Fields Engineering & Equipment, Inc. v. Cargill, Inc.

• Decision Date: 15 June 1981
• Docket Number: No. 80-1685,80-1685
• Citation: 651 F.2d 589
• Parties: FIELDS ENGINEERING & EQUIPMENT, INC., Appellant, v. CARGILL, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 589

651 F.2d 589

FIELDS ENGINEERING & EQUIPMENT, INC., Appellant, v. CARGILL, INC., Appellee.

No. 80-1685.

United States Court of Appeals Eighth Circuit.

Submitted April 2, 1981.

Decided June 15, 1981.

Samuel L. Boyd, (argued), McElroy & Boyd, Dallas, Tex., for appellant.

Peter S. Hendrixson (argued), Ronald J. Brown, Dorsey, Windhorst, Hannaford, Whitney & Halladay, Minneapolis, Minn., for appellee.

Before LAY, Chief Judge, and STEPHENSON and ARNOLD, Circuit Judges.

ARNOLD, Circuit Judge.

Fields Engineering & Equipment, Inc., brought suit against Cargill, Inc., for damages for an alleged breach of a construction contract. Cargill counterclaimed and sought damages, including lost profits. The District Court ruled in favor of Cargill and awarded it $117,578.62. Fields appeals from that decision.

Fields Engineering & Equipment, Inc., is a Texas corporation with its principal place of business in Lubbock, Texas, and is primarily engaged in millwright construction work. Cargill, Inc., is a Delaware corporation with its principal place of business in Minneapolis, Minnesota, and is engaged in grain distribution. In 1975, the parties entered into an agreement for the construction of an overhead conveyor-belt system between two grain-storage facilities owned by Cargill in Clarion, Iowa. Fields had previously performed construction work for Cargill in both Nebraska and Texas.

Fields commenced work on the project on September 1, 1975. Two months later, Fields forwarded its first monthly invoice for payment on the basis of time spent in performance of the job and the cost of materials used in construction, that is, a "time and materials" method of billing. Subsequently, on or about November 19, 1975, a formal written agreement was drafted by Cargill and sent to Fields for approval. Fields Elton Kessler, then president of Fields Engineering, ¹ executed the contract and returned it to Cargill. There is no evidence in the record, however, that the contract was ever executed by Cargill. ²

The contract provided, among other items, that work on the project must be commenced by Fields, the contractor, on or before December 1, 1975, and completed no later than August 1, 1976. Time was said to be of the essence of the agreement. The contract further stated that Cargill must pay Fields "for the construction and work to be performed and materials to be furnished" the sum of cost plus 15%, with the total amount in no event to exceed $270,000. Additionally, the contract gave Cargill the authority to "add to or otherwise alter the construction and work to be performed," subject, however, to modification of the contract price by written agreement between the parties prior to the commencement of any changes.

A number of changes were made in the project at the request of Cargill, but without any express modification of the contract price. ³ Fields made these changes both before and after the deadline of August 1, 1976. Monthly payment invoices were sent to Cargill that reflected the fact that total billing had greatly exceeded the $270,000 cost limitation of the contract. Fields claims that Cargill raised no objections to the billings. Although assurances had been given to Cargill by Fields's representative, George Carter, that the project would be completed on time and within the cost limit, Fields continued working on the conveyor system until December 16, 1976. At that time, Cargill ordered Fields to leave the Clarion job site and thereafter hired the Jarvis Construction Company to finish the project, which it did in November, 1977. ⁴

On February 2, 1978, Fields filed this action seeking $232,612.10 ⁵ in damages for breach of contract. ⁶ The District Court, however, found that Fields had breached the written contract by failing to complete the construction work properly by the August 1 deadline and by exceeding the cost ceiling of $270,000.00. It further found that Cargill had been damaged in the amount of $37,885.00 paid to Jarvis Construction Company to finish the conveyor-belt system and $136,000.00 in two seasons' lost profits as a result of delay in completion. Fields was given credit for the amount Cargill owed for work done under the contract and for additional work performed at Cargill's request. This credit was found to be $56,306.38, reducing Cargill's recovery to $117,578.62.

Fields urges three points for reversal: that it was unlawfully denied a trial by jury in this action at law; that the District Court's findings of fact are insufficient and clearly erroneous; and that the District Court failed to rule on any of plaintiff Fields's evidentiary objections. In the main, we reject these arguments. We do hold, however, that the award for lost profits was erroneous in part, and the judgment against Fields will be reduced accordingly.

I. Jury Trial

Fields contends that its right to a trial by jury was violated when the case was transferred to a non-jury docket without its consent entered on the record, as required by Fed.R.Civ.P. 39(a). This contention has only its audacity to commend it. Although Fields filed a demand for a jury trial on two separate occasions prior to trial, the record indicates that at the pretrial conference Fields, through its counsel, orally agreed to trial before the court. Under Rule 39(a), the parties or their attorneys may stipulate that trial will be without a jury, even though a jury trial has been previously properly demanded. All parties must consent to the stipulation, which must either be made in a writing filed with the court or, as in the present case, by oral stipulation made in open court and somehow reflected in the record. Wright & Miller, Federal Practice and Procedure: Civil § 2332; see Collins v. Government of the Virgin Islands, 366 F.2d 279, 286 (3d Cir. 1966), cert. denied, 386 U.S. 958, 87 S.Ct. 1026, 18 L.Ed.2d 105 (1967). The pretrial order in this case, to which Fields did not object, recites the waiver of jury trial by the parties during pretrial conference. This is a sufficient entry in the record to satisfy the requirements of Fed.R.Civ.P. 39(a). See General Business Services, Inc. v. Fletcher, 435 F.2d 863 (4th Cir. 1970). It is immaterial that the pretrial conference itself was not on the record. The agreement to waive a jury, made at this conference, was recorded in the pretrial order.

II. The Findings of Fact

Fields asserts that the District Court erred in rendering judgment for Cargill for breach of contract and failed to make sufficient findings of fact and conclusions of law on Fields's own theories of recovery. We examine the merits of each specific point raised in turn.

A. Contract

The District Court found that the parties had entered into a written contract for the construction of an overhead conveyor-belt system and that appellant Fields had breached the contract by failing to complete the construction work properly by August 1, 1976, and by exceeding the cost ceiling of $270,000. Under Fed.R.Civ.P. 52(a), our review is limited, and the findings of the trial court will not be set aside unless clearly erroneous and unsupported by substantial evidence. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Goldman, 593 F.2d 129, 131 (8th Cir. 1979). After review of the evidence in the record, we are unable to say that the District Court's findings are clearly erroneous.

There is no question that there was a written agreement between Fields and Cargill. Further, the contract is valid and binding under Iowa law, which governs here, despite the absence of the signature of one of the parties. Service Employees International, Local No. 55 v. Cedar Rapids Community School District, 222 N.W.2d 403, 407 (Iowa 1974). The contract was based on Cargill's standard form, and both sides orally agreed to modifications that were embodied in the written instrument signed by Fields. This instrument was acted on by the parties. It is therefore immaterial that Cargill apparently never signed the final document, and the District Court properly so held. That Fields did not meet the contract deadline and exceeded the cost limitation is also clear. See Restatement, Contracts § 314 (1932). Whether Cargill waived the breach, however, is a different question as to which the District Court made no express finding.

Fields continued working on the overhead conveyor belt for more than four months past the August 1 contract deadline. During that period monthly payment invoices were sent to Cargill. Although Cargill never paid any of those bills, Mrs. Sammie Kessler testified that Fields was told that Cargill "had to get additional funds allocated for additional work." Fields infers that Cargill tacitly approved its continued work, and now should pay for it.

An innocent party may waive a breach of contract and continue performance on his part. S.S. Silberblatt, Inc. v. Seaboard Surety Co., 417 F.2d 1043, 1054 (8th Cir. 1969). As noted above, however, Cargill did not pay Fields for those months worked beyond the contract deadline. This absence of payment apparently signified to the District Court that Cargill chose not to continue performing its obligation under the contract and therefore did not waive Fields's clear breaches. In addition, Mr. Nesseth testified for Cargill that he expressly warned Mr. Kessler not to exceed the $270,000 limit. The District Court apparently gave little weight to the testimony of Mrs. Kessler, and we see no reason to set aside that assessment. The trial court had the opportunity to view the demeanor and credibility of the witness. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Goldman, supra, 593 F.2d at 131-32. Our task would be easier if the District Court had made fuller and more explicit findings, but we cannot say, after reviewing the record, that we are definitely and firmly convinced that the District Court was mistaken in implicitly finding that Fields failed to sustain its burden of proof on the affirmative defense of waiver.

B. Damag...