Case Title: SACK v A V DESIGN INC

Citation: 

Docket Number: 83-513

State: montana

Court: Montana Supreme Court

Date: 1984-07-03T00:00:00Z

Document:
No. 83-513 I N THE SUPREME COURT O F T H E STATE O F M O N T A N A 1984 F L O Y D M. SACK, d/b/a EMPIRE D E V E L O P M E T J T C O M P A N Y P l a i n t i f f and Respondent, -VS- A. V. DESIGN, I N C . , a c o r p . , Defendant and Appellant. APPEAL FROM: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n and f o r t h e County of Yellowstone, The Honorable Robert H. Wilson, Judge p r e s i d i n g . COUNSEL O F RECORD: For Appellant : Hendrickson & Everson; J i m Ragain, B i l l i n g s , Montana P o r t e r f i e l d & Wheatley; Wendell B. P o r t e r f F e l d , JE-:,- Denver, Colorado For Respondent : James P. Murphy, B i l l i n g s , Montana Submitted on B r i e f s : A p r i l 12, 1984 Decided: July 3 , 1984 . - . - - Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. This appeal concerns a construction contract dispute between the owner of a commercial office building erected in Billings, Montana, and the subcontractor corporation that furnished the heating, ventilating and air conditioning systems for the building. The matter was tried in the Thirteenth Judicial District, in and for the County of Yellowstone, before Judge Robert H. \4ilson, presiding without a jury. The District Court found appellant A.V. Design liable for breach of contract and awarded respondent Floyd M. Sack damages in the amount of $11,424.61. From the findings of fact and conclusions of law and judgment, A.V. Design appeals. Floyd M. Sack, d/b/a Empire Development Co. is the owner of several commercial buildings in Colorado, Utah Virginia and Montana. The subject matter of this action is a building owned by Sack in Billings. Acting as the general contractor, Sack requested A.V. Design to submit a bid on the heating, ventilating and air conditioning systems for this building. A.V. Design is a Denver based corporation with whom Sack had prior business dealings. Following preliminary discussions between the parties, a written contract dated August 27, 1980, was entered into between A.V. Design as subcontractor and Empire Development Company as the general contractor. The contract provided that the work was to be performed "continuously and uninterruptedly" until the project was completed. A.V. Design's bid was based on a system designed by it and submitted to Sack, called a variable air volume system (V.A.V.). This type of system was new to Sack and had not been utilized by him in any other buildings he owned. After the system was completed and the building occupied, Sack began receiving complaints from the tenants that the building was alternately too hot or too cold. Sack made several trips from his home in Denver to Billings to examine the system and the building, after which he determined that the system was not properly "balanced." Sack contacted A.V. Design and attempted to persuade them to complete the job by balancing the system. Despite Sack's efforts A.V. Design did not balance the system and eventually Sack was forced to have the system balanced by a Billings professional engineer. In the course of his repairs, the engineer found numerous problems; the return air system was improperly installed, thermostats and V.A.V. boxes were improperly installed, air diffusers were either not installed or improperly installed, V.A.V. coils were sticking open or closed, the hot water circulating pump was improperly installed, outside air sensors for the hot water pumps were not hooked up and static pressure sensors were installed in the wrong places. The major problem was that because of the defective equipment and improper installation, the system was forcing both hot and cold air into the building at the same time. As a result the temperature in the building fluctuated sometimes over 20' during a work day, and the gas bills (which were paid by Sack, not the tenants) were astronomical. The system was finally repaired and balanced after Sack made several trips from Denver to oversee the work and contract with qualified repairmen. I n J u l y 1982, Sack brought s u i t a g a i n s t A.V. Design t o recover damages f o r breach of t h e c o n t r a c t . The complaint sought damages based upon t h e f a i l u r e of A.V. Design t o complete t h e i n s t a l l a t i o n of t h e system and a d e q u a t e l y balance t h e system a f t e r r e p e a t e d demands. T h i s i n t u r n was based on t h e warranty language c o n t a i n e d i n t h e s u b c o n t r a c t , which a l s o allowed Sack t o r e p a i r o r r e p l a c e any d e f e c t s c o v e r e d b y t h e w a r r a n t y a t A.V. D e s i g n ' s e x p e n s e . S p e c i f i c a l l y , Sack claimed damages f o r t h e amounts p a i d o t h e r c o n t r a c t o r s or s u p p l i e r s t o complete t h e i n s t a l l a t i o n and adjustment of t h e system, t h e amount p a i d f o r e x c e s s n a t u r a l g a s consumed by t h e system and t r a v e l expenses i n c u r r e d i n s h u t t l i n g between Denver and B i l l i n g s . Following a t r i a l b e f o r e t h e D i s t r i c t Court s i t t i n g w i t h o u t a j u r y , f i n d i n g s of f a c t and c o n c l u s i o n s of law were e n t e r e d . A.V. Design was found t o be i n breach of c o n t r a c t and Sack was awarded $15,146.39 a s damages f o r t h e above mentioned claims. T h i s amount was set o f f by a $3,722.78 r e t a i n a g e held by Sack, and judgment f o r $11,424.61 was e n t e r e d . A.V. Design f i l e d a motion f o r new t r i a l , which was denied. This a p p e a l f o l l o w s . Appellant r a i s e s t h r e e i s s u e s f o r our c o n s i d e r a t i o n : (1) Are t h e f i n d i n g s of f a c t and c o n c l u s i o n s of law supported by t h e f a c t s of t h i s c a s e ? ( 2 ) Did t h e t r i a l c o u r t e r r i n awarding damages f o r n a t u r a l g a s consumption? ( 3 ) Did t h e t r i a l c o u r t e r r i n awarding Sack h i s t r a v e l expenses? I n reviewing t h e f i n d i n g s of f a c t made by a lower c o u r t , w e may n o t s u b s t i t u t e our judgment i n p l a c e of t h a t of t h e t r i e r of f a c t s . T h i s C o u r t ' s f u n c t i o n r a t h e r , is t o determine whether t h e r e is s u b s t a n t i a l c r e d i b l e evidence t o s u p p o r t t h e f i n d i n g s of f a c t . Cameron v. Cameron ( 1 9 7 8 ) , 179 Mont. 219, 587 P.2d 939. I n making t h a t d e t e r m i n a t i o n , t h e evidence is viewed i n a l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y . Cameron, supra. The D i s t r i c t Court found t h a t A.V. Design had breached t h e c o n t r a c t by f a i l i n g t o make t h e n e c e s s a r y f i n a l a d j u s t m e n t s t o complete t h e system. The c o u r t found t h i s i n breach of t h e warranty p r o v i s i o n s and a l s o t h a t A.V. Design had simply n o t completed t h e c o n t r a c t . D e s p i t e a p p e l l a n t ' s c o n t e n t i o n s , t h e s e c o n c l u s i o n s a r e supported by t h e evidence brought f o r t h a t t r i a l . Sack p r e s e n t e d t h e t e s t i m o n y o f a p r o f e s s i o n a l e n g i n e e r , whose s p e c i a l t y was t e s t i n g and balancing h e a t i n g , a i r c o n d i t i o n i n g and v e n t i l a t i n g systems such a s t h e one i n s t a l l e d here. The engineer enumerated s e v e r a l d e f e c t s i n t h e system a s i n s t a l l e d and s e v e r a l items missing from t h e system which made it incomplete. H e t e s t i f i e d t h a t t h e s e d e f i c i e n c i e s i n t h e system caused t h e problems of which t h e t e n a n t s complained. Appellant p r e s e n t e d some c o n f l i c t i n g e v i d e n c e , contending t h a t t h e work done by S a c k ' s repairmen was " t e n a n t f i n i s h " work n o t r e q u i r e d by t h e c o n t r a c t . However t h i s " t e n a n t f i n i s h " work a l l u d e d t o by A.V. Design d i d n o t c u r e t h e problems enumerated by t h e e n g i n e e r . The changes suggested by t h e engineer cured d e f e c t s i n e i t h e r t h e d e s i g n or i n s t a l l a t i o n of t h e system; such a s placement of t h e r m o s t a t s and s t a t i c p r e s s u r e s e n s o r s , m e c h a n i c a l f a i l u r e of equipment and missing p a r t s . The f a c t t h a t t h e s e changes were n e c e s s a r y t o c o r r e c t t h e problems w i t h t h e system was not rebutted by appellant's testimony. Also, there being a marked decrease in complaints after these adjustments were made lends credence to the engineer's testimony that the defects uncovered by him were the cause of the problem. There is clearly sufficient evidence to support the findings of the trial court. The final two issues concern the award of damages made by the District Court. For a breach of contract, the amount of damages allowed "[Ils the amount which will compensate the party aggrieved for all the detriment which was proximately caused thereby or in the ordinary course of things would be likely to result therefrom. Damages which are not clearly ascertainable in both their nature and origin cannot be recovered for a breach of contract." Section 27-1-311, MCA. "Where the contractor fails to keep his agreement, the measure of the employer's damages . . . is always the sum which will put him in as good a position as if the contract had been performed." Kirby v. Kenyon-Noble Lumber Co. (1976) , 171 Mont. 329 at 332, 558 P.2d 452 at 454. Appellant first contends that it was error to award Sack damages to compensate for the excess natural gas usage caused by the defects in the system. There was ample testimony to establish that during the five summer months when the system was improperly adjusted (May through September, 1981), the heating and cooling systems were operating at the same time, working against each other. This caused the energy bills for the building to skyrocket. Sack testified that the energy costs for the building were over twenty cents per square foot per annum, when they should have been between f i v e and s i x c e n t s per s q u a r e f o o t per annum. Based on t h e s e f i g u r e s , t h e c o u r t a p p a r e n t l y reasoned t h a t t h e d e f e c t s i n t h e system were c a u s i n g it t o consume e i g h t y p e r c e n t more n a t u r a l g a s than it would have i f it had been p r o p e r l y a d j u s t e d . T h e r e f o r e it awarded Sack damages i n t h e amount of $2,493.18, which r e p r e s e n t s e i g h t y p e r c e n t of t h e t o t a l n a t u r a l g a s b i l l s f o r May through September of 1981. A p p e l l a n t contends t h a t t h e D i s t r i c t Court should n o t have awarded any amount f o r e x c e s s g a s usage, and i f it awarded any damages, t h e e i g h t y p e r c e n t f i g u r e was i n e r r o r a s t o o s p e c u l a t i v e . A s noted above, t h e r e was s u f f i c i e n t evidence t o e s t a b l i s h t h a t an award of damages f o r e x c e s s n a t u r a l g a s usage is proper. A p l a i n t i f f w i l l n o t be d e n i e d recovery simply because it is d i f f i c u l t t o a s c e r t a i n t h e amount of h i s damages, a s long a s t h e amount can be proven w i t h a r e a s o n a b l e degree of c e r t a i n t y . Smith v. Zepp ( 1 9 7 7 ) , 173 Mont. 358, 567 P.2d 923. A s noted i n Smith, t h e p l a i n t i f f must p r o v i d e t h e t r i a l judge w i t h , "A r e a s o n a b l e b a s i s f o r computation and t h e b e s t evidence o b t a i n a b l e under t h e circumstances . . . which w i l l e n a b l e t h e judge t o a r r i v e a t a reasonably c l o s e e s t i m a t e of t h e l o s s . . . " 173 Pl0nt. a t 370, 567 P.2d a t 930, c i t i n g Brown v. Homestake E x p l o r a t i o n Co. ( 1 9 3 4 ) , 98 Mont. 305 a t 337, 39 P.2d 168 a t 179. Here, Sack p r e s e n t e d t h e c o u r t with u t i l i t y b i l l s covering t h e p e r i o d f o r which he was claiming damages, and b i l l s covering t h e same months f o r t h e f o l l o w i n g year when t h e system was p r o p e r l y working. T h i s c l e a r l y provided t h e j u d g e w i t h a r e a s o n a b l e b a s i s f o r c o m p u t a t i o n o f h i s damages. Appellant simply claims the award is speculative, and offers no alternative method for computing damages. Any award of damages is grounded to a certain degree upon speculation. Sikorski v. 01in (1977), 174 Mont. 107, 568 P.2d 571. However, the award of damages to Sack for excess natural gas usage is grounded upon the best available evidence and is a reasonably close estimate of the loss suffered. The award was not in error. Finally, appellant contends that the District Court erred by awarding Sack damages for the travel expenses incurred when he traveled from his home in Denver to Billings to oversee the repairs. Upon review of the record it is impossible to determine how this damage figure was arrived at by the District Court. The figures submitted by Sack to support these damages do not total the amount granted by the court, and also it appears most of the expenses claimed were included in a settlement paid by appellant's insurance company. The cause must be remanded for redetermination of the findings of fact and conclusions of law, as they relate to the award of travel expenses. Affirmed in part, remanded in part for redetermination of the findings of fact and conclusions of law as they relate to the award of travel expenses. We concur: % A . ~ * Q { ~ 4 4 Chief Justice