Sites v. Moore

• Decision Date: 30 April 1992
• Docket Number: No. 91-CA-11,91-CA-11
• Citation: 79 Ohio App.3d 694,607 N.E.2d 1114
• Parties: SITES et al., Appellees, v. MOORE, d.b.a. Action Construction Company, Appellant. *
• Court: Ohio Court of Appeals

Page 694

79 Ohio App.3d 694

607 N.E.2d 1114

SITES et al., Appellees, v. MOORE, d.b.a. Action Construction Company, Appellant. ^*

No. 91-CA-11.

Court of Appeals of Ohio, Fourth District, Lawrence County.

Decided April 30, 1992.

Randall L. Lambert, Ironton, for appellees.

David Reid Dillon, South Point, for appellant.

HARSHA, Judge.

This is an appeal from a judgment of the Court of Common Pleas of Lawrence County which adopted the recommendations of the referee and awarded appellees a judgment in the amount of $11,808.42 plus interest. The case arose out of a construction contract pursuant to which appellant, Gary A. Moore, d.b.a. Action Construction Company, was to build a substantial addition onto the home of appellees Steven D. Sites et al. Appellant raises the following assignments of error:

"I. The trial court erred in finding that the requirements placed on the contract by Lawrence Federal modified the contract of the parties requiring defendant-appellant to do additional work without compensation by plaintiffs-appellants [sic].

"II. The trial court erred in its finding that defendant-appellant breached the contract between the parties.

"III. The trial court erred in dismissing the counterclaim of defendant-appellant.

"IV. The trial court erred in its measure of damages."

Through their complaint and amended complaints, appellees asserted two causes of action against appellant. The first alleged that appellees had contracted with appellant to remodel appellees' house at a contract price of $32,995.15. This price was to include all labor and materials. Appellees further claimed they paid appellant approximately $22,000 without appellant's performing a proportionate amount of work. Appellant allegedly refused to purchase materials with the money and refused to complete construction. Appellees assert that appellant's actions constitute a breach of contract, including a failure to perform in a "workmanlike manner." They allege they are damaged in that they will have to complete the construction at an increased cost.

The second cause of action alleged appellant intentionally, knowingly, recklessly, and willfully filed a false affidavit for a mechanic's lien. This allegedly resulted in a loss of use and enjoyment of their property and further caused them to lose financing to complete the remodeling project. Appellees sought $40,000 compensatory damages and $10,000 punitive damages.

Appellant filed a counterclaim against appellees. It too alleged a contract existed between the parties. He asserted that appellees requested and he acquiesced in making "substantial and numerous" changes to the work while it was in progress. Appellant recognized the fact that he had received $24,490 for work completed and further sought $41,943.64 in damages. This figure apparently was arrived at by adding the amount unpaid under the contract ($8,505.15) and the alleged value of the "changes" appellant performed ($33,438.49).

A hearing was held before a referee. Following four days of testimony, the referee issued a report containing the following findings and recommendations. On July 7, 1987, the parties entered into a contract to remodel appellees' home for the price of $32,995.15. Incorporated into the contract was a description of materials bearing appellant's signature and dated July 1, 1987. Also incorporated into the contract was a proposal submitted by appellant to appellees bearing the signatures of both appellant and appellee, Steven Sites, and dated April 9, 1987. The parties discovered, after entering into the contract, that they were under a mutual mistake of fact regarding the size of the existing structure. As a result, they entered into a supplemental agreement for an additional 118.29 square feet to be constructed at a cost of an additional $3,075.54. This sum was to cover all expenses, materials and labor related to the additional area. The referee found the total contract price was "$36,070.60 [sic ]." This supplemental agreement was set forth in an affidavit signed by appellant.

The referee also found that prior to the beginning of "actual construction," appellant was notified that appellees' lender required minimum building standards. He found that many of these standards were "simply minimum standards of workmanlike procedures and practices that the homeowner has a right to expect," regardless of whether the homeowner was aware of their necessity.

Further, the referee found that on November 5, 1987, appellees requested that a window that was to be installed be changed to a set of doors at appellees' expense. As a result of this change, the referee found that appellant left the job site without completing the work for which appellees contracted. Appellant received roughly two-thirds of the contract price without completing nearly that amount of work on the project. The referee determined the evidence showed that appellant was "disgusted" with the project due to unanticipated delays and cost overruns. The referee held that it was appellant's duty to anticipate such things and build them into his bid. He also found (contrary to appellant's position that if appellees wanted an item or procedure in the contract, they should have expressly incorporated it) that a homeowner was not required to specify basic quality and design factors to be included in a construction contract.

The referee found appellees paid appellant $24,330. They paid $9,269.94 to other contractors to complete work and provide materials required to fulfill the contract. They also provided their own labor and materials at a cost of $9,821.86. There were also additional costs of completion in the amount of $3,467.26. Thus, the total cost to complete the contract was $22,559.06. From this figure, the referee deducted monies remaining unpaid on the total contract ($11,740.60) for resulting damages to appellees in the amount of $11,808.42. ¹

In regard to the second cause of action, the referee found appellant knew or recklessly disregarded the fact that his affidavit for a mechanic's lien, claiming a lien of $41,943.64 upon appellees' realty, was false. Finding that appellant's claim for the money was inaccurate, the referee recommended that the lien be vacated. He also recommended, based upon the work appellant performed and the money he received in return, that the counterclaim be dismissed. Ultimately, the court adopted the referee's report and entered judgment for appellees in the amount of $11,808.42 plus interest and costs. Appellant appeals that judgment.

Appellant's first assignment of error asserts that the trial court erred by finding that the minimum building standards required by appellees' lender modified the contract. This is a question of law upon which, as a reviewing court, we afford the trial court no deference. Latina v. Woodpath Dev. Co. (1991), 57 Ohio St.3d 212, 214, 567 N.E.2d 262, 264-265. Appellant first argues that the clear and unambiguous language of the contract prevents the introduction of evidence of the custom of contractors to receive building standards from the lender. He also argues that the requirement that construction be completed in a workmanlike manner does not justify the court in requiring appellant to adhere to the lender's standards and thus force him to provide, without added compensation, labor and materials beyond those bargained for in the contract.

Prior to any further complication of the issues, a review of the contract documents is warranted. The primary contract, dated July 7, 1987 and signed by appellant and Mr. Sites, provides in pertinent portions:

"Article 1. The contractor agrees to provide all materials as specified and to perform all the lobor [sic ] shown on the working drawings and described in, the specifications for the erection of a dwelling for the owner, Mr. and Mrs. Steve Sites at 845 Marion Pike, City of Coal Grove, County of Lawrence Co. [sic ], state of Ohio.

"Article 2. The owner agrees to pay the contractor in current funds for, the performance of the contract thirty-two thousand nine hundred ninety-five and 15/100 dollars ($32,995.15), subject to any additions to the general conditions of the contract agreed, upon in writing, and to make payments on account hereof upon presentation, of proper lien waivers, as the work progresses and payments to be made, as follows; payment of $2,500.00 at renovation, payment of 1/3 on completion of foundation. [sic ] payment of 1/3 on completion of hip roof. [sic ] payment of 1/3 on final completion & inspection.

"Article 3. The contractor and owner agree that the general conditions, the specifications and the drawings, together with this agreement form the contract, as if hereto attached."

The contract incorporates the specifications including the proposal dated April 9, 1987 and signed by appellant and Mr. Sites. That proposal states in part:

"All material is guaranteed to be as specified, and the above work to be performed in accordance with the drawings and specifications submitted for above work and completed in a substantial workmanlike manner for the sum of __________ Dollars ($32,995.15).

" * * *

"Any alteration or deviation from above specifications involving extra costs, will be executed only upon written orders, and will become an extra charge over and above the estimate."

Finally, the incorporated description of materials, in its instructions, includes this provision:

"4. The construction shall be completed in compliance with the related drawings and specifications, as amended during processing. The specifications include this Description of Materials and the applicable Minimum Construction Requirements." (Emphasis added.)

Appellant's arguments in the first assignment of error assume that the minimum requirements of the lender are not expressly incorporated into the contract. The contract, however, does incorporate those requirements. The testimony at the hearing revealed that the requirements...