Case Title: JOHNSON STORAGE AND MOVING COMPANY v. VICTORY, INCORPORATED, D/B/A HIGH PLAINS SECURITY SYSTEMS

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1989-05-26T00:00:00Z

Document:
JOHNSON STORAGE AND MOVING COMPANY v. VICTORY, INCORPORATED, D/B/A HIGH PLAINS SECURITY SYSTEMS1989 WY 122774 P.2d 636Case Number: 88-320Decided: 05/26/1989Supreme Court of Wyoming
JOHNSON STORAGE AND 
MOVING COMPANY, APPELLANT (PLAINTIFF),

v.

VICTORY, INCORPORATED, 
D/B/A HIGH PLAINS SECURITY SYSTEMS, APPELLEE (DEFENDANT).

Appeal from the District 
Court, LaramieCounty, Edward L. Grant, 
J.

William L. Combs 
and Patrick R. Day of Holland & Hart, 
Cheyenne, for appellant.

William A. 
Riner, Cheyenne, 
for appellee.

Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY 
and GOLDEN, JJ.

URBIGKIT, 
Justice.

[¶1.]     This controversy 
concerns an installation contractor who entered into a purchase order agreement 
to provide a fire alarm system for a warehouse facility. Whether the agreement 
included not only the warehouse area but also the office area was litigated in 
district court and the adverse decision to the warehouse facility owner is now 
appealed. The defined issue is whether completion costs should have been allowed 
against the contractor to extend the system throughout the office area on a 
warranty of suitability.

[¶2.]     We 
affirm.

[¶3.]     A representative of 
Johnson Storage and Moving Company (Johnson Storage), appellant, called the 
owner of Victory, Incorporated, d/b/a High Plains Security Systems (High 
Plains), appellee, for a quote to install a fire alarm system in its Cheyenne, Wyoming warehouse facility. High Plains 
submitted a bid proposal dated February 4, 1987 in the amount of $4,675. The job 
location box at the top of the bid only stated "warehouse" and, in descriptive 
terminology, provided for the installation.

[¶4.]     We hereby submit 
specifications and estimates for:

1 MP-24 Fire lite fire 
alarm panel complete w/2 detection zones & rechargeable 
batteries

3 10" Fire alarm bells (2 
interior, 1 exterior)

24 BRK1824-H Smoke 
detectors w/built in heat detectors (6 in west end & 18 in east end of 
warehouse)

1 Multi-channel digital 
communicator programmed to contact central station (there is a 25.00 monthly 
monitoring fee for the 2 zone monitoring service)

Conduit, fittings, boxes, 
wire

All equipment is 
guaranteed by manufacturer for one year.

This will meet or exceed 
any I.S.O. requirements.[1]

[¶5.]     This proposal was 
accepted, creating the contractual dispute present in this appeal. The smoke 
detectors and equipment were duly installed in the warehouse using equipment and 
methods admittedly meeting or exceeding I.S.O. requirements for the warehouse 
area. (Insurance Service Office - a fire insurance rating agency.) No 
insufficiency as installed is presented. A billing following completion of 
installation was paid in full for the bid price.

[¶6.]     However, when Johnson 
Storage applied for the desired reduced fire insurance rates it was turned down. 
Johnson Storage was told the reduction would be available only if the office 
area was also equipped with a fire alarm system since I.S.O. required 100 
percent coverage for a building. This meant adding more zone panels and 
installing an appropriate number of smoke detectors in closets and offices 
located in the facility. The estimated cost for the additional system was about 
$6,000 more than the original bid of $4,675. 

[¶7.]     Johnson Storage 
demanded that High Plains install the extended system without additional charge 
in order to comply with the installer's completion warranty. The demand was 
rejected and another contractor bid the further installation at a price of 
$6,995. Johnson Storage filed suit claiming installation contract breach and 
failure to complete with claimed damage including:

A. Loss of insurance rate 
credits in the past, through and including April of 1987.

B. Loss of insurance rate 
credits incurred subsequent to the filing of this Complaint and prior to the 
entry of a judgment in this matter.

C. Lost 
profits.

D. Loss of rental value 
of the storage facility.

E. Cost of completing an 
I.S.O.-approved fire detection system.[2]

[¶8.]     Following trial, the 
district court found that Johnson Storage showed recoverable damages of $978.15 
for lost insurance rate credits to which $500 was added as sanction attorney's 
fees which arose from a procedural claim. It is from this judgment of $1,478.15 
that Johnson Storage appeals.3 Johnson Storage filed a motion to 
alter or amend the judgment under W.R.C.P. 59(f) on the basis of insufficient 
damages being awarded, including specific objection that completion costs were 
not included. After further extensive briefing, the district court denied the 
motion in an opinion letter which afforded this rationale:

It may be that a more 
appropriate disposition of this case would have been to find that there never 
was the requisite "meeting of the minds" as to the work to be done. Clearly, 
under the evidence, plaintiff and defendant both thought at the time of the 
initial meeting referred to above, that the system would be installed in only 
the warehouse portion of the facility and not in the other 
areas.

The evidence would 
justify such a finding but would require plaintiff to bear all of the burden of 
the apparent misunderstanding. Fairness requires that we try to "fine tune" 
justice more than that. If defendant had known, which he should have known, that 
the ISO requirements would mandate the alarm system being in all parts of the 
facility, he would have said so at that initial meeting and obviously a more 
extensive and commensurately more expensive system would have been contemplated 
by both parties. Because he did not know that and because plaintiff indicated 
the system would be only in the warehouse portion, it was done in that fashion. 
It would seem to me that to now award plaintiff, on the basis of the evidence, 
the cost of installing the system in the nonwarehouse portions would be to give 
the plaintiff not the "benefit of his barg[a]in" but rather an unjustifiable 
windfall by requiring the defendant to provide materials and labor for an 
expanded system never mutually contemplated by the 
parties.

But because the defendant 
should have known that the more extensive system would be required, I think it 
is fair that he pay the difference in ultimate insurance costs during the time 
the more extensive system was not installed. Interestingly, at the time of 
trial, plaintiff had never completed the system.

Law requiring defendant 
to bear the cost of extending the system into the non-warehouse portions of the 
facility would be law requiring an unfair result. Accordingly, the motion to 
alter or amend judgment is denied.

[¶9.]     The starting point for 
our analysis of this written purchase order agreement is with the document 
itself.

The determination of the 
parties' intent is our prime focus in construing or interpreting a contract. 
State v. Moncrief, 720 P.2d 470 (Wyo. 1986); 
Amoco Production Co. v. Stauffer Chemical Co. of Wyoming, 612 P.2d 463 (Wyo. 1980). "If an agreement is in writing and 
the language is clear and unambiguous, the intention is to be secured from the 
words of the agreement." Nelson v. Nelson, 740 P.2d 939, 940 (Wyo. 1987). * * * 
Contract construction and interpretation are done by the court as a matter of 
law. Amoco Production Co., 612 P.2d  at 465; Bulis v. Wells, 565 P.2d 487 
(Wyo. 
1977).

If the contract is 
ambiguous, the intent of the parties may be determined by resort to extrinsic 
evidence. Rouse [v. Munroe], 658 P.2d [74] at 78 [(Wyo. 1983)]; Mountain Fuel Supply Co. v. Central 
Engineering & Equipment Co., 611 P.2d 863 (Wyo. 1980). An ambiguous contract is one 
"which is obscure in its meaning because of indefiniteness of expression or 
because of a double meaning being present." Farr [v. Link], 746 P.2d [431] at 
433 [(Wyo. 
1987)]. See also Bulis, 565 P.2d  at 490. The existence of ambiguity is a 
question of law. Hensley v. Williams, 726 P.2d 90 (Wyo. 1986); Amoco 
Production Co., 612 P.2d  at 465.

True Oil Co. v. 
Sinclair Oil Corp., 771 P.2d 781, 790, (Wyo. 1989). When the job location specifying 
"warehouse" is read in conjunction with the I.S.O. requirements which required 
that the entire facility be equipped, an ambiguity is presented. Therefore, 
resort to parol evidence is proper to ascertain the meaning of this contract. 
See also Cordova v. Gosar, 719 P.2d 625, 641 (Wyo. 1986), where parol evidence was properly 
allowed when mutual mistake occurred. This record clearly shows that neither 
party knew nor anticipated that an entire facility installation would be 
required to meet the I.S.O. requirements when the arrangements for the warehouse 
fire alarm system was contracted. Intent of the parties as to the scope of the 
contract is the determinate for their mutual rights and obligations. Freese 
Leasing, Inc. v. Union Trust and Sav. Bank, Stanwood, 253 N.W.2d 921 (Iowa 1977). While 
extensive testimony was presented which created a factual conflict as to whether 
Johnson Storage's agent specified the office area to be included in the bid 
price, it obviously was neither stated in the document nor done in the work. We 
defer to the district court's decision because no abuse of discretion has been 
shown resulting from the issues of fact addressed. See Anderson Excavating and Wrecking Co. v. Certified Welding 
Corp., 769 P.2d 887 (Wyo. 1988). There is evidentiary support for 
the decision rendered. Pancratz Co., Inc. v. Kloefkorn-Ballard 
Construction/Development, Inc., 720 P.2d 906 (Wyo. 1986).

[¶10.]  Within the conflict of evident decision 
presented, we affirm the district court's factual conclusion that there was no 
contractually adopted intent between the parties to install the alarm system in 
the entire facility.4 Consequently, Johnson Storage is 
not entitled to a reversal of the judgment to permit claim for additional 
damages.

[¶11.]  Affirmed.

FOOTNOTES

1 The provision stating 
"[t]his will meet or exceed any I.S.O. requirements" was inserted in handwritten 
addition on the purchase order form before execution which now presents the 
argument about the extent of the contractor's obligation which is in essence a 
warranty of suitability for a defined purpose.

2 Part of this cost 
included attorney's fees which were specifically requested and were claimed to 
total $6,931.50 at the beginning of trial.

3 What we would do if a 
cross-appeal had been filed by High Plains is purely 
conjectural.

4 It is also totally 
conjectural to guess what Johnson Storage would have decided if the bid had been 
first submitted for the entire building with the price tag of $10,675 instead of 
$4,675. We agree with the district court that the contractor did not 
"intentionally" agree to do what he did not agree to do; provide a $10,675 plus 
job for $4,675. The warehouse installation is undoubtedly of value by providing 
increased protection from fire even though a differential in fire insurance 
rates may not be achievable until an additional fire protection system for the 
balance of the facility is installed.