Opinion ID: 721371
Heading Depth: 1
Heading Rank: 2

Heading: benham's appeal

Text: 29 Benham makes several arguments on appeal. Initially, Benham argues that Maddox should not have been able to present evidence of an oral agreement to supply bidding information to Maddox, because evidence of the oral agreement should have been precluded by the parol evidence rule. Alternatively, Benham argues that Plaintiff's Exhibit 135 was an insufficient damages calculation. Further, Benham contends that the court erred in admitting Plaintiff's Exhibit 108 (summary of delays) and Plaintiff's Exhibit 164 (outlining design deficiencies). Benham also contends that the court erred in not setting aside that portion of the judgment based on Benham's failure to guard Maddox against deficiencies, because there was no contractual duty binding Benham.

30 Under Missouri law, which controls our analysis in this diversity action, the parol evidence rule is a rule of substantive law and not a mere rule of evidence. Union Elec. Co. v. Fundways, Ltd., 886 S.W.2d 169, 170 (Mo.App.1994). We review the district court's interpretation of state law de novo, giving its decision no deference. Aerotronics, Inc. v. Pneumo Abex Corp., 62 F.3d 1053, 1059 (8th Cir.1995). 31 The parol evidence rule prohibits evidence of prior or contemporaneous oral agreements which vary, add to, or contradict the terms of an unambiguous and complete contract absent fraud, common mistake, or erroneous admission. See CIT Group/Sales Fin., Inc. v. Lark, 906 S.W.2d 865, 868 (Mo.App.1995); Union Elec., 886 S.W.2d at 170. However, evidence of an oral agreement that is an independent and separate agreement will not be barred by the parol evidence rule, provided that the oral agreement is not inherently in conflict with the written agreement. See Spencer v. Union Pacific R.R., 916 S.W.2d 838, 840 (Mo.App.1996); Sedalia Mercantile Bank & Trust v. Loges Farms, 740 S.W.2d 188, 193-94 (Mo.App.1987); see also 3 Corbin on Contracts § 594 (1960 & Supp.1994). 32 Given the integration clause found in Subcontract p 7.5.1, it is evident that the parties intended the subcontract to be a complete expression of their intentions. However, we conclude that evidence of the prior oral agreement was admissible at trial, because the oral agreement was a wholly separate and independent contract that did not inherently conflict with the written agreement. 33 We begin by looking at the underlying substance of the transaction. Although the written contract was predated to June 1, it was only signed in mid-September. By this time, the oral contract for bidding services had already been entered into, executed, and paid for. 6 Thus, the oral agreement can be characterized as a separate agreement, a stand-alone contract that was bargained and paid for by Maddox. 34 That this was a separate contract is demonstrated by the testimony of Clete Schierman. Schierman, who, as noted above, was a senior engineer at Benham working on this project, testified that in return for the $58,200 payment ($57,400 was actually paid; see supra note 6), it was the job of the Benham Group ... to prepare the study, the equipment sizing, and to supply the necessary information to Maddox, so that [Maddox] could submit the final construction costs. 5 Trial Tr. at 13. Benham provided services, and they were compensated in return for their efforts. Under Missouri law, this constitutes a contract. See Johnson v. McDonnell Douglas Corp., 745 S.W.2d 661, 662 (Mo. banc 1988). 35 Benham points to three facts in arguing that the oral contract was not a separate contract but was, instead, subsumed by the written contract. First, although the written contract was not signed until mid-September, it was predated to June 1, 1990, before the oral contract was entered into and executed. Second, Schierman testified that the compensation for the written contract, set at $616,050, included the $57,400 paid for the preliminary bidding work. This could indicate that the two agreements were in fact parts of one contract. Finally, the integration clause stated that the written contract represents the entire agreement between [the parties] and supersedes ... prior negotiations, representations or agreements. Subcontract p 7.5.1, reprinted in Appellant's App. at 187. 36 We disagree with Benham. Where the parties bargain for a contract, payment on that contract is made, and the contract is fully performed, we have little difficulty in concluding that the parties intended this interaction to constitute a separate contract. Benham would impermissibly elevate form over substance, which we are not willing to do. 37 Nor does the substance of the oral agreement inherently contradict the written agreement. Although p 3.4 of the written contract provided that Maddox shall furnish all cost estimating services required for the Project, this contract was titled Agreement--Final Design. As this contract was signed two months after Maddox's bid was prepared and accepted, it is reasonable to assume that the parties might adopt a different arrangement for preliminary engineering services, such as preparing an initial bid for the project. Thus, there is no inherent contradiction here. 38 Because the oral agreement represents a wholly separate agreement from the written contract and does not inherently contradict the September agreement, the parol evidence rule is not applicable in this case. See Spencer, 916 S.W.2d at 840. Evidence of the oral agreement was properly before the jury.
39 Benham next contends that, even if the oral agreement is viewed as a separate contract, Maddox cannot recover under a contract theory of damages for the bidding errors because Benham never warranted the accuracy of the bidding information. 40 Under Missouri law, when a company represents itself as being able to do work of a particular character, a warranty is implied that the work will be performed properly. See Biggerstaff v. Nance, 769 S.W.2d 470, 473 (Mo.App.1989); Crank v. Firestone Tire & Rubber Co., 692 S.W.2d 397, 401 (Mo.App.1985). In this case, Benham repeatedly assured Maddox and EEI that it was well qualified to do the work and that it had the manpower and expertise to do the work. Curt Maddox testified that the only way Maddox would have bid on the project was to rely on the bidding information supplied by Benham, because only Benham knew precisely what was going to be designed. 12 Trial Tr. at 91-93. Under Missouri law, these assurances created an implied warranty, allowing liability for the bidding errors. See Biggerstaff, 769 S.W.2d at 473.
41 Benham next contends that Plaintiff's Revised Exhibit 135, 7 a document created by Curt Maddox detailing the damages caused by the bidding errors, should have been inadmissible as hearsay. Maddox counters that the exhibit, which was a summary of business records, was admissible under Rule 1006 of the Federal Rules of Evidence. We review the district court's admission of evidence for abuse of discretion. See Firemen's Fund Ins. Co. v. Thien, 63 F.3d 754, 757 (8th Cir.1995). 8 42 Under Rule 1006, the contents of voluminous writings ... which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. Fed.R.Evid. 1006. In this case, Exhibit 135 was based on information from corporate records, including computer runs that were themselves introduced at trial. Further, as required by Rule 1006, all of the underlying information was available to Benham. The trial court did not abuse its discretion by admitting this evidence. 9
43 Finally, Benham contends that the evidence presented at trial is insufficient to prove damages with the requisite degree of certainty. In Missouri, damages need not be established with absolute certainty, but reasonable certainty is still required as to both existence and amount [of damages]. Aluminum Prods. Enters. v. Fuhrmann Tooling & Mfg. Co., 758 S.W.2d 119, 121 (Mo.App.1988) (quoting Haggard v. Mid-States Metal Lines, Inc., 591 S.W.2d 71, 77 (Mo.App.1979)). A party attempting to prove damages need only place before the jury the relevant facts tending to show the extent of damages, enabling the jury to make an intelligent estimate of [damages] as circumstances of the case will admit. Morris v. Perkins Chevrolet, Inc., 663 S.W.2d 785, 788 (Mo.App.1984) (quoting Truck Ins. Exch. v. Bill Rodekopf Motors, Inc., 623 S.W.2d 612, 614 (Mo.App.1981)). 44 In this case, Maddox placed before the jury evidence of damages with particular clarity. Exhibit 135, and the underlying testimony supporting it, was broken down in great detail. Curt Maddox not only gave an overall damages estimate, but he broke down this estimate into its component parts. For example, testimony was heard regarding the extra expenses for electrical-labor, mechanical/structural, management/clerical, materials, and the like. 45 Curt Maddox also testified, again in great detail, how he arrived at each of the component damages figures. For example, on the mechanical/structural damages, Maddox testified: 46 I took information from corporate records, some being which are the exhibits, the computer runs, and did quantity material takeoff and labor takeoff, takeoff being counting materials or labor hours. I took the total man-hours, labor, equipment, materials purchased on the project, including all the extras, the entire job, entire project, and with a little math I took the number that represented overruns excluding extras. I took the overruns on the project and subtracted those overrun quantities from the actual total job expense. 47 I took the estimates provided by The Benham Group and used that in the math solution and came up with the balance of damages attributed to the deficiencies of Benham over and above our contract and quantities and expectations from The Benham Group. 48 Testimony of Curt Maddox, 11 Trial Tr. at 6-7. Maddox introduced more than sufficient evidence to enable the jury to make an intelligent estimate of [damages] as circumstances of the case will admit. Morris, 663 S.W.2d at 788 (quoting Truck Ins. Exch., 623 S.W.2d at 614). Therefore, Maddox proved damages of $2,746,717.98 with the requisite certainty. 49 Although not clearly enunciated, Benham also seems to challenge the sufficiency of the evidence supporting the jury's verdict, arguing that the jury should not have credited the evidence put forth by Maddox. Although certainty of damages and sufficiency of evidence are two very closely related issues, they are analytically distinct, and this case forces us to address each issue separately. 50 We review jury findings under a highly deferential standard. We resolve all conflicts in favor of Maddox, giving it the benefit of all reasonable inferences and assuming as true all facts supporting Maddox which the evidence tended to prove. We will affirm the jury's findings if a reasonable jury could differ as to the conclusions to be drawn. See Triton Corp. v. Hardrives, Inc., 85 F.3d 343, 345 (8th Cir.1996). Mindful of the deferential standard of review and the mountain of credible evidence presented by both sides, we cannot say that the jury's verdict was unsupported by the record. Benham's contention fails.
51 During trial, Maddox presented evidence that it was damaged in an amount of $5,151,085. Of this amount, Maddox acknowledged that approximately $1.2 million worth of damages was due to errors by Maddox or EEI. See Maddox's Closing Argument, 21 Trial Tr. at 57-58; see also Plaintiff's Preliminary Damage Ex. 173, reprinted in Appellant's App. at 406. Nevertheless, Maddox argued during closing argument that Benham was liable to Maddox in this amount, because p 2.1.6 of the contract required Benham to guard Maddox against Maddox's own deficiencies. Whether the contract placed this duty upon Benham is an issue of law, see Anchor Centre Partners v. Mercantile Bank, 803 S.W.2d 23, 32 (Mo. banc 1991) (construction of a written contract is a question of law, not fact), and thus we review this construction de novo, see Frank B. Hall & Co. v. Alexander & Alexander, Inc., 974 F.2d 1020, 1023 (8th Cir.1992). 52 Pursuant to p 2.1.6 of the subcontract, Benham shall keep [Maddox] informed of the progress and quality of the Work, and shall endeavor to guard [Maddox] against defects and designs in the Work of [Maddox]. Appellant's App. at 184. If this were the only provision in the contract dealing with a duty to guard, we might agree with Maddox. However, this provision must be read in conjunction with p 2.1.7, which reads: 53 [Benham] shall not have control or charge of and shall not be responsible for construction means, methods, techniques, sequences or procedures ... for the acts or omissions of [Maddox], [Maddox's] subcontractors or any other persons performing any of the Work, or for the failure of any of them to carry out the Work in accordance with the Construction Documents. 54 Id. (emphasis added). 55 Given the language of p 2.1.7, it is difficult to interpret p 2.1.6 as shifting to Benham the risk that Maddox would not properly perform its obligations under its contract with EEI. Specifically, p 2.1.7 is clear that Benham is not responsible for the acts or omissions of Maddox, nor is Benham responsible for the failure of Maddox to carry out its work in accordance with the construction plans. Benham simply has no duty under the contract to act as insurance against Maddox's own carelessness. 56 This reading of p 2.1.7 does not, as Maddox suggests, render p 2.1.6 inoperative. Paragraph 2.1.6 does place a duty on Benham, namely the duty to visit the work site and make recommendations to Maddox. What this paragraph does not do is place on Benham the further duty to guarantee that Maddox will not make any errors. Thus, the two provisions can co-exist, and giving effect to one does not render the other inoperative. In this case, giving proper effect to p 2.1.7 requires that we reverse the jury's award of $1,267,367.02 to Maddox.
57 Benham next contends that Instruction No. 7, used by the district court to instruct the jury on breach of contract, was inadequate. Benham argues that the instruction, insofar as it did not distinguish between Maddox's four distinct theories of breach, namely late drawings, errors in drawings, errors in bidding information, and failure to guard, did not give reasonable guidance to the jury. 10 58 The purpose of instructing the jury is to focus attention on the essential issues of the case. The district court has broad discretion to instruct the jury in the form and language it considers fair and adequate to present the substantive law. See Hastings v. Boston Mut. Life Ins. Co., 975 F.2d 506, 510 (8th Cir.1992). We review only for abuse of discretion, see United States v. Parker, 32 F.3d 395, 400 (8th Cir.1994), and we will reverse only if we find that, when viewed in their entirety, the jury instructions contained an error or errors that affected the substantial rights of the party. Hastings, 975 F.2d at 510. 59 The instruction is a proper statement of the law of breach of contract. It sets forth clearly each element of the cause of action. Benham does not dispute this. Rather, Benham contends that the charge is vague because it does not distinguish among Maddox's four theories of breach. However, [w]here the charge to the jury correctly sets forth the law, a lack of perfect clarity will not render the charge erroneous. Roth v. Black & Decker, U.S., Inc., 737 F.2d 779, 783 (8th Cir.1984); see also Hastings, 975 F.2d at 510 (we will not find error in instructions simply because they are ... not a model of clarity); Toro Co. v. R & R Prods. Co., 787 F.2d 1208, 1215 (8th Cir.1986) (same). Benham's contention fails.