Almont Lumber & Equipment, Co. v. Dirk, 980061

• Decision Date: 30 October 1998
• Docket Number: No. 980061,980061
• Citation: 585 N.W.2d 798
• Court: North Dakota Supreme Court
• Parties: ALMONT LUMBER & EQUIPMENT, CO., a/k/a Marshall Lumber Company, a corporation, Plaintiff and Appellant, v. Mainard B. DIRK and Sandy K. Dirk, Defendants and Appellees. Civil

Page 798

585 N.W.2d 798

1998 ND 187

ALMONT LUMBER & EQUIPMENT, CO., a/k/a Marshall Lumber Company, a corporation, Plaintiff and Appellant, v. Mainard B. DIRK and Sandy K. Dirk, Defendants and Appellees.

Civil No. 980061.

Supreme Court of North Dakota.

Oct. 30, 1998.

Cynthia M. Feland, Carson, for plaintiff and appellant.

Todd D. Kranda, of Kelsch, Kelsch, Ruff & Kranda, Mandan, for defendants and appellees.

MARING, Justice.

¶1 Almont Lumber and Equipment Company, also known as Marshall Lumber Company (Marshall Lumber), appeals from a judgment denying it foreclosure of a mechanic's lien recorded against the home of Mainard B. and Sandy K. Dirk. We conclude the trial court did not err in denying Marshall Lumber foreclosure of the mechanic's lien, so we affirm the judgment.

¶2 Marshall Lumber sells wholesale and retail building materials. Marshall Lumber's principal place of business is in Mandan and Marshall Feland is its president and general manager. The Dirks reside in Mandan, and for the last 19 years Mainard has been a self-employed contractor in the Bismarck-Mandan area doing business as D & D Construction.

¶3 In 1992, Mainard opened a credit account with Marshall Lumber to purchase building supplies and materials for his various construction projects. No separate accounts were maintained by Marshall Lumber for the construction projects. Under the parties' agreement, Mainard would pay any balance due on the account by the tenth of the month, or be subject to a finance charge. Marshall Lumber sold Mainard materials and supplies for several years under this arrangement.

¶4 In January 1995, Mainard prepared a handwritten list of materials he needed for construction of his new home. After getting a bid from a competing lumberyard, Mainard asked Feland for a price estimate. Feland and Mainard went through the list together, and Feland inserted a price by each of the building materials. Feland and Mainard also added materials for the home to the list.

¶5 Mainard obtained preliminary financing approval for the home in the form of a $60,000 line of credit from First Southwest Bank (Southwest). Mainard told Feland he would purchase the building materials for his home from Marshall Lumber. Mainard asked Feland for "something to take to the bank" to get the funding in advance for the cost of the building materials for the house. Feland had his wife type the material list, which listed a total cost of $21,594.47 for the materials and supplies to construct the home.

¶6 Mainard took the typed material list to Southwest. Assuming it was a bill for the materials listed, Southwest issued Mainard a bank check payable to Marshall Lumber in the amount of $21,594.47. Mainard testified the check was intended as payment in full for the building materials he wanted for the home, and was not to be applied to building materials he had purchased on credit for other unrelated projects for D & D Construction. Feland testified the $21,594.47 check was not a prepayment for the building materials for Mainard's home, but was to be applied to payment of Mainard's account balance from previous unrelated construction projects.

¶7 Marshall Lumber endorsed the check by a business stamp for deposit in its bank account. The check had a preprinted lien waiver on the back:

NOTICE BEFORE ENDORSING MECHANIC'S LIEN WAIVER

IN CONSIDERATION OF PAYMENT RECEIVED AND BY THIS ENDORSEMENT, THE PAYEE WAIVES ANY AND ALL MECHANIC'S LIENS ACQUIRED BY REASON OF LABOR PERFORMED OR MATERIALS, SKILL, OR MACHINERY FURNISHED PRIOR TO AND INCLUDING THE 26th DAY OF June, 1995 TO THE PREMISES SITUATED AT [the legal description for the Dirks' new home].

Marshall Lumber applied the $21,594.47 check to Mainard's existing account balance of $8,278 on other unrelated construction projects, resulting in an overpayment of $13,316.47 for that account. The materials for the home were delivered after June 26, 1995.

¶8 Mainard continued buying building materials on credit from Marshall Lumber for other unrelated construction projects. By December 1995, the outstanding balance due on Mainard's account exceeded $20,000, and Marshall Lumber refused to extend him further credit. Marshall Lumber then gave Mainard written notice of its intent to file a mechanic's lien against his home, and filed the lien in January 1996.

¶9 Marshall Lumber then brought a collection action against the Dirks to recover the balance owed on its open account and to foreclose the mechanic's lien. After a bench trial, the trial court found the Dirks owed Marshall Lumber $20,758 on the open account as of January 1, 1996. However, the court terminated the mechanic's lien, concluding the lien was not properly perfected because the lien waiver on the back of the $21,594.47 check was valid and, by endorsing the check, Marshall Lumber "had full knowledge that the lien waiver was applicable to the building project related to the price list for the home of the [Dirks]." Judgment was entered in favor of Marshall Lumber for $20,758, plus interest from January 1, 1996, costs and disbursements. Marshall Lumber appealed, claiming the court erred in terminating the mechanic's lien.

¶10 Marshall Lumber asserts the trial court erred in denying foreclosure of its mechanic's lien because the check endorsement stamp was not a "signature" for purposes of a knowing and voluntary waiver of the lien. Marshall Lumber also asserts the court erred because a lien waiver cannot be extended to materials delivered after the date of the time period covered by the waiver, and here, all materials were delivered after June 26, 1995. We need not decide the questions posed by Marshall Lumber because, even if the trial court erred, we will not set aside a correct result merely because the trial court assigned an incorrect reason if the result is the same under the correct law and reasoning. See Hanneman v. Continental Western Ins. Co., 1998 ND 46, p 25, 575 N.W.2d 445. Here, the trial court made other dispositive findings that compel denying Marshall Lumber's foreclosure of the mechanic's lien.

¶11 Section 35-27-02, N.D.C.C.,...