Thermal Design, Inc. v. Duffy

• Decision Date: 04 October 2022
• Docket Number: DA 21-0516
• Citation: 2022 MT 191
• Parties: THERMAL DESIGN, INC., a Nebraska Corporation, Plaintiff, Counterclaim Defendant, and Appellee, v. MARK and PAM DUFFY, a married couple, Counterclaim Plaintiffs, Crossclaim Plaintiffs, and Appellants, STEVE THORSON, an individual, d/b/a TNT Building Systems, a general partnership; TRAVIS THORSON, an individual, d/b/a TNT Building Systems, a general partnership; Defendants, Crossclaim Defendants, and Appellees, STEEL CONCEPTS, LLC, an Idaho limited liability company; and STEVE LARSON, an individual, Defendants and Appellees, MARK DUFFY, an individual; PAM DUFFY, an individual; and CENTRAL COPTERS, INC., a Montana corporation, Defendants and Appellants.
• Court: Montana Supreme Court

2022 MT 191

THERMAL DESIGN, INC., a Nebraska Corporation, Plaintiff, Counterclaim Defendant, and Appellee, STEVE THORSON, an individual, d/b/a TNT Building Systems, a general partnership; TRAVIS THORSON, an individual, d/b/a TNT Building Systems, a general partnership; Defendants, Crossclaim Defendants, and Appellees, STEEL CONCEPTS, LLC, an Idaho limited liability company; and STEVE LARSON, an individual, Defendants and Appellees, v. MARK and PAM DUFFY, a married couple, Counterclaim Plaintiffs, Crossclaim Plaintiffs, and Appellants, MARK DUFFY, an individual; PAM DUFFY, an individual; and CENTRAL COPTERS, INC., a Montana corporation, Defendants and Appellants.

No. DA 21-0516

Supreme Court of Montana

October 4, 2022

Submitted on Briefs: July 13, 2022

District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-15-403-A Honorable Peter B. Ohman, Presiding Judge

For Appellants: Kellie G. Sironi, Attorney at Law, Billings Montana

For Appellee Thermal Design, Inc.: Michael P. Manning, Ritchie Manning Kautz PLLP, Billings, Montana

For Appellees Steven Thorson and Travis Thorson: Steve Thorson Self-Represented, Manhattan, Montana Travis Thorson, Self-Represented, Belgrade, Montana

OPINION

James Jeremiah Shea Justice

¶1 Defendants Mark and Pam Duffy and Central Copters, Inc. (Central Copters) appeal the October 4, 2021 Judgment, Decree of Foreclosure, and Order of Sale by the Eighteenth Judicial District Court, Gallatin County, as well as all orders and actions contained therein. We restate and address the following issues:

1. Whether the District Court abused its discretion during voir dire.

2. Whether the District Court erred by ruling that Thermal Design's construction lien was valid against Central Copters, as the contracting party to a real estate improvement contract with TNT, and the Duffys, as landowners.

3. Whether the District Court erred by allowing TNT to make a crossclaim against Central Copters that was not included in the pretrial order.

¶2 We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Mark and Pam Duffy own two parcels of real property near the Bozeman Yellowstone International Airport in Belgrade that they lease to Central Copters, a charter helicopter and precision lifting company owned and operated by the Duffys.

¶4 In the fall of 2013, Mark ordered a pre-engineered steel building from R &M Steel, a company based in Idaho. The building was to serve as a hangar and repair facility for Central Copters. In the spring of 2014, Central Copters hired Steve Thorson and his son, Travis, d/b/a TNT Building Systems (TNT), to assemble the building. TNT met with Mark at the Central Copters facility in Belgrade to discuss the details of the job. Because Mark was concerned about the building's insulation, the group visited three of TNT's completed projects nearby, each with a different type of insulation, including one called the "Simple Saver System," designed and supplied by Thermal Design, Inc. Steve testified at trial that, to his recollection, Mark was "focused on the Simple Saver one because it's the best looking. It's the most energy efficient. It's the best of those three products." Steve testified:

When we left that meeting, he was definitely interested in it. The only other insulation that he ever mentioned to me -- I mean, he said he didn't want what was in his current hanger [sic], which was clear, and then he said he looked into doing spray foam in the new building. However, he thought that was going to be too expensive, and so I told him about the Simple Saver System, which is a-- like I said -- very good looking, highly efficient system, and so I told him, at that point, that I would get him literature, and that he could look at it then, so that's what we did.

¶5 On June 6, 2014, Steve sent an e-mail to Mark, bidding a flat fee of $70,000 to erect the pre-engineered building kit, specifying that "[t]his quote includes installing the [sic] all the doors." The e-mail noted that Steve had been "talking to several subs to get the ball rolling," and explained that TNT would mark up any subcontractor invoices by ten percent as a general contractor fee. While neither party signed the bid, Mark testified at trial that the parties had an agreement encapsulated by the June 6 e-mail. The e-mail did not specify a completion date or specifically reference any costs associated with TNT providing or installing insulation for the building.

¶6 Over the summer, Mark and Central Copters prepared the job site. When Mark was having trouble finding a contractor to pour the concrete foundation on schedule, he gave TNT permission to engage C&H Engineering and Surveying, Inc. to re-engineer the slab and hire Kruse Enterprises to pour the foundation. Central Copters paid TNT's related invoices within days, including a ten percent general contractor markup on both invoices, without dispute.

¶7 On August 15, 2014, Mark sent Steve an e-mail updating him on the progress at the job site and asking Steve to "please confirm that you have ordered the insulation for the building from the source you have." Steve testified that "because [the Simple Saver System] was the only insulation that [TNT] offered," he understood the e-mail to request that he purchase the Simple Saver System from Thermal Design. However, Steve waited until the building had progressed to a certain point in early October to provide Thermal Design with the final building plans and actually place the order. Thermal Design's engineering department then used the building plans to design an insulation system specific to the Central Copters hangar. Based on Thermal Design's specifications, another company, Johns Manville, manufactured and shipped the fiberglass insulation directly to the job site from its plant. The Simple Saver System insulation kit shipped in three parts in late October, arriving in Belgrade by early November 2014. Mark testified that when the pallets arrived at the site he had "never heard of Thermal Design," TNT had never provided him a quote for the product, and he never authorized TNT to purchase the insulation kit.

¶8 The pre-engineered building was shipped to the site in late August and TNT unloaded eight flatbed trailer loads over two days. Kruse Enterprises completed the concrete foundation in mid-September. By mid-October, Steve testified that the building was about 40 percent complete, and TNT submitted an invoice to Central Copters for $62,520. The invoice included a $25,000 charge labeled "1st labor deposit," which was about 35 percent of TNT's $70,000 bid, and a $37,520 charge for "[i]nsulation materials[:] Simple Saver System."^[1] Mark testified that, with winter approaching, he was disappointed with the progress on the building and "was not prepared to pay TNT for something he had not done." Mark and Steve met on November 13, 2014. The meeting deteriorated into a shouting match. Mark wrote Steve an e-mail later that day, which stated, "I fully intend to pay you in a timely manner, but I need you to 'outline the scope of the project with dates describing progress and completion of the project.'" (Emphasis in original.) Steve never responded to Mark's e-mail, nor did TNT provide Mark with a progress report, but TNT began removing its equipment from the building site within the week. On November 20, 2014, Mark wrote to Steve again, stating, "Consider this email as notice that you are finished with this building project. You and your 'company' T&T [sic] Building Systems have failed to progress and erect the building and therefore you are 'Terminated.'"

¶9 On December 12, 2014, Mark called Thermal Design to tell them that TNT had walked away from the job and he was having trouble finding a reasonably priced installer. Thermal Design's regional sales manager, Micah James, e-mailed TNT, stating: "Brian [Geary] from Central Copters want[s] to pay us directly for the insulation. I want to make sure it is OK with you for us to submit the bill to them. Please contact me today so we can visit about this." James then e-mailed Geary asking for photos of the progress on the job site and sent him the name of an erector finishing a job in Great Falls who "should be able to help you out." On December 15, 2014, Geary sent an e-mail to James indicating that due to higher-than-expected installation costs, "this insulation has become a real problem." Geary asked James to let him know "when to expect trucks" to pick up the insulation and wrote, "This insulation was TNT's Deal and they have Decided to walk off the job and is still there [sic] deal." Central Copters hired Steel Concepts, LLC (Steel Concepts) to complete the building and install spray urethane insulation for $79,025. Neither TNT nor Central Copter ever paid Thermal Design for the Simple Saver System.

¶10 On January 5, 2015, Thermal Design filed a construction lien with the Gallatin County Clerk and Recorder. In May 2015 Thermal Design filed a complaint to foreclose its construction lien against the Duffys and Central Copters. The complaint also asserted claims against Steve and Travis Thorson and TNT, as well as Steel Concepts and its owner, Steve Larson. Central Copters filed an answer denying liability. The Duffys filed counterclaims against Thermal Design for declaratory judgment, breach of warranty and trespass, as well as crossclaims against TNT for breach of contract, negligence, and indemnity. When TNT failed to respond, the clerk entered default against them. In the answer brief that was attached to TNT's motion to set aside the entry of default, TNT denied liability and asserted a crossclaim against the Duffys for breach of contract, claiming the Duffys owed them $25,000 for labor and $31,266.12 for the insulation owed to...