Opinion
As Modified on Denial of Rehearing Sept. 4, 1974. Not
George B. Rice, Denver, for plaintiff-appellant.
Myricks&sNewton, P.C., John Gollub, Denver, for defendants-appellees.
RULAND, Judge.
Plaintiff appeals from a judgment of dismissal following presentation of its case-in-chief. We affirm.
Plaintiff filed the present action to recover $4,998.14, as the final payment allegedly due pursuant to a written contract for remodeling a building owned by defendants. Defendants answered, denying that plaintiff had performed according to the written contract and asserting various affirmative defenses, and counter-claimed for damages of $4,600, allegedly resulting from defective construction. In addition, after determining pursuant to pre-trial discovery that certain subcontractors and materialmen engaged for the project by plaintiff with claims in excess of $4,200 had not been paid, defendants filed a written motion to amend their answer in order to allege this nonpayment as a breach of the contract and thus an affirmative defense to plaintiff's claim, as well as a separate motion to dismiss for failure to join the subcontractors and materialmen as parties.
Trial was to the court. On the opening day of trial, arguments were presented on defendants' motion. Thereafter, the trial court allowed defendants to amend their answer and deferred ruling on the motion to join additional parties pending presentation of plaintiff's case-in-chief. Plaintiff does not complain about this ruling. At the conclusion of plaintiff's case-in-chief, the court dismissed plaintiff's complaint for failure to supply an affidavit called for by Article 9.7.3 of the contract on the basis that the affidavit constituted a condition precedent to payment. Defendants thereupon voluntarily dismissed their counterclaim without prejudice. Insofar as material here, that article provides:
'Neither the final payment nor the remaining retained percentage shall become due until the contractor submits to the architect (1) an Affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with the work for which the owner or his property might in any way be responsible, have been paid or otherwise satisfied . . ..'
Plaintiff's first contention of error is that the trial court should not have considered Article 9.7.3 because the affidavit requirement was not pled as an affirmative defense pursuant to C.R.C.P. 8(c). Defendants answer that this issue was tried by implied consent of the parties pursuant to C.R.C.P. 15(b). We agree with defendants.
The failure to pay the subcontractors and materialmen as constituting a breach of the written contract was first raised as an issue by defendant's motion to amend their answer. Although the motion referred to a different article in the written contract than Article 9.7.3, both the architect and the president of plaintiff corporation were interrogated without objection regarding the affidavit requirement of Article 9.7.3, and both verified that no affidavit was supplied. Counsel for plaintiff then attempted to explain the failure to supply an affidavit, by establishing from the testimony of both witnesses and in argument on the motion to dismiss, that certification of payment of bills under the contract was not required until after the contractor received final payment, and that plaintiff would have prepared the necessary affidavit upon receipt of final payment. Under these circumstances, the issue posed by Article 9.7.3 was tried by implied consent of the parties, and the trial court properly considered this issue. C.R.C.P. 15(b); See Great American Insurance Co. v. Ferndale
Page 938
Development Co., Inc., Colo., 523 P.2d 979 (announced June 17, 1974).
Plaintiff next contends that because the time within which the subcontractors and materialmen could file a lien against defendants' property has expired, defendants have no liability to any subcontractors and materialmen and hence no affidavit of payment is required under Article 9.7.3. We disagree.
Subcontractors and materialmen are not limited to the remedy provided by the Colorado mechanic's lien statutes. See C.R.S. 1963, 86--3--24. For example, recovery from the owner upon whose property improvements are constructed may be based upon implied contract, See Mann v. Farnum, 17 Colo. 427, 30 P. 332, or ratification by the owner of a contract between a subcontractor or materialman and the general contractor. See Hayutin v. Gibbons, 139 Colo. 262, 338 P.2d 1032. Hence, there is no basis on the record before us to conclude that defendants have no liability to the subcontractors and materialmen engaged for the remodeling project by plaintiff.
Plaintiff next contends that, based upon the contract as a whole, Article 9.7.3 must be construed as an independent promise by plaintiff to supply an affidavit and not as a condition precedent to final payment from defendants. Construing the obligation as an independent promise, plaintiff asserts that in lieu of dismissing its complaint, the trial court should have allowed plaintiff to recover, and then awarded defendants any monetary damage that may reasonably have followed from plaintiff's failure to supply the affidavit.
The exhibits introduced during the trial of this case were not designated as part of the record on appeal. However, the trial court purported to include such exhibits in the record by virtue of its certificate regarding the record on appeal. The exhibits have been supplied to us following oral argument. Although we do not approve of such procedure, we have reviewed the exhibits and find plaintiff's contention to be without merit.
Purporting to act pursuant to the contract, and architect issued a certificate that final payment was due; however, he testified that he would not have issued the certificate if he had known that various subcontractors had not been paid. Conversely, a review of the entire contract discloses an intent to protect the owner from any responsibility for payment of subcontractors. Hence, the trial court's ruling that the affidavit requirement is a condition precedent is consistent with the intent of the parties as expressed in the contract, read as a whole.
Plaintiff finally contends that it substantially performed the contract and thus should be allowed recovery on that basis with a deduction allowed for failure to comply with Article 9.7.3. No authority has been presented to us, and we find no authority for the proposition that proof of substantial performance under the circumstances of this case would excuse the express affidavit requirement contained in Article 9.7.3. In addition, plaintiff failed to plead a claim in substantial performance, to argue that theory to the trial court in answer to the motion for dismissal, or to raise that contention in the motion for new trial. The thrust of plaintiff's evidence and argument was not that it substantially performed the contract with the exception of compliance with Article 9.7.3; rather, plaintiff's position was that it was unnecessary to supply the affidavit until final payment was received. Hence, the issue was not tried by implied consent of the parties pursuant to C.R.C.P. 15(b). Accordingly, there is no basis for us to consider this issue on appeal. C.R.C.P. 59(f); Martin v. Opdyke Agency, Inc., 156 Colo. 316, 398 P.2d 971.
The judgment is affirmed.
COYTE and ENOCH, JJ., concur.