J. P. Koch, Inc. v. J. C. Penney Co., Inc.
| Decision Date | 15 April 1975 |
| Docket Number | No. 13850,13850 |
| Citation | 534 P.2d 903 |
| Parties | J. P. KOCH, INC., a corporation, Plaintiff and Respondent, v. J. C. PENNEY COMPANY, INC., a Foreign Corporation, and Skyline Construction Company, Defendants and Appellants. |
| Court | Utah Supreme Court |
Wallace D. Hurd, Joseph J. Palmer, Salt Lake City, for defendants and appellants.
Richard H. Moffat, John L. Young, Salt Lake City, for plaintiff and respondent.
Plaintiff J. P. Koch, Inc., as subcontractor, sued the owner, J. C. Penney Company, for a balance on labor and materials it furnished in the building of defendant's store in Bountiful during the summer of 1970. The general contractor was Skyline Construction Company. It let to plaintiff the subcontract on the general mechanical portion of the construction. These facts appear without dispute: plaintiff furnished labor and materials of the reasonable value of $580,925.36 (net after adjustments). During the course of construction Penney made progress payments totaling $569.668.34; and has tendered into court the difference, $11,317.02. The difficulty arises because the general contractor Skyline, which is now insolvent, admits that it has failed to pay over to its subcontractor, plaintiff Koch, the sum of $56,147.97.
The position essayed by the plaintiff Koch is that even though Penney has paid to the general contractor Skyline the full amount of the contract, it is nevertheless also obligated to pay Koch the $56,147.97 which Skyline failed to pay over to Koch, because Penney failed to furnish a bond as required by Section 14--2--1, U.C.A.1953. In opposition to the foregoing, defendant Penney contends that in order to reduce the expense of the total contract by $11,000 bonding costs, an arrangement was entered into whereby it would advance money to the general contractor (Skyline) only upon furnishing to Penney a lien waiver by the subcontractor (plaintiff Koch) acknowledging receipt of the stated amount of money and waiving lien rights on the property; and that this procedure was followed with respect to each of the payments made, including a final one by which Koch acknowledged the receipt of the total sum paid, $569,608.34. Penney urges that because Koch thus knowingly induced it to pay the money to Skyline, Koch should be estopped to deny that it received the payments as so represented.
On the basis of the pleadings, answers to interrogatories and depositions, the trial court granted plaintiff's motion for summary judgment. In his memorandum decision he expressly stated that in making payments Penney had relied on the lien waivers. But he also stated that Penney could not justifiably rely on the lien waivers, or the figures contained therein, and said reliance is not a defense to the claim of the plaintiff.
The position of the plaintiff in support of the ruling of the trial court seems to be that failure of the owner to furnish the bond required by Section 14--2--1 results in absolute liability; and that the plaintiff could neither waive its right nor be estopped from enforcing it. This of course is not true. Notwithstanding the provisions of that statute, there is no question but that a person may waive or forego the rights it gives him, the same as he could any other property right. We have held that a lien waiver, which induces a debtor to pay, is binding according to its terms. 1
With respect to this transaction, plaintiff makes two further contentions. The first is a factual argument: that the furnishing of the lien waivers was handled in a perfunctory manner, that is, some of them were signed with the date and the amounts left blank, to be filled in by the general contractor; and that under such circumstances, Koch should not be deemed to be bound thereby, nor Penny to have reasonably relied thereon. Koch couples with this a legal argument that in making the progress payments defendant Penney did nothing other than pay debts it owed, and thus gave no consideration for the lien waivers; and consequently cannot claim reliance on them as an inducement to make payment.
In regard to those contentions these comments are pertinent: as to the first: whatever the other facts may be concerning the execution of the lien waivers by Koch and their being forwarded to Penney, it is certain that some such procedure was followed as a prerequisite to Penney making the payments to Skyline. If they were...
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