ProMax Development Corp. v. Raile, 980087.

• Decision Date: 11 January 2000
• Docket Number: No. 980087.,980087.
• Citation: 2000 UT 4,998 P.2d 254
• Parties: PROMAX DEVELOPMENT CORPORATION, Plaintiff and Appellant, v. Rick F. RAILE and Martha K. Raile, Defendants and Appellees.
• Court: Utah Supreme Court

998 P.2d 254

2000 UT 4

PROMAX DEVELOPMENT CORPORATION, Plaintiff and Appellant, v. Rick F. RAILE and Martha K. Raile, Defendants and Appellees.

No. 980087.

Supreme Court of Utah.

January 11, 2000.

Rehearing Denied March 2, 2000.

Rex E. Madsen, Korey D. Rasmussen, Salt Lake City, for plaintiff.

Theodore E. Kanell, Stephen P. Horvat, Salt Lake City, for defendants.

HOWE, Chief Justice:

INTRODUCTION

¶ 1 Plaintiff ProMax Development Corporation appeals from a judgment dismissing its complaint against defendants Rick and Martha Raile for mechanic's lien foreclosure, breach of contract, and unjust enrichment.

BACKGROUND

¶ 2 We state the evidence in the light most favorable to the Railes, who were the prevailing party below. During the spring of 1994, Rick and Martha Raile, a married couple, verbally agreed to hire ProMax Development Corporation to build a home for them for $300,000 excluding the lot and landscaping. The agreement was made between the Railes and their longtime friend, Phil Bates, one of ProMax's principals.

¶ 3 After entering into the agreement, the Railes purchased a building lot with money obtained from the sale of their previous home. They also obtained a $300,000 construction loan. In about May of 1994, ProMax began constructing the home. Its goal was to have the home completed by October 1, 1994, so that it could be exhibited in the Parade of Homes, a sale promotion sponsored by home builders. When the Railes expressed concern over the cost of the home, Bates assured them that ProMax could build the home within the $300,000 budget because it was going to be in the Parade of Homes and suppliers would therefore provide ProMax with discounts of up to forty percent.

¶ 4 In about August of 1994, Bates told the Railes that ProMax would need additional money to complete the home. They applied for additional financing and were approved for a takeout loan of $330,000. The home was completed by October 1 and was exhibited in the Parade of Homes. A closing on the permanent home loan was scheduled for October 12, but prior to closing, Bates again told the Railes that ProMax needed more money to cover construction costs. The Railes then agreed to pay an additional $33,505.32 to ProMax as full and final payment for the home construction. On ProMax's behalf, Bates then signed documents confirming that ProMax would accept the payment from the Railes as a final payment. He also signed a statement for a title company acknowledging the total payoff amount, a lien guaranty certifying there were no outstanding amounts owed for the home construction, and a lien waiver relinquishing all lien rights to the home.

¶ 5 At the closing, all necessary papers were signed, and ProMax received a check for $33,505.32 as payment in full for constructing the home. Following the closing, however, Bates approached the Railes and asked them to sign a Real Estate Purchase Contract ("REPC") representing that ProMax needed to provide it to the bank. Rick Railes signed the document, even though the purchase price and financing amounts were left blank, and per Bates' request, Rick back-dated the REPC to April 20, 1994. Bates then presented Martha Railes with the REPC for her signature, but when she expressed concern because the document did not list the purchase price and financing amounts, Bates told her that he would fill in the amounts later by putting in the numbers the bank needed to see.

¶ 6 At some point after the Railes signed the REPC, Bates filled in the blank lines for the purchase and financing amounts. He listed the total purchase price of the home as $508,000, including a fictitious $30,000 earnest money deposit and $80,000 the Railes supposedly paid to ProMax for the building lot.

¶ 7 Approximately one week after the closing, Bates told the Railes that they owed ProMax an additional $5,000 for a lot reservation fee and landscaping. The Railes paid the money. Several weeks later, Bates told the Railes that they owed ProMax an additional amount exceeding $136,000 for constructing the home. This time the Railes refused to pay any additional monies, and ProMax responded by filing a mechanic's lien and this suit. Specifically, ProMax sought the mechanic's lien foreclosure, damages for breach of contract, and recovery for unjust enrichment.

¶ 8 The parties agreed to a bench trial, and after the close of the evidence, the trial court found in favor of the Railes. It concluded that the documents the Railes signed at the loan closing proved that an accord and satisfaction had occurred, and it dismissed ProMax's complaint with prejudice. The judgment, entered on October 1, 1997, provided in part that

plaintiff's complaint be dismissed with prejudice and upon the merits, with costs being awarded to the defendants after an appropriate hearing on taxation of costs as provided by Section 38-1-18, Utah Code Ann. (1953 as amended), said judgment to bear interest at the legal rate until paid.

¶ 9 Subsequently, the Railes moved for the taxation of costs, and after a hearing, the trial court entered an order on December 1, 1997, awarding them $7,656 for the fees of one of their attorneys, plus $1,336.10 in court costs, for a total of $8,992.10. The court denied any award of attorney fees for a second attorney who had represented the Railes, stating that his affidavit lacked "the specificity necessary to sustain an award of attorney fees." Ten days later, the Railes moved to alter or amend the order to increase the award of fees to $28,291.50, apparently to cover the fees of the second attorney and a third attorney who had previously represented them. The court partially granted the motion by an order on February 9, 1998, rescinded its December 1 order, and increased the Railes' award of attorney fees to $20,791.50. No mention was made of the $1,336.10 in court costs. ProMax filed a notice of appeal on February 13, 1998, assailing the judgment insofar as it holds that the Railes proved an accord and satisfaction. Promax has not raised the issue of the award of attorney fees to the Railes. The Railes cross-appeal, assigning as error the failure of the trial court to award them the $1,336.10 in court costs and $7,500 in attorney fees paid to the third attorney.

ANALYSIS

I. JURISDICTION

¶ 10 The Railes move to dismiss ProMax's appeal as being filed untimely. They argue that the trial court entered final judgment on October 1, 1997, but ProMax did not file its notice of appeal until February 13, 1998, long past the thirty days prescribed for filing by Utah Rule of Appellate Procedure 4(a). The Railes assert: (1) the October 1 judgment was a final judgment as required by Utah Rule of Appellate Procedure 3 and is appealable because it disposed of the merits of the action; (2) their post-trial motions — to have the amount of attorney fees determined and costs taxed — dealt with a different matter, collateral to the merits of the action; and (3) the orders of the court on December 1, 1997, and February 9, 1998, did not change or alter the October 1, 1997, judgment in any respect and therefore did not prevent that judgment from being final on the date of its entry, thereby starting the appeal time to run. They rely on Nielson v. Gurley, 888 P.2d 130 (Utah Ct.App.1994), where the court of appeals held that the amendment of a judgment to award the prevailing party court costs did not interrupt the running of the thirty-day appeal time.

¶ 11 We deny the motion to dismiss ProMax's appeal. In Adamson v. Brockbank, 112 Utah 52, 185 P.2d 264 (1947), we stated:

[W]here a belated entry merely constitutes an amendment or modification not changing the substance or character of the judgment, such entry is merely a nunc pro tunc entry which relates back to the time the original judgment was entered, and does not enlarge the time for appeal; but where the modification or amendment is in some material matter, the time begins to run from the time of the modification or amendment.

112 Utah at 60, 185 P.2d at 268 (emphasis added). The two orders made on attorney fees subsequent to the October 1 judgment were modifications or amendments in a "material matter." The first order awarded the Railes $7,656 in attorney fees, and the second order increased that amount to $20,791.50. These amendments were materially different from the amendment made in Nielson v. Gurley, where the modification or amendment was to recite that the prevailing party was entitled to court costs. As the court of appeals pointed out in that case, the amendment did not "affect any substantive rights running to the litigants. Indeed, the court's amendment to the judgment was completely unnecessary because costs are awarded as a matter of course to the prevailing party unless the court otherwise orders." 888 P.2d at 133 (citing Utah R. Civ. P. 54(d)(1)).

¶ 12 Utah Code Ann. § 38-1-18, which governs the award of attorney fees in this case, provides that in any action to enforce a mechanic's lien, "the successful party shall be entitled to recover a reasonable attorney's fee, to be fixed by the court, which shall be taxed as costs in the action." Where attorney fees are awarded to a party, whether denominated as an item of "costs" or not, and the amount is not stated in the judgment rendered on the merits of the case, and evidence must be taken afterwards by the trial court either by affidavit or live testimony, there is no final judgment for the purposes of appeal until the amount of the fees has been ascertained and granted. However, when, as in Nielson, no attorney fees are involved but only court costs, which are usually small statutory amounts or liquidated amounts, such costs can be added later to a judgment without affecting its finality.

¶ 13 We are aware that in Taylor v. Hansen, 958 P.2d 923, 927 (Utah Ct.App.1998), the court of appeals adopted the rule enunciated by the United States Supreme Court in Budinich v. Becton Dickinson & Co., 486 U.S. 196, 108 S.Ct. 1717, 100...