Carson v. RoedigerCarson v. Roediger
- Reporters:
- , ,
- Before:
- Harris
In 1981 the legislature extensively amended Iowa statutes on mechanic’s liens in order to ensure, according to the bill’s preamble, “that the lien of a subcontractor is not enforceable ... except to the extent of the amount owed to the principal contractor at the time” of notice of the lien. 1981 Iowa Acts ch. 186. This dispute is within the familiar pattern in which the principal contractor fails in his obligations and the courts must decide who, as between the homeowner and a subcontractor, must suffer the loss. The trial court, under the special facts and in light of the 1981 legislation, assigned the loss to the subcontractor and we affirm.
In January of 1990 Wesley and Karen Roediger, the defendants, contracted with Larry Pinckney for the construction of a home for the set sum of $126,000. Plaintiff Judy Carson became a subcontractor by delivering construction materials to the site.
The district court found that the contract price, with the extras ordered by the Roedi-gers, was $129,557. $108,781 of that total had been paid, so that $20,826 was due. The court found that the Roedigers had established that the cost for repairing defects in the construction and completing the home amounted to $25,235. This sum exceeded any remaining amount due under the contract with Pinckney. The court found that Carson’s lien totaled $13,673. Because it found no amount due, the court held all mechanic’s liens were canceled pursuant to its interpretation of Iowa Code section 572.-14(2). 1 The primary issue on the appeal is whether the district court correctly applied this statute. Carson appeals and Roedigers cross-appeal.
An action to enforce a mechanic’s lien is in equity.
A mechanic’s lien is purely statutory in nature.
Gollehon, Schemmer &
Assoc.
v. Fairway-Bettendorf Assoc.,
268 N.W.2d 200, 201 (Iowa 1978). All persons who furnish any material or labor for improvements to building or land will generally be entitled to a lien to secure payment for the labor and materials furnished.
Under our statutory scheme, if a mechanic’s lien is filed within ninety days of the date on which the last material or labor was furnished, a lien arises for the full amount regardless of the balance due on the general contract.
We analyzed the purposes of Iowa Code
This case involved an owner-occupied dwelling. While we have never construed the “balance due” language in section 572.-14(2), we did consider identical language
Carson vigorously contends the district court’s reliance on
Diecke
was in error. She notes that liens filed by the subcontractors in
Diecke
were untimely whereas Carson filed within the required period. But we think it is appropriate to analyze the “balance due” language of the two sections together. The fact that a subcontractor does or does not file a timely lien on an owner-occupied dwelling should not control the meaning of the term “balance due.” A rubric of statutory construction dictates that, when identical language is used in several places in a statute, the phrase is usually given the same meaning throughout.
B.A.A. v. University of Iowa Hosp.,
421 N.W.2d 118, 125 (Iowa 1988);
Another section of chapter 572 reinforces this conclusion. Subsection 16, “rule of construction,” provides that “in the case of an owner-occupied dwelling,
nothing
in this chapter shall be construed to require the owner to pay a greater amount ... than is provided in the owner’s contract with the principal contractor....”
Performance by the principal contractor, then, is crucial to the lien rights of a subcontractor. Before a subcontractor can recover on a mechanic’s lien, the subcontractor must prove the homeowner is indebted to the principal contractor for the work in which the subcontractor’s materials were used. See Kawneer Mfg. Co. v. Renfro & Lewis, 186 Iowa 1344, 1347-48, 173 N.W. 899, 900 (1919); see also Central Iowa Grading v. UDE Corp., 392 N.W.2d 857, 859 (Iowa App.1986) (citing Kawneer, 186 Iowa at 1347-48, 173 N.W. at 900).
We have long recognized that, where a contractor abandons a project and the owner must pay to complete it, the owner is entitled to pay the costs of completion out of the balance remaining on the contract. L.A. Page & Son v. Grant, 127 Iowa 249, 257, 103 N.W. 124, 127 (1905). Subcontractors’ liens are only valid to the extent of the contract price not paid after deduction of the owner’s completion costs. Id. Computation of the balance due to subcontractors requires (1) deducting payments made by the owner from the contract price, (2) adding extras provided by the contractor, (3) then deducting the owner’s damages from omissions and deficiencies in the contractor’s work. See Wickham v. Monroe, 89 Iowa 666, 669-70, 57 N.W. 434, 435 (1894).
A final reason for applying the
Diecke
holding to
We conclude that the trial court correctly interpreted Iowa Code section 572.-14(2). The term “balance due” in that section means the amount the owner is obligated to pay the principal contractor, and in computing that amount the deductions allowed by the trial court were correct.
III. It is contended that the impact of the 1981 legislation should be carefully limited and should apply only in rare instances. It is argued that subcontractors should not be at the mercy of petty dissatisfactions owners may have concerning work of the principal contractor. This contention does not fit the facts of this record. Petty dissat-isfactions were not involved. It is the rule that an owner is not allowed to nitpick until the balance due is depleted. A deduction is
The trial court here correctly placed upon the Roedigers the burden of showing the exact extent of the principal contractor’s default. The court took care that the “extras” in the construction project were added to the contract price originally agreed upon.
It is also contended that the challenged interpretation could result in high-handed practices by homeowners who could deceive subcontractors into intolerable losses. Again the contention does not fit this record. Carson was already on notice of other Pinckney defaults and nevertheless continued to have extensive and close dealing with Pinckney during the entire period. Carson even monitored Pinckney’s separate business transactions, specifically a bank account into which at one time $22,746.91 was deposited from the sale of Roedigers’ prior home. Prom this account, $10,000 was paid to Carson as “advance” on an unrelated account for which Carson had not yet provided any material. The parties dispute whether Pinckney was obligated or even free to pay all of or a part of Roedigers’ deposit to satisfy the account with Carson. This is a matter we need not resolve here. It is mentioned only as a perfect example of why the legislature believed that those in the building industry are in a better position to protect their interests than are their customers.
IV. The only issue not mooted by what has been said is on Carson’s claim that certain “extras” should be added to the contract price and a claim regarding interest. Carson believed the new trusses ordered by Pinck-ney were “extras” and should have been included in the trial court’s calculation of contract price. The record does not indicate the trusses were “ordered” by Roedigers as extras. The first trusses, on the contrary, those replaced by the ones in controversy, were erroneously ordered by Pinckney and did not comply with the building contract. The district court correctly denied the increase in contract price.
Carson assails the district court’s determination of the interest rate on the unpaid balance. Under the construction contract, unpaid balances were to accrue interest at ten percent from the date of possession. Roedigers took possession in late April of 1990. If allowed, this would increase the unpaid balance from $20,825.70 to about $29,-000.
Pinckney was in default and owed the Roedigers $25,235.16 for costs arising from omissions and deficiencies under the contract. This default netted out the $20,825 due on the contract from the Roedigers. Pinckney could therefore not have gotten interest on the $20,825 due. Where a person is barred from recovering principal of a debt, the individual is equallybarred from recovering interest on it. 47 C.J.S. Interest or Usury § 33, at 81 (1982).
AFFIRMED ON APPEAL; CROSS-APPEAL RENDERED MOOT.
Notes
. Under
. There is an exception to the exception. The subcontractors’ recovery may exceed the balance due where the owner pays part or all of the contract price to the principal contractor after receiving notice of the lien.
.