Heating v. Kramer

• Decision Date: 22 May 2017
• Docket Number: A16-1505
• Parties: K&S Heating, Air Conditioning & Plumbing, LLC, Respondent, v. Jeremiah J. Kramer a/k/a Jeremy Kramer, Appellant, XYZ Corporation, et al., Defendants.
• Court: Minnesota Court of Appeals

K&S Heating, Air Conditioning & Plumbing, LLC, Respondent, v. Jeremiah J. Kramer a/k/a Jeremy Kramer, Appellant,XYZ Corporation, et al., Defendants.

A16-1505

STATE OF MINNESOTA IN COURT OF APPEALS

May 22, 2017

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2016).

Affirmed

Bratvold, Judge

Rice County District Court

File No. 66-CV-15-196

John D. Scott, Hoffman, Hamer & Associates, PLLC, Faribault, Minnesota (for respondent)

Timothy L. Morisette, Lampe Law Group, L.L.P, Northfield, Minnesota (for appellant)

Considered and decided by Kirk, Presiding Judge; Schellhas, Judge; and Bratvold, Judge.

UNPUBLISHED OPINION

BRATVOLD, Judge

Appellant hired respondent to install a heating, ventilation, and air-conditioning system in his new home. After respondent installed the furnace but before completion of the home, the furnace became inoperable. Appellant signed a change order for a replacement furnace and the necessary labor costs, but later refused to pay. Respondent brought a mechanic's lien action. After a court trial, the district court entered judgment for respondent. On appeal, appellant raises numerous issues, several of which overlap. Appellant argues that the district court erred because: (1) its factual findings regarding the furnace failure were clearly erroneous; (2) the change order was unenforceable; and (3) respondent did not provide adequate pre-lien notice. Additionally, appellant contends that the district court abused its discretion in awarding attorney fees and denying his motion for sanctions. Because the district court's factual findings are supported by the record and its legal conclusions contain no errors of law, we affirm.

FACTS

In August 2013 appellant Jeremy Kramer applied for and received a permit to build a house in Rice County. Kramer signed the permit and indicated that he was the owner and general contractor. While Kramer was finalizing house plans, he became acquainted with his mother's friend, John Colangelo, who works for both Arthur Construction, Inc. (Arthur) and Fabricated Wood Products (Fabricated Wood). Kramer hired Fabricated Wood to do the framing, construction, and other woodwork in the house. In addition, Colangelo helped Kramer solicit bids from other contractors.

Respondent K&S Heating, Air Conditioning & Plumbing, LLC (K&S) submitted three bids to Colangelo including one for a heating, ventilation, and air conditioning (HVAC) system. Along with its bids, K&S sent a document entitled "Property Owner's Pre-Lien Notice" which tracked the language of Minn. Stat. § 514.011, subd. 2(a), butcontained several blanks where specific information about the improvements could be inserted. Colangelo gave K&S's bids to Kramer, who accepted only the HVAC bid, estimated at $17,040. Colangelo informed K&S that Kramer had accepted the bid.

K&S installed the furnace in Kramer's home in November and December 2013 and attached it to a liquid propane gas line. On December 11, 2013, Kramer stopped by the home to check on progress and called K&S because the house was cold. That evening, and over the next several days, K&S employees tried to figure out what had caused the furnace to fail. Ultimately, the K&S employees determined that the line running between the liquid propane tank and the furnace had become restricted, and soot had built up in the furnace as a result of the low gas pressure, rendering the furnace inoperable.

K&S informed Kramer that the furnace needed to be replaced, and submitted a change order for an additional $3,610.76 to cover the cost. Kramer admitted that he read, signed, scanned, and emailed the change order to K&S on December 23, 2013. Kramer also asked K&S to revise the change order to include the findings about the restricted gas line. K&S made the requested revision before Kramer signed the change order.

K&S installed a second furnace the next day. Later, Kramer paid the original contract price of $17,040, but refused to pay the $3,610.76 for the change order. K&S recorded a mechanic's lien, sent it to Kramer, and sued Kramer when he refused to pay. Kramer moved for summary judgment, which the district court denied because "there are unresolved factual issues in this matter."

A court trial was held in December 2015. Four K&S employees testified, along with Colangelo, Kramer, and a technician who had inspected the damaged furnace. Testimonyat trial focused on three issues: whether Colangelo was Kramer's general contractor, the change order, and the cause of the furnace's damage.

In its initial decision, the district court found that a contract existed between Kramer and K&S, and Colangelo was not Kramer's general contractor; instead, Colangelo acted as Kramer's agent in communicating K&S's bid and Kramer's acceptance. The district court also found that the contract between Kramer and K&S was modified by the change order, which was valid and supported by consideration in the form of additional parts and labor from K&S and additional money from Kramer. Additionally, the court found that Kramer breached the change order by not paying.

Regarding the cause of the furnace's failure, the district court considered evidence supporting two conflicting theories. The K&S employee who installed the furnace testified that he removed the natural gas orifices on the manifold, replaced them with liquid propane orifices, connected the furnace to the ducts, gas, and electricity, and then ignited the furnace. He testified that he assessed the furnace's operation by checking the flame, gas flows, and pressures for at least ten minutes, and that the furnace was running when he left and on the following day. A different K&S employee later investigated the faulty furnace and testified that he determined that the gas line was restricted and not delivering sufficient gas to the furnace.

Kramer offered evidence that the installing employee failed to change all eight orifices. A furnace technician who examined the failed furnace testified that the first orifice was not attached, the cell missing an orifice was filled with soot, and other cells were clean and unaffected. He also testified that he detected no wrench marks near the missing orifice,and he found an orifice inside the furnace. He acknowledged that soot in a furnace can be created in many ways, including an improper air to fuel ratio, low gas pressure, or a cracked manifold.

In response, K&S offered testimony that all eight orifices were present when the furnace was installed and that the investigating K&S employee removed an orifice from the furnace when he was attempting to figure out what had caused the failure. The district court found that the original furnace functioned when installed and the gas line became restricted, causing the furnace to fail. While the court found Kramer's technician testified credibly, it also rejected his conclusion and specifically determined that K&S's evidence was credible.

Finally, the district court determined that K&S complied with the statutory requirements for pre-lien notice and mechanic's lien statements, and accordingly was entitled to recover $3,610.76 from Kramer. The district court awarded K&S attorney fees in the amount of $18,000, denying some of the requested amount of $22,999; the court noted that "it is reasonable in this case that the attorney's fees far exceed the value of the mechanic's lien." It also denied Kramer's motions for sanctions and attorney fees.

Following the district court's order, Kramer filed a motion to amend the findings. The district court denied the motion but granted Kramer's motion to stay enforcement of the judgment pending appeal. Kramer appeals.

DECISION

We review a district court's findings of fact for clear error. Gellert v. Eginton, 770 N.W.2d 190, 194 (Minn. App. 2009), review denied (Minn. Oct. 20, 2009); Minn. R. Civ.P. 52.01. If there is "reasonable evidence to support the district court's findings," we will not find clear error. Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999). A factual finding is not supported only where the finding is "manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole." Id. We review the district court's conclusions of law de novo. Osgood v. Med., Inc., 415 N.W.2d 896, 901 (Minn. App. 1987), review denied (Minn. Feb. 12, 1988).

I. The district court did not clearly err when it found that the furnace was installed properly and failed for reasons not attributable to K&S.

Kramer contends that the district court clearly erred when it concluded that the furnace was installed properly. He argues that the district court should have found that K&S failed to install one of the eight orifices, and that this failure caused the soot to build up and the furnace to fail.

To convince this court that the district court's finding of fact must be reversed, Kramer must demonstrate that the finding is contrary to the evidence as a whole, or not supported by reasonable evidence. Rogers, 603 N.W.2d at 656. Kramer argues that the district court's finding is contrary to the weight of the evidence and points to evidence that supports his improper-installation theory.¹ Kramer's theory is supported by record evidence. Because K&S's theory of causation is also supported by record evidence, wereject Kramer's argument. It is the district court's province to weigh the evidence and find facts; we will not reverse the district court's factual findings when they are supported by record evidence. Landeen v. DeJung, 219 Minn. 287, 292-93, 17 N.W.2d 648, 651-52 (1945) (rejecting the argument that the adverse party's version of the facts was not credible where the trier of fact accepted the adverse party's version); Kelly v. Hopkins, 105 Minn. 155, 158, 117 N.W. 396, 397 (1908) (concluding that "where the evidence was radically conflicting" so as "to make the question one of fact" and the evidence sustains the verdict, it should not be overturned on appeal).

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