Court Opinion

ID: 9955155
Source: CourtListenerOpinion
Date Created: 2024-03-27 19:02:17.491323+00
Date Added: 2024-06-11T08:15:18.152221
License: Public Domain

Filed 3/26/24 Floriani Engineering v. Aegean Stoneworks CA4/3

                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                  DIVISION THREE

 FLORIANI ENGINEERING, INC.,

      Plaintiff and Appellant,                                         G061698

           v.                                                          (Super. Ct. No. 30-2019-01061892)

 AEGEAN STONEWORKS, INC.,                                              OPINION

      Defendant and Respondent.

                   Appeal from a judgment of the Superior Court of Orange County, Lon F.
Hurwitz, Judge. Reversed.
                   John J. Freni for Plaintiff and Appellant.
                   The Vanderpool Law Firm, Douglas B. Vanderpool and Brooke L. Bove for
Defendant and Respondent.
                                              *              *               *
              In this breach of contract case, the issue boils down to who is responsible
for damages caused when the placement of six cranes in a warehouse turned out to be too
close to one another, causing collisions and resultant economic damage due to the
inability to use the cranes to their full extent. After Floriani Engineering, Inc., doing
business as Facilities Engineering (Facilities Engineering), installed the cranes, Aegean
Stoneworks, Inc. (Aegean), refused to pay any amount of the contract, claiming Facilities
had not fully performed its obligations. Facilities Engineering sued on the contract. The
court found the contract was unenforceable due to a mutual mistake of fact and awarded
Facilities Engineering the reasonable value of its services under a common count, which
was less than the full contract amount. Because the court voided the contract, Facilities
Engineering could not move for attorney fees under the contract. Facilities Engineering
appealed, contending the trial court erred in finding a mutual mistake and refusing to
enforce the contract.
              We agree with Facilities Engineering that there was no mistake of fact in
this case. The parties were clear on the facts. What was less than clear was the terms of
the contract—in particular who would be responsible for determining the precise location
of the cranes’ footings. But an ambiguity in a contract does not create a mistake of fact
even when the parties have different understandings of the term, as is often the case. It is
possible for a contract to be so vague that the entire contract is void. However, where, as
here, the principal terms of the contract (to procure and install six cranes) are entirely
clear and ascertainable, the contract is enforceable, and the court is required to construe
ambiguous terms in the contract utilizing the various legal doctrines suited to that task.
Consequently, the contract was enforceable. As to the ambiguous terms concerning the
footings, the interpretation of those terms revolves around the resolution of disputed
extrinsic evidence. Accordingly, we are unable to interpret the contract on appeal and
will reverse and remand for a new trial.

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                                          FACTS
              Facilities Engineering is a California licensed general engineering
contractor. Among other services, Facilities Engineering sells and installs commercial
cranes. Vincent Baroldi is one of Facilities Engineering’s two principals.
              Aegean produces products fabricated from stone and artificial materials,
such as counter tops. Aki Vourakis is Aegean’s chief executive officer and one of its
principals, and Kiriakos “Kiri” Alyousef is its general manager.
              In 2018, Vourakis decided to expand Aegean’s business by moving to a
larger facility. Aegean’s new warehouse was approximately 10,000 square feet larger
than its prior warehouse. Vourakis determined Aegean would install seven major pieces
of equipment (three cutting machines and four edging machines). He prepared a CAD
(computer-aided design) drawing of the layout that included approximate crane locations
and spans.
              At the beginning of May 2018, Baroldi from Facilities Engineering met
with Vourakis and Alyousef at Aegean to discuss selling cranes to Aegean for the new
warehouse. Afterward, Baroldi e-mailed a proposal for the sale and installation of seven
cranes, which became exhibit 1 at trial. Exhibit 1 consists of an e-mail in the nature of a
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cover letter, and a formal proposal on Facilities Engineering’s company letterhead. In
the e-mail, Baroldi stated, “Note that this proposal is ‘turnkey’—we will install all of the
jibs [i.e., cranes] and equipment with our own men and equipment.” The formal proposal
contained the following language: “Per your request we installation [sic] labor and
equipment in this proposal.” “The footings are to be provided by others per our design.”
In the line item description of the services to be provided, each crane has language
similar to the following: “Footing Size 5’-0” x 5’-0” x 4’-0” [BY OTHERS].” The
formal proposal included a sheet of “General Conditions.” The general conditions
              1
                There were two proposals on company letterhead, but they were almost
entirely identical, and the differences are immaterial for purposes of this appeal.

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included the following: “Facilities Engineering . . . will furnish such drawings as
necessary for the work.”
              Over the next two weeks the parties met twice to refine the pricing and
crane options. At one of those meetings, Vourakis showed Baroldi the CAD drawing.
According to Vourakis, Baroldi went into the warehouse, stood where the cranes were to
be installed, and, using a laser measure and tape measure, applied blue tape to the ground
to indicate precisely where the footings of the cranes should be installed. In an e-mail
sent after one of the meetings, Baroldi thanked Vourakis for “finding his laser.”
              Baroldi testified that he did no such thing. According to Baroldi,
determining the layout and position of a crane is a service that he offers, but he would
have charged an additional $5,000 to $10,000 and the charge would have showed up
under the description “engineering” on the bid. He also testified that he would never
mark the placement of footings with tape, because tape can be intentionally or
unintentionally removed. Instead, he uses a chalk line and on top of the chalk line, a
clear spread paint to mark the location of the footings. Facilities Engineering called an
expert witness who testified that it was standard industry practice to charge extra for such
services, which was not done in this case.
              After negotiating some additional discounts, on May 15, 2018, Baroldi e-
mailed a third revision to the quote (dubbed REV3) and some payment terms, which
Vourakis accepted. The contract amount was for $64,081. The contract consisted of the
original proposal as ultimately modified by REV3, the general conditions, and a May 16,
2018 e-mail exchange that clarified some of the payment terms.
              In accordance with the parties’ agreement, a third party concrete contractor
did the actual concrete work to install the footings utilizing a design provided by
Facilities Engineering. The third party contractor testified that he had a five minute
meeting with Baroldi, and that Baroldi did not show him where the crane footings were
supposed to be installed. Rather, Vourakis said he had determined the location of the

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crane footings based on proximity to his working tables. After the concrete contractor
had finished installing the crane footings, Vourakis told the concrete contractor that he
needed to relocate one of the cranes and asked the contractor to move the footing, which
involved demolishing the existing footing and excavating a new footing. Baroldi had no
involvement in moving the footing.
              The cranes were installed by August 9, 2018. However, a problem arose:
the cranes shared “airspace” and could collide with one another or with the wall of the
warehouse. As a result, Facilities Engineering cut down the length of three of the cranes.
The cuts were relatively short—one foot, six inches, and four inches. But that created
another problem: the cranes no longer reached the appropriate drop off points, resulting
in increased labor expenses for Aegean. As a result, Aegean refused to pay on the
contract, taking the position that the installation was incomplete. Aegean offered to settle
the matter for $40,000, which Facilities Engineering rejected.
              In April 2019, Facilities Engineering sued Aegean for breach of contract,
common counts, and unjust enrichment. In June 2019, Aegean cross-complained for
breach of contract and negligence. The matter proceeded to a bench trial, following
which the court issued a statement of decision.
              The court concluded that the parties’ contract was unenforceable due to a
mutual mistake of material fact. The court focused on Baroldi’s use of the term
“turnkey” and concluded the parties had different understandings of that term as it
pertained to who was responsible for determining the precise location of the footings.
The court awarded Facilities Engineering unjust enrichment damages of $53,195, which
was the contract price for the cranes minus the cost to relocate three of the cranes
(approximately $10,000), plus $19,815.20 in prejudgment interest, for a total of
$72,908.21. The court awarded nothing on Aegean’s cross-complaint. Facilities
Engineering appealed from the ensuing judgment.

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                                       DISCUSSION
              The court ruled that the contract was unenforceable as a result of a mutual
mistake of material fact. But what the court actually described was an ambiguity in the
contract, coupled with differing subjective understandings of what the contract required
with regard to placement of the footings. Mistake of fact is not the applicable legal
doctrine under these circumstances.
              “Mistake of fact is a mistake, not caused by the neglect of a legal duty on
the part of the person making the mistake, and consisting in: [¶] 1. An unconscious
ignorance or forgetfulness of a fact past or present, material to the contract; or, [¶] 2.
Belief in the present existence of a thing material to the contract, which does not exist, or
in the past existence of such a thing, which has not existed.” (Civ. Code, § 1577.) This
section has been interpreted to refer to “objective existing fact.” (Hedging Concepts, Inc.
v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1421 (Hedging Concepts).)
Where “the parties had differing subjective understandings of the contract from the
inception[, t]his does not constitute a ‘mistake’ for rescission purposes.” (Ibid.)
              We are not aware of any case law that deemed an ambiguous contract
provision a mistake of fact, and neither the trial court nor Aegean has cited such a case.
To the contrary, that proposition was expressly rejected in Hedging Concepts. There, the
court reasoned that a “subjective misinterpretation of the contract” is “at most a mistake
of law.” (Hedging Concepts, supra, 41 Cal.App.4th at p. 1421.) Yet the court went on to
conclude that mistake of law is likewise inapplicable: “A mistake of law as defined by
Civil Code section 1578 exists only when 1) all parties think they know and understand
the law but all are mistaken in the same way, or 2) when one side misunderstands the law
at the time of contract and the other side knows it, but does not rectify that
misunderstanding. Neither of these two possibilities occurred on the facts found by the
trial court. Clearly, each side here placed a different interpretation on the contract, hence
all parties did not make the same mistake.” (Ibid.) We agree.

                                              6
              Instead, the question is whether the contract is so vague as to void the
agreement. This is a question that we review de novo. (Okun v. Morton (1988) 203
Cal.App.3d 805, 818 (Okun).) Civil Code section 1598 provides, “Where a contract has
but a single object, and such object is . . . so vaguely expressed as to be wholly
unascertainable, the entire contract is void.” “To be enforceable, a promise must be
definite enough that a court can determine the scope of the duty and the limits of
performance must be sufficiently defined to provide a rational basis for the assessment of
damages.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770.)
              Generally speaking, voiding a contract for uncertainty is a disfavored
remedy. “‘“[T]he modern trend of the law is to favor the enforcement of contracts, to
lean against their unenforceability because of uncertainty, and to carry out the intentions
of the parties if this can feasibly be done. Neither law nor equity requires that every term
and condition of an agreement be set forth in the contract. [Citations.] The usual and
reasonable terms found in similar contracts can be looked to, unexpressed provisions of
the contract may be inferred from the writing, external facts may be relied upon, and
custom and usage may be resorted to in an effort to supply a deficiency if it does not alter
or vary the terms of the agreement.”’” (Denver D. Darling, Inc. v. Controlled
Environments Construction, Inc. (2001) 89 Cal.App.4th 1221, 1237.) We are especially
mindful in this case of this bit of wisdom: “Certainly, where a contract was evidently
made for the rendition of services for some agreed compensation and the contract is no
longer executory on both sides but the services stipulated for have been performed, the
court should regard with caution a contention that the arrangement to pay for them was
either so vague or so imperfectly understood as to be unenforceable.” (Sieck v. Hall
(1934) 139 Cal.App. 279, 292.)

                                              7
              The contract here was not void under Civil Code section 1598. To the
extent this contract could be described as having “but a single object,” that object was to
procure and install six cranes. Facilities Engineering did that. There was no ambiguity at
all about it. While the location of the footing was important to the installation, the
ambiguity was not so central to the contract that it vitiated the basic offer and acceptance
that formed the contract. “At bottom, ‘[i]f the parties have concluded a transaction in
which it appears that they intend to make a contract, the court should not frustrate their
intention if it is possible to reach a fair and just result, even though this requires a choice
among conflicting meanings and the filling of some gaps that the parties have left.’”
(Okun, supra, 203 Cal.App.3d at p. 817.) As the Restatement on Contracts similarly
explains, “[T]he actions of the parties may show conclusively that they have intended to
conclude a binding agreement, even though one or more terms are missing or are left to
be agreed upon. In such cases courts endeavor, if possible, to attach a sufficiently
definite meaning to the bargain. [¶] . . . Where the parties have intended to conclude a
bargain, uncertainty as to incidental or collateral matters is seldom fatal to the existence
of the contract.” (Rest.2d Contracts, § 33, com. a, p. 92.) That is the case here.
              How, then, do we deal with the issue of who was responsible for
determining the location of the footings? We begin by addressing Facilities
Engineering’s contention that the contract was not ambiguous at all, which we review de
novo. (Scheenstra v. California Dairies, Inc. (2013) 213 Cal.App.4th 370, 389.)
According to Facilities Engineering, “It is undisputed that there is not one mention of
Facilities [Engineering] determining the footing locations in the contract, or for that
matter, in any other pre-dispute communication with Aegean.” However, what Facilities
fails to fully reckon with is that the contract stated Facilities Engineering would design
the footings and provide all drawings necessary for the installation. Facilities
Engineering tries to explain these provisions away by arguing that “design” meant the
structure of the footing, not its location, and no drawing of footing locations was

                                               8
necessary because that was not within its scope of work. That is certainly one plausible
reading of the contract. However, “‘[a]n ambiguity exists when a party can identify an
alternative, semantically reasonable, candidate of meaning of a writing.’” (Benedek v.
PLC Santa Monica (2002) 104 Cal.App.4th 1351, 1357.) Another semantically
reasonable reading of the contract is that the location of the footing is essential to
installing the crane and thus would be included as a necessary drawing and part of the
design of the footings.
              Accordingly, we must consider how to resolve the ambiguity. “‘The
fundamental goal of contractual interpretation is to give effect to the mutual intention of
the parties.’ ‘The mutual intention to which the courts give effect is determined by
objective manifestations of the parties’ intent, including the words used in the agreement,
as well as extrinsic evidence of such objective matters as the surrounding circumstances
under which the parties negotiated or entered into the contract; the object, nature and
subject matter of the contract; and the subsequent conduct of the parties.’” (Wolf v.
Superior Court (2004) 114 Cal.App.4th 1343, 1356, fn. omitted.) “This inquiry does not
consider the subjective belief of the promisor but, rather, the ‘objectively reasonable’
expectation of the promisee. [Citations.] If, after this second inquiry, the ambiguity
remains, ‘the language of a contract should be interpreted most strongly against the party
who caused the uncertainty to exist.’” (Linton v. County of Contra Costa (2019) 31
Cal.App.5th 628, 636.)
              “‘The conduct of the parties after execution of the contract and before any
controversy has arisen as to its effect affords the most reliable evidence of the parties’
intentions. [Citations.]’ [Citation.] Thus, courts will adopt and enforce the parties’
practical construction when reasonable.” (Hernandez v. Badger Construction Equipment
Co. (1994) 28 Cal.App.4th 1791, 1814.)

                                              9
              And here is where we run into an impassable roadblock on appeal. The
record contains a rich body of evidence concerning pre-conflict course of conduct.
However, much of the evidence is in direct conflict. On the one hand, Facilities
Engineering presented evidence that Vourakis created a drawing to determine the
locations of the cranes, which is supported by Boraldi’s testimony as well as the
testimony of the concrete contractor who testified that Vourakis claimed to have
determined the location of the cranes. On the other hand, Vourakis testified that Boraldi
determined the precise location of the footings using a laser measure and blue tape, which
is corroborated by Boraldi’s e-mail thanking Vourakis for finding his laser. “[W]here the
parol evidence is in conflict, the trial court’s resolution of that conflict is a question of
fact and must be upheld if supported by substantial evidence.” (Wolf v. Superior Court
(2004) 114 Cal.App.4th 1343, 1351.) Consequently, “Where . . . a conflict in the
evidence exists, it must be resolved in the trial court, as with any question of fact, before
the [appellate] court can declare the meaning of the contract as a matter of law.” (Id. at p.
1359.) In this case, the trial court never resolved that conflict, choosing instead to
erroneously void the contract, which bypassed the issue of interpreting the contract.
Accordingly, we must remand for a new trial to resolve this critical factual issue.

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                                    DISPOSITION

             The judgment is reversed. Facilities Engineering shall recover its costs
incurred on appeal.

                                                SANCHEZ, J.

WE CONCUR:

BEDSWORTH, ACTING P. J.

MOORE, J.

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