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STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS WASHINGTON, S.C. SUPERIOR COURT (FILED FEBRUARY 16, 2011) TIMOTHY RAICHE d/b/a T. RAICHE BUILDERS vs. TIMOTHY W. SCOTT and PAMELA J. SCOTT : : : : : : : DECISION LANPHEAR, J. This matter was tried before the Court, jury-waived. Findings of Fact Timothy and Pamela Scott owned a single family home on Solar Drive in Westerly, Rhode Island. In the fall of 2003 they considered expanding their home to include a master bedroom. After receiving a design plan, they met with several builders including Mr. Raiche of T. Raiche Builders. The Scotts told Mr. Raiche the extent of their budget for the project. Mr. Raiche reviewed the plan with them and asked the Scotts to carefully consider specific details not referenced on the plan. The Scotts created a "wish list" for Mr. Raiche, exhibit 5, and discussed it with him. After Mr. Raiche reviewed these documents completely and determined some of the costs he would incur, he agreed with Mr. and Mrs. Scott to complete the construction work for $240,000. The agreement was memorialized in a writing of November 20, 2003, signed by the parties, and submitted as Exhibit A of this trial. Exhibit A states, in part: Any Alteration or deviation from the above specified involving extra costs will be executed only upon written orders, and will become an extra charge over and above the original contract price. ***

W.C. No. 2005-0336

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Any Change work orders that may be signed will have payment terms written on the order. Although the November 20, 2003 writing may have been drafted to assist Mr. and Mrs. Scott to obtain bank financing of the project, it is the only written agreement between the parties, other than the work sheets (exhibit 4 and 5). While exhibit 5 is the "wish list", exhibit 4 is a job quotation form, prepared by Mr. Raiche used to price the plans. 1 In it, he has priced out various costs, added in labor costs for 8.5 weeks, added "sub fees" and added "cost of doing business/overhead". In January of 2004, construction commenced. The project took nine months to complete and, as with most construction, some unexpected changes occurred. A loadbearing beam needed to be installed because the wish list resulted in changes to the kitchen plan. Under the contract, any changes that involved extra costs had to be executed only upon written orders, and any such change order had to include the payment terms. While the parties all recognized this beam would be added, no additional costs or charges were ever discussed between the parties, and no such change work order was executed. Some of the outside stone work was also redesigned. Mr. Raiche directed the

redesign with the stone mason. Mr. and Mrs. Scott assumed that they were within their allowance under the contract. Mr. Scott requested a specific boiler be installed. Mr. Raiche directed the plumber accordingly. The Scotts assumed that the boiler was within their allowance for the plumbing under the contract. Mr. and Mrs. Scott requested a redesign of some of the kitchen plumbing. Mr. Raiche redirected the plumber accordingly. The Scotts assumed that this work was within their allowance for plumbing under the contract.

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At the bottom of exhibit 4 the number 240,855 appears.

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While all of the subcontractors were enlisted by T. Raiche Builders and directed by Mr. Raiche, the electrician had several discussions with Mr. and Mrs. Scott, independent of Mr. Raiche. Eventually, a new lighting plan was given to the electrician by Mr. Scott. These upgrades increased the cost of the electrical work to $14,455. Exhibit A. On the job quotation form, Mr. Raiche had written $6750 for electricity, and $3200 for electricity/allowance. 2 Although Raiche Builders paid the electrician's bill initially, Mr. Raiche never agreed to this work as part of the project. Surprisingly, Mr. Raiche, an experienced builder, did not formalize the significant changes to the project with a new writing. In November, 2004, after the project was complete, Raiche Builders submitted an invoice to Mr. and Mrs. Scott totaling $318,242.80 in charges. It credited them with prior payments of $189,500, and left a remaining balance of $128,742.80. See Exhibit 10. As the cost of the support beam was listed inadvertently, Mr. Raiche acknowledges that this bill should be reduced by $2540. Since the bill, Mr. and Mrs. Scott have paid additional monies into the registry of the court. 3 Mr. Raiche bases his bill on "time and materials". Exhibit 10 contains charges for carpenters and laborers, apparently billed by time. The other entries appear to be for

materials and cost of doing business. In calculating the time and materials billed, Raiche Builders included the monies which he paid to subcontractors. Five of the subcontractors testified on their work and their contractual relationship with Raiche Builders. Mr. Raiche added eight percent to his invoice as profit. His testimony revealed that although he charged

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While some changes suggested by the Scotts increased the cost, some of the material costs were lowered by the changes. 3 $189,500 was paid to Raiche Builders directly and $50,000 was deposited into the Registry of the Court pursuant to the offer of judgment, and disbursed to Mr. Raiche.

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$32 to $35 on his bill for his laborers, he actually paid them less. He marked up their costs and the costs paid to some subcontractors as a cost of doing business.

Presentation of the Witnesses Credibility of witnesses is always a concern for a finder-of-fact. However, in this action, there were few, if any, disagreements of fact. The parties agreed that there was no formal written contract between them, except for Exhibit A. The parties agreed that the renovation project was quoted at $240,000. The parties even agreed that no additional costs or charges were referenced during the project and that Mr. and Mrs. Scott dealt with the electrical subcontractors on their own. Mr. Raiche never disputes the Scotts' claims that they needed to hold to a $240,000 price, or the Scotts' claim that "time and materials" were never referenced as a pricing mode until after the invoice was produced. Mr. Raiche asserts that although the agreement set a $240,000 price, the parties agreed the work would be done on a time and materials basis, apparently in complete derogation of the writing. Mr. Raiche was well prepared, responsive and consistent. While he was scant on certain facts such as what discussions occurred at the outset with Mr. and Mrs. Scott, his candor about the initial price and the lack of ongoing discussions increased his credibility. However, throughout his examinations he was reluctant to speak in definitive dollar amounts, even when asked about his own computations. On cross-examination, he claimed that the parties had all agreed on a time and materials pricing, and acknowledged that he estimated the price to be $240,000 at the outset. Mr. Scott testified succinctly. While he was educated, professional, responsive, clear and respectful, he did not seem sophisticated in dealing with building contractors. The Court

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found Mr. Scott quite credible particularly because his testimony was consistent with that of all other witnesses. The Court also found the subcontractors fairly credible, though their knowledge of the job six years earlier was reasonably limited. Each of the subcontractors testified as to their work on the project. Their bills were consistent with the costs enumerated by Mr. Raiche. Each of them described their subcontracts and seemed protective of Mr. Raiche.

ANALYSIS The Contract Claim In cases where an agreement between the parties has been reduced to a writing, this Court is often called upon to determine the meaning of that writing. In this case, however, Mr. Raiche is not asking the Court to interpret the meaning of the written agreement that both he and the Scotts signed. Rather, Mr. Raiche is asking this Court to disregard that written agreement and substitute in its place an oral agreement he alleges existed between the parties. Mr. Raiche's breach of contract action is based, not on the Scott's breach of the signed written agreement, but on their breach of the alleged oral agreement. For over a century, Rhode Island courts have recognized that [i]f parties have put their contract into writing, the written instrument is to be regarded as the only evidence of the contract as finally concluded. Oral evidence of what was said or done during the negotiations will not be admitted either to contradict what is written or to supply terms with respect to which the writing is silent. The purpose of the rule is to enable parties to make their written contracts the only evidence of their undertakings, and to protect themselves against the hazard of uncertain oral testimony in respect to their engagements . . . . The only exception to the rule is when the written contract is incomplete, and it is apparent from an inspection of the instrument that it does not embrace the entire contract. In such

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a case oral testimony may be resorted to supplement, but not to vary or contradict, what is written. Myron v. Union Railroad Co., 19 R.I. 125, 32 A. 165 (1895) (emphasis added). This language in Myron is of the earliest expressions of the parol evidence rule by a Rhode Island court. While the parol evidence rule has been expounded upon since our high court's ruling some 115 years ago, this principal framework has remained basically unchanged. 4 The parol evidence rule is not a rule of evidentiary law, but a rule of substantive law. Quinn v. Bernat, 80 R.I. 375, 97 A.2d 273 (1953). [T]he rule "does not exclude certain data because they are for one or another reason untrustworthy or undesirable means of evidencing some fact to be proved. What the rule does is to declare that certain kinds of fact are legally ineffective in the substantive law; and this of course (like any other ruling of substantive law) results in forbidding the fact to be proved at all." Golden Gate Co. v. Barrington College, 98 R.I. 35, 39-40, 199 A.2d 586, 589 (1964) (quoting 9 Wigmore, Evidence (3d ed.),

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