Medical Clinic Bd. of City of Birmingham-Crestwood v. Smelley, BIRMINGHAM-CRESTWOOD

• Decision Date: 02 October 1981
• Docket Number: BIRMINGHAM-CRESTWOOD
• Citation: 408 So.2d 1203
• Parties: MEDICAL CLINIC BOARD OF the CITY OFv. E. E. SMELLEY. 79-929.
• Court: Alabama Supreme Court

Page 1203

408 So.2d 1203

MEDICAL CLINIC BOARD OF the CITY OF BIRMINGHAM-CRESTWOOD v. E. E. SMELLEY.

79-929.

Supreme Court of Alabama.

Oct. 2, 1981.

William M. Acker, Jr., of Dominick, Fletcher, Yeilding, Acker, Wood & Lloyd, Birmingham, for appellant.

Thomas Reuben Bell and Thomas R. Bell, Jr., Sylacauga, for appellee.

ALMON, Justice.

This appeal arises from a suit by a subcontractor for damages relating to work he performed on a nursing home construction project. The trial court, sitting without a jury, awarded damages against the defendant general contractor for breach of contract and against the public agency defendant, which owned the property, for failure to require the general contractor to execute a statutorily mandated bond. The public agency, Medical Clinic Board of the City of Birmingham-Crestwood (Medical Clinic Board), appeals from the latter part of this judgment. We affirm.

Medical Clinic Board is a public agency incorporated under Code 1975, §§ 11-58-1 through -15; the stated purpose of this Code Chapter is "to provide for boards as public agencies and instrumentalities of the state of Alabama to promote the acquisition of health facilities in order to promote the public health of the people of Alabama." Id., § 11-58-2(a). On January 31, 1977, it entered into a contract with Garland Co., Inc. (Garland), for construction of a nursing wing addition to Fairhaven Methodist Home for the Aging (Methodist Home). Garland did not execute the bond required by Code 1975, § 39-1-1, in favor of persons supplying labor or materials for the construction.

E. E. Smelley contracted with Garland on June 27, 1978, to perform the drywall (sheetrock) installation in the nursing wing addition. Prior to signing this contract, Mr. Smelley negotiated terms with Doug Stegall, one of Garland's job superintendents. About ten days after he went to work on August 7, 1978, Mr. Smelley was told by Mr. Whatley, Garland's foreman on the site, that he would have to install sheetrock above the dropped eight-foot ceiling level. Considerable dispute arose over this aspect of the work, with Mr. Smelley contending that it was extra work and more difficult and costly than hanging sheetrock just to the eight-foot level, and Garland contending that the higher level was part of the contract signed by Mr. Smelley, which stated that work was to be performed "according to plans and specifications prepared by Thurston W. Sumner/Architect." On September 7 Mr. Smelley quit work on the project.

Mr. Smelley filed suit against Garland on May 8, 1979, seeking damages on open account, for work and labor done, and for breach of contract. On July 31, 1979, Mr Smelley added Medical Clinic Board and Methodist Home as defendants in two counts added by the same amendment: one for wrongfully making final payment to Garland with notice of Smelley's claim against Garland (Count IV) and the other for negligently, in reckless disregard of § 39-1-1, failing to require Garland to furnish bond (Count V). Garland filed a counterclaim alleging breach of contract by Smelley; Medical Clinic Board and Methodist Home filed a cross-claim against Garland based on an indemnity agreement executed on March 28, 1979, by Garland's president, H. H. Garland, Jr.

After further pleadings and discovery the circuit court, sitting without a jury, tried the case on April 10 and 11, 1980. On May 20, 1980, the trial court entered the following findings and judgment:

The Court finds that it was the agreement of the parties that plaintiff E. E. Smelley do only the "eight foot" drywall work at 19 cents per square foot. Defendant Garland Company, Inc. breached the contract by attempting to require more from plaintiff. Plaintiff will be allowed the contract price on all such square footage. For extra work done by Plaintiff he will be reimbursed quantum meruit, since there was not an agreement to do that work, but it was rather done on a step-by-step basis. The Court determines a total amount due to be $18,000.00.

The Court further assesses attorney's fees, since these would have been due had the bond required by statute been obtained, and this amount is fixed at $2,000.00.

Judgment for plaintiff E. E. Smelley against defendant Garland Company, Inc., in the amount of $20,000.00.

Judgment for plaintiff E. E. Smelley against defendant The Medical Clinic Board of The City of Birmingham in the amount of $20,000.00.

Judgment in favor of cross-claimant The Medical Clinic Board of the City of Birmingham against cross-defendant Garland Company, Inc. in the amount of $17,270.58, which was the amount of money paid after the time of the signing of the hold harmless agreement.

Judgment in favor of defendant Fairhaven Methodist Home for the Aging.

Costs taxed against defendants Garland Company, Inc. and The Medical Clinic Board of the City of Birmingham.

The court amended the judgment in favor of Methodist Home ex mero motu to increase the cross-claim judgment by $2,000.00, and denied defendants' motion for new trial on July 23, 1980, and they filed this appeal on September 2, 1980. Garland later moved to dismiss its appeal, so Medical Clinic Board is the sole appellant.

Medical Clinic Board argues a number of issues on appeal alleging errors which we will group into the following categories:

(1) The breach of contract claim against Garland;

(2) The bond claim (Count V);

(3) The wrongful payment claim (Count IV);

(4) The award of attorneys' fees.

The Breach of Contract Claim

Mr. Smelley argues that Medical Clinic Board has no standing to raise these issues, basing this argument on such cases as Tullis v. Blue, 216 Ala. 577, 114 So. 185 (1927), and Otts v. Gray, 287 Ala. 685, 255 So.2d 26 (1971). These cases, however, hold merely that a judgment for or against a nonappealing party will not be affected by a successful appeal by another party. Medical Clinic Board is not seeking to have the judgment against Garland reversed; rather, it argues that any liability it has derives from Garland's liability to Mr. Smelley. That is, if Garland owed nothing to Mr. Smelley, then Mr. Smelley suffered no damage from either the final payment to Garland or the failure to require a bond. Because we find this reasoning persuasive, we will address these contract propositions raised by Medical Clinic Board: (a) the parol evidence rule precludes the introduction of evidence of antecedent oral understandings and negotiations for the purpose of varying or contradicting the terms of a written contract; (b) subsequent agreements to modify a contract must be supported by all the necessary elements of a contract such as mutual assent and consideration; and (c) a plaintiff who has breached his own contract may not sue the other party to the contract for that party's alleged breach of the same contract.

The statement above of the parol evidence rule begs the question of whether the writing is a complete and unambiguous statement of the agreement between the parties. If the writing is ambiguous, parol evidence is admissible to clarify the terms of the agreement; whether the writing is ambiguous is a question of law for the court. Universal Development Corp. v. Shader, 382 So.2d 1115 (Ala.1980); C. F. Halstead Contractor, Inc. v. Dirt, Inc., 294 Ala. 644, 320 So.2d 657 (1975). The ambiguity may be latent if the writing appears clear and unambiguous on its face, "but there is some collateral matter which makes the meaning uncertain; and parol or other extrinsic evidence is admissible to explain or clarify a latent ambiguity." Ford v. Ward, 272 Ala. 235, 130 So.2d 380 (1961); see also Gibson v. Anderson, 265 Ala. 553, 92 So.2d 692 (1956).

Medical Clinic Board argues that the provision that Mr. Smelley was to install the drywall "according to plans and specifications prepared by" the architect is unambiguous and that the contract was entire and complete. Mr. Smelley, however, testified that Mr. Stegall told him to disregard the plans because they were being changed: "(I)n the first plans ... it was supposed to be double half inch going all the way up to the roof, but they were getting a new set of drawings changing the plans and it would be five-eighths going up to eight foot high." Indeed, the plans furnished to Mr. Smelley by the architect in February of 1979 show double thickness sheetrock, and there was no contention at trial that such double thickness was installed or required.

Therefore Mr. Smelley's testimony as to the height to which he agreed to install the sheetrock was admissible and, concomitantly, so was his testimony as to his extra expense for installing it to the higher level. Because the trial court was within its province in accepting Mr. Smelley's testimony as to the original agreement, we hold that the second issue argued by Medical Clinic Board, subsequent modification, is not pertinent.

Similarly, the argument that Mr. Smelley could not recover because he also breached is inapplicable. Mr. Smelley testified that about a week before he left the job he asked Mr. Whatley for payment on some of the work he had done and was told that the only way he would be paid would be to finish the work or to sue. Furthermore, the argument fails because of the doctrine of substantial performance: Mr. Smelley testified that when he quit, approximately 90% of the work had been finished-including the extra work above the eight-foot level. Where one party has substantially performed his part of...