Opinion
No. 3-011 / 02-0012
Filed February 12, 2003
Appeal from the Iowa District Court for Polk County, Robert J. Blink, Judge.
Duane Clark appeals the decision of the district court which declined to foreclose his mechanic's lien on defendants' property and awarded defendants damages to repair defective work. AFFIRMED AS MODIFIED.
Dennis Lawyer of The Lawyer Law Firm, Indianola, for appellant.
John Vernon of Dickinson, Mackaman, Tyler Hagen, P.C., Des Moines, for appellees.
Considered by Huitink, P.J., and Mahan and Hecht, JJ.
Duane Clark appeals the decision of the district court which declined to foreclose his mechanic's lien on the property of Dino Rodish and Daniel Rodish and awarded the Rodishes damages to repair defective work. He claims: (1) he substantially performed the construction contract; (2) he should not be responsible for the cost to connect two buildings; (3) the garage doors were not defective; and (4) the damages for defective work should be offset against the amount owed to him under the contract. We affirm as modified.
I. Background Facts Proceedings
Clark entered into a contract with the Rodishes to construct a Stockade building for $37,886. The building was to be used to store recreational vehicles and was to have six overhead doors measuring twelve feet by thirteen feet. The Rodishes testified the building was to be in line with another building on the lot because they planned to connect the two buildings at a later time. The building was completed, but the Rodishes refused to pay $9822.26 on their outstanding bill.
The Rodishes had several complaints about the building. First, the completed building is not in line with the other building. Second, although the garage door openings measure twelve feet by thirteen feet, the overhead doors did not open a full thirteen feet. Third, some steel siding panels were damaged, and the Rodishes wanted them to be replaced.
Clark filed a mechanic's lien against the Rodishes seeking to collect under the contract. The Rodishes filed a counterclaim seeking to collect damages from Clark for faulty workmanship. The district court determined Clark could not enforce the mechanic's lien because he did not substantially comply with the contract. The court awarded the Rodishes $11,736.50 to repair the three complaints outlined above. Clark's posttrial motion was denied. He appeals.
II. Standard of Review
An action to enforce a mechanic's lien is in equity, and our review is de novo. Schumacher Elec., Inc. v. DeBruyn, 604 N.W.2d 39, 41 (Iowa 1999). While we give weight to the findings of the trial court, especially where credibility of witnesses is involved, we are not bound by them. Iowa R.App.P. 6.14(6)( g); Moore's Builder Contractor, Inc. v. Hoffman, 409 N.W.2d 191, 192 (Iowa Ct.App. 1987).
On the counterclaims, however, our standard of review is determined by the nature of the trial proceedings. Nepstad Custom Homes Co. v. Krull, 527 N.W.2d 402, 405 (Iowa Ct.App. 1994). In the present case, the district court ruled on evidentiary objections, which is a litmus test to determine whether a case was heard in law or equity. See Ernst v. Johnson County, 522 N.W.2d 599, 602 (Iowa 1994). We conclude our standard of review on the counterclaims is on assigned error of law. Iowa R.App.P. 6.4. If supported by substantial evidence and justified as a matter of law, the judgment will not be disturbed on appeal. Moore's Builder, 409 N.W.2d at 194.
III. Mechanic's Lien
Clark claims he substantially performed under the contract and should be entitled to enforce his mechanic's lien. In order to successfully enforce a mechanic's lien, substantial performance of the contract is required. Bidwell v. Midwest Solariums, Inc., 543 N.W.2d 293, 295 (Iowa Ct.App. 1995). Substantial performance allows only omissions or deviations from the contract that are inadvertent or unintentional, not the result of bad faith, do not impair the structure as a whole, are remedial without doing material damage to the other portions of the building, and may be compensated through deductions in the contract price. Nepstad Custom Homes, 527 N.W.2d at 406. By definition, substantial performance means less than full and exact performance of duty. Moore's Builder, 409 N.W.2d at 195. The contractor has the burden to show substantial performance. Id. at 194.
In Nepstad Custom Homes, we stated, "The question is not whether the house was substantially completed when the Krulls moved in, but whether the omissions or deviations from the contract were inadvertent or unintentional." Nepstad Custom Homes, 527 N.W.2d at 405. On our de novo review, we find the problems with the building in this case were inadvertent and unintentional. There was no evidence Clark acted in bad faith. Although the building has defects, these may be compensated through deductions in the purchase price. See Bidwell, 543 N.W.2d at 296. We conclude Clark substantially complied with the contract and should be entitled to enforce his mechanic's lien.
IV. Costs of Connecting the Buildings
The Rodishes presented evidence that it would cost $9435 to connect the two buildings if they had been in line, but since the two buildings were not in line it would cost $14,820 to connect them. The district court determined Clark should be responsible for the difference in these two amounts, $5385.
The property owner has the burden to prove the contractor's breach of contract. Sulzberger Excavating, Inc. v. Glass, 351 N.W.2d 188, 195 (Iowa Ct.App. 1984). Damages are awarded to place the injured party in the same position as that party would have been in if there had been no injury. Bidwell, 543 N.W.2d at 296. Damages in defective construction cases may include diminution in value, cost of construction, and completion in accordance with the contract, or loss of rentals. Service Unlimited, Inc. v. Elder, 542 N.W.2d 855, 857 (Iowa Ct.App. 1995).
Clark argues there was insufficient evidence to show the two buildings would be connected. Connecting the buildings was not part of Clark's contract. The Rodishes testified they wanted to connect the buildings in the future and had made Clark aware of this fact. The south end of the second building and the north end of the first building did not have overhanging eaves, in order to facilitate the future connection of the buildings. David Churchill, who designed the site plan, testified the Rodishes planned to connect the buildings if they obtained approval from the City of Des Moines.
Taking all of these factors into consideration, we find there is substantial evidence to support the district court's finding that Clark was aware the Rodishes planned to connect the buildings, and because of his faulty layout, it would cost more to connect them. While connecting the buildings was not part of the parties' contract, there was an agreement the building would be located as specified in the site plan. We determine the district court properly made Clark liable for the difference in cost in connecting the buildings due to its improper location.
V. Garage Doors
The district court concluded the garage doors were not in accordance with specifications because the doors did not open a full thirteen feet. The Rodishes presented evidence that with mechanical garage door openers the doors could open to their full extent. The cost to install electricity to the building would be $850, and the cost for six mechanical garage door openers would be $2890. The district court ordered Clark to pay these amounts to the Rodishes.
There was evidence some of the recreational vehicles which parked in the building were twelve feet three inches to twelve feet four inches high.
Clark asserts he should not be responsible for these costs because he constructed the building as specified in the contract. Eric Horlyk, an engineer, and Dan Fogarty, the manager of a garage door company, testified a contract which provides for garage doors to be twelve feet by thirteen feet would mean for the garage door frame to be twelve feet by thirteen feet, not that the door would necessarily open a full thirteen feet. Dino testified he expected the doors would open thirteen feet, but it is not clear this expectation was communicated to Clark.
Based on all of these factors, we determine Clark should not be responsible for the cost of electricity and mechanical garage door openers for the building. The evidence showed Clark's construction of the garage doors was as specified in the contract. At the time the parties entered into the contract, there was no expectation the building would have electricity or mechanical garage door openers.
VI. Offset of Recovery
Clark asserts the district court should have awarded him the outstanding amount that was due under the contract. We have already determined Clark substantially performed the contract. When a contractor has substantially complied with the contract, he is entitled to recover the contract price with deductions for any defects or incompletions. Moore's Builder, 409 N.W.2d at 194.
Here, $9822.26 remained unpaid on the contract. Clark is liable to the Rodishes for $7995.50 for the costs of replacing damaged steel siding panels, installing wind bracing, and the difference in price for connecting the buildings. We offset these amounts and determine Clark is entitled to payment of $1826.76, plus interest at the statutory rate. Costs of this appeal are assessed one-half to each party.