Dalton Properties, Inc. v. Jones, 14774

• Decision Date: 03 July 1984
• Docket Number: No. 14774,14774
• Citation: 683 P.2d 30,100 Nev. 422
• Parties: DALTON PROPERTIES, INC., Appellant, v. Roscoe JONES, d/b/a Roscoe's Janitorial Service, Respondent.
• Court: Nevada Supreme Court

Page 30

683 P.2d 30

100 Nev. 422

DALTON PROPERTIES, INC., Appellant, v. Roscoe JONES, d/b/a Roscoe's Janitorial Service, Respondent.

No. 14774.

Supreme Court of Nevada.

July 3, 1984.

George R. Carter, Las Vegas, for appellant.

Leonard P. Smith, Las Vegas, for respondent.

OPINION

PER CURIAM:

The present appeal questions the appropriateness of an award of monetary damages in an action for the breach of a subcontractor's agreement which is terminable without cause. Under the agreement, Jones was employed as a subcontractor to remove trash and other debris from a HUD housing complex which was in the process of being renovated. The subcontract stated that the prime contractor "reserves the absolute right to terminate this agreement."

From the record it appears that Jones performed under the terms of the agreement for approximately three months until a dispute arose between Jones and Dalton Properties. According to Jones, he and his men were wrongfully accused of stealing appliances out of the apartments that they had been cleaning and as a result were ordered off the job site on February 7, 1980. Five months later, Jones requested and received a hearing before the State Contractor's Board to determine whether an amiable solution could be worked out. Unfortunately, the record does not contain any information as to what the parties discussed at the hearing or what the board's recommendation was. All that is known is that, as a result of the hearing, Jones was allowed to resume work on the project.

A complaint was subsequently filed against Dalton Properties in November, 1980, seeking general damages in excess of $10,000 for the loss of income over the five-month period which otherwise would have been received had Jones not been terminated from the project. Following a trial before the bench, judgment was entered in favor of Jones. The lower court specifically found that Jones had been "wrongfully terminated" from the project from February to August, 1980. As a result, the court awarded Jones $8,000 plus interest from February, 1980.

In the present appeal, Dalton Properties contends that damages for lost profits may not be recovered for the breach of a contract that is terminable at will or without cause. We agree.

The courts have long recognized the validity of contracts that provide either party the option of terminating the contract at will. See Shain v. Washington National Insurance Company, 308 F.2d 611 (8th Cir.1962); Pardee Oil Co., Inc. v. Phillips Petroleum Co., 320 A.2d 769 (Del.Ch.1974), aff'd, 343 A.2d 610 (Del.1975); Universal Sales Corp. v. California Press Mfg. Co., 118 P.2d 291 vacated by 20 Cal.2d 751, 128 P.2d 665 (Cal.1941); cf., Aluevich v. Harrah's, 99 Nev. 215, 660 P.2d 986 (1983) (lease terminable at will). Where a contract provides that...