Not overruled or negatively treated on appealinfoCoverage
Supreme Court of WisconsinOct 27, 1964
25 Wis. 2d 246 (Wis. 1964)
25 Wis. 2d 246130 N.W.2d 747

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September 29, 1964 —

October 27, 1964.

APPEAL from a judgment of the circuit court for Dane county: EDWIN M. WILKIE, Circuit Judge. Affirmed.

For the appellant there were briefs by Anderson, Bylsma Eisenberg of Madison, and oral argument by Donald S. Eisenberg.

For the respondent there was a brief by Lawton Cates and John C. Carlson, all of Madison, and oral argument by Mr. Carlson.

Action by plaintiff-architect to recover compensation for services rendered in the designing of plans for an apartment building to be constructed on real estate owned by defendant. Defendant contends that the contract provided a maximum cost limitation of $150,000, and that the building designed by plaintiff could not be constructed for that figure.

The contract involved was allegedly entered into by plaintiff and defendant on May 15, 1962. According to plaintiff, it was evidenced by a standard form of agreement between owner and architect, which was submitted to defendant by plaintiff on May 18, 1962. Defendant never signed that agreement.

Prior to May 15th plaintiff had worked on plans for a 21-unit apartment building for a builder named Bernard Shomberg pursuant to a contract dated March 12, 1962. On its face the Shomberg contract called for an 18-unit apartment building, but the parties are agreed that term was changed between March 12 and March 16, 1962.

On March 16th defendant offered to purchase certain real estate located at 2116 University Avenue in Madison from Shomberg for a price of $30,000. The offer further provided:

"This offer is subject to the purchasers ability to obtain a mortgage of $150,000 for a building to be erected on the above described lots, more particularly described as a 21 unit apartment building designed by Sam. T. Balen Associates. Total price of above described lot and proposed building not to exceed $185,000. Plans and specifications shall be furnished the purchaser within 30 days from date and the building contract closed upon financing commitment. The plans and specifications to be approved by the purchaser within five days after they are furnished by the seller."

On March 12th defendant and Shomberg executed an offer to purchase the same property improved with a building for the sum of $215,000. On a copy of this agreement is the notation, "This offer is for loan purposes only." The notation is initialed by Mr. Franklin and Mr. Shomberg. Defendant and his witnesses testified that the purpose of this offer was to obtain a loan of 70 percent of the face amount, or $150,000, in order to finance the building contemplated by the March 16th offer to purchase.

The plaintiff, Mr. Balen, testified that he was unable to work closely on the apartment building plans with Mr. Shomberg because of Mr. Shomberg's other business interests. He therefore consulted with the defendant, Mr. Franklin, at least once a week.

Notwithstanding the offer to purchase of March 16, 1962, defendant bought the land outright from Mr. Shomberg on April 7th. On April 19th he executed an agreement with Mr. Shomberg providing that Mr. Shomberg would construct a building on the land for a price of $185,000. On a copy of this agreement the notation, "For lending purpose only" appears, initialed by Shomberg and Franklin. On April 23d Shomberg prepared a written cost breakdown which included the cost of the building, grading, and landscaping. This breakdown purported to list the bids of the principal contractor and certain identified subcontractors. It did not include the cost of the land, which was listed separately at $30,000. On April 30, 1962, defendant obtained a construction loan from Anchor Savings Loan Association in the amount of $150,000.

Defendant Franklin had $35,000 of his own money to invest in the land and building. It was necessary for him to finance the remaining cost of the project. Franklin testified that he communicated his building-cost limitation of $150,000 to plaintiff on many occasions. Plaintiff could not recall whether the figure of $150,000 had ever been mentioned to him by Franklin. He had heard that figure mentioned by Shomberg prior to March 12th, but understood that it was used in connection with an 18-unit apartment building containing offices below grade. Changing the offices to apartments so as to make a 21-unit building required extensive changes in plans and materials, according to plaintiff. The principal reason for this was that all apartment units had to be above grade to conform to the Madison building-code requirements, and the building, which would now be a four rather than a three-story structure, would as a result have to be "fire resistive" rather than "ordinary construction" under the building code. There was testimony that plaintiff had stated between March 12th and March 16th that no great cost increase would result from changing the offices to apartments. Plaintiff testified that he knew that defendant would have to obtain financing in order to construct the building but thought that defendant was going to obtain a loan of $185,000.

On May 15th defendant and Shomberg appeared in Mr. Balen's office, which was in the same building occupied by Mr. Shomberg. According to plaintiff Balen, defendant agreed at that time to take over Shomberg's contract with Balen, which called for a fee of four and one-half percent of the construction cost of the project. In addition, Franklin engaged Balen to supervise the construction for a fee of one and one-half percent. Shomberg wrote "Void" across the face of his contract with Balen, shook hands and left. On May 18th Balen prepared the standard-form contract referred to earlier between himself and Franklin, calling for a fee based on percentage of the project construction cost. There was no cost limit contained in this form of agreement. It was sent to Franklin who retained it but did not sign it. Franklin testified he told Balen that he would not sign a contract without a cost limitation and Balen testified Franklin told him he was very busy and had not gotten around to signing it yet. On May 15th Balen had completed 75 to 80 percent of his work on the drawings, plans and specifications. The work remaining to be done had little or no effect on the final cost of construction. Balen could estimate as of May 15th the final cost of the structure with relative accuracy.

Along with the May 18th form of agreement Balen sent a statement of account:

"For Architectural Services Performed in Connection With the Contract for The 21 Unit, Franklin Apartments: Estimated Building Cost — $150,000.00 Architects Fee at 6% — 9,000.00 75% of total Architectural fee now due. . . .$6,750.00 Less amount paid by Shomberg Builders . . . . 878.50 Total due at this time. . . . . . . . . . . .$5,871.50"

Shortly thereafter Franklin sent the bill to Anchor Savings Loan Association to be paid. Anchor refused to pay it because construction had not yet begun.

On June 9, 1962, bids were received on the plans designed by Balen. The lowest bid was $214,633. This bid was, of course, much too high for Franklin. Thereafter Balen met with several contractors, made a number of changes, and lowered the bid to about $193,000. Franklin said this was still too high and determined to abandon the project. According to Balen, Balen then told Franklin he would reduce his fee to cover time and out-of-pocket expenses, and Franklin expressed his appreciation for this gesture.

On June 25, 1962, Balen sent another statement of account to Franklin:

"Lowest Bid and Negotiated Building Cost .. $193,203.00 Architectural Fee @ 6% ........ $11,592.18 Architectural fee @ 4.5% ...... $ 8,694.12 Architects Costs: Time: 497.5 Hrs @ $7.00/hr. ............ $3,482.50 Blue prints: 47 sets ................... 217.36 Specifications: ......................... 236.82 (includes typing, paper, binding, etc.) Mechanical Engineering .................. 1,800.00 Structural Engineering .................. 500.00 --------- Revised fee for Architectural Services .... $6,236.68"

According to Balen, Franklin at first said he would try to take care of this bill but later said he was unable to pay it although he recognized a moral obligation to do so.

The case was submitted to a jury which returned a special verdict finding that Franklin and Balen entered into a contract for architectural services on or about May 15, 1962; that a maximum cost limitation was not one of the terms of that contract; that Balen substantially performed the contract; that the parties agreed on the compensation to be paid Balen for his services; and that the amount due Balen under this agreement was $5,358.18. Defendant made the usual motions after verdict, including a motion for a new trial, which were denied by the trial court. From a judgment on the verdict, defendant appeals.

The issues resolve themselves into the single question — Is there credible evidence to support the verdict?

The defendant states that his basic contention is that the plaintiff architect is not entitled to compensation under any theory of law because of his failure to submit plans and specifications for the construction of a building in accordance with the cost maximum agreed to by the parties. In support of this contention he cites several authorities to the effect that where the owner specifies that a building is not to exceed a specified price and makes this fact known to the architect at the time of entering into the contract and the owner does not thereafter direct alterations which increase the price, the architect cannot recover for his services under the contract or upon quantum meruit unless he provides plans and specifications for a building that can be erected for the sum named.

6 C. J. S., Architects, p. 310, sec. 14; 5 Am. Jur.2d, Architects, p. 679, sec. 17; Clas v. State (1928), 196 Wis. 430, 220 N.W. 185.

The plaintiff does not dispute that this is a correct statement of the law on the facts as alleged by the defendant.

The plaintiff, however, insists this general principle has no application here for the reason that the jury found that the agreement of the parties was not conditioned upon the cost of the building amounting to no more than approximately $150,000. We agree that the plaintiff cannot be denied compensation for his services (assuming the contract was otherwise substantially complied with) unless there was a building-cost limitation agreed to by the parties. The issue, therefore, becomes — Is there any credible evidence which under a reasonable view supports the verdict?

As we stated in Presser v. Siesel Construction Co. (1963), 19 Wis.2d 54, 60, 119 N.W.2d 405:

"Citation of authority is not needed for the oft-quoted rule that the evidence must be viewed in the light most favorable to the verdict and if there is any credible evidence which under any reasonable view will sustain a verdict, which has the approval of the trial court, this court ought not upset it."

The jury found that the parties, on or about May 15, 1962, mutually agreed that the plaintiff was to perform the architectural services for the defendant, and further found that the parties did not agree to a building-cost limitation of $150,000.

Our review of the record convinces us that there is sufficient credible evidence to sustain these findings.

Under the facts as set forth above, the jury could reasonably conclude that the plaintiff and Shomberg had originally agreed that plans and specifications should be prepared for a building not to cost in excess of $150,000; they could further conclude that Shomberg so advised the defendant. The building that Shomberg and the plaintiff agreed should not exceed $150,000 was a building with 18 apartments and three underground offices. It appears without dispute that Shomberg ordered that the plans be revised to provide for a 21-unit apartment. Because of applicable building codes substantial changes were necessary. The apartments could not be below ground which meant a four-story rather than a three-story building. The building could not be of block construction as originally planned but must be constructed as a fire-resistant building. These and other changes, and selection of materials which unquestionably raised the ultimate cost, were discussed between the plaintiff and the defendant. Although the record does not reveal any specific discussion as to increased cost, the jury could infer that defendant knew or should have known that these changes would probably increase the cost of the building.

The jury could consider the defendant's affirmative response to the demand for fees as evidentiary of the fact that the parties had not agreed upon a cost limitation. It could further consider the defendant's participation in the loan transactions as bearing on his credibility as a witness, insofar as cost limitations were concerned.

The verdict reveals that the jury affirmatively found that the parties did mutually agree upon the compensation to be paid for the architectural services and amount due the plaintiff under such agreement to be $5,358.18. These answers, too, are within the credible evidence of the case.

The plaintiff's statement of fees sent to defendant claimed $6,236.38. The plaintiff called the defendant by telephone on June 22d and advised the defendant that inasmuch as the construction of the building had been abandoned by the defendant, the fee for architectural services would not be six percent of the total as originally agreed upon but that his charges would be only for time and expense. The plaintiff testified that the defendant told him that he appreciated this consideration and to send him the bill. The letter of transmittal of June 25th accompanying the bill contained the statement, "I am submitting our statement indicating all our expenses incurred in connection with this building as we had discussed in our telephone conversation of June 22, 1962."

The statement reveals the architect's fee at six percent would have been $11,592.18, and at four and one-half percent $8,694.12, but the amount claimed upon a time and expense basis was $6,236.68. It is undisputed that Shomberg had paid the plaintiff $878.50 for work on the plans. This payment subtracted from the $6,236.68 leaves $5,358.18, the same amount as awarded by the jury. While the record may reveal additional credible evidence to support the verdict as to the agreement for compensation, the facts related are sufficient.

Upon motions after verdict the trial judge reviewed the evidence and approved the verdict. We agree this verdict should be sustained and judgment entered thereon in behalf of the plaintiff.

The portion of the defendant's brief designated "Issues Involved" sets forth several other alleged trial errors as to the form of the verdict, instructions to the jury, and rulings on the evidence. The body of the brief advances no argument and cites no authorities in support of his position on such issues. Because no argument has been made on these issues, if they be such, we do not deem ourselves obligated to do more than briefly comment upon them. Sawdey v. Schwenk (1958), 2 Wis.2d 532, 87 N.W.2d 500.

The defendant's "issues" inquire as to whether it was error to submit a damage question on quantum meruit recovery and instruct the jury in that respect.

The jury was instructed in the verdict not to answer the quantum meruit damages question if it found damages based upon agreement between the parties. The jury, pursuant to that instruction, did not answer the quantum meruit damage question. While we do not intend to intimate it was error to submit the question and the instruction, the submission to the jury could not be prejudicial error for the reason the jury did not answer the question.

The defendant's statement of issue inquires as to whether it was error to admit Exhibits 9, 9A, and 18 into evidence. Exhibits 9 and 9A are the letter of transmittal and the statement of fees sent by plaintiff to defendant on June 25th. The letter contains a gratuitous statement to the effect that the building with a construction cost of $194,000 would be a profitable venture and that other persons were interested in the proposed building or the plans. While these portions of the letter were immaterial and could have, in the discretion of the trial judge, been obliterated or stricken, or the letter reproduced with objectional material omitted before it went to the jury, there is no showing that this information affected the jury and we do not deem it to be prejudicial.

Exhibit 18 was the mortgage-loan application. It was admissible if for no other reason than to challenge the credibility of the witness.

The defendant, through his counsel, upon oral argument, but not in his brief, contends that an architect by virtue of his skill and training has a legal fiduciary obligation to inform the owner of the probable costs during the planning stage. No authority for this contention was furnished to us, but more critically no request of any kind was made to the trial court for an instruction on this subject. The question cannot be raised in this manner nor at this time.

The plaintiff is entitled to judgment upon the verdict, together with his costs.

By the Court. — Judgment affirmed.

WILKIE, J., took no part.