Olberding Const. Co., Inc. v. Ruden, 2--57009

• Decision Date: 30 June 1976
• Docket Number: No. 2--57009,2--57009
• Citation: 243 N.W.2d 872
• Parties: OLBERDING CONSTRUCTION COMPANY, INC., Appellee, v. Elmer RUDEN and Marie Ruden, Appellants.
• Court: Iowa Supreme Court

Page 872

243 N.W.2d 872

OLBERDING CONSTRUCTION COMPANY, INC., Appellee, v. Elmer RUDEN and Marie Ruden, Appellants.

No. 2--57009.

Supreme Court of Iowa.

June 30, 1976.

John D. Randall, Cedar Rapids, for appellants.

Moss & Heims and Marc W. Casey, Dyersville, for appellee.

Heard by REYNOLDSON, Acting C.J., and MASON, RAWLINGS, REES and HARRIS, JJ.

REES, Justice.

This is an appeal by defendants Elmer and Marie Ruden from a decree of the trial court foreclosing the plaintiff's mechanics' lien against their dwelling house and dismissing defendants' counterclaim. We modify the decree of the trial court and affirm the same as modified.

At all times material to the action defendants owned a home in Dyersville. Plaintiff Olberding Construction Company (hereinafter 'Company') maintained its principal place of business in the same city. After a flood in August of 1972, Mr. Ruden contacted Eugene Olberding, vice-president of plaintiff Company, about the possibility of waterproofing the Rudens' basement wall, pouring a new wall outside the old one and doing some landscaping and sidewalk work on the premises. Ruden had been acquainted with Olberding for several years, and the Company had done work for the defendants previously. Olberding advised Mr. Ruden that the proposed work would not hold up or protect against further flood damage.

A second flood occurred September 13, 1972, and the area in which the Ruden home was situated was declared by the government to be a disaster area, making federal relief funds available. Ruden decided to have his home raised and a new basement put in with the aid of such disaster funds. About September 15 Ruden went to Olberding's home to discuss the proposed work. There is a conflict in the testimony regarding whether Olberding ventured a guess at that time as to the probable cost of such work. In any event, Ruden asked Olberding to come to the Ruden house and prepare a cost estimate of the necessary work, including labor and materials. Ruden told Olberding it was his impression the estimate was necessary in order for the Rudens to secure the federal disaster funds.

On or about September 20 Olberding came to the Ruden home in order to see what work would be necessary. He advised the Rudens to contact a Mr. Aylsworth about raising the house so the foundation work could be done. About a week later Ruden, Olberding and Aylsworth met at the Ruden home to discuss the further details of the proposed work. According to Ruden, the figure of $2800 for the entire job was discussed, but Aylsworth suggested a figure of $3000 due to the possibility that unexpected difficulties could arise because of the age of the dwelling house. Olberding testified he could not remember the substance of such conversation.

The next day Olberding brought to the Ruden home two copies of an estimate and left them with Mrs. Ruden. The estimate, which had been prepared and signed by Olberding, called for digging out and replacing the existing foundation, backfilling the wall, replacing the floor, putting in new windows and filling with sand. It included labor. Olberding indicated a price range for the work of from $3200 to $4000 in his estimate. Two or three weeks later Ruden told Olberding to go ahead with the work.

Olberding testified it was his understanding the work would be paid for on a 'time and material' basis, but he admitted he did not explain such an arrangement to the Rudens.

Work on the Ruden home commenced October 21, 1972. On December 15 of the same year, while work was in process, Ruden paid Olberding $3500. There is a dispute as to whether this payment was intended by the parties to constitute partial or complete satisfaction of the cost of all the work. The Company stopped work on the Ruden home December 31, and on January 31, 1973, sent to Rudens a bill for an additional sum due of $2,370.59.

On July 31, 1973, the Company instituted the within action against Mr. and Mrs. Ruden. In its petition the plaintiff alleged there was due and owing it $1,838.85 as the fair and reasonable value of the construction work done on the Rudens' house, which sum was the balance due for the work performed in excess of the $3500 already paid by the Rudens. Plaintiff further prayed for a foreclosure of its mechanics' lien and the issuance of a special execution.

In answer the Rudens denied the Company's allegations of reasonable value and denied the debt was due and owing. They affirmatively alleged they had already paid the Company $3500 for the work it performed, that the agreement between the parties called for the work to be done for a sum not to exceed $4000 and that the work done was faulty, unsatisfactory and unacceptable, making the cost of satisfactorily repairing the residence $10,000.

The answer also contained a counterclaim in which the Rudens sought to collect $13,000 damages from the Company as the result of the alleged faulty, unsatisfactory and unacceptable workmanship on the part of the Company.

In its reply the Company admitted receipt of the $3500 from the Rudens, but denied all other allegations in the answer and counterclaim.

Trial commenced October 16, 1973. On December 18 trial court entered judgment for the Company and against Rudens in the amount of $1,614.85, ordered foreclosure of the mechanics' liens, directed the issuance of a special execution against the property and dismissed the Rudens' counterclaim. Trial court arrived at the figure of $1,614.85 by correcting a $24 error in the computation as shown on the statement for a mechanics' lien and subtracting from the resultant amount the sum of $200 for incomplete and defective work.

The defendants state the following issues for review:

(1) Trial court erred in finding the Company was entitled to $5,114.85 as reasonable compensation for the work performed.

(2) Trial court erred in holding the Company was entitled to $5,114.85 as reasonable compensation for the work performed in view of the fact the Company's vice-president had submitted a signed written estimate to defendants which set out a price range of $3200 to $4000 for the work proposed.

(3) Trial court erred in failing to find the Company had accepted $3500 as payment in full for the work performed.

(4) Trial court erred in entering judgment against defendants for a sum of money with seven percent interest thereon from January 1, 1973.

(5) Trial court erred in dismissing defendants' counterclaim.

I. This case sounded in equity and our review is De novo. Rule 334, Rules of Civil Procedure. We give weight to the trial court's findings of fact, especially in matters involving credibility, but we are not bound by them. Rule 344(f)(7), R.C.P.

II. In their first issue stated for review, defendants assert trial court erred in finding the Company was entitled to $5,114.85 as reasonable compensation for the work done on the Ruden home. All parties to this appeal agree the question is one of fact.

With respect to this issue, the parties have narrowed the question before us to one of the reasonable value of the services rendered by the Company. There is no claim that an express contract existed as to the amount of compensation to be paid. It is well settled that there may be an implied contract on a point not covered by an express one, and where there is no agreement as to the amount of compensation, the law implies a promise to pay reasonable compensation. Sitzler v. Peck, 162 N.W.2d 449, 451 (Iowa 1968).

The proper measure of recovery is the reasonable value of the services rendered and materials furnished, and should be distinguished from actual cost to the contractor. McDonald v. Welch, 176 N.W.2d 846, 847 (Iowa 1970). The Rudens assert trial court's figure of $5,114.85 is too high.

First, the Rudens direct our attention to Olberding's initial oral estimate of $2800 for the job, the written estimate stating a range of $3200--4000 and Olberding's oral assessment of December 15, within two weeks of the time the Company stopped work, that the value of the work done by that date was $2800, 'give a little either way.'

With regard to Olberding's oral assessment of the value of the work done by December 15, we observe there was a conflict of testimony at trial. Olberding testified he told Mr. Ruden on that date that the $3500 would cover most of the work up to that point. Mrs. Ruden testified it was her impression on December 15 that Olberding did not know 'where he was at pricewise or workwise.' We are constrained to give little weight to Mr. Ruden's representation in this regard.

We believe the estimates given by Olberding, particularly the written estimate, are of some relevance in ascertaining the fair and reasonable value of the labor and materials, but they are, by no means, conclusive. We said in Denniston and Partridge Company v. Mingus, 179 N.W.2d 748, 752 (Iowa 1970):

'An estimate is equivalent of 'more or less' and does not pretend to be based on absolute calculations. Use of the word precludes accuracy. 'To make an estimate' ordinarily means to calculate roughly or to form an opinion as to amount from imperfect data. (citations).'

We give less weight to the estimates here because we find additional work was performed which was not explicitly contemplated by the original written estimate. Included in the work ultimately done but not contemplated by the estimate was hauling away the old foundation, construction of new basement steps with handrail, construction of front and back porch temporary steps, sanding under the basement, insulation, erection of steel columns, sill seal, foundation coatings, construction of a ceiling under the porch, new beams and new sills and boards on the porch.

In sum, we believe the evidence of Olberding's estimates was of very limited value to a determination of the fair and reasonable value of the Company's work.

Next, the Rudens contend the evidence showed the work by the Company was performed in an unworkmanlike manner,...