White v. Longley

• Decision Date: 07 December 2010
• Docket Number: No. DA 10-0133.,DA 10-0133.
• Citation: 2010 MT 254,358 Mont. 268,244 P.3d 753
• Parties: Steve WHITE and Donna White, husband and wife, Plaintiffs and Appellees, v. Tom LONGLEY, individually and Castle Homes, LLC, Defendants and Appellants.
• Court: Montana Supreme Court

244 P.3d 753

358 Mont. 268

2010 MT 254

Steve WHITE and Donna White, husband and wife, Plaintiffs and Appellees,

v.Tom LONGLEY, individually and Castle Homes, LLC, Defendants and Appellants.

No. DA 10-0133.

Supreme Court of Montana.

Submitted on Briefs Sept. 15, 2010.

Decided Dec. 7, 2010.

For Appellants: Douglas Scotti; Morrison & Frampton, PLLP, Whitefish, Montana.

For Appellees: Amy N. Guth; Attorney at law Libby, Montana.

Chief Justice MIKE McGRATH delivered the Opinion of the Court.

¶ 1 Tom Longley and Castle Homes, LLC, appeal from the decision of the District Court of the Nineteenth Judicial District awarding damages to Steve and Donna White. Longley and Castle Homes present a number of issues for review which will be noted below. We affirm.

BACKGROUND

¶ 2 In 2006 Steve and Donna White bought 28 acres near Troy, Montana as the site of their retirement home. Upon the recommendation of a family member they contactedTom Longley in Washington state about building their home. They met with Longley and showed him drawings and pictures of the type of house they wanted. They toured Longley's personal house that he had built, and observed the house next door that he also built. Longley gave them a business card identifying himself as the general manager of Castle Homes, LLC, and representing that he was a professional engineer with a doctorate degree. The promotional materials for Castle Homes, LLC contained endorsements by satisfied customers and a biographical sketch that indicated that Longley had earned a Ph. D. in civil engineering from the University of Idaho. Neither Longley nor the materials disclosed that his degree was in agricultural engineering.

¶ 3 The Whites asked about hiring an architect but Longley told them he could design the house based upon the ideas and images they had provided. After Donna confirmed that Longley's contractor license in Washington was current and that the Better Business Bureau had no complaints against him or Castle Homes, the Whites believed that they had found the right contractor to build their home. In January, 2007 the Whites entered a written contract with Longley and Castle Homes. The contract provided that Castle Homes would do the foundation and framing and would contract out the rest of the work. The Whites agreed to pay costs plus 30% and tendered a down payment of $2,000.

¶ 4 A month later Longley sent a set of drawings depicting the floor plan and exterior views. The District Court found that the drawings contained a "remarkable lack of detail regarding framing."

¶ 5 Steve White retired from his job in California and moved to Montana to camp on the property and help work on the house. Jason Ellis, an employee of Longley's in Washington, volunteered to come to Montana to work on the White house project. Ellis also camped on the property and Steve White became his primary helper, even though Steve had no experience in home building. Longley flew Ellis to Montana and back to Washington weekly in Longley's personal airplane.

¶ 6 Longley's initial crew of workers did some foundation work and departed, leaving Ellis to finish the foundation and pour the concrete walls. The project suffered throughout from a lack of skilled workers. While Ellis had years of experience as a carpenter, he was "over his head" trying to build the large and complicated house for the Whites. For example, Longley called for insulated forms to be used to pour concrete walls. Ellis had never worked with these forms, so Longley left an instructional DVD for him along with the materials. While Longley berated Ellis during the weekly flights back to Washington that the work was not progressing fast enough, Ellis would complain that the crew was inadequate and that many mistakes were being made.

¶ 7 One of the largest problems was that the house had not been adequately designed and that the roof would have to be fitted to the structure once the framing was done. Both Ellis and Steve White saw that there were substantial structural problems, not the least of which was that there would be inadequate support for the heavy roof beams.

¶ 8 Meanwhile, Donna White, who was then working outside of the United States, became concerned with Longley's billings. These were coming in increments of $25,000 with little detail. In June, 2007, she returned to Montana and met with Longley and Steve at the property. At that time, in what the District Court described as a "remarkably audacious move," Longley proposed to the Whites that their best course of action was to pay him $30,000 to "buy out" the written contract with Castle Homes. Longley's plan was to continue with the project, complete the framing and installation of the windows and winterize the structure. The Whites would then hire the subcontractors to complete the work.

¶ 9 The Whites paid Longley the $30,000 to "buy out" the contract, and agreed to keep Longley on the project until the framing wasfinished, the windows were in and the house was secured from the weather for the winter. The District Court found that nothing changed and that the "job continued to be understaffed and the work continued to bewoefully substandard." The Whites continued to pay Longley in $25,000 increments in July and August, 2007, when it came time to install the roof.

¶ 10 Longley never consulted a structural engineer about the structural requirements and installation of the roof, which was complicated by multiple dormers and intersecting angles. Instead he went to Larson Lumber in Troy to order beams and rafters for the project. Larson employees told Longley that the roof system needed to be sufficient to handle a snow load of 80 pounds per square foot, and that specification was sent on to Boise Cascade, which was to manufacture the beams and rafters. Against Larson's advice, Longley ordered a roof package rated at 40 pounds per square foot, along with custom-made support hangers that would allow the rafters to be attached despite the framing mistakes. When Bonnie Larson at Larson Lumber objected, Longley told her that he was an engineer and that she should butt out.

¶ 11 Longley later blamed Larson and Boise Cascade for the inadequacies in the roof, and for selling him a miscalculated and undersized system. The District Court found "Larson to be believable on this issue and Longley to be unbelievable." The District Court found that while it was "inconceivable" that both Larson and Boise Cascade would make such fundamental mistakes with the roof, even if mistakes had been made it was Longley's duty as the contractor to "catch the error and send the undersized roof package back." The District Court concluded that "Longley's version of the roof transaction is simply not credible."

¶ 12 Shortly after the roof system arrived on site, Longley and Ellis disagreed on how it should be installed. Ellis quit. The District Court found that by this point the Whites had paid Longley more than $180,000 for a "shoddily constructed unroofed structure." The Whites hired an engineer from Kalispell to inspect the project and advise them on the status. The engineer wrote a report describing numerous issues with the house and the Whites sent it to Longley. He assured them that he was aware of the issues and that a "super crew" was on its way to fix the problems and secure the structure for winter. With the information they had, the Whites were concerned about the ability of the structure to support the roof and became unwilling to pay Longley any more money.

¶ 13 Longley then threatened to take the Whites to arbitration pursuant to the contract with Castle Homes, even though he had been paid $30,000 at his instigation to "buy out" that same contract. He told the Whites that he had already talked to an arbitrator about the situation; that their claims would not "hold water;" and that they would have to arbitrate each of their complaints separately. Longley then served the Whites with an arbitration notice. They hired counsel and filed the suit. The District Court enjoined Longley's attempt at arbitration.

¶ 14 On the eve of the trial in the Whites' lawsuit, they entered a written settlement with Longley. The parties agreed that Longley would hire the same engineer who he had designated as his trial expert to evaluate the structure and recommend corrective measures that Longley would complete. The settlement fell apart when Longley's engineer also found numerous serious structural problems with the work. Longley would not agree to correct the problems and refused to pay the engineer for his work. The Whites then filed an amended complaint incorporating a claim for breach of the settlement agreement.

¶ 15 The Whites and Longley tried the case to the District Court sitting without a jury. The District Court's findings of fact detailed numerous structural issues and poor workmanship with the house that made the "situation unsalvageable." In just the basement those issues included a foundation "significantly out of square;" undersized footings with inadequate depth; a bearing wall that misses the foundation poured for it; plumbing pipes intended to be inside a wall located in concrete outside the wall; wire mesh designed to be within the concrete slab to strengthen it located under the slab; structural errors in the floor heating system; door and window headers that are undersized or missing; and rigid foam insulation omitted when the slab was poured. Above the basement, there were too few anchor bolts toattach the sill plate; inferior lumber was used for studs; support posts were not aligned from one floor to the next; support posts were built from scraps of discarded lumber; vertical and horizontal framing members did not butt squarely; and window and door headers were again undersized or missing.

¶ 16 The District Court found:

It is not just that there is a complete lack of craftsmanship, but the house is structurally compromised from top to bottom. It would be foolish to attach heavy Glulam beams and

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