Glacier Tennis Club v. TREWEEK CONST. CO. INC.

• Decision Date: 23 March 2004
• Docket Number: No. 02-509.,02-509.
• Citation: 2004 MT 70,87 P.3d 431,320 Mont. 351
• Court: Montana Supreme Court
• Parties: GLACIER TENNIS CLUB at the SUMMIT, LLC, Plaintiff, Respondent, and Cross-Appellant, v. TREWEEK CONSTRUCTION COMPANY, INC., Defendant and Appellant. Treweek Construction Company, Inc., Third-Party Plaintiff and Appellant, v. Nupac/Pack and Company, a Montana Corporation; Lyndon Steinmetz, d/b/a Lyndon Steinmetz Drafting and Design, a Sole Proprietorship; Jim Thompson d/b/a Arquitectnos, a Sole Proprietorship, Third-Party Defendants and Respondents.

87 P.3d 431

2004 MT 70

320 Mont. 351

GLACIER TENNIS CLUB at the SUMMIT, LLC, Plaintiff, Respondent, and Cross-Appellant, v. TREWEEK CONSTRUCTION COMPANY, INC., Defendant and Appellant.

Treweek Construction Company, Inc., Third-Party Plaintiff and Appellant, v. Nupac/Pack and Company, a Montana Corporation; Lyndon Steinmetz, d/b/a Lyndon Steinmetz Drafting and Design, a Sole Proprietorship; Jim Thompson d/b/a Arquitectnos, a Sole Proprietorship, Third-Party Defendants and Respondents.

No. 02-509.

Supreme Court of Montana.

Submitted on Briefs February 13, 2003.

Decided March 23, 2004.

For Appellant: Robert H. Phillips & Fred Simpson, Phillips & Bohyer, Missoula, Montana.

For Respondents: Joe Bottomly, Sean Hinchey and Amy Eddy, Bottomly Law Offices, Kalispell, Montana, (Glacier Tennis Club), Bruce A. Fredrickson and Kimberly S. More, Crowley, Haughey, Hanson Toole & Dietrich, P.L.L.P., Kalispell, Montana, (Nupac/Pack), Jeffrey D. Ellingson, Ellingson Law Offices, Kalispell, Montana, (Thompson), Michael A. Ferrington, Attorney at Law, Whitefish, Montana (Steinmetz).

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Glacier Tennis Club at the Summit, LLC (GTC) brought this action against Treweek Construction, Inc. (Treweek), in the District Court of the Eleventh Judicial District, Flathead County, claiming damages for various design and construction defects in its tennis facility. In response, Treweek filed a third-party claim against the project architect, Jim Thompson, d/b/a/Arquitectnos (Thompson), alleging that Thompson was negligent in his preparation and review of plans for the construction of the tennis facility. Treweek also filed third-party claims against various subcontractors, including, Nupac/Pack and Company (Nupac), Lyndon Steinmetz, d/b/a Lyndon Steinmetz Drafting and Design (Steinmetz), and Steve Seitz, d/b/a/Seitz Engineering (Seitz), seeking indemnity. The District Court entered summary judgment in favor of Thompson, Nupac, and Steinmetz, dismissing them from the lawsuit, and Treweek settled its claim with Seitz shortly before trial. A jury trial was thereafter held on GTC's claims against Treweek for negligence and breach of contract, resulting in an $85,000 verdict in favor of GTC. Treweek appeals and GTC cross-appeals on the issue of prejudgment interest. We affirm.

¶ 2 The following issues are raised on appeal:

¶ 3 1. Did the District Court err in granting summary judgment in favor of Third-Party Defendant, Jim Thompson?

¶ 4 2. Did the District Court err in granting summary judgment in favor of Third-Party Defendant, Nupac?

¶ 5 3. Did the District Court err in denying Treweek's motion for judgment as a matter of law regarding GTC's claim for radon remediation damages?

¶ 6 4. Did the District Court err in excluding evidence that GTC had rejected an underslab drain tile system?

¶ 7 5. Did the District Court err in admitting evidence of engineering fees reasonably incurred to evaluate and remedy Treweek's work?

¶ 8 6. Did the District Court err in denying GTC's request for prejudgment interest?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 9 This litigation arises out of the design and construction of a four court indoor tennis facility for GTC, a limited liability corporation owned by Northwest Healthcare Corporation and approximately thirty families interested in promoting tennis. Prior to soliciting bids for construction of the facility, GTC retained the services of Jim Thompson, an architect, to provide preliminary design parameters and building specifications of the tennis facility. Thompson also assisted GTC in obtaining permits and evaluating bid proposals, among other duties.

¶ 10 Based upon the schematic drawings prepared by Thompson, Treweek submitted a bid to GTC for the design and construction of the tennis facility in June 1997. At the request of one of the GTC board members, Treweek additionally quoted the cost of installing an underslab drain tile system within the facility, but the quote was not part of Treweek's original bid proposal, and was not adopted by GTC. Shortly after submitting its bid, Treweek was awarded the contract to design and construct the tennis facility. Treweek commenced construction of the facility early that fall, using subcontractors to complete various aspects of the project. Among those hired to perform the work was Nupac, a construction company who primarily prepared the ground surface and laid asphalt for the tennis courts. Treweek also hired Steinmetz and Seitz, who provided drafting and design services, respectively.

¶ 11 The facility was completed in the early part of 1998. However, shortly thereafter, GTC began experiencing problems with the building. In particular, GTC representatives reported a "bulge" in the surface playing area of one of the tennis courts, which caused tennis players to occasionally stumble. They also noticed water seeping into the building from the exterior walls many of which are below ground whenever the exterior ground became saturated with moisture.

¶ 12 In response to these concerns, several meetings were held between representatives of GTC, Treweek, and the subcontractors. While the parties disagreed as to the cause of the bulge, they generally agreed that its existence was due to error.

¶ 13 Treweek also recognized GTC's concerns with the draining system and acknowledged that water should not be leaking into the building. In an effort to remedy this problem, Treweek patched the interior walls several times. However, the leaking continued despite their efforts. After nearly two years without a remedy, GTC retained the services of Jay Billmayer (Billmayer), an engineer, to investigate the problem. Billmayer determined the building was leaking due to a poor subsurface drainage design as well as defective workmanship in the drainage system, including crushed drain pipes, squashed outlet openings, and unsuitable backfill material.

¶ 14 Billmayer also discovered that a vapor barrier had not been installed beneath the facility. The lack of a vapor barrier raised concerns about the presence of radon, since vapor barriers have a secondary benefit of preventing gas from rising to the surface. As a result of this concern, Billmayer and GTC performed radon tests in the facility which revealed that radon levels were in excess of acceptable limits. Billmayer estimated the cost to remediate the presence of radon was significant. However, Treweek responded that radon remediation was neither contemplated by the parties at the time of contracting, nor required by the standard of care at the time of the project.

¶ 15 On August 18, 2000, GTC brought suit against Treweek, claiming that it was negligent and had breached its contract. In response, Treweek admitted the problems associated with the bulge in the tennis court and leaking water, but denied that such problems were caused by its negligence or breach. Treweek thereafter brought third-party claims against Jim Thompson, Nupac, Steinmetz, and Seitz, alleging that Thompson had been negligent in his preparation, review, and approval of the construction plans, and that Nupac, Steinmetz, and Seitz had failed to perform their subcontracts in a good and workmanlike fashion and had breached their contracts with Treweek. Treweek sought indemnification from its third-party defendants for any claim upon which GTC prevailed.

¶ 16 In response to Treweek's third-party claims, Nupac, Steinmetz, and Thompson filed motions for summary judgment, each seeking to be dismissed from the lawsuit on the basis that no genuine issues of material fact existed as to their alleged negligence or alleged failure to perform the work according to contract. Following oral arguments, the District Court concluded that Treweek had failed to bring forth evidence establishing issues of material fact as to the third-party defendants' liability, and granted summary judgment in favor of each of them.

¶ 17 GTC requested summary judgment as to the issue of its comparative negligence, which Treweek had counterclaimed in response to GTC's first amended complaint. According to Treweek, GTC was comparatively negligent by virtue of its affiliation with Jim Thompson who, Treweek maintained, negligently failed to identify any errors or deficiencies in the plans submitted for his review. The District Court rejected Treweek's contentions, finding no evidence that Thompson was GTC's agent for any part of the project beyond providing preliminary specifications, and awarded summary judgment in favor of GTC on Treweek's counterclaim.

¶ 18 The matter proceeded to trial between GTC and Treweek on April 15, 2002.¹ Following GTC's case-in-chief, Treweek moved for a directed verdict regarding damages for the increased costs of radon remediation allegedly caused by its failure to place a vapor barrier and proper subsurface gravel beneath the tennis facility. This motion was denied.

¶ 19 On April 19, 2002, the jury returned a verdict in favor of GTC in the amount of $85,000. The District Court entered judgment on the verdict on April 23, 2002, and GTC subsequently filed a motion seeking prejudgment interest. The District Court denied GTC's motion, concluding that the amount of damages was incapable of being ascertained prior to trial. Treweek appeals from the April 23, 2002 judgment and GTC cross-appeals from the District Court's denial of prejudgment interest.

DISCUSSION

¶ 20 Did the District Court err in granting summary judgment in favor of Third-Party Defendant, Jim Thompson?

¶ 21 We review a district court's grant of summary judgment de novo, applying the same evaluation under Rule 56, M.R.Civ.P., as the district court. Bos v. Gallatin County, 2003 MT 162, ¶ 8, 316 Mont. 292, ¶ 8, 71 P.3d 1209, ¶ 8. That is, The party moving for summary judgment has the initial burden of proving that there are no genuine issues of material fact that would permit a non-moving party to succeed on the merits of the case.... If the...