*1 VALLEY LUMBER SHEYENNE

COMPANY, Plaintiff, Appellee Cross-Appellant, NOKLEBERG, Defendant,

Jorgen

Appellant Cross-Appellee.

Civ. No. 10099.

Supreme Dakota. Court of North

April

Ohnstad, Twichell, Breitling, Arntson & Hagen, Fargo, plaintiff, appellee West cross-appellant; argued by Leland F. Hagen, Fargo. West Armond G. Erickson and Aakre Steven Tenneson, Serkland, Lundberg, Erickson & Marcil, defendant, Fargo, appellant Erickson, cross-appellee; argued Fargo. PAULSON, Justice. defendant, appeal by an

This is Jor- gen Nokleberg [Nokleberg], judg- August ment dated the District $10,- County Court of Cass in the sum of plaintiff, Sheyenne Valley 447.99. The Company [Sheyenne], cross-ap- Lumber has pealed judgment. modify We and, modified, judgment we affirm. Sheyenne alleging commenced an action that certain lumber and materials were de- by Sheyenne Nokleberg livered $23,637.31, Nokleberg per- value of that formed services for in the sum of $10,334.00,and, accordingly, was indebted to- sum of interest, costs, gether with and disburse- ments.

Nokleberg interposed an answer and denying counterclaim the total amount due purchases, alleging that some of the purchases claims for were barred limitations; statute of that there were ex- charges overcharges; cess as well as agreement whereby there was an Nokle- berg would receive certain setoffs from Sheyenne; further counter- claimed for services rendered him in the $26,587.00,including sum of insulation for in the sum of $1,200.00; Sheyenne agreed to furnish $27,- lumber and materials for a 000.00, Nokleberg but was over-billed in the terminated, disputes there were $7,944.00; re- sum of Shey- the accounts reference to between turned certain materials Nokleberg concerning enne and materials which he was not 12-plex, the site and labor. were Sheyenne filed a by Sheyenne. credited amicably disputes settle unable to their counterclaim. timely reply denied the subsequently Sheyenne this ac- commenced *3 Leonard, Sheyenne located in North is tion. Dakota, Nokleberg carpenter a and and is Sheyenne a motion and Thereafter filed resides in Leonard. contractor who also appointment notice of for the of a motion with some of its Sheyenne often contracted special to determine matters of au- master construction of homes customers for the diting accounting parties and between the carpenter buildings. Nokleberg, and as a and, further, the status of the to determine contractor, and a constructed some of these Sheyenne Nokleberg. between and accounts buildings After each such Sheyenne Nokleberg agreed both that a and completed, Shey- construction contract was appointed pur- for these special master be Nokleberg’s paid enne services either then, by poses. The district court an order Nokleberg by crediting issuing checks to 8,1979, February appointed Darrel K. dated Nokleberg’s for materials which account 1, 1980, special April Grande as master. On Sheyenne purchased special report master submitted his to independent particular This an contractor. court, the total which showed that conducting business was com- course charges by Nokleberg Sheyenne incurred to September menced in of 1970and continued 29, 1970, September through August through August of 1975. $161,757.57; total 1975 totaled credits Sheyenne agreement The oral between $139,- given Nokleberg by Sheyenne were purchase for the of materi- 843.31, $21,914.26. leaving a balance of furnishing als and the of labor was infor- thereafter, Sheyenne, shortly by letter con- pur- mal. The invoices for the merchandise ceded that was entitled to an by Nokleberg always $6,880.00, chased were not deliv- thereby additional credit of re- pur- ducing Sheyenne by to ered him at the various times of the amount owed No- $15,034.26. reports Harris, kleberg to The master’s chase. Harold who is the owner of upon are based examination of the records Sheyenne, by Nokleberg permitted pertain to the business transactions paying use his own discretion when Nokleberg. Sheyenne between by Nokleberg. accounts incurred Harris accept Nokleberg’s also did not refuse to June sub- master on oral statements with reference to the num- report listing the in- mitted an additional employed ber of hours missing voices that were from the state- Sheyenne Nokleberg’s contracts. work ments, listing which totaled a supported by error, hours were not written time posted in total- invoices which were sheets, $23.50, listing any request ing nor did Harris make of invoices which were statements, posted totaling to the verify such written statements the hours $249.23, as well as credits on by Nokleberg. Sheyenne’s worked for- $6,000.00. job, in the sum of warding monthly of the statements show- purchases and credits with refer- trial and the court A bench was held Nokleberg’s Sheyenne, ence to account with $10,- Sheyenne judgment awarded payments as well as the times were made ap- both 447.99. by Nokleberg given by or credits were judgment. pealed Sheyenne, varied because of following Nokleberg has raised the issues acting capacity carpen- in the dual of both a appeal: in his ter independent and as an findings of fact 1. Were the trial court’s contractor. that Nokle- August

In the business when berg failed to establish relationship following: between and Nokle- owed him for the neous, regard

A. Labor on Alvin Wahl machine and due given shall be shed; opportunity judge of the trial court to credibility barn; of the witnesses. The pole B. Labor on Alan Brown findings master, of a to the extent oil; forms, ties, C. Concrete them, adopts the court shall be considered painting D. Labor for of 4-H build- ” findings as the of the court. . .. ing; district court found that E. Return plywood from Bernie sold and delivered to house; certain Anderson $10,- lumber and materials in the sum of F. Storage of insulation in Nokle- unpaid. Nokleberg, 447.99 which remains berg’s barn? however, in his answer and counterclaim 2. Are the denies that there such sum erroneous with reference to the Sheyenne, and claims that he has been Sheyenne against amounts awarded to *4 charged in agreed prices excess of the for Nokleberg for the amounts shown on materials, some of the that certain credits missing the invoices Sheyenne’s from to which he is entitled have not been re- records; and the did court commit er- records, Sheyenne’s flected in and that he is admitting ror in evidence of the miss- $21,500.00; entitled to credits which total ing invoices under the business records that, addition, Nokleberg claims to have exception, pursuant 803(6), (7), to Rule performed services for in the North Dakota Rules of Evidence? hauling unloading of lumber for which 3. Were the trial findings clearly $5,000.00; he should receive a credit of erroneous with reference to the con- he claims he is entitled to the sum of 12-plex struction of the rental for the of insulation a. failing In to rule on belonging Sheyenne; that he to claims claim for overcharge an by doors overcharged 12-plex have been on a in the Sheyenne; Sheyenne original- sum of because finding Sheyenne b. In did not make ly bid on certain materials for a bid of for materials for 12-plex and then at a later date billed 12-plex; such $34,944.00; and, finally, for No- c. finding In Nokleberg failed to es- kleberg claims that he did not receive cred- tablish a credit for returned materials? its certain merchandise which he re- Sheyenne raises following issues on turned to cross-appeal: its Shey- The court further indicated that 1. Did the clearly trial court make a managed by enne was owned and Harold in deciding that No- Harris, wife, Harris, and that his Mrs. kleberg was entitled to a credit of bookkeeper during period all of the $1,075.00 for performed labor he September through August of 1970 Harry garage? 2. Did the trial court make a mentioned, Sheyenne As heretofore en- erroneous finding deciding of fact tered into contracts with some of its cus- was entitled ato credit tomers to furnish materials and of $337.20? buildings, the construction of houses and scope of review of this court should Nokleberg performed the labor for governed be by of the North buildings Sheyenne, construction of such Procedure, Dakota Rules of Civil wherein it paid by Sheyenne for which states, pertinent part: either checks or credits to his account. “RULE 52—FINDINGS BY THE addition, Nokleberg purchased In materials COURT individually for the con-

“(a) Effect. . Findings .. buildings of fact struction of shall not be set aside unless erro- contracted build. The court further found that Sheyenne’s found that further gave Nokleberg, was similar to the credit to of De-

bookkeeping system master bookkeeping systems used other retail for the cember sum Briefly, system $337.20, consisted of merchants. an additional which shows credit of triplicate, preparing invoices in resulting sales aggregate in an total credit of original remaining Shey- $11,491.87. white invoice Sheyenne did not refute this enne, being given yellow copy and, accordingly, granted the court purchaser purchase, and at the time of credit in sum the additional of $337.20 by Sheyenne pink copy being, kept Nokleberg. regular posted course of its Nokleberg further contends that he by Sheyenne’s business owner. is entitled to an additional credit of generally, always, but not followed the cus- $4,500.00. represented This sum is tomary procedure mailing business (for hauling, loading, unloading $725.00 monthly statements to each of its customers of lumber and materials on the Kenneth usually pink copy attached the farm, including therein Anderson the sum invoice to monthly each of the statements. failure to deliver $75.00 monthly An examination of the form of the job site); unloading materials to the at the provision statement showed for the number $640.00; site, Lisbon and an aver respective of the invoice and the amount of age of each at other miscellaneous $150.00 each charge or credit to be listed thereon. job perusal A reveals sites. the record contends that he was en Sheyenne disputed Nokleberg’s claim *5 purchases titled to a 10% discount on all of and that such claim was refut This discount would have only by Sheyenne’s ed not owner and mana $16,- amounted to 10% of Erickson, ger, but also Kenneth a former thereof, support 175.76. In Nokleberg testi employee Sheyenne’s who was well ac companies fied that other lumber in the quainted carpen with and the gave area a carpenters. 10% discount to A ters who were associated with him. Fur review of the record fails to indicate that thermore, Nokleberg during at no time any during period at time 5-year period requested any at issue ever covered the transactions at issue had loading offsets or credits for the and un requested ever Shey- such discount from loading of lumber and materials until after enne, any did not at time instituted; this action was nor did he refute object receiving to not the 10% discount of Kenneth Erickson until Shey- suit was commenced herein. Sheyenne’s delivery effect that of materials having enne denied ever offered generally was Erickson with the any such discount and also denied that it Sheyenne employees. assistance of other customary practice was a business The court found that failed to area to do so. The court found that Nokle- practice establish business existed berg was not entitled to the 10% discount dealings in his which would finding supported by and this the evi justify Nokleberg’s claim that the dence, and clearly is not erroneous. Rule him; was due and and the record 52(a), Robb, N.D.R.Civ.P. Eakman v. 237 supports finding clearly such and it was not (N.D.1973). N.W.2d 423 N.D.R.Civ.P.; 52(a), erroneous. Rule In re stated, As Hager this court v. Devils Elmer, 815, (N.D. Estate of 210 N.W.2d 820 Disk, 630, Lake Public School 301 N.W.2d 1973). (1981): 634 “The usage proved custom or must be The court further found that Nokle- other McCarney, fact. Peterson v. a was not entitled to credit $195.50 254 (N.D.1977). N.W.2d 438 plywood Whether or for returned to not a custom usage question job exists is a Anderson farm site. An examination of fact.” reveals that the 950 invoices in the record

125 any supportive credit Nokleberg did not have tes- for and such oral timony other than his assertion that he 52(a), is not erroneous. Rule was N.D.R.Civ.P.; entitled to the credit. There is Klitzke, $195.50 v. Klitzke 308 the record that each evidence in (N.D.1981). N.W.2d 388 returned, Shey- time that merchandise The dispute par- crux of the between the practice enne’s was to execute a credit in- ties charges concerns the and credits for voice to the customer involved. The testi- concerning labor and materials the erection mony supports judge’s finding, which is buildings, of five namely: different not clearly 52(a), Rule erroneous. N.D.R. home, bam, Sprunk Braun Allen Civ.P. Co-op Ellendale Farmers Union Harry garage, erected Davis, (N.D.1974). Ass’n v. 219 N.W.2d Lisbon, at and the Alvin Wahl machine also trial court found that No- shed. kleberg’s assertion of credit due $150.00

him painting partition on a 4-H build The record with reference to the by Sheyenne’s owner, was contradicted home shows that was to who testified that there were a number of paid be the sum of for services other projects 4-H construction which performed by him and that he work was being done that credit for actually from Sheyenne, received credits ei Nokleberg’s partition painting this account, ther checks or credits building part 4-H was included as $6,000.00. only The court found No- contracts; and, further, the total 4-H work kleberg party was not a to the construction that Nokleberg never previously has contract between and the during claimed such 5-year period Sprunks. also The record shows that the testimony supports involved. The the Sprunks objected to certain defects in their judge’s finding is not and it errone home, new among were the failure of which N.D.R.Civ.P.; ous. Lizakowski certain properly doors to fit and failure to Lizakowski, 307 N.W.2d adjustments, make other needed corrected; Sheyenne failed to have also, its responsible the fact that fact, considered claim for *6 $2,500.00 remaining the collection of the $1,200.00 storage for rental in for Nokle- Sprunks labor account from the was barred berg’s Sheyenne’s barn of insulation. by Sheyenne the statute of limitations. There conflicting testimony by par is both concedes that this is true and that Nokle- ties concerning or not there whether unpaid berg is credit of the entitled to a any charge Nokleberg by for such $2,500.00 performed Sprunk for labor storage, period as well as for the the addition, particular Sprunk home. In this Sheyenne’s insulation was witness stored. specified Sheyenne’s contract a cement Nokleberg es testified that volunteered to poured a ce store block basement rather than Nokle- insulation for did refute berg ment basement. having denied volunteered to store the concerning addi However, independent any testimony insulation. there is or offer Nokleberg testimony Nokleberg expended by that tional for offered use $900.00 basement, hay Sprunks’ poured loft for cement demand, request, findings insulation stated that Nokle- any without or the court in its agreement being credit of the addi Shey- for rental made. was entitled to a $900.00, Nokleberg unpaid Sprunk as the enne allowed the use of its lum tional as well $2,500.00, a total of beryard charge labor facilities without for his account trestles, $3,400.00 findings rafters, Sheyenne. The construction of and other Furthermore, a case without a projects. trying fact the court record does not clearly unless erro support relationship jury binding upon are us landlord-tenant be N.D.R.Civ.P.; 52(a), Dobler v. parties any tween the The court neous. at time. (N.D.1973). Malloy, found that was not 214 N.W.2d Nokleberg entitled to finding The of fact was not court also found that Nokle- The clearly expenditures by that $1,075.00 berg was entitled to a credit of for $600.00, Nokleberg for the home of garage project; labor on the Wadeson insulation, which consisted of for $297.44 pole barn was constructed for Wadeson cabinets, plus finishing services for $40 proper given credit was for it. tile, were removal of basement brick Sheyenne has not refuted the labor claim of agree either included $1,075.00. Accordingly, testimony sup ment had with ports finding of fact that by Nokleberg, claimed the lat entitled in the amount of the having ter of previously which claims been labor on the having considered the court and been garage project, and the court’s rejected by finding it prior in a of fact. findings clearly are not erroneous. Rule record, After a review say we cannot 52(a), N.D.R.Civ.P. this of fact is erron . Woodbury Pfliiger, eous v. 309 N.W.2d 104 trial court also found that No- (N.D.1981). kleberg not entitled reimburse findings of fact of the district forms, ties, oil, ment for for which court concerning the 12-plex refer to the $328.00, furnishing he claimed because the doors, windows, and materials which were practice of these items is the usual of a furnished Sheyenne. The court found doing contractor in cement work. The tes alleged another firm is to have sub timony supports of fact of the mitted a Nokleberg. bid of they court and are not errone Sheyenne agreed asserts that N.D.R.Civ.P.; ous. Rule Sventenko $27,000.00, a bid of but later Sventenko, 306 N.W.2d 607 $34,944.00, billed which in summary, In the trial court found that cluded additional materials. The judgment against was entitled to by Sheyenne adduced at trial revealed that in the sum of calcu- Sheyenne did not in fact deliver a bid to lated the trial court as follows: but, rather, Nokleberg, only an estimate. A “bid” is generally defined “An offer to Amount for merchan- perform a contract for work and labor or dise based on master’s report and letter of June 1, 1980, April supplying goods materials or specified at a amending .$22,139.99 such report price”, (Rev.4th Dictionary Black’s Law Ed. Less credits for labor for 205; 1968), p. while “estimate” is defined as labor and merchandise: returned rough “A or approximate only”, calculation item 191.00 Lumberyard $ (Rev.4th Black’s Law Dictionary Ed.1968), Siding building on Roesler 425.00 Electric door return 156.00 opener p. 647. Nokleberg’s testimony sup did not Two sheets of plywood port his contention that the statement *7 62.00 returned which billed him for 55 windows Credit entitled “house” incorrect, rather than 52 windows was and included additionally and added to invoice 337.20 testimony contradictory is when he as garage 1,075.00 serts that the only contained 50 of project Cleo Braun 6,046.00 the 52 windows rather than 55. In addi 3,400.00 project tion, Nokleberg admitted that he still has Total credits one of the 12-plex inventory windows in his Balance and further admitted that he did not know .$10,447.99 by happened what to the other windows. Nokleberg urges that While the district court conflict, the testimony is in the made a of supported by fact are the record and are not the missing invoices total- erroneous. Rule 52(a), N.D.R.Civ.P.; Homes, Carlson represent Inc. v. should not a credit Messmer, 307 N.W.2d 564 on the basis of the fact that witness, derived unless the source of the amount of was information total or or by court-appointed special prepa- master the method circumstances of the of which lack an examination the statements ration indicate of trustworthiness. invoices, missing para- prepared were The term ‘business’ as used in this is, business, graph institution, invoice numbers and amounts listed includes asso- identifying ciation, without merchan- profession, occupation, calling thereon the and kind, designating identity or of every dise received the of whether or not conducted person the whom the merchandise was profit. received. Uniform Business Records as “(7) Kept Entry Absence of in Records Act, is, 31-08-01, of Evidence the § With in Accordance the Provisions of Code, Century Dakota in provides, North (6). Paragraph Evidence that a matter part:

pertinent memoranda, reports, in the included Admissibility “31-08-01. in evidence records, compilations, or data of business records —Term ‘business’ form, kept in accordance with provi- the act, Exception.—A of an record non- (6), prove the paragraph sions of defined — condition, competent or event shall be mat- of the nonexistence occurrence relevant, insofar evidence if: ter, matter was of a if the kind of memorandum, record, report, or data qualified 1. The custodian or other wit- pre- compilation regularly testifies to identity ness its the served, unless sources of information preparation. mode its or other indicate circumstances lack regular It made in the course of trustworthiness.” business, act, at or near the time of condition, or event. trial court found that 3. The sources of information and the missing amount invoices involved time preparation, method and repre which were listed statements court, opinion of the as to were such prop sented the sum of and were justify the admission.” against erly chargeable Nokleberg because bookkeeping 803(6) they part regular (7), were Rule of the North Dakota records of the notices Rules of Evidence states: number, date, the invoices and amount “RULE 803 were sent to and included in EXCEPTIONS; AVAILA- “HEARSAY monthly which were forwarded statements BILITY OP DECLARANT No- Sheyenne. Although IMMATERIAL attempted by kleberg his oral following “The are not excluded testimony, there is com refute rule, though even hearsay the declarant is Rule petent in the record evidence under available as a witness: N.D.R.Civ.P., support the court’s upon findings. The court relied Shey- “(6) reports, Records of Regularly master’s as well as Conducted memorandum, Activity. system bookkeeping, Business A re- and the enne’s record, port, admitting monthly or data state compilation, did not err in form, acts, events, conditions, opinions, supportive without the ments of diagnoses, missing made at or near time evidence of invoices. by, by, 803(6) (7), Accordingly, or from information transmitted N.D.R.Ev. *8 person knowledge, findings with in the kept if trial court’s are not errone N.D.R.Civ.P.; 31-08-01, of a regularly course business ous. conducted Rule § N.D.C.C.; practice Pulkrabek, and if it activity, regular was the Inc. v. Yamaha see 657, of that business 261 activity Corp., to make the Intern. N.W.2d 659-660 memorandum, record, Jacob, report, (N.D.1977); or data Jahner v. 233 N.W.2d 870, den., 96 compilation, (N.D.1975), all as shown testimo- cert. 423 by the 791 U.S. ny qualified 134, of custodian or other 46 L.Ed.2d 100. S.Ct.

128 appear to this court that if the however, “It would agree, with We do large paid for such a was not Nokleberg Defendant that findings of the trial court doing with money after business sum of to a credit prove he was entitled failed to years at least four after the Plaintiff for constructing the Alvin in for labor constructing another and even that event $1,850.00 for labor Wahl machine shed years two building for the same farmer Allen Braun barn. on the event that the Defendant must after such upon the that it relied the trial court recite for such given paid have been Sheyenne to establish business records failed in his burden He has labor. court The trial Sheyenne. the amounts due not receive credit.” that he did establish that, were miss although there determined merchandise, under the trial reasoning invoices was used Similar 31-08-01, statute, N.D. Braun respect business records to the Allen judge § (7), C.C., 803(6) and N.D.R. and under Rule project. Ev., properly admitted records were other loose man- to the rather The evidence as We prove Sheyenne. the amount due parties busi- these conducted ner in which However, if agree with that conclusion. ness, Sheyenne’s owner consistently, the applied to be statute is paid to be these was that should have credited the lack of projects, these amounts for machine shed Wahl Alvin Sheyenne’s records that in documentation Allen Braun barn as offsets to and the us paid or credited leaves Nokleberg was amount owed that a firm conviction with a definite and Kasper v. Provi- has been made. mistake in his testi- Sheyenne’s owner conceded 548, Co., N.W.2d Life Insurance 285 dent agreement between mony that there was an (cid:127) Bladow, 249 (N.D.1979); Bladow v. 551 that Sheyenne and 917, (N.D.1977). We therefore N.W.2d for labor on paid was to be these amounts judgment which modify portion that of the projects. The records of

these Nokleberg offsets of disallowed paid or fail reflect that machine constructing the Wahl for labor 803(7), Rule credited with these amounts. Allen for labor on the shed and N.D.R.Ev., that a provides that evidence remand with directions Braun barn and memoranda, matter is not included in the Nokleberg be allowed an additional records, reports, compilations, data amounts. offset for these form, the rec- kept in accordance with regularly conducted business activi- ords issue of whether There is a further ty, prove is admissible “to the nonoccur- limitations bars the or not the statute of matter, if the rence nonexistence moneys by Sheyenne and cred recovery of of a of which a memoran- matter was kind Nokleberg. Nokleberg in its on behalf dum, record, compilation report, or data affirmatively plead counterclaim fails to regularly preserved, ...” It made provided of limitations as statute performed Furthermore, apparent that credits be 8(c), N.D.R.Civ.P. mutual, which a Nokleberg were matters of this is a cause we conclude record, memorandum, compi- account, report, or data 28-01— current neither open, § by Sheyenne. N.D.C.C., regularly 16, 6-year lation was statute of which is 104, N.D.C.C., Therefore, limitations, rec- the absence nor § 41-02— limitations, is 4-year these amounts statute of ords of indication that which is the because instant case applicable been credited to is evidence N.D.C.C., governs in this case. paid. they were not so credited or § 28-01— State, Hintz, 281 N.W.2d Etc. v. See assigned by the trial court The reasons offsets refusing to allow these sums as cross-appealed on two Sheyenne has also from Nokle- the amount due issues, namely: Did the court make judge unpersuasive. are The trial de- crediting No- findings of fact in termined: *9 kleberg with for labor on the Har-

ry garage, crediting and in Nokle- with Both of these credits $337.20? opinion, been discussed

have earlier this we conclude court’s find-

ings were erroneous.

52(a), N.D.R.Civ.P.

For the opinion, reasons stated in we

modify portion judgment

disallowed offsets for labor on the Wahl

machine shed and on barn,

Allen Braun and remand di-

rections that Nokleberg be allowed addi-

tional offsets for these amounts. Costs

appeal are against appellee. assessed

ERICKSTAD, J., C. and VANDE SAND, JJ.,

WALLE and concur.

PEDERSON, Justice, concurring special-

ty-

I concur in the results. Dakota, of North

STATE Plaintiff Appellee, RIPPLEY, Lynn

Robert Defendant Appellant.

Cr. No. 815.

Supreme Court of North Dakota.

May