Summary
In Miles Homes the faulty construction of a garage was such this court held the contract was not substantially performed.
Summary of this case from Kreyer v. DriscollOpinion
March 4, 1964 —
March 31, 1964.
APPEAL from a judgment of the circuit court for Washburn county: ALLEN KINNEY, Circuit Judge. Affirmed in part; reversed in part.
For the appellant there was a brief and oral argument by Cletus D. Howard of Eau Claire.
For the respondent there was a brief and oral argument by Warren Winton of Shell Lake.
Action to foreclose a lien. Miles Homes, Inc., of Wisconsin, plaintiff, is the assignee of Miles Construction Company of St. Paul, Inc. Each will be referred to as "Miles."
Miles contracted to build a garage on defendant Starrett's property for $1,250 (ultimately $1,270 because of an extra). The contract called for construction in accordance with plans and specifications on file at the Miles office "and set forth in its folder." Certain additional specifications were written into the Miles printed form of contract. The folder bore a "Gold Bond Guarantee" which provided in part: "Miles guarantees if any parts of any building are not acceptable to you, these parts will be replaced at no additional charge."
Miles constructed the garage in July and August of 1959. Starrett made complaints to Miles during construction and in early September. In November Mr. Starrett detailed his complaints in a letter asking that Miles repair the garage so as to conform to the contract, or authorize Starrett to have it done and deduct the cost from the contract price. Miles did not comply and Starrett had the garage partially rebuilt.
Plaintiff Miles demanded the full contract price. No evidence was presented as to the reasonable value of the garage as constructed.
Trial was to the court. The findings of fact include the following:
"5. That in the construction of the garage the door, as installed, was not a solid door as provided for in the contract, but contained glass windows; that no second door was framed in as provided in the contract; that the siding was not as of good quality as that provided for in the contract; that no felt was used on the roof as provided for in the contract; that plaintiff's assignor agreed by its contract to install 2"x4" rafters spaced 16" on center and guaranteed sufficient quantities of materials; that plaintiff's assignor failed to furnish and construct rafters spaced as aforesaid but installed rafters so widely spaced and lacking in trussing and stringers that within 2 years after construction the roof sagged; that the roof boards were not of good quality as contracted for but were of poor quality and full of holes; that the floor was not laid in a good and workmanlike manner but was laid with an improper slant so that the water ran into the garage instead of out of it; that the roof boards were not nailed in a good and workmanlike manner in that only one nail was put in for each roof board per rafter.
"6. That the defendant spent $549.42 in rebuilding and repairing the garage, but that $86.80 was spent for Redwood siding, a quality of siding better than that specified by the contract and that said sum of $86.80 should be subtracted from the total sum of $549.42 expended by the defendant; that the net sum of $462.60 was reasonably and necessarily expended by the defendant in repairing and rebuilding the garage"
The trial court concluded that Miles did not substantially perform its contract; that there was no basis in the pleadings or proof for allowing a quantum meruit recovery, and that the complaint must be dismissed. Judgment was entered May 17, 1963. Thereafter Miles moved, among other things, for a new trial to determine the reasonable value of its services. The motions were denied. Miles has appealed from the judgment.
Additional facts will appear in the opinion.
1. Performance of the contract. The findings of the circuit court, quoted in the statement of facts, are not against the great weight and clear preponderance of the evidence. Thus the only question is whether the court could properly conclude that the contract was not substantially performed.
The defects found by the court involved every important element of the building, its walls, doors, floor, and roof and were of a character which, under the evidence, the court could consider substantial and important. The sum of money reasonably required to rebuild the garage into compliance with the contract equaled 36 percent of the contract price.
We have said: "No mathematical rule relating to the percentage of the price, of cost of completion, or of completeness can be laid down to determine substantial performance of a building contract." In cases where this court has approved a finding of lack of substantial performance, the amount necessary for proper completion has been a smaller percentage of the contract price than the 36 percent involved in this case.
Plante v. Jacobs (1960), 10 Wis.2d 567, 572, 103 N.W.2d 296.
Whalen v. Eagle Lime Products Co. (1913), 155 Wis. 26, 143 689; Nees v. Weaver (1936), 222 Wis. 492, 269 N.W. 266.
This court has also said: "To recover upon an uncompleted entire contract on the claim of having substantially, but not fully, complied with its terms, the contractor must have made a good-faith effort to perform and satisfied substantially the promises and agreements made by him."
Nees v. Weaver, supra, p. 495, footnote 2. See Anno. 107 A.L.R. 1405.
Although the circuit court made no specific finding that Miles did not make a good-faith effort to perform, such finding may be implied from the conclusion that there was no substantial performance, and there is evidence to support it. As previously noted, certain requirements in addition to standard specifications were written into the printed form of contract. Miles did not provide its carpenter with a copy of the contract, and at least two of the deficiencies were failures to perform these special terms. After complaints were made, Miles made no substantial effort to remedy them.
The record supports the conclusion reached by the trial court, and Miles was not entitled to any lien.
2. Claim of error in receipt of evidence. Miles objected to a newspaper advertisement of a Miles double garage for a price of $888. Mr. Starrett testified that this advertisement had interested him in talking with Miles about building a garage. His counsel offered it on the theory that it tended to show that the special requirements inserted in the contract were reflected in the $382 difference between the advertised price and the contract price. The circuit court made reference to this advertisement in suggesting, in a memorandum, that the Miles employees on the job had not seen the contract and did not know whether Starrett "ordered an $888 garage or a $1,250 garage." Miles points out that it was not established that the advertised garage may not have been available in Washburn county, Wisconsin, at the price advertised in a newspaper in St. Paul, Minnesota. In any event, we find no prejudicial error.
3. Recovery of money judgment for unjust enrichment. After judgment, Miles moved for a new trial so as to recover the reasonable value of its services. Miles did not appeal from the order denying the motion, and although the motion and order have been transmitted here as part of the record, the merits thereof have not been argued by respondent Starrett so as to be before us by waiver. Miles has no standing, as a matter of right, to seek reversal or modification of the judgment. Miles' efforts have, however, conferred a benefit upon Starrett, and, in the interest of justice, Miles should have an opportunity to offer proof upon a theory of restitution.
See sec. 274.11(4), Stats.; Baumgarten v. Jones (1963), 21 Wis.2d 467, 124 N.W.2d 609, and Estate of Burns, ante, p. 175, 127 N.W.2d 239.
The applicable rule is found in Valentine v. Patrick Warren Construction Co. dealing with restitution for benefit conferred by a defaulting contractor. Miles should be permitted to establish the reasonable value of the garage as built. Starrett has already established that it was necessary to spend $462.60 to put the garage into the condition called for by the contract. He apparently does not claim that Miles' failure caused him other damages. Miles would be entitled to a money judgment for the reasonable value of the garage as built, but in no event more than $807.40, the contract price reduced by $462.60. Under the circumstances of this case where the relief being given to Miles is so wholly a matter of grace, Starrett should have the benefit of the costs already awarded in the trial court, and should be allowed to tax costs on this appeal.
(1953), 263 Wis. 143, 165, 56 N.W.2d 860.
Since the obligation does not arise under express agreement, there can be no lien under sec. 289.01, Stats.; see sub. (4); Greenquist, The Doctrine of Unjust Enrichment As it Affects Mechanic's Lien Foreclosures, 34 Wisconsin Bar Bulletin (February, 1961), p. 39.
Starrett should have the option of terminating this case by consenting to a judgment against him for $686.10, without costs. This figure represents the contract price ($1,270) reduced by $462.60, and further reduced by $121.30, the costs originally taxed in circuit court. Under our decision, Miles could not recover a greater sum in any event. Starrett may exercise his option by filing a written consent with the clerk of circuit court within ten days after the return of this record.
By the Court. — Insofar as the judgment denies plaintiff a foreclosure of a lien, it is affirmed. In other respects it is reversed, and cause remanded for further proceedings in accordance with the opinion. Respondent may tax costs on appeal.