Sergeant Co. v. Clifton Building Corp.

Thompson, J., delivered the opinion of the Court. This appeal arises out of an action for breach of contract brought in the Circuit Court for Charles County by Ronald W. Pickett (Pickett) and the Clifton Building Corporation (Clifton), the appellee, against The Sergeant Company (Sergeant) and Fidelity Federal Savings & Loan Association (Fidelity), the appellants. This is the third time this action has been before this Court: on two previous occasions we affirmed, in unreported opinions, a judgment entered at trial awarding Pickett $53,450; on each occasion the Court of Appeals reversed. See, The Sergeant Company v. Pickett, 285 Md. 186 , 401 A.2d 651 (1979); The Sergeant Company v. Pickett, 283 Md. 284 , 388 A.2d 543 (1978).

In its second opinion in this case, the Court of Appeals affirmed the judgment with respect to the liability of the appellants but, because the jury was improperly instructed concerning damages, vacated the damages award and ordered a new trial as to the amount of damages. The present appeal is from the judgment in the second trial* 1 awarding Clifton $53,000 in damages against the appellants. The facts involved were set forth in some detail in the second opinion of the Court of Appeals, see, The Sergeant Company v. Pickett, 285 Md. at 195-203 ; for our present ³⁰⁹ purposes a very brief recitation of the facts will be sufficient. Pickett planned to build houses in a development in Charles County to be known as "Clifton on the Potomac.” In December, 1974, he approached Sergeant, a subsidiary of Fidelity, seeking to obtain a source of permanent financing for the prospective buyers of the houses which he planned to build.

By an agreement executed on January 14,1975, it was agreed that Sergeant would use its best efforts to procure such financing: on January 24, 1975, Sergeant advised Pickett that Fidelity had obtained and would make available to Pickett some $485,000 in "special forward” money. 2 This commitment was for a period of one year. Pickett formed Clifton, the entity which contracted for and built the houses in the development, in May or June, 1975; however, due to difficulties in obtaining building permits and an injury suffered by Pickett in an accident, actual construction was delayed until September, 1975. In September, thirteen buyers signed sales contracts for homes in Clifton on the Potomac. Pickett testified that when the thirteen contracts were presented to Sergeant, Sergeant told him that the special forward money had been withdrawn.

Due to the withdrawal of the low-interest mortgage financing, nine of the thirteen home-buyers refused to complete the sale. The four buyers who chose to buy the houses despite the unavailability of low-interest financing were forced to borrow money at substantially higher interest rates. Pickett testified that, in order to induce the buyers to do this, he was forced to pay the closing costs and fees normally assumed by the buyers. Pickett testified that these costs and fees totalled $1,200 on each house, thus he claimed that, as a result of the appellants’ breach of their loan commitment, he lost $1,200 on each of the four houses for which the buyers were willing to accept alternative financing. ³¹⁰ As for the nine buyers who rescinded their contracts when informed that the promised financing was unavailable, Pickett testified that this resulted in lost profits of $5,000 on each house.

Pickett arrived at this figure by computing the cost to build each house and subtracting that figure from the price at which he had contracted to sell the house. Thus, he claimed losses of $1,200 on each of the four houses where the buyers did not rescind, losses of $5,000 on each of the nine houses where the buyers did rescind, and, in addition, a loss of $4,850 in fees paid to the appellants for the commitment which was withdrawn. The jury awarded damages in the amount of $53,000. I The appellant’s first contention is that, while the previous trial resulted in a determination that the appellants were liable to Pickett, testimony at the second trial showed that the damages caused by the appellants’ breach were suffered by Clifton, the corporation owned by Pickett.

The court below, at the conclusion of the second trial, resolved this situation by instructing the jury that its verdict should be in favor of Clifton, rather than Pickett. The appellants contend that the court should have granted their motion for a directed verdict. The suit was initially filed by Pickett individually. Prior to the first trial, Clifton was added as a party plaintiff.

Apparently, all concerned lost sight of the fact that there were two plaintiffs, for, at the conclusion of the first trial, the jury was instructed that its verdict should be for either the plaintiff or the defendants, after which, as recorded in the transcript, "the jury returned to the courtroom and announced its verdict in favor of the plaintiff in the amount of $53,450; and on the cross-claim in favor of the Defendant.” 3 The docket entry is as follows: ’’Verdict of the Jury: On the Original Case the Jury ³¹¹ found in favor of the plff. Ronald W. Pickett and against the Defts., Sergeant Co. & Fidelity Federal Savings & Loan Association & assessed damages in the amount of $53,450.00. On the Counter-claim the Jury found in favor of the Counter-Deft. Ronald W. Pickett & against the Counter Plff.

The Sergeant Co.” When the present contention was raised below, the trial judge stated: "The Court: Well, Clifton was a party to the proceeding. I concede that reviewing the transcript that apparently the matter was not submitted in that form to the jury but it is obvious from the testimony that Mr. Pickett, who was the sole owner of Clifton, was a Plaintiff, no judgment was entered in favor of the Defendant against the Plaintiff, Clifton, and we feel that the issue should be submitted to the jury on the question of damages. "It seems obvious that this was a mistake in the entry of the judgment in favor of the Plaintiff, Pickett, who, that is all the evidence shows, was not the party who in fact built the houses, which were the subject of the loss, which was occasioned by the breach of the contract.” He then instructed the jury as follows: "The Court: Members of the jury, as previously told by the Court, the matter of liability is not an issue in this case. We are dealing with the issue of damages.

"Now there are two Plaintiffs in this proceeding, Ronald W. Pickett and Clifton Building Corporation. "Now the Court is going to instruct you that at this stage there, and it has been agreed by counsel representing the Plaintiffs, Ronald W. Pickett and Clifton Building Corporation that the verdict ³¹² should be in the name of Clifton Building Corporation, so the verdict, which you rendered in this case, will go in favor of that Plaintiff, it having been concluded that they were the, or that corporation was the one who sustained any loss that you find to have been sustained as a result of the evidence which had been admitted here today.” We think that the action of the trial judge, which amounted to a reformation of the verdict returned at the first trial, was entirely proper. In Montgomery Ward & Co. v. Keulemans, 275 Md. 441, 446-47 , 340 A.2d 705 (1975), the Court, confronted with a somewhat similar situation, stated: "An examination of the record makes it clear that the verdict of $1,350.00 entered on the false arrest count consisted of two elements: $1,000.00 for salary at $200.00 a week which Keulemans lost as a result of his suspension for five weeks while awaiting trial, and the $350.00 fee paid by Keulemans to defend him in the shoplifting case. Hence, the $350.00 fee was only recoverable in the malicious prosecution case.

"The trial court recognized this, and cited it as a reason for the denial of the defendants’ motion for a judgment n.o.v., made before judgment absolute was entered. It would have been appropriate at this juncture for the trial court to have reformed the verdict by transferring the $350.00 award from the false arrest count to the malicious prosecution count. We see no reason why this cannot be accomplished on remand. "The defendants argue that the defect in the verdict may only be corrected by the jury, or by the court, in the jury’s presence.

Alternatively, they argue that there was no effort made by the court here to correct the verdict. On the first point, they would be right, if the verdict were fatally defective, as, for example, would be a verdict which fails to assess damages. Such was the situation in Gaither ³¹³ v. Wilmer, supra, 71 Md. at 364. However, we find their argument on the second point unpersuasive, because we are satisfied that it is not too late to reform the verdict in this case.” See also, Traylor v. Grafton, 273 Md. 649, 683 , 332 A.2d 651 (1975); Davis v. Board of Education, 168 Md. 74, 78-79 , 176 A. 878 (1935); Sun Cab Co. v. Walston, 15 Md. App. 113, 161-62 , 289 A.2d 804 (1972), aff'd in part 267 Md. 559 , 298 A.2d 391 (1973).

II To show the damages suffered by Clifton as the result of the appellants’ breach, Pickett testified concerning the costs incurred by Clifton in constructing four of the houses built in the development from a memorandum which he had prepared, listing the average cost for each of the components of the four houses. The information contained in the memorandum had been extracted by Pickett from the corporation’s checkbooks; apparently the memorandum was a rough list or compilation of those checks which had been written to pay for work and materials which had gone into the four houses. On cross-examination, Pickett indicated that he had with him only his "extractions from the checkbooks” and that the actual checkbooks had not been brought to court. The appellants moved to strike Pickett’s testimony on the grounds that permitting him to testify concerning Clifton’s costs, as recorded in the corporation’s checkbooks, without the production of the checkbooks, violated the best evidence rule; they renew this contention on appeal.

We are of the opinion that the testimony of Pickett, summarizing the contents of the checkbooks, was properly admissible, as within the discretion of the trial court. 4 Wigmore, Evidence, § 1230 (Chadbourn rev. 1972) states: "Where a fact could be ascertained only by the inspection of a large number of documents made up of very numerous detailed statements — as, the net ³¹⁴ balance resulting from a year’s vouchers of a treasurer or a year’s accounts in a bank ledger — it is obvious that it would often be practically out of the question to apply the present principle by requiring the production of the entire mass of documents and entries to be perused by the jury or read aloud to them. The convenience of trials demands that other evidence be allowed to be offered,