Brookhaven Landscape & Grading Co., Inc. v. J. F. Barton Contracting Company and United States Fidelity and Guaranty Co.

Citations: 676 F.2d 516; 1982 U.S. App. LEXIS 19219; 10 Fed. R. Serv. 1529Docket: 81-7059

Court: Court of Appeals for the Eleventh Circuit; May 17, 1982; Federal Appellate Court

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The United States Court of Appeals for the Eleventh Circuit addressed an appeal by J. F. Barton Contracting Company and United States Fidelity and Guaranty Company from a jury verdict awarding Brookhaven Landscaping Grading Company, Inc. $39,045.50. The case involved Brookhaven's claim that Barton breached an oral agreement to compensate for additional excavation beyond what was stipulated in their subcontract. 

Barton contracted with the City of Atlanta for road construction at Atlanta International Airport and subsequently subcontracted Brookhaven for excavation, embankment, and grading work. The subcontract incorporated the project’s plans, which specified Brookhaven's responsibility for removing boulders. Discrepancies arose when Brookhaven encountered boulders over a larger area than the plans indicated. 

Brookhaven argued that the plans and an explanatory note implied a narrower boulder area than they experienced. Their foreman testified that he informed Barton's vice-president of the unexpected boulders and was authorized to remove them, with an agreement for payment at $3.25 per cubic yard. The court affirmed the district court's judgment, with one minor exception, supporting Brookhaven's position on the breach of contract claim.

Alan Batson, an employee of the plaintiff, testified to a conversation where David Barton agreed to pay Brookhaven for the removal of extra boulders. Barton countered that he believed the boulder removal fell within Brookhaven's original contractual obligations and did not agree to any additional payments. After completing their work, Brookhaven submitted a bill that included charges for the boulder excavation, which Barton paid except for the boulder removal fee. The plaintiff then filed a lawsuit.

At trial, the plaintiff argued that the boulder removal was not included in the original contract and that an oral agreement for extra work existed. Alternatively, the plaintiff claimed entitlement to recovery based on quantum meruit if the jury did not find an oral contract. The defendants maintained that the boulder removal was part of the original contract and that no separate oral agreement existed. They moved for a directed verdict, asserting that the contract explicitly required boulder removal and that the plaintiff had a preexisting duty to perform this work, which negated any consideration for a new contract. They also argued that the contract necessitated written notice for any modifications related to extra work.

The court denied both the directed verdict and a subsequent motion for judgment notwithstanding the verdict (j. n. o. v.). The judge instructed the jury to determine if the boulder removal was outside the original contract and, if so, to consider the possibility of an oral contract and quantum meruit. The jury ultimately awarded the plaintiff the full amount requested for the boulder excavation.

On appeal, the defendants contended that the trial court erred in denying their motions for j. n. o. v. and a new trial. During oral arguments, both parties' counsel exhibited a lack of familiarity with key parts of the record and could not clarify whether the district court had interpreted the contract or how the jury was instructed on contract claims. Additionally, despite the defendants' claims of objecting to jury instructions on quantum meruit, the record indicated that the charging conference was not recorded, and no objections were made on the record post-instruction. The court emphasized the necessity for attorneys to be well-acquainted with the district court record and to competently address relevant questions during appellate proceedings.

The defendants argue that the boulder excavation is covered by the written subcontract, claiming the plaintiff had a preexisting duty to remove boulders, thus rendering the oral contract void due to lack of consideration. The plaintiff counters that the contract plans only accounted for the removal of approximately 1,000 cubic yards of boulders over 450 feet, whereas the actual work involved around 12,000 additional cubic yards over 1,100 feet. Under Georgia law, an oral modification to a written contract can be valid if supported by separate consideration. The central issue is whether the jury could determine that the removal of the extra boulders constituted additional work eligible for separate consideration. 

Georgia Department of Transportation Standard Specifications define "extra work" as work not included in the original contract yet essential for satisfactory completion. The contractor is required to perform unforeseen work necessary for contract completion, with payment terms specified in a Supplemental Agreement, which must be authorized in writing before the work begins. The Georgia Supreme Court has ruled that contractors may request supplemental agreements when significant alterations increase their costs, as seen in previous cases. 

Evidence presented indicates that Brookhaven encountered significantly more boulders than anticipated, necessitating additional work to ensure proper foundation preparation. Unlike the Claussen case, Brookhaven claims to have secured a supplemental agreement for the additional work at a specified price.

Defendants initially disputed the existence of an oral contract but later acknowledged that sufficient evidence warranted jury consideration. The jury could determine that the excavation of additional boulders constituted extra work under the contract specifications, serving as the basis for a supplemental agreement. The plaintiff demonstrated increased performance due to significant unanticipated changes, meeting the evidentiary standards set in precedent cases. However, the plaintiff was limited to claiming a supplemental agreement for boulder excavation only in the areas specified in the contract plans, as the plans explicitly noted potential boulder encounters within certain stations. Brookhaven was responsible for all boulder removal between stations 36 k 00 and 40 k 50, and its claim for boulder excavation between 40 k 00 and 40 k 50 lacked substantial evidence, contradicting the contract terms. Consequently, the plaintiff's award should be reduced by the value of the boulders removed in that area, totaling $1,713.47. Additionally, Barton contended that the jury instructions on quantum meruit were inappropriate but failed to formally object during the trial. The defendants also questioned whether the subcontract could be modified orally, despite the written requirement for modifications. Under Georgia law, such requirements may be waived through conduct, and evidence indicated that Barton had orally authorized changes to Brookhaven's performance, supporting a finding that an oral agreement existed, which either did not include or waived the written modification requirement.

Barton claimed entitlement to a judgment notwithstanding the verdict on Brookhaven's quantum meruit claim, arguing that the boulder excavation was not part of the subcontract. The court upheld the jury's decision, affirming that evidence supported the classification of the excavation as extra work, justifying quantum meruit recovery, as established by the Georgia Supreme Court. Federal rules permit litigants to pursue alternative recovery theories, though they cannot recover on mutually exclusive theories. Barton also presented four arguments against the denial of a new trial, two of which were previously addressed, and the other two were deemed without merit. The court ruled that allowing the plaintiff’s foreman to testify about industry customs was appropriate under Georgia law, which permits evidence of established practices to interpret contracts. Additionally, the introduction of a chart identifying anticipated versus unanticipated boulders was deemed relevant and admissible, as substantiated by testimony, despite defendants' claims of potential prejudice, which they failed to raise at the time of introduction, thus waiving their objection under Rule 46 of the Federal Rules of Civil Procedure.

Issues not raised and preserved at the trial level are generally not considered on appeal. Specific objections are confined to the grounds stated; any failure to object based on prejudice or to request a jury limiting instruction results in a waiver of such objections. The district court's judgment is affirmed, except for a reduction of $1,713.47 in the plaintiff's award, with instructions to adjust the judgment accordingly. Brookhaven sought recovery for various work items, but the jury awarded only for extra excavation claimed. The project plans, approved by Atlanta Airport Engineers, followed specifications from the "Grey Book" and "Yellow Book," which defined the work type. "Stations" are defined intervals in the project plans, measured in hundreds of feet. The Eleventh Circuit follows the former Fifth Circuit's precedent. Barton argued against the jury being charged on quantum meruit; however, Brookhaven was entitled to present this theory, and Barton failed to enter specific objections to the jury charges as required by Fed. R. Civ. P. 51. Appellate rules necessitate a thorough understanding of the district court record, with specific guidelines for briefs and record excerpts. Counsel are responsible for discussing relevant portions of the record intelligently during appeals, regardless of their participation at trial.

The defendants contend that the boulder excavation was included in the written subcontract, asserting that the plaintiff's preexisting duty to remove the boulders rendered the oral contract invalid due to lack of consideration. The plaintiff argues that the contract plans specified a limited area for boulder removal—1,000 cubic yards over 450 feet—while in reality, the plaintiff encountered approximately 12,000 additional cubic yards over 1,100 feet. Under Georgia law, an oral modification to a written contract is valid if supported by separate consideration. The critical issue is whether the jury could determine that the removal of the excessive boulders constituted extra work, qualifying as separate consideration for the oral contract. 

According to the Georgia Department of Transportation Standard Specifications, extra work is defined as any work essential for the satisfactory completion of the contract that was not included in the original contract. The contractor is obligated to perform unforeseen work necessary for full completion, and such work must be authorized in writing via a Supplemental Agreement before it begins. The Georgia Supreme Court's interpretation in Department of Transportation v. Claussen Paving Co. allows a contractor to seek a supplemental agreement when significant alterations increase costs. Claussen’s case established that unresolved factual questions regarding the substantiality of alterations take the matter beyond a legal determination for the court.

Brookhaven encountered significantly more boulders than indicated in the subcontract plans, necessitating additional excavation to prepare a proper road foundation. This situation altered Brookhaven's performance, leading them to assert a supplemental agreement for the extra work at a specified price. Although defendants disputed the existence of this oral contract during the trial, they conceded that sufficient evidence warranted jury consideration. The jury could have determined that the excavation of the excess boulders constituted extra work as per the contract specifications, thereby supporting the supplemental agreement.

Brookhaven's evidence met the required standard for demonstrating increased performance due to an unanticipated change in construction demands, as established in relevant case law. However, it was ruled that Brookhaven could only seek a supplemental agreement for boulder excavation beyond what was anticipated in the plans. The plans specifically mentioned that boulders might be found between stations 36 k 00 and 40 k 50, making Brookhaven responsible for all boulder removal in that range. The claim for boulder excavation between stations 40 k 00 and 40 k 50 was denied as it contradicted the clear terms of the plans, which indicated that this 50-foot segment is not supported by substantial evidence. Brookhaven removed 527.22 cubic yards of boulders in this area, which totals $1,713.47, and the award should be reduced by this amount.

Additionally, the defendants questioned whether the subcontract could be modified orally, despite the written modification requirement in the contract specifications. They acknowledged that this requirement could be waived, as established in Georgia law, which allows for such waivers to be demonstrated through the parties' conduct. Waivers may also extend to other technical requirements of the subcontract.

Barton orally authorized modifications to Brookhaven's performance, indicating a practice of verbal agreement between the parties. The jury had sufficient evidence to conclude that Barton was aware of additional work required, agreed to compensate for extra excavation, and that written subcontract terms were either not included in the oral agreement or waived. The court affirmed that recovery in quantum meruit was valid given that the boulder excavation exceeded the original contract terms and there was no evidence of a supplemental agreement. In federal court, parties may pursue alternative recovery theories as long as they are not mutually exclusive. Barton’s motion for a new trial was denied, with the court finding no abuse of discretion. Testimony from the plaintiff's foreman about industry customs was deemed admissible under Georgia law, supporting contract interpretation. Additionally, a chart detailing anticipated and unanticipated boulders was allowed as it clarified previously introduced evidence and had been substantiated by testimony.

Defendants contend that a chart depicting unanticipated boulders in red was prejudicial. However, the court finds it unnecessary to address this claim since the defendants did not raise a prejudice objection at the time the exhibit was introduced. Under Rule 46 of the Federal Rules of Civil Procedure, parties must notify the court of their desired actions or objections at the time of the ruling to allow the trial judge to consider potential errors. Generally, unpreserved issues are not reviewed on appeal, and specific objections are limited to the grounds stated. The defendants' failure to object on the basis of prejudice or to request a jury limiting instruction waives that objection. The court affirms the district court's judgment, except for a specified reduction in the plaintiff's award. Brookhaven's claim for additional work was limited to extra excavation. The plans were prepared and sanctioned by the Atlanta Airport Engineers, guided by specific contract and departmental specifications. The Eleventh Circuit adopts former Fifth Circuit case law as its precedent. The jury was appropriately charged on quantum meruit, despite Barton's claims, as no objections were recorded before the jury's deliberation.