Bull v. PINKHAM ENGINEERING ASSOCS. INC., 98-431.

• Citation: 752 A.2d 26
• Decision Date: 21 April 2000
• Docket Number: No. 98-431.,98-431.
• Parties: John W. and Melinda H. BULL v. PINKHAM ENGINEERING ASSOCS., INC.
• Court: United States State Supreme Court of Vermont

752 A.2d 26

John W. and Melinda H. BULL v. PINKHAM ENGINEERING ASSOCS., INC.

No. 98-431.

Supreme Court of Vermont.

April 21, 2000.

James W. Runcie of Ouimette & Runcie, Vergennes, for Plaintiffs-Appellees.

Michael B. Clapp, Burlington, for Defendant-Appellant.

Present AMESTOY, C.J., and DOOLEY, MORSE, JOHNSON and SKOGLUND, JJ.

SKOGLUND, J.

This appeal concerns a lawsuit in which landowners allege that the engineering firm they hired breached its duty to properly survey their proposed residential subdivision, thereby causing them to incur legal fees in a related lawsuit and to lose an opportunity to develop a portion of their property. Following an evidentiary hearing, the superior court awarded plaintiffs John Bull and Melinda Hinsdale (formerly Bull) $55,000 in lost profits and $15,391 in attorney's fees and expenses for defending the prior related claim. Defendant Pinkham Engineering Associates, Inc. appeals that judgment, arguing that (1) plaintiffs' claims are barred by the three-year statute of limitations governing actions seeking compensation for damages to personal property; (2) the record does not support the trial court's findings concerning the contractual duty owed by defendant to plaintiffs and the amount of damages caused by defendant's conduct; and (3) the doctrine of collateral estoppel bars plaintiffs from claiming that defendant's survey was incorrect. On cross-appeal, plaintiffs claim that they are entitled to prejudgment interest on their damage awards. We affirm the trial court's decision, except that we grant plaintiffs' request for prejudgment interest on the award of attorney's fees.

The trial court made the following findings. In 1986, plaintiffs bought a farm in Ferrisburgh, Vermont. Shortly thereafter, they began to look into the possibility of subdividing a portion of the farm for the development of residential lots. They enlisted the help of Mrs. Bull's brother, Clark Hinsdale, a licensed real-estate broker who had experience in subdividing and developing property. They decided to develop thirty-five acres located on the westerly portion of the farm, a woodland area with little or no agricultural value. Mr. Hinsdale prepared a preliminary sketch laying out fifteen lots for a subdivision to be called Steeplewood. The sketch, which was based on the Ferrisburgh tax map, indicated that the southern boundary of the subdivision coincided with the southern boundary of plaintiffs' property; however, the tax map (and therefore the sketch) incorrectly located the southern boundary of plaintiffs' land a few hundred feet to the north of the actual boundary.

Upon Mr. Hinsdale's recommendation, plaintiffs hired defendant to do the surveying and engineering work for the subdivision. When Mr. Young, defendant's chief of surveying, indicated that it would helpful to be able to refer to surveys of adjoining lands, Mr. Hinsdale provided defendant with copies of the surveys of properties to the west owned by Cutting and to the north owned by Pickett. Mr. Hinsdale told Mr. Young that there was no need for defendant to resurvey the property lines between the Bull property and the Cutting or Picket properties. Mr. Hinsdale never asked defendant to complete a perimeter survey of the Bull property.

In preparing its survey of the Steeplewood subdivision, defendant based all of the bearing references on references in the Pickett and Cutting surveys, yet did not indicate on the Steeplewood survey that it had done so. Nor did defendant independently verify the accuracy of the bearings contained in the prior surveys, even though it would have taken only a matter of minutes to do so. As a result, all of the bearings on the Steeplewood survey were off by approximately eight and one-half degrees.

Nor did defendant survey the southern boundary of the proposed subdivision to determine whether the sketch taken from the Ferrisburgh tax map accurately depicted the location of that boundary. In fact, as noted, the tax map and sketch inaccurately depicted the southern boundary of the subdivision (and plaintiffs' property) a few hundred feet to the north of the actual boundary.

Plaintiffs and Mr. Hinsdale proceeded to implement the subdivision plan in three phases. In late 1989 or early 1990, after the first two phases were complete, plaintiffs decided to go ahead with phase three, which involved the preparation and sale of lots five, seven, and eight. In April 1990, Mr. Hinsdale asked defendant to stake out the center line of an east-west road running through the subdivision and set the corner pins for the phase three lots. Contrary to what it had done in the two earlier phases of the development, defendant set only the corner pins adjacent to the road and did not mark the rear corners of the lots. Nor did defendant inform plaintiffs or Mr. Hinsdale that the rear corner pins for the three lots had not been set.

In the spring of 1991, Mr. Hinsdale discovered that defendant had still not set the rear corner pins of the phase three lots. After advising Mr. Young that the pins had not been set, Mr. Hinsdale reasonably expected defendant to do so. In July 1991, plaintiffs sold lot five to William and Geraldine Burke. After purchasing the lot, Mr. Burke notified plaintiffs that he could not find the pin marking its northeastern corner. Mr. Bull and Mr. Hinsdale spent three hours trying to locate the pin by compass, but were unable to do so. Mr. Hinsdale then telephoned defendant to report that he could not locate the pin. When Mr. Hinsdale was informed that the pin had not been placed yet, he requested that it be set immediately.

Some time before September 11, 1991, the date defendant finally set the pin, Christopher Hastings, the contractor hired by the Burkes to build their home, poured a foundation for the house. Because the northeastern corner marker had not been set, Mr. Hastings attempted to locate the easterly boundary by taking a bearing from the southeastern corner of the lot. Because defendant's survey was off by eight and one-half degrees, the line the contractor determined for the eastern boundary was incorrect, and part of the foundation was located beyond the boundary line separating lots five and seven. After discovering the error, the Burkes halted construction of the house, which was never completed.

In December 1991, the Burkes filed suit against plaintiffs, Mr. Hastings, and defendant. They alleged that (1) plaintiffs were negligent in failing to cause the northeastern boundary pin to be put in place in a timely manner; (2) the incorrect compass bearing in their warranty deed for lot five constituted a breach of warranty; (3) defendant negligently identified an incorrect compass bearing on the eastern boundary of lot five; and (4) Mr. Hastings negligently placed the foundation of their house. After a jury trial, the superior court directed a verdict for all defendants on all counts. The court ruled that the first count failed as a matter of law because no testimony was presented as to the cost of repair or the diminution in value of the property. The court held that the second count also failed as a matter of law because the compass bearings for the subdivision were internally consistent and thus correct for purposes of conveying the title to lot five. A three-justice panel of this Court affirmed the decision. See Burke v. Bull, No. 94-432, 164 Vt. 644, 665 A.2d 890 (August 4, 1995) (mem.).

In February 1996, plaintiffs brought suit against defendant, seeking to recover the legal costs they incurred in defending against the Burke complaint, and the damages resulting from their lost opportunity to include within the Steeplewood subdivision their land located to the south of the southern boundary of the subdivision as depicted on defendant's survey. Following an evidentiary hearing, the superior court awarded plaintiffs $15,391 for legal costs associated with defending the Burke complaint and $55,000 for lost development opportunities. Defendant appeals, raising several issues, and plaintiffs cross-appeal, arguing that the court erred in failing to grant prejudgment interest on their damage awards.

As an initial matter, we emphasize our standard of review. We will not set aside the trial court's findings unless they are clearly erroneous, and we will uphold the court's conclusions as long as they are reasonably supported by the findings. See Morgan v. Kroupa, 167 Vt. 99, 104, 702 A.2d 630, 633 (1997). Findings are viewed in the light most favorable to the judgment, disregarding modifying evidence, and will not be disturbed merely because they are contradicted by substantial evidence; rather, an appellant must show that there is no credible evidence to support them. See Bianchi v. Lorenz, 166 Vt. 555, 562, 701 A.2d 1037, 1041 (1997).

I. Lost Profits

A. Statute of Limitations

Defendant first contends that plaintiffs' claim for lost profits is barred by 12 V.S.A. § 512(5), which provides that an action for damage to personal property caused by the act or default of another must be commenced within three years after the cause of action accrues. According to defendant, § 512(5) governs because the nature of the claimed harm is the relevant inquiry, and in this case the nature of the harm is plaintiffs' loss of cash, which is personal property. We find no merit to this argument.

Plaintiffs' claim for lost profits stemming from defendant's alleged breach of its contractual duty cannot be construed as claim for damage to personal property. Therefore, the claim is governed by 12 V.S.A. § 511, the "catchall statute that applies to civil actions generally." Fitzgerald v. Congleton, 155 Vt. 283, 287, 583 A.2d 595, 598 (1990). In cases such as this, where there is no claim of damage to personal property, we have held that § 511 applies to actions seeking damages for economic loss, including loss stemming from injury to real property. See, e.g., Investment Properties, Inc. v. Lyttle, 169 Vt. ___,...