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Heaton v. Imus

The Court of Appeals of Washington, Division One
Nov 20, 1978
21 Wn. App. 914 (Wash. Ct. App. 1978)


No. 5597-1.

November 20, 1978.

[1] Liens — Perfection — Timeliness — Additional Work. The performance of additional labor to correct a defect in work previously completed will extend the period for perfecting a lien under RCW 60.04.060 unless such work is performed under a new and independent contract, for the purpose of prolonging the filing period, or in an attempt to renew the filing period if it has lapsed.

[2] Liens — Attorney Fees — Disclosure of Cost Increases. The failure of a lien claimant to disclose all anticipated cost increases to the owner is merely one factor to be considered by the trial court in exercising its discretionary power to award attorney fees to the lien claimant under RCW 60.04.130.

[3] Contracts — Construction Contracts — Elements — Custom and Usage. Custom and usage of the construction trade will not suffice to create all missing elements of an incomplete agreement.

[4] Contracts — Construction Contracts — Incomplete Agreement — Effect. The absence of a key term, such as price, and the presence of ambiguities, permit the court to reject custom and usage as a means of completing an agreement's terms and to find work to have been performed in quasi contract instead.

[5] Contracts — Breach — Restitution — Quasi Contract — Interest and Profit. Restitution in quasi contract is that amount determined by the trier of fact to be the reasonable value of the services and expenditures of the nonbreaching party. This determination is made without reference to a fixed standard and is to restore the party to his prior position. No interest or profit may be awarded.

[6] Damages — Review — Improper Element — Remission. Remission may be used when review discloses that an improper element of damages was submitted to the jury and the portion of the award resulting therefrom is readily calculable with reasonable certainty.

Nature of Action: A construction company sought compensation for restorative work on a property owned by a realty firm. Superior Court: The Superior Court for Whatcom County, No. 51861, Marshall Forrest, J., on April 8, 1977, entered a judgment substantially in favor of the construction company.

Court of Appeals: Finding that the trial court's determinations were supported by substantial evidence of quasi contract, but that interest and profit were improperly awarded under such a theory, the court modifies the award and affirms the judgment.

Olson Olson and Charles R. Olson, for appellants.

Oles, Morrison, Rinker, Stanislaw Ashbaugh, Sam E. Baker, Jr., and Arthur D. McGarry, for respondent.

Ken and Barbara Imus, doing business as Jacaranda Land Development Corporation, owned realty in Bellingham, Washington. Stuart D. Heaton, doing business as Heaton Construction Company, performed rehabilitation work on certain of the Imuses' properties. This action arose out of a dispute regarding the compensation agreed upon for the restoration of one of the properties.

Imus contends that the parties agreed upon an oral, implied in fact, lump-sum contract for the construction project. Heaton argues that the agreement between the parties was an oral, implied in fact, cost-plus contract. The trial court concluded:

The work of plaintiff in designing and constructing the Fairhaven building to its present state of completion was not pursuant to a contract written or oral, but plaintiff is entitled to recover the reasonable value of his work (less payments received) on the basis of quantum meruit.

Conclusion of law No. 2.

Because there was no enforceable contract entered by the parties, plaintiff is not entitled to recover lost anticipatory profits for defendant's wrongful termination of the contract, and defendants are not entitled to recover the costs of completing the building in excess of a set amount.

Conclusion of law No. 3. The trial court's findings of fact, which are based on substantial evidence in the record, support these conclusions.

The court ordered the foreclosure of a lien filed by Heaton on March 15, 1976, and, on a theory of quantum meruit, awarded Heaton $95,081.39, together with $14,725 in costs and attorney's fees. It also ordered that prejudgment interest be computed on any adjusted invoices submitted to Imus, commencing 15 days after their date of presentation. Imus' counterclaims of fraud, breach of contract, and for an accounting were dismissed.

Imus argues that the trial court erroneously considered the secret and unexpressed intentions of Heaton, which were inconsistent with his objective manifestations, in denying the existence of a contract. While the record could be construed to support Imus' allegations, the trial court, on the basis of substantial evidence, made findings of fact that rejected Imus' position.

Imus contends that the "post-tensioning" work by Heaton during the last 2 weeks of December 1975 did not constitute performance of labor under the "agreement" so as to make the March 15 lien filing timely. He argues that the labor was performed without the thought of compensation, was charged to and paid for by another subcontractor, and occurred after the termination of construction activity upon his property. The record does not support this contention.

[1] RCW 60.04.060 requires a lien to be filed within 90 days of the date that the lienor last performed labor or supplied materials. When additional work is undertaken to remedy a defect in work already completed, the time for filing a lien runs from the date of performance of the additional labor if the later work was not done (1) under a new and independent contract, (2) for the purpose of prolonging the time for filing the lien, or (3) in an attempt to renew the right to file a lien that had been lost by a lapse of time. Friis v. Brown, 37 Wn.2d 457, 460, 224 P.2d 330 (1950). See Hopkins v. Smith, 45 Wn.2d 548, 552, 276 P.2d 732 (1954). Heaton and his employee, Anderson, testified that they checked and braced the cables supporting the cement building slabs around December 29, 1975. This testimony, if believed, brought Heaton's late December labor within the meaning of RCW 60.04.060; the March 15, 1976, filing was timely.

[2] Imus recognizes that a lien claimant may be awarded attorney's fees under RCW 60.04.130, but contends that because Heaton breached a substantial duty by failing promptly to inform him that the cost of the project would greatly exceed the amount budgeted for it, the trial court's award of attorney's fees constituted an abuse of discretion. We reject the contention. Imus' reliance on Walsh Servs., Inc. v. Feek, 45 Wn.2d 289, 274 P.2d 117 (1954), is misplaced. Heaton's duty to apprise Imus of all cost changes was lessened by the trial court's finding that no contract was entered into by the parties. Heaton sent invoices to Imus detailing cost of labor and materials used to date. The court found that on one occasion Heaton informed Imus of some additional costs that would be incurred in the construction of the building. The court considered Heaton's failure to disclose all expected cost increases as an insufficient basis upon which to deny attorney's fees. An award of attorney's fees is within the trial court's discretion. Forrester v. Craddock, 51 Wn.2d 315, 317 P.2d 1077 (1957). We find no abuse of discretion in the award here.

[3, 4] Certain terms are normally essential to the formation of a construction contract. Plumbing Shop, Inc. v. Pitts, 67 Wn.2d 514, 408 P.2d 382 (1965). Custom and usage will not be used to fill in all of the essential elements of an incomplete agreement. Plumbing Shop, Inc. v. Pitts, supra at 521-22; Milone Tucci, Inc. v. Bona Fide Builders, Inc., 49 Wn.2d 363, 366-67, 301 P.2d 759 (1956). Here the absence of a price term which is generally a necessary element of a binding contract, 17 C.J.S. Contracts § 36(2)(c) (1963), and the lack of clarity surrounding other terms, support the court's finding that there was no contract between Heaton and Imus and that any award should be in quasi contract. See Mill Logging Supply Co. v. West Tenino Lumber Co., 44 Wn.2d 102, 113-16, 265 P.2d 807 (1954).

[5] Interest prior to judgment is allowable when the amount claimed is either "liquidated" or computable "with reference to a fixed standard contained in the contract, without reliance on opinion or discretion." Prier v. Refrigeration Eng'r Co., 74 Wn.2d 25, 32, 442 P.2d 621 (1968); see Boespflug v. Wilson, 58 Wn.2d 333, 362 P.2d 747 (1961). Restitution in quasi contract is that amount necessary to restore the nonbreaching party to his or her position prior to performance. Dravo Corp. v. L.W. Moses Co., 6 Wn. App. 74, 91, 492 P.2d 1058 (1971). Under this theory of recovery, an award is ascertainable only by the introduction of evidence concerning the reasonable value of services and expenditures without reference to a fixed standard. Dravo Corp. v. L.W. Moses Co., supra at 92; Segall v. Ben's Truck Parts, Inc., 5 Wn. App. 482, 486, 488 P.2d 790 (1971). It was error to allow interest to Heaton on the sum recovered.

Heaton argues that the trial court erred in failing to award reasonable profit. His argument might be well taken had the trial court found an implied in fact contract. Bignold v. King County, 65 Wn.2d 817, 826, 399 P.2d 611 (1965); Losli v. Foster, 37 Wn.2d 220, 232, 222 P.2d 824 (1950). Here, however, the trial court based its award on principles of quasi contract, thereby excepting reasonable profit as a factor for consideration. Dravo Corp. v. L.W. Moses Co., supra at 92.

[6] In Dravo, we also stated:

Where an improper element of damages is submitted to the jury, the vice may be cured by ordering a remission if the amount of such damages can be readily calculable with reasonable certainty . . . . Under the particular facts of this case we believe the element of interest, improperly awarded by the jury, is readily calculable with reasonable certainty and see nothing to be gained by submitting the case for a new trial on the issue of damages where this error can be corrected at the appellate level.

(Citations omitted.) Dravo Corp. v. L.W. Moses Co., supra at 95. We follow that principle here. The judgment is reduced by the amount denominated by the trial court as interest charges. We deny the petition for attorney's fees on appeal.

Affirmed as modified.

ANDERSEN and DORE, JJ., concur.

Reconsideration denied February 14, 1979.

Review granted by Supreme Court May 4, 1979.

Summaries of

Heaton v. Imus

The Court of Appeals of Washington, Division One
Nov 20, 1978
21 Wn. App. 914 (Wash. Ct. App. 1978)
Case details for

Heaton v. Imus

Case Details

Full title:STUART D. HEATON, Respondent, v. KEN IMUS, ET AL, Appellants

Court:The Court of Appeals of Washington, Division One

Date published: Nov 20, 1978


21 Wn. App. 914 (Wash. Ct. App. 1978)
21 Wash. App. 914
587 P.2d 602

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