Triton Corp. v. Hardrives, Inc. ( 1996 )

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No. 95-2678
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Triton Corporation, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* District of North Dakota.
Hardrives, Inc., *
*
Appellant. *
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Submitted: March 14, 1996
Filed: June 3, 1996
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Before FAGG, JOHN R. GIBSON, and WOLLMAN, Circuit Judges.
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WOLLMAN, Circuit Judge.
In this diversity action for damages pursuant to an oral contract,
Hardrives, Inc. (Hardrives) appeals the district court's1 evidentiary
rulings and denial of its motion for judgment as a matter of law (JAML),
or in the alternative for a new trial or remittitur of the jury award in
favor of plaintiff Triton Corporation (Triton). We affirm.
I.
The City of Jamestown, North Dakota, annually invites bids to repair
and repave its city streets. Triton attempted to submit a bid for the
project in 1991 but was unable to obtain the required performance bond.
Jerry Szarkowski, vice president of Triton,
1
The Honorable Karen K. Klein, United States Magistrate Judge
for the District of North Dakota, to whom this case was referred
for final disposition by consent of the parties pursuant to 28
U.S.C. § 636(c).
contacted Nick Zwilling, vice president of Hardrives, with a proposal under
which Triton would prepare a bid for the project and Hardrives would
formally submit the bid to the city. If the city accepted the bid,
Hardrives would subcontract the work to Triton and pay Triton 90% of the
contract price. Hardrives would be paid 10% for obtaining the performance
bond for the project.
On May 6, 1991, Zwilling met with Szarkowski at Szarkowski's home
regarding the arrangement, and Szarkowski submitted the bid with Zwilling's
signature to the city that same evening. The Hardrives bid was the low
bid, and the city awarded Hardrives the contract. Zwilling and Szarkowski
attended the preconstruction conference together, and Zwilling told city
engineering staff that Triton would be Hardrives' representative at the
site. In early June, Zwilling informed Szarkowski that Triton could
perform the street repair work only if Triton obtained a performance bond.
When Triton was unable to do so, Hardrives subcontracted most of the job
to a competing company.
Triton sued Hardrives for lost profits of $107,952.44. Upon finding
that an oral contract existed between Triton and Hardrives and that
Hardrives had breached the contract, the jury awarded damages of
$62,745.00. The district court denied Hardrives' post-trial motions for
JAML, new trial, and remittitur.
Hardrives argues on appeal that: (1) there was insufficient evidence
supporting the finding that an oral contract existed; (2) the district
court erred in admitting some of Triton's evidence as to damages and
excluding some of Hardrives' damages evidence; and (3) the damage award was
unsupported by the evidence.
II.
We review the district court's denial of a motion for JAML based on
sufficiency of the evidence de novo, applying the same
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standard used by that court. Kaplon v. Howmedica, Inc., No. 95-2511, slip
op. at 3 (8th Cir. May 13, 1996). This standard requires us to resolve all
conflicts in favor of Triton, giving it the benefit of all reasonable
inferences and assuming as true all facts supporting Triton which the
evidence tended to prove. See id. at 3-4. We will affirm the denial of
the motion for JAML if a reasonable jury could differ as to the conclusions
that could be drawn, and we will not set aside the jury's verdict lightly.
We will not weigh, evaluate, or consider the credibility of the evidence.
Id. at 4.
North Dakota law applies in this diversity case, and we review the
district court's interpretation of that law de novo. See id. (citing Salve
Regina College v. Russell, 499 U.S. 225, 231 (1991)). An oral contract
will be enforced if there has been an offer, acceptance, and mutual
understanding of the terms of the contract. Lohse v. Atlantic Richfield
Co., 389 N.W.2d 352, 355 (N.D. 1986). The contract must be definite enough
to enable the court to ascertain what performance is required of the
parties; indefiniteness as to an essential element may prevent creation of
an enforceable contract. Id.
Hardrives argues that essential elements of the contract were never
resolved in that the parties had not determined the final bid amount, how
much of the work Triton would do and how much of the work would be
subcontracted to other companies, or who would buy materials. Viewing the
evidence in the light most favorable to Triton, however, we believe that
the jury could have reasonably found that any terms left open were not
essential terms of the contract.
Szarkowski testified that the parties had agreed to a bid between
$310,000 and $350,000, and that Hardrives would retain 10% of the final bid
amount, notwithstanding the number and identity of additional
subcontractors. As the district court stated, the jury
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could reasonably have inferred that Triton was going to act as the de facto
contractor on the project, complete with the power to subcontract for any
work it would not perform itself, and needed Hardrives only for its credit
history. Those obligations are reasonably definite and support an
enforceable contract.
Hardrives also argues that Zwilling never agreed to Triton's
understanding of the agreement. Under North Dakota law, acceptance of an
offer must be "absolute, unequivocal, and unconditional." See
Wucherpfennig v. Dooley, 351 N.W.2d 443, 444 (N.D. 1984). The evidence in
this case, construed favorably to Triton, shows such acceptance.
Szarkowski testified that Zwilling agreed to the 10% fee, that he
congratulated Szarkowski on getting the job, and that he held Szarkowski
out to the city as the person performing the bulk of the work on the
project. Such actions show unequivocal acceptance. Thus, we find that the
evidence supported the jury's verdict that a contract existed.
III.
Hardrives next argues that the district court committed reversible
error in allowing Triton to present certain testimony and in disallowing
certain of Hardrives' proffered testimony. The district court has broad
discretion in determining the admissibility of evidence, and we will review
the court's decision only for an abuse of that discretion. Brown v. United
Missouri Bank, N.A., 78 F.3d 382, 388 (8th Cir. 1996).
Hardrives argues that the district court should not have admitted
evidence presented by Szarkowski regarding Triton's bid amount. Szarkowski
submitted the worksheet of his calculations in various categories that he
used to determine the bid amount. He then attempted to refine the
calculations "with the benefit of 20/20 hindsight," adjusting the
calculations based on weather reports and revised material quotes. After
Hardrives objected to
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the testimony for lack of foundation and hearsay, Szarkowski was allowed
to refine his original bid based only on the actual quantities that were
finally required for the project. Hardrives did not object to the
admission of this testimony by Szarkowski. The district court did not
abuse its discretion in finding that Szarkowski was competent to testify
regarding Triton's expenses and expected profit from personal knowledge and
experience, or in finding that underlying evidence of employee payroll
records, standard equipment cost rates, and subcontractor quotations, while
it may have bolstered Szarkowski's testimony, was not necessary to support
the testimony.
Triton's actual damage calculation came from its expert, James
Martin, an assistant construction engineer for the North Dakota Department
of Transportation, who verified the reasonableness of Triton's bid numbers.
Hardrives challenges the admission of Martin's testimony, arguing that
Martin relied upon information not disclosed to Hardrives and that he
relied upon Szarkowski's numbers, which were not properly supported. The
district court excluded evidence that was based on Szarkowski's oral
representations and other undisclosed information. The court allowed
Martin to testify, however, using Szarkowski's prepared bid sheet, adjusted
for the actual quantities that were required for the project. Martin had
compared the numbers Szarkowski used in his bid worksheet to the average
bid prices for similar work in the state of North Dakota, using the
Department of Transportation's standard methodology for analyzing bids, and
found them to be reasonable.
Because he was unable to rely on some of the information he had used,
Martin reduced his calculation of damages from $107,952.44 to $80,222.
Thus, his final calculation was not based on undisclosed evidence, and
Hardrives was able to cross-examine him regarding the basis for his
calculations. Hardrives submitted the testimony of its own expert, who
testified that Triton's profit
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calculation was unreasonable, to rebut Martin's testimony. "As a general
rule, the factual basis of an expert opinion goes to the credibility of the
testimony, not the admissibility . . . ." Loudermill v. Dow Chemical Co.,
863 F.2d 566, 570 (8th Cir. 1988). See also Norton v. Caremark, Inc., 20
F.3d 330, 340 (8th Cir. 1994). Accordingly, we find no abuse of discretion
in the district court's admission of Martin's testimony.
Hardrives argues that the district court erred in not allowing its
proffered evidence regarding actual job costs. The district court
disallowed testimony that Hardrives actually lost money on the job and that
the company it hired in Triton's place lost money. Counsel for Hardrives
conceded that comparisons between a competitor's profit and overhead and
Triton's profit and overhead would be difficult. The competitor's losses,
for example, included overhead costs, which Triton properly excluded from
its expense calculation. Although Hardrives may have suffered a loss, it
subcontracted out all of the work rather than performing the work itself,
as Triton would have done. We thus find no abuse of discretion in the
district court's ruling that the testimony would not have provided a
meaningful comparison and would confuse the jury.
IV.
Hardrives next argues that the damage award by the jury was excessive
and was not supported by the testimony. A district court should grant
remittitur only when the award is so excessive as to shock the court's
conscience. Norton, 20 F.3d at 340. We review the district court's denial
of remittitur for an abuse of discretion. Id. Under North Dakota law,
uncertainty as to the amount of damages, as opposed to the fact of damages,
will not prevent recovery. Bergquist-Walker Real Estate, Inc. v. William
Clairmont, Inc., 333 N.W.2d 414, 420 (N.D. 1983).
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Although Hardrives argues that Martin did not make any allowance for
equipment costs, the testimony does not bear this out. Martin testified
that he included equipment costs in the fuel costs portion of his worksheet
and that he did not include expenses for depreciation of equipment because
that expense would have been incurred whether or not Triton was awarded the
Jamestown project. Triton submitted expert testimony from a certified
public accountant to the effect that it was proper to exclude Triton's
overhead costs as an expense of the Jamestown job. In addition, North
Dakota law holds that such exclusion is proper. See Leingang v. City of
Mandan Weed Bd., 468 N.W.2d 397, 398-99 (N.D. 1991).
Hardrives also argues that Martin's damages calculation did not
include any money that Triton received in mitigation. Szarkowski
testified, however, that the small jobs it obtained when the Jamestown
project fell through could have been done even if Triton had done the
Jamestown project because the Jamestown job had a reasonable time frame for
completion. Taking this testimony as true, Martin's calculations properly
excluded a calculation for mitigated damages. Thus, the jury's
determination of damages was reasonable given the evidence adduced at
trial, and the district court did not abuse its discretion in refusing to
grant remittitur.
The judgment is affirmed.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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