Sullivan Bros., Inc. v. State Bank of Union Grove, 81-1248
| Decision Date | 19 May 1982 |
| Docket Number | No. 81-1248,81-1248 |
| Parties | SULLIVAN BROTHERS, INC., a Wisconsin corporation, Plaintiff-Respondent, v. STATE BANK OF UNION GROVE, a Wisconsin banking corporation, Defendant-Appellant, * Nielsen Iron Works, Inc., Defendant-Respondent, Ruud Electric Company, Inc., John Weiss, d/b/a North Cape Heating Company, a Wisconsin corporation; Milwaukee Insulation, Inc.; Cudahy Roofing & Supply Company, Inc., a Wisconsin corporation; Kenosha Materials, Inc., a Wisconsin corporation; Jim Michel Building Specialties, Inc., a Wisconsin corporation; and Arkay Tile, Inc., a Wisconsin corporation, Defendants-Respondents, Tews Lime & Cement Company, a Wisconsin corporation; Union Grove Lumber & Fuel Company, a Wisconsin corporation; and Chris W. Ludwig, d/b/a Ludwig Plumbing & Heating, Defendants, Du Mor General Contractors, Inc., a Wisconsin corporation, Intervening Defendant- Appellant.* |
| Court | Wisconsin Court of Appeals |
Harrison W. Nichols, Union Grove, and R. Arthur Ludwig, Milwaukee, for defendant-appellant and intervening defendant-appellant.
Edward J. Bruner, Jr. of Heft, Dye, Heft & Paulson, Racine, Dennis R. Boyle, Burlington, Robert L. Mann of Kohner, Mann & Kailas, S. C., Milwaukee, Constantine, Christensen, Krohn & Kerscher, S. C., Racine, Jesse A. Wesolowski of Fleming & Associates, S. C., and Harry W. Theuerkauf, Milwaukee, for defendants-respondents.
Before VOSS, P. J., and BROWN and SCOTT, JJ.
This case concerns the interpretation of sec. 779.02(1)(c), Stats., dealing with the notice that lien claimants must give to preserve their rights. At issue are three questions: (1) whether sec. 779.02(1)(c), Stats., applies to both remodeling and new construction; (2) whether the term "usable square feet of floor space" includes such things as interior and exterior walls, stairwells, columns and exterior canopied areas, and (3) whether the construction contract considered here involved more than 10,000 usable square feet of floor space. We hold that sec. 779.02(1)(c), Stats., does apply to both remodeling and new construction. The term "usable square feet of floor space" includes space occupied by interior walls, stairwells and columns but does not include exterior walls and exterior canopied areas. Finally, we hold the construction considered involved more than 10,000 usable square feet of floor space. For those reasons, this court affirms the judgment of the trial court.
On September 8, 1978, the State Bank of Union Grove entered into a contract with Du Mor General Contractors, Inc., for both construction of an addition to its bank building and remodeling of the first floor of its existing structure. Du Mor entered into contracts with a series of subcontractors to provide material and labor for the construction project.
The addition had a basement and first floor. Each had a gross exterior dimension of fifty-three feet by sixty-eight feet. Together, the two floors had 7,208 total square feet of floor space. The gross exterior dimensions of the first floor of the existing building were fifty-five feet by sixty-eight feet, with a projection to the west of five by thirty-one. The first floor had 3,895 square feet of floor space. Together, the remodeling of the three floors involved 11,103 square feet of floor area.
The record also indicates that work was done in the basement of the existing structure. The work done in the basement was pursuant to an agreement between Du Mor General Contractors and Ruud Electric signed March 20, 1979. According to Gordon Cabush, the project manager for Ruud Electric, the agreement was merely an amendment to the October 5, 1978 contract entered into between Du Mor and Ruud. The basement's dimensions were identical to the first floor dimensions. It measured 3,895 square feet. 1
APPLICATION OF SEC. 779.02(1)(c), STATS.
Du Mor and the State Bank first argue that sec. 779.02(1)(c), Stats., only applies to new construction and not to remodeling. They contend that the legislative history of the statute and a Minnesota case interpreting a similar statute indicate that the statute must be interpreted in such a manner. We do not agree.
Section 779.02(1)(c), Stats., provides an exception from the lien notice requirement mandated by sec. 779.02(2)(b), Stats. The language of the statute declares that the exception is to apply to "any lien claimant furnishing labor or materials for an improvement ...." The central issue, then, is whether remodeling is considered to be an improvement.
The term "improvement" is defined in sec. 779.01(2)(c), Stats., which declares:
(c) "Improve" or "improvement" includes any building, structure, erection, fixture, demolition, alteration, excavation, filling, grading, tiling, planting, clearing or landscaping which is built, erected, made or done on or to land for its permanent benefit. This enumeration is intended as an extension rather than a limitation of the normal meaning and scope of "improve" and "improvement". [Emphasis added.]
The language of the statute indicates that the term "improvement" is intended to cover alterations that are made. This quite clearly extends to remodeling. This is clear from the first sentence of subsection (c). The last sentence of the subsection indicates that an expansive interpretation of the first sentence is intended. This leaves no doubt that the term "improvement" is intended to include remodeling.
Appellants argue that the words "provided" or "added" as used in sec. 779.02(1)(c), Stats., must be defined in order to understand the meaning of the term "improvement." Where a word or phrase is specifically defined in a statute, its meaning is as defined in the statute, and no other rule of statutory construction need be applied. It is only when a word or phrase is used in a statute and is not specifically defined in it that common and approved usage of such a word or phrase and other accepted rules of statutory construction apply. Fredericks v. Industrial Commission, 4 Wis.2d 519, 522, 91 N.W.2d 93, 95 (1958).
Additionally, other sections of the lien statute indicate that the word "improvement" comprehends more than new construction. Section 779.01(4), Stats., declares When new construction is the principal improvement involved, commencement is deemed to occur no earlier than the beginning of substantial excavation for the foundations, footings or base of the new construction, except where the new construction is to be added to a substantial existing structure, in which case the commencement is the time of the beginning of substantial excavation or the time of the beginning of substantial preparation of the existing structure to receive the added new construction, whichever is earlier. [Emphasis added.]
The statutory language indicates that one form of improvement may be new construction. The obvious implication is that other forms of improvements exist which are not new construction. Therefore, we hold that the term "improvement" also applies to remodeling.
Second, appellants argue that the improvements made at the bank do not involve more than 10,000 usable square feet of floor space. Appellants contend that because the improvements do not involve more than 10,000 usable square feet of floor space, the subcontractors were required to give notice of their liens to the State Bank. Such an argument is premised on the supposition that usable square feet of floor space must be defined to exclude areas covered by interior and exterior walls, stairwells, columns, piers, built-in cabinets and duct work. Appellants contend that usable square feet of floor space is space which is not devoted for some fixed purpose. Rather, it must be capable of being walked on, stood upon or otherwise available for use. We find no support for such an argument.
Although sec. 779.02(1)(c), Stats., uses the term "usable square feet of floor space," the term is not defined in ch. 779, the chapter dealing with liens. The term is not defined anywhere in the Wisconsin Statutes or in Wisconsin case law. Although the term or an equivalent term is used in the statutes of other states, it is undefined by those states.
The legislative history of the statute provides clues regarding the intended meaning of the term. The notes of the legislative council indicate that the 10,000 square feet standard was a substitution for a dollar amount. The reason for the substitution was the realization that the dollar standard has built-in obsolescence. W. Raushenbush, Fifth Memorandum to the Insurance and Banking Committee, January 12, 1967. The clear intent of the committee was to have size be a substitute for value in determining when notice of lien should be required.
Also, the Legislative Council Note (1967) to sec. 779.02(1)(c), Stats., discusses the purpose of the lien notice requirement and indicates why...
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