This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




Steffl Drilling and Pump, Inc.,



Barrel Reconditioning Industries,


Filed October 14, 1997


Amundson, Judge

Washington County District Court

File No. C196924

John D. Moritz, O'Leary & Moritz, Chartered, Box 76, 102 North Marshall, Springfield, MN 56087-0076 (for appellant)

Gary G. Fuchs, Campbell, Knutson, Scott & Fuchs, P.A., 317 Eagandale Office Center, 1380 Corporate Center Curve, Eagan, MN 55121 (for respondent)

Considered and decided by Huspeni, Presiding Judge, Amundson, Judge, and Thoreen, Judge.[*]



Appellant billed respondent $18,000 for drilling a 500-foot well. The district court held that respondent owed appellant $4,000 for the well. There was both an oral price estimate and a written proposal from appellant to respondent concerning the job; we remand because it is unclear which was considered the contract by the district court.


In August 1994, respondent Barrel Reconditioning Industries (BRI) leased a building in the Worthington area to operate its business. Because the site was just outside the Worthington city limits, BRI needed a water supply. BRI's sole owner, W. Jay Ahern, called Michael Steffl of appellant Steffl Drilling and Pump, Inc. (Steffl). Ahern asked how much it would cost to connect him to a neighbor's well; Michael Steffl responded that it would cost approximately $3,500. Ahern asked Michael Steffl how much it would cost to build a well of his own, and was told it would also cost approximately $3,500. Based on the estimates, Ahern decided to hire Steffl to drill a well. Steffl sent BRI, via facsimile, a proposal that gave costs for a 100-foot well as $3,595, including a well fee. The proposal also stipulated costs per foot if the well was deeper or shallower than 100 feet. Ahern claims to have not seen the proposal until after billing, however, BRI employee Brad Malecha promptly signed and returned the proposal.

Steffl employee John Dahl began drilling at the BRI site, where Malecha was the foreman. At 200 feet, water still was not found; after consulting with Malecha, Dahl continued drilling. Malecha and Dahl were in periodic communication until Dahl found water at 500 feet. After the well was completed, Steffl presented BRI with an invoice for $17,999. BRI refused to pay, and Steffl brought a lawsuit to enforce the contract. The district court found that BRI owed only $4,000 for the well. This appeal followed.


The district court determined that Steffl and BRI contracted for the drilling of a 100-foot well. The district court made the following legal conclusions:

1. That Steffl Drilling substantially performed its contract with BRI for the drilling of the well to 100 feet in depth in October 1994.

2. That Steffl Drilling substantially and materially deviated from its contract with BRI when it drilled a well to the depth of 500 feet for the defendant in October-November, 1994.

However, it is difficult to discern which agreement the district court considered the binding contract: the oral price quote initially given or the written proposal that was sent by facsimile. This is especially unclear when examining two of the district court's factual findings:

That Michael Steffl acting on behalf of Steffl Drilling, told Jay Ahern in the telephone conversation with Jay Ahern of BRI that the costs of installing the new water line from the existing well and the costs of drilling the new well were equal; he estimated the costs of each project at $3,500.00. Acting on this information, Jay Ahern of BRI directed Steffl Drilling to drill a new well on the property it leased near Worthington, Minnesota.

5. That Steffl Drilling subsequently sent to BRI a written proposal for drilling the new well which shows a total cost of $3,495.00. Brad Malecha, an employee of BRI signed the proposal. BRI then directed Steffl Drilling to commence the drilling of the new well.

If the initial oral discussion of price is considered the contract, BRI would owe Steffl $3,500, which was the oral price estimate given by Michael Steffl for the well construction.

If the written proposal is considered the contract, the matter is somewhat more complicated. First, the proposal was not a contract for a 100-foot well as the district court described, rather, it was for a well of unspecified depth, using 100 feet as its base line for cost calculations. The written proposal's first item reads:

1. 5 inch diameter drilled approximate depth of 100 feet at $ 15.00 per ft. $ 1,500.00 (Add or subtract $ 15.00 per ft. for more or less than 100 ft. estimate - Depth not guaranteed)

There was testimony that it is an industry practice to use a 100-foot base line in well drilling cost estimates.

If the written proposal is considered contractual, there also remains a notification issue. The district court must determine whether Malecha, the site foreman, had the

authority to approve further drilling. If so, BRI would owe Steffl $1,500 plus $6,000 (400 additional feet at $15 per foot), plus any additional costs outlined in the proposal.


Dated: October 8, 1997


Judge Roland C. Amundson

[ ]* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.