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Kim A. Cox Trust, Appellant-Cross-Appellee-Defendant v. Stookey Construction, LLC, Appellee-Cross-Appellant-Plaintiff
MEMORANDUM DECISION
[1] The Kim A. Cox Trust (“Cox Trust”) appeals following the trial court's entry of partial judgment in favor of Stookey Construction, LLC (“Stookey”). Stookey cross-appeals the trial court's entry of partial judgment in favor of Cox Trust. The parties present several issues for our review, which we revise and restate as:
1. Whether the trial court clearly erred when it ruled Stookey was entitled to foreclose on its mechanic's lien;
2. Whether the trial court clearly erred when it did not assign a value to unused bags of gravel mix cement in its determination of damages;
3. Whether the trial court abused its discretion when it awarded Stookey $5,000 in attorney fees; and
4. Whether the trial court abused its discretion when it determined Stookey was not entitled to an award of prejudgment interest.
We affirm.
Facts and Procedural History
[2] Kim Cox (“Kim”) and his wife Cindi Cox (“Cindi”) are trustees of Cox Trust. Cox Trust owns property on Kimal Trail (“the Property”) in Warsaw, Indiana, and Kim and Cindi decided to build a pole barn on the Property to use as a residence. On December 11, 2020, Cox Trust signed a contract with Stookey agreeing to pay Stookey $143,966.45 to construct the shell of the pole barn. Cox Trust also agreed to pay an additional $11,612.57 for upgraded doors and windows. The contract listed Stookey as “an authorized Borkholder [B]uildings dealer,” (Ex. Vol. 3 at 4), and Stookey based the contract price on an estimate generated by Borkholder Buildings’ software. The contract required Cox Trust to pay 20% of the contract price upon execution of the contract, and Cox Trust paid Stookey $28,793.22 on December 11, 2020. The contract also required Cox Trust to pay 50% of the contract price when construction started and the final 30% upon completion.
[3] Cox Trust agreed that Kim would perform some of the site preparation work himself and that Cox Trust would hire other contractors to pour concrete and perform the interior finish work. Cox Trust also obtained a building permit from the City of Warsaw (“the City”). The building permit listed the points during the project when the City needed to perform inspections, and the first inspection involved looking “at the footing before concrete is poured, when steel is in place.” (Tr. Vol. 2 at 70.)
[4] Stookey contacted Borkholder Buildings to obtain supplies, but Stookey ended up purchasing material from other suppliers because a supply chain shortage caused Borkholder's prices to rapidly rise. After Kim completed the site preparation work, J.W. Stookey (“J.W.”), Stookey's owner, and Michael Cassidy, one of Stookey's employees, visited the Property. They checked the level of the grade and marked the pole locations. J.W. then drilled four-foot-deep holes where the pole locations were marked to be placed, and Cassidy and Amish subcontractors cut cleats 1 to place on the wooden poles. After J.W. dug the holes, the Amish subcontractors placed a concrete pad or “cookie” at the bottom of each hole. (Id. at 74.) The Amish subcontractors then placed the poles on top of each concrete pad and backfilled the holes with dirt. Cassidy did not observe the Amish subcontractors place every pole into the ground, but he did observe cleats on the poles that he witnessed the subcontractors put into the ground.
[5] Cox Trust paid Stookey $71,983.22, the second installment payment provided in the contract, on February 3, 2021. At some point thereafter, Cindi told J.W. “she wanted the peak part of the truss enclosed,” but J.W. did not want to enclose that area before the electrical wiring was installed inside the building. (Id. at 17.) Stookey also did not install a sliding glass door, an entrance door, and two overhead doors because Cox Trust had failed to have the house's concrete floor poured. On April 29, 2021, Stookey sent Cox Trust an invoice charging it $54,307.93. This amount represented the remaining $43,189.94 for construction of the pole barn, $14,399.99 for additional windows and doors Stookey ordered on behalf of Cox Trust, and a $3,282.00 deduction due to labor that Stookey had been unable to perform. Cox Trust refused to pay the invoice because it felt Stookey had not yet completed construction of the pole barn given that the trusses were not enclosed and the doors were not installed. On June 15, 2021, Stookey filed a notice of mechanic's lien on the Property.
[6] Neither Cox Trust nor Stookey contacted the City to request an inspection before Stookey erected the pole barn. When Ray Behling, the City's building commissioner, called Kim to ask for an update about the building's progress, Kim told him the shell was mostly complete. Behling then scheduled an appointment on July 7, 2021, to inspect the building. On July 12, 2021, Behling sent Stookey a letter that explained:
During our inspection there were a few problems that were found. The picture that was sent to us on June 24, 2021 showing a random post hole that was drilled at a depth of 48” contradicts a post that was selected on the site and dug down along side of it that shows that the post was actually only 3’4” deep, barely setting on the concrete puck at the bottom of the hole, and no concrete poured along the side of the post. We understand that there was a conversation with the owner that the concrete had to set up for a while so the concrete could dry.
Based on this information, all the poles will need to be exposed to show the depth is correct. If not, then a Structural Engineer will have to provide a fix for the existing condition. The other issue will be to show that the post will be sitting on correctly compacted soil or that the post passes thru [sic] the fill and is sitting on undisturbed soil.
(Ex. Vol. 3 at 152.)
[7] On July 19, 2021, Stookey filed suit against Cox Trust alleging that it had failed to fully pay Stookey for the services and materials Stookey provided. In addition, Stookey asked the trial court to award it prejudgment interest and attorney fees. On September 21, 2021, Cox Trust filed a counterclaim against Stookey alleging Stookey breached the parties’ contract by failing to follow the City's building code and by not completing the contracted work. Cox Trust also alleged Stookey engaged in a deceptive trade practice and committed home improvement fraud by misrepresenting that it “would purchase and use bags of concrete to secure the posts” at the Property and that it was a “Borkholder dealer” and the building would be a “Borkholder building.” (Appellant's App. Vol. 2 at 36.)
[8] The City performed a second inspection of the Property on October 28, 2021. J.W. and Kim attended the second inspection, and J.W. arranged for Robert Martin and Douglas Graham of the engineering firm Barr Design Group to also be present for the inspection. On October 29, 2021, the City sent Martin a letter listing twenty eight “items of concern” regarding the pole building that the City believed needed to be addressed. (Tr. Vol. 3 at 157.) The letter further explained: “Also, with no inspection done during the build, we have no knowledge of post depths, concrete present or installation of uplift preservation cleats. We will require that posts, of our choosing, be dug up for a visual inspection to determine correct installation.” (Id. at 158.) Graham wrote a thirteen-point response to the City's letter. Graham believed that only a few of the alleged defects identified by the City needed corrective action and it would only take four or five hours to make those corrections.
[9] Stookey did not perform any additional work on the pole barn after the second inspection. Cox Trust hired Ed Roberts, the owner of Inside & Out Handyman Services, to add the missing screws and fasteners identified in the City's inspection reports. Kim and his grandson used a diesel tractor to dig around the poles, fully exposing them. Kim did not notice cleats on the exposed poles, but the exposed poles also exhibited scarring and gouging, meaning that “whoever dug up the posts, whether they dug it up with a machine or a tool, could have knocked the [cleats] off while they were doing that[.]” (Tr. Vol. 2 at 185.) Kim and Roberts attached cleats to the poles. The City inspected the Property again and found that the pole barn passed inspection.
[10] The trial court held a bench trial on February 23, 2023. At the conclusion of the bench trial, the trial court ordered the parties to submit proposed findings of fact and conclusions of law. The trial court then issued an order with findings of fact and conclusions of law on April 28, 2023. The trial court made several findings regarding the placement of cleats on the poles:
21. Prior to the build Cox installed a time-lapse camera on site. Review of the video footage and still frames supports the testimony of Stook[e]y and his employee, Michael Cassidy that cleats were in fact attached to the poles prior to setting them.
22. However, Michael Cassidy could not verify that he observed the Amish subcontractors attached [sic] cleats to every pole and it was possible some were missed.
23. Kim Cox testified he took it upon himself to perform the labor required to expose the posts and it took “several days”. [sic] He also testified that upon excavation none of the poles had wind cleats attached. Cox further testified that he attached wind cleats to each pole excavated.
24. However, despite performing the labor to excavate the posts over several days, Cox's [sic] never presented specific evidence of damages sustained on this issue during trial with respect to the reasonable value of the labor/services he or those working on his behalf performed.
(Appellant's App. Vol. 2 at 43-44) (internal citations to the record omitted for all quotes from the trial court's order). In addition, the trial court found with respect to the uninstalled windows and doors:
43. With respect to the windows and doors, Stook[e]y testified that he had purchased them and they were being held by LT siding.
44. Stook[e]y testified he had not installed them per the contract because he was waiting for the concrete floor to be poured. Stook[e]y was concerned that due to the size and weight of the windows and doors a concrete floor was necessary to help support them and installing them prior would compromise the installation. Kim Cox agreed.
45. Stook[e]y further testified that the overhead doors could not be installed, as the installers he would sub contract with required a concrete floor to run motorized lifts upon.
46. Kim Cox testified, that at the time of trial, the concrete floor has not been poured and the doors were still not installed.
(Id. at 46-47.) The trial court concluded that Stookey could foreclose on its mechanic's lien:
3. The original fixed contract price based on the calculations of the Borkholder Buildings computer software used by Stook[e]y was $143,966.45. Of that amount, $43,189.94 remained outstanding as well as the quoted price of $11,612.57 for doors and windows for a total remaining due under the contract in the amount of $54,802.51.
4. Stook[e]y provided labor and materials under contract with Cox and submitted his final invoice for $54,307.93 on 4/9/21. *The final invoice differs from the set price within the contract due to setoffs for labor unperformed and costs for windows and doors, which exceeded the expense identified within the original contract for those items.
5. Notwithstanding the balance due under the original contract or the final invoiced amount the Court does find that while Stook[e]y substantially performed under the contract, he also breached his contractual obligations by failing to complete the additions and modifications necessary for the structure to pass inspection with the City of Warsaw.
6. Notwithstanding, no interpretation of contract law prohibits parties to a contract from failing to complete the contract and or otherwise engage in conduct which leads to a breach. A party's motives or reasoning for terminating or breaching a contract is nearly always irrelevant. State v. IBM, 51 N.E.3d 10 (Ind. 2016)
7. It has also been the law in Indiana that. . . even upon breach, when there has been substantial performance of the contract terms the breaching party remains entitled to compensation for the reasonable value of labor and materials provided less deductions for errors or omissions in doing the work required under contract. Johnson v. Taylor Bldg. Corp., 371 N.E.2d 404 (Ind. Ct. App. 1978)
8. After submitting the final invoice a dispute arose as to payment and Stook[e]y filed a notice of mechanics lien under Ind. Code 32-28-3-1 et seq. with the Kosciusko County Recorder's office on 6/15/2021. *Although the dispute may have been resolved without the necessity of filing a lien, Stook[e]y had the legal right to do so under Indiana law.
* * * * *
11. Cox [Trust] presented no evidence attacking the legal validity of the lien filing and the Court finds the lien filed in conformity with Ind. Code 32-28-3-1 et seq.
12. Cox [Trust] also presented no evidence disputing the reasonable value of the services that had been provided under contract by Stook[e]y prior to the breach which were the subject of the lien.
13. When a mechanics lien exists to secure payment of a debt and the trial court finds a real estate owner owes a contractor, the trial court is required to order that the lien be foreclosed to comply with the mechanics lien statute. Ind. Code 32-28-3-1 et. seq.
14. As indicated the final invoice submitted by S[t]ook[e]y included a total of $14,399.99 of “Add-ons.” The record contains no evidence that the increased amount of the add-ons i.e. doors and windows was ever negotiated by Stook[e]y with the Cox's [sic] after the original contract was signed.
15. Accordingly, the court finds that prior to consideration of any reduction for work not completed and/or direct or consequential damages incurred by the Cox [sic] for the breach, Stook[e]y is be [sic] owed the original negotiated price of $54,802.51 for the labor and material provided and the original negotiated price for the windows and doors provided under the contract.
(Id. at 48-50) (formatting in original).
[11] The trial court also concluded Cox Trust was entitled to direct damages on its breach of contract claim because Stookey failed “to complete the additions and modifications necessary for the construction to pass inspection with the City of Warsaw.” (Id. at 50.) The trial court noted Stookey's final invoice identified deductions for labor not completed totaling $3,282.00 and Cox Trust paid Roberts $1,624.00 to complete work for the building to pass inspection. The trial court further concluded:
5. Cox [Trust] presented evidence Stook[e]y failed to place wind cleats on all of the post [sic] set. As the court indicated in its findings, the evidence submitted on this issue was conflicting. However, even if the court were to conclude that Stook[e]y breached his contractual obligation in this regard Cox [Trust] presented no specific evidence of damages for the days of labor to dig up and place wind cleats on the posts.
6. Cox [Trust] presented evidence, undisputed by Stook[e]y[,] that they were charged for 46 eighty-pound bags of gravel mix that were not used. Cox [Trust] would be entitled to a set of [sic] against the final bill for this damage as well however the Court scoured the record for any evidence introduced by Cox [Trust] as to an appropriate measure of damages or the cost of the gravel mix upon which the court could rely and found that none was presented.
7. Cox [Trust] further alleged that damages were sustained because Stook[e]y did not exclusively obtain his building supplies and materials from Borkholder Builders.
8. Cox [Trust] presented no evidence that the materials used by Stook[e]y were either below industry standard or below the standard of materials that would have been used if obtained directly from Borkholder or that the building failed to meet Borkholder building standards.
* * * * *
12. Since the court may not order damages based on guess or speculation, the court finds that Cox [Trust] presented insufficient and/or no evidence of direct damages to be set off against Stook[e]y's final bill for either the cost of the bags of gravel mix concrete or hours of labor and cost of equipment required to excavate and reset the poles from which the court can base a further award of direct contract breach damages under Counts I and II of Cox [Trust]’s counter complaint.. [sic] (*The question as to whether wind cleats were attached by Stook[e]y is therefore legally of no consequence and the court declines to address the issue further).
13. Accordingly, the Court finds that the Kim A. Cox Trust sustained direct damages in the amount of $4,906.00 comprised of $3,282.00 for labor not completed as identified on Stook[e]y's final invoice and $1,624.00 paid by Cox to Inside & Out Handyman Services for labor and materials to complete the project per the terms of the parties[’] contract.
(Id. at 51-52) (emphasis in original).
[12] The trial court also determined Cox Trust was not entitled to consequential damages on its breach of contract claim:
7. When the parties to an agreement do not fix a date certain for performance, the law implies a reasonable time. What constitutes a reasonable time depends upon the subject matter of a contract, the circumstances attending the performance of the contract, and the situation of the parties to the contract. However, a party cannot impede performance of the contract and then claim damages due to delay of performance. Where the actions or conduct of one party to the contract prevent the other from performing his or her part, the other's nonperformance will be excused. Ponziano Constr. Servs. Inc. v. Quadri Enters., LLC, 980 N.E.2d 867, (Ind. App. 2012) [sic]
8. The evidence established that Cox [Trust] was responsible for subcontracting the pouring of the concrete floor. Cox further testified that he agreed the doors should not be set until the floor was poured.
9. Cox's decision to delay pouring the concert [sic] flooring after the dispute arose would not have been foreseeable by Stook[e]y at the time the contract was entered. In this regard, Stook[e]y cannot be held legally responsible for any damages stemming from the delay in completion of the building since he was precluded from completing that portion of his contractual obligation by Cox [Trust]’s failure to engage a subcontractor to pour the cement flooring.
* * * * *
17. Cox [Trust] also contends that the obligation to schedule inspections and obtain the City of Warsaw's approval at various stages of the build fell upon Stook[e]y and by extension that failure contributed to the delay of the building project.
18. The contract did not address upon whom the obligation to obtain timely inspections fell.
19. Testimony established that Cox was provided the inspection schedule by the City of Warsaw but he did not recall receiving it or even if he provided the information to Stook[e]y. As a result, to the extent that delayed inspections contributed to any delay and damages sustained, Cox bears that responsibility.
(Id. at 54 & 56) (emphasis in original). The trial court ruled in favor of Stookey on Cox Trust's counterclaim that Stookey violated the Deceptive Trade Practices Act, Ind. Code § 24-5-0.5-1 et seq., because while Stookey later lost its designation as a Borkholder Builder, Stookey was an authorized Borkholder Builder at the time the parties entered the contract. The trial court also ruled against Cox Trust on its claim that Stookey violated the Home Improvement Contract Act, Ind. Code § 24-5-11-1 et. seq., because the trial court concluded the “Act by definition is not applicable to new construction and according [sic] is not applicable in this case.” (Id. at 59.) With respect to Stookey's claim for attorney fees, the trial court determined Stookey was entitled to “an appropriate fee incurred by Stook[e]y to enforce the mechanics lien to the exclusion of fees incurred by Stook[e]y in defense of Cox's counterclaims.” (Id. at 60.) Therefore, while Stookey asked for an attorney fee award of $13,467.81, the trial court awarded Stookey only $5,000 in attorney fees. The trial court entered a final net judgment in favor of Stookey for $49,990.51.
[13] On May 25, 2023, Stookey filed a motion to correct error. Stookey argued the trial court miscalculated the amount of the net judgment awarded to Stookey and the net judgment award should be $54,896.51, representing $43,189.94 for the value of Stookey's labor and materials, $11,612.57 for the windows and doors, and $5,000.00 for attorney fees. Stookey also asserted the trial court erred by not awarding it prejudgment interest and only awarding Stookey $5,000.00 in attorney fees. Cox Trust filed a response to Stookey's motion to correct error on June 9, 2023. Cox Trust agreed the correct calculation of the net judgment was $54,896.51, but it argued Stookey was not entitled to prejudgment interest or a greater award of attorney fees.
[14] On June 13, 2023, the trial court issued an order granting Stookey's motion in part and denying it in part. The trial court agreed that it miscalculated the net judgment in its original order and that the correctly calculated net judgment was $54,896.51. The trial court denied Stookey's motion to correct error to the extent it sought prejudgment interest:
5. This case involved a disputed contractual performance and a medley of claims from plaintiff's initial complaint to foreclose its lien, to defendants [sic] multiple counter claims for breach of contract, setoffs and alleged violations of multiple Indiana statutes.
6. While it may be considered that the courts [sic] final judgment consisted of a “simple mathematical calculation”, [sic] the court found nothing inherently simple in arriving at said judgment. Furthermore, the court did find that the plaintiff who seeks prejudgment interest, although awarded a judgment, did in fact fail to complete the terms of the contract. Accordingly, a good faith dispute over damages owed for the services provided in spite of the breach existed.
7. The Court denies Plaintiffs [sic] Motion to Correct Errors and finds that prejudgment interest is not an appropriate remedy in this case, for either party.
(Id. at 72.) The trial court also denied Stookey's request for a higher attorney fee award. It explained:
In the present case, the court finds that the reasonable legal expense to enforce the plaintiff's lien was fractional as compared to the legal service required to defend the multiple counter claims filed, each of which presented a separate legal issue apart from enforcement of the lien. Accordingly, the court declines the invitation to increase its award of attorney fees and denies the motion to correct errors.
(Id. at 73.) The trial court entered an amended order that modified its final judgment only insofar as it reflected the recalculated amount of the judgment in favor of Stookey.
Discussion and Decision
[15] Both Cox Trust and Stookey appeal following the trial court's partial grant of Stookey's motion to correct error. We generally review a trial court's ruling on a motion to correct error for an abuse of discretion which occurs when the trial court's order is clearly against the logic and effect of the facts and circumstances before it or contrary to law. B.A. v. D.D., 189 N.E.3d 611, 614 (Ind. Ct. App. 2022), trans. denied. This standard often requires us to consider the standard of review for the underlying order. Id.
[16] The trial court's underlying order contained sua sponte findings of fact and conclusions of law following a bench trial. “Where the trial court enters specific findings sua sponte, the findings control our review and the judgment only as to the issues those specific findings cover. Where there are no specific findings, a general judgment standard applies and we may affirm on any legal theory supported by the evidence[.]” Samples v. Wilson, 12 N.E.3d 946, 949-50 (Ind. Ct. App. 2014) (internal citation omitted). When reviewing findings of fact and conclusions of law made by the trial court pursuant to Trial Rule 52,2
we will not set aside the findings or the judgment unless they are clearly erroneous. A finding is clearly erroneous when there are no facts or inferences drawn therefrom which support it. We neither reweigh the evidence nor judge the credibility of the witnesses, and we consider only the evidence and reasonable inferences drawn therefrom that support the findings. A judgment is clearly erroneous when there is no evidence supporting the findings or the findings fail to support the judgment. A judgment is also clearly erroneous when the trial court applies the wrong legal standard to properly found facts. In addition, we review the trial court's legal conclusions de novo.
Card v. Sprinkle, 194 N.E.3d 627, 634 (Ind. Ct. App. 2022) (internal citations and quotation marks omitted) (footnote added), trans. denied.
1. Stookey's Mechanic's Lien
[17] Cox Trust contends Stookey “had no contractual right to receive any further or additional payment” after Cox Trust made the second installment payment. (Appellant's Br. at 19.) Cox Trust asserts Stookey failed to complete the work it was obligated to perform under the contract, correct major defects in its work, and comply with the City's building code. Therefore, Cox Trust argues, Stookey committed the first material breach of the parties’ contract, and the trial court erred in concluding that Stookey was entitled to additional payment and had a valid mechanic's lien. Cox Trust maintains that “[c]ontrary to Trial Court's express findings and implicit suggestion, Stookey's responsibility and fault for such contract failures were not caused or shared by Coxes.” (Id. at 23.)
[18] “A mechanic's lien is a statutory tool to help collect payment for labor and materials that improve real property. It prevents landowners from enjoying their improved property while those who provided the labor and materials get the shaft.” Service Steel Warehouse Co., L.P. v. U. S. Steel Corp., 182 N.E.3d 840, 842 (Ind. 2022) (internal citation omitted). Indiana Code section 32-28-3-1(a) provides: “A contractor ․ performing labor or furnishing materials ․ for ․ the erection, alteration, repair, or removal of ․ a house ․ may have a lien as set forth in this section.” The amount of the lien shall be “to the extent of the value of any labor done or the material furnished, or both[.]” Ind. Code § 32-28-3-1(b). “A mechanic's lien, being a remedy unknown at common law, is purely a statutory creation. Because the Indiana statutes governing the filing of a notice of intention to hold a mechanic's lien are in derogation of the common law, their provisions must be strictly construed.” Capital Drywall Supply, Inc. v. Jai Jagdish, Inc., 934 N.E.2d 1193, 1199-1200 (Ind. Ct. App. 2010) (internal citation omitted). We “generally have followed a rule of strict construction in terms of adherence to the requirements for creating such a lien, and a rule of liberal application of the remedial aspects of the mechanic's lien statutes.” Id. at 1200. A mechanic's lien attaches to a property only to the extent that the property's owner owes the contractor on the contract. Ponziano Const. Servs. Inc., 980 N.E.2d at 876 (“[Contractor's] mechanic's lien attaches to [owner's] real estate only to the extent that [owner] owes [contractor] on the Contract.”).
[19] Cox Trust asserts Stookey bore responsibility for contacting the City to arrange an inspection of the poles and wind cleats before backfilling the pole holes. It contends that Stookey “had actual knowledge that its installed post footers were required to be structurally inspected by the City to determine such things as proper post depth, cookie setting, and wind cleat conformity.” (Appellant/Cross-Appellee's Br. at 23.) Cox Trust argues “Stookey's negligent and defective performance of the Contract work caused the Pole Buildings to fail and continue to fail to pass inspection,” and therefore, Stookey's performance “was from the outset at all times wrong, defective, and/or non-compliant[.]” (Id.)
[20] However, the parties’ contract did not specify who was responsible for contacting the City to arrange an inspection before backfilling the pole holes. As Stookey notes, “[t]he evidence at trial demonstrated that Stookey was only hired to construct the shell of the pole barn, that [Kim] obtained the building permit, and that [Kim] did not pass any information on to Stookey regarding the inspection schedules contained in the building permit.” (Appellee/Cross-Appellant's Br. at 29.) Consequently, it is not clear that Stookey performed deficiently by not contacting the City.
[21] Moreover, Stookey contends it substantially performed its obligations under the contract and relies on our decision in Johnson v. Taylor Bldg. Corp., 371 N.E.2d 404 (Ind. Ct. App. 1978), to argue it was entitled to foreclose on its mechanic's lien even if it bears responsibility for not arranging an inspection. In Johnson, James Johnson contracted with Taylor Building Corporation (“Taylor”) to construct four two-family dwellings. Id. at 405. Johnson paid Taylor half of the payment due under the contract, and Taylor filed a notice of intention to hold a mechanic's lien after it had completed construction of the four dwellings. Id. at 406. Johnson argued Taylor did not fulfill its obligations under the contract because the contract required Taylor to abide by all laws, ordinances, and regulations concerning construction of the dwellings, and Taylor did not abide by a county ordinance requiring it to obtain a septic permit prior to construction. Id. We held Taylor was entitled to recover on its mechanic's lien because of its substantial performance of the underlying construction contract. Id. at 407. We quoted with approval the statement of the Wisconsin Supreme Court that “ ‘[s]ubstantial performance as applied to construction of a house does not mean that every detail must be in strict compliance with the specifications and the plans. Something less than perfection is the test of specific performance unless all details are made the essence of the contract.’ ” Id. (quoting Plante v. Jacobs, 103 N.W.2d 296, 298 (Wis. 1960)).
[22] Likewise, Stookey asserts it substantially performed its obligations under the contract and was entitled to foreclose on its mechanic's lien. “The doctrine of substantial performance applies where performance of a nonessential condition is lacking, so that the benefits received by a party are far greater than the injury done to him by the breach of the other party.” ShermansTravelMedia, LLC v. Gen3Ventures, LLC, 152 N.E.3d 616, 624 (Ind. Ct. App. 2020) (internal quotation marks omitted), trans. denied. Here, Stookey fulfilled its obligation to build the pole barn shell. While Stookey did not install some of the windows and doors it had contracted to install, Stookey notes those “portions of the construction work not completed by Stookey were due to the failure of Cox to pour the concrete necessary for Stookey's remaining obligations to be fulfilled.” (Appellee/Cross-Appellant's Br. at 26.) In addition, although Cox Trust hired Roberts to add screws and fasteners after the October 29, 2021, inspection, the trial court deducted the amount the Cox Trust paid Roberts to perform that work from the damages it awarded to Stookey. Moreover, while there was an evidentiary dispute regarding whether Stookey placed cleats on the poles before putting them in the ground, the trial court did not find that dispute consequential because Cox Trust failed to present evidence of the direct damages it sustained due to Stookey's alleged failure to place cleats on the poles. Therefore, given Stookey's substantial performance of its contractual duties, we hold that the trial court did not err in concluding that Stookey was entitled to foreclose on its mechanic's lien. See, e.g., Clark v. Hunter, 861 N.E.2d 1202, 1207 (Ind. Ct. App. 2007) (holding electrician was entitled to foreclose on mechanic's lien after he substantially performed contracted work and to recover damages in the amount of the contract price minus the value of work not completed).
2. Unused Cement
[23] In addition, Cox Trust contends the trial court “improperly shifted the burden to the Trust to disprove Stookey's own claim of damages” related to forty-six bags of gravel mix cement. (Appellant's Br. at 28.) However, it was Cox Trust that sought damages for the unused cement as part of its home improvement fraud counterclaim. After the trial court resolved Stookey's claim seeking to foreclose on its mechanic's lien, the trial court then addressed Cox Trust's counterclaims. It assessed the value of those counterclaims and subtracted the value of the counterclaims from the value of Stookey's mechanic's lien. The trial court explained that while Cox Trust would have been entitled to offset the value of Stookey's mechanic's lien by the value of cement Cox Trust bought but Stookey did not use, the trial court “scoured the record for any evidence” presented by Cox Trust as to the value of the unused cement and could not find any evidence. (Appellant's App. Vol. 2 at 51.) The trial court therefore concluded that it could not offset the value of Stookey's mechanic's lien by the value of the unused cement. “Damages may not be awarded on guess or speculation, [sic] but must be ascertainable with reasonable certainty.” Dana Cos., LLC v. Chaffee Rentals, 1 N.E.3d 738, 748 (Ind. Ct. App. 2013), trans. denied. Therefore, the trial court did not clearly err by refusing to credit Cox Trust for the value of the unused cement because Cox Trust did not present any evidence of the cement's value. See, e.g., Gravis v. Graves, 574 N.E.2d 952, 953 (Ind. Ct. App. 1991) (holding purchaser of equipment from company that eventually went bankrupt was not entitled to credit for payments allegedly made to the bankruptcy trustee when the purchaser failed to present evidence of those payments).
3. Stookey's Award of Attorney's Fees
[24] Both Cox Trust and Stookey challenge the trial court's award of $5,000.00 in attorney's fees to Stookey. We review a trial court's award of attorney's fees for an abuse of discretion, and we will reverse only if the trial court's award is clearly against the logic and effect of the facts and circumstances before it. West Cent. Conservancy Dist. v. Burdett, 920 N.E.2d 699, 702 (Ind. Ct. App. 2010). “The fact that the same circumstances might justify a different outcome does not permit the substitution of this court's judgment for that of the trial court.” Id.
[25] Indiana Code section 32-28-3-14 states:
(a) Except as provided in subsection (b), in an action to enforce a lien under this chapter, a plaintiff or lienholder who recovers a judgment in any sum is entitled to recover reasonable attorney's fees. The court shall enter the attorney's fees as part of the judgment.
(b) A plaintiff may not recover attorney's fees as part of the judgment against a property owner in an action in which the contract consideration for the labor, material, or machinery has been paid by the property owner or party for whom the improvement has been constructed.
Cox Trust contends that “[f]or substantially the same reasons as stated that Stookey's Lien was defective and the Trial Court's foreclosure judgment in relation thereto was improper, Stookey was not entitled to any award of its attorney fees.” (Appellant's Br. at 25.) However, as explained above, Stookey's mechanic's lien was valid, and therefore, Cox Trust's argument fails. See, e.g., Goodrich Quality Theaters, Inc. v. Fostcorp Heating & Cooling, Inc., 39 N.E.3d 660, 664 (Ind. 2015) (holding lienholder was entitled to collect attorney's fees incurred in foreclosing upon mechanic's lien).
[26] Stookey argues the trial court's award of attorney fees was too low. Stookey relies on Abbey Villas Dev. Corp. v. Site Contractors, Inc., 716 N.E.2d 91 (Ind. Ct. App. 1993), reh'g denied, trans. denied, to argue that it should recover attorney's fees for its attorney's work in successfully defending against Cox Trust's counterclaims. In Abbey Villas, a real estate developer sought to build a residential subdivision and hired a contractor to excavate land so that sewer and water main pipes could be installed. Id. at 94-95. When the contractor failed to meet the deadlines established in the parties’ contract, the developer ordered the contractor off the job, and the contractor filed a mechanic's lien against the developer's property for the value of its unpaid work. Id. at 96. After a bench trial, the trial court ruled the contractor could foreclose on the lien and awarded the contractor $41,920.60 in attorney fees. Id. at 97. The developer asserted on appeal that the “[c]ontractor may recover only those fees related to the foreclosure of its mechanic's lien and, therefore, the trial court erred by awarding fees incurred in defending against [d]eveloper's counterclaims.” Id. at 102. We rejected the developer's argument because the contractor's defense against the developer's counterclaims “was part and parcel of, and necessary to, the enforcement of its mechanic's lien.” Id. at 103. Stookey notes that it was successful in defending against most of Cox Trust's counterclaims and asserts that, like the contractor in Abbey Villas, its defense against the counterclaims was part and parcel of enforcing its mechanic's lien. Therefore, Stookey argues, the trial court should have awarded it $13,467.81 in attorney fees.
[27] However, while the trial court ruled in Stookey's favor on many of Cox Trust's counterclaims, the trial court also found Stookey did not perform all of its obligations under the contract and awarded some damages to Cox Trust as a result. In Ponziano Const. Services, we explained:
What constitutes a reasonable attorney's fee in an action to enforce a mechanic's lien is a question of fact, the computation of which may depend on a variety of factors, including the time and effort required; the value of the interest involved; the experience, reputation, and ability of the attorneys performing the services; and the results secured at trial.
980 N.E.2d at 876. “The trial court may look at the responsibility of the parties in incurring the attorney's fees, and the trial judge possesses personal expertise [that] he or she may use when determining reasonable attorney's fees.” Id. at 876-77. The trial court's “award of attorney's fees in an action to foreclose on a mechanic's lien is not an attempt to compensate the attorney for all the legal services performed in connection with the lien[.]” Id. at 877. Instead, it “is intended to reflect the amount the lienholder reasonably had to expend to foreclose on the lien.” Id. The amount of the award “should be reasonable in relation to the amount of the judgment secured.” Id. The trial court fashioning such an award should be cautious “so that excessive awards of attorney's fees do not discourage property owners from challenging defective workmanship on the part of lien holders.” Id.
[28] Stookey submitted a client ledger detailing that it incurred attorney's fees in the amount of $13,467.81 connected to the litigation of this case, but the entries on the ledger do not delineate between tasks directly connected to foreclosing on the mechanic's lien and tasks connected to litigating ancillary claims like the breach of contract claim on which Cox Trust prevailed. Moreover, the trial court was not required to accept Stookey's valuation of its attorney's services. See Glover v. Torrence, 723 N.E.2d 924, 938-39 (Ind. Ct. App. 2000) (“Since the trial judge is considered to be an expert on the question and may judicially know what constitutes a reasonable attorney's fee, the trial court is not bound to accept the evidence presented as to the reasonable value of an attorney's services.”). Given the paucity of evidence before the trial court related to the amount of attorney's fees required for Stookey to foreclose on its mechanic's lien, the trial court was left to estimate that amount based on its own understanding of the legal market, the complexity of the issues, and the results obtained at trial. We will not reweigh the factors considered by the trial court in fashioning its attorney's fee award and hold the trial court's award of attorney's fees in the amount of $5,000 was not an abuse of discretion. See, e.g., Franklin Coll. v. Turner, 844 N.E.2d 99, 105 (Ind. Ct. App. 2006) (holding trial court did not abuse its discretion when it awarded attorney's fees in an amount less than ten percent of the fee award requested).
4. Prejudgment Interest
[29] Stookey also contends the trial court erred by declining to award it prejudgment interest. We generally review a trial court's award of prejudgment interest under an abuse of discretion standard. Clark v. Hunter, 861 N.E.2d 1202, 1208 (Ind. Ct. App. 2007). In Lash v. Kreigh, we explained:
An award of pre-judgment interest in a breach of contract action is warranted if the amount of the claim rests upon a simple calculation and the terms of the contract make such a claim ascertainable. The test for determining whether an award of prejudgment interest is appropriate is whether the damages are complete and may be ascertained as of a particular time. The award is considered proper when the trier of fact does not have to exercise its judgment to assess the amount of damages. Importantly for purposes of our review, an award of prejudgment interest is generally not considered a matter of discretion.
202 N.E.3d 1098, 1105 (Ind. Ct. App. 2023) (internal quotation marks and citations omitted). “An award of prejudgment interest is proper only where a simple mathematical computation is required. Damages that are the subject of a good faith dispute cannot allow for an award of prejudgment interest.” Bopp v. Brames, 713 N.E.2d 866, 872 (Ind. Ct. App. 1999) (internal citation omitted), trans. denied.
[30] Both parties direct us to J.S. Sweet Co., Inc. v. White Cnty. Bridge Com'n, 714 N.E.2d 219 (Ind. Ct. App. 1999), to support their respective positions. In that case, J.S. Sweet Co. (“Sweet”) contracted with the White County Bridge Commission to remove deteriorating concrete from the deck of the New Harmony Tool Bridge and “patch any resulting holes and place an epoxy overlay system back on the deck to protect the deck and provide a wearing surface.” Id. at 222. Sweet got into a dispute with the Commission over the amount of money paid to Sweet for its work on the bridge, and Sweet filed a mechanic's lien against the bridge. Id. Sweet then sued the Commission seeking to foreclose on the lien and recover damages for unjust enrichment and breach of contract. Id. The trial court subsequently awarded Sweet $78,868.64 in damages and itemized its calculation of the damage award by the tasks Sweet was not compensated for performing. Id. at 225.
[31] Sweet argued on appeal that it was entitled to prejudgment interest on the damages award. Id. We explained that in order to determine whether an award of prejudgment interest was warranted, we were required to determine whether each of the items for which the trial court awarded damages “was ascertainable at the time the claim accrued, and thereby subject to prejudgment interest, or whether the trial court was required to exercise judgment in assessing the amount due.” Id. We held Sweet was entitled to prejudgment interest where “the trial court found either that the items were uncontested by the parties or made a mere determination that the amounts were recoverable under the contract.” Id. However, we held Sweet was not entitled to prejudgment interest on the portion of the judgment that represented compensation to Sweet for the bridge deck patching it performed because the parties disputed what amount was due for that work and it had to be determined by the trial court. Id.
[32] Stookey contends its damages were easily ascertainable. It notes that its total damage award of $49,896.51 could be calculated by taking the contract price of $43,189.94 plus the $11,612.57 cost of the additional windows and doors and subtracting from that number the set-off amount of $4,906.00 representing the value of the contracted labor Stookey did not perform and the amount Cox Trust paid Inside & Out Handyman Services to complete repairs. Therefore, Stookey argues, the trial court should have awarded it $8,478.50 in prejudgment interest representing interest at an eight percent per annum rate from April 29, 2021, the date Stookey sent its final invoice, to June 13, 2023, the date the trial court entered final judgment. However, the formula Stookey lays out includes an exercise of discretion by the trial court. While the parties’ contract specified an anticipated total price, neither party lived up to its contractual obligations and the trial court was required to exercise its discretion in fashioning an award because the parties disputed the amount the trial court was to set off the contracted amount. As the trial court noted in its order on Stookey's motion to correct error, the trial court was required to resolve “disputed contractual performance and a medley of claims from plaintiff's initial complaint to foreclose its lien, to defendant[’]s multiple counter claims for breach of contract, setoffs and alleged violations of multiple Indiana statutes.” (Appellant's App. Vol. 2 at 72.) Moreover, the trial court observed: “While it may be considered that the courts [sic] final judgment consisted of a ‘simple mathematical calculation’, [sic] the court found nothing inherently simple in arriving at said judgment.” (Id.) The trial court explained Stookey “did in fact fail to complete the terms of the contract” and “a good faith dispute over damages owed for the services provided in spite of the breach existed.” (Id.) Consequently, the trial court did not abuse its discretion in denying Stookey's request for prejudgment interest. See, e.g., Woodward v. Heritage Const. Co., Inc., 887 N.E.2d 994, 1002 (Ind. Ct. App. 2008) (holding contractor was not entitled to an award of prejudgment interest when the parties’ claims required the trial court to exercise its discretion in determining the value of the services rendered by the contractor and not paid by the homeowner).
Conclusion
[33] The trial court did not clearly err in concluding Stookey was entitled to foreclose on its mechanic's lien. Moreover, the trial court did not clearly err when it refused to offset the value of the unused cement against the value of the mechanic's lien because Cox Trust did not present any evidence of the cement's value. In addition, neither the trial court's valuation of Stookey's attorney's fees nor its refusal to award prejudgment interest constituted an abuse of discretion. Accordingly, we affirm the trial court.
[34] Affirmed.
FOOTNOTES
1. Cassidy described a “cleat” as a 2x6 plank of wood. (Tr. Vol. 2 at 153-54.) He explained: “A cleat is something that we put on one side of the post and then we put another one just a little bit above it on the 90 degree side of the other one[.]” (Id. at 153.) The purpose of a cleat is to help anchor the pole in the ground. Cleats prevent uprising from wind and reduce frame twisting as the wood poles age.
2. Indiana Trial Rule 52 states: “Upon its own motion, or the written request of any party filed with the court prior to the admission of evidence, the court in all actions tried upon the facts without a jury or with an advisory jury ․ shall find the facts specially and state its conclusions thereon.”
May, Judge.
Judges Vaidik and Kenworthy concur. Vaidik, J., and Kenworthy, J., concur.
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Docket No: Court of Appeals Case No. 23A-PL-1618
Decided: January 10, 2025
Court: Court of Appeals of Indiana.
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