Hayle Floor Covering, Inc. v. First Minnesota Construction Co.

253 N.W.2d 809, 1977 Minn. LEXIS 1588
CourtSupreme Court of Minnesota
DecidedApril 22, 1977
Docket46460, 46523 and 47172
StatusPublished
Cited by14 cases

This text of 253 N.W.2d 809 (Hayle Floor Covering, Inc. v. First Minnesota Construction Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hayle Floor Covering, Inc. v. First Minnesota Construction Co., 253 N.W.2d 809, 1977 Minn. LEXIS 1588 (Mich. 1977).

Opinion

PER CURIAM.

These appeals arise out of a mechanics lien foreclosure action brought by Hayle Floor Covering, Inc., a subcontractor in the construction of an apartment building owned by defendant Metram Properties Company. Four other subcontractors filed answers asserting mechanics liens. Defendant First Minnesota Construction Company was the general contractor on the contract with Metram. Metram commenced a third-party action against Capitol Indemnity Corporation, which was the surety for the project having issued a labor and materials bond and a performance bond with Metram as obligee and First Minnesota as principal. Capitol then brought a fourth-party claim against Larry and Ollie Hork and four other individuals who had signed general agreements to indemnify Capitol for losses sustained by reason of Capitol’s becoming surety for First Minnesota.

The district court found as facts that each mechanics lien was valid against Me-tram, that the liens were proper claims under Capitol’s surety bond, that the Horks were individually liable for Capitol’s losses as surety for First Minnesota, and that the remaining fourth-party defendants were in default. As a matter of law the district court found that all liens had priority over a mortgage on the property held by the Federal National Mortgage Association. The court ordered foreclosure of the liens, held Capitol liable to Metram for the amount of the liens, and held all fourth-party defendants liable to Capitol in the same amount.

On appeal, both Metram and Capitol dispute the validity and amounts of the liens. Capitol asserts that the liens are outside the scope of its bond, while the Horks raise a timeliness issue regarding Capitol’s fourth-party claim. Each lien and the third- and fourth-party claims will be considered separately.

Lien of Hayle Floor Covering, Inc.

The lien of Hayle is for additional carpet and labor needed to complete the job beyond the amount specified in its subcontract. The shortage arose due to a scaling error in the blueprints which were relied upon by Hayle in making its bid.

The lien of Hayle must be upheld for two reasons. First, Hayle placed the additional carpet pursuant to written authorization by the general contractor. In Minnesota this is sufficient to imply the consent of the owner for the additional work. Karl Krahl Excavating Co. v. Goldman, 296 Minn. 324, 208 N.W.2d 719 (1973); see generally, 53 Am.Jur.2d, Mechanics Liens, § 114, pp. 635, 636. Second, where a contractor performs according to the plans and specifications supplied him, he is not responsible for defects in those plans and specifications. United States v. Spearin, 248 U.S. 132, 39 S.Ct. 59, 63 L.Ed. 166 (1918). The shortfall in Hayle’s estimate resulted from the scaling error and its reliance thereon was justified under the circumstances. The evidence adequately supports the trial court’s finding of a lien in Hayle’s favor for $8,504.93.

*812 Lien of Minnesota Valley Surfacing Company

Minnesota Valley was under contract with First Minnesota to perform blacktopping for the apartment project. Its lien is for extra materials necessitated by the removal of wet, unstable soil from the project site by First Minnesota, a condition not foreseen by Minnesota Valley in preparing its bid.

No written authorization of payment for the extra materials was offered at trial by Minnesota Valley. The contract between Minnesota Valley and First Minnesota states in Subsection XIII that “no extra work shall be allowed or changes made by the Sub-Contractor, or paid for by the Contractor UNLESS AND UNTIL AUTHORIZED BY THE CONTRACTOR OR HIS AUTHORIZED REPRESENTATIVE IN WRITING BEFORE THE WORK AND/OR CHANGES ARE BEGUN.” In Minnesota, as in most jurisdictions, the rule is that while extrinsic evidence may be admissible to clarify ambiguous terms in a written contract, it is not admissible to vary terms whose meaning is plain. In re Trust Known as Great Northern Iron Ore Properties, Minn., 243 N.W.2d 302 (1976). Further, the terms of a written agreement can only be altered by parol evidence which is clear and convincing. Wertheimer v. Byrd, 278 Minn. 150, 153 N.W.2d 252 (1967). In this case neither condition is satisfied. The contract provision requiring written change orders is unambiguous — in fact, it is the only capitalized subsection of the entire contract. The only testimony tending to establish oral authorization for the work is that of Stuart Dittbrenner, office manager of Minnesota Valley. His testimony on this issue cannot be read as clear and convincing. Hence, there is insufficient evidence supporting the trial court’s finding of a lien in favor of Minnesota Valley, and the trial court must be reversed.

Lien of Stern Drywall, Inc.

Stern Drywall was under contract with First Minnesota to install gypsum drywall and insulation in the project. Stern’s subcontract contained an “in writing” provision for extra work identical to that quoted above.

At trial Stern introduced evidence of two written change orders, one for $1,320 and one for $1,206. A number of other extras were also claimed by Stern on the basis of an exhibit and the testimony of Lorin Stern, president of the company, as to oral authorizations. The trial court granted a lien for $2,823.30, which included all the claimed extras, whether authorized in writing or not. The evidence also showed that Stern had been paid $773.70 in excess of the basic contract price of $120,000.

For the same reasons given above with respect to Minnesota Valley, the amount of Stern’s lien must be reduced. Written authorization was proved for $2,526 in extras, from which must be subtracted the $773.70 to arrive at a valid lien of $1,752.30. The evidence supports the trial court’s finding only to that extent, requiring a reduction of its judgment in favor of Stern.

Lien of Schütz Contracting Co., Inc.

Schütz Contracting was under contract for excavation and water and sewer work on the project, and had two subcontracts identical in all relevant respects with those of Hayle, Minnesota Valley, and Stern.

The Schütz lien claim involves a complex pattern of extras and retainages totaling $14,472.56 for both contracts. The district court allowed the lien in the full amount, although only one written change order for $3,896.65 was introduced at trial.

The Schütz lien must be denied as being untimely filed. The lien statement itself claims November 24,1971, as the last day of work on the project; the lien was filed on January 13, 1972. The evidence at trial, however, shows that on November 24 Schütz only moved equipment and materials belonging to First Minnesota, which was moving to another jobsite. No work was done on that day which pertained to Schütz’ excavating or sewer and water contracts; in fact, a Schütz invoice to First Minnesota dated October 5, 1971, indicates that the *813 contract work was 100 percent complete as of that day.

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Cite This Page — Counsel Stack

Bluebook (online)
253 N.W.2d 809, 1977 Minn. LEXIS 1588, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hayle-floor-covering-inc-v-first-minnesota-construction-co-minn-1977.