Popich v. Fidelity & Deposit Co. of Md.

• Decision Date: 02 February 1970
• Docket Number: Nos. 3757,3758,s. 3757
• Citation: Popich v. Fidelity & Deposit Co. of Md., 231 So.2d 604 (La. App. 1970)
• Parties: Joseph A. POPICH v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND. H. Bennett FOX v. Joseph A. POPICH. . Fourth Circuit
• Court: Court of Appeal of Louisiana

Page 604

231 So.2d 604

Joseph A. POPICH v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND.

H. Bennett FOX v. Joseph A. POPICH.

Nos. 3757, 3758.

Court of Appeal of Louisiana. Fourth Circuit.

Feb. 2, 1970.

Rehearing Denied March 9, 1970.

Morphy & Freeman, A. D. Freeman, Jr., New Orleans, for Joseph A. popich.

Cox, Bagot & Huppenbauer, Michael H. Bagot and Henry L. Klein, New Orleans, for Fidelity & Deposit Co. of Md.

Cox, Bagot & Huppenauer, Michael H. Batot and Henry L. Klein, New Orleans and Emile E. Martin, III, Belle Chasse, for H. Bennett Fox.

Before REGAN, REDMANN and BARNETTE, JJ.

BARNETTE, Judge.

This is an action arising out of a building contract. The contractor seeks recovery of the balance alleged due from the owner under the terms of the contract. The owner seeks by way of reconvention against the contractor and by separate suit against the contractor's surety, recovery of an amount alleged necessary to complete the building and to correct the deficiencies caused by improper workmanship.

On February 9, 1965, Joseph A. Popich, owner of a lot in Buras in Plaquemines Parish, contracted with H. Bennett Fox, a building contractor, to build a residence thereon for the contract price of $43,660. Certain extras were thereafter agreed upon to cost an additional $1,279.17. The contract provided for payments in four installments at respective stages of completion in the amount of $9,823.50 each and a fifth and final installment (not including extras) in the amount of $4,366. The contract completion date was August 13, 1965, with provision for 'liquidated damages' of $10 per day for each day thereafter the building remained incomplete. Fidelity and Deposit Company of Maryland, as the contractor's surety and bonding company, was a party to the contract which contained also the following clause:

'And it is agreed and understood that said surety, in addition to the amount of the foregoing bond, shall be liable for all costs, charges, expenses and attorney's fees, incurred in any concursus or other legal proceeding made necessary by the failure of the contractor to faithfully comply with the foregoing contract, said attorney's fees to be fixed at five per cent, on the amount of the foregoing bond.'

The first three installments were paid but Popich withheld payment of the fourth and fifth installments amounting to $14,189.50 and the $1,279.17 for extras, being a total of $15,468.67. Fox brought suit for this amount.

Popich answered setting forth the defense of incomplete, improper and deficient work. He alleged an estimated cost of $15,626.92 plus $10,000 added by supplemental pleading for completion of the residence; $500 due for certain credits; $1,512.83 for corrective work already done; liquidated damages for failure of completion by August 13, 1965, 320 days at $10 per day ($3,200); attorney's fee $2,183--all totaling $33,022.75. This amount he claimed as a set-off and prayed for judgment in that amount in reconvention.

Thereafter Popich filed a separate suit against Fidelity and Deposit Company of Maryland seeking judgment for the same amount and for the specific items respectively alleged owing by the contractor, Fox, except the above item of $500 alleged due for certain credits.

The suits were consolidated for trial. In the first suit, number 9515 on the trial court docket, number 3758 on the docket of this court, there was judgment in favor of the plaintiff, Fox, against Popich for $15,468.67, the exact amount claimed by Fox. Neither the judgment nor the 'Reasons for Judgments' makes any reference to the conventional demand. Popich appealed suspensively.

In the suit of Popich against the statutory bondsman, Fidelity and Deposit, number 9779 on the trial court docket and number 3757 on the docket of this court, there was judgment in favor of Popich, plaintiff, against Fidelity and Deposit Company of Maryland in the amount of $8,135. Fidelity and Deposit appealed suspensively. Popich answered the appeal in this court seeking an increase, including $500 for expert witness fees. He contends a net balance of $11,901.50 plus interest is due him after set-off of the acknowledged amount due Fox.

A certain type of brick was selected by Mr. and Mrs. Popich and was timely received on the building site by the contractor. Mr. and Mrs. Popich were dissatisfied with the brick delivered because of an alleged variation in color and rejected them. Approximately three weeks elapsed before they made selection of another type of brick. After the selection was made an order was placed immediately and delivery was made in due course. Fox contends that the five or six weeks' delay attributable to the rejection and reorder of the brick is chargeable to Popich and accounts for the noncompletion of the house by August 13. This issue will be discussed more fully below in connection with the claim for damages for delay in completion.

On September 9, 1965, while the building was still incomplete, the area was subjected to the devastating effects of hurricane 'Betsy.' The house in question was extensively damaged. Fox was protected by builder's risk insurance and in due time reached a settlement of the insurance claim.

In the meantime it became necessary for emergency protective measures to be taken. Labor and materials were scarce because of extensive damage to property in the area. We have no doubt that this further delayed repairs and completion of the house. A dispute arose between Fox and Popich over the delays and alleged unsatisfactory completion of the house and repairs of storm damage. On June 28, 1966, Popich filed a notice of default in the office of the Recorder of Mortgages and on the next day or at the latest by July 1, he moved into the house.

In addition to Popich's claims for liquidated damages for noncompletion by August 13, 1965 and attorney's fees, we have the usual issues of substantial performance and numerous disputed items of incompletion, improper repair or replacement of damaged parts, unskilled and substandard workmanship and the conflict of testimony of experts both as to the disputed items and the estimated costs involved.

Clearly this is a case of substantial performance and the owner is obligated to pay in full the contract price less the cost of making the necessary repairs or in completing the work contemplated by the building contract. The burden of proof of this cost is upon the owner. U-Finish Homes, Inc. v. Michel, 183 So.2d 101 (La.App.1st Cir. 1965); Federico v. Kratzberg, 163 So.2d 843 (La.App.4th Cir. 1964); Loeb v. Neilson, 128 So.2d 447 (La.App.4th Cir. 1961).

Prior to trial below, by agreement of all parties, the trial judge, accompanied by the attorneys and the parties litigant, inspected the house in question. In his 'Reasons for Judgments,' after holding that Popich was obligated for payment of the contract balance of $15,468.67 to Fox, the trial judge further found and held as follows:

'The Court spent considerable time in inspecting the house and could only conclude that there was much to be desired in the workmanship in the construction of same. Many defects were found and they are as follows:

1. The roof was not installed properly. (sagging in left front and back)

2. The garage door would not open and close.

3. The passage doors in the house were not plumb and therefore did not open and close properly.

4. The terrazzo was cracked in front of fire place and elsewhere throughout the house.

5. Cabinets in the kitchen should be replaced.

6. Cabinets in the bathroom should be replaced.

7. Sheet rock not finished properly in certain areas.

8. Front porch column not plumb.

9. Chipped and cracked bricks throughout.

10. Replace bathroom fixtures that were blistered by salt water.

11. Insulation in attic should be replaced where it was damaged by Betsy.

12. Leak in roof over fire place.

13. Slab needs finishing in spots.

14. Fire place needed to be finished.

The Court was also informed that Mr. Popich performed certain repairs which he himself paid for and proof was offered to show that amount.

'The Court is of the opinion that it would take Seven Thousand Six

Hundred Fifty and no/100 ($7,650.00) Dollars to repair the defects found and put the house in an acceptable condition plus an additional Four Hundred Eighty-five and no/100 ($485.00) Dollars spent by Mr. Popich or a total of EIGHT THOUSAND ONE HUNDRED THIRTY-FIVE and NO/100 ($8,135.00) DOLLARS.

'The Court is also of the opinion that each party should bear their own cost.'

No mention was made of the issues of damage and attorney's fees and we must hold that Popich's claims for these items of damage were rejected. Nicholson v. Holloway Planting Company, 216 So.2d 562 (La .App.1st Cir. 1968); Melde Tile Roofing Co. v. Compact Homes, Inc., 92 So.2d 735 (La.App.Orleans 1957); Williams v. Ralph R. Miller Shows, 15 So.2d 249 (LaApp.1st Cir. 1943).

We have attempted in vain to determine how the trial judge arrived at the figure $7,650, and both counsel in their briefs filed in this court concede that this figure is 'inexplicable.' We will, therefore, endeavor to determine which of the disputed items and the cost of correction of each the owner, Popich, has borne the burden of proving, and we will render such judgment as we deem just and proper on the record before us on this appeal. LSA-C.C.P. art. 2164 .

Early in November, 1966, Popich prepared a list of 40 items of alleged improper workmanship or damage not repaired. He submitted the list to Elmer C. Gilcrease, general manager of B & G Construction Company, Inc., for an estimate of cost of correction. On November 9, 1966, Gilcrease made a bid to furnish the labor and materials to do the work covered by 32 of the 40 items for the sum of $16,800. This is the basis of a substantial portion of Popich's claim in reconvention and in his suit against the surety. We have examined item by item Gilcrease's testimony given at the trial below to determine which items appear to...