Three Way, Inc. v. Burton Enterprises, Inc.

• Decision Date: 21 February 2008
• Docket Number: No. S-07-0139.,No. S-07-0140.,S-07-0139.,S-07-0140.
• Parties: THREE WAY, INC., a Wyoming Corporation, Appellant (Plaintiff), v. BURTON ENTERPRISES, INC., a Wyoming Corporation, Appellee (Defendant). Burton Enterprises, Inc., a Wyoming Corporation, Appellant (Defendant), v. Three Way, Inc., a Wyoming Corporation, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

177 P.3d 219

2008 WY 18

THREE WAY, INC., a Wyoming Corporation, Appellant (Plaintiff), v. BURTON ENTERPRISES, INC., a Wyoming Corporation, Appellee (Defendant).

Burton Enterprises, Inc., a Wyoming Corporation, Appellant (Defendant), v. Three Way, Inc., a Wyoming Corporation, Appellee (Plaintiff).

No. S-07-0139.

No. S-07-0140.

Supreme Court of Wyoming.

February 21, 2008.

Representing Appellant in case No. S-07-0139: Christopher M. Wages and Greg L. Goddard of Goddard, Wages & Vogel, Buffalo, Wyoming. Argument by Mr. Goddard.

Representing Appellee in case No. S-07-0139: Mark W. Gifford of Casper, Wyoming.

Representing Appellant in case No. S-07-0140: Mark W. Gifford of Casper, Wyoming.

Representing Appellee in case No. 5-07-0140: Christopher M. Wages and Greg L. Goddard of Goddard, Wages & Vogel, Buffalo, Wyoming. Argument by Mr. Goodard.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

VOIGT, Chief Justice.

[¶ 1] This is a dispute in which, after a jury trial on some issues, and a bench trial on other issues, the district court ordered specific performance of a contract for the construction of certain water and sewer mains. The plaintiff contractor (Three Way) sued for the value of its services or for specific performance of the contract. The defendant owner (Burton) counterclaimed for breach of contract and breach of the warranty of workmanship. After the jury found that Burton breached the contract, the district court found the contract to be unambiguous and ordered specific performance, rather than money damages. Three Way appealed that decision. Burton then cross-appealed, alleging that the jury had been improperly instructed and that the district court had erred in an evidentiary ruling. We affirm.

ISSUES

[¶ 2] 1. Whether the district court's judgment and order should be summarily affirmed because of Three Way's non-compliance with W.R.A.P. 7.01(e)(2)?

2. Whether the district court abused its discretion in denying Three Way's motion for leave to amend its complaint?

3. Whether the district court abused its discretion when it granted, in part, Burton's motion in limine?

4. Whether the district court erred as a matter of law when it denied Three Way's motion to affirm the jury's verdict?

5. Whether the district court abused its discretion in instructing the jury as to Three Way's duty of workmanship?

6. Whether the district court abused its discretion by admitting evidence of Three Way's claimed money damages?

FACTS

[¶ 3] Burton planned to develop property it owned in Buffalo, Wyoming. On April 8, 2003, Three Way submitted to Burton a bid for $353,604.30 for the construction and installation of certain water and sewer mains related to that development. Burton did not accept that bid. Instead, the parties entered into a written agreement whereby Three Way was to perform the work in exchange for the following consideration:

10. Upon completion of the above described work by Contractor and when such work is approved by Owner and Engineer, Owner will convey the following described property to Contractor:

(a) Lot 20 and Lot 19 of the Village West Estates Subdivision as described on Exhibit A;

(b) Certain property in the City of Buffalo, Wyoming consisting of approximately 7.81 acres more particularly described as

See Exhibit B

(c) A 20 foot easement along the East/West boundary of the South End of the Village West Estates Subdivision and Village West Mobile Home Park for future construction of a Sewer lift line in the Mobile Home Park Extension for the purpose of a future hook up to City sewer. Easement will follow lot line to the South East manhole.

At such time and place as mutually agreed to by the parties in accordance with the terms of this agreement, Owner shall deliver to Contractor a good and sufficient deed, subject to all real estate taxes for 2003, exceptions, reservations, covenants, conditions, restrictions, easements, rights of way, reservations and rights of record and subject to any state of facts which would be disclosed by an accurate survey or physical inspection of the premises and subject to building, zoning, subdivision or other regulations of any private or governmental entity.[¹]

. . . .

12. The above described property will be conveyed "as is," in its present condition. There are no representations, covenants or agreements by Owner or between the parties with reference to the quality, condition, or status of the property except as specifically set forth in this Agreement, and any such warranties are hereby disclaimed. Contractor is not relying upon any representations by Owner or Owner's agents as to any condition which Contractor deems to be material to Contractor's decision to enter into this Agreement.

[¶ 4] In addition to the disclaimers contained in paragraph 12 as set forth above, the Agreement also provided as follows:

17. This agreement contains the entire agreement between the parties. All' prior representations made in the negotiations of this sale have been incorporated herein, and there are no oral agreements or representations between the Owner, Contractor, or their agents to modify the terms and conditions of this agreement. Contractor acknowledges and agrees that Contractor is not relying upon any representations of Owner or Owner's agents as to any condition of the property which Contractor deems to be material to Contractor's decision to enter into this Agreement. This Agreement may not be modified except by a written instrument signed by each of the parties.

[¶ 5] At the time the parties executed the agreement, Exhibit B was not attached. Two weeks later, however, Burton provided Exhibit B, in the form of an Affidavit of Lot Division, splitting off, the 7.81 acre parcel mentioned in the agreement from a smaller commercial lot retained by Burton. Much of the present controversy was engendered by the fact that Exhibit B shows the 7.81 acres as a single undeveloped parcel, but Three Way contends that Burton had agreed to subdivide the parcel into seven developed lots, with a completed street access.

[¶ 6] After work under the agreement had commenced, Burton proposed additional work for Three Way to perform. Three Way agreed, and paragraph 10 of the agreement was amended, in pertinent part, to convey Lots 22 and 24, rather than Lots 19 and 20, to Three Way as additional compensation.² The language concerning the 7.81 acre tract was not amended.

[¶ 7] As the project neared completion, high groundwater in the area caused excessive water to appear in valve boxes, requiring "trench plugs" or other remedial measures. Each party considered those remedial measures to be the responsibility of the other. A stalemate ensued, with Three Way refusing to fix the problem, and Burton refusing to convey the 7.81 acres. This lawsuit followed.

[¶ 8] Three Way fired the first volley in the litigation with the filing of a complaint on April 12, 2005, alleging breach of contract and unjust enrichment. Three. Way sought monetary damages "in excess of $400,000.00," or alternatively, specific performance of the contract in the form of conveyance of the 7.81 acres. Burton's counterclaim alleged breach of contract and breach of warranty, both based upon the valve box water problem. On April 26, 2006, the district court set the matter for trial on July 17, 2006.

[¶ 9] On May 26, 2006, Three Way filed a motion to amend its complaint, seeking now to allege reformation of contract, breach of the written contract, breach of an oral contract, unjust enrichment, fraud in the inducement, and promissory estoppel. Generally, Three Way justified the motion on the ground that "Mellowing limited discovery in this matter, additional facts and evidence have surfaced, and Plaintiff needs to amend its Complaint in order to conform to the specific circumstances of this case." Burton's objection to the motion argued (1) the motion did not comply with W.R.C.P. 7(b) because it did not state its supporting grounds with particularity; (2) the motion was occasioned by undue delay, bad faith, dilatory motive and undue prejudice; (3) the allegations of the amended complaint were inconsistent; (4) the allegations of the amended complaint were known to Three Way prior to its filing of the original complaint; and (5) the proposed amendment did not have substantial merit and Three Way had not come forward with convincing evidence supporting the new claims.

[¶ 10] The district court held a pre-trial conference on June 12, 2006, at which time it denied both parties' motions for summary judgment and Three Way's motion to amend its complaint. The pre-trial conference was not reported, so there is no transcript of the proceedings, but Three Way avers in its brief that its motion to amend was denied during that conference. Likewise, the record contains no order denying the motion. The only record of the denial and the rationale therefore is found in this sentence from the post-trial decision letter: "Plaintiff untimely requested permission to amend to plead fraud, but this was denied by the court."

[¶ 11] The scheduled trial was to be bifurcated, in that the jury was to determine whether either party breached the contract, the value of Three Way's services, and the amount of Burton's damages if Three Way was found in breach. Just before trial, Burton filed a motion in limine seeking to exclude any evidence regarding (1) the monetary value of Three Way's services, and (2) Burton's alleged promise to subdivide and improve the 7.81 acre parcel. Succinctly stated, Burton argued that the unambiguous contract provided neither for the payment of monetary compensation, nor for subdivision and improvement of the parcel. The motion was heard on the first day of trial, with the district court denying the motion as to evidence of the monetary value of Three Way's services, but granting the motion as to evidence of any promise to subdivide and improve the parcel.

[¶ 12] The jury returned a verdict...