Hempel v. Bragg, 92-1176

• Decision Date: 21 June 1993
• Docket Number: No. 92-1176,92-1176
• Citation: 313 Ark. 486,856 S.W.2d 293
• Parties: Carl E. HEMPEL et ux, Appellants, v. Dewayne BRAGG and Black, Corley & Owens, P.A., Appellees.
• Court: Arkansas Supreme Court

Page 293

856 S.W.2d 293

313 Ark. 486

Carl E. HEMPEL et ux, Appellants, v. Dewayne BRAGG and Black, Corley & Owens, P.A., Appellees.

No. 92-1176.

Supreme Court of Arkansas.

June 21, 1993.

Charles A. Brown, Little Rock, for appellants.

David E. Smith, Benton, for appellees.

DUDLEY, Justice.

The general contractor on a home construction project filed suit against the owners of the home for a progress payment that was due under the terms of the contract. The owners filed a counterclaim against the contractor and a third-party complaint against the architects who designed the home. The chancellor decided all of the issues in favor of the general contractor and the architects. We affirm all of the rulings of the chancellor, except one that awarded the architects the balance of their fee, and we reverse that one ruling because the architects did not file a counterclaim or ask for any affirmative relief.

The facts, viewed in the light most favorable to the appellees, as we must do, are as follows. In early 1990, appellants, Carl and Betty Jo Hempel, decided to build an expensive home in the Hidden Valley Estates subdivision in Benton. On June 12, 1990, they hired the appellee architectural firm of Black, Corley and Owens to provide the architectural services. They filled in the blanks on a form entitled "American Institute of Architects Owner-Architect Agreement." Under the express terms of the agreement the owners were to "furnish surveys describing the physical characteristics, legal limitations and utility locations for the site of the Project, and a written legal description of the site. The surveys and legal information shall include ... boundaries and contours of the sites...." In short, it was the duty of the owners to provide the architects with a boundary survey and a topographical survey of the lots on which the house was to be located. The owners provided a copy of the recorded plat of the subdivision, but, unfortunately, it was based on an earlier erroneous survey made for the subdivision developer. In addition to the plat based on the erroneous survey, owner Carl Hempel showed one of the architects the erroneous north boundary line of the lots, showed the architect survey pins that erroneously divided his lots from the neighbor's lot, and said his lot extended to the pins which were on the line maintained by a neighbor. The architect relied on the plat, survey pins, maintained line, and statements of the owner as establishing the boundaries of the lots. The owners did not provide a topographical survey. On June 13 and 14, the architects used the boundaries given them to set out stakes and shoot elevation levels on the lots. That information was then taken back to their offices where it was overlaid on the boundary survey and developed into a topographical survey. The purpose of the topographical survey was to show the building contractor where and how to locate the house on the lots and to show the excavation contractor where to remove and move soil. Ultimately, the erroneous boundaries supplied by the owners to the architects caused the topographical survey to be in error. In August the owners supplied the architects with a copy of the erroneous survey that they had acquired at the time they purchased the lots from the developer of the subdivision. The survey shows a "pin" and "one iron pin" that are the pins the architects had located earlier, and they were at the precise location they are supposed to be according to the survey the owners gave the architects.

The owners chose the low bidder, appellee Dewayne Bragg, to be the general contractor for the project, and in January 1991 the owners and Bragg signed a form entitled "American Institute of Architects Owners-Builders Contract." In February 1991, as the contractor was shooting levels and staking out the house on the partially cleared lots, he found that the elevations at the rear of the lots were not as depicted on the topographical survey. He notified the architects, and the architects decided that modifications would have to be made in the plans in order to keep the house at the elevation planned. The changes required additional excavation work in a courtyard area, a lengthening of the driveway, and an extension of a retaining wall. The architects did not notify the owners of the changes at the time because the owners were in Minnesota, and the architects did not think the modifications affected either the function or aesthetics of the home. A part of the owner-architect contract provides: "The architect's decision on matters relating to aesthetic effects will be final as consistent with the intent expressed in the contract." At this time the architects had not discovered that the topographical survey error was a result of the error in the plat and survey supplied by the owners, but instead thought the error was due to some unknown mistake of their own. Consequently, the architects told the owners that they would pay the additional expense caused by their mistake, and owner Carl Hempel responded that he was "not going to stick it to me [the architect] for that." It was only after this suit was filed that the architects discovered the true cause of the error in their topographical survey, and, after discovering that cause, they testified that they did not feel they owed the additional expenses. The architects testified, and the trial court found, that the architects explained the modifications to the owners immediately upon their return to Benton.

The owners made no objection to the recommended remedial excavation, to the lengthening of the driveway, or to the extension of the retaining wall. Beginning on March 22, 1991, the owners visited the construction site from time to time. They were present when the floor slabs were poured. They took video recordings of the construction. They paid a progress payment submitted by the contractor on April 10, 1991. They paid another progress payment on May 5, 1991. During all of this period they never said anything about the changes in the excavation, to the lengthening of the driveway, or to the extension of the retaining wall. On June 5, 1991, the owners refused to pay the third requested progress payment and stated that the reason was, in part, because of the errors the architects made in the topographical survey.

Since he was not paid the progress payment, the contractor ceased work on June 17, 1991, and filed suit against the owners on July 9, 1991, for the amount due. He also asked that a materialman's lien be imposed and, if not satisfied, for foreclosure of the lien. The owners filed a counterclaim against the contractor and pleaded that he breached their contract by not informing them of the survey errors and the resulting changes. The owners additionally filed a cross-complaint against the architects and pleaded that they had breached their contract by not informing them of the changes and that they were guilty of negligence in performing the topographical survey. After a five-day trial the chancellor, on disputed facts, found in favor of the architects and the contractor. The chancellor found that the architects were not guilty of negligence in relying on the plat, survey pins, and established property line in the preparation of the topographical survey and did not breach their contract with the owners because the architects informed the owners of the changes as soon as reasonably practical and the owners, without comment, allowed the construction with the changes to continue. The chancellor found that the contractor had not breached his contract, and that under the terms of the contract, the contractor was entitled to $112,936.00 plus interest at the rate of 10%, plus costs, and attorneys' fees. The chancellor further ruled that the pleadings should be amended to conform to the proof and awarded the $900.00 remaining due to the architects under their contract with the owners. There were various posttrial motions, and the ones that become material to this opinion are set out as they are discussed.

The appellant owners' primary argument on appeal is that the chancellor erred in his finding of facts. The owners ask us to reverse the judgments in favor of the architects and contractor and instead to award judgments to them against the architects and contractors. They divide this part of the argument in their brief into three separate points of appeal, with one of the points being subdivided into five subpoints, and both points having many additional untitled subarguments. We treat all of the arguments involving the findings of fact in this one part of our opinion. As a preliminary matter, we note that the chancellor heard all of the testimony, weighed that testimony, addressed the owners' arguments, and found the disputed facts against the owners. We must give due deference to the superior position of the chancellor, and we will not reverse the findings of the chancellor unless they are clearly erroneous. Magnolia Sch. Dist. No. 14 v. Arkansas State Bd. of Educ., 303 Ark. 666, 799 S.W.2d 791 (1990). We cannot say that any one of the findings of fact that determines the outcome of this case was clearly erroneous.

The first of these arguments about the findings of fact is that the chancellor erred by failing to find that the architects were negligent in their preparation of the topographical survey. Viewing the evidence most favorably to the appellees, the architects relied on the plat furnished by the owners and relied on statements made by the owners about the location of the boundary line, then confirmed the correctness of the plat and of the owners' statements by finding established survey pins and observing the maintained property line, and later...