ProMax Development Corp. v. Mattson

• Decision Date: 25 July 1997
• Docket Number: No. 960684-CA,960684-CA
• Citation: ProMax Development Corp. v. Mattson, 943 P.2d 247 (Utah App. 1997)
• Parties: 322 Utah Adv. Rep. 35 PROMAX DEVELOPMENT CORPORATION, Plaintiff, Appellant, and Cross-appellee, v. Matt MATTSON and Sherie Mattson, Defendants, Appellees, and Cross-appellants.
• Court: Utah Court of Appeals

Page 247

943 P.2d 247

322 Utah Adv. Rep. 35

PROMAX DEVELOPMENT CORPORATION, Plaintiff, Appellant, and Cross-appellee, v. Matt MATTSON and Sherie Mattson, Defendants, Appellees, and Cross-appellants.

No. 960684-CA.

Court of Appeals of Utah.

July 25, 1997.

Rex E. Madsen, Korey D. Rasmussen, and David L. Pinkston, Snow, Christensen & Martineau, Salt Lake City, for Appellant.

Steven C. Russell, G. Brent Smith, and Curt W. Morris, Affordable Legal Advocates, Salt Lake City, for Appellees.

Before WILKINS, Associate P.J., and GREENWOOD and JACKSON, JJ.

OPINION

GREENWOOD, Judge:

Appellant ProMax Development Corp. (ProMax) challenges the trial court's judgment in favor of appellees Matt and Sherie Mattson, arguing that (1) the evidence presented at the bench trial does not support the trial court's finding of intentional interference with contractual relations; (2) the trial court erred in not considering newly discovered evidence, which indicates that ProMax should not be held liable for intentional interference with contractual relations; and (3) even if ProMax is liable, the evidence does not support the amount of damages awarded. The Mattsons cross appeal, claiming (1) the trial court awarded them insufficient damages; and (2) the trial court erred in refusing to award punitive damages and attorney fees. We affirm for the most part, but reverse and remand in part for further proceedings regarding damages.

BACKGROUND ¹

The Mattsons contracted with ProMax, through ProMax's employee Phil Bates, to build a home. At trial, ProMax claimed the contract was a cost-plus arrangement in which the Mattsons would pay the cost of building the home plus a $10,000 builder's fee. The Mattsons claimed, however, that the contract was a fixed-price arrangement in which they would pay a flat price of $219,200--$190,200 for the home, plus $29,000 for one-half the cost of the lot. A number of witnesses testified on this issue, including Mr. Mattson, who testified it was a fixed-price contract, and Bates, who testified it was a cost-plus contract. The trial court accepted the Mattsons' position and held that the contract was a fixed-price arrangement for $219,200. In making this finding, the trial court noted that the evidence presented by ProMax was "too inconsistent and contradictory to be persuasive."

Construction costs exceeded the $190,200 designated as the cost for building the home resulting in significant cost overruns. The Mattsons were forced to pay the overruns from their own funds instead of through their construction financing arrangement. ProMax claimed that the overruns were due to the Mattsons making changes in the original plans for the home. The trial court found, however, that although the Mattsons were involved in the construction process, they were not made aware of the cost overruns until construction was complete. In this respect, the trial court noted that ProMax had produced no written change orders. The trial court also found that the Mattsons thought they were within the original budget until the home was completed, and that at all times, the Mattsons requested a written contract detailing the specifics of the parties' agreement. ²

Both sides produced evidence regarding the home's fair market value at the time of completion. Culley Davis, ProMax's owner, testified that the home was worth approximately twice the amount of the $190,200 mortgage, or approximately $380,000. Bates testified that he listed the home's value on certain insurance documents as $330,000. Finally, Mr. Mattson testified that, in his estimation, the home was worth $395,000. The trial court found that the home's fair market value at the time of completion was $390,000.

Mr. Mattson testified that (1) he attempted to sell the home and was able to find a buyer, Curtis Johnsen; (2) Johnsen first offered $565,000 for the home, but then reduced the offer to $560,000; and (3) he accepted Johnsen's offer on August 28, 1993. To corroborate this testimony, the Mattsons offered an earnest money agreement (the Earnest Money Agreement) between them and Johnsen. Mr. Mattson testified that he signed the Earnest Money Agreement. The trial court accepted Mr. Mattson's testimony as true, finding that the Mattsons and Johnsen entered into a contract to sell the home for $560,000.

When advised of the proposed sale, Bates insisted that he was entitled to act as selling agent and therefore to collect a selling agent's fee for the sale. Mr. Mattson refused, and in response, Bates threatened to "kill the deal." Accordingly, Bates encouraged several material suppliers to file mechanics' liens on the home. Mr. Mattson testified, and the trial court accepted as true, that Johnsen backed out of the deal because of the liens.

The trial court concluded that ProMax had breached the original cost-plus contract by failing to inform the Mattsons of the cost overruns. However, the trial court found that the parties had "received what they paid for" in this respect and that neither party was entitled to damages relating to the cost overruns.

The trial court also found that ProMax breached its warranty duties by performing defective work and that the Mattsons were forced to pay the costs of remedying the defective work. The trial court awarded the Mattsons $23,000 for these damages.

In addition, the trial court found that ProMax, through its agent Bates, had "maliciously and with intent to harm" interfered with the Mattsons' contractual relations by thwarting the Mattsons' deal to sell their home to Johnsen. As damages for this tort, the trial court awarded the Mattsons $170,000; the trial court calculated this figure by subtracting the home's fair market value, $390,000, from the price agreed to in the contract for sale, $560,000.

Finally, the trial court concluded that insufficient evidence had been presented to award punitive damages.

The trial court issued its oral findings of fact and conclusions of law from the bench on March 18, 1996. On April 2, 1996, ProMax's trial counsel withdrew from the case. On April 4, 1996, a written judgment, reflecting the detailed oral findings, was entered (the April 4 judgment). On April 10, 1996, ProMax's new counsel entered their appearance.

On May 8, 1996, ProMax filed a Motion to Vacate Judgment, pursuant to Rule 60(b) of the Utah Rules of Civil Procedure. ProMax argued that the April 4 judgment drafted by the Mattsons' counsel (1) was not provided to ProMax in the form of proposed findings, in violation of Rule 4-504(2) of the Utah Code of Judicial Administration (providing that proposed judgments must be furnished to opposing party); (2) was entered two days after ProMax's trial counsel withdrew from the case, in violation of Rule 4-506(3) of the Utah Code of Judicial Administration (providing that action in a case cease for twenty days after party whose counsel has withdrawn is notified of obligation to retain new counsel); and (3) did not comport with the trial court's March 5 bench ruling. On May 29, 1996, the trial court granted ProMax's motion to vacate the April 4 judgment, granting ProMax ten days to object to the findings.

On June 10, 1996, ProMax filed a Rule 59(a) motion for partial new trial based on new evidence. ProMax offered new evidence in the form of affidavits, including affidavits from Johnsen and his wife and from two real estate agents involved with the failed sale of the Mattsons' home to Johnsen. None of these people testified at trial, and ProMax's trial counsel had apparently not deposed or otherwise questioned them prior to trial. These affidavits refuted Mr. Mattson's testimony that the sale failed as a result of the mechanics' liens. The Johnsens' affidavits indicated that (1) the Mattsons told the Johnsens they no longer wished to sell the house before they allegedly accepted Johnsen's offer to buy; (2) the Johnsens were unable to raise the money to buy the house; and (3) the mechanics' liens played no part in the Johnsens' decision not to buy the house. The sales agents' affidavits corroborated this information.

In addition, ProMax offered affidavits from witnesses who testified at trial, which allegedly "clarified" testimony given at trial. According to ProMax, these affidavits demonstrated that cost-plus contracts are common and that the arrangement between ProMax and the Mattsons was a cost-plus contract. Finally, ProMax noted that the trial court's first judgment stated that the cost overruns totaled $170,000, but that the only evidence presented at trial was that they totaled $140,000. On July 3, 1996, the trial court denied ProMax's motion for a partial new trial, but ordered that the amount listed as the total of the cost overruns be reduced from $170,000 to $140,000.

On July 29, 1996, the trial court entered an Amended Judgment, which reflected its disposition of the ProMax motion. On August 8, 1996, ProMax filed a Rule 60(b) motion to vacate judgment on the grounds that the Earnest Money Agreement was invalid because (1) it violated the statute of frauds and (2) the offer in the Earnest Money Agreement expired under its own terms without being accepted and before Bates's alleged interference with the transaction. On September 5, 1996, the trial court denied ProMax's Rule 60(b) motion. This appeal followed.

ISSUES

We address the following issues: (1) has ProMax properly preserved its statute of frauds defense; (2) did the trial court err by not considering new evidence offered by ProMax after trial; (3) did the trial court erroneously rule that Bates wrongfully caused the mechanics' liens to be filed, so as to constitute tortious interference with the Mattsons' contractual relations; (4) does the evidence support the trial court's factual findings and legal conclusions; (5) did the trial court err by not including the cost overruns in calculating the Mattsons' damages; and (6) did the trial court err by failing to award punitive damages after a judgment against...