Biteler's Tower Service, Inc. v. Guderian

• Decision Date: 22 February 1991
• Docket Number: No. 900244,900244
• Citation: 466 N.W.2d 141
• Parties: BITELER'S TOWER SERVICE, INC., Plaintiff and Appellant, v. Les GUDERIAN d.b.a. Guderian Broadcasting, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 141

466 N.W.2d 141

BITELER'S TOWER SERVICE, INC., Plaintiff and Appellant, v. Les GUDERIAN d.b.a. Guderian Broadcasting, Defendant and Appellee.

Civ. No. 900244.

Supreme Court of North Dakota.

Feb. 22, 1991.

Gary S. Gronneberg, Gronneberg Law Office, Fargo, for plaintiff and appellant.

A.W. Stokes, Stokes Law Offices, Wahpeton, for defendant and appellee.

VANDE WALLE, Justice.

Biteler's Tower Service appealed from a judgment awarding Les Guderian $8,717.50 plus costs and disbursements on a counterclaim for damages arising from a breach of contract. We affirm the judgment.

Les Guderian is the sole owner of Guderian Broadcasting. In 1988, Guderian obtained approval from the Federal Communications Commission to operate an FM radio station in Wahpeton. Guderian sought price quotes for the construction of facilities which would meet FCC standards. On March 25, 1989, Guderian accepted a proposal prepared by Biteler's Tower Service (BTS) for the construction of a transmitting tower.

Under the terms of the contract, BTS agreed to furnish a 325-foot tower and all labor and equipment necessary to install the tower. Any additional work or hardware furnished by BTS which was not stated in the proposal required an additional fee and was to be agreed upon in writing. Guderian Broadcasting agreed to pay for a structural analysis and to pay Biteler $16,570.00. Guderian Broadcasting was to pay one-half of the amount upon acceptance of the proposal with the balance to be paid upon completion of the tower.

On April 4, 1989, Guderian executed a check for $8,285.00 paid to the order of BTS for one-half of the total amount due. Construction on the tower began April 17, 1989 and was completed May 12, 1989. During the construction phase, BTS requested that Guderian pay $1,725.00 for a structural analysis, $1,700.00 for guy wire and hardware, and an additional $1,000.00. On April 26, Guderian executed a check payable to BTS in the amount of $1,000.00 for "tower parts as per contract." On May 1, Guderian executed a check payable to BTS in the amount of $2,425.00 for "structural analysis--guy wire as per tower contract." On May 16, after construction had been completed, Guderian executed a check payable to BTS in the amount of $4,142.50 "as per contract." On May 23, BTS billed Guderian an additional $1,103.56 for extra hardware and freight.

On May 30, 1989, BTS initiated a lawsuit against "Les Guderian, doing business under the firm and style name of Guderian Broadcasting" for breach of contract. BTS sought damages in the amount of $5,246.06 including $4,142.50 representing the unpaid balance under the contract and $1,103.56 for extra hardware and freight. Guderian filed a counterclaim alleging that BTS breached the contract and sought damages in excess of $10,000. The trial court determined that BTS had breached the contract by installing a 310-foot tower rather than a 325-foot tower, as provided for in the contract. BTS received nothing on its complaint and Guderian was awarded $8,717.50 in damages on his counterclaim. Additional facts will be presented and discussed more thoroughly below.

On appeal, BTS raises several issues and subissues. Many of these issues are either repetitive or inadequately developed and will be disposed of accordingly. The remaining relevant issues may be assembled into four discernible assignments of error. BTS asserts that the trial court erred in concluding that it had breached the contract; that the trial court erred in awarding Guderian damages on his counterclaim; that the trial court erred in not awarding BTS any damages on the original complaint; and finally, that the trial court erred in allowing the testimony of several of Guderian's witnesses.

In raising these issues, BTS has challenged several of the trial court's findings of fact and conclusions of law which we will discuss throughout this opinion. We note that on appeal conclusions of law are fully reviewable while findings of fact are not set aside unless they are clearly erroneous. Norden Laboratories, Inc. v. Rotenberger, 358 N.W.2d 518 (N.D.1984). A finding is clearly erroneous if it has no support in the evidence or if we are left with a firm conviction that a mistake has been made. Miller Enterprises, Inc. v. Dog N' Cat Pet Centers of America, Inc., 447 N.W.2d 639 (N.D.1989).

BREACH OF CONTRACT

The tower installed by BTS was a "used" 310-foot tower which had been dismantled from its location near Fort Dodge, Iowa. BTS was required under the contract to install a 325-foot tower. The trial court found that the parties contemplated using the Fort Dodge tower. BTS contends that both parties mistakenly believed that the Fort Dodge tower was 325 feet and due to their mutual mistake "[t]he contractual obligation must be altered and reformed to be consistent with the mutual understanding of the parties."

Alteration of a contract and reformation of a contract are distinct legal principles. Alteration is a process wherein the parties make "[a] change in the provisions of a contract." Black's Law Dictionary 71 (5th ed. 1979). Reformation is an "[e]quitable remedy used to reframe written contracts to reflect accurately real agreement between contracting parties...." Black's Law Dictionary 1152 (5th ed. 1979).

Section 9-09-06, NDCC, governs the alteration of a contract and provides:

"A contract in writing may be altered by a contract in writing or by an executed oral agreement and not otherwise. An oral agreement is executed within the meaning of this section whenever the party performing has incurred a detriment which he was not obligated by the original contract to incur."

In the case at bar, the oral discussion of the Fort Dodge tower took place before the parties executed the written contract. The execution of a written contract supercedes all preceding oral negotiations. NDCC Sec. 9-06-07. See, Jorgensen v. Crow, 466 N.W.2d 120 (N.D.1991). The written contract became the culmination of all prior agreements. Rettig v. Taylor Public School District No. 3, 211 N.W.2d 743 (N.D.1973). There existed no written contract which could have been altered by the parties at the time they contemplated the Fort Dodge tower. See Rettig, supra. Further, as a general rule, a court cannot alter the provisions of an existing contract, but can only interpret a contract created by the parties. 17A C.J.S. Contracts Sec. 296(3) (1963).

BTS argues that the contract should be reformed because a fair interpretation of its provisions may be accomplished only through a consideration of the real intention of the parties. In support of this proposition, BTS argues the application of section 9-07-05, NDCC, which provides:

"When through fraud, mistake, or accident a written contract fails to express the real intention of the parties, such intention is to be regarded and the erroneous parts of the writing disregarded."

Before we examine the parties' intentions under section 9-07-05, we must determine whether this case involves a relevant mistake of fact. Section 9-03-13, NDCC, provides the following definition for mistake of fact:

"Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake and consisting in:

1. An unconcious ignorance or forgetfulness of a fact, past or present, material to the contract;

....."

The particular mistake of fact which BTS asserts triggers consideration of section 9-07-05 is that both parties believed the Fort Dodge tower to be 325 feet high. The trial court in its memorandum opinion does not indicate affirmatively that this was indeed a fact, but rather only found that both parties had contemplated using the Fort Dodge tower. Guderian testified that the use of the Fort Dodge tower had been considered previously when he was engaged in another venture. He further testified that an agent for BTS suggested that a used tower from its inventory would be installed at the Wahpeton site.

BTS's assertion that both parties mistakenly believed the Fort Dodge tower to be 325 feet is not significant. In order for this mistake of fact to be significant, it must be material to the contract. The height of the particular tower located in Fort Dodge was not material to the contract. The contract unambiguously required BTS to erect a 325-foot tower, notwithstanding the origin of that tower. If the Fort Dodge tower was not a 325-foot tower, it was BTS's obligation under the contract to secure a tower that met the contract specification. Because there has been no material mistake of fact, we need not apply section 9-07-05 to our analysis of this case. After a full review of the record and consideration of the assertions raised by BTS, we affirm the trial court's conclusion that BTS breached the contract.

GUDERIAN'S DAMAGES

The next issue raised by BTS is whether the trial court properly awarded Guderian damages on his counterclaim. BTS challenges both the propriety of awarding damages to Guderian, personally, and the measure of damages utilized by the trial court.

BTS contends that Guderian Broadcasting, not Les Guderian, is the real party in interest. BTS argues that any damages established at trial were to corporate property, not personal property, and, therefore, Guderian's personal counterclaim must be dismissed. This issue was not raised, however, until a post-trial motion to amend the judgment. The trial court determined that the case had been completed and that BTS waived the right to raise that issue.

Rule 17(a), NDRCivP, sets forth the requirement that a party be a real party in interest and provides:

"(a) Real party in interest. Every action must be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may sue in that person's own name without joining the party for whose...