Background
In 2012, Edward Williams, a disabled veteran, contracted with Lorenz Brothers Construction to build an ADA-compliant home on his property in Helena, Montana using VA benefits. The Lorenz Brothers prepared a proposal for $155,420 with a four-to-five-month completion timeline, financed through a $160,000 promissory note secured by Williams’s property. Construction began in December 2012, but the parties’ relationship broke down in mid-February 2013 over a dispute about whether finishing the basement was included in the original bid. Williams ordered the contractors off the property, at which point the home was only 30–40% complete and more than $86,000 had been drawn on the line of credit.
An inspection after construction stopped revealed twenty-six violations of the 2006 International Residential Code, including defects in the foundation, framing, roofing, waterproofing, and ADA-related access. A subsequent engineering review found that all violations were correctable without tearing down the structure, and the Lorenz Brothers offered to perform the repairs at no additional charge. Williams refused to allow them to return, and the partially completed home sat without protection from the elements for more than a decade.
Litigation commenced in 2016. The district court dismissed Williams’s claims under the Montana Consumer Protection Act (MCPA) and most of his negligence theories, awarding him only $35,000 on his negligence claim for patio-related repairs. Williams appealed the dismissal of his MCPA and broader negligence claims; the Lorenz Brothers did not cross-appeal the $35,000 patio award.
The Court’s Holding
The Montana Supreme Court unanimously affirmed the district court in all respects. On the MCPA claim, the court held that while a materially understated or misleading residential construction proposal can support a consumer protection claim on the right record, Williams failed to show the district court clearly erred in its factual findings. The district court credited testimony from the Lorenz Brothers and a lender representative that the bid was realistic, that no change orders had been issued, and that the home could have been completed as contracted — findings the Supreme Court declined to disturb.
On negligence, the court rejected Williams’s argument that the district court improperly excused defective work by treating correctability as dispositive. The court assumed without deciding that the twenty-six IRC violations established defective work, but affirmed on the narrower grounds of causation, damages, and mitigation. The district court credited the Lorenz Brothers’ offer to cure all defects at no cost and found that Williams’s refusal to allow the work — and his subsequent decade of inaction — caused or increased the damages beyond the patio. Those findings were not clearly erroneous.
The court also addressed Williams’s financial hardship argument under McPherson v. Kerr, which exempts injured parties from mitigation expenditures they cannot afford. The court held that McPherson does not shield a party who refuses a no-cost corrective option already on the table. Because the Lorenz Brothers did not file a cross-appeal, the court considered their arguments only to the extent they supported affirmance and did not allow them to seek reduction of the $35,000 patio award.
Key Takeaways
- A misleading or unrealistically priced construction proposal can support an MCPA claim, but the plaintiff bears the burden of proving the deceptive act caused ascertainable financial loss — credibility determinations by the trial court will be upheld unless clearly erroneous.
- Correctability of construction defects does not erase liability, but a plaintiff’s failure to accept a no-cost offer to cure can break the chain of causation and bar recovery for damages beyond what the refusal caused.
- Montana’s financial-hardship exception to the duty to mitigate applies to expenditures a party cannot afford — it does not excuse refusing remediation that is offered at no charge.
- Without a cross-appeal, an appellee may defend the judgment on any record-supported ground but may not seek affirmative relief that would reduce the award against it.
Why It Matters
This decision illustrates the limits of both the Montana Consumer Protection Act and the financial-hardship mitigation defense in residential construction disputes. Contractors and homeowners should understand that an injured party’s refusal to allow no-cost curative work can substantially limit damages recovery, even where construction defects are numerous and serious. The ruling signals that trial courts have broad discretion to resolve credibility contests between contractors and homeowners, and that appellate reversal on those grounds will be rare.
The case is designated noncitable under Montana Supreme Court Internal Operating Rules and does not establish or modify precedent. Nonetheless, it offers a practical reminder to construction clients and their counsel: document offers to cure in writing, and be prepared to demonstrate why accepting such an offer was unreasonable — mere distrust of the original contractor is unlikely to suffice when a no-cost remedy is on the table.