Opinion ID: 2639411
Heading Depth: 2
Heading Rank: 1

Heading: the metcalf project

Text: ¶ 3 On May 11, 1993, a fire occurred at the home of Colonel Donald and Sidella Metcalf. In extinguishing the fire, the fire department cut apart the roof and doused the house with water, causing water damage to the interior of the home. The Metcalfs, who held a first-party homeowner's insurance policy with AFIE, notified AFIE of their loss. After receiving this notification, AFIE retained a local adjusting company, C.W. Reese Co. (Reese), to serve as its agent for this claim. ¶ 4 After consulting with Reese, Colonel Metcalf entered into a contract with RSI to do the restoration work. RSI was, at the time, a corporation engaged in the restoration of damaged homes and buildings. Harrison was the president, director, and sole shareholder of RSI. Initially, RSI estimated that it could restore the structure and contents of the Metcalfs' home for $89,305.76. Subsequently, RSI submitted several additional estimates to AFIE through Reese, requesting payment for additional costs associated with the restoration of the Metcalfs' home. In total, RSI billed AFIE $311,342.85 for work done on the Metcalfs' home. Of this billed amount, AFIE paid $272,638.17. In addition to the amount billed to AFIE, RSI billed the Metcalfs directly in the amount of $15,492.50 for certain upgrades RSI provided in addition to the restoration work. [1] By combining RSI's billings to the Metcalfs and to AFIE, the trial court determined that RSI billed a total of $326,335.37 [2] for restoration work on the Metcalfs' home. ¶ 5 RSI submitted each of its estimates to Greg Peters, an adjustor for Reese, AFIE's local agent. After reviewing each estimate, Peters recommended that AFIE reimburse RSI for the full amount. AFIE requested Peters to review the amounts claimed on the February 1994 and July 1994 estimates and to check for duplications. Following his examination of the estimates and invoices provided by RSI, including three subcontractor invoices fabricated by RSI, Peters found no duplication and recommended that AFIE provide full payment. AFIE sent checks based on these recommendations. Additionally, three of AFIE's own employees also reviewed the RSI estimates and failed to discover any double billing, although one employee did discover a nine dollar mistake. ¶ 6 Sometime in December 1994, RSI left the Metcalf job. However, some of the restoration work was not yet completed, so the Metcalfs retained other contractors to correct and finish the restoration of their home. In February 1995, AFIE sued RSI and Harrison under several contract and tort theories. ¶ 7 During the initial discovery period, RSI claimed that several pertinent documents relating to the Metcalf project were taken in a burglary. These documents included a Job Cost Detail Report (JCDR), which was an internal document maintained by RSI for each of its projects to keep a record of the actual costs associated with that project. Though it claimed that certain source documents were lost as a result of the burglary, RSI was nevertheless able to recreate the JCDR in June 1995. AFIE contended that the burglary had been staged. During discovery, Harrison and RSI provided this recreated JCDR and the source documents they claimed to have used in the recreation process to AFIE by August 1995. No more than a month later, when it deposed Chris Stavheim, RSI's accounting clerk, AFIE knew that the JCDR was recreated. Harrison admitted that parts of the recreated JCDR were a best-shot effort based on a review of the information available to them at the time of the recreation. Three of the subcontractor invoices RSI provided AFIE in support of the JCDR were fabricated by RSI.