Opinion
No. A04-1737.
Filed June 7, 2005.
Appeal from the District Court, Dakota County, File No. C6-04-13695.
Able Concrete Raising, Inc., (respondent).
Margaret Jensen, (pro se appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
To prevent water seepage into her basement, appellant hired respondent to elevate and slope her sidewalk away from her house using a process called "mudjacking." When respondent's work was completed, appellant considered it to be inadequate and declined to pay respondent. Respondent then initiated a conciliation court action in which appellant was awarded damages. Respondent removed the action to the district court, which reversed and awarded damages to respondent. Appellant challenges that award. Because the district court's finding of substantial performance was clearly erroneous, we reverse.
DECISION I.
Appellant Margaret Jensen argues that respondent Able Concrete Raising, Inc. breached the contract. A breach of contract can occur when one party fails to perform. Estate of Riedel by Mirick v LifeCare Ret. Communities, Inc., 505 N.W.2d 78, 81 (Minn.App. 1993). Where one party has breached the contract, the other party is excused from performing. See Restatement (Second) of Contracts § 237 cmt. B (1981) ("[W]here performances are to be exchanged under an exchange of promises, each party . . . will not be called upon to perform his remaining duties . . . if there has already been an uncured material failure of performance by the other party."). A party becomes liable for breach of contract where damages were caused by that party's breach. Nguyen v. Control Data Corp., 401 N.W.2d 101, 105 (Minn.App. 1987).
In building and construction contracts, the general rule is that a party fulfills its duty under the contract with "substantial performance." Material Movers, Inc. v. Hill, 316 N.W.2d 13, 18 (Minn. 1982). Substantial performance is defined as:
performance of all the essentials necessary to the full accomplishment of the purposes for which the thing contracted has been constructed, except for some slight and unintentional defects which can be readily remedied or for which an allowance covering the cost of remedying the same can be made from the contract price. Deviations or lack of performance which are either intentional or so material that the owner does not get substantially that for which he bargained are not permissible.
Id. (quoting Ylijarvi v. Brockphaler, 213 Minn. 385, 390, 7 N.W.2d 314, 318 (1942)). Whether a party substantially performed is a question of fact and will be reviewed by this court on a clearly erroneous basis. Minn. R. Civ. P. 52.01; Indep. Sch. Dist. No. 35 v. A. Hedenberg Co., 214 Minn. 82, 92, 7 N.W.2d 511, 518 (1943); Paving Plus, Inc. v. Prof'l Invs., Inc., 382 N.W.2d 912, 915 (Minn.App. 1986). Application of the substantial performance doctrine depends on the facts of the case and the nature and scope of the nonperformance. Id.
The district court's findings of fact were terse, stating "[w]ork was substandard only as to patch areas." Thus, it appears that the district court concluded that respondent substantially performed. The record does not support this conclusion. To achieve substantial performance, the thing contracted for must fulfill the essential purpose for which it was constructed. Material Movers, Inc., 316 N.W.2d at 18. The record indicates that respondent's work did not fulfill its essential purpose. Appellant testified that the essential purpose of the work was to slope the sidewalk away from the house to prevent water seepage into the basement. Respondent's estimate confirms that the purpose of the work was to "[r]aise to the original level and for drainage." But the record demonstrates that the water seepage problem has worsened, not improved. Respondent raised the sidewalk but failed to slope it away from the house.
Further, the record indicates that the other defects in respondent's work are material. Raising the sidewalk created gaps of as much as one and one-half inches between concrete slabs. Respondent covered one gap between appellant's front steps and the sidewalk with only a thin layer of cement over rolled-up newspaper, left chunks of broken concrete between the driveway and sidewalk, made unequal rises between steps by elevating the slabs as much as one and three-quarter inches too high, created a dangerous drop-off from the sidewalk to the front lawn, left a patch of broken sidewalk by a basement window to slope down toward the house, and caused new cracks in the concrete slabs that were inadequately patched. This work is not "substandard only as to patch areas" as the district court found; it is wholly substandard. Moreover, because the patching became a significant portion of the job due to the many defects that resulted from the mudjacking, we could not construe the performance as substantial even if only the patch areas were substandard. Thus, the record does not support the conclusion that appellant received substantial performance of the work for which she bargained. Because the district court's finding of substantial performance is clearly erroneous, we conclude that respondent's defective performance breached the contract.
II.
The district court awarded costs and fees to respondent. A breach of contract entitles the injured party to damages. Restatement (Second) of Contracts § 346 cmt. a (1981). This court will not disturb a damage award unless the "failure to do so would be shocking or would result in plain injustice." Hughes v. Sinclair Mktg., Inc., 389 N.W.2d 194, 199 (Minn. 1986). We review the district court's award only for an abuse of discretion, Dallum v. Farmers Union Cent. Exch., Inc., 462 N.W.2d 608, 614 (Minn.App. 1990), review denied (Minn. Jan. 14, 1991), and must view the evidence in the light most favorable to the award. Rayford v. Metro. Transit Comm'n, 379 N.W.2d 161, 165 (Minn.App. 1985), review denied (Minn. Feb. 14, 1986).
A building contractor who substantially performs on a contract with only minor defects is entitled to recover the contract price minus the cost of remedying the defects. Sward v. Nash, 230 Minn. 100, 102, 40 N.W.2d 828, 830 (Minn. 1950). But the contractor cannot recover that price if the defects are so substantial as to not be capable of remedy even with an allowance for repair out of the contract price. Id. at 103, 40 N.W.2d at 830. Because we conclude that the defects in respondent's work were substantial, respondent cannot recover.
We conclude that appellant is entitled to damages. The general measure of damages for the injured party is the loss of the value of the deficient performance plus any expenses incurred due to the breach. Restatement (Second) of Contracts § 347 (1981); see also Gess v. Sill, 312 Minn. 288, 291, 2n. 1, 251 N.W.2d 650, 652 n. 1 (1977) (damages for defective installation were cost of installation plus costs of remedying defects).
Based on this general measure of damages for breach of a construction contract, we conclude that appellant is entitled to damages totaling $1,167: $808, the original price of the contract to have the work performed correctly, plus $359, the amount appellant paid in labor and materials to repair some of the damage. We reverse and remand for an order in accord with this opinion.