Opinion
No. 3-759 / 03-0362
Filed March 10, 2004
Appeal from the Iowa District Court for Harrison County, Timothy O'Grady, Judge.
Hopp Construction, Inc. appeals the district court's order dismissing its claim for breach of contract against the City of Logan. AFFIRMED.
Ed Skinner and R. Bradley Skinner of Skinner Law Office, P.C., Altoona, for appellant.
Mark McCormick of Belin Lamson McCormick Zumbach Flynn, P.C., Des Moines, for appellee.
Heard by Vogel, P.J., and Hecht and Vaitheswaran, JJ.
A construction company appeals the dismissal of its breach-of-contract action against a city. Finding substantial evidentiary support for the district court's findings, we affirm.
I. Background Facts and Proceedings
Gary Hopp and his wife, Dianna, owned Hopp Construction Company, Inc. (HCCI). They also owned a limestone quarry east of the City of Logan (the City). The City became interested in purchasing a portion of the quarry for a new wastewater treatment facility. Hopp met several times with City representatives, including, Marvin Vannier, special counsel for the project, Patrick Hall of the Southwest Iowa Planning Council, and engineer Terry McCarl of the firm of Veenstra and Kim. Eventually HCCI entered into a contract with the City. HCCI agreed to sell sixty-four acres and the City agreed to buy them, subject to the following condition concerning land reclamation:
assuming the property is reclaimed and restored to a grade determined and approved by Veenstra Kimm, Inc. to make the property suitable for a proposed wastewater treatment facility, as the land in its present condition is a "spent" portion of a quarry and has to be reclaimed.
With respect to reclamation, the contract also stated, "[t]he property has no value to the City, unless it is reclaimed." It additionally included the following clause:
Said real estate in its present state is not marketable, and therefore holds no value to the City. The property must be reclaimed. The parties agree that Seller will reclaim the property by completing the Reclamation activities listed in paragraph 2 above. . . .
The contract did not define reclamation.
The contract made use of another term, "enhanced reclamation." The charge for "enhanced reclamation" was to be 100,000 cubic yards of compacted fill at $1.10 per cubic yard, or $110,000. Below this listing, the contract stated,
The parties agree that in the event more c.y. or materials are needed for the reclamation portion of the agreement as listed above, the price for the additional c.y. or materials is the price set to the right of the specific c.y. or materials so provided.
Following execution of the contract, HCCI began transferring dirt to the site. Nine months later, an engineer hired by HCCI estimated that 674,968.07 cubic yards of dirt had been used.
About a year after the contract was executed, Hopp submitted a bill to the City for various items including "enhanced reclamation." He sought $742,464.80 for "enhanced reclamation" (674,968 cubic yards of dirt at a unit price of $1.10). The difference between the contract amount for enhanced reclamation ($110,000) and the new amount ($742,464.80) was $632,464.80.
The City disputed this sum, and HCCI filed suit. Following trial, the district court dismissed the petition. HCCI appealed.
The City filed a counterclaim that was also dismissed. The City does not appeal the dismissal of its counterclaim.
The district court found and the parties essentially agree that this case turns on the use of "reclamation" and "enhanced reclamation" in the contract and "how or whether Hopp would be compensated for reclamation work he did to prepare the land for sale to the City." HCCI claims that the term "enhanced reclamation" encompasses all 674,968 cubic yards of dirt that it moved which, in its view, is compensable at the rate of $1.10 per cubic yard. The City counters that the "enhanced reclamation" provision was only to come into play after HCCI filled and leveled the site to a base level two feet below the lagoons. The district court resolved this dispute in favor of the City, finding "a unit price was set forth in the portion of the contract dealing with enhanced reclamation, and not in the portion of the contract that required the land to be reclaimed before the conveyance." The court also found that "[e]nhanced reclamation under the contract merely dealt with the final two feet of grading under the bottom of the lagoons."
II. Contract Interpretation
Our job is to interpret these contract terms. See Molo Oil Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 225 (Iowa 1998) (stating interpretation is determining meaning of contractual terms). Contract interpretation is "an issue for the court unless it is dependent upon extrinsic evidence or upon a choice among reasonable inferences from the extrinsic evidence." Id. In these instances, the findings of fact are binding if supported by substantial evidence. Hartig Drug Co. v. Hartig, 602 N.W.2d 794, 797 (Iowa 1999); Connie's Const. Co., Inc. v. Fireman's Fund Ins. Co., 227 N.W.2d 207, 210 (Iowa 1975) (stating "[i]nterpretations of words of a contract by the trial court as trier of fact are binding on us if supported by substantial evidence.").
The parties agree that the disputed contract terms should be interpreted in light of extrinsic evidence. See Fausel v. JRJ Enter., Inc., 603 N.W.2d 612, 618 (Iowa 1999) (stating "meaning can almost never be plain except in a context."). They also appear to concede that reasonable minds could differ on the meaning of the terms. Id. (stating interpretation is decided as matter of law only where "evidence is so clear that no reasonable person would determine the issue in any way but one."). Therefore, the only question before us is whether the cited district court findings are supported by substantial evidence. We conclude they are.
When the City began to explore the possibility of purchasing land from Hopp, dirt was already being moved into pits on the site. Attorney Marvin Vannier said the parties acknowledged the "site was no good to [the City] as it sat."
When the City made an initial offer to Hopp, the offer required that "[t]he property . . . be reclaimed and placed in a marketable condition before the City has any interest in acquiring it for any public purpose." It also required completion of reclamation by October 1, 2000. The document stated that "[a]fter the property is reclaimed and placed in marketable condition, the property will appraise to the marketable value of $900.00 per acre."
When the parties met to hammer out a possible agreement, Hopp listed an amount of 100,000 cubic yards "to level shape site @ $1.10 = $110,000." Patrick Hall testified that "level shape site" was interpreted by the group to mean "the base material that was to be put over the reclaimed area of the site." He said the additional amount for the 100,000 cubic yards was "enhanced reclamation" and that Hopp was to be compensated for reclaiming the site to a "basic rough elevation" through "the purchase price."
Later, Hopp and city representatives, including a city councilman, had a conversation about the difference between reclamation and enhanced reclamation. The councilman testified that Hopp was aware the City "expected a flat site" and that this would be "part of the purchase price."
At a subsequent meeting, engineer Terry McCarl told Hopp that the City was "not going to do a survey for quantities" and that "the site was going to be filled as part of the reclamation activity."
Vannier and Hopp met to finalize the contract language. Hopp requested the clause concerning additional cubic yards of dirt. Vannier testified that he expressed concern about including this language, but Hopp assured him that the land "has to get first to that level of reclamation that you have in that top paragraph. . . ." According to Vannier, Hopp went on to say,
As noted, that clause provided the following:
The parties agree that in the event more c.y. materials are needed for the reclamation portion of the agreement as listed above, the price for the additional c.y. or materials is the price set to the right of the specific c.y. materials so provided.
`Terry McCarl is going to tell you when you finally get to the bottom of the liner. You are protected right there. You know that it has to be brought up to that before any of this comes in, and so five percent on this second part of it is hardly nothing.' And he says, `I don't know the length of the beams and the configuration where' — And I said, `Yeah, you are right. You are right. That's a condition precedent, so you are right.
McCarl also expressed concern about the added language but was told by Vannier that it had "all been worked out with Mr. Hopp."
Finally, when the offer was presented to the city council, the meeting minutes reflect that Vannier told the council the land "has no value to us as it is," and that "[w]hat we are proposing is that you authorize the easement, acquisition and reclamation for $288,000."
This contextual evidence provides substantial evidentiary support for the City's view that the specified unit price for "enhanced reclamation" applied only to the final two feet of grading underneath the lagoons, as the district court found. This view was articulated more than once in the contract. While we concede there is some evidence to support HCCI's argument that unit pricing was contemplated for all reclamation activities, we may not substitute our "own findings of fact for those of the district court simply because the evidence supports different inferences." Walsh v. Nelson, 622 N.W.2d 499, 502 (Iowa 2001).
We affirm the judgment of the district court.