Hawa v. Moore

• Decision Date: 29 March 2011
• Docket Number: No. 87A01–1007–SC–344.,87A01–1007–SC–344.
• Citation: 947 N.E.2d 421
• Parties: Mike HAWA, Appellant–Plaintiff,v.Gerald R. MOORE, Appellee–Defendant.
• Court: Indiana Appellate Court

947 N.E.2d 421

Mike HAWA, Appellant–Plaintiff,

v.Gerald R. MOORE, Appellee–Defendant.

No. 87A01–1007–SC–344.

Court of Appeals of Indiana.

March 29, 2011.

Jonathan M. Young, Law Office of Jonathan M. Young, Newburgh, IN, Attorney for Appellant.Robin R. Craig, Evansville, IN, Attorney for Appellee.

OPINION

VAIDIK, Judge.

Case Summary

Property owner Mike Hawa and contractor Gerald Moore entered into a contract for the installation of a recycled concrete base for a parking lot. When Moore walked off the job, Hawa filed a breach of contract claim in small claims court. Moore filed a counterclaim. Hawa now appeals the small claims court's $4745 judgment in favor of Moore on his counterclaim. He contends that the court clearly erred by ruling in favor of Moore and improperly calculating damages and denied him due process by not giving him an opportunity to defend against Moore's counterclaim or rebut Moore's testimony. We conclude that Hawa repudiated the contract by failing to provide Moore with adequate assurance that he would pay for Moore's services. The small claims court thus did not err by ruling in favor of Moore. However, the court erred by awarding Moore the cost of transporting certain materials after the lawsuit was filed, damages that Moore should have used reasonable diligence to mitigate. Finally, because the transcript shows that Hawa rejected the court's offer to reschedule the matter for any further evidence, he was not denied due process. We therefore affirm in part, reverse in part, and remand for a reduction in the damage award.

Facts and Procedural History

Hawa was interested in constructing a parking lot for a new building at his storage facility in Warrick County. In December 2008, Moore prepared an estimate to install a base that Hawa could later top with either finishing gravel, concrete, or pavement. The estimate indicated that Moore would use recycled concrete and also provided the terms of payment:

Recycled concrete base for parking area approx. 150x200 ft

Hauling ruff grading power raking Approx. $13,500.00

Non compaction and no under laying fiber cloth

Man[ne]r of payment—$5000.00 down to start work— $5000.00 due when half of area is done—Remaining balance is due upon 75% of work completion due to remaining material cost = $3500.00

Petitioner's Ex. 1 (emphasis added). The parties later agreed to reduce the contract price from $13,500 to $12,000. Moore asked Hawa to meet him at a location where he had installed recycled concrete so that Hawa could see samples prepared with the material and observe it supporting heavy traffic. In February 2009, Hawa looked at the samples and handed Moore a $5000 check to begin work.

Moore began work about a week later. He obtained two types of recycled concrete, each from a different supplier. From K–Enterprises, he bought $3000 and reserved $2000 of # 2 rock. From IMI, he obtained # 53 rock at no cost. Moore used J Stucki Trucking to transport the materials and some equipment to Hawa's storage facility at a cost of $3795.

The material Moore sent to Hawa's storage facility was placed into nine piles. When Hawa saw the piles, he complained that there was wire in the rocks and told Moore that he would not make the second payment because he was “not happy.” Tr. p. 10, 45.¹ He also went to K–Enterprises to attempt to switch the product. Respondent's Ex. C. After Moore assured him that any wire would be separated from the rocks, Hawa allowed Moore to spread six of the nine piles. When Moore asked about the second $5000 payment, Hawa told him that he needed to see eighty percent of the parking lot done before he would make the second payment. Tr. p. 16.

At some point, Hawa told Moore that his bank would not advance him any more money for the second $5000 payment until it could inspect the work. Hawa claimed that the bank wanted to see the power rake blender, which separates the wire out and levels and grades the rock. Moore told Hawa that he “would meet at any convenient time with him and his banker.” Id. at 80. Hawa said he was in the process of scheduling an on-site meeting between the parties and the bank. Moore then moved the power rake blender to the front of Hawa's property, ready to meet the bank and complete the job, but the bank never visited the site. Moore left the power rake blender at Hawa's property for five days before he walked off the job.

In March 2009, Hawa filed a breach of contract claim against Moore in small claims court. Two months later in May 2009, Moore had more free # 53 rock hauled to his own property, where he stockpiled it for use on Hawa's project, at a transportation cost of $1500. Moore subsequently filed a counterclaim demanding payment on the contract. At trial, Moore submitted a list of total costs incurred for Hawa's project, which totaled $10,495. See Respondent's Ex. A. Moore's list included the $1500 cost of hauling the free # 53 rock to his own property. Hawa vehemently denied that half of the area of the parking lot was done as required by the contract.

During the trial, the small claims court cut off Hawa's cross-examination of Moore because of time constraints. The court twice gave the parties the choice of either rescheduling the matter for further evidence, allowing the parties to submit their arguments by memoranda, or ruling from the evidence that had been presented. Both parties indicated that the court could rule from the evidence that had been presented.

The court ruled in favor of Moore and awarded him a judgment of $4745:

[T]here's a lot that goes into a project that just doesn't happen on the ground. And you don't see that. The planning of it, the organization of it, the hauling of it and etc. like that. I doubt if he had fifty percent of the work done on the ground that you saw, and that was your concern. But there's another side of that picture there's a lot of work that goes into it prior to that time. The big issue I have, he's got that ten thousand four hundred ninety five dollars. I understand that ten thousand four hundred ninety five dollars. I disagree with some of it. And the part I disagree with is the part that is stock piled on the property that is not on his property. And the fifteen hundred dollars is just to put that property over there because evident [ ]ly it became a free product to ... him. But he did invest the fifteen hundred dollars into that program, for this. I think he could probably recover most of that money if he uses it on another project. So it's not on this. And I'd give fifty percent for the cost of hauling. Saying that I give him the judgment, I give on the cross complaint a judgment of nine thousand let me get my figures here, nine thousand seven hundred and forty five dollars and he's already paid five thousand dollars, so the defendant has a judgment of four thousand seven hundred and forty five dollars.

Tr. p. 110–11. Hawa filed a motion to correct error, which was denied.

Hawa now appeals.²

Discussion and Decision

Hawa contends that the small claims court clearly erred by ruling in favor of Moore and improperly calculating damages and denied him due process by not giving him an opportunity to defend against Moore's counterclaim or rebut Moore's testimony.

I. Judgment in Favor of Moore

Hawa first contends that the small claims court clearly erred by ruling in favor of Moore.

Judgments in small claims actions are “subject to review as prescribed by relevant Indiana rules and statutes.” Ind. Small Claims Rule 11(A). The clearly erroneous standard applies to appellate review of facts determined in a bench trial with due regard given to the opportunity of the trial court to assess witness credibility. Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1067 (Ind.2006). This deferential standard of review is particularly important in small claims actions, where trials are informal, with the sole objective of dispensing speedy justice between the parties according to the rules of substantive law. Id. at 1067–68. In determining whether a judgment is clearly erroneous, we do not reweigh the evidence or determine the credibility of witnesses but consider only the evidence that supports the judgment and the reasonable inferences to be drawn therefrom. Counceller v. Ecenbarger, Inc., 834 N.E.2d 1018, 1021 (Ind.Ct.App.2005).

The construction of a contract and an action for its breach are matters of judicial determination. McKeighen v. Daviess Cnty. Fair Bd., 918 N.E.2d 717, 720 (Ind.Ct.App.2009). The elements of a breach of contract action are the existence of a contract, the breach thereof, and damages. Id. at 721. When construing a contract, unambiguous contractual language is conclusive upon the parties and the courts. Id. If an instrument's language is unambiguous, the parties' intent is determined from the four corners of the instrument. Id.

Hawa argues that the unambiguous language of the contract provides that the second $5000 payment is to be made “when half of [the] area is done.” He claims that he did not breach the contract by failing to make the second payment because less than half of the area was complete, and thus, his performance was not yet due. Hawa points to the small claims court's statement that it “doubt[ed that Moore] had fifty percent of the work done on the ground” to support his claim that the court clearly erred by finding him in breach of contract.

We need not determine if the evidence supports the conclusion that half of the parking lot was completed because the facts most favorable to the judgment show that Hawa repudiated the contract. Repudiation of a contract must be positive, absolute, and unconditional. Jay Cnty. Rural Electric Membership Corp. v. Wabash Valley Power Ass'n, 692 N.E.2d 905, 911 (Ind.Ct.App.1998), trans. denied. “Mere expression of doubt as to [a party's] willingness or ability to perform is not enough to constitute a repudiation, although such an expression may give an obligee reasonable grounds to believe that the...