Kellogg v. Pizza Oven, Inc.

• Decision Date: 24 May 1965
• Docket Number: No. 20718,20718
• Parties: Charles H. KELLOGG, William B. Sayre and Kellogg and Sayre, Plaintiffs in Error, v. PIZZA OVEN, INC., Defendant in Error.
• Court: Colorado Supreme Court

Page 633

402 P.2d 633

157 Colo. 295

Charles H. KELLOGG, William B. Sayre and Kellogg and Sayre, Plaintiffs in Error, v. PIZZA OVEN, INC., Defendant in Error.

No. 20718.

Supreme Court of Colorado, In Department.

May 24, 1965.

Rehearing Denied June 21, 1965.

Yegge, Hall & Shulenburg, Denver, for plaintiffs in error.

Donald A. Klene, William J. Caskins, Jr., Denver, for defendant in error.

DAY, Justice.

This writ of error arises out of two actions consolidated for trial in the Denver District Court.

We will refer to plaintiffs in error as the Architects and to the defendant in error as Pizza.

Pizza in one action sued the Architects, alleging that they failed to perform properly architectural services in designing and supervising the construction of a restaurant building to be occupied by Pizza. It was alleged that the cost of the building was not to exceed $62,000.00, but, because of the negligence of the Architects, it cost approximately $100,000.00, with the resultant damage to Pizza of $40,000.00. The companion action involved a mechanic's lien foreclosure in which Pizza, the Architects and others were the defendants and in which the Architects filed a cross claim against Pizza for $2,761.80 due for services rendered.

Trial was to a jury, and the verdict was returned in favor of Pizza and against the Architects in the amount of $21,489.00. A verdict in favor of the Architects for $930.00 as the balance of their fee was also returned. Motions for new trial and for judgment notwithstanding the verdict were filed and denied.

In their writ of error the Architects assert error as follows:

1. That the evidence fails to support the verdict as no negligence was shown.

2. That the damages awarded are grossly excessive.

3. That the court failed to instruct the jury on the measure of damages.

4. That the verdicts of the jury were inconsistent in that damages were awarded to Pizza while at the same time the Architects were determined to have earned their fee and given a judgment accordingly.

Addressing ourselves to the first point in the summary of argument, we find that although the evidence was in sharp conflict, it was ample to support the verdict of the jury. The Architects knew that Pizza was not to be the owner of the building. Pizza had negotiated with the owner of the land to build the restaurant building and lease it to Pizza. The owner-lessor put a ceiling of $60,000.00 cost on the construction. The agreement between the lessor and Pizza was that if the building cost more, Pizza would be required to pay the overage.

The testimony on custom in the architect profession was that budgetary limitations are proper to impose upon an architect; that an architect must understand, in general, what the building will cost and that when he has all of the information he can estimate the construction cost. It was agreed that a 10% variation is within the norm. It was not disputed that by custom when it is discovered that a building is exceeding the cost limitations it is incumbent upon the architect to tell this fact to the one who is employing him.

There was ample testimony to establish that after construction started the Architects made no attempt to recheck their original estimate by using any of the recognized cost breakdown systems; that when they were requested to supply a detailed cost breakdown to the contractor they utilized former erroneous estimates and made no effort to recalculate their figures. There was testimony that if their figures had been rechecked they would have discovered the almost 40% excess in costs, and certain changes could have been made to meet the budgetary limitations. The Architects failed to check the various bids as they came in and approved them without regard to the total, and the building was more than half way completed before they did so. A check of the bids before the contracts on them were let would have revealed immediately the cost to be in the area of $90,000.00. The general rule upon the duty of an architect is found in 5 Am.Jur.2d, Architects, § 23, as follows:

'An architect who substantially underestimates, through lack of skill and care, the cost of a proposed structure, which representation is relied upon by the employer in entering in the contract and proceeding with construction, may not only forfeit his right to compensation, but may become liable to his employer for damages. * * *'

The jury was instructed that they could find for Pizza and against the Architects if the latter were 'negligent in the furnishing of the preliminary estimate and that the plaintiff reasonably relied upon such preliminary estimate; or that the defendants were negligent in their supervision of the construction work; and that such alleged negligence was the proximate cause of damages to the plaintiff.' It is our view that this is a correct statement of the law. The jury had before it evidence of careless work on the preliminary estimate, in the supervision of the various subcontracting bids, and was told of some errors in design which required additional costly installations, none of which added to the functional features of the building. As an example, a brick planter had to be built to cover exposure of a foundation wall above grade level.

The assertion that the damages were excessive and that the jury was not properly instructed as to the measure of damages must be discussed together. Counsel for the Architects did not submit an instruction on their theory on the measure of damages. The instruction which the court gave was as follows:

'Instruction No. 9

'You are instructed that if you find from the evidence that the plaintiff is entitled to recover damages under its second claim for relief, based upon the...