Donnie Custis, Sr., Appellant-Plaintiff, v. Aaron Littrell, Felicia Littrell, and North Salem State Bank, Inc., Appellees-Defendants. (2025)

MEMORANDUM DECISION

Statement of the Case

[1] Aaron Littrell and Felicia Littrell hired Donnie Custis, Sr., to paint their new family home. Later, they fired him and refused to pay his invoice because he did a poor job. Custis filed a mechanic's lien on the Littrells’ land, claiming they owed him $15,075. He then filed suit for breach of contract and to foreclose upon the lien. The Littrells counterclaimed, alleging breach of contract and slander of title, among other claims.

[2] After a bench trial, the trial court entered judgment for the Littrells, ordering Custis to pay damages and attorney's fees. He appeals, challenging the court's findings of fact and conclusions of law. Concluding the trial court did not err, we affirm.

Issues

[3] Custis raises three issues, which we consolidate and restate as:

I. Whether there is sufficient evidence to sustain the trial court's determination that Custis slandered the Littrells’ title to their land.

II. Whether the trial court erred in concluding Custis was not deprived of the right to be notified of defects in his work and an opportunity to correct them.

Facts and Procedural History

[4] In 2021, the Littrells decided to build a new home in Greencastle, Indiana. Aaron Littrell, who owns his own masonry business, acted as general contractor. The Littrells obtained written estimates from several potential subcontractors, including Custis. Custis has thirty-eight years of experience as a professional painter, including working for general contractors on new home construction projects. His estimate stated it would cost $22,600 to paint the exterior and interior of the home.

[5] The Littrells ultimately hired Custis. The parties did not sign a written contract. Based on subcontractor estimates and other information provided by the Littrells, North Salem State Bank (the Bank) issued a construction loan to finance the project.

[6] Custis began painting the trim on the home's exterior in November 2021. At that time, shingles had not been installed. Later, Aaron complained to Custis that he had failed to caulk nail heads and seams before painting some areas. Aaron further determined that some touch-up work was needed on the exterior after the shingles were installed, but Custis refused to do that work.

[7] The Littrells asked Custis to revise his estimate for painting the interior of the home, because they decided to do some of the work themselves. In January 2022, Custis gave them a revised written estimate of $10,250. The Littrells accepted Custis's revised estimate, still with no written contract, and Custis began painting the interior on March 2. By that time, other subcontractors had installed windows, drywall, and the heating system.

[8] One day while Custis was painting, Aaron looked in a closet and noticed Custis had used two shades of paint on a wall. He told Custis about the error, but Custis had no response. In addition, after Custis had applied primer to some of the walls, Aaron noticed there were rough spots and asked Custis to sand those spots prior to applying the top coat. Custis refused.

[9] On March 28, Aaron texted Custis to complain about other defects in his work, including blotchy spots on the ceiling and peeling paint. They met at the house later that day. Custis acknowledged more painting was needed but demanded additional payment for the corrective work. Aaron declined.

[10] On April 3, the Littrells fired Custis by text message, telling him to remove his equipment from the house. They contacted another painter, Aaron Weiler. Weiler examined the interior of the house and pointed out numerous defects, including cracks in the paint finish on the ceiling, uneven paint application on the ceiling, inadequate sanding and priming of the walls, visible drips or runs of paint on walls throughout the house, and paint overspray on numerous window frames. Weiler told Aaron that he would have to repaint the interior of the home to correct all of the problems. The Littrells hired Weiler and paid him $13,893.06. In addition, Aaron, Felicia, and Aaron's employee spent time cleaning Custis's paint overspray off of window frames and the garage floor.

[11] Later, the Littrells discovered many spots on the home's exterior where paint was peeling or no paint had been applied. Weiler gave them an estimate of $7,384 to correct the exterior defects.

[12] Meanwhile, Custis invoiced the Littrells, requesting $15,075. The Littrells refused to pay. Instead, on April 29 they sent him a notice through their attorney, describing the defects in his work. They also claimed that he had breached their contract.

[13] Custis did not respond to the notice. Instead, on May 13 he filed a mechanic's lien with the county recorder in relation to the Littrells’ land, claiming they owed him $15,075.

[14] In July 2022, Custis sued the Littrells and the Bank, alleging breach of contract, requesting foreclosure of the mechanic's lien, and asserting lien priority over the Bank's construction loan. The Littrells filed an answer and counterclaims, alleging: (1) unreasonable failure to remedy defective work; (2) breach of contract; (3) slander of title; and (4) violation of Indiana's home improvement contract act.

[15] In December 2022, the Putnam County Planning and Building Department issued a certificate of occupancy for the house. But the Bank refused to convert the construction loan into a regular mortgage loan while Custis's lien was in effect. As a result, the Littrells paid a higher interest rate on the construction loan than they would have for a standard home mortgage.

[16] The trial court held a multi-day bench trial and issued findings of fact, conclusions of law, and judgment in favor of the Littrells. The court found that Custis's work was defective. The court also concluded: (1) Custis had materially breached the oral contract; (2) he committed the first material breach, relieving the Littrells of any obligation to pay; (3) Custis had been given notice and an opportunity to cure the defects; (4) Custis was not entitled to a judgment or attorney's fees on his mechanic's lien; (5) Custis slandered the Littrells’ title to their property; and (6) the Littrells were entitled to damages of $27,050.95, plus $8,500.00 in attorney's fees. This appeal followed.¹

Discussion and Decision

I. Standard of Review

[17] Before trial, the Littrells asked the court to issue findings of fact and conclusions of law under Indiana Trial Rule 52(A). The purpose of findings and conclusions is “to provide the parties and the reviewing court with the theory upon which the trial court decided the case in order that the right of review for error may be effectively preserved.” Campbell v. Campbell, 250 N.E.3d 459, 470 (Ind. Ct. App. 2024).

[18] When we review a trial court's findings and conclusions, Trial Rule 52(A) requires that we “shall not set aside the findings or judgment unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” We apply a two-tiered standard of review, determining: “(1) whether the evidence supports the findings; and (2) whether the findings support the judgment.” Campbell, 250 N.E.3d at 470. “Findings of fact are clearly erroneous only where they enjoy no factual support in the record, and a judgment is clearly erroneous if it applies an incorrect legal standard to properly-found facts.” Carmichael v. Separators, Inc., 148 N.E.3d 1048, 1057 (Ind. Ct. App. 2020), trans. denied.

[19] We neither reweigh the evidence nor reassess the credibility of the witnesses. Id. Instead, we consider the evidence most favorable to the judgment, with all reasonable inferences drawn in favor of the judgment. Id. “We review conclusions of law de novo.” Sri Shirdi Saibaba Sansthan of Tri State, Inc. v. Farmers State Bank of Alto Pass, Ill., 194 N.E.3d 55, 60 (Ind. Ct. App. 2022), trans. denied.

II. Slander of Title

[20] Custis argues the trial court should have found in his favor on the Littrells’ counterclaim for slander of title, which arose from Custis's mechanic's lien. A contractor or subcontractor who works on the construction of a house or other project may file a mechanic's lien on land for an unpaid claim. See Ind. Code § 32-28-3-1(a) (2020) (describing who may file a lien). The contractor may file a lien “to the extent of the value of any labor done or the material furnished, or both[.]” Ind. Code § 32-28-3-1(b). The contractor must file the lien with the county recorder. Ind. Code § 32-28-3-3(a)(1) (2008).

[21] “To prevail on a slander of title claim, a plaintiff must prove that the defendant made false, malicious statements regarding the plaintiff's ownership of the land in question and that those statements caused the plaintiff to suffer pecuniary loss.” Country Contractors, Inc. v. A Westside Storage of Indianapolis, Ind., 4 N.E.3d 677, 691 (Ind. Ct. App. 2014). A malicious statement is a statement that is made knowingly or with reckless disregard for its falsity. Id. A trier of fact may infer malice from the evidence. Id. The unjustified filing of a mechanic's lien may support a claim for slander of title. See Display Fixtures Co. v. R.L. Hatcher, Inc., 438 N.E.2d 26, 30-31 (Ind. Ct. App. 1982) (property owner's successful counterclaim for slander of title based on invalid mechanic's lien).

[22] The trial court made the following conclusion regarding Custis's lien and the Littrells’ counterclaim for slander of title:

e. In this case, Donnie recorded a Mechanic's Lien in the amount of $15,075.00 when Donnie: (a) knew that he had not completed $15,075.00 worth of work; (b) knew that the amount claimed in the Mechanic's Lien exceeded the Contract Price; (c) knew that the Littrells considered his work to be defective; and (d) knew that recording the Mechanic's Lien would prevent the Littrells from being able to convert their higher interest rate construction loan into a lower interest rate permanent loan. On this set of facts, the Court infers malice and concludes that Donnie committed a slander against the Littrells’ title to the Littrell Real Estate by recording the Mechanic's Lien.

Appellant's App. Vol. II, p. 74.

[23] Custis argues no evidence supports the trial court's statement that he “knew that recording the Mechanic's Lien would prevent the Littrells from being able to convert their higher interest rate construction loan into a lower interest rate permanent loan.” Id. We disagree. Custis is experienced in new home construction projects, including financing procedures. For example, he testified that he knows banks penalize construction loan recipients if construction projects take too long. In addition, Custis stated on cross-examination that he knew the Littrells had a construction loan that most likely would have been converted into a permanent loan after the house was built and that the interest rate on construction loans is higher than for standard home mortgage loans. This is sufficient evidence from which the trial court reasonably could have inferred that Custis was aware that filing a mechanic's lien would cause the bank to refrain from converting the Littrells’ construction loan into a home mortgage.

[24] Custis also argues there is insufficient evidence to support the court's statement that he knew he had not completed $15,075 worth of work and that the requested amount was higher than the contract price. But Custis admitted on cross-examination that he had not completed all of the work he had proposed in the estimate, and he had not done $15,075 of work when the Littrells fired him. This is ample evidence to support the trial court's statements.

[25] Next, Custis claims there is no evidence that he knew the Littrells believed his work was defective. But Aaron testified about defects he had observed on the exterior and interior of the house, and he said he had discussed these issues with Custis several times during the painting process. Custis refused to touch up areas on the exterior of the home, refused to sand rough areas on interior walls after priming but before applying the top coat, and demanded additional money to correct problems on the ceilings inside the home. Custis's claim amounts to a request to reweigh the evidence, which our standard of review forbids. There is sufficient evidence to sustain the factual statements the trial court included in the conclusion of law.

[26] Custis also raises a question of law, arguing that “it is well established in Indiana that alleged defects do not preclude a contractor from filing a mechanic's lien.” Appellant's Br. p. 16. Although defects may not bar the contractor from filing a lien, the defects may prevent the contractor from establishing a right to compensation. In A House Mechanics, Inc. v. Massey, 124 N.E.3d 1257, 1260 (Ind. Ct. App. 2019), a property owner fired a roofing contractor after noting defects in the contractor's work. The owner had repeatedly asked the contractor to remedy the defects, but the contractor refused. Ultimately, the contractor sent the owner an invoice, which the owner refused to pay. The contractor then filed a mechanic's lien and a lawsuit to foreclose on the lien. The property owner counterclaimed, raising slander of title, among other claims, and prevailed on summary judgment.

[27] On appeal, the contractor argued his lien was valid, but the Court determined the designated evidence showed that the contractor's work was so defective that it had to be completely redone. As a result, the work added no value to the property. The Court affirmed the trial court's rejection of the lien. Id. at 1266.

[28] In the current case, the trial court found, with sufficient evidentiary support in the record, that Weiler had to completely repaint the interior of the house and further proposed to do $7,384 of work on the exterior to correct Custis's defective work. As a result, the court properly concluded Custis's work, like the contractor's work in Massey, added no value to the home. The court did not err in entering judgment for the Littrells on slander of title and rejecting Custis's request to foreclose on the mechanic's lien.²

III. Right to Notice and to Remedy Defects

[29] For his final allegation of error, Custis claims the trial court should not have held him responsible for any defects because the Littrells did not give him notice of his defective work and an opportunity to fix it.

[30] Indiana Code section 32-27-3-2(a) (2003) provides that a claimant who intends to file suit against a “construction professional” for defective work must provide a written notice of claim that describes the defect “in reasonable detail sufficient to determine the general nature of the defect.” The construction professional must serve a response within twenty-one days. In the response, the construction professional may offer to inspect the residence and remedy any defects, or they may dispute the claim. If the construction professional does not respond to the notice of claim, the claimant may file suit “without further notice.” Ind. Code § 32-27-3-3(a) (2003).

[31] In this case, on April 29, 2022, the Littrells sent Custis a letter that: (1) set forth a long list of specific defects in his work; (2) accused him of breaching the contract; (3) and repudiated any obligation to pay Custis. The letter fulfills the obligation of providing notice under Indiana Code section 32-27-3-2(a). Custis did not respond, much less offer to inspect and cure any defects, but he received the notice required by statute.³

[32] Custis notes the trial court determined he did not act “unreasonably” by failing to respond to the Littrells’ letter. Appellant's App. Vol. II, p. 70. But whether Custis acted reasonably in response to the letter is irrelevant to whether he received notice for purposes of Indiana Code section 32-27-3-2(a).

[33] Custis next argues that homeowners have a separate common law duty to give a contractor notice and a reasonable opportunity to remedy defects before filing suit, and the Littrells failed to fulfill that duty. Custis is raising this argument for the first time on appeal. Consequently, it is waived. See Safeco Ins. Co. of Ind. v. Blue Sky Innovation Group, Inc., 230 N.E.3d 898, 907 (Ind. 2024) (issue not presented to the trial court is waived on appeal).

[34] Waiver notwithstanding, Custis directs us to Wagner Constr. Co. v. Noonan, 403 N.E.2d 1144 (Ind. Ct. App. 1980), in support of his common law argument. That case is inapplicable here because it addressed the tort of breach of implied warranty of habitability, and the Littrells did not raise that tort. Custis has failed to demonstrate the trial court erred in concluding the Littrells gave him sufficient notice of his defective work and an opportunity to fix it.⁴

Conclusion

[35] For the reasons stated above, we affirm the judgment of the trial court.

[36] Affirmed.

FOOTNOTES

1.   The trial court also determined that the Bank's loan still had top priority on the Littrells’ house. The Bank is not participating in this appeal, but we have included them in the caption because “[a] party of record in the trial court ․ shall be a party on appeal.” Ind. Appellate Rule 17(A).

2.   Custis further argues that he is entitled to attorney's fees on his claim to foreclose his mechanic's lien. His argument is based on his conclusion that “the trial court erred in finding he slandered [the] Littrells’ title.” Appellant's Br. p. 20. Having determined that the trial court did not err in finding in favor of the Littrells on slander of title, we need not address this issue further.

3.   The trial court determined that Custis was not entitled to notice of defects in the first place because he had failed to notify the Littrells in writing when they hired him that: (1) they were required to notify him in writing of any defects in his work prior to filing suit; and (2) he would have the right to offer to inspect the house and repair any defects. We need not address this issue because the court alternatively concluded that the Littrells’ April 29 letter met the notice requirement, and we affirm on that basis.

4.   The Littrells argue that, to the extent they had a common law duty to notify Custis of his defective work, that duty was abrogated in 2003 when the General Assembly enacted Indiana Code section 32-27-3-2(a) and related statutes. We need not address this argument.

Baker, Senior Judge.

Chief Judge Altice and Judge Bailey concur. Altice, C.J., and Bailey, J., concur.