Bill Whorff, Inc. v. Breakwater Design & Build, Inc.

• Court: Superior Court of Maine
• Decided: March 24, 2008
• Docket: CUMre-07-090and091
• Status: Unpublished

Opinion

STATE OF MAINE SUPERIOR COURT . CUMBERLAND, ss. - '-'-" . CIVIL ACTION / DOCKET NO: RE-07-090/ ;}: 0 J RE-07- 0 9 1 : \. /2: Ar·_C/.lM ''-J . . ,v,/I i _3!PI-I/c)I)Oi; : BILL WHaRFF, INC.,

Plaintiff, ORDER v.

BREAKWATER DESIGN & BUILD, INC.

Defendant,

And

ATLAS ENTERPRISES, LLC,

Defendant.

This case comes before the Court on Plaintiff Bill Whorff, Inc.'s Motion for

Summary Judgment pursuant to M.R. Civ. P. 56(c) and Defendant Atlas Enterprise,

LLC's Motion to Strike.

PROCEDURAL AND FACTUAL BACKGROUND The dispute in this case arises from the design and construction of Sunset

Terrace Subdivision, Boothbay Harbor Maine (the "Project"). Defendant Atlas

Enterprise LLC (Atlas) is the owner of the property. Defendant Breakwater

Design & Build, Inc. (Breakwater) was the general contractor on the Project and

Plaintiff Bill Wharff, Inc. (Wharff) was the subcontractor on the Project.

Beginning in May 2005, Atlas and Breakwater entered into two contracts

for the design and creation of the infrastructure of the Subdivision. The first

contract, entered into on May 11, 2005 was for the design of the subdivision. The second contract, entered into in October 2005, was for the building of the

infrastructure of the Subdivision.

On October 10, 2005, Breakwater and Whorff entered into several

subcontractor contracts for the construction of the Subdivision infrastructure.

Under the terms of that contract, Whorff was to provide monthly invoices for

services rendered. Payments were timely made until April 30, 2006. Whorff last

provided labor, services and materials for the Project on July 31, 2006.

On September 18, 2006, Whorff recorded a Notice of Mechanics' Lien

Claim in Lincoln County Registry of Deeds in Book 3739, Page 226 in order to

preserve a statutory mechanics' lien on the Property pursuant to 10 M.R.S.A §

3251.

Whorff alleges that Breakwater and Atlas owe unpaid invoices totaling

$105,400.00. Breakwater concedes that it has failed to pay Whorff's invoices and

concurs in the amounts due, contingent upon completion of the Project.

Breakwater defends its failure to pay Whorff asserting that Whorff has not

completed its obligations under the contracts and further that Breakwater is not

obligated to pay Whorff until Atlas has honored its contract with Breakwater by

paying on submitted invoices. Atlas, in turn defends by asserting that 1) it has

paid Breakwater for the amounts owed to Whorff under the subcontracts, and 2)

Breakwater misrepresented the cost of the Project and failed to adequately

research the actual cost. Based on this failure to research, Atlas asserts,

Breakwater has billed an excessive and unconsented-to amount under that

contract.

2 DISCUSSION

I. Standard of Review

Summary judgment is proper where there exist no genuine issues of

material fact such that the moving party is entitled to judgment as a matter of

law. M.R. Civ. P. 56(c); see also Levine v. R.B.K. Caly Corp., 2001 ME 77,

A.2d 653, 655. A genuine issue is raised "when sufficient evidence requires a

fact-finder to choose between competing versions of the truth at trial." Parrish v.

Wright, 2003 :rvrn 90,

potential to affect the outcome of the suit." Burdzel v. Sobus, 2000 ME 84,

A.2d 573, 575.

"A court may properly enter judgment in a case when the parties are not

in dispute over the [material] facts, but differ only as to the legal conclusion to be

drawn from these facts." Tondreau v. Sherwin-Williams Co., 638 A.2d 728,730 (Me.

1994). "If material facts are disputed, the dispute must be resolved through fact­

finding." Curtis v. Porter, 2001 ME 158,

they must be resolved in favor of the non-moving party. Beaulieu v. The Aube

Corp., 2002 ME 79,

summary judgment is no longer an extreme remedy, it is not a substitute for trial." Arrow

Fastener co. v. Wrabacon, Inc., 2007 ME 34,1 18, 917 a.2d 123, 127 (citing Curtis, 2001

ME 158,17,784 A.2d at 21-22).

II. Mechanics' Liens

Whorff timely filed a mechanics' lien against the subject property on

September 18, 2006 and now seeks enforcement of that lien. Mechanics' liens are

available to "[w ]hoever performs labor or furnishes labor or materials ... used in

3 erecting, altering, moving or repairing a house, building or appurtenances ... by

virtue of a contract with or by consent of the owner" in order "to secure payment

thereof." 10 M.R.S. § 3251 (2007). "A lien is given upon the ground that the

work has been a benefit to the realty, and has enhanced its value." Combustion

Engineering, Inc. v. Miller Hydro Group, 577 A.2d 1186, 1188 (Me. 1990) (quoting

Bangor Roofing & Sheet Metal Co. v. Robbins Plumbing Co., Inc., 151 Me. 145, 148,

116 A.2d 664,666 (1955)).

a. Consent to Labor and Materials

In order for a subcontractor to assert a mechanics' lien against a property

where no contract exists between the owner and the subcontractor, the

"subcontractor must prove (1) knowledge on the part of the owner of the nature

and extent of the work being performed on the premises, and (2) conduct on the

part of the owner justifying the expectation and belief on the part of the

subcontractor that the owner consented." John W. Goodwin, Inc. v. Fox, 1999 ME

33, <]I IS, 725 A.2d 541, 543-44.

In this case, it is undisputed that no contract exists between Whorff and

Atlas and thus Whorff must prove that Atlas had knowledge of the nature and

extent of the work being done and displayed conduct conveying consent.

Whether or not Atlas consented to the scope of the work being done is a genuine

issue of material fact in dispute. Atlas asserts that the scope and cost of the work

exceeded that agreed to in its contract with Breakwater. Moreover, Atlas asserts

that it sought information regarding the scope of the Project, but that the

information was not provided to them until discovery. Accordingly summary

judgment should be denied to Whorff on Count 1.

4 III. Breach of Contract

Whorff brings a breach of contract claim against Breakwater for its failure

to pay on the invoices under the October 2005 contracts. A material breach of

contract occurs when a party to a contract fails to perform a "duty so material

and important [to the contract] as to justify the injured party in regarding the

whole transaction as at an end." Jenkins, Inc. v. Walsh Brothers, Inc., 2001 ME 98, 1

13, 776 A.2d 1229, 1234. Breakwater asserts that it is not in breach because no

monies are due until Whorff has satisfied its obligations under the contract,

which Breakwater asserts, Whorff has not yet done. Whorff counters that billing

is monthly under the contract and that, accordingly, Breakwater has breached

the contract for failing to pay the monthly invoices. Alternatively, Breakwater

asserts that Breakwater's obligation to Whorff is contingent upon Atlas honoring

its contract with Breakwater. Whorff counters that no contingency clause exists

in the contract and therefore the status of Atlas' payments to Breakwater are not

relevant to Breakwater's obligations under its contract with Whorff.

When considering the language of a contract at summary judgment,

contract language that is unambiguous, it is a "question of law for the court."

Gagne v. Stevens, 1997 ME 88, 18, 696 A.2d 411,414 (citations omitted). If

"contract language is ambiguous or uncertain, ... [it] is a question of fact to be

determined by the fact finder." Id. In that case, extrinsic evidence is admissible

to show what the parties intended. Portland Valve, Inc. v. Rockwood Sys. Corp., 460

A.2d 1383, 1387 (Me. 1983). "Whether a material breach has occurred is a

question of fact." Jenkins, Inc., 2001 ME 98, 113, 776 A.2d at 1234.

In this case it is undisputed that a written contract was entered into

between Whorff and Breakwater in October 2005. The contract has an

5 integration clause. The payment schedule in the contract reads: "Payment

Schedule: Billed Monthly." There is no other provision in the contract for

payment. Nor is there any contingency clause in the contract that payment to

Whorff by Breakwater is conditioned upon payment to Breakwater by Atlas.

This Court finds the contract's payment provision ambiguous and thus extrinsic

evidence is admissible. To that end, Breakwater claims that there is a course of

dealing between itself and Whorff allowing payment to Whorff contingent upon

payments to Breakwater by Atlas. This fact is in dispute. Accordingly, summary

judgment is not proper.

IV. Quantum Meruit and Unjust Enrichment

Whorff brings a claim against both Breakwater and Atlas under both the

theories of quantum meruit and unjust enrichment. To pursue a claim under a

theory of quantum meruit, a plaintiff "seeks recovery for services or materials

provided under an implied contract." Cummings v. Bean, 2004 ME 93, <]I 9,853

A.2d 221, 224 (quoting Paffhausen v. Balano, 1998 ME 47, <]I 6, 708 A.2d 269, 271)).

In contrast, an unjust enrichment claim stands where no contract exists and

recovery is for the "value of benefits conferred on another." Id. Accordingly, the

claims cannot co-exist. Id. <]I 10, 708 A.2d at 224. Moreover, it is undisputed that

written contracts exist between Whorff and Breakwater and thus neither a

quantum meruit claim nor an unjust enrichment claim can be brought by Whorff

against Breakwater. Summary judgment in favor of Breakwater on these two

counts is appropriate.

The issue thus remains whether Whorff can bring a claim of quantum

meruit or unjust enrichment against Atlas.

6 a. Quantum Meruit

Whorff did not bring a count against Atlas for quantum meruit but does

reference Atlas as a defendant in its claim for quantum meruit in its

memorandum of law. Nor are there any facts asserting that an implied contract

exists between Whorff and Atlas. Accordingly, because no claim was brought

against Atlas for quantum meruit, the Court need not address the issue.

b. Unjust Enrichment

As stated above, an unjust enrichment claim presumes no contract

between the disputing parties. See Cummings, 2004 ME 93,

order to prevail on a claim for unjust enrichment, the "complaining party must:

Establish that: (1) it conferred a benefit on the other party; (2) the other party had appreciation or knowledge of the benefit; and (3) the acceptance or retention of the benefit was under such circumstance as to make it inequitable for it to retain the benefit without payment of its value.

Maine Eye Care Assoc's v. Gorman, 2006 ME 15,

Tucci v. City 0 Biddeford, 2005 ME 7,

party must prove that "a benefit was conferred." Id.

Atlas asserts that no benefit was conferred because it has already paid to

Breakwater all amounts claimed by Whorff. Breakwater disputes that the

amounts owed to Whorff as a subcontractor have been paid by Atlas to

Breakwater. This material fact is in dispute and consequently summary

V. "Prompt Payment" Statute

Maine law "provides for penalties against owners or contractors who do

not make payments to subcontractors in a timely fashion." Jenkins, Inc., 2001 ME

98,

7 provided in addition to those available for breach of contract or quantum meruit

claims and thus there is a higher burden of proof on the party seeking penalties.

Id.

that:

(1) the services were performed in accordance with the agreement or understanding of the parties; (2) the owner has made the progress or final payment; (3) the subcontractor has invoiced the work; and (4) the contractor failed to make payment within seven days after receipt of the invoice, or after receipt of the progress or final payment from the owner, whichever is later. Id.

In this case the degree to which Whorff has satisfied its obligations under

the contract is in dispute. Also in dispute is the status of Atlas' payments and

obligations to Breakwater. Because material facts remain in dispute, summary

judgment regarding additional penalties as provided under sections 1111-1120 is

not proper.

VI. Atlas' Motion to Strike

Atlas moves to strike portions of the supplemental affidavit of Ginny

Savage submitted by Whorff, alleging that it contains misrepresentations of facts.

Motions to strike under Rule 56 are no longer valid. See M.R. Civ. P. 56(i). "If a

party contends that the court should not consider a factual assertion, denial, or

qualification, the party may set forth an objection in either its opposing statement

or its reply statement. ..." Id. That being said, only "such facts as would be

admissible in evidence" will be considered at summary judgment. M.R. Civ. P.

56(e).

8 Therefore, the entry is:

Count I: Mechanics' Lien against Defendant Breakwater Design & Build, Inc. and Defendant Atlas Enterprises, LLC. Summary judgment on Count I is DENIED.

Count II: Summary judgment is DENIED to Plaintiff on Count II Breach of Contract.

Count III: Summary judgment is GRANTED in favor of Defendant Breakwater Design & Build, Inc. on Plaintiff's Quantum Meruit claim.

Count IV: Summary judgment is GRANTED in favor of Breakwater Design & Build, Inc. and Summary judgment is DENIED to Plaintiff in its claim against Defendant Atlas Enterprises, LLC for Unjust Enrichment.

Count V: Summary judgment is DENIED against Defendant Breakwater Design & Build, Inc. under 10 M.R.S.A. §§ 1111-1120, the Prompt Payment Statute.

The clerk shall incorporate this Order into the docket by reference pursuant to M.R. Civ. P. 79(a).

Dated at Portland, Maine this eP 'Itt day of ~:..><....::.-;lV'J~ --P...........

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