Case Title: CITY OF GILLETTE, WYOMING V. HLADKY CONSTRUCTION, INC.

Citation: 

Docket Number: S-07-0291

State: wyoming

Court: Wyoming Supreme Court

Date: 2008-11-14T00:00:00Z

Document:
CITY OF GILLETTE, WYOMING V. HLADKY CONSTRUCTION, INC.2008 WY 134196 P.3d 184Case Number: S-07-0291, S-07-0292, S-07-029Decided: 11/14/2008
OCTOBER 
TERM, A.D. 2008

 
 

CITY 
OF GILLETTE, 
WYOMING,Appellant(Defendant),v.HLADKY 
CONSTRUCTION, INC.,Appellee(Plaintiff).

 
 

Appeal 
from the DistrictCourtofCampbellCounty

The 
Honorable Dan Spangler, Judge, Retired

 
 
Representing 
Appellant:

Raymond 
B. Hunkins and Amanda Hunkins Newton of Jones, Vines & Hunkins, Wheatland, Wyoming.

 
 
Representing 
Appellee:

Patrick 
Murphy of Williams, Porter, Day & Neville, P.C., Casper, Wyoming; Tad T. 
Daly of Daly Law Associates, P.C., Gillette, Wyoming.

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

 
 
KITE, 
Justice.

 
 
[¶1]  A jury awarded Hladky Construction, Inc. 
(HCI) damages in the amount of $1,125,436.77 against the City of Gillette (City) for breach 
of the implied covenant of good faith and fair dealing.  The district court entered judgment on 
the verdict and, subsequently, awarded HCI attorney fees and costs pursuant to 
the parties' contract.  

 
 
[¶2]  In its first appeal, the City claims HCI 
did not comply with the Wyoming Governmental Claims Act in presenting its notice 
of claim and, therefore, the district court lacked subject matter jurisdiction 
to consider its claims.  
Alternatively, the City claims the district court erred in several 
respects in not granting its motions for judgment as a matter of law and in 
failing to adequately instruct the jury.  
In its second and third appeals, the City claims the district court erred 
in awarding attorney fees.  We find 
no reversible error and affirm.  

 
 
 
 
STATEMENT 
OF THE ISSUES

 
 
[¶3]  In its first appeal, the City presents 
the following issues: 

 
 
            
A.        Where 
it is established in a breach of construction contract suit that the City of 
Gillette, the 
owner, neither did anything forbidden by the contract nor failed to do something 
required by the contract, may Hladky Construction, Inc., the contractor, still 
recover for breach of an implied covenant of that contact?

 
 
            
B.        Where 
the City of Gillette did not breach its contract with Hladky Construction, Inc., 
could delay and breach of contract, "total cost" damages be awarded for breach 
of an implied covenant, where the contract provided for an exclusive remedy of 
time extension and where Hladky Construction, Inc. failed to prove the predicate 
for using the total cost method.

 
 
            
C.        Where 
Hladky Construction, Inc. asked for and received a change order, without 
reservation of rights, and accepted $71,133.00 in extra compensation for 
changing from its problematic supplier, is Hladky Construction, Inc. allowed to 
accept the change order, take the money, change suppliers and then later bring 
suit and be awarded additional damages allegedly caused by choosing the wrong 
supplier?

 
 
            
D.        Must 
the trial court enforce contract procedures for asserting a claim which are 
conditions of bringing suit, and if it fails to do so must it at least instruct 
on them and allow relevant evidence bearing on the conditions to be 
admitted?

 
 
            
E.        Did 
the trial court (and does this court) have subject matter 
jurisdiction?

 
 
[¶4]  HCI rephrases the issues as follows: 

 
 
            
A.        Has 
Wyoming 
already held that a party can breach its implied covenant of good faith and fair 
dealing without breaching the express terms of its 
contract?

 
 
            
B.        Did 
the trial evidence support the jury's verdict that the City of Gillette breached its 
implied covenant of good faith and fair dealing?

 
 
            
C.        Where 
the contract does not contain a "no damages for delay" clause, is the contractor 
entitled to recover delay damages?

 
 
            
D.        Did 
the district court correctly instruct the jury on proper damage calculation 
methods when multiple calculation methods were presented at 
trial?

 
 
            
E.        Did 
the trial evidence support the jury's verdict that HCI complied with all the 
contractual conditions precedent to pursuing its claim for delay 
damages?

 
 
            
F.         
Did the trial court correctly conclude that the City of Gillette failed to prove 
that change order No. 2 was an accord and satisfaction, or waiver, of HCI's 
claim for delay damages?

 
 
            
G.        Did 
the district court properly exercise its discretion when it precluded the City 
from presenting evidence of HCI's conduct on two prior and unrelated 
claims?

 
 
            
H.        Did 
HCI's governmental claim contain sufficient information to vest the district 
court with subject matter jurisdiction?

 
 
[¶5]  In its second and third appeals, the 
City presents the following issues: 

 
 
            
A.        Where 
a contractual provision allows for reasonable attorneys' fees, and costs of suit 
to be awarded to the prevailing party in a suit to enforce rights under the 
Contract Documents, does a finding that the party against whom suit was filed 
was not in breach of the contract, preclude the award of those attorneys' fees 
to the plaintiff?

 
 
            
B.        Where 
Hladky Construction, Inc. disclaimed the Contract's provisions at the trial of 
this matter, can it simultaneously seek the benefits of the Contract's 
fee-shifting provision allowing reasonable attorneys' fees, and costs of 
suit?

 
 
            
C.        
Whether Hladky Construction, Inc. brought two claims against the City of 
Gillette, 
failing on one claim, and succeeding on the other claim, is it required, as a 
matter of law, to segregate its fees between its successful and unsuccessful 
claims, and does its failure to segregate its fees preclude the 
award?

 
 
            
D.        
Whether the District Court abused its discretion by: (1) allowing Hladky 
Construction, Inc. to increase the hourly rate for its attorney once the Jury's 
decision became known; (2) awarding substantial attorneys' fees to Hladky 
Construction, Inc. for dispositive motions that were untimely, and not heard by 
the Court; and (3) awarding Hladky Construction, Inc. its electronic research 
charges?

 
 
            
E.        Did 
the District Court (and does this Court) have subject matter 
jurisdiction?

 
 
HCI 
re-states substantially the same issues.

 
 
FACTS

 
 
[¶6]  In 2000, the City embarked on a project 
to remodel and expand City Hall.  
The City hired Schutz Foss Architects, P.C., (Schutz Foss) as the project 
architect.  Schutz Foss assigned its 
employee, Kyle Gillette, to act as project manager on site during 
construction.  HCI, a Gillette 
construction company owned and operated by Mike and Judy Hladky, was one of four 
companies that submitted a bid for the project.

 
 
[¶7]  The project specifications required 
precast concrete exterior panels to be installed on the new part of the building 
to match the panels on the existing structure.  The specifications provided:  "[T]he precast concrete manufacturing 
plant shall be certified by the Precast/Prestressed Concrete Institute, Plant 
Certification Program, prior to the start 
of production."  Bill Oakey, a 
structural engineer retained by Schutz Foss for the City Hall project, added the 
italicized language to what was otherwise a standard American Institute of 
Architects (AIA) provision after learning that only one certified precast 
concrete manufacturing plant, Gage Brothers Concrete Productions, Inc. (Gage 
Brothers), planned to bid on the project.  
In order to promote competitive bidding and keep Gage Brothers from 
artificially inflating its bid, Mr. Oakey added the italicized language so that 
other uncertified manufacturing plants could bid and be considered for the 
project and become certified later, before beginning production of the precast 
panels.  

 
 
[¶8]  In the bid it initially prepared for 
submission to the City, HCI identified Gage Brothers as its precast panel 
manufacturer.  On the day the City 
accepted bids, however, HCI received a quote from Architectural Sales Products 
(ASP) indicating that Winfrey Architectural Concrete, Inc. (Winfrey) could 
produce the panels at a price $67,585 lower than Gage Brothers' quote.  HCI changed its bid to name Winfrey as 
its precast manufacturer.  At the 
time it submitted its bid, HCI believed Winfrey was a certified precast 
manufacturer.1  

 
 
[¶9]  Mr. Gillette reviewed HCI's bid as well 
as those submitted by three other construction companies.  Mr. Oakey also reviewed the bids, 
checked around and learned that Winfrey was not a certified architectural 
precast panel manufacturer and had been in the process of trying to obtain 
certification for eighteen months.  
He shared this information with Mr. Gillette, but neither he nor Mr. 
Gillette shared it with HCI.  
Despite knowing that Winfrey did not have the necessary certification and 
a contract provision requiring the architect to notify bidders of any objections 
to a bid,2 no City representative objected to 
HCI's use of Winfrey as its precast manufacturer and, on August 24, 2000, the 
City awarded the contract to HCI.  
HCI learned that Winfrey did not have the required certification sometime 
between submitting its bid on August 8, 2000, and signing the contract on August 
24, 2000.   

 
 
[¶10]  On August 31, 2000, one week after 
signing the contract, the parties attended a project meeting.  At the meeting, Mr. Gillette informed 
HCI that the City and the architect needed Winfrey's certification before HCI 
ordered the precast panels. This was contrary to the project specification that 
required the manufacturer to have its certification prior to the start of 
production of the panels.  Mr. 
Gillette's statement concerned Mr. Hladky because in order to complete phase 1 
of the project on schedule, HCI needed to place the order for the precast panels 
very soon and not wait until Winfrey was certified.

 
 
[¶11]  Immediately after the project meeting, 
HCI sent a letter advising Winfrey that it could not order the precast panels 
until Winfrey was certified.  Mr. 
Hladky testified that he also met with Mr. Gillette and Dan Roberts, the 
assistant city engineer, and neither of them would retract Mr. Gillette's 
statement that certification was required before the precasts could be ordered. 
Mr. Hladky also testified that on September 18, 2000, HCI submitted a request 
for a change order to allow it to substitute Gage Brothers for Winfrey as its 
precast supplier at an additional cost of $83,249.23.  Mr. Gillette did not respond to the 
request.   

 
 
[¶12]  On October 5, 2000, Mr. Hladky met with 
city administrator John Darrington, Mr. Roberts and Mr. Gillette in the hope of 
getting the change order request approved.  
Mr. Darrington told Mr. Hladky that he did not have authorization to 
approve the request and that HCI should focus on getting Winfrey certified.  HCI submitted a second change order 
request at the end of October proposing to deduct the price of the precast 
panels from its bid and have the City negotiate with certified suppliers for 
production of the panels "in an effort to minimize the cost of delays, 
litigation, etc."  In the letter, 
HCI stated:  "Due to the ambiguous 
specifications there is potential for a major impact on the schedule causing 
loss of productivity and increased costs."  
Mr. Gillette denied the request.

 
 
[¶13]  HCI followed up with another letter 
dated October 31, 2000, reiterating that the delay caused by the City's action 
and inactions had resulted in additional costs.  HCI advised the City that it would 
monitor and document the costs as the job progressed.  Two weeks later, the city council 
approved a change order to allow HCI to substitute Gage Brothers as its precast 
supplier.  By this time, however, 
Gage Brothers was busy on other projects and could not begin work on the precast 
panels for several weeks.  HCI sent 
another letter dated November 28, 2000, stating in pertinent 
part:

 
 
Pursuant 
to our conversations the last few days we will reschedule the subs as necessary 
to complete the project as efficiently as possible.  With the owner caused delays and the 
winter months upon us the concrete imbed3 delays have caused an extension of 
time for the foundation which will change the rest of the schedule.  We will document those costs for the 
owner[']s account.  

 
 
Although 
Mr. Gillette did not sign the change order approved by the city council until 
the end of January 2001, HCI proceeded with Gage Brothers as the precast panel 
manufacturer. Winter weather and subcontractor schedules further delayed the 
completion date and increased the project cost.  HCI completed the project originally 
scheduled for completion in August of 2001 one year later, in August of 
2002.   

 
 
[¶14]  In March of 2003, HCI submitted a claim 
to the City for $1,300,016.57 in damages allegedly caused by the specification 
change and subsequent delays.  In 
accordance with the contract, the City and HCI attempted unsuccessfully to 
mediate the claim on three separate days.4   HCI then served the City with a 
notice of claim pursuant to Wyo. Stat. Ann. § 1-39-101 (LexisNexis 2007) and 
Art. 16, § 7 of the Wyoming Constitution.  When the City did not respond, HCI filed 
a complaint in district court claiming that the City breached the contract and 
the implied covenant of good faith and fair dealing when it refused to allow HCI 
to order the precast panels from Winfrey until it obtained the required 
certification contrary to the express contract provision requiring certification 
prior to the start of production.  
HCI also claimed the City breached the contract and the implied covenant 
when it failed to approve HCI's change order requests in time for HCI to order 
the precast panels from Gage Brothers and prevent further delay.  The City answered the complaint and 
filed a counterclaim against HCI for breach of the implied covenant of good 
faith and fair dealing and failure to abide by the claims and dispute provisions 
of the contract.   

 
 
[¶15]  Prior to trial the parties submitted 
proposed jury instructions to the district court.  HCI included instructions concerning the 
cardinal change doctrine informing the jury that a cardinal change is a change 
in the contract so profound that it cannot be redressed under the contract, 
constitutes a material change of the contract and relieves the other party from 
its duty to perform under the contract.  
The City submitted instructions as well, including a damage instruction 
setting out the elements required for use of the total cost method of 
calculating damages.         

 
 
[¶16]  On May 29, 2007, the district court 
convened a jury trial.  At the 
conclusion of HCI's case in chief, the City moved pursuant to W.R.C.P. 50 for 
judgment as a matter of law on all of HCI's claims.  The district court granted the motion 
with respect to the cardinal change claim5 but denied it on the breach of 
contract and breach of the implied covenant claims.  The City proceeded with its defense and, 
after HCI presented its rebuttal witnesses, renewed its motion for judgment as a 
matter of law.  The district court 
again denied the motion.  

 
 
[¶17]  After a five week trial, the jury 
returned a verdict finding that the City had not breached the contract but had 
breached the implied covenant of good faith and fair dealing.  On the City's counterclaim, the jury 
found that HCI did not breach the implied covenant of good faith and fair 
dealing. The jury awarded HCI damages in the amount of $1,125,436.77.  The district court entered judgment on 
the verdict.  The City renewed its 
Rule 50(b) motion for judgment as a matter of law and moved alternatively for a 
new trial pursuant to Rule 59.  The 
district court denied the motions and awarded HCI attorney fees pursuant to the 
parties' contract.  The City filed 
timely notices of appeal challenging both the judgment and two orders awarding 
attorney fees.

 
 
DISCUSSION

 
 
1.         
Sufficiency of the Notice of Claim

 
 
[¶18]  The City claims the district court 
lacked, and this Court lacks, subject matter jurisdiction to consider HCI's 
claims because its notice of claim did not comply with Wyo. Stat. Ann. § 
1-39-113 (LexisNexis 2007).  
Specifically, the City asserts the notice of claim did not describe the 
conduct constituting, or the damages resulting from, the alleged breach of the 
implied covenant of good faith and fair dealing.  When a claimant fails to comply with § 
1-39-113, a district court has no jurisdiction to consider claims brought 
against a governmental entity.  Peterson v. Sweetwater County School 
District No. 1, 929 P.2d 525, 529 (Wyo. 1996).  Because neither the district court nor 
this Court would have authority to decide the matters presented if the City is 
correct that HCI did not comply with § 1-39-113, we address the notice of claim 
issue first.  

 
 
[¶19]  On March 12, 2004, approximately one and 
a half years after substantial completion of the City Hall project and five 
months after the parties' unsuccessful attempts to mediate their dispute came to 
an end, HCI served the City with a notice of claim for $1,300,015.97.  The notice itself was 4 1/2 pages in 
length and referenced 11 attachments, including a "Summary of financial impact 
to HCI."  Mr. Hladky verified under 
oath that he had read the notice and that its contents were true and 
correct.  

 
 
[¶20]  Three months later, on June 7, 2004, HCI 
served the City with an amended governmental claim.  The amended notice was identical to the 
earlier one except that Mr. Hladky verified "under penalty of perjury" that the 
notice was correct as required by the Wyoming Constitution, Art. 16, § 7.6   The City did not respond to the 
notices of claim and, on December 1, 2004, HCI filed its complaint against the 
City for breach of contract and breach of the implied covenant of good faith and 
fair dealing.  In its answer, the 
City asserted among its affirmative defenses that HCI's notice of claim did not 
comply with the Wyoming Governmental Claims Act notice provision.  

 
 
[¶21]  On July 10, 2007, after the jury 
returned its verdict on June 27, 2007, the City filed an objection to the 
proposed judgment asserting that the district court lacked subject matter 
jurisdiction over the case because HCI's notice of claim did not comply with 
Art. 16, § 7 and § 1-39-113.  HCI 
responded, claiming as it does now that its notice of claim was sufficient.  The district court considered the 
arguments and rejected the City's contention, concluding that both the breach of 
contract claim and the breach of the implied covenant claim were mentioned in 
the notice of claim, the conduct and damages were similar for both claims and 
the notice of claim was not defective.  

 
 
[¶22]  The City does not assert that HCI failed 
to serve a notice of claim and an amended notice of claim.  The City also does not assert that 
service of the notice of claim was untimely or that it was not properly signed 
and certified.  The City's only 
claim is that the notice did not adequately notify it as to the conduct giving 
rise to the claim for breach of the implied covenant and the damages allegedly 
resulting from the breach.  Citing 
Hochalter v. City of Gillette, 2005 
WY 125, 120 P.3d 674 (Wyo. 2005), the City contends the notice was insufficient 
because it only "generically-described" the conduct giving rise to HCI's 
claims.

 
 
[¶23]  Section 1-39-113 provides in pertinent 
part:

 
 
 (a) No action shall be brought under this 
act against a governmental entity unless the claim upon which the action is 
based is presented to the entity as an itemized statement in writing within two 
(2) years of the date of the alleged act, error or omission . . . 
.

(b) 
The claim shall state:

(i)   The time, place and circumstances 
of the alleged loss or injury including the name of the public employee 
involved, if known;

(ii) 
The name, address and residence of the claimant and his representative or 
attorney, if any; and

(iii)  The amount of compensation or other 
relief demanded.

 
 
Pursuant 
to this provision, the notice of claim is not required to specify the legal 
theories upon which the claimant is relying.  Instead, the notice of claim is required 
to state in pertinent part "the time, place and circumstances of the alleged 
loss of injury" and the amount of compensation demanded.  

 
 
[¶24]  HCI's notice of claim included over 
three pages describing in detail the time, place and circumstances of the 
alleged loss.  The notice stated 
that the claim arose from "The City Hall Expansion Project" that commenced on 
August 28, 2000, in and for the City of Gillette.  
It stated that the claim was made by HCI against the City and named eight 
city officials to whom it was intended to provide notice.  It described the circumstances of HCI's 
bid, quoted the precast specification, stated that the City did not object to 
the precast supplier HCI listed in its bid, and described Mr. Gillette's 
statement at the August 31, 2000, project meeting, HCI's efforts to accommodate 
the City's change to the contract, and the City's responses, or lack thereof, to 
those efforts.   The notice 
also described HCI's actions after the City rejected or failed to respond to 
HCI's efforts.  It further described 
the effect of the City's actions and inactions in terms of delaying the project 
and damages.  Additionally, although 
it was not required, the notice of claim identified HCI's legal theories by 
stating that the City breached the contract and the implied covenant of good 
faith and fair dealing.       

 

[¶25]  With respect to the amount of 
compensation demanded, the notice of claim stated:  "The money damages being sought by HCI 
can be summarized very simply:  it 
is the difference between its bid price and the actual cost incurred by HCI to 
fulfill its obligation and complete the contract."  The notice of claim referenced Exhibit 
K, Summary of Financial Impact to HCI, which is a one page document attached to 
the notice that itemized the $1,300,016.57 in damages claimed by HCI.  Exhibit K separated the damages into 
five categories:  extended overhead 
cost impact, direct cost impacts, other costs, insurance and bonding, and sales 
tax increase.  The "direct cost 
impacts" and "other costs" categories were further broken down into 
subcategories.  

 
 
[¶26]  We are at a loss to understand the 
City's assertion that the notice of claim left it to speculate as to the conduct 
giving rise to HCI's claim and resulting damages.  It is clear from the notice that the 
conduct giving rise to HCI's claims was, first, the City's action in changing 
the project specifications and, second, the City's subsequent inaction in the 
face of HCI's efforts to keep the project on schedule.  The notice also clearly sets forth the 
damages HCI claimed resulted from the City's conduct.  Contrary to the City's assertion that 
HCI's notice of claim "generically-described" the conduct, we conclude that it 
fully complied with § 1-39-113.7  

 
 
2.         
Recovery for Breach of the Implied Covenant of Good Faith and Fair 
Dealing

 
 
[¶27]  The City contends that once it 
established that it did not breach the contract, HCI could not recover for 
breach of the implied covenant of good faith and fair dealing and the district 
court erred in not granting its motions for judgment as a matter of law.  The City asserts that the event HCI 
claimed gave rise to the breach of the implied covenant, i.e. Mr. Gillette's 
August 31, 2000, statement that HCI could not order the precast panels until its 
supplier was certified, did not breach the contract even if true because the 
contract unambiguously provided, first, that the architect did not have the 
authority to bind the City and, second, that all modifications must be in 
writing.  Given these provisions, 
the City contends, Mr. Gillette's alleged statement had no effect on the 
contract and did not prevent HCI from ordering the precast panels from its 
uncertified supplier.  Just as Mr. 
Gillette's statement did not constitute a breach of contract, the City argues, 
it could not constitute a breach of the implied covenant.  The City asserts the issue is one of law 
subject to de novo review.  

 
 
[¶28]  HCI contends that a party can breach the 
implied covenant of good faith and fair dealing without breaching the express 
terms of the contract.  It argues 
that an implied covenant to cooperate and not interfere with contract 
performance exists in every contract separate and apart from the express 
terms.  Regardless of the express 
contract terms, HCI asserts, the jury reasonably could have concluded that the 
City breached the implied covenant when, during the first months of the 
contract, its representatives told HCI it could not order the precast panels 
from Winfrey until Winfrey was certified. Additionally, or alternatively, HCI 
contends the jury could have concluded the City breached the implied covenant 
when it did not act on HCI's change order request to substitute Gage Brothers as 
the precast supplier until it was too late for HCI to meet the scheduled 
deadline.  HCI asserts the question 
of whether the City breached the implied covenant of good faith and fair dealing 
was a factual one. 

 
 
[¶29]  To the extent the City claims the 
district court erred in denying its motions for judgment as a matter of law, the 
following standards govern our review:     

 
 
Judgment 
as a matter of law should be granted cautiously and sparingly.  However, where the evidence is not 
legally sufficient to support a claim, the district court has an obligation to 
enter such a judgment.  We review de 
novo a decision to grant or deny judgment as a matter of law, meaning we examine 
the record anew affording no deference to the district court's views.  The test is whether the evidence 
appearing in the record is such that reasonable persons could reach but one 
verdict.  We view the evidence in 
the light most favorable to the nonmoving party, giving that party the benefit 
of all reasonable inferences that may be drawn from the evidence.  When the evidence permits more than one 
reasonable inference or the inferences favorable to the moving party are subject 
to doubt, the matter is properly for the jury to decide and a motion for 
judgment as a matter of law must be denied.   

 
 

Johnson 
v. Reiger, 
2004 WY 83, ¶ 8, 93 P.3d 992, 995 (Wyo. 2004) (citations 
omitted).

 
 
[¶30] 
Under Wyoming 
law, the implied covenant requires that neither party to a commercial contract 
act in a manner that would injure the rights of the other party to receive the 
benefit of the agreement.  Scherer Constr., LLC v. Hedquist Constr., 
Inc., 2001 WY 23, ¶ 19, 18 P.3d 645, 654 (Wyo. 2001).  It requires the parties to act in 
accordance with their agreed common purpose and each other's justified 
expectations.  Id. A breach of 
the implied covenant occurs when a party interferes or fails to cooperate in the 
other party's performance.  
Id.  

 
 
[¶31]  The implied covenant of good faith and 
fair dealing may not be used to create new, independent rights or duties beyond 
those agreed to by the parties.  
Id.  Rather, it must arise from the language 
used or be indispensable to effectuate the intention of the parties as 
determined by the contract language, the parties' conduct and their course of 
dealing.  Id.  In the absence of evidence of 
self-dealing or breach of community standards of decency, fairness and 
reasonableness, the exercise of contractual rights alone will not be considered 
a breach of the covenant.  
Id.  

 
 
[¶32]  The question of whether the implied 
covenant of good faith and fair dealing was breached is ordinarily one of fact, 
focusing on the conduct alleged as constituting the breach within the context of 
the contract language, the parties' course of conduct and industry 
standards.  Id.  A party is entitled to judgment as a 
matter of law on the claim only where the actions alleged to have breached the 
covenant were in conformity with the clear contract language.  Id.  
Where the evidence establishes a material dispute as to whether a 
party's conduct went beyond the exercise of contract rights and amounted to 
self-dealing or a violation of community standards of decency, fairness or 
reasonableness, the issue is one for determination by the fact-finder.  Id.  

 
 
[¶33] 
In claiming that it was entitled to judgment as a matter of law on the implied 
covenant claim, the City points to the following contract 
provisions:

 
 
1.1.1   THE CONTRACT 
DOCUMENTS

 
 
The 
Contract Documents consist of the Agreement between Owner and Contractor 
(hereinafter the Agreement), Conditions of the Contract (General, Supplementary 
and other Conditions), Drawings, Specifications, Addenda issued prior to 
execution of the Contract, other documents listed in the Agreement and 
Modifications issued after execution of the Contract.  A Modification is (1) a written 
amendment to the Contract signed by both parties, (2) a Change Order, (3) a 
Construction Change Directive or (4) a written order for a minor change in the 
Work issued by the Architect.

 

. 
. . .

 
 

2.1.1 
The Owner is the person or entity identified as such in the Agreement and is 
referred to throughout the Contract Documents as if singular in number.  The Owner shall designate in writing a 
representative who shall have express authority to bind the Owner with respect 
to all matters requiring the Owner's approval or authorization.  Except as otherwise provided in 
Subparagraph 4.2.1, the Architect does not have such authority.  The term "Owner" means the Owner or the 
Owner's authorized representative.

 
 
[¶34]  The contract identified the City as the 
Owner.  Article 7.3 identified the 
City's representative as Dan Roberts, an Engineer II in the Department of Public 
Works.  The City claims it was 
entitled to judgment as a matter of law on the implied covenant claim because 
the evidence was that its actions were in conformity with the contract, i.e. 
only Mr. Roberts had authority to bind the City; Mr. Gillette did not have such 
authority; contract modifications were required to be written; there was no 
written modification of the contract specification requiring certification prior 
to the start of production; therefore, the City did not breach the implied 
covenant when Mr. Gillette stated that the "Architect/City needs certification 
before precast order."  

 
 
[¶35]  The difficulty with the City's claim is 
that the evidence established a material dispute as to whether its conduct went 
beyond the exercise of its contract rights.  The evidence created a reasonable 
inference that, rather than conforming to the agreed common purpose and HCI's 
justified expectations, the City instead interfered and failed to cooperate with 
HCI's ability to perform.  Scherer, ¶ 18, 18 P.3d  at 653.  HCI presented evidence to show that, 
despite the contract provisions, the City went along with Mr. Gillette's oral 
modification of the contract specification.8  Stella Alexander, HCI's office manager, 
testified that she was present at the August 31 project meeting and that Mr. 
Roberts nodded his head in agreement when Mr. Gillette stated certification was 
needed before the precasts were ordered.  
Rosemary Shubert, HCI's financial officer, who also attended the August 
31 meeting, testified Mr. Roberts seemed to agree or at least did not disagree 
or object to Mr. Gillette's statement.  
Ms. Alexander also testified that no one from the City objected to, 
disputed or asked for correction of the minutes of the August 31 project meeting 
which included Mr. Gillette's statement that certification was needed before the 
precasts were ordered.  The 
September 14 project meeting minutes also stated that the precast supplier 
needed to be certified before HCI ordered the precasts and, again, no one from 
the City objected to the minutes, asked that they be corrected or even pointed 
out that Mr. Gillette's statement was not correct.  

 
 
[¶36]  Additionally, Mr. Hladky, who did not 
attend the August 31 meeting, testified that upon being informed about Mr. 
Gillette's statement by his employees after the meeting, he went to talk to Mr. 
Gillette and Mr. Roberts.  He 
testified that he told Mr. Roberts they could not wait to order the precast 
panels, that was not the deal as stated in the contract specifications and the 
panels needed to be ordered then.  
Mr. Roberts' response was that he was responsible for job quality.  Mr. Hladky testified that it was clear 
from Mr. Roberts' response that the City concurred with Mr. Gillette's statement 
that Winfrey's certification was needed before the panels were ordered.  Mr. Hladky testified that after speaking 
with Mr. Roberts, he had Ms. Alexander send a letter the same day advising 
Winfrey that it needed its precast certification before HCI could order the 
panels.    

 
 
[¶37]  In addition to the evidence tending to 
show that the City breached the implied covenant when it went along with Mr. 
Gillette's oral modification of the contract specification, the evidence also 
permitted a reasonable inference that the City breached the covenant when it did 
not act on HCI's change order request to substitute Gage Brothers as the precast 
supplier until after the scheduled deadline had passed.  Mr. Hladky testified that after Mr. 
Gillette told him Winfrey needed to be certified before the precast panels were 
ordered, he expressed his concern to the City that waiting for the certification 
to order the panels would delay the project.  He testified that by September, when he 
was still being told he could not place the order until Winfrey was certified, 
he was considering other options.  
He offered to hire an inspector to watch the panels being made so as to 
ensure their quality.  Mr. Gillette 
rejected the proposal because it waived the certification requirement.  At his expense, Mr. Hladky offered to 
take Mr. Gillette to visit Winfrey's plant in the hope that upon seeing the 
plant Mr. Gillette would allow HCI to order the precast panels before Winfrey 
received certification.  Mr. 
Gillette rejected that offer as well.  Mr. Hladky requested a change order to 
substitute Gage Brothers, who was already certified, as the precast panel 
supplier.  Ms. Alexander testified 
that on September 18, 2000, she typed the change order request and sent it to 
Mr. Gillette.  She testified that 
Mr. Gillette called her a couple of days later and told her to void the 
request.   

 
 
[¶38]  Mr. Hladky then set up a special meeting 
with John Darrington, the city administrator and the primary contact between the 
City engineers and city council, in the hope that he would approve the change 
order request to substitute Gage Brothers for Winfrey.  Mr. Darrington testified that he 
attended a meeting on October 5, 2000, with Mr. Hladky, Mr. Gillette and Mr. 
Roberts.  In his October 5 
memorandum following the meeting, Mr. Darrington stated that Mr. Hladky asked 
him to attend because he thought as city administrator Mr. Darrington could 
approve the change order request to substitute Gage Brothers as the precast 
panel supplier.  Mr. Darrington 
responded by suggesting that perhaps Mr. Hladky could get Winfrey to assume 
liability for the damages that would result from the delay caused by the lack of 
certification.   

 
 
[¶39]  There is no question from the testimony 
that the City knew by September or early October of 2000 that the precast panels 
needed to be ordered or the project would be delayed and damages would 
result.  Yet, the City took no 
action to allow HCI to order the precast panels from Winfrey or, alternatively, 
to substitute Gage Brothers as the supplier. By November 14, 2000, when the City 
finally approved the change order request, the scheduled deadline for the 
precast panels had passed.  

 
 
[¶40] 
Viewing the evidence in the light most favorable to the nonmoving party, as we 
must, and giving HCI the benefit of all reasonable inferences that may be drawn 
from the evidence, we conclude the evidence permitted more than one reasonable 
inference and the inferences favorable to the City were subject to doubt. Thus, 
the issue of whether the City breached the implied covenant of good faith and 
fair dealing by interfering or failing to cooperate with HCI's ability to 
perform was for the jury to decide and the district court properly denied the 
motion for judgment as a matter of law.  

 
 
[¶41]  To the extent that the City contends a 
breach of the implied covenant claim does not survive after a finding that the 
contract was not breached, we point to Cathcart v. State Farm Mut. Auto. Ins. Co., 
2005 WY 154, ¶ 25, 123 P.3d 579, 589 (Wyo. 2005) in which this Court 
stated:

 
 
[T]he 
two claims require proof of independent elements and are not mutually dependent, 
meaning one can be maintained without the other.  While an insured may state causes of 
action for breach of contract and breach of the duty of good faith and fair 
dealing, the insured does not need to prevail on the breach of contract claim to 
prevail on the claim for breach of the duty of good faith and fair dealing.  

 
 

See 
also, 
State Farm Mut. Auto. Ins. Co. v. 
Shrader, 882 P.2d 813, 828 (Wyo. 1994).  The City's legal position is without 
support.

 
 

3.                              
Recovery 
of Delay Damages

 
 
[¶42]  The City claims next that, once the jury 
found that it did not breach the contract, it was not appropriate to utilize the 
total cost method of proving damages for breach of the implied covenant.  The City contends that the total cost 
method of calculating damages is disfavored even in breach of contract cases and 
there is no authority for its use in determining damages where, as here, there 
was no breach of contract.  Even 
assuming such damages were recoverable for breach of the implied covenant, the 
City claims HCI did not establish the elements necessary to recover under the 
total cost method.  The City also 
asserts the exclusive remedy available to HCI was an extension of time, not 
monetary damages. 

 
 
[¶43]  HCI responds that the contract allowed 
the contractor to recover money damages, the jury properly awarded monetary 
damages for breach of the implied covenant and HCI proved the elements necessary 
for recovery under the total cost method.  
These same arguments were made twice during the trial and again after the 
verdict.  The district court ruled 
against the City and for HCI each time.

 
 
a.         
Contract Remedy for Delay

 
 
[¶44]  We begin with the City's claim that the 
exclusive remedy for delay available to HCI under the contract was an extension 
of time.  The City points to Article 
8 of the standard form contract which provides:

 
 
8.3.1   If the Contractor is delayed at any 
time in the commencement or progress of the Work by an act or neglect of the 
Owner or Architect, or of an employee of either . . . or by changes ordered in 
the Work . . . or other causes beyond the Contractor's control, . . . then the 
Contract Time shall be extended by Change Order for such reasonable time as the 
Architect may determine. 

 
 
The 
City further claims that HCI did not follow the contract claims procedures 
requiring claims, including claims for extension of time, to be filed within 21 
days of the event giving rise to the claim.  The City asserts HCI waived its right to 
a time extension by failing to follow the procedures set forth in the 
contract.

 
 
[¶45]  HCI responds that the contract allowed 
the contractor to recover money damages.  
It cites the following provisions of the contract:

 
 
Article 
8.3.3  This Paragraph 8.3 does not 
preclude recovery of damages for delay by either party under other provisions of 
the Contract Documents.

. 
. . .

 
 
Article 
13.4.1  Duties and obligations 
imposed by the Contract Documents and rights and remedies available thereunder 
shall be in addition to and not a limitation of duties, obligations, rights and 
remedies otherwise imposed or available by law.

 
 
HCI 
references State Highway Comm'n v. Brasel 
& Sims Constr. Co., Inc., 688 P.2d 871, 877 (Wyo. 1984) for the 
principle that delay damages are available at law.  Additionally, HCI quotes William 
Schwartzkopf, the City's construction expert and author of Calculating 
Construction Damages (2d ed. 2001), as having stated that Article 8.3 of the AIA 
General Conditions of the Contract for Construction does not preclude delay 
damages.  Id.  § 14.02(c), 284. 

 
 
[¶46]  Implicit in the district court's rulings 
on the City's motions was the legal conclusion that the contract allowed the 
recovery of money damages.  Courts 
interpret contracts to effectuate the parties' intention, as expressed in the 
language of the agreement.  Reynolds v. Milatzo, 2007 WY 104, ¶ 14, 
161 P.3d 509, 513 (Wyo. 2007).  As 
long as the contract language is clear and unambiguous, our obligation on appeal 
is to interpret it as a matter of law.  Id.  The 
parties to a contract are free to incorporate within their agreement whatever 
lawful terms they desire, and the courts are not at liberty, under the guise of 
judicial construction, to rewrite the contract.  Christensen v. Christensen, 
2008 WY 10, ¶ 13, 176 P.3d 626, 629 (Wyo. 2008).

 
 
[¶47]  The provisions at issue are part of the 
general conditions of construction contracts published by the AIA.  This Court has considered these 
provisions in prior cases but has not previously been asked to decide whether 
they preclude the recovery of money damages. In Quin Blair Enterprises, Inc. v. Julien 
Constr. Co., 597 P.2d 945, 949 (Wyo. 1979), this Court held that the 
contractor's failure to submit a written request for an extension of time to 
complete the project as required by Article 8.3 precluded his claim that he was 
entitled to credit for the delay caused by the owner.  In State Surety Co. v. Lamb Constr. Co., 
625 P.2d 184, 192 (Wyo. 1981), we held that Article 8.3 required the contractor 
to obtain extensions even for delays caused by the owner and the contractor's 
failure to do so made it liable to the owner for damages resulting from the 
delay.  Both Quin and Lamb involved claims brought by the 
owner against the contractor for delay damages and in both cases the Court 
upheld part of the damage award.  
However, the issue of whether the contract precluded the contractor from 
recovering money damages for owner caused delay was not raised or 
discussed.   

 
 
[¶48]  This Court has adhered to the principle 
that remedies provided in a contract are generally not exclusive.  Dewey v. Wentland, 2002 WY 2, ¶ 40, 38 P.3d 402, 417 (Wyo. 2002); Walters v. 
Michel, 745 P.2d 913, 915 (Wyo. 1987).  Rather, such remedies are merely some of 
several remedies which might be pursued by an injured party.   Id.  This Court also has found it significant 
when an agreement does not include a limiting "exclusive remedy" clause or 
contains a clause recognizing the rights available at law or in equity.  Dewey, ¶ 41, 38 P.3d  at 417.  Although Dewey and Walters involved disputes about whether 
the remedies of damages and specific performance were available under the 
respective contracts, we think the principles espoused in those cases are 
equally applicable here. 

 
 
[¶49]  Article 8.3 of the construction contract 
does not provide that an extension of time was the "exclusive remedy" available 
for delay.  It does provide, 
however, that the remedies available under the contract were in addition to 
those remedies available at law.  
One of the remedies available at law for breach of the implied covenant 
is contract damages.  Therefore, it 
is reasonable to conclude that an extension of time was not the exclusive remedy 
available to HCI for City caused delay but was merely one remedy that HCI could 
pursue.   

 
 
[¶50]  Moreover, a leading commentator on 
construction law provides the following example of a typical "no damage for 
delay" clause:

 
 
If 
the Contractor is delayed by the Owner or Architect or any Agent or employee of 
either, the Contractor's sole and exclusive remedy for delay shall be the right 
to a time extension for completion of the Contract and not 
damages.

 
 
Robert 
F. Cushman and James J. Myers, Construction Law Handbook, § 26.01 
(1999).  Unlike this provision, the 
contract provision at issue here does not state that the "sole and exclusive" 
remedy for delay is a time extension nor does it say recovery of damages is not 
allowed.  We hold that Article 8.3.1 
is not a "no damage for delay" clause; therefore it did not preclude HCI from 
recovering damages and the district court properly reached the same 
conclusion.  We turn to the City's 
claim that the district court erred in allowing the jury to consider the total 
cost method in calculating damages. 

 
 
            
b.         
Total Cost Method of Calculating Damages 

 
 
[¶51]  The total cost method compares the 
actual costs incurred, plus profit, to the bid amount and seeks the 
difference.  Cushman, supra § 34.02.  It is disfavored primarily because it 
attributes all responsibility to the owner without establishing a clear causal 
connection between the owner's breach and the increased costs.  Id.  In Frost Constr. Co. v. Lobo, Inc., 951 P.2d 390, 397-98 (Wyo. 1998), a breach of contract case, this 
Court said:

 
 
The 
proper measure of damages is the amount of the contractor's extra costs directly 
attributable to the ... breach [ ].  
Obviously, the preferable method for calculating such losses would be to 
itemize and total the cost of each piece of equipment or material and each man 
hour necessitated by the unanticipated conditions encountered in performing the 
contract.  Such exactness is not 
always possible or necessary.  

 
 
The 
total-cost method of computing recovery, while generally disfavored by the 
courts, is permissible where the breach or unexpected conditions pervade 
substantial areas of performance.  . 
. . [T]he requirements for use of the total-cost method . . . [are proof 
that]:

 
 
            
(1) the nature of the particular losses make[s] it impossible or highly 
impracticable to determine them with a reasonable degree of accuracy;  (2) the plaintiff's bid or estimate was 
realistic;  (3) its actual costs 
were reasonable;  and (4) it was not 
responsible for the added expenses. . . .  

 
 
(citations 
omitted).  

 
 
[¶52]  We applied these principles in Frost to uphold the district court's use 
of the total cost method for determining contract damages.  In Frost, the parties entered into an oral 
contract in which Frost subcontracted to perform paving work on Lobo's highway 
construction project.  After 
entering into the original agreement, Frost attempted to add conditions to the 
agreement.  When Frost submitted a 
new contract containing the conditions and failed to sign and return the 
original agreement, Lobo hired another company to perform the paving work.  Frost filed a breach of contract action 
and Lobo counter-claimed for breach of contract.  The district court concluded Frost 
breached the contract by failing to perform the paving work and awarded damages 
based upon the total cost method.  
We affirmed, finding that the breach pervaded Frost's entire obligation 
under the contract.  See also State 
Highway 
Comm'n, 688 P.2d  at 880 (holding that use of the total cost method was 
appropriate under the circumstances).  

 
 
[¶53]  As reflected in Frost, the preferred method of 
calculating breach of contract damages under Wyoming law is to itemize the extra costs 
directly caused by the breach.  
However, where such precise itemization is not possible, use of the total 
cost method is permissible if the breach substantially affected performance and 
the contractor proves the requisite elements.  Wyoming has recognized that a breach of the 
implied covenant of good faith and fair dealing may be actionable in contract 
for compensatory damages.  Cathcart, ¶ 24, 123 P.3d  at 589; Shrader, 882 P.2d  at 825.  Thus, as is the case for breach of 
contract damages, damages for breach of the implied covenant may be calculated 
using the total cost method when the breach substantially affected performance 
and the requisite elements are proven.

 
 
[¶54]  As noted, the City claims it was error 
to allow the jury to consider the total cost method because HCI did not prove 
the necessary elements. On that basis, the City moved at the close of the 
evidence for judgment as a matter of law. Considering the evidence in the light 
most favorable to HCI as it was required to do, the district court denied the 
motion and submitted the question of damages to the jury.  The City renews its claim of error on 
appeal.

 
 
[¶55] 
HCI responds that it proved the required elements of the total cost method; 
however, that method was only one of the methods used to calculate its damages; 
therefore, it would not have been appropriate to single out the total cost 
method for instruction; the general contract damages instruction the district 
court gave adequately informed the jury concerning the applicable law; and, in 
any event, the jury did not award damages based upon the total cost 
method.

 
 
[¶56]  To the extent the City claims error in 
the denial of its motion for judgment as a matter of law on the total cost 
method, we review the district court's decision de novo, meaning we examine the record 
anew and afford no deference to the district court's views.  Johnson, ¶ 8, 93 P.3d  at 995.  If the evidence, viewed in the light most 
favorable to HCI, permits more than one reasonable inference or the inferences 
favorable to the City are subject to doubt, the matter was properly for the jury 
to decide and the district court did not err in denying the motion. 

 
 
[¶57] 
As noted above, the threshold question for use of the total cost method is 
whether the breach pervaded substantial areas of performance.  Frost, 951 P.2d  at 398.  Mr. Hladky testified that HCI was ready 
to send out the purchase order for the precast panels when Mr. Gillette changed 
the deal. He testified that, but for Mr. Gillette's statement and the City's 
concurrence with it, HCI probably would have ordered the precast panels within a 
day or so.  Mr. Hladky testified 
that he needed to order the precast panels so that Winfrey could design where 
the imbeds would be placed in time for the architect to approve them, a process 
that could take a month, and allow the concrete subcontractor to pour the walls 
in time for them to cure before the panels arrived.    

 
 
[¶58]  Mr. Hladky further testified that as the 
time came and went for Winfrey to meet the deadline, he attempted to obtain a 
change order to allow him to use Gage Brothers.  He testified that HCI still could have 
met the deadline if the City had approved his request in October. The fact that 
the approval did not come until November 14 made it impossible for HCI to meet 
the scheduled deadline for phase 1 of the project.  

 
 
[¶59]  HCI also presented the expert testimony 
of Norm Davies, the owner of his own construction company with over forty years 
experience in construction.   
Mr. Davies testified that the City's handling of the precast panels had a 
major impact on HCI, forcing the construction company to change its complete 
as-bid construction plan.  He 
testified that the panels were the critical element on phase 1 of the project 
and the delay in ordering them prevented HCI from getting the imbeds, pouring 
the concrete, receiving and installing the panels, and installing the drywall, 
studs, electrical and mechanical work.  
Mr. Davies testified that the delay resulting from HCI's inability to 
order the precast panels also caused further delay due to weather conditions, 
loss of productivity and unavailability of subcontractors.  

 
 
[¶60]  We have already concluded that the 
evidence was sufficient to allow a reasonable juror to conclude that the City 
breached the implied covenant of good faith, first, by failing to allow HCI to 
perform in accordance with the written specification and, second, by failing to 
issue the change order.  We further 
conclude that the evidence, viewed in the light most favorable to HCI, permitted 
more than one reasonable inference as to whether the City's breaches 
substantially pervaded performance under the contract.  Therefore, the district court properly 
denied the City's motion for judgment as a matter of law on the total cost 
method if HCI presented sufficient evidence of each of the following 
elements:    (1) the 
nature of the losses made it impossible or highly impracticable to determine 
them with a reasonable degree of accuracy; (2) HCI's bid or estimate was 
realistic; (3) HCI's actual costs were reasonable; and (4) HCI was not 
responsible for the added expenses.  
Frost, 951 P.2d  at 397.   

 
 
[¶61]  Addressing the first element, we hold 
that the evidence, viewed in the light most favorable to HCI, permitted more 
than one reasonable inference as to whether the nature of HCI's losses made it 
highly impracticable to determine them with a reasonable degree of 
accuracy.  James Adrian, Ph.D., a 
professor, lecturer and consultant in the field of construction productivity, 
estimating, scheduling and accounting, testified that the City's change on the 
precast supplier certification issue essentially resulted in a different project 
than HCI bid, the cumulative effect of which was difficult to calculate.  Dr. Adrian testified that this 
circumstance made the total cost method the only appropriate method of figuring 
financial damage.  He stated that it 
was not possible to accurately calculate productivity after a major disruption 
like what occurred on this project using any other method.  Given this testimony, the evidence was 
sufficient to permit more than one reasonable inference and judgment as a matter 
of law would not have been appropriate as to the first element necessary for use 
of the total cost method.   

 
 
[¶62]  HCI also presented evidence establishing 
a reasonable inference on the second element necessary for use of the total cost 
method, i.e. that its bid was realistic.  
Mr. Gillette reviewed all of the bids and recommended that the City award 
the project to HCI.  He testified 
that he had no problem with the amount of the bid and never felt that HCI 
underbid the project.  In fact, the 
evidence showed that HCI's bid of $3,623,068 was in line with the architect's 
estimate of $3,700,000 for what the project would cost.  Additionally, Mr. Davies testified that 
the bid was reasonable.  He 
testified that it was clear from comparing HCI's bid with those of other bidders 
that HCI did not overbid the project.  
He also testified from his review of the project documents that it was 
clear HCI did not underbid the project in order to get the job with the 
intention of then obtaining change orders to increase its profit.  He based this conclusion on the fact 
that only two of the ninety some change orders were initiated by HCI.  This evidence was sufficient to raise a 
reasonable inference as to the second element necessary for calculating damages 
using the total cost method.    

 
 
[¶63]  Consistent with the third element, HCI 
presented evidence that its actual costs were reasonable.  Mr. Davies testified that in his 
opinion, considering that "it was a tough time to get qualified tradesmen and 
personnel on [job] sites," the costs were reasonable.  Dr. Adrian also testified that HCI's 
actual costs were reasonable.  Even 
the City's own expert testified that a high percentage of HCI's actual costs 
were reasonable.   

 

[¶64]  Finally, addressing the last element 
necessary for use of the total cost method, HCI presented evidence that it was 
not responsible for the added expenses.  
Mr. Hladky testified that the City was responsible for the added expenses 
caused by the delay and that none of the expenses included in HCI's claim were 
attributable to HCI.  Mr. Davies 
also testified that the responsibility for the added expenses lay with the 
City.  

 
 
[¶65]  Although the City presented evidence to 
refute HCI's evidence as to each of the elements necessary for use of the total 
cost method, it is clear from our review of the record that the evidence 
presented, viewed in the light most favorable to HCI, supported submission of 
the total cost method of calculating damages to the jury.  We turn to consideration of the City's 
claim that the district court erred in not adequately instructing the jury 
concerning the damages evidence.  

 
 
            
c.         
Damage Instructions

 
 
[¶66]  In essence, the City claims it was error 
to instruct the jury only as to the general measure of contract damages and not 
to instruct also on the elements necessary for recovery using the total cost 
method.  The City contends this 
error allowed the jury to consider damages without having sufficient guidance as 
to how to calculate them.

 
 
[¶67]  HCI asserts that it presented evidence 
of alternative methods of calculating damages including, in addition to the 
total cost method, the modified total cost method and the jury verdict 
method.  Given the evidence as to 
these alternative methods, HCI contends it would have been improper for the 
district court to single out the total cost method for a separate 
instruction.  HCI asserts it was 
appropriate under these circumstances for the district court to instruct the 
jury as to the general measure of contract damages.  

 
 
[¶68]  When reviewing claimed error in 
instructing the jury, we consider whether the instructions, taken as a whole, 
adequately and clearly advise the jury of the applicable law.  Parrish v. Groathouse Constr., Inc., 
2006 WY 33, ¶ 7, 130 P.3d 502, 505 (Wyo. 2006).  The district court is not obligated to 
give an instruction offered by a party as long as the jury is adequately 
instructed on the law as it pertains to that case.  Id.  A district court's ruling on an 
instruction will not constitute reversible error absent a showing of prejudice, 
and prejudice will not be said to result unless it is demonstrated that the 
instruction confused or misled the jury with respect to the proper principles of 
law. Id.  The burden is on the appellant to show 
prejudicial error.  

 
 
[¶69]  The City proposed the following jury 
instruction:

 
 
INSTRUCTION 
NO. 33

DAMAGES 
 TOTAL COST METHOD

 
 
            
If you find that Hladky Construction, Inc. is entitled to recover 
damages, the proper measure of damages is the amount of the contractor's extra 
costs directly attributable to the breach.  
Only in the event that you find that any breach or unexpected conditions 
pervaded substantial areas of performance, can you revert to the "total cost 
method" of calculating damages.  The 
"total cost method," as opposed to the preferred method of itemizing each 
additional cost resulting from the breach, is acceptable only if the following 
criteria are met:

 
 
(1) 
the nature of the particular losses make[s] it impossible or highly 
impracticable to determine them with a reasonable degree of 
accuracy;

(2) 
 Hladky Construction, Inc.'s bid or 
estimate was realistic;

(3)  Hladky Construction, Inc.'s actual costs 
were reasonable;

(4) 
Hladky Construction, Inc. was not responsible for the added 
expenses.

 
 
[¶70]  The district court rejected the City's 
proposed instruction and gave instead the following damages 
instruction:

 
 
INSTRUCTION 
NO. 13

DAMAGES 
REASONABLE, NOT SPECULATIVE

 
 
            
If you should find that either Hladky Construction, Inc. or the City of 
Gillette are entitled to a verdict on their respective claims, you may award 
only such damages as will reasonably compensate the party for such damages as 
you find, from a preponderance of the evidence, that it has 
sustained.

 
 
            
You are not permitted to award speculative damages.  So, you are not to include in any 
verdict compensation for any prospective loss which, although possible, is not 
reasonably probable to occur in the future.

 
 
            
Your determination as to damages is to be based upon the evidence and not 
upon sympathy, speculation, passion, prejudice or 
conjecture.

 
 
The 
district court also instructed the jury that in order to find that the City 
breached the implied covenant of good faith and fair dealing, it had to find 
that the breach caused damage to HCI.  

 
 
[¶71]  In closing argument, HCI asked the jury 
to award $1,766,338.92 in damages.  
The jury awarded $1,125,436.77, or $640,902.15 less than HCI 
requested.  In its ruling on the 
City's post-verdict motions, the district court addressed the City's argument on 
damages as follows:  

 
 
The 
jury's verdict indicates that it did not adopt [the total cost] method, as its 
damage award differs from that proposed under the total cost method.  The jury was presented with a number of 
proposals and arguments on damages and was free to select those damages which it 
found to be reasonable.

 
 
[¶72]  When a plaintiff seeks to recover based 
upon the total cost method of calculating damages, the jury must be instructed 
to apply the method only if the four requisite elements are proven and to award 
damages only if the plaintiff proved that the defendant's breach caused them. 
Thus, in Geolar, Inc. v. 
Gilbert/Commonwealth Inc. of Michigan, 874 P.2d 937 (Alaska 1994) the Alaska 
Supreme Court held that the trial court erred in admitting total cost evidence 
without instructing the jury to apply the method only if the four requisite 
elements were proven and to award damages only if the plaintiff proved that the 
defendant's breach caused them.  
Id. at 
944-45.  The Court held that before 
allowing the jury to consider the total cost method the trial court must 
determine whether the evidence created a question of fact as to each element. 
Upon making that determination, the trial court must then instruct the jury 
specifically as to each of the elements and that it must find that the plaintiff 
proved each of the total cost elements before awarding damages based upon that 
method.  Id. at 945.  Because the trial court did not instruct 
the jury accordingly, the Supreme Court reversed the award and remanded for a 
new trial on the issue of damages.  
Id. at 946.  

 
 
[¶73]  We agree that ordinarily when total cost 
evidence is admitted, a trial court must instruct the jury to use the method 
only if the four elements were proven and to award damages only if it was shown 
that the defendant's breach caused them.  
Ordinarily, a trial court's failure to instruct the jury in this manner 
when total cost evidence has been admitted constitutes reversible error.  Under the particular circumstances of 
this case, however, we conclude no prejudice resulted from the failure to 
instruct concerning the total cost method. 

 
 
[¶74]  In Power Constructors v. Taylor & 
Hintze, 960 P.2d 20, 41 (Alaska 1998), a case decided after Geolar, the Alaska Supreme Court held 
that the trial court did not err in allowing the plaintiff to present its case 
based on the total cost method without instructing the jury in accordance with 
Geolar.  In Power, the trial court did not instruct 
the jury on the four total cost elements, instructed the jury not to consider 
the total cost method and instructed the jury to rely on actual cost evidence. 

 
 
[¶75]  After reviewing the various methods for 
calculating damages and the evidence presented, the Power Court held there was no error 
because, while the evidence included information concerning the total cost of 
delay, it also included detailed testimony concerning the actual construction 
delays and the contractor's frustrations and economic problems as well as 
testimony tying the owner's acts to the specific problems the contractor 
encountered in performing the contract.  
The Court concluded the jury also heard a significant amount of cost 
analysis evidence and received significant documentation analyzing each phase of 
construction.  Although some of the 
analysis was based upon the total cost approach, the Court noted that some of it 
was in the form of expert opinion and testimony concerning the contractor's 
actual work experience. The Court stated: 

 
 
This 
admixture of evidence left the jury with much more to consider than "the 
difference between the actual costs incurred on a project, plus a 
reasonable amount for profit, and the contract price." Geolar, 
874 P.2d  at 943.  
In addition to establishing total project costs significantly exceeding 
the original contract price, the evidence strongly suggested that a substantial 
amount of PCI's added costs resulted from delayed and out-of-sequence delivery 
of powerline poles. The evidence also described instances in which A/H misled 
PCI with regard to pole delivery, and it described the effects of A/H's 
misrepresentations and negligence on PCI's construction efforts. While PCI never 
submitted itemized proof of actual added costs attributable to A/H's misconduct, 
it presented enough information to support a strong inference that A/H had 
caused PCI a substantial amount of actual harm and to enable the jury to form a 
reasonable, though perhaps imprecise, estimate of the extent of that 
harm.

 
 

Power, 
960 P.2d  at 43.  On that basis, the 
Court concluded the trial court properly instructed the 
jury.

 
 
[¶76]  Unlike the situation in Power, the district court here did not 
instruct the jury not to consider the total cost method or to rely on actual 
cost evidence.  However, the jury 
heard extensive testimony concerning the actual delay in ordering the precast 
panels and the problems HCI experienced because of that delay.  As in Power, the jury also heard extensive 
testimony tying the City's acts to the specific problems HCI encountered in 
performing the job.  Also as in Power, the jury heard cost analysis 
testimony from lay and expert witnesses and received documentation analyzing the 
actual economic and physical effects the precast panel delay had on other 
aspects of the project.  Although 
some of the analysis was based upon the total cost approach, some of it was in 
the form of expert opinion and lay testimony concerning HCI's actual work 
experience.  The evidence strongly 
suggested that a substantial amount of HCI's added costs resulted from the 
City-imposed delay in ordering the precast panels and its failure to act on 
HCI's change order request, which in turn caused subsequent work to be out of 
sequence. 

 
 
[¶77]  Given the evidence, we conclude this 
case is more akin to Power than it is 
to Geolar.  The evidence left the jury with much 
more to consider than the actual costs incurred, plus profit, as compared to the 
bid amount.  HCI presented enough 
information to support a strong inference that the City caused it substantial 
actual harm and to enable the jury to form a reasonable, though perhaps 
imprecise, estimate of the extent of that harm.     

 
 
[¶78]  The jury was instructed that to be 
entitled to damages for breach of the implied covenant of good faith and fair 
dealing, HCI had to prove by a preponderance of the evidence that the City's 
breach caused it damages.  The jury 
was also instructed that it could award only such damages as would reasonably 
compensate HCI for the harm it sustained as a result of the City's breach. Based 
upon the evidence and the instructions, the jury awarded HCI $1,125,436.77, or 
$640,902.15 less than the $1,766,338.92 HCI requested.  Considering all of the circumstances in 
this particular case, including the fact that the jury clearly did not calculate 
HCI's damages using the total cost method, we hold that the City has failed to 
show that prejudice resulted from the district court's failure to instruct the 
jury on the total cost method. 

 
 

4.         
Change Order as Accord and Satisfaction or Waiver

 
 
[¶79]  In its next issue, the City claims the 
district court erred by not instructing the jury on the issue of accord and 
satisfaction because it had presented evidence that the change order request the 
city council verbally approved on November 15, 2000, operated as an accord and 
satisfaction of HCI's delay claim under Article 7.2.1 of the contract. The City 
also claims that HCI waived its delay claim by accepting the change order and 
proceeding to perform under the contract without reserving the claim.  HCI asserts there was no evidence to 
support such an instruction.  HCI 
contends there was no evidence that either party intended the change order to 
operate as an accord and satisfaction.  
Without evidence of intent, HCI argues the district court properly 
refused to give the City's proposed instructions on waiver and accord and 
satisfaction.

 
 
[¶80]  For the change order to operate as an 
accord and satisfaction, it must clearly have appeared that HCI intended it to 
operate as such and that the City either expressly agreed to it, or was bound to 
know of HCI's intention at the time it accepted the change order. Oedekoven v. Oedekoven, 538 P.2d 1292, 
1297 (Wyo. 
1975).  

 
 
[¶81]  The evidence relevant to this issue 
showed that after the city council approved the change order request, HCI 
proceeded to perform under the contract.  
However, as previously mentioned, HCI also sent the November 28, 2000, 
letter to Mr. Gillette stating that although it would attempt to complete the 
project as efficiently as possible, the delays caused by the City had delayed 
the project, the original schedule was no longer possible and HCI would document 
the costs of the delay for the City's account.  HCI referenced its earlier letter, dated 
October 30, 2000, in which it had advised Mr. Gillette that "due to the 
ambiguous specifications there is a potential for a major impact on the schedule 
causing loss of productivity and increased costs."  The October letter also referred to "the 
cost of delays, litigation, etc."  

 
 
[¶82]  This documentation suggests that rather 
than intending to waive or release any claim for damages, HCI intended to keep 
track of the additional costs resulting from the delay for payment by the 
City.  Mr. Hladky testified that he 
absolutely did not intend to waive any claim for delay by signing the change 
order.  He testified if that had 
been his intent he would have put it in writing.  He testified that the City 
representatives did not indicate they considered the change order to be a waiver 
and, if they had, he would not have signed it.      

 
 
[¶83]  Consistent with this evidence, the 
written change order Mr. Gillette finally prepared at the end January of 2001 
contains no language, doubtful or otherwise, indicating that it was intended to 
operate as a waiver or an accord and satisfaction.  An accord and satisfaction can never be 
implied from language of doubtful meaning.  
Oedekoven, 538 P.2d  at 
1297.  If it cannot be implied from 
language of doubtful meaning, it certainly cannot be implied from a change order 
containing no language at all indicating that it was intended to operate as an 
accord and satisfaction or a waiver.  
We agree with the district court's conclusion that the change order did 
not contain language supporting the defenses of waiver or accord and 
satisfaction.  The district court 
properly declined to submit these issues to the jury.

 
 
[¶84]  Within its argument that the district 
court erred in not submitting the accord and satisfaction and waiver issues to 
the jury, the City also asserts that the district court erred when it prohibited 
Mr. Anderson, the city attorney, from testifying concerning the change order. 
Rulings on the admissibility of evidence are within the sound discretion of the 
trial court. Barnes v. State, 2008 WY 
6, ¶ 11, 174 P.3d 732, 736 (Wyo. 2008).  
We will not disturb such rulings absent a clear abuse of discretion.  Id.  An abuse of discretion occurs when it is 
shown the trial court reasonably could not have concluded as it did.  Id.  

 
 
[¶85]  The City claimed that Mr. Anderson's 
testimony was critical to rebut Mr. Hladky's testimony that he did not intend 
the change order to operate as an accord and satisfaction or waiver of his 
damage claim.  The City asserted 
that Mr. Anderson was the City's trouble shooter with respect to the change 
order, he attended the city council meeting where it was addressed and he was 
the appropriate person to testify concerning the City's 
intent.

 
 
[¶86]  In his deposition taken prior to trial, 
Mr. Anderson testified that he had no involvement in preparing the change 
order.  He did not review it after 
it was drafted.   He testified 
his only involvement with the written change order may have been in getting it 
signed.  He testified his memory of 
the city council meeting was a conversation which he thought focused on the need 
to move the project forward by getting a precast panel supplier because the one 
selected by HCI was not certified.   
He did not remember anything Mr. Hladky or Mr. Roberts may have said at 
the meeting.  He remembered 
something being said about "no more change orders," which he thought upset Mr. 
Hladky.  He also remembered being 
glad the change order had been approved and the project was moving forward  "it 
got the contractor out of a horrible spot he was in, moved things on."  

 
 
[¶87]  We find no abuse of discretion in the 
district court's ruling.  Mr. 
Gillette drafted the change order and was the best source for testimony 
concerning what the City intended.  
While Mr. Gillette may have had discussions with Mr. Roberts concerning 
the change order, no evidence was presented that Mr. Anderson was involved in 
those discussions. The city council and the mayor approved the change order and 
were the best source of testimony concerning what the City intended.  No showing was made that Mr. Anderson 
had knowledge sufficient to allow him to testify concerning the City's 
intent.      

 
 
5.         
Evidence and Jury Instructions on Contract Claim 
Requirements

 
 
[¶88]  The City asserts the district court 
erred when it failed to enforce the contract provisions governing claims, 
refused to instruct the jury that HCI was required to comply with those 
provisions and excluded testimony concerning the authenticity of HCI's notice of 
claim documents.  We address each of 
these arguments separately.

 
 
a.         
Enforcement of Contract Provisions

 
 
[¶89]  The City filed motions for judgment as a 
matter of law based in part on its assertion that HCI failed to comply with the 
contract notice provisions.  The 
City argues the district court erred as a matter of law in denying its motions 
on those grounds.  The City cites 
the following contract provisions:

 
 

4.3.1       
Definition.  A Claim is a demand or assertion by one 
of the parties seeking, as a matter of right, adjustment or interpretation of 
Contract terms, payment of money, extension of time or other relief with respect 
to the terms of the contract.  The 
term "Claim" also includes other disputes and matters in question between the 
Owner and Contractor arising out of or relating to the Contract.  

 
 

4.3.2       
 Time Limits on Claims.  Claims by either party must be initiated 
within 21 days after occurrence of the event giving rise to such claim or within 
21 days after the claimant first recognizes the condition giving rise to the 
Claim, whichever is later.  Claims 
must be initiated by written notice to the Architect and the other 
party.

 
 
. 
. . .

 
 

4.3.5       
Claims 
for Additional Cost.  If the 
Contractor wishes to make a Claim for an increase in the Contract Sum, written 
notice as provided herein shall be given before proceeding to execute the Work. 

 
 

4.3.6       
If 
the Contractor believes additional cost is involved for reasons including but 
not limited to . . . (7) other reasonable grounds, Claim shall be filed in 
accordance with this Paragraph 4.3.   

 
 
4.3.7.1 
If the Contractor wishes to make Claim for an increase in the Contract Time, 
written notice as provided herein shall be given.  The Contractor's Claim shall include an 
estimate of cost and of probable effect of delay on progress of the Work.  In the case of a continuing delay only 
one Claim is necessary. 

 
 
. 
. . .

 
 
13.3.1  Written notice shall be deemed to have 
been duly served if delivered in person to the individual or a member of the 
firm or entity or to an officer of the corporation for which it was intended, or 
if delivered at or sent by registered or certified mail to the last business 
address known to the party giving notice. 

 
 
[¶90]  Pursuant to these provisions, the City 
maintained HCI was required to give written notice of its breach of the implied 
covenant claim to both the architect and the City in person or by certified mail 
within 21 days after it first recognized at the August 31, 2000, project meeting 
that it would not be allowed to order the precast panels until Winfrey was 
certified.  The City further argued 
HCI was required to include in the notice an estimate of the cost and of the 
probable effect of the delay on the progress of the work.  The City contended that HCI failed to 
comply with these requirements because it did not provide written notice of its 
claim to the architect and the City in person or by certified mail by September 
21, 2000, and did not include an estimate of the cost or probable effect of the 
delay.  

 
 
[¶91]  The evidence presented at trial showed 
that after learning that the City was requiring Winfrey to be certified before 
HCI placed the precast panel order, Mr. Hladky took a number of steps to move 
the project along as scheduled and prevent delay.  He testified that he met the same day 
with Mr. Roberts and Mr. Gillette in an effort to persuade them to allow him to 
place the order.  He testified that 
he also informed Winfrey that day that it needed to obtain its certification 
before he could place the order.  He 
testified that he offered to take a City representative to inspect Winfrey's 
plant to ensure that its manufacturing process was adequate to allow HCI to 
place the order.  He proposed hiring 
an inspector or paying a city representative to watch Winfrey's manufacturing 
process to assure the quality of the precast panels.  He submitted a change order request 
substituting Gage Brothers as the precast panel supplier on September 18; met 
with Mr. Darrington on October 5 in the hope of obtaining his approval of the 
change order request; proposed by letter dated October 30 to deduct the price of 
the precast panels from HCI's bid and let the City find another supplier; 
submitted a second change order request to that effect on October 31; and met 
with the city council to obtain approval of the change order request.    

 
 
[¶92]  Viewed in the light most favorable to 
HCI, this evidence raised a reasonable inference that HCI "first recognized the 
condition giving rise to [its] claim" within the meaning of Article 4.3.2 of the 
contract only after Mr. Hladky had unsuccessfully exhausted efforts to prevent 
delay damages.  Thus, the 21 days 
for initiating the claim began to run not on August 31, as the City asserts, but 
from some later date when HCI recognized there was nothing it could do to 
prevent the delay.  Mr. Hladky 
testified that he could not put an exact date on when he first recognized the 
condition giving rise to the claim.  
He testified, however, that if the City had acted two weeks before the 
October 31, 2000, notice of claim letter, HCI's subcontractor could have 
completed the concrete work and much of the delay could have been avoided. On 
that basis, he testified that HCI first recognized the condition giving rise to 
its claim when the City had not acted by mid-October of 2000.  From this evidence it can reasonably be 
concluded that the 21 days began to run in mid-October.  Thus, HCI's October 31, 2000, letter met 
the requirements of the contract and the district court's rulings to that effect 
were proper.

          

[¶93]  The City asserted the October 31, 2000, 
letter did not meet the contract requirements because HCI did not deliver it in 
person or by registered or certified mail.  
A close look at the language of Article 13.3.1 demonstrates that delivery 
in person or by registered or certified mail is not mandated.  While "written notice shall be deemed to 
have been duly served if delivered in person . . . or if . . . sent by 
registered or certified mail," the contract does not preclude service by regular 
mail.  Additionally, Mr. Gillette 
testified that he received the October 31, 2000, notice of claim; therefore, the 
evidence was undisputed that he had actual notice of the claim.  Given the actual notice, the district 
court was not willing to conclude that HCI's failure to serve the notice of 
claim personally or by certified mail was fatal to its claim.  We agree.

 
 
[¶94]  The City contends that Article 4.3.2 of 
the contract required HCI to provide written notice of its claim to the 
architect, Mr. Gillette, and the City 
and the fact that the October 31 letter went only to Mr. Gillette caused the 
claim to be legally defective.  An 
abundance of evidence was presented from which it could be reasonably concluded 
that Mr. Gillette was the City's representative on the City Hall project and 
that notice to him was sufficient to constitute notice to the City.  Given that evidence, the district court 
concluded that HCI complied with the contract claim provisions.  

 
 
[¶95] 
The City further argues HCI failed to comply with the contract provisions 
because its October 31, 2000, notice of claim did not include an estimate of the 
cost and probable effect of the delay.  
Article 4.3.7.1 applied to claims for additional time.  HCI's claim was for the additional costs 
caused by the delay, not for additional time.  The contract did not require submission 
of an estimate of the cost and effect of the delay for a damages claim.  

 
 
b.         
Failure to Instruct on the Contract 
Provisions

 
 
[¶96]  The City contends, without citation to 
any authority, that the district court erred in failing to instruct the jury 
that the contract claims provisions were mandatory.  The City offered, and the district court 
rejected, the following instructions:

 
 
INSTRUCTION 
NO. 22(a)

CONTRACT 
TERMS  CONDITIONS PRECEDENT

 
 
            
Wyoming 
law provides that parties can contractually  require that certain conditions  (conditions precedent) be met prior to a 
party being able to bring a claim, i.e., to sue the other 
party.

            
The Contract between Hladky Construction, Inc. and the City of Gillette provides for 
certain conditions that have to be met before a Claim can be made by Hladky 
Construction, Inc.  Those condition 
precedents are found at Articles 4.3.1, 4.3.2, 4.3.5, 4.3.7.1 and Article 
13.1.  If you find that Hladky 
Construction, Inc. failed to abide by the Contract's mandatory procedures to 
establish a Claim, then Hladky Construction, Inc.'s claims against the City of 
Gillette are 
barred.

 
 
INSTRUCTION 
NO. 23(a)

WRITTEN 
NOTICE OF CONTRACT CLAIMS

 
 
            
Hladky Construction, Inc., by and through this lawsuit, is making a claim 
for additional monies under the Contract between it and the City of Gillette.  That Contract provides that a Claim 
arising out of or relating to the Contract, must be initiated by written 
notice.

            
Hladky Construction, Inc. has the burden of proving, by a preponderance 
of the evidence that, it complied with all contractual requirements regarding 
procedures for making Claims.  If 
you find that Hladky Construction, Inc. failed to comply with the requirement in 
Article 4.3.1 that written notice be provided not only to the Architect, but 
also the City of Gillette's Owner's Representative, Dan Roberts, 
then you must find that its Claims are barred.

 
 
INSTRUCTION 
NO. 39

PROCEDURE 
FOR SERVING WRITTEN NOTICE OF CLAIM

 
 
            
Article 13.1 of the General Conditions of the Contract for Construction, 
(AIA document A201-1997) provides that notice is deemed duly served if delivered 
in person or if sent by registered or certified mail.  If you find that Hladky Construction, 
Inc. failed to serve its written notice of claim letters in the above manner, 
then you must find that its Claims are barred.

 
 
[¶97]  As we have said, the district court is 
not obligated to give an instruction offered by a party as long as the jury is 
adequately instructed on the law as it pertains to the case.  Parrish, ¶ 7, 130 P.3d  at 505.  A district court's ruling on an 
instruction will not constitute reversible error absent a showing of prejudice, 
and prejudice will not be said to result unless it is demonstrated that the 
instruction confused or misled the jury with respect to the proper principles of 
law.  Id.  The burden is on the appellant to show 
prejudicial error.  

 
 
[¶98]  The City cites to no authority on the 
issue of whether a court is required to instruct the jury that contract 
provisions are mandatory.  The cases 
the City cited to the district court as authority for its proposed instructions 
do not address the question.  Under 
the facts of this case, we conclude the district court was not required to 
instruct the jury concerning the individual contract claims provisions.  As the City states in its appellate 
brief, "[m]uch of the five-week trial was devoted to the notice issue."  The contract claims provisions were 
presented to the jury, testimony was presented concerning those provisions and 
the parties had a full opportunity to argue the impact of those provisions.  The contract provisions were 
sufficiently presented to the jury for consideration without specific 
instructions from the court concerning them.   

 
 
            
c.         
Exclusion of Testimony

 
 
[¶99]  At trial, the City intended to attempt 
to show that HCI created the October 31, 2000, and November 28, 2000, notices of 
claim letters after-the-fact and had submitted a low bid on an earlier project 
with the intent to later file a claim to recover its losses.  The City designated Van Ewing, a former 
part owner and vice president of HCI, to testify that HCI submitted a low bid on 
another job and filed a claim to recover its losses.  Mr. Ewing also would have testified that 
Mr. Hladky produced a notice of claim on that project that was not in anyone 
else's file and, when Mr. Ewing asked him about it, Mr. Hladky said it was 
better if Mr. Ewing did not know about it.

 
 
[¶100]  The City also designated Roger Voorhis, 
the general contractor against whom HCI filed the claim on the earlier job 
referenced by Mr. Ewing, to testify that Mr. Hladky presented him with a false 
notice of claim.  Additionally, the 
City designated Gillette city attorney, Charles Anderson, to testify that he 
searched the City's and the architect's files on the City Hall project and did 
not find the September 18, 2000, change order request, the October 31, 2000, 
notice of claim letter or the November 28, 2000, notice of claim letter. 

 
 
[¶101]  HCI filed motions in limine to exclude 
Mr. Ewing's, Mr. Voorhis' and Mr. Anderson's testimony.  The district court granted the motion as 
to Mr. Anderson's testimony on the grounds that it was cumulative of other 
testimony indicating that the documents were not in the City's files.  The district court also granted the 
motion as to Mr. Ewing's and Mr. Voorhis' testimony on the ground that it would 
divert the jury's attention from the issue before it and would likely have led 
to a trial within a trial in that upon the City's presentation of the testimony, 
HCI would have wanted to present rebuttal testimony.

 
 
[¶102]  Rulings on the admissibility of evidence 
are within the sound discretion of the trial court and will not be disturbed by 
this Court absent a clear abuse of discretion. Barnes, ¶ 11, 174 P.3d  at 736. We find 
no abuse of discretion in the district court's rulings excluding the testimony 
at issue.  Mr. Anderson's testimony 
that the documentation was not in the City's or architect's files was cumulative 
of the testimony of other witnesses indicating that the notices of claim and the 
change order request were not in the files and were first seen at the mediation 
or just prior to trial.  Mr. 
Voorhis' and Mr. Ewing's testimony did not relate to the project at issue, 
involved different parties and circumstances and would have led HCI to present 
rebuttal evidence in an already lengthy trial.  Moreover, as the district court 
concluded, the City was able to attack Mr. Hladky's credibility and character 
sufficiently by other means.  
Viewing the totality of the trial evidence and testimony, we hold that 
the district court reasonably concluded that "more of the same would not have 
produced a different result."            

 
 
[¶103]  The City argues that whether or not the 
district court's initial ruling was proper, once HCI opened the door to evidence 
concerning the veracity of its business practices, evidence to refute its claims 
was admissible.  The City asserts 
the district court erred at that point when it prohibited Mr. Ewing's testimony 
on the ground that it was "not of sufficient importance to justify the time that 
would be necessary to explore it."  
Whether or not the door was opened, the district court reasonably could 
have concluded that any probative value of the earlier alleged incident was 
outweighed by the specter of a trial within a trial as the City tried to prove 
HCI's actions on the earlier project.  
Armstrong v. Hrabal, 2004 WY 
39, ¶ 48, 87 P.3d 1226, 1242 (Wyo. 2004).  
We hold the district court did not err in precluding the testimony in 
question.

 
 
6.         
Attorney Fees

 
 
a.     Prevailing Party in 
Suit to Enforce Rights Under the Contract

 
 
[¶104]  In claiming that the district court 
improperly awarded HCI attorney fees, the City argues first that HCI was not 
entitled to the award because it did not prevail on the breach of contract 
claim.  The City cites Article 13.8 
of the contract which provided:

 
 
In 
the event either party files suit to enforce their rights under the Contract 
Documents, the prevailing party in such suit shall be entitled to recover all 
costs of the suit, and any subsequent appeal of such suit, including reasonable 
attorney fees, from the other party, in addition to any other damages awarded by 
the court.  

 
 
Emphasizing 
the phrase "to enforce their rights under the Contract Documents," the City 
contends the only basis for recovery of attorney fees under the contract was a 
suit for breach of the express provisions of the contract.  Because the jury found that it did not 
breach the contract, the City argues that HCI was not entitled to attorney 
fees.

 
 
[¶105]  To reiterate, every contract imposes 
upon the parties a duty of good faith and fair dealing in its performance and 
its enforcement.  Scherer, ¶ 17, 18 P.3d  at 652.  Accordingly, parties to a commercial 
contract may bring a claim for breach of the implied covenant of good faith and 
fair dealing based upon a contract theory.  Id.  One of 
the rights a party may seek to enforce under the contract is the right to good 
faith performance by the other party.  
Under the contract at issue in this case, the prevailing party in a suit 
to enforce its rights was entitled to attorney fees. Upon prevailing on its 
claim that the City breached the covenant implied in the contract in its suit to 
enforce its rights to good faith and fair dealing, HCI was entitled to recover 
reasonable attorney fees.  We hold 
that the district court properly awarded HCI attorney fees after it prevailed on 
its breach of the implied covenant claim.

 
 
b.         
Judicial Estoppel

 
 
[¶106]  The City argues HCI should have been 
judicially estopped from seeking attorney fees under the contract because it 
took the position throughout the trial that upon the City's breach, the contract 
no longer applied.  The City argues 
it is inconsistent to argue the contract does not apply and then to seek 
attorney fees under the contract.  
The City raised these same arguments in its opposition to HCI's 
post-trial motion for attorney fees.    

 
 
[¶107]  The doctrine of judicial estoppel is 
intended to prevent a party from playing fast and loose with the courts or 
trifling with judicial proceedings.  
Shepard v. Beck, 2007 WY 53, ¶ 
10, 154 P.3d 982, 986 (Wyo. 2007).  
It is an expression of the maxim that one cannot blow hot and cold in the 
same breath, meaning a party will not be allowed to maintain inconsistent 
positions in judicial proceedings.  
Id.  Thus, when a party is successful in a 
position taken in a previous court proceeding, that position rises to the 
position of conclusiveness for purposes of later court proceeding.  Wilson v. LucerneCanal and Power Co., 2007 WY 10, ¶ 26, 
150 P.3d 653, 663 (Wyo. 2007).  
Judicial estoppel bars only the changing of position in regard to facts; 
it does not apply to legal conclusions based upon facts.  Id., ¶ 28, 150 P.3d  at 664, n. 6.  

 
 
[¶108]  At the close of HCI's case in chief, 
upon the City's motion, the district court granted judgment as a matter of law 
on HCI's cardinal change claim.  The 
jury was not instructed that upon a finding that one party breached the contract 
or the implied covenant, the other party was relieved from performing under the 
contract.  Regardless of the 
evidence or arguments HCI presented, the case was given to the jury as a breach 
of contract and/or breach of the implied covenant case.  Upon the jury finding that the City 
breached the implied covenant contained in the contract, HCI was entitled to 
recover reasonable attorney fees.  
The district court did not err in ruling as a matter of law that HCI was 
not judicially estopped from seeking attorney fees.    

 
 
            
c.         
Segregation of Attorney Fees

 
 
[¶109]   The City argues that HCI was 
required to segregate its attorney fees between its successful and unsuccessful 
claims and should not have been awarded fees for its breach of contract 
claim.  On appeal of an award of 
attorney fees, the burden is on the party attacking the district court's ruling 
to show an abuse of discretion, and the ultimate issue is whether the court 
could reasonably conclude as it did.  
Burnett v. Steeley, 2008 WY 
94, ¶ 35, 190 P.3d 132, 139 (Wyo. 2008).  
In State Surety Co., 625 P.2d  
at 184, we required apportionment of attorney fees based upon the distinct 
nature of the issues in the suit between the subcontractor and the owner and the 
suit between the general contractor and the owner.  In that case, we concluded counsel for 
the owner was engaged in distinct activities that related only to one matter or 
the other.  More recently, in Forshee v. Delaney, 2005 WY 103, ¶ 16, 
118 P.3d 445, 450 (Wyo. 2005), we could not say that counsel for Delaney could 
so distinctly divide his activities.  
We concluded instead that the defense of Forshee's counterclaim was 
inextricable from pursuing Delaney's claim for breach of contract and payment of 
the invoices related to that contract.  
In Forshee, the issue was 
whether or not Forshee owed Delaney money and if so, how much.  Had Forshee been successful in his 
counterclaim, his damages would have offset the amount he owed to Delaney, 
rendering his counterclaim a necessary aspect of Delaney's suit to collect the 
past due invoices.

 
 
[¶110]  The same can be said in this case.  HCI's breach of the implied covenant 
claim was inextricably intertwined with its breach of contract claim.  We cannot say, and neither could the 
district court, that counsel was engaged in distinct activities when pursuing 
one claim or the other.  The issue 
was whether there was a breach  of contract or the implied covenant  and, if 
so, how much HCI was damaged.  We 
hold the district court did not abuse its discretion by refusing to require HCI 
to allocate its fees between the two claims.

 
 
d.         
Reasonableness of the Award

 
 
[¶111]  The City's final claim is that the 
district court abused its discretion in awarding certain fees and costs to 
HCI.  HCI responds that the district 
court properly exercised its discretion in awarding HCI $37,133.83 less than 
that for which it applied.

 
 
[¶112]  Wyoming has adopted the two-factor federal 
lodestar test to determine the reasonableness of attorney fee awards.  This test requires a determination of 
whether:  1) the fee charged 
represents the product of reasonable hours times a reasonable rate; and 2) other 
factors of discretionary application should be considered to adjust the fee 
upward or downward.  Foreshee, ¶ 7, 18 P.3d  at 448.  The City claims the award was 
unreasonable in three ways:  first, 
the district court allowed a $15/hour increase in lead counsel's hourly rate 
after the jury rendered its verdict and the fee-shifting provision of the 
contract became operative; second, the district court awarded fees for time 
HCI's counsel spent preparing motions which the court refused to consider 
because they were untimely and improper; and third, the district court awarded 
HCI costs for computer assisted legal research.  

 
 
[¶113]  Addressing the issue of the increase in 
lead counsel's hourly rate, HCI asserts that the increase was not related to the 
verdict or the fee-shifting provision.  
HCI contends that the increase occurred when Mr. Hladky learned during 
the first week of trial that, in contrast to the $165/hour per hour his attorney 
was charging, the City's attorneys were charging $195/hour. According to lead 
counsel's affidavit, Mr. Hladky thought it fair that he receive $180.00/hour for 
his trial work and he agreed to charge that amount beginning June 1, 2007.  For his work prior to June 1, 2007, 
including pre-trial preparation and the first week of trial, Mr. Hladky's lead 
counsel charged $165/hour.     

 
 
[¶114]  The hourly fee HCI's counsel charged for 
trial work beginning June 1, 2007, was $15/hour less than the hourly rate the 
City's counsel charged and $20/hour less than the hourly rate this Court deemed 
reasonable in Morrison v. Clay, 2006 
WY 161, ¶ 19, 149 P.3d 696, 702 (Wyo. 2006).  HCI attached to its motion for attorney 
fees the affidavit of another attorney, who attested to the reasonableness of 
the fees. We conclude the district court did not abuse its discretion in 
awarding fees at the rate of $180/hour beginning the second week of 
trial.

 
 
[¶115]  We likewise find no abuse of discretion 
in the district court's determination that fees were appropriate for time 
incurred in preparing motions that it did not ultimately consider.  The district court presided over this 
matter for several months before trial during which time it heard and decided 
numerous motions.  It then presided 
over the five week trial when it considered and decided the parties' 
motions.  In awarding attorney fees, 
the district court specifically considered the City's objection to fees incurred 
in preparing motions which it ultimately did not consider.  The district court concluded "these 
[were] reasonable activities for attorneys to undertake."    

 
 
[¶116]  Finally, we address the City's claim 
that the district court improperly awarded costs for computer assisted legal 
research.  The City cites Snyder v. Lovercheck, 992 P.2d 1079, 1092 (Wyo. 
1999) in which this Court concluded that computer research expenditures are 
included within attorney fees and are not taxable as costs.  We find no reference to computer 
assisted legal research as a cost in HCI's attorney billing statement.  Citing Snyder, the district court concluded 
that legal research fees are recoverable as attorney fees but not as costs.  We affirm the district court's 
award.

 
 
CONCLUSION

 
 
[¶117]  HCI fully complied with the § 1-39-113 
and Art. 16, § 7 of the Wyoming Constitution.  Therefore, this Court and the district 
court had subject matter jurisdiction to proceed with the matter presented.  The district court properly denied the 
City's motion for judgment as a matter of law on HCI's claim for breach of the 
implied covenant of good faith and fair dealing.  The City failed to meet its burden of 
proving prejudice resulted from the district court's failure to instruct the 
jury concerning the requisite elements of the total cost method of calculating 
damages.  The district court 
properly handled the contract claims procedures.  As a matter of law, the January 2001, 
change order did not constitute an accord and satisfaction or a waiver of HCI's 
claim for delay damages.  The 
district court did not abuse its discretion in awarding attorney fees.    

 
 
[¶118] Affirmed.

 
 
FOOTNOTES

 
 

1In fact, 
Winfrey was certified to manufacture structural precast panels.  The City Hall project required 
certification for manufacturing architectural precast panels.  Winfrey was not certified for 
architectural precast panels.

 
 

2Article 
6.3.3 of the contract provided:

 
 
Prior to the award of the 
Contract, the Architect will notify the Bidder in writing if either the Owner or 
Architect, after due investigation, has reasonable objection to a person or 
entity proposed by the Bidder.  If 
the Owner or Architect has reasonable objection to a proposed person or entity, 
the Bidder may, at the Bidder's option, (1) withdraw the Bid, or (2) submit an 
acceptable substitute person or entity with an adjustment in the Base Bid or 
Alternate Bid to cover the difference in cost occasioned by such 
substitution.  The Owner may accept 
the adjusted bid price or disqualify the Bidder. 

 
 

3Webster's 
On-Line Dictionary, www.websters-online-dictionary.org, defines "imbed" in the 
context of building and civil engineering as follows:  "Tensioned wires within the beam which 
are either bonded to the concrete. . . or are held between firm anchorages 
embedded in each end of the beam."  
Mr. Hladky testified that, in addition to delaying production of the 
precast panels, the specification change requiring Winfrey to be certified 
delayed the design for the walls which would have shown where the imbeds needed 
to be placed when the concrete was poured.  
The delay in the design had the further effect of delaying the concrete 
work.     

 
 

4Article 4.5 
of the contract provided in pertinent part:

 
 
4.5.1  Any Claim arising out of or related to 
the Contract . . . shall, after initial decision by the Architect or 30 days 
after submission of the Claim to the Architect, be subject to mediation as a 
condition precedent to . . . the institution of legal . . . proceedings by 
either party.

 
 

5In its ruling, the 
district court stated that it was not persuaded Wyoming law recognizes the cardinal change 
doctrine; even if the claim is recognized, the facts were insufficient to 
support the claim; and, even if the facts were sufficient, HCI waived the claim 
by continuing to perform under the contract.  

 
 

6Art. 16, § 7 
provides:

 
 
            
No money shall be paid out of the state treasury except upon 
appropriation by law and on warrant drawn by the proper officer, and no bills, 
claims, accounts or demands against the state, or any county or political 
subdivision, shall be audited, allowed or paid until a full itemized statement 
in writing, certified to under penalty of perjury, shall be filed with the 
officer or officers whose duty it may be to audit the 
same.

 
 

7In 
considering the City's claim that it had to speculate as to the conduct giving 
rise to HCI's claim, it is of some interest that HCI first presented its claim 
to the City by letter dated September 10, 2002. It provided more detail and 
reduced the damage amount it was claiming in a subsequent letter dated April 25, 
2003.  The parties then attempted to 
resolve the dispute through mediation with the AIA.  After three sessions, the parties 
appeared to be at an impasse.  Only 
then did HCI proceed with a formal notice of claim.  Although actual notice of a claim does 
not excuse a failure to comply with the Wyoming Governmental Claims Act, when, 
as here, a party is involved in lengthy efforts to resolve a claim through 
mediation and then, when those efforts prove unsuccessful, receives a detailed 
notice of claim, it is difficult to imagine the party did not understand the 
basis for the claims.    

 
 

8In addition 
to the evidence showing the City went along with Mr. Gillette's change to the 
contract, there was substantial evidence from which the jury could reasonably 
conclude that Mr. Gillette had the authority to bind the City at least on some 
matters.  Article 4.2.1 of the 
contract provided that the architect was to administer the contract and was the 
City's representative during construction.  
Article 4.2.2 provided that the architect, as the City's representative, 
was to guard the City against construction defects and deficiencies. Article 
4.2.4 provided that the City and HCI were to communicate through the 
architect.  Article 4.2.6 gave the 
architect authority to reject work that did not conform to the contract.  Article 4.2.7 required the architect to 
review HCI's submittals for checking conformance with the contract.  Article 4.2.8 required the architect to 
prepare change orders.  Article 
4.2.11 required the architect to interpret and decide matters concerning 
performance under and requirements of the contract on written request of HCI or 
the City. Articles 4.4.1 and 4.4.5 required claims to be submitted to the 
architect and provided that the architect's decision concerning any claim was 
final and binding on the parties subject to 
mediation.