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Travelers Casualty Insurance Co. of America v. Williams Co. Construction, Inc.

Supreme Court of North Dakota

July 31, 2014

Travelers Casualty Insurance Company of America, BMB Investment, LLC, and Brenda Barfield, Plaintiffs and Appellees
Williams Company Construction, Inc., SKL, Inc. D/B/A Home Heating, Plumbing & Air Conditioning, Inc., and McIntosh & Associates, Inc., Defendants Williams Company Construction, Inc., Appellant

Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Frank L. Racek, Judge.

Steven L. Theesfeld, Minneapolis, MN, for plaintiffs and appellees.

Michael J. Morley, Grand Forks, ND, for defendant and appellant.

Gerald W. VandeWalle, C.J., Carol Ronning Kapsner, Lisa Fair McEvers, Dale V. Sandstrom. Opinion of the Court by VandeWalle, Chief Justice. I concur in the result. Daniel J. Crothers.


Page 165

VandeWalle, Chief Justice.

[¶1] Williams Company Construction, Inc., appealed from a judgment entered by the district court following a jury trial and from a district court order denying its motion for a new trial. We affirm the judgment and the order denying the motion for a new trial.

Page 166


[¶2] In the spring of 2008, Williams Company Construction, Inc. (" Williams" ), a company solely owned and managed by Glen Williams, entered into a construction contract to remodel the Friendly Smiles Cosmetic Dentistry Office owned by Dr. Brenda Barfield. Dr. Barfield previously leased the building from Glen Williams for approximately five years before she purchased the property from him in 2008. Dr. Barfield hired Williams to remodel the building because of its construction experience and familiarity and knowledge of the building. Dr. Barfield hired Williams as the general contractor to " oversee the whole project and make sure that [the construction] was all done correctly and everything was followed the way that it should be." When Dr. Barfield hired Williams, she did not know whether the remodeling work would be done by Williams or subcontractors. Dr. Barfield did not deal directly with any subcontractors during the remodeling project nor did she direct Williams to hire any specific subcontractors.

[¶3] During the remodel, Williams served as the general contractor and hired subcontractors to do various construction tasks. Williams hired SKL, Inc., doing business as Home Heating, Plumbing & Air Conditioning, Inc. (" Home Heating" ), to install the plumbing. Williams also subcontracted McIntosh & Associates, Inc., to do the framing. Williams did not perform any physical construction during the remodeling project. Williams charged Dr. Barfield a ten percent mark-up in price for the projects he coordinated and a twenty-five percent mark-up for the projects he supervised daily, including the installation of the plumbing.

[¶4] As part of the project, Dr. Barfield wanted a new vanity room for her office which required the installation of plumbing pipes. Home Heating installed the water pipes to the new vanity room. A plumbing wall to house the pipes was installed by McIntosh & Associates. Another subcontractor, not a party to this appeal, installed the sheetrock on the plumbing wall. Williams approved the location of the plumbing wall. The project was completed in the fall of 2008.

[¶5] In December 2008, a section of a copper water pipe installed in the vanity room froze and burst. The frozen water pipe caused minor water damage and was repaired by Home Heating. During the repair process, a Home Heating employee cut a hole in the wall to locate the leak and discovered that the air in the plumbing wall was cold. The employee was concerned the pipe could freeze again and notified the Friendly Smiles Cosmetic Dentistry Office about the cold air.

[¶6] Dr. Barfield contacted Williams to express her concern about the pipes re-freezing from the cold air. Williams went to the dentist's office and examined the hole in the wall and viewed the pipes. According to testimony, Williams told Dr. Barfield not to worry about the pipes freezing again because of circulating warm air around the hole. Dr. Barfield also wanted the hole in the wall patched, but had difficulty in securing Williams or Home Heating to fix it. Dr. Barfield made repeated requests for Williams or Home Heating to resolve the cold air issue, but they did not fix the problem. Approximately one week after the pipe was fixed, the water pipe froze and broke again, this time causing extensive water damage to the dental office.

[¶7] Dr. Barfield and her insurance company, Travelers Insurance, brought suit against Williams, Home Heating, and McIntosh & Associates. Dr. Barfield sued Williams for breach of contract and negligence. She also sued Home Heating and

Page 167

McIntosh & Associates for negligence. Before trial, the parties stipulated that the total amount of damages was $220,046.09. Williams requested the trial court to include a jury instruction concerning the independent contractor distinction (C-55.25), and a jury instruction pertaining to the failure of a party to produce witnesses (C-80.30). The court denied the two requests. At the pretrial hearing, the parties stipulated that the case would be tried before the jury based on comparative fault. The jury was given a special verdict form and found Williams seventy percent at fault, Home Heating twenty-five percent at fault, McIntosh & Associates zero percent at fault, and Dr. Barfield five percent at fault. Judgment was entered against Williams. Williams subsequently filed a motion for a new trial arguing the court erred in denying its requested jury instructions and there was insufficient evidence for the jury to find Williams seventy percent at fault for the damages. Following a hearing, the district court denied the motion.


[¶8] In Leno v. K & L Homes, Inc., 2011 ND 171, 803 N.W.2d 543, ¶ 19, this Court held that the district court did not err in refusing to instruct the jury on modified comparative fault principles in a home construction dispute where the home buyers' cause of action against a home builder was based on breach of contract. We specifically noted, " Fault and modified comparative fault do not apply where the cause of action arises solely out of the contract between the parties, and the damages sought are for the loss of the expected bargain only." Id. The plaintiff home buyers originally raised negligence as one of their causes of action, but subsequently dropped the negligence claim and proceeded with the case on breach of contract and breach of implied warranties theories. Id. at ¶ 2.

[¶9] In the instant case, Dr. Barfield's complaint against Williams went to trial on both breach of contract and negligence claims. The parties stipulated to try the case to the jury based on comparative fault. The jury was instructed on comparative fault. Those instructions became the law of the case. See Bakke v. D & A Landscaping Co., LLC, 2012 ND 170, 820 N.W.2d 357, ¶ 17 (citing Livinggood v. Balsdon, 2006 ND 11, 709 N.W.2d 723, ¶ 10 (" instruction was the settled law of the case because there was no objection ...

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