John D. Latimer & Associates, Inc. v. Housing Authority of the City of Durham

WELLS, Judge. By its properly preserved exceptions and assignments of error, defendant raised questions as to the sufficiency of the evidence to withstand defendant’s motions, made pursuant to Rule 50 of the Rules of Civil Procedure, for a directed verdict and for judgment notwithstanding the verdict. 1 Defendant’s argument raises three aspects of the sufficiency of the evidence to support the submission of the issue as to an implied contract between plaintiff and defendant, so as to entitle plaintiff to recover under principles of quantum meruit. First, defendant argues that plaintiff and defendant reached an express contract which included as a condition precedent to plaintiffs entitlement to compensation the approval of the project by the Department of Housing and Urban Development (H.U.D.), that such approval was never obtained, and therefore no implied contract ever arose. Second, defendant argues that defendant received no benefit from plaintiffs services, thus defeating plaintiffs entitlement to a recovery under quantum meruit. Third, defendant argues that its director, Kerr, had no authority to obligate defendant to compensate plaintiff absent H.U.D. approval of the project. The evidence, which we will summarize below, was in substantial conflict on the question of whether H.U.D. approval was understood to be a condition precedent to plaintiffs entitlement to compensation. We perceive no such substantial conflicts in the evidence as to defendant’s benefit from plaintiffs work on the project or on Kerr’s authority to obligate defendant to plaintiff. *641 The rules as to the sufficiency of evidence to withstand a motion for directed verdict are well established. On such a motion by defendant at the close of plaintiffs evidence in a jury case, plaintiffs evidence must be taken as true and considered in the light most favorable to plaintiff, giving plaintiff the benefit of every reasonable inference which may legitimately be drawn therefrom. See Home Products Corp. v. Motor Freight, Inc., 46 N.C. App. 276, 264 S.E. 2d 774 (1980), disc. rev. denied, 300 N.C. 556, 270 S.E. 2d 105 (1980), and cases cited therein. On such a motion made at the close of all the evidence, any of the defendant’s evidence which tends to contradict or refute the plaintiffs evidence is not considered, but other evidence presented by defendant which tends to clarify plaintiffs case may be considered. Home Products Corp., supra. These rules also apply to defendant’s motion for judgment N.O.V. Home Products Corp., supra, Briefly summarized, plaintiffs evidence, as tested by the foregoing rules, tended to show the following. Plaintiff is a large firm specializing in industrial and institutional architecture. Plaintiffs firm has been in business in Durham for about 28 years. In August, 1976, Mr. James Kerr, Executive Director of defendant, approached plaintiffs president, Latimer, requesting assistance in determining evaluation of a site in Durham for a housing project. The project initially contemplated the construction of 110 housing units for the elderly. Plaintiff carried out an initial site evaluation, and on 10 September 1976 sent a letter to Kerr giving plaintiffs impressions of the site, favorably recommending the site for the proposed project. At the request of Kerr, plaintiff then further evaluated the site to determine estimated cost of street improvements, water and sewer extensions and site preparation necessary to accommodate 110 housing units. Plaintiff furnished this evaluation, in writing, to Kerr on or about 21 October 1976. Subsequently, at Kerr’s request, plaintiff prepared a preliminary proposal for the project, showing a site location plan, floor plans and perspective, and cost estimates on all aspects of constructing the project. This proposal was furnished defendant on or about 19 April 1977. Subsequently, meetings and conferences between defendant and plaintiff resulted in a modified proposal to H.U.D. to construct 85 housing units on the site. On 2 June 1978, defendant wrote to plaintiff, informing plaintiff that H.U.D. had accepted the modified site plan, but had suggested extensive design *642 changes in the housing units. Defendant requested further discussion with plaintiff regarding the suggested design changes. Negotiations with H.U.D. continued, resulting in a H.U.D. notification on 20 March 1979 that defendant’s final proposal, dated 6 December 1978, was approved, subject to appropriate financing. Plaintiff continued to work on the plans for the project, including reviewing construction bids. Defendant did not obtain final H.U.D. approval for the project. The agreement was that plaintiff would be paid for its services subject to H.U.D. approval of plaintiff’s plans. Plaintiff periodically sent bills to defendant for services. Kerr assured plaintiff that plaintiff would be paid, but defendant had to wait for “H.U.D. approval.” In December of 1979 or January of 1980, plaintiff was told for the first time that defendant would not pay for plaintiffs services. Plaintiffs fees were reasonable for the service rendered and totaled at least $105,000.00. The actual expenses incurred by plaintiff in work on the project was in the amount of $58,587.00. Defendant’s evidence tended to confirm plaintiffs evidence as to the initiation and progress of plans for the project, but consistently emphasized defendant’s position that plaintiff was plainly told and well understood that plaintiff was engaged on a contingent fee basis and would not be entitled to payment for its work unless the project was approved and built. The heart of defendant’s argument is that plaintiffs own evidence showed an express contract, and that where there is an express contract, no implied contract can exist. We recognize the validity of defendant’s argument as to this principle of contract law. See Snyder v. Freeman, 300 N.C. 204, 266 S.E. 2d 593 (1980); Supply Co. v. Clark, 247 N.C. 762, 102 S.E. 2d 257 (1958); Campbell v. Blount, 24 N.C. App. 368, 210 S.E. 2d 513 (1975). Whatever the agreement may have been in the early stages of negotiation between plaintiff and defendant in this case, plaintiffs evidence clearly showed that as plaintiffs work on the project progressed, plaintiff requested payment and was assured that it would be paid for its work. Thus, even if an express contract may have at one time existed between these parties, by their conduct clearly indicating a different understanding, an implied contract could arise between them. See Campbell, supra. *643 Defendant argues that even if there was evidence to support an implied contract, plaintiff is not entitled to recover under quantum meruit because defendant received no benefit from plaintiff s services, citing Stout v. Smith, 4 N.C. App. 81, 165 S.E. 2d 789 (1969) and Williams and Associates v. Products Corp., 19 N.C. App. 1, 198 S.E. 2d 67, 69 A.L.R. 3d 1348, cert. denied, 284 N.C. 125, 199 S.E. 2d 664 (1973). Neither of the cases relied upon by defendant involved resolution of a question of whether there was sufficient evidence to support an implied contract. Stout involved the appropriate measure of damages under quantum meruit. Williams and Associates involved the question of the propriety of using parol evidence to vary the terms of a written contract. In the case now before us, plaintiffs version of the agreement was that it would be compensated for preparing plans for defendant’s use in applying for H.U.D. approval for the project. Plaintiffs evidence having showed that plaintiffs plans were received and used by defendant in defendant’s H.U.D. application, there was a sufficient showing of benefit to defendant from plaintiff s work. Finally, defendant argues that Kerr had no authority to bind defendant to pay plaintiff unless the project was approved and built. Kerr was defendant’s chief executive officer, responsible for conducting its affairs. Plaintiffs evidence showed that plaintiff dealt extensively with Kerr, not only on the project involved in this case, but also on other similar projects. Plaintiffs reliance on Kerr’s authority was reasonable. See Zimmerman v. Hogg and Allen, 286 N.C. 24, 209 S.E. 2d 795, 76 A.L.R. 3d 1004 (1974). The trial court properly denied defendant’s motions for directed verdict and for judgment notwithstanding the verdict. No error. Judges VAUGHN and Webb concur. Footnotes [1] Although defendant has argued in its brief that the verdict is inconsistent and does not support the judgment, all of defendant’s assignments of error relate to the sufficiency of the evidence to support the verdict, none of them relating to the entry of judgment. The question of the sufficiency of the verdict to support the judgment is therefore not before us.