W. F. Const. Co., Inc. v. Kalik, 13720

• Decision Date: 12 October 1982
• Docket Number: No. 13720,13720
• Citation: 103 Idaho 713,652 P.2d 661
• Parties: W. F. CONSTRUCTION COMPANY, INC., Plaintiff-Respondent, v. Charlotte KALIK, Defendant-Appellant.
• Court: Idaho Court of Appeals

Page 661

652 P.2d 661

103 Idaho 713

W. F. CONSTRUCTION COMPANY, INC., Plaintiff-Respondent, v. Charlotte KALIK, Defendant-Appellant.

No. 13720.

Court of Appeals of Idaho.

Oct. 12, 1982.

Lawrence J. Young, Ketchum, for defendant-appellant.

Mark William Russell of Kneeland, Laggis, Korb, Collier & Benjamin, Ketchum, for plaintiff-respondent.

SWANSTROM, Judge.

W. F. Construction Company, Inc. brought suit to foreclose a contractor's lien against real property owned by Charlotte Kalik in Sun Valley, Idaho. The district court found that the owner was indebted to the contractor for the amount claimed in the lien, minus a small offset. The owner appeals from the judgment allowing foreclosure of the lien and granting the contractor its attorney fees. We affirm.

In September of 1977, the parties entered into an oral agreement for the construction of a house by the contractor on the owner's property. The contractor prepared and delivered to the owner a standard contract form recommended by the American Institute of Architects (AIA) which contained terms relating to the total cost of the project and the contractor's fee. Neither party signed the AIA contract, but the court admitted it into evidence to outline the contents of the parties' oral agreement. The AIA form contract stated that the owner was to reimburse the contractor for the cost of the work, plus a contractor's fee of 10% of the "direct" and "indirect" costs of the work. The "direct" costs were the actual costs of material and labor expended by the contractor to build the house. The "indirect" costs were a portion of the contractor's general overhead allocated to the job, and they were set at 5% of the direct costs. Thus, under the AIA form contract, the contractor was to be paid a total fee of approximately 15% of the direct construction costs. The trial court found that this "15%" fee term was part of the parties' initial oral agreement. The form contract also provided that the maximum cost to the owner, including the contractor's fee, would not exceed $106,000, subject to increase or decrease if changes were made in the plans.

The contractor began work on the house in September, 1977. By June of 1978 the house was ready for occupancy and the owner's architect issued a certificate of substantial completion. The owner moved in and the contractor presented its bill. It showed the direct costs alone amounted to $117,368, not including the "15%" contractor's fee. The owner balked at paying the balance due, claiming that the house cost more than agreed, and that the workmanship was defective.

The owner, her architect, and the contractor negotiated and reached a compromise. In return for payment of the fee and outstanding costs, the contractor agreed to complete a "punch list" of items that the owner and the architect wanted done, and to reduce its fee to 10% of direct costs. The contractor undertook to perform the punch list, but the owner was not satisfied and withheld payment. Another compromise was reached, the contractor agreeing this time to reduce its fee to a flat $10,000 and to complete a second punch list. The contractor worked on those items. By December of 1978, the owner had paid the remainder of all outstanding costs, but still did not pay the $10,000 contractor's fee. At this point negotiations ceased and the contractor filed its lien against the property, claiming $18,692 due. This amount was based on the original "15%" fee agreement.

At trial, the owner did not dispute the claim of the contractor that the parties originally had an oral agreement providing for a "15%" contractor's fee. The owner did not testify and did not dispute the reasonableness of the charges made by the contractor. The contractor's witnesses testified to several changes and additions to the original plans that the owner and her architect requested after the start of construction. The evidence also showed that specific accounting was made to the owner for the cost of all labor and materials that went into the work. The owner, however, presented three defenses. The first was that the contractor's claim of lien had been filed too late to comply with I.C. § 45-507. The second defense was that the contractor was bound by the compromise agreement which provided only for a flat $10,000 fee. The owner argued that when the contractor submitted an itemized statement of costs plus the $10,000 fee, there was an "account stated" which she accepted, foreclosing any later claim based on the original agreement. She finally urged that, even if the lien had been filed in time, it was invalid because the amount claimed was excessive. At trial the owner also sought to show she was entitled to substantial offsets against the contractor's fee because of unsatisfactory work by the contractor.

The trial judge found the numerous changes requested by the owner and the architect accounted for the cost overrun on the project. He found that the contractor had fully, or substantially, completed the work, including the items on the two punch lists. The judge found the parties originally had agreed to the "15%" fee arrangement. He awarded judgment to the contractor for the amount of the claimed lien, $18,692, less an offset of $600 allowed as the cost for sandblasting and refinishing a concrete wall. The court also awarded the contractor $4,023.74 as costs of suit, including attorney fees, under I.C. § 45-513.

Now, on appeal, the owner contends that the parties never had a "15%" fee agreement. She asserts that no agreement was reached concerning the fee until the contractor offered to take $10,000 as its fee, and she accepted the offer. This contention was not raised and considered below, and will not be considered for the first time on appeal. See, e.g., State ex rel. Evans v. Click, 102 Idaho 443, 631 P.2d 614 (1981).

We turn now to the negotiations which followed the original agreement. Notwithstanding her contention on appeal that the $10,000 agreement represented an "account stated," the owner alleged in her counterclaim that the "parties entered into an [sic] Conciliation and Satisfaction Agreement" which she also referred to as "the revised Agreement of November 28 and 30, 1978." The trial court determined that the parties, in trying to resolve the dispute in the summer of 1978, attempted to achieve an "accord and satisfaction."

We concur with the trial court's characterization of the negotiations. In Fairchild v. Mathews, 91 Idaho 1, 4, 415 P.2d 43, 46 (1966), the Idaho Supreme Court defined accord and satisfaction:

Accord and satisfaction is a method of discharging a contract or cause of action, [w]hereby the parties agree to give and accept something in settlement of the claim or demand of the one against the other, and perform such agreement, the "accord" being the agreement and the "satisfaction" its execution or performance.

See also Nordling v. Whelchel Mines Co., 90 Idaho 213, 409 P.2d 398 (1965).

In this case, the owner's agreement to accept completion of the items on the second punch list, and the contractor's agreement to do that work for immediate payment of the $10,000 constituted the "accord." The completion of those items and the payment of the $10,000 would have supplied the "satisfaction." There was substantial and competent, though disputed, evidence at trial showing the contractor did satisfactorily...