827 N.W.2d 831
N.D.2013Background
- May 4, 2007 contract for construction and sale; Barretts provided blueprints; contract required adherence to approved plans; October 2007 Final Settlement Offer reduced price and closing occurred on October 8, 2007.
- Barretts sued Gilbertson in July 2010 for breach of contract alleging nonconformity to blueprints (below-grade space and laundry room) and warranty repairs; Gilbertson counterclaimed for defamation and emotional distress (later dismissed).
- District court dismissed Barretts’ breach claims, held settlement before closing extinguished those claims, and denied both parties’ attorney’s fees.
- Contract allowed changes or substitutions per lending/government approvals, blueprints lacked explicit height/headroom specs, parties’ conduct suggested additional terms and agreed understanding beyond written contract.
- Settlement before closing disposed of alleged conforming defects; Barretts failed to prove breach; related warranty/discrepancy issues largely unsubstantiated; Barretts prevented Gilbertson from repairing defects, excusing nonperformance; court affirmed denial of Barretts’ attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a breach of contract re the below-grade space | Barretts contracted for a full-depth basement per blueprints | Below-grade space was constructed in accordance with negotiated understandings | No breach; settlement resolved the issue |
| Was there a breach of contract re the laundry room size | Laundry room smaller than blueprints violated contract | Change needed for HVAC; Barretts chose duct placement | No breach; settlement discharge |
| Did the settlement preclude consideration of construction claims | Settlement did not address all construction disputes | Settlement resolved all related claims | Settlement disposed of the construction claims |
| Did warranty/nonperformance claims survive given Barretts prevented repairs | Gilbertson failed to repair within 12 months | Barretts prevented access to repair; nonperformance excused | Barretts failed to prove breach; nonperformance excused by prevention |
| Whether Barretts’ request for attorney’s fees on frivolous counterclaims was justified | Counterclaims were frivolous | Counterclaims not frivolous; discretion to deny or award rests with court | Court did not abuse discretion; fees denied |
Key Cases Cited
- WFND, LLC v. Fargo Marc, LLC, 730 N.W.2d 841 (2007 ND 67) (breach of contract elements; standard of review for factual findings)
- Longer v. Bartholomay, 745 N.W.2d 649 (2008 ND 40) (contract interpretation; use of writings and extrinsic evidence)
- Delzer v. United Bank of Bismarck, 459 N.W.2d 752 (1990 ND) (integration of parol terms and subsequent evidence)
- Kuperus v. Willson, 709 N.W.2d 726 (2006 ND) (settlement as contracting disposition; finality of compromise)
- Vandal v. Peavey Co., 528 N.W.2d 266 (1994 ND) (settlement as bar to further litigation)
- Barnes v. St. Joseph’s Hosp., 601 N.W.2d 587 (1999 ND) (nonperformance defense when one party prevents performance)
- Felco, Inc. v. Doug’s North Hill Bottle Shop, Inc., 579 N.W.2d 576 (1998 ND) (parol evidence and partial integration)
- Longer v. Bartholomay, 745 N.W.2d 649 (2008 ND) (contract interpretation and extrinsic evidence)