Court Opinion

ID: 4583583
Source: CourtListenerOpinion
Date Created: 2020-11-04 16:04:40.663042+00
Date Added: 2024-06-11T13:44:29.664681
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                      No. 20-0038
                                Filed November 4, 2020

INVISION ARCHITECTURE, LTD.,
      Plaintiff-Appellee,

vs.

LESLIE HOSPITALITY CONSULTING LLC,
     Defendants-Appellants.

and

EDWIN W. LESLIE AND LK WATERLOO LLC,
     Defendants.

________________________________________________________________

      Appeal from the Iowa District Court for Black Hawk County, Bradley J.

Harris, Judge.

      Leslie Hospitality Consulting LLC appeals from the judgment entered

against it in this breach of contract case. AFFIRMED IN PART, REVERSED IN

PART, AND REMANDED.

      Paula L. Roby, Dan Childers, and Laura Moon Williams (until withdrawal) of

Elderkin & Pirnie, PLC, Cedar Rapids, for appellants.

      Thomas C. Verhulst of Beecher, Field, Walker, Morris, Hoffman & Johnson,

P.C., Waterloo, for appellee.

      Considered by Bower, C.J., and Doyle and Schumacher, JJ.
                                          2

DOYLE, Judge.

       Edwin Leslie of Leslie Hospitality Consulting LLC1 (Leslie Hospitality)

contacted Michael Broshar of Invision Architecture, Ltd. (Invision) seeking design

services for redevelopment and renovation of a downtown Waterloo hotel and

convention center. After preliminary meetings with Leslie, Invision prepared a

contract for services on an hourly basis. Leslie signed the agreement, and Invision

then put hundreds of hours of work into the redevelopment and renovation plans.

Invision sent monthly invoices to Leslie Hospitality, and after receiving no

payments, Invision sued for breach of contract. Defendants2 answered claiming

there was no contract. After a bench trial, the district court determined there was

a contract and Leslie Hospitality breached it. The court entered judgment for

Invision and against Leslie Hospitality in the amount of $86,327.50.3           After

reviewing the evidence we affirm in part, reverse in part, and remand for an order

reducing the judgment by $7415.

      I.      Facts and Prior Proceedings.

       Edwin Leslie made a phone call to Invision and spoke with Michael Broshar,

the managing partner. Leslie Hospitality was planning to redevelop and renovate

1 As the trial court noted, “Defendant Leslie Hospitality Consulting, LLC, was
referred to throughout the trial by both parties as Leslie Hospitality Consulting LLC,
Leslie Hospitality Company, LLC, and Leslie Hospitality.”
2 Named defendants were, Leslie Hospitality Consulting LLC, Edwin W. Leslie, and

LK Waterloo, LLC. Apparently LK Waterloo, LLC is the entity that owned the
project and contracted with the City of Waterloo and the Ramada Hotel.
3 The district court dismissed the suit against Erwin Leslie individually because

there was no proof he acted in his individual capacity. The court also dismissed
LK Waterloo, LLC from the suit because it was not mentioned in the contract or
any other documents or correspondence and it could not be considered a party to
the contract. Invision has not cross-appealed the dismissal of these defendants.
                                          3

a downtown Waterloo hotel and convention center. Invision is a company that

provides architecture, planning, and interior design services, mainly for

commercial projects. The two agreed to meet at the hotel in August 2017. Broshar

testified about their discussions.4 According to Broshar, Leslie

         was interested in concepts for—for both the renovation of the hotel
         and the convention center, and specifically he did not have a defined
         plan but he had—he had a general idea of what he wanted to spend,
         and he needed to be able to understand the scope of the renovation
         and how it would fit within his budgets.

Invision would develop some design concepts and preliminary cost estimates for

that work. Broshar understood that Leslie Hospitality would use the concepts to

secure financing and then move ahead with construction following a more

complete design phase. Once Leslie Hospitality obtained funding for the project,

Invision would: develop design documents that further defined the scope of the

work to be accomplished by the contractors, develop construction documents, help

procure construction services through a bidding process, and assist in construction

administration. After funding was obtained, it was anticipated Leslie Hospitality

and Invision would enter into an AIA (American Institute of Architects) contract for

this second phase of Invision’s work.

         Based on the conversation he had with Leslie, Broshar prepared an

agreement for services, signed it, attached an hourly rate schedule, and emailed

it to Leslie. According to Broshar, the purpose of preparing the agreement “was to

have a preliminary agreement for us providing services for him until we could

4   Edwin Leslie did not testify.
                                          4

define the scope better and develop an AIA standard contract. . . . We were

proposing to work on an hourly basis at the rates we identified in the [agreement].”

       The parties met again on September 14, 2017, in Omaha. This time,

Broshar; Michael Bechtel, a principal of Invision; and Mark Nevenhoven, a partner

of Invision, met with Leslie. During that meeting, Broshar presented a hard copy

of the agreement to Leslie. Broshar testified Leslie had requested no changes to

the terms of the contract before the meeting and Leslie had a hard copy of it at the

Omaha meeting. Leslie reviewed the services set forth in the agreement “and

agreed that an hourly approach was the best approach given that he had not

defined the total scope of the project yet but needed assistance to get documents

to closing.” Leslie thought the “hourly rates were a little higher than he was used

to, but he understood that this was a complicated project.” During the meeting,

Broshar asked Leslie if he had any questions and Leslie said he did not. Broshar

then asked Leslie “Are you ready to sign it?” and he said, “I am.” Leslie then signed

the agreement in front of the group. The parties then took a break. All of their

documents were spread out on the table. At some point they were cleared away.

Broshar did not know what happened to the signed document. Bechtel thought it

was “[s]imply a matter of it was left on the table when we split up, and I think

everyone thought somebody else grabbed it.”          No one from Invision left the

meeting with the signed agreement. No signed agreement was produced at trial.

       Bechtel testified that after the meeting Invision provided architectural design

services, existing building evaluation of both the hotel and the conference center,

and preliminary code services. He also testified that he worked closely with Leslie

to create a detailed matrix of FF&E (Furniture, fixtures, and equipment) and OSE
                                        5

(owner-supplied equipment) items.      Representatives of Leslie Hospitality and

Invision met in September “to align goals, responsibilities, program, and brand

requirements,” and in December 2017 to “review renovation concepts, provide

feedback to the design team, develop project milestones, refine the project budget,

and clarify brand standards.”    During this period of time, various emails and

documents were exchanged between the parties.          From September through

December 2017, Invision sent Leslie Hospitality invoices at the end of each month

for work done. At no time while Invision was providing its services did Leslie say

they were not authorized or that there was no contract. At no time did Leslie tell

Invision not to proceed with its services, nor did Leslie object to the services

Invision was performing.    Bechtel testified Leslie was pleased with the work

Invision had done.

      Sometime in December, Bechtel requested payment of the invoices. Leslie

responded by email:

      Mike,
              I did get your message today and yesterday. I do know we
      have some invoices that need to be cleared up. I am meeting with
      our bankers at the hotel on Friday of this week to review the
      project/details/updates etc. and will have a definitive plan on when
      they will fund the invoices and as well begin the next phases of
      construction etc.
              I realize you would like a definitive answer[—]if you need to
      place all items on hold until these invoices are finalized and we have
      full funding completed[—]I have no objection!

      Bechtel emailed back asking if a portion of the outstanding balance could

be paid before securing funding from the lenders. He also asked if there was any

specific documentation Leslie needed for the banks. Leslie asked for a “progress

set.” Bechtel sent the progress set documents to Leslie and again asked, “is there
                                          6

a payment value you can offer before the end of the year?” After those email

exchanges and still with no payment, Invision stopped their work for Leslie

Hospitality.   In March 2018, Leslie emailed Bechtel claiming he was moving

forward with the project and anticipating an update from a lender, but no payments

were made to Invision.

       Invision sued for breach of contract to recover the amount owed on the

invoices. After a bench trial, defendants moved to dismiss arguing Invision failed

to prove a contract, that there was no meeting of the minds, and that Invision failed

to show the terms of the alleged contract were sufficiently definite. Unpersuaded,

the district court found:

               Although plaintiff was unable to produce a signed copy of the
       contract, plaintiff did provide an unsigned copy of this contract and
       uncontested testimony that an identical contract was signed by the
       parties. Although preliminary in nature, the contract contains
       sufficient detail to establish the duties and responsibilities of each
       party.
               ....
               Plaintiff performed the work shown in the invoices sent to
       Leslie Hospitality.       Leslie Hospitality, through Edwin Leslie,
       encouraged further work by plaintiff, provided additional information
       and assured plaintiff that funding would be forthcoming.
               Based upon reasonable inferences drawn from the
       circumstances surrounding this transaction the court determines that
       a written contract did exist.
               ....
               Pursuant to the terms of this written contract, plaintiff was to
       perform that work shown on the invoices sent to Leslie Hospitality.
       Plaintiff did perform the work required by the contract.
               Pursuant to the terms of the contract, Leslie Hospitality was
       to pay plaintiff for the work performed as set forth in the schedule of
       hourly rates attached to the contract. Leslie Hospitality has failed to
       make this payment and has breached the contract.

The court entered judgment against Leslie Hospitality for $86,327.50 plus interest

and costs. Leslie Hospitality now appeals.
                                          7

      II.      Scope and Standard of Review

       An action for a money judgment based on breach of contract is at law. Van

Sloun v. Agans Bros., Inc., 778 N.W.2d 174, 179 (Iowa 2010).              Our review

therefore is for correction of errors at law. Iowa R. App. P. 6.907. If supported by

substantial evidence, “[t]he district court’s findings of fact have the effect of a

special verdict” and are binding on us. NevadaCare, Inc. v. Dep’t of Human Servs.,

783 N.W.2d 459, 465 (Iowa 2010). “We construe the district court’s findings

broadly and liberally.” Hawkeye Land Co. v. Iowa Power & Light Co., 497 N.W.2d
480, 483 (Iowa Ct.App.1993). “In case of doubt or ambiguity we construe the

findings to uphold, rather than defeat, the district court’s judgment.” Id.

        III.    Analysis

       To prevail on its breach-of-contract claim, Invision must prove: (1) the

existence of a contract, (2) the terms and conditions of the contract, (3) Invision

performed all the terms and conditions required under the contract, (4) Leslie

Hospitality breached the contract in some particular way, and (5) Invision suffered

damages as a result of Leslie Hospitality’s breach. Royal Indem. Co. v. Factory

Mut. Ins. Co., 786 N.W.2d 839, 846 (Iowa 2010).

       A. Lack of Signed Contract

       Because Invision did not produce a contract signed by Leslie at trial, Leslie

Hospitality argues there was insufficient evidence for the district court to find a

contract. Leslie Hospitality claims Invision failed to meet its burden to show by

clear, satisfactory, and convincing evidence all of the following: (1) the former

existence of the document, (2) execution of the document, (3) loss of the

document, and (4) the contents of the document. In re Marriage of Webb, 426
                                          8
N.W.2d 402, 404 (Iowa 1988). When a document is missing, secondary evidence

of the missing document’s existence, execution, loss, and contents is admissible.
Id.

       Broshar and Bechtel testified that Leslie signed the contract in front of the

three Invision representatives. It was left on the table when the parties took a

break. When they all returned to the meeting room, all the documents on the table

were cleared away at some point, and the Invision representatives picked up their

bags and took a tour of some other hotel properties Leslie had rehabilitated.

Broshar did not know what happened to the signed document. Bechtel thought it

was “[s]imply a matter of it was left on the table when we split up, and I think

everyone thought someone else grabbed it.”           At trial, Invision produced an

unsigned copy of the contract and uncontested testimony that it was identical to

the copy signed by Leslie. There was no testimony or evidence that Leslie refused

to deliver the signed contract to Invision. Like the trial court, we conclude Invision

carried its burden to establish the existence of the written contract.

       B. Acceptance of Offer

       Leslie Hospitality asserts it did not accept Invision’s offer because it did not

strictly follow the method of acceptance outlined in the contract. See First Am.

Bank v. Urbandale Laser Wash, LLC, 874 N.W.2d 650, 656 (Iowa Ct. App. 2015)

(“[A]cceptance must conform strictly to the offer in all its conditions, without any

deviation or condition whatever. Otherwise there is no mutual assent and therefore

no contract.” (citation omitted)). The contract provided: “If this is acceptable,

please sign and return a copy to us.” Since Leslie Hospitality did not do these two

things, it argues it did not accept the offer. The evidence is undisputed that Leslie
                                         9

signed the contract. There is no evidence that Leslie refused or did not intend to

return the signed contract to Invision. Invision representatives mistakenly thought

they had in hand a signed copy of the contract when they packed their bags and

left the meeting. While it is true the signed contract was not technically delivered

to Invision, we will not conflate the unique facts here into a finding that Leslie

Hospitality did not accept the offer.

       In any event, we find clear and convincing evidence that Leslie Hospitality

accepted the offer.     The offer was for Invision to provide its services at a

predetermined hourly rate to develop a defined documented project concept and

schematic design for the hotel and convention center renovations.         After the

contract was signed, Leslie Hospitality continued to engage in discussions with

Invision and accepted all the work that Invision was doing and sometimes provided

guidance on the work being done. Leslie Hospitality’s actions reflect affirmation of

the contract. Invision sent monthly invoices reflecting the hourly rates charged for

each specific service performed by each specific employee. Leslie Hospitality did

not object or protest. Instead, Leslie acknowledged by email on December 19,

2017, that he knew “we have some invoices that need to be cleared up,” and after

meeting with his bankers he “will have a definitive plan on when they will fund the

invoices and as well begin the next phases of construction.” Leslie Hospitality’s

post-signing actions evidenced acceptance of the offer.

       C. Sufficiency of Contract Terms

       Leslie Hospitality argues there was no contract because the terms were not

definite enough, and therefore there was no meeting of the minds.
                                        10

              For a contract to be valid, the parties must express mutual
      assent to the terms of the contract. Mutual assent is present when it
      is clear from the objective evidence that there has been a meeting of
      the minds. To meet this standard, the contract terms must be definite
      enough for the court to determine the duty of each party and the
      conditions of performance.

Royal Indem., 786 N.W.2d at 846 (internal citations omitted).

      Broshar drafted the agreement in letter form on Invision letterhead after

Leslie contacted him and requested Invision’s services for the hotel and convention

center project, and after the two met at the hotel and discussed the project.

Broshar emailed the agreement and fee schedule to Leslie on September 7, 2017.

It was addressed to Edwin Leslie, CHA and Leslie Hospitality Company, LLC. The

agreement states:

            Thank you for the opportunity to work with you on the
      redevelopment of the hotel and convention center. Following our
      meetings, we have a general understanding of your goals for the
      redevelopment of the properties, but hope to gain a stronger idea
      through our next series of meetings. The general scope of work to
      be accomplished is listed below. We will work with you to determine
      what work you would like to engage us to perform.

             Hotel:

             Redevelopment of the street level of the building, with the
      exception of the kitchen area. The goals are to redevelop the
      natatorium as the dining space for the restaurant, maintaining a
      separate entrance from the street; redevelopment of the current
      lounge area, meeting rooms and dining space to create an open
      lobby for registration, live performance, meeting and lounge spaces;
      converting the existing registration area to a coffee bar with
      development of adjacent exterior space for seating areas for the
      coffee bar; redevelopment of the north vestibule and opening walls
      as possible to create a more open feeling and direct guests to the
      registration and lobby areas. The budget allocated for construction
      of the restaurant dining is $1.5M with $1.75M for the balance of
      renovation of the street level.

             The upper floors of the hotel will be renovated in phases.
      Finishes will be updated throughout, and bathrooms will be modified
                                  11

to remove bathtubs and install showers, with new plumbing fixtures.
PTAC units will be replaced in phases to provide thermostat control
in each room.

      Exterior work will include replacement of window and louvers,
treatment of the brick surfaces (possibly painting) and evaluation and
possible replacement of roofs.

      We are continuing our search for existing documents to create
a base model for development of the project documents.

       Convention Center:

        The convention center needs to be evaluated to determine
highest priorities for renovation / update / repair. We have previously
completed an assessment of the condition of the center, and will
provide that for discussion and determination of direction. Exterior
repairs and treatment of the open structure with cladding and lighting
have been discussed. Interior renovations may include updating of
finishes and lighting, opening ceiling areas, reconfiguration of the
toilet rooms to increase the fixture count, removal of the octagonal
meeting room on the street level, and relocation of the sales offices
from the hotel to the convention center.

      We have the original documents from the convention center
construction, and will use those to develop our base model for
improvements.

       With our understanding of the general intent in the street level
areas of the hotel, we are beginning some plan development
sketches of those areas. We would like to meet with you in Omaha,
if possible, so that we can see the development in your property
there. We are available next Thursday, September 14, if that works
for your schedule.

        Have you identified further if the work that you would like to
accomplish and what you do not want to do in the PIP? We will
develop a matrix of FFE and PIP responsibilities that we can use to
clarify the work for which you want us to be responsible, and can
review when we meet.

       Until the project scope and responsibilities are further defined,
we propose to work with you on an hourly basis. We are attaching
our hourly rate schedule. Services will be invoiced monthly. Once
we have better definition, we can provide a lump sum proposal for
the defined work, and can execute an Owner/Architect agreement.
                                          12

              We understand your intent will be to use trade contractors for
       design/build mechanical and electrical work in the hotel. We have
       worked with Modus Engineering on the assessment of the
       convention center and propose working with them on mechanical
       and electrical work in the convention center. We can discuss that
       further as the project develops.

              If this is acceptable, please sign and return a copy to us.
       Please contact me with any questions or concerns. Thank you again
       for the opportunity to work with you on this important project for
       downtown Waterloo.

The letter is signed by “Michael Broshar, FAIA, Partner.” It shows “Hourly Billing

Rates” as an attachment. Below is a signature line: “Accepted:_____Date:_____.”

A schedule of hourly rates was attached.

       The district court found that “Although preliminary in nature, the contract

contains sufficient detail to establish the duties and responsibilities of each party.”

We agree for the following reasons.

       Leslie Hospitality suggests the parties are not specified in the contract. It is

written on Invision letterhead and signed by Michael Broshar, partner of Invision.

The contract was addressed to “Edwin Leslie, CHA” and “Leslie Hospitality

Company, LLC.” Invoices were directed to Leslie Hospitality. Minutes of meetings

between representatives of Invision and Leslie Hospitality show Leslie Hospitality

as owner of the project.      Emails to Invision are from Edwin Leslie, CHA as

President and CEO of Leslie Hospitality. While not a model of clarity, the evidence

sufficiently establishes that Leslie Hospitality is a party to the contract.

       As to its terms, the contract provides Invision would begin to work on a base

model for redevelopment and renovation of the hotel convention center complex.

It was to search for and use existing documents to begin that process. Invision

was to evaluate the convention center to determine highest priorities for
                                          13

renovation. Invision had begun to plan development sketches of the street level

areas of the hotel. Invision was to “develop a matrix of FFE and PIP responsibilities

that” it could use to clarify the work for which Leslie Hospitality wanted Invision to

do.   Until Leslie Hospitality further defined the project’s scope and Invision’s

responsibilities, Leslie Hospitality was to pay Invision on an hourly basis to be billed

monthly. The contract was for preliminary work by Invision as it was envisioned

that once the project was better defined, the parties would enter into an AIA

Owner/Architect contract with a lump-sum proposal. We conclude the contract

was detailed enough as to Invision’s responsibilities to develop design concepts,

documents, and sketches for the project.           Broshar understood that Leslie

Hospitality would use the concepts to secure financing and then move ahead with

construction following a more complete design phase. The district court correctly

concluded that the contract was detailed enough to establish the duties and

responsibilities of each party to the contract.

       Leslie Hospitality also argues that “if anything the agreement demonstrated

his intent to agree in the future.” To be sure, the contract contemplated execution

of an AIA Owner/Architect agreement at a later date, but Leslie signed the

agreement for Invision to do preliminary work on an hourly basis until details of the

project were developed. And, as stated above, we find this preliminary contract to

contain sufficient detail to establish the duties and responsibilities of each party.

       Leslie Hospitality cites Liphardt v. Shaw, No. 15-1746, 2016 WL 4054203

(Iowa Ct. App. July 27, 2016), in support of its argument the agreement was not

definite enough to determine its terms. In Liphardt, our court affirmed the district

court’s ruling and found that the document included no narrative to assign specific
                                         14

responsibilities to any party. 2016 WL 4054203, at *3. Liphardt differs from the

case at hand.

       Invision agreed to develop a defined documented project concept and

schematic design to renovate the hotel and convention center so that Leslie could

secure financing. Leslie was to use the design documents Invision produced to

reach out to banks and obtain financing to complete the actual renovation. The

agreement contained sufficient details about what Invision would do to produce a

documented project concept and schematic design. The agreement included a

narrative that included specific responsibilities. We therefore do not find Liphardt

persuasive when applied to the facts.

       D. Damage Award

       The district court awarded the full damages requested by Invision based on

Invision’s invoices to Leslie Hospitality. A portion of billed services was for work

Invision performed before the signing of the written agreement on September 14,

2017. The amount billed for these services totaled $7415. Leslie Hospitality

argues that if we find there was a contract, Leslie Hospitality should not be liable

for work performed before the formation of the agreement and that the judgment

should be reduced accordingly.

       The parties first met on August 8, 2017. Invision’s first invoice to Leslie

Hospitality, dated September 30, 2017, includes $7415 for services performed

between August 8 and September 13. Those services predate execution of the

agreement. Although the agreement mentions some preparations Invision made

in anticipation of the September 14 meeting, it says nothing about Leslie Hospitality

paying for those efforts. And the agreement states, “We will work with you to
                                         15

determine what work you would like to engage us to perform.” (Emphasis added).

It also says, “we propose to work with you on an hourly basis.” (Emphasis added).

The district court erred in including the $7415 in its award. So we must reverse

and remand for an order reducing the judgment by that amount.

       IV.    Conclusion

       There is clear and convincing evidence that Leslie Hospitality entered a

contract with Invision. Leslie Hospitality breached the contract by not paying

Invision’s invoices for services provided. But the district court’s award erroneously

included invoiced amounts that predate the contract. We affirm in part, reverse in

part, and remand for an order reducing the amount of the judgment by $7415.

Costs of this appeal are taxed equally to the parties.

       AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.