Gillingham Const. v. Newby-Wiggins Const.

• Decision Date: 22 July 2005
• Docket Number: No. 30129.,30129.
• Citation: 142 Idaho 15,121 P.3d 946
• Parties: GILLINGHAM CONSTRUCTION, INC., an Idaho corporation, Plaintiff-Counterdefendant-Appellant-Cross Respondent, v. NEWBY-WIGGINS CONSTRUCTION, INC., an Idaho corporation, Defendant-Counterclaimant-Respondent-Cross Appellant. Newby-Wiggins Construction, Inc., an Idaho corporation, Third-Party Plaintiff, v. State of Idaho, Third Party Defendant. State of Idaho, Third Party Plaintiff, v. Lombard-Conrad Architects, P.A., an Idaho professional corporation, corporation, Third Party Defendant.
• Court: Idaho Supreme Court

Page 946

121 P.3d 946

142 Idaho 15

GILLINGHAM CONSTRUCTION, INC., an Idaho corporation, Plaintiff-Counterdefendant-Appellant-Cross Respondent, v. NEWBY-WIGGINS CONSTRUCTION, INC., an Idaho corporation, Defendant-Counterclaimant-Respondent-Cross Appellant.

Newby-Wiggins Construction, Inc., an Idaho corporation, Third-Party Plaintiff, v. State of Idaho, Third Party Defendant.

State of Idaho, Third Party Plaintiff, v. Lombard-Conrad Architects, P.A., an Idaho professional corporation, corporation, Third Party Defendant.

No. 30129.

Supreme Court of Idaho, Boise, March 2005 Term.

July 22, 2005.

Rehearing Denied October 3, 2005.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Barker, Rosholt & Simpson, LLP, Boise for appellant. Albert P. Barker argued.

Perkins Coie, LLP, Boise, for respondent. Richard C. Boardman argued.

SCHROEDER, Chief Justice.

Gillingham Construction, Inc. (Gillingham) appeals from an order granting Judgment Notwithstanding the Verdict or, in the Alternative, a New Trial entered by the district court setting aside a jury verdict following trial for breach of a construction contract against Newby-Wiggins Construction, Inc. (Newby-Wiggins).

I. FACTUAL AND PROCEDURAL BACKGROUND

On June 13, 1993, the State of Idaho (the State) awarded Newby-Wiggins Construction, Inc., (Newby-Wiggins) the Prime Construction Contract (Prime Contract) for the regional headquarters building of the Idaho Department of Parks and Recreation on Warm Springs Avenue in Boise, Idaho (the Project). Section 3.2.1 of the general conditions of the Prime Contract stated:

The Contractor shall carefully study and compare the Contract Documents with each other and with information furnished by the Owner pursuant to Subparagraph 2.2.2 and shall at once report to the Architect errors, inconsistencies or omissions discovered. The Contractor shall not be liable to the Owner or Architect for damage resulting from errors, inconsistencies or omissions in the Contract Documents unless the Contractor recognized such error, inconsistency or omission and knowingly failed to report it to the Architect. If the Contractor performs any construction activity knowing it involves a recognized error, inconsistency or omission in the Contract Documents without such notice to the Architect, the Contractor shall assume appropriate responsibility for such performance and shall bear an appropriate amount of the attributable costs for correction.

Section 3.2.2 further stated:

The Contractor shall take field measurements and verify field conditions and shall carefully compare such field measurements and conditions and other information known to the Contractor with the Contract Documents before commencing activities. Errors, inconsistencies or omissions discovered shall be reported to the Architect at once.

Gillingham does demolition, excavation and grading work. Newby-Wiggins and Gillingham executed an agreement on July 19, 1993, whereby Newby-Wiggins agreed to pay Gillingham a lump sum payment of $284,635 for work on the project. Gillingham's subcontract expressly excluded survey work and in addition contained the following language:

Subcontractor shall review the Prime Contract, and Subcontractor agrees in respect to the Work to be bound to Contractor by all the obligations set forth in the Prime Contract that the Contractor has assumed.

Gillingham began work under the subcontract in the fall of 1993. After completing approximately 85% of its work, Gillingham's project superintendent, Robert Allen (Allen) discovered a problem with the existing site elevations which were much higher than those previously reported on the Project's site plans and specifications. Allen informed Newby-Wiggins of the problem, and Newby-Wiggins told Gillingham to stop work until the problem could be resolved. Gillingham stopped its excavation work and removed some of its equipment from the site. On November 1, 1993, Gillingham resumed work and moved its equipment back onto the site. However, seven days later Gillingham had to again stop work due to weather-related delays. Gillingham eventually completed its work in the spring of 1994 based upon new site drawings.

Gillingham alleged it was required to perform extra excavation work as a result of the higher elevation and requested additional compensation for the extra work, plus the time its equipment sat idle, and the costs of moving its equipment back and forth onto the site. Gillingham filed suit against Newby-Wiggins for breach of implied warranty of the plans and specifications and for breach of contract. Newby-Wiggins counterclaimed for unjust enrichment and filed a third-party suit against the State for indemnification. The State filed a third-party suit against the Project's architects, Lombard-Conrad Architects, P.A. (Lombard-Conrad).

Gillingham entered into a settlement agreement with the State and Lombard-Conrad prior to trial. In exchange for $25,000 Gillingham agreed to waive all claims against the State and Lombard-Conrad and assume any liability the State might owe on Newby-Wiggins' indemnification claim. Newby-Wiggins' counterclaim was dismissed on partial summary judgment. A jury trial followed with Gillingham and Newby-Wiggins as the sole remaining parties. At the conclusion of Gillingham's case-in-chief, Newby-Wiggins moved for a directed verdict. The district court granted the motion, holding as a matter of law that (1) Gillingham had not relied on the defective plans and specifications and could therefore not recover against Newby-Wiggins on its implied warranty claim, (2) Newby-Wiggins did not breach its subcontract with Gillingham by failing to pay for the extra work, (3) any liability of Newby-Wiggins to Gillingham passed to the State which in turn passed to Gillingham pursuant to Gillingham and the State's settlement agreement, and (4) Newby-Wiggins' obligation to verify the site conditions passed to Gillingham under its subcontract. Gillingham appealed. This Court affirmed and reversed in part the district court's decision. Gillingham Constr., Inc. v. Newby-Wiggins Constr., Inc., 136 Idaho 887, 42 P.3d 680 (2002). The Court affirmed the decision of the district court to dismiss Gillingham's breach of implied warranty claim on the basis a subcontractor could not bring such a claim against a contractor who had not prepared the plans and specifications. The Court reversed the directed verdict which the district court had entered in finding that there was insufficient evidence for a jury to decide Gillingham had relied on the plans and specifications in bidding its contract under the standards articulated in Beco Corp. v. Roberts & Sons Constr. Co., 114 Idaho 704, 760 P.2d 1120 (1988). The Court also reversed the directed verdict on Newby-Wiggins' indemnity claim. This Court found that the Prime Contract's field verification provision was ambiguous, and there was evidence Newby-Wiggins failed to verify field measurements prior to the commencement of work. Finally, this Court held there was sufficient evidence for a jury to decide whether Gillingham assumed Newby-Wiggins' field verification obligation.

The case was remanded and a new jury trial was held. The jury returned a special verdict awarding Gillingham $53,440.97 and found that the State was not required to indemnify Newby-Wiggins for the damages awarded to Gillingham. Newby-Wiggins filed a motion for JNOV and for a new trial. The district court granted Newby-Wiggins' motion for JNOV, or in the alternative ordered a new trial.

Gillingham moved to disqualify the district judge. The district court denied the motion and later awarded Newby-Wiggins attorney fees in the amount of $135,768.55 and costs as a matter of right in the amount of $1,903.76. Gillingham appealed entry of the JNOV, or alternatively order for new trial, the denial of its motion for disqualification without cause, and the award of attorney fees to Newby-Wiggins. Newby-Wiggins filed a cross-appeal, which this Court dismissed.

II. GILLINGHAM HAS STANDING TO APPEAL AND THE APPEAL IS NOT MOOT

Newby-Wiggins asserts Gillingham does not have standing to bring this appeal, relying on Mutual of Enumclaw Ins. Co. v. Pedersen, 133 Idaho 135, 983 P.2d 208 (1999). This position is based on the fact that the State has not appealed the JNOV or grant of a new trial. Consequently, according to Newby-Wiggins, the appeal is moot.

Idaho Appellate Rules, Rule 4 states:

Any party aggrieved by an appealable judgment, order or decree, as defined in these rules, of a district court, the Public Utilities Commission or the Industrial Commission may appeal such decision to the Supreme Court as provided in these rules.

I.A.R. 4 (2005).

A "party aggrieved" has been defined "as any party injuriously affected by the judgment." Fed. Land Bank of Spokane v. Parsons, 116 Idaho 545, 547, 777 P.2d 1218, 1220 (Ct.App.1989)(citing Roosma v. Moots, 62 Idaho 450, 112 P.2d 1000 (1941)). Gillingham is clearly an aggrieved party by the district court's rulings. The jury award of money damages was set aside and Gillingham has been ordered to pay a large amount of attorney fees. Additionally, Gillingham assumed the State's rights and liabilities as against Newby-Wiggins and stands in the place of the State on appeal.

Newby-Wiggins' reliance on Mutual of Enumclaw Ins. Co. v. Pedersen, 133 Idaho 135, 983 P.2d 208 (1999), is misplaced. Pedersen merely held that a plaintiff in a personal injury case does not have standing to raise the issue of whether an insurance company has a duty to indemnify or defend its insured. Id. at 139, 983 P.2d at 212. In Pedersen the mother and daughter alleging standing were not named parties to the declaratory judgment. Id. In this case Gillingham is named in the court's order for JNOV or new trial, depriving it of a money judgment. Gillingham has been ordered to pay attorney fees to Newby-Wiggins. Pedersen has little to do with this case. Gillingham has standing to file...