Summary
holding that a party's failure in its notice of appeal to mention an interlocutory order dismissing a counterclaim did not preclude the Court from considering an appeal of the dismissal
Summary of this case from Manosh v. First Mountain VermontOpinion
No. 302-78
Opinion Filed February 5, 1980 Motion for Reargument Denied February 28, 1980
1. Contracts — Construction — Reading of Entire Contract
The meaning of a contract is to be determined by examination of every material part, in order to form a harmonious whole.
2. Contracts — Construction Contracts — Easements
Construction contract between town and contractor, providing that copies of all permanent and temporary easements for work done under the contract were on file at municipal office, did not bind town to have all easements needed for the job on file and excuse contractor's refusal to sign the contract, which its bid had bound contractor to sign if bid were accepted, when contractor found that all necessary easements had not been obtained, for several other provisions of the contract contradicted contractor's interpretation of the easement provision, and one of them provided that town could delay work if necessary rights of way were not obtained and that contractor would have no claim for damages for such delay.
3. Contracts — Construction — Giving Effect to Every Part
If possible, a contract must be construed to give effect to every part, and supreme court will avoid constructions that render ineffectual any part of the language of a contract.
4. Appeal and Error — Harmless Error — Erroneous Findings
If finding was error, it was harmless where other findings amply supported the judgment; a superfluous finding does not constitute reversible error if the supreme court is not satisfied that the excepting party was prejudiced by it.
5. Contracts — Rescission — Unilateral Mistake
Although unilateral mistake does not preclude rescission of a contract, the rule is that where the mistake has resulted solely from the negligence or inattention of the party seeking relief and the other party is without fault, relief will not be granted absent unusual circumstances that would make enforcement of the contract manifestly unjust.
6. Contracts — Rescission — Unilateral Mistake
Where contractor agreed to sign contract for work if its bid were accepted and refused to sign on ground that other party had not acquired all necessary easements, there was no unilateral mistake requiring rescission, for contractor had made no inquiries about easements prior to submitting bid, assuming other party already had them, other party did not represent that it had acquired all easements, and the mistake resulted solely from contractor's negligence or inattention.
7. Contracts — Impossibility of Performance — Inapplicable Situations
By submitting bid proposal obligating it to sign contract if bid were accepted, contractor did not agree to build sewer line the work upon which was bid for, but rather, contractor agreed to sign a contract, and that other party did not obtain all necessary easements did not render performance by contractor impossible, thereby discharging contractor from its agreement; and in fact, lack of easements had no bearing on contractor's ability to perform by signing the contract.
8. Appeal and Error — Notice of Appeal — Necessary Inclusions
An appeal from a judgment preserves for review any claim of error in the record and the notice of appeal need not specify each order claimed to be error, so that fact notice of appeal did not specify interlocutory order dismissing counterclaim did not mean court had no jurisdiction to consider challenge to the dismissal on appeal; and anything to the contrary in In re Town of St. Johnsbury Town School District, 137 Vt. 557, 409 A.2d 573 (1979), is overruled. V.R.A.P. 3.
9. Appeal and Error — Dismissal of Counterclaim — Grounds
Appellant's counterclaim was properly dismissed below where based on assertion disposed of in supreme court against appellant.
Appeal from judgment against contractor and insurer putting up bid bond, for breach of a bid proposal and bid bond. Caledonia Superior Court, Underwood, J., presiding. Affirmed.
Witters, Zuccaro, Willis Lium, Inc., St. Johnsbury, for Plaintiff.
Howard J. Seaver, Office of Donald E. O'Brien, Burlington, for Defendants.
Present: Daley, Billings and Hill, JJ., and Smith, J. (Ret.), and Hayes, Superior Judge, Specially Assigned
This is an appeal from a judgment against defendants for breach of a bid proposal and bid bond. The court awarded plaintiff damages in the amount of the bid bond, as provided in the liquidated damages clauses of the proposal and bond. Defendants appeal.
In 1975, defendant Burnett's Contracting Co., Inc. (Burnett) submitted a bid to plaintiff, Town of Lyndon, on Contract No. 2 for the construction of interceptor sewers and force mains. This bid was bonded by defendant Hartford Accident and Indemnity Company (Hartford). By submitting the bid proposal, Burnett agreed that it would not revoke its bid within sixty consecutive days after the opening of the bids, and that it would sign the contract agreement if its bid was accepted. By bonding this bid, defendant Hartford assumed secondary liability for any breach of the bid proposal by Burnett.
The bid proposals were opened on July 16, 1975. Shortly thereafter, plaintiff notified defendant Burnett of its intent to accept defendant's bid. Although Burnett had assumed that plaintiff possessed all easements necessary for completion of the job, soon after its bid was accepted it discovered that plaintiff lacked 14 easements.
By August 27, plaintiff still lacked 8-9 easements. On that date, two letters crossed in the mail. In one, plaintiff notified defendant as to the time and place of the contract signing. In the other, Burnett notified plaintiff that, because of the lack of necessary easements, "we cannot enter into a contract to perform the proposed project."
Plaintiff replied that it would proceed with the scheduled contract signing, and that it was prepared to execute the contract in accordance with the bid proposal. Nonetheless, the contract was never executed by defendant Burnett. Furthermore, defendant Hartford rejected plaintiff's demand for payment on the bid bond.
Plaintiff brought this action for breach of contract against Burnett and Hartford in superior court. Burnett counterclaimed against plaintiff for breach of an agreement to obtain all necessary easements, and for fraudulent misrepresentation. At the close of the trial, the court granted plaintiff's motion to dismiss the counterclaim. Subsequently, by order of September 26, 1978, the court entered judgment in plaintiff's favor against both defendants.
The defendants join in three principal claims here:
1. That plaintiff breached an agreement, which goes to the essence of the contract, by not having all necessary easements in hand when the bid was accepted (or, at the latest, when Burnett was to have signed the contract), and therefore Burnett was excused from performance;
2. That the contract should be rescinded because Burnett entered into it under a unilateral mistake of fact, not resulting from any negligence on Burnett's part, and not arising without fault on the part of the plaintiff; and
3. That Burnett should be relieved of its obligation to perform because performance was impossible.
In addition, defendant Burnett claims error in the dismissal of its counterclaim for breach of contract and fraudulent misrepresentation.
The claim that defendants are excused because plaintiff breached an agreement to have all easements in hand by the date the contract was to be signed fails because plaintiff made no such agreement. Defendants rely on § 6.16 of the contract, which states in part: "The Contractor is advised that copies of all permanent and temporary easements and rights-of-way for work done under this contract are on file at the municipal office." Defendants argue that this provision bound plaintiff to have all easements for the entire job on file at the municipal office prior to execution of the contract. Failure to have these easements, according to defendants, breached the essence of the contract because Burnett's bid assumed a particular cost-efficient sequence of work, which was made impossible by the absence of key easements. The plaintiff, on the other hand, argues that the provision means only that all easements that the town has acquired to date are available at the office for inspection, but not that the town has acquired all easements that will ever be needed for the job.
The meaning of a contract is to be determined by examination of every material part, in order to form a harmonious whole. Cross-Abbott Co. v. Howard's, Inc., 124 Vt. 439, 441, 207 A.2d 134, 137 (1965); Breding v. Champlain Marine Realty Co., 106 Vt. 288, 296, 172 A. 625, 628 (1934). Several other sections of the contract contradict Burnett's interpretation of § 6.16. Section 4.3 specifies that the sequence of the work "shall be subject to the approval of the Engineer who shall have authority to direct that changes be made in such sequence where public necessity or welfare shall require," and that the engineer's approval or direction does not affect the contractor's responsibility for the work. Section 4.13 provides for commencement of work within ten days after receipt of the owner's notice to proceed, "at such points as the Engineer may approve." Most important, however, is the express contradiction of Burnett's interpretation of § 6.16, contained in § 4.14:
The Owner may delay the beginning of the work or any part thereof if the necessary lands or rights-of-way for such work shall not have been obtained. The Contractor shall have no claim for damages on account of such delay, but shall be entitled to . . . additional time . . . .
It is true, as defendants argue, that § 6.16 is one of the special conditions which, according to § 6.1, control whenever there is a conflict with another provision. If possible, however, a contract must be construed to give effect to every part, and therefore this Court will avoid constructions that render ineffectual any part of the language of a contract. Haberman v. Department of Employment Security, 136 Vt. 573, 575, 396 A.2d 141, 142 (1978) (per curiam); Furlon v. Haystack Mountain Ski Area, Inc., 136 Vt. 266, 269, 388 A.2d 403, 405 (1978). Section 6.16, when read in conjunction with § 4.14, simply means that all easements that have been acquired are on file; it does not mean that all easements for the entire project are on file. This construction avoids any conflict between the provisions, and gives effect to the instrument as a harmonious whole. Finally, even had defendants' view prevailed, we fail to see how defendants were harmed by the lack of several easements, because the contract as a whole does not allow the contractor absolute control over the sequence of its work.
Before leaving the question of the construction of the contract, we note that defendants claim error based on the trial court's finding of a custom in the industry "that 75% of the municipalities do not have all the necessary pipe line easements at the time of invitation for bids from contractors and 55% of the municipalities do not have all the necessary pipe line easements at the time the contract is signed." If this was error (which we do not decide), it was harmless error, because the other findings amply support the judgment in plaintiff's favor. A superfluous finding does not constitute reversible error if this Court is not satisfied that the excepting parties have been prejudiced by it. Loeb v. Loeb, 118 Vt. 472, 490, 114 A.2d 518, 529 (1955).
Defendants' next claim is that Burnett submitted its bid under a unilateral mistake of fact as to the possession of the easements, and that therefore the bid proposal should be rescinded. Although unilateral mistake does not preclude rescission, the rule is that where the mistake has resulted solely from the negligence or inattention of the party seeking relief, and the other party is without fault, relief will not be granted absent unusual circumstances that would make enforcement of the agreement manifestly unjust. Sparrow v. Cimonetti, 115 Vt. 292, 301, 58 A.2d 875, 882 (1948); New York Life Insurance Co. v. Kimball, 93 Vt. 147, 153, 106 A. 676, 678 (1919). In this case, the court found that Burnett made no inquiries about easements prior to submitting its bid, but that "[i]t just assumed that Plaintiff had already acquired them." The court also found that the plaintiff did not represent to Burnett that it had acquired all the easements. These findings are not challenged here, and are therefore conclusive for the purposes of this appeal. DeLance v. Hennessey, 137 Vt. 214, 216, 401 A.2d 903, 904 (1979). On the basis of these findings, we can only conclude with respect to the claim of mistake that defendant Burnett "has no one and nothing to blame except his own negligence and inattention." Norton v. Haggett, 117 Vt. 130, 132, 85 A.2d 571, 573 (1952). No special circumstances having been shown, we cannot say that it would be manifestly unjust to hold defendants to their agreements.
Defendants also argue that plaintiff's failure to obtain all necessary easements made performance impossible, thereby discharging them from their agreements. The fallacy of this argument is that it misperceives the nature of the performance contracted for. By submitting its bid proposal, Burnett did not agree to build a sewer line; rather, it agreed to sign a contract, and to refrain from revocation of its bid. Plaintiff's lack of easements not only did not render Burnett's performance impossible, but in fact it had no bearing whatsoever on Burnett's ability to sign the contract, or to keep its bid open.
Finally, defendant Burnett challenges the order dismissing its counterclaim. The objection has been raised at oral argument that this Court lacks jurisdiction over the appeal from this order because the defendants' notice of appeal does not specify this particular interlocutory order. The notice of appeal, however, need not specify each order claimed to be error; "[a]n appeal from a judgment preserves for review any claim of error in the record." V.R.A.P. 3(a); see Wells v. Village of Orleans, Inc., 132 Vt. 216, 219-20, 315 A.2d 463, 465-66 (1974). Anything to the contrary in In re Town of St. Johnsbury Town School District, 137 Vt. 557, 409 A.2d 573 (1979), is hereby overruled.
Therefore, we reach the merits of defendant Burnett's claim that the court erred in dismissing the counterclaim for breach of contract and fraudulent misrepresentation. The alleged breach is based on the previously disposed of claim that plaintiff contracted to have all easements in hand by the date of the contract signing. The alleged fraudulent misrepresentation is based on a claim that § 6.16 of the contract amounts to a representation that all easements have been obtained. In light of our prior discussion of the meaning of this contract, however, we cannot agree that plaintiff either contracted to have all easements, or represented that it would have all easements, by any specific date. Accordingly, the counterclaim was properly dismissed.
Judgment affirmed.