DeSimone Electric, Inc. v. Cmg, Inc.

• Decision Date: 29 June 2006
• Docket Number: No. 2004-268-A.,2004-268-A.
• Citation: 901 A.2d 613
• Parties: DeSIMONE ELECTRIC, INC. v. CMG, INC., et al.
• Court: Rhode Island Supreme Court

901 A.2d 613

DeSIMONE ELECTRIC, INC. v. CMG, INC., et al.

No. 2004-268-A.

Supreme Court of Rhode Island.

June 29, 2006.

COPYRIGHT MATERIAL OMITTED

Michael R. DeLuca, Esq., Providence, for Plaintiff.

Albert R. Romano, Esq., Providence, for Defendant.

Present: WILLIAMS, C.J., and GOLDBERG, FLAHERTY, SUTTELL, and ROBINSON, JJ.

OPINION

Justice SUTTELL, for the Court.

The plaintiff, DeSimone Electric, Inc., appeals from a Superior Court judgment denying its petition to enforce a mechanic's lien and awarding the defendants, CMG, Inc., Ashford Homes, LLC, and James Colucci, damages on their counterclaims for breach of contract and negligence. The plaintiff contends that the trial justice erred in finding the mechanics' lien statute, G.L.1956 chapter 28 of title 34, unconstitutional and in denying its petition to enforce. The plaintiff also avers that the trial justice was clearly wrong and overlooked or misconceived evidence in her findings concerning the defendants' counterclaims.

This case came before the Supreme Court for oral argument pursuant to an order directing the parties to show cause why the issues raised in this appeal should not be decided summarily. After considering the written and oral submissions of the parties and examining the record, we are of the opinion that the issues raised in this appeal may be resolved without further briefing or argument. For the reasons set forth herein, we affirm the judgment of the Superior Court.

Facts and Procedural History

The present dispute arose over two contracts between plaintiff and defendants. One of the contracts was created when James Colucci, in his capacity as president of CMG, Inc., hired plaintiff, DeSimone Electric, Inc., an electrical contractor, to do work on eight lots at City View Highlands Estates in Johnston, Rhode Island (the City View project). The parties orally agreed that plaintiff would complete the "basic" or "rough" wiring at each lot for a fixed price of $2,750 per lot.¹ To receive payment for the work it did on the City View project, plaintiff would submit an invoice upon completion of the rough phase of the electrical work, and CMG-Ashford² would pay, usually within a week or two. The owner of DeSimone Electric, Alberto DeSimone, testified that CMG-Ashford never exceeded two or three months on a payment.

The plaintiff began work on the City View project at the end of 2000 and discontinued labor on July 17, 2001. Mr. DeSimone testified that CMG-Ashford owes the plaintiff corporation $4,795 for work done on five of the eight lots. Mr. DeSimone admitted that the plaintiff corporation did not complete work on all the lots, but he said that it stopped working because it was not receiving payment.

CMG-Ashford asserts, however, that the expenses it incurred to complete or fix plaintiff's electrical work, combined with resulting delays, additional management costs, and finance charges, exceeded the amount that plaintiff claims it is due. Specifically, CMG-Ashford maintains that plaintiff owes it $31,208.08 for management and supervision costs that resulted from being forced to review and correct plaintiff's work, dealing with the realtor and town inspectors during the delay, and the compounded daily interest that CMG-Ashford paid to the bank on construction loans for the houses during the delay. James Colucci testified that he spoke to Mr. DeSimone "on a couple of different occasions" concerning the poor quality of plaintiff's work on the City View project and about the fact that plaintiff's work sometimes had not passed inspection. He also chided plaintiff for not always cleaning up the site after work. He further testified that it was particularly important that plaintiff's electrical work be finished in a timely manner so that other trades could follow with their portions of the work. James Colucci testified that Mr. DeSimone "worked with [defendants] long enough that he knew to keep up with the other trades." Nonetheless, he said that he had to hire other contractors to complete the electrical work when plaintiff refused to return to the job. Thomas Colucci, James Colucci's brother and an employee of CMG-Ashford, also testified that plaintiff left the work site "unclean" and did not finish the rough wiring according to plan. He said that he spoke to Mr. DeSimone about his dissatisfaction in the spring or early summer of 2001.

Karen Rainone, the former office manager of CMG, testified that she took phone calls from Mr. DeSimone during which he expressed his desire to be paid before completing additional work. She also said that she remembered hearing complaints about plaintiff and other subcontractors concerning their failure to clean up after themselves at the City View project work site. She testified that her job sometimes required her to inform subcontractors when their work did not pass inspection. Although Ms. Rainone first stated that she did not recall a failed inspection concerning plaintiff's work, she later testified on cross-examination that she communicated with plaintiff on at least one occasion concerning a failed inspection on the City View project.

The other contract disputed in this case was created when Mr. DeSimone and James Colucci orally agreed that plaintiff would do electrical work on James Colucci's private home on Iroquois Trail in Glocester, Rhode Island (the Iroquois Trail project). The plaintiff worked on the Iroquois Trail project from August 2000 until February or April of 2001. James Colucci testified that plaintiff's work on the Iroquois Trail project already had begun when the City View project commenced. The parties presented conflicting testimony concerning the price specified in the oral agreement for the Iroquois Trail project. Mr. DeSimone testified that he and James Colucci agreed that the price was "not to exceed" $9,500. James Colucci, on the other hand, testified that he agreed to pay plaintiff a flat price of $6,800. Thomas Colucci also testified that the price was $6,800. In addition, the record reflects an electrical permit application in which plaintiff listed $5,000 as the "ESTIMATED COST OF COMPLETED INSTALLATION" for the Iroquois Trail project. Mr. DeSimone testified, however, that this was only a "rough estimate," that he wrote the $5,000 amount to save money on the permit fee, and that he filled out the permit application before knowing the extent of the work to be done on the Iroquois Trail project.³ Mr. DeSimone could not remember whether he ever submitted an amended electrical permit application to the Town of Glocester reflecting a more "accurate" estimate.

Mr. DeSimone testified that the plaintiff corporation had performed $9,410 worth of the work on the Iroquois Trail project when it ceased labor. It is undisputed that plaintiff received $6,000 over four payments from James Colucci for the contract. Mr. DeSimone contends that the plaintiff corporation still is owed the balance of $3,410 for the work completed, even though he admitted that "the house wasn't completed a hundred percent." James Colucci testified, however, that plaintiff's work on the Iroquois Trail project was only about 80 to 85 percent done when plaintiff stopped work. James Colucci also said that although he was satisfied with the work that plaintiff did finish at the Iroquois Trail project "[f]or the most part," there were several problems with the work, including jobs that were not completed or were done incorrectly, so that other contractors had to be hired to fix plaintiff's work. Accordingly, James Colucci alleges that he need not pay plaintiff anything more for the Iroquois Trail project because plaintiff owes him $2,590 in damages caused by plaintiff's substandard or incomplete work.

On or about July 19, 2001, James Colucci and his two brothers met with Mr. DeSimone at Birchwood Estates, a third possible project site. James Colucci testified that the purpose for the meeting was to discuss the completion of the City View project, but Mr. DeSimone said that the meeting was held to establish when plaintiff's work on the new Birchwood Estates development would begin. At the meeting, Mr. DeSimone informed the Coluccis that plaintiff would not start a new project or finish the City View or Iroquois Trail projects without further payment for those projects. According to James Colucci, he in turn told Mr. DeSimone that there were problems with plaintiff's work. An argument ensued, and plaintiff never returned to work.

On July 20, 2001, James Colucci sent a letter to plaintiff advising it that CMG-Ashford expected plaintiff to return and complete the electrical work on the City View project in a timely manner or CMG-Ashford would be forced to hire another subcontractor to complete the work and "back-charge" plaintiff for the completion. The letter informed plaintiff that it was "behind schedule and holding up progress" on Lots 3, 4, 5, and 7. On the same date, plaintiff filed notices of intention to claim liens on five lots at the City View project for which plaintiff alleged it was not fully paid.

On November 16, 2001, the parties stipulated that CMG-Ashford would file a bond in the amount of $5,090, thereby making it unnecessary for plaintiff to file a notice of lis pendens, and plaintiff filed a petition to enforce a mechanic's lien against the bond pursuant to chapter 28 of title 34, the Rhode Island mechanics' lien statute.⁴ On December 7, 2001, defendants answered and counterclaimed, alleging that plaintiff had breached the oral contracts and that the work done on both sites was negligent and not performed in a workmanlike manner. On January 4, 2002, the Superior Court allowed plaintiff to file an amended petition adding a second count against James Colucci for breach of contract with respect to the Iroquois Trail project. The defendants answered the amended petition on January 29, 2002, and they included counterclaims alleging negligence and breach of contract with respect to each of the...