Title: RYN, Inc. v. Platte County Memorial Hosp. Bd. of Trustees

State: wyoming

Issuer: Wyoming Supreme Court

Document:

RYN, Inc. v. Platte County Memorial Hosp. Bd. of Trustees1992 WY 171842 P.2d 1084Case Number: 91-270Decided: 12/10/1992Supreme Court of Wyoming
RYN, INC., 
Appellant (Plaintiff),

v.

PLATTE COUNTY MEMORIAL HOSPITAL BOARD OF TRUSTEES and 
Gertsch/Baker & Associates, Inc., Appellees 
(Defendants).

Appeal from District Court, PlatteCounty, William A. Taylor, 
J.

 Don W. 
Riske (argued) of Riske & Arnold, Cheyenne, for appellant.

Frank 
J. Jones, Wheatland, for appelleeHospital Bd. of 
Trustees.

Patricia 
L. Simpson (argued), and Aron Henning Simpson, Laramie, for appellee 
Gertsch-Baker.

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

* Chief Justice at time of oral 
argument. 

CARDINE, Justice.

 [¶1.]     In this appeal, RYN, 
Inc. (RYN) challenges the amount of damages the jury awarded for wrongful 
termination of its construction contract with appellee Platte County Memorial 
Hospital Board of Trustees (Board). Specifically, RYN appeals from the trial 
court's orders which entered judgment on the jury's verdict and which denied its 
motion for amendment of judgment or a new trial on the issue of 
damages.

 [¶2.]     We 
affirm.

 [¶3.]     RYN states the issues 
as follows:

Issue 
I

Whether 
the trial court erred in denying Appellant's Motion for Amendment of Judgment 
or, in the Alternative, for a New Trial.

Issue 
II

Whether 
the jury was free to disregard the opinion of Appellant's damage expert in 
making its award of $2800.00 to Appellant for wrongful termination 
damages.

Issue 
III

Whether 
the Jury Verdict awarding Appellant $2800.00 in damages for the wrongful 
termination of the subject construction contract was contrary to the 
Instructions of the Court.

Issue 
IV

Whether 
the Jury Verdict awarding Appellant $2800.00 in damages for the wrongful 
termination of the subject construction contract was the result of improper 
considerations by the jury.

 [¶4.]     Appellee Board restates 
the issues in more concise form:

1. Was 
the jury justified in awarding the amount of damages it did to 
Appellant?

2. Was 
the trial judge justified in denying Appellant's Motion for Amendment of 
Judgment or, in the Alternative, for a New Trial?

Appellee 
Gertsch-Baker & Associates, Inc. (architect) presents no additional or 
supplemental issues for our review.

 [¶5.]     The litigation which 
resulted in this appeal arose out of the construction of an addition to 
PlatteCountyMemorialHospital in Wheatland. On March 18, 1988, 
the Board entered into a standard form agreement with RYN by which RYN was to 
construct the approximately 7,200 square foot addition for payment of 
$336,300.00. RYN was to begin construction on April 1, 1988, and to achieve 
substantial completion of the addition no later than July 25, 1988. 
Gertsch-Baker was to serve as the architect for the 
project.

 [¶6.]     RYN began construction 
early in April 1988. Beginning in June 1988, the Board notified the architect 
and RYN of numerous unacceptable and nonconforming conditions on the project. 
After the expected completion date for the project, July 25, 1988, passed 
without completion, the Board's attorney gave RYN seven-day notice that the 
contract would be terminated on November 14, 1988. Even after this deadline 
passed, both the Board and the architect attempted to work with RYN. On November 
16, 1988, the architect issued a Certificate of Substantial Completion, albeit 
with an attached long list of items to be completed or corrected. Between 
January 4, 1989, and January 18, 1989, the Board also published notice of final 
settlement of the contract.

 [¶7.]     On February 16, 1989, 
the architect conducted an inspection of the project and found numerous items 
incomplete. He estimated that $2875.00 worth of work remained. On March 14, 
1989, the Board voted to terminate the contract with RYN. The Board decided, 
based on the architect's advice, to withhold from RYN's payment between two and 
three times the approximate $2,800.00 needed to complete the project. The Board 
voted to pay RYN $23,000.00 from the contract money which remained, but to 
retain the balance to hire another contractor to complete the 
project.

 [¶8.]     On April 4, 1989, the 
Board accepted a bid of $6,462.00 to finish the work on the property. That same 
day, the Board's attorney wrote State Surety Company and notified them that the 
contract with RYN had been terminated due to 
nonperformance.

 [¶9.]     RYN filed a 
governmental claims act claim against the Board, alleging wrongful termination 
from the project. After the Board denied RYN's claim against it, RYN filed a 
complaint against the Board and the architect in district court. The complaint 
sought damages against the Board for breach of contract and wrongful 
termination, and against the architect for negligence, breach of the covenant of 
good faith and fair dealing, and intentional interference with contract. The 
Board responded with a counterclaim against RYN for liquidated damages for delay 
in constructing the addition and for alleged construction defects, and a 
cross-claim against the architect. The architect also cross-claimed against the 
Board.

 [¶10.]  A jury trial was held on all claims, 
beginning on August 5, 1991. Extensive testimony was elicited by all sides on 
responsibility for the delays and for the nonconforming conditions at the 
project. RYN introduced the testimony of its certified public accountant, who 
rendered an opinion that RYN had suffered a loss of $272,095.00 for the years 
1989, 1990 and 1991 from failure to obtain bonding after being fired by the 
Board. On August 14, 1991, the jury rendered a verdict which may be summarized 
as follows:

     The jury found that 
the Board breached the construction contract with RYN by failing to pay the 
remaining $10,446.00 of the total contract price. The Board was entitled, 
however, to withhold $5,980.66 from the total contract amount for its costs 
incurred in completing the work after termination of the 
contract.

     RYN did not abandon 
the contract before March 14, 1989. The Board wrongfully terminated the 
contract. RYN suffered damages from wrongful termination of $2,800.00. The 
architect did not intentionally interfere with the contract between RYN and the 
Board.

     RYN breached the 
contract by failing to perform in a timely manner. The Board sustained $2,805.00 
in damages as the result of this breach. (The jury included a margin note that 
this figure was calculated by multiplying the liquidated damage amount contained 
in the contract, $55.00 per day, by 51 days.) RYN also breached the contract by 
failing to perform completely (however, the jury did not award any damages for 
this breach).

 [¶11.]  The trial court entered judgment on the 
jury's verdict. RYN moved for amendment of the jury's verdict of $2,800.00 for 
wrongful termination, or in the alternative, for a new trial on the issue of 
damages. RYN asserted it was entitled to wrongful termination damages in the 
amount testified to by its expert, $272,095.00. The trial court denied this 
motion. RYN thereafter took timely appeal to this court.

 [¶12.]  The only real issue to be decided is 
whether the trial court abused its discretion in refusing to amend the jury's 
award or to order a new trial on the issue of damages. In order to decide this 
issue, we necessarily consider whether the jury's damage award was so inadequate 
that it was not within the proper exercise of the trial court's discretion to 
uphold it.

 [¶13.]  We begin our analysis with W.R.C.P. 59, 
which provides in part:

(a) A 
new trial may be granted to all or any of the parties, and on all or part of the 
issues. * * * Subject to the provisions of Rule 61, a new trial may be granted 
for any of the following causes:

* * * * 
* *

(5) 
Error in the assessment of the amount of recovery, whether too large or too 
small[.]

* * * * 
* *

(e) A 
motion to alter or amend the judgment shall be served not later than 10 days 
after entry of the judgment.

A trial 
court has broad discretion when ruling upon a motion for new trial. We will not 
disturb its decision absent an abuse of that discretion. Coulthard v. Cossairt, 
803 P.2d 86, 91 (Wyo. 1990). The grant or denial of additur is 
also subject to an abuse of discretion standard. Carlson v. BMW Indus. Serv., 
Inc., 744 P.2d 1383, 1390 (Wyo. 1987), citing 
McPike v. Scheuerman, 398 P.2d 71, 73 (Wyo. 1965). An court abuses its discretion 
when it commits an error of law under the circumstances. Coulthard, 803 P.2d  at 
91.

 [¶14.]  The trial court has both the right and 
the duty to grant a new trial or modify a jury's award if it considers under the 
facts and circumstances disclosed at trial that the award was inadequate. 
Carlson, 744 P.2d  at 1390. See also Cates v. Eddy, 669 P.2d 912, 922 (Wyo. 1983). The proper 
measure of inadequacy of an award is whether that award is "so * * * 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, 
803 P.2d  at 92. Simply stated, once the trial court determines in its discretion 
that an award is inadequate, grant of the appropriate relief becomes 
mandatory.

 [¶15.]  Appellant advances several reasons why 
the trial court should have granted its motion for amendment of judgment or new 
trial. RYN claims, first, that the jury arbitrarily disregarded the 
uncontroverted testimony of its expert witness. Second, RYN argues that the jury 
arrived at a damage figure which is unsupported by the evidence. Finally, RYN 
contends that the jury's award was so low as to shock the conscience of the 
court. We consider each of these claims in turn.

 [¶16.]  Appellant argues that since the damage 
figure provided by its expert witness was uncontroverted, the jury could not 
disregard it in reaching its verdict. While we agree with the general rule that 
a jury is not free to arbitrarily disregard uncontroverted testimony from a 
disinterested witness, the expert testimony in this case was neither 
disinterested nor uncontroverted.

 [¶17.]  RYN's expert, a certified public 
accountant, was not a disinterested witness. He testified that his firm had been 
RYN's accountant since 1983. Nor was his testimony uncontroverted. It may be 
helpful to discuss the meaning of the term "uncontroverted" in this 
context.

     "Where the testimony 
of a disinterested witness is not directly contradicted but there are 
circumstances which controvert the testimony or explain it away, or if such 
testimony is clouded with uncertainty or improbability, or otherwise appears to 
be unreliable or unworthy of belief, the trier of fact is not bound to accept 
it. Justice does not require a court or jury to accept as an absolute verity any 
statement of a witness merely because it is not directly or specifically 
contradicted by other testimony, and there are many things which may properly be 
considered in determining the weight that should be given the direct testimony 
of a witness even though no adverse verbal testimony is adduced. If such 
testimony is evasive, equivocal, confused, or otherwise uncertain, it may be 
disregarded. If it is improbable, physically impossible, contrary to physical 
facts or to the laws of nature or scientific principles, or is opposed to common 
knowledge, inconsistent with other circumstances established in evidence, or 
contradictory within itself, it is without any value and may be 
disregarded."

Matter 
of Krause, 803 P.2d 81, 83 (Wyo. 1990), quoting 30 Am.Jur.2d Evidence § 
1083 (1967).

 [¶18.]  Thus, testimony is not "uncontroverted" 
merely because the opposing side fails to call its own expert witness or 
introduce its own exhibits to refute the challenged testimony. Internal 
inconsistencies in the testimony or insufficient foundation for the basis of the 
expert's opinion, for example, may provide sufficient contradiction to allow the 
jury to disregard the opinion rendered.

 [¶19.]  Thus, the jury was instructed 
that

You are 
not bound to accept an expert opinion as conclusive, but [you] should give to it 
the weight to which you find it to be entitled. You may disregard any such 
opinion if you find it to be unreasonable.

 [¶20.]  The evidence shows that the accountant's 
testimony was not uncontroverted. First, his opinion as to the loss suffered by 
RYN was premised on the fact that RYN was unable to be bonded from sometime in 
1989 until the date of trial. However, RYN's insurance salesman testified that 
even after State Surety canceled RYN's insurance sometime in 1989 or 1990, RYN 
was able to get bonding through Transamerica Insurance for a brief period of 
time. This bonding began on approximately August 31, 1989, and continued until 
Transamerica was (unforeseeably) sold to Continental Casualty. Continental 
Casualty did elect to cancel RYN's surety status because of nonperformance on 
the hospital project. Even after losing its insurance, however, RYN was able to 
obtain bonding through a substandard surety company, Transamerica Premier. This 
bonding status continued through the date of trial.

 [¶21.]  The insurance agent testified that having 
to bid through a substandard surety company did cause RYN certain types of harm. 
First, greater paperwork was required. Second, a substandard bond costs more. 
Third, less surety credit is available in the substandard market. Finally, the 
standard market is more lenient than the substandard market in evaluating a 
company's working capital. It is possible that the jury took this testimony into 
account when making its award.

 [¶22.]  The accountant's testimony was further 
limited by his failure to undertake an independent investigation of RYN's 
ability to bond and/or reasons for failure to bid on projects. Under 
cross-examination, he admitted he did not know what RYN's maximum bonding 
capacity was in 1988 or 1989, that he did not know why RYN did not bid under its 
1989 bonding capacity with Transamerica, and that he did not know if RYN 
attempted to obtain any jobs between January and April of 1989. His estimated 
loss figure for 1990 was based on lag time necessary to "get back into the bond 
market," when RYN was already back in the market.

 [¶23.]  A finder of fact may justifiably reject 
an expert opinion which is based upon an incorrect assumption of material fact. 
Fry's Food Stores v. Indus. Comm'n, 161 Ariz. 119, 776 P.2d 797, 800 (1989). RYN's 
expert assumed that RYN had entirely lost its bidding capacity. This assumption 
was proved incorrect by the testimony at trial. The jury was therefore entitled 
to disregard the testimony of RYN's expert on lost 
profits.

 [¶24.]  RYN next argues that the jury's award 
must be reversed because it was unsupported by the evidence. We do not 
understand RYN's argument to be that the jury should have awarded it nothing. 
Rather, RYN contends that once the jury found that it was wrongfully terminated, 
it could only award damages in an amount proved at trial. RYN's figure was the 
only one proposed. The question is thus, if the jury disbelieved the expert's 
calculation of damages, as it was entitled to do, could it award some lesser sum 
for which neither side offered supporting testimony?

 [¶25.]  A review of cases from other 
jurisdictions shows that jury awards which did not equal either the amount 
requested by the plaintiff or proved by expert testimony have been defended 
against claims for a new trial. In Kamp Dakota, Inc. v. Salem Lumber Co., Inc., 
89 S.D. 696, 237 N.W.2d 180 (1975), the South Dakota Supreme Court upheld a jury 
verdict of $200.00 for defective construction of two swimming pools against a 
claim that uncontroverted expert testimony supported the requested amount of 
$6,767.48. The court, quoting its earlier case of Rowan v. Becker, 73 S.D. 273, 
41 N.W.2d 836, 839 (1950) stated:

"This 
case does not involve liquidated damages. The proof of damages rests largely 
upon opinion evidence. Such evidence was to some degree weakened by 
cross-examination. The jurors were the sole judges of the credibility of the 
witnesses. They were not bound to accept the testimony of appellant's witnesses 
as absolutely true."

Kamp 
Dakota, 237 N.W.2d  at 182.

In 
Rands v. Forest Lake Lumber Mart, Inc., 402 N.W.2d 565 (Minn.App. 1987), the court affirmed a verdict of $9,000.00 for 
construction defects against testimony which gave the jury three possible 
figures ($56,350.00, $18,600.00, and $800.00) to choose from. The court noted 
that in setting the award, the jury need not adopt the figures of any particular 
witness; it is sufficient if the result is "within the mathematical limitations 
established by the various witnesses and is otherwise reasonably supported by 
the evidence as a whole."

Rands, 402 N.W.2d  at 569 (citation omitted). See also 
Davis v. Ralston Purina Co., 248 Ark. 1128, 455 S.W.2d 685 
(1970) (affirming jury's refusal to award damages for lost profits based on 
speculation).

 [¶26.]  We do not know for certain how the jury 
arrived at the amount of its verdict. It may be that the $2,800.00 awarded RYN 
for wrongful termination was meant to balance the $2805.00 awarded the Board for 
the construction delay. It may also be that the jury was overly generous to an 
appellant who should have received nothing (although since that question has not 
been presented on cross-appeal, we do not consider it. See Louth v. Kaser, 405 P.2d 276, 279 (Wyo. 1965)). In any case, the amount of 
recovery was not outside a reasonable range, given the jury's right to disregard 
the expert testimony presented.

 [¶27.]  Finally, appellant contends that the 
jury's verdict must be reversed because it is so low that it shocks the 
conscience of the court. Appellant argues that this case is different from, for 
example, an action seeking tort damages for pain and suffering, where wide 
latitude is given to the jury's verdict, because his damages for wrongful 
termination are objectively calculable.

 [¶28.]  RYN's damages are not so "objectively 
calculable" as it contends. The damages claimed for improper termination involve 
lost profits on subsequent deals. We note that at least one court has barred recovery for such damages under 
very similar circumstances, on grounds that the damages were too speculative. 
See Indiana and Michigan Elec. Co. v. Terre Haute Indus., Inc., 507 N.E.2d 588, 
604-07 (Ind. App. 1987), transfer denied 525 N.E.2d 1247 (Ind. 1988). While we do 
not take the position that such damages are barred, we do think given their 
somewhat speculative nature and the paucity of proof presented, reasonable 
persons could differ on the amount of future profit RYN lost by virtue of the 
Board's actions. Therefore, a broad range of permissible jury recovery was 
acceptable, and the jury's verdict was not so insufficient as to shock the 
judicial conscience.

 [¶29.]  We hold that the trial court did not 
abuse its discretion in denying RYN's motion for modification of judgment or new 
trial. The trial court's order denying that motion, and its entry of judgment, 
are affirmed.