Opinion
No. C4-97-138.
Filed August 26, 1997.
Appeal from the District Court, Dakota County, File No. C9-96-6483.
David D. Hammargren, Timothy J. Peters, Hammargren Meyer, P.A., (for Respondent).
Russell L. Streefland, (for Appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
In this mechanic's lien foreclosure action, appellant challenges the trial court's denial of his motion for a new trial, asserting that the trial court clearly erred by finding that the contract did not provide that the sale of certain subdivision lots was a condition precedent for payment to respondent. We affirm.
FACTS
Appellant Michael Brandt owned real property that he and his father developed into a nine-lot residential subdivision. On April 17, 1995, appellant contracted with respondent Ryan Contracting, Inc. to grade the property and to install utilities and streets, and the parties agreed that payment would coincide with the sales of the first four lots. Respondent completed its work on June 2, 1995. The parties stipulated that appellant owed respondent $138,452.41 plus interest for respondent's work. After the closing of the first lot in August 1995, appellant paid respondent $33,278.38 plus interest of $484.13, which left a remaining balance of $105,174.03 plus interest. The other eight lots remained unsold.
In September 1995, respondent filed and served a mechanic's lien statement. In February 1996, it commenced this foreclosure action. Hearing the case without a jury, the trial court ruled for respondent, awarding it monetary damages plus interest, costs, and attorney fees. Appellant brought a motion for amended findings or a new trial, and respondent moved for amended findings requesting the court to order a sheriff's sale of appellant's property and to award additional attorney fees. The trial court granted respondent's motion to order a sheriff's sale but denied all other motions. In March 1997, the court issued an order confirming the sheriff's sale of the property to respondent.
DECISION
The construction and effect of a contract are questions of law, but when ambiguity exists and construction depends on extrinsic evidence and a writing, they become a question of fact. Turner v. Alpha Phi Sorority House , 276 N.W.2d 63, 66 (Minn. 1979). "Ambiguity exists when the language of a written document, by itself, is reasonably susceptible to more than one meaning." Trondson v. Janikula , 458 N.W.2d 679, 681 (Minn. 1990). Findings of fact will not be set aside unless clearly erroneous. Minn.R.Civ.P. 52.01. A trial court's findings with respect to the formation and terms of a contract receive the same weight as those of a jury, and a reviewing court will not reverse unless they are "manifestly and palpably contrary to the evidence." Jadwin v. Kasal , 318 N.W.2d 844, 847 (Minn. 1982). When deciding whether findings of fact are clearly erroneous, an appellate court views the evidence in the light most favorable to the trial court's findings. Trondson , 458 N.W.2d at 682.
Alleging that the trial court clearly erred, appellant essentially argues that the plain meaning of the contract established that appellant would pay respondent only upon the sale of the lots and, thus, that the sale of the lots is a condition precedent to his obligation to pay respondent. Rejecting that argument, the trial court found:
10. That the parties never agreed that if the remaining three lots failed to sell that [respondent] would not be paid for the work it has performed.
Although the parties agree that appellant would make partial payments to respondent after the sale of each of the first four lots, the contract itself does not state this requirement. The contract provided:
III. Payment to [respondent] by [appellant] shall be made as provided in attached Exhibit A.
The exhibit provides in pertinent part:
I have attached a tabulation of the lots in SUNSET HILL that shows how the money from the sales will be distributed at the closing. Lot 5, Block 1, is sold and will close 30 days after the plat is recorded. * * *
You will get $33,278.38 plus $2056.41 * * * for a total of $35,334.79. * * *
When the next three lots sell, I will also give you the amount of the real estate commission, if I don't have to pay it to a realtor. * * *
I will pay you interest (at the annual rate of 9% starting 30 days after the blacktop is done) and anticipate that we will have 3 more sales that will close within a few months after the blacktop is done.
The attached schedule indicates that between $32,201.82 and $36,932.21 of the anticipated proceeds from the sale of any given lot would become "[a]vailable" for respondent. Thus, the contract does not state that appellant would pay respondent only when he sold the first four lots.
Following the Restatement and numerous jurisdictions, the court of appeals has adopted the rule of law that a court will not construe a subcontract to require payment to the general contractor as "a condition precedent to payment to the subcontractor, absent unequivocal, unambiguous language to that effect." Mrozik Constr., Inc. v. Lovering Assocs., Inc. , 461 N.W.2d 49, 52 (Minn.App. 1990) (construing contract language that "the Subcontractor shall be paid to the extent that the Contractor has been paid on the Subcontractor's account" as merely indicating that "the timing of payment to the subcontractor must not be delayed after the general contractor receives funds from the owner"). The court also noted that the law disfavors conditions precedent when the obligee exercises no control over the occurrence of the event in question. Id. In this case, the contract does not contain "unequivocal, unambiguous language" that the sale of lots was a condition precedent for the payment to respondent, and respondent exercised no control over the sale of the lots. Moreover, the language in this contract, like the Mrozik language, merely provides the timing for the payment, not a condition. Thus, the contract contains no condition precedent.
Appellant also asserts that the record contains no testimony that the lots would never sell. The trial court, however, only found that lots had "failed to sell." The record sufficiently supports the trial court's findings. The contract exhibit provided that appellant and his father "anticipate that we will have 3 more sales that will close within a few months after the blacktop is done." Respondent's owner testified that he relied on this statement and that he expected payment within a "reasonable time." The lots then remained unsold for over a year. Thus, this finding is not clearly erroneous.
The trial court's finding that the contract did not require sale of the first four lots before appellant's obligation to pay respondent does not appear "manifestly and palpably contrary to the evidence." Jadwin , 318 N.W.2d at 847. Because the contract contained no condition precedent, the trial court did not abuse its discretion by denying appellant's motion for amended findings or a new trial.
Finally, respondent asserts that the trial court abused its discretion by not awarding it additional attorney fees for defending appellant's post-trial motion after the court previously had awarded it attorney fees as the prevailing party at trial. In a mechanic's lien action, the amount of the attorney fees awarded rests within the "sole discretion" of the trial court, and we will not reverse absent an abuse of that discretion. Automated Bldg. Components, Inc. v. New Horizon Homes, Inc. , 514 N.W.2d 826, 831 (Minn.App. 1994), review denied (Minn. June 15, 1994). Appellant cites no authority to support its claim that the successful defense of a post-trial motion compels an additional award of attorney fees. The trial court was well within its discretion to conclude that respondent already had received a sufficient amount of attorney fees.