Court Opinion

ID: 4386543
Source: CourtListenerOpinion
Date Created: 2019-04-11 18:10:09.872033+00
Date Added: 2024-06-11T14:50:32.651434
License: Public Domain

Filed 4/11/19 by Clerk of Supreme Court
                       IN THE SUPREME COURT
                      STATE OF NORTH DAKOTA

                                  2019 ND 97

Larry Pavlicek,                                             Plaintiff and Appellee

      v.

American Steel Systems, Inc., Gabriel
Construction Services, LLC, Door Pro,
Inc., and Dickinson Ready-Mix, Co.,                                     Defendants

      and

JRC Construction, LLC,                                   Defendant and Appellant

                                 No. 20180168

      Appeal from the District Court of Stark County, Southwest Judicial District,
the Honorable William A. Herauf, Judge.

      AFFIRMED.

      Opinion of the Court by Tufte, Justice.

        Craig E. Johnson (argued) and Jared J. Hines (appeared), Fargo, N.D., for
plaintiff and appellee.

      Paul R. Sanderson, Bismarck, N.D., for defendant and appellant.
                       Pavlicek v. American Steel Systems, Inc.
                                      No. 20180168

          Tufte, Justice.
[¶1]      JRC Construction, LLC, appeals a judgment entered after a jury awarded Larry
Pavlicek $217,244.55 in damages against JRC. The jury found JRC breached a
contract with Pavlicek relating to construction work performed by JRC. JRC argues
the district court erred in denying its motion and renewed motion for judgment as a
matter of law because Pavlicek failed to prove he had a contract with JRC. We
affirm.

                                             I
[¶2]      Pavlicek contracted with American Steel Systems, Inc., for the purchase of a
steel building. The contract provided Pavlicek was responsible for hiring other
contractors to erect the building and perform other work, including concrete
installation. American Steel made recommendations relating to the other contractors.
JRC installed the concrete floor for the building. The concrete floor developed
problems including peeling, cracking, delaminating, and bubbling. JRC’s attempted
repair of the concrete was unsuccessful.
[¶3]      Pavlicek sued American Steel and JRC for breach of contract relating to the
defective work. JRC denied a contract existed between Pavlicek and JRC. American
Steel did not answer the complaint, and the district court granted Pavlicek a
$185,800.80 default judgment against American Steel.
[¶4]      At trial, Pavlicek testified about his dealings with JRC. He testified he spoke
with a representative from JRC about installing the concrete floor for the building.
Pavlicek testified he received a verbal proposal from the JRC representative, he
agreed to the proposal, and JRC began the concrete work. After JRC installed the
concrete, Pavlicek noticed problems with the concrete, including peeling, cracking,
delaminating, and bubbling. Pavlicek testified that JRC returned to the site to try to
repair the concrete damage, but JRC’s efforts failed to correct the problems. On
                                             1
cross-examination, Pavlicek stated he did not enter into a written contract with JRC.
He testified American Steel hired JRC to do the concrete work. On redirect, Pavlicek
stated he contracted with JRC and understood JRC was working for him.
[¶5]   At the conclusion of Pavlicek’s case-in-chief, JRC moved for judgment as a
matter of law under N.D.R.Civ.P. 50, arguing Pavlicek did not prove he had a contract
with JRC because of his conflicting testimony about who contracted with JRC to do
the concrete work. JRC also argued the damages Pavlicek was awarded resulted in
a double recovery because Pavlicek already had a judgment against American Steel
for replacement of the concrete floor. The district court denied JRC’s motion and a
jury returned a verdict in Pavlicek’s favor, awarding him $217,244.55 in damages.
JRC renewed its motion for judgment as a matter of law after trial. Following a
hearing, the court denied JRC’s renewed motion.

                                            II
[¶6]   JRC argues Pavlicek failed to prove he had a contract with JRC and the district
court erred in denying its motion for judgment as a matter of law.
[¶7]   Rule 50, N.D.R.Civ.P., governs judgments as a matter of law.                Under
N.D.R.Civ.P. 50(a)(1), a district court may grant a motion for judgment as a matter
of law “[i]f a party has been fully heard on an issue during a jury trial and the court
finds that a reasonable jury would not have a legally sufficient evidentiary basis to
find for the party on that issue.” A party moving for judgment as a matter of law “is,
in effect, claiming that the evidence is insufficient to create a question of fact for the
jury. And whether or not the evidence is sufficient to create a question of fact for the
jury is itself a question of law to be decided by the trial court.” Bjorneby v. Nodak
Mut. Ins. Co., 2016 ND 142, ¶ 7, 882 N.W.2d 232 (quoting Okken v. Okken, 325
N.W.2d 264, 267 (N.D. 1982)).
[¶8]   This Court has explained the standard of review for a motion for judgment as
a matter of law:
       The trial court’s decision on a motion brought under N.D.R.Civ.P. 50
       to deny or grant judgment as a matter of law is based upon whether the
                                            2
       evidence, when viewed in the light most favorable to the party against
       whom the motion is made, leads to but one conclusion as to the verdict
       about which there can be no reasonable difference of opinion. In
       considering this motion, the trial court must apply a rigorous standard
       with a view toward preserving a jury verdict, and so must we in our
       review on appeal. In determining if the evidence is sufficient to create
       an issue of fact, the trial court must view the evidence in the light most
       favorable to the non-moving party, and must accept the truth of the
       evidence presented by the non-moving party and the truth of all
       reasonable inferences from that evidence which support the verdict.
       The trial court’s decision on a motion for judgment as a matter of law
       is fully reviewable on appeal.
Bjorneby, 2016 ND 142, ¶ 7, 882 N.W.2d 232 (quoting Minto Grain, LLC v. Tibert,
2009 ND 213, ¶ 7, 776 N.W.2d 549). To determine whether the trial court erred in
granting or denying a motion for judgment as a matter of law, “this Court examines
the trial record and applies the same standard as the district court was required to
apply initially.” Id.

                                           A
[¶9]   JRC argues this case is analogous to Thompson v. Hannah Farmers Coop.
Elevator Co., 79 N.W.2d 31 (N.D. 1956). In Thompson, a farmer alleged he delivered
flax to an elevator and did not get paid. Id. at 32. The farmer attempted to prove his
case based solely on his testimony. Id. at 33. This Court discussed the standard for
submitting the issue of a witness’s credibility to the jury:
                The right to the submission of an issue of fact depending upon
       the credibility of a witness does not exist where the testimony is
       inherently incredible or impossible or where the undisputed
       circumstances show that the story told by the witness cannot be true, or
       that it is so improbable, absurd and self-contradictory that it should be
       deemed a nullity by the court. Where the inherent improbability of the
       evidence is so patent that no truth can be in it, the question is one of
       law. That is also the case where it is so inherently weak that reasonable
       minds could not entertain different opinions about it. The rule that it is
       for the jury to reconcile conflicting testimony of a witness does not
       apply where the only evidence in support of a controlling fact is that of
       a witness who so contradicts himself as to render findings of fact a
       mere guess. Where a witness’ testimony is itself so contradictory that
       it has no probative force, a jury cannot be invited to speculate about it
                                           3
         or to select one or another contradictory statement as a basis of a
         verdict.
Id. at 37 (citations omitted).
[¶10] This Court held the farmer failed to prove his cause of action against the
elevator because “[h]is testimony upon matters vital to his cause is contradictory and
improbable.” Id. at 36. This Court further explained the farmer’s failure to prove his
claim:
                 The plaintiff comes into court and attempts to establish a cause
         of action against the defendant based on his own oral testimony without
         support or corroboration. He brought this action nearly six years after
         the claim which he is attempting to establish had accrued. He says
         he received scale tickets for the flax hauled on the 4th and 5th of
         November 1948 to the defendant elevator. He offers contradictory
         explanations as to his failure to produce them. He intimates that they
         may have been washed with his clothes. Later he asserts that they were
         given to the Internal Revenue inspector. No explanation is made, nor
         is there any evidence in the record as to whether any attempt was made
         to contact the Internal Revenue Department to locate these alleged scale
         tickets. Although the plaintiff asserts that he asked about the flax
         several times during the winter of 1948 and 1949, he never made a
         formal demand for either a sale of the flax or a return or redelivery
         thereof.
         ....
                 The defendant has no record to show deliveries of flax on
         November 4 and 5, 1948. To attempt to explain away the lack of this
         record, the plaintiff offers the absurd explanation that the rats carried
         away the particular book of scale tickets covering his flax. The
         defendant’s manager positively testifies that the plaintiff did not deliver
         any flax to the defendant on the dates in question. The inability of the
         manager and of the plaintiff to find any such record indicates the truth
         of the manager’s statement.
         ....
                 A close examination of the evidence indicates that even upon
         many minor matters, as well as the essential facts, the testimony of the
         plaintiff is contradictory, inaccurate, incoherent, evasive, irresponsive
         and improbable. There is no substantial evidence to establish the
         plaintiff’s cause of action.
                 The evidence in this case is so contradictory and inherently
         improbable that reasonable minds could not entertain different opinions
         thereon and could arrive at but one conclusion, that the plaintiff did not

                                             4
         on November 4 and 5, 1948, haul over 1,100 bushels of flax to the
         defendant.
Id. at 38-39.
[¶11] JRC argues Pavlicek’s conflicting testimony about who contracted with JRC
is similar to the contradictory testimony in Thompson. We disagree; Thompson is
distinguishable from this case. Unlike Thompson, Pavlicek’s claim against JRC did
not hinge solely on his testimony. Although Pavlicek gave conflicting testimony
about who contracted with JRC, Pavlicek’s written contract with American Steel
states Pavlicek was responsible for hiring other contractors to install concrete and
perform other work. Pavlicek testified that after he agreed to JRC’s proposal to install
the concrete, JRC began performing the work. Pavlicek testified he paid JRC for the
concrete work and JRC did not dispute that testimony. Additionally, neither Pavlicek
nor JRC submitted written evidence establishing American Steel contracted with JRC
to install the concrete. Despite Pavlicek’s conflicting testimony about who contracted
with JRC, there was sufficient evidence presented allowing the jury to decide that
issue.

                                           B
[¶12] JRC argues its motion for judgment as a matter of law should have been
granted to prevent a double recovery for Pavlicek.
[¶13] Under N.D.C.C. § 32-03-36, “no person can recover a greater amount in
damages for the breach of an obligation than the person could have gained by the full
performance thereof.” Before trial, Pavlicek received a $185,800.80 default judgment
against American Steel. The amount of damages represented the proposed cost to
replace the concrete floor. At trial, the jury found Pavlicek contracted with JRC to
install the concrete floor. The jury awarded Pavlicek $217,244.55 in damages to
replace the concrete floor.
[¶14] We are not persuaded that JRC’s motion for judgment as a matter of law
should have been granted to prevent a double recovery for Pavlicek. JRC has cited
no authority that supports that argument. To the extent Pavlicek’s judgments against

                                           5
American Steel and JRC represent the same obligation, legal remedies are available
to American Steel and JRC to prevent a double recovery for Pavlicek. See, e.g.,
N.D.R.Civ.P. 60(b)(5) (allowing relief from a final judgment that has been satisfied).
[¶15] We conclude the district court did not err in denying JRC’s motion and
renewed motion for judgment as a matter of law.

                                         III
[¶16] We have considered JRC’s remaining arguments and conclude they are either
unnecessary to our decision or without merit. The judgment is affirmed.
[¶17] Jerod E. Tufte
      Daniel J. Crothers
      Lisa Fair McEvers
      Jon J. Jensen
      Gerald W. VandeWalle, C.J.

                                          6
        Jensen, Justice, concurring specially.
[¶18] The majority opinion reaches the correct result with the correct analysis by
affirming the district court’s determination that there was an enforceable contract
between Pavlicek and JRC Construction, LLC. That was the issue presented to the
district court, and the majority opinion appropriately limits itself to that issue. I write
separately to prevent future litigants from ignoring a third-party beneficiary’s right
to enforce a contract through the application of N.D.C.C. § 9-02-04.
[¶19] A third-party beneficiary may enforce a contract under N.D.C.C. § 9-02-04,
which reads as follows: “A contract made expressly for the benefit of a third person
may be enforced by that person at any time before the parties thereto rescind it.” This
Court has previously applied N.D.C.C. § 9-02-04 as follows:
                “A contract made expressly for the benefit of a third person may
        be enforced by him at any time before the parties thereto rescind it.”
        N.D.C.C. § 9-02-04. “To enforce a contract between two others, a third
        party must have been intended by the contracting parties to be benefited
        by the contract.” Apache Corp. v. MDU Resources Group, Inc., 1999
ND 247, ¶ 10, 603 N.W.2d 891. To determine whether the contract at
        issue was made expressly for the third party’s benefit, “we must
        look to the intentions of the parties to the contract.” O’Connell v.
        Entertainment Enterprises, Inc., 317 N.W.2d 385, 388 (N.D. 1982).
        “The intentions of the parties to a contract must be ascertained from the
        written contract alone, if possible.” Id. “Another guideline for
        determining whether a party is a third-party beneficiary, as opposed to
        an incidental beneficiary, is whether the benefit to the third party was
        ‘within the contemplation’ of the contracting parties.” Moen v.
        Norwest Bank of Minot, 647 F. Supp. 1333, 1341-42 (D.N.D. 1986).
Peoples State Bank of Truman, Inc. v. Molstad Excavating, Inc., 2006 ND 183, ¶ 20,
721 N.W.2d 43.
[¶20] In the present case, JRC concedes it had a contract to perform concrete work
for the benefit of Pavlicek, albeit JRC argues its contract was with American Steel.
Because JRC concedes it entered into a contract intending to perform concrete work
for the benefit of Pavlicek, the contract can be enforced by Pavlicek as a third-party
beneficiary, even if the contract was between JRC and American Steel. Although the
parties chose to litigate the existence of a contract between JRC and Pavlicek, had the
district court found that a contract between JRC and Pavlicek did not exist, Pavlicek
would nonetheless still have been entitled to a recovery as a third-party beneficiary
by enforcing the agreement between JRC and American Steel.
[¶21] Jon J. Jensen
                                            7
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