Goebel v. National Exchangors, Inc.

• Citation: 277 N.W.2d 755,88 Wis.2d 596
• Decision Date: 01 May 1979
• Docket Number: No. 76-721,76-721
• Parties: Matthias GOEBEL and Anthony Balestrieri, d/b/a Goebel, Balestrieri and Associates, Plaintiffs-Respondents, v. NATIONAL EXCHANGORS, INC., a Wisconsin Corporation, Ray T. Stemper, and Alpine Valley Resort, Inc., Defendants-Appellants, Nutrico, Inc., a Wisconsin Corporation, Herbert G. Moat and Ida Mae Moat, Defendants.
• Court: United States State Supreme Court of Wisconsin

Page 755

277 N.W.2d 755

88 Wis.2d 596

Matthias GOEBEL and Anthony Balestrieri, d/b/a Goebel Balestrieri and Associates, Plaintiffs-Respondents, v. NATIONAL EXCHANGORS, INC., a Wisconsin Corporation, Ray T Stemper, and Alpine Valley Resort, Inc. Defendants-Appellants Nutrico, Inc., a Wisconsin Corporation, Herbert G. Moat and Ida Mae Moat, Defendants.

No. 76-721.

Supreme Court of Wisconsin.

Argued March 27, 1979.

Decided May 1, 1979.

This is an action brought to foreclose a construction lien under ch. 289, Stats. The trial court held the lien was valid and enforceable and granted a judgment of foreclosure. The defendants, National Exchangors, Inc., Ray T. Stemper, and Alpine Valley Resort, Inc., appeal.

William C. Yellin, Milwaukee, for appellants National Exchangors, Inc., and Ray T. Stemper.

Thomas C. Ewing, Milwaukee, argued, for appellant Alpine Valley Resort, Inc.; Richard H. Pfeil, Elkhorn, and Richard P. Buellesbach, Michael T. Hart and Whyte & Hirschboeck, S. C., Milwaukee, on brief.

Robert F. Lehman, Elkhorn, argued, for respondents; Lehman, Seymour & Kremer, Elkhorn, on brief.

BEILFUSS, Chief Justice.

The claimed construction lien arises from a written contract to provide architectural services for a residential condominium project which was to be built on a 20.743 acre parcel of land on the north side of Sugar Creek Valley, Town of Lafayette, Walworth county.

The lien claimants, plaintiffs in the trial court and respondents on appeal, are Matthias Goebel and Anthony Balestrieri of Goebel, Balestrieri and Associates, architects and engineers doing business in Elkhorn, Wisconsin. The defendant National Exchangors, Inc., owner of the land in question at the time the lien was filed, is a corporation engaged in the business of land development and licensed to do business in the State of Wisconsin. The defendant Ray Stemper, a director and stockholder of National Exchangors, Inc., was president of the corporation when the events which gave rise to this action took place, and agent for the company in its business dealings with the plaintiffs. The defendant Alpine Valley Resort, Inc., a Wisconsin corporation, is the present owner of the property. It purchased the land in question and other land from National Exchangors, Inc., conveyed by warranty deed recorded on January 31, 1974. All three defendants appeal from the judgment of the trial court foreclosing the lien, fixing the amount due the plaintiffs at $37,719.69 ($31,216.69 plus $6,503 interest) for work done pursuant to the contract, and directing that the property be sold to satisfy the judgment.

Some time prior to February, 1972, defendant Stemper contacted the plaintiffs regarding the development of a condominium complex on premises owned by National Exchangors, Inc., and described above. A written contract in letter form dated February 8, 1972 and signed by Goebel was accepted and approved by Ray Stemper for National Exchangors on February 15, 1972. The principal terms of the agreement read as follows:

"This will confirm our telephone conversation of this date concerning the above project as follows:

"Goebel-Balestrieri & Associates, hereinafter referred to as the Architect, agrees to provide architectural services for this project including conferences with National Exchangers, hereinafter referred to as the Owner, governmental bodies and regulatory agencies; preparation of preliminary drawings, working drawings and specifications; taking of bids and administration of the construction contract.

"The Owner agrees to pay the Architect for the above services, a fee of Five Hundred Dollars ($500.00) per apartment, for each apartment constructed. Payments shall be made periodically as construction progresses.

"The Architect shall not proceed with working drawings and specifications without prior written authorization from the Owner.

"In the Event this project does not proceed into working drawings and specifications, no monies shall be due the Architect."

The initial site plan presented to the town board for rezoning was drawn up by the architects. The property was rezoned to accommodate the planned construction. The architects next prepared preliminary drawings and specifications on the instructions of Stemper and pursuant to their written agreement. The requisite approval of the plans was obtained from the State Industrial Commission. In order to evaluate the economic feasibility of the proposed complex, Stemper submitted the drawings to a general construction contractor, with whom his company had previously done business, for a preliminary cost estimate. The estimate was approximately $17 per square foot. On the basis of these favorable approximate costs, Stemper orally authorized and directed Goebel to proceed with final working drawings and specifications.

The final working plans were let out for bidding to interested parties selected by Stemper. The bids returned were substantially higher ($30-$40 per sq. ft.) than the original projections. The parties then met to revise the plans. Corrections and alterations were made by the architects in the final working plans and specifications reflecting the changes agreed upon, and the plans were redistributed for rebidding. When the second bids also exceeded the projected budget, the corporation completely abandoned the project. The land, still vacant, was ultimately sold by National Exchangors, Inc., to Alpine Valley Resort, Inc., under a warranty deed recorded on January 31, 1974.

In May, 1973, the architects served an amended notice of intent to file a lien claim dated May 7, 1973, and on May 8, 1973 delivered a copy to National Exchangors, Inc. The amount of the claim was $30,016.68 plus disbursements of $1,200.01 for architectural services over the period commencing March 15, 1972 and terminating December 19, 1972. Pursuant to this notice a lien claim in the amount of $31,216.69 was timely filed and, on June 8, 1973, docketed in the circuit court for Walworth county.

On December 12, 1973, because no payment on the debt had been made, an action for lien foreclosure was commenced against National Exchangors, Inc., Ray Stemper, and three others: Nutrico, Inc., Herbert G. Moat and Ida Mae Moat. The latter three defendants were ultimately found to have no interest in the property and were consequently dismissed from the action and are not involved in this appeal. On April 10, 1974, an amended summons and complaint were filed joining Alpine Valley Resort, Inc., the purchaser of the land, as a party defendant. The defendants National Exchangors and Stemper answer the complaint denying both the existence of the debt and the validity of the lien.

A hearing on the matter was held to the court without a jury. At the opening of the trial the plaintiffs moved the court for leave to amend the complaint to include an alternative claim based on Quantum meruit. The defendants objected and the motion was denied by the court on the grounds of surprise to the defendants. At the close of the trial, the court, Sua sponte, vacated the ruling on the motion and reserved its decision pending appeal of the lien foreclosure action to this court.

The trial court's findings of fact and conclusions of law were included in a written decision and order dated February 8, 1977. With reference to the lien claim the court found as follows: That Alpine Valley Resort, Inc., had the advantage of examining the plaintiffs' working plans and specifications for the abandoned building project prior to the sale of the land; that Alpine's purchase of the property in 1974 was made with full knowledge of the existence of the architects' construction lien filed in 1973; that ch. 289, Stats., provides for a lien for furnishing architectural plans and specifications for the improvement of land; and that ch. 289 further provides that such liens may attach prior to the visible commencement of construction. Based on these findings the trial court concluded that the plaintiffs' construction lien claim was valid and enforceable and prior to Alpine's interest in the property.

As to the contractual obligation of defendants National Exchangors and Stemper, the court found the facts substantially as set forth above and, further, that at the time of the abandonment of the project by the defendant corporation the architects had accomplished all the architectural services contemplated by the contract except some supervision of construction which amounted to approximately 10 percent of the total contractual obligation; and that the payment of fees did not depend on the completion of the apartments. Based on these findings the court concluded that under the contract the amount claimed by the plaintiffs for architectural services rendered was due and owing to them even though the contract was admittedly ambiguous as it related to the fees.

On February 23, 1977, judgment was entered fixing and foreclosing the construction lien in the amount of $31,216.69 plus interest of $6,503 and ordering the sale of the property to satisfy the judgment. Pursuant to sec. 840.10, Stats., Lis pendens had previously been filed by the plaintiffs on August 3, 1976.

All three defendants appeal from the whole of the judgment. Notice of appeal was filed by National Exchangors, Inc., and Stemper on May 12, 1977, and by Alpine Valley on June 3, 1977. The foreclosure sale originally scheduled for May 17, 1977, was adjourned until completion of the appeal upon deposit of an undertaking in the sum of $46,825 pursuant to sec. 289.08, Stats.

The defendant-appellant Alpine Valley Resort, Inc., contends under our statutory construction lien law and the cases decided thereunder that a lien cannot attach unless visible construction on the land has commenced. The additional issue that involves only the plaintiff-respondent-architects and defendant-respondent-owners National Exchangors, Inc., and Ray T. Stemper is whether under the terms of the agreement and the...