Opinion
No. 03-1670.
March 16, 2005.
Appeal from the Iowa District Court for Dickinson County, Joseph Straub, Judge.
Hillebrand Construction of the Midwest, Inc. and United Fire Casualty Company appeal a final decision enforcing Wedeking Construction Inc.'s, and Wedeking Pit Plant, Inc.'s mechanic's liens. AFFIRMED.
James A.Clarity, III, of Clarity Law Office, Spirit Lake, for appellant.
Michael Johnson of Stoller and Johnson, Spirit Lake, for appellee.
Heard by Sackett, C.J., and Vogel, Zimmer, and Hecht, JJ., and Brown, S.J.
Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2003).
Hillebrand Construction of the Midwest, Inc. (Hillebrand) and United Fire Casualty Company (United) appeal the judgment of the district court enforcing Wedeking Construction, Inc.'s and Wedeking Pit Plant, Inc.'s (together referred to as Wedeking) mechanic's liens. Specifically, Hillebrand contests the determination: (1) that it vested its project superintendent with authority to bind it to pay for work performed by Wedeking, (2) that the evidence supports quantum meruit recovery for the breach of an implied-in-fact contract, and (3) the district court's award of interest at eighteen percent. We affirm.
I. Facts and Proceedings
In 1996 Hallmark Development, Inc. (Hallmark) hired Hillebrand to act as general contractor for the construction of a thirty-unit apartment complex, access road, and parking area. Hillebrand was to employ all subcontractors needed to complete the project. That fall, Hillebrand hired Syndegard Excavating to perform grading work on the access road. The work was completed, but the road was not asphalted. As a consequence of this failure and the use of the road during a mild and muddy winter and spring, the road had to be re-graded the following year.
In April of 1997 Hillebrand's project supervisor, Bob Ryan, passed away. Michael Michehl, a subcontractor on the Hallmark project was hired to replace Ryan as project supervisor and occupied Hillebrand's on-site project supervisor's trailer. On April 30 Hillebrand sent out a letter to all the other subcontractors informing them that Michehl was now the project superintendent and held him out as such to project material suppliers. No limitations on Michehl's authority were mentioned in the letter or otherwise communicated by Hillebrand.
The parties use the term "superintendent" and "supervisor" interchangeably.
In the spring of 1997 Hallmark made it clear that it was becoming frustrated with certain delays in construction. In July of 1997 Hillebrand, realizing that it needed to remove some rock that was brought in during the winter to stabilize the soft and muddy access road, asked Wedeking for an estimate for this rock removal work. Wedeking provided an estimate of $2,000.00. This work was not done until Jerry Hillebrand, who was on-site, received approval from Dick Hillebrand, the acting manager of Hillebrand.
Following the removal of the rock, Michehl hired Wedeking to re-grade the access road. Wedeking proceeded with the work, believing Michehl had the authority to hire Wedeking. When Wedeking billed Hillebrand for this work, Hillebrand refused to pay, asserting Dick Hillebrand had not approved the work and only he could approve such contracts. Wedeking filed mechanic's liens, and United Fire Casualty Co. filed bonds discharging the liens. Hillebrand and United Fire Casualty Company appeal the district court's ruling.
II. Scope of Review
Actions to enforce mechanic's liens are tried in equity. See Iowa Code § 572.26 (1997); Baumhoefener Nursery, Inc. v. A D Partnership, II, 618 N.W.2d 363, 366 (Iowa 2000). Therefore, they are reviewed de novo. Griess Ginder Drywall, Inc. v. Moran, 561 N.W.2d 815, 816 (Iowa 1997). "Weight will be given to the findings of fact and credibility determinations of the district court, especially in mechanic's lien cases." Bidwell v. Midwest Solariums, Inc., 543 N.W.2d 293, 294 (Iowa Ct.App. 1995) (citation omitted).
Our review of the file produces some confusion as to whether this case was actually tried in equity. The petition, answer, and all other filings reflect that the case was assigned Law No. 20408. A July 21, 2003, calendar entry made by Judge Straub indicates that the action is an action at law. The trial transcript reflects that Judge Straub states as much at the beginning of the bench trial, and evidence was excluded based on legal considerations. See Stille v. Shaffer, 297 N.W.2d 379, 381 (Iowa 1980) (noting that ruling on evidentiary objections is a "hallmark" of a trial at law). However, this discrepancy is remedied approximately halfway through the trial when Judge Straub stated the following in response to an objection based on lack of foundation,
[t]he objection is well taken. During the noon hour I was doing some research as far as mechanics liens and determined that we're in equity. I have been making prior rulings as though we are in law. Therefore, I am going to ask the witness to answer the question, although as far as I'm concerned, there isn't the foundation.
Quantum meruit recovery based on an implied-in-fact contract is normally reviewed for corrections of errors at law. See Iowa Waste Sys., Inc. v. Buchanan County, 617 N.W.2d 23, 30 (Iowa Ct.App. 2000). However, where the case was tried in equity, review is de novo. See id.
III. Issues
A. Apparent Authority
Both parties agree the pivotal issue on appeal is whether Hillebrand acted in such a manner as to vest Michehl with apparent authority to bind Hillebrand to pay for the grading work done by Wedeking. It is Wedeking's burden to establish that such authority existed. Waukon Auto Supply v. Farmers Merch. Sav. Bank, 440 N.W.2d 844, 847 (Iowa 1989). Proof of apparent authority focuses on the actions of the principal. Id. Such authority is that which has been knowingly permitted by the principal or which the principal has held the agent out as possessing. See Magnusson Agency v. Public Entity Nat'l Co. Midwest, 560 N.W.2d 20, 25-26 (Iowa 1997). This determination is a fact question. Waukon Auto Supply, 440 N.W.2d at 847.
The district court concluded that the "evidence overwhelmingly shows that Mike Michehl had apparent authority to request Wedeking to finish the job." (Emphasis added). This determination was largely based on the April 30, 1997, letter notifying everyone concerned that Michehl was the new project superintendent, while placing no limitations on his authority. The district court also cited the fact that the "prior course of dealings" between Wedeking and Hillebrand indicated that oral orders made by the project supervisor (either Ryan or Michehl) were paid for by Hillebrand even though they were never approved by Dick Hillebrand.
At oral argument Hillebrand admitted that the evidence of the letter alone is sufficient support for a finding of apparent authority. However, Hillebrand claims Wedeking's actual knowledge of Hillebrand's internal policy requiring Dick Hillebrand's approval of all contracts negates the finding of apparent authority. Hillebrand's main support for a finding of actual knowledge is its proposition that Wedeking's delay earlier in the project in moving rocks until Dick Hillebrand approved its $2,000.00 bid evidences Wedeking's prior knowledge of Hillebrand's internal policy. Upon our review we find that the record supports only a finding that Jerry Hillebrand, who was on-site, waited for Dick's approval before giving Wedeking the go-ahead for the rock removal. Thus, Wedeking waited for on-site approval, but not specifically for approval from Dick Hillebrand. This delay does not evidence Wedeking's actual knowledge of Hillebrand's internal policy regarding contract approval.
Hillebrand also argues that Wedeking though its corporate manager Charles Wedeking actually knew all contracts had to be approved by Dick Hillebrand. However in support of this proposition Hillebrand cites Charles Wedeking's testimony in its entirety, but not to any particular page and is thus not in compliance with Iowa Rule of Appellate Procedure 6.14. This rule requires, among other things, that every proposition put forth in the brief, which is either found in or supported by the record, be followed by a specific reference to the record or appendix in accordance with Iowa Rule Appellate Procedure 6.14(7). See Iowa R.App. P. 6.14(1)( f). Thus, to reach the merits of this argument would require us to assume a partisan role and undertake Hillebrand's research and advocacy. This role is one we refuse to assume. See Inghram v. Dairyland Mut. Ins. Co., 215 N.W.2d 239, 240 (Iowa 1974); see also In re Estate of Leonard v. Swift, 656 N.W.2d 132, 147 n. 4 (Iowa 2003) (refusing, where brief contained inaccurate reference to place in appendix where pertinent court orders could be found, to undertake an independent review of the record); Hoefer v. Wisconsin Educ. Ass'n Ins. Trust, 470 N.W.2d 336, 342 (Iowa 1991) (stating failure to cite to record or transcript for factual support permits court "to ignore [a party's] contentions altogether").
In summary, our review reveals that the letter Hillebrand mailed out in the spring of 1997 announcing that Michehl was the new project superintendent placed no constraints on his authority. Wedeking had been paid for prior work and materials requested by the project supervisor. No evidence supports a finding that Wedeking actually knew of any limitations on Michehl's authority. We accordingly affirm the district court's finding that "Mike Michehl had apparent authority to request Wedeking to finish the job."
B. Quantum Meruit Recovery Based Upon An Implied-In-Fact Contract
Our supreme court stated in Roger's Backhoe Service, Inc. v. Nichols, 681 N.W.2d 647, 651 (Iowa 2004), that the party seeking recovery under an implied-in-fact contract must show (1) the services were carried out under such circumstances as to give the recipient reason to understand (a) they were performed for him and not some other person, and (b) they were not rendered gratuitously, but with the expectation of compensation from the recipient; and (2) the services were beneficial to the recipient. Quantum meruit damages for a breach of an implied-in-fact contract are "the reasonable value of the services provided and the market value of the materials furnished." See Iowa Waste Sys., Inc., 617 N.W.2d at 30.
The crux of Hillebrand's argument is that the second requirement of an implied-in-fact contract has not been satisfied as Hillebrand received no benefit from Wedeking's work. Specifically, Hillebrand argues (1) the benefit of Wedeking's work was not to Hillebrand, but to Hallmark Development, and (2) it lost money on the project.
In Okoboji Camp Owners Coop. v. Carlson, 578 N.W.2d 652 (Iowa 1998), the Iowa Supreme Court provided the following definition of "benefit:"
A person confers a benefit upon another if he gives to the other possession of or some other interest in money, land, chattels, or choses in action, performs services beneficial to or at the request of the other, satisfies a debt or a duty of the other, or in any way adds to the other's security or advantage. He confers a benefit not only where he adds to the property of another, but also where he saves the other from expense or loss. The word "benefit," therefore, denotes any form of advantage.
Okoboji Camp Owners Coop., 578 N.W.2d at 654 (quoting Restatement of Restitution § 1, cmt. b (1937)).
Hillebrand was contractually bound to Hallmark to complete the project, including the parking lot and access road. The re-grading work performed by Wedeking was, by all accounts, necessary for completion of the project. Thus, Wedeking's performance of the grading work was a benefit to Hillebrand. See Roger's Backhoe Serv. Inc., 681 N.W.2d at 652 (concluding that a benefit was conferred because the effort made was "necessary to the successful completion of the project . . ."). Moreover, Hillebrand had the contractual duty to hire the subcontractors necessary to complete the Hallmark project, and Michehl had apparent authority to request that Wedeking perform the necessary grading work. Therefore, this work benefited Hillebrand as it was part of Hillebrand's contractual obligation to Hallmark and was performed at the request of Hillebrand. We accordingly conclude Wedeking is entitled to quantum meruit recovery for the breach of an implied-in-fact contract.
C. Interest Rate
Hillebrand's final issue is that the eighteen percent per annum interest awarded on the judgment ordered by the district court is unfair and usurious. Hillebrand, however, failed to cite any authority in support of this argument so we deem it waived. See Iowa R.App. P. 6.14(1)( c). Consequently, we affirm the district court's interest award.
Hillebrand's primary argument is that the interest rate was selected randomly. However, the invoices from Wedeking to Hillebrand all provided notice that an interest rate of one-and-one-half percent per month or eighteen percent per annum would be applied to unpaid balances. Moreover, the interest rate charged and the notice provided both comply with Iowa Code section 535.11 (1997), which governs finance charges on accounts receivable.
D. Appellate Attorney Fees
Wedeking requests appellate attorney fees and costs on appeal. Iowa Code section 572.32 directs that a prevailing plaintiff may be awarded reasonable attorney fees. Section 572.32 "in no way limits attorney fees to those incurred in the district court. . . . [T]he statute contemplates the award of appellate attorney fees." Schaffer v. Frank Moyer Const., Inc., 628 N.W.2d 11, 23 (Iowa 2001). Wedeking has provided an affidavit of attorney fees incurred in furtherance of its appeal. We find these fees reasonable and therefore award Wedeking $5,587.84 in appellate attorney fees. Cost on appeal are assessed against appellants.