Garrison v. Cc Builders, Inc.
| Decision Date | 28 March 2008 |
| Docket Number | No. S-07-0133.,No. S-07-0132.,No. S-07-0162.,S-07-0132.,S-07-0133.,S-07-0162. |
| Citation | 2008 WY 34,179 P.3d 867 |
| Parties | Wayne GARRISON and Pamela Garrison, Appellants (Plaintiffs), v. CC BUILDERS, INC., a Wyoming corporation and Clint Cook, Individually, Appellees (Defendants). CC Builders, Inc., a Wyoming corporation, Appellant (Defendant), v. Wayne Garrison and Pamela Garrison, Appellees (Plaintiffs). |
| Court | Wyoming Supreme Court |
Representing Wayne Garrison and Pamela Garrison: Lawrence B. Hartnett of Law Offices of Lawrence B. Hartnett, Jackson, Wyoming.
Representing CC Builders, Inc., a Wyoming corporation and Clint Cook, Individually,: Kenneth S. Cohen of Cohen Law Office, P.C., Jackson, Wyoming; and Heather Noble of Jackson, Wyoming. Argument by Mr. Cohen.
Representing CC Builders, Inc., a Wyoming corporation: Kenneth S. Cohen of Cohen Law Office, P.C., Jackson, Wyoming; and Heather Noble of Jackson, Wyoming. Argument by Mr. Cohen.
Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.
[¶ 1] CC Builders, Inc. (CC Builders) built Wayne and Pamela Garrison (the Garrisons) a house in Teton County, Wyoming, on a "cost plus" basis. This litigation resulted from the parties' subsequent disagreement as to the reasonable cost of construction. Both parties have appealed from the district court's award of damages and costs to the Garrisons. We affirm in part and reverse in part.
[¶ 2] The numerous convoluted issues presented by the parties in these three inter-related appeals can be restated as follows:
1. Are the district court's findings of fact as to damages clearly erroneous?
2. Are the district court's conclusions of law as to damages inconsistent with its findings of fact?
3. Did the district court err in concluding that CC Builders had not committed fraud?
4. Did the district court abuse its discretion in its award of costs to the Garrisons?
[¶ 3] The Garrisons live in Teton County, Wyoming. CC Builders is a Wyoming corporation engaged in the business of building custom residences in Teton County. In 1994, the Garrisons hired CC Builders, on a "cost plus 10%" basis, to build them a home in the Bear Island Subdivision. The 10% was designated for overhead and profit. During this project, which lasted two years, the Garrisons became friends with Clint and Lisa Cook, the owners of CC Builders.
[¶ 4] As had always been their intent, the Garrisons put the Bear Island home up for sale and began construction planning for a permanent home on a neighboring lot, known as the Hansen property. CC Builders was hired to construct a small guest house and garage on that lot. At some point, however, the Garrisons changed their minds and decided to have a house built for them at Teton Village. They sold the Hansen property and purchased a condominium unit at Teton Village, which they hired CC Builders to remodel.
[¶ 5] In 1999, the Garrisons bought a residential lot at Teton Village and engaged a local architect, Larry Berlin, to design a house. On March 24, 2000, the Garrisons met with Berlin and Clint Cook to consider construction of the house. Although the parties discussed the possibility of a "square-footage" contract, no agreement was reached as to what the cost per square foot would be. Instead, the parties entered into an oral "cost plus 12%" construction contract.
[¶ 6] Excavation for the house's foundation began in late May of 2000. Unstable soils were removed and large areas were backfilled. Gravel was imported to replace other soils under the foundation, and the building site was raised three feet above the original plan. The house was "roughed-in" by March 2001. Wayne Garrison and Clint Cook then met to discuss costs, which subject had not been broached since the project began, even though the Garrisons had, to that date, already paid $1,278,000.00 to CC Builders in response to monthly billings. At that meeting, Cook presented a written estimate to complete the project, excluding landscape and "hardscape"1 costs, totaling $3,335,157.00. Garrison authorized Cook to proceed.
[¶ 7] CC Builders did continue with construction of the house. Construction did not strictly follow the architect's plans, however, as numerous changes and additions were made. Those changes and additions were so numerous that, after litigation began and the district court authorized an inspection of the residence, the changes and additions were compiled into what became known as the "List of 520."
[¶ 8] The Garrisons continued to pay CC Builders' monthly invoices through August 10, 2001 — the total at that point being $3,463,174.74. The September 6, 2001 monthly invoice was for an additional $532,775.72. The Garrisons paid all but $57,083.21 of that bill, the withheld sum representing profit and overhead. They also withheld an additional $153,696.44, representing profit and overhead from the monthly billings for October through December 2001.
[¶ 9] The Garrisons sued CC Builders on February 11, 2004, alleging counts of contract breach, fraud, and negligent misrepresentation.2 Primarily, the Garrisons alleged that CC Builders had agreed to build the house within a year and at a cost of $350 per square foot, which amount was to include 6% for overhead and 6% for profit. The Garrisons further alleged that CC Builders had failed to obtain competitive bids from subcontractors, had failed to build the house in a timely manner, had breached the covenant of good faith and fair dealing, had grossly overcharged for labor costs and use of equipment, had ordered and billed for materials not used on the project, had failed adequately to superintend the project, and had wrongfully charged overhead costs as direct costs. These same allegations were then repeated as having been done knowingly and willfully, or negligently, to support fraud and negligent misrepresentation claims.
[¶ 10] CC Builders answered and counterclaimed, seeking $215,696.44 for breach of contract, that sum representing CC Builders' calculation of the total amount still due under monthly invoices. In its second cause of action, CC Builders sought the same amount under a quantum meruit theory. Finally, CC Builders sought damages "in excess of $1,000,000.00" for defamation, alleging that the Garrisons had published false and defamatory statements, orally and in writing, concerning CC Builders' conduct during the construction project.
[¶ 11] After a thirteen-day bench trial, the district court concluded that CC Builders had been overpaid by the Garrisons in the amount of $131,962.77. The district court based that figure on expert testimony as to reasonable costs and industry practices in the area, as well as the parties' course of conduct. The district court's mathematical computation was as follows:
Estimate $3,335,157.00
Permits 23,713.00
Utilities 9,006.00
Additional Masonry 171,163.00
Landscaping 244,409.00
_____________
$3,723,458.003
[¶ 12] After concluding that this figure— $3,723,458.00—was the reasonable cost of the project, the district court noted that the Garrisons had been billed for $3,995,817.77—an overpayment of $272,359.77. The district court also found certain "bonus and incentive" charges in the amount of $123,592.00, to have been unreasonable, raising the overcharge to $395,951.77. From that total, the district court then subtracted $153,000.00 that the Garrisons had withheld, and $110,989.00 for change costs attributable to the Garrisons, leaving the amount due to the Garrisons of $131,962.77. Judgment was entered against CC Builders in that amount.
[¶ 13] After trial, the Garrisons filed a Motion to Amend Judgment, citing W.R.C.P. 59(a)(5) and (6), which rule provides as follows:
(A) Grounds.—A new trial may be granted to all or any of the parties, and on all or part of the issues. On a motion for a new trial in an action tried without a jury, the court may open the judgment, if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment. Subject to the provisions of Rule 61, a new trial may be granted for any of the following causes:
....
(5) Error in the assessment of the amount of recovery, whether too large or too small;
(6) That the verdict, report or decision is not sustained by sufficient evidence or is contrary to law;
....
[¶ 14] Substantively, the Garrisons contended in their motion that the district court should have computed the judgment as follows based upon the evidence presented at trial:
Actual costs through September 2001
less overhead and profit from 9/6/01
invoice $3,938,734.65
October 3, 2001 invoice less overhead
and profit from 10/3/01 invoice 248,288.42
November 7, 2001 invoice less overhead
and profit and labor from 11/7/01
invoice 30,030.91
December 11, 2001 invoice less overhead
and profit and labor from 12/11/01
invoice 12,389.24
January 10, 2002 invoice less overhead
and profit and labor from
12/11/01 invoice 3,327.27
___________
SUBTOTAL $4,202,739.58
Less reasonable cost found by court 3,723,458.00
_____________
SUBTOTAL $479,281.58
Plus unreasonable bonuses and incentives 123,592.00
___________
SUBTOTAL $602,873.58
Plus change amount known before
estimate 8,602.00
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