Automatic Control Products Corp. v. Tel-Tech, Inc., TEL-TEC

• Decision Date: 06 October 1989
• Docket Number: INC,No. 20422,TEL-TEC,20422
• Citation: 780 P.2d 1258
• Parties: AUTOMATIC CONTROL PRODUCTS CORP., Plaintiff and Appellant, v., a corporation, Industrial Indemnity Company, a corporation, and Cache Valley Dairy Association, Defendants and Appellees.
• Court: Utah Supreme Court

Page 1258

780 P.2d 1258

AUTOMATIC CONTROL PRODUCTS CORP., Plaintiff and Appellant, v. TEL-TECH, INC., a corporation, Industrial Indemnity Company a corporation, and Cache Valley Dairy Association Defendants and Appellees.

No. 20422.

Supreme Court of Utah.

Oct. 6, 1989.

John L. McCoy, Salt Lake City, for plaintiff and appellant.

Tom Crowther, Salt Lake City, for defendants and appellees.

HOWE, Associate Chief Justice:

This action was brought by plaintiff Automatic Control Products Corp. (ACP) to recover $25,790.34 it claimed was due on an oral contract with defendant Tel-Tech, Inc. The trial court awarded ACP judgment for only $3,874.81, and ACP appeals.

Defendant Tel-Tech is engaged in the sale and installation of dairy and food processing equipment and machinery and in automating dairies and other food processing plants. Since its inception in 1975, Tel-Tech has often subcontracted with ACP to supply and install electric control panels which serve to turn on and off valves and pumps on the equipment and machinery which it sells. Until this litigation, Tel-Tech and ACP enjoyed a good relationship, with ACP installing approximately 200 panels on various Tel-Tech jobs. Although all contracts between Tel-Tech and ACP have been oral, these parties have not had any significant problems in their dealings with each other over the course of their seven-year business relationship.

In the summer of 1981, Randy Telford, President of Tel-Tech, met with Larry Florence, President of ACP, to discuss the building of panels on a job Tel-Tech was bidding for at the Cache Valley Dairy Association (CVDA) plant at Amalga, Utah. The two men examined some sketches and piping diagrams of the proposed installation. Telford wrote on a piece of paper, "Control Panel Estimates from Larry (ACP)" and beneath that heading listed four kinds of panels that would be needed and a figure opposite each kind, ranging from $3,000 to $10,000 each. Below that was listed an additional panel without any figure opposite it. Telford testified that based on this estimate, the two men determined that ACP could build the required panels for $31,600 and that he incorporated that figure into his bid to CVDA.

Tel-Tech was the successful bidder, and ACP did later construct and install the required panels. However, the parties are in sharp disagreement as to the contract price. Tel-Tech contends that the two men agreed on $31,600 as a firm figure and that although changes were made as the work progressed, they were largely substitutions which should not have increased ACP's price above the estimate. Florence testified that only price estimates were discussed at their meeting, that ACP billed Tel-Tech on a material and time basis as it had done on previous jobs, and that many changes were made as the CVDA job progressed, increasing ACP's costs. Both men acknowledged that Tel-Tech needed prices from ACP before it could bid the CVDA job. During the course of the work, ACP submitted invoices for payment to Tel-Tech. The latter paid $28,378.94 but refused to pay ACP's final invoices, which would bring the total price to $54,169.28.

After a four-day trial, the trial judge, sitting without a jury, concluded that he could not determine from the evidence "whether plaintiff (ACP) and Tel-Tech entered into a firm bid contract or a time and materials contract." However, the court ruled that ACP was entitled to reasonable compensation for its services and materials, which it determined to be $32,253.75, a figure the court explained was "the mid point between the $37,707 and $33,968 high and low values of the services and materials involved less 10% to reflect prices at the time of contracting and performance." These high and low values had been testified to by defendant's expert, Raldo Lanni. Consequently, judgment was awarded to ACP for the difference between $32,253.75 and $28,378.94, which had already been paid by Tel-Tech to ACP, or a net judgment of $3,874.81.

I.

ACP first contends that the trial court erred in mechanically adopting findings of fact and conclusions of law prepared and submitted by counsel for Tel-Tech without modifying or changing them in any respect. This contention finds its basis in Boyer Co. v. Lignell, 567 P.2d 1112 (Utah 1977), where we cautioned trial courts not to mechanically adopt findings of fact prepared and submitted by the prevailing party's attorney. ACP points out that there is what appears to be a typographical error and a transposition of figures in the finding which indicate lack of care and circumspection by the trial court. We find no error. There is no indication from the record here that the trial judge failed to adequately deliberate and consider the merits of the case. The errors in the findings pointed out by ACP do not render the findings in any way ambiguous. After the trial, the court took the case under advisement, allowing both parties to submit memoranda, and later requested both parties to submit proposed findings of fact and conclusions of law. The fact that the trial court did not completely agree with the contentions made by either party would indicate that there was no "mechanical" adoption of the theory or evidence of either party.

Nor was there any error in the failure of the trial court to notify ACP's counsel promptly after he had signed his findings of fact and conclusions of law and the judgment. Our rules do not require the court to give notice but put the burden on counsel to check periodically with the clerk of the court as to the date of entry of the findings and judgment so that post-trial motions may be timely filed. ¹

II.

ACP assails the findings of fact and conclusions of law made by the trial court in several respects.

First, ACP contends that the trial court erred in not awarding it as a base figure $31,600, which was the estimate given by ACP to Tel-Tech, and then adding to that figure the cost of all extra items not included in the estimate. We conclude that the trial court was justified in not having done so since not all of the panels on the estimate were built. Substitutions were made for some of the panels which were not necessarily of equal value. However, three panels listed on the estimate were built, and ACP's argument as to those three panels is sound. Since it is Tel-Tech's position that the parties firmly agreed on prices for these three panels and ACP does not dispute these prices, the trial court should have used those agreed-upon prices instead of resorting to Lanni's expert opinion of the reasonable and fair value of the three panels. The receiving panel was listed on the estimate at $3,000, but the trial court awarded the slightly lower sum of $2,985.50. Similarly, the main panel was listed on the estimate at $10,000. Yet the trial court awarded only $8,246. The third panel, a dual eductor panel, was included in the estimate at $6,000 according to Telford. But Lanni and the trial court fixed a value of only $4,787.50. The judgment in favor of ACP should be increased by those differences which total $2,981, since it is Tel-Tech's position that these estimated amounts were fair and reasonable and had been firmly agreed upon. No changes or substitutions were made affecting them, as was the case with the other panels listed on the estimate.

Second, ACP contends that because Tel-Tech paid invoices totalling $28,378.94 submitted by it as the job progressed without any objection, Tel-Tech cannot now object to or question the amounts charged for material and labor shown on those invoices. Thus ACP asserts that it was error for the trial court to allow Tel-Tech's expert to testify and for the trial court to award lesser amounts for the items shown on the paid invoices. This argument might be valid if it were not Tel-Tech's position that there was a firm bid and commitment to do the job for $31,600. Viewing the payments of the invoices in that light, we cannot hold as a matter of law that defendants were obligated to question each invoice as rendered since defendant could have reasonably believed that succeeding invoices would not bring the total cost above the $31,600 estimate. Moreover, Telford testified that ACP had in the past experienced cash flow problems and that Tel-Tech had on those occasions made advance payments to alleviate ACP's problems.

Third, ACP argues that in reaching its decision, the trial court completely ignored the previous course of dealings between the parties. The evidence was undisputed that on prior jobs there was "give and take" between the parties when ACP's costs exceeded its original estimate furnished to Tel-Tech. In those instances, Tel-Tech would endeavor to absorb additional costs incurred by ACP or Tel-Tech would go to its customer and endeavor to get it to agree to an increase. By this method, ACP and Tel-Tech in the past had been able to resolve any increases in ACP's cost because of changes or additions made as the job progressed. It appears that the trial court did not ignore this course of dealing and, in fact, gave ACP the full benefit of that course of dealing by endeavoring to award to it the fair and reasonable value of its materials and labor. It did not restrict ACP to the $31,600 estimate which Tel-Tech, throughout the trial, strenuously argued was the extent of its liability. Telford testified that the parties had endeavored to find means by which ACP's additional costs could be absorbed and that they met with CVDA for that purpose, but to no avail. We find no error in this regard.

Fourth, ACP complains that the trial court, in making its award of judgment, erred in reducing by 10 percent the average between the reasonable high and low values placed on the panels by Raldo Lanni, an expert witness called by Tel-Tech, which average amounted to $35,837.50. The trial court reduced that amount by 10 percent, or $3,583.75, "to reflect prices at the time of contracting and performance." ACP assails the 10 percent reduction...