Dickson v. Moran

• Decision Date: 21 March 1977
• Docket Number: No. 13179,13179
• Citation: 344 So.2d 102
• Parties: Cryel DICKSON d/b/a Dickson Supply Company, Plaintiff-Appellant, v. Frank Scott MORAN et al., Defendants-Appellants.
• Court: Court of Appeal of Louisiana — District of US

Page 102

344 So.2d 102

Cryel DICKSON d/b/a Dickson Supply Company, Plaintiff-Appellant, v. Frank Scott MORAN et al., Defendants-Appellants.

No. 13179.

Court of Appeal of Louisiana, Second Circuit.

March 21, 1977.

Bethard & Davis by Henry W. Bethard, III, Coushatta, for plaintiff-appellant.

Richie & Kernaghan by Edward O. Kernaghan, Shreveport, for defendants-appellants.

Before PRICE, HALL and JONES, JJ.

JONES, Judge.

Plaintiff seeks to recover sums expended by him for labor and materials in the partial performance of a verbal building contract, by the terms of which he agreed to build a home for defendant Frank Scott Moran, hereafter referred to as owner. He also sought loss of profits which he would have earned had he been allowed to complete the contract, and demands recognition of a laborer's and materialman's lien which he filed affecting the land on which the construction was performed, standing of record in the name of Joe E. Moran, the father of the owner. The owner reconvened for damages consisting of the cost of demolishing the portion of the structure constructed by the plaintiff, along with sums previously paid to plaintiff under the contract, and loss of income. Both the owner and his father demanded cancellation of the lien and asked for damages caused by its wrongful recordation. The trial judge ordered the lien cancelled, and rejected all other demands. All parties have appealed . We affirm.

Under the terms of the verbal contract, the plaintiff was obligated to construct the owner's home according to plans and specifications prepared by an architect for a total price of $66,400 . He commenced the work on November 12, 1974. The owner paid plaintiff approximately $14,000 under the terms of the contract on January 2. On January 20 he stopped plaintiff from performing further work under the contract because of numerous defects in the portion of the house completed and plaintiff's failure to follow the plans and specifications. The owner had another contractor complete the construction of his home and correct many of the defects which existed in the portion of the structure previously completed by plaintiff.

The principal issues on this appeal are:

I. Did the plaintiff establish he was entitled to any additional sums from the owner for his work on the house after having failed to follow the plans and specifications, and leaving defects in the unfinished structure?

II. Did the owner establish he was entitled to recover the costs of demolishing the structure from the contractor along with recovery of amounts previously paid under the contract?

III. Is a contractor liable for general damages when he wrongfully files a laborer's and materialman's lien in good faith and without malice?

I. Claim of contractor

It is implied in every building contract that the work of the builder will be performed in a good and workmanlike manner, and free from defects in either material or workmanship. Nichols Ford Company, Inc. v. Hughes, 292 So.2d 345 (La.App., 2d Cir. 1974).

The contractor's liability for noncompliance with the construction contract is governed by Civil Code Art. 2769:

'If the undertaker fails to do the work he has contracted to do, or if he does not execute it in the manner and at the time he has agreed to do it, he shall be liable in damages for the losses that may ensue from his non-compliance with his contract.'

The jurisprudence has construed this article to mean when a contractor has 'substantially performed' the building contract, he is entitled to recover the contract price even though some defects are present, and the owner of the house is relegated to having the price reduced by an amount sufficient to perfect or complete the work. Neel v. O'Quinn, 313 So.2d 286 (La.App., 3d Cir. 1975); Airco Refrigeration Service, Inc. v. Fink, 242 La. 73, 134 So.2d 880 (1961).

However, if the building contract has not been substantially performed, the contractor's recovery is limited to quantum meruit, Airco Refrigeration Service, Inc. v. Fink, supra, and if the defects are such that they cannot be corrected except by removing and replacing the construction, the owner may even require the contractor to remove the object from the land and restore the premises to their prior condition, and may also be entitled to damages. Neel v. O'Quinn, supra.

Thus the initial determination to be made in a dispute between the contractor and the owner, such as presented in this litigation, is whether the contract was substantially performed. Plaintiff urges his substantial compliance with the building contract until January 20, 1975 should be considered as a 'substantial performance' of the contract. We agree with the trial court that this argument has no merit. 'Substantial performance' requires the structure be usable for the purpose which it was intended. Keating v. Miller, 292 So.2d 759 (La.App., 4th Cir. 1974); Cannon v. Van Valin, 211 So.2d 751 (La .App., 4th Cir. 1968). The evidence shows the house was only 25--40% Complete when plaintiff and his employees stopped work on January 20 . At that time it was not usable for the purpose for which it was intended and therefore failed to meet the criteria for 'substantial performance'.

The trial court found plaintiff breached his contract with the owner because of the numerous defects in the completed portion of the house, and by his substantial deviations from the plans and specifications for the house. The evidence clearly supports this finding. Since there was a breach of contract, the owner had 'cause' to terminate plaintiff, and therefore plaintiff cannot recover any loss of profit but is entitled only to recover under quantum meruit. Thibodeaux v. Kern, 143 So.2d 422 (La.App., 3d Cir. 1962).

Plaintiff attempted to show the amount of material and labor that had been expended on the house by introducing various invoices, checks, and check stubs. Although he testified all expenses reflected by these documents were for material and labor used on the...