Haag v. Noetzelman

1999 ND 157, 598 N.W.2d 121, 1999 N.D. LEXIS 175, 1999 WL 549298
North Dakota Supreme Court·Decided July 29, 1999·No. No. 980349·Published·Cited by 3 cases

Opinion

KAPSNER, Justice.

[¶ 1] Jean Noetzelman appealed from an amended judgment awarding Bernard Haag, doing business as Haag Construction, judgment against her personally and foreclosure on a mechanic’s lien. We affirm.

[¶ 2] By written contract, dated May 17, 1996, with an addendum dated June 8, 1996, Noetzelman contracted with Haag Construction for construction of a house near Horace, North Dakota, at a cost of $75,720. On June 8, 1996, Haag Construction began construction. As construction progressed, Haag Construction received periodic payments totaling $29,-220 from a trust fund established by Noetzelman to finance the construction. When the trust fund money was depleted, Haag Construction requested Noetzelman to continue financing the construction. When Noetzelman failed to continue financing the construction, Haag Construction stopped working on the house and on November 8, 1996, Haag Construction filed a mechanic’s lien on the property. On August 4, 1997, Haag Construction sued for breach of contract, to foreclose on the lien, and to recover the value of improvements Haag Construction made to a house Noetzelman owns in Moorhead, Minnesota.

[¶ 3] Haag Construction contended, under the terms of the contract and its addendum, Noetzelman was obligated to continue financing the construction by using her Moorhead house to secure financing. [123]*123Haag also contended the improvements were made to the Moorhead house to increase its value in expectation of the house being used to finance construction of the Horace house. Noetzelman denied breaching the contract and counterclaimed on the grounds the construction of the Horace house was deficient.

[¶ 4] The trial court found Noetzelman did not perform as required under the contract by failing to use her Moorhead house to secure financing for construction of the Horace house. The trial court also found some of the construction performed by Haag Construction was deficient. The trial court concluded Haag Construction was entitled to the contract price, plus extra work completed, totaling $76,220, from which the court subtracted:

1) $29,220 already paid to Haag Construction from the trust fund;
2) $15,633.30 for the cost of the unfinished work; and
3) $9,725 for the cost of repairing the deficient construction.

The trial court awarded Haag Construction foreclosure on the mechanic’s lien in the amount of $24,510.36, including prejudgment interest, and judgment against Noetzelman in the amount of $7,758.63, including prejudgment interest, costs and disbursements, for the improvements, to her Moorhead house. Noetzelman appealed.

I

[¶ 5] Noetzelman contends the trial court erred when it found Noetzelman breached the contract by failing to finance the construction with her Moorhead house.

[¶ 6] “Contracts are construed to give effect to the mutual intention of the parties at the time of contracting.” Circle B Enterprises, Inc. v. Steinke, 1998 ND 164, ¶ 9, 584 N.W.2d 97. If the parties’ intentions can be ascertained from the writing alone, then the interpretation of the contract is entirely a question of law, and we will independently examine and construe the contract to determine if the district court erred in its interpretation of the contract. N.D.C.C. § 9-07-04; Pamida, Inc. v. Meide, 526 N.W.2d 487, 490 (N.D.1995). “The intention of the parties to a contract must be gathered from the entire instrument, not from isolated clauses, and every clause, sentence, and provision should be given effect consistent with the main purpose of the contract.” Nat’l Bank of Harvey v. Int’l Harvester Co., 421 N.W.2d 799, 802 (N.D.1988). N.D.C.C. § 9-07-06.

[¶ 7] The parties’ intent can be ascertained from the written contract and its addendum. The contract provides:

WE PROPOSE hereby to furnish material and labor-complete in accordance with above specifications, for the sum of; SEVENTY FIVE THOUSAND SEVEN HUNDERED TWENTY DOLLARS $75720.00
PAYMENT IS AS FOLLOWS; THE HOUSE AT 218 13 TH ST, NORTH [Moorhead, Minnesota] SHALL BE DEEDED TO HAAG CONSTRUCTION THE AMOUNT OF FOURTY SIX THOUSAND FIVE HUNDRED DOLLARS WILL SUBTRACTED OFF OF THE SEVENTY FIVE THOUSAND SEVEN HUNDERED TWENTY DOLLARS PURCHASE PRICE. THE REMAINDER AMOUNT OF SWENTY [sic] NINE THOUSAND SEVEN HUNDRED TWENTY DOLLARS SHALL PLACED IN A TRUST FUND FOR THE FIRST STAGE OF THE CONSTRUCTION PHASE. AND WILL BE BILLED AS HAAG CONSTRUCTION SEES NESSAS-SARY [sic]. THE HOUSE AT 218 13 TH ST. N. SHALL BE THE SOLE PROPERTY OF HAAG CONSTRUCTION AND HANDLED WITH WHAT EVERY [sic] DECISION BERNARD HAAG SEES FIT TO DEAL WITH.

The addendum provides:

1. Jean Noetzelman is paying to Haag Construction the sum of $75,720 for the construction [sic] a home to be [124]*124located on Noetzelman’s property near Horace, North Dakota (rural site). It is understood and agreed that Noetzelman owns said property.
2. Payment of the purchase price for construction of said home, including all materials and labor referred to in the foregoing contract, shall be as follows:
a. $29,720 will be placed in a bank account or trust fund to be utilized for the construction phase (first stage) and all disbursements from said fund will bear the signature of both parties.
b. Haag agrees to take for the remainder of such purchase of the new home, Noetzelman’s home located at 218 13 th Street North, Moorhead, Minnesota. The agreed consideration for trade-in of Noet-zelman’s home shall be the sum of $46,500. The home shall remain in Noetzelman’s name until the parties otherwise agree. In the event the home is deeded to Haag, Haag will provide security to Noetzelman to secure the balance of the purchase price until the home to be constructed is completed. In the event the home is to be deeded to Haag and a mortgage given in order to provide funds for construction of Noetzelman’s home, the parties agree that the proceeds of such mortgage shall be placed in the bank account or trust fund referred to in paragraph (a) above and utilized for the same purposes and under the same restrictions as other funds in said account. In the event the home is to be sold, the proceeds again shall be placed in said bank account or trust fund as aforesaid. By way of illustration, if Haag desires that the property be deeded so that it can commence work on the same, Haag will give a mortgage back to Noetzelman as security, said mortgage to reduce automatically by all authorized expenditures in construction of the new home. The method of authorization of expenditures on the new home are referred to hereinafter.
3. Haag agrees that lien waivers will be provided when any request for payment is made to Noetzelman. Disbursement of funds, whether from the original amount deposited in the bank account or trust fund, or whether from proceeds of a loan or sale of the home being traded in, will be dependent on furnishing said lien waivers by Haag.

[¶ 8] Noetzelman’s argument that she was not obligated to finance construction of the Horace house through her Moor-head house is based on a single sentence in the addendum.

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Haag v. Noetzelman, 1999 ND 157, 598 N.W.2d 121, 1999 N.D. LEXIS 175, 1999 WL 549298 (N.D. 1999).

1999 ND 157 (Haag v. Noetzelman) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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