Berkel & Co. Contractors, Inc. v. Palm & Assoc., Inc.

• Decision Date: 08 September 2004
• Docket Number: No. 71A03-0307-CV-294.,71A03-0307-CV-294.
• Citation: 814 N.E.2d 649
• Court: Indiana Appellate Court
• Parties: BERKEL & COMPANY CONTRACTORS, INC., Appellant-Defendant, v. PALM & ASSOCIATES, INC., Appellee-Plaintiff.

814 N.E.2d 649

BERKEL & COMPANY CONTRACTORS, INC., Appellant-Defendant, v. PALM & ASSOCIATES, INC., Appellee-Plaintiff.

No. 71A03-0307-CV-294.

Court of Appeals of Indiana.

September 8, 2004.

Sean E. Kenyon, Robert J. Konopa, Konopa Reagan & Kenyon, South Bend, IN, Attorneys for Appellant.

Robert J. Palmer, Jeffery A. Johnson, Richard F. Nugent, Jr., May Oberfell & Lorber, South Bend, IN, Attorneys for Appellee.

OPINION

SHARPNACK, Judge.

Berkel & Company Contractors, Inc. ("Berkel") appeals the trial court's grant of partial summary judgment to Palm & Associates, Inc. ("Palm") on its breach of contract claim, the trial court's denial of Berkel's cross-motion for summary judgment, and the trial court's findings of fact and conclusions thereon awarding damages to Palm. Berkel raises three issues, which we consolidate and restate as:

I. Whether the trial court erred by granting partial summary judgment to Palm on its breach of contract claim and by denying Berkel's cross-motion for summary judgment after it found that Berkel breached a valid contract with Palm; and

II. Whether the trial court's findings of fact and conclusions thereon awarding damages to Palm for Berkel's breach of contract were clearly erroneous.

We affirm.

The relevant facts follow. In early 2002, Berkel, as a sub-contractor, contracted with Black & Veatch Construction, Inc. ("Black & Veatch"), as the general contractor, to install approximately 800 pilings¹ for a generating plant in St. Joseph County, Indiana ("the Project") being built by Black & Veatch. Berkel contacted Palm about performing some surveying work on the Project, and on April 3, 2002, Berkel issued a purchase order to Palm.

The purchase order listed that Palm was to "[v]erify pile locations in Electronics Drawings against plan sheet dimensions prior to staking" and to "[p]repare a pre-drill staking drawing showing grid-lines, caps, piles, pile designation, with corresponding staking numbers" for a price "[n]ot to exceed $780.00[.]" Appellant's Appendix at 16. The purchase order also included a provision that Palm would supply the following:

Field Crew — 2 men full time during the course of our work[.]

• Stake centers of approximately 800 auger pilings[.]

• Measure as-built locations of constructed piles measurements.

• Prepare as-built drawings of client specified pile groups & submit to client within 24 hours of request.

There will be no charge for t[r]avel time.

Id. The terms of the purchase order called for Berkel to compensate Palm for these services at a price of $110 per hour. The purchase order further had a provision that "[m]aterials and equipment must meet standards required by state and federal regulations and any project requirement." Id. On April 11, 2002, two of Palm's employees began performance of the work listed under the purchase order and completed one and one-half hours of work. On April 15, 2002, Berkel learned that all subcontractors were required to employ union labor and told Palm that Palm would be required to use union labor on the Project. Palm told Berkel that it would talk to the local unions and that the price in the purchase order would need to be adjusted if Palm was to have a working agreement with the union. On April 19, 2002, Palm had not yet worked out an agreement with the union, and Berkel hired another surveyor to complete the work that Palm had agreed to perform. Berkel then informed Palm that it was to perform no further work under the purchase order and paid Palm for its work already completed.

Palm then filed a complaint for breach of contract against Berkel. Palm later filed a motion for partial summary judgment on its breach of contract claim, arguing that "Berkel breached its agreement to have Palm perform certain tasks and compensate Palm according to the purchase order." Appellant's Appendix at 44. Berkel filed a cross-motion for summary judgment, arguing that: (1) the purchase order did not constitute a contract; and (2) even if the purchase order was a contract, Palm breached it by refusing to use union labor. Following a hearing on the motions, the trial court granted Palm's motion for partial summary judgment and denied Berkel's cross-motion for summary judgment.

Thereafter, a bench trial was held on the issue of damages, and Berkel asserted an affirmative defense of failure to mitigate damages. Pursuant to Indiana Trial Rule 52, Berkel requested that the trial court enter findings of facts and conclusions thereon, and the trial court issued the following order:

Findings of Fact

* * * * *

5. Berkel performed work on the Allegheny gas fired electrical generating plant, also known as the St. Joseph generating plant, (the Project) and contracted with Palm to undertake certain work with respect to the Project.

6. The contract between Palm and Berkel was memorialized by Purchase Order No. 03-315 dated April 3, 2002 (Contract).

7. Specifically, Berkel contracted with+ (sic) Palm to:

• Verify pile locations in Electronic Drawings against plan sheet dimensions prior to staking.

• Prepare a pre-drill staking drawing showing grid-lines, caps, piles, pile designation, with corresponding staking numbers[.]

8. Palm was to perform the activities described in finding numbered 7 for a cost not to exceed $780.

9. Palm performed the work described in finding numbered 7 and was compensated for these services as provided in the Contract.

10. Berkel contracted with Palm to perform the following tasks, as well:

Field Crew-2 men full time during the course of our work

• Stake centers of approximately 800 auger pilings[.]

• Measure as-built locations of constructed piles measurements.

• Prepare as-built drawings of client specified pile groups & submit to client within 24 hours of request.

11. Palm devoted the time of its employees, Jason Tincher and John Compton, to the performance of the Contract.

12. Palm was to be compensated at the rate of $110 per hour, per man, for performance of the work to be performed at the Project site.

* * * * *

14. The Contract does not specify a fixed time for completion of the work, nor a fixed number of man-hours for which Palm was to be compensated.

15. The Contract was an unusually large project for surveying work, in terms of its scope and duration, and therefore a lucrative opportunity for Palm. Both Berkel and Palm recognized this fact at the time of execution of the Contract.

16. The work to have been performed by Palm under the Contract, although expansive in terms of its scope and duration, did not involve the provision of unique personal services.

17. Prior to commencement of the work set forth at finding numbered [10], above, Berkel terminated the Contract.

18. Berkel hired DLZ to perform the work that Palm was to have performed for the Project.

* * * * *

25.... Palm estimated it would require 520 man hours to perform the activities the Contract contemplated would be performed at the Project by Tincher and Compton.

* * * * *

27. The hourly cost to Palm of Tincher and Compton's wages and expenses, calculating the tax and other burden at fifteen percent (15%) is $28.75. The hourly cost of travel time to Palm is $.59, for a total hourly cost to Palm for Tincher and Compton's time in the field of $29.34.

* * * * *

30. After the Contract was terminated, Palm's employees Compton and Tincher worked on other accounts or projects which (sic) Palm was obligated to perform for other customers.

31. Had the Contract not been terminated, the work performed by Compton and Tincher, as described in finding numbered 30, would have been performed by Palm, nonetheless.

32. Berkel has failed to introduce evidence sufficient to show that income received by Palm for work performed by it after Berkel's breach of the Contract was received as a result of Palm being relieved from its performance of the Contract. Albert Johann & Sons, Co. v. Echols, 143 Ind.App. 122, 238 N.E.2d 685 (1968).

* * * * *

35. Palm's reasonable profits proven to have been earned under the Contract totals $41,368....

* * * * *

Conclusions

A. Palm and Berkel entered into the Contract on or about April 3, 2002.

B. Palm performed the work described in finding numbered 7, above, and was compensated by Berkel for this effort in accordance with the Contract.

C. Berkel breached the Contract prior to Palm's commencement of the work described at finding number 10, above.

D. Palm suffered damages of $41,368 for net lost profits that would have been earned under the Contract for the work to have been performed on the Project site by Palm had Berkel not breached the contract.

* * * * *

G. Berkel has not proven its affirmative defense of a failure on the part of Palm to have mitigated its damages.

Appellant's Appendix at 6-11.

I.

The first issue is whether the trial court erred by granting partial summary judgment to Palm on its breach of contract claim and by denying Berkel's cross-motion for summary judgment. Our standard of review for the grant of a motion for summary judgment is well settled. Summary judgment is appropriate only where the evidence shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Mangold ex rel. Mangold v. Ind. Dep't of Natural Res., 756 N.E.2d 970, 973 (Ind.2001). The standard of review is not altered by cross-motions for summary judgment on the same issues. Indiana Ins. Co. v. American Cmty. Servs., Inc., 718 N.E.2d 1147, 1152 (Ind.Ct.App.1999). All facts and reasonable inferences drawn from those facts are construed in favor of the nonmoving party. Mangold, 756 N.E.2d at 973. Review of a summary judgment motion is limited to those materials designated to the trial court. Id.

The essential elements of a breach of contract action are the existence of a contract, the defendant's breach thereof, and damages. Rogier v. Am. Testing and Eng'g Corp., 734 N.E.2d 606, 614 (Ind.Ct.App.2000), reh'g denied, trans. denied. Berkel argues that the...