Title: ROD FOX, d/b/a FIBERTECTION CORPORATION, a FOX COMPANY V. WHEELER ELECTRIC, INC., a Corporate Entity

State: wyoming

Issuer: Wyoming Supreme Court

Document:

ROD FOX, d/b/a FIBERTECTION CORPORATION, a FOX COMPANY V. WHEELER ELECTRIC, INC., a Corporate Entity2007 WY 171169 P.3d 875Case Number: S-07-0058Decided: 10/31/2007
OCTOBER 
TERM, A.D. 2007

 
 
ROD FOX, d/b/a 
FIBERTECTION CORPORATION, a FOX COMPANY,

 
 
Appellant

(Plaintiff/Counter-Defendant),

 
 
v.

 
 
WHEELER ELECTRIC, 
INC., a Corporate Entity,

 
 
Appellee

(Defendant/Counter-Claimant).

 
 
Appeal 
from the DistrictCourtofTetonCounty

The 
Honorable Nancy J. Guthrie, Judge

 
 
Representing 
Appellant:

Kenneth S. Cohen, Cohen Law Office, 
PC, Jackson, Wyoming.

 
 
Representing 
Appellee:

Michael Dean Gaffney, Beard, St. 
Clair, Gaffney, PA, Idaho 
Falls, Idaho.

                                    

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

 
 
BURKE, 
Justice.

 
 

[¶1]           
This is 
an appeal from the trial court's judgment that Rod Fox and Fibertection 
Corporation breached a contract with Wheeler Electric, Inc., to supply fire 
alarm equipment.  We 
affirm.

 
 
ISSUES

 
 

[¶2]           
Appellant 
raises four issues for our consideration.  
To facilitate discussion, we place them in this order: 

 
 

1.                  
Did the 
district court err in concluding that the parties' contract required equipment 
from one particular manufacturer when the contract specifications provided that 
other manufacturers' equipment would be accepted and the equipment was 
conforming?

 
 

2.                  
Did the 
district court err in imposing procedural requirements contained in a Request 
for Proposal when the district court did not find the RFP to be part of the 
parties' agreement?

 
 

3.                  
Did the 
district court err in excluding the Customer Application and Agreement for 
Credit as part of the parties' contract merely on the basis that it was remote 
in time, when the parties' credit relationship was ongoing and had not 
expired?

 
 

4.                  
Did the 
district court err in not applying Article 2 of the Uniform Commercial Code to 
the parties' contract for supplying, testing, and certifying fire alarm 
equipment?

 
 
FACTS

 
 

[¶3]           
The basic 
facts in this case are not disputed.  
Rod Fox is the president and owner of Fibertection Corporation, a 
Wyoming 
corporation that supplies fire alarm, security, and communications equipment and 
support services.  Wheeler Electric, 
Inc., an Idaho 
corporation, is a family-owned electrical contractor.  The two companies worked together on a 
number of projects over the years, and enjoyed a good business relationship 
until this dispute arose. 

 
 

[¶4]           
In 2004, 
Bechtel BWXT Idaho, LLC, was the operating contractor for the United States 
Department of Energy's Idaho National Energy and Environmental Laboratory.  Bechtel sent Wheeler, among other 
potential sub-contractors, a Request for Proposal (RFP) for a project to upgrade 
the laboratory's fire monitoring systems.  
Wheeler, in turn, asked Fibertection to submit a proposal to supply fire 
alarm equipment for the project.  
Wheeler gave Fibertection a copy of the Construction Specifications for 
the project, which indicated that the equipment supplied should be made by a 
manufacturer known as Digitize.

 
 

[¶5]           
Fibertection submitted a bid to 
Wheeler, "in conformance with the plans and specifications," to provide the 
equipment at a price of $289,974.  
Fibertection also proposed an alternative bid of $226,490 to provide 
similar equipment from a maker known as Radionics.  Fibertection's bids were significantly 
below its competitor's, and Wheeler used Fibertection's bid to prepare its 
proposal to Bechtel.  Wheeler passed 
on Fibertection's proposal to use Radionics equipment, but Bechtel rejected the 
proposal, indicating that it preferred the Digitize equipment.  After Bechtel awarded the contract to 
Wheeler, Wheeler issued a purchase order to Fibertection.  

 
 

[¶6]           
When 
Fibertection tried to order the Digitize equipment, however, it learned that its 
distributor was prohibited by Digitize from supplying equipment for a project in 
Idaho.  The only authorized Idaho distributor was 
Fibertection's competitor, the one that had submitted the substantially higher 
bid to Wheeler.  Unable to obtain 
the Digitize equipment, Fibertection instead ordered equipment from another 
manufacturer, Keltron.  When 
Fibertection later told Wheeler that it would be supplying Keltron equipment for 
the project, it asserted that the Keltron equipment was in full compliance with 
the plans and specifications, and was equal to or better than the Digitize 
equipment.  Fibertection provided 
documentation to that effect to Wheeler, who passed it on to Bechtel with a 
request that Bechtel approve the use of Keltron equipment.  However, Bechtel told Wheeler there was 
not enough time to review the Keltron information without compromising the 
project schedule, and again indicated that it would require the Digitize 
equipment as listed in the Construction Specifications.  

 
 

[¶7]           
After 
Bechtel rejected the Keltron equipment, Wheeler told Fibertection that it would 
have to provide the required Digitize equipment, or else Wheeler would have to 
obtain it from another source.  
Fibertection confirmed that it would not provide the Digitize 
equipment.  Wheeler therefore 
obtained it from Fibertection's competitor, at a price substantially higher than 
Fibertection's bid. 

 
 

[¶8]           
Fibertection contended that its 
contract with Wheeler allowed it to provide either Digitize equipment or 
equipment from another manufacturer if it met the technical requirements for the 
project.  Wheeler contended 
otherwise, leading to this litigation.  
The trial court agreed with Wheeler, and ruled that Fibertection had 
breached the contract by failing to provide Digitize equipment.  As damages, it awarded Wheeler the 
difference between Fibertection's bid price and the higher price Wheeler paid 
the competitor for the Digitize equipment.  
Fibertection appeals from that judgment.

 
 
STANDARD OF 
REVIEW

 
 

[¶9]          
Following a 
bench trial, we review the trial court's findings of fact for clear error, and 
its conclusions of law de novo.  Pinther v. Ditzel, 2007 WY 116, 
¶ 3, 163 P.3d 816, 816 (Wyo. 2007).  
Fibertection does not dispute the trial court's findings of fact, but 
takes issue with its application of legal standards to those facts.  Accordingly, in reviewing these 
questions of law, we afford no deference to the legal conclusions of the trial 
court.  Jacoby v. Jacoby, 2004 WY 140, ¶ 7, 
100 P.3d 852, 855 (Wyo. 2004). 

 
 
DISCUSSION

 
 

[¶10]       
A trial 
court follows a familiar path when interpreting or construing a contract.  The primary focus is on determining the 
intent of the parties to the contract.  
The initial question is whether the language of the contract is clear and 
unambiguous.  If it is, then the 
trial court determines the parties' intent from the contract language 
alone.  It does not consider 
extrinsic evidence, although it may consider the context in which the contract 
was written, including the subject matter, the purpose of the contract, and the 
circumstances surrounding its making, all to help ascertain what the parties 
intended when they made the contract.  
The trial court then enforces the contract in accordance with the plain 
meaning its language would be given by a reasonable person.  All of these issuesdeciding whether a 
contract is unambiguous, determining the parties' intent from the unambiguous 
language, and enforcing the contract in accordance with its plain 
meaninginvolve questions of law for the trial court.  When we undertake de novo review of the trial court's 
conclusions of law, we follow the same familiar path.  See Double Eagle Petroleum & Mining 
Corp. v. Questar Exploration & Production Co., 2003 WY 139, ¶¶ 7-8, 
78 P.3d 679, 681-82 (Wyo. 2003), and 
cases cited therein.

 
 
1.         
Digitize Equipment

 
 

[¶11]       
The trial 
court ruled that the contract between Fibertection and Wheeler was made up of 
three separate documents:  (1) the 
Construction Specifications from Bechtel; (2) the bid that Fibertection 
submitted to Wheeler; and (3) the purchase order that Wheeler issued to 
Fibertection.  The parties do not 
dispute this, and the record contains ample evidence that the parties intended 
to include these documents as components of their 
contract.

  

[¶12]       
Fibertection does dispute the trial 
court's conclusion that the contract required Fibertection to supply Digitize 
equipment.  While Fibertection 
acknowledges that it was obligated to supply equipment that conformed to the 
Construction Specifications, it asserts that it could select any manufacturer 
whose equipment met the technical requirements of the Specifications.  However, our review confirms that the 
trial court's conclusion accurately reflects the reasonable and plain meaning of 
the contract language.

 
 

[¶13]       
The bid 
that Fibertection submitted to Wheeler stated that it was "in conformance with 
the plans and specifications for all equipment."  The first page of the referenced 
Construction Specifications stated that the scope of work for the project 
includes "[f]urnishing, installation, termination, and testing of . . . [t]wo 
Digitize 3505 control panels" in one location, "a Digitize 3505 control panel . 
. . using the Digitize CAPS II software system language" in another location, 
and a "Digitize CGRMS front end computer."  
It also required "[p]rogramming of all of the input points from the 
various DACTs into the Digitize DDI-9E DACR."  The Specifications also contained these 
further provisions about the equipment to be supplied:

 
 

Approved Equal:  Whenever a product is specified by using 
a proprietary name, the name of a manufacturer, or vendor, the specific item 
mentioned shall be understood as establishing type, function, dimension, and 
quality desired.  Other 
manufacturer's products will be accepted [by Bechtel], provided sufficient 
information is submitted by [Wheeler to Bechtel] to demonstrate that products 
proposed are equivalent to those named. 

 
 
. . .

 
 

Or Equal Material or Equipment 
Submittals:  All "or equal" materials, equipment or 
systems shall be identified and submitted for approval as required by the 
Subcontractor Requirements Manual.

 
 
When an "equal" item is proposed, 
data shall be submitted to [Bechtel] by [Wheeler] in such detail that clearly 
illustrate that the item, including components and fabrication thereof, or that 
adjustment of features to make the item "equal", meets requirements of the 
subcontract drawings and specifications.  
An "or equal" submittal shall contain as a minimum all operating and 
physical parameters necessary to show that the material or equipment is 
equivalent to the specified material or equipment.  All parameters shall be specifically 
identified by [Wheeler] in the proposal.  
Exceptions or differences between the specified item and the "or equal" 
item shall also be identified.  
[Wheeler] shall submit data for "equal" approval and obtain [Bechtel]'s 
approval before committing to purchase the proposed "equal" item.  

 
 

[¶14]       
Representatives of Wheeler testified 
that they understood these provisions as requiring Fibertection to supply 
Digitize equipment unless Bechtel approved a different manufacturer.  Bechtel did not approve any other 
manufacturer, and specifically rejected Radionics and Keltron equipment.  Accordingly, Wheeler was required to 
supply Digitize equipment to Bechtel, and in turn, believed that Fibertection 
was required to supply Digitize equipment to Wheeler.

 
 

[¶15]       
On behalf 
of Fibertection, Mr. Fox testified that he had initially intended to provide 
Digitize equipment because it was "desired," as stated in the first paragraph of 
the Specifications quoted above.  
Mr. Fox asserted that "desired" did not equal "required."  This focus on the single word "desired" 
is too narrow.  The word must be 
considered in the context of the contract as a whole.  Polo Ranch Co. v. City of Cheyenne, 969 P.2d 132, 136 (Wyo. 1998).  The contract provisions quoted above 
plainly provided that equipment from a manufacturer other than Digitize was 
subject to Bechtel's approval.  If 
it did not approve of alternative equipment, then Digitize equipment was 
required.  In this context, the word 
"desired" expresses not merely a preference, but a requirement.  Moreover, the language made it plain 
that the choice to approve or reject any other equipment belonged to 
Bechtel.  There is nothing in the 
contract language suggesting that Fibertection was entitled to make a unilateral 
decision to substitute Keltron equipment for the listed Digitize equipment.  Giving the contract language its 
reasonable and plain meaning, we agree with the trial court's conclusion that 
the contract obligated Fibertection to supply Digitize 
equipment.

 
 
2.         
Requirements from the Request for Proposal

 
 

[¶16]       
The RFP 
that Bechtel gave to Wheeler did not become part of the contract between 
Fibertection and Wheeler.  Neither 
party asserts that the RFP was meant to be incorporated into their 
agreement.  Fibertection contends, 
however, that the trial court erred by imposing some of the procedural 
requirements of the RFP on Fibertection, even though the RFP was not part of 
their contract.

 
 

[¶17]       
The 
specific RFP language that Fibertection quotes is that, "[u]nless the Offeror 
clearly indicates in the proposal that it is offering an equal' product, the 
proposal shall be considered as offering the brand name product(s) referenced in 
the solicitation."  All parties 
agree that the RFP, through this and other language, required Wheeler to submit 
a proposal to substitute another brand of equipment at the time it submitted its 
proposal to Bechtel.  Fibertection 
asserts that it was not subject to this same requirement.  However, Fibertection overlooks language 
from the Construction Specifications, quoted above, also requiring that 
information on alternative equipment "shall be specifically identified by 
[Wheeler] in the proposal." (Emphasis 
added.)  It is undisputed that the 
Construction Specifications were part of the contract between Fibertection and 
Wheeler, and it was language from the Construction Specifications, not 
provisions of the RFP, that the trial court enforced against 
Fibertection.

 
 

[¶18]       
Fibertection's suggestion that it 
was not subject to the Specifications' requirement to submit information on 
alternative equipment "in the proposal" because it was submitting a bid rather 
than a proposal is wholly unconvincing.  
Fibertection did not establish any meaningful distinction between a 
proposal and a bid.  Moreover, the 
fact that Fibertection, in its bid, proposed Radionics equipment as an 
alternative strongly suggests that Fibertection knew that a proposal for 
alternative equipment had to be submitted at the beginning.  Again, we uphold the trial court's 
conclusion.

 
 

[¶19]       
After 
considering Fibertection's contentions, reviewing the record, and analyzing the 
trial court's conclusions, we agree with the trial court's reasoning, and uphold 
its conclusions that:

 
 
It was not until after the contract 
had been formed that Fibertection requested approval for Keltron equipment in 
violation of the express terms of the specifications requiring that such a 
request be made at the time of the proposal.  The contract specifies Digitize 
equipment.  Fibertection 
acknowledged that its bid was submitted based on Digitize equipment.  The parties did not agree to Keltron 
equipment or any other "or equal" equipment when the contract was entered. . . 
.  Fibertection's refusal to provide 
Digitize equipment constitutes [breach of the contract].

 
 

3.                  
Customer Application and Agreement 
for Credit

 
 

[¶20]       
Four 
years before entering into the contract at issue here, Fibertection and Wheeler 
executed a Customer Application and Agreement for Credit.  The trial court held that this Agreement 
was not part of the contract between Fibertection and Wheeler because it was too 
remote in time.  Fibertection 
asserts that this was in error because the Agreement, though predating the 
contract by several years, was still in effect.  We need not decide if the trial court 
ruled correctly, however, because the Agreement contains no provisions with any 
impact on the issues raised by Fibertection in this appeal.  

 
 

[¶21]       
Although 
Fibertection does not mention this in its appeal brief, at trial it pointed to a 
provision of the Agreement stating that Fibertection was not subject to any 
"flow-down" terms or conditions, by which Fibertection meant that the terms or 
conditions of the contract between Wheeler and Bechtel would not "flow-down" and 
become binding on Fibertection.  Specifically, it claims that Bechtel's 
approval or disapproval of Wheeler's request to substitute parts should not 
"flow-down" and affect Fibertection's obligation to Wheeler.  As discussed previously, however, the 
trial court was not imposing on Fibertection any terms or conditions from the 
contract between Wheeler and Bechtel.  
Rather, it was enforcing the express terms and conditions of 
Fibertection's contract with Wheeler.  
Even if we were to interpret the "flow-down" provision of the Agreement 
as Fibertection suggests, it would make no difference in our 
decision.

 
 

[¶22]       
The only 
other part of the Agreement with potential relevance is one that might allow 
Fibertection to recover attorney's fees.  
Because Fibertection is not the successful party in this case, that 
provision is also irrelevant.  There 
is no reason for us to determine whether or not the Agreement was a part of the 
contract.

 
 
4.         
Uniform Commercial Code

 
 

[¶23]       
Fibertection also cites Article 2 of 
the Uniform Commercial Code for the proposition that "[g]oods or conduct 
including any part of a performance are conforming' or conform to the contract 
when they are in accordance with the obligations under the contract."  Wyo. Stat. Ann. § 34.1-2-106(b) 
(LexisNexis 2007).  The Keltron 
equipment "was in full conformity with the contract," Fibertection asserts, 
because the evidence is undisputed "that Keltron equipment was equivalent to or 
superior to Digitize equipment."  In 
this argument, however, Fibertection again ignores the provisions of the 
Construction Specifications that, as already discussed, required Digitize 
equipment.  Fibertection's untimely 
submission of information that the Keltron equipment was as good as or better 
than the Digitize equipment did not give Bechtel sufficient time to consider the 
substitution without delaying the project, and imposed no obligation on Bechtel 
to approve of the substitution.  Put 
another way, the Keltron equipment did not conform because it was not in 
accordance with Fibertection's obligations under the contract to provide 
Digitize equipment or obtain approval to substitute Keltron 
equipment.

 
 

[¶24]       
Fibertection 
cites Courtesy Enterprises, Inc. v. 
Richards Laboratories, 457 N.E.2d 572, 575 (Ind. 1983), for the proposition that "[i]n 
determining whether goods are conforming, previous dealings between the parties 
are relevant."  Fibertection asserts 
that in their prior dealings, Wheeler had always specified brand names on its 
purchase orders when specific products were required.  Because Wheeler's purchase order for 
this project did not specify Digitize equipment, Fibertection suggests that 
Digitize equipment was not required.

 
 

[¶25]       
Wyoming law 
similarly provides that parties' course of dealings in prior transactions may 
"give particular meaning to and supplement or qualify terms of an 
agreement."  Wyo. Stat. Ann. 
§ 34.1-1-205(c) (LexisNexis 2007).  
However, the statute also provides that the express terms of an agreement 
and an applicable course of dealing "shall be construed whenever reasonable as 
consistent with each other; but when such construction is unreasonable express 
terms control."  Id. § 
34.1-1-205(d).  Even if Fibertection 
is correct that, based on their course of dealings, Wheeler's failure to specify 
Digitize equipment in its purchase order should be construed as leaving that 
choice to Fibertection, that would be inconsistent with the express terms of the 
Construction Specifications.  We 
uphold the trial court's conclusion that the express terms of the contract were 
controlling.

  

[¶26]       
Fibertection also appears to claim 
that the trial court committed error because its judgment did not cite or rely 
on the Uniform Commercial Code.  We 
reject that claim because, in the first place, it is factually inaccurate.  The trial court's judgment does cite the 
Uniform Commercial Code, specifically Wyo. Stat. Ann. § 34.1-2-712, under 
which the trial court concluded that "[i]f the seller breaches the contract, the 
buyer may cover' by making in good faith and without unreasonable delay any 
reasonable purchase of or contract to purchase goods in substitution for those 
due from the seller."  In the second 
place, Fibertection has not demonstrated that the trial court's conclusions were 
inconsistent with the provisions of the Uniform Commercial Code, or erroneous in 
any other way.

 
 

[¶27]       
Finally, 
we deny Wheeler's request for an award of attorney's fees for this appeal.  We have concluded that Fibertection's 
arguments lack merit, but they were not sufficiently frivolous, or lacking in 
cogence and supporting legal authority, to justify an award of attorney's fees 
against Fibertection.  Compare Osborn v. Kilts, 2006 WY 142, ¶ 14, 
145 P.3d 1264, 1268 (Wyo. 2006).

 
 
CONCLUSION

 
 

[¶28]       
We find 
no error in the trial court's conclusions of law, and so affirm the judgment 
that Fibertection breached its contract with Wheeler.