Schiro-Del Bianco Enterprises v. Nsl

765 So. 2d 1087, 2000 WL 722263
CourtLouisiana Court of Appeal
DecidedMay 24, 2000
Docket99-CA-1237
StatusPublished
Cited by11 cases

This text of 765 So. 2d 1087 (Schiro-Del Bianco Enterprises v. Nsl) 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
Schiro-Del Bianco Enterprises v. Nsl, 765 So. 2d 1087, 2000 WL 722263 (La. Ct. App. 2000).

Opinion

765 So.2d 1087 (2000)

SCHIRO-DEL BIANCO ENTERPRISES, INC.
v.
NSL, INC., Steven A. Bogdanoff and Arthur C. Stern.

No. 99-CA-1237.

Court of Appeal of Louisiana, Fourth Circuit.

May 24, 2000.
Rehearing Denied July 28, 2000.

*1088 W. Lee Kohler, Terrence L. Brennan, Deutsch, Kerrigan and Stiles, L.L.P., New Orleans, LA, Counsel for Defendants/Appellants (NSL, Inc. and Cynthia House).

F. M. Stoller, Ethan N. Penn, McCloskey, Langenstein and Stoller, LLP, New Orleans, LA, Counsel for Appellees (Steven Bogdanoff And Arthur Stern).

(Court composed of Chief Judge ROBERT J. KLEES, Judge WILLIAM H. BYRNES, III, Judge MICHAEL E. KIRBY).

KIRBY, Judge.

STATEMENT OF THE FACTS

In 1996, Arthur Stern and Steven Bogdanoff (Stern and Bogdanoff) contacted NSL, Inc., a general contractor, about performing renovations to their future home. They described to the owner of NSL, Cynthia House, a general scope of work desired and, although the testimony is conflicting, advised her that they had a budget of between twenty and thirty thousand dollars. NSL prepared an estimate based upon the general scope of work described. Because Stern and Bogdanoff were concerned about keeping track of the cost, NSL proposed to perform work on a costplus basis, billing Stern and Bogdanoff weekly to allow them to keep track of the expenses as they were incurred.

*1089 NSL and Stern and Bogdanoff never entered into any written agreement.

Stern and Bogdanoff paid all but the last few weekly invoices, all of which clearly revealed the cost plus an additional "10% MARK UP" charge, or in one instance "10% P and O" charge.

Throughout most of the work period on the house, Stern and Bogdanoff requested changes or specific materials that were of higher quality and more costly. Among other things, these changes included: requesting more expensive bathroom fixtures, moving the locations of bathroom fixtures, running a new gas line to feed a clothes dryer in a closet on the third floor, applying sheetrock mud on exposed ceiling beams to give them a smoother appearance, repainting the entire apartment due to a color change requested by Stern and Bogdanoff, upgrading the electrical system to install more expensive light fixtures and three-way switches, installation of a built-in stereo system, requesting more expensive tile and countertops, and requesting more expensive entry door. Cynthia House, president of NSL, claims that Stern and Bogdanoff were made aware at all times when requesting these upgrades and additions that their requests would increase the cost of the job. Stern and Bogdanoff claim that House assured them that even with the changes, the work could be done within their budget. House admitted that she never gave specific information to Stern and Bogdanoff.

Stern and Bogdanoff visited the jobsite often and were aware of the work being performed. They were billed weekly for work actually performed and the invoices revealed in detail all expenditures made and costs.

After the sixth invoice had been paid, Stern and Bogdanoff had paid NSL slightly over $26,000 for the renovation work. Stern and Bogdanoff allowed NSL to work another two weeks on the job, but then refused to pay the seventh invoice when it was submitted for that two week period of work. On August 31, 1996, NSL reported to the jobsite only to discover that the locks had been changed. Stern and Bogdanoff refused NSL access to complete the work.

Upon locking out NSL, Stern and Bogdanoff paid other contractors to finish the work, alleging defective work was done by NSL.

Schiro del Bianco, a subcontractor which supplied granite countertops and floor tile, originally filed suit against Stern and Bogdanoff and NSL to recover on a Private Works Act Lien filed by Schiro del Bianco in the amount of $7,140.00. NSL filed a cross-claim against Stern and Bogdanoff for $21,907.85, the amount it claims it was owed for the work it performed or had performed for it by subcontractors, but which had not been paid. This amount included Schiro del Bianco's claim. Stern and Bogdanoff filed a cross-claim against NSL for the amounts incurred in completing the work.

The trial court judgment awarded $14,767.85 to NSL for work performed by it and its subcontractors. The trial court judgment also awarded $15,000 to Stern and Bogdanoff for work performed defectively and for the cost to finish the work. The trial court did not rule on the nature of this contract, but implicit in its judgment is the fact that it was not viewed as a cost plus percentage contract.

LEGAL ANALYSIS

This Court must decide the following issues: (1) What was the nature of the contract entered into by the parties? (2) Was NSL's work defective? (3) Can NSL recover on behalf of their subcontractors? And (4) Is NSL entitled to interest from the dates its unpaid invoices became due?

Nature of the Contract

Louisiana jurisprudence recognizes three basic types of construction contracts: lump sum contracts; cost plus percentage of the cost contracts (percentage contracts); and cost plus a fixed fee contract. M. Carbine Restoration, Ltd. v. *1090 Sutherlin, 544 So.2d 455 (La.App. 4 Cir. 1989); Joe Bonura, Inc. v. Hiern, 419 So.2d 25 (La.App. 4 Cir.1982); Standard Oil Co. of Louisiana v. Fontenot, 198 La. 644, 4 So.2d 634 (1941). In a percentage contract, or cost plus percentage of the cost contract, the owner reimburses the contractor for the costs of the material and labor while paying the contractor a percentage of the total cost of the project for his profit or gain. Standard Oil Co. of Louisiana v. Fontenot, supra.

Here, Stern and Bogdanoff claim this was a fixed price contract, while NSL claims that this was a cost plus percentage contract. This court has held that a building or renovation contract which provided an agreed price, but required the contractor to document his material and labor costs before receiving payment was a cost plus percentage contract. M. Carbine Restoration, Ltd. v. Sutherlin, supra; Wendel v. Maybury, 75 So.2d 379 (La.App. Orl.1954); Planning Systems Corp. v. Murrell, 374 So.2d 719, 721 (La.App. 4 Cir.1979), writ denied 376 So.2d 319 and 377 So.2d 843 (La.1979).

In reaching that conclusion in the Wendel case, the court considered the fact that the owners were allowed to make a number of changes in the project after the agreed price had been set and the fact that the owners were allowed to select various materials after the project was started. (Citation omitted.) The court noted that the owners would have had no interest in the cost of materials and costs had the contract been for a stipulated price and stated that "no contractor, after agreeing on a fixed price, would have permitted the owner to select materials which might cost more than those contemplated when the contract was entered into." (Citation omitted.)

M. Carbine Restoration, Ltd. v. Sutherlin, 544 So.2d 455, 458 (La.App. 4 Cir.1989).

The facts of this case are very similar. The parties never agreed upon a fixed price. Stern and Bogdanoff were never presented with a written estimate of the cost of the work. The parties did not have a written contract. Stern and Bogdanoff never testified that they had a fixed price contract. Bogdanoff testified only that they had a budget, of which they claim to have advised NSL.

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Cite This Page — Counsel Stack

Bluebook (online)
765 So. 2d 1087, 2000 WL 722263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schiro-del-bianco-enterprises-v-nsl-lactapp-2000.