Farah, LLC v. Architura Corp.
952 N.E.2d 328
Ind. Ct. App.2011Background
- Farah, LLC and Barrington Jewels, Inc. contracted with Architura to design, bid, and oversee renovations for a Barrington Jewels location at a former O’Charley’s in Indianapolis, for $40,000 plus $1,500 in expenses.
- The contract allowed additional charges only for specified items, with major changes to design after schematic approval potentially triggering added fees.
- During construction, bids exceeded Farah’s budget; Capitol Construction offered a bid around $747,000, with changes that later required added back items and costs, including $8,000 for steps Architura paid $5,000 of.
- Architura filed a mechanic’s lien in August 2003; Farah paid $34,000 to release it; Architura filed a second lien in December 2003 for services beyond the original contract.
- Farah deposited $50,300 with the trial court in September 2004 to release the second lien; Architura later sought additional fees and prejudgment interest.
- A certificate of substantial completion was issued in November 2003; Architura and Capitol were involved in inspections, but Architura initially certified completion without inspecting, later being clarified by inspections before final funds release.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mechanic’s lien amount limits | Architura’s lien capped at contract balance, not the full value of services. | Architura seeks reasonable value of its services beyond the contract price. | Lien limited to contract balance; $7,500 remains, not $26,166. |
| Attorney fees under the mechanic’s lien | Architura should recover fees under the lien. | Fees justified by lien recovery should be awarded. | Reverse award of $15,000 in fees; remand to set fees to $7,500 and recalculate prejudgment interest. |
| Failure to inspect and resulting damages | Architura’s failure to inspect caused damages to Farah. | Architects are not insurers; contract allowed limited inspections; no damages proven. | No damages awarded for failure to inspect; breach not shown to cause damages. |
| Amount of damages for Architura’s breaches | Costs for roof, insulation, lighting, and other items total over $206,081.55; should be awarded accordingly. | Many costs are allocable to Capitol or exceed reasonableness; evidence supports a smaller award. | Damages of $64,310 affirmed as within the record; full amount not awarded due to offsets and shared responsibility. |
Key Cases Cited
- Saint Joseph’s College v. Morrison, Inc., 302 N.E.2d 865 (Ind. Ct. App. 1973) (mechanic’s lien generally limited by amounts owed under contract)
- Korellis Roofing, Inc. v. Stolman, 645 N.E.2d 29 (Ind. Ct. App. 1995) (lien amount tied to contract price)
- Peter & Burghard Stone Co. v. Marion Nat. Bank of Marion, 153 N.E.2d 472 (Ind. 1926) (lien recovery not exceed contract amounts)
- Walker v. Statzer, 284 N.E.2d 127 (Ind. Ct. App. 1972) (lien amount measured by agreed price between owner and contractor)
- Clark’s Pork Farms v. Sand Livestock Systems, Inc., 563 N.E.2d 1292 (Ind. Ct. App. 1990) (mechanic’s lien fees forfeited if lien judgment not in sum)
- Complete Elec. Co. v. Liberty Nat’l Bank and Trust Co., 530 N.E.2d 1216 (Ind. Ct. App. 1988) (mechanic’s lien fees denied when lien judgment defeated)
- Nelson v. Marchand, 691 N.E.2d 1264 (Ind. Ct. App. 1998) (mechanic’s lien fees limited when owner prevails)
- Mayberry Cafe, Inc. v. Glenmark Constr. Co., Inc., 879 N.E.2d 1162 (Ind. Ct. App. 2008) (architect not insurer of contractor’s work absent special agreement)