Bergstedt, Wahlberg, Berquist Associates, Inc. v. Rothchild

• Decision Date: 17 January 1975
• Docket Number: No. 44709,44709
• Citation: 225 N.W.2d 261,302 Minn. 476
• Parties: BERGSTEDT, WAHLBERG, BERQUIST ASSOCIATES, INCORPORATED, Respondent, v. Kennon V. ROTHCHILD and Hanover Ramp, a Partnership Composed of Kennon V.Rothchild, Richard M. Vogel and Jefferson Lines, Inc., Appellants.
• Court: Minnesota Supreme Court

Page 261

225 N.W.2d 261

302 Minn. 476

BERGSTEDT, WAHLBERG, BERQUIST ASSOCIATES, INCORPORATED Respondent, v. Kennon V. ROTHCHILD and Hanover Ramp, a Partnership Composed of Kennon V.Rothchild, Richard M. Vogel and Jefferson Lines, Inc., Appellants.

No. 44709.

Supreme Court of Minnesota.

Jan. 17, 1975.

Syllabus by the Court

Findings of the trial court that an implied contract for architectural services existed between plaintiff and defendants, providing for compensation measured by plaintiff's costs plus 25 percent, were not without requisite evidentiary support.

Vogel, Nemo, Chrysler & Stapleton and Roger R. Lenzmeier, St. Paul, for appellants.

M. D. Zeddies, Minneapolis, for respondent.

Heard before PETERSON, TODD, and SCOTT, JJ., and considered and decided by the court en banc.

PETERSON, Justice.

This appeal arises from an action on implied contract for an architectural fee tried to the court without a jury. Plaintiff was awarded the sum of $29,823.25. Defendants appeal from the denial of their postrial motion for a new trial. We affirm.

Plaintiff, Bergstedt, Wahlberg, Berquist Associates, Inc., is a Minnesota corporation in the business of furnishing architectural services. Defendants include Kennon V. Rothchild, individually, and Hanover Ramp, a partnership composed of Kennon V. Rothchild, Richard M. Vogel, and Jefferson Lines, Inc. In the transaction out of which the litigation arises, Rothchild alone appears to have represented defendants.

Defendant Hanover Ramp is the owner of a seven-story parking ramp located in St. Paul. The existing parking ramp was not a financial success, and in 1965 defendants became interested in the possibility of erecting additional stories on top of the Hanover Ramp for commercial purposes.

In February 1965 a conference was held between Clark Wold, an architect and officer of plaintiff, a leading architectural office building designer in St. Paul, and Kennon V. Rothchild to discuss the feasibility and nature of the proposed Hanover Ramp addition. There was no agreement as to fee arrangements at that time. In the spring of 1965 Rothchild was advised by plaintiff that office space could be added to the existing structure. Wold testified that at no time did Rothchild ever talk to him about the fee for architectural work being based on any contingency as to eventual cost. According to Wold, cost estimates were discussed but not in terms of a limitation beyond which the cost could not go. Rothchild also never indicated that services would not be paid for if the building was not built.

On May 26, 1965, Wold wrote to Rothchild setting forth the fee arrangement for plaintiff's architectural work for the Hanover Ramp. The arrangement provided for actual costs plus a fee of 25 percent of such costs. The letter contained a provision that 'if and when it is determined that the project shall proceed, you have the option of continuing this fee basis or using one of the standard AIA-owner agreements with the amount extended applied to the total fee.' The letter contained a space for Hanover to sign indicating agreement with the terms stated. Rothchild received the letter but never signed the agreement.

Plaintiff regularly consulted with Rothchild concerning its progress, and kept him informed of new developments. In March 1965 Charles Wahlberg, one of plaintiff's officers, wrote to Rothchild concerning meetings with St. Paul building officials. In May 1965 Wahlberg concluded a letter to Rothchild by saying, 'If you are in agreement with this concept we shall proceed with further development of preliminary drawings at that point which will enable you to seek financing.' By letter dated June 2, 1965, Rothchild replied, 'I have reviewed the sketches and agree that this represents a good approach to the problem.' In the same letter, Rothchild made specific suggestions as to the treatment of the stairways and entryway. Informal progress meetings involving the nature and scope of the project continued through June and July 1965.

Wahlberg testified that in June or July 1965 plaintiff had developed preliminary drawings for the Hanover Ramp project to the point where it was possible to obtain a preliminary estimate as to the probable cost of the project. On July 22, 1965, Wahlberg sent Rothchild a detailed estimate of construction costs totaling $745,500. The letter indicated that the general, mechanical, and electrical construction estimates were prepared by outside firms consulted by plaintiff.

Plaintiff started billing in July 1965 and continued to bill throughout 1965 and 1966. On October 18, 1965, Rothchild wrote a letter to Wahlberg requesting that the billing done on the project be sent in the name of Hanover Ramp. Defendants made a payment of $5,000 in July 1966. Plaintiff's final bill was in the amount of $34,823.25, less the $5,000 paid. A total of $29,823.25 remains unpaid.

Bids were opened in July 1966 and totaled in excess of $931,000. Rothchild thereafter orally advised Wahlberg that defendants could not proceed with the project on the basis of the bids received. In September 1966 plaintiff prepared alternative proposals to reduce the cost of the addition. In October 1967 Rothchild wrote Wahlberg, mentioning for the first time in writing a specific limitation on construction costs. The Hanover Ramp addition was subsequently built, but the extent to which plaintiff's plans were ultimately utilized is not clear.

Plaintiff brought this action to collect the amount due, claiming breach of an implied contract. The trial court found that plaintiff performed architectural services for defendant Hanover Ramp at the request of defendant Kennon V. Rothchild between March 1, 1965, and May 1, 1967. The trial court further found that the parties had entered into an agreement providing that plaintiff was to be paid its costs plus 25 percent, and ordered judgment for plaintiff in the sum of $29,823.25. Defendants moved for a new trial and appeal from a denial of that motion.

On an appeal from a denial of a motion...