Carl Bolander & Sons, Inc. v. United Stockyards Corp., 44109

• Decision Date: 01 March 1974
• Docket Number: No. 44109,44109
• Court: Minnesota Supreme Court
• Parties: CARL BOLANDER & SONS INC. Appellant, v. UNITED STOCKYARDS CORPORATION, Respondent.

Page 473

215 N.W.2d 473

298 Minn. 428

CARL BOLANDER & SONS INC. Appellant, v. UNITED STOCKYARDS CORPORATION, Respondent.

No. 44109.

Supreme Court of Minnesota.

March 1, 1974.

Syllabus by the Court

1. Where the language used in a contract is plain and unambiguous, there is no opportunity for interpretation or construction.

2. A 'firm not to exceed price' offer in a contract may be conditional.

3. Whether or not the condition existed must be determined by the trial court as a fact and cannot be done implicitly or by implication.

4. Parol evidence may be considered by the trial court in construing the meaning of the business terms contained in a contract.

LeVander, Gillen, Miller & Magnuson and Paul A. Magnuson, South St. Paul, for appellant.

Grannis & Grannis and Vance B. Grannis, South St. Paul, for respondent.

Heard before KNUTSON, C.J., and OTIS, MacLAUGHLIN, and MULALLY, JJ., and considered and decided by the court.

EDWARD D. MULALLY, ^* Justice.

This is an appeal from an order of the trial court denying the motion of plaintiff, Carl Bolander & Sons Co., Inc., for amended findings of fact or for a new trial.

On May 6, 1970, defendant, United Stockyards Corporation, contacted Bolander and invited a bid for the excavation work to be performed incident to the construction of a warehouse on property owned by Stockyards. When completed, the building was to be leased to Farwell, Ozmun, Kirk & Co.

The land upon which the building was to be built is 10 acres of a 17-acre tract located at the southeast corner of Armour and Stockyards Road in South St. Paul, Minnesota. The land had previously been used as a manure and refuse dump for the stockyards.

Stockyards wanted the poor soil excavated from the 10-acre plot and replaced with good fill. The site was to be ready for building to commence about August 1, 1970.

At the May 6, 1970, meeting Stockyards gave to Bolander a copy of a report of soil tests performed by Soil Exploration Company. The report of soil conditions had been received by Stockyards on February 20, 1970, and contained the results of five 2-inch borings of the soil made on the 10-acre site. One bore was made in each corner and one in the center. The parties agree that the test bores were correct as to the depth and locations tested; that Bolander made no additional tests; and that the test report did not warrant conditions below the depths of the borings or that the bores were necessarily typical of the entire site.

On May 11, 1970, Bolander delivered to Stockyards a written offer ¹ to excavate a site for a 412,200-square-foot building which would involve the removal of from 140,000 to 170,000 cubic yards of unsuitable material at a cost of either 59cents per cubic yard or 71cents per cubic yard, depending on the location of the dump site used. Further, Bolander offered a 'firm not to exceed the figure' of $105,000 'assuming that no extreme depth pockets of unsuitable material exists that do not show up in your soil borings.'

Shortly thereafter Stockyards and Bolander again met and Bolander was informed that the size of the proposed building was to be increased to 428,000 square feet.

On May 14, 1970, Bolander made a second written offer almost identical in form to the May 11 letter, but increasing the size of the building to 428,000 square feet and increasing the price to $107,000. The unit price clauses and the extreme depth pockets reference remained intact.

On May 26, 1970, Stockyards sent Bolander a written authorization to begin excavating. This completed the written memoranda of the agreement between the parties.

Bolander moved equipment in and began work.

During the third week in June Bolander became aware that more material than had been anticipated would have to be removed and subsequent changes in the building plans required the removal of an additional 11,000 cubic yards of material.

The excavation was completed on August 7, 1970, and Bolander billed Stockyards for 258,980 cubic yards. Stockyards paid what it contended was the contract price of $107,000, and Bolander commenced this action to recover an additional $45,798.20 for the removal of 89,000 cubic yards of material.

The trial court found that Bolander was paid the maximum 'not to exceed sum' due under the contract and granted Bolander judgment for $6,490 for the removal of the additional 11,000 cubic yards of material made necessary by the changes in the building plans. Bolander appealed from the court's denial of its motion for amended findings or for a new trial.

Bolander contends that the 'firm not to exceed' price was qualified and conditioned upon there being 'no extreme depth pockets.'

Cone soundings showed that 253,000 cubic yards had been removed, and Bolander found by a transit check that the figure was 259,000 cubic yards. This exceeded the maximum contract estimate by approximately 90,000 cubic yards and was 53 percent over what the original test report showed. The boring data indicated that Bolander would have to dig to an average depth of 9 1/2 feet. Actually, the excavation went to an average depth of 16 feet.

The trial court found that Stockyards had fully disclosed to Bolander all information it possessed; that a 'firm not to exceed' price was contemplated by the parties; that Bolander was paid the maximum 'not to exceed sum' of $107,000 due under the contract providing for excavation; and that the terms of the contract were unequivocally clear. In a memorandum accompanying its order, the court added that any loss resulting from error in judgment in making this proposal must be assumed by Bolander. The trial court made no finding of fact as to the amount of material necessarily removed from the site or whether or not any extreme depth pockets did in fact exist.

Bolander asserts the plain meaning of the contract to be that the 'not to exceed firm' offer is conditioned upon a finding of 'no extreme depth pockets.' We agree.

The contract provision in dispute reads as follows:

'Based upon a 428,000 square foot building and assuming that no extreme depth pockets of unsuitable material exists that do not show up in your soil borings, we offer a firm not to exceed figure of One Hundred Seven Thousand Dollars ($107,000.00) with material disposed at dump site No. 1 or 2.'

This provision can only be construed as an express condition precedent, which qualifies Bolander's firm offer of $107,000.

Where the language used in a contract is plain and unambiguous, there is no opportunity for interpretation or construction. 4 Williston, Contracts (3 ed.) § 609. 'A contract is to be interpreted to give effect to the mutual intention of the parties at the time of contracting, and in so doing the language used governs if it is clear and does not involve an absurdity. The meaning of a contract is to be ascertained from the writing alone, if possible, the duty of the...