This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
STATE OF MINNESOTA
IN COURT OF APPEALS
LeMaster Construction, Inc.,
John Doe and Mary Roe,
whose names are unknown to the plaintiff,
Filed June 5, 2007
Ramsey County District Court
File No. C6-04-3199
Mark E. Fuller, Mark
Fuller & Associates, Ltd.,
Jennifer M. Macaulay, Macaulay Law Offices,
Considered and decided by Ross, Presiding Judge; Kalitowski, Judge; and Halbrooks, Judge.
In this consolidated appeal from the district court’s judgment in a mechanic’s-lien foreclosure matter, appellant Seamus Mahoney argues that the district court erred by disregarding the statutory mechanic’s-lien provisions and by failing to strictly construe the prelien-notice requirements in determining damages. As a result of these errors, appellant contends that the attorney-fees award must be vacated. Respondent LeMaster Construction, Inc. argues that the district court erred in its determination that there was no contract between the parties, instead awarding damages on a quantum meruit basis, and that the district court abused its discretion by awarding only a portion of the attorney fees it requested. We affirm.
Following a fire at his home on September 12, 2003, appellant Mahoney was referred by his insurance agent to respondent LeMaster Construction, Inc., a company that specializes in fire and water remediation. Verdean LeMaster, the company owner, and Mahoney met that night, and LeMaster secured the home by boarding it up. The parties dispute whether LeMaster gave Mahoney a copy of the company’s standard remediation agreement on September 12, 2003. But it is undisputed that Mahoney signed the agreement on September 26, 2003. The agreement provided, in part, that
Contractor is hereby authorized to complete all of the work, including, but not limited to, restorations, cleaning, repairing, removal, storage, testing, damage appraisal and return of the inventories personal property (“Contents”) and all repairs to the building (“Structure”) relating to the insurance claim for fire damage to contents and structure (“Loss”) at the following location . . . (“Property”). Contractor shall repair the property for amount to be determined later between adjuster and contractor. Owner responsible for deductible and upgrades.
The agreement also contained the mechanics’ prelien notice required by Minn. Stat. § 514.011 (2006) and provided for liquidated damages in the event of breach by the homeowner; 8% per annum interest on any unpaid balance; and costs, disbursements, and attorney fees in the event of litigation. Removal of Mahoney’s personal property from the home commenced on September 16, 2003, and demolition started on October 7, 2003. LeMaster and Mahoney’s insurance adjuster communicated about the scope of the work to be paid by the insurer for the remediation. On October 23, 2003, the adjuster met with Mahoney and LeMaster to review the scope of the project, the total cost of which was $58,256.39. It was also agreed that LeMaster would be paid for removing, cleaning, and storing Mahoney’s personal property.
At some point after LeMaster had begun its work, Mahoney orally requested some additions or upgrades to the work that had been approved by his insurance company. On November 5, 2003, and November 11, 2003, LeMaster faxed change orders to Mahoney that reflected the proposed changes. Signed orders were never returned. As a result, on approximately November 19, 2003, LeMaster ceased work on the project. By that time, LeMaster claims that it had completed $15,060.14 of work on the restoration and $7,466.67 of work related to change orders and incurred $16,509 to remove, clean, and store Mahoney’s personal property. While Mahoney’s insurer ultimately paid him $58,256.39 for structural repairs and $16,509 for personal-property treatment, Mahoney has not paid anything to LeMaster.
LeMaster initiated a mechanics’-lien foreclosure action by leaving a mechanics’-lien statement at Mahoney’s home with his girlfriend. Pursuant to the terms of the agreement that Mahoney signed on September 26, 2003, LeMaster claimed total damages of $85,307.88. Mahoney testified that he received the statement later that day. LeMaster subsequently filed a summons and complaint, seeking damages for mechanics’-lien foreclosure, breach of contract, and unjust enrichment.
The matter was tried to the district court. The district court determined that there was no valid contract because, although the amount that the insurance company agreed to pay Mahoney was established on October 23, 2003, the parties had not agreed to the essential terms of the work that Mahoney wanted LeMaster to complete and the price of that work versus what Mahoney would do himself. But the district court found that because LeMaster had completed work that was of value to Mahoney, LeMaster was entitled to quantum meruit damages. The district court, therefore, awarded LeMaster a total of $22,526.81—$15,060.14 for the completed demolition and restoration work and $7,466.67 for work done pursuant to change orders. In response to Mahoney’s challenge to the validity of the statutory prelien notice, the district court concluded that the mechanics’ lien was perfected for the structural work done by LeMaster after September 16, 2003. With respect to LeMaster’s claim for expenses related to Mahoney’s personal property, the district court determined that there was no perfected, separate lien and no contractual basis for recovery, but awarded $9,649.99 in quantum meruit damages to LeMaster for “contents processing” up until December 30, 2003. Finding no contractual basis to award attorney fees, the district court awarded $10,000 to LeMaster as reasonable attorney fees pursuant to the mechanics’-lien statute. Mahoney’s counterclaims for conversion, substandard work, and attorney fees were denied. Posttrial, the parties stipulated to some additional mechanics’-lien language in the district court’s order. But all other posttrial motions were denied by the district court. This consolidated appeal follows.
We first examine
whether the district court erred in its determination that there was no
contract between the parties. Whether a
contract exists is generally an issue for the fact-finder that will be
overturned only if “manifestly contrary to the evidence.” Morrisette
v. Harrison Int’l Corp., 486 N.W.2d 424, 427 (
formation requires mutual assent. Field-Martin Co. v. Fruen Milling Co.,
law does not favor the destruction of contracts because of indefiniteness, and
if the terms can be reasonably ascertained in a manner prescribed in the
writing, the contract will be enforced.”
King v. Dalton Motors, Inc., 260
Here, the district court determined that the essential terms of the contract were never fully settled. And, in fact, the document that Mahoney signed on September 26 stated that “the scope of the work shall be as authorized by [Mahoney’s] insurance company and agreed to by [Mahoney] and [LeMaster], all as more specifically set forth in attached Exhibit ‘A’.” But “Exhibit ‘A’” was not attached. Although the parties had some agreement on the general nature and scope of the work, the specific terms were never committed to writing. The insurance adjuster testified that Mahoney and LeMaster were still discussing the scope of the work to be done when he left the October 23, 2003 meeting. At that time, Mahoney was considering new work on his basement and less work upstairs. As the district court found, this gap in the agreement left terms open for future negotiation. Thus, we agree that a contract was never formed.
because the district court found that Mahoney received a benefit from
LeMaster’s work, the district court awarded LeMaster quantum meruit damages of
$15,060.14 for demolition and restoration and $7,466.67 for work done pursuant
to change orders. Quantum meruit is
equitable relief that is “within the sound discretion of the [district] court.” Nadeau v.
argues that a valid mechanics’ lien was never perfected because of faulty
prelien notice and improper service. “[M]echanics’
liens exist only by virtue of the statute creating them.” Dolder v.
law provides that “[w]hoever . . . contributes to the improvement of real
estate by performing labor, or furnishing skill, material or machinery . . .
shall have a lien upon the improvement, and upon the land on which it is
situated or to which it may be removed.”
Every person who enters into a contract with the owner for the improvement of real property and who has contracted or will contract with any subcontractors or material suppliers to provide labor, skill or materials for the improvement shall include in any written contract with the owner the notice required in this subdivision and shall provide the owner with a copy of the written contract. If no written contract for the improvement is entered into, the notice must be prepared separately and delivered personally or by certified mail to the owner or the owner’s authorized agent within ten days after the work of improvement is agreed upon.
Minn. Stat. § 514.011, subd. 1
(2006). The notice must use the statutory
Here, the district court determined that because there was no contract, a separate prelien notice was required under Minn. Stat. § 514.011 (2006). In its determination of the date that the “work of improvement” was agreed upon, the district court found that there was an oral agreement between the parties before September 15, 2003, authorizing LeMaster to board up the house. But because there was no separately prepared prelien notice in an acceptable form given to Mahoney until he received and signed LeMaster’s agreement on September 26, 2003, the district court found that only LeMaster’s work on and after September 16, 2003, was covered by the lien. Because the district court’s determination that the prelien notice requirement was met is consistent with the language of Minn. Stat. § 514.011, we conclude that there is no error.
an alternative argument, Mahoney asserts that even if the prelien notice was
valid, the lien statement fails because LeMaster overstated its claim and
failed to properly serve it upon him. A
mechanics’ lien is effective only after the lienholder properly serves notice
of the lien’s filing to the landowner within “120 days after doing the last of
the work, or furnishing the last item of skill, material, or machinery,” by providing
“a copy of the statement . . . personally or by certified
mail on the owner or the owner’s authorized agent or the person who entered
into the contract with the contractor.”
Minn. Stat. § 514.08, subd. 1 (2006). A lienholder who has filed a lien statement
and served a copy by the above procedure may sue to foreclose the lien.
purpose of service of process is to give notice ‘reasonably calculated, under
all circumstances, to apprise interested parties of the pendency of the
action.’” Smith v. Flotterud, 716
N.W.2d 378, 382 (Minn. App. 2006) (quoting Mullane v. Cent. Hanover Bank
& Trust Co., 339
rules of civil procedure apply to lien actions unless the mechanics’ lien
statutes are inconsistent or in conflict with the rules of civil
procedure.” Ryan Contracting, Inc. v.
JAG Invs., Inc., 634 N.W.2d 176, 186 (
supreme court has held that Minn. R. Civ. P. 4.03 governing personal service
applies to service of a summons for a mechanics’-lien action. Ryan Contracting, 634 N.W.2d at
186. Because the statute did not
“specify how each step of the action must proceed . . . the
rules of civil procedure govern.”
Here, LeMaster’s process server served the lien statement at Mahoney’s “usual place of abode,” “by leaving a copy” of the lien statement with Mahoney’s girlfriend, a “person of suitable age and discretion then residing therein.” Mahoney also acknowledged that his girlfriend gave it to him later that same day.
The district court found that Mahoney “admitted to receiving the mechanics’ lien statement,” and therefore found that personal service satisfied the mechanics’-lien statute. Because service to Mahoney substantially complied with both the mechanics’-lien statute and Minn. R. Civ. P. 4.03, the district court did not err in its determination that service was proper.
also asserts that the lien was improper because it overstated LeMaster’s
legitimate claim. A mechanics’ lien may
not be perfected “for a greater amount than the sum claimed in the lien
statement, nor for any amount, if it be made to appear that the claimant has
knowingly demanded in the statement more than is justly due.”
LeMaster’s lien claim was based on the provisions contained in the signed agreement. The district court’s later determination that the agreement was not a binding contract, while dispositive of other issues, is not a basis to find LeMaster’s conduct to have been in bad faith. To the contrary, the district court stated that there was no evidence of fraud or bad faith on LeMaster’s part. We agree.
argues that the district court abused its discretion by not awarding the full
amount of attorney fees it requested. “On
review, this court will not reverse a [district] court’s award or denial of
attorney fees absent an abuse of discretion.”
Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 661 (
a mechanics’-lien foreclosure action, a prevailing lienholder is entitled to
“costs and disbursements to be fixed by the court.”
the district court granted LeMaster $10,000 of its requested $23,093.90 in
fees, costs, and disbursements. Although
the district court’s decision did not discuss the application of the Jadwin
factors, the discretionary grant of attorney fees does not require use of the
factors. See Klingelhutz v.