PINNACLE ENGINEERS v. Heron Brook, LLC

• Decision Date: 26 February 2004
• Docket Number: No. 29181.,29181.
• Citation: 139 Idaho 756,86 P.3d 470
• Parties: PINNACLE ENGINEERS, INC., Plaintiff-Counterdefendant-Respondent, v. HERON BROOK, LLC., Defendant-Counterplaintiff-Appellant.
• Court: Idaho Supreme Court

86 P.3d 470

139 Idaho 756

PINNACLE ENGINEERS, INC., Plaintiff-Counterdefendant-Respondent, v. HERON BROOK, LLC., Defendant-Counterplaintiff-Appellant.

No. 29181.

Supreme Court of Idaho, Boise, January 2004 Term.

February 26, 2004.

Huntley Park, LLP, Boise, for appellant.

Meuleman & Miller, Boise, for respondent.

EISMANN, Justice.

This is an appeal from a judgment awarding the plaintiff as damages sums due for professional engineering services, denying the defendant relief on its counterclaims, and awarding the plaintiff costs and attorney fees. We affirm the judgment of the district court.

I. FACTS AND PROCEDURAL HISTORY

On August 19, 1999, the appellant Heron Brook, LLC, (Heron Brook) and the respondent Pinnacle Engineers, Inc., (Pinnacle) entered into a written contract under which Pinnacle agreed to perform engineering work on a subdivision that Heron Brook was developing. Heron Brook agreed to pay Pinnacle $21,580.00 to perform six specified phases of the work and to pay for work on two additional phases on a time-and-materials basis. Between August 1999 and April 2000, a number of disputes involving alleged billing errors and the quality of work being done arose between the parties regarding Pinnacle's performance of the contract. Pinnacle completed its work under the contract on November 27, 2001. On December 11, 2001, it recorded a claim of lien against the subdivision, contending that Heron Brook had failed to pay $6,970.42 of the amount due for Pinnacle's services. In January, Heron Brook executed a cash bond to have the lien released. On February 19, 2002, Pinnacle filed this action seeking to recover $6,970.42, plus attorney fees. On March 7, 2002, Heron Brook filed an answer and counterclaim seeking unspecified damages for breach of contract, negligence, and unjust enrichment and an order requiring Pinnacle to produce "as-built drawings."

This case was tried to the district court, and on November 1, 2002, it issued its memorandum decision finding in favor of Pinnacle both on its complaint and on Heron Brook's counterclaim. Judgment was ultimately entered awarding Pinnacle damages in the sum of $6,182.85, court costs in the sum of $2,191.30, and attorney fees in the sum of $61,846.38. Heron Brook timely filed this appeal.

II. ISSUES ON APPEAL

A. Are the trial court's findings of fact clearly erroneous?

B. Did the trial court fail to consider the factors listed in Rule 54(e)(3) when awarding attorney fees?

C. Is Pinnacle entitled to an award of attorney fees on appeal?

III. ANALYSIS

A trial court's findings of fact will not be set aside on appeal unless they are clearly erroneous. Bramwell v. South Rigby Canal Co., 136 Idaho 648, 39 P.3d 588 (2001); IDAHO R. CIV. P. 52(a). When deciding whether findings of fact are clearly erroneous, this Court does not substitute its view of the facts for that of the trial court. Id. It is the province of the trial court to weigh conflicting evidence and to judge the credibility of witnesses. Rowley v. Fuhrman, 133 Idaho 105, 982 P.2d 940 (1999). On appeal, this Court examines the record to see if challenged findings of fact are supported by substantial and competent evidence. Id. Evidence is regarded as substantial if a reasonable trier of fact would accept it and rely upon it in determining whether a disputed point of fact has been proven. Bramwell v. South Rigby Canal Co., 136 Idaho 648, 39 P.3d 588 (2001).

A. Are the Trial Court's Findings of Fact Clearly Erroneous?

1. Standard of care. In its contract with Heron Brook, Pinnacle agreed to perform its work in a manner consistent with the standard of skill and care ordinarily exercised by civil engineers in Boise, Idaho. Heron Brook contended that Pinnacle's work fell below that standard in four respects, thereby constituting a breach of the contract and negligence and entitling Heron Brook to a refund based upon unjust enrichment to the extent that its payments exceeded the reasonable value of Pinnacle's work. The district court found that Pinnacle's work did not fall below the standard of care applicable to civil engineers in Boise, Idaho. Heron Brook contends that the district court's finding is clearly erroneous.

The plans drafted by Pinnacle for the project included a street elevation error of six tenths of a foot, two storm-drain pipes impermissibly intersecting, and two drainage swales that could not be constructed in the space available with the side slopes shown. There was expert testimony that none of these errors was below the standard of care. Heron Brook argues, however, that the testimony of its expert was uncontradicted that even if it was not below the standard of care to commit the errors, it was below the standard of care not to pay the cost incurred by Heron Brook to correct the errors.

When the court is the trier of fact, its duties include determining the credibility of witnesses, the weight to be given their testimony, its probative effect, and the inferences and conclusions to be drawn from their testimony. Levin v. Levin, 122 Idaho 583, 836 P.2d 529 (1992). The opinion of an expert is not binding on the trial court, and, as long as it does not act arbitrarily, the trial court may reject expert testimony even when it is uncontradicted. Id.; Simpson v. Johnson, 100 Idaho 357, 597 P.2d 600 (1979).

Heron Brook's expert witness initially defined the standard of care as "a level of services provided to our clients and the public, in accordance with the skills that are ordinarily exercised by engineers in our area." That definition does not include paying to remedy errors that do not fall below the standard of care. When first asked about an engineer being financially responsible for a mistake that did not breach the standard of care, the expert responded that the engineer's obligation to pay for the mistake was based upon maintaining good client relations.

Q: How would you be responsible financially but not have that be below the standard of care?

A: I suppose the best answer is, in good client relations, is the best answer. There are certain times things come up during the construction of the project that you may not have been able to discover during the process of that event. And I don't consider that breaching the standard of care requirement, but your clients had some financial obligation to perhaps something could have been discovered. And so I personally feel I have some financial obligation to help rectify that situation.

Although the expert later testified that in his opinion the standard of care required Pinnacle to pay the expenses incurred by Heron Brook to correct the errors, even if the errors themselves did not violate the standard of care, the trial court was not required to accept that testimony. The trial court could reasonably have concluded that paying the cost of remedying mistakes was more related to maintaining good relations with clients than to complying with the standard of care in providing engineering services.

Pinnacle's drawings designated a general ten-foot utility easement on the final plat. Part of that easement would be under the planned location of certain structures. Heron Brook contended that had Pinnacle negotiated with the utility companies, they would have agreed to a five-foot easement. There was conflicting expert testimony regarding whether Pinnacle violated the standard of care in this instance. While recognizing the rule that the trial court has wide latitude in making credibility determinations, Heron Brook asks us to reweigh the evidence on appeal and find that Heron Brook's expert was more credible than Pinnacle's. Heron Brook has not convinced us to abandon that well-established principle of appellate review.

2. Billing disputes. During the project, there were a number of disputes between Heron Brook and Pinnacle regarding its billing practices. Representatives of both parties met in April 2000 and again in April 2001 to resolve those disputes. During those meetings, Pinnacle agreed to make certain changes and to reduce the amounts of certain charges. Heron Brook contends that Pinnacle failed to make the agreed-upon reductions and misapplied funds paid. Pinnacle's accountant testified during Pinnacle's case-in-chief and again in rebuttal. She stated that she had made the reductions and that the payments were properly applied, with the exception of a $146 error that she discovered while preparing for trial. During the trial, Pinnacle also admitted that it had mistakenly billed Heron Brook two different times for the same landscaping work, resulting in an over-billing of $750. The trial court deducted both of those sums from the amount claimed by Pinnacle at the commencement of the trial. Although some of the accountant's testimony may have been conflicting, the trial court was the arbiter of her credibility. Its finding regarding the amount owing is supported by substantial and competent evidence.

3. As-built drawings. In a separate oral agreement, Pinnacle contracted to provide Heron Brook with...