IN THE SUPREME COURT OF IOWA 

No. 10–1278 

Filed June 1, 2012 

FLYNN BUILDERS, L.C., 

 Appellee, 

vs. 

MATTHEW P. LANDE 

and CHRIS LANDE, 

 Appellants. 

 On review from the Iowa Court of Appeals. 

 Appeal from the Iowa District Court for Boone County, William C. 

Ostlund, Judge. 

 On further review, appellants allege the district court and court of 

appeals erred in holding the appellee was entitled to enforce its 

mechanic’s lien. DECISION OF COURT OF APPEALS AFFIRMED IN 

PART AND VACATED IN PART; DISTRICT COURT JUDGMENT 

REVERSED, AND CASE REMANDED FOR FURTHER PROCEEDINGS. 

 Duane M. Huffer and Robert L. Huffer of Huffer Law P.L.C., Story 

City, for appellants. 

 Meredith C. Mahoney Nerem and John D. Jordan of Jordan & 

Mahoney Law Firm, P.C., Boone, for appellee. 

 
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APPEL, Justice.

 In this action to foreclose a mechanic’s lien, we address the 

consequences of a contractor’s failure to render full and complete 

performance.1 An owner and contractor entered into an agreement for 

the construction of a new home. During construction, the owner refused 

to pay the contractor after discovering markups on the cost of materials. 

In response, the contractor halted construction and filed an action to 

enforce a mechanic’s lien. The contractor subsequently filed a petition to 

foreclose the mechanic’s lien. Although the contractor did not complete 

construction, the district court found the contractor rendered substantial 

performance under the contract and entered a judgment against the 

owner. The court of appeals affirmed, and we granted further review. 

For the reasons expressed below, we affirm in part and vacate in part the 

decision of the court of appeals, reverse the judgment of the district 

court, and remand the case for further proceedings. 

I. Factual and Procedural Background. 

 This case involves a dispute between Gregg Flynn (Flynn) and 

Matthew and Chris Lande. In early 2009, the Landes were seeking a 

builder to construct a new home. Flynn, the owner of Flynn Builders, 

L.C., submitted to the Landes a bid to construct the home for $259,576. 

The bid included a line item for a “materials package” in the amount of 

$61,223.77. The Landes accepted the bid, and Flynn began construction 

in May 2009. 

 1The defendants raise six separate issues in their application for further review. 

In the exercise of our discretion, we choose to only address the issue related to 

substantial performance of the construction contract. As to the other issues raised on 

appeal, the court of appeals’ opinion will stand as the final decision in this appeal. See 

State v. Rodriguez, 807 N.W.2d 35, 37 (Iowa 2011). 
3 

 Construction continued until early July when the Landes 

discovered the materials package included a $20,000 markup that Flynn 

did not disclose.2 Though the markup did not increase the agreed upon 

price, the Landes’ lender and the Landes refused to pay the markup. 

Because the Landes and their lender refused to continue making 

payments, Flynn stopped construction on the project and filed a 

mechanic’s lien for $28,307.50 in the district court. 

 In August 2009, Flynn filed a petition to enforce the mechanic’s 

lien. In their answer, the Landes denied the existence of a contract and 

made no counterclaim. The matter proceeded to trial in May 2010. 

 During trial, Flynn testified that his duties as a general contractor 

were nearly completed when he left the project. He explained that, while 

the plumbing, drywall, paint, carpet, floor coverings, and trim remained 

unfinished, arrangements had been made with various subcontractors to 

complete the work. According to Flynn, “Everything was ready to go. . . . 

[A]ll Matt [Landes] had to do is contact the individual sub[contractors], 

even after I walked off, to have them come complete their jobs.” Brian 

Stolte, an employee of Flynn, testified Flynn completed between eighty 

and eighty-five percent of the project, possibly more, before leaving. 

Stolte stated the insulation, drywall, trim, and flooring remained 

unfinished when Flynn left. The unfinished trim, which would have 

taken two weeks to complete, included the installation of cabinets, doors, 

and windows. Stolte further stated that a day of work remained with the 

heating and air conditioning and the concrete was not poured in the 

front of the garage. Stolte estimated that it would have taken a total of 

five to seven weeks to complete the four-to-five month project. 

 2A markup is defined as “[a]n amount added to an item’s cost to determine its 

selling price.” Black’s Law Dictionary 1059 (9th ed. 2009). 
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 According to Matt Lande, “[t]he whole house was pretty much 

studs” when Flynn stopped working on the project. He stated the 

basement doors and garage doors were not installed and that the siding 

was only partially completed. Lande also testified that he, not Flynn, 

was in fact the general contractor on the project. Lande explained he 

understood the agreement to be that Flynn would frame, side, and 

shingle the house, and both Flynn and Lande would recruit 

subcontractors to build the house. 

 Following trial, the district court held, inter alia, Flynn was entitled 

to enforce the mechanic’s lien because Flynn substantially performed the 

contract. The court concluded Flynn was a general contractor of the 

project and that the general contracting markup fee of $20,000 was 

“appropriate and in accordance with standards of the industry.” The 

court stated that Matt Lande acted in large part as a general contractor 

during construction. Addressing the substantial performance issue, the 

court found that Flynn’s completion of eighty percent of the project 

amounted to substantial performance of the contract. The court stated 

“the credibility of the parties was given substantial weight in reaching 

[the court’s] ultimate conclusion.” The court entered a judgment in the 

amount of $16,574.75, plus interest, against the Landes. The Landes 

appealed. 

 On appeal, the Landes argued the district court erred in finding 

Flynn substantially performed. The Landes noted the home was only 

eighty to eighty-five percent complete when Flynn stopped working on 

the project. The Landes observed a number of items remained 

unfinished on the project, including installing insulation, drywall, 

flooring, and trim. The Landes also asserted Flynn breached the contract 
5 

by walking off the job before completing the project. The court of appeals 

affirmed. 

 The court of appeals reasoned that Flynn substantially performed 

the contract because the home was “framed, enclosed, roofed, sided (with 

a minor exception), and the electrical and plumbing were roughed-in.” 

The court explained evidence in the record established the home was 

seventy to ninety-five percent complete when Flynn left the project. The 

court further noted the record was devoid of any indication of bad faith 

on the part of Flynn or that the unfinished portion of the home impaired 

the structure as a whole. The Landes filed an application for further 

review, which we granted. 

II. Standard of Review. 

 Actions to enforce mechanic’s liens are in equity. Carson v. 

Roediger, 513 N.W.2d 713, 715 (Iowa 1994). Our review is therefore 

de novo. Id. In our de novo review, the district court’s fact findings are 

given weight, but we are not bound by them. Id. This court has stated 

in mechanic’s lien cases, “involving as they do numerous charges and 

counter charges which depend entirely on the credibility of the parties, 

we have frequently held the trial court is in a more advantageous 

position than we to put credence where it belongs.” McDonald v. Welch, 

176 N.W.2d 846, 849 (Iowa 1970). 

III. Discussion. 

A. Law Related to Mechanic’s Liens and Substantial 

Performance. Mechanic’s liens were not recognized at common law and 

are purely a creature of statute. See Clemens Graf Droste Zu Vischering

v. Kading, 368 N.W.2d 702, 708 (Iowa 1985); Roger W. Stone, Mechanic’s 

Liens in Iowa, 30 Drake L. Rev. 39, 41 (1980) [hereinafter Stone]. 

Mechanic’s lien statutes are designed to protect “persons who have 
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supplied labor or material for the construction, improvement, or repair of 

a building or other structure by giving the lienholders security 

independent of their contractual remedies against the owner of the 

property, if any.” Stone, 30 Drake L. Rev. at 42. Although mechanic’s 

lien statutes are in derogation of the common law, they are liberally 

construed “ ‘with a view to promote its objects and assist the parties in 

obtaining justice.’ ” Gollehon, Schemmer & Assocs., Inc. v. FairwayBettendorf Assocs., 268 N.W.2d 200, 201 (Iowa 1978) (citation omitted). 

 The Iowa territorial government enacted the first mechanic’s lien 

statute in Iowa in 1838. The Statute Laws of the Territory of Iowa 349 

(1839); Stone, 30 Drake L. Rev. at 41. Though the statute has 

undergone a series of amendments since its adoption, Stone, 30 Drake L. 

Rev. at 41–42, Iowa caselaw has developed a requirement that in order to 

enforce a mechanic’s lien, the work must be substantially performed by 

the contractor, Keys v. Garben, 149 Iowa 394, 395, 128 N.W. 337, 337 

(1910); see also S. Hanson Lumber Co. v. De Moss, 253 Iowa 204, 208, 

111 N.W.2d 681, 684 (1961); Farrington v. Freeman, 251 Iowa 18, 23, 99 

N.W.2d 388, 391 (1959); Peterman v. Hardenbergh, 250 Iowa 931, 933, 

97 N.W.2d 152, 154 (1959); S.D. & D.L. Cota Plastering Co. v. Moore, 247 

Iowa 972, 978, 77 N.W.2d 475, 478 (1956); Huffman v. Hill, 245 Iowa 

935, 938, 65 N.W.2d 205, 206 (1954). The more recent applications of 

the substantial performance doctrine in Iowa appear in published 

decisions of the Iowa Court of Appeals. See, e.g., Nepstad Custom Homes 

Co. v. Krull, 527 N.W.2d 402, 406 (Iowa Ct. App. 1994); Moore’s Builder & 

Contractor, Inc. v. Hoffman, 409 N.W.2d 191, 194 (Iowa Ct. App. 1987). 

Our caselaw in this regard is consistent with the law in a significant 

number of states. See 53 Am. Jur. 2d Mechanic’s Liens § 49, at 133–34 

(2006). 
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 In Huffman, the court explained that “a technical, exact and 

perfect performance is not necessary” in an action to foreclose a 

mechanic’s lien. Huffman, 245 Iowa at 938, 65 N.W.2d at 206. So long 

as the builder substantially performs the contract, the builder “is entitled 

to the contract price less reasonable damages on account of slight 

defects in performance.” Id. This court elaborated on the substantial 

performance doctrine in Farrington, stating, 

“ ‘Substantial performance,’ as defined by the cases, permits 

only such omissions or deviations from the contract as are 

inadvertent or unintentional, are not due to bad faith, do not 

impair the structure as a whole, are remediable without 

doing material damage to other parts of the building in 

tearing down and reconstructing, and may without injustice 

be compensated for by deductions from the contract price. 

So much is allowed in building contracts because of the 

hardship to the contractor if slight, unintentional deviations 

should bar his recovery.” 

Farrington, 251 Iowa at 24, 99 N.W.2d at 391 (quoting Littell v. Webster 

Cnty., 152 Iowa 206, 215, 131 N.W. 691, 694 (1911)). 

 The concept of substantial performance in the mechanic’s lien 

context is derived from contract law. In Farrington, for example, the

court’s definition of substantial performance was taken directly from a 

breach of contract case. See Farrington, 251 Iowa at 24, 99 N.W.2d at 

391; Littell, 152 Iowa at 215, 131 N.W. at 694. In the area of contracts, 

“[s]ubstantial performance is performance without a material breach, 

and a material breach results in performance that is not substantial.” 

II E. Allan Farnsworth, Farnsworth on Contracts § 8.16, at 518 (3d ed. 

2004); see also 5 Philip L. Bruner & Patrick J. O’Connor, Jr., Bruner & 

O’Connor Construction Law § 18:12, at 892–93 (2002) (“Substantial 

performance means the contractor has completed its work to such an 

extent that it cannot be said to have materially breached the contract.”); 

Richard A. Lord, Williston on Contracts § 44:55, at 232–33 (4th ed. 2000) 
8 

(“A breach of a contract is not material if substantial performance has 

been rendered.”). 

B. Application of Law to Facts. With these principles in mind, 

we now turn to the facts in this case. In our de novo review, we conclude 

Flynn did not substantially perform the contract. We note that more 

than simply punch-list items remained to be completed when Flynn left 

the project. See Cont’l Ill. Nat’l Bank & Trust Co. v. United States, 101 F. 

Supp. 755, 758 (Ct. Cl. 1952) (holding unfinished punch-list items did 

not amount to material breach); Pettit v. Hampton & Beech, Inc., 922 A.2d 

300, 305 (Conn. App. Ct. 2007) (substantial performance even though 

punch-list items totaling $5000 unfinished). Flynn himself testified that, 

although he made arrangements with subcontractors to complete the 

house, the plumbing, drywall, paint, carpet, floor coverings, and trim 

remained unfinished. According to Stolte, Flynn’s own witness, the 

unfinished trim included the installation of cabinets, doors, and 

windows. Stolte also stated the heating and air conditioning was not 

complete and the concrete had not been poured in front of the garage. 

Stolte estimated it would take an additional five to seven weeks to 

complete the project. All told, Stolte believed Flynn completed only 

eighty to eighty-five percent of the project when the contract was 

terminated. See Carefree Bldg. Prods., Inc. v. Belina, 564 N.Y.S.2d 852, 

854 (App. Div. 1991) (holding, as a matter of law, contractor failed to 

substantially perform when deficiencies represented twenty-five percent 

of contract price); Jerry B. Wilson Roofing & Painting, Inc. v. Jobco-E.R. 

Kelly Assocs., Inc., 513 N.Y.S.2d 263, 265 (App. Div. 1987) (fifteen 

percent); Fuchs v. Saladino, 118 N.Y.S. 172, 176 (App. Div. 1909) (fifteen 

percent). While “[n]o mathematical rule relating to the percentage of the 

price, of cost of completion or of completeness can be laid down to 
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determine substantial performance of a building contract,” Plante v. 

Jacobs, 103 N.W.2d 296, 298 (Wis. 1960), the work left unfinished in 

this case was much more than a technical or inadvertent omission; 

rather, the omissions materially affected the habitability of the house. 

See Nelson v. Hazel, 406 P.2d 138, 144 (Idaho 1965) (“The mere fact that 

a shell was constructed containing the rooms outlined in the contract, 

does not in itself mean that the contract was substantially performed.”). 

 We acknowledge the record demonstrates Matt Lande agreed to 

perform some tasks that are ordinarily the responsibility of a general 

contractor. But the owner’s willingness to take on additional 

responsibilities does not absolve the builder’s responsibility to 

substantially perform the work the builder agreed to perform. While 

Matt Lande had the ability to contact Flynn’s subcontractors to complete 

the work, the responsibility to complete the project was Flynn’s in his 

capacity as general contractor. As observed by the Wisconsin Supreme 

Court, 

the owner has a right to contract for the completed structure 

or work and in the building of a house the contract price 

pays for the relief from trouble and personal effort on the 

part of the owner in respect to building. 

Kreyer v. Driscoll, 159 N.W.2d 680, 681–82 (Wis. 1968) (holding $50,000 

contract for building of house not substantially performed when $4650 

remained); see also Harris v. Desisto, 932 S.W.2d 435 (Mo. Ct. App. 

1996) (stating the general contractor “cannot argue that he had 

substantially performed under the agreement when it is obvious that [the 

developer] had performed in his stead and that [l]ogically, under a claim 

of substantial performance, [the general contractor] cannot claim the 

benefits of the [developers’] efforts precipitated by [the general 

contractor’s] breach as a basis for avoiding the effect of the breach”); 
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Local Union No. 964, United Bros. of Carpenters & Joiners of Am. v. 

Lighting Servs., Inc., 557 N.Y.S.2d 764, 765 (App. Div. 1990) (holding 

that, although certificate of occupancy had been delivered, evidence in 

the record established work that should have been done by the 

contractor was performed by others). 

C. Disposition. Having determined Flynn did not substantially 

perform the contract, we recognize that there may be additional legal and 

factual issues that were not reached by the district court that could have 

an impact on the disposition of this case. The district court did not 

address, for instance, the factual disputes in the record for the reason 

Flynn walked off the job and whether lack of specific performance might 

be excused by the conduct of the Landes. See Horsfield Constr., Inc. v. 

Dubuque Cnty., 653 N.W.2d 563, 573 (Iowa 2002) (stating that 

anticipatory repudiation “excuses performance on the part of the nonbreaching party”). The district court also did not address the 

significance, if any, of the hidden nature of the markup on the ability of 

Flynn to enforce a mechanic’s lien. We intimate no view on these 

questions, but remand the case on the current record for further 

proceedings. See, e.g., Lewis Elec. Co. v. Miller, 791 N.W.2d 691, 694–96 

(Iowa 2010) (reversing based on lack of evidence of substantial 

performance and remanding for new findings “on the basis of the current 

record”); Sauder v. Union Produce Coop., 592 N.W.2d 695, 698 (Iowa 

1999) (remanded for findings on an issue the district court did not 

consider “on the existing record”). 

IV. Conclusion. 

 For the reasons discussed above, we hold that the trial court erred 

in concluding that Flynn had substantially completed work for the 

Landes. On this issue, we vacate the opinion of the court of appeals, 
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reverse the judgment of the district court, and remand the case for 

further proceedings. The opinion of the court of appeals is affirmed as to 

all other issues raised in this appeal. 

DECISION OF COURT OF APPEALS AFFIRMED IN PART AND 

VACATED IN PART; DISTRICT COURT JUDGMENT REVERSED, AND 

CASE REMANDED FOR FURTHER PROCEEDINGS.