983 N.W.2d 548
S.D.2022Background
- Suvada (contractor) contracted in Aug 2016 to remodel/add to the Mullers’ cabin for $131,600; contract required substantial completion by May 31, 2017 and stated time was of the essence.
- Parties dispute numerous post‑contract "extras" (Suvada claims >60 extras and a verbal agreement to charge $38/hr for siding/soffit beyond a 224‑hour credit); no written change orders except one concrete change.
- After a heated Jan 10, 2018 call, Suvada stopped work; Mullers terminated him in Feb 2018; Suvada filed a materialmen’s lien for $16,389.35 (relating only to extras) and sued to foreclose the lien and for breach of contract.
- Mullers counterclaimed for breach of contract and fraud and hired All Star to finish the job, claiming about $38,310.55 (later reduced) in finishing costs; both sides demanded a jury trial on legal issues.
- Circuit court ruled the materialmen’s lien was properly filed, granted JMOL for Mullers on breach and on Suvada’s claimed oral modifications (including the 224‑hour credit), submitted amount due on the lien to the jury as an advisory/legal matter; jury awarded Suvada $8,049.99 and Mullers $28,505.22 (fraud found but no damages); net judgment for Mullers; Suvada appeals.
Issues
| Issue | Plaintiff's Argument (Suvada) | Defendant's Argument (Mullers) | Held |
|---|---|---|---|
| 1. Entitlement to jury trial on triable issues and amount of lien | Lien foreclosure is equitable; no jury right as lien is the heart of the case; court should decide lien amount | Counterclaims and breach claims are legal; parties agreed to jury; court may use jury to decide amount owed on lien | Court did not err: lien foreclosure is equitable but court properly allowed jury to decide triable legal claims and the amount due on the lien (advisory/factfinding role) |
| 2. Grant of JMOL on Mullers’ breach of contract claim | Evidence supported an oral modification/waiver of the deadline and an executed oral agreement for the 224‑hour credit; factual disputes preclude JMOL | Written contract required completion by May 31, 2017 and modifications must be written or executed oral agreements; no executed oral modification was proved | JMOL proper: no evidence of a written or executed oral modification; Suvada breached by failing to complete on time and failed to prove an executed oral agreement for the 224‑hour credit |
| 3. Jury instructions on fraud (admission of parol evidence) | Fraud instructions proper; parol evidence admissible to show fraudulent misrepresentation/concealment | Fraud claims relate to contract performance and thus are not independent torts; parol evidence improperly used to alter contract | Court erred in submitting fraud claims/instructions because fraud did not allege duty independent of contract, but error was harmless because jury awarded no damages on fraud |
| 4. Sufficiency of evidence for reduced lien award | Lien statute entitles lienholder to claimed amount; jury should have awarded full lien sum | Lien claimant must prove reasonable value; jury may award less based on credibility and evidence | Evidence sufficient to support the jury’s reduced award; jury weighed credibility and value and verdict stands |
| 5. Denial of trial attorney fees and costs | Fees were warranted under SDCL 44‑9‑42 and other statutes; contractor recovered some amount | Jury awarded Mullers a larger net recovery; no basis to award Suvada fees | No abuse of discretion: court reasonably denied Suvada’s fee request given mutual recoveries and facts distinguishable from Wald |
| 6. Request for appellate attorney fees | Requested under SDCL 15‑26A‑87.3 | Opposed | Denied |
Key Cases Cited
- First Nat’l Bank of Philip v. Temple, 642 N.W.2d 197 (S.D. 2002) (foreclosure actions treated as equitable; guide to law/equity analysis)
- Mundhenke v. Holm, 787 N.W.2d 302 (S.D. 2010) (bifurcate legal claims to jury and equitable claims to court)
- Nizielski v. Tvinnereim, 453 N.W.2d 831 (S.D. 1990) (de novo review whether action is legal or equitable)
- Duffield Constr., Inc. v. Baldwin, 679 N.W.2d 477 (S.D. 2004) (mechanic’s lien foreclosure is equitable)
- First W. Bank, Sturgis v. Livestock Yards Co., 466 N.W.2d 853 (S.D. 1991) (trial court discretion to empanel advisory jury in equitable cases)
- Lytle v. Morgan, 270 N.W.2d 359 (S.D. 1978) (lienholder must prove reasonable value of work/materials)
- Magner v. Brinkman, 883 N.W.2d 74 (S.D. 2016) (standards for JMOL and related review principles)
- Wald, Inc. v. Stanley, 706 N.W.2d 626 (S.D. 2005) (awarding attorney fees to prevailing contractor where contractor was sole prevailing party)