State v. Thomas J. Haiduk, 2011AP551-CR, District 3, 8/30/11
In determining restitution for home improvement-related theft, the trial court failed to resolve whether the underlying contract was fixed-price or time-and-materials, therefore remand is necessary.
¶22 The court’s value-based $100,517.96 offset, and corresponding $35,877.33 restitution award, only includes an offset for the costof Haiduk’s materials, labor, and designs. The court never made a finding of whether Haiduk was or was not entitled to a profit offset or the amount. We therefore remand to the circuit court for a determination on this issue. We note that a profit offset determination will also require the court to resolve whether the agreement between the parties was for a fixed-price or time-and-materials contract.
¶23 If the court determines the agreement was a $150,000 fixed-price contract, Haiduk’s billing rates and markups are irrelevant for calculating profit, because, in a fixed-price contract, the contractor’s profit is already built into the agreement. See 1325 North Van Buren, LLC v. T-3 Group, Ltd., 2006 WI 94, ¶47, 293 Wis. 2d 410, 716 N.W.2d 822 (In a fixed-price contract, parties bargain for the final price of the project, not the amount of time or what is required to complete the project.). However, if the court concludes the agreement was for a time-and-materials project and the $150,000 was just an estimate, evidence of Haiduk’s billing rates and markups may be relevant to determine Haiduk’s profit offset.
Not much discussion in the opinion about offset, but the court does refer to State v. Longmire, 2004 WI App 90, 272 Wis. 2d 759, 681 N.W.2d 534, which discusses the matter at some length.