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COURT OF APPEALS DECISION DATED AND RELEASED July 18, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-0497-FT
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT IV
TERRA ENGINEERING
& CONSTRUCTION CORPORATION,
a Wisconsin
Corporation,
Plaintiff-Respondent,
v.
LA CROSSE COUNTY,
Defendant-Appellant.
APPEAL from a judgment
of the circuit court for La Crosse County:
JOHN J. PERLICH, Judge. Affirmed.
Before Eich, C.J.,
Dykman and Vergeront, JJ.
PER
CURIAM. La Crosse County appeals from a money judgment in
favor of Terra Engineering & Construction Corporation. The issue is whether damages were calculated
properly. We affirm.[1]
Terra contracted to
perform a construction project for the County.
Terra commenced this action to increase the contract price due to soil
conditions that were different than expected.
The dispute on appeal centers on calculation of the increased
price.
The parties are
substantially in agreement as to how the contract applies to their
dispute. The contract states the
increased price is to be determined "on the basis of the Cost of the Work
(determined as provided in paragraphs 11.4 and 11.5) plus a CONTRACTOR's fee
for overhead and profit (determined as provided in paragraph 11.6)." Under paragraph 11.4, the cost of the work
consists of costs for payroll, materials, equipment, subcontractors, consultants
and certain "supplemental" items.
Paragraph 11.5 provides that certain items shall not be included in
calculating the "cost of the work," including expenses of the
contractor's principal and branch offices off the site and "[o]ther
overhead or general expense costs of any kind."
Paragraph 11.6 provides
how the contractor's fee for overhead and profit is determined. The fee consists of several components. The amounts include fifteen percent of the
payroll, material and equipment charges included in the cost of the work, and
five percent of the subcontractor payments.
Subparagraph 11.6.2.4 provides that no fee shall be payable on the basis
of the consultant or supplemental costs, or on the items excluded from the cost
of the work by paragraph 11.5.
The special verdict
asked the jury to set separate amounts for "actual construction
costs" and "home office overhead costs." The calculation of "home office
overhead costs" is not discussed at all in the jury instructions. The calculation of "actual construction
costs" received only cursory treatment:
In the event that you decide that the
clay soil data provided Terra by the County did contain a significant
discrepancy, you will then be asked to determine how much Terra's actual
construction costs increased as a result of such discrepancy.
In
answering this question, you should determine what increased costs, if any,
reasonably resulted from the discrepancy ....
The jury set actual
construction costs at $82,850 and home office overhead costs at $13,670. The County filed a post-verdict motion to
change the answer on home office overhead to zero on the ground that the
contract does not permit recovery of such costs. The trial court concluded that under the contract Terra should
receive fifteen percent of the actual construction costs, or $12,427.50. The court reduced the verdict accordingly,
and also denied a subsequent motion for reconsideration. The County appeals.
The County argues that
home office overhead costs cannot be recovered because of the provision in
subparagraph 11.6.2.4 that no fee shall be payable on the basis of those items
excluded from the cost of the work by paragraph 11.5. That paragraph excludes expenses of the contractor's principal
and branch offices off the site and "[o]ther overhead or general expense
costs of any kind." Therefore, the
County argues, no recovery of "home office overhead costs" is
possible.
We conclude the County's
argument is irrelevant to the judgment in this case. The County concedes that a contractor is entitled to a fee for
overhead and profit for direct expenses such as materials, equipment and
employees at the site. By the terms of
the contract, the fee on these items is fifteen percent. That is what the trial court allowed. The court reduced the jury's award of
"home office overhead costs" to an amount that was fifteen percent of
the "actual construction costs" set by the jury. It is not clear from the jury instructions
or the briefs precisely what items were included in the "actual
construction costs."[2] Thus, we do not know whether the entire
amount was payroll, material and equipment costs on which the contractor is
entitled to fifteen percent, or whether there were other costs on which only a
five percent fee, or no fee at all, is allowed. However, the County is not arguing that the trial court erred by
awarding a full fifteen percent on the "actual construction
costs." Rather, the County argues
that no additional fee is allowable at all.
It does so, essentially, simply because the additional amount was
referred to as "home overhead costs" on the special verdict. In view of the trial court's modification of
the verdict amount, based on the language of the contract, the label on the
verdict is irrelevant at this point.
Even if the County's
reading of the contract is correct, meaning that the contractor's percentage
fee for overhead and profit must somehow be reduced to eliminate any fee for
home office overhead, the result would not be a complete reduction of the fee
to zero. However, the County does not
explain what the methodology for calculating the proper partial deduction would
be, or what the figures would be in this case.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.