BUENA VISTA CHARTER TWP V ANKLAM CONSTRUCTION INC
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STATE OF MICHIGAN
COURT OF APPEALS
BUENA VISTA CHARTER TOWNSHIP,
UNPUBLISHED
February 15, 2002
Plaintiff/Third-Party PlaintiffAppellee,
No. 224052
Saginaw Circuit Court
LC No. 96-016609-CZ
v
ANKLAM CONSTRUCTION, INC.,
Defendant-Third-Party PlaintiffAppellant,
and
RC ASSOCIATES-ENGINEERINGARCHETECTURAL-ENVIRONMENTALSURVEYING-CONSTRUCTION TESTINGGEOTECHNICAL, INC.,
Third-Party Defendant.
Before: Fitzgerald, P.J., and Bandstra and K. F. Kelly, JJ.
PER CURIAM.
Following a bench trial, the trial court entered a judgment finding in favor of plaintiff
Buena Vista Charter Township (hereinafter “Buena Vista,”) in the amount of $14,610.40 and
finding no cause of action on defendant Anklam Construction, Inc.’s, (hereinafter “Anklam,”)
counter/cross-claims against Buena Vista and third-party defendant RC Associates. Anklam
appeals as of right. We affirm in part, reverse in part and remand for further factual findings.
I. Basic Facts and Procedural Background
RC Associates is a professional engineering firm engaged in planning and managing
construction projects. Buena Vista contracted with RC Associates to design and manage the
construction of a water main on Portsmouth Road. When RC Associates designed the project, it
placed the water main directly in the right-of-way controlled by the Saginaw County Road
Commission.
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As a result of a bidding process, Anklam was selected as the subcontractor for purposes
of digging and laying the pipeline. However, when Saginaw County Road Commission declined
to grant a permit for this construction, the pipe line had to be moved eight feet and the design
altered. Because Anklam determined that it would incur additional costs due to the alternate
location, it submitted a request for change order to RC Associates. When RC Associates did not
issue the requested change order, Anklam did not proceed with the construction. According to
Anklam, RC Associates threatened that if Anklam did not complete the project, it would award
the contract to another company. Anklam maintains that because of this threat and the fear that
Buena Vista would seek to collect on the contractor’s bond that Anklam posted, it proceeded
with the project and completed performance.
After the project was completed, Buena Vista sued Anklam for $14,641.60, contending
that this sum had been erroneously paid as a second progress payment to Anklam. In response,
Anklam admitted that it was overpaid this amount, but counterclaimed against Buena Vista and
filed a cross-claim against RC Associates. Anklam alleged it was entitled to increased costs
caused primarily by RC Associates failing to obtain the right-of-way from the road commission.1
Anklam’s counter-complaint against Buena Vista charged that Buena Vista owed it $16,080 for
the third progress payment that was never paid to Anklam as well as $4,470 for the retainage fee
that was never paid. In addition to the progress payment and retainage fee, Anklam claimed that
Buena Vista owed it $67,869.60 for required construction changes that put it above the $170,470
contract price.
Following a bench trial, the trial court, in a written opinion, made specific factual
findings. The trial court found that Anklam was awarded the contract and that in accord
therewith, Anklam had to begin construction on June 26, 1995. RC Associates’ design provided
for the main to be laid twenty-eight feet from the centerline of Portsmouth Road, which was
within the right-of-way controlled by Saginaw County Road Commission. Because the road
commission would not grant a permit for construction in its right of way, the original design had
to be altered and the main laid twenty feet from the centerline. It was clear to Anklam by July 5,
1995, that because of the alterations, the contract could not be performed as originally bid.
Accordingly, Anklam requested change orders from RC Associates.
RC Associates
acknowledged that Anklam would incur additional costs but only granted one change order. The
trial court found that at this juncture, Anklam had a number of different options and elected to
proceed and complete performance.
After making these factual findings, the trial court held that as a result of the road
commission’s actions refusal to grant the permit to construct in its right of way, the original
contract was void. The trial court then reasoned that Anklam’s request for a change order from
RC Associates in light of the alterations in the original contract constituted a new offer. The trial
court further reasoned that RC Associates’ response that it would approve only a part of
Anklam’s request for change constituted a counteroffer, which Anklam accepted by continuing
with the project and completing performance. Accordingly, the trial court found in favor of
Buena Vista in the amount of $14,610.40 and found no cause of action on Anklam’s claims.
1
The lower court referred to Anklam’s claim as a cross-claim only; however, Anklam brought a
counter-claim against Buena Vista and a third-party claim against RC Associates.
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Anklam appeals as of right.
II. Standard of Review
This Court reviews findings of fact by a trial court sitting without a jury under the clearly
erroneous standard. Walters v Snyder, 239 Mich App 453, 456; 608 NW2d 97 (2000). A finding
is clearly erroneous when, although there may be evidence to support it, the reviewing court on
the entire record is left with the definite and firm conviction that a mistake has been committed.
Id. In contrast, this Court reviews a trial court’s conclusions of law de novo. Id. Where the trial
court’s factual findings may have been influenced by an incorrect view of the law, this Court’s
review of those findings is not limited to clear error. Id.
III. The Complaint and Counterclaim
Anklam argues that the trial court clearly erred in finding no cause of action on it’s
counterclaim against Buena Vista for the third unpaid progress payment. We agree.
On appeal, the parties do not dispute that the third progress payment in the amount of
$16,080 and the retainage fee in the amount of $4,470 was never paid to Anklam. Indeed, Buena
Vista admits these amounts are due and owing and further states that it will treat the loss as an
offset for the remaining judgment. Accordingly, we reverse the trial court’s judgment finding no
cause of action and find in favor of Anklam in the amount of $20,550. We further affirm the
trial court’s finding in favor of Buena Vista in the amount of $14,610.40; the amount paid to
Anklam in error.
IV. Validity of the Contract
Next, Anklam argues that the trial court erred in finding that the contract was void. We
agree.
We first note that neither party argues the original contract was void. Yet the trial court
nevertheless determined that because the location of the water main changed, the contract was
void. The trial court further determined that Anklam’s request for change orders constituted a
new offer and RC Associates indication that it would only approve a portion of those changes
constituted a counter-offer. Thus, the trial court held Anklam accepted the counter-offer by
completing performance on the contract.
MCR 2.517(1) requires the trial court, when acting without a jury, to find the facts
specifically and state separately its conclusions of law. Indeed, clear and complete findings are
essential to this Court for the proper discharge of our appellate function. Cacavas v Zack, 43
Mich App 222, 226; 203 NW2d 913 (1972). (Citation omitted.)
On this record, we are unable to discern the rationale underlying the trial court’s ruling.
A review of the trial court’s opinion reveals its internal inconsistency. The court found that the
conditions underlying the initial contract changed which presupposes the existence of a valid
contract. From this, the trial court determined that the contract was completely void; i.e. not
valid at all. Moreover, the trial court did not provide a factual basis to support its conclusion that
the original contract was void. Equally unclear is whether the trial court considered the
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possibility that the inability to secure a permit from the Saginaw Road Commission to construct
in its right-of-way and reconfiguring the placement of the water main were modifications to the
original contract upon which there was a meeting of the minds and for which Anklam provided
additional consideration by completing performance. See generally Port Huron Ed v Port Huron
Area Sch Dist, 452 Mich 309; 550 NW2d 228 (1996) (discussing the requisites for modification
of an existing contract.) Because the trial court did not explain the basis upon which it
concluded that the contract was void or any of its additional findings flowing from that
determination, we remand to the trial court for further explanation and development of the
record.
V. Anklam’s Cross-claim
Finally, with regard to Anklam’s claim for costs in excess of the contract amount,2
although the trial court dismissed this claim, it did not make factual findings on the record. We
therefore remand this issue to the trial court as well.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion. We do not retain jurisdiction.
/s/ E. Thomas Fitzgerald
/s/ Richard A Bandstra
/s/ Kirsten Frank Kelly
2
We note that on appeal Buena Vista claims that Const 1963 art 11, § 3 insulates it from
additional payments arising from a “work directive change” issued by RC Associates after the
parties entered into the original contract. We do not agree. The record reveals that Anklam
submitted its request for change order because of a contemplated increase in construction costs
arising from the relocation of the main. In response, RC Associates agreed to approve some of
the requested changes and indicated that a change order would be granted when construction was
completed. Therefore, authorization for the changes occurred before the end of construction and
thus became part of the contract. See E C Nolan Co v Highway Dept, 45 Mich App 364, 367;
206 NW2d 472 (1973). The prohibition contained in art 11 § 3 applies to prevent additional
payments after the service is completed. Accordingly, on the facts presented in the case at bar,
art 11 § 3 does not apply.
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