Liggett v. Young, 38A02-0511-CV-1086.

• Decision Date: 24 July 2006
• Docket Number: No. 38A02-0511-CV-1086.,38A02-0511-CV-1086.
• Citation: 851 N.E.2d 968
• Parties: Ronald D. LIGGETT, d/b/a Liggett Construction Company, Appellant-Third-Party Plaintiff, v. Dean A. YOUNG and Elisabeth Young, Appellees-Third-Party Defendants.
• Court: Indiana Appellate Court

851 N.E.2d 968

Ronald D. LIGGETT, d/b/a Liggett Construction Company, Appellant-Third-Party Plaintiff, v. Dean A. YOUNG and Elisabeth Young, Appellees-Third-Party Defendants.

No. 38A02-0511-CV-1086.

Court of Appeals of Indiana.

July 24, 2006.

COPYRIGHT MATERIAL OMITTED

Mark E. GiaQuinta, Robert W. Eherenman, Haller & Colvin, P.C., Fort Wayne, IN, Attorneys for Appellant.

Robert G. Forbes, Forcum, Forbes, Danielson & Danielson, LLP, Hartford City, IN, Attorney for Appellees.

OPINION

BAKER, Judge.

Appellant-third-party-plaintiff Ronald D. Liggett, d/b/a Liggett Construction Company (Liggett), appeals from the trial court's order granting summary judgment in favor of appellees-third-party-defendants Dean and Elisabeth Young (collectively, the Youngs). Specifically, Liggett raises three issues: (1) whether the trial court erred in refusing to consider new evidence as it reconsidered its previous order granting partial summary judgment in favor of the Youngs; (2) whether the trial court erred in failing to conclude that the contract entered into between the Youngs and Liggett was void because Dean, an attorney, violated Professional Conduct Rule 1.8 by entering into the contract and (3) whether the contract is ambiguous and should be construed against Dean, who drafted it. Finding no error, we affirm the judgment of the trial court.

FACTS

At some point before July 2, 1999, Dean hired Liggett to build a home for the Youngs in Blackford County. At that time, Dean, an attorney licensed in Indiana, was representing Liggett in litigation concerning an unrelated construction contract matter. That representation continued during the negotiation of the parties' contract and throughout the construction of the Youngs' residence.

After Liggett had broken ground and begun construction on the home, Dean drafted the construction contract. At that time, Liggett considered Dean to be his attorney. According to Liggett, Dean verbally assured him that "there would be no problems as a result of [Dean's] dual status as Liggett's attorney and as a party to the Construction Contract." Appellant's Br. p. 4. Dean used a state bar association form entitled "Building, Construction and No-Lien Agreement" as the template for the contract, though he made certain changes to the boilerplate form. The parties executed the contract on July 2, 1999.

Part 1 of the contract provides as follows:

Builder, in consideration of * the sum of Two Hundred Thirty Thousand Dollars, ($230,000), to be paid to it by the Owner as hereinafter provided, hereby agrees to furnish all of the materials and to perform and/or provide all of the labor necessary to erect, construct and completely finish in a substantial and workmanlike manner, the improvements, as identified below, upon real estate located in Blackford County . . .

The improvements to be made under this contract are described in, and shall be erected and constructed according to and in the manner set out in, the plans and specifications which have been identified by the parties hereto by affixing their initials or signatures thereto and which are attached thereto, made a part hereof and respectively marked Exhibit "A" and Exhibit "B".

Appellant's App. p. 32. Neither Exhibit A nor Exhibit B was attached to the contract, and no plans and specifications were initialed by the parties.

The asterisk (*) in Part 1 referred to a modification made by Dean, and referred to an "additional covenant" in Paragraph 12(b). The additional covenant provided that the contract price was "subject to changes which may from time to time be made following construction [sic] between builders and owners, and, where necessary, following consultation with Owners' construction/mortgage lenders." Id. p. 32, 34. The parties agree that the provision contains a scrivener's error, and they also agree that the provision was intended to read as follows: the contract price is "subject to changes . . . following consultation between builders and owners, and, where necessary, following consultation with Owners' construction/mortgage lenders." Appellant's Br. p. 6; Appellees' Br. p. 9.

Paragraph 12(b) must be read in conjunction with Paragraph 8, which provides as follows:

Owner may order extra work or make changes by altering, adding to, or deducting from the work described in the initial plans and specifications attached hereto; PROVIDED, HOWEVER, that before such work or changes are made, the adjustment—upward or downward— of the contract price hereunder to take account of such work or changes shall first be agreed to in writing by the parties hereto.

Appellant's App. p. 33-34. Liggett argues that Paragraph 12(b) conflicts with Paragraph 8, while Dean contends that neither has an impact on the other.

During the construction of the Youngs' home, Liggett alleges that he provided more than $30,000 in upgrades and more than $35,000 in labor above and beyond the contract price of $230,000. The alleged increases in the contract price because of changes to the plans and specifications were never put in writing. The parties agree that the Youngs paid Liggett $230,000, but refused to pay any amount above and beyond that price.

On April 2, 2001, Tri-County Builders sued Liggett for payment of materials supplied for the construction of the Youngs' residence. On May 22, 2001, Liggett filed a third-party complaint against the Youngs, arguing that the Youngs had failed to pay Liggett for the materials. On July 17, 2001, the Youngs filed a counterclaim against Liggett, claiming that the construction of the house was defective.

On August 14, 2003, the Youngs filed a motion for partial summary judgment against Liggett on his third-party complaint, arguing that he was not entitled to payment because the construction contract required any changes to the contract price to be made in writing. Liggett's affidavit in response to the motion provided, among other things, as follows:

3. At the time said contract was entered into, [Dean] was serving as [Liggett's] personal attorney, and [Dean] assured [Liggett] that there would be no problems as a result of [Dean's] dual status as [Liggett's] attorney and party to said contract.

4. [Liggett] informed [Dean] that he was not set up to put all requests for extra work or work change orders into writing (as required in the pre-printed form [Dean] was using), and [Dean] agreed that said extra work or changes could be authorized verbally.

5. [Dean] then added Subparagraph (b) in Paragraph 12 of said contract. . . .

Appellant's App. p. 58-59. On November 4, 2003, the trial court granted the Youngs' motion, finding that Liggett could not recover payment because there were no written change orders authorizing the extra work that Liggett had performed. Thus, the partial summary judgment disposed of Liggett's third-party complaint against the Youngs but did not dispose of the Youngs' counterclaim against Liggett for defective workmanship.

On March 23, 2004, Liggett advised the trial court that the Youngs had changed their cause of action against him from one based upon negligent acts and omission to one based upon an alleged breach of the contract.¹ Liggett moved to amend his answer to respond to the contract claim, and the trial court granted his motion on March 24, 2004. Liggett's amended answer raised new affirmative defenses, including unconscionability resulting from Dean entering into a contract with his client in violation of Professional Conduct Rule 1.8, illegality based upon Dean's violation of Rule 1.8, and unjust enrichment.

On February 2, 2005, after deposing the Youngs, conducting other discovery, and again amending his answer, Liggett filed a motion for summary judgment on his third-party complaint, alleging as follows: the partial summary judgment in favor of the Youngs should be reversed, the contract was void because of Dean's violation of Rule 1.8, and the contract permitted the parties to agree verbally to changes in the contract price. Liggett's motion referred to Liggett's original affidavit designated in response to the Youngs' motion for partial summary judgment and to evidence discovered subsequent to the partial summary judgment order. The trial court interpreted Liggett's motion to be a motion to reconsider the partial summary judgment order in favor of the Youngs on Liggett's third-party complaint.

Following a hearing, the trial court denied Liggett's motion and granted final summary judgment in favor of the Youngs on all of Liggett's claims on October 17, 2005. The trial court concluded that only the evidence submitted as part of the prior summary judgment ruling could be considered. Thus, the trial court declined to consider the new evidence designated by Liggett in support of his motion for summary judgment. Additionally, the trial court found that the contract unambiguously required changes in the contract price to be made in writing and that Dean had not violated Rule 1.8 because the rule does not apply to "standard commercial transactions between the lawyer and the client . . . ." Ind. Professional Conduct Rule 1.8(a) cmt. 1. Liggett now appeals.²

DISCUSSION AND DECISION

I. New Evidence

Liggett argues that the trial court erred in its approach to the portion of his motion for summary judgment seeking a reconsideration of the earlier partial summary judgment in favor of the Youngs. In particular, he contends that the trial court should have considered new evidence as it contemplated the earlier partial summary judgment against Liggett.

Liggett emphasizes that the trial court permitted him to amend his answer to the Youngs' counterclaim nearly one year before he filed his motion for summary judgment. His amended answer included new affirmative defenses—unconscionability, illegality, and quantum meruit—to which the new evidence is relevant. Indeed, Liggett notes that these issues are new and could not have been resolved by the trial court's partial summary judgment...