KN Excavation LLC v. Rockmill Brewery LLC
| Decision Date | 27 September 2022 |
| Docket Number | 2021 CA 00034 |
| Citation | 2022 Ohio 3414 |
| Court | Ohio Court of Appeals |
| Parties | KN EXCAVATION LLC Plaintiff-Appellee v. ROCKMILL BREWERY LLC, ET AL. Defendants-Appellants |
Appeal from the Fairfield County Court of Common Pleas, Case No 2020CV418
AFFIRMED IN PART; REVERSED AND VACATED IN PART; JUDGMENT ENTERED PURSUANT TO APP.R. 12(C)(1)
For Plaintiff-Appellee: KOREY M. KIDWELL JEREMY R. ABRAMS CYNTHIA A. CUNNINGHAM
For Defendants-Appellants: ADAM F. FLOREY
{¶1} Defendants-Appellants Rockmill Brewery LLC, Hocking Headwaters RE Holding LLC, and Matthew Barbee (hereinafter "Rockmill") appeal the October 25, 2021 and December 8, 2021 judgment entries of the Fairfield County Court of Common Pleas.
{¶2} Plaintiff-Appellee KN Excavation LLC is in the business of doing residential and commercial site development, septic, and general excavation. On April 12, 2019, KN Excavation and Rockmill executed a written contract for the installation of a new septic system. The original contract amount was $84,705 and with a change order, the amount due and owing under the septic system contract was $86,129.
{¶3} During the discussion for the septic system contract, Rockmill inquired about building two parking lots and doing landscape-type work. KN Excavation provided Rockmill with a written estimate and Rockmill told KN Excavation to go forward with the work on the parking lots and landscaping, but the parties did not enter into a written contract for the work. KN Excavation provided Rockmill with invoices for the parking lot work on a "time and materials" basis.
{¶4} The work began in May 2019 and KN Excavation provided Rockmill with invoices for time and materials. All work was completed on the project in September 2019. Rockmill paid all the invoices related to the septic system contract in the amount of $86,129. Rockmill paid some invoices related to the parking lot work, but in November 2019, Rockmill questioned the invoices and made no further payments.
{¶5} On November 9, 2020, KN Excavation refiled its complaint against Defendants-Appellants Rockmill Brewery LLC, Hocking Headwaters RE Holding LLC, and Matthew Barbee with the Fairfield County Court of Common Pleas. KN Excavation brought claims for breach of contract and unjust enrichment seeking damages in the amount of $87,416.17 for unpaid construction work.
{¶6} Rockmill filed a motion for summary judgment on August 13, 2021. In its motion for summary judgment, Rockmill argued it was entitled to judgment as a matter of law on KN Excavation's claims for breach of contract and unjust enrichment. On October 7, 2021, the trial court found that based on the Civ.R. 56 evidence, there was no genuine issue of material fact that a contract existed between KN Excavation and Rockmill for the septic system work and Rockmill complied with its contractual obligations as to the septic system work. Under KN Excavation's claim for unjust enrichment, the trial court found reasonable minds could come to differing conclusions as to whether Rockmill was unjustly enriched by the work KN Excavation completed on the parking lots and related projects. In support of its claim, the trial court found it was permissible for KN Excavation to present its estimate and invoices as to that work not to establish contractual damages, but to calculate the reasonable costs of the work performed or benefit conferred. The claim for unjust enrichment was set for a bench trial.
{¶7} The matter came on for a two-day bench trial. KN Excavation presented the testimony of Nathan Otto, the owner of KN Excavation. He explained how he and Defendant-Appellant Matthew Barbee discussed the installation of the new septic system, which led to a discussion of building two parking lots and doing landscape-type work. Otto provided Barbee a contract for the septic system and a written estimate for putting down stone in the two parking lots. The written estimate for $97,000 included materials and the cost to place the materials but did not include preparatory work. KN Excavation started work in May 2019. KN Excavation billed Rockmill for time and material.
{¶8} Otto was presented the invoices for the work performed on the parking lot and landscaping and he described the work invoiced therein. Otto testified that rates in the invoices were standard for KN Excavation in 2019.
{¶9} Some of the work performed and billed for was at the request of the mother of Defendant-Appellant Matthew Barbee, who resided on the property where KN Excavation was working. Otto testified there were three unpaid invoices totaling $87,416.17: Exhibit F for $36,880, Exhibit H for $42,120.39, and Exhibit I for $8,415.78. Exhibit F was invoiced on July 18, 2019 for stone for the parking area on the north side of the road and the three days of equipment and labor to place the stone. Exhibit H was invoiced on September 5, 2019 that involved 13 days of labor such as grading, cutting firewood, digging up tree stumps, moving rocks, moving a small building, pouring a concrete pad, installing a new driveway, seeding and strawing, and other landscape work. Exhibit I was invoiced on October 22, 2019 for work completed on September 19, 2019 that involved spreading limestone over the driveway and parking areas. In August, Barbee sent Otto emails requesting at least 14 additional tasks to be completed in the project, which KN Excavation completed and invoiced to Rockmill. Otto testified that Rockmill never expressed dissatisfaction with the construction work and had not questioned the invoices until November 20, 2019.
{¶10} In support of KN Excavation's case, it presented Exhibit Q, an Excel spreadsheet used by KN Excavation to keep daily track of the equipment used, hourly labor, and a brief description of the work. Nathaniel Stover was responsible for inputting the data into Exhibit Q, which he then used to create the invoices and bills. Stover and Otto testified that the crew leader would fill out daily sheets, which recorded the hourly employees' time. Stover inputted the daily sheet data into Exhibit Q. The labor hours recorded in Exhibit Q included only hourly employees, not salaried employees. During the Rockmill construction project, Stover spoke with Austin Warner, the field supervisor and Project Superintendent, multiple times a day regarding the data for Exhibit Q. Warner testified that he was at the job site every day.
{¶11} On November 20, 2019, Otto, Stover, Barbee, and Barbee's attorney met at the Rockmill property. Otto and Stover testified that Barbee and the attorney questioned the billing and would not pay the balance of the outstanding invoices.
{¶12} Barbee testified that he was generally satisfied with the work completed by KN Excavation, but there were some areas that were improperly done. KN Excavation made the repairs, but Barbee felt he was improperly charged for the repairs. In order to pay for the construction project, Barbee had obtained an equity line of credit through Live Oak Bank for approximately 1.4 million dollars. Live Oak Bank paid the KN Excavation invoices directly. Barbee received copies of the invoices, but he did not check the invoices because he assumed Live Oak Bank was reviewing the invoices. At the conclusion of the construction project and when the unpaid invoices were issued, Barbee testified the funds in the equity line were very close to being diminished.
{¶13} At the conclusion of the parties' evidence, the trial court ruled from the bench. The trial court noted that it would be understandable for Rockmill to question the expensive invoices at the end of the project, but the evidence showed that Rockmill requested multiple tasks at the end of the project of which KN Excavation and Rockmill discussed through emails. The evidence also showed that Rockmill relied upon Live Oak Bank to monitor the invoices with the work completed. Upon review of the invoices, the trial court found that there were billing errors that benefited either KN Excavation or Rockmill; however, the crux of the case was not the legitimacy of the invoices and Rockmill's overpayment but rather Rockmill's inability to pay the remaining invoices. The trial court concluded, (T. 450). The trial court next ordered awarded prejudgment interest at five percent per annum from November 20, 2019. (T. 451).
{¶14} The trial court memorialized its judgment via an entry filed on October 25, 2021.
{¶15} On October 22, 2021, Rockmill requested findings of fact and conclusions of law. The trial court issued its findings of fact and conclusions of law on December 8, 2021, awarding KN Excavation $70,000 based on its claim for unjust enrichment. It further ordered, pursuant to R.C. 1343.03, prejudgment interest from November 20, 2019 at the rate of five percent per annum.
{¶16} It is from this judgment that Rockmill now appeals.
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