Electrical Wholesale Supply Co. v. Nielson

• Citation: 136 Idaho 814,41 P.3d 242
• Decision Date: 31 December 2001
• Docket Number: No. 25807.,25807.
• Parties: ELECTRICAL WHOLESALE SUPPLY CO. INC., Plaintiff-Respondent-Cross Appellant, v. Kenneth M. NIELSON d/b/a Ken Nielson Electric, Defendant-Respondent-Cross Appellant, and Idaho Falls BPA, LLC, an Idaho limited liability company a/k/a R. Webster and Associates; Helen Swindells Trust, Defendants-Appellants-Cross Respondents. Ken Nielson, d/b/a Ken Nielson Electric, Cross Claimant-Respondent-Cross Appellant, v. Idaho Falls BPA, LLC, an Idaho limited liability company a/k/a R. Webster and Associates; Helen Swindells Trust, Cross Defendants-Appellants-Cross Respondents.
• Court: United States State Supreme Court of Idaho

41 P.3d 242

136 Idaho 814

ELECTRICAL WHOLESALE SUPPLY CO. INC., Plaintiff-Respondent-Cross Appellant, v. Kenneth M. NIELSON d/b/a Ken Nielson Electric, Defendant-Respondent-Cross Appellant, and Idaho Falls BPA, LLC, an Idaho limited liability company a/k/a R. Webster and Associates; Helen Swindells Trust, Defendants-Appellants-Cross Respondents.

Ken Nielson, d/b/a Ken Nielson Electric, Cross Claimant-Respondent-Cross Appellant, v. Idaho Falls BPA, LLC, an Idaho limited liability company a/k/a R. Webster and Associates; Helen Swindells Trust, Cross Defendants-Appellants-Cross Respondents.

No. 25807.

Supreme Court of Idaho, Idaho Falls, September 2001 Term.

December 31, 2001.

Rehearing Denied February 19, 2002.

Service, Gasser & Kerl, Pocatello, for appellant (BPA/Webster). Steven V. Richert argued.

Bart M. Davis, Idaho Falls, for respondent (EWSC).

David A. Johnson, Idaho Falls, for respondent (Nielson).

SCHROEDER, Justice.

Idaho Falls Bonneville Power Administration, LLC (hereinafter BPA) a/k/a R. Webster and Associates (hereinafter Webster), brings this appeal contesting the district court's decision imposing liens on Webster for work and materials used in constructing the new BPA building in Idaho Falls. The trustee for Kenneth M. Nielson, d/b/a Ken Nielson Electric, (Nielson) who performed electrical work on the project, has cross appealed on issues concerning the amount of the award to Nielson and the amount of attorney fees allowed. The decision of the district court is affirmed.

I. BACKGROUND AND PRIOR PROCEDURES

The property subject to the liens in this case is real property located in Idaho Falls where the new Idaho Falls BPA building was constructed. The property is owned by BPA subject to the terms and conditions of the Helen Swindells Trust's thirty percent interest as a tenant in common.

In October of 1995 Webster assumed the role of general contractor for the construction of the Idaho Falls BPA building. Webster hired Ken Nielson as the electrical subcontractor for the project. The two orally agreed that Nielson's work was on a "time and material" basis, which meant that Nielson would bill Webster for the time that he and his employees worked on the project and for the materials he furnished. Nielson did a small amount of work on the project between October of 1995 and January of 1996. The bulk of the work was done after that time. These facts are relevant in determining the amounts to be awarded based on who did the work at those times.

Electric Wholesale Supply Co., Inc. (hereinafter EWSC) is an electrical materials supplier. Nielson had an account with EWSC with an outstanding balance before he began the BPA project. In October of 1995 Nielson began charging electrical materials on his account at EWSC to use on the BPA project. Webster eventually opened his own account at EWSC but never directed Nielson to use that account, and Nielson never charged on the account. Nielson began submitting bills to Webster for the work performed and for the materials provided. In these bills Nielson included a markup on the cost of the materials of between 15% and 20%. The parties had not expressed any agreement on a mark-up.

In January of 1996, Nielson hired Dave Paulk (Paulk), d/b/a Warrior Electric (Warrior) to work on the BPA project. Warrior worked on the building during the day, Nielson worked at night and on the weekends. Nielson directed Paulk to charge materials used for the BPA project to his account at EWSC, which Paulk did until EWSC placed a credit hold on Nielson's account. Paulk then purchased the materials needed from his own account at EWSC. Once the credit hold was released on Nielson's account, Paulk resumed charging the materials on Nielson's account. By March and April, Warrior employees were doing most of the work on the project.

Nielson submitted bills for materials and labor to Webster who paid in full, without question. In April, however, Webster paid Nielson $10,000 and refused to make additional payments. Webster changed the locks on the project site, preventing Nielson from working on the project. Webster directed Warrior to complete the project. While completing the project, Warrior continued to purchase the materials on Nielson's account at EWSC.

On June 26, 1996, EWSC filed a materialman's lien against the property, seeking payment for $14,941.02 of unpaid credit purchases made on Nielson's account. Nielson also submitted a claim against the property for the amount of materials he claimed to have furnished to the project, $51,571.00. Nielson did not seek payment for the cost of labor provided. When Webster refused to pay the lien amounts, EWSC filed a complaint to foreclose its claim of lien on the property. EWSC named Nielson, BPA, Helen Swindells Trust, and D & S Electrical Supply Co. as defendants. Nielson filed an answer and cross-claim to foreclose his own claim of lien on the property. Nielson later filed a petition for voluntary Chapter 7 bankruptcy on May 21, 1997, which was granted. Thereafter, the U.S. Bankruptcy Trustee (the trustee) became the legal party in interest for Nielson's claim. In August of 1997 Webster filed an offer of judgment for $6,000 to the EWSC's lien, but EWSC did not accept the offer. In January of 1998 Webster and D & S Electric settled D & S Electric's cross-claim and filed a stipulation to dismiss the cross-claim, which the district court granted. Following a bench trial, the district court issued findings of fact and conclusions of law. BPA and Helen Swindells Trust filed a motion with the district court to reconsider its factual findings. The trustee also moved the district court to alter, amend, or reconsider its findings and for an award of attorney fees. BPA and Helen Swindells Trust then filed a second motion for reconsideration. EWSC filed a motion for costs and attorney fees. The district court granted EWSC's motion for costs and attorney fees and the bankruptcy trustee's motion for costs. The district court also reconsidered and altered some of its findings. The district court ultimately awarded EWSC $11,691.08 for the materials and $26,930.65 in costs and attorney fees; and awarded Nielson's bankruptcy trustee $1,069.12 for materials and $9,221.63 in costs and attorney fees.

II. STANDARD OF REVIEW

Review of a district court's findings of fact is limited to ascertaining whether the evidence supports the findings of fact and whether the findings of fact support the conclusions of law. Roell v. Boise City, 134 Idaho 214, 999 P.2d 251 (2000) (citing Conley v. Whittlesey, 133 Idaho 265, 985 P.2d 1127 (1999)). A district court's findings of fact in a court-tried case are construed liberally on appeal in favor of the judgment entered. Id. It is the province of the trier of fact to weigh conflicting evidence and testimony and to judge the credibility of the witnesses. Id. If the findings of fact are based on substantial evidence, even if the evidence is conflicting, they will not be overturned on appeal. Id. However, this Court exercises free review over the lower court's conclusions of law to determine whether the court correctly stated the applicable law, and whether the legal conclusions are sustained by the facts found. Id.

III. THERE IS SUBSTANTIAL, COMPETENT EVIDENCE TO SUPPORT EWSC'S CLAIM FOR MATERIALS PROVIDED TO THE PROJECT

Webster disputes the district court's factual findings regarding what materials were provided by EWSC to the BPA project, contending that because Nielson signed the invoices after the date that the district court determined he was no longer working on the project, those invoices cannot be included in EWSC's award. There is substantial and competent evidence to support the district court's findings regarding which materials were provided by EWSC to the project. Therefore, the district court properly included them in the lien amount. Although the district court concluded that Nielson's testimony was unreliable, the district court had Paulks' testimony and the correlation between the invoices submitted by EWSC, the bills submitted from Nielson to Webster, and the payments made by Webster to support the decision. The district court determined that the materials included in EWSC's claim that were purchased after April 4th were purchased by Warrior on Nielson's account and used on the BPA project, entitling EWSC to payment for the materials. This finding is supported by evidence in the record.

IV.

THE DISTRICT COURT DID NOT APPLY THE WRONG BURDEN OF PROOF WHEN DETERMINING WHETHER MATERIAL PURCHASED BY NIELSON WAS PROPERLY INCLUDED IN EWSC'S CLAIM.

A. Application Of The Burden Of Proof

Webster asserts that the district court erred in failing to require EWSC to present substantial evidence that the claimed material was either delivered to the project site or otherwise incorporated into the project, asserting that EWSC's evidence only indicated that the material claimed to be included in the lien was "of the type" that could be used on the project.

Whether the district court applied the correct burden of proof at trial is a question of law over which this Court exercises free review. Humberger v. Humberger, 134 Idaho 39, 41, 995 P.2d 809, 811 (2000) (citing Jensen v. Jensen, 128 Idaho 600, 604, 917 P.2d 757, 761 (1996)). The district court's findings of fact are reviewed with an abuse of discretion standard. The district court's opinion detailed what materials included in the invoices submitted were either "used or consumed by the BPA project." Webster challenges the district court's findings, arguing that the testimony supporting the claim, especially Nielson's, was unreliable.

Materialmen and mechanics liens are governed by I.C. § 45-501 et seq., which provides:

Right to lien—Every person, otherwise unsecured in whole or in part, performing labor upon, or furnishing materials to be used in the construction, alteration or repair of any. . . building. . . or any other structure, or. . .

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