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Leslie v. Vander Ploeg

Court of Appeals of Iowa
Feb 12, 2003
662 N.W.2d 374 (Iowa Ct. App. 2003)

Opinion

No. 2-995 / 02-0327

Filed February 12, 2003

Appeal from the Iowa District Court for Dickinson County, Joseph J. Straub, Judge.

Larry Leslie appeals the decision of the district court which declined to foreclose his mechanic's lien on defendants' property and awarded defendants damages to repair defective work. AFFIRMED AS MODIFIED.

William K. Klinker of Smith, Grigg, Shea Klinker, P.C., Primghar, for appellant.

Lloyd W. Bierma of Oostra Bierma, P.L.C., Sioux Center, for appellee.

Considered by Mahan, P.J., and Vaitheswaran and Eisenhauer, JJ. Huitink, J., takes no part.


Larry Leslie appeals the decision of the district court which declined to foreclose his mechanic's lien on property owned by Chuck and Connie Vander Ploeg and awarded them damages to repair defective work. Leslie claims the trial court erred in: (1) determining the reasonable value of his services; (2) calculating his material costs; (3) determining the Vander Ploegs' repair costs; and (4) failing to foreclose his mechanic's lien and award him attorney fees.

I. Background Facts Proceedings

The Vander Ploegs hired Leslie to renovate a home they purchased on West Lake Okoboji, Iowa. Leslie estimated the cost would be about $50,000. The work was to be completed in September 1998. Leslie began work on July 15, 1998. When he submitted his first bill, for about $43,000, in November 1998, the work was not yet completed. The Vander Ploegs paid $20,000, but refused to pay the rest without a more detailed itemization of expenses. Leslie provided them with invoices, but the Vander Ploegs were not satisfied with the labor portion of the bill. They were also concerned that Leslie was not spending enough time at the project because he was running for county supervisor.

In December 1998 Leslie suggested:

Perhaps it would be wise for you to seek other estimates for the completion of your job. If you then choose to have me complete the work I will draw up a budget so that we can alleviate further conflict.

The Vander Ploegs responded that "it would be in both of our interests to part ways." Leslie then submitted a final bill showing a total balance due of $31,880.85. The Vander Ploegs made no further payments to Leslie.

The Vander Ploegs completed the renovations to the home using other contractors. Their total cost to renovate the home, including the $20,000 paid to Leslie, was about $93,000. Some of these costs were to repair or redo work performed by Leslie and his employees.

Leslie filed a mechanic's lien to collect on the Vander Ploegs' unpaid bill. The Vander Ploegs filed a counterclaim seeking damages for inferior work performed by Leslie. The district court determined Leslie was not entitled to enforce his mechanic's lien because he had not substantially complied with the contract. The court found, however, he was entitled to recover for the value of the improvements he made to the house and was liable for any defective work that had to be remedied. The value of Leslie's work was determined to be $29,723.67. The court awarded the Vander Ploegs $24,680.28 to repair defective workmanship. These amounts were offset, and taking into account the $20,000 the Vander Ploegs had already paid Leslie, Leslie was ordered to pay the Vander Ploegs $14,956.61, plus interest. Leslie appeals.

II. Standard of Review

An action to enforce a mechanic's lien in is equity, and our review is de novo. Schumacher Elec., Inc. v. DeBruyn, 604 N.W.2d 39, 41 (Iowa 1999). Because mechanic's lien cases usually involve numerous charges and counter charges which depend entirely on the credibility of the parties, we have frequently given weight to the district court's determinations of credibility. Nepstad Custom Homes Co. v. Krull, 527 N.W.2d 402, 404-05 (Iowa Ct.App. 1994).

III. Reasonable Value of Services

The district court determined there was an implied contract that the Vander Ploegs would pay Leslie and his assistant, Mark Slemp, eighteen dollars per hour. The court did not look at the actual hours worked by Leslie and Slemp, but calculated the amount it felt they should have earned, and awarded Leslie $14,976 for labor on the project. The court found the Vander Ploegs were not responsible for the cost of hiring miscellaneous laborers because that was not part of the original agreement. In addition, the court stated, "the unauthorized, unskilled laborers actually caused as much damage as the value they added to the property."

The court stated the project was expected to last three months. Forty hours per week for thirteen weeks at eighteen dollars per hour for two men is $18,720. The court found Leslie only completed eighty percent of the job, and so was entitled to eighty percent of $18,720, which is $14,976.

Under an implied contract, the proper measure of recovery is the reasonable value of the services rendered and material furnished, and should be distinguished from the actual cost to the contractor. Olberding Constr. Co., Inc. v. Ruden, 243 N.W.2d 872, 875 (Iowa 1976) (citing McDonald v. Welch, 176 N.W.2d 846, 847 (Iowa 1970)).

The problem with the district court's formula in this case is that it has no correlation to the actual value of the services rendered by Leslie and his employees. We first note that the Vander Ploegs were aware from the beginning of the project that Leslie had hired miscellaneous laborers to assist with the work. They allowed the work to continue, and we determine they are responsible to pay the reasonable value of the work. We also note that while some of the work had to be repaired or redone, these calculations are part of the Vander Ploegs' counterclaim, and will be considered there. The only real evidence on the reasonable value of services was Leslie's testimony the workers had worked the hours they claimed and had been paid what they were worth. We therefore determine Leslie should be paid the amount for labor which he requested, $30,732.50.

IV. Reasonable Value of Materials

The district court found Leslie should be reimbursed for materials purchased, plus ten percent. Leslie was awarded $10,811.52 for supplies, plus a profit of $1081.15. On appeal, Leslie contends the court should have awarded him an additional $5437.39, to reflect additional materials of $4943.08, plus ten percent.

Leslie raised this issue in his motion pursuant to Iowa Rule of Civil Procedure 1.904(2). The district court denied the motion, finding the charges were for stone and lumber which were not used in the project. We agree with the court's conclusions on this issue.

V. Repair Costs

The district court found Leslie was responsible to pay the Vander Ploegs $24,680.28 to repair defective workmanship. Leslie asserts this amount is excessive. He only accepts responsibility for $630 in repairs. He claims the remainder of the Vander Ploegs' expenses was for completion of the project, and not to repair the work he had already performed.

In defective construction cases, damages may include diminution in value, cost of construction, and completion in accordance with the contract, or loss of rentals. Bidwell v. Midwest Solariums, Inc., 543 N.W.2d 293, 296 (Iowa Ct.App. 1995). A contractor's recovery is decreased by the cost of remedying those defects for which he is responsible. See Moore's Builder Contractor, Inc. v. Hoffman, 409 N.W.2d 191, 195 (Iowa Ct.App. 1987).

The evidence showed there was substantial work which needed to be performed to remedy Leslie's work. The Vander Ploegs paid Wallstra Plumbing Heating Company $495 to install the heating. They paid Midwest Electrical Services $3727.09 to repair defective electrical work. They paid Timothy Larson $20,458.19 to replace defective taping and sheetrock throughout the house, and make other repairs. We conclude the district court properly calculated the amount of the Vander Ploegs' damages.

VI. Attorney Fees

Leslie claims he substantially performed under the contract and should be entitled to collect attorney fees. In order to successfully enforce a mechanic's lien, substantial performance of the contract is required. Bidwell, 543 N.W.2d at 295. Substantial performance allows only 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 the other portions of the building, and may be compensated for through deductions in the contract price. Nepstad Custom Homes, 527 N.W.2d at 406. The contractor has the burden to show substantial performance. Id.

Similar to the factual situation in Nepstad, where there was evidence the contractor lost interest in the project and failed to supervise subcontractors, there was evidence in this case that Leslie lost interest in the project because he was running for county supervisor. Because of the substantial amount of work needed in this case to repair Leslie's faulty workmanship, we determine he did not substantially comply with the contact and is not entitled to enforce the mechanic's lien. A party who cannot enforce its mechanic's lien is not entitled to attorney fees under Iowa Code section 572.32 (1999). Id. at 407.

VII. Summary

We have increased the total amount Leslie is entitled to receive for labor costs, which means Leslie is entitled to the total amount of $45,480.17. This amount is reduced by $20,000, which the Vander Ploegs have already paid, to give Leslie a judgment for $25,480.17. This amount is further offset by the damages awarded to the Vander Ploegs of $24,680.28. We conclude the Vander Ploegs are responsible to pay Leslie $799.89, plus interest. Costs of this appeal are assessed one-half to each party.

AFFIRMED AS MODIFIED.


Summaries of

Leslie v. Vander Ploeg

Court of Appeals of Iowa
Feb 12, 2003
662 N.W.2d 374 (Iowa Ct. App. 2003)
Case details for

Leslie v. Vander Ploeg

Case Details

Full title:LARRY LESLIE d/b/a LESLIE SERVICES, Plaintiff-Appellant, v. CHUCK VANDER…

Court:Court of Appeals of Iowa

Date published: Feb 12, 2003

Citations

662 N.W.2d 374 (Iowa Ct. App. 2003)