This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C9-01-920

 

Turner Excavating Company, Inc.,
Appellant,

vs.

GWX Limited Partnership, et al.,
Respondents,

Norwest Bank Minnesota, NA,
Respondent,

City of Oakdale,
Observer.

 

Filed January 2, 2002

Affirmed

Mulally, Judge*

 

Washington County District Court

File No. C9002765

 

David S. Holman, Holman Law Office, Suite 225, 201 Travelers Trail, Burnsville, MN 55337 (for appellant)

 

Arthur D. Walsh, A.D. Walsh & Associates, Suite 190, 6053 Hudson Road, St. Paul, MN 55125; and

 

John F. Bannigan, Jr., Kelly and Fawcett, PA, 2350 Piper Jaffray Tower, 444 Cedar Street, St. Paul, MN 55101 (for respondents)

 

Considered and decided by Shumaker, Presiding Judge, Halbrooks, Judge, and Mulally, Judge.

U N P U B L I S H E D   O P I N I O N

MULALLY, Judge

            In this mechanics-lien proceeding, appellant lienor challenges the district court’s grant of summary judgment for respondent, alleging that the district court erred in finding the lien was untimely and erred in not finding issues of material fact.  Because we conclude that the district court did not err, we affirm.

FACTS

            On May 22, 2000, appellant Turner Excavating Company, Inc. (Turner), commenced an action claiming $150,049 (plus retainage of $15,000, since paid) for what it contends was “extra work” on a 70-acre commercial development. 

            GWX is the developer of a 70-acre parcel of property in Oakdale.  The site is located southeast of I-694 and 10th Street.  In order to develop this property, GWX entered into a written contract with Turner for excavation.  The contract is a standard, AIA approved, fixed-sum contract.  The contract fixed Turner’s compensation for the work at $1,180,000.        

            Incorporated into the contract are the general conditions.  Article 7 of the general conditions provides for changes in the work to be accomplished by written requests and change orders.  This provision essentially requires that GWX, Turner, and Clark Engineering (the architect of the project) agree on the changes.  Article 4 of the general conditions requires the contractor to give a written request before work begins.  The contract also includes a provision that the contract price and scope of the work includes exporting excess material and importing sand to fill as necessary.

            Turner began work on the project in July 1998.  During the project, Turner submitted approximately 30 written requests for changes.  These requests were eventually incorporated into three change orders, numbered one, two, and three. 

            In the summer of 1998, Turner began peat correction on the project.  The amount of the correction exceeded the quantity specified in the contract.  Turner superintendent Bill Knutson stated that on at least two occasions GWX’s engineer, Steven Olson, instructed Knutson to dig deeper.  After completion of this excavation, in a letter dated March 15, 1999, Olson stated that the “depth to competent sand was deeper than even boring B-5 in the excavation further to the north.”       

            The parties disagree on the date the peat correction was complete.  Turner asserts that the project was not complete until October, 1999.  The district court found evidence that the job was substantially complete as of November 30, 1998.  Invoice #29044, dated November 30, 1998, submitted by Turner, indicates that the only items left to complete on November 30 were the remaining wetland mitigation and work under change order number two.  Turner asserts that two items establish a later completion date: (1) a “punch list” letter from the City of Oakdale dated December 3, 1999, and (2) a letter from GWX’s counsel, dated February 24, 2000, stating that “we are well within 15 days of completion of the contract.”      

            John Turner asserts in his affidavit that “[a]fter the peat correction was complete” he requested excavation measurements from Olson in preparation of a change-order claim.  Eventually, Turner sent a letter requesting an additional $150,049 for the peat correction.  Clark Engineering advised GWX that the soil correction was “incidental to” or part of the contract. 

            The project construction manager, Jon Gumbrill, denied Turner’s request.  Gumbrill also stated that excavation review suggests a three-foot difference from the original projection -- which differs from the six and one-half foot difference Turner used in its request.  Additionally, Gumbrill stated that they “were surprised to receive a request for a change relating to this issue some 5 months after the occurrence of the condition without any prior notice.” 

            Turner replied to the Gumbrill letter requesting a second review.  A second review was granted and Gumbrill; Thomas Cesare, a project engineer from Clark Engineering; and William Beard, a co-managing partner of GWX, met with Turner.  A three-page memorandum of the issues was prepared and distributed by Cesare.  In turn, Cesare issued a four-page analysis again denying the requested adjustment.  His reasons were: (1) the inability to verify depth of excavation due to discrepancies in records; (2) the work was incidental to the contract; (3) Turner obtained no owner authorization to proceed with the work; and (4) Turner did not submit its change request until six months after it had commenced the alleged additional work.  Cesare’s analysis did not explicitly state that the decision was final subject to mediation or arbitration.  Nor did Turner demand mediation or arbitration.

            Over the course of its work for GWX, Turner received progress payments that included five checks: 

            (1)       Check no. 014563     - $445,500     - July 29, 1998

                        (2)       Check no. 018995     - $216,000     - Oct. 20, 1998

            (3)       Check no. 031504     - $320,400     - Dec. 17, 1998

                        (4)       Check no. 035801     - $97,581       - Feb. 24, 1999

                        (5)       Check no. 043768     - $59,971       - June 29, 1999

 

Each check states that “[e]ndorsement constitutes acknowledgement of payment in full to [day of pay request] and waives all lien rights except retainage[.]”  Each check was endorsed by Turner.  Additionally, Turner’s agent signed documents entitled “Receipt and Waiver of Mechanics’ Lien Rights.”  These appear to be receipts for the progress payments.  This document states that “if payment is not in full * * * [contractor must] date, so state, SHOW UNPAID BALANCE, and strike out last three lines.”  While these directions were not explicitly followed, the term “full” payment was stricken and the term “partial” was written above it.

D E C I S I O N

            On appeal from summary judgment, we ask whether any genuine issues of material fact exist and whether the district court erred in applying the law.  Cummings v. Koehnen, 568 N.W.2d 418, 420 (Minn. 1997).  This court views evidence in the light most favorable to the non-moving party.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1996).

I.

 

A mechanic’s lien arises automatically upon the provision of labor or materials.  Minn. Stat. § 514.01 (2000).  The lien attaches when the lien claimant first furnishes the labor or materials at the beginning of the project.  Minn. Stat. § 514.05, subd. 1 (2000).  The lien, however, ceases at the end of 120 days after doing the last of the work, or furnishing the last item of skill, material, or machinery, unless a statement of the claim is filed of record.  Minn. Stat. § 514.08 (2000).  Although mechanics lien laws are construed liberally after the lien has been created, they are strictly construed as to the non-notice aspects of the creation of a lien.  See Minn. Stat. § 514.011, subd. 2 (b) (2000) (absent prejudice, party’s failure to strictly comply with statutory notice requirements does not require forfeiture of a lien); Dolder v. Griffin, 323 N.W.2d 773, 780 (Minn. 1982).  The timing requirement of § 514.08 is strictly construed so that the failure to file the lien statement within 120 days after completion of the work defeats the lien.  David-Thomas Cos. v. Voss, 517 N.W.2d 341, 343 (Minn. App. 1994).

            Turner argues that the district court erred in granting summary judgment against Turner because there existed issues of material fact as to (a) whether Turner’s mechanic’s lien was barred by the statute of limitations and (b) whether Turner’s right to mechanic’s lien was waived.

            Turner argues that the district court erred in finding that Turner’s mechanic’s-lien filing was untimely under Minn. Stat. § 514.08.  The statute states that the “lien ceases at the end of 120 days after doing the last of the work, or furnishing the last item of skill, material, or machinery[.]”  Minn. Stat. § 514.08.

If the work being done is one continuous work constituting one job, though there are several agreements for the furnishing of different materials, each being a separate contract for some part of the general work, a lien claim filed within 120 days after the last item preserves a lien for all.

 

Enviro-Fab, Inc. v. Blandin Paper Co., 349 N.W.2d 842, 846 (Minn. App. 1984) (quotation omitted), review denied  (Minn. Sept. 12, 1984).

            Turner argues that the last item of work was performed within 120 days of the January 28, 2000 mechanic’s-lien filing.  Other than Turner’s own affidavits, Turner provides a copy of the “punch list,” dated December 3, 1999, from the City of Oakdale to support a later completion date.  This “punch list,” under the heading “RE: FINALING OUT GATEWAY 3RD ADDITION PUBLIC IMPROVEMENTS,” states that “[s]od installed within right of way was not watered and as a result has died.  The sod will need to be replaced and watered for 30 days.”  The “punch list” from the city does not establish that the work was being done for the GWX contract.

            Additionally, Turner offers a letter from counsel for GWX stating that

[s]ince there is work on a punch list yet to be done, we are well within 15 days from completion of the contract.  We therefore invoke a section of the lien law and call upon you to provide an itemized explanation – under oath – as to the viable basis for your claimed mechanic’s lien * * * .

 

This letter was written in response to Turner’s mechanic’s lien asserting the later completion date under the punch list.  The letter states, when discussing notice, that it deals with “[Turner’s] claimed completion date.”  Under these circumstances, the statement is a request for an itemized explanation required by law under Turner’s claimed completion date and not a party admission.

            Turner’s claim that the grading, sodding, and seeding done in October 1999 was work on the GWX contract is also not supportable based on Turner’s own documents and statements:  First, according to Turner, the grading, sodding, and seeding along Helena Avenue and 9th Street was incorporated into the contract by change order one.  Second, according to Turner’s affidavits, the work in change order one was either completed or, at least, commenced before the change order was executed.  Third, according to Invoice 29044, all of the work referred to in change order one had been completed by November 30, 1998.  Finally, Turner was paid $18,814 for the work referred to in change order one by February 24, 1999.  Accordingly, the district court did not err in concluding that the mechanic’s lien was untimely because the claimed work had been completed by November 1998.

II.

            Before Turner can proceed with a claim for breach of contract, it must be able to establish that the parties had agreed to the extra work and to the extra expenses of that work.  The contract provided a mechanism for obtaining agreements for extra work, but Turner failed to provide the architect or project manager with the opportunity to inspect the site before the work was done and did not obtain the agreement of GWX and the architect for a change order.  Turner meets this dilemma by arguing that (1) GWX waived the written notice requirement by establishing inconsistent practices, (2) GWX is estopped from denying liability because its agent requested the extra work, and (3) the contract did not preclude the action when Turner did not seek arbitration within 30 days  after the denial of its claim.

1.         Written-Notice Requirement.

            Turner argues that the district court erred in not finding a genuine issue of material fact as to whether GWX waived the contractual provision requiring a written change order before proceeding with additional work.  Turner relies on Standard Constr. Co. for the proposition that when a practice is established that is inconsistent with the quoted provision of the contract, a waiver of the right to demand compliance with that provision results.  Standard Constr. Co. v. Nat’l Tea Co., 240 Minn. 422, 428-29, 62 N.W.2d 201, 205 (1953).  Additionally, Turner asserts that, in many instances, written change orders were not required before proceeding with additional work.  To support this disputed assertion, Turner relies on its own affidavits. 

The record establishes only that the written change orders were prepared and signed after the work was done.  It is reasonable to assume that Turner obtained oral  approval to do some or all of the work listed in the change orders, but this does not  establish a prima facie showing that GWX waived the contractual provisions requiring written change orders.  The non-moving party must do more than rest on averments.  DLH Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997).  Therefore, Turner has not established a genuine issue of material fact concerning the waiver of the contractual written-notice requirement.

2.         Estoppel of liability.

            Turner also argues that GWX was estopped from denying liability for extra work performed because Turner relied on an agent of GWX for the authority to perform the work.  “The general rule is that a principal is bound not only by the agent's actual authority but also by that which the principal has apparently delegated to him.”  McGee v. Breezy Point Estates,283 Minn. 10, 22, 166 N.W.2d 81, 89 (1969) (citation omitted). Turner supervisor Bill Knutson stated that on at least two occasions GWX’s engineer, Steven Olson, instructed Turner to dig deeper.  Turner rests on its own averments. 

            The contract incorporates the general provision 7.4.1, which states that “[t]he Architect will have authority to order minor changes in the Work not involving adjustment in the Contract Sum[.]”  The two instructions from GWX to “dig deeper,” without additional evidence establishing what was meant by the command, does not establish a delegated authority to perform $150,049 in additional work in this case.  

3.         Arbitration.

            Turner argues that the district court erred in finding the contract precluded this action when it did not seek arbitration within 30 days after the denial of its claim.  Turner argues that the literal language of general condition, subsection 4.4.6 requires that when the

written decision of the Architect states that (1) the decision is final but subject to mediation and arbitration and (2) a demand for arbitration of a Claim covered by such decision must be made within 30 days after the date on which the party making the demand receives the final written decision, then failure to demand arbitration * * * shall result in the architect’s decision becoming final and binding upon * * * the Contractor. 

 

In this case, the architect’s decision did not declare in writing that the decision was final or subject to mediation or arbitration.      

Interpretation of a contract is a question of law for the court.  Katzner v. Kelleher Constr., 535 N.W.2d 825, 828 (Minn. App. 1995) aff’d, 545 N.W.2d 378 (Minn. 1996).  “[A] phrase capable of several meanings is defined by the words with which the phrase is associated.”  Wayne v. MasterShield, Inc., 597 N.W.2d 917, 920 (Minn. App. 1999) (citation omitted) (discussing the doctrine of noscitur a sociis), review denied (Minn. Oct. 21, 1999).

            In this case, the bulk of the specific terms of the contract put Turner on notice that mediation and arbitration are required following the project architect’s final decision:  (1) subsection 4.4.5 states that “approval or rejection of a Claim by the Architect shall be final and binding on the parties but subject to mediation and arbitration”; (2) [subsection] 4.5.1 states that “[a]ny Claim arising out of or related to the Contract * * * shall * * * be subject to mediation as a condition precedent to arbitration * * * ”; and (3) [subsection] 4.6.1 states that “[a]ny claim arising out of or related to the Contract * * * shall * * * be subject to arbitration.”  Therefore, the mediation and arbitration process is a condition precedent to the commencement of litigation. 

III.

            Turner argues that the district court erred in granting summary judgment on the claim for unjust enrichment.

To establish an unjust enrichment claim it must be shown that a party has knowingly received something of value, not being entitled to the benefit, and under circumstances that would make it unjust to permit its retention.

 

Southtown Plumbing v. Har-Ned Lumber Co., 493 N.W.2d 137, 140 (Minn. App. 1992).  Turner cites Karon v. Kellogg, 195 Minn. 134, 261 N.W. 861 (1935), for the proposition that an unjust enrichment claim is allowed when a mechanic’s lien may be defeated.  This proposition misstates the case.  In Karon, the existence of a valid contract was challenged.  See Lundstrom Constr. Co. v. Dygert, 254 Minn. 224, 231, 94 N.W.2d 527, 532-33 (1954) (discussing Karon).  The existence of an express contract between the parties precludes recovery under the theories of quasi-contract, unjustenrichment, or quantum meruit.  Sharp v. Laubersheimer, 347 N.W.2d 268, 271 (Minn. 1984).  Here, Turner and GWX had a valid contract and the Minnesota statutes provide a remedy for breach of contract.  Therefore, no action for unjust enrichment can stand.

            Affirmed.



*   Retired judge of the district court, serving as judge of the Minnesota  Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.