Murray First Thrift & Loan Co. v. N-C Paving

• Decision Date: 22 March 1978
• Docket Number: Nos. 4805 and 4806,N-C,s. 4805 and 4806
• Citation: 576 P.2d 455
• Parties: MURRAY FIRST THRIFT & LOAN COMPANY, a Utah Corporation, Appellant (Plaintiff below), v.PAVING, a Wyoming Corporation, Appellee (Defendant below).PAVING, a Wyoming Corporation, Cross-Appellant (Defendant below), v. MURRAY FIRST THRIFT & LOAN COMPANY, a Utah Corporation, Cross-Appellee(Plaintiff below).
• Court: Wyoming Supreme Court

Page 455

576 P.2d 455

MURRAY FIRST THRIFT & LOAN COMPANY, a Utah Corporation, Appellant (Plaintiff below), v. N-C PAVING, a Wyoming Corporation, Appellee (Defendant below).

N-C PAVING, a Wyoming Corporation, Cross-Appellant (Defendant below), v. MURRAY FIRST THRIFT & LOAN COMPANY, a Utah Corporation, Cross-Appellee(Plaintiff below).

Nos. 4805 and 4806.

Supreme Court of Wyoming.

March 22, 1978.

Patrick Dixon and G. G. Greenlee, Murane, Bostwick, McDaniel, Scott, Greenlee & Owens, Casper, signed the brief and Patrick Dixon appeared in oral argument on behalf of the appellant and cross-appellee, Murray First Thrift & Loan Company.

Frank D. Neville and Richard L. Williams, Wehrli & Williams, Casper, signed the briefs and appeared in oral argument on behalf of the appellee and cross-appellant, N-C Paving.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

RAPER, Justice.

By these appeals, Murray First Thrift & Loan Company (hereinafter Murray), plaintiff, as well as N-C Paving, Inc. (hereinafter N-C), defendant, allege error on the part of the district court in its granting of summary judgment. Through its appeal, Murray asserts that: (1) the record evidence is insufficient to support the district court's award to N-C of the costs of completion of the subject subcontract, and; (2) the award of attorney's fees as an item of damage was improper. N-C, by its appeal, contends that the district court's sole error was its failure to award to N-C the liquidated damages established by the subcontract in the event of a breach. We shall modify the judgment of the district court to include the award of liquidated damages, and, as modified, affirm.

On May 24, 1973, N-C entered into a contract with the State Highway Commission of Wyoming to perform paving work on a four-lane highway between Moorcroft and Sundance, Wyoming. By the contract terms, N-C was required to have its paving work completed on or before October 31, 1973. In the event the paving was not completed on that date, N-C was required to pay the State Highway Commission, "as liquidated damages and not as a penalty, $500.00 per day" for each working day in excess of the contract time limit.

On June 13, 1973, N-C entered into a standard subcontract agreement with Joe Frehner of Salt Lake City, Utah, and whereby Frehner was to provide machines and labor and haul crushed rock to N-C for its use in paving the highway. The subcontract provided the work to be completed on or before September 1, 1973; and further that in the event the subcontractor (Frehner) failed to diligently proceed with or complete the work, N-C was entitled to hire another subcontractor or could step in and complete the work itself, charging Frehner "the entire cost thereof, together with liquidated damages at the rate specified in the General Contract for each day after the completion date specified herein when the work provided for herein is not completed." Frehner then assigned all proceeds due him under the subcontract to Murray, the assignment being accepted in writing by N-C subject to its right to first deduct any offsets that N-C "may have against the ASSIGNOR for expenses incurred for parts and labor and repairs or damages sustained in connection with or arising out of the performance of said Contract."

At some point in time, for reasons unknown to the parties, Frehner abandoned the construction project. N-C, in order to continue performance of its contract with the State of Wyoming, undertook the work remaining under the subcontract, and after due notice to Frehner, employed additional men and equipment and completed the subcontract work on October 2, 1973, 31 days subsequent to the date set for completion under the N-C-Frehner contract. In an accounting to Frehner and his assignee, Murray, following completion of the contract, N-C stated that had the contract been properly completed, a total of $84,999.66 would have been due Frehner, of which a total of $10,887.64 had been paid. In computing the damages to be withheld for Frehner's breach, N-C deducted a total of $53,841.85 as costs of completion, $1,206.65 as attorney's fees, and $15,500.00 as liquidated damages, leaving $3,563.52 owing, payment of which was tendered. In response to the action of Murray, in challenging the withholding of those sums by N-C, the district judge found that Frehner had abandoned the subcontract involved and that N-C Paving was entitled to an offset for all costs to which it was subjected by the breach, including attorney's fees reasonably incurred in its attempt to mitigate the damages involved. The court, however, denied the withholding by N-C of the $15,500.00 in liquidated damages, holding them to be a penalty. Judgment was thus entered in favor of Murray in the amount of $15,500.00 plus the agreed sum of $3,563.52. From this judgment, both parties have appealed.

The initial assertion of error raised by Murray, on appeal, alleges that the record evidence is insufficient to support the district court's award to N-C of the costs of completion of the subcontract in question. It asserts that N-C has failed to sufficiently support...