Kostohryz v. McGuire

• Decision Date: 16 November 1973
• Docket Number: Nos. 43850 and 44001,s. 43850 and 44001
• Citation: 212 N.W.2d 850,298 Minn. 513
• Court: Minnesota Supreme Court
• Parties: D. W. KOSTOHRYZ, et ux., Respondents, v. George McGUIRE, Appellant.

Page 850

212 N.W.2d 850

298 Minn. 513

D. W. KOSTOHRYZ, et ux., Respondents, v. George McGUIRE, Appellant.

Nos. 43850 and 44001.

Supreme Court of Minnesota.

Nov. 16, 1973.

Meagher, Geer, Markham, Anderson, Adamson, Flaskamp & Brennan and Mary Jeanne Coyne, and O. C. Adamson II, Minneapolis, for appellant.

Collins & Buckley, Theodore J. Collins, and Morley Friedman, St. Paul, for respondents.

Heard before KNUTSON, C.J., and ROGOSHESKE, PETERSON, and KELLY, JJ.

PER CURIAM.

Plaintiffs, as owners, and defendant, as architect, in the spring of 1967 entered into a contract on a standard form used by architects for the design of a home. Reduced to a minimum, the essential facts are: The owners described for the architect certain features they wanted in the home and advised him they were prepared to spend $30,000 for its construction. Under the contract, the architect was called upon to design the home and submit a 'Statement of Probable Construction Cost based on current area, volume or other unit costs.'

The estimated cost prepared by the architect and accepted by the owners was $39,973. The owners, with the knowledge and consent of the architect, acted as their own contractor. Construction was carried out over about a 4-year period in a piecemeal fashion. The owners spent for a partially completed home the sum of $63,863. There was some expert testimony submitted by the owners that at least.$19,000 to $20,000 of additional labor and materials would be required to complete the house in accordance with the architect's plan and that the market value of the partially completed structure was $52,000 to $55,000.

This action, brought by the owners against the architect, was pleaded as an action to recover damages for the alleged malpractice of defendant. The case was tried as a malpractice action and also as an action to recover damages for breach of contract. The issues, however, as we finally conclude from a study of the record, were submitted to the jury essentially on the theories of negligent design and of a negligent breach of a provision of the contract requiring the architect to submit an estimate of probable construction costs. They were submitted in the form of a special verdict consisting of four separate questions.

The first question was whether defendant was negligent in the design of a skylight for the home and, if so, the damages suffered thereby. Similarly submitted were the issues of the negligence of defendant in the design of the heating system and the damages resulting. The third question asked the jury to pass on plaintiffs' claim that defendant was negligent in substantially underestimating the cost to build the home and plaintiffs' resulting damages. The fourth question concerned defendant's counterclaim for unpaid professional services.

The jury found in favor of plaintiffs on all four questions and awarded separate damages for the negligent design of the skylight ($850) and heating plant ($2,220) and for negligent underestimation of construction costs ($7,000). Defendant was denied recovery for claimed unpaid fees for professional services. After denial of defendant's post-trial motions, the damages awarded with respect to the skylight and the heating system were paid by defendant, thus rendering moot two of the most litigated issues.

This appeal is from a denial of the usual blended motions, and our review is limited to the issues raised by plaintiffs' claim that defendant was negligent in underestimating the cost of building the home. A review is also sought by defendant on his claim for professional fees.

Defendant takes two basic positions. His first contention is that the trial court was in error in submitting the issue of liability absent expert testimony supporting plaintiffs' alleged claim that he failed to exercise the degree of skill and care ordinarily possessed and exercised by an architect in the performance of his professional duties. Secondly, he contends that the proximate cause of the loss was the owners' decision to act as their own contractor and proceed with the construction in a piecemeal fashion over a period of years and that the issue of damages was thus submitted on an erroneous theory. At trial, defendant urged that the issue of damages be submitted in terms permitting the jury to compare the negligence of the owners with that of the architect. This position seems to have been abandoned on appeal and the issue is thus not here considered in that form but rather as submitted to the jury in the form of plaintiffs' duty to mitigate damages.

Defendant argues also that the architect's comprehensive and detailed estimates were not presented as guaranteed or firm figures--rather, they were represented as expressions of the architect's opinions. In this sense defendant raises a question of the interpretation of the contract. Apart from the provisions of the contract which impose of the architect during the 'Schematic Design Phase' the duty to 'submit to the Owner a Statement of Probable Construction Cost based on current area, volume or other unit costs'; during the 'Design Development Phase' the duty to 'submit to the Owner a further Statement of Probable Construction Cost'; and during the 'Construction Documents Phase,' upon completion of working drawings and specifications, the duty to 'advise the Owner of any adjustments to previous Statements of Probable Construction Cost indicated by changes in requirements or general market conditions,' defendant points out this clause:

'Statements of Probable Construction Cost and Detailed Cost Estimates prepared by the Architect represent his best judgment as a design professional familiar with the construction industry. It is recognized, however, that neither the Architect nor the Owner has any control over the cost of labor, materials or equipment, over the contractors' methods of determining bid prices, or over competitive bidding or market conditions. Accordingly, the Architect cannot and does not guarantee that bids will not vary from any Statement of Probable Construction Cost or other cost estimate prepared by him.'

The case of Durand Associates, Inc. v. Guardian Investment Co., 186 Neb. 349, 183 N.W.2d 246 (1971), was one to recover fees for professional engineering services rendered pursuant to a contract. Because the construction bids were substantially in excess of the alleged estimates, no construction was performed. In considering the case, the court made the following observations (186 Neb. 353, 183 N.W.2d 250):

'* * * It strains credulity to believe any businessman or private corporation would enter into a substantial building project without insisting on some estimate of cost. Plaintiff's expert witness testified that a cost estimate is valuable information to give a client before entering into a contract, and that it would be very unusual for an architect not to discuss costs, For estimating costs are a part of the design of a project.' (Italics supplied.)

In the Durand case, the plaintiff relied for recovery on two provisions of the contract, which read as follows (186 Neb. 354, 183 N.W.2d 250):

'Article 4: 'If any work designed or specified by the Architect is abandoned or suspended, in whole or in part, the Architect is to be paid for the service rendered on account of it.'

'Article 8: 'When requested to do so, the Architect will furnish preliminary estimates on the cost of the Project, but he...