ABC Electric, Inc. v. Nebraska Beef

• Citation: 249 F.3d 762
• Decision Date: 14 December 2000
• Docket Number: N,No. 00-2021,00-2021
• Parties: (8th Cir. 2001) ABC ELECTRIC, INC., PLAINTIFF - APPELLEE/ CROSS APPELLANT, v. NEBRASKA BEEF, LTD., DEFENDANT - APPELLANT/ CROSS APPELLEE, o. 00-2022 Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 762

249 F.3d 762 (8th Cir. 2001)

ABC ELECTRIC, INC., PLAINTIFF - APPELLEE/ CROSS APPELLANT, v. NEBRASKA BEEF, LTD., DEFENDANT - APPELLANT/ CROSS APPELLEE,

No. 00-2021, No. 00-2022

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: December 14, 2000

Filed: May 7, 2001

Appeals from the United States District Court for the District of Nebraska. [Copyrighted Material Omitted] Before Loken and Magill, Circuit Judges, and Battey, ^* District Judge.

Loken, Circuit Judge.

Nebraska Beef, Ltd. ("Nebraska Beef"), decided to renovate and expand a slaughtering and beef processing facility. It hired JB Contracting, Inc. ("JB"), as general contractor. JB subcontracted with ABC Electric, Inc. ("ABC"), to provide electrical work on the project. As work progressed, problems developed, and ABC submitted substantial invoices for the costs of excessive overtime and extra work. Nebraska Beef refused to pay these additional amounts and eventually ordered ABC off the project. ABC filed this diversity suit against Nebraska Beef and JB, seeking damages for unpaid work. Nebraska Beef and JB counterclaimed to recover expenses incurred in completing the project's electrical work.

After ABC dismissed JB from the case, the district court ¹ concluded there was no express or implied-in-fact contract between Nebraska Beef and ABC and dismissed all remaining breach-of-contract claims. After a jury trial, the court submitted ABC's quantum meruit and promissory estoppel claims. The jury returned a verdict in favor of ABC, awarding damages of $335,190 on the quantum meruit claim and $356,280 on the promissory estoppel claim. Nebraska Beef appeals, arguing the district court erred in construing the subcontract and instructing the jury, in admitting parol evidence, in dismissing Nebraska Beef's breach-of-contract counterclaim, and in awarding prejudgment interest. ABC filed a protective cross-appeal. We affirm.

I. ABC's Quantum Meruit Claim.

Under the Nebraska law of quantum meruit, ABC is entitled to recover the reasonable value of electrical services that it performed for Nebraska Beef's benefit in circumstances that would make it inequitable for Nebraska Beef not to pay. See, e.g., Hoffman v. Reinke Mfg. Co., 416 N.W.2d 216, 219 (Neb. 1987). Nebraska Beef contends that ABC, an unpaid subcontractor, may not recover from Nebraska Beef, the project owner, because the two were not in privity of contract. We disagree. Recovery under quantum meruit does not require privity of contract. See Siebler Heating & Air Conditioning, Inc. v. Jenson, 326 N.W.2d 182, 184 (Neb. 1982). The evidence, viewed most favorably to the jury's verdict, established that Nebraska Beef directly supervised the part of the project that renovated the existing facility. Nebraska Beef, not JB the general contractor, controlled the entire project, finally approved change orders, and directly paid ABC for work performed. ABC's quantum meruit claim did not include work for which Nebraska Beef had paid JB. In these circumstances, we conclude the Supreme Court of Nebraska would apply the principles of quantum meruit to permit an unpaid subcontractor to recover from the project owner. See generally Annot., Building and Construction Contracts: Right of Subcontractor Who Has Dealt with Primary Contractor to Recover Against Property Owner in Quasi Contract, 62 A.L.R. 3d 288 (1975).

A party may not recover under quantum meruit for work it was obligated to perform under an express contract. See Siebler, 326 N.W.2d at 184-85. However, a quantum meruit claim may supplement an express contract by seeking reasonable compensation for work not covered by the contract. See Associated Wrecking & Salvage Co. v. Wiekhorst Bros. Excavating & Equip. Co., 424 N.W.2d 343, 348-49 (Neb. 1988). Here, ABC's subcontract with JB required ABC to perform electrical work for an $880,000 "Contract Price." ABC's quantum meruit claim is not precluded by the subcontract, but it may not recover for the work it promised to perform for $880,000. Construing the proper scope of the $880,000 price term in the subcontract is the most difficult and critical issue in this case.

The parties agree that two provisions in the subcontract defined what work was covered by the contract price -- the scope-of-work paragraph, in which ABC agreed to:

Furnish and install, complete all electrical work per plans and specs described on Schemmer Associates, Inc. drawings . . . [plus] temporary wiring/lighting as required in existing and new plant. Sub-Contractor is aware that Nebraska Beef will add equipment requiring electrical services to its existing plant and new addition, not shown on plan or specified. Sub-Contractor agrees to provide electrical service as required. Electrical is deemed to mean all inclusive electrical wiring, outlets, breakers, panels, etc. as required such that when this contract is complete, the plant is operational electrically for production equipment.

and the contract price provision, in which JB agreed:

To pay [ABC] for the full, faithful and prompt performance of this contract agreement, subject to all of the terms and conditions hereof, the sum of Eight hundred and eighty thousand Dollars ($880,000.00) hereinafter called the "Contract Price" plus all additions and less all deductions herein provided for . . . .

A major difficulty in construing and integrating these provisions is that the Schemmer Associates drawings referred to in the scope of work covered only the proposed addition to the facility, whereas the entire project also included a major renovation of the existing facility. The parties hotly disputed, at trial and on appeal, whether the $880,000 contract price covered only, in the words of the scope-of-work provision, "all electrical work per plans and specs described on Schemmer Associates, Inc. drawings."

Under Nebraska law, construing an unambiguous contract is a question of law for the trial court. "However, if the contract is ambiguous -- that is, if it may objectively be understood in more than one sense -- then extrinsic evidence is admissible, and the parties' intent is a question of fact for the jury." Rayman v. American Charter Fed. Sav. & Loan Ass'n, 75 F.3d 349, 354 (8th Cir. 1996). Here, in the Order on Final Pretrial Conference, both parties listed as a disputed issue whether the scope of work described in the subcontract was ambiguous. But neither party asked the district court to resolve this issue prior to trial, and substantial extrinsic evidence on the question of the parties' intent was admitted without objection at trial.

At the close of evidence, just prior to the instruction conference, the district court ruled that the subcontract unambiguously limited the $880,000 price term to the work described in the Schemmer Associates drawings. Although Nebraska Beef objected to this construction, it did not argue that the subcontract is ambiguous and therefore the scope-of-work issue should be submitted to the jury. Accordingly, the district court instructed the jury, consistent with its construction of the subcontract, that ABC may only recover in quantum meruit for "construction work on the premises of [Nebraska Beef] over and above that required...