Harper, Drake & Associates, Inc. v. Jewett & Sherman Co.
| Decision Date | 05 January 1971 |
| Docket Number | No. 159,159 |
| Parties | HARPER, DRAKE & ASSOCIATES, INC., Respondent, v. JEWETT & SHERMAN CO., Appellant. |
| Court | Wisconsin Supreme Court |
An action by plaintiff, Harper, Drake & Associates, Inc. (hereinafter respondent), to recover the sum of $21,727.12, alleged due for architectural services performed for the defendant, Jewett & Sherman Company (hereinafter appellant).
In late 1965, the appellant herein, a food processor and distributor, decided to build a new plant and warehouse. The appellant contacted several contractors and architects regarding the possibility of contracting with one of them to do the job. The respondent herein was one of these firms. The parties herein had two preliminary conferences at which Mr. Charles Harper, the president of Charles H. Harper & Associates, Inc., 1 explained to Jewett & Sherman Company what services he could offer them and how his fee would be computed should he ultimatedly be hired to do the job.
On July 12, 1966, Mr. Ralph Gardner, then chairman of the board of Jewett & Sherman Company, called Mr. Harper on the telephone. When asked at trial what Mr. Gardner had said on that occasion, Mr. Harper said:
'A. Mr. Gardner said that we had received--he didn't say,
From July 12 to September 22, 1966, Harper and the other employees of his firm devoted time to defendant's proposed building. These included both architects and draftsmen on the plaintiff's staff. Mr. Harper also asked three consulting firms to aid him in an evaluation of defendant's building needs. These firms were Ring & DuChateau, Inc. (plumbing and heating, air conditioning and ventilating), Leedy & Petzold (electrical) and R. C. Greaves & Associates, Inc. (landscape architecture).
On August 10, 1966, Mr. Harper tendered a Standard Form of Agreement Between Owner and Architect of The American Institute of Architects (AIA) Contract to defendant. This contract called for Harper's firm to be compensated on the basis of a percentage of the total construction cost. The percentage set by the contract was five percent. The contract was never executed by either of the parties.
During most of August and up until September 22, 1966, Mr. Harper was also working on numerous other jobs in the Milwaukee area. These other jobs were, by Mr. Harper's own admission, substantial projects, one of which involved a construction cost of between four and five million dollars. Robert Jenstead was, during this period, the corporate engineer for Jewett & Sherman Company and also the chief liaison between Jewett & Sherman and Mr. Harper for purposes of coordinating the efforts of both parties on the building project. The company was quite anxious to get the project moving as quickly as possible. Jenstead testified that during August he was calling Mr. Harper on a daily basis and that initially he was able to contact Mr. Harper fairly easily, but that as the month wore on he was very rarely able to get in touch with Mr. Harper. He also stated that despite specific requests, his calls were seldom returned.
On September 2i, Jewett & Sherman contacted Mr. Harper and advised him to stop all work for the appellant. Subsequently, the appellant hired Link Builders Inc., to handle the building project for them. Mr. Harper was told that he would be paid for his services up to September 22, 1966, and that he should submit a bill to Jewett & Sherman Company. That bill was in the amount of $21,875. Mr. Harper derived that figure in the following manner:
The unsigned AIA standard form contract which he had tendered to Jewett & Sherman provided that his fee, upon completion of the project, would be five percent of the total cost of construction. He estimated the total cost to be $1,250,000. Five percent of that figure would be $62,500. That is, if the project were 100 percent completed, he would be entitled to $62,500. Mr. Harper then estimated that the work he had done up to September 22 amounted to 35 percent of all the work he would have done had he followed through to completion. Taking 35 percent of five percent of the total (i.e., 35 percent of $62,500), he arrived at $21,875 as his bill.
Jewett & Sherman refused to pay this bill on the grounds that it was improper for Harper to compute his fee on the basis of the AIA contract provisions because neither party had signed or agreed to be bound by the terms of that contract.
Jewett & Sherman then sent Harper a letter, by their attorney, stating that they would pay nothing until Harper submitted a statement of the time he and his associates put in on the project.
In August of 1967, about a year later, Harper's attorney told him (Harper) to compute the time he and his staff spent on the Jewett & Sherman job. Except for Harper himself, everyone in his office kept track in writing of how much time they were spending on each job. For an estimation of his own hours spent on the Jewett & Sherman job, Harper had to refer to his appointment book and desk calendar pad during the period in question. Exhibits 10A and B, 11 and 12A and B are the results of Harper's computation. Exhibit 10 was received in evidence over objection. Exhibits 11 and 12 were not put in evidence as such, but Harper testified from them.
On November 2, 1967, respondent commenced this action by a complaint which alleged a cause of action based on a contract, or, in the alternative, based on quantum meruit. Respondent consented to a directed verdict on the cause of action for contract, and the case went to the jury on the basis of quantum meruit. The jury returned a special verdict in the sum of $19,448.50. Motion for a new trial on the grounds that the verdict was excessive and not supported by the evidence was denied; and judgment with costs and interest was entered in the sum of $21,558.56.
Appellant appeals from the whole of said judgment.
Additional facts will be stated in the opinion.
Grootemaat, Cook & Franke, Milwaukee, for appellant; David J. Hase, Milwaukee, of counsel.
Cahill, Fox & Smith, Milwaukee, for respondent; Daniel O. Ryan, Jr., Milwaukee, of counsel.
The following issues are presented on appeal:
(1) When a written, proposed contract is unexecuted and unenforceable may resort be had to one of its terms in determining the reasonable value of an architect's services; it not,
(2) Then is the remaining evidence in the record as to reasonable value of services sufficient to support the verdict; and
(3) Was there a rational and credible basis for the amount claimed by Harper for the services of Richard Kirsch? Resort to One Term of an Unexecuted and Unenforceable Contract.
The jury verdict broke down as follows:
Architectural services $14,141.00
Plumbing consulting services 600.00
Heating, ventilating and air
conditioning consulting
services 1,050.00
Electrical consulting services 787.50
Landscape architecture consulting
services 2,870.00
----------
$19,448.50
On appeal, only the first item on this list is in dispute. Respondent contended at trial that the reasonable value of the architectural services rendered by himself and his staff could be arrived at in either of two ways. The first would be to simply accept his percentage computations based on the terms of the contract. 2 The second would be to accept the evidence he offered of the time spent on the project by his office. Respondent explained at trial that when he billed on an hourly basis, he took each employee's hourly rate, multiplied that by a profit and overhead factor of 2.5 and then multiplied the resulting figure by the number of hours worked by the employee. Under this approach Harper submitted the following figures as to the reasonable value of the services of himself and his staff: 3
Architect
or Hourly rate Hours times gross Value of
Draftsman times factor hourly rate services
-----------------------------------------------------------
Harper 15 x 2.5 = 37.50 156 x 37.50 = $5,850.00
Drake 15 x 2.5 = 37.50 65 x 37.50 = 2,437.50
Kirsch 5 x 2.5 = 12.50 160.5 x 12.50 = 2,006.25
Kinnich 10 x 2.5 = 25.00 8 x 25.00 = 200.00
Arnot 7.5 x 2.5 = 18.75 7.5 x 18.75 = 140.63
Groff 5 x 2.5 = 12.50 6.5 x 12.50 = 81.25
Knoll 5 x 2.5 = 12.50 8 x 12.50 = 100.00
Guerin 10 x 2.5 = 25.00 6 x 25.00 = 150.00
----------
TOTAL $10,965.63
The jury's award for architectural services was $14,141. There is no way of knowing how the jury reached that figure. If they used the hours expended approach, then the verdict is clearly excessive in the amount $3,175.37 (i.e., he proved $10,965.63, but they gave him $14,141 or $3,175.37 more than he proved).
On oral argument, respondent's attorney admitted that, as to this item, there was no specific evidence to support the extra $3,175.37. He speculated that the jury must have compromised and used parts of each approach (i.e., a combination of the percentage of cost method and the hours expended method).
Obviously, the respondent was only entitled to be compensated once, and since each method represents a separate and distinct means of answering the same question (i.e., What is the reasonable value of respondent's architectural services?), a combination of those methods would be improper.
Respondent acknowledges this, but points out that the demand in the complaint was for $21,727.12. He then argues that the jury might have used only the percentage of cost of construction method in arriving at its special verdict of $19,448.50. He...
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...to be accurate when they were recorded, and that they were recorded while fresh in his mind. Harper, Drake & Asso. v. Jewett & Sherman Co., 49 Wis.2d 330, 342, 343, 182 N.W.2d 551 (1971); State v. Wind, 60 Wis.2d 267, 274, 275, 208 N.W.2d 357 No such foundation for admission of the chemical......
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