Agritrack, Inc. v. DeJohn Housemoving, Inc., 00SC52.

• Decision Date: 11 June 2001
• Docket Number: No. 00SC52.,00SC52.
• Citation: 25 P.3d 1187
• Parties: AGRITRACK, INC., a Colorado corporation, Petitioner, v. DeJOHN HOUSEMOVING, INC., a Colorado corporation, Respondent.
• Court: Colorado Supreme Court

25 P.3d 1187

AGRITRACK, INC., a Colorado corporation, Petitioner, v. DeJOHN HOUSEMOVING, INC., a Colorado corporation, Respondent.

No. 00SC52.

Supreme Court of Colorado, En Banc.

June 11, 2001.

As Modified on Denial of Rehearing July 2, 2001.

Yates & Leal, LLP, Carlos Leal, Russell E. Yates, Phillip J. Frazee, Jan Kneisel, Suzanne V. Suher Katchmar, Denver, CO, Attorneys for Petitioner.

Law Office of David M. Herrera, David M. Herrera, Fort Collins, CO, Attorney for Respondent.

Justice KOURLIS delivered the Opinion of the Court.

This is a breach of contract case. DeJohn Housemoving, Inc., the respondent, contracted with the Cheyenne Airport Board to demolish and remove approximately fifty housing units in order to allow the Airport Board to construct a sound buffer at the end of a runway. DeJohn, a house moving company, subcontracted with the petitioner, Agritrack, Inc., to do the excavation, demolition, and grading services. DeJohn intended to move most of the housing units to a new subdivision.

DeJohn was not able to complete the work on schedule. Agritrack filed a civil action against DeJohn in the Weld County District Court, seeking damages under the subcontract and also on the basis of a theory of implied contract. The jury found DeJohn had breached both the subcontract and the implied contract between the parties, and awarded Agritrack damages. The district court also awarded Agritrack its attorney's fees pursuant to a provision in the subcontract. On appeal, the court of appeals affirmed the district court's judgment on the issues of liability and damages, but reversed the award of attorney's fees. Agritrack, Inc. v. DeJohn Housemoving, Inc., No. 98CA1843, slip op. at 10-12 (Colo. App. Dec. 2, 1999) (not selected for official publication). Agritrack filed a petition for writ of certiorari seeking this court's review of the attorney's fees issues only.¹ We granted the petition for writ of certiorari, and we now reverse. We hold that the district court properly awarded attorney's fees on the breach of express contract claim and on the implied contract claim.

I.

DeJohn was the successful bidder and became the general contractor for the Airport Board under a federal contract calling for the demolition or removal of a fifty-unit housing subdivision, which included excavation of the surrounding streets, curbs, and utilities. DeJohn contracted with a housing developer to remove the house structures and to relocate them to a new subdivision in Cheyenne. On August 15, 1995, DeJohn entered into a written contract with Agritrack (the express contract or the subcontract) for Agritrack to perform excavation, demolition, and grading services. The subcontract referred to the contract between DeJohn and the Airport Board. The subcontract provided, in part:

Article 3. The Subcontractor [Agritrack] shall furnish all work as prescribed in the Morie Avenue Redevelopment Phase I bid packet, with the exception of the removal of the houses, which shall be done by the contractor [DeJohn]. It is agreed that the subcontract work performed by Agritrack, Inc. will be done for the contract price of One Hundred Ninety-Nine Thousand Dollars ($199,000).

Article 4. The Contractor shall, upon completion of the work by the Subcontractor and receipt of payment by the Contractor from the Cheyenne Airport Board, compensate the Subcontractor. Payments to Subcontractor shall be within five (5) days of receipt of payments by the Contractor.

The provision at the heart of this case, Article 9, stated, "Should judicial intervention be necessary to resolve disputes between the parties, the party found liable will be responsible for all attorney's fees, costs, and interest."

Agritrack's performance of the contract was delayed for reasons that Agritrack claimed were DeJohn's fault. Moreover, Agritrack asserted that they had performed certain work in addition to that specified in the subcontract. According to Agritrack, DeJohn promised to recompense Agritrack at a later date for that additional work. Finally, DeJohn failed to pay Agritrack the last payment due under the subcontract. Agritrack filed a civil action in the district court, requesting damages under the subcontract and damages for the additional work under a theory of implied contract.² Jury Instruction No. 1 summarized Agritrack's claims as follows:

The plaintiff claims:

1. That the Defendant entered into a written contract with plaintiff for excavation and demolition services;

2. The amount of the contract was for $199,000.00;

3. The Plaintiff was paid $172,737.00;

4. That it is owed an additional . . . $26,263.00;

5. The Defendant delayed the performance of the contract for five and one-half months;

6. That Plaintiff at the request of Defendant provided additional materials[,] equipment[,] and labor to the Defendant in the sum of $156,228.00 . . . .

The same jury instruction summarized the defendant's position on the amount unpaid under the subcontract: "That while the Defendant owes Plaintiff an additional $26,263.00, less amounts for work not performed, payment under the contract is not yet due." DeJohn also asserted that they did not delay the performance of the contract for five and one-half months; that Agritrack did not perform any additional work under the contract between the parties; that Agritrack provided no additional material, equipment, and labor to DeJohn; and that no agreement was ever reached between the parties subsequent to the subcontract.

As pertinent to the issues before us, DeJohn asserted affirmative defenses that Agritrack's claims were barred by waiver, laches, and estoppel, the failure to comply with conditions precedent, the failure to mitigate damages; and finally that any damages Agritrack may have suffered were the result of its own actions or inaction.

Instruction No. 11 presented Agritrack's breach of express contract claim and DeJohn's defenses:

In order for the Plaintiff, Agritrack, Inc., to recover from the defendant, DeJohn Housemoving, Inc., on its claim of breach of express contract, you must find all of the following have been proved:

1. The defendant entered into a contract with the plaintiff to provide excavation and demolition services; and

2. The defendant failed to pay the plaintiff the amounts due under the contract; and

3. The Plaintiff has complied with all the terms and conditions of the contract with the defendant.

If you find that any one or more of these (3) propositions has not been proved by a preponderance of the evidence, then your verdict must be for the defendant.

On the other hand, if you find that all of these (3) propositions have been proved by a preponderance of the evidence, then your verdict must be for the plaintiff unless you should also find that the defendant's affirmative defense that Plaintiff's claims are barred by the doctrines of estoppel; failure to comply with conditions precedent of the contract; that Plaintiff's claims against Defendant are barred by the conduct of another; Plaintiff's claims are barred by the speculative nature of the claimed damages; Plaintiff's claims are barred by Plaintiff's own failure to mitigate damages, if any; Plaintiff's claims are barred in whole or in part by intervening or supervening causation; Plaintiff's claims are barred in whole or in part by the express provisions of the contract governing the transaction; Plaintiff's claims are barred in whole or in part by custom and trade practice; Defendant has fully performed its contractual obligations; Plaintiff's damages, if any[,] are the result of Plaintiff's own actions or inactions, has been proved by a preponderance of the evidence, in which event, your verdict must be for the defendant.

(Emphasis added.) The jurors were also instructed on Agritrack's claim of breach of implied contract in Jury Instruction No. 25:

In order for the plaintiff, Agritrack, Inc., to recover from the defendant, DeJohn Housemoving, Inc., on its claim of an implied contract to pay for excavation and demolition services, you must find all of the following have been proved:

1. The plaintiff rendered services to the defendant;

2. The plaintiff did so without a specific agreement as to payment, but with the reasonable expectation that it would be paid the reasonable value of such services by the defendant;

3. The defendant requested or accepted such services expecting to pay for them or under such circumstances that it knew, or as a reasonable person should have known, that the plaintiff expected to be paid; and

4. The reasonable market value of the services rendered.

If you find that any one or more of these (4) propositions has not been proved by a preponderance of the evidence, then your verdict must be for the defendant.

On the other hand, if you find that all of these (4) propositions have been proved by a preponderance of the evidence, then your verdict must be for the plaintiff (unless you should also find that the defendant's affirmative defense of that Plaintiff's claims are barred by the doctrines of estoppel; failure to comply with conditions precedent of the contract; that Plaintiff's claims against Defendant are barred by the conduct of another; Plaintiff's claims are barred by the speculative nature of the claimed damages; Plaintiff's claims are barred by Plaintiff's own failure to mitigate damages, if any; Plaintiff's claims are barred in whole or in part by intervening or supervening causation; Plaintiff's claims are barred in whole or in part by the express provisions of the contract governing the transaction; Plaintiff's claims are barred in whole or in part by custom and trade practice; Defendant has fully performed its contractual obligations; Plaintiff's damages, if any[,] are the result of Plaintiff's own actions or inactions, has been proved by a preponderance of the evidence, in which event, your verdict must be for the defendant).³

The jury found in favor of Agritrack on both of the claims. With respect to...