Case Title: Universal Drilling Co., LLC v. R & R Rig Serv., LLC

Citation: 

Docket Number: S-11-0079

State: wyoming

Court: Wyoming Supreme Court

Date: 2012-03-01T00:00:00Z

Document:
UNIVERSAL DRILLING COMPANY, LLC, a Wyoming Limited Liability Company v. R & R RIG SERVICE, LLC. R & R RIG SERVICE, LLC. v. UNIVERSAL DRILLING COMPANY, LLC, a Wyoming Limited Liability Company. 2012 WY 31Case Number: S-11-0079, S-11-0080Decided: 03/01/2012NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
OCTOBER 
TERM, A.D. 2011
 
UNIVERSAL 
DRILLING COMPANY, LLC, a Wyoming Limited Liability Company,Appellant 
(Defendant),v.R & R RIG SERVICE, LLC.,Appellee 
(Plaintiff).R & R RIG SERVICE, LLC,Appellant 
(Plaintiff),v.UNIVERSAL DRILLING COMPANY, LLC, a Wyoming Limited 
Liability Company,Appellee (Defendant).
 
Appeal 
from the District Court of Washakie County
The 
Honorable Robert E. Skar, Judge
 
Representing 
Universal Drilling Company, LLC:
Raymond 
B. Hunkins and Amanda Hunkins Newton of Hunkins Newton Law Firm, Cheyenne, 
Wyoming.  Argument by Mr. 
Hunkins.
 
Representing 
R &R Rig Service, LLC:
David 
B. Hooper of Hooper Law Offices, Riverton, Wyoming.
 
 
Before 
KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, 
JJ.
 
KITE, 
Chief Justice.
 
[¶1]      R & R Rig 
Service, LLC (R & R) moved Universal Drilling Company, LLC’s (Universal) 
drilling rig in May 2007 under a time and materials contract.  Universal refused to pay R & R’s 
invoice, claiming that it should only have to pay the amount it paid to have the 
rig moved a few weeks later by a different company.  R & R brought suit for payment for 
the services it rendered, and Universal counterclaimed on the basis of fraud and 
breach of the implied covenant of good faith and fair dealing.  The district court held a bench trial 
and generally ruled in favor of R & R and against Universal, although it 
refused to grant R & R’s request for pre-judgment interest.  Both parties appealed.  We affirm in part and reverse and remand 
in part. 
 
ISSUES
 
[¶2]      In Case No. 
S-11-0079, Universal challenges the district court’s judgment in favor of R 
& R on the following grounds:  

 
1.    
 Did the trial court adopt an erroneous 
methodology for calculating the amount due to R & R for the rig move when it 
superimposed its determination of “reasonableness” rather than the appropriate 
methodology for calculating damages under a time and materials 
contract?
 
2.    
Did 
the trial court make a clearly erroneous ultimate finding that fraud in the 
execution and fraud in the inducement had not been proven when its basic 
findings included findings constituting a concurrence of several indicia or 
“badges” of fraud?
 
3.    
Did 
the trial court reach an incorrect conclusion that breach of the implied 
covenant of good faith and fair dealing was not proven where the trial court’s 
findings supporting that conclusion showed that R & R systematically and 
pervasively overcharged Universal and then sought to enforce its invoice 
containing those overcharges for over two years without any attempt to reconcile 
its own records until this matter went to trial?
 
4.    
Did 
the trial court erroneously fail to consider Universal’s affirmative defense of 
estoppel?
 
5.    
Do 
the computational and arithmetical errors in the trial court’s findings related 
to R & R’s daily work tickets render the trial court’s determination of the 
amount due to R & R for the rig move clearly 
erroneous?
 
R 
& R restates the issue generally as:  

 
            
Are any of the trial court’s findings entered in this matter clearly 
erroneous and was the judgment rendered a correct application of the 
law?
 
In 
Case No. S-11-0080, R & R articulates the following issue: 

 
Was 
it error and abuse of discretion for the trial court judge to refuse to award 
prejudgment interest on any part of the amount the trial court found was due and 
owing R & R Rig Service by Universal Drilling Company, 
LLC?
 
Universal 
states the issue as:
 
            
In a payment dispute arising from an oral, time and materials contract 
where the evidence showed multiple billing discrepancies and the trial court 
itself undertook the task of reconciling the plaintiff’s billing records, was it 
an abuse of discretion for the trial court to refuse to award prejudgment 
interest on an amount tendered by Universal but refused by R & R, given the 
record in this case?
 
FACTS
 
[¶3]      In May 2007, 
Universal employed R & R to move its drilling rig in Washakie County on a 
time and materials basis.  R & R 
hired two subcontractors for the move—CC&T Trucking, which was affiliated 
with R & R because it had common ownership, and DFI, which was an 
independent company.  R & R 
equipment operators prepared daily work tickets, showing the equipment in use, 
personnel, work activities and hours worked.  R & R co-owner Randy Woodward 
supervised the move and prepared tickets for his own work and also for 
subcontractor DFI.  Mr. Woodward and 
the other operators presented their tickets to the Universal supervisors at the 
end of each day for signature, acknowledging “that the personnel and equipment 
were actually on site and working.”  
DFI also prepared its own tickets and invoiced R & R after the 
move.        

 
[¶4]      The move took 
seven days, from May 7 through May 14, 2007.  On May 15, 2007, R & R bookkeeper 
Sharon Mosbrucker prepared an invoice for the Universal move, using R & R’s 
daily work tickets.  She added in 
the applicable hourly rates for equipment and personnel and totaled the amount 
due for each ticket.  Neither the 
DFI work tickets nor R & R’s employee time sheets were available when she 
prepared the invoice.  R & R 
invoiced Universal a total of $208,616.50 for the move.    
 
[¶5]      Before Universal 
paid R & R, it arranged for the rig to be moved again.  This time, Universal requested bids, and 
another rig moving company, Bar S, bid $65,000 plus crane charges to move the 
rig.  Universal employed Bar S, and 
its final bill for the second rig move was $97,499.     
 
[¶6]      Universal 
tendered a check to R & R in the amount of $97,500 as full payment for R 
& R’s services in moving the rig.  
Universal stated it considered $97,500 “the fair value” for R & R’s 
rig moving services based upon the amount billed by Bar S.  R & R refused Universal’s tender and 
demanded full payment on the invoice, plus interest.   
 
[¶7]      When Universal 
refused to pay the invoiced amount, R & R brought suit seeking full 
payment.  Universal counterclaimed 
for fraud and breach of the implied covenant of good faith and fair 
dealing.  It also asserted estoppel 
as an affirmative defense to R & R’s claim.  The matter was heard in a bench trial in 
June 2010.  The district court 
considered extensive evidence of the charges and costs associated with the move, 
including R & R’s and DFI’s daily tickets and R & R’s employee time 
sheets.  The district court 
carefully compared all of the documentation, considered the witness testimony 
and ordered Universal to pay R & R $188,301.50 for the time and materials 
associated with the rig move.  The 
district court stated that it considered that amount to be “the reasonable value 
of the services rendered to Universal . . . .”  The district court also ruled against 
Universal on its fraud and breach of the implied covenant of good faith and fair 
dealing claims, but it did not directly address Universal’s estoppel 
defense.  The district court denied 
R & R’s request for prejudgment interest.  Both parties appealed.     
 
STANDARD 
OF REVIEW
 
[¶8]      The district 
court held a bench trial in this case.  
Accordingly, we apply the following standard of 
review:
 
      The factual 
findings of a judge are not entitled to the limited review afforded a jury 
verdict. While the findings are presumptively correct, the appellate court may 
examine all of the properly admissible evidence in the record. Due regard is 
given to the opportunity of the trial judge to assess the credibility of the 
witnesses, and our review does not entail re-weighing disputed evidence. 
Findings of fact will not be set aside unless they are clearly erroneous. A 
finding is clearly erroneous when, although there is evidence to support it, the 
reviewing court on the entire evidence is left with the definite and firm 
conviction that a mistake has been committed.
 
Mullinnix 
LLC v. HKB Royalty Trust, 2006 
WY 14, ¶ 12, 126 P.3d 909, 916 (Wyo. 2006) (citations omitted).   
 
            
[W]e assume that the 
evidence of the prevailing party 
below is true and give that 
party every reasonable inference that can fairly and reasonably be drawn from 
it. We do not substitute ourselves for the trial court as a finder of 
facts[.]
 
Comet 
Energy Servs., LLC v. Powder River Oil & Gas Ventures, LLC,  2010 WY 82, ¶ 9, 239 P.3d 382, 386 (Wyo. 
2010), quoting Cook v. Eddy, 2008 WY 111, ¶ 6, 193 P.3d 705, 708 (Wyo. 
2008).  The district court’s 
conclusions of law are reviewed de novo.  Lieberman v. Mossbrook, 2009 WY 
65, ¶ 40, 208 P.3d 1296, 1308 (Wyo. 2009).
 
DISCUSSION
 
A.   Damages
 
[¶9]      Two of 
Universal’s issues pertain to the district court’s calculation of damages.  In its first issue, Universal claims 
that the district court incorrectly superimposed a “reasonableness” standard 
rather than appropriately calculating damages under the parties’ time and 
materials contract.  In its fifth 
issue, Universal claims that the district court’s findings with regard to 
damages were clearly erroneous because of computational errors and because the 
district court did not adopt, in their entirety, the calculations presented by R 
& R in a revised invoice admitted into evidence at trial.  
 
[¶10]     Universal challenges the district 
court’s reference to the “reasonable value” of R & R’s services in its 
decision, as reflected in Finding of Fact No. 95:
 
95.       This Court 
finds that the reasonable value of the services rendered to Universal and the 
amount owed to R & R is the sum of $188,301.50. 
 
Universal 
also challenges Conclusion of Law No. 2:
 
            
2.         
That Plaintiff is entitled to recover the reasonable charges for labor, 
equipment usage, and materials used in the move of Defendant Universal’s rig. 
 That Plaintiff has demonstrated to 
the Court that the reasonable value of the services provided to Universal is in 
the sum of $188,301.50.
 
Universal 
contends these rulings demonstrate that the district court improperly resorted 
to a standard of “reasonable value” to compute the damages.  It claims that the court’s determination 
of the reasonable value of R & R’s services was not “material to its 
decision, although the [c]ourt made it so.”    
 
[¶11]   The district court found that the 
parties had entered into a time and materials contract, and its decision 
included a careful breakdown of each of Universal’s charges and comparison of 
them to the employee time sheets and subcontractor work tickets.  Mr. Woodward and Ms. Mosbrucker both 
testified about the documentation.  
There is no indication in the decision that the district court somehow 
adjusted the final amount of damages to reflect a “reasonable” value, as opposed 
to the actual value of the time and materials calculated from the testimony and 
documentation.  

 
[¶12]   Furthermore, “[p]roven actual costs 
in contract claim cases are presumed reasonable . . . .”  Frost Constr. Co. v. Lobo, Inc., 951 P.2d 390, 398 (Wyo. 1998).  See also, Garrison v. CC Builders, Inc., 2008 WY 
34, ¶¶ 30-37, 179 P.3d 867, 875-77 (Wyo. 2008) (holding that the district court 
did not commit clear error in calculating the “reasonable” amount due on a cost 
plus contract by considering documents and expert testimony addressing the 
construction costs and calculating a total “reasonable” cost by adding up 
numerous “subcosts”).   The district court’s order indicates 
it determined the costs of  R & 
R’s actual time and materials and then simply concluded the total amount was 
reasonable.  That conclusion is 
consistent with the presumption that actual costs are reasonable.  Universal has not convinced us the 
district court employed an improper methodology in calculating 
damages.
 
[¶13]   In its fifth issue, Universal 
challenges the district court’s arithmetic in Findings of Fact 44, 51, 61, and 
68.  R & R does not respond to 
Universal’s arguments individually, but simply states there were no errors.  After reviewing the record and the 
district court’s findings in light of Universal’s contentions, we conclude there 
were some minor computational errors that should be corrected.  Finding of Fact No. 44 
stated:
 
            
44.       
Exhibit 2.13, dated 5-08-07, is ticket no. 4623 showing a total of 
$4,550.00.  . . . The Court finds R 
& R over-billed Universal on this ticket, bed truck $205.00, swamper $630.00 
and per diem $125.00 for a corrected total of $5,670.00  (bold in 
original).
 
It 
is clear the district court erred by failing to subtract the overbilled amounts 
from the ticket total.   
Because this error involves a simple arithmetic correction, we conclude 
the correct amount of the ticket should have been $3,590, i.e., $4,550 minus 
$960 in total overbilled amounts.
 
[¶14]   Finding of Fact No. 51 
stated:
 
            
51.       
Exhibit 2.20, dated 5-09-07 is ticket no. 3900 showing a total of 
$8,680.00.  This ticket was prepared 
by “RW” (Randy Woodward) and bears the signature of Richard Parks.  The number[s] in the “amount” and 
“total” columns were inserted by Sharon Mosbrucker after the ticket was prepared 
and presented to Richard Parks for signature.  Universal is charged on the R & R 
daily work ticket (2.20) for the DFI #29 truck for 13 hours.  However, on the DFI daily work ticket 
(ee 7) the DFI [#]29 truck is charged to R & R for 12 hours.  In addition, Universal is also charged 
for 13 hours for a swamper for this unit.  
However, on the DFI daily work ticket to R & R there is no “swamper” 
charged.  In addition, Universal is 
charged on the R & R daily work ticket for the DFI truck #34 for 9 
hours.  However, on the DFI daily 
work ticket to R & R (ee 9), R & R has been charged for only 7.5 hours 
for truck #34.  In addition, on the 
R & R ticket to Universal (2.20) a “swamper” for this unit is also charged 
to Universal for 9 hours but on the DFI daily work ticket to R & R (ee 9) 
the swamper is only charged for 7.5 hours.  
On the R & R work ticket (2.20) to Universal (and on the invoice, Ex. 
1), the DFI forklift loader is represented to have worked 13 hours.  However, on the DFI daily work ticket to 
R & R (ee 8), R &R is only charged for 11.5 hours of time for the fork 
lift loader.  This Court finds that 
R & R over-billed Universal on this ticket, haul truck $160.00, swamper 
$585.00, bed truck $307.50, forklift loader $270.00, for a corrected total of $7,357.50. 
 
[¶15]   Universal argues that the district 
court’s total does not account for the 1½ hour overcharge of the swamper 
(laborer) for DFI truck #34.  In 
Finding of Fact No. 28, the district court concluded that the proper hourly rate 
for a swamper was $45, and Universal does not dispute this hourly rate.  The last sentence of Finding of Fact No. 
51, includes a reduction for swamper charges of $585, or 13 hours of swamper 
time.  That amount corresponds to 
the incorrect inclusion of swamper time on DFI truck #29, but, as pointed out by 
Universal, it does not include the additional 1½ hours of swamper time 
incorrectly charged on DFI truck #34.  As such, the total should have been 
reduced by 1½ swamper hours at $45 per hour, or $67.50, for a corrected total on 
that ticket of $7,290.        
 
[¶16]   Universal claims the district court 
incorrectly failed to deduct improper per diem charges in Finding of Fact No. 
61.  This argument involves more 
than a mathematical error because the district court did not address per diem 
charges at all in Finding of Fact No. 61.  
Although Universal outlines the per diem charges on the ticket and states 
that R & R overcharged by $500, it does not provide a sufficient explanation 
of how the failure to deduct the per diem amounts was clear error in light of 
the entire record.  We, therefore, 
reject Universal’s argument in this regard.
 
[¶17]   In Finding of Fact No. 68, the 
district court addressed Exhibit 2.37, which was ticket No. 3902 dated 
5-11-07.  The district court 
concluded that Universal had overbilled two per diem amounts of $125, totaling 
$250.  It did not, however, subtract 
that amount from the ticket total.  
We agree with Universal that the ticket should be reduced by $250, for a 
total of $12,130.   

 
[¶18]   Universal also makes a general 
argument that the district court erred by failing to incorporate all of R & 
R’s admitted billing errors into its decision.  This argument is based upon R & R’s 
Exhibit 20, which was admitted at trial without objection by Universal.  Exhibit 20 was a revised invoice 
prepared by Ms. Mosbrucker shortly before trial, in which she reconciled the 
original invoice with R & R employee time sheets and the invoice/work 
tickets received from subcontractor DFI after R & R had already invoiced 
Universal for the rig move.  In 
Exhibit 20, R & R identified billing mistakes in the original invoice 
totaling over $16,000.     
 
[¶19]   Universal claims the district court 
erred by failing to include R & R’s “admissions” of billing mistakes in 
Exhibit 20 in several of its findings of fact.  It argues that because the parties 
agreed to amend the pleadings to conform to the evidence presented at trial, 
which included the admitted billing mistakes outlined in Exhibit 20, the 
district court should have simply adopted Exhibit 20 as part of its 
decision.   

 
[¶20]   Universal ignores the fact that the 
district court had many documents to consider in making its final decision.  The district court reconciled the 
information from all of those documents to determine the amount owed to R & 
R for the rig move.  It referred to 
Exhibit 20, along with many other exhibits in its decision, in some instances 
adopting the numbers included in Exhibit 20 and in other instances choosing to 
rely on other information.  
Universal does not provide an analysis demonstrating that the district 
court’s individual findings were clearly erroneous, but just points out that 
they do not comport with Exhibit 20.  
Because Universal has not convinced us the district court erred by 
weighing all of the evidence before it, including Exhibit 20 and the other 
exhibits, we will not set aside its findings.  See Garrison, ¶¶ 34-37, 179 P.3d  at 
876-77 (concluding that the district court did not err in calculating damages by 
using different numbers derived from the evidence than the plaintiffs would have 
preferred). 
 
B.  Fraud
 
[¶21]   We reviewed the requirements for 
proving a fraud claim in Excel Constr., 
Inc. v. HKM Engineering, Inc., 2010 WY 34, ¶ 33, 228 P.3d 40, 48-49 (Wyo. 
2010) (some citations omitted):
 
The 
elements of intentional 
misrepresentation or fraud are 
as follows:
 
(1) 
the defendant made a false representation intended to induce action by the 
plaintiff; (2) the plaintiff reasonably believed the representation to be true; 
and (3) the plaintiff relied on the false representation and suffered 
damages.
 
In 
order to prove intentional misrepresentation, the plaintiff must show that the 
misrepresentation was made intentionally, with knowledge of its falsity, or that 
the maker of the misrepresentation was at least aware that he did not have a 
basis for making the statement. Fraud must be proven by clear and convincing 
evidence, as opposed to by a preponderance of the evidence for negligent 
misrepresentation claims. Fraud must be pled with particularity. W.R.C.P. 
9(b).
 
[¶22]   The district court found that 
Universal had failed to establish any of the elements of fraud by clear and 
convincing evidence.  Finding of 
Fact No. 92 addresses Universal’s fraud claim:
 
            
92.       
This Court finds that there is not clear and convincing proof of fraud in 
this case.  The invoice was created 
the day following completion of the rig move from Mr. Woodward’s daily time 
records of which Universal had a copy . . . There is no doubt that Mr. Woodward 
is inept in keeping tabs on his worker hours and equipment time on the job but 
the Court cannot equate that to an intention to defraud.  There is no evidence of a false 
representation intended to induce action by Universal.  There can therefore be no evidence of 
reliance on that false representation and thus no damages suffered.  The reasonable cost of moving the 
Universal rig was a moving target throughout the move and the costs of the move 
depended on the readiness of the move, the changes requested during the move 
(i.e. additional welding done to make future moves less expensive, and hauling 
materials and equipment to Riverton, etc.) and the facts and circumstances of 
the move, on the ground, on a day by day basis.  Universal was aware from the outset that 
large and expensive pieces of equipment were to be used to move this rig.  It also had men in the field validating 
the daily time records of men and equipment involved each day.  Universal is [a] company experienced in 
hiring rig movers.  Universal cannot 
now be heard to complain that they should have asked for a bid or should have 
hired a different company.  The fact 
that this move was more expensive than the one two weeks lat[]er is not 
remarkable given the circumstances.  
It is made less remarkable when you factor in the difference between a 
“time and materials” contract and a bid contract.  The oil industry is replete with “do it 
now, the hell with the cost” attitudes.  
Each party had in place the personnel to keep this issue from 
happening.  Universal does not now 
get to rewrite its contract with R & R because it got a better deal 
elsewhere. 
 
[¶23]   Universal claims there were a 
number of “badges” of fraud in this case and the district court clearly erred by 
failing to recognize that those badges proved R & R had committed 
fraud.  Universal directs us to Butcher v. Butcher (Matter of Estate of 
Reed), 566 P.2d 587, 590-91 (Wyo. 1977) (citations omitted) as support for 
its badges of fraud argument: 
 
Since 
it is impractical to look into a person’s mind to ascertain his intention, it is 
necessary to consider surrounding circumstances. Since it is most difficult to 
prove intent by direct evidence, circumstantial evidence is necessary. The issue 
of actual fraud is commonly determined by recognized indicia, demonstrated 
badges of fraud, which are circumstances so frequently attending fraud; a 
concurrence of several will make out a strong case and be the circumstantial 
evidence sufficient to sustain a court’s finding. 
 
Butcher 
recognizes 
the reality that, many times, there will be no direct evidence of a party’s 
intent to defraud; consequently, a court must look at the circumstantial 
evidence to determine whether a fraudulent intent existed or not.  
 
[¶24]   Universal claims several 
“anomalies” support a finding of fraud in this case.  First, it points to the fact that Ms. 
Mosbrucker added certain information like the rates/prices and totals to the 
tickets after Universal personnel had already signed the tickets.  The district court addressed this 
procedure in Findings of Fact Nos. 30 and 31:
 
            
30.       
Upon completion of the Universal rig move R & R personnel provided 
copies of their daily tickets to Ms. Mosbrucker who added the price, amount and 
totals where needed but she did not add any hours for equipment, services or 
manpower or per diem not already shown on the tickets in coming up with the 
final bill to Universal.  She did 
send to Universal along with the invoice the finalized daily 
tickets.
 
            
31.       
Copies of the non-finalized tickets had already been provided to the 
[Universal] company man on the day they were signed in the field.  Universal claims not to have the 
non-finalized copies of the daily tickets generated and presented to the company 
man in the field.    

 
[¶25]   Richard Parks was Universal’s tool 
pusher during the rig move, and his video deposition was shown at trial.  He confirmed that he had signed most of 
the daily tickets during the move, thereby substantiating R & R activities 
and hours for each day.  Mr. Parks 
stated that he would have objected and refused to sign if he disagreed with the 
information on the tickets.  Ron 
Coats was Universal’s driller during the R & R rig move.  Although two of the tickets purported to 
bear his signature, he denied signing any of the tickets.  He testified, however, that it was not 
unusual for prices and totals to be added in the office because the field 
workers do not know the rates being charged for their services.    
 
[¶26]   Consistent with Mr. Parks’ and Mr. 
Coats’ testimony, the district court held that the daily ticket procedure used 
by R & R allowed Universal to validate the daily time records for the men 
and equipment involved each day in the field.  On this record, the district court did 
not clearly err by refusing to assign any nefarious intent to R & R as a 
result of the daily tickets not being fully completed in the field before they 
were presented to Universal personnel for signature.  
 
[¶27]   The second anomaly identified by 
Universal was that Mr. Parks and Mr. Coats denied signing a few of the 
tickets.  Universal argues that the 
record shows the tickets were forged and “[t]he only people who had the 
opportunity and motive to sign the names of Parks and Coats to the tickets, 
worked for R & R.”  The district 
court made an express finding that it was not convinced the tickets were 
forged.1  Universal has not demonstrated that the 
district court’s finding was clearly erroneous.  While Mr. Parks and Mr. Coats testified 
they did not sign a few tickets, there was no showing that someone from R & 
R in fact forged their names.  Mr. 
Woodward testified that he did not sign Universal representatives’ names to any 
tickets and was not aware of any of his employees having signed for Universal’s 
personnel.  The district court 
properly weighed the evidence before it, and its conclusion that R & R did 
not forge the Universal employees’ names is not clearly erroneous.  As such, this anomaly does not amount to 
a badge of fraud.  

 
[¶28]   The third anomaly identified by 
Universal was that one of the tickets, Exhibit 2.6, bore the date of 5-7-09, 
instead of 2007, when the job was actually accomplished.  The district court noted the 
discrepancy, but did not assign any relevance to it.  That is consistent with the record 
because Mr. Parks admitted to signing Exhibit 2.6.  There is no basis for deriving a 
fraudulent intent on the part of R & R based upon the incorrect date. 

 
[¶29]   The remaining “anomalies” 
identified by Universal pertain to overcharges on R & R’s daily 
tickets.  The district court 
addressed each of the tickets in its decision and made changes to the amounts 
due to reflect errors on the tickets.  
The district court did not commit clear error by correcting the 
overcharges or by failing to conclude that the errors demonstrated fraud.  As the district court stated in Finding 
of Fact No. 92, Mr. Woodward was “inept” at keeping track of the workers and 
equipment on the job, but that did not mean R & R intentionally 
misrepresented the hours, equipment or other charges on the tickets.   
 
[¶30]   Moreover, the record demonstrates 
that not all of R & R’s billing errors were in its favor.  For example, Exhibit No. 2.1 was the 
daily ticket for Richard Cantrell and his swamper, Ron Schultz, on May 7, 
2007.  The daily ticket, which was 
used by Ms. Mosbrucker to prepare the invoice, showed that each man worked 10 
hours that day and that time was charged to Universal.  However, Mr. Cantrell’s and Mr. 
Schultz’s time sheets, which R & R used to pay them, indicated they each 
actually worked 10 ½ hours on the “Worland rig move”  that day.  There are other tickets and time sheets 
showing instances where R & R employees reported working more hours than 
were charged to Universal.  The 
district court recognized instances of R & R billing less than was shown on 
the employee time sheets in several findings of fact.  However, no adjustments were made in 
favor of R & R, and Mr. Woodward testified at trial that he did not expect 
to be paid for the instances of under-billing.  Consequently, by failing to reconcile 
the employee time sheets with the daily tickets, R & R missed some time that 
presumably could have been billed to Universal.  The fact that errors were made both 
against and in favor of Universal further indicates that R & R did not 
intentionally make false representations in the invoice.  The district court did not commit clear 
error by concluding Universal had failed to present clear and convincing 
evidence of false representations.2
 
[¶31]   Looking to the other elements of a 
fraud claim, Universal was also required to prove that it believed the alleged 
misrepresentations were true and relied upon them to its detriment.  Universal did not pay the invoice which 
included the overcharges. Thus, there is no showing that Universal relied upon 
any alleged fraudulent statements in the daily tickets or invoice.  The district court’s ruling that 
Universal did not meet its burden of proving reliance is not clearly 
erroneous.  
 
[¶32]   Universal also claims R & R 
committed fraud in the inducement based on the following finding by the district 
court:
 
            
8.         
In soliciting the business from Universal’s Rig Superintendent John 
Hancock in a local laundromat, R&R’s co-owner and manager, Randy Woodward 
represented to Universal that R&R was honest, trustworthy, and competitive, 
and that its fees would be fair and reasonable.  Universal was interested in establishing 
a relationship with a local rig moving company since it was new to the Wyoming 
area.  
 
[¶33]   Universal directs us to Sundown, Inc. v. Pearson Real Estate Co., 
8 P.3d 324 (Wyo. 2000) as authority for its argument that R & R 
committed fraud in the inducement.  
In that case, Sundown was interested in purchasing a ranch in Carbon 
County, and Pearson was one of the realtors involved in the transaction.  Sundown claimed that Pearson 
fraudulently induced it to enter into a contract to purchase the property with 
false representations in a brochure and maps provided prior to Sundown’s 
execution of the purchase contract.  
Sundown asserted those materials did not properly describe the impact of 
coal mining operations on the ranch lands.  
We rejected Sundown’s claim that the maps and brochure contained 
fraudulent misrepresentations, in part because the statements in the brochures 
were opinions rather than statements of facts.  Id. at 327, 330-31.  We stated that “any false representation 
must relate to a matter of fact rather than of opinion.”  Id.  
at 331.  

 
[¶34]   The Sundown decision does not support 
Universal’s argument that R & R committed fraud in the inducement.  Mr. Woodward’s statement that R & R 
was honest, trustworthy and competitive and its fees would be fair and 
reasonable are matters of opinion rather than fact.  Each of those descriptors is subjective, 
rather than objective, and could change from person to person or job to 
job.  Moreover, the district court’s 
findings indicate that the opinions were not necessarily false.  With regard to whether the company was 
competitive and its fees were fair and reasonable, Universal does not question 
the reasonableness of the rates charged by R & R.  The district court concluded that, after 
reducing the invoice amount by approximately $20,000 (the $208,515.50 invoiced 
less the $188,301.50 judgment), the total charge for the rig move was 
reasonable.3  With regard to whether R & R was 
competitive, the district court found the R & R rig move could not be 
compared with the Bar S move because the Bar S move was a bid job and there were 
different circumstances involved with the R & R move, including additional 
work performed.  As such, this 
record does not demonstrate that R & R was not competitive or that its fees 
were not fair and reasonable.  
Concerning Mr. Woodward’s representation that R & R was honest and 
trustworthy, the district court found that, while Mr. Woodward was inept at 
keeping track of the costs of the job, there was no fraud associated with the 
billing.  The obvious implication of 
this finding is that R & R may have been negligent in its billing practices, 
but it did not fail to act in an honest or trustworthy manner.  
 
[¶35]   In addition, the evidence did not 
clearly demonstrate that the decision to hire R & R was based in significant 
part on Mr. Woodward’s statements.  
As we stated above, to prove a fraud claim the injured party must 
establish by clear and convincing evidence that it relied upon the false 
representation.  To that end, the 
injured party must show that the false representation pertained to a material 
fact.  Dewey v. Wentland, 2002 WY 2, ¶ 20, 38 P.3d 402, 412 (Wyo. 2002).  Mr. 
Hancock testified that he related Mr. Woodward’s statements to his supervisor, 
Ken McKinney in Denver, Colorado, who participated in the decision to hire R 
& R.  However, Mr. McKinney died 
before the lawsuit was filed in this case so there is no evidence showing that 
he relied on Mr. Woodward’s statements or that they were material to the 
decision to hire R & R.  
Interpreting the evidence in favor of R & R in accordance with our 
standard of review, we conclude the district court did not commit clear error in 
ruling that Universal had failed to prove its fraud claim.  
 
C.  Implied Covenant of Good Faith and Fair 
Dealing 

 
[¶36]   Universal claims R & R’s 
pervasive overbilling and failure to reconcile the original invoice with its 
employees’ time sheets and DFI’s work tickets constituted breach of the implied 
covenant of good faith and fair dealing.  
The district court concluded that R & R had not breached the implied 
covenant.    

 
[¶37]   In Scherer Constr., LLC v. Hedquist Constr., 
Inc., 2001 WY 23, ¶ 24, 18 P.3d 645, 655 (Wyo. 2001), we adopted a good 
faith obligation for contracts in accordance with the Restatement (Second) of 
Contracts, § 205.  Section 205 
states:
 
Every 
contract imposes upon each party a duty of good faith and fair dealing in its 
performance and enforcement.    

 
The 
comments to § 205 provide the following definitions:
 
Comment:
 
a. 
Meanings of “good faith.” 
Good faith is defined in Uniform Commercial Code § 1-201(19) as “honesty in fact 
in the conduct or transaction concerned.” . . . The phrase “good faith” is used 
in a variety of contexts, and its meaning varies somewhat with the context. Good 
faith performance or enforcement of a contract emphasizes faithfulness to an 
agreed common purpose and consistency with the justified expectations of the 
other party; it excludes a variety of types of conduct characterized as 
involving “bad faith” because they violate community standards of decency, 
fairness or reasonableness. The appropriate remedy for a breach of the duty of 
good faith also varies with the circumstances.
 
. 
. . .
 
d. 
Good faith performance. 
Subterfuges and evasions violate the obligation of good faith in performance 
even though the actor believes his conduct to be justified. But the obligation 
goes further: bad faith may be overt or may consist of inaction, and fair 
dealing may require more than honesty. A complete catalogue of types of bad 
faith is impossible, but the following types are among those which have been 
recognized in judicial decisions: evasion of the spirit of the bargain, lack of 
diligence and slacking off, willful rendering of imperfect performance, abuse of 
a power to specify terms, and interference with or failure to cooperate in the 
other party's performance.
 
Restatement 
(Second) of Contracts, § 205 (1981); see also 13 Samuel Williston & 
Richard A. Lord, A Treatise on the Law of Contracts § 38:15 (4th 
Ed.2000).
 
Id., 
¶ 
18, 18 P.3d  at 653.  

 
[¶38]   We summarized the good faith 
obligation in the context of commercial contracts in City 
of Gillette v. Hladky Constr., Inc., 2008 
WY 134, ¶ 30, 196 P.3d 184, 196 (Wyo. 2008) (citations 
omitted).
 
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.  
It requires the parties to act in accordance with their agreed common 
purpose and each other’s justified expectations.  A breach of the implied covenant occurs 
when a party interferes or fails to cooperate in the other party’s 
performance.  
 
[¶39]   Universal’s claim that R & R 
failed to meet its justified expectations by overcharging and failing to 
reconcile the records to identify billing errors before sending out the invoice 
is not supported by the record.  The 
district court found that Universal’s initial refusal to pay R & R’s bill 
was not “because of any perceived errors in R & R’s billings but because Bar 
S did it cheaper.”  We agree that 
Universal had the right to reasonably expect that R & R would not knowingly 
overcharge on the time and materials contract.  However, Universal’s reason for refusing 
to pay R & R’s invoice was not because there were errors in R & R’s 
billing, but because Bar S charged less.  
Any efforts to reconcile the invoice with the other relevant 
documentation, which, consistent with the district court’s findings would have 
reduced the total bill by approximately ten percent, would not have satisfied 
Universal because it wanted to pay R & R the amount it had paid Bar S and no 
more.  On this record, R & R’s 
actions did not fail to meet Universal’s justified expectations or undermine the 
parties’ common purpose of moving the rig on a time and materials basis.  
 
[¶40]   In addition, to establish breach of 
the implied covenant of good faith and fair dealing, the injured party must 
demonstrate the other party acted in “bad faith” by 
violating community standards of decency, fairness or reasonableness, and when 
the allegation pertains to the performance under a contract, the injured party 
must demonstrate some type of misconduct.  
Restatement of Contracts (Second) § 206, comments a. and d.  For example, in Hladky, ¶¶ 35-37, 196 P.3d  at 197-98, 
the City of Gillette violated the covenant by acceding to the architect’s 
improper oral modification of the contract, which delayed Hladky’s ordering of 
required materials for the construction job, and by failing to act on a change 
order until after the scheduled deadline had passed.  These actions were taken with knowledge 
that they made it impossible for Hladky to perform under the contract.  Here, the district court ruled that R 
& R did not intentionally overcharge.  
Universal does not direct us to any authority stating that unintentional 
mistakes in billing are enough to establish the requisite bad faith or lack of 
fair dealing.  The district court 
properly ruled R & R did not breach the implied covenant of good faith and 
fair dealing.  

 
[¶41]   Universal also claims that R & 
R was obligated to reconcile its invoice with the other documentation during the 
litigation of this matter and its failure to do so constituted bad faith.  It relies upon Restatement § 205, 
comment e for this argument.  That 
comment states, in relevant part:  
“The obligation of good faith and fair dealing 
extends to the assertion, settlement and litigation of contract claims and 
defenses.”  The problem with 
Universal’s argument is that this Court ruled in Roussalis v. Wyo. Med. Center, Inc., 4 P.3d 209, 257 (Wyo. 2000) that Wyoming would not follow comment e and litigation 
conduct would not be considered in a bad faith claim.  We stated that the Rules of Civil 
Procedure control the litigation process and provide adequate remedies for 
improper conduct.  Id.; See also, Ultra Resources, Inc. v. Hartman, 2010 
WY 36, ¶ 90, 226 P.3d 889, 921 (Wyo. 2010).  R & R was obligated to provide the 
information necessary to reconcile its billings during the litigation, to the 
extent required by the discovery rules.  
Universal makes no argument that R & R failed to comply with its 
discovery obligations or that the district court erred in making any discovery 
rulings.  Therefore, R & R’s 
failure to reconcile its invoice with the other documentation until shortly 
before trial4 is not actionable under the 
covenant of good faith and fair dealing.  
The district court properly denied Universal’s claim for breach of 
the implied covenant of good faith and fair dealing. 
 
D.  Estoppel
 
[¶42]   Universal pled estoppel as an 
affirmative defense to R & R’s breach of contract claim.  The district court did not specifically 
rule on Universal’s estoppel defense and Universal claims it erred by failing to 
conclude that R & R was estopped from asserting its claim against 
Universal.
 
[¶43]   We have described the doctrine of 
equitable estoppel as follows:
 
“'Equitable 
estoppel is the effect of the voluntary conduct of a party whereby he is 
absolutely precluded from asserting rights which might otherwise have existed as 
against another person who has in good faith relied upon such conduct and has 
been led thereby to change his position for the worse.’”   Snake 
River Brewing Co., Inc. v. Town of Jackson, 2002 WY 11, ¶ 28, 39 P.3d 397, 
407–08 (Wyo.2002) (quoting State Farm Mut. Auto. Ins. Co. v. Petsch, 261 F.2d 331, 335 (10th Cir.1958)). “Equitable estoppel arises only when a party, by 
acts, conduct, or acquiescence causes another to change his position.” Roth 
v. First Sec. Bank of Rock Springs, Wyo., 684 P.2d 93, 96 (Wyo.1984). The 
elements of equitable estoppel are a lack of knowledge, 
reliance in good faith, and action or inaction that results in an injury. 
Id. 
 
Parkhurst 
v. Boykin, 2004 
WY 90, ¶ 21, 94 P.3d 450, 460 (Wyo. 2004).  
See also, Mullinnix,  ¶ 32, 126 P.3d  at 922-23.  
 
[¶44]   The elements of equitable estoppel 
include reliance principles much like those included in a fraud claim.  Given the district court concluded 
generally that R & R did not commit fraud and specifically that Universal 
did not rely on any false representations made by R & R, it is clear it also 
would have denied Universal’s estoppel defense.    We have affirmed the 
district court’s ruling on the fraud issue.  Accordingly, we reject Universal’s 
argument that the district court should have ruled R & R was estopped from 
asserting its claim for payment.
 
E.    Prejudgment 
Interest
 
[¶45]   In its cross-appeal, R & R 
claims the district court erred by refusing to award it prejudgment interest, at 
least on the $97,500 which Universal admitted it owed for the rig move.  Universal argues the district court 
properly refused to award prejudgment interest because the amount owed was not a 
sum certain and was not easily ascertainable and the “equities mandate” against 
such an award.    

 
[¶46]   Prejudgment interest is a proper 
element of a damages award when the claim is “liquidated.”  A claim is considered liquidated when it 
“is readily computable by basic mathematical calculation.”  Pennant Serv. Co. v. True Oil Co., 2011 
WY 40, ¶ 36, 249 P.3d 698, 711 (Wyo. 2011), citing Stewart Title Guar. Co. v. 
Tilden, 2008 WY 46, ¶ 21, 181 P.3d 94, 101-02 (Wyo. 2008).  The theory 
behind allowing prejudgment interest is to fully compensate an injured party for 
its loss.  It is intended to 
reimburse the injured party for the loss of use of the owed money during the 
period between the accrual of the claim and the date of judgment.  Id; Stewart Title, ¶ 28, 181 P.3d at 
103–04 (citing 44 Am.Jur.2d Interest and Usury § 39 (2007)).  See also, Rissler & McMurry Co. v. Atlantic 
Richfield Co., 559 P.2d 25, 32 
(Wyo.1977).
 
The 
general principle is that “'he who retains money which he ought to pay to 
another should be charged interest upon it.’” 5 Arthur Linton Corbin, Corbin 
on Contracts, § 1046, at 280 n. 69 (1964). The successful claimant is 
compensated for the lost “use value” of the money owed. Hansen v. 
Rothaus, 107 Wash. 2d 468, 730 P.2d 662 (1986). That is, an award of 
prejudgment interest is in the nature of preventing the unjust enrichment of the 
defendant who has wrongfully delayed payment. See 1 Dan B. Dobbs, Law of 
Remedies, 3.6(3), at 348–49 (2d ed.1993) (“in many cases the interest award 
is necessary to avoid unjust enrichment of a defendant who has had the use of 
money or things which rightly belong to the plaintiff”).
 
Pennant, 
¶ 
37, 249 P.3d  at 711-12.  

 
[¶47]   Indicating that it did not consider 
R & R’s claim to be liquidated, the district court ruled that R & R was 
not entitled to prejudgment interest “[d]ue to the errors in billing and the 
fact that no agreed upon rates were set for equipment usage, labor and 
materials.”  In Rissler, 559 P.2d  at 32-33, this Court 
ruled that an amount due on a paving contract which was calculated after the 
project was completed using the actual materials provided  and an agreed upon unit cost was 
liquidated for the purposes of awarding prejudgment interest.  We stated that it is the character of 
the claim rather than the defense that determines whether the amount in dispute 
is liquidated.  “'[T]he existence of a dispute over the whole or part of the 
claim should not change the character of the claim from one for a liquidated, to 
one for an unliquidated sum . . . .’”  
Rissler, 559 P.2d  at 33, 
quoting McCormick on Damages, § 54, 215-16.  In other words, “a mere 
difference of opinion as to the amount due or as to liability does not preclude 
prejudgment interest if the amount sought to be recovered is a sum certain and 
the party from whom payment is sought receives notice of the amount 
sought.”  Wells Fargo v. Hodder, 2006 WY 128, ¶ 
61, 144 P.3d 401, 421 (Wyo. 2006), discussing Laramie Rivers Co. v. Pioneer Canal Co., 
565 P.2d 1241, 1245 (Wyo. 1977).  

 
[¶48]   However, United Pacific Ins. Co. v. Martin and Luther 
General Contractors, Inc., 455 P.2d 664, 677 (Wyo. 1969) demonstrates that 
there are cases where factual disputes over various aspects of a claim are so 
significant, they render the claim unliquidated.  United Pacific involved a complex 
construction contract and lien case with numerous accounting issues.  Ruling the district court erred by 
concluding the claim was liquidated and allowing prejudgment interest, we 
explained:  
 
It 
could hardly be said that a claim such as that exhibited in the controversy here 
which required weeks to try and which presented myriad, perplexing problems 
arising out of the loosest kind of arrangement between the contractor and 
subcontractor showed a claim which was readily computable by simple mathematical 
calculations. 
 
Id.  (citation 
omitted).  
 
[¶49]   We agree that the total amount 
awarded as damages in this case was not liquidated due to the numerous billing 
errors and the expansive review of the record which was required for the 
district court to calculate the judgment amount.  This case is, therefore, similar to United Pacific because it presented 
“myriad, perplexing problems” associated with calculating the final 
judgment.  Nevertheless, R & R 
argues it should have at least been awarded prejudgment interest on the amount 
Universal conceded was owed based upon the cost of the Bar S move—$97,500.  On August 8, 2007, Universal tendered 
payment for $97,500, and Universal’s general counsel made the following 
statements in the accompanying letter:
 
            
Enclosed is my client’s check for $97,500.00.  This is the fair value of . . . R & 
R’s services in moving my client’s rig from one site to another last May.  This is validated by the attached 
invoice from Bar S Inc. for $97,499.00 for a nearly identical move of the same 
rig.  The check is restrictively 
endorsed to conclude all our dealings with this one payment[.] 

 
The 
amount for which R & R is requesting prejudgment interest, therefore, was 
not only known to Universal but was actually proposed by it, making the amount 
both a “sum certain” and “readily ascertainable.”  
 
[¶50]   
Crest, Inc. v. Costco Wholesale Corp., 115 P.3d 349 (Wash. Ct. App. 
2005), and Board of Works of Lake Station 
v. I.A.E., Inc., 956 N.E.2d 86 (Ind. Ct. App. 2011)provide valuable guidance 
in this case.  In Crest, the defendant general contractor 
acknowledged that it owed the plaintiff subcontractor money but would not pay 
prior to the judgment because the subcontractor refused to sign a general 
release.  The court held the general 
contractor should have paid the money into the court and, since it did not, the 
subcontractor was entitled to prejudgment interest to compensate it for the lost 
use of the money.  Crest, 115 P.3d  at 356-57.  In Lake Station, I.A.E., an engineering 
firm, sued Lake Station seeking payment for engineering services on a road and 
bridge construction project that was eventually abandoned by the city.  Id. at 89-90.  The Indiana court of appeals ruled that 
a pre-litigation letter written by Lake Station’s mayor, acknowledging that the 
City owed a certain amount to the engineering firm, was a sufficient basis to 
award prejudgment interest on that amount.  
Id. at 96.     
 
[¶51]   As in Crest and Lake Station, Universal acknowledged 
that it owed R & R a certain amount for its services.  Similar to Crest, Universal refused to pay the 
amount it believed was owed unless R & R would accept that amount as payment 
in full.  By refusing to pay the 
undisputed amount, Universal denied R & R the use of the money it was 
unquestionably owed during the four years of protracted litigation.5  The lost use of that sum of money is a 
very real damage suffered by R & R for which it will not be compensated 
unless prejudgment interest is awarded.   
 
[¶52]   The district court’s decision 
simply stated that prejudgment interest was not awardable “[d]ue to errors in 
billing and the fact that no agreed upon rates were set for equipment usage, 
labor and materials . . . .”  The 
implication was that the court concluded the amount was not liquidated because 
it was difficult to determine the ultimate amount of damages owed.  Considering the amount of effort the 
court expended in reconciling the various documents to arrive at a final 
judgment, it is understandable that the district court would focus on that 
fact.  However, when the $97,500 
conceded by Universal to be due is considered in light of the authority cited 
above, we conclude interest on that 
amount must be awarded to fully compensate R & R for its breach of contract 
damages. To do otherwise would encourage breaching parties to withhold payment 
of funds known to be due and payable in the hopes of coercing a settlement, in 
this case for approximately half of the amount ultimately 
awarded.
 
[¶53]   Universal also argues that the 
district court properly exercised its discretion and recognized the relative 
equities when it denied R & R’s request for prejudgment interest.  Universal’s equity argument echoes its 
repeated assertions that R & R committed fraud.  The district court rejected Universal’s 
fraud claim and we have affirmed that determination on appeal; consequently, we 
do not believe the district court relied on equitable considerations in denying 
R & R’s request for prejudgment interest. For these reasons, we conclude R 
& R should be awarded prejudgment interest on the $97,500 from the date 
payment was offered.    

 
CONCLUSION
 
[¶54]   The record supports the district 
court’s judgment of $188,301.50 in favor of R & R, less the minor 
computation errors noted above, and we affirm its decision subject to those 
adjustments.  In fact, the court did 
a masterful job of sorting through the voluminous documents and arriving at a 
fair value for the time and materials provided by R & R in moving 
Universal’s rig.  The district court 
properly ruled that Universal failed to prove R & R committed fraud or 
breached the implied covenant of good faith and fair dealing, and we affirm 
those rulings.  In addition, the 
record does not support Universal’s estoppel defense.  However, we conclude R & R should be 
awarded prejudgment interest on the amount Universal conceded it 
owed—$97,500.  We reverse the 
district court’s ruling on that issue and remand for further proceedings 
consistent with this opinion.
 
[¶55]   Affirmed in part and reversed and 
remanded in part for further proceedings consistent with this decision.  
 
FOOTNOTES
 
1Universal and the district court had different totals for the number of 
allegedly forged tickets.  Universal 
claims there are six such tickets, while the district court concluded there were 
only two alleged forgeries.  The 
difference in numbers does not affect our decision.    
2Universal also argues that the following aspects of Finding of Fact No. 
92 were clearly erroneous:  1) 
Universal was experienced at hiring rig movers; and 2) “[t]he oil industry is 
replete with 'do it now, the hell with the cost’ attitudes.”  Even if we assume, for the sake of 
argument, that these statements were not supported by the record, they do not 
warrant a conclusion that the district court’s ultimate finding that Universal 
had not proven fraud was clearly erroneous.  Neither of those statements pertain 
directly to the elements of a fraud claim.  
They were clearly extraneous to the district court’s decision and, 
therefore, do not provide a basis for reversal.    

  3Even including 
the minimal adjustments to the judgment noted above, the difference between the 
invoiced amount and the final judgment is only ten percent 
(10%).
4Universal refers repeatedly to R & R’s Exhibit 20 which, as we 
explained above, was the revised invoice prepared by Ms. Mosbrucker and 
introduced into evidence at trial.  
Universal professes outrage that R & R would wait until just before 
trial to present this information.  
However, Universal made no claim that R & R had not complied with its 
discovery obligations and, in fact, offered no objection to the admission of 
Exhibit 20 at trial.  

5We want to caution that this case has somewhat unique facts and should 
not be interpreted as allowing prejudgment interest in any case in which an 
offer is made to settle a disputed claim.  
Because Universal acknowledged that it owed R & R $97,500 for its 
services, this case is different from cases where there is a settlement offer on 
disputed facts.   In addition, 
this situation does not involve an offer of judgment, which would be governed by 
W.R.C.P. 68.