Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-91-02229/USCOURTS-ca10-91-02229-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FILL l) United Stat.es C.ourt olA. 1 Appu Tenth Circu t 

UNITED STATES COURT OF APPEALS 

DEC 18 1992 

ROBERT L. HOECKER 

Clerk 

FOR THE TENTH CIRCUIT 

JERRY W. ROGERS, d/b/a Jerry ) 

Rogers Excavation, ) 

) 

Plaintiff/Appellee, ) 

) 

V. ) 

) 

EDDY COUNTY BOARD OF COMMIS- ) 

SIONERS; BOB STOCKWELL, as ) 

Eddy County Manager; WILLIAM ) 

ALSOP, County Commissioner; ) 

FRED ALVAREZ, County Commis- ) 

sioner; NANCY BRANTLEY, County ) 

Commissioner; BILL KIRKES, ) 

County Commissioner; W.L. JAY ) 

MOBLEY, County Commissioner; ) 

EDDY COUNTY, ) 

) 

Defendants/Counter- ) 

Claimants/ Appellants. ) 

No. 91-2229 

(D.C. No. CIV-89-1208-JP) 

(D. New Mexico) 

ORDER AND JUDGMENT* 

Before MOORE and BRORBY, Circuit Judges, and THEIS, District 

Judge.** 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36 . 3. 

**The Honorable Frank G. Theis, Senior Judge for the United States 

District Court, District of Kansas, sitting by designation. 

Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 1 
The Eddy County Board of Commissioners (the county) appeals a 

judgment entered against it following a trial to the court. I n 

this diversity action for recovery of damages for breach of 

contract or unjust enrichment, the district court found the 

plaintiff, Jerry W. Rogers, doing business as Rogers Excavating 

Company (Rogers) , had entered into a written contract which was 

subsequently breached by the defendant county. Alternatively, the 

court held if there was no contract, the county was unjustly 

enriched when it seized and put to its own use property produced 

by the plaintiff. Concluding the district court correctly held 

the county breached the contract, we do not consider whether an 

action in unjust enrichment will lie. We affirm the judgment of 

the district court. 

Although the county attempts to focus upon innuendo either 

undecided or resolved contrary to its position, the operative 

facts lie in the findings of the court. Since those findings are 

not clearly erroneous, indeed the county does not even suggest 

that they are, the findings are binding upon us . Fed. R. Civ . P. 

52 (a) • 

The only questions before us are pure questions of law which 

we must decide de novo. Salve Regina College v. Russell, U.S. 

, 111 S. Ct . 1217, 1221 (1991). Nonetheless, that decision is 

circumscribed by the facts found by the district court. 

Therefore, the county's effort to influence us by recitation of 

irrelevant testimony is unavailing and improper. 

Prior to trial, the parties stipulated to a number of facts . 

Accordingly, it was uncontested that: 

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Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 2 
1. For the years 1985 through 1988, Rogers submitted bids 

and proposals to Eddy County in response to the county's public 

invitation for sealed bids and proposals. For each of those 

years, the county accepted Rogers' bids as well as bids from 

others. 

2. For the calendar year 1988, the county received bids 

from Rogers in response to an invitation. The county replied, 

notifying Rogers by letter that his bid was accepted. 

3 . "In the first three months of 1988, the County 

continuing [sic] to haul materials from Jerry Rogers." In March 

1988, the county discovered "discrepancies in the billing 

process." At the end of that month, the county stopped hauling 

gravel produced by Rogers, and it did not pay Rogers the last two 

invoices it received from Rogers for hauling materials in March 

1988. 

4. "The County removed the stockpiles created by Jerry 

Rogers in eleven days, hauling 2,381 truck loads of materials. 111 

From other evidence, the district court also found: 

1 . "The parties followed the practice and procedure of 

operating under a bid or proposal beyond the termination dates 

specified in the bid proposals until a new invitation for bid or 

proposal was issued and a new bid or proposal accepted on a later 

date." 

2 . During the eleven days in 1989 during which the county 

1 From other facts in the case, we assume this means the county 

removed the material over a period of eleven days, and not that 

Jerry Rogers created the stockpile in eleven days. 

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Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 3 
removed material from Rogers' stockpile, the county took specific 

products valued at a net price of $205,190.91. In addition, the 

court determined the county owed $15,146.45 for unpaid invoices 

from Rogers. 

On the basis of the stipulated and proven facts, the court 

concluded the bids and proposals constituted indefinite quantity 

contracts under N.M. Stat. Ann. § 13-1-63 1978 (1988 Repl.); that 

indefinite quantity contracts are permissible under § 13-1-149; 

that the 1988 contract consisted of the county's invitation for 

sealed proposals, Rogers' proposal, and the county's letter of 

February 16, 1988, accepting the proposal. 

Critical to the issues before us, the court next concluded 

because of the practice of the parties in which they continued 

operations beyond calendar years based upon the immediately prior 

invitation or proposal, "the 1988 contract was still in force as 

of January 27, 1989," and that contract "constituted a valid 

written contract within the meaning of 37-1-23 N.M.S.A. 1978." 

Consequently, the court held, when the county removed material 

from the stockpile, it breached the 1988 written contract 

resulting in liability in the amount of $205,190.91. That 

liability is not shielded by sovereign immunity, the court held, 

because the extension of the contract was based upon a written 

agreement, citing Vinnell Corp. v. New Mexico, 85 N. M. 311, 312 

(1973). 2 

2 The court also concluded if the contract was 

the county was unjustly enriched by the same amount 

protected by sovereign immunity from a claim for 

court made clear, however, this conclusion was an 

its breach of contract holding. 

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not breached, 

and it was not 

damages . The 

alternative to 

Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 4 
The county argues the district court "misapplied the 

appropriate New Mexico law" by concluding the 1988 contract was 

extended beyond its expiration date through the practice and 

procedure followed by the parties. The county, however, supports 

this argument by citation to federal and other state cases not in 

point. The sole legal issue we see here is whether New Mexico law 

recognizes the principle that contracts can be modified by the 

conduct of the contracting parties. 

New Mexico courts have not had a problem with this question. 

Indeed, a contract can be modified by the conduct of the parties 

once its existence is established. Elephant Butte Resort Marina. 

Inc. v. Woolridge, 102 N . M. 286 , 694 P.2d 1351 (1985) . "[T]he 

conduct of the parties in performing an agreement may be relevant 

to show a modification or waiver of a provision inconsistent with 

their conduct in the performance of that agreement . " Hale 

Contracting Co. v. United New Mexico Bank of Albuquerque, 110 N.M. 

712 , 799 P.2d 581, 589 (1990) (emphasis in original). See also 

N.M. Stat. Ann . § 55-2-207(3). 

It follows, then, when the parties undertake a course of 

mutual conduct contrary to the written terms of an agreement, that 

conduct forms a modification of the or iginal contract . Contrary 

to the position asserted by the county, the modification is not a 

separate oral contract. It is a provision incorporated into the 

original written contract. 

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Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 5 
To counter the effect of this concl usion, the c ounty cites 

N.M. Stat . Ann. § 13-1-42, which defines the term "contract 

modification. " That definition, standing alone, begs the issue . 

It does not affect in any way t he legal principle recognized by 

New Mexico courts or established in the sales provision of the 

Commercial Code adopted by the New Mexico legislature. 

The only question that remains is whether there is factual 

support for the trial court's finding the parties had established 

a practice and procedure for operating beyond the expiration of 

the contract. Neither of the parties has helped us in this quest, 

but we have found in the testimony of Mr. Rogers evidence which 

supports the district court's findings . 

Mr. Rogers testified that "they [the county] kept hauling it 

[gravel] from me" after the contracts expired and "until new ones 

were actually formulated and completed." He also testified that 

after the expiration of the 1987 contract until the completion of 

the 1988 contract in February of that year, "they kept hauling." 

We believe that testimony supports the district court's finding. 

Having arrived at this point, it is evident the remaining 

issues raised by the county are moot . The county admits there was 

a valid contract between it and Rogers in 1988. It refuses only 

to recognize the effect of the conduct of the parties as a 

modification of that conduct. Notwithstanding, we conclude the 

trial court correctly held that contract was modified and 

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Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 6 
subsequently breached. We, therefore, do not need to consider 

whether the county is immune from an unjust enrichment claim. 

AFFIRMED. 

Entered for the Court 

John P. Moore 

Circuit Judge 

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Appellate Case: 91-2229 Document: 010110152684 Date Filed: 12/18/1992 Page: 7