Opinion
No. 49A02-1008-PL-1029
12-13-2011
EDNA KELLY, Appellant, v. JOHNNY CONWAY, d/b/a CONWAY SERVICE, Appellee.
ATTORNEY FOR APPELLANT: DANA CHILDRESS-JONES Indianapolis, Indiana ATTORNEY FOR APPELLEE: MITCHELL M. POTE Indianapolis, Indiana
Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT:
DANA CHILDRESS-JONES
Indianapolis, Indiana
ATTORNEY FOR APPELLEE:
MITCHELL M. POTE
Indianapolis, Indiana
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Caryl F. Dill, Magistrate
Cause No. 49D05-0705-PL-19026
MEMORANDUM DECISION - NOT FOR PUBLICATION
MATHIAS , Judge
Johnny Conway d/b/a Conway Service ("Conway") sued Edna Kelly in Marion Superior Court for breach of contract alleging that he was not paid for labor and materials utilized in rebuilding her fire-damaged home. After a bench trial, the trial court concluded that Conway was entitled to judgment in his favor pursuant to the theory of unjust enrichment. Kelly appeals and argues that the trial court erred when it concluded that Kelly was unjustly enriched because her home was not livable when Conway was fired from the construction project.
We affirm.
Facts and Procedural History
Kelly hired Conway to rebuild her home, which was damaged by a fire on January 4, 2006. The estimated cost to rebuild the home was $125,000. Conway had previously performed repairs on Kelly's home and they were acquainted through their membership at the same church. Ron Miller ("Miller"), another member of the church, assisted Kelly with the redesign of her home and oversaw the reconstruction of her home. During the construction process, Kelly began to question the quality of Conway's work and was dissatisfied with the progress of the reconstruction. On June 20, 2006, as the home was nearing completion, Kelly fired Conway.
Conway submitted a final invoice to Kelly after his dismissal. Miller and Kelly believed that Conway overcharged Kelly for his services on the final invoice. Kelly refused to pay Conway's final invoice. But she paid remaining amounts due to subcontractors directly and paid additional amounts to third parties to complete the reconstruction of her home.
On May 9, 2007, Conway filed a complaint against Kelly alleging that Kelly had breached their agreement by failing to pay his final invoice, and he requested foreclosure of a mechanic's lien. In response, Kelly filed her answer and counterclaims against Conway. A bench trial was held on February 4, 2010. The evidence generally established that Kelly paid all invoices submitted by Conway except for his final invoice. In total, Kelly paid Conway $74,915.85, but this amount included $7,614 for demolition of the existing structure and $6061.65 for windows and doors, which cost was not included in the original $125,000 estimate to rebuild the home.
On May 21, 2010, the trial court issued its findings of fact and conclusions of law, and entered judgment in favor of Conway. Specifically, the trial court found in pertinent part:
7. . . . Conway prepared a written proposal on or about February 13, 2006 which estimated the cost to rebuild the home to be $125,900. The rough written proposal was presented to Mr. and Mrs. Kelly at a meeting in their temporary residence. Also present at the meeting were Conway's brother, and Mr. Ronald Miller who was hired by Mr. Kelly to draw blueprints for the restoration and generally oversee the project as the Kelly's [sic] agent. No written contract was ever presented or signed.Appellant's App. pp. 28-31.
***
10. Conway had done remodeling work for Kelly less than one year prior to the fire, had invoiced Kelly for that work, and been promptly paid for that work. There was no written contract for that prior work.
11. Both Conway and Kelly testified that they worked without a signed contract because they "trusted each other."
12. Both parties agreed that an oral agreement was reached by the parties for Conway to begin work on the project at their initial meeting whereby Conway would invoice Kelly and she would pay him for work done and materials purchased. Although a completion date within 90 days was discussed, Conway would not commit to it because of the uncertainty of the weather.
13. Ronald Miller's testimony corroborated that an agreement was reached. He prepared blueprints based upon the agreement of the parties with some modifications which were not in Conway's initial proposal. Any time frame discussed in the initial meeting did not included these modifications.
***
22. Completion time became an issue because the lease on Kelly's temporary apartment was for six months and she was concerned that the work was not progressing fast enough to allow her and her daughter to return to the home.
23. Kelly and Miller complained at trial that Conway was frequently a "no show, no call" at the work site although there was no dispute that all parties knew that the construction job was a second job for Conway and that he had obligations to his other employer.
24. Conway also missed some time from the job as a result of being hospitalized with pneumonia for a week after the footings were poured.
25. Further delays resulted from bad weather, and significant changes and "tear outs requested by Ronald Miller." These upgrades from the original home and the original estimate included changing the thickness of the footing requiring it to be torn out and repoured; increasing the total square footage of the home by moving walls; adding and extending heat runs; changing the roof design from gable to hip which required reordering trusses; changing the color of the bricks and requesting bricks be torn out and relaid; choosing Hardi-Board siding rather than replacing the original vinyl; increasing the size of the sunroom; and redesigning the bathrooms and the kitchen.
26. The upgrades were not contemplated in the original estimate and required upgrades in materials. Some tear outs were the result of bad workmanship or substandard construction, but some resulted from "creative" differences between Miller and Conway which were not specified before the work began. Any issues raised by Miller or Kelly during construction were addressed at the time they were raised. Conway was unaware of any ongoing dissatisfaction.
27. It is undisputed that Conway was dismissed from the job on June 30, 2006, before the house was finished, but that the subcontractors remained on the job briefly after that date. At the time of his dismissal, all major construction was done and all that was left was interior finishing, painting and trim and finishing the kitchen. Neither he nor his contractors laid any flooring or did any work in the kitchen. At the time of his dismissal, neither the electricity nor the water were on.
28. Some work that was contemplated in the original estimate was not completed.
29. It is undisputed that Conway was dismissed before the final walk through inspection where any potential problems would be brought to the contractors [sic] attention so that they could be remedied.
30. Kelly testified that her main reason for terminating Conway was that the work was "just taking too long."
31. Although Kelly testified that the home was not habitable at the time of Conway's dismissal, she admitted an official move in date of July 12, 2006. On that date, Kelly paid the plumber, Ron Sayles' final invoice in the amount of $3850.42.
32. A Certificate of Completion was issued by the City of Indianapolis for the Kelly home on July 18, 2006. The certificate indicates that all plumbing work had been completed and passed inspection by a city inspector.
***
36. Prior to his dismissal, the last invoice that was presented and paid was on June 7, 2006. Conway met with Miller and Kelly at Cracker [B]arrel on July 13, 2006 to present his final invoice for $35,927.00 and demand payment. That invoice was not seeking the balance due on the original estimate of $125,900.00, but rather reimbursement for sums that Conway alleged that he had expended to pay labor and materials and $7,395.00 "O&P". Payment was never made. Since Conway is not seeking payment of the alleged contract price, the court shall not need to consider the reasonableness of that price or whether or not a price was even agreed to. Rather, the Court will consider Conway's claim for unjust enrichment.
37. There is no evidence that Conway was on the job at any point after June 30, 2006. Therefore, he had no authority to supervise the subcontractors after that date. Therefore, Conway's mechanic's lien filed on October 2, 2006 was filed more than 90 days after he last worked on the job.
38. Conway's subcontractors were paid in full. Any balances due after Conway's dismissal were paid by Kelly.
Mr. Kelly died during the reconstruction of the home.
Ultimately, the trial court determined that Kelly owed Conway $26,304.15 for labor and materials used to complete work on Kelly's home. Specifically, the court found that Conway paid certain sums for materials and to subcontractors "which were not reimbursed by Kelly prior to his dismissal". Id. at 32. And after finding that "Kelly benefitted from the labor, tools, and materials supplied by Conway", which increased the fair market value of her home, id. at 35, the court concluded that Conway was entitled to recover this amount from Kelly under the theory of unjust enrichment. Id. at 35. The court also found in Conway's favor on Kelly's counterclaims. Thereafter, Kelly filed a motion to correct error, which the trial court denied on July 21, 2010. Kelly now appeals. Additional facts will be provided as necessary.
Standard of Review
Conway requested findings of fact and conclusions of law pursuant to Trial Rule 52(A). When a trial court enters findings and conclusions, we apply a two-tiered standard of review; first we determine whether the evidence supports the findings, and second we determine whether the findings support the judgment. Smith v. Smith, 938 N.E.2d 857, 860 (Ind. Ct. App. 2010). "In deference to the trial court's proximity to the issues, we disturb the judgment only where there is no evidence supporting the findings or the findings fail to support the judgment." Id. We do not reweigh the evidence, and we consider only the evidence favorable to the trial court's judgment. Id. The party appealing the trial court's judgment must establish that the findings are clearly erroneous. Id. "Findings are clearly erroneous when a review of the record leaves us firmly convinced that a mistake has been made." Id. We do not defer to conclusions of law, which are evaluated de novo. Id.
Kelly does not challenge the trial court's conclusion that the parties failed to execute an express contract or agree upon an implied-in-fact contract. See Appellant's Br. pp. 6, 8. In the absence of an enforceable contract, a party may still recover in quantum meruit. "'Quantum meruit is an equitable doctrine that prevents unjust enrichment by permitting one to recover the value of work performed or material furnished if used by another and if valuable.'" Carr v. Pearman, 860 N.E.2d 863, 870 (Ind. Ct. App. 2007) (quoting Galanis v. Lyons & Truitt, 715 N.E.2d 858, 861 (Ind. 1999)), trans. denied. Kelly argues that the trial court erred when it concluded that Conway was entitled to recover damages under the theory of unjust enrichment.
There are three general types of contracts: express, implied-in-fact, and constructive contracts. See Zoeller v. E. Chicago Second Century, Inc., 904 N.E.2d 213, 220 (Ind. 2009). "Express and implied-in-fact contracts are traditional contracts, while constructive contracts 'also referred to as quantum meruit, contract implied-in-law, [unjust enrichment], or quasi-contracts[,]' are not contracts at all." Id. (citation omitted and brackets in original).
In her brief, Kelly briefly states that "Conway's Complaint sought damages under a theory of breach of contract not quantum meruit." Appellant's Br. at 9. Kelly has waived any attempt to raise this issue by failing to provide citation to authority or additional argument. See Appellate Rule 46(A)(8)(a). And our review of the record leads us to conclude that the issue was tried by implied consent of the parties. See Ind. Trial Rule 15(B) ("When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings."). Notably, Kelly did not challenge the trial court's reliance on the theory of unjust enrichment in her motion to correct error.
"A claim for unjust enrichment 'is a legal fiction invented by the common law courts in order to permit a recovery . . . where the circumstances are such that under the law of natural and immutable justice there should be a recovery[.]'" Zoeller v. E. Chicago Second Century, Inc., 904 N.E.2d 213, 220 (Ind. 2009) (quoting Bayh v. Sonnenburg, 573 N.E.2d 398, 408 (Ind. 1991)). To prevail on a claim of unjust enrichment, a claimant must establish that a measurable benefit has been conferred on the defendant under such circumstances that the defendant's retention of the benefit without payment would be unjust. Id. This theory "permit[s] recovery where in fact there is no true contract, but where, to avoid unjust enrichment, the courts permit recovery of the value of the services rendered just as if there had been a true contract." Kelly v. Levandoski, 825 N.E.2d 850, 860 (Ind. Ct. App. 2005), trans. denied (citation omitted). No action can lie in quasi contract unless one party is wrongfully enriched at the expense of another. Savoree v. Indus. Contracting & Erecting, Inc., 789 N.E.2d 1013, 1018 (Ind. Ct. App. 2003); see also Zoeller, 904 N.E.2d at 220 ("A person who has been unjustly enriched at the expense of another is required to make restitution to the other.").
Here, Conway provided a rough estimate to Kelly of the cost to rebuild her home. But there was no written contract executed between the parties, and given the lack of evidence in the record leading us to conclude that the parties had agreed to any specific terms concerning the construction project, there was also not an implied-in-fact contract between the parties. Therefore, the trial court properly considered whether Kelly had been unjustly enriched at Conway's expense. See Zoeller, 904 N.E.2d at 222.
It is undisputed that Conway purchased materials, hired subcontractors, and labored in the rebuilding and renovation of Kelly's fire-damaged home. Kelly also timely paid all invoices tendered by Conway for labor, materials, and subcontractors until Kelly fired Conway on June 30, 2006. Kelly refused to pay the last invoice submitted by Conway after he was dismissed from the job.
The trial court found that the evidence established that Conway was not paid for labor and materials utilized prior to his June 30, 2006 firing. Kelly's home was nearly complete when she fired Conway. In fact, she moved into the home approximately two weeks after Conway was fired. Kelly has not directly challenged the trial court's finding that Conway paid certain sums for materials and to subcontractors for labor in constructing her home for which Conway was not reimbursed. And there is no evidence that Conway rebuilt Kelly's home gratuitously or that he did not expect payment. Finally, Kelly's argument that she had to spend nearly $50,000 to "redo or undo the poor work Conway had done to make her home livable," see Appellant's Br. at 9, is simply a request to reweigh the evidence and the credibility of the witnesses, which our court will not do.
Kelly argues that she paid subcontractors directly in the amount of nearly $25,000 after Conway was fired, but does not challenge the trial court's finding number 38 wherein the trial court specifically listed the amounts Conway paid to certain subcontractors for which he was not reimbursed.
--------
The market value of Kelly's home increased after it was rebuilt, and Conway significantly contributed to that increase in value by paying the subcontractors for their materials and labor. It would be unjust for Kelly to retain the benefit of the increase in her home's value without paying for it. For all of these reasons, we conclude that the trial court properly entered judgment in favor of Conway on the theory of unjust enrichment.
Affirmed. BAILEY, J., and CRONE, J., concur.