Lake. The cost of such services would be $750. Anderson refused to use Eschenbacher's truck, as he had already made arrangements with Driver.

¶ 16 Eschenbacher then asked Anderson for the name and contact information for Anderson's boom truck operator. Anderson refused to provide this information and said that the boom truck was his responsibility. Eschenbacher responded by refusing to deliver the log home to Georgetown Lake. He then told Anderson that he wanted the lawyers to work out this disagreement.

¶ 17 Anderson claims that Eschenbacher was attempting to pressure him into using Eschenbacher's new boom truck. Anderson maintains that he had no duty to provide Eschenbacher with information regarding Driver and that Driver assured Anderson that his boom truck would be adequate. Furthermore, Anderson claims that if Driver's boom truck proved to be inadequate once the log home arrived, he was willing to acquire a different one. Anderson also insists that he would have provided a specific type of boom truck from the beginning if the contract had required it. Eschenbacher denies that he was pressuring Anderson into using his boom truck and contends that his request for the name and contact information of the boom truck operator was simply for safety reasons. He testified that it is his general practice to ask for such information.

¶ 18 Eschenbacher filed suit against Anderson on October 20, 1999, for breach of contract. On February 11, 2000, Anderson filed an Answer and Counterclaim. The Counterclaim alleged five claims, including breach of contract. On July 28, 2000, the parties stipulated that only the breach of contract claim should be tried before the District Court.

¶ 19 The District Court held a bench trial on August 21, 2000, and issued its Findings of Facts, Conclusions of Law and Order on December 29, 2000, in favor of Anderson. In its findings, the District Court concluded that Eschenbacher materially breached the contract by refusing to deliver Anderson's log home. In making its decision, the District Court found that if Eschenbacher discovered the boom truck to be inadequate upon delivery, he could have refused to unload the logs from his truck and charge Anderson for any subsequent delay as Anderson acquired a more adequate boom truck. The contract anticipated such a delay, according to the District Court, as it specifically provided that Anderson must pay for any excess layover time Eschenbacher's transportation truck incurred. The District Court further concluded that Eschenbacher could have avoided this dispute by enumerating specific requirements for the boom truck in the agreement.

¶ 20 The District Court held that Anderson was relieved of any further obligations under the contract. The District Court also held that Anderson was entitled to rescission of the contract and to attorney's fees and costs. Eschenbacher appeals the findings of the District Court.

STANDARD OF REVIEW

¶ 21 The construction and interpretation of a written agreement are questions of law. See, e.g., In re Estate of Hill (1997), 281 Mont. 142, 145, 931 P.2d 1320, 1323

(citations omitted). It is also a question of law whether ambiguity exists in a written agreement. See Estate of Hill, 281 Mont. at 146, 931 P.2d at 1323 (citations omitted). We review a district court's conclusions of law to determine whether the court's interpretation is correct. See Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686 (citations omitted).

¶ 22 The determination of whether a party materially breached a contract is a question of fact. See Sjoberg v. Kravik (1988), 233 Mont. 33, 38, 759 P.2d 966, 969

. We review a district court's findings of fact to determine whether they...