GCI, INC. v. Haught

• Decision Date: 17 July 2000
• Docket Number: No. 99-234.,99-234.
• Citation: 7 P.3d 906
• Parties: G.C.I., INC., Appellant (Defendant), v. Janet HAUGHT, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

7 P.3d 906

G.C.I., INC., Appellant (Defendant), v. Janet HAUGHT, Appellee (Plaintiff).

No. 99-234.

Supreme Court of Wyoming.

July 17, 2000.

Representing Appellant: Bill G. Hibbler, Cheyenne, WY.

Representing Appellee: Michael R. O'Donnell of Burke, Woodard & O'Donnell, P.C., Cheyenne, WY.

Before LEHMAN, C.J., and THOMAS, MACY¹, GOLDEN, and HILL, JJ.

LEHMAN, Chief Justice.

After litigation over the construction of appellee Haught's home, the homebuilder, appellant G.C.I., Inc., and Haught entered into a settlement agreement by which G.C.I., Inc. agreed to make certain repairs. When G.C.I., Inc. failed to make the repairs, Haught filed suit, alleging breach of the settlement agreement. After a bench trial, the district court found that G.C.I., Inc. had breached the settlement agreement by failing to make the repairs in a reasonable time and awarded Haught damages. We affirm.

ISSUES

G.C.I., Inc. presents three issues for our review:

I. Because no time was fixed for performance within the agreement, was Haught required, as a matter of law, to make a demand upon GCI before a default or breach could occur?

II. Was the amount of damages awarded by the court, in excess of and contrary to the specific amount expressed by the parties' intent within the agreement?

III. Did Haught excuse any non-performance by GCI by refusing to allow it to perform, when offered?

Appellee, Janet Haught, rephrases the issues:

1. Is the conclusion of the District Court that the Defendant/Appellant (G.C.I., Inc.) breached its contract with Janet Haught supported by substantial evidence such that it is not clearly erroneous?

2. Is the conclusion of the District Court regarding the damages suffered by Janet Haught supported by substantial evidence such that it is not clearly erroneous?

FACTS

In early 1995, Janet Haught (Haught) and her husband Dwight hired appellant G.C.I., Inc. to build their "dream home" north of Cheyenne. The home was completed in mid-June of 1995. When the Haughts moved into their new home in late June and early July, they discovered a number of problems. Most obvious of the problems was a chimney that swayed in the wind. A "spongy" floor, i.e., one that bowed when walked on, was also a problem.

G.C.I., Inc. sued Haught in April of 1996 to recover monies due for the construction of the home. Haught counterclaimed, alleging that the workmanship was unsatisfactory. Court-ordered mediation was held in April of 1997, and a settlement agreement was filed in June of 1997. Under the terms of the settlement agreement, Haught agreed to pay $9800 into an escrow account, which she did immediately. When G.C.I., Inc. completed repairs, at its own expense, it would then be entitled to the $9800 held in escrow.

Pursuant to the terms of the settlement agreement, there were two categories of repairs: those the parties agreed on and those contingent on an engineer's report. As to this second category, the parties agreed to retain an engineer to determine if certain repairs were necessary and also to determine the manner in which certain repairs would be performed. The engineer completed his report on December 10, 1997, and both parties were given a copy of the report.

G.C.I., Inc. never performed any of the repairs, and Haught filed the present action on June 2, 1998, alleging breach of the settlement agreement. Trial was bifurcated into a liability phase and a damages phase. The liability phase was tried to the bench on January 29, 1999, whereafter the district court determined G.C.I., Inc. breached the settlement agreement. The damages phase was held May 25, 1999, where the district court determined that G.C.I., Inc. was liable to Haught for damages of $76,163.36. The district court allowed G.C.I., Inc. to offset the $9800 escrow amount, thus leaving it liable to Haught for $66,363.36. G.C.I., Inc. appealed.

STANDARD OF REVIEW

In this case, we are asked to review both the district court's findings of fact as well as its conclusions of law.

The factual findings of a judge are not entitled to the limited review afforded a jury verdict. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 538 (Wyo.1993). While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Id. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail weighing disputed evidence. Id. Findings of fact will not be set aside unless the findings are clearly erroneous. Id. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. Id.

Stroup v. Oedekoven, 995 P.2d 125, 128 (Wyo. 1999) (quoting Springer v. Blue Cross and Blue Shield of Wyoming, 944 P.2d 1173, 1175-76 (Wyo.1997)). A district court's conclusions of law are reviewed de novo. Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 538 (Wyo.1993). This dispute arises over a settlement agreement. We have previously stated that a settlement agreement is a contract subject to the same legal principles as those which apply to any contract. Exxon Corp. v. Board of County Comm'rs, Sublette County, 987 P.2d 158, 165 (Wyo.1999); Aztec Gas & Oil Corp. v. Roemer Oil Co., 948 P.2d 902, 903 (Wyo.1997); Matter of Estate of McCormick, 926 P.2d 360, 362 (Wyo.1996); Wyoming Bd. of Certified Public Accountants v. Christensen, 800 P.2d 853, 856 (Wyo.1990).

DISCUSSION

Breach

G.C.I., Inc. argues it did not breach the settlement agreement because Haught never demanded the repairs be performed by a certain time. It argues that, where no time for performance is fixed in a contract, demand is necessary before a party may be held in default. Haught responds that, where there is no time specified for performance, an unreasonable delay constitutes a breach and a formalistic demand is not required.

We first examine the issue of reasonable time. Where, as here, no time for performance is specified in a contract, the law implies performance must be within a reasonable time, and what is a reasonable time depends upon the circumstances of each case. Bennett v. Foust, 996 P.2d 693, 697 (Wyo.2000); Matney v. Webster, 808 P.2d 212, 214 (Wyo.1991); Zitterkopf v. Roussalis, 546 P.2d 436, 439 (Wyo.1976); Black & Yates v. Negros-Philippine Lumber Co., 32 Wyo. 248, 258, 231 P. 398, 401 (Wyo.1924). An unreasonable delay in performance constitutes a breach and justifies the remedy of cancellation. Zitterkopf v. Roussalis, 546 P.2d at 439; Keller v. Hummel, 334 N.W.2d 200, 203 (N.D.1983). What constitutes a reasonable time in any particular case is a question of fact. Matney v. Webster, 808 P.2d at 214.

After reviewing the evidence, we conclude that the district court's finding that G.C.I., Inc.'s delay was unreasonable is not clearly erroneous. The settlement agreement was filed in June of 1997, and G.C.I., Inc. had not made the repairs prior to Haught filing suit in June of 1998. Haught's home was ostensibly completed in June of 1995, yet three years later the repairs to complete the home had not been made. Although G.C.I., Inc.'s owner testified that he was in the process of lining up subcontractors to perform the work, the district court did not find this evidence persuasive. In making its findings from the bench, the district court stated:

There seems to be a posture taken here that, you know, I had this squeaking wheel, and I greased it by entering into this [settlement] agreement and I don't have to grease it again until it squeaks again. There just comes a point where the situation has to take on some urgency and be done promptly in order to be done within a reasonable period of time.

The district court found the delay was unreasonable, going so far as to say it was not even a close case. G.C.I., Inc. provides us with no persuasive reason to disturb this finding. Zitterkopf v. Roussalis, 546 P.2d at 439.

We shift our focus to the issue of demand. Although the settlement agreement did not require a demand for performance, G.C.I., Inc. argues a demand is required when a contract does not specify a time for performance. The general rule is that a demand is not a prerequisite to performance of a contractual obligation unless demand is required by the terms of the contract or the peculiar nature thereof. Ramesbotham v. Farmers Elevator Co. of Jefferson, 428 N.W.2d 542, 544 (S.D.1988); Albee v. Maverick Media, Inc., 239 Neb. 60, 474 N.W.2d 238, 243 (1991); 17A Am.Jur.2d Contracts § 610 (1991); 17B C.J.S. Contracts § 546 (1999). Accordingly, where an agreement is absolute and unconditional, the general rule is that no demand for performance is necessary before action may be brought.

The authorities are split, however, on whether a demand is required when, as here, the contract fails to fix a time for performance. McCall v. Atchley, 256 Mo. 39, 164 S.W. 593, 596 (1914); Seybold v. Magnolia Land Co., 376 So.2d 1083, 1086 (Ala.1979); Drake v. Martin, 30 Cal.App.4th 984, 36 Cal. Rptr.2d 704, 713 (1994) (demand "usually necessary"); 17B C.J.S. Contracts § 546. While some courts are hesitant to imply a demand requirement when the parties have failed to include one in their contract, other courts imply a demand requirement to allow the defaulting party to avoid defective performance and to promote the informal settlement of disputes. McClain v. Kimbrough Const. Co., Inc., 806 S.W.2d 194, 198 (Tenn. App.1990). We further note that there are instances in which courts will imply an obligation to give notice as a matter of common equity and fairness. McClain v. Kimbrough Const. Co., Inc., 806 S.W.2d at 198 ("Under the facts of this case, we find that Kimbrough had a duty to give McClain notice and a reasonable opportunity to correct its defective work before terminating the contract."). Under these circumstances, rather than making a rigid rule that...