Captain & Co., Inc. v. Stenberg
| Decision Date | 18 March 1987 |
| Docket Number | No. 4-285A44,4-285A44 |
| Court | Indiana Appellate Court |
| Parties | CAPTAIN & COMPANY, INC. and Darold Joe Bates, Appellants (Defendants Below), v. Daniel T. STENBERG, and Dorothy I. Stenberg, Appellees (Plaintiffs Below). |
James R. Byron, Thorne, Grodnik, & Ransel, Elkhart, Ralph R. Huff, Goodrich, Jones & Huff, Plymouth, for appellants.
Edward J. Chester, Chester & Paulson, Elkhart, James N. Clevenger, Kizer, Neu, Joyce, Wyland Humphrey, Wagner & Gifford, Plymouth, for appellees.
Appellants, home building contractors Darold Joe Bates and the Captain & Company, Inc. (the Company) entered a contract to rebuild the fire damaged home of Daniel and Dorothy Stenberg. When the Stenbergs refused to pay more than what they considered to be the agreed contract price, the Company ceased work on the house. The Stenbergs sued on the theories of breach of contract, fraud and violation of the Indiana Deceptive Consumer Sales Practices Act, and a jury, in a single general verdict, awarded them $65,000. The Company appeals, alleging there is insufficient evidence to prove it breached the contract, defrauded the Stenbergs, or violated the Act. It further alleges that, as a matter of law, it is not liable under any of these theories.
Additionally, it challenges the damage award on several grounds. It first argues the trial court incorrectly instructed the jury as to the proper measure of compensatory damages. It next claims the Stenbergs did not properly prove the amount of a reasonable attorney's fee. Finally, it argues there is no basis for a recovery for emotional distress.
We find the Stenbergs offered sufficient evidence for a jury to have found the Company liable under each of the three theories, and we find a basis in law for each of the three theories in this case. However, we do find the trial court erred in giving an erroneous jury instruction on compensatory damages. Accordingly, we affirm the verdict on the question of liability, but reverse the verdict on the issue of damages. We remand for a new trial limited to a determination of the proper amount of damages.
The facts most favorable to the judgment reveal that on May 4, 1982, a fire severely damaged the home of Daniel and Dorothy Stenberg. On the same day, the Stenbergs hired the Company to board up the structure, and, later, to salvage and store the personal property from their home.
Darold Joe Bates, the president of the Company, tried to persuade the Stenbergs to allow the Company to submit an estimate of the cost of reconstructing the house. The Stenbergs initially were reluctant to discuss reconstruction because they believed the house was a total loss. Instead of reconstructing the house, the Stenbergs intended to use the proceeds of their insurance policy to purchase another house. Bates counseled the Stenbergs that it would be unwise for them to buy a new home since they would suffer large financial losses due to supposed insurance penalties for failure to rebuild. This advice eventually led the Stenbergs to accept reconstruction estimates from the Company and Servicemaster, another fire reconstruction firm. The Company submitted an estimate in the amount of $68,135.99; on the basis of this estimate the parties entered into contract negotiations.
During the contract negotiations, the Stenbergs made it clear they did not want to spend more to repair the house than the amount they were to recover from their insurance company for its repair or replacement. The negotiations led to a contract which specified:
Captain and Company shall negotiate settlement with insurance company representative.
Captain and Company will prepare all necessary documents for Veterans Administration to release funds for repairs of damaged property.
Property owner shall be responsible to release proceeds for repairs and services rendered by Captain and Company, Inc.
"s/ Donald J. Bates
Representative of Captain and Company, Inc.
(emphasis added).
The Stenbergs insurance coverage for damage to the house and garage totalled $64,100; their coverage for damage to personal property totalled $29,000. The Stenbergs' insurance carrier, Meridian Mutual Insurance Company, eventually disbursed $64,100 to the Stenbergs for the reconstruction of the house.
The Stenbergs wanted some changes in the rebuilt house. Bates told them that it was possible to make the changes and stay within the amount of the original estimate by means of "put and take." By "put and take", Bates meant that the expense of the changes could be absorbed if the Stenbergs were willing to forego replacement of some of the original features of the house. 1
The Company began reconstruction of the house, and shortly thereafter, Bates submitted additional estimates which stated the cost of rebuilding was going to be higher than the Company originally anticipated. When the Stenbergs did not agree to the cost increases, a good deal of tension arose between the parties resulting in a series of heated discussions; the Stenbergs were unable to understand the explanation of the price changes, but they thought that Bates wanted the contract price increased to $90,000. The confrontations with Bates adversely affected Dorothy Stenberg emotionally and physically. When the parties reached an impasse, Bates ordered the Company's personnel to quit the job site. At that time the reconstruction of the house was only 40% complete, and the Company had drawn $53,269.97 of the available funds.
In order to complete the project, the Stenbergs paid other contractors $28,000, resulting in a final cost of $81,519.60. Evidence indicated that before the fire the house had a value of $36,000. After the expenditure of over $81,000, the market value increased to $39,500.
The Company raises several challenges to the judgment of the trial court. We shall first address those issues concerning the liability of the Company; we will then address the issues relating to the propriety of the court's damages award.
The Stenbergs brought this action against Bates and the Company on three grounds: breach of contract, fraud, and violation of the Indiana Deceptive Consumer Sales Practices Act. Bates and the Company allege it was error for the jury to find them liable under any of these theories of liability.
The Company advances two arguments against liability under the theory of breach of contract. It first argues that there is no evidence it breached by failing to complete construction for the agreed contract price. It also argues there was no breach because the Stenbergs erroneously interpreted the contract and, on the basis of the erroneous interpretation, made improper demands entitling the company to abandon the project.
The Company admits the question of whether a contract has been breached is ordinarily a question of fact, and is for the jury to decide. Strong v. Commercial Carpet Co. (1975), 163 Ind.App. 145, 322 N.E.2d 387, reh. denied in part, 163 Ind.App. 145, 324 N.E.2d 834; Hanging Rock Iron Co. v. P.H. & F.M. Roots Co. (7th Cir.1925), 10 F.2d 154. On appeal, we will not disturb the jury's decision unless the evidence is without conflict and can logically lead to but one conclusion, but the jury reached another conclusion. Riverside Insurance Co. v. Pedigo (1982), Ind.App., 430 N.E.2d 796; Thompson Farms v. Corno Feed Products (1977), 173 Ind.App. 682, 366 N.E.2d 3. The Company asserts the evidence is without dispute and clearly shows the Stenbergs wanted extra work When we review a jury verdict upon sufficiency grounds, we view the evidence in the light most favorable to the verdict, and we will make all reasonable inferences in favor of the verdict. Martin v. Roberts (1984), Ind., 464 N.E.2d 896. It is axiomatic that we will not, on appeal, reweigh the evidence.
done, but refused to allow the Company to adjust the price to account for their additional work. Furthermore, the Company argues the evidence establishes that when it first indicated the contract could not be completed for the original price, the revised estimates were merely offers to do additional work, not invoices amounting to unilateral revisions of the contract. Finally, the Company argues the Stenbergs demanded the Company complete the contract for a price which was too low and, consequently, the Company was entitled to abandon the project.
Using this standard of review, we find sufficient evidence to support the verdict. The Stenbergs testified they were unwilling to spend more on the reconstruction than they were to recover from the insurance company for the damage to the house. There was also evidence introduced that, before the parties executed the contract, the Stenbergs informed the Company they were unwilling to exceed the structural damage insurance limit. Additionally, the evidence indicated Bates told the Stenbergs it was possible to make changes in the house without raising the contract price if they were willing to surrender some of the features the house originally possessed, a process described as "put and take". The Stenbergs did forego some of the original features of the house in order to compensate for changes. 2
We find there was ample evidence from which the jury could have concluded the Company had breached the contract. When the Stenbergs refused to accede to the Company's demands for a higher contract price, the Company walked off the job site. In...
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