Opinion ID: 1136039
Heading Depth: 2
Heading Rank: 2

Heading: The ISBA's Motion For Judgment N.O.V. On Bott's Claim For Compensation For The Incentive Bonus Was Properly Granted.

Text: Bott, in the cross-appeal, argues that judgment n.o.v. was improperly granted on Bott's claim for the incentive bonus fee. Bott contends that substantial evidence supports the jury's verdict. The Agreement between the parties provides that Bott would be compensated in an amount equal to 7.75% of the total construction cost. The Agreement also provides for the payment of a bonus as an incentive to keep the total cost of construction down. The incentive bonus provision provides that Bott would be compensated in an amount equal to 10% of the amount by which the total construction cost is less than $8,200,000.00. The construction cost upon which the basic fee and the incentive bonus is to be calculated is defined by the Agreement as the total amount paid by [the ISBA] to the construction contractor performing the construction work. With respect to the payment of the basic services fee, the Agreement also provides that Bott is to receive monthly payments for work performed prior to the completion of the project, based upon a percentage of the total construction fee calculated by using an estimated cost of construction. Bott was terminated prior to the completion of the project, however, there is no dispute between the parties that the actual total construction cost to complete the project was $8,207,898.31. Bott argues that since the estimated bid construction cost of $7,688,311.54 was used to calculate the amount of monthly compensation Bott was to receive for basic services provided, the bid construction cost should also be used to determine whether Bott is entitled to the incentive bonus. We disagree. The parties' Agreement establishes the terms of Bott's compensation for work performed under the Agreement. The basic fee and the incentive bonus are to be calculated based upon the actual total construction cost paid to the construction contractor. In order to allow Bott to receive monthly payments prior to the completion of the project, the Agreement provides an alternate method of compensation for the basic service fees. Without this provision, the only basis for compensating Bott for basic services performed would be based on the actual total construction cost, which was unknown until the completion of the entire project. Thus, Bott could not receive any compensation prior to the completion of the construction without the monthly compensation provision. No such alternate method of compensation is provided for the incentive bonus. Under the terms of the Agreement, the sole method of determining whether Bott is entitled to the incentive bonus is based upon the actual total cost of construction paid to the construction contractor and whether that amount is less than $8.2 million. Since the total cost of construction was $8,207,898.31, Bott is not entitled to an incentive bonus under the terms of the Agreement. To calculate an incentive bonus based upon the estimated bid cost of construction would defeat the purpose behind the incentive bonus. The bonus was offered as an incentive to keep the total cost of construction below $8.2 million. If the bonus could be based on the bid amount, there would be no motivation for Bott to keep the project costs down. Thus, Bott could have submitted a low bid, and received the bonus regardless of the final cost of the project. Such an interpretation of the incentive bonus provision would render the provision and its purpose meaningless. Additionally, it seems rather elementary that the same construction cost figure to determine both the basic service fee and the incentive fee is what was expressly contemplated by the parties. There is no substantial evidence in the record upon which reasonable minds could conclude that the award of $38,314.00 for the incentive bonus was proper. Judgment n.o.v. as to Bott's claim for the incentive bonus was properly granted.