Title: CARROLL v. BERGEN

State: wyoming

Issuer: Wyoming Supreme Court

Document:

CARROLL v. BERGEN2002 WY 16657 P.3d 1209Case Number: 01-200Decided: 11/15/2002
OCTOBER TERM, A.D. 2002

 

                                                                                                
    

 

DALE 
E. CARROLL,

dba 
PROJECT CONSULTANTS,

 

Appellant(Defendant),

 

v.

 

THOMAS 
W. BERGEN,

 

Appellee(Plaintiff).

 

 

Appeal 
from the District Court of Lincoln County

The 
Honorable Dennis L. Sanderson, Judge

 

Representing 
Appellant:

            
John D. Bowers of Bowers Law Office, P.C., Afton, Wyoming  

 

Representing 
Appellee:

            
M. Kevin Voyles of Luthi & Voyles, Thayne, Wyoming  

 

Before 
HILL, C.J., and GOLDEN, LEHMAN,* KITE, and VOIGT, JJ.

 

KITE, 
J., 
delivered the opinion of the Court; GOLDEN, J., filed a dissenting 
opinion in which HILL, C.J., joined

 

*Chief 
Justice at time of oral argument

 

            
KITE, Justice.

 

[¶1]      Appellant Dale E. 
Carroll inspected a home Appellee Thomas W. Bergen was interested in buying and 
provided a report stating the house appeared to be "structurally sound."  Mr. Bergen bought the property and 
thereafter sued Mr. Carroll alleging he had relied on the report to purchase the 
house but later discovered additional repairs were necessary.  After a bench trial, the trial court 
awarded Mr. Bergen a $14,954 judgment against Mr. Carroll, and this appeal 
followed.  We reverse and remand for 
a new trial.

 

 

ISSUES

 

[¶2]      We rephrase the 
issues:

 

            
1.  Did a valid contract exist?

 

2.  Was 
Mr. Carroll's case unfairly prejudiced because Mr. Bergen was allowed to call a 
witness, not designated as an expert, to testify as a lay witness as to the 
industry standard for contracts and the need for repairs?

 

3.  Was 
the damage award clearly erroneous because it was supported only by undesignated 
expert testimony? 

 

 

FACTS

 

[¶3]      On or about March 
4, 1998, Mr. Bergen, through his real estate agent, Mary Fahringer of Real 
Estate of Star Valley, made an offer to purchase a house in Alpine.  The offer had a provision permitting the 
buyer to obtain "electrical, mechanical, structural, environmental and/or other 
inspections of the Property by qualified professional inspectors and/or 
engineers."  The seller accepted the 
offer, and Mr. Bergen asked Ms. Fahringer to arrange a "home inspection."  She contacted Mr. Radford, the inspector 
for the Town of Alpine, who had performed several inspections for her in the 
past.  Because he was going out of 
town, he referred her to Mr. Carroll. 

 

[¶4]      Ms. Fahringer 
contacted Mr. Carroll and asked him to perform a "home inspection," which he 
agreed to do with the understanding he would be paid a fee and mileage.  She did not specifically ask him to 
perform a "structural inspection," nor did she explicitly communicate the nature 
of the inspection she wanted beyond requesting a "home inspection." 

 

[¶5]      Ms. Fahringer was 
present for the roughly forty-five-minute home inspection during which she and 
the seller advised Mr. Carroll of a broken window and a leak in the downstairs 
bathtub.  Mr. Carroll prepared a 
handwritten report after the inspection in which he stated in 
part:

 

I 
am pleased to have done the inspection on the above referenced home.  I found the home to be structurally 
sound.

 

. . . . Roof 
supports strong, 12" log construction, caulked where 
necessary.

 

After 
reviewing the report, Ms. Fahringer called Mr. Carroll to advise him he had 
mistakenly indicated the house was built of solid log when it was actually 
constructed of structured insulated panels with log facing.  Mr. Carroll rewrote the report so it was 
consistent with Ms. Fahringer's information and indicated only two problems with 
the house: a crack in the window in the northwest end of the home and a leak in 
the upstairs bathtub.1  Thereafter, Mr. Carroll submitted an 
invoice for $462 that was never paid. 

 

[¶6]      Mr. Bergen never 
spoke to Mr. Carroll prior to the inspection and did not provide him with any 
instructions.  Mr. Bergen received 
the home inspection report, completed the purchase, and moved into the house on 
approximately April 1, 1998.  Upon 
taking possession, he began to notice problems which were not reflected in the 
inspection report such as a damaged deck board, a partially finished wall, gaps 
between the walls and the logs supporting the roof, a lack of insulation around 
window casings, a fireplace which did not draw properly, and a sagging floor. 

 

[¶7]      Robert Wagner of 
R&R Builders came to the house to build a dormer and noted additional 
problems. He determined the sag in the floor was caused by a lack of support 
which could be repaired by placing a concrete pier and a post in the crawl 
space.  He also concluded there were 
problems with some of the girders and the porch was built with wood intended for 
interior, not exterior, use.  In 
October of 1999, Mr. Wagner estimated the total cost of all the 
"repairs," without any itemization, would not exceed $15,000.  At trial in June of 2001, he testified, 
allegedly as a lay witness, over Mr. Carroll's continuing objection that his 
testimony should be precluded because he was not designated as an expert witness 
pursuant to the prehearing scheduling order.  Mr. Wagner testified the same repairs in 
2001 would likely cost $17,000 due to increased material, labor, and overhead 
expenses.  In answer to questions 
posed by the court, he also testified the Uniform Building Code (UBC) was the 
standard for most contracts and construction in the building industry.  

 

[¶8]      The other trial 
witnesses were the real estate agent, Mr. Bergen, and Mr. Carroll.  The court found a contract existed and 
awarded Mr. Bergen judgment against Mr. Carroll for $14,954 ($15,000 less the 
$46 unpaid inspection fee) plus $45 in court costs.  Mr. Carroll appealed contending the 
trial court erred in finding there was a valid contract; and, alternatively, if 
there was a contract, Mr. Carroll did not breach it; or, if a valid contract was 
breached, no damages were proved.

 

 

STANDARD 
OF REVIEW

 

[¶9]      Our standard of 
review when a trial is held before the bench 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.  We review a district 
court's conclusions of law de novo on appeal.

 

Springer 
v. Blue Cross and Blue Shield of Wyoming, 
944 P.2d 1173, 1175-76 (Wyo. 1997) (citations omitted); see also Saulcy Land 
Company v. Jones, 983 P.2d 1200, 1203 (Wyo. 1999).  

 

 

DISCUSSION

 

[¶10]   "Whether an oral contract exists is 
a question of fact to be determined by the trier of fact."  Williams v. Dietz, 999 P.2d 642, 
644 (Wyo. 2000).  The trial court 
found:  "Plaintiff, through his real 
estate agent, contracted with Defendant to perform a home inspection on a home 
that Plaintiff was buying."  Mr. 
Carroll argues there was no valid contract because (1) the real estate agent 
made all the arrangements with him but was not authorized to enter into outside 
contracts on Mr. Bergen's behalf, (2) there was no consideration because no 
payment was ever made for the "home inspection," and (3) there was no mutual 
assent to the contract terms.           

 

[¶11]   The record demonstrates Mr. Bergen 
and Ms. Fahringer, for Real Estate of Star Valley, entered into an Exclusive 
Right-to-Buy Contract which provided in part that the real estate office/broker 
and agent would act to locate and secure property to meet the buyer's 
needs.  The contract expressly dealt 
with the broker/agent's authority to obtain services from outside sources.3  This court has 
said:

 

Actual 
authority may be express or implied.  
An agent has express actual authority to bind the principal when the 
principal, orally or in writing, specifically grants the agent the power to bind 
the principal.  Implied actual 
authority is established by the course of dealings between the parties and the 
circumstances surrounding the case.  

 

Cargill, 
Incorporated v. Mountain Cement Company, 
891 P.2d 57, 62 (Wyo. 1995) (citations omitted).  It is reasonable to infer the 
broker/agent had authority to obtain outside services.  If such services were not obtained 
consistent with the contract's terms, it is possible the buyer would have a 
claim against the broker/agent.  
However, there is no dispute between Mr. Bergen and the broker/agent 
regarding the manner in which Mr. Carroll's services were secured.  Therefore, this argument fails because 
Ms. Fahringer had authority to secure the home inspection that Mr. Bergen 
requested.

 

[¶12]   Mr. Carroll promised to inspect 
and, as Mr. Bergen's agent, Ms. Fahringer promised payment of his fee and 
mileage.  Mr. Carroll asserts this 
exchange of promises did not constitute sufficient consideration for a valid 
contract because his $46 fee was not paid.  
We must disagree.  For a 
contract to be valid, "[t]here must be an offer and acceptance along with 
bargained for and exchanged valuable consideration.  Valuable consideration in this context 
may consist of [an] exchange of mutual promises, which promises impose a legal 
liability upon each promisor."  
Kerper v. Kerper, 780 P.2d 923, 932 (Wyo. 1989) (citation 
omitted).  Consideration is described in the 
Restatement (Second) of Contracts:

 

(1)  To 
constitute consideration, a performance or a return promise must be bargained 
for.

 

(2)  A performance or return promise is 
bargained for if it is sought by the promisor in exchange for his promise and is 
given by the promisee in exchange for that 
promise.

 (3)  The 
performance may consist of 

 

(a)  an 
act other than a promise, or

 (b)  a 
forbearance, or

 

(c)  the 
creation, modification, or destruction of a legal 
relation. 

(4)  The 
performance or return promise may be given to the promisor or to some other 
person. It may be given by the promisee or by some other 
person.

 

1 
Restatement (Second) of Contracts § 71 at 172 (1981).  The promise to pay for the inspection 
and mileage constitutes valuable consideration.  Mr. 
Bergen's failure to pay the fee was a breach of his promise to pay and, 
consequently, an actionable breach of the contract.  The 
subsequent breach notwithstanding, the mutual exchange of promises 
was 
sufficient consideration to support a valid contract. 

 

[¶13]   Mr. Carroll's inspection report 
that the home was "structurally sound" is proof of his belief a contract 
existed.  "A contract comes into 
being when there is a meeting of the minds concerning the terms of the 
agreement.  The existence of a 
contract depends upon the intent of the parties and presents the trial court 
with a question of fact."  
Anderson 
Excavating and Wrecking Company v. Certified Welding Corporation, 
769 P.2d 887, 889 (Wyo. 1988) (citation omitted); see also Raymond v. 
Steen, 882 P.2d 852, 856 (Wyo. 1994).

 

"[O]n 
appeal, the Supreme Court assumes that evidence in favor of the successful party 
is true, leaves out of consideration entirely the conflicting evidence presented 
by the unsuccessful party, and gives the evidence of the successful party every 
favorable inference that may reasonably and fairly be drawn from it.  Furthermore, a reviewing court cannot 
substitute its judgment of the facts for that of the trial court unless the 
trial court's judgment is clearly erroneous or contrary to the great weight of 
the evidence.'"  McCormick v. 
McCormick, 926 P.2d 360, 362 (Wyo. 1996) (quoting Wyoming Sawmills, Inc. 
v. Morris, 756 P.2d 774, 775 (Wyo. 1988)).  The party who alleges that a contract 
exists bears the burden of proving the terms of that 
contract.

 

            
. . . It is well established that courts do not have the 
power to supply indefinite terms.

 

Williams, 
999 P.2d  at 644-45 (citation omitted).

 

[¶14]   The problem in this case is the 
dispute over the terms of the contract. Only Mr. Carroll and Ms. Fahringer 
communicated about the inspection.  
Mr. Bergen never spoke with Mr. Carroll.  Ms. Fahringer 
testified:

 

Q.  Did 
Mr. Bergen ask you to obtain a home inspection?  

 

A.  Yes, 
he did.  He was -- we have dates 
filled in and times on that contract that an inspector was coming in to 
inspect.

 

Q.  And 
what did he ask you to do?

 

A.  He 
asked me to contact one.  

 

Q.  To 
perform a home inspection? 

 

A.  To 
perform the home inspection.  And I 
called Mr. Radford.

 

Q.  Did 
he give you any reason why he wanted a home inspection?

 

A.  Probably 
because he is not an inspector or he's not a structural engineer or he doesn't 
know, never built a house, probably.  

 

Q.  Did 
he tell you that he lacked expertise on house 
construction?

 

A.  Yes, 
he did.

 

Q.  So 
following up on Mr. Bergen's request, what did you proceed to do?            

 

A.  I 
called Mr. Radford, who was the town inspector for the Town of 
Alpine . . . . And he referred . . . me 
to Mr. Carroll.

 

. . . .

 

Q.  So 
you proceeded to contact Mr. Carroll?

 

A.  Correct.

 

Q.  What 
did you ask Mr. Carroll to do?

 

A.  To 
do a home -- asked him to do a home inspection as -- Because I didn't know Mr. 
Carroll, I did have to relay (sic) back to Mr. Radford, giving me his name, that 
he would do an inspection for me because I usually get Mr. Radford and he was 
going to be out of town.  

 

Q.  Do 
you recall the conversation?

 

A.  Not 
much of it.  Just that I would meet 
him or I would give him a key.  Now, 
we usually give them keys or we meet them and take them to the place where it 
is, if they don't know where the area is.  

 

THE 
COURT:  Did she ask -- the key 
question here is was there -- did you tell him that you wanted a structural 
inspection?

 

THE 
WITNESS:  We asked for an 
inspection.  And if they'd been 
working with any realtors, they know what kind of inspection Mr. Radford 
does.

 

THE 
COURT:  What kind is 
that?

 

THE 
WITNESS:  That is a structural 
inspection of the house so that the person who is buying it feels 
comfortable purchasing it.

 

 (Emphasis added.)  Ms. Fahringer acknowledged she did not 
discuss what should have been included in the inspection because Mr. Radford had 
said Mr. Carroll could do the inspection and, from this information, she 
concluded Mr. Carroll would already be aware of what was expected of him.  Mr. Radford did not testify regarding 
what a home inspection should entail in his experience.

 

[¶15]   The record is clear that Mr. 
Carroll had some experience in the building trades and went with Mr. Radford on 
four inspections.  Without any 
instructions from Ms. Fahringer, Mr. Carroll stated in his report that he found 
the home to be "structurally sound." This choice of words is a strong indication 
he, like Ms. Fahringer, understood the inspection was intended to review and 
report on the structural soundness of the home.  We conclude a contract existed because 
the parties implicitly and mutually agreed a home inspection was to be completed 
which would report on the structural soundness of the house.  

 

[¶16]   Mr. Wagner, the building 
contractor, provided the only testimony relating to an industry standard for 
home inspections and construction. Two problems exist with his testimony.  First, he provided expert testimony 
which had not been designated as such.  
Second, not even Mr. Wagner offered an opinion that the repairs he 
suggested were needed to achieve "structural soundness."

 

[¶17]   Mr. Carroll asserts his case was 
unfairly prejudiced because, despite a pretrial order requiring designation of 
expert witnesses and his continuing objection to Mr. Wagner's testimony without 
such a designation, the trial court permitted the testimony to include the 
industry standard applied in most building contracts, the condition of the 
house, and damages.  

 

[¶18]   A pretrial order required both 
parties to designate expert witnesses by November 17, 2000.  On June 4, 2001, Mr. Carroll filed a 
motion in limine objecting to any expert witness other than Ms. Betty Rogers, 
the only expert designated prior to trial.  
The motion specifically complained Mr. Carroll could not depose 
unidentified experts or request a Daubert4 hearing on the admissibility of 
their testimony.5  A hearing on this motion was held 
immediately prior to the trial on June 4, 2001, and the trial court ruled Mr. 
Bergen could call Mr. Wagner only as a lay witness and noted Mr. Carroll's 
continuing objection.  

  

[¶19]   "We have stated that a trial court 
has discretion to waive the requirements contained in its pretrial orders.  We will not overturn the trial court's 
ruling excusing a failure to observe its pretrial order unless there has been an 
abuse of discretion."  Contreras 
By and Through Contreras v. Carbon County School District # 1, 843 P.2d 589, 
592 (Wyo. 1992) (citations omitted).  
Similarly, admission of evidence is within the trial court's sound 
discretion, and we will not disturb evidentiary rulings absent a clear abuse of 
discretion.  Garnick v. Teton 
County School District No. 1, 2002 WY 18, ¶13, 39 P.3d 1034, ¶13 (Wyo. 
2002). 

 

[¶20]   However, it is also true that 
adherence to such orders is critical in maintaining the integrity of judicial 
proceedings.  1488, Inc. v. 
Philsec Investment Corp., 939 F.2d 1281, 1289 (5th Cir. 1991); Reaves v. Bergsrud, 982 P.2d 497, 502 (N.M. Ct. App. 1999).  
The pretrial order controls the issues to be litigated, allowing the 
parties to rely on the pretrial order exhibit and witness lists to prepare their 
cases, and the trial court is vested with extensive authority to enforce its 
pretrial order.  
Id.

 

[¶21]   W.R.E. 701, entitled "Opinion 
Testimony by Lay Witnesses," provides:

 

If 
the witness is not testifying as an expert, his testimony in the form of 
opinions or inferences is limited to those opinions or inferences which are (a) 
rationally based on the perception of the witness and (b) helpful to a clear 
understanding of his testimony or the determination of a fact in 
issue.

 

We 
previously held that W.R.E. 701 cannot be read to allow a witness who fails to 
qualify as an expert to offer opinion testimony "where the subject in question 
lies outside the realm of common experience and requires special skill or 
knowledge.'"  Kemper Architects, 
P.C. v. McFall, Konkel & Kimball Consulting Engineers, Inc., 843 P.2d 1178, 1190 (Wyo. 1992) (quoting 3 David W. Louisell & Christopher B. 
Mueller, Federal Evidence § 376 at 419 (Supp. 1992)).  "Topics demanding special experience, 
such as the appropriate mechanical design for an atypical heating and air 
conditioning system, require that only the testimony of a person possessing that 
special experience be received."  
Id.

 

[¶22]   A review of the testimony to which 
Mr. Carroll objected leads to the inescapable conclusion that the witness was 
allowed to provide opinions outside the realm of common experience.  He testified he was a building 
contractor with twenty-four years of experience and had observed the condition 
of Mr. Bergen's house.  He then gave 
his opinion as to why the floor sagged using technical terms such as point 
loads, girder widths, and floor joists and concluded the home did not conform 
with the UBC.  Mr. Wagner also 
provided his opinion of what repairs were necessary, how they should be made, 
and what they would cost.  The 
average lay person would not have the knowledge or experience to give such 
opinions.  Borrowing the expression, 
"if it looks like a duck, walks like a duck, and quacks like a duck, it must be 
a duck," we conclude Mr. Wagner's testimony was essentially an expert opinion 
from an experienced builder.  In 
addition, his opinion that the UBC was the standard "most contracts use" 
suggested the home inspection contract required Mr. Carroll to identify 
deviations from the UBC.

 

[¶23]   Without other evidence establishing 
the minimum requirements of a structural soundness inspection or that Mr. 
Carroll failed to meet the requirements, the trial court must have relied on Mr. 
Wagner's testimony to conclude Mr. Carroll breached the contract by performing 
the inspection incompetently.  No 
evidence was introduced to prove the sagging floor or other identified 
conditions actually impacted the structural soundness of Mr. Bergen's home.  Mr. Wagner's testimony regarding the UBC 
inferred as much, but there was no direct evidence that compliance with the UBC 
was equivalent to structural soundness or the parties contemplated deviations 
from the UBC would be included in an inspection for structural soundness.           
 

 

[¶24]   "Findings of fact not supported by 
the evidence, contrary to the evidence, or against the great weight of the 
evidence cannot be sustained."  
Drake v. McCulloh, 2002 WY 50, ¶17, 43 P.3d 578, ¶17 (Wyo. 
2002).  We cannot sustain the trial 
court's finding that Mr. Carroll did not do a competent job of inspecting the 
home without admissible evidence of the standard the parties intended should 
apply to such an inspection.         

 

[¶25]   Mr. Wagner's testimony unfairly 
prejudiced Mr. Carroll's case because Mr. Carroll had no notice or opportunity 
to investigate the opinion in advance and counter with his own expert.  Holding otherwise would suggest 
litigants must be prepared to counter undesignated experts because they may be 
allowed to testify as lay witnesses. Cases should proceed in an orderly manner 
without parties having to anticipate ambush. The error was harmful because, 
without Mr. Wagner's testimony, there is a reasonable possibility the trial 
court's decision would have been more favorable to Mr. Carroll.  McCarthy v. Whitlock Construction and 
Supply, 715 P.2d 218, 221 (Wyo. 1986). 

 

 [¶26]  Mr. Carroll similarly contends the award 
of damages was clearly erroneous because the trial court  relied on Mr. Wagner's testimony and 
lacked any other supporting evidence.

 

Damages 
are findings of ultimate fact.  In a 
jury trial, the "jury's determination of the amount of damages is inviolate 
absent an award so excessive or inadequate as to shock the judicial conscience 
and to raise an irresistible inference that passion, prejudice, or other 
improper cause had invaded the trial."  
Coulthard v. Cossairt, 803 P.2d 86, 92 (Wyo. 1990).  But the standard of review after a bench 
trial is less deferential.  
"Damages, like apportionment of fault, are reviewed as fact and are not 
reversed unless clearly erroneous."  
S. Childress, A Standards of Review Primer:  Federal Civil Appeals, 125 F.R.D. 319, 
330 (1989).

 

Cross 
v. Berg Lumber Company, 
7 P.3d 922, 928 (Wyo. 2000).  We agree with Mr. Carroll.  Mr. Wagner's undesignated expert 
testimony which established the standard for determining what repairs were 
necessary and the cost of making those repairs should not have been 
allowed.  Mr. Bergen presented no 
other evidence of damages.

 

[¶27]   Reversed and remanded for a new 
trial consistent with this opinion.  

 

 

  

GOLDEN, 
J., dissenting, 
in which HILL, C.J., joins.

 

[¶28]      
I 
agree with everything said in the Court's opinion, except that which remands 
this case for a new trial.  Absent 
Mr. Wagner's erroneously admitted testimony, Mr. Bergen's claim fails.  Simply stated, Mr. Bergen has failed to 
prove his claim; consequently, this Court should reverse and remand with 
directions that the district court enter judgment for Mr. Carroll, so that this 
case is at an end.  I see no reason 
to give Mr. Bergen another bite at the apple.

 

FOOTNOTES

1The only problems Mr. Carroll noted were those he was told about by the 
real estate agent and the seller.  
However, he mistakenly identified the wrong 
bathtub.

 

2The fee included $40 for the inspection cost and $6 for 
mileage.

 

3

VI. Costs of Services or Products Obtained From Outside 
Sources.

 

Broker will not obtain or order products or services from outside sources 
unless Buyer has previously authorized the services in writing and has agreed to 
pay for those services promptly when due.  
(Examples: surveys, soil tests, radon tests, title reports, property 
inspections.)

 

4Daubert v. 
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).

 

5

"Under the Daubert model, the 
trial court must first determine whether the expert's methodology is reliable; 
then the court must determine whether the proposed testimony fits' the facts of 
the particular case."  [Chapman v. State, 2001 WY 25, ¶8, 18 P.3d 1164, ¶8 (Wyo. 2001)].  In Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 119 S. Ct. 1167, 143 L. Ed. 2d 238 (1999), the United States Supreme 
Court further clarified the scope of Daubert, holding the gatekeeping duties 
of the trial judge apply to all expert testimony, whether such testimony is 
based on scientific, technical, or other specialized 
knowledge.

 

Alexander v. 
Meduna, 2002 WY 
83, ¶21, 47 P.3d 206, ¶21 (Wyo. 2002).