Mitchell v. Flandro

• Decision Date: 22 December 1972
• Docket Number: No. 10994,10994
• Citation: 506 P.2d 455,95 Idaho 228
• Parties: Leslie L. MITCHELL, doing business as Mitchell Construction Company, Plaintiff-Respondent and Cross-Appellant, v. C. Ed FLANDRO et al., Defendants-Appellants and Cross-Respondents.
• Court: Idaho Supreme Court

Page 455

506 P.2d 455

95 Idaho 228

Leslie L. MITCHELL, doing business as Mitchell Construction Company, Plaintiff-Respondent and Cross-Appellant, v. C. Ed FLANDRO et al., Defendants-Appellants and Cross-Respondents.

No. 10994.

Supreme Court of Idaho.

Dec. 22, 1972.

Rehearing Denied Feb. 26, 1973.

Ben Peterson, R. M. Whittier, Pocatello, for appellants and cross respondents.

John B. Kugler, Pocatello, for respondent and cross appellant.

BAKES, Justice.

This action arose out of two construction contracts (referred to as Phase 1 and Phase 2) executed by Leslie Mitchell, d/b/a Mitchell Construction Company, (hereinafter referred to as respondent), with C. Ed. Flandro, the late Stella Flandro, and C. Ed Flandro, Inc., (hereinafter referred to as appellants) for the construction of an automobile sales and service plant to house appellants' Ford dealership. ¹ Other party appellants named, the lessor-owners of the realty on which the sales and service plant was constructed, are passive in this action.

According to the memorandum decision of the district court, respondents and appellants entered into the contract for Phase 1 of the construction on November 14, 1963. The Phase 2 contract was entered into on February 24, 1964. At the time of the commencement of this action, appellants had paid all the amounts due on both contracts except for $21,209.29.

On November 10, 1964, Kenneth Douglas, appellants' architect, signed a certificate acknowledging the substantial completion of the construction. Respondent alleges that he continued to do finishing work on the structure and finally ceased work altogether on January 2, 1965. Respondent filed a contractor's lien, pursuant to I.C. 45-507, on March 11, 1965.

Respondent instituted a foreclosure of the lien for the unpaid contract price due him. Appellants counterclaimed for damages of $50,000 for respondent's allegedly negligent construction and for $50.00 a day as liquidated damages for respondents' failure to complete the Phase 1 construction. At the commencement of the trial in July, 1970, respondents moved to amend their complaint by adding separate counts for recovery for breach of contract by appellants and for recovery in quantum meruit. Respondents' motion was denied by the district court at that time.

At the conclusion of the trial, respondents renewed their motion to amend the complaint. The district court allowed the amendment to add a breach of contract count, but denied the motion in regard to adding a count in quantum meruit.

In its memorandum decision, the district court concluded that no recovery could be had on the lien since it had not been timely filed. The court decided, however, that the action had in fact been tried on the contract theory and that therefore respondent was entitled to damages in the amount of $21,209.29 for breach of contract, less offsets totalling $3,133.89 for respondents' breaches of warranty.

From the district court order both sides have appealed. Out of the numerous assignments of error advanced by both sides, several pertinent issues have arisen which require disposition in this appeal. The two major disputes involve (1) the validity of respondent's lien and (2) the propriety of the district court decision allowing respondent to amend the complaint to add the contractual count, and ultimately basing the award on that count. Other issues requiring discussion herein include the correctness of the district court's treatment of the alleged offsets by appellants, the adequacy of the court's findings of facts and conclusions of law, the denial of compensation for 'extra work' allegedly performed by respondent, and the failure to award interest to respondent. With the exception of the interest claim, we affirm the district court in toto.

Of primary importance in this appeal is the district court's conclusion that respondent's lien was not timely filed as required in I.C. 45-507. At the time that respondent filed his lien, that section provided:

'Every original contractor claiming the benefit of this chapter must, within ninety (90) days, . . . after the completion of any building, improvement or structure, or after the completion of the alteration or repair thereof, or in case he cease to labor thereon before the completion thereof, then after he so ceases to labor or after he has ceased to labor thereon for any cause, or after he has ceased to furnish materials therefor, . . . file for record with the county recorder for the county in which such property or some part thereof is situated, a claim containing a statement of his demand, after deducting all just credits and offsets, with the name of the owner, or reputed owner, if known, and also the name of the person by whom he was employed or to whom he furnished the materials, . . .' I.C. 45-507.

It is respondent's position that due to the fact that he allegedly performed work on the structure up until January 2, 1965, that the lien application filed March 11, 1965, was in fact filed within ninety days of the cessation of work under the contract and hence was timely filed. In finding that the lien was not timely filed, the trial court stated:

'. . . as a matter of fact, that from the November (1964) date through the March (1965) date that plaintiff did not prove services of such a nature as to expand the time for filing his lien and the court concludes, therefore, as a matter of law, that the lien was not timely filed . . ..' (Clk. Tr. p. 126).

Since there is competent evidence in the record supporting the trial court's factual determination that no substantial work was proven done after November, 1964, we do not disturb it on appeal. E. g. Reardon v. Union Pacific R.R., 93 Idaho 833, 475 P.2d 370; Jolley v. Puregro Co., 94 Idaho 702, 496 P.2d 939 (1972).

It is undisputed in the record that the certificate of 'substantial completion' was submitted by respondent and approved by appellants' architect on November 10, 1964. According to the architect, the certificate issued when the construction was completed to the extent that appellants could assume occupancy. On issuance of the certificate, the respondent-builders were entitled to submit their final estimate for payment from respondent Mitchell's own testimony it appears that the issuance of the certificate also marked the effective completion of construction under the contract. ²

It is established that 'trivial' work done or materials furnished after the contract has been substantially completed will not extend the time in which a lien claim can be filed under I.C. 45-507. As well articulated in Gem State Lumber Co. v. Whitty, 37 Idaho 489, 217 p. 1027:

'While the time fixed in the contract for the completion of a building is not controlling against laborers or materialmen, it has a direct bearing upon the time when the building was to be completed under the contract, so that the time for filing liens for material and labor would begin to run. The statute provides that this time shall be computed from the date of the last item of material furnished, or from the last work performed. The rule very generally, prevails that such time begins to run from a substantial completion of the contract, and that new items thereafter added to the account will not extend the time in which to claim a lien or revive a lien already expired. The more difficult question is to determine when under this doctrine the contract has been completed. By the weight of authority, this is to be ascertained by the conditions of the contract, the conduct of the parties with reference thereto, and the surrounding facts and circumstances. (Citations omitted).

'Ordinarily, furnishing an article or performing a service trivial in character is not sufficient to extend the time for claiming a lien or to revive an expired lien, where the article is furnished or the service rendered after a substantial completion of the contract, and the article is not expressly required by the terms thereof.' Gem State Lbr. Co. v. Whitty, supra, at 499, 217 P. at 1030. (Emphasis added).

Since it is undisputed that the contract was substantially completed on November 10, 1964, and since the trial court found inadequate proof that any material or substantial work was performed or supplies furnished after that date which would extend the time for filing a lien, we conclude that the trial court was correct in ruling that the lien was not timely filed. H. W. Johns-Manville Co. v. Allen, 37 Idaho 153, 215 P. 840 (1923).

Appellants' major contention is that the court erred in allowing respondent to amend his pleadings by adding a breach of contract count at the close of trial. Appellants' argument is twofold. Arguing that the amendment adds a distinctly new cause of action from the originally pleaded lien foreclosure, appellants claim that since over five years have passed since the alleged breach of contract that any recovery on the contract theory would be barred by the statute of limitations. I.C. 5-216. In this regard, appellants also note that no sanctuary is provided respondents by the 'relation back' aspect of I.R.C.P. Rule 15(c) which provides:

'Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading.'

Appellants contend that this rule is not applicable in the situation where, as in the case at bar, the complainant attempts to add an entirely new cause of action after the time when the statute of limitations would otherwise have barred such action. 6 Wright & Miller, Federal Practice and Procedure, § 1497, pp. 489-92 (1971). See Denton v. Detweiler, 48 Idaho 369, 282 P. 82 (1929). Appellants second contention is that the allowance of the amendment by the district court to add an action at law (i. e., contract action) effectively denies appellants their rights to an adjudication...