Court Opinion

ID: 9679387
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:51:40.945735+00
Date Added: 2024-06-11T13:15:39.227851
License: Public Domain

WOLLMAN, Chief Justice.
Appellee sued appellant for the reasonable value of materials and labor expended to remodel appellant’s house. The trial court’s judgment dismissed appellant’s *312counterclaim, rescinded the contract and allowed appellee the reasonable value of work performed. Appellant appeals from this judgment. We affirm.
In late 1977 appellant was the successful bidder on a structure that was originally constructed as a place to sell produce and was later remodeled into a dwelling. Appellant had the structure moved onto its present location, a residential lot on West Lotta Street in Sioux Falls. Appellant planned to have the structure remodeled before renting it out or occupying it himself.
In May of 1978 the parties met for the first time at the Lotta Street address to discuss remodeling the house. Appellee is a carpenter and small contractor who had originally built the structure and who had also previously remodeled it into a house. Appellant told appellee that he would be away at school for the summer and that he wanted the house completely remodeled in the meantime. In appellee’s words, “[H]e (appellant) asked me what it was going to take to fix the building, and I said $7,000.... [H]e just said, go ahead and go to work.” Appellant told appellee to use subcontractors of his own choosing for the plumbing, heating, and electrical work.
Appellant understood this to be a bid for $7,000 for all carpentry, subcontractor labor, and materials. Appellee understood it to be a. bid for his labor cost only. The labor performed by appellee pursuant to his bid included straightening the structure on its new foundation, straightening the roof, adding additional length to the walls, replacing and repairing the interior sheet rock, building two porches, building a bathroom, closing off an old garage door, constructing closets and a stairway, closing up a window in the basement, and additional cement and block work. At appellee’s verbal request, appellant paid appellee $5,000 in October of 1978 as partial payment on the total cost. Appellee submitted his final bill in November of 1978. The bill represented appellee’s total labor cost, slightly over $7,600, plus material and supply expenses, less the amount appellee had already been paid. At this point/ when the work was nearly completed, the parties realized that they each had a different understanding of the meaning of the bid. Upon receiving the bill, appellant discharged ap-pellee and hired another contractor to complete the work. Appellee then commenced this action to recover the balance due on his bill.
The first issue is whether the trial court erred in finding that appellee was entitled to rescind the contract on the basis of mutual mistake of fact. SDCL 53-4-9 defines mistake:
Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake and consisting in:
(1) An unconscious ignorance or forgetfulness of a fact, past or present, material to the contract; or
(2) Belief in the present existence of a thing material to the contract which does not exist, or in the past existence of such a thing which has not existed.
The requirement of SDCL 53-4-9 that a “mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake,” has been interpreted to mean:
The fact concerning which the mistake was made must be material to the transaction and must not result from the want of such care and diligence as would be exercised by a person of reasonable prudence under the same circumstances and must relate to a present or past fact.
Nilsson v. Krueger, 69 S.D. 312, 317, 9 N.W.2d 783, 786 (1943), (interpreting SDC 10.0312, which was recodified as SDCL 53—4-9). See also Beatty v. Depue, 78 S.D. 395, 402, 103 N.W.2d 187, 191 (1960). Cf. McDonald v. Miners & Merchants Bank, Inc., 310 N.W.2d 591 (S.D.1981).
The trial court thoroughly considered the issue of negligence before concluding that the evidence established a mutual mistake of fact regarding the terms of the bid. The trial court specifically found that “the mistake was not the product of any negligence on the part of either the Plaintiff or the *313Defendant nor the result of fraud or misrepresentation of either party.”
We will not set aside a trial court’s findings unless they are clearly erroneous. SDCL 15-6-52(a); In re Estate of Hobelsberger, 85 S.D. 282, 181 N.W.2d 455 (1970). After a review of the record, we cannot say that the trial court erred in finding that neither party was negligent in his mistaken understanding of the bid. Consequently, rescission of the contract was an appropriate remedy.*
. The second issue is whether appellee established the reasonable value of the services rendered and materials furnished.
The basic principles of restitution are illustrated in the following excerpt from D. Dobbs, Handbook on the Law of Remedies 261 (1973):
[T]he plaintiff is not entitled to damages from the defendant who has committed no tort nor breached any contract. He is entitled only to restitution, representing the value of the benefit to the defendant. His costs may represent some kind of evidence of value, especially if it is added that the costs were reasonable, but they do not represent a recoverable item of restitution in themselves.
As stated by the Supreme Court of Iowa, “The proper measure of recovery is the reasonable value of the services rendered and materials furnished, and should be distinguished from actual cost to the contractor.” Olberding Const. Co., Inc. v. Ruden, 243 N.W.2d 872, 875 (Iowa 1976). See also Stark v. Stark, 79 S.D. 178, 109 N.W.2d 904 (1961); Fehlhafer v. Reiners, 37 S.D. 289, 157 N.W. 1058 (1916); Woodford v. Kelley, 18 S.D. 615, 101 N.W. 1069 (1904); Caldwell v. Myers, 2 S.D. 506, 51 N.W. 210 (1892).
Appellee presented evidence of what he paid for all of the materials that were placed in the structure. He and his witness testified regarding the number of hours spent working on the structure and the hourly wage paid to appellee’s employees. Appellant called two experts to estimate the reasonable value of the services rendered by appellee. It is clear from the record that the trial court considered the evidence presented by both parties, not merely the evidence of appellee’s costs. After reviewing the evidence the trial court concluded that the reasonable value of the work performed and the materials used corresponded to the costs of those items. The record also reveals that the trial court carefully considered the reasonable value issue prior to denying appellant’s motion for a new trial.
We conclude that what was said by the Iowa Court in Olberding Const. Co., Inc. v. Ruden, supra, is applicable to the case before us. There, the plaintiff sought to recover for the value of work performed on defendant’s home. The plaintiff presented the costs of the items of labor, materials, and rental equipment as evidence of value conferred on the defendants. The defendants called two experts who offered their opinions of the value of the work done on the home. The Iowa Court determined that plaintiff’s cost was an accurate measure of the benefit conferred upon the defendants. The court stated, “The resolution of the ease below clearly depended on matters of credibility.... It is obvious from the decision that the trial court gave substantial credence to the evidence introduced by the Company. On the record before us, we cannot say the court was wrong in so doing.” 243 N.W.2d at 877.
Granted that appellee did not call any witnesses to testify regarding the reasonableness of the charges for labor and materials, our review of the record convinces us that the trial court did not err in finding that appellee’s costs represented the reasonable value of the benefits conferred upon appellant.
The judgment is affirmed.
*314DUNN and MORGAN, JJ., concur.
FOSHEIM, J., concurs specially.
HENDERSON, J., dissents.

 SDCL 21-12-2 provides:
Rescission cannot be adjudged for mere mistake, unless the party against whom it is adjudged can be restored to substantially the same condition as if the contract had not been made.
Because appellant does not contend that the statute bars appellee’s prayer for rescission and for recovery on the basis of quantum meruit, we are not disposed to so hold on the basis of our own motion and in the absence of any countervailing arguments.