This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C1-97-1084

Neil Baier, et al.,

Respondents,

vs.

Frank Ulwelling and Mary Ulwelling,

individually and d/b/a F&M Builders,

Appellants.

Filed March 17, 1998

Affirmed in part and reversed in part

Amundson, Judge

Stearns County District Court

File No. C6-95-3056

Kay N. Hunt, John M. Giblin, Lommen, Nelson, Cole & Stageberg, P.A., 1800 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondents)

Mark G. McKeon, Willenbring, Dahl, Wocken & Zimmermann, Red River at Main, P.O. Box 417, Cold Spring, MN 56320-0417 (for appellants)

Considered and decided by Crippen, Presiding Judge, Schumacher, Judge, and Amundson, Judge.

U N P U B L I S H E D O P I N I O N

AMUNDSON, Judge

Appellant contractors challenge the district court's award of damages to respondent homeowners. Appellants argue that the district court erred in some of its factual findings as well as in its application of the law. They also contend that the district court awarded a sum of money twice and that the district court abused its discretion in its award of attorney fees to the homeowners. We affirm in part and reverse in part to reduce the homeowners' award by $5,550.57 and to withdraw their award of costs and attorney fees.

FACTS

Respondents Neil and Betty Baier own a home in Stearns County. In July and August 1994, the Baiers asked appellants Frank and Mary Ulwelling, of F&M Builders, for an estimate of the cost of adding a room and other improvements to their house. Frank Ulwelling (Ulwelling) performs the construction work for the company; Mary Ulwelling conducts the bookkeeping duties. The parties negotiated a contract, itemizing the work. Ulwelling began work on the site in September 1994. There were some problems with Ulwelling's work that the Baiers noticed: they commented on irregularities in a walkway he constructed, and a foundation wall that was built by Ulwelling had to be torn down and rebuilt due to poor workmanship. The parties agreed that the work would cease over the holidays and resume in the spring. On December 21, 1994, Ulwelling and Neil Baier discussed both payment and remaining work. Ulwelling believed that he was owed approximately $8,000, while Baier wanted certain work done. The parties agreed to a $4,400 payment, but Baier then found a shingle wrapper identifying the shingles as 220-pound shingles. The Baiers had specified the use of 240-pound shingles and were angry with Ulwelling for what they viewed as his deception. On December 22, Ulwelling completed the specified work, but as a result of the Baiers' anger at Ulwelling regarding the shingles, they paid Ulwelling only $2,200. Ulwelling became upset and left the job site, threatening to put a lien on the Baiers' property. In January 1995, Betty Baier and Ulwelling had a telephone conversation in which he told her he would quit the project if he was paid an additional $6,723.05. The Baiers hired building inspector Jerry Schramel, who identified numerous problems with the construction in his February 6, 1995 report, many of which were code violations. When the Ulwellings read the report, Mary Ulwelling told the Baiers that her husband wanted to fix items on the report. On February 26, 1995, through an attorney, the Baiers told Ulwelling not to return to the job site.

On or about March 30, 1995, the Ulwellings filed a mechanic's lien on the Baiers' property. The Baiers hired another contractor, Sheldon Lang, to finish the job, asking him to itemize what he charged to finish or change items identified by Schramel's report; the total charged was $1,843. In June 1995, the Baiers sued Ulwelling for breach of contract. At trial, Betty Baier testified that the Baiers paid Lang $5,550.57 to "correct deficiencies." After a three-day trial, the district court awarded the Baiers $42,985.15. This appeal followed.

D E C I S I O N

I. Factual Findings

Findings of fact will not be set aside by a reviewing court unless clearly erroneous. Minn. R. Civ. P. 52.01. This court gives due regard to the district court's assessment of witnesses' credibility. Id. We will reverse the district court's findings of facts only if we have a "definite and firm conviction that a mistake has been made." Snesrud v. Instant Web, Inc., 484 N.W.2d 423, 428 (Minn. App. 1992), review denied (Minn. June 17, 1992).

a. Finding X, paragraph 1

The Ulwellings assert that other than its first sentence, paragraph 1 of finding X in the district court's amended order is not supported by the evidence. They dispute the district court's finding that there was a mutual agreement that Ulwelling would not complete the contract, arguing that the Baiers prevented Ulwelling from completing the project.

[E]very contract contains an implied condition that each party will not unjustifiably hinder the other from performing. In a contract for construction of a home, an owner who unreasonably fails to allow the contractor to complete the project excuses the contractor's performance and breaches the contract.

Zobel & Dahl Constr. v. Crotty, 356 N.W.2d 42, 45 (Minn. 1984).

However, an examination of the record does not substantiate the Ulwellings' claim that the Baiers unreasonably failed to allow Ulwelling to complete the project. At trial, Neil Baier testified that it was initially Ulwelling's idea for him to leave the job site and that it was only after seeing the inspection report that the Baiers had a lawyer call Ulwelling to tell him not to return to the job site. While the final sentence of the paragraph would appear inaccurate if separated from its context, the paragraph refers to the December conflicts between the parties and is therefore accurate.

b. Finding VI

The Ulwellings assert that the district court erred in finding that inspector Schramel testified and in referring to the standard practice of waterproofing retaining walls. It appears that the district court was referring to the foundation wall in Finding VI and mistakenly referred to it as the retaining wall. Ulwelling did testify that waterproofing is standard on foundation walls. Schramel's report, which includes the statement to which the district court referred, was entered into evidence. The Ulwellings themselves note that these errors "may seem trivial." We agree, and find that any error is harmless.

c. Finding IX

The district court found that the Baiers had specified, and Ulwelling had promised to use, 240-pound shingles. The Ulwellings argue that the contract did not specify 240-pound shingles, and consideration of conversations outside the contract violates the parol evidence rule. The contract does not mention shingles at all, but Ulwelling testified that he might have told the Baiers that a standard shingle was a 240-pound shingle and Betty Baier testified that she told Ulwelling that she wanted 240-pound shingles. The parol evidence rule does not bar conversations outside the written agreement when the agreement is incomplete or ambiguous and the evidence tends to establish the intent of the parties. Material Movers, Inc. v. Hill, 316 N.W.2d 13, 17 (Minn. 1982). Finding IX is not clearly erroneous, and evidence of the parties' conversations is proper because it established the intent of the parties regarding the type of shingle to be used.

d. Finding XII

The district court found that the Baiers paid Sheldon Lang $5,550.57 to correct Ulwelling's work. The Ulwellings argue that $1,867 of that sum was paid for shingling the garage, which Baiers did not pay Ulwelling to do. They also argue that items found to be "corrections" were removed from the change order on the original contract. The Ulwellings' argument is somewhat semantic; they emphasize the word "correction," differentiating it from "completion." Further, the finding is supported by the evidence, including Betty Baier's testimony that Lang was paid $5,550.57 to "correct deficiencies" in Ulwelling's work.

We conclude that the district court's findings of fact are not clearly erroneous.

II. Conclusions of Law

This court is not bound by and need not defer to the district court's decision on purely legal issues. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

a. Conclusions I and II

The Ulwellings argue that the district court erred in stating in Conclusion I (and by reference in Conclusion II) that their work failed to comply with the building code. The Ulwellings assert that the district court erred by failing to give them the benefit of the implied condition of the contract that they would have the opportunity to complete work without hindrance. It appears, however, that code violations cannot be considered merely incomplete work, but poorly done work. The Baier-Ulwelling contract specified that "all work [is] to be completed in a workmanlike manner according to standard practices."

b. Conclusion IV

The district court concluded that the retaining wall was substandard. The Baiers requested $4,800 to replace the wall, which the district court offset by $2,400 because the Baiers capped the wall before Ulwelling could core-fill it. The Ulwellings argue that the Baiers prevented completion of the wall. However, Ulwelling's failure to core-fill the retaining wall was only one of the problems that rendered it substandard. Ulwelling himself testified that the wall "didn't come out," and that the thickness of the joints did not comply with code. The only reasonable remedy for the nonconforming wall seems to have been removal and replacement at a cost of $4,800. It appears that the district court recognized that Ulwelling might have added core-fill if the wall had not been capped and exercised its discretion in granting Ulwelling an offset of $2,400.

c. Conclusion V

The district court concluded that the Baiers were entitled to $13,310, the cost of replacing the roof. The Ulwellings assert that the district court erred by referring to Ulwelling's negligence in ordering trusses because negligence is not recognized in breach of contract cases. See Lesmeister v. Dilly, 330 N.W.2d 95, 102 (Minn. 1983). But the district court concluded that Ulwelling breached the contract because the work did not comply with the building code. Liability was based on breach of contract, not on negligence. There is evidence that the irregularity of the roof line, which was referred to as "unacceptable and objectionable" by the building inspector, could only be truly remedied by reconstruction. The district court did not err in awarding damages for the roof.

d. Conclusion VII

The Ulwellings assert that the district court erred by making them liable for $13,981 for work done by the second contractor. We agree that the district court counted $5,550.57 twice. We thus reverse the award by $5,550.57.

III. Costs and Attorney Fees

The Ulwellings argue that the district court erred by awarding the Baiers $10,000 in costs and attorney fees pursuant to Minn. Stat. §§ 549.21 (1996) (repealed 1997; current version at Minn. Stat. § 549.211 (Supp. 1997)), 325F.69 (1996), and 8.31, subd. 3(a) (1996).

There is no evidence to support attorney fees in the instant case under any of the three statutes. While the Ulwellings may have inadequately performed their contract, there is no evidence that they committed fraud upon the court, that they made any misrepresentations, or that they engaged in unfair, discriminatory, or unlawful business practices. The district court erred by awarding costs and attorney fees. We reverse the award of attorney fees.

Affirmed in part and reversed in part.

Dated:

_____________________________________

Judge Roland C. Amundson