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Grosse Steel Co., Inc v. Midtown Development

March 27, 2013


Appeal from the Iowa District Court for Black Hawk County, Bradley J. Harris, Judge.

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

Two defendants appeal the district court's order awarding the plaintiff damages and dismissing other defendants in a breach of contract action. AFFIRMED.

Considered by Vogel, P.J., and Potterfield and Doyle, JJ. Bower, J. takes no part.

Midtown Development, LLC (Midtown) and Donna Nelson d/b/a Nelson Properties (Nelson) appeal the district court's ruling in this breach of contract action which awarded Grosse Steel Company $8854.41 from Nelson and dismissed Midtown along with Bourbon Street Restaurant, LLC (Bourbon Street) and Darin Beck Properties, Ltd (Beck Properties). Midtown and Nelson assert the district court's ruling, which found Nelson in breach of its contract with Grosse Steel, is not supported by substantial evidence.

The evidence here supports district court's conclusion that Nelson is responsible for the "extra" invoices. The district court is entitled to determine what evidence to believe and is in a better position to assess the credibility of the witnesses. While Nelson and Midtown argue that the construction workers on site should be responsible for the invoices in question, those construction workers were not made a part of this litigation and did not have a contract with Grosse Steel. We find sufficient circumstantial evidence to support the district court's ruling.


Midtown owns a building in downtown Waterloo. Midtown is owned and run by the Nelson family. Bourbon Street entered into a lease agreement with Midtown for the first floor, a portion of the mezzanine, and the eighth floor of the building to run a restaurant. An extensive remodel was required for Bourbon Street to operate. Darin Beck, owner of Bourbon Street and Beck Properties, prepared the original plans, which were then developed by an architect. The plans included a schedule for doors. The door plans were submitted to Gross Steel who provided a quote. That quote was accepted by Nelson*fn1 and signed by Nelson's vice president, Vern Nelson III, on March 10, 2009. The contract had a provision which stated, "Any additional material required will be charged as an extra to the contract at prices in effect by us at the time the additional material is ordered."

The doors for the remodel project were provided by Grosse Steel, and Nelson paid the contract price of $25,534.93. However, Nelson refused to pay for five other invoices that had the notation of "extra." These invoices totaled $5805.82, plus finance charges at the time of trial of $3048.59.

When the "extra" invoices were not paid, Grosse Steel filed suit against Midtown, Nelson, Bourbon Street, and Beck Properties. The case proceeded to a bench trial. Grosse Steel called its owner, Bob Grosse, to testify at trial. He confirmed that the "extra" invoices were faxed to Nelson, to the attention of Vern Nelson III, though Bob Grosse did not personally fax the invoices. He also testified that his employee, Warren Ledtje, faxed a quote for several of the "extras" and notated on the side of the quote the approval or disapproval once it was received. He also confirmed that all the materials itemized in the "extra" invoices were delivered to the remodel project by his company.

Vern Nelson III testified for Midtown and Nelson asserting he never received the "extra" invoices, and he did not approve the extras. He asserted that the extras were likely the result of Chris Reed, the foreman of the construction crew employed by Darin Beck,*fn2 ordering the materials because Reed's name and phone number appears on a number of the "extra" invoices.

Darin Beck testified for Bourbon Street and Beck Properties. He maintained that Beck Properties had nothing to do with Bourbon Street or the remodel project. Bourbon Street leased the space in question from Midtown and Barmuda, another one of his companies, did some of the construction for the remodel. He confirmed he had an agreement with either Midtown or Nelson for Barmuda to provide skilled labor for the remodel project. Some of the remodel work was subcontracted out directly by Nelson, and neither of Beck's companies was in charge of paying for any of the subcontracted work.

Beck testified his companies had nothing to do with the door contract with Grosse Steel other than to receive deliveries if Nelson's employees were not around. Chris Reed was his lead construction employee on site and did sign for several of the "extra" invoices, but he never ordered material unless he had the approval of Nelson. Beck also pointed out that while his employees' names were on several of the "extra" invoices that remained unpaid by Nelson, the same employees' names can also be found on the invoices from Grosse Steel that were paid by Nelson.

Barmuda's employee, Nick Bonewitz, also testified at the trial. He worked on the remodel project directly under Chris Reed, who, at the time of trial, was no longer employed with Barmuda. When changes had to be made with respect to the doors, Bonewitz testified that Chris Reed would measure, then go through Vern Nelson III, and may call in the measurements to Grosse Steel, but would never place an order. A quote would be sent and would then need to be verified or ordered. However, on cross-examination Bonewitz testified he never actually saw Chris go to Vern Nelson III to seek approval to order additional doors. As far as Bonewitz knew, all the items listed in the "extra" invoices were needed and ordered because of inspections or necessities that changed during the construction process. Bonewitz testified that neither Chris Reed nor anyone working for Beck would have ordered something without getting approval.

The district court ruling awarded Grosse Steel the full amount of its claim-$8854.51-against Nelson and dismissed the claims against Midtown, Bourbon Street, ...

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