Robey v. Parnell

• Decision Date: 10 January 2017
• Docket Number: NO. 33,852,33,852
• Citation: 392 P.3d 642
• Parties: KENNETH M. ROBEY Plaintiff-Appellee/Cross-Appellant, v. LLOYD G. PARNELL, Defendant-Appellant/Cross-Appellee.
• Court: Court of Appeals of New Mexico

392 P.3d 642

KENNETH M. ROBEY Plaintiff-Appellee/Cross-Appellant,

v.LLOYD G. PARNELL, Defendant-Appellant/Cross-Appellee.

NO. 33,852

Court of Appeals of New Mexico.

Filing Date: January 10, 2017

Yntema Law Firm P.A., Hessel E. Yntema, III, Albuquerque, NM, for Appellee/Cross Appellant.

Lakins Law Firm, P.C., Charles N. Lakins, Albuquerque, NM, for Appellant/Cross Appellee.

HANISEE, Judge.

OPINION

{1} The district court entered a judgment in favor of Plaintiff, Kenneth M. Robey, in his action for breach of contract against Defendant, Lloyd G. Parnell, after a bench trial. Defendant appeals, raising six issues. Plaintiff cross-appeals the district court's dismissal of his claims for unfair and unconscionable trade practices. We reject the arguments of both parties, except as to the district court's award of consequential damages to Plaintiff in the amount of $ 2,500. We reverse as to that amount of damages only and affirm the judgment in all other respects.

BACKGROUND

{2} Plaintiff owns a farm in Lemitar, New Mexico. After nearly fifty years of use, the irrigation well on Plaintiff's property stopped producing water and he contacted Defendant about designing and constructing a replacement well. Defendant provided Plaintiff with two estimates: an initial written estimate and, after some discussion, a final written estimate. The latter estimate indicated the well would be 120 feet deep, and would include, among other things, an annular seal installed to protect the well from biofouling¹ and other contaminants. The replacement well was anticipated to cost $ 37,876.64. Prior to construction, Plaintiff asked Defendant for a written contract, but Defendant told Plaintiff that "he didn't do business that way," and they could proceed based on the estimate, their verbal agreement, and a handshake. Plaintiff agreed. Plaintiff's understanding of the agreement, as told to him by Defendant, was that Defendant would construct a well that would be fully adequate for Plaintiff's irrigation purposes, that it would be capable of producing 2,500 to 3,000 gallons of water per minute, and that it would last at least as long as Plaintiff's prior well, approximately fifty years.

{3} In September 2007 Defendant completed work on the well. The final invoice Defendant submitted to Plaintiff totaled $ 37,334.04. The invoice indicated the well was not 120 but 115 feet deep, and included an added item—a concrete pad—but did not include an annular seal. Defendant told Plaintiff that the shallower depth would "not make any difference[,]" and that the concrete pad was required by the state and would serve the function of an annular seal, which was unnecessary. The absence of an annular seal was contrary to Defendant's verbal representation regarding the well Plaintiff understood would be constructed.

{4} Plaintiff was initially satisfied with the well, but by March 2011, three-and-a-half years after its completion, the well failed to produce anything but a surge of sediment-filled water before it began sucking air. Plaintiff contacted Defendant about the well's failure and Defendant recommended the well be cleaned out. But in order for the well to be cleaned out, the concrete pad first had to be removed. Plaintiff again discussed the annular seal with Defendant, who told Plaintiff that an annular seal was not required when Plaintiff's well was constructed but that he could add one, although it really was not necessary. Following the well's clean-out, its performance did not improve.

{5} After some further unproductive communications with Defendant, Plaintiff filed suit in August 2011. At the bench trial, Plaintiff testified that instead of being 120 feet deep as described in the estimate, or 115 feet deep as described in the invoice, the well was less than 105 feet deep. Additionally, Plaintiff testified that he discovered that the concrete pad was not required by the state, and that it was his belief that the pad was actually used to conceal the fact that an annular seal had not been installed as promised. Plaintiff's expert testified to numerous issues with the well, including Defendant's failure to install the annular seal described in the estimate, a component Plaintiff's expert explained was required by state regulation. Plaintiff's expert further testified that the well was not constructed to a workmanlike standard, and ultimately concluded that the failure of the well was caused by a number of factors, including Defendant's negligent design and construction and biofouling attributable to Defendant's failure to install the annular seal or sanitize his tools and materials. Defendant's expert disputed the cause of the biofouling and the failure of the well. In Defendant's expert's view, the biofouling of the well was caused by naturally occurring bacteria, and could have been prevented through routine maintenance, which was the responsibility of the well owner.

{6} After a three-day bench trial, the district court entered its findings of fact and conclusions of law. Crediting Plaintiff's testimony, the district court found that Defendant told Plaintiff the new well would last at least as long as the old one, or for about fifty years, and concluded that, as a matter of law, this statement amounted to an express warranty. The district court further concluded, based on the Plaintiff's expert's testimony, that Defendant failed to design and construct the well in a workmanlike manner with the ordinary skill of those who undertake such work. Additionally, based on the estimate provided by Defendant, Plaintiff's testimony, and Plaintiff's expert's testimony, the district court concluded Defendant failed to perform all contracted-for obligations and breached his contract with the Plaintiff. The district court also found that Defendant negligently made numerous false or misleading material representations to Plaintiff regarding the well's specifications and capabilities and the state's requirements for the well, and determined that Defendant negligently represented, by omission, "reductions in quantity and changes in quality of the materials provided," as compared to what was originally specified in the estimate.

{7} The district court entered judgment for Defendant on Plaintiff's claims for unfair and unconscionable trade practices, finding that Plaintiff failed to demonstrate that Defendant knowingly made false or misleading statements and that Defendant's acts and practices constituted an unconscionable trade practice. The district court also denied Defendant's request for attorney fees, determining that Plaintiff's unfair trade practices claim was not groundless. The district court concluded that Plaintiff was entitled to compensatory damages in the amount of $ 37,334.04, the total amount Plaintiff paid to Defendant for design and construction of the well, and consequential damages in the amount of $ 14,997.74.

{8} Defendant appeals the district court's judgment, raising the following issues: (1) The district court erred in finding that an express warranty was created, (2) The district court erred in finding Defendant breached the contract based upon differences in the estimate and the well as built, (3) The district court erred in finding Defendant to be in breach of contract for failure to design and construct the well in a workmanlike manner with the ordinary skill of those who undertake such work, (4) The district court erred in determining Plaintiff was entitled to consequential damages based on negligent misrepresentation, (5) The district court erred in awarding consequential damages, and (6) The district court erred in finding that Plaintiff's unfair trade practices claim was not groundless.

{9} Plaintiff cross-appeals, raising the following claims of error: (1) The district court erred in denying Plaintiff's claim for unfair trade practices; and (2) The district court erred in denying Plaintiff's claim for unconscionable trade practices.

DISCUSSION

Standard of Review

{10} Plaintiff and Defendant disagree as to the appropriate standard of review for the district court's findings of fact. Yet, this Court has definitively stated the standard that "the judgment of the trial court will not be disturbed on appeal if the findings of fact entered by the court are supported by substantial evidence, are not clearly erroneous, and are sufficient to support the judgment." Bank of New York v. Romero , 2011–NMCA–110, ¶ 7, 150 N.M. 769, 266 P.3d 638, rev'd on other grounds , 2014–NMSC–007, 320 P.3d 1. "Substantial evidence is such relevant evidence that a reasonable mind would find adequate to support a conclusion." Landavazo v. Sanchez , 1990–NMSC–114, ¶ 7, 111 N.M. 137, 802 P.2d 1283. In reviewing a claim of insufficient evidence, we resolve "all disputes of facts in favor of the successful party and indulge[ ] all reasonable inferences in support of the prevailing party." Las Cruces Prof'l Fire Fighters & Int'l Ass'n of Fire Fighters v. City of Las Cruces , 1997–NMCA–044, ¶ 12, 123 N.M. 329, 940 P.2d 177. "Findings of fact may properly be given a liberal interpretation if the interpretation is supported by the evidence." Herrera v. Roman Catholic Church , 1991–NMCA–089, ¶ 14, 112 N.M. 717, 819 P.2d 264. Lastly, this court "will not reweigh the evidence nor substitute our judgment for that of the fact [-]finder." Las Cruces Prof'l Fire Fighters , 1997–NMCA–044, ¶ 12, 123 N.M. 329, 940 P.2d 177.

{11} Regarding the parties' challenges to the district court's conclusions of law, we apply de novo review. See Gallegos v. State Bd. of Educ. , 1997–NMCA–040, ¶ 11, 123 N.M. 362, 940 P.2d 468.

Defendant's Claims of Error

1. The District Court Did Not Err in Finding an Express Warranty

{12} Defendant first challenges the district court's conclusion that Defendant's statements to Plaintiff created an express warranty and that Defendant breached his contract with Plaintiff when the well failed to meet that warranty. Specifically, Defendant states the district court's...