Summary 2010 WY 4

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Case Name: Winter v. Pleasant

Citation: 2010 WY 4

Docket Number: S-09-0058, S-00-59

Appeal from the District Court of Sweetwater County, Honorable Jere Ryckman, Judge

Representing Gaye Winter and JO/ETTA, LLC, a Wyoming close limited liability company: V. Anthony Vehar of Vehar Law Offices, Evanston of Wyoming

Representing Andy Pleasant, doing business as A. Pleasant Construction: Patrick J. Crank and Matthew D. Obrecht of Speight, McCue & Crank, Cheyenne, Wyoming.

Date of Decision: January 12, 2010

These combined appeals arise from a judgment relating to a construction contract. In S-09-0058, Don Winter, Gaye Winter, and Jo/Etta, LLC (Winter) appeal from the district court's ruling that a materialman's lien (Amended Lien Statement) filed against their property, was valid. In S-09-0059 Andy Pleasant, doing business as A. Pleasant Construction (Pleasant Construction), appeals the district court's holding that Winter did not breach the Contract, the district court's interpretation of the Contract, and the district court's damages award.

Issues: Whether the district court erred in finding that an Amended Lien Statement complied with the requirements of Wyo. Stat. 29-1-301 (2009). Whether the district court erred in finding the word "monthly," as used in the Contract, to be ambiguous. Whether the district court erred in finding that the Project Manual was incorporated into the Contract. Whether the district court's damages calculation is factually and legally flawed.

Holdings: Lien statutes create remedies in derogation of common law and must be strictly construed. Accordingly, in order to perfect a materialman's or mechanic's lien, full compliance with all statutory requirements is necessary. In order to have a perfected lien pursuant to this title, a lien claimant shall file with the county clerk a lien statement sworn to before a notarial officer. In the present action, the notary block of the Amended Lien Statement reads:

On this 11th day of May, 2006, before me personally appeared Robert T. McCue, to me personally known, who being by me duly sworn, did say that he is the attorney for A. Pleasant Construction and that the above and foregoing AMENDED LIEN STATEMENT was signed on behalf of A. Pleasant Construction by authority of Andy Pleasant.

For a lien statement to be valid, the plain language of the phrase "sworn to" in the lien statute requires that the lien affiant swear to the truth and accuracy of the lien statement. Wyo. Stat. 32-1-105(b) (2009) provides that "a notary establishes the identity of the person signing the document and attests that the signature on the document was made in his presence." Given the fact that § 32-1-105(b) requires that the notary public determine the identity of the affiant, it would make little sense to conclude that the affiant need only swear to his or her identity. Moreover, swearing to one's identity does nothing to assure the factual accuracy of the lien statement. Interpreting § 29-1-301(a) in any way except to require that the accuracy and truth of the contents of the lien statement be "sworn to" would lead to an absurd result.

The Amended Lien Statement here fails to indicate that the affiant, Robert T. McCue, was swearing to the accuracy of the lien statement. Instead, the Amended Lien Statement, merely indicates that he duly swore to his identity and/or to his authority as a representative of A. Pleasant Construction. That statement is insufficient to create a valid lien statement under the plain language of § 29-1-301(a). The district court erred as a matter of law when it concluded that the Amended Lien Statement was valid.

It is unnecessary to determine whether the district court correctly found the term "monthly" to be ambiguous because the court may affirm a decision on any legal grounds appearing in the record. In this action, prior to Winter's non-payment, Pleasant Construction was in material breach of contract for changing the Contract without first obtaining written change order authorization, failing to comply with the plans and specifications, and for not building the Winters Professional Building in a workmanlike manner. The party first committing a substantial breach of contract cannot complain that the other party fails to perform. Accordingly, Winter was not in breach for failing to make further payments.

Similarly, because none of the breaches by Pleasant Construction are dependent on finding that the Project Manual, in whole, was incorporated into the Contract, it is unnecessary to determine whether the district court did in fact find that the entire Project Manual was incorporated by reference into the Contract, and if it did, whether or not that was error. The first breach relies on a part of the Project Manual that Pleasant Construction admits was incorporated into the Contract, and the remaining three breaches exist as a result of the Contract itself, not as a result of any part of the Project Manual. There was sufficient evidence in the record supporting the district court's finding that Pleasant Construction's work resulted in numerous construction defects which were not in conformity with the parties' agreement, which left Pleasant Construction in breach of contract. Thus, the district court did not err in finding that Pleasant Construction was the first to breach the Contract by failing to perform the work in a workmanlike manner.

In general, the legal remedy for a breach of contract is the award of damages designed to place the plaintiff in the same position in which he would have been had the contract been fully performed, less proper deductions. In awarding damages to Pleasant Construction, the district court stated "[Pleasant Construction] is entitled to the value of labor and materials expended in [Winter]'s project if those values are demonstrated with prima facie evidence. However, because of [its] breach of contract, [Pleasant Construction] must reimburse [Winter] for defective construction and overcharges as supported by the evidence." This case is different than the typical damages case for a breach of contract, in that the breaching party, Pleasant Construction, was awarded damages, instead of the non-breaching party, Winter. However, because "[t]he law will not put a victim in a better position than he would have been in had the wrong not been done,", Winter was required to pay for the labor and materials expended by Pleasant Construction, which resulted in a net damages award for Pleasant Construction. The district court's damages calculation were not clearly erroneous as all of the challenged deductions were supported by testimony and evidence in the record.

The district court erred as a matter of law when it found that the Amended Lien Statement was valid. Accordingly, that portion of the district court's decision is reversed. However, the invalidity of the Amended Lien Statement does not affect the damages portion of this opinion. The district court did not err by finding that Winter had not breached the contract, by finding Pleasant Construction in breach of contract, or in calculating damages. Therefore, uphold those portions of the district court's decision are upheld. However, it is necessary to remand this case to the district court in order for it to address the apparent mathematical error in the damages calculation.

C.J. Voigt delivered the opinion for the court.

Link to the case: http://bit.ly/6CNBX5.