Opinion
No. C5-97-228.
Filed October 7, 1997.
Appeal from the District Court, Dakota County, File No. C7956911.
Gregory A. Solsrud, John P. Swenson, Gregory A. Solsrud Associates, P.C., (for Respondents)
John D. Rice, Rice Law Firm, (for Appellant)
Considered and decided by Norton, Presiding Judge, Schumacher, Judge, and Willis, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Appellant Alfred Shadduck challenges the district court's determination that he is responsible to respondents Naper Construction and Westurn Cedar Supply for labor and services they provided in the construction of an addition to Shadduck's home. We affirm.
FACTS
On September 14, 1993, B.K.S. Construction, Inc., gave Shadduck and his wife a three-page "proposal for adding [a] great room and garage," which Shadduck accepted. On September 21, 1993, Shadduck and BKS signed a 14-page "construction management agreement" that states:
The owner agrees that BKS represent Owner, as Owner's agent, to award contracts to all necessary Independent licensed contractors to complete the work as listed and detailed within this contract specifications and for the contract price as listed.
* * * *
BKS will, as Owner's agent, disperse all monies to contractors upon receipt of said payments (as listed herein) from Owner.
Shadduck agreed to pay BKS $176,321 to construct the addition to the Shadducks' home.
In the fall of 1993, BKS accepted bids from Naper and Westurn for work on the Shadduck project. The next spring, representatives of Naper and Westurn separately told Shadduck that BKS had not paid them and that BKS claimed it had not received payment from Shadduck. Shadduck told respondents that he had given BKS money to pay them and that he would resolve the matter, but he did not promise that he personally would pay them. Nevertheless, Shadduck sent Westurn a check for $1,500 on the advice of counsel. In April 1994, before the project was completed, BKS went out of business and filed for bankruptcy.
Naper served a mechanic's lien statement on the Shadducks for $8,250 for insulation and sheetrock labor and materials. Westurn served a mechanic's lien statement on the Shadducks for $5,422 for roofing and gutter labor and materials. Respondents filed a complaint against the Shadducks based on the purported mechanic's liens and on theories of unjust enrichment and breach of contract. The Shadducks denied that respondents provided labor and materials at the Shadducks' request. The Shadducks waived their right to a jury, and the matter proceeded as a court trial.
The district court concluded that respondents' mechanic's liens were void because Westurn failed to provide the Shadducks with pre-lien notice and respondents both failed to file their complaints within one year after the date they provided the last item of materials or labor. The district court dismissed respondents' complaint against Shadduck's wife, but concluded that Shadduck is responsible to respondents because a principal-agent relationship existed between Shadduck and BKS. Shadduck moved for amended findings of fact or, in the alternative, for a new trial. The district court denied Shadduck's motions, and he appeals.
DECISION
In actions tried without a jury, the district court's findings of fact
whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.
Minn.R.Civ.P. 52.01. This court, therefore, will not reverse a district court's finding of fact unless it is manifestly contrary to the weight of the evidence or is not reasonably supported by the evidence as a whole. Milbank Ins. Co. v. Johnson , 544 N.W.2d 56, 59 (Minn.App. 1996).
The supreme court has stated:
It is well established that an owner is not liable for work or materials furnished a contractor where he is not a party to the contract between the contractor and subcontractor or materialman. The owner's consent to the making of an improvement does not of itself impose on him any personal liability nor does the fact that he benefits therefrom import contractual liability.
Johnson Peterson, Inc. v. Toohey , 285 Minn. 181, 183-84, 172 N.W.2d 326, 328 (1969). Respondents argue, however, that the contract between Shadduck and BKS creates an express agency. We agree.
Agency is a legal concept that the law imputes to the factual relationship between the parties. PMH Properties v. Nichols , 263 N.W.2d 799, 802 (Minn. 1978). "Whether an agency relationship exists is a question of fact." Church of the Nativity of Our Lord v. WatPro, Inc. , 491 N.W.2d 1, 6 (Minn. 1992).
An agency relationship is "the fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act."
Id. at 5-6 (quoting Restatement (Second) of Agency § 1 (1958)). Proof of an agency relationship rests with the will of the principal, rather than the acts of the alleged agent. Mikulay v. Home Indem. Co. , 449 N.W.2d 464, 467 (Minn.App. 1989), review denied (Minn. Feb. 21, 1990). If persuasive evidence to establish the elements of an agency relationship does not exist, there is no agency as a matter of law. Jurek v. Thompson , 308 Minn. 191, 200-01, 241 N.W.2d 788, 793 (1976).
The district court's finding that BKS was Shadduck's agent is reasonably supported by the evidence as a whole. The essential elements of an agency relationship are (1) consent to agency by the parties, (2) fiduciary relationship, and (3) principal's right to control agent. Jurek , 308 Minn. at 200-201, 241 N.W.2d at 793. The plain language of the written agreement between Shadduck and BKS shows that Shadduck agreed and consented to have BKS represent him as his agent in awarding contracts to independent contractors to complete the specified work. The record also shows that BKS had fiduciary obligations to Shadduck because it had to: (1) inspect payment requests from contractors to ensure that the work completed was sufficient for the amount requested; (2) determine that all work met with Shadduck's specifications and approval; (3) notify Shadduck of any violations of the contract and advise him regarding necessary and appropriate responses; and (4) work with Shadduck to resolve any conflicts with contractors, subcontractors, or suppliers. Finally, the record shows that Shadduck exercised control over BKS because the terms of the contract required BKS to ensure that subcontractors supplied lien waivers before dispersing money and to determine that work met Shadduck's specifications and approval.
It was not clear error for the district court to find an agency relationship between Shadduck and BKS and to determine that Shadduck, as principal, is responsible to respondents.