City of Bridgewater v. Morris, Inc.

• Decision Date: 26 May 1999
• Docket Number: No. 20560,20560
• Citation: 594 N.W.2d 712,1999 SD 64
• Court: South Dakota Supreme Court
• Parties: CITY OF BRIDGEWATER, Plaintiff and Appellee, v. MORRIS, INC., Defendant and Appellant, and Schmucker, Paul, Nohr & Associates, Defendant and Third Party Plaintiff, v. Morris, Inc., Third Party Defendant and Appellant.

Page 712

594 N.W.2d 712

1999 SD 64

CITY OF BRIDGEWATER, Plaintiff and Appellee, v. MORRIS, INC., Defendant and Appellant, and Schmucker, Paul, Nohr & Associates, Defendant and Third

Party Plaintiff, v. Morris, Inc., Third Party Defendant and Appellant.

No. 20560.

Supreme Court of South Dakota.

Argued Jan. 13, 1999.

Decided May 26, 1999.

Murl E. Miller, Michael D. Stevens of Blackburn, Stevens & Fox, Yankton, Attorneys for plaintiff and appellee City of Bridgewater.

Ronald G. Schmidt, Brett M. Koenecke of Schmidt, Schroyer & Moreno, P.C., Pierre, Attorneys for defendant and appellant Morris, Inc.

MEIERHENRY, Circuit Judge

¶1 Morris, Inc. (Morris) appeals the trial court's judgment rendered in favor of the City of Bridgewater (Bridgewater). We affirm.

FACTS

¶2 Bridgewater let bids for a construction project to replace portions of its existing water distribution system. Bridgewater contracted with Schmucker, Paul, Nohr & Associates (SPN), a consulting and engineering firm to prepare plans, specifications, and contract documents to construct the system. Bridgewater awarded Morris the contract to construct the new water distribution system. In July 1993, Morris sought payment for substantial completion of the project. Both Bridgewater and SPN refused to sign the substantial completion certificate until Morris completed a "punch list" of work that needed to be done. During this time, Bridgewater discovered that some of the water lines were installed with only three feet seven inches of ground cover. Further testing revealed that the water lines had less than six feet of cover in several areas of the system. As a result of the discovery, Bridgewater brought breach of contract and negligence claims against Morris and SPN. SPN and Morris commenced claims against each other for contribution.

¶3 The court dismissed the negligence claims, but submitted the breach of contract claims as to both defendants to the jury. The court also submitted the counter cross-claims of contribution by SPN and Morris to the jury. On March 19, 1998, the jury found for Bridgewater against both Morris and SPN and awarded damages in the amount of $124,500. The jury found contribution between the defendants attributing seventy percent to Morris and thirty percent to SPN. The jury further awarded interest from March 19, 1997.

¶4 Morris appeals raising the following issues:

Whether a written contract may be modified in the absence of a written agreement or an executed oral agreement.

Whether Bridgewater is entitled to a damage award if the breach of contract is based on a technical violation of contract in the absence of actual damages.

Whether a jury may apportion damages in a contract case.

Whether a jury can award prejudgment interest when the damages were uncertain until fixed by the jury.

STANDARD OF REVIEW

¶5 In reviewing a jury verdict or denial of a directed verdict, the Court must view the evidence "in the light most favorable to the non-moving party and give him the benefit of all reasonable inferences." Westover v. East River Elec. Power, 488 N.W.2d 892, 896 (S.D.1992). This Court reviews the record to "determine whether there is any substantial evidence to allow reasonable minds to differ. This Court does not weigh the evidence and substitute its judgment for that of the jury." (citations omitted) Id.

¶6 The standard of review of a trial court's instruction to the jury is whether the instructions viewed as a whole are not erroneous and provide a full and correct statement of the law as it applies to the case. Knudson v. Hess, 1996 SD 137, 556 N.W.2d 73, 75 (citing Sommervold v. Grevlos, 518 N.W.2d 733, 739 (S.D.1994)); Frazier v. Norton, 334 N.W.2d 865, 870 (S.D.1983); Mueller v. Mueller, 88 S.D. 446, 221 N.W.2d 39 (1974). If the court gives an erroneous instruction to the jury, the appellant has the burden of showing that the jury might and probably would have returned a different verdict had the correct instruction been given. Chambers v. Dakotah Charter, Inc., 488 N.W.2d 63, 64 (S.D.1992). "[A]n appellant who seeks to set aside a civil verdict because of an incomplete or ambiguous instruction must establish that it was prejudicial." Schmidt v. Wildcat Cave, Inc., 261 N.W.2d 114, 119 (S.D.1977).

DECISION

¶7 Whether a written contract may be modified in the absence of a written agreement or an executed oral agreement.

¶8 Morris claims on appeal that the terms of the written contract did not specifically require six feet of cover of the pipes. Morris further claims that the requirement of six feet of cover was a modification of the original contract and could only be modified by a writing or by an executed oral agreement. SDCL 53-8-7.

¶9 The case was presented to the jury as a straightforward breach of contract issue as to whether the six feet of cover for the underground water system was a specification of the contract. As part of the evidence, Bridgewater introduced drawings of the prospective system that specified a cover of six feet. Other testimony revealed several discussions between the parties about the six feet requirement, including clarifications at the pre-construction meeting. Morris's foreman admitted at trial that he knew of the requirement. Additionally, Bridgewater presented testimony that the prevailing industry standard was six feet of cover. ¹

¶10 It is the jury's responsibility to judge the credibility of the witnesses and the weight to give to the evidence. Berry v. Risdall, 1998 SD 18, 576 N.W.2d 1. The jury heard the evidence and determined that the six feet of cover was a requirement of the original contract. A review of the evidence presented at trial reveals sufficient evidence from which the jury could have made its finding. This was a question of fact appropriately submitted to the jury. Morris does not claim that the jury instructions on this issue were in error. We, therefore, affirm on this issue.

¶11 Whether Bridgewater is entitled to a damage award if the breach of contract is based on a technical violation of contract in the absence of actual damages.

¶12 Morris cites the jury's award of damages as error. Morris claims that if there was a breach, it was a technical breach, from which Bridgewater incurred no actual damage. Whether the failure of Morris to cover the pipes six feet caused damage was a jury question. The court instructed the jury that it could award damages based upon reasonable expense of repair or the sum of the difference between the fair market value of the project as contracted and as constructed. ² Morris made no objection to court's instruction on the proper measure of damages. Under any damage model, "there need only be a reasonable basis for measuring the loss and it is only necessary that damages can be measured with reasonable certainty." Tri-State Ref. & Inv. Co. v. Apaloosa Co., 452 N.W.2d 104, 110 (S.D.1990).

¶13 The jury heard experts testify that the diminution of value suffered by Bridgewater was approximately $150,000. The expert testimony also provided for an alternative method of damages which would compensate Bridgewater by replacing all pipes under the elevation of five feet six inches or twenty-two percent of the project at a cost of $125,000. Thus, the compensatory damage award of $124,500 is within the limitations justified by the evidence.

¶14 Again, it is the jury's role to weigh the testimony, resolve conflicting testimony, and evaluate the credibility of the witnesses. Berry v. Risdall, 1998 SD 18 at p 10, 576 N.W.2d at 4. In viewing the evidence "in the light most favorable to the non-moving party" and giving "the benefit of all reasonable inferences," we find there is substantial evidence on which reasonable minds could differ. Westover v. East River Elec. Power, 488 N.W.2d at 896. The jury's determination of the amount of damages is affirmed.

¶15 Whether a jury may apportion damages in a contract case?

¶16 Bridgewater started this case as two separate actions: one against Morris and one against SPN. Both lawsuits were based on negligence and breach of contract claims. SPN filed an answer and third party complaint against Morris, and Morris counterclaimed. As part of the third party complaint and counterclaims, both SPN and Morris requested contribution and/or indemnity if the jury found them liable to Bridgewater. The court dismissed the negligence claims precluding the need for apportioning fault between the defendants. Neither SPN nor Morris, however, was willing to dismiss its claim for contribution and indemnity against each other.

¶17 The court instructed the jury to consider the rights of the defendants as separate and distinct and to decide each defendant's case as a separate lawsuit. ³ The court also instructed the jury that SPN had the burden of proving, "That if SPN is liable to city, there exists a disproportion of fault between SPN and Morris so as to render inequitable an equal distribution between them." Jury Instruction # 15. The court further instructed the jury to apportion the damages between the defendants based upon their "respective percentages of fault." ⁴

¶18 The jury was required to designate on the verdict form the defendants it found liable on the depth of cover issue. ⁵

The jury found against both defendants and entered the names of both Morris and SPN on the verdict form. A special verdict form required the jurors to allocate the respective degrees of fault between Morris and SPN. The jury determined Morris was seventy...