How NOT to Modify a Written Contract: The Snakebit Pool Repair case

When heat from the burning cabana damaged his swimming pool, Owner DiMiceli got estimates from several swimming pool repair companies to put the fix on it. On May 24, 1999, Owner D and Affordable Pool Maintenance, Inc. (APM), signed a written contract which listed the repairs to be undertaken, and called for payment of $7,250 in three installments, one at the signing of the contract, one when APM started the work, which was supposed to be June 9, and one final payment when APM finished the work, which was supposed to be July 1, just in time for the July 4 weekend. In any event, at the time of inspection, APM found these repairs that needed to be done:

Drain the pool
Light acid wash
Remove old plaster
Repair cracks as needed
Repair gunite if required
Reseal all skimmers
Install diving board brackets and diving board
Install a new light fixture

Sounds like pretty superficial, appearance-driven stuff, the sorts of things that we might expect to be caused by intense heat close by. Ah yes, but looks can be deceiving. And anyone familiar with construction knows this scenario is going to breed a fight over when the work is finished. Owners have a peculiar way of demanding perfection in result, as opposed to perfection in effort, which is more often the construction company’s focus.

Even though there aren’t a lot of days between May 24 and June 9, apparently some things had changed, because when APM showed up to begin work, they unexpectedly found that the pool’s beam was broken in several places. It seems that Owner D had hired another subcontractor to remove some of the decking and decorative flagstones around the pool. There was no direct proof in the case as to what caused the beam to break. But this subcontractor had used a jackhammer to remove some of the decking and flagstones, leaving to Sherlock Holmes-minded people the obvious conclusion as to how it happened.

At this point, APM would probably have been better served to refuse to go on with its repairs, but I suppose the fact that it’d probably already spent the several-thousand-dollar down payment, as well as the taste for more cash (this is, after all, what it does to earn its revenues), pushed it onward. So APM did the next best thing. It told Owner D that the broken beam would cause an uneven tile line and make APM’s job more difficult. APM also said they couldn’t install tile in the places where the beam was broken.

Owner D was not convinced, but he did pull APM off the job temporarily, so that yet another subcontractor, Concrete Innovations, could come in and repair the beam, pour a new deck and add coping (coping is the lip that surrounds a pool to prevent water from running into the pool). APM politely asked Owner D to go about this a different way because pouring the deck before fixing the tile line could cause an uneven tile line. Owner D, acting as his own all-knowing, all-experienced general contractor, ignored the advice.

Ever notice how problems seem to breed problems, especially in construction? Once something goes wrong (I refer to these projects as being “snakebit” in my office), it takes a Herculean effort to keep the poison from infecting other parts of the project. Well, the poison in this project just kept on floating APM’s way, because when APM showed up to get after this repair job, it found that Concrete Innovations had forgotten to add the coping. How do you forget something like that? At this point, my intuition’s red flags of danger would have become Las Vegas style flashing neon signs! And yet, APM set about doing the work.

Keep in mind that all of this transpired on the basis of one written contract signed just a few weeks prior, most likely before the pool’s beam had been broken. But the real world facts, as they existed on that day, had now morphed into something far more complex. And those facts significantly changed the probabilities of a successful repair by APM or anybody else.

Well, APM finished the job, and, to no one’s surprise, Owner D refused to pay that last installment of $3,530.47, because the pool wasn’t in the shape he expected. “Breach of contract” he said. “Breach of the warranties of constructing it in a good and workmanlike manner” he bellowed, adding the kicker “so I don’t owe you a DIME.” And here’s the list of problems Owner D thought he had as of the “completion” date:

the decorative tile was not level with the water line
the skimmers in the pool were “intolerable”
the underwater light installed by APM didn’t work
APM failed to install a diving board

Not being able to come to any agreement on that last payment, APM finally sued Owner D in January of 2000. And you can safely assume that Owner D and APM each sued each other for everything they could think of.

But the poison that infected this deal the day the pool’s beam broke continued to find APM, because by the time the case got to trial, Owner D’s “expert” testified that the pool had these additional poisonous problems:

the underwater light didn’t work because it was not connected to the junction box which, in turn, wasn’t in operation (show me, in the list of services to be performed by APM, where APM agreed to fix the previous electrician’s problems–it’s not there, so how could APM be liable for this?)

the grab rails leading out of the pool were improperly placed and weren’t properly grounded (again, APM never agreed to fix grab rails, originally, but keep reading to see how this crept in)

the decorative tile wasn’t level with the water line (classic case of “told you so”)

the skimmers, which are supposed to circulate water at the top and bottom of the pool, weren’t aligned with each other, preventing water from circulating as it should (interesting note: APM agreed to reseal the skimmers, which, by definition, would not move them from the state in which APM found them. Time for some more Sherlock Holmes style deductive reasoning, and here’s the rhetorical question–how in the world could resealing a skimmer knock the skimmers out of alignment? Keep reading to figure out Owner D’s real gripe with APM, because this is just a symptom of the real problem).

the plaster in the pool was extremely rough

the bolts sticking out of the concrete to hold the diving board were unsafe

In response, APM told the jury that the proper sequence of renovation wasn’t followed. The proper sequence is to:

1. Prepare the pool for plaster;
2. Install the decorative tile;
3. Pour the deck and install the coping;
4. Plaster the pool;
5. Add the decking.

And why wasn’t this sequence of events followed, asked APM? Because Owner D decided to remove the old decking himself, and then have Concrete Innovations pour the deck before the tile line was fixed. Therefore, concluded APM, the reason the pool didn’t look right at the end had nothing to do with APM’s services, but rather Owner D’s errors.

Well, after thinking about things for awhile, the jury agreed with APM. They awarded APM $2,030.47 for Owner D’s breach of contract (this was the third and final installment), or in the alternative $6,380.47 for all the work done by APM for which Owner D didn’t pay, and $12,500 in attorneys fees (yes, the attorneys were the winners here). Now, APM could choose which damages it wanted, either the $2,030.47 for breach of contract, or the $6,380.47 in what us lawyers call “quantum meruit” damages. That’s a Latin phrase we learn in first-year law school.

“Quantum meruit” basically says “I provided x to someone, they accepted it, they are getting the benefit from it, I provided it under circumstances in which a reasonable person would have known x would have to pay for it, and a reasonable amount to pay for something like that is $y.” If you prove your case, you can collect $y from x, even though there’s no written contract.

So what else did APM do for Owner D to try to satisfy him? They installed pump equipment, bypassed the heater, hand cleaned the pool twice (because he was “fixing to have a party”), set chemical levels, and other various services.

As you might imagine, Owner D was quite unhappy with the jury trial result. He didn’t want to pay APM a dime, much less $6,380.47. So he appealed, and told the court “APM can’t get those fancy smancy ‘quantum meruit’ damages because we had a written contract covering their goods and services, and by definition, ‘quantum meruit’ means you don’t have any written contract. So, at worst, I should only have to pay contract damages.” APM said “not so fast. I have a written contract for some things, and then outside that contract we did these other things for you by agreement, and so I get to be paid for all of what I did.”

But said the court, “APM provided all these goods and services under the written contract, and so APM can’t get ‘quantum meruit’ damages. There were no services provided ‘outside the contract.’”

So let’s see, now, how this case came out. APM provided what it thought was $6,380.47 in goods and services, for which they only got paid $2,030.47, so APM was out $4,350.00 as well as all the goodwill you hope to have from a satisfied customer. Owner D had to pay APM $2,030.47 for a pool that, even with the extra work, still didn’t work right, so he was out untold thousands just to fix the pool in the future, plus he had to pay his own lawyers, plus he had to pay APM’s attorneys fees. Owner D easily got the worst of it. And what about those lawyers? Well, they got paid $12,500 plus an additional $4,000 for the appeal, for a total of $16,500. So who really benefitted from this dispute?

Now before you get too down on lawyers, the moral of this story isn’t “don’t involve the lawyers”. The moral is this: when you have a written contract, and you provide additional products and services over and above what’s called for in the written contract, make sure you note that fact in writing in a particular way. Don’t make it look like this extra “stuff” is just an extension of the pre-existing written contract.

Or, alternatively, if you intend for the extra “stuff” to be included in the written contract, so you can still take advantage of your warranty disclaimers and other liability limitations in that contract (hint: this may be the better way to go), then get something in writing that changes the contract price too. That way, you’ll increase the odds you will be made whole when a deal gets snakebit.

DiMicelli v. Affordable Pool Maintenance, Inc., Case No. 04-02-00497 (Tex. App.–San Antonio, Delivered and Filed May 7, 2003)

REFERRAL NETWORKS

Your new client referrals are a big part of our continued success, and the same is true about this blog. Please take a moment to think about friends and colleagues you know who might enjoy receiving notice of new Enviropinions blog posts and forward this to them. Individual subscription information is below.

SUBSCRIPTIONS

To subscribe to the free Enviropinions Blog, please enter your preferred Email address in the right column under “FOLLOW BLOG VIA EMAIL”. There is no set schedule for postings. I write them as important or interesting developments occur.

CREDITS

Enviropinions are original writings of Mark McPherson.
© 2014, Mark McPherson. All rights reserved.
15950 Dallas Parkway, Suite 400
Dallas, TX 75248
214-722-7096 Office
214-540-9866 Facsimile
mark@texasenvironmentallaw.com
www.TexasEnvironmentalLaw.com

Leave a Reply

Your email address will not be published. Required fields are marked *