Homes v. Sutherland

• Court: Court of Appeal of Louisiana
• Writing for the Court: Panel composed of Judges SUSAN M. CHEHARDY, FREDERICKA HOMBERG WICKER, and JUDE G. GRAVOIS.
• Citation: Homes v. Sutherland, 60 So.3d 52 (La. App. 2011)
• Decision Date: 14 April 2011
• Docket Number: No. 10–CA–178.,10–CA–178.
• Parties: COFFMAN HOMES, L.L.C.v.Robert SUTHERLAND and Jeanne Sutherland.

60 So.3d 52

COFFMAN HOMES, L.L.C.

v.Robert SUTHERLAND and Jeanne Sutherland.

No. 10–CA–178.

Court of Appeal of Louisiana, Fifth Circuit.

Feb. 15, 2011.Rehearing Denied April 14, 2011.

Michelle M. Davis, Mark G. Duncan, Attorneys at Law, Mandeville, LA, for Plaintiff/Appellee, Coffman Homes, L.L.C.Marc L. Frischhertz, Lloyd N. Frischhertz, Jr., Attorneys at Law, New Orleans, LA, for Defendants/Appellants, Robert Sutherland and Jeanne Sutherland.Panel composed of Judges SUSAN M. CHEHARDY, FREDERICKA HOMBERG WICKER, and JUDE G. GRAVOIS.SUSAN M. CHEHARDY, Judge.

[5 Cir. 2] This suit arises from a contract involving construction of a home. The defendants, Robert Sutherland and Jeanne Sutherland, appeal the trial court's judgment against them that awarded damages to the contractor. We affirm.

FACTS

On November 18, 2004, the Sutherlands signed a document titled “Coffman Homes, LLC Builder's Contract,” which provided that Coffman Homes, LLC (“Coffman”) would construct a house for the Sutherlands on Square B, Lot 51A in Southlake Village Subdivision in Kenner. The agreement designated the Sutherlands as Owner and Coffman as Contractor and states as follows, in pertinent part:

Contractor and Owner, for the consideration hereinafter named, agree and bind and obligate themselves as follows: (Project to start in 30–90 days)

Contractor's Obligations:

The Contractor agrees to, obtain all subcontractors, to do and perform or have performed all the work, and to erect, build finish and deliver in a workmanlike manner a single or two story, single family residence, with one year warranty as shown on the drawings and described in the specifications prepared or to be prepared by Owner's architect, ____________________ and to be dated and signed by the parties hereto on the date of submission to the Contractor, which said drawings and specifications are [5 Cir. 3] by reference made a part thereof, and, together with this agreement, form the contract.

* * *

The said building to be erected on the following described property, which either currently belongs to the Owner, or shall be obtained by Owner, viz:

Southlake Village Subdivision Kenner, LA

Square B Lot 51A 81.25/75x95.43/120

The contract also contained the following cancellation clause:

Should the Owner cancel this contract, at any time and for any reason, Owner hereby agrees and stipulates that liquidated damages to the Contractor in the amount of $20,000.00 shall be paid directly to the Contractor as damages for cancellation of this Contract.... Should Contractor be required to enforce the terms of this contract through the institution of legal proceedings, Owner hereby agrees to pay all of Contractor's legal costs and attorney's fees in the amount of 25% of the total amount due under the Contract.

After they signed the agreement with Coffman, the Sutherlands purchased the designated lot. Thereafter they met with an architect on several occasions in an attempt to have plans drafted for construction of the house. The Sutherlands were not satisfied with any of the proposed house plans, because those that had all the features they desired would not fit on their lot due to the lot's odd shape. Eventually the Sutherlands informed Coffman they were not going to build a house on the lot.

Coffman filed suit against the Sutherlands on June 1, 2006, alleging the Sutherlands had breached the contract to build the house. Coffman sought the contractual stipulated damages of $20,000 plus attorney's fees.¹

The Sutherlands answered the petition with a general denial.² The matter proceeded to trial, and the trial court rendered judgment in favor of Coffman in the amount of $20,000 plus costs and attorney's fees.

[5 Cir. 4] In reasons for judgment incorporated into the judgment, the trial court held as follows:

This is a suit for liquidated damages for the non-performance of a conditional contract, containing suspensive conditions.... The primary issue ... is whether the Sutherlands breached the contract by refusing to commence construction on the subject lot or whether the suspensive conditions contained within the contract rendered the contract null and void.

It is uncontested that there existed a condition in the contract which required “drawings and specifications” be prepared or procured by the “owners” and then submitted to the contractor. It is this suspensive condition which the Court addresses and upon which the issues before this Court depend. Although other conditions exist within the contract, the fulfillment or non-fulfillment of the owners['] obligation to submit plans supercedes all other conditions which are not before this Court this date and are inconsequential at this point in time.

Defendants entered into the subject contract with Coffmann [sic] apparently as [a] purchase requirement and/or a condition of the Subdivision within which the lot was located.

Testimony of defendants revealed that plans were drawn and reviewed with Coffman and it was then they first interjected a desire to place a pool in the yard. The pool was not contemplated initially nor was it made a condition of the contract subsequently. The plans were never signed and dated. The contract could not be fulfilled and failed.

Defendants also argue that there was no meeting of the minds nor price certain negotiated between the parties. The Court disagrees. It is clear that the intention of both parties was that Coffman was to build defendants' house on the designated lot and that a “cost-plus” price was the agreed price certain.

While La. Civ.Code Article 1770 states that an obligation is null and void when dependent upon the will of the obligor, as argued by the Sutherlands, the obligations in the contract at hand are not based solely on whim but are clearly conditions that defendants were in control of bringing about or not. Accordingly, La. Civ.Code Art. 1772 must be considered:

[5 Cir. 5] A condition is regarded as fulfilled when it is not fulfilled because of the fault of a party with an interest contrary to fulfillment.

Testimony and evidence revealed that defendants clearly had interests contrary to fulfillment of the contract. Defendants wanted a pool[,] which they testified would not fit to their satisfaction on the lot; and, consequently, they wanted to sell the lot, and have done so.

Finally, the court found no merit to the defendants' argument that the contract's $20,000 in liquidated damages was excessive and against public policy. The court noted there was no testimony of discussion or objection to the stated damages prior to the institution of this suit. The court found that the stipulated amount “conservatively approximates lost profit of Coffman” due to the failure of the contract and that the amount is reasonable.

The Sutherlands filed a motion for new trial, which was denied, and now they appeal.

LAW AND ANALYSIS

We address the assignments of error in the order in which they are raised in the Sutherlands' brief.

I. Validity and Enforceability of Contract

In their first assignment, the Sutherlands argue the trial court erred in concluding there was a valid, completed, and enforceable contract between the parties, because there was no meeting of the minds as to the object of the contract and no agreement as to the price. They assert the document expressly contemplates future agreements being entered into between the parties prior to an enforceable contract coming into existence.

There are four elements necessary for a valid contract: capacity, consent, object, and lawful cause. [5 Cir. 6] Color Stone Intern., Inc. v. Last Chance CDP, LLC, 08–35, p. 8 (La.App. 5 Cir. 5/27/08), 986 So.2d 707, 713. “In other words, the parties must have the capacity to contract and give their consent freely for a certain object, and the contract must have a lawful purpose. Both parties must be bound in order for there to be a contract.” J. Caldarera & Company, Inc. v. Louisiana Stadium & Exposition District, 99–787, p. 6 (La.App. 5 Cir. 12/15/99), 750 So.2d 284, 288.

The determination of the existence of a contract is a finding of fact, not to be disturbed unless clearly wrong. Color Stone Intern., Inc., 08–35 at p. 5, 986 So.2d at 712. An appeals court may not set aside a trial court's ruling as to the existence or non-existence of a contract in the absence of manifest error. Id.

The Sutherlands contend the contract was to consist of the agreement at issue together with the drawings and specifications of the architect, which were to be signed and dated by the parties. They assert, “According to the plain language of the contract, it was not until both the agreement and the drawings and specifications were signed by the parties that the contract to build was to be formed.”

Further, the Sutherlands cite the contract's express language that the drawings and specifications “prepared or to be prepared by owner's architect ... and to be dated and signed by the parties hereto on the date of submission to the Contractor ... by reference made a part thereof, and, together with this agreement, form the contract.” The Sutherlands argue that any ambiguity should be construed against Coffman, since Coffman drafted the contract.

They assert the contract did not have a certain object, because before any construction could commence, architectural plans and drawings had to be submitted, as well as approved and signed by the parties. Further, the itemized cost of construction was to be calculated by Coffman after receipt of the plans, and agreed to and signed off on by the parties. The Sutherlands contend that in order [5 Cir. 7] for the contract to have a certain object, the plans and specifications had to become part of the contract through being approved and signed by the parties.

In opposition, Coffman argues that taken to its logical conclusion, the Sutherlands' argument would nullify any contract between a contractor and an owner if at any time during the building, the plans were ever modified,...