HOERSTMAN GENERAL CONTRACTING INC V JUANITA REMS HAHN
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STATE OF MICHIGAN
COURT OF APPEALS
HOERSTMAN GENERAL CONTRACTING
INC.,
UNPUBLISHED
June 15, 2004
Plaintiff/Counter DefendantAppellee/Cross Appellant,
v
No. 244507
Cass Circuit Court
LC No. 2001-000103-CH
JUANITA REMS HAHN and C. RONALD
HAHN,
Defendants/Counter PlaintiffsAppellants/Cross Appellees,
and
TEACHERS CREDIT UNION,
Defendant.
Before: Cavanagh, P.J., and Murphy and Smolenski, JJ.
PER CURIAM.
Defendants appeal as of right the order denying their motion for partial summary
disposition as to Count I of plaintiff’s complaint and the judgment subsequently entered in
plaintiff’s favor following a three-day bench trial in this construction lien dispute. Plaintiff cross
appeals the trial court’s denial of its motion for attorney fees. We reverse the denial of
defendants’ motion for summary disposition, but affirm in all other respects.
On appeal, defendants first argue that plaintiff failed to prove it was a licensed residential
builder as required under MCL 339.2412(1) and the trial court erred when it concluded that this
issue was waived pursuant to MCR 2.116(D)(2). We agree in part, only. Although defendants
did not raise this issue until closing argument, they cannot be deemed to have waived the issue.
See Reynolds v College Park Corp, 63 Mich App 325, 327-328; 234 NW2d 507 (1975).
However, defendants’ closing argument, which was buttressed by their filing of a post-trial brief,
was rebutted by plaintiff with the production of proof to the trial court that it was properly
licensed. Plaintiff had previously produced this evidence to defendants during the course of the
litigation. Accordingly, in compliance with MCL 339.2412(1), plaintiff did allege and prove
proper licensure and, thus, was entitled to pursue lien foreclosure and breach of contract claims.
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Next, defendants argue that the trial court should have granted their motion for summary
disposition as to Count I of plaintiff’s complaint, which sought foreclosure of an alleged claim of
lien. We agree. This Court reviews a trial court’s decision on a motion for summary disposition
de novo to determine whether the moving party was entitled to judgment as a matter of law.
Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999).
Defendants claim that specific requirements of the Construction Lien Act (CLA) were not
met, invalidating plaintiff’s claim of lien. Generally, MCL 570.1114 requires that (1) the work
be performed pursuant to a written contract, (2) all changes to the contract be in writing, and (3)
such contract inform the owner that the contractor must be licensed and that the contractor is, in
fact, licensed. Here, the changes to the contract were not in writing and no licensing information
was contained in the contract. Further, defendants argue, MCL 570.1110(1)(a) required that
plaintiff provide the owner with a sworn statement whenever payment was due or requested and
MCL 570.1117(7) required plaintiff to allege in its complaint such compliance. Here, no
statements were provided and it was not alleged in plaintiff’s complaint. Plaintiff responds, first,
that MCL 570.1114 could not be complied with because defendant C. Ronald refused to sign
change orders and, second, it substantially complied with this requirement, as well as the other
two, by performing the work.
MCL 570.1114 of the CLA provides:
A contractor shall not have a right to a construction lien upon the interest
of any owner or lessee in a residential structure unless the contractor has provided
an improvement to the residential structure pursuant to a written contract between
the owner or lessee and the contractor and any amendments or additions to the
contract also shall be in writing. The contract required by this section shall
contain a statement, in type no smaller than that of the body of the contract,
setting forth all of the following:
(a) That a residential builder or a residential maintenance and alteration
contractor is required to be licensed . . . .
(b) If the contractor is required to be licensed to provide the contracted
improvement, that the contractor is so licensed.
(c) If a license is required, the contractor’s license number.
In this case, it is uncontested that the changes to the contract were not in writing and that the
contract did not contain the required licensure information. Plaintiff’s claim that the “written
change” provision should not be enforced against him because defendant C. Ronald refused to
sign a change order was not argued in the trial court in response to the motion and, thus, may not
be considered by this Court. And, in any event, plaintiff has failed to present any authority that
such refusal, even if proved, would have negated the statutory mandate.
Further, plaintiff’s claim of “substantial compliance” to the statutory “written change”
and licensure information requirements merely by the performance of work is without merit.
With regard to statutory construction, our Supreme Court has repeatedly held that when a
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statute’s language is clear and unambiguous, we must assume that the Legislature intended its
plain meaning which must be enforced as written. See, e.g., Roberts v Mecosta Co Gen Hosp,
466 Mich 57, 63; 642 NW2d 663 (2002). It has further held that “liberality cannot and should
not nullify a clear and unambiguous requirement.” Brown Plumbing & Heating, Inc v
Homeowner Constr Lien Recovery Fund, 442 Mich 179, 185; 500 NW2d 733 (1993). Here,
MCL 570.1114 mandates, through the use of the word “shall,” that amendments or additions to
the written contract be in writing and that the contract include certain licensure information.
These are clear and unambiguous requirements. Even if we assumed for the sake of this
argument that the “substantial compliance” provision, MCL 570.1302(1), applied, we could not
conclude that plaintiff substantially complied with MCL 570.1114 merely because he performed
requested work. Accordingly, the trial court erred when it denied defendants’ motion for
summary disposition as to Court I of plaintiff’s complaint for foreclosure on the claim of lien
because the claim of lien was invalid for failure to comply with the clear and unambiguous
statutory requirements. In light of this conclusion, we need not consider whether plaintiff
complied with MCL 570.1110(1)(a) or 570.1117(7). Because plaintiff is not entitled to a claim
of lien, all references to such claim of lien contained within the trial court’s judgment must be
vacated and an amended judgment entered.
Next, defendants argue that an accord and satisfaction was reached between the parties
because plaintiff cashed a check containing the words “final payment” that defendants tendered
in the amount of $5,144.79 in response to plaintiff’s claim that $16,910.79 was due and owing.
We disagree.
The doctrine of accord and satisfaction is based on contract principles and is an
affirmative defense to which the defendant has the burden of establishing. Nationwide Mut Ins
Co v Quality Builders, Inc, 192 Mich App 643, 646; 482 NW2d 474 (1992). The doctrine was
explained by this Court in Faith Reformed Church v Thompson, 248 Mich App 487; 639 NW2d
831 (2001), as follows:
An ‘accord’ is an agreement between parties to give and accept, in
settlement of a claim or previous agreement, something other than that which is
claimed to be due, and ‘satisfaction’ is the performance or execution of the new
agreement. To prove the existence of an accord and satisfaction, a defendant
must show (1) its good-faith dispute of (2) an unliquidated claim of the plaintiff,
(3) its conditional tender of money in satisfaction of the claim, and (4) the
plaintiff’s acceptance of the tender (5) while fully informed of the condition. A
defendant need not show a plaintiff’s express acceptance of the condition; rather,
the law of accord and satisfaction is that where a creditor accepts a conditional
tender, the creditor also agrees to the condition. However, the expression of the
condition must be ‘clear, full, and explicit.’ [Id. at 491-492, citing Nationwide,
supra at 646-647 (citations omitted).]
An accord and satisfaction was not reached here. This Court has repeatedly held that in
order to effect an accord and satisfaction, “the tender must be accompanied by an explicit and
clear condition indicating that, if the payment is accepted, it is accepted in discharge of the whole
claim.” In re MCI Telecommunications Complaint, 255 Mich App 361, 367; 661 NW2d 611
(2003). The words “final payment” written on a check was not sufficient to inform plaintiff that
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its acceptance of the check discharged the whole claim. See, e.g., Faith Reformed Church, supra
at 493.
Next, defendants argue that the trial court improperly admitted evidence in support of
plaintiff’s claim for damages that exceeded the amount of the fixed fee contract. We disagree.
This Court reviews a trial court’s decision to admit evidence for an abuse of discretion.
Chmielewski v Xermac, Inc, 457 Mich 593, 614; 580 NW2d 817 (1998).
Essentially, defendants argue that they should not be liable for any amount over and
above the amount expressed in the fixed fee contract and, thus, the admission of any evidence in
support of such a claim was erroneous as irrelevant. The trial court held that defendants waived
the contractual requirement that all changes be written. We agree with this conclusion.
Defendants admit that they verbally requested and authorized extensive changes to the contract.
The law of contracts recognizes that parties to a contract may modify or waive their own
requirements. See Minkus v Sarge, 348 Mich 415, 421-422; 83 NW2d 310 (1957). Further,
“[g]enerally, evidence of changes in the contract, and their costs, is by necessity admissible to
show the modification or abandonment of the contract. Indeed, when the burden is put on the
party to introduce evidence to show a change in the contract, he must be permitted to introduce
evidence to substantiate his position.” Dault v Schulte, 31 Mich App 698, 702; 187 NW2d 914
(1971) (citation omitted). Consequently, the evidence that defendants claim was irrelevant, i.e.,
testimony regarding an estimate for the remodel and testimony regarding the total cost of
completing the project, was relevant and, thus, properly admitted by the trial court.
Next, defendants argue that the trial court failed to render findings of fact, as required by
MCR 2.517(A), with regard to their counterclaim accounting of the amounts owed for the
project. We disagree.
MCR 2.517(A) requires the trial court, in bench trials, to “find the facts specially, [and]
state separately its conclusions of law[.]" MCR 2.517(A)(1). "Brief, definite, and pertinent
findings and conclusions on the contested matters are sufficient, without overelaboration of
detail or particularization of facts." MCR 2.517(A)(2). Findings are sufficient if "it appears that
the trial court was aware of the issues in the case and correctly applied the law, and where
appellate review would not be facilitated by requiring further explanation." Triple E Produce
Corp v Mastronardi Produce, Ltd, 209 Mich App 165, 176; 530 NW2d 772 (1995).
Here, in its recitation of the facts, the trial court acknowledged the factual dispute
between the parties with regard to the outstanding balance on this project. The court referenced
both plaintiff’s accounting and defendants’ accounting as set forth in their trial exhibits and
reached the conclusion that plaintiff’s was the accurate accounting. Accordingly, the
requirements of MCR 2.517(A) were fulfilled.
Finally, defendants argue that they were entitled to attorney fees pursuant to MCL
570.1118(2). The CLA does authorize the recovery of “reasonable attorneys’ fees to a prevailing
defendant if the court determines the lien claimant’s action to enforce a construction lien under
this section was vexatious.” MCL 570.1118(2). Defendants failed to set forth any persuasive
argument in support of their claim of entitlement, including why, if at all, plaintiff’s action was
vexatious. This Court will not discover and rationalize the basis for their claims. See Wilson v
Taylor, 457 Mich 232, 243; 577 NW2d 100 (1998). Although we concluded above that
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plaintiff’s claim of lien was invalid, such finding does not automatically lead to a determination
in defendants’ favor and they are not relieved of their responsibility to appropriately argue the
merits of this issue; therefore, this issue is deemed abandoned.
On cross appeal, plaintiff argues that the trial court misinterpreted MCL 570.1118(2) and,
thus, erroneously failed to award it attorney fees. However, because plaintiff’s claim of lien was
invalid and it had no rightful claim under the CLA, it was not entitled to attorney fees under
MCL 570.1118(2).
Affirmed in part and reversed in part. The trial court’s denial of defendants’ motion for
summary disposition as to Court I of plaintiff’s complaint, foreclosure of claim of lien, is
reversed and those provisions of the judgment related to such lien are vacated. The judgment is
affirmed in all other respects. This matter is remanded to the trial court for entry of an amended
judgment consistent with this opinion. We do not retain jurisdiction.
/s/ Mark J. Cavanagh
/s/ William B. Murphy
/s/ Michael R. Smolenski
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