Defendants-appellants Sidney D. Eskena-zi and Louis Eskenazi d/b/a Sand-West Development Company (Sand-West) appeal a judgment in favor of plaintiff-appellee 'American Drywall, Inc. (American) following a trial to the Hancock Circuit Cоurt. 1
Sand-West contracted with a builder for remodeling work on certain real estate owned by Sand-West. American contracted with the builder to perform drywall and painting work on the Sand-West property. Builder went out of business before completing the work under the contract with Sand-West, and on February 19, 1976, American notified Sand-West, pursuant to Ind. Code 32-8-8-9, that American was holding Sand-West responsible for American's unpaid claims against the builder. Under the terms of that statute, once propеrly notified, Sand-West would be liable for such claims "but not to exceed the amount which may be due, and may thereafter become due" from Sand-West to the builder.
Sand-West's appeal raises two issues for our review:
I. Whether the trial court erred in its finding and judgment that at the time American served its statutory notiсe of liability Sand-West was indebted to the builder in the amount of $12,600 and that American was entitled to recover that amount from Sand-West; and
II. Whether the trial court erred in finding that American did not intend to bind itself by endorsing checks containing purported releases and waivers of claims through the dates of the checks.
We reverse on the basis of Issue I and thus find it unnecessary to address Issue II.
In special findings of fact and conclusions of law, the trial court found that Sand-West owed the builder $12,600 on February 19, 1976, and that Sand-West was obligated to pay that entire amount to American. The court did not, however, enter findings of fact which show the basis for its calculation of the $12,600 figure.
Sand-West contends that it owed nothing to the builder on February 19, 1976, and *1185 attempts to еxplain $12, 310 of the $12,600 figure as the amount retained by Sand-West for work billed pursuant to progress billings under the following provisions from the contract between Sand-West and the builder:
"Owner shall pay directly to Contractor monies for cost and expensеs attrlbutable to material, work and services performed by Contractor and his subcontractors and suppliers within ten (10) days after the required documentation is received and approved, the appropriate percentage amounts based on the percentage of the completion of the various items involved, less ten percent (10%) to be retained by Owner until final settlement is made.
* * * # * *
Any final balance of the contract price shall be paid by Owner when work specified and punch list is completed and all warranties are delivered to Owner."
Sand-West argues that, if. the trial court's figure of $12,600 does include this retain-age, the court erred in two respects: 1) the retainage was not owed to builder by Sand-West under the terms of the contract until the work was completed and warranties delivered; and 2) Sand-West had a right to the retainage superior to anyone making a claim against the funds and had, prior to receiving the notice from Amеrican under Ind. Code 32-8-8-9, expended the retainage plus additional funds in completion of the work left undone by builder.
American argues that the trial court's finding of a $12,600 indebtedness of Sand-West to the builder on February 19, 1976, is supported by the evidence in eithеr of two ways: 1) that 88.75 percent of the project had been completed by the date of builder's breach, 75 percent of the contract price had been paid, leaving $12,928.88 owed to the builder on the date of breach; and 2) thаt American was entitled to the $12,810 re-tainage.
It is well-established that this court will not reweigh conflicting evidence on appeal. We will consider only that evidence which tends to support the trial court's findings of fact, conclusions of law, аnd judgment, together with all reasonable inferences which may be drawn therefrom. If, from that perspective, there is sufficient evidence to support the trial court's judgment, we must affirm. Shahan v. Brinegar, (1979) Ind.App.,
We first note the fallacies of American's first argument. First, the issue under Ind. Code 82-8-3-9 is what was owed to builder by Sand-West on the date of the giving of the statutory notice not on the date of builder's breach. Second, if 88.75 percent of the work were completed and 75 percent of the contract price paid, $12,926.64 would have remained unpaid, but $12,872.64 of this unpaid amount would represent the retainage under the contract and would be subject to Sand-West's arguments that this retainage was not owed under the contract on February 19, 1976, and was properly used by Sand-West to complete the project.
We now look to the evidencе to see if the trial court's figure of $12,600 can be supported in any other way except as an approximation of the ten percent retainage under the contract.
Generally, one who claims a statutory right must bring himself within the provisions of the statute. Board of Commissioners of Marion County v. Millikan, (1934)
American introduced into evidence the last progress billing submitted to Sand-West by the builder showing that as of December 3, 1975, builder had earned $123,-108 of the total contract price of $147,788 {approximately 88.75 percent, as American argues), of which $110,798 was paid by Sand-West as of December 15 {approximately 75 percent, as American argues), and $12,810 was retained under the above-quoted contract provisions. American introduced testimony that some unspecified work continued at the site until the latter part of December or the middle of January 1976, but no one testified as to the dollar value or the details of any work completed between December 8, the last date covered by the last progress billing, and the day all work under the contract stopped. In fact, a vice-president and secretary of American expressly said he could not estimate how much work was done by American between November 25 and December 11 or after December 11. The record shows that the builder constructed and delivered to Sidney Eskenazi's private residence a poolside cabana for which he did not pay. The architect's drawing of the cabana bore the project number of the construction project at issue here, but there was no testimony as to the amount owed the builder for the cabana or as to its reasonable value.
In summary, the evidence leads conclusively to but one inference, that the court's finding of an indebtedness by Sand-West to the builder on the date of American's notice could only be based on the funds retained under the above-quoted contract provisions. We turn to whether this retainage was money owed the builder by Sand-West on February 19, 1976, and we find that it was not.
First, under the express terms of the above-quoted contract provisions, Sand-West was not required tо pay the builder the balance of the contract price over and above the percentage amounts paid pursuant to periodic progress reports until the builder completed the project and delivered all warranties to Sand-West, neither of which ever occurred.
Second, under Indiana law, Sand-West had a right to hold the retained funds to secure itself against any damages that might have resulted from the builder's nonperformance. Southern Surety Co. v. Merсhants' & Farmers' Bank of Avilla, (1931)
The purpose of such retained funds was well-explained in Hanson v. Liberty Const. Co., (1931)
"The object in retaining a certain percentage of the installments, paid on a work during the course of construction, is to create a tempоrary fund to insure all the better the payment of claims against the work, and to enable better the owner, or the surety, in the event of necessity, to complete the undertaking. To require the owner to pay anything out of that fund before the сompletion and acceptance of the improvement, or before the arrival of the time for the release of the fund, would defeat the very object that the contracting parties had in view in creating the fund ."
In determining what wаs owed by Sand-West to the builder and thus to American under Ind. Code 32-8-3-9, American stands in the shoes of the builder, and American's rights are not superior to those of the builder. Sand-West had a right of set-off against the builder as to any monies owed Sand-West by the builder as a result of the builder's breach of their contract. Pioneer Lumber and Supply Company v. First-Merchants National Bank of Michigan City, (1976) Ind.App.,
Sidney Eskenazi testified that, in addition tо the $110,798 paid to the builder for the work billed through December 3, 1975, Sand-West had advanced an additional $9,100 to the builder prior to the breach of the contract, and Sand-West spent an additional $50,870 in completing the project subsequent to the brеach. He thus testified that Sand-West spent a total of $170,268 to complete the work that was to have been done for $147,788 under the contract with the builder.
Uncontradicted was his testimony that he advanced $9,100 to the builder, and that one particulаr subcontractor charged an additional $18,839.87 above what the progress reports had said the subcontractor would charge for the identical work under the original contract. A payment of $12,600 to another subcontractor was challenged as being for work outside the original contract, but even excluding that expenditure, the final outlay for the project sill totaled $157,668, well above the original contract price.
It was incumbent upon American, as plaintiff, in order to lay claim to any of the retained funds, to introduce evidence that Sand-West either did not in actuality spend more than the original contract price to complete the project, or to introduce evidence that Sand-West's completion costs after the breach were unreasonable. American did neither. The only evidence before the court was the bills paid by Sand-West. The record thus shows that Sand-West used the retained monies, plus additional funds, to cоmplete the project.
Our review of the evidence leaves us with the definite and firm conviction that the trial court erred in finding that Sand-West was indebted to the builder on February 19, 1976; thus, that finding is clearly erroneous. University Caseworks Systems, Inc., supra. Sand-West owed the builder nothing on February 19, 1976, or subsequent thereto; therefore, Sand-West has no personal liability to American under the provisions of Ind. Code 82-8-8-9.
The judgment of the trial court is reversed. |
Reversed.
Notes
. We can find nothing in the record relative to the defendant builder (Blade Corp., Blade & Associates, Inc., The Blade Company) and the builder was not a party to this appeal.