Tilt-Up Concrete, Inc. v. Star City/Federal, Inc., TILT-UP

• Decision Date: 31 July 1998
• Docket Number: TILT-UP,No. S-96-508,S-96-508
• Parties: CONCRETE, INC., A Nebraska Corporation, Appellee, v. STAR CITY/FEDERAL, INC., A South Dakota Corporation, Appellant.
• Court: Nebraska Supreme Court

Page 604

582 N.W.2d 604

255 Neb. 138

TILT-UP CONCRETE, INC., A Nebraska Corporation, Appellee, v. STAR CITY/FEDERAL, INC., A South Dakota Corporation, Appellant.

No. S-96-508.

Supreme Court of Nebraska.

July 31, 1998.

Syllabus by the Court

1. Equity: Mechanics' Liens: Foreclosure: Appeal and Error. An action to foreclose a construction lien is one grounded in equity. In an appeal of an equitable action, an appellate court tries factual questions de novo on the record and reaches a conclusion independent of the findings of the trial court, provided, where credible evidence is in conflict on a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.

2. Contracts: Mechanics' Liens. A construction lien is not valid absent a contract between the parties.

3. Contracts: Proof: Circumstantial Evidence. A contract may be written or oral and can be shown by circumstantial evidence.

4. Contracts: Parties: Intent. To create a contract, there must be both an offer and an acceptance; there must also be a meeting of the minds or a binding mutual 5. Contracts. Acceptance of an offer may be illustrated by words, conduct, or acquiescence indicating agreement and may be indicated by the silence and inaction of an offeree.

understanding between the parties to the contract. Mutual assent to a contract is determined by the objective manifestations of intent by the parties, not by their subjective statements of intent.

6. Construction Contracts: Mechanics' Liens. Where a contract has been terminated without fault on the contractor's part, a construction lien is preserved despite the failure of the contractor to complete the contract.

7. Statutes: Legislature: Intent: Appeal and Error. In determining the meaning of a statute, an appellate court may conjunctively consider and construe a collection of statutes which pertain to a certain subject matter to determine the intent of the Legislature, so that different provisions of the act are consistent, harmonious, and sensible.

8. Construction Contracts: Mechanics' Liens: Breach of Contract: Damages. A prime contractor is entitled to the unpaid part of his or her contract price under Neb.Rev.Stat. § 52-136(1)(a) (Reissue 1993) when the prime contractor has substantially performed the contract; however, when the prime contractor has not substantially performed the contract or has been prevented from completing his or her work, the contractor is entitled to a lien for the reasonable value of the labor he or she has performed and the material he or she has furnished, but the contractor cannot have a lien for the damages sustained from the breach of the contract.

9. Construction Contracts: Mechanics' Liens: Breach of Contract: Damages. A contractor is entitled to a reasonable profit on the work performed that is secured by a construction lien, even though the profit is limited to the extent that it may be considered compensation for services actually rendered as distinguished from the amount of the contractor's loss because of an owner's breach of contract.

Robert T. Grimit, of Baylor, Evnen, Curtiss, Grimit & Witt, Lincoln, for appellant.

Edward H. Tricker and Kerry L. Kester, of Woods & Aitken, Lincoln, for appellee.

Before CAPORALE, WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

GERRARD, Justice.

Tilt-Up Concrete, Inc. (Tilt-Up), constructed improvements on real estate owned by Star City/Federal, Inc. (Star City). Upon Star City's failure to make payments for the improvements, Tilt-Up filed a construction lien on the real estate and, subsequently, filed a petition for foreclosure in the district court. The district court found that Tilt-Up had a valid construction lien in the amount of $852,243.70 and entered judgment against Star City in that amount plus prejudgment interest and costs. Star City appeals. Because we determine in our de novo review that the district court erred in calculating the value of Tilt-Up's construction lien at full contract damages, rather than at the reasonable value of services performed and materials furnished, we find that Tilt-Up is entitled to recover from Star City the sum of $235,418 and modify the judgment of the district court accordingly.

FACTUAL BACKGROUND

Tilt-Up is a contractor specializing in the construction of buildings using concrete wall panels that are cast on the building site and then "tilted up." Steve Miers is the president of Tilt-Up. Tilt-up walls differ from precast walls in that the wall panels are formed and poured on casting slabs at the building site rather than at the factory.

Star City is the owner of the real estate upon which Tilt-Up constructed improvements pursuant to the authorization of H. Lee Gendler, now deceased. Gendler was a shareholder and the president of Star City, the company he formed to provide a building for lease to the U.S. General Services Administration GSA) to house the Lincoln, Nebraska, office of the Immigration and Naturalization Service (INS). The construction of In the fall of 1992, Miers informed Gendler that the GSA intended to lease a building in the downtown Lincoln area. Thereafter, Gendler negotiated an option to purchase the real estate upon which the INS Project was constructed. In early 1993, Gendler obtained the GSA Solicitation for Offers (SFO) for the INS Project and began to assemble a proposal to construct a building to lease to the GSA.

the building was known as the INS Project. Gendler also was a shareholder and the president of Marathon Realty, Inc., and Olympic General, Inc. The INS project was the last of 5 construction projects performed by Tilt-Up for the Gendler companies during the 1989-93 time period and was 1 of over 50 projects for which Gendler obtained lump-sum price quotes from Tilt-Up for Tilt-Up's normal scope of work. James Nicas was an employee of the Gendler companies and provided information to Miers for use in furnishing such price quotes.

During early 1993, Nicas and Gendler began formulating Star City's lease price proposal for the INS Project by determining construction and financing costs. In so doing, Nicas requested a price from Miers for the normal Tilt-Up scope of work, which included constructing the foundations and floor slabs, erecting structural steel supports and wall panels, and doing the caulking, grouting, and exterior finish work. Miers was provided with the SFO and the design information necessary to price Tilt-Up's scope of work.

On April 27, 1993, Tilt-Up submitted to Nicas its first lump-sum bid on the INS Project. Nicas testified that he absolutely expected and wanted a price from Tilt-Up such that if Star City were awarded the project, Nicas could require Miers to perform the work for that amount. In order to facilitate the pricing of Tilt-Up projects, Nicas had developed a "Building Shell Estimating Form" (Form) upon which he delineated the specific work activities which Tilt-Up was to include in its bid price, and Nicas used it whenever Gendler was considering tilt-up style construction for a project. Tilt-Up's April 27 bid was submitted on Nicas' Form and included within its scope the requisites listed under item 1, entitled "Tilt-Up Contract."

Tilt-Up's April 27, 1993, bid conveyed Tilt-Up's lump-sum price of $1,172,000.11 for the stated scope of work. The bid included the requisites listed under the "Tilt-Up Contract" portion, item 1 of Nicas' Form. It also included the underslab fill sand, two elevator pits, and structural engineering for the INS Project. It did not include any accommodations for winter conditions, since Star City was anticipating an award of the INS Project in the first week of September and planned to have the tilt-up building shell completely erected by mid-November.

On approximately June 8, 1993, Nicas provided Miers with the information necessary to revise Tilt-Up's price to add a loading dock. On June 15, Miers gave Nicas Tilt-Up's revised price of $1,308,000. Nicas and Gendler each understood the $1,308,000 price to include the work described under item 1 of Nicas' Form. Thereafter, Nicas and Gendler requested Miers to revise the price again to reflect an increase in the load-bearing capacity of the second floor of the building to 150 pounds. On June 29, Miers gave Nicas the revised Tilt-Up price of $1,352,800. Miers confirmed this price in writing on June 30. Nicas understood that the scope of work included in Tilt-Up's $1,352,800 lump-sum price was everything included in the $1,308,000 price, plus an adjustment for the increase in the load-bearing capacity of the second floor.

In approximately October 1993, Star City submitted its best and final offer for the INS Project to the GSA. On November 23, the GSA formally awarded the INS Project to Star City. Within a day of the award, Nicas advised Miers that Tilt-Up should plan on constructing the project through the winter months. To accommodate winter construction conditions, Gendler agreed to pay a portion of the cost of the special fabrication of insulating blankets. Gendler also asked Miers to have the site work done and to have 6 to 8 inches of rock backfill placed on the site to alleviate potential moisture problems. Such work was considered by both Miers and Gendler to be extra work that was not included in Tilt-Up's $1,352,800 price. Gendler On December 15, 1993, Miers hand delivered to Gendler a letter setting forth Miers' understanding of the changes that had been made to the project since June and the extra work Gendler authorized and anticipated. In the letter, Miers confirmed and delineated the scope of his $1,352,800 price; proposed a unit price for the additional quantities of footings resulting from the changes in footing design ordered by Nel Hymans, Star City's project engineer; and set forth the terms upon which Tilt-Up would perform other work items or extras that...