Nofziger v. Holman
| Decision Date | 09 July 1964 |
| Parties | , 393 P.2d 696 Robert A. NOFZIGER et al., Plaintiffs, Cross-defendants and Appellants, v. Fred J. HOLMAN et al., Defendants, Cross-complainants and Respondents. S. F. 21303. |
| Court | California Supreme Court |
Wexler & Wexler and Louis E. Wexler, Millbrae, for plaintiffs, cross-defendants and appellants.
Dinkelspiel & Dinkelspiel and Alan A. Dougherty, San Francisco, for defendants, cross-complainants and respondents.
The principal question presented on this appeal is whether the trial court erred in refusing to admit evidence to explain the meaning of a written contract. We have concluded that the evidence should have been admitted and that the judgment must be reversed.
Plaintiffs Nofziger and Rossi employed defendant Holman as foreman to supervise the construction of houses in a certain subdivision. The contract of employment provides in part that Holman shall receive a 'minimum and guaranteed' wage equal to the regular carpenter's wage scale in the area for a workweek of 40 hours and, in addition, 'one-fourth of the net profit from the sale of each home constructed in said subdivision under the supervision of Employee under the terms of this agreement.' Net profit is defined in the agreement as the profit to the owners after deducting a sales commission and the direct and indirect cost of the house and lot. There are also provisions for payment of the one-fourth of the net profits at times to be mutually agreed upon by the parties, for inclusion within the agreement of houses previously constructed in the subdivision under Holman's supervision, and for termination of the agreement.
All 63 homes constructed in the subdivision were built under Holman's supervision, and 43 were sold at a profit and 20 at a loss. After completion of construction a dispute arose as to the method of calculating Holman's share of the profits.
At the trial testimony was offered by plaintiffs to show that the parties intended that Holman was to receive one-fourth of the net profit from the entire venture, including profitable and unprofitable houses, not one-fourth of the profits from the 43 houses sold at a profit without any deduction of the losses suffered on the 20 houses. The testimony, which was admitted subject to defendants' motion to strike, may be summarized as follows: Holman had worked on other projects with Nofziger where it was agreed that Holman was to receive a percentage of the profits, and in those transactions losses were deducted in the calculation of profits. In discussions with Holman it was said that he was to get one-fourth of the profits at the end of the year. Nofziger stated that 'we never thought about losses but it was assumed that he was sharing the losses' and that 'if there weren't any profits, he wouldn't get any profits.' In the tax returns for Nofziger and Rossi, which were prepared by an accountant, Holman's share of the profits was treated as an overhead expense, and the amount of his share was equal to an amount which could be one-fourth of the net profit of the entire subdivision after deduction of...
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