Stroud Constr., Inc. v. Walsh


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Docket Number: 2009-CA-00725-COA
Linked Case(s): 2009-CA-00725-COA ; 2009-CT-00725-SCT

Court of Appeals: Opinion Link
Opinion Date: 07-20-2010
Opinion Author: Ishee, J.
Holding: Affirmed.

Additional Case Information: Topic: Contract - Parol evidence - Fixed-price contract
Judge(s) Concurring: King, C.J., Lee and Myers, P.JJ., Irving, Griffis, Barnes, Roberts, Carlton and Maxwell, JJ.
Procedural History: Jury Trial
Nature of the Case: CIVIL - CONTRACT

Trial Court: Date of Trial Judgment: 04-09-2009
Appealed from: MADISON COUNTY CIRCUIT COURT
Judge: William E. Chapman, III
Disposition: TAKE-NOTHING JUDGMENT ON BUILDER’S COMPLAINT FOR UNPAID INVOICE ($127,321.81) AND $90,000 JUDGMENT AGAINST BUILDER ON COUNTERCLAIM BY HOMEOWNERS FOR DEFECTIVE WORK
Case Number: 2008-0095-C

  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Stroud Construction, Inc.




CECIL MAISON HEIDELBERG, SUSAN SPURLOCK COPELAND



 
  • Appellant #1 Brief
  • Appellant #1 Reply Brief

  • Appellee: Bill Walsh and Cindy Walsh ROBERT T. HIGGINBOTHAM, JR.  

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    Topic: Contract - Parol evidence - Fixed-price contract

    Summary of the Facts: Bill and Cindy Walsh executed a written construction contract with Stroud Construction, Inc. The contract required that Stroud build a luxury home for the Walshes on lot eight of the Lake Caroline Subdivision. Pursuant to the contract, the Walshes agreed to pay Stroud for the actual costs associated with the construction of the house as well as a builder’s fee of $52,000 and a cost fee of 1.25 percent. The construction of the house began in June 2001 and under the terms of the contract, was to be completed within one year. In July 2001, Stroud was issued a building permit. The building permit reflected that the total value of all of Stroud’s work would be $525,000. The Walshes moved into the house in August 2002. Before moving into the house, the Walshes complained to Stroud that the roof leaked. After moving in, the roof continued to leak. The Walshes sent a list of problems with the house, including the leaky roof, to Stroud. Stroud attempted numerous times to repair the leaky roof, but it continued. Stroud exceeded the agreed upon contract price for the Walshes’ house. As a result, the Walshes refused to pay any additional money to Stroud. Stroud filed a complaint seeking an additional $127,321.81 from the Walshes. The Walshes then filed a counterclaim asserting that Stroud was negligent and in breach of contract. Following a trial, the jury found in favor of the Walshes and awarded them $90,000 in damages. Stroud appeals.

    Summary of Opinion Analysis: Stroud argues that the trial court should have ruled as a matter of law that the contract at issue was a cost-plus contract; therefore, the trial court should not have permitted the admission of parol evidence to explain the contract terms and the agreement of the parties. When the language of a contract is ambiguous, parol evidence may be admitted to clarify the meaning of the ambiguity. The contract between Stroud and the Walshes was ambiguous because the contract terms and the agreement of the parties were not clearly defined. Nowhere in the contract was the term “estimated price” or “cost-plus” defined. Also, Bill struck the portion of the contract that stated the entire and final agreement between the parties was contained in the written contract. Stroud argues that the Walshes attempted to vaguely characterize the contract as a fixed-price contract, but they were never required to identify the fixed price, thereby confusing the jury as evidenced by its verdict. The negotiations between the parties clearly reflect that both parties believed that the Walshes’ house would be completed for a total of $752,154. Stroud’s application for a building permit confirmed that he understood that his contribution to the project would cost $525,000. Consistent with his understanding of the contract, which incorporated their negotiated and agreed upon price to build, Bill struck out the portion of the contract which said that everything before then was incorporated into that one document. Thus, it is clear that Stroud understood that the negotiated price would include the items paid for directly by the Walshes.


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