Kuswa & Associates, Inc. v. Thibaut Const. Co., Inc.

• Decision Date: 25 February 1985
• Docket Number: No. 83-C-2646,83-C-2646
• Citation: 463 So.2d 1264
• Court: Louisiana Supreme Court
• Parties: KUSWA & ASSOCIATES, INC., General Contractors v. THIBAUT CONSTRUCTION CO., INC. 463 So.2d 1264

Page 1264

463 So.2d 1264

KUSWA & ASSOCIATES, INC., General Contractors v. THIBAUT CONSTRUCTION CO., INC.

No. 83-C-2646.

463 So.2d 1264

Supreme Court of Louisiana.

Feb. 25, 1985.

Rehearing Denied April 11, 1985.

Mack E. Barham, Robert E. Arceneaux, Barham & Churchill, Barbara Treuting Casteix, Carl W. Cleveland & Associates, New Orleans, for defendant-applicant.

Terrence J. Lestelle, New Orleans, Amato & Creely, Gretna, for plaintiff-respondent.

LEMMON, Justice.

This is an action by Kuswa & Associates against Thibaut Construction Co. to recover damages, primarily loss of profits, caused by Thibaut Construction Co.'s allegedly illegal termination of a construction contract.

The dispute involved Kuswa's subcontracting work on a construction project in which Thibaut was the general contractor in the construction of fourplex buildings. Kuswa was paid for all of the work that it performed during the seven months it spent on the project (except for $3,029.50 withheld in connection with labor liens). However, Kuswa contended that Thibaut had guaranteed Kuswa the subcontracting work on all 62 buildings involved in the project and that Thibaut's illegal termination of the contract deprived Kuswa of the profits it would have made on the buildings constructed after the termination. On the other hand, Thibaut's position was that its contracts with Kuswa did not contemplate work on any specific number of buildings, so that Kuswa's only possible relief involved the disputed claim for completed work. Thibaut also sought by reconventional demand the costs incurred in remedying unsatisfactory work performed by Kuswa.

The trial court awarded Kuswa most of its claim based on the unpaid invoice for work performed, but denied entirely its claim for loss of profits, concluding that the contracting parties had intended that the subcontracting work be performed on a building-by-building basis. The court of appeal amended the judgment and awarded Kuswa an additional $130,840.25 for loss of profits on unperformed work, holding that the parties intended a contract for 62 buildings. 440 So.2d 1338. We granted certiorari, being primarily concerned with the intermediate court's (1) reversal of the trial court's findings regarding the intention of the contracting parties and (2) method of measuring damages and disregard for Kuswa's failure to mitigate damages. 445 So.2d 428. We now reverse on the basis that there was no manifest error in the trial court's finding as to the intention of the parties to the construction contract. ¹

Trianon Square was a subdivision of 65 vacant lots. Thibaut's officers had formed a partnership which purchased the raw land and constructed the off-site improvements, intending to have Thibaut construct fourplex buildings to be retained by the developers. However, because permanent financing was unavailable for the planned construction of buildings, Thibaut's officers decided to transfer lots to Thibaut in small groups and for Thibaut to construct and sell completed buildings to third parties or to individual partners.

In connection with this project, Kuswa submitted a proposal to Thibaut on February 9, 1979 to perform the painting work on individual fourplexes for $2,850 per building and the sheetrock work for 14.5 cents per square foot. The proposal was "Good for 30 Days from above Date". The three-page document also contained the details of the work to be performed and further stated: "This bid is contingent on Kuswa & Associates, Inc., doing the same work on all four-plexes which are sixty-two (62) in number."

On March 28, 1979, Thibaut and Kuswa executed a "Sub-Contractor Base Agreement", whereby Kuswa agreed to furnish certain labor and materials in accordance with plans and specifications. The agreement, completed on Thibaut's printed form, listed the type of work as "Painting and Sheetrock." Article 1 contained the printed words "The work to be performed hereunder is generally described as:", and in the following blank space were typed the words "Bid from Kuswa & Associates, Inc.". At the bottom of the one-page agreement, under the printed words "Price Lists", were the typed words "See attachment schedule A" and "See attachment schedule B".

Attached to the agreement were three sheets typed on Kuswa's letterheads. Attachment A listed the completion steps for painting work and the payment schedule, the total amount being $2,850. Attachment B listed the completion steps for sheetrock work and the payment schedule per square foot, the total amount being 14.5 cents. ² Nothing in the Sub-Contractor Base Agreement or in the three attachments expressly provided that Kuswa was to perform painting and sheetrock work on any particular number of buildings. The February 9 proposal submitted by Kuswa was not attached to the Sub-Contractor Base Agreement nor expressly incorporated into it. The only arguable reference to the February 9 proposal in the March 28 contract was the use of the term "Bid by Kuswa & Associates, Inc." to refer to the general description of the work.

The court of appeal decision was based on the factual finding that the parties intended to incorporate the February 9 proposal into the March 28 contract and to bind Thibaut to use Kuswa for painting and sheetrock work in 62 buildings. After reviewing the record, we conclude that the intermediate cour...