Maxwell Masonry Restoration & Cleaning LLC v. N. Ridge Constr., 20200924-CA

CourtCourt of Appeals of Utah
Writing for the CourtTENNEY, JUDGE
Citation2022 UT App 109
PartiesMaxwell Masonry Restoration & Cleaning LLC, Appellee, v. North Ridge Construction Inc., Appellant.
Docket Number20200924-CA
Decision Date01 September 2022

2022 UT App 109

Maxwell Masonry Restoration & Cleaning LLC, Appellee,
v.

North Ridge Construction Inc., Appellant.

No. 20200924-CA

Court of Appeals of Utah

September 1, 2022


Third District Court, Silver Summit Department The Honorable Richard E. Mrazik No. 180500153

Trevor J. Lee, Attorney for Appellant

M. Darin Hammond, Attorney for Appellee

JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGE MICHELE M. CHRISTIANSEN FORSTER and SENIOR JUDGE KATE APPLEBY concurred. [1]

OPINION

TENNEY, JUDGE

¶1 North Ridge Construction Inc. (North Ridge) is a general contractor, and in 2017, North Ridge entered into a subcontract with Maxwell Masonry Restoration & Cleaning LLC (Maxwell) for Maxwell to perform masonry work on one of its projects. The project experienced some delays, and when the project was finally completed, the two companies had a disagreement about how much North Ridge owed Maxwell.

¶2 Maxwell later sued North Ridge, asking for more than $250,000 in damages. North Ridge counterclaimed, asking for

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more than $36,000 in damages. At the close of a bench trial several years later, the district court ruled in favor of each side on one of its claims. The court awarded Maxwell $18,537 in damages on its successful claim, and it awarded North Ridge $16,750 in damages on its successful claim, thus resulting in a net judgment for Maxwell of $1,787.

¶3 The sole issue before us has to do with North Ridge's request for an award of attorney fees. North Ridge contended that it was entitled to its attorney fees as the "prevailing party." But the district court concluded that neither party had prevailed, so it denied North Ridge's request. North Ridge now appeals that determination, and for the reasons set forth below, we agree with North Ridge that it was indeed the prevailing party. We therefore reverse and remand with instructions for the district court to determine and award the attorney fees that North Ridge reasonably incurred below and on appeal.

BACKGROUND

The Railyard Restoration Project

¶4 In early 2017, the city of Evanston, Wyoming, hired North Ridge to be the general contractor for a restoration project on a historic railyard building. North Ridge later entered into a subcontract with Maxwell. In that subcontract, Maxwell agreed to perform "masonry restoration, cleaning and sealing, interior wood cleaning, sanding and sealing" for the project. (Quotation simplified.) The parties agreed that the "project finish date" would be October 24, 2017.[2]

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¶5 North Ridge agreed to pay Maxwell a "fixed lump sum of $394,241.00 ('Contract Sum') in periodic payments as draws [were] submitted and approved for the value of the work performed." (Quotation simplified.) North Ridge's "actual receipt of payment" from the city was "an express condition precedent to [North Ridge's] payment obligation to [Maxwell]"-i.e., North Ridge was not obligated to pay Maxwell until it received payment from the city.

¶6 The parties also agreed that Maxwell was entitled to payment for "extra work," but only if there was a "written change order." They further agreed that "[i]f [Maxwell] perform[ed] extra work without a written order, [Maxwell] shall be deemed to have waived any claim for compensation for such work." Of particular note for this appeal, the subcontract provided that if "the parties [became] involved in litigation or arbitration with each other arising out of [the subcontract] or other performance thereof . . . the prevailing party [would] be fully compensated for the cost of its participation in such proceedings," including attorney fees.

¶7 Maxwell began work on the project in March 2017, and North Ridge made periodic payments to it as the project progressed. To receive these payments, Maxwell would submit a pay application to North Ridge along with a signed lien release, after which North Ridge would pay Maxwell. During the first few months, there were some change orders for additional work that Maxwell performed, thereby increasing the overall amount that North Ridge owed Maxwell for its work on the project.

¶8 Starting sometime around July 2017 and continuing for the next several months, Maxwell "performed tasks it believed were beyond the scope of work under the Subcontract." Maxwell believed that those tasks were "extra work" as defined in the subcontract, but it did not submit change orders for those tasks. As a result, it did not receive compensation for the alleged "extra work" that it completed during those months.

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¶9 By September, the parties realized that Maxwell would not be able to complete its work by the October 2017 finish date. To give Maxwell more time, the city agreed to extend the deadline to November 27, 2017.

¶10 North Ridge had largely finished its work on the project by November 2017, but Maxwell's work was still incomplete. That month, the city issued a Certificate of Substantial Completion to North Ridge, which included a punch list "comprised largely of work Maxwell had not yet started or had done inadequately."[3]

¶11 In December 2017, Maxwell informed North Ridge that it believed it had completed its duties. It also submitted invoices for tasks that it had already completed. Those tasks included work that Maxwell claimed was outside the scope of the subcontract but that North Ridge had allegedly asked it to perform. Maxwell also contended that it was under "time constraints" that prevented it from previously submitting change orders and that North Ridge had "waived" the change order provision of the subcontract. In response, North Ridge contended that this work was within the scope of the subcontract, meaning that Maxwell was not entitled to additional compensation. North Ridge also insisted that it had never waived the change order requirement.

¶12 In February 2018, representatives from North Ridge, Maxwell, and the city met at the railyard to conduct a final walkthrough. After the walkthrough, North Ridge and the city "signed off on Maxwell's work as complete, accepting the project."

¶13 North Ridge's project manager participated in the walkthrough, and he had a final pay application and payment check ready for Maxwell. The city was still retaining a portion of

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its payment to North Ridge, however, so North Ridge did not include the retained amount in the final payment check to Maxwell.[4] But Maxwell's owner still believed that Maxwell had completed additional work on the project for which it was entitled to additional payment. He became "agitated" as a result, and he refused to speak with North Ridge's project manager. Because of this, North Ridge's project manager "did not feel comfortable providing [Maxwell's owner] with the pay application and check," so as a result, Maxwell did not sign the pay application or receive its final payment that day.

¶14 North Ridge emailed Maxwell a few days later, explaining that North Ridge would put Maxwell's check in the mail as soon as Maxwell signed the pay application. Maxwell refused to sign the pay application, however, instead "demand[ing] additional payment beyond the Subcontract's total amount." Maxwell's owner later conceded that he refused to sign the pay application because "he did not want to jeopardize the lawsuit he planned to file."

Pretrial Litigation

¶15 In April 2018, Maxwell filed a complaint against North Ridge. It asserted four causes of action: breach of contract, breach of an implied-in-fact contract, unjust enrichment, and breach of the implied covenant of good faith and fair dealing.

¶16 Maxwell initially sought $251,308.38 from North Ridge. Of that amount, $186,084.67 represented work that Maxwell alleged was "additional work outside the scope of the Subcontract." The remaining $65,223.71 represented the balance of the subcontract and approved change orders. This $65,223.71 came from (1) an $18,537.40 final payment that North Ridge was withholding because Maxwell would not sign the pay application and

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(2) retainage funds (totaling almost $47,000) that the city was withholding and that North Ridge therefore was not yet obligated to pay to Maxwell under the terms of the parties' subcontract.

¶17 North Ridge responded to the suit with an answer and a counterclaim. The counterclaim asserted causes of action for breach of contract and breach of the implied covenant of good faith and fair dealing, and North Ridge also requested "fees and costs incurred in defending this action and attempting to enforce" the subcontract. North Ridge asserted that Maxwell delayed completion of the project by not finishing its work until February 2, 2018, which was 67 days after the extended deadline of November 27, 2017. North Ridge initially sought $36,621 in damages, but it later elected to instead seek damages under the subcontract's liquidated damages provision. That provision provides that "[s]hould [Maxwell's] actions cause a delay in the project beyond the scheduled completion date, liquidated damages will be assessed against the subcontract in the amount relative to the actual delay." And it further provides that "[l]iquidated damages on this project are assessed at $250.00 per day." North Ridge's decision to seek liquidated damages thus reduced its claimed damages to $16,750 ($250 x 67).[5]

¶18 The parties participated in almost a year of discovery. During discovery, the parties deposed representatives from Maxwell, North Ridge, and the city. North Ridge also filed various motions in limine regarding the evidence and arguments that might be presented at trial, several of which were granted. The district court later found that Maxwell abandoned $40,211 of its claimed damages before trial "[i]n response to" North Ridge's motions.

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Bench Trial

¶19 The case proceeded to a three-day bench trial. At the close of Maxwell's case, North Ridge moved for a judgment on partial findings under rule 52(e) of the Utah Rules of Civil Procedure....

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