Opinion
No. 4-845 / 04-0249
Filed April 13, 2005
Appeal from the Iowa District Court for DubuqueCounty, Lawrence H. Fautsch, Judge.
A subdivision owner appeals from a district court decree that foreclosed a mechanic's lien filed by a subcontractor. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Robert Day of Day, Hellmer Straka, Dubuque, for appellant.
Todd Locher of Locher Locher, Farley, for appellee.
Heard by Sackett, C.J., and Vogel, Zimmer, Hecht, and Eisenhauer, JJ.
Brook Haven, LLC, a subdivision owner, appeals from a district court decree that foreclosed a mechanic's lien filed by F.L. Krapfl, Inc., a subcontractor who had performed work on the subdivision. We affirm the district court's decree to the extent it found F.L. Krapfl, Inc. had substantially complied with the contract and was entitled to enforce its mechanic's lien, but reverse the court's determination that Brook Haven, LLC failed to prove a right to a deduction from the remaining contract price. We accordingly remand the matter to the district court for the entry of a judgment amount that properly compensates Brook Haven LLC for the established deduction.
I. Background Facts and Proceedings.
Hawk Developers, LLC (Hawk) was the owner of the Brook Haven Subdivision (the subdivision) in the City of Asbury (the City). Hawk contracted with Union Construction Co. (Union) to serve as the general contractor for certain site improvements to the subdivision. Randy Hefel is the manager and one of several members of Hawk. He is also the president, the secretary, and a shareholder of Union. Hefel had the authority to act alone in his decision making for both companies.
Acting on behalf of Union, Hefel "arranged to hire" the engineering firm of Ken Buesing Associates (Buesing) to prepare plans and specifications "for Hawk," and to oversee portions of the site improvements at the subdivision. Buesing prepared a document which is captioned as the "Specification and Contract Documents for Site Improvements Brook Haven Subdivision Asbury Iowa" (Specification and Contract Documents). Hefel then, on behalf of Union as "Contractor," prepared and entered into a subcontract with F.L. Krapfl, Inc. (Krapfl) as "Subcontractor" for the construction of a lift station at the subdivision.
The subcontract, executed on August 25, 2001, provided that "(Subcontractor) [will] . . perform the Work identified in Article 2 in accordance with the Project's Contract Documents." The "Project" was described as "Site Improvements Brook Haven Subdivision (LIFT STATION)." Article 2, of the subcontract entitled Scope of Work, bound Krapfl to perform and complete [its] Work in accordance with Contract Documents . . . includ[ing] all work necessary or incidental to complete the . . . Work for the Project as more particularly, though not exclusively specified in Plan sheet #7, date 8-6-01, Specifications Contract Documents for Site Improvements book, Addendum #1, dated 8-15-01, pgs 1-6 re: Section 11303 LIFT STATION.
Section 11303, contained in Addendum #1 of the Specification and Contract Documents, outlined the details of "providing labor, materials, installation, and administration necessary to complete all work covered by the section in accordance with the best present day installation and construction techniques." It also contained the following provision, titled "Related Documents" which states that: "The general provisions of the contract, including General and Supplemental Conditions and other General Requirement sections, apply to the work specified in this section."
The payment provisions of the subcontract bound Hawk to pay Krapfl $45,518 "for satisfactory performance of [Krapfl's] Work." They further provided that both the ninety-five percent progress payments for "Work satisfactorily performed," and the "[f]inal payment of the balance due" shall be made to Subcontractor no later than seven (7) days after receipt by Contractor of payment from Owner for Subcontractor's Work. These payments are subject to receipt of such lien waivers, affidavits, warranties and guarantees required by the Contract Documents or Contractor.
The subcontract also listed the following under its "Special Provisions" section: "Add for 2 year maintenance and performance bond is accepted for $486.00."
Krapfl supplied a performance bond, a payment bond, and a maintenance bond in September 2001. The maintenance bond was rejected by Union, which informed Krapfl that it would be required to provide the two-year maintenance bond "upon completion and acceptance of the lift station by the City of Asbury." Krapfl also received a facsimile from its bonding company that stated the maintenance bond "will be provided upon completion and acceptance of the project."
On February 19, 2002, Krapfl completed its work on the lift station, and a successful startup was performed. Krapfl viewed this as substantial completion of the work under the subcontract, and on February 22, 2002, billed Union for $29,075.45, or the original contract price of $45,518 minus a $16,442.55 progress payment Krapfl had received in 2001.
On April 26 Krapfl received the startup report, which indicated the lift station had been inspected and was running in accordance with the specifications. The report was delivered to Buesing and, at Buesing's direction, Krapfl delivered other project documents to the City. On May 1, 2002, Krapfl billed Union for the $486 add on in the "Special Provisions" section of the subcontract, plus two percent interest from the time the bonds had been provided.
On May 10, 2002, Krapfl filed a mechanic's lien for the total of the two invoices. Union responded that prior to payment Krapfl had to meet certain obligations under both the subcontract and the Specification and Contract Documents, including the obligation to provide a two-year maintenance bond. Union further asserted that the subcontract did not provide for "payment in full" until the lift station had been "formally accepted" by the City. Krapfl and Union then exchanged a series of letters which reflect their disagreement about the applicability of the Specification and Contract Documents, and the nature and extent of their obligations.
In August 2002 Krapfl filed a petition to foreclose its mechanic's lien against Hawk, which was now doing business as Brook Haven, LLC (Brook Haven). After the petition was filed, Union and Krapfl continued to make various demands and offers. Krapfl eventually complied with a number of Union's requests, including those to provide lien waivers and affidavits. Krapfl also provided a maintenance bond that ran from February 19, 2002, the date it completed work on the lift station. Union again rejected the bond, asserting that under the Specification and Contract Documents the bond was required to run from the time the City accepted the lift station.
Krapfl's petition initially named Hawk and Union as defendants, and was then amended to name Hawk and Brook Haven. The amended petition asserted that Brook Haven had acquired the subdivision from Hawk in July 2002 via a quit claim deed, but that, due to a title defect, Hawk remained the record owner of the subdivision. By the time of trial, however, it appears the parties agreed that Brook Haven was the proper party defendant. For ease of reference, from this point forward we will use "Brook Haven" to refer to both Hawk Developers, LLC and Brook Haven, LLC.
The City formally accepted the work on the lift station on June 24, 2003. In July 2003 the City sent a letter to Hefel requesting that the contractors and subcontractors provide maintenance bonds running from the date the City had accepted the project. When Hefel passed the City's request on to Krapfl, Krapfl once again asserted it was only required to provide a bond running from the date of completion. Brook Haven then obtained a maintenance bond running from the date of acceptance by the City.
By the time of trial in December 2003 a balance of $7,078.81 remained unpaid under the subcontract, as Union had made another partial payment to Krapfl in November 2003. Krapfl asserted it was entitled to the remaining balance, plus interest. Brook Haven asserted Krapfl had been fully compensated, as Brook Haven was entitled to a setoff for the costs incurred in obtaining a conforming maintenance bond as well as a bond to release the mechanic's lien. It further asserted that it was entitled to hold an additional $3,000 in an escrow account to be used for any future maintenance expenses.
Following trial the district court concluded Krapfl had substantially performed under the contract, and thus was entitled to file and enforce its mechanic's lien. The court further concluded that Brook Haven was not entitled to any of the claimed deductions. The court rejected Brook Haven's assertions that Krapfl "stood in the shoes" of Union and was bound by all terms of the Specification and Contract Documents, and that Krapfl had breached its contract with Union. The court entered judgment in favor of Krapfl for $7,078.81, as well as five percent interest from February 22, 2002, the date Krapfl had submitted an invoice for the remaining balance due under the subcontract. The court also awarded Krapfl court costs and attorney fees of $3,600.
Brook Haven filed a motion pursuant to Iowa Rule of Civil Procedure 1.904(2), which was overruled by the district court. Brook Haven then filed this appeal. On appeal Brook Haven asserts Krapfl could neither file nor enforce a mechanic's lien until it had a right under the subcontract to receive final payment. Brook Haven contends no payment is due because (1) Krapfl failed to comply with the terms of the subcontract and the Specification and Contract Documents and otherwise breached the subcontract, and (2) Union has yet to receive payment for work on the lift station from Brook Haven, a precondition to final payment under the subcontract. Brook Haven also contends it is entitled to a setoff for expenses incurred in obtaining the maintenance bond and a bond to release Krapfl's lien, to recover attorney fees, and to retain the $3,000 until the expiration of the maintenance bond.
As Brook Haven did not file a counterclaim for breach of contract by Krapfl, we consider its allegations of breach only to the extent they affect enforcement of the lien.
II. Scope of Review.
We conduct a de novo review of actions to enforce mechanic's liens. Baumhoefener Nursery, Inc. v. A D P'ship, II, 618 N.W.2d 363, 366 (Iowa 2000). We give weight to the district court's fact findings, but are not bound by them. Iowa R. App. P. 6.14(6)( g).
III. Mechanic's Lien.
A mechanic's lien is purely statutory in nature. Griess Ginder Drywall, Inc. v. Moran, 561 N.W.2d 815, 816 (Iowa 1997). Mechanic's lien statutes are liberally construed to promote restitution, prevent unjust enrichment, and assist parties in obtaining justice. Carson v. Roediger, 513 N.W.2d 713, 715 (Iowa 1994). Looking to the relevant statutes, as well as the particular facts of this case, we conclude Krapfl was entitled to file and enforce its mechanic's lien.
Pursuant to Iowa Code section 572.2 (2001), a person who furnishes any material or labor for improvements to a building or land "by virtue of any contract with the owner or the owner's agent" is entitled to a lien upon the property to secure payment for the labor and materials furnished. Thus, a subcontractor must establish the existence of an express or implied contract, demonstrating that the owner has agreed or otherwise bound itself to pay for the material and labor. See Giese Constr. Co., Inc. v. Randa, 524 N.W.2d 427, 430 (Iowa Ct.App. 1994). Here, Krapfl adequately established that it provided all materials and furnished all labor required under the subcontract, the value of the materials and labor provided, and the necessary contractual relationship. Brook Haven, however, asserts Krapfl must also demonstrate it complied with all relevant contract terms and is otherwise entitled to receive final payment.
Although Brook Haven suggests Krapfl's work on the lift station was somehow defective or incomplete, the record demonstrates Krapfl satisfactorily completed work on the lift station.
Nothing in chapter 572 conditions the filing or enforcing of a mechanic's lien upon a right to receive payment or strict compliance with contract terms. Rather, the chapter contemplates that a mechanic's lien such as Krapfl's, which was filed within ninety days of the date on which the last material was furnished or the last of the labor performed, will be enforced based upon the value of furnished materials and labor. See Iowa Code §§ 572.2(2), .9, .14(1).
A lien filed within the ninety-day period is fully enforceable against the owner's property, even if the owner has paid the contractor before the end of the period. Iowa Code § 572.14(1). A lien filed after the expiration of the ninety-day period requires notice to the owner, id. § 572.10, and the lien can be enforced against the property only to the extent of the balance due from the owner to the contractor at the time the notice is given, id. § 572.11.
Brook Haven points to provisions in chapter 572 that tie enforcement of a lien to the "balance due" from the owner or the "amount due" to the subcontractor. See Iowa Code §§ 572.11 (applying to liens filed after ninety days), .14(2) (applying in the case of an owner-occupied dwelling). However, these provisions only serve to limit enforcement of the lien, under circumstances inapplicable to this case, to the amount the owner is obligated to pay the principal contractor or subcontractor. See Carson, 513 N.W.2d at 716 (interpreting the term "balance due" within the context of chapter 572). While they recognize that computation of the "balance due" may require deductions for payments made by the owner or omissions and deficiencies in the work performed, and additions for extras provided by the contractor, see id., they do not condition a subcontractor's right to file or enforce a mechanic's lien upon a right to receive payment.
The pertinent question in determining whether Krapfl has a right to enforce its mechanic's lien is whether Krapfl has substantially performed under the subcontract. See Moore's Builder Contractor, Inc. v. Hoffman, 409 N.W.2d 191, 195 (Iowa 1987).
Substantial performance allows only the omissions or deviations from the contract that are inadvertent or unintentional, not the result of bad faith, do not impair the structure as a whole, are remedial without doing material damages to other portions of the building, and may be compensated for through deductions from the contract price.
Id. at 193. Krapfl bears the burden of demonstrating that it has substantially performed under the contract. If it meets that burden, then it falls to Brook Haven to demonstrate any defects or incompletions to be deducted from the amount due. Id. at 194.
Reviewing the record, we agree with the district court that Krapfl substantially performed its obligations under the subcontract. The record demonstrates the lift station is in good working order. A successful startup was performed shortly after Krapfl completed its work on the lift station. Moreover, in September 2002 Buesing certified to the City that the site improvements on the subdivision had been completed in substantial compliance with the plans and specifications, and the City has accepted the work on lift station along with the other site improvements. This meets the standard for substantial performance set out by our supreme court.
Brook Haven nevertheless asserts that the lien cannot be enforced because it has not yet paid and is not yet required to pay Union for the lift station, and nothing in chapter 572 "shall require the owner to pay a greater amount or at an earlier date than is provided in the owner's contract with the principal contractor." Iowa Code § 572.16. The problem with this argument is the record does not reflect that enforcement of Krapfl's lien would be an acceleration of Brook Haven's obligations under the Specification and Contract Documents. Under the Specification and Contract Documents, Brook Haven's obligation to make final payment to Union comes due upon "completion and acceptance of the work" by Brook Haven. When we look to the record, there is no persuasive evidence that the work on the lift station is incomplete or that Brook Haven has yet to accept the work.
As we have previously noted, the record demonstrates the work on the lift station is complete, has in fact been certified as complete by Buesing, and has been accepted by the City. Although Buesing initially informed Krapfl it would be required to comply with Section 01700, the project closeout section, which "covers the sequence of events and requirements necessary for final acceptance of the project by the Owner," it later informed Krapfl that acceptance of the entire project by the City would override the requirements of Section 01700. Finally, when asked why Brook Haven had yet to make payment for the work on the lift station Hefel, Brook Haven's manager and an officer and shareholder of Union, testified only that Brook Haven would not make payment until Krapfl's mechanic's lien was "cleared up."
The record does not convincingly demonstrate that enforcement of Krapfl's lien would be an acceleration of Brook Haven's obligations under the Specification and Contract Documents, and Krapfl has substantially performed under the contract. Moreover, the record does not demonstrate, as Brook Haven asserts, that Krapfl waived its right to file a mechanic's lien until after payment became due. See generally Eclipse Lumber Co. v. Bitler, 213 Iowa 1313, 1318, 241 N.W. 696, 698 (1932) (defining lien waiver). Accordingly, we see no basis for precluding enforcement of the lien.
We therefore turn to the question of whether Brook Haven demonstrated that deductions should be made from the remaining contract price for defects or incompletions. Brook Haven relies upon Krapfl's alleged noncompliance with terms of the Specification and Contract Documents. It asserts the Specification and Contract Documents were incorporated by reference into the subcontract, and Krapfl accordingly undertook all responsibilities of the "Contractor" under those documents.
In particular, Brook Haven asserts Krapfl failed to comply with two paragraphs of the "Instruction to Bidders" section. The first, Paragraph 14, required the "Contractor" to furnish a one-year maintenance bond from the date of final acceptance of the project by the City. The second, Paragraph 15, which outlined procedures and requirements for payment of the "Contractor" by the "Owner," required the Contractor to submit lien waivers and contractor and subcontractor affidavits, and provided that failure to complete the waivers and affidavits could delay additional "Contractor payments." In addition, Brook Haven asserts Krapfl was required to comply with the project closeout section.
Before we consider Brook Haven's incorporation argument we note that, by the time of trial, Krapfl had complied with the affidavit and waiver requirements of Paragraph 15. Krapfl had also provided all underlying documentation required by the project closeout section, and the lift station had been certified complete and formally accepted by the City. Even if Krapfl were bound to comply with the terms of Paragraph 15 or the project closeout section, there is no evidence that any delay or failure to comply by Krapfl was tantamount to a defect or incompletion of the subcontract for which a deduction could be made.
In fact, Brook Haven seeks only a setoff for the costs incurred in obtaining a bond releasing the mechanic's lien and a maintenance bond, as well as a right to hold $3,000 in escrow "for the purpose of providing any necessary maintenance that might be required during the two-year period of the maintenance bond." Given our prior determinations, we can summarily dispose of two of these three items.
Because Krapfl was entitled to file and enforce its mechanic's lien, we see no basis for allowing Brook Haven a setoff for the costs incurred in obtaining a bond to release the mechanic's lien. As for withholding $3,000 to provide for future maintenance, Brook Haven has provided no authority for the proposition that they are entitled to withhold cash to cover potential future expenses. No such provision appears anywhere in the subcontract or the Specification and Contract Documents.
At this time, when any future maintenance needs are speculative at best, Krapfl's only obligation is to provide a maintenance bond. The sole question is whether Krapfl has satisfied its obligation by providing a bond that ran from the date it completed work on the lift station, or whether it was required to provide a bond running from the date of acceptance by the City. Thus, we return to the question of whether Paragraph 14 of the Specification and Contract Documents was incorporated into the subcontract.
Although the subcontract does refer to the Specification and Contract Documents, we interpret as part of the subcontract only so much of the Specification and Contract Documents as is clearly and specifically referred to by the subcontract. See Hofmeyer v. Iowa Dist. Court, 640 N.W.2d 225, 228 (Iowa 2001). Under that standard, the entirely of the Specification and Contract Documents was not, as Brook Haven contends, incorporated into the subcontract.
Although the subcontract did require Krapfl to complete its "Work . . . in accordance with the Project's Contract Documents," within the context of the subcontract the "Project" is defined as only the lift station portion of the site development. In addition, "Work" is specifically defined by reference to Section 11303, which is limited to the construction, installation, and testing requirements of the lift station. Finally, Section 11303 provides only that "[t]he general provisions of the contact, including General and Supplemental Conditions and other General Requirement sections, apply to the work specified in [Section 11303]." Thus, the language of Section 11303 incorporates, at most, only the referenced "general provisions" of the Specification and Contract Documents. The question then becomes whether Paragraph 14 is such a general provision, and binding on Krapfl.
Section 11303 also contains a warranty provision that applies solely to the manufacturer of the lift station.
Brook Haven cites a number of cases for the proposition that even absent direct reference and incorporation all relevant terms of the principal contract are binding on the subcontractor. While these cases do charge a subcontractor with knowledge of the terms of the principal contract, none purport to bind a subcontractor to perform terms in the principal contract beyond those relating to plans, material specifications, or standards of performance. See, e.g., Casler Elec. Co. v. Carlsen, 249 Iowa 289, 294-95, 86 N.W.2d 682, 686 (1957) (charging subcontractor with knowledge that contractor was to perform rough wiring only); Granette Products Co. v. Arthur H. Neumann Co., 208 Iowa 24, 29, 221 N.W. 197, 199 (1928) (finding subcontractor bound by the plans and specifications in the principal contract, "and likewise by the terms and provisions of the principal contract . . . in so far as they were applicable to the matter involved in the [sub]contract . . . regarding the material to be furnished" (emphasis added)).
When interpreting the meaning of contract terms, our primary consideration is the intent of the parties at the time the agreement was executed. Hartig Drug Co. v. Hartig, 602 N.W.2d 794, 797 (Iowa 1999). A clear and unambiguous contract will be enforced as written. Iowa Fuel Minerals, Inc. v. Iowa State Bd. of Regents, 471 N.W.2d 859, 862 (Iowa 1991). However, if a genuine uncertainty exists as to which of two reasonable interpretations is proper, the contract is ambiguous. Hartig Drug Co., 602 N.W.2d at 797.
To determine if the meaning of a contract is clear on its face or ambiguous we resort to general rules of contract interpretation, interpreting words and other conduct in light of all the circumstances, interpreting the writing as a whole, and giving words their generally prevailing meaning. Id.; Restatement (Second) of Contracts § 202, at 86 (1981). If an ambiguity exists, the court is required to determine which of the possible meanings was intended by the parties. See generally Walsh v. Nelson, 622 N.W.2d 499, 503 (Iowa 2001). In doing so, the court construes the documents against the drafters. Northern Natural Gas Co. v. Knop, 524 N.W.2d 668, 671 (Iowa Ct.App. 1994).
It is not clear from the face of the subcontract, Section 11303, or the remainder Specification and Contract Documents, that the parties intended Paragraph 14 to be incorporated as a "general provision." Neither the Instruction to Bidders section in general, nor Paragraph 14 in particular, is expressly denominated in the Specification and Contract Documents as a general provision. While Section 11303 does define general provisions by definitional examples — General Conditions, Supplemental Conditions, and General Requirements sections — it does not specifically refer to the Instruction to Bidders section or Paragraph 14.
However, those examples which are given indicate that "general provisions" might refer to those portions of the Specification and Contract Documents that deal with general contract terms. Although the General Conditions section does not appear in the record, based upon the language of the Supplementary Conditions section, which governs insurance coverage requirements, it appears that the General and Supplemental Conditions sections both cover general terms of a construction contract. Providing a maintenance bond is also a general term of contract.
Based on the foregoing, it is ambiguous whether "general provisions" was intended to refer to Paragraph 14. We therefore look to the remainder of the record, including extrinsic evidence of the parties' conduct, to determine which of the possible meanings of "general provisions" is the correct one. See Hofmeyer v. Iowa Dist. Court, 640 N.W.2d 225, 228 (Iowa 2001); Walsh, 622 N.W.2d at 503.
Krapfl points out that Paragraph 14 refers to the obligation of the "Contractor" to "furnish a maintenance bond . . . for a period of one year from the date of final acceptance by resolution of the City of Asbury," and that under the subcontract "Contractor" is expressly defined as Union. We do not find such a fact dispositive, especially as Krapfl effectively conceded it was required to provide certain documents, as required in the project closeout section of the Specification and Contract Documents. That section also refers to only the obligations of the "Contractor." Moreover, Krapfl provided a payment bond, which was required of the "Contractor" under the Specification and Contract Documents, but was not required under the subcontract.
Krapfl points to testimony of its president, Floyd Krapfl, that the bond was to run from the date of substantial completion, as the "subcontract agreement specifically states." However, the only reference in the subcontract to a maintenance bond is the statement in the Special Provisions section: "Add for 2 year maintenance and performance bond is accepted for $486.00." This provision does not provide a date from which the bond must run. Moreover, it is not structured as a provision imposing an obligation upon Krapfl, but as an acceptance by Union of a term of Krapfl's proposal.
Krapfl's proposal to Union offered to furnish and install ten items for a total of $45,518, the eventual contract price. Under the signature of Floyd Krapfl appeared the following additional language: "Add For 2 yr. Maint. Bond = 486."
The majority of persuasive evidence indicates that the parties intended "general provisions" to refer to those provisions governing general terms of contract, such as Paragraph 14. Of particular note is Krapfl's conduct regarding the various bonds. In addition to the fact that Krapfl provided a payment bond, Krapfl took no immediate steps to voice its disagreement or otherwise contradict the September 2001 statements of Union and Krapfl's own bonding company that the maintenance bond was tied to acceptance of the project. The only objection that Krapfl points to occurred in July 2003, through counsel, just months prior to trial. In addition, although not referenced by Brook Haven, we note the letter issued by the City, in July 2003, clearly reflects the City's belief that maintenance bonds are to be provided by all contractors and subcontractors on the site improvement project, and that all the bonds were to run from the date of formal acceptance by the City.
We are mindful of the fact that, due to the ambiguity, the subcontract, Section 11303, and the remainder of the Specification and Contract Documents, should be construed against Union and Brook Haven. However, even when we do so, the language of the relevant documents, viewed in light of the surrounding circumstances, demonstrates that by the use of the term "general provisions," the parties intended to refer to and incorporate Paragraph 14 into the subcontract. The record also adequately demonstrates that Krapfl failed to comply with this requirement, and that as a result Brook Haven incurred expenses of $1,137.38 to obtain a conforming maintenance bond. This amount should be deducted from the remaining balance due under the subcontract.
IV. Attorney Fees.
Brook Haven asserts the district court erred when it failed to award Brook Haven trial attorney fees. Brook Haven asserts such a fee award was mandated by Iowa Code section 572.32(2), because the record demonstrated Krapfl filed the mechanic's lien in bad faith, and provided a materially false affidavit. In addition, both Brook Haven and Krapfl seek appellate attorney fees.
In mechanic's lien cases attorney fee requests are governed by Iowa Code section 572.32. See Schaffer v. Frank Moyer Constr., Inc., 628 N.W.2d 11, 23 (Iowa 2001) (holding that section 572.32 provides for both trial and appellate attorney fees). Section 572.32(1) provides that, in an action to enforce a mechanic's lien, a prevailing plaintiff who furnished labor and materials directly to the defendant may be awarded reasonable attorney fees. Section 572.32(2) provides that, in an action challenging a mechanic's lien filed on an owner-occupied dwelling, a party who successfully challenges the lien may be awarded reasonable attorney fees, and shall be awarded such fees if the court determines the lien was filed in bad faith or the supporting affidavit was materially false.
As this case does not involve an owner-occupied dwelling, Brook Haven was not entitled to a discretionary or mandatory fee award under section 572.32(2). Moreover, section 572.32(1) provides for an attorney fee award only to one seeking to enforce a lien. Accordingly, we see no statutory basis for an attorney fee award to Brook Haven. In addition, under the facts of this case, where Krapfl was only partially successful on appeal, we decline to award Krapfl appellate attorney fees under section 572.32(1).
V. Conclusion.
We have considered all of Brook Haven's arguments, whether or not specifically discussed, and conclude Krapfl has made the necessary showing for the foreclosure of its mechanic's lien. However, we further conclude Brook Haven has demonstrated a right to deduct from the contract price the $1,137.38 it incurred in obtaining a conforming maintenance bond. Accordingly, while we affirm the district court's decision to enter judgment in favor of Krapfl, we must reverse the amount of the judgment entry, and remand this matter to the district court for entry of a judgment amount consistent with awarding Brook Haven a deduction of $1,137.38 from the $7,078.81 balance due under the subcontract. The remainder of the district court's judgment entry, regarding the award of interest, court costs, and attorney fees, is affirmed.