TRENCH SHORING SERVICES v. SARATOGA SPRINGS DEVELOPMENT
| Citation | 2002 UT App 300,57 P.3d 241 |
| Decision Date | 26 September 2002 |
| Docket Number | No. 20010784-CA.,20010784-CA. |
| Parties | TRENCH SHORING SERVICES, INC., a Utah corporation, Plaintiff and Appellee, v. SARATOGA SPRINGS DEVELOPMENT, L.L.C., a Utah limited liability company; and Freewheeling Enterprises, Inc., a Utah corporation, Defendants and Appellants. |
| Court | Court of Appeals of Utah |
Douglas Matsumori, Brent D. Wride, and Elaina M. Maragakis, Ray, Quinney & Nebeker, Salt Lake City, for Appellants.
David W. Slaughter and Heather S. White, Snow, Christensen & Martineau, Salt Lake City, for Appellee.
Before Judges BILLINGS, GREENWOOD, and ORME.
¶ 1 Saratoga Springs Development, L.L.C., (Developer) appeals the district court's orders granting summary judgment and awarding attorney fees to Trench Shoring Services, Inc. (Supplier). We affirm.
¶ 2 Developer owned several lots in Saratoga Springs, a planned unit development. To obtain the Town of Saratoga Springs's approval of subdivision plats, Developer agreed to improve the development's sewer system (the project).
¶ 3 Developer contracted with Larry Price Construction to make the project improvements. Larry Price Construction then subcontracted some of the project work to Freewheeling Enterprises, Inc. (Subcontractor). To perform that work, Subcontractor rented trench shoring equipment from Supplier on August 25, 1999. The rental agreement indicated the equipment was to be used on the project. Subcontractor gave Supplier a check for $3,392.57 for the rental. Thereafter, Supplier delivered the rented equipment to the project site.
¶ 4 On September 1, 1999, the $3,392.57 Subcontractor promised to pay under the rental agreement had been consumed. Supplier continued to rent the equipment to Subcontractor on Subcontractor's credit account with Supplier. On September 24, 1999, Subcontractor's check for $3,392.57 was returned for insufficient funds. The following day, Supplier retrieved its equipment from the project site.
¶ 5 After Subcontractor failed to pay for the rented equipment, Supplier filed an action against Subcontractor1 and Developer. Supplier and Developer filed motions for summary judgment. In its motion, Supplier contended that because Developer failed to require Larry Price Construction, the project contractor, to obtain a payment bond under Utah Code Ann. § 14-2-1 to-5 (1999) (the Payment Bond Statute), Developer was liable for the rent for the equipment plus interest and collection costs and attorney fees as specified in the rental agreement and under the Payment Bond Statute. In its cross-motion, Developer admitted it failed to require a payment bond, but contended that the Payment Bond Statute did not apply to rent charges for equipment; therefore, Supplier was not entitled to recover under the statute. Developer also contended Supplier was not entitled to recover because Subcontractor's work failed to comply with project specifications and Supplier's equipment therefore did not benefit the project.
¶ 6 Following a hearing, the district court granted Supplier's motion and awarded Supplier the rent it claimed, prejudgment and postjudgment interest, and costs and attorney fees in collecting the judgment. Subsequently, the court also awarded attorney fees to Supplier as a prevailing party under the Payment Bond Statute. Developer now appeals.
¶ 7 Developer argues the district court erred in concluding that Supplier is entitled to recover under the Payment Bond Statute. This issue presents a question of statutory interpretation, which is a question of law. See John Wagner Assocs. v. Hercules, Inc., 797 P.2d 1123, 1126 (Utah Ct.App.1990)
. Thus, we review the district court's interpretation for correctness. See id.
¶ 8 Developer also argues the district court erred in awarding Supplier attorney fees under the Payment Bond Statute. We review the district court's award of attorney fees under this statute, which makes the award discretionary, for an abuse of discretion. See Bailey-Allen Co. v. Kurzet, 876 P.2d 421, 428 (Utah Ct.App.1994)
.2
¶ 9 Developer first argues the district court erred in granting Supplier's motion for summary judgment because the Payment Bond Statute does not provide for the recovery of rent for the equipment used on the project. The Payment Bond Statute provides in relevant part:
Utah Code Ann. § 14-2-1(2)(a), (3) (1999). The statute further provides:
[A]n owner who fails to obtain a payment bond is liable to each person who performed labor or service or supplied equipment or materials under the contract for the reasonable value of the labor or service performed or the equipment or materials furnished up to but not exceeding the contract price.
Id. § 14-2-2(1).
¶ 10 "`We will interpret and apply [a] statute according to its literal wording unless it is unreasonably confused or inoperable.'" Cox Rock Prods. v. Walker Pipeline Constr., 754 P.2d 672, 676 (Utah Ct.App.1988) (citation omitted) (alteration in original). Only "`[w]hen uncertainty exists as to the interpretation and application of a statute, [is it] appropriate to look to its purpose in the light of its background and history, and also to the effect it will have in practical application.'" John Wagner Assocs. v. Hercules, Inc., 797 P.2d 1123, 1125 (Utah Ct.App.1990) (citation omitted). We conclude the statute's plain meaning includes rent for the equipment used on the project.
¶ 11 Developer argues that under the statute an owner who fails to require a bond is liable for equipment that is "furnished," not equipment that is "rented." Thus, Developer argues the statute protects only equipment sellers. We disagree. The statute unambiguously imposes liability on an owner, who fails to require a contractor to obtain a bond, "to each person" who "supplied equipment ... under the contract." Utah Code Ann. § 14-2-2(1) (emphasis added). The owner is liable "for the reasonable value of ... the equipment ... furnished." Id. (emphasis added). "Equipment" is not qualified by the term sold, but rather the broader terms "supplied" and "furnished." Thus, we conclude the statute protects equipment lessors and they are entitled to recover the reasonable value of the equipment they furnish.3 ¶ 12 Developer relies on Graco Fishing & Rental Tools, Inc. v. Ironwood Exploration, Inc., 766 P.2d 1074 (Utah 1988), and Johnson v. Gallegos Construction Co., 785 P.2d 1109 (Utah 1990). Developer claims in these cases the Utah Supreme Court held the term "rent" must be included for rent charges to be recoverable under the Payment Bond Statute.
¶ 13 We are not persuaded. In Graco, a subcontractor rented and sold oil well drilling equipment to the contractor. See 766 P.2d at 1075-76. As in the present case, the owner failed to obtain a payment bond from the contractor. See id. at 1076. After the contractor failed to pay for the equipment, the subcontractor sought relief from the owner under the then controlling Mechanics' Lien and Payment Bond Statutes. See id.
¶ 14 The court denied the subcontractor recovery of "rental services" under the then controlling Payment Bond Statute. Id. at 1077. At this date, the Payment Bond Statute required owners to obtain a bond "`conditioned for the faithful performance of the contract and prompt payment for material furnished and labor performed under the contract.'" Id. at 1078 (quoting Utah Code Ann. § 14-2-1 (1973)) (emphasis added). The statute further provided, "`[a]ny person... who shall fail to obtain such ... bond ... shall be personally liable to all persons who have furnished materials or performed labor under the contract for the reasonable value of such materials furnished or labor performed not exceeding, however, in any case the prices agreed upon.'" Id. (quoting Utah Code Ann. § 14-2-2 (1973)) (second ellipsis in original) (emphasis added). The supreme court noted, "[t]he critical question ... [was] whether Graco, as a subcontractor which incurred rental costs, [was] a party who ... `furnished materials or performed labor for or upon such building, structure or improvement for which payment has not been made.'" Id. (emphasis added). The court then concluded the subcontractor had not "furnished materials or performed labor." See id. at 1079. The court explained, until the Payment Bond Statute was amended in 1985 "to expressly include rental charges [for equipment], liability for rental charges could not be imposed under it." Id. Because the subcontractor's cause of action arose prior to the 1985 amendment, it could not recover under the Payment Bond Statute. See id.
Id. at 1111 (quoting Utah Code Ann. § 63-56-38(1)(b),(3) (Supp.1985)) (ellipses in original). The...
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