HTC CORPORATION v. Olds

486 P.2d 463
CourtColorado Court of Appeals
DecidedApril 13, 1971
Docket70-628. (Supreme Court No. 23714.)
StatusPublished
Cited by11 cases

This text of 486 P.2d 463 (HTC CORPORATION v. Olds) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HTC CORPORATION v. Olds, 486 P.2d 463 (Colo. Ct. App. 1971).

Opinion

486 P.2d 463 (1971)

H. T. C. CORPORATION, Plaintiff in Error,
v.
Ben OLDS, dba Olds and Redd Construction Company, and Millard C. Simpson, dba Simpson Sheet Metal, Defendants in Error.

No. 70-628. (Supreme Court No. 23714.)

Colorado Court of Appeals, Div. II.

April 13, 1971.
Rehearing Denied May 4, 1971.
Certiorari Denied July 6, 1971.

*464 Harden, Olson & Napheys, Ralph B. Harden, Fort Collins, for plaintiff in error.

Hill & Hill, Alden T. Hill, Fort Collins, for defendants in error.

Not Selected for Official Publication.

PIERCE, Judge.

This case was transferred from the Supreme Court pursuant to statute.

*465 This was an action on oral contract for fees, costs, and to enforce and foreclose mechanics' liens. The plaintiff Ben Olds, dba Olds and Redd Construction Company (Olds), was a general contractor; plaintiff Millard C. Simpson, dba Simpson Sheet Metal (Simpson), was a subcontractor. Defendant H. T. C. Corporation (H. T. C.) was a Colorado corporation formed by Messrs. Harris, Thomsic, and Carlson, who were the sole owners and officers of H. T. C.

H. T. C. Corporation was formed to build a recreational facility, called the Matterhorn, for college students in Fort Collins, Colorado. It was to provide restaurant, drinking, and dancing accommodations. After initial meetings between Olds and H. T. C. in late 1965, plans for construction of the Matterhorn began to take form. Without any drawings or specifications, Olds made a conjecture as to the probable cost, based mainly upon a similar facility recently completed by Olds for Mr. Thomsic. The cost estimate was approximately $100,000.

About the same time, a designer with whom both plaintiff Olds and Mr. Thomsic had previous experience, was hired by defendant to prepare plans.

Defendant arranged financing with the First National Bank of Fort Collins, which required a written contract between plaintiff and defendant before disbursement of funds.

On or about March 20, 1966, plaintiff Olds and defendant signed a written agreement prepared by defendant's attorney, although at the time, plaintiff stated his objection to the contract's guaranty provision. A few of the designer's preliminary plans were available at that time but were admittedly very incomplete and without specifications. Plaintiff, defendant, and the bank had studied these plans before the contract was signed and before the bank agreed to loan $100,000 for construction. The bank made its own appraisal of the site and plans.

The written agreement recites that:

"Second party [Olds] construct [sic] improvements on the above-described property owned by first party [H. T. C.] in accordance with the attached copy of plans and specifications, which plans and specifications have been agreed to by and between the parties hereto * * *."

No plans or specifications were ever attached to this document, and the only plans existing at the time were the designer's admittedly inadequate drawings. Not until sometime after construction was started were there any plans drawn for plumbing, heating, air conditioning, electrical, sewage, and numerous other details normally needed for construction. No specifications were ever prepared except the designer's notes that appeared at different points on the drawings.

The written agreement also provided that after work had started no changes in plans or specifications would be made unless they were set forth in writing and signed by defendant officers, the bank, and the plaintiff. Evidence is undisputed that, although several changes were made, none was ever specified or described in a written and signed order.

The written agreement further provided that plaintiff:

"will construct said premises on a cost-plus basis with the guarantee that the cost for constructing the improvements in accordance with the plans and specifications will not exceed the sum of One Hundred Twenty Thousand Dollars ($120,000). This cost of $120,000 does not include site improvement and is exclusive of chattels and also does not include the cost of fill which is necessary before construction can be commenced."

Plaintiff's fee, by the written agreement, was to be $8,400.

After commencement of construction, extensive changes were made by the parties. Plaintiff attempted to get bids from various subcontractors, most of whom refused to bid due to the inadequacy of the plans and would give only estimates. One subcontractor, *466 who ventured to make a bid in the middle of the job, told plaintiff and defendant that, because so many changes were being made during the course of his work, he would only continue on a cost-plus basis.

The case went to trial in October of 1967 on a variety of issues. Plaintiff Simpson was granted an in rem judgment in the amount of $4,865.60; Olds was granted an in personam judgment in the amount of $12,516.60, and foreclosure of the liens was ordered.

Numerous errors have been alleged by both parties. A more specific delineation of the facts involved in this case will be presented as separate assignments of error are discussed.

I.

The trial court, in its findings of fact and conclusions of law, found:

"Although Plaintiff and Defendant may have had a contract with the guarantee of $120,000, it was abandoned by the conduct of the parties, particularly by the Defendant in requiring so many changes without, in most cases, regard to cost. No doubt all parties hoped to do the job for $120,000 or less, but once the bank was satisfied by the execution of the contract, there seemed to be no further reference or concern for its terms or conditions.

* * * * * *

"The changes made are too numerous to list, but the evidence disclosed over 40 major changes. * * * Some of the changes were made to save costs, but most of them were made, obviously, without too much regard for cost. Evidence shows that one of the Defendant Officers was on the job site every day and sometimes two or three times a day. He ordered some changes on the job without knowledge or approval of the Plaintiff. * * * The Defendant Officers approved of all changes made. The attitude of Defendant Officers was indicated to some extent at one point during the construction when Plaintiff and Defendant Officers were all present discussing a number of major changes that were under consideration. One of the Defendant Officers expressed his concern that those changes would cost a lot and he wasn't in favor of them. The other two officers of the Defendant corporation said that he, the dissenter, was `just out voted,' and the changes were to be made."

The court also found there was considerable conflict in the evidence as to when anyone realized or even suspected that the cost would exceed $120,000, stating:

"The Defendant admittedly didn't look over the monthly bills and the Plaintiff apparently was not doing a very good job of cost accounting. It was not until the end of August, 1966, when the August bills came in, that everyone clearly knew that the cost had exceeded $120,000."

H. T. C. assigns as error the trial court's finding that under the facts of this case the construction contract between H. T. C. and Olds had been abandoned. It is the settled and general rule that a contract may be abandoned by mutual consent and that such consent may be implied from the acts and conduct of the parties. City of Del Rio v.

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Bluebook (online)
486 P.2d 463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/htc-corporation-v-olds-coloctapp-1971.