BARCAT, LLC v. Nail

15 So. 3d 1246, 2009 La. App. LEXIS 1382, 2009 WL 1874586
CourtLouisiana Court of Appeal
DecidedJuly 1, 2009
Docket44,416-CA
StatusPublished

This text of 15 So. 3d 1246 (BARCAT, LLC v. Nail) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BARCAT, LLC v. Nail, 15 So. 3d 1246, 2009 La. App. LEXIS 1382, 2009 WL 1874586 (La. Ct. App. 2009).

Opinion

STEWART, J.

| ,In this dispute involving a contract to build a home, the trial court awarded the contractor / plaintiff, Bareat, L.L.C., the sum of $12,563.85 representing unpaid invoices and a five percent profit on the contract, plus attorney fees totaling $12,500, and costs. The judgment also recognized the validity of a lien filed by Bareat under the Private Works Act, La. R.S. 9:4801 et seq. The defendants / homeowners, Rodney James Nail and Connie Nail, have appealed. Finding no error, we affirm.

FACTS

On June 8, 2006, the Nails entered a contract with Bareat for the construction of their home. Rodney Nail and Barcat’s owner, Tony Barnes, had known each other since teenagers, and Rodney, who is a painter, had done some work for Barnes over the years. The Nails were designated as the owner of the home in the contract. Barnes was to act as construction-manager. The contract was priced as a “cost plus project” with a five percent (5%) profit to Bareat upon substantial conyoletion. Payments were to be disbursed from the project building account on an as-needed basis, allowing review and discussion with the Nails. Moreover, the contract provided that the Nails could perform some subcontractor work such as painting, flooring, and landscaping “as joartial down payment.”

On July 6, 2006, Bareat purchased the lot on which the Nails’ house was to be built and obtained financing for the project in the amount of $300,000 secured by a mortgage on the lot. 1 Construction then began.

12According to Barnes’ testimony, the first part of the project included clearing trees off the lot, laying the foundation, and framing the house. Connie Nail believed this phase of the project took too long to complete and cost too much. Barnes disputed this and testified that she complained about payment of basic labor costs. As the project proceeded, the Nails exercised their option to perform some of the work by coordinating subcontractors for flooring, painting, interior trim finish, landscaping, and pouring the driveway. Connie Nail testified that she also purchased fixtures, lighting, counter tops, and appliances. Payments for work done on the house were made out of a project account controlled by Bareat. The check register admitted into evidence shows over $20,000 in payments made directly to Connie Nail. Her claim that she did not receive this much from Bareat and that she paid for certain items from her personal account was unsubstantiated.

To have the Nails in their new home in time for the holidays, the transfer of the property from Bareat to the Nails took place on November 21, 2006. According to the “Cash Sale Deed” executed by Bareat and the Nails, the stated consideration was the Nails’ “assumption of the outstanding mortgage executed by Bareat LLC in favor of Bancorp - South.” The Nails obtained financing to pay off the Bancorp mortgage and additional amounts listed on the “Settlement Statement,” including un *1249 paid construction costs submitted by Barnes at the time of the closing.

After the property transfer, Barcat sought to collect additional construction costs that had become due as well as the five percent profit |8owed under the contract to build. When the Nails failed to pay, Barcat filed a lien against their property. It then filed suit to collect the amount claimed due and to enforce its lien. The Nails denied that it owed any additional payment and reconvened seeking cancellation of the lien and damages. The matter proceeded to trial.

Barnes testified that he spoke to Rodney Nail around the time of the closing and that Nail knew that additional costs and the profit remained to be paid. Both Nails denied agreeing to pay any additional money after closing. Though Connie Nail asserted that Barcat paid itself the profit during the construction instead of waiting until substantial completion as provided in the contract, Barnes denied that Barcat included the profit in its invoices. He explained that any markup was to cover labor costs, such as taxes and workers’ compensation insurance.

Robert McKinzie, the attorney who handled the closing, had little recollection of his conversation with Barnes. He recalled that Barnes faxed him unpaid invoices that were used to prepare the settlement statement, but he did not recall any discussion of amounts owed Barcat. He explained that Barcat had to sign the title of the property over to the Nails whose loan was being processed as a refinance. We note that the settlement statement in conjunction with the Nails’ loan does not list a seller or make any reference to Barcat. McKinzie also testified that he would not have proceeded with the closing if he had known that payments were still due. He explained that the mortgage company required him to guaranty there was no possibility of liens priming its mortgage.

1 ¿After hearing the testimony, the trial court rendered judgment in favor of Bar-cat for $12,563.85, representing the amount due for certain unpaid construction costs and the five percent profit. The trial court found that there had been mistakes in the closing, that Barcat was entitled to recover additional bills that became due, and that no records credibly showed that Barcat had previously billed for its five percent profit. 2 As allowed by a provision in the contract to build, the trial court also awarded Barcat attorney fees in the amount of $12,500 plus court costs. The Nails’ appeal followed.

DISCUSSION

In their first assignment of error, the Nails argue that the trial court erred in finding that the contract to build survived the closing on the sale of the home. They contend that the June 8, 2006 agreement between the parties should be viewed as a contract to “sell and buy,” with the intent being for Barcat to sell a completed house to them with their performance being to buy the residence. They further contend that the cash sale deed evidences the closure of their obligation to Barcat. Absent allegations of fraud, error or mistake, the trial court should not have considered par-ol evidence to determine that anything other than the consideration stated in the deed was owed.

The Nails describe the contract between them and Barcat as a sales contract. However, the parties did not agree to a contract for the sale of a | ¿house. *1250 Instead, they contracted for the construction of a house for a stipulated price. A contract to build or a construction contract is distinct from a contract for a sale of a home. Price v. Huey Childs Builder, Inc., 426 So.2d 398 (La.App. 2d Cir.1983), writ denied, 433 So.2d 164 (La.1983); Duhon v. Three Friends Homebuilders Corp., 396 So.2d 559 (La.App. 3d Cir.1981); Broussard v. R.G. Pierret, 215 So.2d 136 (La.App. 3d Cir.1968). As stated in La. C.C. art. 2756, “To build by a plot, or to work by the job, is to undertake a building or a work for a certain stipulated price.” The person who undertakes the work may furnish his work and industry alone, or may also furnish the materials necessary for the work. La. C.C. art. 2757.

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Bluebook (online)
15 So. 3d 1246, 2009 La. App. LEXIS 1382, 2009 WL 1874586, Counsel Stack Legal Research, https://law.counselstack.com/opinion/barcat-llc-v-nail-lactapp-2009.