Blade Corp. v. American Drywall, Inc., 1-479A111

• Decision Date: 04 March 1980
• Docket Number: No. 1-479A111,1-479A111
• Court: Indiana Appellate Court
• Parties: BLADE CORP., Blade & Associates, Inc., the Blade Company, Sidney D. Eskenazi and Lois Eskenazi, d/b/a Sand-West Development Company, a Partnership, Defendants-Appellants, v. AMERICAN DRYWALL, INC., Plaintiff-Appellee.

Page 1183

400 N.E.2d 1183

BLADE CORP., Blade & Associates, Inc., the Blade Company Sidney D. Eskenazi and Lois Eskenazi, d/b/a Sand-West Development Company, a Partnership, Defendants-Appellants, v. AMERICAN DRYWALL, INC., Plaintiff-Appellee.

No. 1-479A111.

Court of Appeals of Indiana, First District.

March 4, 1980.

Richard J. Dick, Marvin Mitchell, Eskenazi, Mitchell, Yosha & Hurst, Indianapolis, for defendants-appellants.

Michael S. Miller, Kennedy, Miller, Coons & Muller, William Freihofer, Dalrymple, Minton & Freihofer, Indianapolis, for plaintiff-appellee.

NEAL, Judge.

Defendants-appellants Sidney D. Eskenazi and Louis Eskenazi d/b/a Sand-West Development Company (Sand-West) appeal a judgment in favor of plaintiff-appellee American Drywall, Inc. (American) following a trial to the Hancock Circuit Court. ¹

Sand-West contracted with a builder for remodeling work on certain real estate owned by Sand-West. American contracted with the builder to perform drywall and painting work on the Sand-West property. Builder went out of business before completing the work under the contract with Sand-West, and on February 19, 1976, American notified Sand-West, pursuant to Ind. Code 32-8-3-9, that American was holding Sand-West responsible for American's unpaid claims against the builder. Under the terms of that statute, once properly notified, Sand-West would be liable for such claims "but not to exceed the amount which may be due, and may thereafter become due" from Sand-West to the builder.

Sand-West's appeal raises two issues for our review:

I. Whether the trial court erred in its finding and judgment that at the time American served its statutory notice of liability Sand-West was indebted to the builder in the amount of $12,600 and that American was entitled to recover that amount from Sand-West; and

II. Whether the trial court erred in finding that American did not intend to bind itself by endorsing checks containing purported releases and waivers of claims through the dates of the checks.

We reverse on the basis of Issue I and thus find it unnecessary to address Issue II.

In special findings of fact and conclusions of law, the trial court found that Sand-West owed the builder $12,600 on February 19, 1976, and that Sand-West was obligated to pay that entire amount to American. The court did not, however, enter findings of fact which show the basis for its calculation of the $12,600 figure.

Sand-West contends that it owed nothing to the builder on February 19, 1976, and attempts to explain $12,310 of the $12,600 figure as the amount retained by Sand-West for work billed pursuant to progress billings under the following provisions from the contract between Sand-West and the builder:

"Owner shall pay directly to Contractor . . . monies for cost and expenses attributable to material, work and services performed by Contractor and his subcontractors and suppliers within ten (10) days after the required documentation is received and approved, the appropriate percentage amounts based on the percentage of the completion of the various items involved, less ten percent (10%) to be retained by Owner until final settlement is made.

Any final balance of the contract price shall be paid by Owner when work specified and punch list is completed and all warranties are delivered to Owner."

Sand-West argues that, if the trial court's figure of $12,600 does include this retainage, the court erred in two respects: 1) the retainage was not owed to builder by Sand-West under the terms of the contract until the work was completed and warranties delivered; and 2) Sand-West had a right to the retainage superior to anyone making a claim against the funds and had, prior to receiving the notice from American under Ind. Code 32-8-3-9, expended the retainage plus additional funds in completion of the work left undone by builder.

American argues that the trial court's finding of a $12,600 indebtedness of Sand-West to the builder on February 19, 1976, is supported by the evidence in either of two ways: 1) that 83.75 percent of the project had been completed by the date of builder's breach, 75 percent of the contract price had been paid, leaving $12,928.38 owed to the builder on the date of breach; and 2) that American was entitled to the $12,310 retainage.

It is well-established that this court will not reweigh conflicting evidence on appeal. We will consider only that evidence which tends to support the trial court's findings of fact, conclusions of law, and judgment, together with all reasonable inferences which may be drawn therefrom. If, from that perspective, there is sufficient evidence to support the trial court's judgment, we must affirm. Shahan v. Brinegar, (1979) Ind.App., 390 N.E.2d 1036. We are cognizant that the trial court's findings are not to be set aside on appeal unless clearly erroneous, Ind.Rules of Procedure, Trial Rule 52(A), and that a trial court's judgment will be determined to be clearly erroneous only after a review of the evidence leaves us with a definite and firm conviction that the trial court erred. University Casework Systems, Inc. v. Bahre, (1977) Ind.App., 362 N.E.2d 155.

We first note the fallacies of American's first argument. First, the issue under Ind. Code 32-8-3-9 is what was owed to builder by Sand-West on the date of the giving of the statutory notice not on the date of builder's breach. Second, if 83.75 percent of the work were completed and 75 percent of the contract price paid, $12,926.64 would have remained unpaid, but $12,372.64 of this unpaid amount would represent the retainage under the contract and would be subject to Sand-West's arguments that this retainage was not owed under the contract on February 19, 1976, and was properly used by Sand-West to complete the project.

We now look to the evidence to see if the trial court's figure of $12,600 can be supported in any other way except as an approximation of the ten percent retainage under the contract.

Generally, one who claims a statutory right must bring himself within the provisions of the statute. Board of Commissioners of Marion County v. Millikan, (1934) 207 Ind. 142, 190 N.E. 185. Specifically, the burden of proof is upon an asserted mechanic's lienholder who seeks foreclosure to show that the purported lien meets all the statutory requirements necessary to its creation. Stanray Corporation v. Horizon Construction, Inc., (1976) Ind.App., 342 N.E.2d 645. Ind. Code 32-8-3-9 is an integral part of Title 32, Article 8, Chapter 3 which creates remedies for contractors,...