Opinion
DOCKET NO. A-4715-12T4
07-17-2014
MICHAEL PICOZZI, Plaintiff-Appellant, v. WESKETCH ARCHITECTURE, Defendant-Respondent
Azzolini & Benedetti, LLC, attorneys for appellant (Thomas J. Benedetti, on the briefs). Marshall, Dennehey, Warner, Coleman & Goggin, attorneys for respondent (Christopher J. Gonnella, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Alvarez and Ostrer.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3111-10.
Azzolini & Benedetti, LLC, attorneys for appellant (Thomas J. Benedetti, on the briefs).
Marshall, Dennehey, Warner, Coleman & Goggin, attorneys for respondent (Christopher J. Gonnella, on the brief). PER CURIAM
Plaintiff Michael Picozzi appeals from the trial court's order granting summary judgment to defendant WESKetch Architecture, a professional architectural firm, and dismissing plaintiff's breach of contract claim. Plaintiff does not appeal the court's dismissal on summary judgment of his negligence and unjust enrichment claims, nor does he appeal from the court's order denying his cross-motion for summary judgment. Plaintiff argues that he has asserted a viable breach of contract claim because he contracted for the design of a house of between 13,000 and 15,000 square feet, with an estimated construction cost of $5 million, and defendant produced plans for a house of almost 21,000 square feet, with construction estimates ranging between $11 million and $13 million. Having reviewed plaintiff's arguments in light of the record and applicable principles of law, we affirm.
I.
We discern the following facts from the record, affording plaintiff all favorable inferences. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
Plaintiff entered into a contract with defendant for architectural services in May 2005. Defendant agreed to design and prepare the plans for the construction of a new mansion on vacant land plaintiff owned in Harding Township. The fee for identified "basic services" was $235,000. The contract included a schedule of rates for "additional services." The services were described as those that would take plaintiff's project "from preliminary design through the commencement of construction."
The parties contemplated the design of a large residence. The "preliminary understanding of the project scope" described a house of 13,000 to 15,000 square feet, but did not expressly state whether the square footage included finished basement space. The agreement described the project scope as follows:
The design of a new home approximately 13,000-15,000 square feet inclusive of six second floor bedroom suites, a first floor maid's bedroom[,] a double-height foyer, a dining room large enough for 16 people with fireplace, living room with fireplace, library with fireplace, great room with fireplace, kitchen/family room with fireplace/breakfast room combined area, toy room for kid's [sic] near family room, laundry on first floor, butler's pantry and multiple staircases. At least a four car garage and a guest house with bedroom suite and two additional cars beneath. The house is envisioned by the owner to be styled in the French Manor with smooth cut limestone and a slate or tile roof system. The lower level will contain a media/theater space, a bar/game room, wine cellar for approximately 2000 bottles with a tasting area and a 100 square foot exercise room.
The contract provided that defendant would perform four phases of work as "basic services" in return for the $235,000 fee. The contract allocated shares of the fee to each phase, and provided that if plaintiff terminated the contract before completion of all phases, defendant would be entitled to the fee earned to that point, plus a ten percent termination fee.
The contract stated that the project's "preliminary construction budget" was $5 million. But, the agreement expressly disclaimed any guarantee that ultimate construction costs would meet that initial budget. The contract also provided that as defendant proceeded through the identified phases of design, an "Opinion of Probable Construction Cost" (OPCC) would be provided to plaintiff for approval.
The disclaimer stated:
The proposed preliminary construction budget for the project is approximately $5,000,000. In no way shall the preliminary budget be construed as a guarantee of the costs of the construction or that the project can actually be constructed within the parameters of the budget, rather it shall be used as a bench mark to assist in gauging the scope of the initial concept studies. Once an [OPCC] has been presented following the completion of the Schematic Design phase, further refinements can be made to the construction budget.
The first phase of work, the "Preliminary Design Phase," accounted for five percent of the total fee. It involved preliminary background work, including the architects gaining an understanding of the client's needs and design objectives, and evaluating surveys, municipal restrictions, and other documentation.
The second stage of work, the "Schematic Design Phase," was to include "the preparation of conceptual representations of the proposed project" for plaintiff's review. Allocated twenty-five percent of the fee, the phase would involve one to four presentations to the client, culminating in "[s]caled sketch plans, [and] artistic renderings." The contract stated, "It is during this phase of service where design alterations and deviations may be made with the most efficiency." As for construction costs, the contract stated, "A preliminary [OPCC] will be prepared at the completion of the Schematic Design Phase for your consideration."
Under the contract, defendant was to proceed to the third phase — "Design Development" — only upon plaintiff's approval of both the Schematic Design presentation and the OPCC. Design Development involved preparation of "[s]caled detailed plans." A design presentation was to be made to plaintiff once fifty percent of the design development was complete, including "generic details on interior and exterior finishes and preliminary mechanical requirements." At that point, an "updated" OPCC would also be provided.
Apparently separate from defendant's updated opinion, defendant agreed to procure a "preliminary estimate of construction cost at 50% completion of the Design Development Phase from a professional contractor." Defendant expressly disclaimed any responsibility for the contractor's estimate, stating, "WESKetch has no control over costs or the price of labor, equipment or materials, or over the Contractor's method of pricing. WESKetch makes no warranty, expressed or implied, as to the accuracy of such estimates as compared to bids or actual costs."
A second presentation — "[a] 100% complete [p]resentation" — was to include "revised details on interior, refined placement of mechanical equipment, and a Contractor's Estimate (Provided by Lancor)." Apparently, this Contractor's Estimate was distinct and separate from a contractor's "preliminary estimate of construction cost" prepared after fifty percent of the design development work was complete.
Lancor was apparently a construction firm affiliated with plaintiff, not defendant. Plaintiff testified that he had a financial relationship with Lancor.
The contract described plaintiff's responsibilities during this phase as "[a]pproval of concepts and OPCC." The third phase accounted for forty percent of the total fee. The contract noted that client-initiated changes after fifty percent of the design development was complete would result in additional fees.
The fourth phase of the contract, which allocated thirty percent of the fixed fee, involved preparation of "Contract Documents (commonly referred to as 'blueprints' or 'Construction Documents')." These would include "final drawings with written specifications outlining in detail the parameters for construction." The plaintiff's responsibilities in this phase were "[a]pproval of Design Development and OPCC."
The contract provided that defendant would furnish "basic design documentation sufficient for shop drawing development by others for wall and ceiling applications" for the foyer and five rooms: the "great room, living room, library, family room and dining room." Apparently, similar work for interiors of other rooms was not included.
The contract included a standard integration clause, stating that amendments to the agreement had to be in writing, and signed by both parties. However, the contract did not expressly state that plaintiff's approval of OPCCs had to be in writing.
In January 2006, defendant's project manager, Michael Moritz, sent plaintiff a document entitled, "03 - DESIGN DEVELOPMENT Opinion of Probable Construction Cost." It stated, "The following represents WESKetch's Opinion of Probable Construction Cost for your project as represented in the 50% Design Development Drawings, which where [sic] presented to you on December 15, 2005." The document opined that the construction cost would range between $10,645,850 to $12,679,723 for the main house, and an additional $558,295 to $652,940 for the carriage house, for a total range of $11,204,145 to $13,332,663. The document described the main house as consisting of a shell of 15,800 square feet. It also referred to a "Basement Fit-up" accounting for 5380 square feet. The carriage house consisted of a shell of 1118 square feet; within the carriage house would be a seventy-square-foot bathroom and a 685-square-foot guest room. The record does not reflect any response from plaintiff.
William E. S. Kaufman, defendant's principal shareholder, testified in deposition that the residence, as reflected in the final construction documents defendant ultimately prepared, included total "bulk square footage" of about 20,739. That total consisted of 8594.01 square feet on the first floor, 7160.49 in the basement, and 4984.61 on the second floor. It apparently excluded the carriage house.
Kaufman also referred to "livable square footage," which he described as the space "from the inside of the wall, [but] doesn't include closet space or mechanical space or those kinds of things; that's just net floor area." He stated, "[W]e rarely count basement space as part of that [livable square footage] because it's a subterranean windowless environment." On the other hand, he conceded that plaintiff "wanted to expand his livable square footage in his basement because he is into fitness, and having a large gym was part of what he decided he wanted, and so that expands the square footage of the building."
Plaintiff's understanding of square footage was not at odds with Kaufman's notion of livable square footage. Plaintiff included within square footage the area of the garage and finished space; for example, a finished attic or basement would be included in square footage, while raw, unfinished space would not. Kaufman defined livable square footage as finished space.
Plaintiff stated that he had served as the general contractor of a $1.5 million home that he built for himself in Rockland County, New York. He also contracted to build a large home on Long Island. He professed familiarity with the design and construction process, although he indicated he was not an expert.
The record does not include a written OPCC that, according to the contract, was to be provided to plaintiff after the second phase, and approved by plaintiff before commencement of the third phase. Kaufmann testified that two OPCCs were prepared, but was uncertain if one was provided during the second phase:
There were, I believe, two probable construction cost opinions prepared, one of them during the design development phase. I don't recall the first one, if there was one
during the schematic design phase or not. I believe there was one prepared, I just don't recall what meeting or what time, what the timing of it was. This was an unusual circumstance because Mr. Picozzi had his own builders, and we weren't to be involved in the construction of the project or the procurement of the project; he just wanted the documentation.
So he took the initiative on the initial costs over the project. He did ask us on several occasions, or at least one occasion, what the -- what we thought the cost was going to be. I don't think that he felt that our estimates were realistic compared to what he felt he could build the project for.
At one point we gave him a number, and I think it was during the schematic design phase, where we thought it might go, and he commented that he could build it much cheaper than we could. So he took the initiative on the costing of the project certainly.
Plaintiff admitted that defendant had not "failed to conduct any client meetings . . . as . . . required by the contract."
Kaufman could not recall discussing the January 2006 OPCC with plaintiff, but stated, "This may have been one of the times when Mr. Picozzi alluded to the fact that our numbers were out of whack and he could definitely build it cheaper than we could. I just don't recall." Kaufman also testified that plaintiff alternated between pushing the project, and putting it on the shelf, as he focused on business pursuits that took his attention elsewhere. Plaintiff agreed that he put the project on hold at various times.
Plaintiff testified that he received a $12 million estimate of construction costs. Although the record is unclear, he apparently was referring to the January 2006 OPCC. He stated that he laughed at the number and asked the project manager, "[']what are you guys smoking over there?[']" Plaintiff thought the numbers were inflated. For example, he believed the prices for windows were high. "I was like, [']Who are they buying these windows from?[']" Plaintiff admitted that he told the project manager that he could have the house built more cheaply than projected in the estimate.
Phase three design development was completed March 2, 2006. Plaintiff admitted that he repeatedly asked the project to be put on hold. He did not dispute that a document indicated that around March 6, 2006, he put the project on hold.
Nonetheless, later in March 2006, plaintiff emailed Moritz, the project manager, requesting "square ft[.] numbers" for "1st, 2nd, and basement" and stated "e-mail is fine." Moritz responded with what he called "bulk square footage numbers." The total footprint of the house would be 9292 square feet; the first floor, 7772 square feet; the second floor 6490, and the entire basement 8086 square feet, of which 5380 would be finished. The carriage house had 1117 square feet on the first floor and 682 on the second. Plaintiff acknowledged receipt, and apparently expressing his satisfaction, replied, "thank you. . . . your [sic] the man." In September 2006, Moritz sent the square foot numbers to plaintiff again, and plaintiff responded, "thanx [sic] . . . you are the man. . . "
In January 2007, after a period of inactivity, plaintiff asked defendant to proceed with phase four. He agreed to pay the balance due on the contract of $103,900. He also agreed to pay $15,000 to accelerate the preparation of plans. Plaintiff wanted to submit his plans quickly upon discovering that changes in land use regulations governing his property might be imminent. Defendant completed the construction documents in May 2007.
Plaintiff claims that the house as it was ultimately designed was larger than the parties agreed, or he contemplated. He asserted that he continually told Moritz that he wanted a house of 15,000 square feet for a cost of no more than $5 million. Plaintiff claimed that he only learned that the size of the house exceeded 15,000 square feet when his construction documents were presented to the local township building department. Plaintiff could not recall when that was. He did not recall reading Moritz's March and September 2006 emails. He also did not recall reading the square footage on plans completed in March 2006. Plaintiff stated that he did not review the construction documents before submitting them to the municipality.
Plaintiff testified that after the building department staffer told him that his plans depicted a 20,000-square-foot house, he asked municipal officials to cease their review. Plaintiff did not dispute that in September 2008, he responded to an inquiry from Moritz regarding when he was going to build the house he designed. Plaintiff wrote that the "building permit is done," and "[o]nce I square things away with Lancor . . . I will start." Defendant also offered to revise the plans to downsize the house, for an additional fee. Plaintiff refused to pay and no revisions were prepared.
II.
Plaintiff filed a three-count complaint in September 2010. In count one, plaintiff asserted that defendant "failed to perform under the Contract and/or has performed the work in a defective and unsatisfactory manner" including "(a) Architect produced permit plans that did not conform to the requirements set forth in the Contract; and (b) Architect failed to produce interior layout drawings as required by the Contract." The second count alleged unjust enrichment, and the third count, sounding in negligence, alleged that defendant "failed to exercise reasonable care, skill, diligence, or knowledge normally possessed by members of their profession."
In response to an interrogatory asking plaintiff to identify the aspects of defendant's work that caused him damages, plaintiff echoed the allegations in the complaint:
[T]he Defendant agreed, among other things, to accept payment of a stipulated sum of $235,000 in exchange for creating (1) permit plans for a home between 13,000 and 15,000 square feet and (2) interior layout drawings for a minimum of five rooms. Rather than comply with the terms of the agreement, the Defendant produced permit plans that did not conform to the requirements set forth in the agreement and failed to produce interior layout drawings as required by the agreement.Although plaintiff filed an affidavit of merit, he ultimately did not obtain an expert report to support any of his claims.
After the close of discovery, defendant moved for summary judgment on all counts, and plaintiff cross-moved for summary judgment on count one. Defendant's principal argument in support of its motion was that plaintiff's claims — even those stated in count one — required the support of an expert to provide evidence on matters outside the ken of average jurors. Plaintiff conceded that his negligence claim in count three could not survive. However, he argued that expert testimony was not required to support his claim that defendant breached the contract by designing a house that was substantially larger, and more costly, than called for by the contract.
In accord with Rule 4:46-2(a), defendant provided a statement of undisputed facts supported by references to the documentary record. Plaintiff's response, in many respects, included bald denials, without references to the evidentiary record, as required. See Pressler & Verniero, Current N.J. Court Rules, comment 1.2 on R. 4:46-2 (2014). To that extent, we deem defendant's allegations to be undisputed. R. 4:46-2(b).
The trial court granted defendant's motion and denied plaintiff's cross-motion. The court held that plaintiff's claims in count one alleged that defendant deviated from accepted standards of care, citing the allegation of defective and unsatisfactory performance. Defendant argued that the allegations in plaintiff's complaint and interrogatory answers, particularly those related to whether defendant's performance conformed with the contract requirements, required expert opinion.
The court held that plaintiff's complaint and interrogatory answers did not encompass the allegation that the house, as designed, was larger and more expensive than the contract contemplated. The court also held that the unjust enrichment claim could not survive in the face of an enforceable agreement, citing Caputo v. Nice-Pak Products, Inc., 300 N.J. Super. 498, 507 (App. Div.), certif. denied, 151 N.J. 463 (1997).
On appeal solely from the dismissal of count one, plaintiff renews his argument that expert testimony is not required to prove his claim that the plans did not comply with the contract. He argues the contract called for the design of a house of 15,000 square feet, at a cost of $5 million, and defendant provided the design of a much larger house, which would cost much more to build. Defendant likewise renews the argument presented to the trial court that expert testimony is required. In particular, defendant argues that the fundamental definition of square footage is a technical issue that requires expert testimony to distinguish between "bulk square footage" and "livable square footage."
III.
On an appeal from an order granting summary judgment, we exercise de novo review, applying the same standard as the trial court. Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010). We determine whether there exists a genuine issue of material fact, and if not, whether the motion judge correctly applied the law. Ibid. We are free to affirm the grant of summary judgment for reasons other than those given by the trial court. See Isko v. Planning Bd. of Livingston, 51 N.J. 162, 175 (1968), abrogated on other grounds, Commercial Realty & Res. Corp. v. First Atl. Props. Co., 122 N.J. 546, 565-66 (1991).
We part company with the trial court's conclusion that plaintiff's complaint and discovery responses simply did not encompass the claim that the designs and plans were for a house larger and more expensive to build than contemplated. Affording plaintiff's allegations all favorable inferences, his assertion that the plans "did not conform to the requirements set forth in the Contract" is broad enough to encompass the claim. Nonetheless, for the reasons stated below, we do not believe the claim may survive summary judgment.
We turn first to defendant's proffered ground for summary judgment — the necessity of expert testimony. We agree that plaintiff's claim that defendant's plans were "defective and unsatisfactory" would require expert testimony if plaintiff were asserting the plans failed to meet architectural or legal standards. We look to the nature of the claim, not the label placed on it, to determine whether expert testimony is required. See Couri v. Gardner, 173 N.J. 328, 340 (2002).
Generally, regardless of its label, a claim asserting professional negligence requires expert testimony. "[R]ather than focusing on whether the claim is denominated as tort or contract, attorneys and courts should determine if the claim's underlying factual allegations require proof of a deviation from the professional standard of care applicable to that specific profession." Ibid. (discussing when an affidavit of merit is required under N.J.S.A. 2A:53A-27). See also Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone, P.C. v. Ezekwo, 345 N.J. Super. 1, 12 (App. Div. 2001) ("[T]he party asserting malpractice must, under New Jersey case law, present expert testimony that establishes the standard of care against which the [professional's] actions are to be measured."), abrogated on other grounds, Segal v. Lynch, 211 N.J. 230, 261-63 (2012). An exception applies when "jurors' common knowledge as lay persons is sufficient to enable them, using ordinary understanding and experience, to determine a defendant's negligence without the benefit of the specialized knowledge of experts." Hubbard ex rel. Hubbard v. Reed, 168 N.J. 387, 394 (2001) (internal quotation marks and citation omitted).
Plaintiff has narrowed his contract claim to exclude any allegation that the plans and designs failed to meet standards of care in the architecture profession. Rather, plaintiff argues that defendant's breach consists of its failure to design a house of 15,000 square feet, with a construction cost of $5 million. Plaintiff argues that the nature of defendant's design — which reflects a house of over 20,000 square feet, with an estimated cost of at least $11 million — does not require an expert. Indeed, plaintiff argues that the nature of the design is essentially undisputed.
On that point, we are constrained to agree that expert testimony is not essential. Although defendant has highlighted that there are varying concepts of square footage — including "bulk square footage" and "livable square footage" — we do not agree that expert testimony is required to interpret the parties' agreement. At most, defendant has identified a potential ambiguity in the contract's terms. See M.J. Paquet, Inc. v. N.J. Dep't of Transp., 171 N.J. 378, 396 (2002) (stating that a contract is ambiguous if it is susceptible to two reasonable alternative interpretations). The resolution of an ambiguous term would be a fact issue. Michaels v. Brookchester, Inc., 26 N.J. 379, 387-88 (1958). Although defendant had the option to rely on expert testimony to interpret the contract's terms, plaintiff was not required to use an expert as part of his prima facie case.
Moreover, defendant does not assert — either through a certified statement by Kaufman or any other knowledgeable person — that the contract's reference to a house of 15,000 square feet was intended to refer to bulk square footage. Nor does defendant cite any support for the notion that a consumer contract for architectural services would typically refer to bulk square footage, as opposed to livable square feet, where specificity is lacking. In any event, by either measure, it is undisputed that the house as designed substantially exceeded a total of 15,000 square feet.
Additional ambiguity is found in the contract's reference to 13,000 to 15,000 square feet. As noted above, it is unclear whether the contemplated area was intended to encompass only the first and second floor spaces, and not the lower level. The first sentence of the paragraph describing the "preliminary understanding of the project" refers to the square footage only in connection with the first two floors:
The design of a new home approximately 13,000-15,000 square feet inclusive of six second floor bedroom suites, a first floor maid's bedroom[,] a double-height foyer, a dining room large enough for 16 people with fireplace, living room with fireplace, library with fireplace, great room with fireplace, kitchen/family room with fireplace/breakfast room combined area, toy room for kid's [sic] near family room, laundry on first floor, butler's pantry and multiple staircases.The sentences that follow refer to the garage, guest house, and lower level. In sum, plaintiff's contract claim does not fail because of the absence of expert testimony.
Nonetheless, we affirm the grant of summary judgment. Notwithstanding plaintiff's assertions that he insisted upon obtaining a design of a house of 15,000 square feet at a cost of no more than $5 million, the plain language of the written contract did not require defendant to provide that. The interpretation of the parties' contract is a matter of law for our de novo review. See Kieffer v. Best Buy, 2 05 N.J. 213, 222-23, 223 n.5 (2011). We shall not "make a better contract for either of the parties" than the parties themselves created. Kampf v. Franklin Life Ins. Co., 33 N.J. 36, 43 (1960).
The reference to square footage is made in the context of a description of the "preliminary understanding of the project scope." The clear import of the contract was that the design of the house would be a collaborative process, and would take shape over the four specified stages. At each stage, the design of the house would reflect the client's desires in consultation with the architect. As a consequence, the size of the project was subject to change.
Plaintiff repeatedly expressed his approval of the design of a house significantly larger than 15,000 square feet. The OPCC in January 2006 reflected a house of over 20,000 square feet — whether one calculates bulk or livable square footage. There is no evidence that plaintiff protested the size of the house as designed.
In March 2006, plaintiff requested and received square footage figures that reflected again that the house would exceed 20,000 square feet. Reasonably construed, plaintiff approved the figures by stating, "thank you. . . . your [sic] the man." He responded similarly when the figures were sent to him again the following September. The scaled detailed plans prepared in March 2006, at the end of phase three, apparently conformed to these estimates. Plaintiff simply could not recall receiving the plans. After the project was shelved for almost a year, plaintiff asked defendant to speedily prepare construction documents, and paid over $100,000 in remaining fees. Again, at no point did plaintiff object to the design of the house, which resulted from his earlier consultations with defendant.
There is even less support for plaintiff's claim that defendant breached a promise to design a house with a cost of no more than $5 million. Although the contract stated that "[t]he proposed preliminary construction budget for the project is approximately $5,000,000," the contract expressly stated that the preliminary budget was not a "guarantee of the costs of the construction or that the project can actually be constructed within the parameters of the budget." Rather, the $5,000,000 figure was to be used "as a bench mark to assist in gauging the scope of the initial concept studies." "[F]urther refinements" in the budget would be made after completion of phase two, the schematic design phase.
The contract also required defendant to provide plaintiff with multiple opinions regarding the probable construction cost based on the status of the design at that point. Kaufman recalled, albeit without certainty, that such an opinion was provided at the end of phase two. Plaintiff does not dispute Kaufman's claim, nor does he provide any evidence that he protested. Instead, he paid the fee associated with the third stage of work.
Plaintiff does state that he objected to the OPCC that was provided after fifty percent of phase three was complete. However, he did not view the OPCC as a reflection that the house was too elaborate; rather, he believed that defendant had miscalculated and overestimated the cost. For example, he apparently believed the cost of windows was higher than could be procured elsewhere. Plaintiff testified that he believed the house, as designed, could be built for less. Although the contract provided that a professional contractor — one associated with plaintiff — would also provide a cost estimate, the record does not reflect that plaintiff obtained such an estimate. Even after receiving the January 2006 OPCC, there is no evidence that plaintiff sought to scale back the design. By March, phase three was complete.
Inasmuch as plaintiff himself asserted the January 2006 OPCC was inflated, it was incumbent upon him to provide expert testimony as to the actual cost of construction.
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We recognize that an architect who promises to design a structure to meet a fixed budget may be precluded from recovery if the cost of construction exceeds the promised budget. See J.F. Ghent, Annotation, Effect on compensation of architect or building contractor of express provision in private building contract limiting the cost of the building, 20 A.L.R.3d 778 (2009) (citing cases). When the construction budget is an estimate, jurisdictions are split on whether the architect may be barred from recovery for his or her fees if the cost of construction exceeds the estimate. Id. at § 5(a), (b). Courts consider several factors in determining whether to allow recovery. These include (1) whether "actual or probable cost of construction does not substantially exceed the agreed figure"; (2) "whether the excess of the actual or probable cost resulted from orders by the client to change the plans"; (3) "whether the client has waived his right to object either by accepting the architect's performance without objecting or by failing to make a timely objection to that performance"; and (4) "whether the architect, after receiving excessive bids, suggested reasonable revisions in plans which would reduce the probable cost." Griswold & Rauma, Architects, Inc. v. Aesculapius Corp., 221 N.W.2d 556, 560-61 (Minn. 1974).
No doubt, a construction cost of over $11 million — if that is what the house would in fact cost to build — would substantially exceed the $5 million "preliminary estimate of construction cost." However, plaintiff rejected defendant's opinion as erroneous. There is no other record evidence of what the house would cost to construct. Also, as noted, plaintiff did not ask defendant to cease work or revise its design after receiving the January 2006 OPCC. The project was a product of the design inputs of plaintiff, including expansion of its scope. Defendant also offered to revise the plans, albeit for an additional fee.
But, most importantly, the contract's $5 million figure was not offered as an estimate, even an unguaranteed one, of the cost of construction. Rather, it was expressly described as a "bench mark to assist in gauging the scope of the initial concept studies." The parties agreed that the probable construction costs would be updated. Defendant also expressly disclaimed any responsibility for the accuracy of preliminary estimates of construction costs provided by a professional contractor in phase three.
The contract provided plaintiff the opportunity to terminate for any reason. Plaintiff could have terminated the contract if the cost of construction was greater than acceptable. The contract required defendant to submit the first OPCC at the end of phase two, after a total of thirty percent of the fee was earned for the first two phases. If plaintiff terminated the contract then, he would have been responsible for thirty-three percent of the base fee. Instead, plaintiff proceeded.
In sum, plaintiff's claim that defendant breached the contract by failing to design a 15,000 square foot home for a construction cost of $5 million must be dismissed.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPEALATE DIVISION