Retrovest Associates, Inc. v. Bryant

• Decision Date: 26 January 1990
• Docket Number: No. 86-213,86-213
• Citation: 153 Vt. 493,573 A.2d 281
• Court: Vermont Supreme Court
• Parties: RETROVEST ASSOCIATES, INC. v. Thomas W. BRYANT and Yola M. Carlough.

Page 281

573 A.2d 281

153 Vt. 493

RETROVEST ASSOCIATES, INC. v. Thomas W. BRYANT and Yola M. Carlough.

No. 86-213.

Supreme Court of Vermont.

Jan. 26, 1990.

Leighton Detora and Paul R. Clemente (on the brief) of Valsangiacomo, Detora, McQuesten, Rose & Grearson, Barre, for plaintiff-appellant.

Robert P. Davison, Jr., Stowe, for defendants-appellees.

Before ALLEN, C.J., PECK, GIBSON and DOOLEY, JJ., and BARNEY, C.J. (Ret.), Specially Assigned.

DOOLEY, Justice.

Plaintiff Retrovest Associates appeals from an order of the Lamoille Superior Court awarding damages to defendants Bryant and Carlough and denying plaintiff foreclosure and attorney's fees. We affirm.

In March 1983, defendants engaged plaintiff to inspect an old farmhouse they were interested in purchasing in Stowe, Vermont. Plaintiff's president, David Scheuer, walked through the house with defendants, noted some problem areas, especially a sag in the kitchen floor, but otherwise found no major structural defects. Defendants then bought the house and, setting aside $40,000 in a special construction account, hired plaintiff to do renovations. Their plans included adding a dormer to expand the upstairs, adding a bathroom, expanding the kitchen and repairing its floor, relocating certain interior walls, exposing beams in the ceiling, and converting the garage into a living-dining area. Work began about the 1st of June, 1983.

Disagreements arose as the work progressed more slowly than anticipated and as costs mounted. It became apparent that some sills, floor joists, and other structural timbers required replacement, which had not been contemplated when plaintiff first contracted to do the work. As a result, plaintiff's crew gutted most of the interior of the house, and the part of the house that contained the kitchen was entirely demolished. Defendants paid the bills as they came due up to $43,000.

At this point, defendants had exceeded their budget and the parties had to renegotiate their arrangement. In October of 1983, plaintiff prepared and gave to defendants a list of the work remaining, with a projected cost (including the outstanding balance on the previous bill) of $23,680.60. On October 24, 1983, defendants signed a note declaring that they "promise to pay to Retrovest Associates ... a sum of money, not to exceed twenty thousand dollars, said sum being the total of unpaid invoices for materials and labor furnished by [plaintiff] to [defendants'] residence ... between September 1, 1983 and November 15, 1983, said sum being established on or before December 1, 1983." The note, secured by a mortgage on the property, set up a schedule of payments beginning on January 31, 1984.

On December 6, plaintiff sent defendants a bill for services rendered since the signing of the note, along with the earlier outstanding balance, in a total amount of $22,181.40. Defendants failed to pay according to the schedule provided in the note. Consequently, in June of 1984, plaintiff began an action in superior court to foreclose the mortgage. Defendants sought to void the note on grounds of duress and filed a counterclaim for consumer fraud and breach of the initial renovation contract. Both parties sought attorney's fees.

The case was tried by a jury on the legal claims in 1985. ¹ The jury rejected defendants' consumer fraud claim (with its ancillary request for punitive damages and attorney's fees) but awarded defendants $30,130 in damages for breach of contract. In a separate verdict, the jury awarded plaintiff $23,000 damages under the October 24, 1983 agreement. ²

Both parties filed post-trial motions, including a request by plaintiff for attorney's fees and costs. On March 14, 1986, the trial court issued findings and conclusions relating to the mortgage foreclosure. It ordered a consolidation of the two verdicts, resulting in a net award of $7,130 plus interest to defendants. The court concluded that the mortgage was discharged and dismissed the foreclosure action, denying plaintiff any attorney's fees and costs.

Plaintiff raises three grounds for appeal: that the evidence does not support the $30,130 verdict for defendants; that the court erred in dismissing the foreclosure claim; and that the court erred in denying plaintiff costs and attorney's fees. ³

I.

The measure of damages when a contractor breaches a construction contract is " 'the reasonable cost of reconstruction and completion in accordance with the contract, if this is possible and does not involve unreasonable economic waste.' " VanVelsor v. Dzewaltowski, 136 Vt. 103, 105-06, 385 A.2d 1102, 1104 (1978) (quoting 5 A. Corbin, Contracts § 1089, at 485 (1964)). The jury in this case had before it an abundance of evidence going to the costs of reconstruction and completion of the renovations on defendants' house, as well as evidence going to the parties' understanding at the time of the initial contract. Although the evidence was conflicting and contested, that does not relieve the jury of its duty to determine to the best of its ability the damages due the nonbreaching party. "[D]ifficulty in computing damages does not preclude the jury from making an assessment if there is evidence from which an estimation may be made with reasonable certainty." Lemnah v. American Breeders Service, Inc., 144 Vt. 568, 580, 482 A.2d 700, 707 (1984); see Meadowbrook Condominium Ass'n v. South Burlington Realty Corp., 152 Vt. 16, 27, 565 A.2d 238, 244 (1989). This Court is not, of course, permitted to second-guess the jury; we must affirm its verdict "unless it appears to be clearly erroneous when the supporting evidence is viewed in the light most favorable to the prevailing party and any modifying evidence is disregarded." Meadowbrook Condominium, 152 Vt. at 26, 565 A.2d at 244; see Claude G. Dern Electric, Inc. v. Bernstein, 144 Vt. 423, 426, 479 A.2d 136, 138 (1984) (Court will sustain jury verdict where it is justified by any reasonable view of evidence). Although we are not privy to the methods used by the jury to arrive at its verdict, nor to which evidence it found credible and persuasive and which it did not, we find that the verdict of $30,130 is supportable by the evidence in the record.

Plaintiff insists that the calculation of defendants' damages must derive from a document prepared by defendants' expert witness. This document contains two lists that summarize the estimated costs to repair and complete the work in accordance with the contract. The first list, entitled "Items in contract not completed by contractor," contains four items and totals $57,800. The second, "Defective items billed--to be repaired," includes ten items and totals $16,325. Plaintiff argues that the jury had to choose one of the totals, or the sum of both, and because their award is none of these amounts, it cannot be sustained. Plaintiff further argues that only the lesser amount, $16,325, can be reconciled with the verdict for plaintiff. ⁴

There are a number of flaws in plaintiff's argument. First, it is based on the untenable premise that the jury could not accept some of the items on the expert's lists while rejecting others. In fact, there were numerous theories under which the jury could pick and choose. ⁵ Second, defendants testified to items not included in the expert's lists. The jury may have awarded damages for some of these items. ⁶ Third, the jury may have held plaintiff liable for not completing the project in the time promised--evidence was introduced to show that time was of the essence to defendants. Any of these matters may have figured in the jury's verdict. Finally, plaintiff seeks to narrow the jury's choices based on conflicts between the verdicts. Given the various theories advanced by the parties, there are numerous ways to reconcile the verdicts without imposing substantial limits on the components of defendants' damages that the jury could recognize. In sum, this was a case in which the jury could reach virtually any amount within very wide limits. ⁷

II.

The trial court consolidated the two verdicts, ordering plaintiff to pay the difference, $7,130, plus interest from the date of its judgment, to the defendants. The court, "consider[ing] itself bound by those verdicts as they apply to any facts dealing with the equitable issues," then determined that since no debt was owing to plaintiff, foreclosure was unavailable. Plaintiff contends that it retained its right to foreclose on the note because the jury found in its favor on that issue. In addition, plaintiff claims attorney's fees and costs under the note, ⁸ based on an affidavit filed with the trial court after the trial, in an amount of $11,175.28.

The first hurdle for plaintiff in pursuing these claims on appeal is that it appears doubtful that the jury award of $23,000 for plaintiff was based on the note itself. The court instructed the jury that they may treat the October 24 agreement as an executory contract rather than a promissory note, and the jury's verdict--larger by $3,000 than the maximum amount promised in the note--indicates that they rejected the theory that the note was the extent of the agreement. Only the note was secured by the mortgage, however; if plaintiff's verdict was not based on the note but rather on an underlying unsecured and unwritten agreement, foreclosure is not an available remedy. In addition, if this were the case, each party was properly ordered to bear its own costs. See Anderson v. State, 147 Vt. 394, 395, 518 A.2d 360, 360 (1985) (attorney's fees not awarded "without special legal authority or as a matter of contract").

Even if plaintiff's verdict--or a portion thereof--had its source in the secured note, however, the trial court properly denied foreclosure. A mortgage must be discharged when the underlying debt is paid. Island Pond National Bank v. Lacroix, 104 Vt. 282, 294, 158 A. 684, 690 (1932). Similarly, the mortgage must be discharged when the mortgagor establishes an offset...