Audette v. Cummings

• Decision Date: 24 December 2013
• Docket Number: No. 2012–496,2012–496
• Citation: 82 A.3d 1269,165 N.H. 763
• Parties: Robert AUDETTE & a. v. Suzynne D. CUMMINGS & a.
• Court: New Hampshire Supreme Court

165 N.H. 763

82 A.3d 1269

Robert AUDETTE & a.

v.Suzynne D. CUMMINGS & a.

No. 2012–496

Supreme Court of New Hampshire.

Argued: September 12, 2013

Opinion Issued: December 24, 2013

Casassa and Ryan, of Hampton (Daniel R. Hartley on the brief and orally), for the plaintiffs.

Law Offices of Peter E. Hutchins, PLLC, of Manchester (Peter E. Hutchins on the brief and orally), for the defendants.

LYNN, J.

The defendants, Suzynne D. Cummings (Cummings) and S.D. Cummings & Co., PC, appeal a final order of the Superior Court (McHugh, J.) awarding $44,403 to the plaintiffs, Robert Audette (Audette) and his company, H & S Construction Services, LLC (H & S), for breach of contract. We affirm.

I

The trial court found the following facts. Beginning in 1999, the defendants provided various accounting and business services to Audette and his then-partner, Paul Fogarty, including helping them to start their construction business partnership, as well as preparing tax returns for both the business and Audette and Fogarty personally. In 2007, the defendants assisted Audette and Fogarty in dissolving their partnership, including drafting a dissolution agreement and serving as an intermediary between the parties.

In February and March 2008, H & S performed framing work on a house in Kingston (the property). On this project, H & S was a subcontractor of a general contractor, Ledge Rock Construction, LLC (Ledge Rock), owned by Peter Rizzo, for whom the plaintiffs had completed between twenty-five and thirty framing jobs since 1999. Ledge Rock owned the property and was constructing the house for Michael and Karen Greene, who were to purchase the property upon completion. In early March, the plaintiffs were informed that the Town of Kingston had issued a cease and desist order, halting construction on the property. By that time, H & S had completed approximately ninety-five percent of its work on the property and was owed $44,403.

Shortly thereafter, during a meeting regarding his taxes, Audette asked Cummings to recommend an attorney to place a mechanic's lien on the property. Cummings responded that she could perform the work and drafted a Representation Letter. The Representation Letter, dated March 10, 2008, set forth a number of services that the defendants would provide with regard to collecting the money owed to H & S for its work on the property, including:

3. Communicate with all pertinent parties in order to attempt to collect the monies due you without the intervention of the Court systems.

4. Prepare all documents necessary to secure your claim for services rendered and monies due you and your company. This will included, [sic] but not limited to preparation of all applications for a mechanic[']s lien, Court petitions and applicable municipality forms.

5. Define all terms for collection of the monies due, including but not limited to structure agreements, communications both written and verbal, and preparation of mechanic's lien for recording if necessary.

The Representation Letter indicated that the defendants would be paid for their services on an hourly basis. It also acknowledged that Audette had earlier given Cummings his key to the property.

H & S provided Cummings with a final invoice for its work on the property within a week of signing the Representation Letter. Cummings instructed Audette not to have any further contact with Rizzo or the Greenes, and to refer any calls from either party to her. Cummings had previously given Audette a similar instruction not to communicate with Fogarty while advising him during the dissolution of the Audette–Fogarty partnership.

Within a few weeks of executing the Representation Letter, Audette received a call from Rizzo. Rizzo left a voicemail promising to pay Audette if he returned to finish his remaining work on the house. Pursuant to Cummings' direction, Audette immediately notified her, and she said she would contact Rizzo. A few days later, Audette received a call from Michael Greene, whose voicemail confirmed that he had paid Rizzo and that H & S would be paid if it completed its work. Again, Audette immediately informed Cummings of the call and did not return Greene's message.

On October 8, 2008, Audette's wife, Judy Audette, sent Cummings an e-mail asking about the status of the property. Cummings responded by e-mail, stating, "received a call [from] Kingston while I was away so need to return it. Have everything else in motion." Later that day, Cummings wrote in another e-mail to Judy that she was "waiting on a return call from Kingston...never ending phone tag." On October 10, Cummings wrote in an e-mail to Judy, "I will keep you posted when I hear on Kingston." On November 18, 2008, Cummings replied to another e-mail from Judy by saying she was "in Court in Kingston right now. Will follow up with you. Keep your fingers crossed." Finally, on May 20, 2009, Cummings e-mailed Judy, "I will make an appointment for next week for Kingston." The plaintiffs understood these e-mails to mean that the defendants had secured a mechanic's lien on the property and had filed a lawsuit on their behalf.

During the summer of 2009, the plaintiffs began having difficulty contacting Cummings. In August, Judy Audette investigated the status of the property and mechanic's lien. After learning that the Greenes had moved into the home, she went to the Rockingham County Registry of Deeds and discovered that a warranty deed had been recorded, dated July 14, 2008, transferring the property from Ledge Rock to the Greenes. No mechanic's lien on the plaintiffs' behalf had been recorded. Because the plaintiffs' 120–day statutory lien had not been timely secured or recorded, it had lapsed in July 2008. RSA 447:2, :9 (2002). Judy continued her attempts to contact Cummings into September, but Cummings failed to respond to her calls or e-mails.

The plaintiffs brought suit against the defendants in November 2009 for breach of contract. At trial, Cummings' testimony conflicted with many of the facts recited above, but the trial court, as fact finder, discounted most of her testimony. The trial court found for the plaintiffs and awarded damages in the amount of $44,403. This appeal followed.

II

"A breach of contract occurs when there is a failure without legal excuse to perform any promise which forms the whole or part of a contract." Lassonde v. Stanton, 157 N.H. 582, 588, 956 A.2d 332 (2008) (quotation omitted). "We will uphold a trial court's ruling in an action for breach of contract unless the decision was made without evidentiary support or was an unsustainable exercise of discretion." Id. "A trial court's findings of fact in a breach of contract action are binding upon us unless they are unsupported by the evidence or erroneous as a matter of law." Id.

"The interpretation of a contract is a question of law, which we review de novo ." Czumak v. N.H. Div. of Developmental Servs., 155 N.H. 368, 373, 923 A.2d 208 (2007). "When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole." Id. "Absent ambiguity, the parties' intent will be determined from the plain meaning of the language used in the contract." Id.

On appeal, the defendants argue that the trial court erred in ruling: (1) that the plaintiffs did not fail to mitigate their damages; (2) that the defendants' breach of contract was the legal cause of the plaintiffs' damages; and (3) that expert testimony on the issues of reasonable care or legal causation was not necessary. We address these arguments in turn.

A

First, the defendants argue that the plaintiffs failed to mitigate their damages by: (1) not responding to the telephone calls from Rizzo and Greene asking the plaintiffs to return to the property, finish the job, and collect the monies owed them; and (2) not instituting legal action against Rizzo and/or the Greenes within the statute of limitations. We disagree.

The claimant in a breach of contract claim must take such measures to lessen his or her loss as can be effectuated "with reasonable effort and without undue risk." Coos Lumber Co. v. Builders Supply Co., 104 N.H. 404, 408, 188 A.2d 330 (1963) ; see also Grenier v. Barclay Square Commercial Condo. Owners' Assoc., 150 N.H. 111, 119, 834 A.2d 238 (2003) ("[A] party seeking damages occasioned by the fault of another must take all reasonable steps to lessen his or her resultant loss."). But the claimant need not do so until the defendant refuses to perform its part of the contract. Coos Lumber, 104 N.H. at 408, 188 A.2d 330. Put another way, "[t]here is no obligation on a promisee to minimize his damages until he actually knows that he is suffering damages because of a breach of contract by the promisor." Citizens Nat. Bank v. Hermsdorf, 96 N.H. 389, 394, 77 A.2d 862 (1951). Instead, the promisee "may assume that the promisor will keep his contractual promise." Id. Further, "[t]he defendants bear the burden of proving that the plaintiffs failed to mitigate damages." Grenier, 150 N.H. at 119, 834 A.2d 238 ; see also Parem Contracting Corp. v. Welch Const. Co., Inc., 128 N.H. 254, 259, 512 A.2d 1104 (1986) (holding that trial court was not permitted to conclude that damages could have been avoided absent evidence to that effect, and that defendant bore burden of presenting that evidence).

The defendants' first mitigation argument fails because the plaintiffs did not learn until August 2009 that the defendants had failed both to secure the mechanic's lien on the property and to take any action to recover the money owed as promised in the March 2008 Representation Letter. Indeed, the trial court found that the defendants led the plaintiffs to believe that "everything was in motion," meaning that they had secured the mechanic's lien and filed a lawsuit. Based upon his history with Cummings, Audette had every reason to believe Cummings was...