U-Finish Homes, Inc. v. Michel, U-FINISH

• Court: Court of Appeal of Louisiana
• Writing for the Court: BAILES
• Citation: U-Finish Homes, Inc. v. Michel, 183 So.2d 101 (La. App. 1965)
• Decision Date: 21 December 1965
• Docket Number: No. 6507,U-FINISH,6507
• Parties: HOMES, INC., Plaintiff-Appellant, v. Ralph C. MICHEL et ux., Defendants-Appellees.

Page 101

183 So.2d 101

U-FINISH HOMES, INC., Plaintiff-Appellant, v. Ralph C. MICHEL et ux., Defendants-Appellees.

No. 6507.

Court of Appeal of Louisiana, First Circuit.

Dec. 21, 1965.

Rehearing Denied Jan. 24, 1966.

Writ Refused Feb. 23, 1966.

Donald H. Lee, of Seal, Mitchell & Lee, Bogalusa, for appellant.

D. A. McGovern, III, New Orleans, for appellees.

Before ELLIS, LOTTINGER, LANDRY, REID and BAILES, JJ.

BAILES, Judge.

The plaintiff, U-Finish Homes, Inc., contracted with the defendants, Ralph C. Michel and his wife, Mrs. Gladys F. Michel, on Auguat 5, 1961, for the construction of what is commonly called a shell home on a plot of ground owned by the defendants. The price for this home as agreed to between the parties was a total of $7599.90, of which amount the defendants paid the sum of $10 down and the payment of the balance was represented by the defendants making and executing a promissory note in the amount of $7589.90, payable in 83 consecutive monthly installments of $90.35 each. The price agreed to by the parties included the interest and carrying charges over this period of time of installment payments.

On the same date that the contract for the building of the shell home was entered into, the defendants made and executed the above described promissory note. As security for the promissory note they likewise executed a special mortgage on the land on which the shell home was to be constructed. The first payment of this promissory note was due October 1, 1961. No payment whatever was made by the defendants on this note.

Executory proceeding was initiated by plaintiff on March 29, 1963, on the promissory note and special mortgage executed by the defendants as stated supra. In defense of this action, the defendants seek injunctive relief to arrest the sale of their property and to permanently enjoin the collection of the note and enforcement of the securing special mortgage on the ground that the house was unsatisfactory for the reasons that 'the roof leaks, the batten boards in the front of the house are shrunk to the extent that cracks are visible, all of the flooring is not level and there are cracks visible. The blinds for the house were never installed and cannot be in view of the fact, that the front of this new structure would have to be re-done. The front steps are defected and broken. There is no snack bar separating the kitchen from the dining room. * * * (No) chain wall or spot-footing (or) concrete foundation (were installed). (The) concrete block piers (were laid) directly on the soft ground. The house now as a result is sinking.'

A temporary restraining order was sought and obtained, and in their petition for injunction, the defendants prayed for a temporary injunction to issue in due course and finally that a permanent injunction issue, enjoining 'any further use of executory proceeding in' this matter; that defendants be awarded $5000 damages; that plaintiff be ordered 'either to remove said defective house from defendants' property or to perform the necessary corrective work,' and finally that there be judgment ordering the Clerk of Court of St . Tammany Parish to cancel and erase from his records the mortgage inscribed in MOB 178, page 250.

The plaintiff answered defendants' petition for injunctive relief herein by what was tantamount to a general denial, and then reconvened for $450 as a reasonable attorney fee for services rendered in this suit for injunction on the ground that the action taken by defendants was meritless.

A rule was issued by the court to the plaintiff to show cause why a preliminary injunction should not issue, and after hearing thereon, the preliminary injunction did issue.

On this issue the case was tried in the lower court, after which judgment was rendered permanently enjoining the executory proceeding, ordering the Clerk of Court to cancel the subject mortgage from the records of his office, and finally recognizing plaintiff the owner of the shell home which was to be removed from the defendants' land within forty-five days from the date of the judgment. The defendants made no offer of proof on the trial to support their claim for damages allegedly suffered by them by reason of the defects in their home, the trial judge made no mention of it in his reasons for judgment, and no specification of error is made thereof in this court, therefore we consider this alleged claim abandoned. The same can be said of plaintiff's asserted claim for $450 as attorney's fee in defending defendants applicable for injunctive relief. Inasmuch as the trial judge did not pass on the merit of the claim and no assignment of error is made thereto by the plaintiff, we will consider this phase of the case abandoned, too. From this judgment, plaintiff appeals.

Before proceeding with a discussion of the evidence offered by both plaintiff and defendants, we feel it would serve us well to set forth the law applicable to such case as this, and a sampling of the jurisprudence interpreting and elucidating thereon.

LSA-C.C. 'Art. 2769. Contractor's liability for non-compliance with contract 'Art. 2769. If an undertaker fails to do the work he has contracted to do, or if he does not execute it in the manner and at the time he has agreed to do it, he shall be liable in damages for the losses that may ensue from his noncompliance with his contract.'

In the case of Airco Refrigeration Service, Inc. v. Fink (1961) 242 La. 73, 134 So.2d 880, the Supreme Court said on page 79 of 242 La. on page 882 of 134 So.2d:

'(1, 2) The contract involved in the instant case is a building contract within the definition of Article 2756 of the LSA-Civil Code . Article 2769 is therefore controlling. Under this codal provision the law is well settled that when the contractor has substantially performed a building contract which he has breached, he is entitled in a suit on the contract to recover the contract price less whatever damages the owner may prove attributable to the breach.

'(3) Substantial performance of the contract is essential to warrant the application of this rule of law. For if the breached contract has not been substantially performed, the contractor may not recover on the contract, but is limited to recovery on quantum meruit.

'(4) The principal question presented in this case is whether or not there has been substantial performance so as to permit recovery on the contract. This is a question of fact. Among the factors to be considered are the extent of the defect or non-performance, the degree to which the purpose of the contract is defeated, the ease of correction, and the use or benefit to the defendant of the work performed.'

In the case of Lillis v. Anderson (1945), Orl.App., La.App., 21 So .2d 389, in differentiating the procedure in this type action from that which prevails in recovery on other commutative contracts, the court stated on page 392:

'(2, 3) While it is the general rule that a person suing to recover on a commutative contract must allege and prove that he has fully performed his part of the engagement in order to recover, it is the well-settled jurisprudence of this state that this doctrine is without application to suits brought on building contracts. * * *.

'The foregoing article (meaning Article 2769, LSA-Civil Code) has been construed by the courts to mean that, where a contractor sues on a building contract and it is shown that the work delivered is defective or unfinished, the contractor is, nonetheless, entitled to recover the contract price if the defendant fails to establish the damages he has sustained by reason of the contractor's partial default. The remedy of the owner in such cases is for a reduction in the price to an amount necessary to perfect or complete the work according to the terms of the contract. (citation of authorities omitted.)'

Reverting to the case of Airco Refrigeration Service, Inc. v. Fink, supra, the court quoted approvingly from the opinion of the Court of Appeal, as follows:

"With reference to the performance vel non of building contracts, where the contractor has defaulted, either in not completing the work or having performed defective work, but where there has been substantial performance, the contractor may sue for the full contract price. The remedy of the owner then is to allege and prove the nature and extent of the unfinished or defective work and the cost of completion and correction, the same to be deducted from the balance due under the contract. The burden is not upon the contractor to prove the value of the actual work done on a quantum meruit basis." (Emphasis supplied)

Also see: Merrill v. Harang (1940) La.App., 198 So. 386; Polizzi v . Thibodeaux (1948) La.App., 35 So.2d 660; Montague v. Milan (1953) La.App., 67 So.2d 351; Leopold v. Leggio (1955) La.App., 79 So.2d 925; Norman v. Brown (1955) La.App., 83 So.2d 488; Ebert v. Chambers (1956) La.App., 87 So.2d 613; Charest v. Busby (1962) La.App., 141 So.2d 466; Edward Chassaniol, Jr., Roofing & Siding, Inc., v. Ramsey (1962) La.App., 144 So.2d 618; and Federico v. Muhleisen (Kratzberg) (1964) 163 So.2d 843.

Actually there is no dispute between the parties as to the law applicable to the involvement of the parties in this litigation. It involves a resolution of a question of fact, namely, was there substantial performance of the building contract by plaintiff. If it is found that there is not substantial performance, the court would be correct in ordering the contractor to remove the edifice from the owner's property under the provisions of LSA-Civil Code Article 1928. However, if it is found that there was substantial performance by the builder, the burden is upon the owner to prove what defects, imperfections and faulty work was performed and the cost of rectifying same.

The trial judge stated in his written reasons for judgment that:

'The law applicable in such a case as this is clear. If there has been substantial compliance with the terms and...