FOR PUBLICATION
ATTORNEYS FOR APPELLANT
: ATTORNEYS FOR APPELLEE:
SEAN E. KENYON ROBERT J. PALMER
ROBERT J. KONOPA JEFFERY A. JOHNSON
Konopa Reagan & Kenyon RICHARD F. NUGENT, JR.
South Bend, Indiana May Oberfell & Lorber
South Bend, Indiana
IN THE
COURT OF APPEALS OF INDIANA
BERKEL & COMPANY CONTRACTORS, INC., )
)
Appellant-Defendant, )
)
vs. ) No. 71A03-0307-CV-294
)
PALM & ASSOCIATES, INC., )
)
Appellee-Plaintiff. )
APPEAL FROM THE ST. JOSEPH SUPERIOR COURT
The Honorable Jenny Pitts Manier, Judge
Cause No. 71D05-0205-PL-223
September 8, 2004
OPINION - FOR PUBLICATION
SHARPNACK, Judge
Berkel & Company Contractors, Inc. (Berkel) appeals the trial courts grant of partial
summary judgment to Palm & Associates, Inc. (Palm) on its breach of contract
claim, the trial courts denial of Berkels cross-motion for summary judgment, and the
trial courts findings of fact and conclusions thereon awarding damages to Palm.
Berkel raises three issues, which we consolidate and restate as:
Whether the trial court erred by granting partial summary judgment to Palm on
its breach of contract claim and by denying Berkels cross-motion for summary judgment
after it found that Berkel breached a valid contract with Palm; and
Whether the trial courts findings of fact and conclusions thereon awarding damages to
Palm for Berkels breach of contract were clearly erroneous.
We affirm.
The relevant facts follow. In early 2002, Berkel, as a sub-contractor, contracted
with Black & Veatch Construction, Inc. (Black & Veatch), as the general contractor,
to install approximately 800 pilings
See footnote for a generating plant in St. Joseph County,
Indiana (the Project) being built by Black & Veatch. Berkel contacted Palm
about performing some surveying work on the Project, and on April 3, 2002,
Berkel issued a purchase order to Palm.
The purchase order listed that Palm was to [v]erify pile locations in Electronics
Drawings against plan sheet dimensions prior to staking and to [p]repare a pre-drill
staking drawing showing grid-lines, caps, piles, pile designation, with corresponding staking numbers for
a price [n]ot to exceed $780.00[.] Appellants Appendix at 16. The
purchase order also included a provision that Palm would supply the following:
Field Crew 2 men full time during the course of our work[.]
( Stake centers of approximately 800 auger pilings[.]
( Measure as-built locations of constructed piles measurements.
( Prepare as-built drawings of client specified pile groups &
submit to client within 24 hours of request.
There will be no charge for t[r]avel time.
Id. The terms of the purchase order called for Berkel to compensate
Palm for these services at a price of $110 per hour. The
purchase order further had a provision that [m]aterials and equipment must meet standards
required by state and federal regulations and any project requirement. Id.
On April 11, 2002, two of Palms employees began performance of the work
listed under the purchase order and completed one and one-half hours of work.
On April 15, 2002, Berkel learned that all subcontractors were required to
employ union labor and told Palm that Palm would be required to use
union labor on the Project. Palm told Berkel that it would talk
to the local unions and that the price in the purchase order would
need to be adjusted if Palm was to have a working agreement with
the union. On April 19, 2002, Palm had not yet worked out
an agreement with the union, and Berkel hired another surveyor to complete the
work that Palm had agreed to perform. Berkel then informed Palm that
it was to perform no further work under the purchase order and paid
Palm for its work already completed.
Palm then filed a complaint for breach of contract against Berkel. Palm
later filed a motion for partial summary judgment on its breach of contract
claim, arguing that Berkel breached its agreement to have Palm perform certain tasks
and compensate Palm according to the purchase order. Appellants Appendix at 44.
Berkel filed a cross-motion for summary judgment, arguing that: (1) the purchase
order did not constitute a contract; and (2) even if the purchase order
was a contract, Palm breached it by refusing to use union labor.
Following a hearing on the motions, the trial court granted Palms motion for
partial summary judgment and denied Berkels cross-motion for summary judgment.
Thereafter, a bench trial was held on the issue of damages, and Berkel
asserted an affirmative defense of failure to mitigate damages. Pursuant to Indiana
Trial Rule 52, Berkel requested that the trial court enter findings of facts
and conclusions thereon, and the trial court issued the following order:
Findings of Fact
* * * * *
5. Berkel performed work on the Allegheny gas fired electrical generating plant,
also known as the St. Joseph generating plant, (the Project) and contracted with
Palm to undertake certain work with respect to the Project.
6. The contract between Palm and Berkel was memorialized by Purchase Order
No. 03-315 dated April 3, 2002 (Contract).
Specifically, Berkel contracted with+ (sic) Palm to:
( Verify pile locations in Electronic Drawings against plan
sheet dimensions prior to staking.
( Prepare a pre-drill staking drawing showing grid-lines, caps,
piles, pile designation, with corresponding staking numbers[.]
8. Palm was to perform the activities described in finding numbered
7 for a cost not to exceed $780.
9. Palm performed the work described in finding numbered 7 and was
compensated for these services as provided in the Contract.
10. Berkel contracted with Palm to perform the following tasks, as well:
Field Crew 2 men full
time during the course of our work
( Stake centers of approximately 800 auger pilings[.]
( Measure as-built locations of constructed piles measurements.
( Prepare as-built drawings of client specified pile groups &
submit to client within 24 hours of request.
11. Palm devoted the time of its employees, Jason Tincher and John
Compton, to the performance of the Contract.
12. Palm was to be compensated at the rate of $110 per
hour, per man, for performance of the work to be performed at the
Project site.
* * * * *
14. The Contract does not specify a fixed time for completion of
the work, nor a fixed number of man-hours for which Palm was to
be compensated.
15. The Contract was an unusually large project for surveying work, in
terms of its scope and duration, and therefore a lucrative opportunity for Palm.
Both Berkel and Palm recognized this fact at the time of execution
of the Contract.
16. The work to have been performed by Palm under the Contract,
although expansive in terms of its scope and duration, did not involve the
provision of unique personal services.
17. Prior to commencement of the work set forth at finding numbered
[10], above, Berkel terminated the Contract.
18. Berkel hired DLZ to perform the work that Palm was to
have performed for the Project.
* * * * *
25. . . . Palm estimated it would require 520 man hours
to perform the activities the Contract contemplated would be performed at the Project
by Tincher and Compton.
* * * * *
27. The hourly cost to Palm of Tincher and Comptons wages and
expenses, calculating the tax and other burden at fifteen percent (15%) is $28.75.
The hourly cost of travel time to Palm is $.59, for a
total hourly cost to Palm for Tincher and Comptons time in the field
of $29.34.
* * * * *
30. After the Contract was terminated, Palms employees Compton and Tincher worked
on other accounts or projects which (sic) Palm was obligated to perform for
other customers.
31. Had the Contract not been terminated, the work performed by Compton
and Tincher, as described in finding numbered 30, would have been performed by
Palm, nonetheless.
32. Berkel has failed to introduce evidence sufficient to show that income
received by Palm for work performed by it after Berkels breach of the
Contract was received as a result of Palm being relieved from its performance
of the Contract. Albert Johann & Sons, Co. v. Echols, 143 Ind.App.
122, 238 N.E.2d 685 (1968).
* * * * *
35. Palms reasonable profits proven to have been earned under the Contract
totals $41,368 . . . .
* * * * *
Conclusions
A. Palm and Berkel entered into the Contract on or about
April 3, 2002.
B. Palm performed the work described in finding numbered 7, above,
and was compensated by Berkel for this effort in accordance with the Contract.
C. Berkel breached the Contract prior to Palms commencement of the
work described at finding number 10, above.
D. Palm suffered damages of $41,368 for net lost profits that
would have been earned under the Contract for the work to have been
performed on the Project site by Palm had Berkel not breached the contract.
* * * * *
G. Berkel has not proven its affirmative defense of a failure
on the part of Palm to have mitigated its damages.
Appellants Appendix at 6-11.
I.
The first issue is whether the trial court erred by granting partial summary
judgment to Palm on its breach of contract claim and by denying Berkels
cross-motion for summary judgment. Our standard of review for the grant of
a motion for summary judgment is well settled. Summary judgment is appropriate
only where the evidence shows that there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of
law. Ind. Trial Rule 56(C); Mangold ex rel. Mangold v. Ind.
Dept of Natural Res., 756 N.E.2d 970, 973 (Ind. 2001). The standard
of review is not altered by cross-motions for summary judgment on the same
issues. Indiana Ins. Co. v. Am. Cmty. Servs., Inc., 718 N.E.2d 1147,
1152 (Ind. Ct. App. 1999). All facts and reasonable inferences drawn from
those facts are construed in favor of the nonmoving party. Mangold, 756
N.E.2d at 973. Review of a summary judgment motion is limited to
those materials designated to the trial court. Id.
The essential elements of a breach of contract action are the existence of
a contract, the defendants breach thereof, and damages. Rogier v. Am. Testing
and Engg Corp., 734 N.E.2d 606, 614 (Ind. Ct. App. 2000), rehg denied,
trans. denied. Berkel argues that the trial court erred by granting
partial summary judgment to Palm on its breach of contract claim because: (1)
there was no contract; and (2) even if there was a contract, it
was Palm, not Berkel, who breached the contract. We will address each
argument in turn.
A. Contract
We first review whether the purchase order constituted an enforceable contract. When
construing a contract, we will not find uncertainty in the contract if a
logical interpretation can find certainty. Intl Shoe Co. v. Lacy, 114 Ind.
App. 641, 647-648, 53 N.E.2d 636, 639 (1944). In order to be
enforceable, a contract must be reasonably definite and certain in its material terms
so that the intention of the parties may be ascertained. Id.; Kokomo
Veterans, Inc. v. Schick, 439 N.E.2d 639, 644 (Ind. Ct. App. 1982).
Berkel argues that the purchase order was an indefinite quantities contract and did
not constitute an enforceable contract. Appellants Brief at 8-9. An indefinite
quantities contract is a contract under which the buyer agrees to purchase and
the seller agrees to supply whatever quantity of goods the buyer chooses to
purchase from the seller but it does not obligate the buyer to purchase
anything from the seller. Indiana-Am. Water Co., Inc. v. Town of Seelyville,
698 N.E.2d 1255, 1259 (Ind. Ct. App. 1998). [A]n indefinite quantities
contract, without at least the requirement that the buyer purchase a guaranteed minimum
quantity from the seller, is illusory and unenforceable. Id. at 1259-1260.
Berkel argues that the following section of the purchase order renders it indefinite
and unenforceable as a contract:
Field Crew 2 men full time during the course of our work[.]
( Stake centers of approximately 800 auger pilings[.]
( Measure as-built locations of constructed piles measurements.
( Prepare as-built drawings of client specified pile groups &
submit to client within 24 hours of request.
There will be no charge for t[r]avel time.
Appellants Appendix at 16. The purchase order also contained a provision that
Berkel would pay Palm $110 per hour for these services. Berkel argues
that the purchase order was indefinite because it did not specify the number
of hours that the two-man crew would need to work and merely outlined
the labor needed for the Project and the price that would be charged
for the field crew as it performed work requested by Berkel. Appellants
Brief at 9. Palm argues that the purchase order was more like
a definite quantity contract because it called for a definite quantity of surveying
services, i.e., stake centers of approximately 800 auger pilings. Appellees Brief at
9-15.
To support its argument, Berkel relies on Dayhuff v. Canonie Const. Co., 152
Ind. App. 154, 283 N.E.2d 425 (1972). In that case, Canonie and
Dayhuff entered into an agreement whereby Dayhuff agreed to haul sand to a
highway construction project. Id. at 155, 283 N.E.2d at 426. Canonie
issued Dayhuff a purchase order, which provided that Dayhuff would haul sand as
required. Id. The purchase order also provided that the hauling may
include approximately 35,000 to 50,000 cubic yards of sand, and it also provided
the price that Canonie would pay for the sand. Id. When
Canonie entered into a similar agreement with another company, Dayhuff sued for breach
of contract, alleging that the purchase order gave Dayhuff the exclusive right to
haul sand for the construction project. Id. at 156, 283 N.E.2d at
427. The trial court granted summary judgment in favor of Canonie, and
we affirmed, holding that the purchase order was not a valid contract because
it was too indefinite and the lack of [Dayhuffs] obligation to accept the
offer . . . defeat[ed] mutuality. Id. at 156-157, 283 N.E.2d at
427.
We conclude that Dayhuff is distinguishable. In Dayhuff, the purchase order was
indefinite and limited Canonies obligation to purchase Dayhuffs hauling services only as required.
Dayhuff, 152 Ind. App. at 155, 283 N.E.2d at 426. Thus,
it was more like an indefinite quantities contract, which, absent the requirement that
the buyer purchase a guaranteed minimum quantity from the seller, renders it unenforceable.
See Indiana-Am. Water, 698 N.E.2d at 1259-1260. Here, contrary to Berkels
argument, the purchase order did not contain a limitation that Palm would perform
work only as requested by Berkel. Rather, the language of the purchase
order required Palm to provide a two-man field crew during the course of
our work to: (1) [s]take centers of approximately 800 auger pilings; (2)
[m]easure as-built locations of constructed piles measurement; and (3) [p]repare as-built drawings of
client specified pile groups & submit to client within 24 hours of request
and required Berkel to pay Palm $110 per hour for these services.
Appellants Appendix at 16. In Dayhuff, the indefiniteness was in the job
to be performed, i.e., haul sand as required. Here, however, the purchase
order was definite in the overall job to be performed, i.e., stake approximately
800 auger pilings. While there was no provision defining the number of
hours necessary to perform the surveying work, the purchase order, which called for
surveying services to stake approximately 800 auger pilings to be paid at a
rate of $110 per hour, was reasonably definite in its terms and, thus,
was a valid, enforceable contract.
B. Breach
In the alternative, Berkel argues that if the purchase order constituted an enforceable
contract, it was Palm, not Berkel, who breached the contract. Specifically, Berkel
argues that the purchase order required Palm to use union labor and that
Palm breached the contract by failing to reach an agreement with a union.
Berkels argument requires us to interpret the purchase order.
Generally, construction of the terms of a written contract is a question of
law and reviewed de novo. Harrison v. Thomas, 761 N.E.2d 816, 818
(Ind. 2002), rehg denied. The goal of contract interpretation is to ascertain
and give effect to the parties intent. First Fed. Sav. Bank of
Ind. v. Key Mkts., Inc., 559 N.E.2d 600, 603 (Ind. 1990). In
interpreting a written contract, the court will attempt to determine the intent of
the parties at the time the contract was made as disclosed by the
language used to express their rights and duties. Id. Thus, we
will determine the intent of the parties to a contract by the four
corners of the contract. When interpreting the meaning of the words used
in a contract, we must first determine if the contract is ambiguous.
A contract is not ambiguous merely because a controversy exists; rather, ambiguity will
be found when a contract is susceptible to more than one interpretation as
measured by the standard of whether reasonable minds could differ as to its
meaning. Crowe v. Boofter, 790 N.E.2d 608, 611 (Ind. Ct. App. 2003).
Absent ambiguity, we will give the terms of a contract their plain
and ordinary meaning. USA Life One Ins. Co. of Indiana v. Nuckolls,
682 N.E.2d 534, 539 (Ind. 1997).
On April 3, 2002, Berkel issued Palm a purchase order, which required Palm
to provide surveying services that included a two-man field crew to stake approximately
800 auger pilings and required Berkel to pay Palm $110 per hour for
this surveying work. The purchase order also included the following provision: [m]aterials
and equipment must meet standards required by state and federal regulations and any
project requirement. Appellants Appendix at 16. On April 11, 2002, two
of Palms employees began performance of the work listed under the purchase order
and completed one and one-half hours of work. On April 15, 2002,
after learning that its client, Black & Veatch, wanted the surveying company to
have a working agreement with the unions, Berkel informed Palm that Palm would
be required to use union labor on the Project. On April 19,
2002, Palm had not yet worked out an agreement with the union, and
Berkel hired another surveyor to complete the work that Palm had agreed to
perform. Berkel then informed Palm that it was to perform no further
work under the purchase order and paid Palm for its work already completed.
Berkel asserts that the purchase order required Palm to use union labor.
Specifically, Berkel argues that because its client required union labor be used on
the Project, the purchase order provision that [m]aterials and equipment must meet standards
required by state and federal regulations and any project requirement required Palm to
use union labor. See Appellants Appendix at 16. We disagree.
First, the plain language of the purchase order does not require Palm to
use union labor. In addition, the unambiguous language of the contract states
that materials and equipment must meet project requirements, but it does not make
any reference to labor meeting project requirements. See Appellants Appendix at 16.
In addition to the plain language of the purchase order, the record
reveals that at the time Berkel contracted with Palm and issued the purchase
order, there was no requirement that union labor be used. Palm had
already begun performance on the work listed in the purchase order when Berkel
informed Palm that it needed to use union labor. Accordingly, because the
contract did not include a provision requiring Palm to use union labor, Palm
did not breach the contract by failing to reach an agreement with the
union. Indeed, the trial court found that the purchase order was an
enforceable contract, and there is no dispute in the facts that Berkel issued
a purchase order to another company and instructed Palm to cease work on
the purchase order. Thus, the trial court did not err by granting
partial summary judgment to Palm and by denying Berkels motion for summary judgment
after it found that Berkel breached a valid contract with Palm.
II.
The next issue is whether the trial courts findings of fact and conclusions
thereon awarding damages to Palm for Berkels breach of contract were clearly erroneous.
After the trial court granted Palms partial motion for summary judgment, it
held a bench trial on the issue of damages. Pursuant to a
motion by Berkel, the trial court issued findings of fact and conclusions thereon
pursuant to Ind. Trial Rule 52. When reviewing the trial courts findings
of fact and conclusions thereon, we consider whether the evidence supports the findings
and whether the findings support the judgment. Yanoff v. Muncy, 688 N.E.2d
1259, 1262 (Ind. 1997). Findings are clearly erroneous only when the record
contains no facts to support them either directly or by inference. Id.
A judgment is clearly erroneous if it applies the wrong legal standard
to properly found facts. Id. In order to determine that a
finding or conclusion is clearly erroneous, our review of the evidence must leave
us with the firm conviction that a mistake has been made. Id.
The trial court entered judgment in favor of Palm, concluding that Palm suffered
damages of $41,368 and that Berkel did not prove its affirmative defense of
failure to mitigate damages. Berkel argues that the trial courts judgment is
erroneous because Palms damages were not foreseeable and because Palm was required to
mitigate its damages because the purchase order was a personal service contract.
A. Palms Damages
Berkel argues that the trial courts conclusion awarding damages to Palm is erroneous
because the damages were not foreseeable or contemplated within the purchase order.
Specifically, Berkel argues that any damages were unforeseeable because the purchase order, which
contemplated payment on an hourly basis, did not contain a specified number of
hours to be worked, did not have a fixed price and did not
provide a reasonable certainty of the actual amount of service required. Appellants
Brief at 14.
Generally, the computation of damages is a matter within the sound discretion of
the trial court. Marathon Oil Co. v. Collins, 744 N.E.2d 474, 481
(Ind. Ct. App. 2001). We will not reverse a damage award unless
it is based on insufficient evidence or is contrary to law. Id.
A party injured by a breach of contract may recover the benefit
of the bargain. INS Investigations Bureau, Inc. v. Lee, 784 N.E.2d 566,
577 (Ind. Ct. App. 2003), trans. denied. Consequential damages may be awarded
on a breach of contract claim when the non-breaching partys loss flows naturally
and probably from the breach and was contemplated by the parties when the
contract was made and are generally limited to reasonably foreseeable economic losses.
Johnson v. Scandia Assocs., Inc., 717 N.E.2d 24, 31 (Ind. 1999). The
test for measuring damages is forseeability at the time of entry into the
contract, not facts existing and known to the parties at the time of
the breach; the test is an objective one. Indiana & Mich. Elec.
Co. v. Terre Haute Indus., Inc., 507 N.E.2d 588, 601 (Ind. Ct. App.
1987), rehg denied, trans. denied.
Consequential damages may include lost profits. Marathon, 744 N.E.2d at 482.
Where a contractor is prevented from completing a project by the owner, the
contractor, as a part of its measure of damages, is entitled to its
lost profit. Indiana & Mich. Elec., 507 N.E.2d at 601. Where
damages consist of lost profits, a proper award of lost profits must be
confined to lost net profits. Ashland Pipeline Co. v. Ind. Bell Tel.
Co., Inc., 505 N.E.2d 483, 490 (Ind. Ct. App. 1987), rehg denied, trans.
denied. An award of damages for lost profits is proper where the
evidence is sufficient to allow the trier-of-fact to estimate the amount with a
reasonable degree of certainty and exactness. Marathon, 744 N.E.2d at 482.
However, lost profits need not be proved with mathematical certainty. Id.
Lost profits are not uncertain where there is testimony that, while not sufficient
to put the amount beyond doubt, is sufficient to enable the factfinder to
make a fair and reasonable finding as to the proper damages. Id.
In addition, any doubts and uncertainties as to proof of the exact
measure of damages must be resolved against the defendant. Weston v. Buckley,
677 N.E.2d 1089, 1093 (Ind. Ct. App. 1997), trans. denied.
The trial court found, in part, as follows:
* * * * *
10. Berkel contracted with Palm to perform the following tasks, as well:
Field Crew 2 men full
time during the course of our work
( Stake centers of approximately 800 auger pilings[.]
( Measure as-built locations of constructed piles measurements.
( Prepare as-built drawings of client specified pile groups &
submit to client within 24 hours of request.
* * * * *
12. Palm was to be compensated at the rate of $110 per
hour, per man, for performance of the work to be performed at the
Project site.
* * * * *
14. The Contract does not specify a fixed time for completion of
the work, nor a fixed number of man-hours for which Palm was to
be compensated.
15. The Contract was an unusually large project for surveying work, in
terms of its scope and duration, and therefore a lucrative opportunity for Palm.
Both Berkel and Palm recognized this fact at the time of execution
of the Contract.
* * * * *
25. . . . Palm estimated it would require 520 man hours
to perform the activities the Contract contemplated would be performed at the Project
by Tincher and Compton.
* * * * *
27. The hourly cost to Palm of Tincher and Comptons wages and
expenses, calculating the tax and other burden at fifteen percent (15%) is $28.75.
The hourly cost of travel time to Palm is $.59, for a
total hourly cost to Palm for Tincher and Comptons time in the field
of $29.34.
* * * * *
Appellants Appendix at 7-8.
The trial court found that the parties foresaw that this was a lucrative
contract. Here, the purchase order required Palm to provide surveying services to
stake approximately 800 auger pilings, and Berkel agreed to pay Palm $110 per
hour for this surveying work. We cannot say that Palms damages that
arose when Berkel hired another company to perform the work that Palm agreed
to do and instructed Palm to cease all work under the purchase order
was not a reasonably foreseeable economic loss from Berkels breach and was not
contemplated when the contract was made. Although the purchase order did not
specifically define the total amount of hours necessary to complete the services, the
parties could estimate the number of hours. Furthermore, damages for lost profits
need only be shown to a reasonable degree of certainty and need not
be proved with mathematical certainty. Accordingly, we cannot say that the trial
courts judgment awarding damages to Palm was clearly erroneous.
B. Mitigation
Berkel argues that the trial courts conclusion that Berkel failed to prove its
affirmative defense of mitigation of damages was clearly erroneous. As a general
rule a nonbreaching party must mitigate damages. National Adver. Co. v. Wilson
Auto Parts, Inc., 569 N.E.2d 997, 1001 (Ind. Ct. App. 1991). However,
this general rule is not without exception or limitation. Id. The
breaching party has the burden of proving that the nonbreaching party has failed
to use reasonable diligence to mitigate damages. Id.
Berkel asserts that Palm was required to mitigate its damages upon Berkels breach
of the contract because the purchase order was a personal service contract, where
Palms other income would need to offset any damages. Berkel maintains, however,
that Palm mitigated its damages by accepting additional work after Berkel breached the
contract, but that the trial court should have deducted any amount for such
additional work from the damages awarded to Palm. Palm argues that the
purchase order did not constitute a personal service contract because anyone acting on
behalf of Palm could have completed the work and that its completion of
additional work did not need to be deducted from its damages because Berkel
failed to show that Palm was only able to accept the additional work
because of Berkels breach of contract.
To support their arguments, both parties rely on Albert Johann & Sons
Co. v. Echols, 143 Ind. App. 122, 238 N.E.2d 685 (1968). There,
the defendant contracted to employ the plaintiff in an advisory capacity. After
the defendant breached the contract, the plaintiff performed work elsewhere, and the defendant
argued that the plaintiffs earnings subsequent to the termination of his contract should
be deducted as mitigation of the plaintiffs damages. Id. at 129, 238
N.E.2d at 689. The trial court rejected the defendants evidence of the
plaintiffs earnings to be used as mitigation. Id. On appeal, we
stated the following general rule:
[W]here one person holds a contract to perform services for another and the
other party wrongfully discharges the employee, then, while said employee may have a
cause of action for damages resulting from the wrongful discharge, he may not
sit idly by, but must make a reasonable effort to secure other work
and any income from such work may be offset against the damages sought.
Id. We, however, recognized an exception to the above rule where the
wrongfully discharged employee is not required to devote his entire time to work
under the contract. Id. We noted that the plaintiff, who was
not contractually required to refrain from other work and did not agree to
devote his entire time to work under the contract, would have earned the
additional money even if the defendant had not terminated the contract. Id.
at 130, 238 N.E.2d at 689. Thus, we held that the plaintiffs
earnings from his employment after the defendant had terminated the contract did not
need to be deducted as a means of mitigating his damages. Id.
Here, the trial courts findings of fact reveal the following:
* * * * *
11. Palm devoted the time of its employees, Jason Tincher and John
Compton, to the performance of the Contract.
12. Palm was to be compensated at the rate of $110 per
hour, per man, for performance of the work to be performed at the
Project site.
* * * * *
16. The work to have been performed by Palm under the Contract,
although expansive in terms of its scope and duration, did not involve the
provision of unique personal services.
* * * * *
30. After the Contract was terminated, Palms employees Compton and Tincher worked
on other accounts or projects which (sic) Palm was obligated to perform for
other customers.
31. Had the Contract not been terminated, the work performed by Compton
and Tincher, as described in finding numbered 30, would have been performed by
Palm, nonetheless.
32. Berkel has failed to introduce evidence sufficient to show that income
received by Palm for work performed by it after Berkels breach of the
Contract was received as a result of Palm being relieved from its performance
of the Contract. Albert Johann & Sons, Co. v. Echols, 143 Ind.App.
122, 238 N.E.2d 685 (1968).
* * * * *
Appellants Appendix at 7-10.
Here, the trial court found that Palm performed other work after Berkel breached
the contract, that it would have earned the additional money on the subsequent
project even if Berkel had not terminated the contract, and that Berkel failed
to show that Palms completion of additional work was only the result of
Berkels breach. During the bench trial on damages, the president of Palm
testified that Palm performed work for other customers during the time that it
had contracted to complete the surveying work for Berkel and that it still
would have performed this additional work even if Berkel had not terminated the
contract. Thus, the evidence supports the trial courts findings. Because Palm
would have completed the additional work even if Berkel had not breached the
contract, Palms earnings from the subsequent job after Berkel had terminated the contract
did not need to be deducted as a means of mitigating damages.
See Johann & Sons, 143 Ind. App. at 130, 238 N.E.2d at 689.
Accordingly, we cannot say that the trial courts conclusion that Berkel did
not prove its affirmative defense of failure to mitigate damages was clearly erroneous.
For the foregoing reasons, we affirm the trial courts grant of partial summary
judgment to Palm, the trial courts denial of Berkels summary judgment motion, and
the trial courts judgment awarding damages to Palm.
Affirmed.
VAIDIK, J. concurs
MATHIAS, J. dissents with separate opinion
IN THE
COURT OF APPEALS OF INDIANA
BERKEL & COMPANY CONTRACTORS, INC., )
)
Appellant-Defendant, )
)
vs. ) No. 71A03-0307-CV-294
)
PALM & ASSOCIATES, INC., )
)
Appellee-Plaintiff. )
MATHIAS, Judge, dissenting
I respectfully dissent.
I believe the trial court erred when it entered summary judgment in favor
of Palm because the Purchase Order at issue here does not fulfill[] the
office of a valid, binding, and exclusive contract between the parties. Dayhuff
v. Canonie Constr. Co., 152 Ind. App. 154, 156, 283 N.E.2d 425, 427
(1972). The Purchase Order issued by Berkel did not specify a fixed
time for completion of the work, any estimated number of hours for which
Palm would be paid, nor any guaranteed minimum payment to Palm. The
Purchase Order merely set forth the scope of the surveying work required for
the Project and the terms of any surveying work Berkel should choose to
order from Palm. Therefore, at best, the Purchase Order is an indefinite
quantities contract that is unenforceable.
As in Dayhuff, the Purchase Order at issue here calls for a service
(surveying), sets out the overall scope of the work that will be needed
(stake centers of approximately 800 auger pilings), and provides the rate at which
the services would be charged ($110.00/hr.). Appellants App. p. 16. Due
to time pressures on the Project, Berkel, like Canonie in Dayhuff, ultimately opted
to engage other firms to perform the work it needed.
This court held that the purchase order at issue in Dayhuff was not
a valid contract because it was too indefinite and the lack of [Dayhuffs]
obligation to accept the offer
defeats mutuality. Dayhuff, 152 Ind. App.
at 156-157, 283 N.E.2d at 427. Likewise, Palm was not obligated to
accept the offer as set forth in the Purchase Order. In fact,
the record indicates that when Palm learned it would be required to reach
an agreement with the union before being given any more work on the
project, Palm informed Berkel that it would not be able to perform its
surveying work at the price set forth in the Purchase Order. Berkel
therefore requested that Palm submit a revised price quote. Critically important is
the fact that Palm never submitted the requested revised quote to Berkel.
Appellants App. pp. 61, 66. This back and forth communication where one
contractor ceases to communicate thereby forcing the other contractor to find alternative performance
is quite common in the construction industry. At the very least, these
circumstances preclude the entry of summary judgment in favor of Palm on its
breach of contract claim.
Moreover, even if the Purchase Order can in fact be stretched into an
enforceable contract, genuine issues of material fact remain as to its terms.
Whether the items to be supplied under the Purchase Order are subject to
the overall project requirement of union labor is an extremely large and genuine
issue of material fact that precludes the entry of summary judgment for Palm.
For all these reasons, I would reverse the trial courts entry of summary
judgment in favor of Palm and remand for a trial on liability and
damages.
Footnote:
The installation of pilings is a process involving the drilling of
a hole, up to thirty-six inches in diameter and up to 130 feet
in depth. As the drill is backed out of the ground, it
is replaced by concrete, which, when hardened, serves as the foundational support for
various structures.