Title: FRANK N. FORSHEE and NANCY A. FORSHEE, husband and wife V. TOM DELANEY and DEANY DELANEY, husband and wife, d/b/a DELANEY IRRIGATION

State: wyoming

Issuer: Wyoming Supreme Court

Document:

FRANK N. FORSHEE and NANCY A. FORSHEE, husband and wife V. TOM DELANEY and DEANY DELANEY, husband and wife, d/b/a DELANEY IRRIGATION2005 WY 103118 P.3d 445Case Number: 04-126Decided: 08/26/2005
APRIL 
TERM, A.D. 2005

 
 
FRANK N. 
FORSHEE and NANCY A. FORSHEE,

husband 
and wife,

 
 
Appellants

(Defendants),

 
 
v.

 
 
TOM 
DELANEY and DEANY DELANEY,

husband 
and wife, d/b/a DELANEY IRRIGATION,

 
 
Appellees

(Plaintiffs).

 
 

Appeal 
from the DistrictCourtofWashakieCounty

The 
Honorable Gary P. Hartman, Judge

 
 
Representing 
Appellants:

 
 
William 
R. Shelledy Jr., Worland, 
Wyoming

 
 
Representing 
Appellees:

 
 
Randy L. 
Royal, Greybull, Wyoming

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

 
 
            
HILL, Chief 
Justice.

 
 
[¶1]      Appellees Tom and 
Deany Delaney, d/b/a Delaney Irrigation (Delaney), filed suit against Frank and 
Nancy Forshee (Forshee) seeking to be paid for Delaney's work installing a pivot 
irrigation system on farmland owned by Forshee.  Forshee counterclaimed against Delaney, 
seeking damages for crop loss due to delays in the system becoming 
operational.  The district court 
found in favor of Delaney on Delaney's claim, against Forshee on Forshee's 
counterclaim, and awarded Delaney attorneys fees. Forshee appeals the judgment 
on the issues of the initial claim and the award of attorneys fees.  Forshee argues that the findings of fact 
by the district court contradict the weight of the evidence, and that the 
district court improperly awarded attorneys fees to Delaney.  We affirm.

 
 

 
 
[¶2]      Forshee presents 
the following issues:

 
 
Whether 
the record contains evidence to sustain a judgment for attorneys fees and if so, 
whether the District Court abuse [sic] its discretion in awarding attorneys fees 
to [Delaney] without distinguishing between the fees covered by the parties' 
contract and those fees not covered by the parties' 
contract.

 
 
Whether 
the court erred in failing to find that the parties agreed to use the old 
pipeline in the new system and that [Forshees] were responsible for the 
functionability of the old line in the new system.

 
 
Whether 
the court's specific findings of fact set forth in paragraphs Nos. 20, 23 and 28 
are inconsistent with the evidence, clearly erroneous, or contrary to the great 
weight of the evidence.

 
 
Whether 
the District Court erred when determining damages for breach of contract by 
including in its damages the cost of repairs of the old existing line and the 
costs of replacing the old existing line?

 
 
Is there 
any other theory upon which [Forshee] could recover for the costs of repairs to 
the old existing line and the costs of replacing the old existing line other 
than breach of contract as stated by the court?

 
 
Delaney 
states the issues in this way:

 
 
Are the 
District Court's findings of fact supported by the record; are they clearly 
erroneous?

 
 
Did the 
District Court abuse its discretion in the award of legal fees to 
[Delaney]?

 
 
Are the 
District Court's findings relative to damages clearly 
erroneous?

 
 

 
 
[¶3]      In May of 2001, 
Forshee and Delaney entered into an agreement for Delaney to install a pivot 
sprinkling irrigation system on Forshee's land.  The specifics of the transaction were 
documented only by a quote prepared by Delaney and signed by Forshee.  The quote contained a page of additional 
terms, two of which are relevant to this appeal:  First, "No Agreements, representation, 
stipulations or conditions, verbal or otherwise not stated in this quotation 
will be recognized," and second, "The purchaser agrees to pay any legal fees 
involved in collecting and [sic] past due invoices."

 
 
[¶4]      When Delaney's 
workmen began installation of the pipeline for the pivot system, they laid the 
pipeline out incorrectly, but in such a way that the new pipeline could connect 
to an existing pipeline on Forshee's property (referred to as the "red line" by 
the parties and throughout this opinion).  
Testimony of the parties diverges as to whether or not they agreed to 
change the original plan and use the red line, but, in the end, Delaney's 
workmen did install the pipeline for the pivot system using the red line.  Almost immediately after the Delaney 
workmen completed the work, the pivot system developed problems.  An existing electrical panel for the 
intake pump burned out, and Delaney replaced it with a new panel.  On another day, a snake got into the 
pump, and Delaney's workmen came out to lift the pump out of the water source 
(the NowoodRiver) and remove the 
snake.  Most relevant to this 
lawsuit, the red line developed leaks and after Delaney's workmen repaired the 
red line two times, the parties agreed that if the red line leaked again, it 
would need to be replaced with new pipe.  
A third leak did occur, Delaney's workmen replaced the red line, and the 
system became operational.  However, 
a few days after the red line was replaced, Forshee was notified of a call on 
the water from the NowoodRiver and was not allowed to draw water 
for the rest of the irrigating season.

 
 
[¶5]      Delaney is being 
or has been paid the original amount of the contract under a lease financing 
agreement.  Delaney brought this 
suit against Forshee for additional amounts owed due to replacement of the 
electrical panel, the work of removing the snake out of the pump, and the 
repairs to and replacement of the red line with new pipe.  Forshee brought a countersuit against 
Delaney for the loss of the crop planted on the land irrigated by the 
system.  After a bench trial, the 
district court found in favor of Delaney on his claim, against Forhsee on his 
counterclaim, and awarded Delaney damages in the principal amount of $18,922.64 
plus accrued interest and attorneys fees of $11,211.53.  Forshee appeals this aspect of the 
judgment but not the finding against him on his counterclaim for crop 
loss.

 
 

 
 
A.        
Findings and Conclusions After a Bench Trial

 
 
[¶6]      After a bench 
trial, our standard of review with respect to findings of fact made by the 
district court is well established:

 
 
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 weighing disputed evidence. Findings 
of fact will not be set aside unless the findings 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.

 
 

Springer 
v. Blue Cross and Blue Shield of Wyoming, 944 P.2d 1173, 1175-76 (Wyo. 1997) (citations 
omitted).

 
 

 
 
[¶7]      Our standard of 
review when a party appeals an award of attorneys fees is also well 
established:

 
 

Wyoming 
subscribes to the American rule regarding recovery of attorney fees. Under the 
American rule, each party is generally responsible for his own attorney fees. 
However, a prevailing party may be reimbursed for his attorney fees when express 
statutory or contractual authorization exists for such an 
award.

 
 

Alexander 
v. Meduna 2002 WY 
83, ¶49, 47 P.3d 206, 220-21 (Wyo. 2002) (citations omitted).  In addition to following the American 
rule as to when attorneys fees may be awarded, Wyoming also has adopted 
the two-factor federal lodestar test to determine the reasonableness of 
the award:

 
 
To 
determine the reasonableness of the attorneys' fees award, Wyoming employs the 
two-factor federal lodestar test. These factors are: (1) whether the fee 
charged represents the product of reasonable hours times a reasonable rate; and 
(2) whether other factors of discretionary application should be considered to 
adjust the fee either upward or downward.'  It follows therefrom that the trial 
court's determination concerning attorney's fees is reviewed under an abuse of 
discretion standard. 

 
 

Id. at 221 
(citations omitted).

 
 

 
 

A.        
Findings and Conclusions After a Bench Trial

 
 
[¶8]      After careful 
review of the record, we find that the district court's findings of fact cannot 
be set aside as clearly erroneous.  
The district court concluded that Delaney and Forshee did agree to change 
their written agreement and use the red line as part of the pipeline 
installation.  Wyoming law recognizes 
that parties to a written contract can orally amend that contract, even when the 
language of the contract seeks to preclude that very thing.  Ruby Drilling Company, Inc. v. Duncan Oil 
Company, Inc., 2002 WY 85, 
¶11, 47 P.3d 964, 968-69 (Wyo. 2002). 

 
 
The 
party asserting that a written agreement was modified by the subsequent 
expressions of conduct of the parties must prove so by clear and convincing 
evidence. The question of whether modification of the written agreement has been 
proved by the required quantum of evidence is one to be decided by the trier of 
fact. We will not reverse the decision of the trier of fact unless that decision 
is clearly erroneous or contrary to the great weight of the 
evidence.

 
 
Clear 
and convincing evidence is the "kind of proof which would persuade a trier of 
fact that the truth of the contention is highly probable."

 
 

Id. 
at 
968-69 
(citations omitted).

 
 
[¶9]      In this case, the 
district court left no indication in the record of the standard it used to 
evaluate Delaney's contention that the parties orally agreed to change the 
original plan for the pipeline and use the existing red line in the pivot 
system.  However, after examining 
the record, we determine that Delaney did show by clear and convincing evidence 
that such a verbal agreement was made and therefore the ruling of the trial 
court is not clearly erroneous.

 
 
[¶10]   Testimony about whether or not 
Delaney and Forshee agreed to change the layout of the pipeline to include the 
red line is in controversy.  Delaney 
testified that there was such an agreement, and Forshee testified that there was 
not and that, in fact, he objected to the change once he found out about the 
mistake.  Two pieces of testimony 
from other witnesses sway us to allow Delaney to prevail.  First, Delaney's wife, Deany, testified 
that she heard Delaney's side of the telephone conversation discussing with 
Forshee the idea of changing the layout of the pipeline to use the red line, and 
that it was obvious from Delaney's side of the conversation that the two men 
agreed to do so.  Second, Forshee's 
son-in-law, Chris Bolken, testified that he called Forshee when he saw the pipe 
being laid out incorrectly and another time when he noticed the Delaney workmen 
using old valves in the installation instead of new ones.  Forshee's response, according to Bolken, 
differs considerably between the two incidents.  In the case of the valves, Bolken 
testified that  " during that time 
I talked to my father-in-law and told him that they are putting old valves back 
into this new system and he said something to that fact and got it changed 
around to where the new valves got put in."  However, when Bolken called Forshee to 
tell him that the pipeline was being laid out in the wrong place, Forshee did 
not discuss what he was going to do with Bolken.  We find it inconsistent that Mr. Bolken 
would be aware that Forshee objected to the use of old valves in a new pivot 
system, but would be unaware of Forshee's reaction to news that the pipe was 
being laid out at the wrong place. 

 
 
[¶11]   The district court also found that 
the parties agreed that if the red line leaked a third time, it would need to be 
replaced at an additional cost to Forshee.  
Again, we cannot conclude that the findings of the district court are 
clearly erroneous.  Forshee, as a 
contractor who builds houses, and as someone familiar with the construction 
business, could not reasonably expect that Delaney would be offering to do such 
substantial work at no cost to Forshee. 

 
 
[¶12]   When testimony of witnesses is in 
conflict, without other evidence to substantiate one story or the other, we will 
not substitute ourselves for the trier of fact.  The district court had opportunity to 
examine the witnesses and observe their demeanor and draw conclusions of 
credibility.  Therefore, we cannot 
say that the finding of the district court is clearly erroneous, and we uphold 
the district court's findings with respect to the agreement and the damages 
awarded to Delaney under the agreement as verbally amended between the 
parties.

 
 
[¶13]   Following from the conclusion that 
the parties did amend their written agreement and that Forshee breached that 
agreement by his failure to pay for the equipment and services Delaney provided, 
we decline to address Forshee's request to consider another theory under which 
he might prevail.

 
 

 
 
[¶14]   Forshee does not argue that no 
attorneys fees should be awarded in this case and does not dispute the 
reasonableness of such fees.  
Instead, he argues that the attorneys fees incurred by Delaney must be 
apportioned between Delaney's claim for payment of invoices and Forshee's 
counterclaim for crop loss.  Forshee 
contends that attorneys fees relating to the counterclaim are not recoverable, 
as the language of the written contract between the parties does not allow 
them.  Forshee cites as his 
authority State Surety Company v. Lamb 
Construction Company, 625 P.2d 184 (Wyo. 1981).

 
 
[¶15]   In State Surety, a subcontractor on a 
construction project brought a suit against the general contractor, the owner of 
the project, and the insurance company that had issued a labor and material 
payment bond for the project.  The 
owner of the project and the general contractor filed cross-claims against each 
other, and all of the claims were heard together.  The court found that the general 
contractor, by statute, and the insurance company, by the terms of the bond, 
were obligated to pay the costs and expenses to defend the claim against the 
subcontractor, including attorneys fees.  
However, with respect to the dispute between the owner and the general 
contractor, there was no contractual or statutory authorization for an award of 
attorneys fees to the owner.  The 
court remanded the case to the district court for an apportionment of attorneys 
fees between the owner's defense of the suit brought by the subcontractor and 
the owner's dispute with the general contractor.

 
 
[¶16]   The facts of State Surety do not align with the facts 
of this case closely enough to allow us to apply the same decision as to the 
allocation of attorneys fees among the individual issues.  We required apportionment of attorneys 
fees in State Surety based upon the 
distinct nature of the issues in the suit between the subcontractor and the 
owner and the suit between the general contractor and the owner.  In such a case, counsel for the owner 
was engaged in distinct activities that related only to one matter or the 
other.  In the present case, we 
cannot say that counsel for Delaney could so distinctly divide his activities; 
instead, the defense of Forshee's counterclaim for crop loss is inextricable 
from pursuing Delaney's claim for breach of contract and payment of the invoices 
related to that contract.  The issue 
in this case is whether or not Forshee owed Delaney money and if so, how 
much.  Had Forshee been successful 
in his counterclaim, his damages would have offset the amount he owed to 
Delaney, rendering his counterclaim a necessary aspect of Delaney's suit to 
collect the past due invoices.

 
 
[¶17]   In addition, it appears from the 
record that Forshee lodged no objection in the district court to Delaney's claim 
for attorneys fees at the time proof of such fees was offered.  At trial, when Delaney's counsel began 
questioning in order to establish proof of legal fees, Forshee's counsel 
objected and suggested that the court "save some time."  After the trial concluded, both parties 
submitted findings of fact and conclusions of law.  Delaney's submission contained attorneys 
fees and an affidavit by Delaney's counsel as to the amount and reasonableness 
of the fees.  The record contains no 
evidence of any objection to the fees by Forshee's counsel.  Given the fact that it was at the 
suggestion of Forshee's counsel that the matter was put aside during the bench 
trial, we cannot reinstate Forshee's standing to appeal this matter at this 
point.

 
 

 
 
[¶18]   We cannot conclude that the 
findings of the district court are clearly erroneous or that the award of 
attorneys fees to Delaney is an abuse of discretion.  Therefore, we affirm the judgment of the 
district court.