Oxford Development Corp. v. Rausauer Builders, Inc.

• Decision Date: 03 December 1973
• Docket Number: No. 1--173A15,1--173A15
• Court: Indiana Appellate Court
• Parties: OXFORD DEVELOPMENT CORPORATION et al., Appellants (Defendants Below), v. RAUSAUER BUILDERS, INC., Appellee (Plaintiff Below), Clyde Riddle & Sons, Appellee (Defendant and Cross-Plaintiff Below).

Page 211

304 N.E.2d 211

158 Ind.App. 622

OXFORD DEVELOPMENT CORPORATION et al., Appellants (Defendants Below), v. RAUSAUER BUILDERS, INC., Appellee (Plaintiff Below), Clyde Riddle & Sons, Appellee (Defendant and Cross-Plaintiff Below).

No. 1--173A15.

Court of Appeals of Indiana, First District.

Dec. 3, 1973.

Gene R. Leeuw, Klineman, Rose & Wolf, Indianapolis, for appellants (defendants below).

Thaddeus R. Spurgeon, Oaklandon, for Rausauer Builders, Inc.

Chalmer Schlosser, Jr., Schlosser, White & Schlosser, Indianapolis, for Clyde Riddle & Sons.

LYBROOK, Judge.

Defendants-appellants Oxford Development Corporation, et al. (Oxford) appeal from the judgment of the trial court ordering foreclosure of mechanics' liens in favor of plaintiff-appellee Rausauer Builders, Inc. (Rausauer) and defendant and cross-plaintiff-appellee Clyde Riddle & Sons (Riddle). The action stemmed from an alleged breach of a Sub-Contract Agreement (contract) between Oxford and Rausauer.

The facts relevant to the issues on appeal are as follows:

On July 2, 1968, Oxford and Rausauer entered into a contract whereby Rausauer, as sub-contractor, agreed to furnish certain materials and perform certain work in the construction of an apartment project known as Beechwood Gardens in Indianapolis. Rausauer in turn hired Riddle to perform certain work.

Rausauer commenced work on the project in August of 1968. A dispute subsequently arose as to whether certain work performed was included within the contract or was an 'extra' for which Rausauer was entitled to payment over and above the contract price. Oxford's job superintendent, Hap Chandler, had directed Rausauer to complete the work in question. The work had in turn been performed by Riddle at Rausauer's direction.

On October 13, 1969, Rausauer billed Oxford for the work as an 'extra'. Following Oxford's refusal to pay for the work in question, Rausauer ceased all work under the contract on October 30, 1969.

Rausauer and Riddle filed notices of intention to hold a lien upon Oxford's premises, in the Office of the Recorder of Marion County. Rausauer subsequently filed its complaint for foreclosure of its lien, and Riddle then cross-claimed for foreclosure of its lien.

After hearing evidence on the issue of whether the disputed work was an 'extra' or work encompassed within the contract, the court issued the following ruling:

'Court being duly advised now finds and adjudges that the underlaying done was extra work and not encompassed in the contract.'

Thereafter, the court heard evidence on Rausauer's claim for additional sums for labor performed pursuant to the contract, on Riddle's cross-claim for unpaid labor and foreclosure of its lien, and on Oxford's counterclaim against Rausauer for damages resulting from an alleged breach of contract by Rausauer.

Judgment was entered in favor of Rausauer and Riddle against Oxford. The court found that there was due Rausauer from Oxford the sum of $17,268.71 plus $5400.00 attorney fees. It was also found that there was due Riddle from both Rausauer and Oxford the sum of $4801.00. Further due Riddle from Oxford was $1,087.00 plus $1,800.00 attorney fees.

The court adjudged that Rausauer and Riddle held liens against Oxford's premises to the extent of their judgments and ordered the liens foreclosed.

Oxford appeals, raising the following issues for review:

1. Whether the court erred in finding that the work in dispute was an 'extra' not encompassed in the contract.

2. Whether the court by its finding reformed the contract between Rausauer and Oxford, thereby committing error.

3. Whether the court erred in awarding Rausauer damages in excess of the sum due for performance of the disputed work.

4. Whether the award of attorney fees to Rausauer was excessive and not supported by the evidence.

5. Whether the assessment of attorney fees in favor of Riddle was erroneous as a matter of law.

6. Whether the assessment of damages against Oxford and in favor of Riddle was erroneous as a matter of law.

ISSUE 1.

The central controversy in this case is whether the installation of 'underlayment' during the construction of the defendants' apartment complex was an item of work included within the contract or an item of 'extra' work for which Rausauer was entitled to payment over and above the contract price.

Oxford insists that the trial court erred as a matter of law in construing the contract to exclude the installation of underlayment as an item of work to be performed thereunder.

In examining the court's construction of the contract, we are mindful that our standard of review requires affirmance of a judgment if it can be sustained on any theory presented by the issues. Devine v. Grace Construction and Supply Co. (1962), 243 Ind. 98, 181 N.E.2d 862. Further, all reasonable presumptions are indulged in favor of the trial court, and this court will make no presumptions in favor of an appellant to sustain any alleged error. New York Central Ry. Co. v. Milhiser (1952), 231 Ind. 180, 106 N.E.2d 453, 108 N.E.2d 57.

The primary rule of construction is to ascertain and give effect to the parties' intentions. To accomplish this end, the agreement should be construed as a whole. Ahlborn et al. v. City of Hammond (1953), 232 Ind. 12, 111 N.E.2d 70; Wiltse et al. v. Cornell (1970), 146 Ind.App. 447, 256 N.E.2d 572; Kuhn v. Kuhn et al. (1955), 125 Ind.App. 337, 123 N.E.2d 916.

Oxford argues that since the plans and specifications for the construction are expressly incorporated into the contract under paragraph FIRST of the sub-contract agreement and the plans and specifications provide for the installation of underlayment, the work is included within the contract as a matter of law.

Paragraph FIRST of the contract is as follows:

'FIRST. The Sub-contractor agrees to furnish all material and perform all work necessary to complete the carpentry and roofing of 51 buildings in Phases 1, 2, & 3 of apartment project known as Beechwood Gardens, 5725 East 30th St., Indianapolis, Indiana.

Job Supt.--Hap Chandler

(Plans dated 12/28/67 and revised 2/22/68 and specks dated 2/22/68 incl. addendum dated 1/5/68) for the above named structure, according to the plans and specifications (details thereof to be furnished as needed) of _ _ Architect, and to the full satisfaction of said Architect.'

It is true that parties may, by express provision, make plans and specifications a part of their contract. Where this is done, those plans and specifications will control with the same force as though they were incorporated in the contract itself. Staley et al. v. New et al. (1952), 56 N.M. 756, 250 P.2d 893; Warren et al. v. Gray (1954), 90 Ga.App. 398, 83 S.E.2d 86; Kandalis v. Paul Pet Construction Co. (1956), 210 Md. 319, 123 A.2d 345.

However, a reference to plans and specifications is not effective beyond the parties' agreement. Where qualifying words appear in the contract, such reference will be limited accordingly. Hill & Combs v. First Nat. Bank of San Angelo, Tex. (5th Cir. 1944), 139 F.2d 740.

Absent express provision, the plans and specifications cannot operate to either restrict or extend the scope of the contract to subjects other than those covered by the contract. Warren et al. v. Gray, supra; Pittsburgh Plate Glass Co. v. American Surety Co. (1942), 66 Ga.App. 805, 19 S.E.2d 357.

Paragraph SECOND lists specific items of work to be performed under the contract as follows:

'SECOND. The Sub-contractor agrees to promptly begin said work as soon as notified by said Contractor, and to complete the work as follows: ROUGH PHASE: Furnish all labor and equipment to erect all exterior and interior wall panels; apply drywall to one side of party wall; floor joist & plywood sub floor; trusses; plywood roof deck; roofing includes felt, shingle & vent-a-ridge; all exterior trim; soffit system; siding; stairways; exterior doors, shutters. Windows & sliding glass doors will be installed by others. A reasonable amount of framing adjustments shall be included. 'M' building will be conventionally framed.

TRIM PHASE: Install all stairway and landing trim, base, casing (doors & windows). Kitchen cabinets, kitchen and bath tops, medicine cabinets, mail boxes, closet shelves and poles, access panels, hardware, interior doors and other miscellaneous items as shown on drawings.'

In our opinion, the court could have reasonably found that paragraph SECOND limited the reference to plans and specifications in paragraph FIRST. Underlayment is not listed as an item of work to be performed under paragraph SECOND.

Alternatively, it could be found that the contract is ambiguous on its face due to an apparent conflict between these two parts of the contract. It has been held that in case of ambiguity, a contract will be construed against its maker--in this case, Oxford. Philco Corp. v. 'Automatic' Sprinkler Corp. of America (7th Cir. 1964), 337 F.2d 405; Wabash Life Insurance Co. v. Hacker (1960), 130 Ind.App. 342, 164 N.E.2d 666; Lacy v. White (1972), Ind.Ct.App., 288 N.E.2d 178.

Moreover, where a contract is ambiguous, the court will apply the construction which has been given it by the parties. City of Vincennes v. Citizens' Gas Light Co. (1892), 132 Ind. 114, 31 N.E. 573. Mobley v. J. S. Rogers Co. (1918), 68 Ind.App. 308, 119 N.E. 477; Town of Hagerstown v. Liberty, etc., Power Co. (1926), 84 Ind.App. 115, 150 N.E. 116.

In the case at bar, the evidence most favorable to the appellee tends to support a finding that the installation of underlayment was considered an 'extra' by the parties. Henry Sauer, Jr., secretary-treasurer of Rausauer, testified that he discussed the installation of underlayment with Hap Chandler, Oxford's job superintendent. Chandler instructed Sauer to proceed with the installation and said that a written work order would be drafted at a later date. Chandler's replacement, Morris Walton, instructed Sauer to bill Oxford for the underlayment.

Allen Sklare, president of...