Little Thompson Water Ass'n v. Strawn

• Decision Date: 23 March 1970
• Docket Number: No. 22535,22535
• Citation: 466 P.2d 915,171 Colo. 295
• Parties: LITTLE THOMPSON WATER ASSOCIATION and Little Thompson Valley Water District, Plaintiffs in Error, v. B. Douglas STRAWN and Longs Peak Engineering Company, Inc., Defendants in Error.
• Court: Colorado Supreme Court

Page 915

466 P.2d 915

171 Colo. 295

LITTLE THOMPSON WATER ASSOCIATION and Little Thompson Valley Water District, Plaintiffs in Error, v. B. Douglas STRAWN and Longs Peak Engineering Company, Inc. Defendants in Error.

No. 22535.

Supreme Court of Colorado, In Department.

March 23, 1970.

Rehearing Denied April 13, 1970.

Cross & Christensen, John A. Cross, Robert C. Christensen, Loveland, for plaintiffs in error.

Knowles, Hopper & Molen, Donald S. Molen, Yegge, Hall, Treece & Evans, James C. Perrill, Denver, for defendants in error.

LEE, Justice.

This writ of error arises out of a judgment for $21,154.04 entered upon a jury verdict in the District Court of Boulder County in favor of plaintiff Longs Peak Engineering Company, Inc. and against defendant Little Thompson Valley Water District. The parties are herein referred to as the 'Company' and the 'District.'

A group of interested persons associated together under the name of Little Thompson Water Association for the purpose of creating a quasi-municipal water district and constructing a domestic water system to serve certain rural portions of Boulder, Larimer and Weld Counties. The association entered into an agreement dated April 1, 1961, for engineering services to be provided by B. Douglas Strawn, a registered professional engineer. By this agreement Strawn agreed to perform various professional engineering services required for the construction of a domestic water supply and distribution system, included among which were the designing of the system, the making of necessary investigations, studies, reports, plans and specifications, surveys, profile plats, cost estimates, etc., consulting services and construction supervision, all to the end that a complete water distribution system including a filtration plant would be constructed and put into operation by September 1, 1962.

The agreement further provided that Strawn would be compensated for his services at the rate of 6% Of the entire cost of the system, $1,500 of which was payable at the time the water district was formed and funds became available, and the balance of the engineering fee to be paid in installments at various stages of construction, on engineer's estimates of costs incurred. The final 10% Of compensation was due upon final acceptance of the system, but in any event within thirty days after final completion of the system.

The water district was successfully created and the agreement was assigned by the water association to the District, and by Strawn to the Longs Peak Engineering Company, Inc. which he had incorporated. Strawn was the principal stockholder, chairman of the board, president and general manager, and his wife was secretary of the company. Both assignments were with complete consent of all of the parties and no problem arises by reason thereof. Although Strawn was a party plaintiff and Little Thompson Water Association was a party defendant, both were dismissed from the action by the trial court.

There was no general contractor in charge of the whole project. Rather, the performance of the construction work was done by various contractors, and the materials used therein were furnished by various suppliers, all of whom contracted directly with the District. The last pipeline installation was completed in April of 1963, and the system was placed in operation then rather than in September of 1962 as originally contemplated.

The controversy arose over the refusal of the District to pay the Company the final 10% Of the engineering fee payable under the contract. The company brought this action to recover the balance claimed to be due and owing. The Company's complaint alleges two claims for relief, the first of which was based on the written agreement and demanded $21,381.99, and the second of which claimed extra compensation in the amount of $4,000 for engineering services rendered beyond and in addition to those contemplated in the written agreement.

The District's answer and counterclaim denied it owed any sums, contending the Company failed in its performance under the contract and that by reason of its failure to perform and its 'ill-designed' and 'improperly specified' work under the contract the District 'necessarily incurred great expense to redesign, modify and rebuild substantial portions' of the water system. The District demanded damages of $63,907.66 on its counterclaim.

At the conclusion of all of the evidence, the trial court directed a verdict of liability in favor of the Company on its first claim for relief, submitting only the issue of compensation to the jury which brought in a verdict in favor of the company...