Service Unlimited, Inc. v. Elder

• Decision Date: 27 November 1995
• Docket Number: No. 94-1737,94-1737
• Citation: 542 N.W.2d 855
• Parties: SERVICE UNLIMITED, INC., Plaintiff-Appellant, v. Ronald ELDER and Edith Elder, Defendants-Appellees.
• Court: Iowa Court of Appeals

Page 855

542 N.W.2d 855

SERVICE UNLIMITED, INC., Plaintiff-Appellant, v. Ronald ELDER and Edith Elder, Defendants-Appellees.

No. 94-1737.

Court of Appeals of Iowa.

Nov. 27, 1995.

Daniel DenBeste of Elderkin & Pirnie, P.L.C., Cedar Rapids, for appellant.

Ronald W. Wendt of Nazette, Marner, Good, Wendt & Knoll, L.L.P., Cedar Rapids, for appellees.

Heard by SACKETT, P.J., CADY, J., and PERKINS, Senior Judge. ^*

CADY, Judge.

Service Unlimited, Inc. appeals certain provisions of a district court's judgment dealing with their mechanic's lien foreclosure action and Ronald and Edith Elder's counterclaim for breach of contract. We affirm the district court's decision.

Service Unlimited, Inc., is a business in Quasqueton, Iowa operating as a general contractor. In 1990, it entered into a contract with Ronald and Edith Elder to perform remodeling work on a building owned by the Elders. The first floor of the building was to be used as a business and the second floor was to be used as the Elders' residence. The contract price was $78,977, and included a provision requiring Service to provide "approximately 2800 square feet" of concrete for "the main floor" and to insulate the ceiling to the R-40 level. The Elders claim the concrete on the main floor included the concrete approaches outside of the building. While remodeling Service only used insulation to a level of R-19, which required the Elders to install a larger air conditioner with additional cooling costs. The Elders still complained about inadequate air conditioning and heating on the second floor.

The Elders paid Service over $63,000 under the contract, but refused to make a final payment because the work had not been finished and the amount sought was incorrect. Service subsequently filed a mechanic's lien which the Elders claimed was based on bills never presented to them. Service sought $1364 for the concrete approaches as extra work. The Elders claimed they had put $130,000 into purchasing and remodeling the building but the market value was only around $60,000. In addition, evidence indicated it would cost $10,800 to bring the insulation to the R-40 level.

Service subsequently filed a petition seeking to foreclose on the mechanic's lien. The Elders filed a counterclaim raising breach-of-contract and negligence claims for the alleged failure of Service to perform the contractual work in a workmanlike manner.

After a bench trial, the district court entered judgment determining Service was entitled to recover the unpaid contract balance and the fair and reasonable value of certain extras furnished minus a set off to the Elders for certain credits and for work improperly performed. The court found the contract included the concrete approaches under the provision providing concrete for the main floor. The court further determined the Elders were entitled to a credit for the installation of a properly insulated roof and awarded the Elders $7179.18 plus interest. The court also found Service was not entitled to recover on its mechanic's lien since the sums owed the Elders exceeded the amount they owed Service.

Service appealed. They claim the trial court erred in concluding the exterior concrete approaches around the building did not constitute extra work. They also claim the trial court erred in computing damages for the inadequate insulation by using "cost of repair" instead of "reduction in value."

I. Standard of Review

An action to enforce a mechanic's lien is in equity. Iowa Code § 572.26 (1993). We therefore review the denial of a claim for extra work in an action to enforce a mechanic's lien de novo. See Overhead Door Co. of Des Moines, Inc. v. Sharkey, 395 N.W.2d 186, 187 (Iowa App.1986). The findings of the trial court are given weight, but are not binding. Id. A claim for damages arising from the construction of a building, on the other hand, is reviewed for error of law. See Busker v. Sokolowski, 203 N.W.2d 301, 302 (Iowa 1972). The findings of the trial court are binding on us if supported by substantial evidence. Id.

II. Claim for Extra Work

Generally, a builder may recover for extra work performed on a construction project when ordered and agreed to by the parties and not covered by the building contract. Nepstad Custom Homes Co. v. Krull, 527 N.W.2d 402, 407 (Iowa App.1994). A claim for extra work must fail, however, when the work was covered by the terms of the contract. 13 Am.Jur.2d, Building and Construction Contracts, § 19 (1964).

We agree with the trial court the written contract covered the exterior concrete slabs. The phrase "main floor" as used in the contract was susceptible to two different meanings and is ambiguous. See Berryhill v. Hatt, 428 N.W.2d 647, 654 (Iowa 1988) (ambiguity exists in contract when, after application of rules of interpretation to face of instrument, a genuine uncertainty exists concerning which of two reasonable construction is proper). The phrase "main floor" refers to either the internal dimensions of the floor solely or to both the interior and exterior dimensions. Therefore, the circumstances surrounding the contract and the interpretation given by the parties may be considered. Kroblin v. RDR Motels, Inc., 347 N.W.2d 430, 433 (Iowa 1984).

In this case, the contract called for "approximately 2,800 square feet" of concrete for the "main floor." The main floor of the building, including the exterior approach, measured approximately 2,800 square feet. The interior dimensions equaled 2,584 square feet and the exterior approach...