Grosvold v. Neely: Residential Construction Defect Statute as Procedural Mechanism, Not Independent Cause of Action

Introduction

Grosvold v. Neely, 2025 MT 99 (Mont. 2025), arose from a dispute between John Grosvold, doing business as Grosvold Excavating, and J. Bowman Neely, as trustee of The J. Bowman Neely Revocable Trust. In April 2021, Neely—acting as his own general contractor—entered an oral agreement with Grosvold to perform excavation and related work on a property known as “Bowman Camp.” After several months of work, Neely refused to pay a final invoice of $55,858 and disputed additional fees (storage of materials and a safe door). Neely counterclaimed for breach of contract, negligence, and “construction defect” under the Montana residential construction defect statutes (§§ 70-19-426 through ‑428, MCA). Grosvold sought prejudgment interest on his contractual recovery. The District Court excluded jury instructions on negligence and construction defect and denied prejudgment interest; both issues were appealed.

Summary of the Judgment

The Montana Supreme Court affirmed. It held:

The residential construction defect statutes (§§ 70-19-426 to -428, MCA) establish a mandatory pre-litigation notice and resolution process for defects in single‐family residences but do not create an independent cause of action distinct from breach of contract or negligence.
The District Court did not err in refusing to give jury instructions on construction defect or negligence because the breach‐of‐contract instructions (implying work performed in a “reasonably skillful and workmanlike manner”) encompassed the same duty and evidence.
Grosvold was not entitled to prejudgment interest under § 27-1-211, MCA, because the jury award was not a “sum certain” until the verdict; it was a mixed, disputed figure settled by the jury.

Analysis

Precedents Cited

Rafes v. McMillan, 2022 MT 13: Prior case construing the same construction defect statute in the context of an oral contract with a homeowner‐attorney acting as general contractor.
McClue v. Safeco Ins. Co., 2015 MT 222: Standard of review for summary judgment is de novo.
Camen v. Glacier Eye Clinic, P.C., 2023 MT 174: Parties have the right to jury instructions supported by credible evidence; refusal is reversible error only if prejudicial.
Davis v. State, 2015 MT 264: Court may affirm for right result under wrong reasoning.
DeTienne v. Sandrock, 2018 MT 269: Tests for awarding prejudgment interest—sum certain, vesting date, underlying obligation.
Ryffel Family Partnership v. Alpine Country Construction, Inc., 2016 MT 350: When damages are not readily ascertainable or are disputed, prejudgment interest is inappropriate.

Legal Reasoning

1. Construction Defect Statute as Procedural Mechanism

• The 2003 Legislature enacted §§ 70-19-426 to -428 (2003 Mont. Laws ch. 412) to provide an alternative dispute resolution procedure for residential construction defects—not to create new tort or contract causes of action. • The statutory definitions frame an “action” as any contract or tort lawsuit for defect in a “residence” (single‐family home) and prescribe pre‐suit notice (§ 70-19-427, MCA) and damage limits (§ 70-19-428, MCA). • The Court applies the plain meaning rule: statutes do not add omitted causes of action; they impose procedural prerequisites.

2. Overlap of Contract and Tort Duties

• A contractor impliedly owes a duty to perform work in a reasonably skillful and workmanlike manner—breach of which can sound in contract and tort. • Here, Neely’s breach‐of‐contract and negligence counterclaims were based on identical duties and overlapping facts. Granting separate jury instructions would have been duplicative and risked confusing the jury. • The jury verdict that Grosvold did not breach the contract (Instruction 14) necessarily resolved any overlapping negligence theory.

3. Prejudgment Interest

• § 27-1-211, MCA, mandates prejudgment interest when (a) there is a money obligation, (b) the recovery is a “sum certain,” and (c) the award vests on a known date. • Grosvold’s requested damages combined hours, materials, storage, and miscellaneous fees, all disputed. The jury arrived at $60,512.60—an amount different from any single figure Grosvold claimed. • As in Ryffel and Knight, the award was not capable of being made certain until the jury’s resolution; prejudgment interest was thus inappropriate.

Impact

Montana practitioners must treat §§ 70-19-426 to -428, MCA, as mandatory procedural prerequisites—not new substantive causes of action.
In mixed contract/tort litigation over construction or remodeling of single‐family homes, trial courts should ensure jury instructions avoid duplicative claims and confusion where duties overlap.
Pre‐judgment interest is only available when plaintiffs seek a clearly defined, undisputed sum—emphasizing precise pleadings and claims for discrete contractual balances.

Complex Concepts Simplified

Pre‐litigation notice requirement: Before suing for a residential construction defect, the homeowner must send detailed written notice to the builder, giving them time to inspect and repair.
“Sum certain” for prejudgment interest: If you ask a court for exactly $10,000 and win, you earn interest on that $10,000 from the date you became entitled. If you ask for a vague or disputed amount, no interest attaches until the court fixes the number.
Overlap of contract and tort: A contractor’s promise to do work properly is in the contract. If they screw up, you can sue for breach of contract. If the same failure also violates a general duty of care, you can also sue for negligence—but you can’t get “two verdicts” on the same facts.

Conclusion

Grosvold v. Neely reaffirms that Montana’s residential construction defect statutes are procedural gates—pre‐suit notice and repair opportunities—not standalone causes of action. Trial courts need not give separate “construction defect” or “negligence” instructions when breach‐of‐contract instructions already convey the same implied duty and cover the parties’ evidence. Finally, prejudgment interest under § 27-1-211, MCA, is reserved for cases where damages are undisputed or readily calculable before trial. This decision promotes clarity in construction disputes, encourages precise pleadings, and ensures that remedy procedural requirements do not create redundant or confusing claims.