Patel v. Harless

• Decision Date: 27 November 1996
• Docket Number: No. 96-67,96-67
• Citation: 926 P.2d 963
• Parties: Piyush PATEL, Appellant (Defendant), v. Keith HARLESS and Harvey Harless, d/b/a H & H Drywall, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

Page 963

926 P.2d 963

Piyush PATEL, Appellant (Defendant), v. Keith HARLESS and Harvey Harless, d/b/a H & H Drywall, Appellees (Plaintiffs).

No. 96-67.

Supreme Court of Wyoming.

Nov. 27, 1996.

Charles E. Graves and Loren Joseph Richards of Charles E. Graves & Associates, P.C., Cheyenne, for appellant.

Colin M. Simpson of Simpson, Kepler & Edwards, LC, Cody, for appellees.

Before TAYLOR, C.J., and THOMAS, MACY, GOLDEN and LEHMAN, JJ.

MACY, Justice.

Appellant Piyush Patel appeals from the judgment which was entered in favor of Appellees Keith Harless (Keith) and Harvey Harless (Harvey), who were doing business as H & H Drywall. The trial court found that a mutual mistake had occurred in the formation of the parties' contract.

We reverse.

ISSUES

Patel requests our review of the following issues:

I. Whether the evidence presented at trial supports a finding of mutual mistake[.]

II. Whether Appellees assumed the risk[.]

FACTS

In 1993, Patel contracted with Paragon Management Inc. to provide management services for a construction project on a Days Inn located in Cody. One of Paragon's responsibilities was to locate a subcontractor who would install the drywall in the building. The project architect contacted the appellees to see whether they would be interested in H & H Drywall began installing the drywall at the motel in mid-March 1994. On March 22, 1994, Paragon gave H & H Drywall a $1,500 advance. H & H Drywall submitted a payment request for $16,585 on March 25, 1994, and received $13,426.20 on March 29, 1994. H & H Drywall received a $4,500 payment on April 20, 1994, and a $2,000 payment on April 22, 1994. The drywall installation was completed by May 7, 1994, and on that date Paragon paid $3,686 to H & H Drywall and one of its employees, jointly. H & H Drywall subsequently requested an additional payment which resulted in the total price for the job being significantly higher than the contract figure, claiming that it had installed 2,746 sheets of drywall and that it should be compensated $16 for each sheet that it had installed. Patel paid two of H & H Drywall's employees $1,170 and $1,496 to avoid having liens filed against the motel property, and it credited those amounts as payments to H & H Drywall.

doing the job. The architect provided a set of plans and specifications for the appellees to review. When the appellees agreed to do the job, the architect sent a contract to them which provided that H & H Drywall would install and finish the drywall and all accessories according to the plans and specifications for a fixed price of $28,800. The contract also provided that H & H Drywall was required to submit a written request for a change order prior to beginning any extra work which might need to be done. The appellees reviewed the proposed contract and made some changes, but they did not change the fixed price amount, note any limitations on the square feet of drywall which would be installed, indicate any limitation on the number of drywall sheets which would be installed, or include a per sheet price. The appellees signed the contract and returned it to the architect.

The appellees recorded a lien against the motel on June 17, 1994, and thereafter filed an action to foreclose on that lien. After a bench trial, the trial court found in the appellees' favor, concluding that both parties had agreed on the total area which was to be drywalled and that they had both been mistaken in their estimate of the space. The trial court also concluded that, when the architect inserted the fixed price of $28,800 into the contract, he based that figure upon the rate of $16 per sheet multiplied by the number of sheets which would be required to drywall the erroneously estimated area. Patel appeals from that decision.

STANDARD OF REVIEW

In this type of case, we are guided by the following standard:

The initial question of whether the contract is capable of being understood in only one way is a question of law for the court. If the court determines that the contract is capable of being understood in only one way, then the language used in the contract expresses and controls the intent of the parties. In such case, the next question, what is that understanding or meaning, is also a question of law.... As we have said, "[w]e are ... at liberty to make a determination as to the existence of ambiguity whether or not the parties here agree thereto one way or the other, and whether or not the trial court has reached a conclusion thereon one way or the other."

Examination Management Services, Inc. v. Kirschbaum, No. 95-278, 927 P.2d 686, 689 (Wyo.1996) (citations omitted) (quoting Amoco Production Company v. Stauffer Chemical Company of Wyoming, 612 P.2d 463, 465 (Wyo.1980)). When the provisions of a contract are not ambiguous or uncertain, the document speaks for itself, and parol evidence which tends to show that a prior or contemporaneous oral agreement or tacit understanding was made with respect to the terms of the agreement is inadmissible. Cordova v. Gosar, 719 P.2d 625, 640 (Wyo.1986). This Court, however, has recognized that, even though a document is unambiguous, an exception is made in the case of mutual mistake to the rule which prohibits parol evidence from being admitted. Schulz v. Miller, 837 P.2d 71, 75 (Wyo.1992); Cordova, 719 P.2d at 640-41.

"[W]here there is no ambiguity, all conversations, contemporaneous negotiations, and Schinnell v. Doyle, 6 Wash.App. 830, 496 P.2d 566, 568 (1972) (quoting Fleetham v. Schneekloth, 52 Wash.2d 176, 324 P.2d 429, 430 (1958)).

parol agreements between the parties prior to a written agreement are merged therein. In the absence of accident, fraud or mistake, parol evidence is not admissible for the purpose of contradicting, subtracting from, adding to, or varying the terms of such written instruments."

DISCUSSION

Patel claims that the evidence with regard to an asserted mutual mistake was insufficient to support, by clear and convincing evidence, the trial court's finding that both parties intended to enter into a contract which provided for the installation of exactly 1,800 sheets of drywall at $16 per sheet. ¹ The appellees maintain that substantial evidence did support the trial court's finding of mutual mistake in the formation of the contract.

A contract may be canceled or reformed by reason of a mutual mistake. Shrum v. Zeltwanger, 559 P.2d 1384, 1386 (Wyo.1977); see also Goodson v. Smith, 69 Wyo. 439, 457, 243 P.2d 163, 171 (Wyo.1952). A mutual mistake is one which is reciprocal and common to both parties with each party being under the same misconception as to the terms of the written instrument. Shrum, 559 P.2d at 1386.

"[W]hen a mistake in a writing is claimed, the burden rests on the party claiming the mistake to establish by evidence that is clear, satisfactory and convincing that the contract as written does not contain the agreement entered into between the parties; that the mistake was mutual; and that it did not occur by or result from negligence of the party claiming it."

Schulz, 837 P.2d at 76 (quoting Pfister v. Brown, 498 P.2d 1243, 1245 (Wyo.1972)). Although an agreement may be reformed to reflect the parties' intent when a mutual...