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Constructive Consultants, Inc v. Jon P. Banwart and Mary Jo Banwart

March 13, 2013


Appeal from the Iowa District Court for Cerro Gordo County, Colleen D. Weiland, Judge.

The opinion of the court was delivered by: Doyle, J.

Constructive Consultants, Inc. appeals from the district court's ruling in this mechanic's lien and breach of contract action in favor of the Banwarts. AFFIRMED.

Considered by Vogel, P.J., and Potterfield and Doyle, JJ.

Constructive Consultants, Inc. (CCI) filed this action to foreclose its mechanic's lien, seeking $144,252.24 for labor and materials CCI asserts it provided to Jon and Mary Jo "Jo" Banwart in building out the Banwarts' Clear Lake store and residence. The Banwarts, in turn, filed counterclaims against CCI and its officer Jarrell "Leigh" Foster for breach of contract, among other things. Following a bench trial, the district court found the parties had an express guaranteed maximum price or "not-to-exceed" contract. The court concluded CCI breached that contract, performed some work unsatisfactorily, and trespassed and converted the Banwarts' property. It awarded the Banwarts total damages in the amount of $103,856, and it dismissed CCI's claims. CCI now appeals those conclusions and seeks reversal and damages. Upon our thorough review of the record, we affirm.

I. Scope and Standards of Review.

"Actions to enforce mechanic's liens are in equity." Flynn Builders, L.C. v. Lande, 814 N.W.2d 542, 545 (Iowa 2012). Consequently, our review is de novo. Iowa R. App. P. 6.907; see also id. Our supreme court has explained that although we are not bound by the district court's fact findings in our de novo review, we do give those finding weight. See Flynn Builders, L.C., 814 N.W.2d at 545. Particularly, "in mechanic's lien cases, 'involving as they do numerous charges and counter charges which depend entirely on the credibility of the parties, we have frequently held the trial court is in a more advantageous position than we to put credence where it belongs.'" Id. (quoting McDonald v. Welch, 176 N.W.2d 846, 849 (Iowa 1970)).

II. Background Facts and Proceedings.

The following facts are fairly established by the evidence. Business owners Jon and Jo Banwart operate Cookies, Etc., a retail food store with locations in Ames, Mason City, and Clear Lake. The construction work in the building out of the Cookies Clear Lake location is the subject of the parties' litigation and this subsequent appeal.

CCI is an Iowa corporation that conducts much of its business providing glass and window installation and service in the construction industry. The three officers of CCI are Leigh Foster, Julie Foster, and Alan Foster. At the outset of this case, the Banwarts and Leigh were friends. CCI, through Leigh, had previously performed work for the Banwarts on a number of occasions, including working on the construction of the Banwarts' three other Cookies locations.*fn1 At that time, the parties were satisfied with their working relationship.

In early 2007, the Banwarts became interested in a condominium project under construction in Clear Lake; chewing over opening a Cookies store in a unit of the building. Additionally, because the building was designed for both residential and retail use, the Banwarts contemplated finishing the second level of the unit as a residence for their personal use or as a rental. To that end, the Banwarts consulted their friend Leigh on the feasibility of developing a store and residential rental unit there, and they asked for his advice in preparing a unit for their purposes.

In late April 2007, Leigh visited the jobsite with Jon. At that time, the unit was merely a shell and needed extensive work to be finished, including modifications to make it ready for retail use. Leigh made some initial plans, and he assisted the Banwarts in communicating and coordinating with the developer and architect, as well as with the local bank about financing.

The Banwarts made an offer on the property in May 2007, and their offer was accepted. The Banwarts obtained a $430,000 bank loan, which included $300,000 for the purchase of the unit and $130,000 for finishing construction on the unit. Additionally, the Banwarts and Leigh verbally agreed that CCI would act as project manager. The parties' agreement was never reduced to writing.

Thereafter, Leigh began working on plans for finishing the unit, including hiring a carpenter/laborer and making plans to spend significant time on the jobsite. Although Jo hoped to have the store open in time for the Fourth of July holiday, the closing on the unit was pushed back and did not occur until June 2007. Jo subsequently pushed back the planned opening of the Clear Lake Cookies location to August 1.

Ultimately, work dragged on beyond the anticipated opening date, and the costs of the construction grew. By the end of October 2007, CCI's stated expenditures were closing in on $120,000, though the project was not near completion. The Banwarts began questioning the project's costs, and they requested ...

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