Theissen-Nonnemacher, Inc. v. Dutt
| Decision Date | 23 September 1986 |
| Docket Number | No. C1-86-246,THEISSEN-NONNEMACHE,INC,C1-86-246 |
| Citation | 393 N.W.2d 397 |
| Parties | , Respondent, v. Raj DUTT and K. Dutt, Appellants. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
1. Summary bills accompanied by itemized sheets may be accepted as evidence of the "reasonable value" of a construction project when testimony indicates the bills' validity.
2. A general contractor remains responsible to the contractee for all work done pursuant to the contract regardless of a subcontractor's warranty.
Ronald P. Smith, St. Paul, for respondent.
Robert L. Lowe, Minneapolis, for appellants.
Heard, considered and decided by SEDGWICK, P.J. and FORSBERG and LESLIE, JJ.
Theissen-Nonnemacher, Inc. brought suit on a cost-plus 10% construction contract to recover the "reasonable value" of their work on the project. The trial court found the reasonable value was $22,499.69 in addition to the $40,000 already paid. The court also found damages for defective work in the basement of $1,500. The contractor was also found not responsible for the defective roof installed by a subcontractor. Both parties appeal. We affirm as modified.
Dr. Raj Dutt contacted an architect friend P.S. Vedi, the designer of his Golden Valley home, about an addition to his house. Vedi referred Dutt to Theissen-Nonnemacher, Inc. (hereinafter TNI). Vedi knew Nonnemacher from previous projects and liked him. Nonnemacher was a "very honest person" who, on a previous project, had done a "tremendous job."
The addition encompassed a master bedroom and bathroom, and an unfinished basement. Dutt had $35,000 available for construction. TNI estimated the cost around $40,000 to $42,000. The parties orally contracted that material and labor were to be billed together with a 10% contractor's fee.
From the start there were problems with the building permit, setbacks, excavation and sewer lines, which were different from what Dutt had represented them to be. Winter complicated the construction of the foundation and pouring concrete. As a result, the foundation was poured as a monolithic slab with reinforcing rods. Drainage problems resulted from that method, which were not corrected because Dutt terminated the contract in March, 1984 due to accelerating costs.
The project involved a number of different construction changes. Walls and windows were moved about, wiring and plumbing were "roughed in" and then shifted, creating significant additional costs. Work outside the contract was undertaken on the main house at Dutt's instigation. TNI listed more than 10 items which involved the house rather than the addition.
The record shows that the changes resulted in three plans and 33 extras incorporated during the project, with a steady rise in costs from around $40,000 to $64,999.69 with the addition still incomplete.
The billings and back-up data submitted by TNI are difficult to decipher. The back-up data does not always correspond to billing summaries. On the basis of the billings and testimony, the trial court found the cost plus 10% billings by TNI to represent the reasonable value of the project. The court's only deviation from the TNI charges was on the bill for hauling dirt from the site, which the court reduced from over $5,000 to $2,500.
1. Are the trial court's findings as to reasonable value supported by sufficient evidence?
2. Should the respondent be held liable for the defective roof installed on the addition?
1. The parties agree that Malmin v. Grabner, 282 Minn. 82, 163 N.W.2d 39 (1968), provides the appropriate measure for recovery--"The reasonable value of labor and materials furnished." Id. at 83, 163 N.W.2d at 40. Apparently, the parties and trial court equated a cost plus arrangement with "reasonable value." The appellant disputes only the reliability and substance of respondent's figures.
Appellant charges the evidence consists solely of summary bills with "backup" data--and the backup data does not support the summaries. The summaries indicate only that bills "were prepared and submitted to Dr. Dutt." Respondent emphasizes the changing nature of the project rather than the hard numbers to explain why the bills were so large.
Notwithstanding the contractor's poor bookkeeping and accounting practices, the court did not err in receiving the billings:
Courts should not be captious in reception of evidence of this kind. All businessmen do not keep their books of account in the same manner. Some keep them badly. If the books kept are intended as a true record of business transactions and are made in the usual course of business, contemporaneously with the transaction of which they purport to be a record, the court should be liberal in receiving them.
Keller Electric Co. v. Burg, 140 Minn. 360, 362, 168 N.W. 98, 98 (1918).
Here, the five bills sent to Dutt were comprised of a summary charge for materials, labor, and included the 10% contractor fee. The bills also included a separate figure for TNI labor charges (but not Theissen's or Nonnemacher's labor). A separate sheet listing the assorted component costs and items which equaled the summary charge accompanied each bill. Although these sheets corroborate the bill, they do not correspond to the backup data which are also attached to the bills.
Minnesota Rule of Evidence 803 (1984) contains the business record exception to the rule against hearsay.
The following are not excluded by the hearsay rule, even though the declarant is available as a witness:
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(6) Records of regularly conducted business activity. A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness. The term "business" as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.
The exception contains three requirements: the evidence was kept in the course of regularly conducted business activity, the record was made as a regular practice of that business activity, and a...
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...This principle survives to this day. See Brasch v. Wesolowsky, 272 Minn. 112, 138 N.W.2d 619 (1965); Theissen-Nonnemacher, Inc. v. Dutt, 393 N.W.2d 397 (Minn.Ct.App. 1986); Federal Ins. Co. v. Westurn Cedar Supply, Inc., 2008 WL 686556 (D.Minn. March 13, 2008) (Slip copy) (applying Minnesot......
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