Court Opinion

ID: 4014100
Source: CourtListenerOpinion
Date Created: 2016-07-08 15:04:47.719647+00
Date Added: 2024-06-11T14:28:16.722785
License: Public Domain

MEMORANDUM DECISION                                                           FILED
                                                                               Jul 08 2016, 8:35 am
      Pursuant to Ind. Appellate Rule 65(D), this
      Memorandum Decision shall not be regarded as                                  CLERK
                                                                                Indiana Supreme Court
      precedent or cited before any court except for the                           Court of Appeals
                                                                                     and Tax Court
      purpose of establishing the defense of res judicata,
      collateral estoppel, or the law of the case.

      ATTORNEY FOR APPELLANTS                                       ATTORNEY FOR APPELLEES
      Paul J. Wallace                                               Michael H. Hagedorn
      Jones-Wallace, LLC                                            Hagedorn Law Office
      Evansville, Indiana                                           Tell City, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      Jeffrey M. Kaetzel, Marcia Kaetzel                            July 8, 2016
      d/b/a J&M Construction,                                       Court of Appeals Case No.
                                                                    62A01-1507-CC-837
      Appellants-Plaintiffs/Counter-defendants,
                                                                    Appeal from the Perry Circuit
              v.                                                    Court.
                                                                    The Honorable William E.
                                                                    Weikert, Special Judge.
      Donald L. Woods, II and Kori M.                               Cause No. 62C01-1103-CC-127
      McBrayer Woods,
      Appellees-Defendants/Counter-plaintiffs.

      Friedlander, Senior Judge

[1]   Jeffrey M. Kaetzel and Marcia Kaetzel, doing business as J & M Construction,

      appeal after a bench trial from the trial court’s order resolving their amended

      complaint against Donald L. Woods, II and Kori M. McBrayer Woods, and

      resolving the Woodses’ counterclaims against the Kaetzels. The Woodses

      Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016                Page 1 of 12
      cross-appeal contending that the trial court erred by entering judgment against

      them and in favor of non-parties Leroy Oeding and Glen Hassfurther,

      subcontractors of J & M Construction. We affirm in part, reverse in part, and

      remand with instructions.

[2]   The Woodses own real estate located in Tell City, Indiana. On April 16, 2010,

      the Woodses and Jeffrey signed a document bearing the words “price sheet”

      prepared by J & M Construction, the Kaetzels’ corporation, and listing the

      prices of various aspects of the construction of a new home on the Woodses’

      property. Appellees’ App. p. 11. The agreement had several prices that were

      fixed, while other prices were dependent on factors not known to the parties at

      the time of the signing. This agreement was a two-page document on the

      second page of which a total price of $224,804.26 was typed, but $226,379.26
                                           1
      was written in the margin. At some point, an additional page was added, but

      was neither signed nor dated. The additional page contained several items not

      priced on the initial two pages. Certain written plans, blueprints, and

      specifications also came into existence during the discussion by the parties.

[3]   Jeffrey provided labor, materials, supplies, and services in the construction of

      the Woodses’ home. He would submit invoices to them, and they would then

      make payments to the Kaetzels’ business, J & M Construction. The Woodses

      had separate projects related to the home construction to be completed by

      1
       If the total price of $224,804.26 is added to the line providing for additional allowances for tile floor and
      heat priced at $1,575, you arrive at the sum $226,379.26, the number handwritten in the margin. Id. at 63.

      Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016                  Page 2 of 12
      Jeffrey that were not priced in the two-page agreement. They also had separate

      projects related to the home construction that were not part of the agreement to

      be completed by Oeding and Hassfurther. Kaetzel had subcontracted with

      Oeding to complete the plumbing and heating and with Hassfurther to complete

      the masonry work, each aspects that were part of the two-page agreement.

[4]   A dispute arose over the amount paid by the Woodses. On December 30, 2010,

      Jeffrey filed in the county recorder’s office a sworn statement and notice of

      intention to hold a mechanic’s lien against the Woodses’ property. On March

      25, 2011, Jeffrey, doing business as J & M Construction, filed a complaint

      against the Woodses for underpaying him by $93,993.39. The Woodses filed

      an answer and affirmative defenses to Jeffrey’s complaint, and then on May 31,

      2011 filed counterclaims against Jeffrey and J & M Construction, alleging

      breach of contract, fraud, and slander of title. In particular, the Woodses

      alleged that Jeffrey had been overpaid $79,635.16 beyond the contract price of

      $226,379.26 for construction of the new house.

[5]   On August 8, 2011, the trial court entered an order granting the Woodses’

      motion for leave to deposit cash with the trial court clerk to be held in trust until

      judgment of the court, and for the release of the mechanic’s lien against the

      Woodses’ property. They deposited the money on September 29, 2011.

      Thereafter, the Woodses filed amended counterclaims against Jeffrey and J &

      M Construction, adding Marcia as a counter-defendant and additionally

      alleging construction defects and breach of express and implied warranties.

      Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 3 of 12
[6]   The Kaetzels entered a general denial to the Woodses’ counterclaims. They

      then filed an amended complaint on March 4, 2014, alleging that the parties

      signed an agreement on April 16, 2010, and attaching the agreement to the

      complaint. The Woodses filed an answer and affirmative defenses to the

      amended complaint, and while admitting the existence and signing of the

      agreement, denied the authenticity of the document attached to the amended

      complaint.

[7]   The bench trial began on July 28, 2014, and continued over the course of

      several days before its completion on November 6, 2014. At the beginning of

      the second day of trial, Jeffrey filed a motion with the trial court seeking to

      amend the complaint to conform to the evidence by adding a claim alleging

      breach of contract, citing to the April 16, 2010 agreement. The motion was

      filed in open court, but does not appear to have been ruled on by the trial court.

      After the presentation of the evidence had concluded, the trial court took the

      matter under advisement and entered findings of fact and conclusions thereon.

[8]   The trial court found that there was never a meeting of the minds between the

      parties, and therefore, no contract existed. The trial court concluded that the

      only theory under which Jeffrey could recover was quantum meruit. The trial

      court further concluded that it would not consider page three of the agreement,

      doubting its legitimacy, but would consider the plans and blueprints that were

      part of the discussions between the parties in the early stages of negotiations.

      Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 4 of 12
                                                            2
       The trial court then found $224,022.26 to be the fair market value of the

       Woodses’ home. In order to arrive at a just amount to compensate Jeffrey, the

       trial court deducted from the fair market value certain amounts for which

       Jeffrey provided no labor, materials, supplies, or services. The trial court

       deducted a total of $85,206.00 for plumbing, duct work, rock, grading,

       excavating, cabinets, tile, paint, painting, floors, geothermal, electrical,

       appliances, permits, and fees. The total amount owed Jeffrey under a quantum

       meruit analysis was $139,598.26. The Woodses had already paid Kaetzel

       $150,090.03, thereby overpaying him by $10,491.77. The trial court concluded

       that Jeffrey was entitled to take nothing by way of his amended complaint, and

       entered judgment against J & M Construction and Jeffrey and Marcia Kaetzel

       jointly and severally in the amount of $10,491.77.

[9]    The trial court also considered Jeffrey’s claims of entitlement to payment for

       extra projects completed for the Woodses by him. After hearing the evidence,

       the trial court concluded that the Woodses owed Jeffrey $6,652.39 for all extra

       projects, including trim, hedge labor, extra concrete pad, and enlargement of

       the back porch.

[10]   The trial court then made findings, legal conclusions, and entered judgment

       against the Woodses and in favor of Oeding and Hassfurther, non-parties to the

       2
         In the trial court’s conclusions of law with respect to Kaetzel’s claim on quantum meruit, paragraph 5(a)
       finds the fair market value of the Woodses’ home to be $224,022.26. Appellees’ App. p. 20. In subsequent
       conclusions with respect to that claim, however, the trial court cites the fair market value as $224,804.26,
       which is the price reflected in the April 16, 2010 agreement.

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016                Page 5 of 12
       action, for the cost of extra projects that were not part of the agreement, but

       were completed by them for the Woodses.

[11]   Next, the trial court considered the Woodses’ counterclaims for construction

       defects and concluded that they were entitled to $39,370.00 for the repair of

       structural defects attributable to Jeffrey and J & M Construction. The trial

       court also entered judgment in favor of the Woodses for professional costs for a

       structural evaluation by a professional engineer incurred in the prosecution of

       that counterclaim. The Kaetzels and J & M Construction were ordered to

       reimburse the Woodses for attorney fees incurred in the prosecution of this

       counterclaim in an amount to be determined later.

[12]   The trial court found that the Woodses had failed to meet their burden of

       proving fraud, slander of title, and breach of express and implied warranties.

       This appeal and cross-appeal followed.

[13]   When entering judgment, the trial court, sua sponte, issued findings of fact and

       conclusions thereon pursuant to Indiana Trial Rule 52(A). Under that rule,

       courts on review will not set aside the findings or judgment unless they are

       clearly erroneous and due regard shall be given to the opportunity of the trial

       court to judge the witnesses’ credibility. Best v. Best, 941 N.E.2d 499 (Ind.

       2011). We do not reweigh the evidence nor reassess witness credibility, and

       view the evidence most favorably to the judgment. Id. Findings are clearly

       erroneous only when the record contains no facts to support them either

       directly or by inference. Id.

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 6 of 12
[14]   Neither party challenges the trial court’s determination that Jeffrey was entitled

       to damages under principles of quantum meruit, nor do they challenge the trial

       court’s calculation of damages. Jeffrey asks that we reverse the trial court’s

       judgment awarding damages to the Woodses for their counterclaim under

       Indiana Code article 32-27 (West, Westlaw 2002), contending that the absence

       of a contract, which is a statutory prerequisite, makes the award improper.

[15]   The Woodses alleged in Count IV of their counterclaim that their home had a

       major structural defect, defect, or construction defect, as those terms are defined

       by statute, and that they met the definitions of both initial home buyers, or

       home owners, terms also defined by statute. Indiana Code section 32-27-2-2

       (West, Westlaw 2002) defines an initial home buyer as “a person who executes a

       contract with a builder to buy a new home and who occupies the new home as its

       first occupant and occupies the new home as a residence.” (emphasis added).

       A home owner is defined by Indiana code section 32-27-3-1(6) (West, Westlaw

       2002) in pertinent part as any person that is the owner of the residence and

       contracts with a construction professional for the construction of a residence.

       Crucial to both definitions is the existence and execution of a contract.

[16]   When examining the trial court’s special findings of fact, appellate courts

       review the sufficiency of the evidence supporting the trial court’s findings of

       fact, and then determine if those findings support the trial court’s conclusions.

       The Woodses seek damages authorized by statute. When a statute is clear and

       unambiguous, as the pertinent statutes are, we need not apply rules of statutory

       construction other than to give words and phrases their plain, ordinary, and

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 7 of 12
       usual sense. City of Carmel v. Steele, 865 N.E.2d 612 (Ind. 2007). The existence

       of a contract is a question of law. Sands v. Helen HCI, LLC, 945 N.E.2d 176

       (Ind. Ct. App. 2011).

[17]   Regarding the Woodses’ construction defects claims, the trial court concluded

       that the Woodses met the statutory definition of initial home buyer and home

       owner. The trial court also found that “Kaetzels did, in fact, construct the

       ‘New Home and Residence’, but not in accordance with the ‘Contract’ or the

       Plans and Specifications.” Appellants’ App. p. 27. The trial court’s only

       reference to a contract in this specific section of findings and conclusions

       thereon was to note that the home was built not in accordance with the

       contract, plans, and specifications; i.e., the home’s construction suffered one or

       more of the kinds of defects as defined by statute and alleged in the

       counterclaims.

[18]   Although the trial court specifically concluded as a matter of law that the

       Woodses met the statutory definition of initial home buyer and homeowner, it

       made no specific findings pertaining to the execution of a contract, which

       would be necessary to support its conclusion. Other findings explicitly made by

       the trial court, specifically addressing the issue of breach of contract, reflected

       that there was no contract, and those findings are supported by the evidence.

       The Woodses, therefore, cannot succeed on their claim for statutory damages,

       the prerequisite for which is the existence and execution of a contract, when the

       trial court has made no finding in this specific section of its order, or by looking

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 8 of 12
       at the findings in the entire order. Likewise, the Woodses cannot recover

       attorney fees, costs, or professional fees under the related statutes.

[19]   The Woodses cross-appeal, contending that the trial court’s award of damages

       to Oeding and Hassfurther is improper because they were not parties to the

       action. The Woodses further contend that the trial court used an improper

       measure of damages in determining the judgment amounts in favor of Oeding,

       Hassfurther, and Jeffrey for extra projects completed.

[20]   The trial court issued specific findings of fact and conclusions thereon with

       respect to extra projects completed by Hassfurther, Oeding, and Jeffrey.

       Although Hassfurther and Oeding testified at trial, neither were named parties

       to the complaint, nor did they move to intervene in the cause of action. With

       respect to Hassfurther, the trial court found as follows:

               Hassfurther was a subcontractor of plaintiff. The plaintiff
               performed no services in the areas claimed by Hassfurther.
               Therefore, the plaintiff can make no claim under quantum meruit
               for services done by Hassfurther. Since Hassfurther was not a
               party to this action, Hassfurther cannot make a claim for its
               contribution to the reasonable value of this house on the basis on
               [sic] quantum meruit. Therefore, the only claims made by
               Hassfurther which shall be allowed are for “extra projects”
               between Hassfurther and the defendant. These will be itemized
               separately.
       Appellants’ App. pp. 22-23. After finding that the Woodses were equally

       responsible for the events contributing toward the expense associated with the

       retaining wall, the trial court awarded Hassfurther a judgment of $9,584.40

       against the Woodses.

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 9 of 12
[21]   The trial court made the following findings pertaining to Oeding:

               Oeding was a subcontractor of plaintiff. The plaintiff performed
               no services in the areas claimed by Oeding. Therefore, the
               plaintiff can make no claim under quantum meruit for services
               done by Oeding. Since Oeding was not a party to this action, he
               cannot make a claim for his contribution to the reasonable value
               of this house on the basis of quantum meruit. Therefore, the
               only claims made by Oeding which shall be allowed are for
               “extra projects” between Oeding and the defendant. These will
               be itemized separately.
       Id. at 24. The trial court then awarded Oeding a judgment of $5,597.54 against

       the Woodses.

[22]   While there is evidence to support the trial court’s findings, we must reverse the

       trial court’s award of damages in favor of Hassfurther and Oeding, which seem

       to be based on a theory of implied contract or quasi contract. “A judgment

       cannot properly be rendered for or against one who is not a party to the action.”

       Ind. Dept. of State Revenue v. Ind. Gamma Gamma of Alpha Tau Omega, Inc., 181
Ind. App. 664, 687, 394 N.E.2d 187, 201 (1979) (citing Kist v. Coughlin, 222 Ind.
639, 57 N.E.2d 586 (1944)). Because Hassfurther and Oeding were not parties

       to this action, we must reverse the trial court’s judgment as to them.

[23]   The trial court also issued findings of fact and conclusions thereon pertaining to

       extra work performed for the Woodses by Jeffrey. The trial court specifically

       found that the addition of Craftsman trim to the interior of the house, hedge

       labor, extra concrete pad, and the expansion of the back porch were extra

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 10 of 12
       projects completed for the Woodses by him. The trial court assigned values for

       the reasonable cost of the extra work totaling $6,652.39.

[24]   The Woodses assert that the trial court used an improper measure of damages

       in determining the judgment amount. The trial court relied on invoices

       submitted by Kaetzel and admitted in evidence over objection as Plaintiff’s

       Exhibit 29. The Woodses claim that if awarding damages under a theory of

       quantum meruit is proper, introduction of invoices and bills for materials

       purchased and of work done is insufficient to establish the reasonable value of

       the materials and labor, which is required to establish what benefit was received

       or rendered to the Woodses.

[25]   Adhering to our standard of review, we observe that the trial court’s findings of

       fact are supported by Plaintiffs’ Exhibit 29. The Woodses do not dispute that

       the extra projects were requested and performed. Instead, they challenge the

       value of the benefit received by them. The evidence of that value was

       established by the invoices and bills, and while objected to, was uncontradicted.

       The trial court did not err by using that evidence to determine the measure of

       damages. The conclusion that Jeffrey is entitled to recovery for the value of the

       extra work totaling $6,652.39 is supported by the findings, which are supported

       by the evidence.

[26]   The value of the home was $224,804.26 to which $85,206.00 Jeffrey is not

       entitled. The amount the Woodses owed Jeffrey is $139,598.26. The Woodses,

       however, have paid Kaetzel $150,090.03, thereby overpaying Kaetzel by

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016   Page 11 of 12
                      3
       $10,401.74. The extra projects completed by Kaetzel are valued at $6,652.39.

       The Woodses are not entitled to statutory damages and are not liable in this

       cause of action for the extra projects completed by Hassfurther and Oeding,

       non-parties to the complaint. Consequently, we instruct the trial court to enter

       judgment in favor of the Woodses for the difference, $3,749.35.

[27]   Judgment affirmed in part, reversed in part, and remanded with instructions.

       Mathias, J., and Bradford, J., concur.

       3
        The trial court’s summary indicates an overpayment of $10,491.77 by the Woodses to Kaetzel. Appellants’
       App. p. 26. Our calculations reflect the overpayment is $10,401.74.

       Court of Appeals of Indiana | Memorandum Decision 62A01-1507-CC-837 | July 8, 2016         Page 12 of 12