Odegaard v. Investors Oil, Inc.

• Decision Date: 17 August 1962
• Docket Number: No. 7995,7995
• Citation: 118 N.W.2d 362
• Parties: Willard ODEGAARD, Plaintiff and Respondent, v. INVESTORS OIL., INC., a Minnesota Corporation, Defendant and Appellant, and Anchor Casualty Company, Defendant and Respondent.
• Court: North Dakota Supreme Court

Page 362

118 N.W.2d 362

Willard ODEGAARD, Plaintiff and Respondent, v. INVESTORS OIL., INC., a Minnesota Corporation, Defendant and Appellant, and Anchor Casualty Company, Defendant and Respondent.

No. 7995.

Supreme Court of North Dakota.

Aug. 17, 1962.

On Rehearing Dec. 11, 1962.

Syllabus by the Court.

1. Upon an appeal from a judgment rendered in an action not triable anew in the Supreme Court, neither errors of law that do not appear on the face of the judgment roll nor the sufficiency of the evidence may be reviewed in the absence of specifications of error.

2. Upon an appeal from an order denying a motion for judgment notwithstanding the verdict or in the alternative for a new trial, the Supreme Court will review the correctness of the order with respect to properly assigned specifications of error and insufficiency of the evidence that were before the trial court.

3. On a motion for judgment notwithstanding the verdict the trial court reviews its ruling in denying a previous motion for a directed verdict and for a second time considers the questions properly raised by the motion for a directed verdict.

4. The rule that a written contract supersedes all discussions, conversations and oral negotiations concerning the subject matter of the contract which preceded or accompanied its execution presupposes that the entire subject matter involved in the prior negotiations was included within the framework of the written contract and does not exclude the possibility of a contract being partly oral and partly written.

5. Where a contract is partly oral and partly written, the written portion is no more subject to contradiction by parol than the entire contract would be had it been wholly reduced to writing.

6. Where the written portion of a contract contained estimates of quantities of material to be used in construction of a mound and the evidence was conflicting as to whether the material placed in the mound greatly exceeded the estimates, it was error for the court to instruct the jury that the plaintiff 'was necessarily required to use a much greater quantity of gravel and rock than stated in the contract estimate.'

7. To entitle a contractor to recover upon a construction contract under the doctrine of substantial compliance it must appear that he endeavored to perform in good faith, that the other party will get substantially the structure contracted for, and that the defects must not be so serious as to deprive the structure of its value for its intended use nor be such that a deduction in damages will not be fair compensation.

8. It was error for the trial court to instruct the jury that substantial performance 'means not doing the exact thing promised but doing something else that is just as good or good enough to reasonably meet the obligation under the contract.'

9. For reasons stated in the opinion it is held that the verdict is excessive in that the evidence fails by a substantial sum to support the verdict to the extent of the amount rendered.

10. The judgment having been reversed in its entirety and a new trial granted, it is held that an appeal from an order denying a motion to modify the judgment by striking therefrom an item of interest is moot.

Vogel, Ulmer & Bair, Mandan, for plaintiff and respondent.

Cox, Pearce, Engebretson, Murray, Atkinson & Gunness, Bismarck, for defendant and appellant Investors Oil, Inc.

Nilles, Oehlert & Nilles, Fargo, for defendant and respondent Anchor Casualty Co.

MORRIS, Judge.

Investors Oil, Inc., defendant and appellant herein, is a Minnesota corporation that owns and operates an oil well located within the confines of the Garrison reservoir in North Dakota. The plaintiff and respondent, Willard Odegaard, is a construction contractor who on February 20, 1958, entered into a written agreement with Investors Oil, Inc., to build

'a mound made of clean pit run gravel and graded field rock, said mound generally described as follows: The mound shall be in the shape of a frustum of a cone, with a bottom radius of One Hundred Thirty-nine and 5/10 (139.5') feet and a top radius of Forty (40') feet. The height of the mound shall be Sixty-three (63') feet above elevation One Thousand Seven-Hundred Ninety-two (1792') feet; said mound to be constructed in accordance with the attached Construction Drawing, which by reference is made a part hereof.'

Anchor Casualty Company, defendant and respondent, a Minnesota corporation, on April 4, 1958, executed a bond as surety with Odegaard as principal and Investors Oil, Inc., as obligee, indemnifying the obligee against loss it might sustain by reason of the failure or default of Odegaard under the contract in the penal sum of $70,000.

The purpose of the mound was to protect the oil well against the rising and encroaching waters of the reservoir which had begun to flood the wellsite.

The plaintiff brought this action against Investors Oil, Inc., and in his complaint alleges that at the times mentioned therein William D. Walters was the vice president and an agent and employee of the defendant, authorized to make representations and perform the acts which the complaint alleges he made and performed on behalf of the defendant. It is then alleged that Walters began negotiating with the plaintiff for the construction of the mound in December, 1957; that he falsely and fraudulently assured the plaintiff that the well was located on a solid earth bottom at ground level when Walters well knew there was quicksand to a depth of 22 feet below that level; that Investors Oil, Inc., was only interested in protecting the well against the rising water, and that the plaintiff would be paid for all materials placed on the mound which were necessary to its protection, at the rate agreed upon. It is also alleged that pursuant to the oral agreement with Walters, the plaintiff, on January 20, 1958, commenced hauling gravel to the mound location; that in February, Walters, acting on behalf of the defendant, informed the plaintiff that the Corps of Army Engineers required that a written contract containing the specifications of the mound be filed and approved by them; that Walters again assured the plaintiff that if he protected the oil well from water he would be paid for all materials necessary to perform the task regardless of the exact specifications or estimates contained in the written contract, and that the plaintiff signed the contract on the strength of those representations.

With respect to furnishing material and the performance of the work, the complaint alleges:

'VII. That at the special instance and request of the defendant the plaintiff commenced hauling gravel for construction of said mound across the ice with trucks onto the location of said oil well on January 20, 1958, and continued until the 8th day of March, 1958, placing 33,834 yards of gravel on said mound; that from the 20th day of April, 1958, until the 22nd day of August, 1958, the plaintiff with use of a barge in said reservoir placed 75,600 yards of gravel and 6,000 yards of rock on said mound; that from December 14, 1958 to March 1, 1959, the plaintiff again hauled materials to said mound across the ice of said reservoir with trucks placing 19,872 yards of gravel and 5,100 yards of rock on said mound; that all of said materials placed on said mound so delivered and placed were worth the agreed and reasonable value of One Hundred Fifty-six Thousand One Hundred Forty and 70/100 ($156,140.70) Dollars.

'VIII. That the plaintiff has substantially completed construction of said mound project and all of said materials so delivered and placed on said mound by plaintiff are necessary to the stability of said mound because of the quicksand bottom and placement in water all of which facts were known to defendant corporation; that said mound has been and now is used to the benefit of the defendant to protect said oil well from the waters of the Garrison Reservoir.'

It is further alleged that a payment was made to the plaintiff in May, 1958, and another in the summer of 1959, in the total sum of $39,502.51. The plaintiff asks judgment for the balance of $116,638.19.

As a second count the plaintiff states that if recovery cannot be had upon express contract, he seeks recovery in the alternative on the theory of quantum meruit.

The defendant Investors Oil, Inc., filed an answer and counterclaim against the plaintiff and against Anchor Casualty Company in which the alleged statements and representations by Walters are denied as well as matters with respect to the making of the contract or the supervision of the construction of the mound. It alleges the execution of the written contract and denies that any agreement was made with the plaintiff until February, 1958. It denies the placement of the amount of material alleged in the complaint, and states that the plaintiff breached the contract by failure to properly perform his obligations in accordance therewith. It is further alleged that additional work must be done to give the mound and the well proper protection which will cost in excess of $70,000, and that the plaintiff has refused to complete the structure and that the defendant will hold the Anchor Casualty Company responsible for the performance of the contract under its surety bond. Defendant then asks that the plaintiff's cause of action be dismissed, that Anchor Casualty Company be made a party defendant to respond to the counterclaim, and that the defendant have judgment against Odegaard and the Anchor Casualty Company in the sum of $70,000, for the cost of completion of the structure in accordance with the terms of the contract.

Upon an application of the Investors Oil, Inc. for an order making Anchor Casualty Company a party defendant to the counterclaim, the casualty company was made a party defendant and a summons, together with a copy of the answer and counterclaim, was ordered to be served on the casualty company.

The Anchor Casualty Company,...