Thompson v. Hanson

• Decision Date: 13 December 1971
• Docket Number: No. 320--III,320--III
• Citation: 491 P.2d 1065,6 Wn.App. 1
• Court: Washington Court of Appeals
• Parties: Max THOMPSON, d/b/a Thompson Sanitary Service & Construction Company, Claimant, v. Lyle HANSON et al., Defendants, Alpine Shores, Inc., a Washington corporation, Respondent, D. S. McHenry, d/b/a Liberty Lake Utilities and Betty McHenry, his wife, Appellants.

Page 1

6 Wn.App. 1

491 P.2d 1065

Max THOMPSON, d/b/a Thompson Sanitary Service & Construction Company, Claimant, v. Lyle HANSON et al., Defendants Alpine Shores, Inc., a Washington corporation, Respondent D. S. McHenry, d/b/a Liberty Lake Utilities and Betty McHenry, his wife, Appellants.

No. 320--III.

Court of Appeals of Washington, Division 3.

Dec. 13, 1971.

Rehearing Denied Jan. 31, 1972.

Robert G. Schimanski, of Schimanski & Leeds, Spokane, for appellants.

J. Orville Humphries, of Humphries & Patterson, Spokane, for respondent.

MUNSON, Chief Judge.

This is primarily a factual appeal. We affirm in part and reverse in part since the evidence does not support one finding of fact which may have influenced the trial court's assessment of damages and remand the case to the trial court for the purpose of reconsideration of its monetary conclusion in light of this opinion.

On March 29, 1966, D. S. McHenry, as an individual, entered into a contract with Alpine Shores, Inc. (Alpine) to construct a sewage treatment plant to serve a tract of land owned by the latter. The contract required McHenry to construct the plant, weather permitting, as soon as reasonably possible. In addition to the service aspect of the contract, it was also within the contemplation of the parties that the construction of the new treatment plant would reduce the odor which emanated from the existing McHenry sewage facilities. The first stage of the plant was not finished until June 1, 1968 and the second stage until November 26, 1969.

In the fall of 1967, Lyle Hanson completed the construction of a dwelling on the land to be served by the McHenry sewage plant. Since it was not operational, Hanson employed Max Thompson to perform sanitary services for his dwelling pending the completion of the treatment plant. In December of 1967, Frank Reno, who had purchased a plot of land from Alpine, completed construction of his home and desired to move in. Since the plant was still not completed and the county health authorities would not allow Reno to connect onto the existing sewage system, Alpine employed Thompson to install steel holding tanks at the Reno residence and to keep them pumped out.

Hanson failed to pay Thompson and Thompson started suit to foreclose his lien upon the Hanson property for the sanitary services rendered. Hanson complained over against Alpine, his predecessor in interest, in the amount of the Thompson claim, plus an additional $261.25 for the amount initially paid Thompson. Alpine in turn complained over against McHenry for (1) the Hanson claim, (2) the Reno sanitary service charge, and (3) additional damages suffered by Alpine because of McHenry's failure to complete the construction of the treatment plant as soon as reasonably possible. The trial court rendered judgment in favor of Alpine and McHenry appeals.

The trial court found: A reasonable time for completion of the primary stage of the plant was July 31, 1967; sewer service could have been provided Hanson and Reno from that date. Therefore, the trial court granted judgment against McHenry for (1) $2,125.56 for the Thompson claim against Hanson, plus $261.25 previously paid by Hanson to Thompson; and (2) $2,037.22 for temporary sewer service for the Reno residence expended by Alpine. As to these matters we affirm the trial court. There is substantial evidence to support the finding relative thereto and the judgment entered thereon.

The trial court further found: A reasonable date for completion of the second stage was December 31, 1967; a worse odor emanated from the treatment facilities after completion of the primary stage than previously and this condition persisted until the second stage was completed which detrimentally affected the sale of lots; ¹ that Alpine suffered additional damages because of the unreasonable time it took McHenry to complete the project: (a) interest payments and property taxes incurred by Alpine's inability to sell lots; ² (b) in order to obtain working capital, Alpine was forced to sell several lots at 50 per cent of the anticipated sale price because of the purchaser's inability to obtain building permits until the primary stage of the plant was complete; ³ and (c) Alpine suffered additional loss of profit due to McHenry's breach inasmuch as there was a substantial increase in the interest rate on construction loans and other economic developments from December 1967 to November 1969 which made it difficult for purchasers to obtain construction financing thereby requiring Alpine to reduce the sales price of vacant lots 25 per cent. ⁴ In assessing damages on these findings the trial court entered a lump-sum figure of $43,775.

We believe these additional findings, ⁵ with the exception of (c) above, are supported by substantial evidence, although disputed.

In Larsen v. Walton Plywood Co., 65 Wash.2d 1, 6, 390 P.2d 677, 681 (1964) the court stated:

(1) damages for breach of contract in this state can be recovered only for such losses as were reasonably foreseeable by the party to be charged, at the time the contract was made. Lewis v. Jensen, 39 Wash.2d 301, 235 P.2d 312; (2) if the injury was not foreseeable, then it must specifically be shown that the defendant had special knowledge of the risk he was undertaking. Dally v. Isaacson, 40 Wash.2d 574, 245 P.2d 200.

Continuing further in Larsen at page 15, 390 P.2d at page 686 the court stated:

The modern view is that they (lost profits) are properly recoverable as damages when (1) they are within the contemplation of the parties at the time the contract was made, (2) they are the proximate result of defendant's breach, and (3) they are proven with reasonable certainty.

The evidence does not sustain a conclusion that the wide swing in interest rates was within the contemplation of the parties at the time the contract...