Los Pumas Concrete v. Harmony Hospitality, LLC

CourtCourt of Appeals of Tennessee
DecidedAugust 11, 2021
DocketM2020-00956-COA-R3-CV
StatusPublished

This text of Los Pumas Concrete v. Harmony Hospitality, LLC (Los Pumas Concrete v. Harmony Hospitality, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Los Pumas Concrete v. Harmony Hospitality, LLC, (Tenn. Ct. App. 2021).

Opinion

08/11/2021

IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE June 1, 2021 Session

LOS PUMAS CONCRETE v. HARMONY HOSPITALITY, LLC ET AL.

Appeal from the Chancery Court for Davidson County No. 18-995-III Ellen Hobbs Lyle, Chancellor ___________________________________

No. M2020-00956-COA-R3-CV ___________________________________

A subcontractor that performed concrete and site work on a hotel construction project filed a lien on the property and then commenced this action against the general contractor and the owner of the property to recover sums due on the balance of the subcontract, for additional change order work, and interest. The claims relevant to the issues on appeal are against the owner for unjust enrichment and to enforce the lien. After obtaining a default judgment against the now defunct general contractor, the subcontractor moved for summary judgment on its claims against the owner. The owner contended that summary judgment was not proper because there were genuine issues of material fact concerning the amount owed to the subcontractor and whether the change orders had been approved. The court found it undisputed that the subcontractor performed work, in addition to that paid by the owner to the general contractor, for which the subcontractor was not paid; and that the owner received and appreciated a benefit from the services rendered by the subcontractor. Based on these findings, the trial court held that the subcontractor satisfied its burden of proving that the property owner was unjustly enriched. Accordingly, the trial court granted summary judgment in favor of the subcontractor on its claims of unjust enrichment and to enforce its lien. We affirm the trial court in all respects.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the court, in which ANDY D. BENNETT and W. NEAL MCBRAYER, JJ., joined.

Kevin C. Stevens, Knoxville, Tennessee, for the appellant, Harmony Hospitality, LLC.

Richard Smith and Mason Rollins, Nashville, Tennessee, for the appellee, Los Pumas Concrete. OPINION

FACTUAL AND PROCEDURAL BACKGROUND

Harmony Hospitality, LLC, (“Harmony”) was at all times material to this action the owner of real property located at 7616 Highway 70 South in Nashville, Tennessee. On September 20, 2016, Harmony entered into a construction contract with Omni Construction Company (“Omni”) for Omni to serve as the general contractor for the construction of a “Home 2 Suites” hotel on the property. In February 2017, Omni entered into a Subcontractor Agreement with Los Pumas Concrete (“Los Pumas”) to install a complete concrete system and perform site work for the hotel for the price of $323,254.

Although Los Pumas was paid by Omni for some of the labor and materials it provided pursuant to the Subcontractor Agreement, Los Pumas ceased work on the project in April 2018 because Omni ceased making progress payments. Shortly thereafter, Omni went out of business without fulfilling all of its financial obligations to Los Pumas.

Los Pumas timely filed a mechanic’s and materialmen’s lien on the property on July 6, 2018, asserting that Omni failed to pay it for materials and labor; and that it was owed $144,067 plus interest, attorney’s fees, and other reasonable costs and expenses. Notice of the lien was sent to Omni and Harmony (collectively, “Defendants”).

Three weeks later, Los Pumas timely filed a complaint in Davidson County Chancery Court against Omni and Harmony1. It sued Omni for breach of contract. As for Harmony, the complaint asserted, inter alia, claims for unjust enrichment, to enforce its lien on the property, and for a Writ of Attachment on the property in order to perfect the lien. It also sought a judgment against Defendants of $144,067, plus interest and attorney’s fees.

Harmony filed an answer to the complaint in which it denied the allegations and asserted the affirmative defenses of failure to state a claim and failure to mitigate damages.2 Omni, however, did not file an answer or responsive pleading. As a consequence, Los Pumas moved for default judgment as to Omni due to its failure to respond to the complaint and requested a judgment in the amount of $156,000.95, the sum of the requested $144,067, interest, and attorney’s fees.

The Default Judgment Certificate based the requested award amount on the following calculations: (1) the total amount of the original obligation was $352,357, (2)

1 The complaint also named Legends Bank as a defendant because it had a secured interest in the property but all claims against Legends Bank were subsequently dismissed and are not at issue on appeal. 2 Harmony also filed a cross-complaint against Omni, but that claim was dismissed by agreed order. -2- the amount already paid by Defendants was $208,290, (3) the amount of interest requested was $5,332.45, and (4) the amount of attorney’s fees and expenses requested was $6,601.50. The motion was granted on January 23 as to Omni, which had already become defunct, and the trial court awarded Los Pumas a judgment in the amount requested plus interest and attorney’s fees. The remaining claims only pertain to Harmony.

Los Pumas subsequently moved for summary judgment against Harmony on its claims of unjust enrichment, in the amount of $197,199.72, and to enforce its lien. This amount was based upon Los Pumas’ assertion that the balance owed under the contract, including change orders, amounted to $183,434.72, and the amount of prejudgment interest due was $13,765.

Harmony responded, contending that Los Pumas’ unjust enrichment claim must fail because it had already paid Omni for the work performed under the Subcontractor Agreement. Additionally, Harmony disputed the amount claimed, insisting that the change orders were not signed by the authorized representative of Omni in accordance with the Subcontractor Agreement. It also contended that summary judgment was not appropriate because there were genuine issues of material fact concerning the discrepancies between a pay application that indicated the remaining balance due to Los Pumas was $48,627.84 and the lien, which stated that $144,067 was owed.

Following a hearing on May 22, 2020, the trial court held there were no genuine issues of material fact and granted summary judgment to Los Pumas on its unjust enrichment claims, for which it awarded $193,602.50. It also granted judgment on Los Pumas’s claim to enforce the lien.

The trial court noted that Harmony’s defense that it paid Omni 100% of the scheduled value of the site work under the Subcontract was unavailing because the record established that Los Pumas performed work, in addition to that paid by Harmony to Omni, for which it had not been paid. Further, the trial court adopted the reasoning and authorities from Los Pumas’s May 20, 2020 Reply in Support of its Motion for Summary Judgment, which the court quoted as follows:

Los Pumas is entitled to recover the full amount of its claim against [Harmony] because Harmony has benefited from Los Pumas’ work, Harmony has appreciated the benefit of Los Pumas’ work, and Harmony accepted those benefits[,] and it would be inequitable for Harmony to retain said benefits without paying for said benefits. Paschall’s, Inc. v. Dozier, 219 Tenn. 45, 57 (Tenn. 1966). Harmony merely relies upon its own self-serving affidavit that it paid Omni 100% of the scheduled values of the site work that was performed by Los Pumas under the Agreement.

First, Los Pumas’ site work change orders and invoices were approved -3- by Omni. Los Pumas has not been paid for these change orders and invoices.

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Los Pumas Concrete v. Harmony Hospitality, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/los-pumas-concrete-v-harmony-hospitality-llc-tennctapp-2021.