BAILEY-ALLEN COMPANY INC. V. KURZET 876 P.2d 421 (1994) CASE BRIEF

BAILEY-ALLEN COMPANY INC. V. KURZET

876 P.2d 421 (1994)

NATURE OF THE CASE: Kurzet (D) appealed an order that entered judgment in favor of Bailey-Allen (P) in P's breach of contract action, and that denied D recovery of attorney's fees under the mechanics' lien statute and the bond statute.

FACTS: In July 1990, D and P entered into a contract for the construction of the D's home. The contract clearly stated that D is concerned about the quality of workmanship and materials and that this concern stems from prior experience with a local contractor and ownership of several condominiums at the Pinnacle development. The contract clearly stated that slovenly workmanship and/or substandard materials will neither be accepted nor paid for by D. The contract clearly stated that D considers that the fees he pays to P are specifically for P's expertise in selecting and supervising workers so as to avoid unacceptable and substandard workmanship and/or the use of substandard quality materials. The agreement was silent regarding remedies in the event of a breach by either party. Ten days after the contract was signed, D requested the contractually required certificate of insurance, but never received it. P later admitted that its policy had expired nearly two years earlier. In October 1990, D terminated P's services, based on its failure to provide proof of insurance and D's dissatisfaction with P's attention to the project. At the time of the termination, the work under the contract was approximately 10% complete, with the house and framed and the roof partially finished. P sued D alleging breach of contract, mechanics' lien, unjust enrichment, and failure to obtain a construction bond. The trial court granted the D's motion for partial summary judgment on the latter three causes of action, reserving the breach of contract claim for trial to the bench. At the trial on the breach of contract claim, the court reinstated sua sponte the unjust enrichment claim and granted a continuance for the parties to present their evidence thereupon. The court determined 'that the subject contract was ambiguous and incomplete as drafted and that the Court has a responsibility to add to it.' The court further concluded D's failure to provide evidence of insurance and its lack of supervision of the project were material breaches of the contract that justified the termination. The court determined the D had not breached the contract. The court ruled that P was entitled to recover under its unjust enrichment theory and went on to consider the amount of damages due, concluding that 'the most logical basis [was] the percentage of D's residence that was completed during the period P was on the job.' Accordingly, the court awarded P $5,500 'in quantum meruit/unjust enrichment, based on the contract between plaintiff and defendants, $10,000 representing 1/10 of the contract price for services in completing 1/10 of the construction, and $5,500 for services involving negotiations for the purchase of lumber.' P was held liable to the D for $1800 in costs for repairing P's faulty construction of a retaining wall, for $2000 for repairing its faulty construction of concrete steps, and for $559 in costs for unnecessary materials. The court entered judgment for P in the amount of $11,141. The court awarded P prejudgment interest and post judgment interest from and after April 17, 1992, the date the trial court granted P's motion to compel findings of fact and conclusions of law. The court dismissed D's' counterclaims and denied their claim for attorney fees and costs associated with their successful motion for partial summary judgment on the mechanics' lien and construction bond claims. This appeal resulted. D claims the trial court erred in: (1) awarding P damages under the contract or in quantum meruit; (2) awarding prejudgment interest; (3) awarding post judgment interest from the date it granted P's motion to compel findings of facts and conclusions of law, rather than from the date the judgment was entered; and (4) denying their claim for attorney fees and costs on their successful partial summary judgment motion under the mechanics' lien and construction bond statutes.

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