Michael O'Byrne d/b/a Michael O'Byrne Construction, Respondent, vs. Lumber One, Avon, Inc., Appellant.
Annotate this CaseThis opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (2006).
STATE OF MINNESOTA
IN COURT OF APPEALS
A06-1121
Michael O'Byrne
d/b/a Michael O'Byrne Construction,
Respondent,
vs.
Lumber One, Avon, Inc.,
Appellant.
Filed June 5, 2007
Affirmed in part, reversed in part, and remanded
Harten, Judge*
Olmsted County District Court
File No. 55-C8-03-000997
David W. VanDerHeyden, VanDerHeyden and Ruffalo, P.A., 302 Elton Hills Drive Northwest, Suite 300, P.O. Box 6535, Rochester, MN 55903 (for respondent)
Ken D. Schueler, Dunlap & Seeger, P.A., 206 South Broadway, Suite 505, P.O. Box 549, Rochester, MN 55903 (for appellant)
Considered and decided by Peterson, Presiding Judge; Ross, Judge; and Harten, Judge.
U N P U B L I S H E D O P I N I O N
HARTEN, Judge
After a jury awarded respondent breach of contract damages against appellant, appellant moved for judgment as a matter of law or for a new trial and/or remittitur. The district court granted conditional remittitur, reduced the award, and denied all other motions. Respondent accepted the reduced award. Appellant now challenges the amount of the remittitur award and the denial of its motion for a new trial; respondent, by notice of review, challenges the grant of remittitur. Because we see no abuse of discretion in the granting of appellant's motion for remittitur and the denial of its motion for a new trial, we affirm those decisions; because we see an abuse of discretion in the amount of remittitur, we reverse and remand that award.
FACTS
Appellant Lumber One, Inc., is a lumber yard and development company; respondent Michael O'Byrne is a contractor. In 1999, appellant invited respondent, then in business with his father and his brother, to bid on a 37-home project known as Valley Side Estates, Phase One. Respondent was awarded the bid for installing footing placement, block walls, basement floors, garage floors, steps, and walks, and for finishing grading. Respondent's work on Phase One was finished in about May 2002.
In January 2002, respondent submitted a bid to appellant to do essentially the same work on Phase Two, which consisted of 36 homes. Appellant accepted that bid. In September 2002, respondent began receiving work orders for Phase Two. Later, by the time that respondent was terminated on 8 October 2002, he had received no orders and done no work on 20 of the lots (the non-work-order lots). He had received work orders for 16 lots (the work-order lots) and had done some work on seven of them.[1] Respondent was paid part of what he claimed he was owed for work on the seven lots; he filed a mechanic's lien for the remainder.[2] He also brought this action against appellant for breach of contract damages on all 36 lots.
At trial, respondent testified that, for the 32 lots with two-car garages, he would have charged $10,200 per lot, his costs would have been $4,200, and his profits $6,000; for the four lots with three-car garages, he would have charged $11,200 per lot, his costs would have been $4,490, and the profits $6,710. He also testified that his lost profits on the seven lots where he had done some work were $44,310 and his lost profits on the 29 lots on which he had not worked were $176,840.
The jury awarded respondent $50,960 in damages for the 16 work-order lots and $115,076 for the 20 non-work-order lots, a total of $166,036. Appellant moved for judgment as a matter of law, for a new trial, or for remittitur. The district court granted conditional remittitur, reducing respondent's damages to $103,530 and awarding appellant a new trial if respondent did not accept that award. Respondent accepted the award.
Appellant now challenges the denial of its motion for a new trial and the amount of the remittitur award; by notice of review, respondent contests the grant of remittitur.
D E C I S I O N
1. Grant of Remittitur.
Although respondent originally accepted the reduced award, he lawfully seeks review of it because his opponent appealed its amount. An award of damages is excessive if it surpasses an adequate award to the extent that it can be accounted for only as the result of passion and prejudice. Dallum v. Farmers Union Cent. Exch., Inc., 462 N.W.2d 608, 614 (Minn. App. 1990), review denied (Minn. 14 Jan. 1991). We will not reverse a grant of remittitur unless the trial court clearly abused its discretion. Myers v. Hearth Techs, Inc., 621 N.W.2d 787, 792 (Minn. App. 2001), review denied (Minn. 13 Mar. 2001). We review the record in the light most favorable to the judgment of the district court and will not reverse that judgment merely because we view the evidence differently. Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999).
The jury found that respondent had lost profits of $115,076 for the 20 non-work-order lots, or $5,753.80 per lot. The district court noted that this was 96% of respondent's claim for a $6,000 lost profit per lot, or $120,000 for 20 lots. The jury also found that respondent had lost profits of $50,960 for the 16 work-order lots. The district court concluded that this was $5,622.22 for the nine work-order lots on which respondent had not worked and that the award was 94% of respondent's claim for $6,000 per lot, or $54,000 for nine lots.[3] The district court indicated three reasons for granting appellant's motion for remittitur.
First, the district court found that "[respondent's] evidence of his labor and equipment costs lacked any documentary support; and what specificity [respondent] finally provided regarding those figures came so late in the case and in such a form as to reasonably place its credibility in doubt." The transcript reveals that respondent first said he had no documents to support his damage claims because his figures were based on his previous experiences, not on written records, and because he discarded his paperwork. Later in the trial, respondent produced an exhibit to explain his calculation of his labor costs. In connection with that exhibit, he testified that he had prepared it "a couple of days ago." Respondent was asked, "[Y]our claim is that . . . for the particular job you did on Phase Two, your profit was $6,000 on [a] $12,700 contract?"[4] He answered, "That's correct." He was then asked, "And you don't have any supporting documentation to back that up?" and answered, "No." The finding that respondent did not provide documentation to support his figures is supported by respondent's testimony.
Second, the district court found that respondent's brother and the excavator hired to replace respondent testified that "labor costs for specific job tasks included in [respondent's] calculation were a fraction of what would be reasonable." Respondent's brother, who also worked for appellant on Phase Two, was asked about respondent's reported costs. Respondent had testified that his cost for excavating billed at $2,000 was $350. His brother testified, "The labor and equipment on the excavation, $350 on $2,000 of excavating I would say would be very unrealistic." Respondent's brother testified that for footings billed at $2,500, on which respondent testified to costs of $1,020, the costs would actually be $2,200: $1,000 for labor, $900 for concrete, and $300 for a concrete pump. He testified that labor on a basement floor would be about $1,000, rather than the $300 respondent listed, and that labor on a garage floor would be $400, as opposed to respondent's $175. Thus, the district court's finding that respondent's labor costs were a fraction of the reasonable costs is supported by respondent's brother's testimony.
Similarly, when the excavator was asked if he agreed with the cost figure for excavating and backfilling basements, he answered, "Well, the labor and equipment would have been a lot more than that . . . I want to say three or four times [more]." For finishing grading, the excavator said he did not agree with respondent's cost of $175. When asked what would be more realistic, he answered, "[A]round 650 bucks, 700." Again, the record supports the district court's finding.
Third, the district court found that "respondent's claimed profit margin of $6,000 on a $10,200 job is extraordinarilyindeed, incrediblyhigh." When respondent's brother was asked about the profit margin one would normally get on this type of job, he answered, "When I bid a job, I hope to get 10 percent profit on it."
In light of the evidence supporting its findings that respondent's claim of at least a $6,000 profit per lot lacked documentary support and was not credible, and that respondent's calculation of costs was considered unreasonable by others working in the field, the district court did not abuse its discretion by granting appellant's motion for remittitur.
2. The Amount of Remittitur.
Appellate review of the trial court's order granting remittitur is appropriate, although [the judgment creditor] originally consented to the reduction, and the order is examined, as in the case of an unconditional grant of a new trial, to determine whether there has been a clear abuse of the trial court's discretion. . . . [E]ffective appellate review is most readily facilitated when the trial court has issued findings of fact and a legal analysis in sufficient detail to allow this court to fully comprehend the basis of the trial court's decision.
Bebeau v. Mart, 310 N.W.2d 465, 470 (Minn. 1981) (citation omitted).
The district court found that the jury had awarded respondent a 56% profit on the 20 non-work-order lots and concluded that this profit margin was not "within the bounds of reason'" because it was not "solidly supported by firm explanatory evidence . . . [or] unimpeached by knowledgeable witnesses." The district court then determined that a 35% profit would be reasonable and awarded respondent $103,530, explained as "35 percent of $10,200 ($3,570) times 29 (the number of lotsnine work order lots and 20 non-work order lotsfor which [respondent] was not paid)."
The district court provided no explanation for its decision that respondent was entitled to a 35% profit margin rather than a 56% profit margin, and the record provides nothing from which an explanation can be inferred.[5] Absent "findings of fact and a legal analysis in sufficient detail to allow this court to fully comprehend the basis of the trial court's decision," id., we reverse the remittitur award and remand for reconsideration, upon specific competent evidence, the amount of respondent's damages. Upon remand the district court may, in its discretion, reopen the record and receive additional evidence on damages.
3. Motion for New Trial.
This court will not disturb a district court's decision on a motion for a new trial absent a clear abuse of discretion. Halla Nursery, Inc., v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). Appellant contends that the district court should have granted a new trial because respondent was allowed to seek double recovery on one item and because evidence on the profit from the Phase One job was excluded.
a. Double Compensation.
Appellant paid respondent's brother $16,800 directly for work he did on seven of the lots. At trial, the district court allowed respondent to include that $16,800 as damages. The district court later admitted that this was an error: in its decision on the posttrial motions, it noted that "[Respondent's] damages should not include the loss of [appellant's] payments for block work that were, in their entirety, a pass-through to [respondent]. [Respondent] lost nothing by this money not coming to him." But the district court concluded that the error was harmless because the jury did not award respondent any damages for the seven lots on which work was done; thus, there was no double recovery. Appellant does not persuasively argue that any prejudice resulted from the error, and nothing in the record supports the inference that any part of the jury's award required appellant to pay respondent for the same work he had already paid his brother for doing. Appellant is not entitled to a new trial on this basis. See Langford Tool & Drill Co., v. Phenix Biocomposites, LLC, 668 N.W.2d 438, 446 (Minn. App. 2003) (concluding new trial was not warranted when review of the record indicated that outcome would not have changed if evidence had been excluded).
b. Exclusion of Evidence.
Appellant wanted respondent's brother to testify that respondent had received no profit from the Phase One job. The district court refused to allow this testimony because the nature of respondent's relationship with his brother on the Phase One job, whether contractor/subcontractor or partners, had not been established. The district court explained, "I prohibited presentation of testimony that could only be probative if we delved into the brothers' business relationship on Phase One. That examination of their business dealings was too far afield from the present controversy."
Appellant argues that the testimony should have been permitted because respondent said he calculated his lost profit damages for Phase Two based on his experience with Phase One, and the fact that he and his brother made no profit was relevant. But respondent did not say that he sought the same profit on Phase Two that he had earned on Phase One; he said that his experience with Phase One taught him how to calculate his bid for Phase Two. Appellant is not entitled to a new trial because this evidence was excluded.
4. Summary.
The district court did not abuse its discretion in granting appellant's motion for remittitur or in denying its motion for a new trial; we therefore affirm those decisions. But the district court abused its discretion by adopting a 35% profit basis for the calculation of damages without specifying the evidentiary foundation for that basis. We therefore reverse the $103,530 damage award and remand for reconsideration of the evidence of damages. The district court may, or may not, in its discretion, reopen the record to receive additional evidence on which to base its findings and conclusion as to the proper amount of remittitur damages.
Affirmed in part, reversed in part, and remanded.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
[1] Respondent had subcontracted some of the work to his brother, who continued to work for appellant and who was paid directly by appellant for the work he performed.
[2]Respondent's mechanic's lien claim was dismissed before the case went to the jury.
[3] The district court assumed the jury awarded respondent nothing for the seven lots on which he had worked and for which he was at least partially paid.
[4] The amount respondent would actually have received was $10,200; $2,500 was subcontracted to his brother.
[5] While the district court's opinion may be that respondent is entitled to 35%, that is not the standard for a remittitur verdict: "the highest dollar verdict permissible under the evidence . . . is the appropriate standard to be applied." Sandt v. Hylen, 301 Minn. 475, 476, 224 N.W.2d 342, 343 (1974). Whether $103,530 is "the highest dollar verdict permissible under the evidence" is not known and cannot be ascertained from the district court's findings or from the record.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
