Belfor Usa Group, Inc. v. Rocky Moun. Caulk. and Water., 05CA0022.

• Docket Nº: No. 05CA0022.
• Citation: 159 P.3d 672
• Case Date: August 10, 2006
• Court: Court of Appeals of Colorado

159 P.3d 672 BELFOR USA GROUP, INC., Plaintiff-Appellee,
v.
ROCKY MOUNTAIN CAULKING AND WATERPROOFING, LLC, Defendant-Appellant. No. 05CA0022. Colorado Court of Appeals, Div. III. August 10, 2006. Certiorari Denied December 18, 2006.

[159 P.3d 674]

Burg Simpson Eldredge Hersh & Jardine, P.C., Diane Vaksdal Smith, Tiffanie D. Stasiak, Englewood, Colorado, for Plaintiff-Appellee.

The Hustead Law Firm, P.C., Patrick Q. Hustead, Jennifer J. Gifford, Denver, Colorado, for Defendant-Appellant.

Opinion by Judge GRAHAM.

Defendant, Rocky Mountain Caulking and Waterproofing, LLC, appeals the trial court's remittitur of the jury's damages award. We reverse and remand.

Plaintiff, Belfor USA Group, Inc., hired Rocky Mountain to install caulking and waterproof coatings on 161 exterior decks of an apartment complex. The contract between Rocky Mountain and Belfor was a lump sum contract for $184,831. Rocky Mountain completed some, but not all of the work, and Belfor made some progress payments to Rocky Mountain but did not pay for all the work completed.

Belfor sued Rocky Mountain for breach of contract and negligence in connection with the project. Rocky Mountain counterclaimed for breach of contract with respect to the remaining unpaid invoices, describing its damages as follows: "Defendant Rocky Mountain . . . performed all services required under the Subcontract and [invoiced] [Belfor] for sums totaling $12,582.90. . . . Plaintiff Belfor is in breach of the Agreement by reason of nonpayment of amounts due and owing under the Subcontract Agreement." Rocky Mountain also sought to foreclose a mechanic's lien for $12,582.90.

In Rocky Mountain's initial C.R.C.P. 26(a)(1) disclosures, it provided the following description and computation of damages: "Rocky Mountain . . . seeks judgment against Belfor . . . in an amount to be proven at trial, pre and post judgment interest, costs, expert witness fees, and that the Court decree that Rocky Mountain . . . has a valid lien for the principal sum of $12,582.90 plus interest."

In the trial management order, Rocky Mountain stated that it "provided labor, materials, equipment, services, design and plans for the construction of improvements to the property with a reasonable value of $12,582.90, all of which were ordered by [Belfor] for incorporation into the property" and that it "is due this principal sum, interest at the statutory rate of 12% per annum, together with costs of the foreclosure certificate, and the recording of a mechanic's lien on the property." Before trial, Rocky Mountain

159 P.3d 675

dismissed its mechanic's lien claim, electing to prosecute only its breach of contract claim.

At trial, one of the principals of Rocky Mountain testified that progress payments were keyed to Rocky Mountain's work as it completed all the decks of any one apartment building. When Rocky Mountain completed the decks of a particular building, it would invoice Belfor. He testified that only four invoices totaling $12,582.90 remained unpaid. Belfor did not object to this testimony, and the trial court did not give any instruction to disregard this testimony.

The witness also testified that Belfor had paid Rocky Mountain $65,380 for work performed. He then attempted to testify concerning Rocky Mountain's lost future profits:

Q. So the total work bill paid, and then bill not paid, is about [$]77,962.10, does that sound about right?

A. Yes, it does.

Q. Okay. Now if you subtract that amount billed from the original contract price, you get a balance worth left to complete of [$]106,868.10, does that sound right?

A. It sounds right.

Q. Okay. Now if you would have been allowed to complete that work, what would have been your overhead profit on that?

A. Roughly 30 percent.

Q. Okay. And if you, now it would be 30% of 106 for another $30,000 would it?

A. Well, it would be figured in off of the base number for costs.

Q. Because this number already includes overhead and profits?

A. That's correct.

After an unrecorded bench conference with counsel, the court ruled that the jury must disregard the testimony regarding lost profits because "there has been no such claim in the counterclaim in this case, or in any of the higher [sic] disclosure documents."

Belfor's vice president later testified that his experts had agreed that Rocky Mountain "had worked on approximately 150" of 161 decks, which amounted to about 93% of the total deck waterproofing contract, representing $171,120 based upon a mathematical interpolation, using 161 decks as the total and a contract lump sum price of approximately $184,000. He agreed that, under a lump sum contract, when a party performs 93% of the work under the contract, it would be "fair" that such party be entitled to 93% of the contract sum, assuming the work is satisfactory. The trial court did not give any instruction to disregard this testimony.

Notwithstanding the trial court's earlier instruction to disregard testimony concerning lost profits because the claim had not been asserted or disclosed, at the close of the evidence the jury was given this instruction regarding Rocky Mountain's breach of contract counterclaim:

[I]f actual damages have been proved, you shall award the amount of damages sought. You may award these damages if you find that they were a natural and probable consequence of the Counterclaim Defendant, Belfor USA Group, Inc.'s breach of contract and the Counterclaim Defendant reasonably could have foreseen at the time the parties entered into the contract that the damages would probably occur if they breached the contract.

Belfor did not object to this instruction, which was modeled after CJI-Civ. 4th 30:34 (2004).

The jury found in favor of Rocky Mountain on all Belfor's claims and on Rocky Mountain's breach of contract counterclaim, awarding damages of $106,868.10. After the jury read its verdict, Belfor moved for a judgment notwithstanding the verdict or alternatively for a new trial, arguing that the jury's award of damages could not be sustained on the evidence presented and that Rocky Mountain was precluded from recovering any amount over $12,582.90 based on its failure to specify damages above $12,582.90 in its pretrial disclosures.

Belfor then filed a motion for remittitur based upon Rocky Mountain's failure to disclose any damages beyond $12,582.90 pursuant to C.R.C.P. 16 and 26. The court granted the motion for remittitur, reducing the jury award to $12,582.90, and awarded pre and post judgment interest thereon.

159 P.3d 676

Rocky Mountain contends that the trial court erred in granting Belfor's motion for remittitur. We agree.

We review a trial court's order of remittitur for an abuse of discretion. See Walford v. Blinder, Robinson & Co., 793 P.2d 620 (Colo.App.1990): Miller v. Carnation Co., 39 Colo.App. 1, 564 P.2d 127 (1977); cf. George v. Welch, 997 P.2d 1248 (Colo. App.1999) (because the damages award was not so clearly excessive as to indicate that the jury disregarded its instruction and instead awarded damages based on sympathy or prejudice, the trial court did not abuse its discretion...