Mecum v. Weilert Custom Homes, LLC
| Decision Date | 10 December 2018 |
| Docket Number | No. 15 C 8548,15 C 8548 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | DANA MECUM, Plaintiff, v. WEILERT CUSTOM HOMES, LLC, LIEDERBACH & GRAHAM ARCHITECTS, PHILLIP J. LIEDERBACH, and R. MICHAEL GRAHAM, Defendants. |
MEMORANDUM OPINION AND ORDER
Plaintiff hired defendants Liederbach & Graham, Phillip J. Liederbach, and R. Michael Graham to design a multimillion-dollar home for him in Lake Geneva, Wisconsin. Plaintiff said the parties' agreement was a handshake deal that did not include an agreement to arbitrate. Defendants said the parties entered into a standard American Institute of Architects ("AIA") written agreement, which contains an arbitration clause. On August 13, 2018, a jury agreed with defendants. (See Jury Verdict, ECF 192.) The case is before the Court on plaintiff's Federal Rule of Civil Procedure ("Rule") 50(b) renewed motion for judgment as a matter of law. For the reasons set forth below, the Court denies the motion [199].
Rule 50 permits a court to enter judgment as a matter of law when "a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue." Fed. R. Civ. P. 50(a). In deciding a Rule 50 motion, the Court views the evidence "in the light most favorable to the non-moving party." Payne v. Milwaukee Cty., 146 F.3d 430, 432 (7th Cir. 1998). The Court "will overturn a jury verdict for a [party] only if [it] conclude[s] that no rational jury could have found for [that party]." Waite v. Bd. of Trs. of Ill. Cmty. Coll. Dist. No. 508, 408 F.3d 339, 343 (7th Cir. 2005) (quotations omitted).
Plaintiff argues that the jury verdict is fatally flawed because the evidence established the AIA contract was missing an essential term—price. Defendants contend that plaintiff waived this issue by failing to raise it in the pretrial order as an issue for either the Court or the jury to address. See Local Rule Form 16.1.4, Pretrial Order ¶ 2(h) & n.9 (); (Pretrial Order, ECF 147). As defendants admit, however, plaintiff raised the issue in his motion for judgment as a matter of law at the close of the evidence and in his closing argument to the jury (see Defs.' Resp. Opp'n Pl.'s Renewed Mot. J. Matter Law, ECF 213 at 3), apparently without objection from defendants. (See 8/13/18 Trial Tr., ECF 196 at 431-34.)1 Under the circumstances, the Court finds that plaintiff has adequately preserved the issue.
On the merits, plaintiff argues that the price term in the AIA contract, "Fourteen (14) percent of the Cost of the Work" (see Defs.' Resp. Pl.'s Renewed Mot. J. Matter Law, Ex. C, ECF 213-4 § 11.1), is too indefinite to create a valid contract. Wisconsin law, which the parties agree governs, deems price to be an essential term of a contract for services. See Goebel v. Nat'l Exchangors, Inc., 277 N.W.2d 755, 765 (Wis. 1979). That does not mean, however, that "the exact amount in figures must be stated in the agreement." Id. (quotation omitted). Rather, "theprice must, by the terms of the agreement, be capable of being definitely ascertained." Id. (quotation omitted); see Herder Hallmark Consultants, Inc. v. Regnier Consulting Grp., Inc., 685 N.W.2d 564, 567 (Wis. Ct. App. 2004) () (quoting 1 Corbin on Contracts: Formation of Contracts § 4.3 (rev. ed. 1993)); see also Headstart Bldg., LLC v. Nat'l Ctrs. for Learning Excellence, Inc., 905 N.W.2d 147, 153 (Wis. Ct. App. 2017) () (quotation omitted); Gerard v. Gerard, 2015 WI App 68 ¶ 14, 869 N.W.2d 171 (Wis. Ct. App. 2015) (per curiam) () (quoting Herder Hallmark, 685 N.W.2d at 567).
Moreover, even if:
"[T]he parties have expressed an agreement in terms so vague and indefinite as to be incapable of interpretation with a reasonable degree of certainty, they may cure this defect by their subsequent conduct and by their own practical interpretation. . . . . If the expressions used leave the subject matter, or the price or the time or any other element of the performance incapable of determination, the rendition of a part or all of the performance may make clear the meaning that should be given to those expressions."
Nelsen v. Farmers Mut. Auto. Ins. Co., 90 N.W.2d 123, 131 (Wis. 1958) (quoting 1 Corbin on Contracts § 101); see Metro Ventures, LLC v. GEA Assocs., 717 N.W.2d 58, 67 (Wis. 2006) (); Herder Hallmark, 685 N.W.2d at 567-68 ().
The evidence, viewed favorably to defendants, showed that both parties understood defendants' fee would be fourteen percent of the cost of constructing the home, defendants' invoices to plaintiff were based on fourteen percent of the cost of construction, and plaintiff paid invoices that said defendants' fee was based on fourteen percent of the cost of construction. Given the language of the AIA contract, the parties' mutual understanding of the method for calculating defendants' fee, defendants' invoices reflecting that method, and plaintiff's payment of those invoices, a reasonable jury could find that the price term was sufficiently definite to be the basis for a contract.2
Plaintiff relies heavily on Harper, Drake & Associates v. Jewett & Sherman Co., 182 N.W.2d 551 (Wis. 1971) to support his position that the price as defined in the AIA contract was not sufficiently definite. Harper, however, does not dictate a different result. In that case, an architecture firm sued to recover for services it had provided to defendant pursuant to an allegedcontract. Id. at 553. As in this case, the architect said its fee would be a percentage of the cost of construction. Id. at 554. However, in Harper, the owner fired the architect before the building was built. Id. at 553-54. The architect then sought recovery based on quantum meruit, using a cost-of-construction percentage in seeking compensation. The Harper court rejected this approach in assessing an appropriate recovery. Id. at 557.
Harper is distinguishable on two fronts. First, the issue before the Harper court was not whether a contract existed between the parties. Significantly, the architects in Harper abandoned their contract claims before the matter was submitted to the jury. Id. at 554. Therefore, the Harper court was only deciding whether terms of the "unenforceable" AIA contract could be considered in assessing the architect's reasonable compensation in an action for quantum meruit. Id. Admittedly, Harper contains language that suggests a percentage of cost of construction is too indefinite to be the basis of an enforceable contract when the cost of construction is unknown at the time of the contract's attempted formation. Id. at 557. However, that language must be considered dicta because quantum meruit is an equitable remedy, not a contractual remedy.3 Lindquist Ford, Inc. v. Middleton Motors, Inc., 557 F.3d 469, 478 (7th Cir. 2009) ( ) (quotation omitted).
Second, the cost-of-construction figure the architect in Harper used as a basis for his contract claim was a hypothetical number devised solely by the architect. Id. at 554. Under the circumstances, the Harper court said, "[i]t would abuse the fundamental precepts of contract interpretation to hold that [defendant] bound himself and his company to pay five percent of whatever [plaintiff] should later decide would be the actual cost of the building." Id. at 557 (emphasis added). Here, the AIA contract defined how cost of construction would be calculated, (see Pl.'s Reply Supp. Renewed Mot. J. Matter Law, Ex. B, AIA Contract, ECF 219-2 § 6), and plaintiff knew the estimated cost of constructing the house, and the impact his design and material decisions had on that cost, from the outset of the parties' relationship. (See Trial Tr. Excerpts, ECF 213-2 at 178-79, 309, 334-35.) Based on the evidence presented, plaintiff, more than defendants, had the ability to control the size, scope and most importantly, the cost, of the project. Because plaintiff knew, and played an integral role in determining, the estimated...
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