Title: BRASHEAR v. RICHARDSON CONSTRUCTION INC.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

BRASHEAR v. RICHARDSON CONSTRUCTION INC.2000 WY 16710 P.3d 1115Case Number: 99-325Decided: 08/17/2000Supreme Court of Wyoming
 
BILL 
BRASHEAR, d/b/a B & W PAINTING & WALLCOVERING,

 Appellant 
(Plaintiff),v. RICHARDSON CONSTRUCTION, INC., a Wyoming 
corporation,

 Appellee 
(Defendant). 

Appeal from the District 
Court of Laramie County The Honorable Edward L. Grant, 
Judge 

Representing 
Appellant: William D. Bagley of 
Bagley Law Office, Cheyenne, WyomingRepresenting Appellee: Don W. 
Riske of Riske & Arnold, P.C., Cheyenne, Wyoming

Before 
LEHMAN, C.J., and THOMAS, GOLDEN, HILL & KITE, JJ. 

KITE, 
Justice.

[¶1] Appellant 
Bill Brashear d/b/a B & W Painting & Wallcovering (the subcontractor) 
filed a complaint against Appellee Richardson Construction, Inc. (the general 
contractor), seeking payment on a subcontract for services (the contract) 
rendered including painting and wallpapering. The contract provided for 
liquidated damages for every day of delay caused by the subcontractor after 
April 7, 1998. The entire project had an estimated completion date of April 8, 
1998. The subcontractor was not allowed to begin work until April 13, 1998, six 
days after the completion deadline in the contract. The general contractor 
counterclaimed, seeking liquidated damages for delays allegedly caused by the 
subcontractor and recovery of additional costs to the general contractor 
resulting from work it performed to correct and complete the subcontractor's 
work. After trial, the district court awarded the general contractor $14,858.86 
for the costs incurred to cure the defects caused by the subcontractor and 
$17,550 in liquidated damages. These awards were set off against the $30,601 the 
district court found that the general contractor owed for work performed under 
the contract resulting in a judgment against the subcontractor of $1,807.86. The 
subcontractor appeals to this Court. In his brief, he limited the appeal to the 
issue of the liquidated damages award. We affirm the district court's judgment 
as to costs, reverse the award of liquidated damages, and 
remand.

ISSUES

[¶2] The 
subcontractor presents the following issue:

[¶3] Whether the 
Trial Court erred in assessing liquidated damages against Appellant, when the 
contractual provision regarding liquidated damages did not apply to the factual 
situation found by the Court.

[¶4] The general 
contractor restates the issue as:

[¶5] ISSUE I: Whether the 
District Court erred in awarding Appellee a set-off from the claimed contract 
amount for liquidated damages.

[¶6] IA. The Liquidated 
Damages provision of the Subcontract does not contain a condition precedent, the 
failure of which would negate the entire provision.

[¶7] IB. Appellant failed 
to claim a right to an extension of time in the manner required by the 
Subcontract.

[¶8] IC. Appellant waived 
the application of the date as a condition precedent by his 
actions[.]

FACTS

[¶9] The 
subcontractor and the general contractor entered into a contract on July 31, 
1997, for the performance of certain services on the remodeling of a church in 
Sidney, Nebraska. Section E of the contract specifically 
provided:

[¶10] In 
addition to Contractor's other remedies set forth herein, in the event that 
contractor is delayed in completing the project by April 7, 1998 due to actions 
or inaction[]s of Subcontractor, Subcontractor shall be liable to Contractor for 
Liquidated Damages of Three Hundred Twenty[-]Five Dollars ($325.00) per calendar 
day of such delay.

[¶11] (Emphasis 
added.) On August 5, 1997, the subcontractor acknowledged receipt of a Notice to 
Proceed dated July 31, 1997.

[¶12] However, 
in November and December 1997, the project was delayed due to a number of 
different causes, none of which were under the control of the subcontractor. 
Initially, the subcontractor was scheduled to begin work February 1, 1998. The 
start date was delayed by weather and change orders unrelated to the 
subcontractor. It was undisputed that the subcontractor did not begin work until 
April 13, 1998.

[¶13] At that 
time, sheetrockers were still not finished with their work, and they and other 
trades limited the subcontractor's efforts. On June 15, 1998, the architect for 
the owner certified that the subcontractor's work was eighty percent completed, 
and the owner paid the general contractor for eighty percent of the 
subcontractor's work. In late June, the architect noticed certain problems with 
the subcontractor's installation of the sisal wall covering (the sisal). There 
was a dispute concerning the notification of the subcontractor of the problems. 
The owner, on or about June 30, 1998, gave written notice of the rejection of 
the sisal installation and a demand to cure. In late June, the subcontractor 
demanded payment for the work completed, but the general contractor withheld 
payment pending correction of the noted problems with the sisal installation. 
The owner's architect, the general contractor, and the subcontractor negotiated 
concerning how the defect should be cured. The subcontractor wanted to try to 
correct the problems without removing the sisal, but the architect insisted that 
removal and reinstallation consistent with the manufacturer's instructions were 
required. After the end of June, the subcontractor performed no significant 
work. On August 10, 1998, the general contractor terminated the contract and 
removed and reinstalled the sisal. The subcontractor does not contest the 
judgment against it for the costs of that additional work. The project was 
accepted by the owner as complete on October 1, 1998.

[¶14] The owner 
assessed liquidated damages to the general contractor pursuant to the general 
contract for more than 118 days of delay in the project completion.1 The general contract was not 
included in the record, and, therefore, the terms and conditions of the 
liquidated damages charged by the owner against the general contractor cannot be 
ascertained. The general contractor allocated fifty-four days of delay to this 
subcontractor based upon what the general contractor considered was a 
"reasonable" basis with the remaining days of delay being allocated to the 
general contractor and other subcontractors. The record contains no evidence 
concerning the basis for that allocation.

[¶15] The 
subcontractor testified that he understood he was undertaking the work under the 
contract even though he was not allowed to begin work until a later date than 
was anticipated when the contract was signed. It appears from the testimony of 
the architect that the general contractor may have received an extension of the 
completion date from the owner by approval of a change order. A handwritten 
notation on the Final Acceptance Certification indicates that the general 
contractor may have received an extension of the completion date from April 8, 
1998, to June 14, 1998, from the owner. However, the record does not contain the 
change order or orders which affected any such extension. No request for 
extension of time was made by the subcontractor or the general contractor of one 
another. The record reflects no change order or orders affecting an extension of 
the April 7, 1998, deadline which triggered liquidated damages in the contract 
between the general contractor and the subcontractor.

[¶16] Before the 
controversy developed, the subcontractor was paid $2,524.50 for the sisal 
material costs he incurred. No further payments were made to the 
subcontractor.

STANDARD OF 
REVIEW

[¶17] Resolution 
of this matter is governed by interpretation of the terms of the contract. 
Neither party contends the contract is ambiguous. Because the interpretation of 
a contract is purely a question of law, this Court conducts a de novo review of 
the district court's conclusions. Fremont Homes, Inc. v. Elmer, 974 P.2d 952, 
955-56 (Wyo. 1999); Anderson v. Bommer, 926 P.2d 959, 961 (Wyo. 1996); see also 
Moncrief v. Louisiana Land and Exploration Company, 861 P.2d 516, 524 (Wyo. 
1993).

DISCUSSION

[¶18] The 
interpretation of an unambiguous contract is governed by its plain language. 
This Court recently noted in Page v. Mountain West Farm Bureau Mutual Insurance 
Company, 2 P.3d 506, 508 (Wyo. 2000) (quoting Arnold v. Mountain West Farm 
Bureau Mutual Insurance Company, Inc., 707 P.2d 161, 166 (Wyo. 1985)), as 
follows:

"If a contract is clear 
on its face, we must assume it reflects the intent of the parties. Schacht v. 
First Wyoming Bank, N.A.-Rawlins, Wyo., 620 P.2d 561 (1980). We are not free to 
rewrite contracts under the guise of interpretation. Adobe Oil & Gas Corp. 
v. Getter Trucking, Inc., Wyo., 676 P.2d 560 (1984). So long as there is no 
ambiguity, we are bound to apply the contract as it is written. Rouse v. Munroe, 
Wyo., 658 P.2d 74 (1983)."

[¶19] This Court 
also held in Sierra Trading Post, Inc. v. Hinson, 996 P.2d 1144, 1148 (Wyo. 
2000) (emphasis added) as follows:

[¶20] While we 
have said that the question of whether a contractual provision is a condition 
precedent or a condition subsequent is one resolved by the intention of the 
parties, and normally such questions are to be resolved by the trier of fact, 
Goodwin v. Upper Crust of Wyoming, Inc., 624 P.2d 1192, 1195 (Wyo. 1981), we 
also have said that when the language of the contract is clear, we need look no 
further than the four corners of the contract. Hillman[v. Raymond], 733 P.2d 
[605,] 607 [(Wyo. 1987)].

[¶21] The plain 
language of this contract provides for liquidated damages only if the 
subcontractor delays the completion of the project by April 7, 1998. "[I]n the 
event that contractor is delayed in completing the project by April 7, 1998 due 
to actions or inaction[]s of Subcontractor, Subcontractor shall be liable to 
Contractor for Liquidated Damages." (Emphasis added.) The record contains no 
evidence, and not even a claim, that the project was delayed past April 7, 1998, 
by the actions or inactions of this subcontractor. The plain language of this 
contract does not provide authority for the award of liquidated damages unless 
the subcontractor caused a delay of the project past April 7, 1998. The district 
court erred when it awarded liquidated damages beyond those contemplated in the 
contract.

[¶22] The court 
may look to the surrounding circumstances, the subject matter, and the purpose 
of the contract to ascertain the intent of the parties at the time the agreement 
was made. However, the context cannot be invoked to contradict the clear meaning 
of the language used, and extraneous circumstances do not justify inserting a 
provision contrary to the express terms of the contract; the court cannot make a 
contract for the parties.

[¶23] Polo Ranch 
Company v. City of Cheyenne, 969 P.2d 132, 136-37 (Wyo. 1998) (citations 
omitted); see also Examination Management Services, Inc. v. Kirschbaum, 927 P.2d 686, 690 (Wyo. 1996).

[¶24] The 
general contractor argued that the subcontractor did not seek an extension of 
time. However, neither did the general contractor. If the general contractor had 
wanted a liquidated damages provision that would apply after the date specified 
in the contract, it certainly could have provided one because it drafted the 
contract. Liquidated damages can be drafted to apply whenever work is begun and 
a specific amount of time is allowed for the work to be completed.2 Keith v. Burzynski, 621 P.2d 247, 
249 (Wyo. 1980). This contract provided for change orders and extensions of 
time. However, neither party used those remedies to alter the explicit terms of 
the contract when the April 7, 1998, date passed. Consequently, only the 
explicit terms of the written contract will apply. Colorado Interstate Gas 
Company v. Natural Gas Pipeline Company of America, 842 P.2d 1067, 1070 (Wyo. 
1992); see also Quin Blair Enterprises, Inc. v. Julien Construction Company, 597 P.2d 945, 951 (Wyo. 1979).

[¶25] The 
general contractor argues it is evident from the subcontractor's testimony that 
he understood the contract applied even though work was commenced later than 
contemplated. The general contractor asserts this testimony supports its 
argument that liquidated damages apply whenever a delay is caused. However, the 
subcontractor's testimony in no way undermines the conclusion that the express 
terms of the contract did not authorize liquidated damages where the project was 
delayed long after April 7, 1998, by persons other than the 
subcontractor.

[¶26] The 
general contractor asks this Court to rewrite the contract to provide that 
liquidated damages apply whenever the subcontractor delays completion of the 
project. As we noted in Snyder v. Lovercheck, 992 P.2d 1079, 1089 (Wyo. 
1999):

[¶27] Courts are 
not free to rewrite contracts under the guise of interpretation where the 
contractual provisions are clear and unambiguous. Klutznick v. Thulin, 814 P.2d 1267, 1270 (Wyo. 1991). "Accordingly, in private disputes, a court must enforce 
the contract as drafted by the parties and may not relieve a contracting party 
from anticipated or actual difficulties undertaken pursuant to the contract, 
unless the contract is voidable on grounds such as mistake, fraud or 
unconscionability." Holly Hill Holdings v. Lowman, 226 Conn. 748, 628 A.2d 1298, 
1302 (1993) (citing 1 Restatement (Second), Contracts §§ 154, 159, and vol. 2, § 
208 (1981)). Moreover, "[o]ne who signs a contract generally cannot avoid it on 
the ground that he did not attend to its terms, or did not read it, or that he 
took someone's word as to what it contained." First State Bank of Wheatland v. 
American Nat. Bank, 808 P.2d 804, 806 (Wyo. 1991).

[¶28] Neither is 
the general contractor's argument persuasive that, by commencing work after the 
April 7, 1998, date, the subcontractor waived his right to claim that liquidated 
damages would only apply pursuant to the terms of the contract. In fact, the 
opposite is true. The general contractor waived its right to rely on the 
liquidated damages provision when it allowed the subcontractor to commence work 
after April 7, 1998-the contractually specified liquidated damages date-without 
requiring a change order or amendment to the contract.

[¶29] The award 
of liquidated damages was based upon the allocation of all of the days of delay 
after the contract was terminated until the project was accepted as complete by 
the owner.3 No provision in the contract 
provided for such an allocation of damages. Absent such a contract provision, 
the district court inappropriately developed its own formula to calculate 
liquidated damages to be assessed against the subcontractor. Snyder, 992 P.2d  at 
1089.

[¶30] We affirm 
that portion of the district court's judgment which awarded the general 
contractor $14,858.86 for the costs incurred to cure the defects caused by the 
subcontractor, reverse that portion of the district court's judgment which 
awarded the general contractor liquidated damages in the amount of $17,550, and 
remand the case for a revision of the judgment consistent with this 
opinion.

FOOTNOTES

1 The owner 
charged the general contractor for 118 days at $225 per day for a total of 
$26,550. In addition, the owner charged the general contractor for eighty-four 
days at $70 per day, which was discounted to forty-two days, for a total of 
$2,940. The reason for the discount is not apparent in the 
record.

2 Keith v. 
Burzynski, 621 P.2d 247, 249 (Wyo. 1980) (quoting 5 Samuel Williston & 
Walter H. E. Jaeger, A Treatise on the Law of Contracts § 789 at 765-66 (3d ed. 
1961)), provides as follows:

"In 
building contracts, there is often inserted a provision giving the architect 
power to certify an extension of time in certain cases, by virtue of which the 
effect of a delay caused by the owner operates merely as an extension of the 
time for performance, and a new time is substituted for the old. In that event 
though the owner causes delay the builder is liable in liquidated damages, but 
the period of delay caused by the owner is deducted from the total delay. Unless 
the contract contains such a provision the delay due to each party will not 
generally be apportioned."

3 August 10, 
1998, was the date the contract was terminated, and October 1, 1998, was the 
date the project was deemed complete by the owner.