SACK v A V DESIGN INC
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No. 83-513 I N THE SUPREME COURT O THE STATE O M N A A F F O T N 1984 FLOYD M. SACK, d / b / a DEVELOPMETJT C M A Y O P N EMPIRE Plaintiff and R e s p o n d e n t , -VS- A. V. DESIGN, I N C . , a corp., D e f e n d a n t and A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t , I n a n d f o r t h e County of Y e l l o w s t o n e , The H o n o r a b l e R o b e r t H . W i l s o n , J u d g e p r e s i d i n g . COUNSEL O RECORD: F For Appellant : H e n d r i c k s o n & E v e r s o n ; J i m R a g a i n , B i l l i n g s , Montana P o r t e r f i e l d & W h e a t l e y ; Wendell B. P o r t e r f F e l d , JE-:,Denver, C o l o r a d o For Respondent : James P. Murphy, B i l l i n g s , Montana S u b m i t t e d on B r i e f s : Decided: ..- Clerk A p r i l 1 2 , 1984 July 3 , 1984 Mr. Justice John Conway Harrison delivered the Opinion of the Court. This appeal concerns a construction contract dispute between the owner of a commercial office building erected in Billings, Montana, and the subcontractor corporation that furnished the heating, ventilating systems for the building. Thirteenth and conditioning The matter was tried Judicial District, in and for Yellowstone, before Judge Robert H. without a jury. air in the the County of \4ilson, presiding The District Court found appellant A.V. Design liable for breach of contract and awarded respondent Floyd M. Sack damages in the amount of $11,424.61. From the findings of fact and conclusions of law and judgment, A.V. Design appeals. Floyd M. owner of Sack, d/b/a Empire Development Co. several commercial buildings Virginia and Montana. is the in Colorado, Utah The subject matter of this action is a building owned by Sack in Billings. contractor, Sack requested A.V. Acting as the general Design to submit a bid on the heating, ventilating and air conditioning systems for this building. with whom A.V. Sack had Design is a Denver based corporation prior business dealings. Following preliminary discussions between the parties, a written contract dated August 27, 1980, was entered into between A.V. Design as subcontractor and Empire Development Company as the general contractor. The contract provided that the work was to be performed "continuously and uninterruptedly" until the project was completed. A.V. Design's bid was based on a system designed by it and submitted to Sack, called a variable air volume system (V.A.V.). This type of system was new to Sack and had not been utilized by him in any other buildings he owned. After the system was completed and the building occupied, Sack began receiving complaints from the tenants that the building was alternately too hot or too cold. Sack made several trips from his home in Denver to Billings to examine the system and the building, after which he determined that the system was not properly "balanced." Sack contacted A.V. Design and attempted to persuade them to complete the job by balancing the system. Despite Sack's efforts A.V. Design did not balance the system and eventually Sack was forced to have the system balanced by a Billings professional engineer. In the course of his repairs, the engineer numerous problems; installed, the return air thermostats and V.A.V. found system was improperly boxes improperly were installed, air diffusers were either not installed or improperly installed, V.A.V. coils were sticking open or closed, the hot water circulating pump was improperly installed, outside air sensors for the hot water pumps were not hooked up and static pressure sensors were installed in the wrong places. The major problem was that because of the defective equipment and improper installation, the system was forcing both hot and cold air into the building at the same time. As a result the temperature in the building fluctuated sometimes over 2 0 ' during a work day, and the gas bills (which were astronomical. paid by Sack, not the tenants) were The system was finally repaired and balanced after Sack made several trips from Denver to oversee the work and contract with qualified repairmen. I n J u l y 1 9 8 2 , Sack b r o u g h t s u i t a g a i n s t A.V. r e c o v e r damages f o r b r e a c h of s o u g h t damages complete based the upon the contract. the of installation failure the Design t o The c o m p l a i n t of A.V. Design system and adequately b a l a n c e t h e s y s t e m a f t e r r e p e a t e d demands. to T h i s i n t u r n was b a s e d on t h e w a r r a n t y l a n g u a g e c o n t a i n e d i n t h e s u b c o n t r a c t , which a l s o allowed covered by the Specifically, Sack Sack to repair at warranty claimed or replace Design's A.V. damages any d e f e c t s for the expense. amounts paid o t h e r c o n t r a c t o r s or s u p p l i e r s t o complete t h e i n s t a l l a t i o n and adjustment of natural gas the system, by consumed the system the amount p a i d and for travel excess expenses i n c u r r e d i n s h u t t l i n g b e t w e e n Denver and B i l l i n g s . Following a without a jury, entered. A.V. trial before t h e D i s t r i c t Court s i t t i n g f i n d i n g s o f f a c t and c o n c l u s i o n s o f law w e r e D e s i g n was f o u n d t o be i n b r e a c h o f c o n t r a c t and Sack was awarded $15,146.39 a s damages for the above mentioned claims. T h i s amount was s e t o f f by a $ 3 , 7 2 2 . 7 8 retainage held by Sack, entered. A.V. Design was d e n i e d . and judgment for $11,424.61 f i l e d a m o t i o n f o r new t r i a l , was which This appeal follows. Appellant r a i s e s t h r e e i s s u e s f o r our c o n s i d e r a t i o n : (1) Are t h e f i n d i n g s of f a c t and c o n c l u s i o n s o f law s u p p o r t e d by t h e f a c t s o f t h i s c a s e ? ( 2 ) Did the t r i a l court e r r i n a w a r d i n g damages f o r n a t u r a l g a s consumption? (3) Did the trial court err in awarding Sack made a his t r a v e l expenses? In reviewing the findings of fact by c o u r t , w e may n o t s u b s t i t u t e o u r judgment i n p l a c e o f lower that o f t h e t r i e r of f a c t s . This Court's function rather, is t o d e t e r m i n e w h e t h e r t h e r e is s u b s t a n t i a l c r e d i b l e e v i d e n c e t o support t h e f i n d i n g s of 179 Mont. the 219, 587 P.2d i s viewed evidence prevailing party. fact. a l i g h t most contract by failing to make adjustments t o complete t h e system. b r e a c h of (1978), favorable to D e s i g n had b r e a c h e d the necessary final The c o u r t f o u n d t h i s i n t h e w a r r a n t y p r o v i s i o n s and a l s o t h a t A.V. had s i m p l y n o t c o m p l e t e d t h e c o n t r a c t . contentions, the Cameron, s u p r a . The D i s t r i c t C o u r t f o u n d t h a t A.V. the Cameron I n making t h a t d e t e r m i n a t i o n , 939. in Cameron v. Design Despite appellant's t h e s e c o n c l u s i o n s a r e s u p p o r t e d by t h e e v i d e n c e brought f o r t h a t t r i a l . Sack presented the testimony of a professional e n g i n e e r , whose s p e c i a l t y was t e s t i n g and b a l a n c i n g h e a t i n g , air conditioning i n s t a l l e d here. and ventilating systems such as the one The e n g i n e e r e n u m e r a t e d s e v e r a l d e f e c t s i n t h e s y s t e m a s i n s t a l l e d and s e v e r a l items m i s s i n g f r o m t h e s y s t e m which made it incomplete. He testified that these d e f i c i e n c i e s i n t h e system caused t h e problems of which t h e tenants complained. Appellant presented some c o n f l i c t i n g e v i d e n c e , c o n t e n d i n g t h a t t h e work d o n e by S a c k ' s r e p a i r m e n was "tenant finish" work not required by the contract. However t h i s " t e n a n t f i n i s h " work a l l u d e d t o by A.V. Design d i d n o t c u r e t h e p r o b l e m s e n u m e r a t e d by t h e e n g i n e e r . c h a n g e s s u g g e s t e d by t h e e n g i n e e r cured d e f e c t s The in either t h e d e s i g n o r i n s t a l l a t i o n of t h e s y s t e m ; s u c h a s p l a c e m e n t of t h e r m o s t a t s and s t a t i c pressure sensors, f a i l u r e of e q u i p m e n t and m i s s i n g p a r t s . changes were necessary to correct the mechanical The f a c t t h a t t h e s e problems with the system was not rebutted by appellant's testimony. there being a marked adjustments were made Also, decrease in complaints after these lends credence to the engineer's testimony that the defects uncovered by him were the cause of the problem. There is clearly sufficient evidence to support the findings of the trial court. The final two issues concern the award of damages made by the District Court. For a breach of contract, the amount of damages allowed "[Ils the amount which will compensate the party aggrieved for all proximately caused thereby or the detriment which in the ordinary course of things would be likely to result therefrom. are not clearly ascertainable origin cannot be recovered Section 27-1-311, MCA. was in both for a Damages which their breach of nature and contract." "Where the contractor fails to keep his agreement, the measure of the employer's damages . . . is always the sum which will put him in as good a position as if the contract Kenyon-Noble Lumber Co. had been performed." Kirby v. (1976), 171 Mont. 329 at 332, 558 P.2d 452 at 454. Appellant first contends that it was error to award Sack damages to compensate for the excess natural gas usage caused by the defects in the system. There was ample testimony to establish that during the five summer months when the system was September, 1981), the improperly heating adjusted and operating at the same time, working cooling (May through systems were against each other. This caused the energy bills for the building to skyrocket. Sack testified that the energy costs for the building were over twenty cents per square foot per annum, when they s h o u l d h a v e been b e t w e e n f i v e and s i x c e n t s p e r s q u a r e f o o t per annum. Based on these figures, the court apparently r e a s o n e d t h a t t h e d e f e c t s i n t h e s y s t e m were c a u s i n g i t t o consume e i g h t y p e r c e n t more n a t u r a l g a s t h a n i t would h a v e i f i t had b e e n p r o p e r l y a d j u s t e d . T h e r e f o r e i t awarded Sack damages i n t h e amount o f $ 2 , 4 9 3 . 1 8 , which r e p r e s e n t s e i g h t y percent bills of the total natural gas for May through S e p t e m b e r o f 1981. Appellant contends t h a t t h e D i s t r i c t Court should n o t have awarded any amount for excess gas usage, and if it awarded a n y damages, t h e e i g h t y p e r c e n t f i g u r e was i n e r r o r a s too speculative. noted above, As t h e r e was s u f f i c i e n t e v i d e n c e t o e s t a b l i s h t h a t a n award o f n a t u r a l g a s u s a g e is p r o p e r . recovery simply because amount of h i s damages, with a reasonable it damages f o r e x c e s s A p l a i n t i f f w i l l n o t be d e n i e d is d i f f i c u l t to ascertain the a s l o n g a s t h e amount c a n b e p r o v e n degree of certainty. ( 1 9 7 7 ) , 1 7 3 Mont. 3 5 8 , 567 P.2d 923. Smith v. Zepp A s noted i n Smith, t h e p l a i n t i f f must p r o v i d e t h e t r i a l judge w i t h , "A reasonable b a s i s f o r c o m p u t a t i o n and t h e b e s t e v i d e n c e o b t a i n a b l e u n d e r the . . . circumstances which will enable the judge .. a r r i v e a t a r e a s o n a b l y c l o s e e s t i m a t e of t h e l o s s . Pl0nt. a t 370, 567 P.2d E x p l o r a t i o n Co. a t 930, ( 1 9 3 4 ) , 98 Mont. c i t i n g Brown v . to " 173 Homestake 305 a t 337, 39 P.2d 168 a t 179. Here, Sack presented covering the period the court with utility bills f o r which h e was c l a i m i n g damages, and b i l l s c o v e r i n g t h e same months f o r t h e f o l l o w i n g y e a r when t h e s y s t e m was p r o p e r l y w o r k i n g . This c l e a r l y provided t h e judge for with a reasonable basis computation of his damages. Appellant simply claims the award is speculative, and offers no alternative method for computing damages. award of damages speculation. P.2d 571. natural is grounded to a certain degree Any upon Sikorski v. 01in (1977), 174 Mont. 107, 568 However, the award of damages to Sack for excess gas usage is grounded upon the best available evidence and is a reasonably close estimate of the loss suffered. The award was not in error. Finally, appellant contends that the District Court erred by incurred awarding when he Sack damages traveled from Billings to oversee the repairs. for his the home travel expenses in Denver to Upon review of the record it is impossible to determine how this damage figure was arrived at by the District Court. Sack to support granted by the expenses claimed The figures submitted by these damages do not court, and were also included appellant's insurance company. total the it appears most in a amount of settlement paid the by The cause must be remanded for redetermination of the findings of fact and conclusions of law, as they relate to the award of travel expenses. Affirmed in part, remanded in part for redetermination of the findings of fact and conclusions of law as they relate to the award of travel expenses. We concur: % A . ~ * Q { ~4 Chief Justice 4
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