This opinion will be unpublished and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
C2-01-1701
The Peck Companies, LLC,
Respondent,
vs.
Richfield Bus Company, et al.,
Appellants.
Filed May 21, 2002
Affirmed in part, reversed in part, and remanded
Foley, Judge*
Hennepin County District Court
File No. LN9912792
Timothy J. Grande, Joanne H. Turner, Mackall, Crounse & Moore, PLC, 1400 AT&T Tower, 901 Marquette Avenue, Minneapolis, MN 55402 (for respondent)
Daniel J. Moulton, James M. Hansen, 976 14th Avenue SW, Rochester, MN 55902 (for appellants)
Considered and decided by Hanson, Presiding Judge, Klaphake, Judge, and Foley, Judge.
FOLEY, Judge
Respondent brought this action to foreclose on a mechanic’s lien on appellants’ property to recover money owed for permanent improvements respondent had made. Appellants claim that the evidence does not support the district court’s findings regarding the cost of the project and challenge the award of attorney fees. Because the record supports the district court’s findings that respondent incurred unexpected expenses in making the improvements, and because the court did not abuse its discretion in awarding respondent attorney fees, we affirm. Because respondent is entitled to interest on the unpaid balance pursuant to Minn. Stat. § 514.135 (2000), we reverse and remand for proceedings in accordance with this opinion.
FACTS
Respondent The Peck Companies, LLC, retrofits underground fuel storage tanks by lining them with rubber resin to bring them into compliance with federal environmental standards. Appellants George and Marilyn Holter, owners of Richfield Bus Co., wished to bring two underground fuel storage tanks located at their Bloomington facility into compliance with federal standards. In late 1996 or early 1997, George Holter contacted Matt Peck requesting an estimate to update the tanks. Peck estimated that the retrofitting would cost $43,000 and stated that his company was ready to begin work immediately. The project did not begin at that time due to appellants’ lack of funds.
In the summer of 1998, Holter contacted respondent and stated he was ready to have the tanks retrofitted. Respondent explained that its schedule was full and that it would not be able to complete the work at that time. After Holter assured respondent that the money was available for the project, respondent agreed to take the job.
Respondent began the project in late February 1999 and finished during the first week of March. The project required more work than respondent initially estimated. Retrofitting an underground fuel tank requires digging down to the tank and cutting a manhole in the tank. When respondent dug down to each tank, it discovered that vent lines obstructed the area in which it intended to place the manhole. Respondent was unable to account for this problem in the original estimate because it was not possible to ascertain the placement of the underground vent lines. Consequently, respondent had to remove and replace the vent lines, thereby resulting in additional time and materials costs.
Holter also had specific requests that increased the cost of the project. Retrofitting underground fuel tanks requires pumping each tank dry. Normally, when working on multiple tanks at once, respondent uses two pumps, one for each tank. Holter wanted each pump to be able to pump from both tanks. The new pipe arrangement required additional piping and other materials. Holter also purchased an additional pump from respondent.
When respondent estimated the cost of retrofitting, it assumed that it would work on both tanks simultaneously; Holter insisted the tanks be worked on separately. Because respondent was required to work on each tank separately, the project took longer than anticipated. Project costs also increased because respondent had to move its equipment to Bloomington, Minnesota, from Sioux Falls, South Dakota. The initial estimate did not include this cost because at the time of the original estimate, respondent was working on a project in Bloomington.
Respondent sent Holter an invoice for $48,869.99, the total cost of the completed project, shortly after its completion. Holter stated that he did not have the money to pay respondent, but agreed to meet to discuss the situation. At a meeting 30 to 45 days after completion of the project, Holter gave respondent two postdated checks totaling $24,000, as partial payment and told respondent that he would pay the rest in two weeks. Holter failed to pay the remaining balance. Respondent sent a demand letter on April 26, 1999, requesting payment in the amount of $25,372.84, representing the balance of $24,869.99 and a finance charge in the amount of $502.85 (1-1/2% of the unpaid balance per month). The letter stated that unless the amount was paid in full by May 3, 1999, respondent would file a lien on appellants’ property. No payment was received; respondent filed a mechanic’s lien on May 7, 1999.
Respondent brought an action to foreclose the lien. During a bench trial, Holter claimed that he should receive an offset against the amount of the unpaid balance. Holter explained that in 1996 respondent demolished a gas station in Sioux Falls. Part of the demolition required removing and disposing of a canopy located above the fuel tanks. Respondent told Holter that he could have the canopy to cover his bus-fueling islands, but that he would have to move it to Bloomington himself. Holter never made arrangements to move the canopy, and it is still available for him to move. Holter claimed that he should receive an offset in the unpaid balance for the retrofitting and for the value of the canopy.
The district court held that appellants were not entitled to an offset for the value of the canopy and ruled that they breached the agreement with respondent. The court ordered the Hennepin County Sheriff to sell the property and ruled that personal judgments should be docketed against appellants in the amount of $41,429.26.[1] This amount consisted of the unpaid balance as well as respondent’s $16,659.27 in attorney fees. Appellants moved for amended findings of fact, claiming that the evidence was not sufficient to support the district court’s factual findings. The district court denied the motion, and appellants challenge the initial judgment.
D E C I S I O N
I. District Court’s Findings of Fact
Appellants did not move for a new trial. In the absence of a motion for a new trial, the sole issue on appeal is “whether the evidence sustains the findings of fact and whether such findings sustain the conclusions of law and the judgment.” Stall v. First Nat’l Bank of Buhl, 375 N.W.2d 841, 845 (Minn. App. 1985) (quotation omitted). A district court’s findings of fact are entitled to great deference on appeal and will not be set aside unless they are clearly erroneous. Fletcher v. St. Paul Pioneer Press, 589 N.W.2d 96, 101 (Minn. 1999). “Findings of fact are clearly erroneous only if the reviewing court is left with the definite and firm conviction that a mistake has been made.” Id (quotation omitted). “If there is reasonable evidence to support the district court’s findings, we will not disturb them.” Rogers v. Moore, 603 N.W.2d 650, 656 (Minn. 1999).
A. Alleged Agreement to Perform Work on “at-cost” Basis
Appellants argue that respondent agreed to perform the work on an “at-cost” basis, with no profit or overhead. The district court found that respondent made no such agreement, and the record supports this. Peck testified that he did not agree to perform the work on an “at-cost” basis and that Holter did not object to the charge for overhead and profit. Because it is the province of the district court to judge the credibility of witnesses, its finding that respondent did not agree to provide the work “at-cost” is warranted. Minn. R. Civ. P. 52.01.
B. Increased Labor Costs
Appellants contend that the record does not support the district court’s implicit finding that the finished project resulted in higher labor costs than estimated. Although the court made no specific finding stating that labor costs increased, the record supports respondent’s position that they did. The estimate provided for 50 hours of labor, but respondent provided 55.02 hours because Holter requested that respondent rearrange the pipes between the tanks. Appellants assert that respondent contradicted himself at trial regarding whether labor costs increased, but the district court is the exclusive judge of witness credibility, and the record supports its conclusion that labor costs were higher than expected.
C. Increased Material Costs
Appellants argue that respondent’s claim that the cost of materials increased between 1996 and 1999 is false. Respondent testified that the cost of materials increased during these years because the federal government became increasingly stringent about tank lining materials. Respondent points to the record to support its claim of increased material costs. Because Holter requested additional work, respondent obtained six pipe couplings instead of four. By 1999, the cost of a control unit increased by $200. Materials also cost more than usual because respondent had to order them in small quantities specifically for appellants’ project. The record supports the district court’s implicit finding that a portion of the difference between the estimate and the final cost was due to increased material costs.
D. Cause of Delay
Appellants argue that the district court’s implicit finding that appellants, not respondent, delayed the project does not have support in the record. Although the district court did not make a specific finding as to delay, respondent testified that it was ready to begin work when it provided the cost estimate in late 1996 or early 1997, but that Holter wished to delay the work due to insufficient funds. The delay was attributable to appellants rather than respondent.
E. Cost Estimate
Appellants argue that the district court should not have accepted respondent’s testimony that the estimate it offered in late 1996 or early 1997 was an estimate rather than a bid. Appellants claim that respondent’s testimony was inadmissible parol evidence because the document was not ambiguous.
The parol evidence question is irrelevant because the document did not represent a contract. Even if the estimate was indeed an offer, Holter did not accept it because he lacked the funds to have the work performed. Furthermore, appellants’ operations manager testified that appellants never saw the estimate in writing. Parol evidence is admissible to show the nonexistence of a contract. Hamilton v. Boyce, 234 Minn. 290, 292, 48 N.W.2d 172, 173-74 (1951). Therefore, the district court did not err in accepting respondent’s testimony that the estimate was not a bid.
F. Conflicting Testimony Regarding Cost
Appellants presented Robert Miller of Rochester Petroleum Equipment to provide an estimate of the reasonable cost for retrofitting appellants’ fuel tanks. Miller testified that a reasonable charge for respondent’s materials and services would be $34,515.41. Appellants charge it was error for the district court to adopt respondent’s bill of $48,869.99, instead of Miller’s estimate. This contention is without merit because a number of differences exist between how Miller would have performed the work and how respondent performed the work. Miller’s estimate represented what he would have charged on December 20, 2000, the date he testified, rather than what he would have charged in 1999, when respondent actually performed the work. Additionally, Miller’s estimate assumes that the tanks were retrofitted simultaneously, whereas Holter requested that respondent retrofit the tanks in succession. Therefore, the district court’s discounting of Miller’s estimate was not in error.
G. Canopy “Offset”
Appellants argue that they are entitled to a $20,000 offset of the unpaid balance for the value of the gas station canopy. The district court correctly found this contention meritless because, despite making the initial arrangements for transportation of the canopy, Holter never executed them due to lack of funds. Responsibility for transporting the canopy belonged to Holter and does not form the basis for any offset.
II. Award of Attorney Fees
We will not reverse an award of attorney fees absent an abuse of discretion. Becker v. Alloy Hardfacing & Eng’g Co., 401 N.W.2d 655, 661 (Minn. 1987). Appellants allege that the district court abused its discretion in awarding respondent attorney fees, claiming that the award of $16,659.27 is disproportionate to the amount of the lien. Appellants ask for a reduction in attorney fees as a matter of policy. In Asp v. O’Brien, 277 N.W.2d 382 (Minn. 1979), the court reduced an award of attorney fees, noting that such awards in mechanic’s lien foreclosure cases should be made cautiously so as not to discourage property owners from challenging defective workmanship. Id. at 385. This policy concern does not apply to this case because no issues of defective workmanship are present. The award of attorney fees is not an abuse of discretion.
III. Interest on Unpaid Balance
Although the agreement between the parties did not provide for interest, respondent is entitled to such pursuant to the applicable Minnesota statute, which states that “[e]xcept as otherwise provided by contract, interest awarded on mechanics’ lien claims shall be calculated at the legal rate * * * .” Minn. Stat. § 514.135 (2000) (emphasis added). The statute refers to “claims,” indicating that the right to receive interest is a result of the litigation. Therefore, we remand for the award of interest in accordance with this opinion. See Minn. Stat. § 549.09 (2000) (allowing for awards of interest on verdicts, awards, and judgment).
Affirmed in part, reversed in part, and remanded.