Title: Hellbusch v. Rheinholdt
Citation: 550 P.2d 1199
Docket Number: N/A
State: Oregon
Issuer: Oregon Supreme Court
Date: June 17, 1976

550 P.2d 1199 (1976)
David HELLBUSCH, Respondent,
v.
Marvin RHEINHOLDT and Sonya J. Rheinholdt, Husband and Wife, Appellants,
First Federal Savings &amp; Loan Association of Salem, Oregon, an Oregon Corporation, et al., Defendants.

Supreme Court of Oregon.
Argued and Submitted May 3, 1976.
Decided June 17, 1976.
*1200 Neil R. Bryant, Bend, argued the cause for appellants. With him on the brief were William M. Holmes, and Gray, Fancher, Holmes &amp; Hurley, Bend.
Max Merrill of Merrill &amp; O'Sullivan, Bend, argued the cause and filed a brief for respondent.
Before O'CONNELL,[*] C.J., and McALLISTER, DENECKE,[**] TONGUE and BRYSON, JJ.
Argued and Submitted at Pendleton May 3, 1976.
BRYSON, Justice.
Plaintiff brought this suit to foreclose a mechanic's lien on defendants' dwelling for the balance due on the construction contract. Defendants appeal from a decree in favor of plaintiff. We review de novo.
In November, 1972, defendants contacted plaintiff regarding the construction of a home for them in Bend, Oregon. They had no plans or specifications. By March of 1973 defendants had a designer prepare the plans and elevation drawings but no specifications. In the latter part of May, 1973, defendants asked plaintiff "to get started on the foundation on a cost plus basis." Defendants did not submit specifications for materials or fixtures and plaintiff could not submit a firm price. The parties did not execute a written contract, and none was prepared.
Plaintiff claims there was an oral contract to build on "cost plus." Defendants claim there was an oral contract to build for a fixed price of $49,798.45. This price is based on plaintiff's "Contractor's Estimate Sheet" submitted to defendants so they could apply for a construction loan. Subsequently, plaintiff, at defendants' request, prepared a form, "Description of Materials." The estimate is itemized in a scanty manner on a printed form and obviously does not include all building items contemplated by the parties, and particularly defendants.
The Contractor's Estimate Sheet, on which defendants claim a fixed contract price for construction, concludes as follows:
Neither the Contractor's Estimate Sheet nor the description of materials form is signed by the parties.
Plaintiff testified:
As the house was built, defendants continued to make numerous minor and major changes. The defendants didn't have the funds to pay plaintiff's final billing and the lien was filed, based on an oral contract to build on a cost-plus basis, showing:
This suit to foreclose followed.
The defendants contend the court erred "in formulating a cost plus contract between the parties." The court's letter opinion found:
The plaintiff testified that his original understanding of the contract was cost plus 10 percent, which would have amounted to approximately $6,000. However, before the filing of the lien he reduced his claim to cost plus 5 percent, or a profit of $3,000, in order to reach a settlement with the defendants, when defendants' loan would not cover the total construction cost of the dwelling as completed. Plaintiff testified:
The ambiguity in the oral contract was the amount of percentage to be applied as "cost plus" in arriving at plaintiff's profit. Certainly the parties did not contemplate that plaintiff would build the house for defendants at no profit. The evidence shows the defendants asked plaintiff to excavate and construct the foundation at "cost plus." Mr. Betts, a subcontractor, and Mr. Kearns, who inspected the house, both testified that Mr. Rheinholdt told them that plaintiff was building the house for him on a cost plus basis. Defendants argue that the percentage of profit to be applied cannot be determined by custom and usage.
See Green Mt. Log Co. v. C. &amp; N.R.R.R., 146 Or. 461, 471, 30 P.2d 1047, 86 A.L.R. 1228 (1934); ORS 41.270. The question of determining the custom or usage is for the trier of facts. Andrews Equip. Service v. Heintz Constr., 241 Or. 28, 29, 403 P.2d 774 (1965).
Defendant Marvin Rheinholdt is in the electrical and television business. Rheinholdt first met plaintiff when Rheinholdt was making installations at the Inn of the Seventh Mountain near Bend, Oregon. Plaintiff was completing some construction work on the same project. Rheinholdt testified that he had dealt with suppliers and materialmen. On cross-examination he testified that he had never heard of the term "cost plus." The trial court did not accept this testimony and in light of all of the testimony, we reach the same conclusion. From the testimony, it is clear that defendants had reason to know of the custom in the industry and that a builder would charge at least 5 percent profit, based on his costs of construction.
Defendants also contend that plaintiff was not registered with the "Builder's Board" pursuant to Chapter 701, ORS, and therefore, the court erred in allowing this foreclosure. ORS 701.065(1) provides:
The evidence shows that plaintiff was registered with the Builder's Board as Hellbusch Construction Co. The court allowed plaintiff's registration card, which showed his registration number as a "Homebuilder," to be received in evidence. Plaintiff did business as an individual under the name Hellbusch Construction Co. The purpose of Chapter 701, *1203 ORS, is to protect the party for whom the construction work is performed. It requires a surety bond to be posted and a procedure of filing complaints, claims, the investigation of complaints, and the satisfying of claims from the bond. There is no provision that requires a builder such as plaintiff to register both in his individual name and the name under which he does business, and we can see no practical reason for so providing. We conclude that the evidence was properly received, showing that the plaintiff was registered as required by law. Further, the defendants did not raise this issue by any pleadings.
Finally, the defendants contend that "[t]he evidence does not support the finding that the plaintiff is entitled to a judgment in the sum of $14,851.13."
The defendants filed a list of complaints with the Builder's Board and one of their inspectors made an investigation and recommendation. Most of the numerous complaints were minor in nature. There is testimony that there is a "hump" in the floor of the master bathroom; that the wrong tile was used in one of the bathrooms; that one of the three fireplaces was to be white brick rather than "painted white"; and that a "heatalator" was to have been installed in one of the fireplaces.
As to the "hump," the plaintiff testified:
We have examined all of the testimony and the trouble with placing the responsibility on the plaintiff arises from the fact that the defendants dealt individually with several of the subcontractors who performed the tile, brick, and fireplace work. It is difficult to determine whose fault, if any, resulted in the complaints submitted by the defendants. The testimony shows that plaintiff and his subcontractors performed their work in a good, workmanlike manner. Witnesses who inspected the premises for the Builder's Board estimated it would take one to three days' work to complete most of the objectionable items. The record discloses that the plaintiff agreed to make any reasonable correction. The trial judge did not allow the full amount of the lien and made an additional allowance of $205 to cover the correction of specific items.
From our review of the evidence we reach the same conclusion as the trial judge, and the plaintiff is entitled to judgment in the amount of $14,851.13.
Affirmed.
[*]  Chief Justice when the case was argued.
[**]  Chief Justice when the case was decided.