Opinion ID: 2632521
Heading Depth: 1
Heading Rank: 5

Heading: District Court's Construction of the Contract

Text: [¶12] The district court concluded that the contract between the parties unambiguously contained an express provision assigning a duty to Farmer to take account of the soil in which the Rickards' house was to be built. The governing rules of contract construction are these: In contract litigation, when the terms of the agreement are unambiguous, the interpretation is a question of law.... Examination Management Services, Inc. v. Kirschbaum, 927 P.2d 686 , 689 (Wyo.1996); Union Pacific Resources Co. v. Texaco, Inc., 882 P.2d 212 , 218-19 (Wyo.1994). Whether a contract is ambiguous is a question of law for the reviewing court. Prudential Preferred Properties v. J and J Ventures, Inc., 859 P.2d 1267 , 1271 (Wyo.1993). We review questions of law de novo without affording deference to the decision of the district court. Hermreck v. United Parcel Service, Inc., 938 P.2d 863 , 866 (Wyo.1997); Griess v. Office of the Atty. Gen., Div. of Criminal Investigation, 932 P.2d 734 , 736 (Wyo.1997). According to our established standards for interpretation of contracts, the words used in the contract are afforded the plain meaning that a reasonable person would give to them. Doctors' Co. v. Insurance Corp. of America, 864 P.2d 1018, 1023 (Wyo.1993). When the provisions in the contract are clear and unambiguous, the court looks only to the four corners of the document in arriving at the intent of the parties. Union Pacific Resources Co., 882 P.2d at 220; Prudential Preferred Properties, 859 P.2d at 1271. In the absence of any ambiguity, the contract will be enforced according to its terms because no construction is appropriate. Sinclair Oil Corp. v. Republic Ins. Co., 929 P.2d 535 , 539 (Wyo.1996); Prudential Preferred Properties, 859 P.2d at 1271. Roney v. B.B.C. Corp., 2004 WY 113, ¶ 10, 98 P.3d 196 , 200 (Wyo. 2004) (citing Amoco Prod. Co. v. EM Nominee Partnership Co., 2 P.3d 534 , 540 (Wyo. 2000)); and see Castleberry v. Phelan, 2004 WY 151 , ¶¶ 11-12, 101 P.3d 460 , 463-64 (Wyo. 2004). [¶13] While we agree with the district court that the contract is not ambiguous, we conclude that the contract itself, as well as the language from the house plans about conditions, is silent as to the matter of who will be responsible for whether soil testing is necessary. This is too important a responsibility/duty to be inferred from silence and/or the use of the word conditions. Moreover, the language from the house plans clearly suggests that it relates to the conditions shown by these drawings. The drawings do not purport to account for soil conditions, whatever they might happen to be where the plans are utilized. [¶14] In Reiman Const. Co. v. Jerry Hiller Co., 709 P.2d 1271 , 1275-76 (Wyo. 1985), we considered a case wherein the building team included a soils engineer, an architect, a civil engineering firm, as well as a builder. In that case we said: It is generally recognized that a contractor who follows the building plans and specifications is not liable for the resultant defects in a building due to a faulty design.    In the absence of special provisions in the contract, the contractor's obligation is ended upon the completion of the structure in accordance with the terms of the contract. Therefore, he is not liable in case the structure is subsequently damaged or is destroyed by some accident or calamity, or falls from some defect or weakness in the structure or fault of the soil, inasmuch as he does not guarantee the sufficiency of the specification, but only the skill with which he performs his work and the soundness of the materials used therein.       [T]he rule has become well settled in practically every American jurisdiction in which the matter has been involved, that a construction contractor who has followed plans or specifications furnished by the owner, and the architect or engineer, and which have proved to be defective or insufficient, will not be responsible to the owner for loss or damage which results, at least after the work is completed, solely from the defective or insufficient plans or specifications, in the absence of any negligence on the contractor's part, or any express warranty by him as to their being sufficient or free from defects.    13 Am.Jur.2d Building and Construction Contracts, §§ 27, 28, pp. 29-30 (1964). Hiller claims Reiman was negligent by failing to notify Hiller of the soils condition encountered. Such argument is faulty since Hiller's architect, Deines, as well as the engineering firm of Volk & Harrison, had already been apprised of the soils condition from Chen's soils report and had made their plans and specifications accordingly. Therefore, there was no need to inform Deines and Volk & Harrison of the soils condition when they already knew such from the soils report. In this case, there is no evidence which shows Reiman did anything but perform all work properly under the design given for the building. Carrel McClain, architect for the Deines firm, testified the building was constructed in accordance with the plans and specifications. To the same effect is the testimony of Michael Apostolos, designer for Deines, who also concluded the building was completed in accordance with the specified design. In the case of Gaybis v. Palm, 201 Md. 78, 92 A.2d 269 (1952), the court held the contractor of a home which was subsequently damaged after construction due to faulty soil could recover for the cost of construction from the owner. The contractor built the home according to the owner's plans and specifications and was absolved of any liability:    If a building contractor does his work in accordance with the plans and specifications and without negligence, he will not be liable to the owner where the building is subsequently damaged by reason of some defect in the building or some fault of the soil, in the absence of an express warranty that the plans and specifications are sufficient, inasmuch as he does not warrant their sufficiency but only the skill and care with which he performs his work and the soundness of the materials used therein. Id., 93 A.2d at 272. In Ridley Investment Company v. Croll, Del.Super., 192 A.2d 925, 6 A.L.R.3d 1389 (1963), an owner sought recovery from a contractor for damages to a post office building due to substantial settling after installation of the floor. The contractor notified the owner of the soft soil conditions. An outside expert was called in who recommended additional piling be placed beneath the exterior walls. The owner concurred and the contractor followed the expert's recommendations. Shortly thereafter, the expert again recommended that additional piling was needed, but the owner disagreed and no further piling was added. After installation of the floor, substantial settling occurred in the foundation of the building. Additional expense was required to remedy the settling, and the owner sought to recover this expense from the contractor. The court found the contractor not liable for damages to the building due to defective design: The lower court held that defendant was exonerated from liability because the damages resulted from a defect in the plans and specifications prepared by the owner and which were followed by defendant in a workmanlike manner. Plaintiff contends here that the court below failed to distinguish between defects inherent in the plans and specifications and defects extrinsic to such specifications, such as a latent defect in the soil. This argument is untenable, since plans and specifications do not exist in a vacuum; they are made for a particular building at a particular place. The defect in the plans and specifications for the building in question was the failure to make provision for adequate pilings and other support for the floor; the fact that these plans and specifications might provide for an adequate building in some other place does not render the plans and specifications less defective for the location in question. Id., at 926-927. See also the annotation at 6 A.L.R.3d 1394 (1966), and the cases cited therein. [Emphases added.] [¶15] The district court deemed the Reiman case not applicable to the circumstances of this case. We, however, conclude that it must be a part of the discussion even though it may not be dispositive of the issue presented here. An important factor in Reiman is most certainly the fact that the architect and the engineers knew they were dealing with soil problems when they assembled the plan that Reiman constructed. [¶16] In an annotation devoted to this particular subject, it is stated that a contractor who knows, or should know, of a defect in a particular subsoil does not perform his contractual obligations in a workmanlike manner if he fails to notify the owner of the existence of the condition. Annotation, Duty of Contractor to Warn Owner of Defects in Subsurface Conditions, 73 A.L.R.3d 1213 (1976 and Supp. 2006). That annotation goes on to suggest that: ...[T]he courts frequently distinguished between latent soil conditions and apparent defects in the soil, absolving the contractor from blame for the consequences of the former, but holding him responsible for failing to notify the property owner of the later. Counsel representing property owner in such cases should not discount the importance of expert testimony in establishing whether a soil condition is one that should be apparent to the builder, and thus one of which the builder has a duty to inform the householder. 73 ALR3d at 1216-17. [¶17] The prevailing law appears to be different in those circumstances where a home is purchased from a builder-vendor (one who builds houses on lands he owns). Mark S. Dennison, Builder-Vendor's Liability to Purchaser of New Dwelling for Breach of Implied Warranty of Fitness or Habitability, 50 POF3d 543, § 13 (Defects in building site) (1999 and Supp. 2006). In a nutshell, a builder-vendor may be liable for soil conditions under the theory of an implied warranty of fitness and/or habitability. [¶18] On a similar note, a legal encyclopedia states this as the prevailing law: A contractor or builder who has complied with the requirements of a construction contract normally is not responsible for defects caused by the nature of the soil or the action of the elements. Moreover, in the absence of a statute or contractual provision to the contrary, a contractor who agrees to follow plans and specifications is not required to examine the soil for hidden subterranean conditions therein which may affect its suitability for the purpose intended or to perform such an examination to determine whether all parts of the structure will be watertight if the contractor follows the plans and specifications. Furthermore, a builder is not responsible where, by the fault of the owner, he or she is unable to overcome defects in the soil. 17B C.J.S. Contracts § 592(d) at 289 (1999). [¶19] Of course, because of the disposition below, inadequate fact gathering and no fact finding has been done in this regard. What we do know is that the seller of the lot, which was designed to be used for residential purposes, knew of the potential of unfavorable soil conditions and warned the Rickards of them. We know that Mr. Rickard sought an opinion on the condition of the soil. That opinion was given without benefit of a written agreement, was not in a written form, and Rickard was not required to pay for it. Rickard claims that he asked Farmer about the condition of the soil, and Farmer agrees with that claim, but counters that his suggestion that more formal soil testing be done was disregarded by the Rickards. In sum, we conclude there are genuine issues of material fact that preclude summary judgment at this juncture.