Opinion
No. 70-035 (Supreme Court No. 22776)
Decided March 10, 1970.
Lien action by general contractor and one subcontractor on motel construction contract. From an adverse jury verdict, plaintiffs appealed.
Affirmed
1. MECHANICS' LIENS — General Contractor's Damages — Amounts Owed Subcontractors — Not Parties — No Mechanics' Liens Filed — No Judgment Required. Where a general contractor's claim of damages includes amounts he owes to various subcontractors who have not filed mechanics' liens against the owners and who are not parties to the action, the failure of the owners to deny the claims of these subcontractors does not require that a judgment be entered in favor of the general contractor for these amounts.
2. DAMAGES — Property Owner's Claim — Reduce — Lien Claim — General Contractor — Includes — Amounts Owed Subcontractors. Damages suffered by property owners as a result of general contractor's breach of his contract to build may be used to reduce the lien claim of that contractor even though his claim includes undisputed amounts which are owed to subcontractors where those subcontractors are not parties to the action and have not filed mechanics' liens.
3. EQUITY — Mechanic's Lien Claim — Counterclaim — No Conversion to Law Case. In general, a mechanic's lien action is equitable in nature and the filing of a counterclaim for damages will not convert it into a law case.
4. ESTOPPEL — Equity Action — Stipulation — Trial by Jury — May Not Complain — After Adverse Verdict. Where plaintiffs in equity action stipulate to trial of the action to a jury, they are estopped from complaining of that stipulation after they suffer an adverse verdict by the jury.
Error to the District Court of Chaffee County, Honorable Howard E. Purdy, Judge.
Arthur M. Morris, David W. Sarvas, for plaintiffs in error.
Theodore J. Kuhlman, Edward J. McHugh, for defendants in error.
This case was originally filed in the Supreme Court of the State of Colorado and subsequently transferred to the Court of Appeals under authority vested in the Supreme Court.
The parties will be referred to as they appeared in the trial court: plaintiff in error, Roy Barlow, as plaintiff; Paul Kafalas and George Heinz doing business as Bellview Decorators by name; and George W. Staples and Ve B. Staples, defendants in error, as defendants.
Plaintiff entered into a written contract to build a motel for defendants in Buena Vista. The motel was to be built according to plans and specifications furnished by defendants. Plaintiff agreed to give his best professional advise on modifications and changes to be made. Plaintiff further agreed to purchase materials and hire help as inexpensively as possible, and if per diem expenses were necessary for outside labor, the same would be mutually agreed upon. Plaintiff was to receive as a fee for his services ten percent of the actual cost incurred. The project was to go forward with all possible speed. The project was to go forward with all possible speed. Plaintiff was to personally supervise construction and would spend at least one-half of his time on the project. He represented that the project could be finished by July 1, 1964, and that the construction would cost approximately $67,000. Pursuant to the agreement, work started in April and on July 19, 1964, defendants commenced operation of the motel.
At this point $69,779 had been paid out on the project and plaintiff claimed that there was $28,237.08 still due and owing to him. He filed a lien claim as the general contractor for this amount and subsequently in August initiated suit to foreclose his lien.
Only two subcontractors filed liens. One was subsequently paid in full by defendants and the lien was satisfied of record. The other subcontractor, Bellview Decorators, was joined as a defendant and filed a cross-complaint against defendants claiming $3,847.18 was due them and requested that their lien be foreclosed.
Defendants answered the cross-complaint of Bellview Decorators and generally denied that there was anything due and owing.
Defendants likewise answered plaintiff's complaint and generally denied anything due and owing, and filed a counterclaim alleging that plaintiff had breached the contract; that he had not completed the contract; that he had not followed plans and specifications; that he had not used his best professional judgment and knowledge; and that he had not completed the project on schedule; all to defendants damage to the amount of $24,685.
Defendants also filed a jury demand. A pretrial conference was held and the case set for trial to a jury. The pretrial order provided that plaintiff's claim be reduced by the amount of any subcontractors' or materialmen's lien claims. The claim of plaintiff was reduced $7,272.18, $3,847.18 claimed by Bellview Decorators under their lien and $3,425 on the lien claim that was paid by defendants. Subsequently, the trial date was vacated and reset for a few days later. Again, the stipulation and order provided that the case be set to a jury and it was so tried without any objection by anyone.
The jury verdict on the Bellview Decorators' claim was as follows:
"We the jury, duly sworn and empaneled, find the issues herein joined in favor of the Defendants, George W. Staples and Ve B. Staples, and against the Plaintiff, Bellview Decorators."
The jury verdict on defendants' claim was as follows:
"We the jury, duly sworn and empaneled, find the issues herein joined in favor of the Defendants, George W. Staples and Ve B. Staples, and against the Plaintiff, Roy Barlow, and assess their damages in the amount of $1.00."
Motion for a new trial was filed and overruled by the court and subsequently the court entered judgment in words and figures as follows:
"Judgment is hereby entered in favor of the Defendants and Third-Party Defendants on the claim of the Plaintiff and Third-Party Plaintiffs.
"Judgment is entered with reference to the Defendants and Third-Party Defendants Counter-Claim and against the Plaintiff, Roy Barlow, in the amount of One Dollar ($1.00) and for costs.
"Said Judgments are hereby entered this 15th day of December, 1966, nunc pro tunc February 7, 1966."
The evidence revealed that there had been a number of variations from the contract and specifications during the course of construction. There had been a substitution of materials in numerous instances and delays in completion.
Plaintiff and Bellview Decorators allege as grounds for reversal that the court committed numerous errors during the course of the trial. These alleged errors are without merit, but will be discussed in order.
We would be remiss in our duty if we were to proceed further without expressing our dissatisfaction with the briefs as filed. The record contains 1,797 folios and several pages of supplemental papers filed making up the record. The statement of the case and supplemental statement of the case, contrary to R.C.P. Colo. 115(a), do not refer to folio numbers, and throughout the briefs, there are rare references to folio numbers and argument is made with nonexistent evidence.
[1,2] Plaintiff claims that defendants never denied the claims of certain subcontractors and materialmen and that there should have been at least a judgment for these undisputed amounts. These subcontractors and materialmen did not file mechanic's lien statements as required by C.R.S. 1963, 86-3-9. They did, however, testify as to work performed, materials furnished, and the amount of their unpaid bills in support of plaintiff's lien claim. They apparently chose to rely upon the lien claim filed by plaintiff for the full amount of his claim, which included the amounts due each of the subcontractors and materialmen who had not been paid.
C.R.S. 1963, 86-3-1(2) provides:
"In case of a contract for the work, between the reputed owner and a contractor, the lien shall extend to the entire contract price, and such contract shall operate as a lien in favor of all persons performing labor or services or furnishing materials under contract, express or implied, with said contractor, to the extent of the whole contract price; and after all such liens are satisfied, then as a lien for any balance of such contract price in favor of the contractor."
C.R.S. 1963, 86-3-9(1)(a) provides: "In case of a contract for the work, between the reputed owner and a contractor, the lien shall extend to the entire contract price, and such contract shall operate as a lien in favor of all persons performing labor or services or furnishing materials under contract, express or implied, with said contractor, to the extent of the whole contract price; and after all such liens are satisfied, then as a lien for any balance of such contract price in favor of the contractor."
C.R.S. 1963, 86-3-9(1)(a)provides:
"In order to preserve a lien for work performed or materials furnished by a subcontractor, there must be served upon the owner or reputed owner of the property or his agent, at or before the time of filing with the county clerk and recorder the statement above provided for, . . . ."
C.R.S. 1963, 86-3-9(5) provides:
"All lien statements of all other subcontractors and of all materialmen whose claims are either entirely or principally for materials, machinery or other fixtures, must be filed for record after the last labor is performed or the last material furnished for which the lien is claimed and at any time before the expiration of two months next after the completion of such building, structure or other improvement."
There was no privity between the defendants and the various subcontractors and materialmen. If they had a claim for labor or materials, it would have been good against the contractor and would have been lienable against the owner. They apparently did not choose to proceed against either the contractor or owner in this proceeding. In order to protect themselves on the amount due, they would have had to file a mechanics lien statement against the owners in accordance with the above-referenced statute. They are not parties and are not herein complaining. If the contractor had prevailed, he would have had a lien for the amount owed to him under his contract. However, since these contractors and suppliers cast their lot with the general contractor and did not file separate liens, the owners are entitled to have their claim for damages reduce the amount of the general contractor's claim by the amount of the owners' damages.
In summary, by failing to file their lien claims, they are foreclosed from being parties in the instant proceedings or from complaining through the general contractor of the results of the trial.
Plaintiff and Bellview Decorators claim that the court erred in accepting the verdict of the jury and in not setting the same aside since proceedings of this type are equitable in nature and the jury should serve only in an advisory capacity.
There is a long line of authority that holds that lien cases are equitable in nature and that by filing a counterclaim for damages, the case is not converted into a law case. Selfridge v. Leonard, 51 Colo. 314, 117 P. 158; Miller v. District Court in and for Arapahoe County, 154 Colo. 125, 388 P.2d 763.
We agree with these decisions. However, defendants requested a jury and the case was set for trial and tried to a jury by stipulation and agreement of all the parties.
We adhere to the reasoning in Johnson v. Neel, 123 Colo. 377, 229 P.2d 939, to the effect that plaintiffs are estopped to complain of the fact that the case was tried to a jury after they had agreed to the jury trial.
There are other cases that hold to the same view; such as Macgregor v. Porter, 143 Colo. 467, 354 P.2d 489, and Fuller v. Brough, 159 Colo. 147, 411 P.2d 18, wherein it is stated:
". . . Rather, it was only after he had suffered an adverse judgment at the hands of the trial court that Fuller had this belated change of heart. Under such circumstances we hold that Fuller's notice of his desire to withdraw his earlier notice is too late. The notice having been acted upon before it was attempted to be withdrawn, the equitable principle of estoppel in pais precludes this belated shift in position. See Johnson v. Neel, 123 Colo. 377, 229 P.2d 939 and Piz v. Housing Authority, 132 Colo. 457, 289 P.2d 905."
The reverse is equally true when trial is to a jury without objection.
Bellview Decorators have joined with plaintiff in this appeal. There were no objections made to any instructions tendered and refused, and no objections made to any instructions given and the verdict and judgment against plaintiff and Bellview Decorators are supported by competent evidence.
Plaintiff and Bellview Decorators allege other grounds of error that are without merit and need no discussion.
This entire matter involved controverted testimony. There was sufficient evidence to support the verdict and subsequent judgment entered by the court, and same will not be disturbed upon review.
We find no error in the trial of the case. Judgment is affirmed.
CHIEF JUDGE SILVERSTEIN and JUDGE PIERCE concur.