Uhrhahn Const. & Design, Inc. v. Hopkins

Decision Date22 February 2008
Docket NumberNo. 20060616-CA.,20060616-CA.
CourtUtah Court of Appeals
PartiesUHRHAHN CONSTRUCTION & DESIGN, INC., a corporation, Plaintiff and Appellee, v. Lamar HOPKINS and Joan B. Hopkins, Defendants and Appellants. Lamar Hopkins and Joan B. Hopkins, Trustees of the Joan B. Hopkins Family Trust, Third-party Plaintiffs and Appellants, v. Roger Uhrhahn, Third-party Defendant and Appellee.

Ray G. Martineau, Anthony R. Martineau, and Brett D. Cragun, Salt Lake City, for Appellants.

Nan T. Bassett, Salt Lake City, for Appellee.

Before Judges BILLINGS, McHUGH, and ORME.

OPINION

ORME, Judge:

¶ 1 Lamar Hopkins (Hopkins) and Joan B. Hopkins, individually and as trustees (the homeowners), appeal from a judgment, entered following a bench trial, by which the trial court ruled in favor of Uhrhahn Construction & Design, Inc. on its mechanic's lien and breach of contract claims.1 This case presents the issue, among others, of whether parties to a construction contract can orally agree on extra work to be performed when the written contract contains a provision requiring change orders or "extras" to be put in writing. We affirm the trial court's breach of contract determination, reverse its mechanic's lien and attorney fees rulings, and remand for a determination of the homeowners' attorney fees, limited to those fees incurred in litigating the timeliness of the mechanic's lien enforcement action.

BACKGROUND2

¶ 2 This dispute involves Uhrhahn's written proposals for the partial construction of the homeowners' house, in which Uhrhahn estimated the cost and specifications for multiple projects it would complete. Each proposal stated that "[a]ny alteration or deviation from above specifications involving extra costs will be executed only upon written orders." Hopkins signed the proposals under sections titled "Acceptance of Proposal."3

¶ 3 The trial court found that "Hopkins . . . made several requests for additional work to the home which [were] not included in the initial proposals," and that "Uhrhahn . . . completed a substantial amount of the additional work requested." Hopkins paid for work performed in connection with at least three of the additional requests, only one of which may have been in writing.4

¶ 4 The trial court further found that "[d]uring the initial bidding process, Mr. Hopkins requested installation of Durisol blocks on the home rather than standard cinder blocks." "[He] represented to [Roger] Uhrhahn . . . that the Durisol blocks were easier to install than traditional cinder block and would take half the time." He also "gave [Roger] Uhrhahn written information about the blocks, which turned out to be incomplete." The trial court found that the Durisol blocks Hopkins provided for Uhrhahn to install "were deformed, requiring [Uhrhahn] to expend a substantial amount of additional time to install the blocks, above and beyond the initial proposal amount." This increased installation time caused Uhrhahn to incur expenses above its original estimation for the Durisol block project.

¶ 5 The dispute that ensued over the Durisol blocks led to the deterioration of the parties' relationship. Hopkins refused to pay Uhrhahn for the extra cost incurred while installing the deformed blocks, and Uhrhahn refused to continue working if it was not paid. For reasons that are not entirely clear, Uhrhahn did continue to work on the house, probably because Roger Uhrhahn was under the impression that Hopkins would pay after Uhrhahn provided "a complete breakdown and analysis of all costs to date, including additions, with documentation." After Uhrhahn provided the detailed information, Hopkins still refused to pay.

¶ 6 On March 28, 2003, Uhrhahn filed a complaint in district court "to collect a debt and to foreclose on a Mechanic's lien" pursuant to Utah Code section 38-1-11, see Utah Code Ann. § 38-1-11 (Supp.2001).5 The homeowners then filed an answer, counterclaim, and third-party complaint, alleging breach of contract and wrongful lien, and seeking punitive damages and attorney fees. After a bench trial, the court entered a memorandum decision on September 15, 2005, ruling in favor of Uhrhahn on its claims and against the homeowners on theirs. The trial court directed Uhrhahn to prepare findings of fact and conclusions of law following a damages hearing. After the damages hearing held on February 22, 2006, the homeowners objected to Uhrhahn's proposed factual findings because the findings failed to indicate whether or not the mechanic's lien was timely filed. The trial court entered its final factual findings and conclusions of law on June 7, 2006, without addressing the homeowners' concern, and they now appeal the court's final order.

ISSUES AND STANDARDS OF REVIEW

¶ 7 The first issue is whether the parties entered into a contract implied in fact that allowed them to agree orally to changes and extra work that deviated from the proposal agreement. Whether a contract implied in fact exists is generally considered a question of fact, and we review a trial court's factual findings under the deferential clearly erroneous standard. See Ryan v. Dan's Food Stores, Inc., 972 P.2d 395, 401 (Utah 1998); Sorenson v. Kennecott-Utah Copper Corp., 873 P.2d 1141, 1144 (Utah Ct.App. 1994). However, we "`retain[] the power to decide whether, as a matter of law, a reasonable [fact finder] could find that an implied contract exists.'" Ryan, 972 P.2d at 401 (quoting Sanderson v. First Sec. Leasing Co., 844 P.2d 303, 306 (Utah 1992)). As our review of this matter is limited to the trial court's factual findings, which we accept as valid, we will be determining whether an implied-in-fact contract exists as a matter of law in light of those findings.

¶ 8 The second issue is whether the trial court's damages award was proper given the lack of explicit factual findings regarding the award. "[An] award of damages is a factual determination that we review for clear error." Saleh v. Farmers Ins. Exch., 2006 UT 20, ¶ 29, 133 P.3d 428.

¶ 9 The third issue is whether the trial court, albeit only implicitly, correctly determined that Uhrhahn timely filed its mechanic's lien enforcement action under Utah Code section 38-1-11. See Utah Code Ann. § 38-1-11(1)(b) (Supp.2001) (current version at Utah Code Ann. § 38-1-11(2) (Supp. 2007)). "[S]tatutory interpretation [presents] a question of law that we review for correctness." Sill v. Hart, 2007 UT 45, ¶ 5, 162 P.3d 1099.

¶ 10 Finally, in light of our disposition of the third issue, the fourth issue is whether the homeowners were the successful party in the mechanic's lien action, thus entitling them to attorney fees under Utah Code section 38-1-18. See Utah Code Ann. § 38-1-18(1) (Supp.2001) (current version at Utah Code Ann. § 38-1-18(1) (2005)). Attorney fee determinations that involve statutory interpretation present questions of law. See A.K. & R. Whipple Plumbing & Heating v. Guy, 2004 UT 47, ¶ 6, 94 P.3d 270 ("When reviewing attorney fee decisions that involve questions of law, we review for correctness. This is also the standard we apply when construing statutes.") (citations omitted).

ANALYSIS
I. Contractual Issues
A. The Proposal Agreement Was a Contract

¶ 11 The homeowners argue that the trial court improperly determined that the proposal agreement was just an estimation of the work Uhrhahn would perform and not a contract. However, based on our review of the trial court's findings of fact and conclusions of law, it appears that the trial court did not actually determine whether or not the proposal agreement was a binding contract. In the trial court's memorandum decision, it indicated "that the proposals . . . submitted . . . were estimates of the amount that would be charged for the completion of the job." Then, in its conclusions of law, it stated: "Even if the bid proposals constituted a contract, based upon Mr. Hopkins' misrepresentations and conduct in continually requesting additional work . . . Plaintiff was entitled to consider the contract voidable." These statements indicate that the trial court did not decide the issue. Nonetheless, we agree with the homeowners that the court made an inconsistent statement when it concluded that Uhrhahn could recover "under both express and implied contracts." But because the existence of a contract is a legal determination, see Carter v. Sorensen, 2004 UT 33, ¶ 6, 90 P.3d 637 ("We determine the existence of a contract . . . by resorting to principles of law[.]"); Herm Hughes & Sons, Inc. v. Quintek, 834 P.2d 582, 583 (Utah Ct.App.1992) ("Whether a contract exists between parties is a question of law[.]"), and because we can readily determine whether the proposal agreement was a contract from the documents themselves, we conclude that the signed proposal agreement was an enforceable contract between the parties.6

¶ 12 The essential elements of contract formation were present here. See Golden Key Realty, Inc. v. Mantas, 699 P.2d 730, 732 (Utah 1985) (indicating that the essential elements of a contract include "offer and acceptance, competent parties,[7] and consideration"). The proposal constituted an offer by Uhrhahn to complete certain detailed construction projects for certain prices, and it clearly set forth additional terms regarding the work and the parties' relationship. See DCM Inv. Corp. v. Pinecrest Inv. Co., 2001 UT 91, ¶ 12, 34 P.3d 785 ("A bona fide offer is one made in good faith which, on acceptance, would be a valid and binding contract. For an offer to be one that would create a valid and binding contract, its terms must be definite and unambiguous.") (citations omitted). When Hopkins signed the written proposal multiple times—once for each proposed project under sections titled "Acceptance of Proposal"he accepted Uhrhahn's offer and promised to pay the amounts delineated for the various projects. See Nunley v. Westates Casing Servs., Inc., 1999 UT 100, ¶ 27, 989 P.2d 1077 ("`An acceptance must...

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