Zobel & Dahl Construction v. Crotty

356 N.W.2d 42, 1984 Minn. LEXIS 1484
CourtSupreme Court of Minnesota
DecidedOctober 12, 1984
DocketC5-83-879
StatusPublished
Cited by46 cases

This text of 356 N.W.2d 42 (Zobel & Dahl Construction v. Crotty) 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
Zobel & Dahl Construction v. Crotty, 356 N.W.2d 42, 1984 Minn. LEXIS 1484 (Mich. 1984).

Opinion

TODD, Justice.

Zobel & Dahl Construction sued David Crotty for Crotty’s failure to pay Zobel & Dahl for the construction of a residence near Duluth, Minnesota. Crotty had paid Zobel & Dahl $67,000, but refused to pay the remaining balance of the contract price because of certain defects in the house. Zobel & Dahl claimed Crotty owed $13,-552.56 and impleaded several of the subcontractors including Builders Supply Company, suppliers of roof trusses.

A jury trial was conducted and answers to special interrogatories returned by the jury found Crotty had breached the contract by failing to allow Zobel & Dahl to repair the defects. The jury also found that Crotty’s damages for the roof trusses and other defects totalled $9,350. Zobel & Dahl’s damages consisted of the remaining contract price plus interest for a total of $10,872.13. The St. Louis County District Court, the Honorable Charles T. Barnes presiding, entered an Order for Judgment on March 24,1983, in conformance with the jury’s answers to the special interrogatories. On May 2,1983, Judge Barnes denied Crotty’s post trial motions for a new trial or judgment notwithstanding the verdict. Crotty appeals from the denial of these motions and the resulting judgment and seeks relief against respondents Zobel & Dahl and Builders Supply Company. We affirm with respect to the issues of liability, but reverse the determination of damages.

David Crotty and Zobel & Dahl entered into a contract on November 14, 1976 to have Zobel & Dahl construct a home for Crotty. After various “change orders,” the contract amount was $74,616.60, subject to a credit of $144 for fixtures not installed. Crotty paid $67,000, leaving a total unpaid balance of $7,472.60 by May 1977. The contract provided that final payment was due “upon completion.”

Crotty moved into his home in March 1977. During the next several months the builders continued to work on the house, correcting various minor problems. At trial, Crotty contended he informed the builder in May 1977 that the garage roof had begun sagging. Raymond Dahl, one of the partners of Zobel & Dahl, testified that he had no conversations with Crotty about the roof problem until January 1978. Zobel & Dahl sent Crotty a final itemized bill for services in August 1977. Dahl said he knew some defects existed at the time of the final billing, but that he did not know, in August 1977, about the sagging roof.

Crotty and the contractors discussed the defects in the home on many occasions. Dahl testified that after Crotty moved into the house, he repeatedly tried to get Crotty to either give him a “punch list” — a list of defects in the house — or pay the builders in full. Respondent established that it is industry practice to allow the owner to submit a punch list and have defects corrected before making final payment to the contractor. Crotty said he did not pay the bill because “the house wasn’t done and I wasn’t going to pay the bill until Mr. Dahl came back and finished my house.” Dahl was willing to make the repairs, but Crotty told him his attorney had advised him not to allow the builders to make any repairs until they agreed to waive their mechanics lien rights. Dahl refused to waive his lien rights.

In January 1978, Crotty finally submitted a list of 29 defects in the home that he wanted repaired. Crotty, however, conditioned his request by providing that the expiration date of the mechanics liens would not be extended by this act since the work was not new construction, but old repairs. Zobel & Dahl would not agree to this proposal. They argued at trial that Crotty was simply stalling because he did *45 not have the money to pay them. Zobel & Dahl admitted at all times, however, that those defects did exist and that they included a $150 masonry item, twenty-seven other minor defects totalling $1,000, and a roof truss problem that would cost $8,200 to remedy. The jury found Crotty’s damages in these amounts came to $9,350. The trial court did not allow this amount to offset Zobel & Dahl’s recovery of $10,-872.13 because of the jury finding that Crotty had breached the contract by failing to pay and by not allowing the builders to complete the project.

The legal issues to be resolved are:

1. Whether the trial court erred in instructing the jury to determine whether Crotty breached the contract by refusing to allow Zobel & Dahl to complete the project;

2. Whether the trial court erred in awarding Zobel & Dahl the full amount of the contract price for the house based on the jury finding that the buyer had breached the contract;

3. Whether the trial court erred in computing the amount of prejudgment interest to be awarded to Zobel & Dahl;

4. Whether Crotty should have been allowed to amend his pleadings at trial and obtain a jury instruction on his negligence and product liability claims against Builders Supply;

5. Whether the trial court erred in admitting evidence of the consent order which revoked Crotty’s real estate broker’s license.

1. The trial court posed the following special interrogatory: “Did Mr. Crotty breach his contract with Zobel & Dahl by refusing to allow them to complete the project? ”

The court instructed the jury that “if upon substantial completion of the project defects are noted and brought to the contractor’s attention, the contractor does have the right to enter the premises to cure the defects and complete the contract.” Crotty contends that this question reflects the trial court’s misapplication of the Uniform Commercial Code’s right to cure concept to a construction case. The court, in the jury instructions and in its memorandum accompanying its order for judgment, never referred to the U.C.C. and we find no basis for concluding that the court applied the Code instead of common law principles.

Our decisions support a finding of breach of contract for an owner’s failure to allow a builder to complete construction. Generally, contract performance is excused when it is hindered or rendered impossible by the other party. Instrumentation Services, Inc. v. General Resource Corp., 283 N.W.2d 902, 908 (Minn.1979); Nodland v. Chirpich, 307 Minn. 360, 366-67, 240 N.W.2d 513, 516 (1976); Wormsbecker v. Donovan Construction Co., 247 Minn. 32, 42, 76 N.W.2d 643, 650 (1956). Further, a breach of contract occurs under those circumstances. Instrumentation Services, supra at 908-909. Stated differently, every contract contains an implied condition that each party will not unjustifiably hinder the other from performing. See J. Calamari and J. Perillo, The Law of Contracts, 441-444 (1977).

In a contract for construction of a home, an owner who unreasonably fails to allow the contractor to complete the project excuses the contractor’s performance and breaches the contract. See Kaltoft v. Nielsen, 252 Ia. 249, 106 N.W.2d 597

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Orbit Sports LLC v. Taylor
D. Minnesota, 2021
Wirtz v. JPMorgan Chase Bank, N.A.
185 F. Supp. 3d 1140 (D. Minnesota, 2016)
In re American Resource & Energy, LLC
513 B.R. 371 (D. Minnesota, 2014)
Riley J. Wilson v. Career Education Corporation
729 F.3d 665 (Seventh Circuit, 2013)
David Longaker v. Boston Scientific Corporation
715 F.3d 658 (Eighth Circuit, 2013)
Carlton v. State
816 N.W.2d 590 (Supreme Court of Minnesota, 2012)
Opheim v. County of Norman
784 N.W.2d 90 (Court of Appeals of Minnesota, 2010)

Cite This Page — Counsel Stack

Bluebook (online)
356 N.W.2d 42, 1984 Minn. LEXIS 1484, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zobel-dahl-construction-v-crotty-minn-1984.