Treasure Valley Plumbing and Heating, Inc. v. Earth Resources Co., Inc.

• Decision Date: 09 December 1988
• Docket Number: No. 16696,16696
• Parties: TREASURE VALLEY PLUMBING AND HEATING, INC., Plaintiff-Respondent, v. EARTH RESOURCES CO., INC., Defendant-Third Party Plaintiff-Appellant, v. MOUNTAIN STATES MINERAL ENTERPRISES, INC., a corporation, Third Party Defendant-Appellant.
• Court: Idaho Court of Appeals

Page 1254

766 P.2d 1254

115 Idaho 373

TREASURE VALLEY PLUMBING AND HEATING, INC., Plaintiff-Respondent, v. EARTH RESOURCES CO., INC., Defendant-Third Party Plaintiff-Appellant, v. MOUNTAIN STATES MINERAL ENTERPRISES, INC., a corporation, Third Party Defendant-Appellant.

No. 16696.

Court of Appeals of Idaho.

Dec. 9, 1988.

[115 Idaho 374] Dale G. Higer (Eberle, Berlin, Kading, Turnbow & Gillespie), Boise, for defendant-third party plaintiff-appellant.

James S. Underwood, Jr., Boise, for plaintiff-respondent.

SUBSTITUTE OPINION

The Court's prior opinion, dated September 8, 1988, is hereby withdrawn.

BURNETT, Judge.

This is an action brought by a construction subcontractor to foreclose a mechanic's lien for work performed at the Delamar Silver Mine in Owyhee County. Following a non-jury trial, the district court entered judgment in favor of the subcontractor on the lien and on a claim for additional work outside the lien. The court also awarded costs and attorney fees. The mine owner has appealed, raising four issues: (1) whether the district court's findings are supported by substantial evidence; (2) whether the district court abused its discretion in refusing to grant a new trial; (3) whether the subcontractor was entitled to a judgment against the mine owner for the additional work outside the lien; and (4) whether the trial court abused its discretion in making the awards of costs and attorney fees. For reasons explained below, we affirm the district court's judgment with respect to all work performed, and we uphold the award of costs. However, we vacate the award of attorney fees and remand the case for further consideration of that issue.

The essential facts may be stated briefly. Pursuant to an oral agreement the subcontractor, Treasure Valley Plumbing and Heating, Inc., was hired by a general contractor, Mountain States Mineral Enterprises, Inc., to install necessary plumbing and a water supply system at the Delamar Silver Mine. The mine was owned predominantly by Earth Resources Company. Initially, the labor and materials to be provided by Treasure Valley were itemized in a purchase order prepared by Mountain States. Construction on the mine proceeded at a rapid pace. Unanticipated needs and unforeseen problems arose from time to time. As a result, Treasure Valley supplied labor and materials beyond the estimates set forth in the original purchase order. Often, but not always, these revisions were memorialized in change orders or new purchase orders prepared by Mountain States. Eventually the project--including Treasure Valley's work--was successfully completed. However, cost overruns were substantial. Treasure Valley's billings exceeded the original estimates. When Treasure Valley reviewed the records, it determined that it had been underpaid. Both Mountain States and Earth Resources denied any underpayment.

Negotiations with Mountain States and Earth Resources were stymied due to impending litigation between those parties. Accordingly, Treasure Valley filed a notice of claim of lien for $80,097.98--a sum the company could document as being owed at that time. Treasure Valley then sued to foreclose the lien. In the meantime, Earth Resources filed a third-party complaint against Mountain States for indemnification against any recovery obtained by Treasure Valley. When Mountain States did not defend the action, Earth Resources obtained an order of default. Subsequently, the district court entered summary judgment for Earth Resources on Treasure Valley's lien foreclosure suit, holding that the claim of lien had been defective. On appeal to this Court, the summary judgment was reversed and the case was remanded for trial. See Treasure Valley Plumbing and Heating, Inc. v. Earth Resources Company, 106 Idaho 920, 684 P.2d 322 (Ct.App.1984). ¹

At trial the parties explored the factual and accounting issues in great detail. As noted above, the district court ultimately entered judgment for Treasure Valley in an amount secured by the lien plus an amount due for work outside the scope of the lien. In addition, the court awarded costs and attorney fees. The mine property was ordered sold at a public auction to satisfy the aggregate judgment. This appeal followed.

I

Earth Resources first contends that the district court's findings of fact are not supported by substantial evidence. Earth Resources further urges that because much of the evidence contained in the record is documentary, this Court may exercise de novo review over the factual issues. With neither of these contentions do we agree.

A

We first discuss the appropriate standard of review. It is axiomatic that an appellate court will apply differing standards of review to lower court decisions, depending upon the nature of the issues presented. Questions of law or "mixed" questions of law and fact ordinarily call for free review on appeal. See generally IDAHO APPELLATE HANDBOOK, Standards of Appellate Review in State and Federal Courts 3.2.1 (Idaho Law Foundation, Inc. 1985) (hereinafter cited as HANDBOOK). One such question of law, enti tling an appellate court to exercise free review, is the interpretation of unambiguous contracts. See, e.g., Shipley v. Cook, 109 Idaho 537, 708 P.2d 942 (Ct.App.1985).

Over questions of fact, the scope of appellate review is more limited. A trial court's findings will be overturned only upon a showing of clear error. I.R.C.P. 52(a). Clear error, in turn, will not be deemed to exist if the findings are supported by substantial, albeit conflicting, evidence. Rasmussen v. Martin, 104 Idaho 401, 659 P.2d 155 (Ct.App.1983). Questions of credibility and the weight of the evidence are matters uniquely within the province of the trial court. Id. The "clear error" standard of review applies regardless of whether the evidence adduced below is documentary or testimonial. HANDBOOK § 3.3.4.2.

Here, we have not been asked to interpret the legal import of any contracts. Rather, our task is to determine whether the trial court found facts consistent with a body of evidence that happened to consist largely of documents. On such an issue, the appropriate standard of review is the deferential "clear error" standard. Accordingly, we now apply that standard.

B

The salient issue at trial was whether or not Treasure Valley had been paid fully for the services and materials it provided. The trial judge noted that when the job was completed, a conference was held among the parties in an effort to reach a final accounting. The points of discussion included change orders and other "extras" throughout the project. The judge found that the parties reached an agreement embracing work performed in addition to that anticipated in the original purchase order. The agreement reflected work for which written change orders had not been sent to Treasure Valley. A large portion of the unpaid obligation was represented by a document known as change order number 8. The agreement also encompassed repair work on a pipeline laid pursuant to the original purchase order but damaged by another subcontractor on the site.

The judge determined that the negotiated agreement had not been performed by Earth Resources and that change order number 8 had not been paid. He found that Treasure Valley was owed $105,482.27 for unpaid work, materials and expenses incurred on the Delamar mine project. However, in his conclusions of law, he held that Treasure Valley's compensable claim was limited to two items: the amount recited in the claim of lien ($80,097.98) and an unsecured sum ($11,357.40) representing the cost of repairs to the damaged pipe. The trial judge found that Treasure Valley was entitled to recover the latter sum upon uncontroverted proof that an Earth Resources representative had authorized payment for repairs if the general contractor, Mountain States, failed to compensate Treasure Valley for the extra work. Judgment was entered on the lien for $154,829.39 ($80,097.98 plus prejudgment interest) and on the repair claim for $21,953.85 ($11,357.40 plus prejudgment interest).

Based upon our review of the record, including the voluminous transcripts and exhibits, we cannot say that the judge's findings are clearly erroneous. The evidence adduced at trial clearly indicated that substantial work, not requisitioned in the original purchase order (number 5060), had been performed by Treasure Valley. However, as might have been expected, the evidence regarding payment was conflicting. Both sides presented accounting summaries which reached different conclusions. The trial judge accepted Treasure Valley's calculations despite Earth Resources' contrary evidence and arguments.

Earth Resources advanced two main contentions during the trial. First, it contended that by matching all cancelled checks against purchase and change orders, an overpayment was disclosed. Alternatively, Earth Resources asserted that a certain check, numbered 40708 for $53,500.00, was intended to satisfy the obligation represented by change order number 8. However, as the trial court recognized, Mountain States' first argument was based upon a selective analysis of debits and credits. In fact, when all work and materials were considered--including those amounts not represented by invoices--Treasure Valley had been underpaid. As to the second contention, Treasure Valley demonstrated that check number 40708 was intended as payment for a schedule of invoices distinct from and prior to the items ultimately contained in change order number 8. Finally, it was undisputed--indeed, conceded by Earth Resources--that Mountain States had not paid certain other billings from Treasure Valley for such items as sales tax, extra liability insurance, and extra pipe which Treasure Valley had ordered but could not return for a refund.

We believe that Treasure Valley adduced substantial evidence in support of its claim. It is true that some of the evidence was controverted. However, these conflicts in...