Court Opinion

ID: 5718261
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:05:36.381884+00
Date Added: 2024-06-11T08:40:39.764385
License: Public Domain

IN THE COURT OF APPEALS OF IOWA

                                  No. 20-1627
                            Filed January 12, 2022

AL URBAIN CONSTRUCTION MANAGEMENT COMPANY, INC.,
     Plaintiff-Appellant/Cross-Appellee,

vs.

CW WOLFF, LLC,
     Defendant-Appellee/Cross-Appellant.
________________________________________________________________

      Appeal from the Iowa District Court for Dubuque County, Alan Heavens,

Judge.

      Plaintiff appeals and defendant cross-appeals the district court’s decision

on their breach-of-contract claims. AFFIRMED ON BOTH APPEALS.

      Robert E. Sabers, Dubuque, for appellant.

      Darin S. Harmon and Jeremy N. Gallagher of Kintzinger, Harmon, Konrardy,

P.L.C., Dubuque, for appellee.

      Considered by Bower, C.J. and Vaitheswaran and Schumacher, JJ.
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SCHUMACHER, Judge.

       Al Urbain Construction Management Co. (AUCM) appeals and CW Wolff,

LLC (CWW) cross-appeals the district court’s decision on their breach-of-contract

claims. The district court awarded damages to AUCM on one project and CWW

on another project, then offset these two amounts. We find the district court’s

decision is supported by substantial evidence and affirm on the appeal and cross-

appeal.

       I.     Background Facts & Proceedings

       Aloysius Urbain is the president and sole shareholder of AUCM, a

construction management company.           AUCM works with commercial clients

through a pre-construction phase, produces a project budget, arranges a

sequence of construction, and ensures everything is done according to plan. A

construction management company is different from a general contractor, who

retains subcontractors for a job. Urbain testified, “The way management works is

I find the contractors and I share the exact numbers with the client and historically

the client pays those bills directly is way it’s supposed to work.”

       Clark Wolff is the owner of CWW, a real estate business. He is also the

president of Selco, Inc., a contract traffic control company. Urbain and Wolff were

acquainted socially. They entered into agreements that AUCM would work on two

building projects for CWW—a new building for Selco (Selco project), and a

barbeque restaurant called Devil’s Pit (Devil’s Pit project). There were no written

contracts.

       During the construction process, CWW became increasingly concerned

with what it viewed as AUCM’s lack of attention to the projects. Many problems
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were caused by a lack of documentation concerning what services AUCM was

hired to provide and communication difficulties. When AUCM presented bills to

CWW for contractors and suppliers, CWW would not pay the full amount due, so

AUCM paid the shortfall. AUCM also began sending some contractors directly to

CWW, rather than CWW paying AUCM and then AUCM paying the contractors.

These practices caused problems in determining the actual costs of the projects.

Both projects were completed on time and lien waivers were obtained from all of

the contractors.

       On November 22, 2017, AUCM sent a letter to CWW asking for a meeting

to close out the projects. AUCM stated CWW owed $88,734.36 for the Devil’s Pit

project. This included a payment of ten percent of the project costs for AUCM’s

services, which it stated was $16,600.00.        AUCM also stated CWW owed

$48,981.14 for the Selco project, which included a payment of $35,856.14,

representing six percent of the project costs.       The total amount due was

$137,715.50. CWW did not respond to the letter and AUCM sent a second letter

on December 20, again requesting a meeting. No response was made to the

second letter.

       On May 2, 2018, AUCM sent a letter to CWW stating it had revised its billing.

The letter stated, “It was my intent not to charge you for services provided at your

previous Selco operation located at 15 S. Main Street, Dubuque, Iowa, plus

additional sites, including your personal residence as outlined in my new final

billing in the amount of $177,827.41.” AUCM asked to be paid $120 per hour for

looking at other locations for the new Selco building before the present location

was selected. The revised billing asked for $89,494.36 for the Devil’s Pit project
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and $58,319.75 for the Selco project, plus payment for work at other sites. CWW

did not respond to this request for payment.

       On June 14, AUCM filed a petition claiming CWW breached their contract

by not paying for services. In the alternative, AUCM sought relief on a theory of

quantum meruit. CWW raised counterclaims against AUCM, asserting claims of

breach of contract, unjust enrichment, and conversion.        A bench trial was

conducted on October 29 and 30, 2020. Testimony was provided by Urbain; Wolff;

Damien Miller, a general contractor; Dan Muntz, a supervisor for Selco; Roger

Klosterman, a certified public accountant (CPA) and financial advisor; and Steve

Ulstad, an architect.

       The district court found AUCM proved CWW breached the contract for

construction management services for the Devil’s Pit project by failing to pay for

AUCM’s services and the reimbursement of some of the contractors. The court

awarded AUCM damages of $89,494.36 for the Devil’s Pit project. The court

denied AUCM’s request to be paid $120 per hour for work scouting out other

locations for the new Selco building, finding there was no agreement AUCM would

be paid for the work. The court determined AUCM did not prove its other claims

for damages related to the Selco project but CWW did prove its claims through the

testimony of Klosterman. The court awarded CWW damages of $83,050.51 for

the Selco project. The two awards were set off and the court entered judgment for

AUCM in the amount of $6443.85. AUCM appealed and CWW cross-appealed.

       II.    Standard of Review

       We review breach-of-contract actions for the correction of errors at law.

Iowa Mortg. Ctr., L.L.C. v. Baccam, 841 N.W.2d 107, 110 (Iowa 2013).           “If
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substantial evidence in the record supports a district court’s finding of fact, we are

bound by its finding. However, a district court’s conclusions of law or its application

of legal principles do not bind us.” Id. (citation omitted). “When a party challenges

a district court’s ruling claiming substantial evidence does not support the decision,

we must view the evidence in the light most favorable to support the judgment and

liberally construe the court’s finding to uphold, rather than defeat, the result

reached.” Papillon v. Jones, 892 N.W.2d 763, 770 (Iowa 2017), as amended

(June 6, 2017) (quoting Iowa Beta Chapter of Phi Delta Theta Fraternity v. State,

763 N.W.2d 250, 257 (Iowa 2017)).

       III.   Selco Project

       AUCM contends the district court erred by denying its claims for damages

for the Selco project. In order to show a breach of contract, a party must show:

       (1) the existence of a contract; (2) the terms and conditions of the
       contract; (3) that it has performed all the terms and conditions
       required under the contract; (4) the defendant’s breach of the
       contract in some particular way; and (5) that plaintiff has suffered
       damages as a result of the breach.

Iowa Mtg. Ctr., 841 N.W.2d at 111 (citation omitted).

       AUCM claims CWW breached the contract by not paying AUCM the total

amount due for its services. It asserts there was not substantial evidence in the

record to support the district court’s conclusion that AUCM was overpaid for the

Selco project.   AUCM contends the financial exhibits show it was underpaid

$29,061.19 for its work.1 AUCM also states that it was not paid the six percent

1 AUCM states CWW paid $710,000.00 for the Selco project and AUCM paid
vendors $739,061.19, which is a deficit of $29,061.19.
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management fee, which it calculates to be $88,190.16. In total, AUCM claims

CWW owes it $117,251.35 for the Selco project.

         The district court found AUCM did not adequately prove its damages,

stating, “To put it mildly, AUCM’s damages request for the Selco project was a

moving target.” AUCM’s request for damages kept changing over time. The court

found:

                In the Petition the total request was $177,827.41. In the
         Amended Petition the total request was $317,207.58. During the trial
         the total request changed to $173,648.36 and then to $230,959.43
         before finally settling on $185,462.15. All of these changes were due
         to [Urbain’s] revisions to the charges for the Selco project.

         The court concluded AUCM’s claim for damages on the Selco project was

not credible “in no small part due to the many different positions taken by AUCM

before and during the trial . . . .” In a bench trial, the district court is the fact-finder

and it assesses the credibility of the witnesses. City of Forest City v. Holland

Contracting Corp., No. 11-0782, 2012 WL 170195, at *3 (Iowa Ct. App. Jan. 19,

2012). “[T]he credibility of witnesses is peculiarly the responsibility of the fact

finder to assess.” Est. of Hagedorn ex rel. Hagedorn v. Peterson, 690 N.W.2d 84,

88 (Iowa 2004).

         CWW’s claims concerning the Selco project were supported by the

testimony of a CPA, Klosterman, who provided a detailed accounting to show

AUCM was overpaid $83,050.51 on the Selco project.2 The district court relied on

Klosterman’s testimony and exhibits to conclude CWW should be awarded

damages of $83,050.51 for the Selco project.             While the district court found

2Klosterman first stated the amount was $147,313.66 but stipulated the amount
should be revised to $83,050.51.
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AUCM’s claims for damages on the Selco project were not credible, the court found

CWW’s claims for damages on this project were credible.

       AUCM challenges the credibility of Klosterman and disputes the

calculations in his exhibits. We defer to the district court’s findings on credibility.

See Tim O’Neill Chevrolet, Inc. v. Forristall, 551 N.W.2d 611, 614 (Iowa 1996)

(“The district court has a better opportunity than we do to evaluate the credibility

of witnesses. So we think factual disputes depending heavily on such credibility

are best resolved by the district court.”). On appeal, we “determine whether

substantial evidence supports the district court’s findings according to those

witnesses whom the court believed.”        Id.   Additionally, we consider “whether

substantial evidence supports the finding actually made by the trial court, not

whether substantial evidence would have supported a different finding.” Van Oort

Constr. Co. v. Nuckoll’s Concrete Serv., Inc., 599 N.W.2d 684, 691 (Iowa 1999).

       We conclude there is substantial evidence in the record to support the

district court’s decision finding AUCM did not prove it was entitled to damages for

the Selco project. Also, there is substantial evidence to show CWW is entitled to

damages of $83,050.51 for overpayments made to AUCM for this project. The

exhibits provided by Klosterman provide substantial evidence to support the award

and these are also supported by his testimony during the trial.

       IV.    Devil’s Pit Project

       In the cross-appeal, CWW claims the district court erred by awarding AUCM

$89,494.36 for the Devil’s Pit project. It asserts the terms of the contract were not

sufficiently definite for the contract to be enforceable. It also claims CWW did not

approve AUCM’s management fee. CWW contends there was no meeting of the
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minds that AUCM would be paid a ten percent management fee for the Devil’s Pit

project. It claims the award to AUCM for the Devil’s Pit project is not supported by

substantial evidence.

       The district court found:

              The Court finds that it is more likely than not that the 10% fee
       was disclosed by [Urbain] to [Wolff] through a statement of probable
       cost that was one of many documents shown to [Wolff]. Although
       the evidence shows that [Wolff] never signed anything, the Court
       does not believe that [Wolff] would let AUCM complete the entire
       Devil’s Pit project without ever looking into what the fee for doing so
       would be.

The court also found the Devil’s Pit project was completed to CWW’s satisfaction

and AUCM did not breach the contract.

       A statement of probable cost for the Devil’s Pit project dated March 15,

2016, has a handwritten note by Urbain stating, “Original budget reviewed &

approved by Clark 4/28/2016.”       The statement of probable cost includes the

construction management fee of $21,600.00. The district court found Wolff’s

testimony that he never approved the project or the construction management fee

was not believable, as the project was completed by AUCM and CWW must have

been aware AUCM would receive a fee for its work.

       The district court is in a better position to evaluate the credibility of

witnesses. See Tim O’Neill Chevrolet, 551 N.W.2d at 614. Disputes of factual

matters that depend on the credibility of witnesses “are best resolved by the district

court.” Id. We find there is substantial evidence in the record to support the district

court’s findings that CWW agreed to the cost statement for the Devil’s Pit project

and AUCM’s construction management fee.
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       CWW also claims the amount of damages awarded to AUCM for the Devil’s

Pit project is not supported by substantial evidence. Klosterman testified CWW

did not owe AUCM any money for the Devil’s Pit project, but he did not provide

documentation to support his statement, unlike his testimony concerning the Selco

project. AUCM presented exhibits to support its position that CWW had not paid

it for some of the contractors for the project. We conclude there is substantial

evidence in the record to support the district court’s award of $89,494.36 to AUCM

for the Devil’s Pit project.

       The district court awarded AUCM $89,494.36 for the Devil’s Pit project and

awarded CWW $83,050.51 for the Selco project. The court offset these amounts

and entered judgment to AUCM for $6443.85.         We affirm the district court’s

decision on the appeal and the cross-appeal.

       AFFIRMED ON BOTH APPEALS.