Curtis Const. Co. v. American Steel Span

• Decision Date: 20 December 2005
• Docket Number: No. 20050175.,20050175.
• Court: North Dakota Supreme Court
• Parties: CURTIS CONSTRUCTION COMPANY, INC., Plaintiff and Appellee v. AMERICAN STEEL SPAN, INC., dba Mastercraft, and Wane Engkjer, Defendants and Appellants.

Page 68

707 N.W.2d 68

2005 ND 218

CURTIS CONSTRUCTION COMPANY, INC., Plaintiff and Appellee v. AMERICAN STEEL SPAN, INC., dba Mastercraft, and Wane Engkjer, Defendants and Appellants.

No. 20050175.

Supreme Court of North Dakota.

December 20, 2005.

COPYRIGHT MATERIAL OMITTED

Adam W. Hamm, Anderson & Bottrell, Fargo, N.D., for plaintiff and appellee.

Jeff A. Bredahl, Bredahl, Frisk & Grande, Fargo, N.D., for defendants and appellants.

SANDSTROM, Justice.

[¶ 1] American Steel Span, Inc., and Wane Engkjer appeal a district court judgment awarding Curtis Construction Company, Inc., $34,241.62 after a bench trial. The disputes arose over the concrete work on two projects in Fargo. The district court's findings are supported by the evidence, and we affirm.

I

[¶ 2] American Steel Span, Inc., does business as Mastercraft and sells steel buildings around the country. Wane Engkjer is American Steel's principal owner. Curtis Construction is a North Dakota contractor.

[¶ 3] The first disputed project involved concrete work that Curtis Construction agreed to do for Mastercraft at Reile's Transfer in Fargo. Russell Handegard, the president of Curtis Construction, testified that Mastercraft was concerned about its need to finish the Reile's Transfer project and that the site had drainage problems that needed to be solved. Mastercraft asked Curtis Construction to help it finish the project. Tolly Wangsness, Mastercraft's foreman, testified that Mastercraft contracted with Curtis Construction through its foreman, Kent Moritz, to remove some concrete that Mastercraft had poured and to lay new concrete for a flat, per-square-foot rate. In support, American Steel offered Exhibit 3 into evidence at trial, which American Steel refers to as a "work order." The document contains language that American Steel argues created a flat-rate contract. Exhibit 3, dated "10/10/02," lists the job as "Reile's Transfer" and states "Tear out & Replace concrete @ $4.50 ¢; Place 6" concrete @ $3.00 Sq Ft per Tolly at Master craft Bldg. T.W. T.W. Tolly Wangness [sic]." The document was initialed by Wangsness. Handegard testified that Moritz did not have authority to contract for new projects on behalf of Curtis Construction and that the contract for the removal of old and pouring of new concrete was an oral contract for a time-and-materials price. The time-and-materials price was calculated by adding the cost of raw materials, plus labor, plus an eight percent allowance for overhead costs and an eight percent allowance for profit. The district court concluded that the contract was a time-and-materials contract and awarded Curtis Construction $19,345. Of this amount, $14,000 had been paid, so the remaining balance due was $5,345.

[¶ 4] The second project was for concrete work at Engkjer's home in the Rose Creek area of Fargo. Handegard and Engkjer orally agreed that Curtis Construction would lay two concrete driveways at Engkjer's home. According to Engkjer, the parties agreed on a flat, per-square-foot rate. Handegard testified the agreement was for a time-and-materials price. Engkjer also contends Curtis Construction did not substantially perform the Rose Creek contract, because Curtis Construction delayed in pouring when it did not have a concrete pump; did not install joints to prevent cracking; did not finish the driveway to specifications by failing to insert decorative concrete diamonds into the driveway; and did not properly lay the sand sub-grade, which Engkjer claims has resulted in extensive heaving and cracking. Moritz testified that his observations of the cracking persuaded him that the driveway's useful life has been reduced by thirty to forty percent. The district court found that Engkjer acquiesced to the time-and-materials pricing. The court also found that Engkjer had not established the diminished value of the driveway caused by the alleged failure to properly perform. It awarded Curtis Construction $26,674 in damages.

[¶ 5] On appeal, American Steel and Engkjer argue that the district court clearly erred by concluding the two agreements were not fixed-rate contracts and by not reducing the Rose Creek judgment, given Curtis Construction's alleged failure to substantially perform. Curtis Construction argues the district court's findings are correct.

[¶ 6] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. The appeal was timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2, 6, and N.D.C.C. § 27-02-04 and §§ 28-27-01 through 28-27-02.

II

A

[¶ 7] On the Reile's Transfer project, American Steel argues that Exhibit 3 constitutes the contract between the parties. Whether a writing is sufficient to constitute a contract is a question of law, fully reviewable by this Court. Johnson v. Auran, 214 N.W.2d 641, 652 (N.D.1974).

[¶ 8] The elements of a contract include parties capable of contracting, the consent of both parties, a lawful objective, and consideration. N.D.C.C. § 9-01-02. Section 9-06-02, N.D.C.C., provides that all contracts may be oral, except those required by statute to be in writing. Both contracts in dispute in this case may be oral and not violate the statute of frauds, because they were capable of being performed in one year. See N.D.C.C. § 9-06-04 (contracts incapable of being performed in one year, contracts assuming payment of the debt of another, real estate sales or leases for a year or more, and contracts lending or extending credit for $25,000 or more must be in writing).

[¶ 9] In Auran, this Court addressed whether a "written memorandum of an alleged oral contract not to be performed within a year from the making" was sufficient to satisfy the statute of frauds provided for in N.D.C.C. § 9-06-04. 214 N.W.2d at 650. The disputed matter was an employment agreement between a car dealership owner and the widow of the former dealership owner. Id. at 646. The widow and the dealership allegedly agreed orally that the dealership would employ the widow as a "goodwill representative" of the car dealership for $100 per month and the yearly use of a new car. Id. The agreement was outlined in a letter from the dealership to the widow. Id. This Court held that for a writing to be sufficient to constitute the complete contract, the writing "must contain all the essential or material conditions and terms of the contract." Id. at 649-50. The contract may be contained in several writings or documents as long as it contains four details: (1) "Who the contracting parties are"; (2) "The identity of the subject matter involved"; (3) "The consideration"; and (4) "The terms and conditions upon which the contract was entered into." Id. at 651 (citing Hoth v. Kahler, 74 N.W.2d 440, 441 (N.D.1956)). Even though the agreement between Curtis Construction and American Steel is not a contract that must be in writing, the same factors may be considered in deciding whether Exhibit 3 sufficiently explains the agreement. See Stout v. Fisher Indus., Inc., 1999 ND 218, ¶ 14, 603 N.W.2d 52 (because the memorandum in question clearly showed that the parties planned to negotiate some employment terms later, it was not a complete contract).

[¶ 10] Exhibit 3 in this case is labeled as a "Daily Log." Curtis Construction's president, Handegard, testified the document is field notes regarding Reile's Transfer. The parties dispute whether the form is regularly used by Curtis Construction in its business. The writing on Exhibit 3 lists the job as "Reile's Transfer" and states "Tear out & Replace concrete @ $4.50 ¢; Place 6" concrete @ $3.00 Sq Ft per Tolly at Master craft Bldg. T.W. T.W. Tolly Wangness [sic]." Handegard testified that the notes must have been written by Moritz or Wangsness. He also testified that the alleged per-square-foot pricing was communicated to him by Moritz, not from him to Moritz, and that he never approved a flat-rate price.

[¶ 11] Applying the Auran elements to Exhibit 3 demonstrates that it fails as a complete contract between the parties because it does not include both parties and all the essential or material terms and conditions of the agreement. Exhibit 3 discloses only Mastercraft as a party to the agreement through Wangsness's name and initials. The document does not disclose Curtis Construction as a party. It is not signed by any representative of Curtis Construction. According to Handegard, the form was not created by Curtis Construction and is only sometimes used on its construction projects. Therefore, Exhibit 3 does not disclose the parties to the agreement. Furthermore, Exhibit 3 does not disclose the complete terms and conditions under which the contract was entered into. Handegard testified that the document is very brief, describing only a small aspect of the job, and does not describe the work being done at the site. The document does not disclose the total square footage involved in the project or the amount of supplies needed. It does not discuss any specifications for any aspect of the project, nor does it discuss a deadline for the project. Exhibit 3 is too incomplete to constitute a full written contract between the parties. Therefore, it is merely extrinsic evidence that the district court may consider when deciding what the terms of the oral contract were. Exhibit 3 cannot be a contract as a matter of law.

B

[¶ 12] That Curtis Construction and American Steel had at least an oral contract regarding the Reile's Transfer project is not disputed. The only disputed term is the pricing. American Steel argues the oral agreement was for a flat-rate, per-square-foot price, evidenced by Exhibit 3. Curtis Construction argues that the oral agreement was for a time-and-materials price.

[¶ 13] For disputes involving oral contracts, the trier of fact decides the terms of the contract. Smith Enters., Inc. v. In-Touch Phone Cards, Inc., 2004 ND 169, ¶ 13, 685 N.W.2d 741 (citing Tallackson Potato Co., Inc. v. MTK Potato Co.,...