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South County Post & Beam, Inc. v. McMahon

Supreme Court of Rhode Island

June 5, 2015

South County Post & Beam, Inc.
Brian T. McMahon et al

Page 205

Washington County Superior Court. (WC 11-339). Associate Justice Kristin E. Rodgers.

For Plaintiff: Neil P. Philbin, Esq.

For Defendants: Kelly M. Fracassa, Esq.

Present: Suttell, C.J., Goldberg, Flaherty, and Robinson, JJ. Justice Indeglia did not participate.


Page 206

Paul A. Suttell, Chief Justice

This case stems from the all-to-common scenario of an escalated billing dispute between

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property owners and a subcontractor hired to help construct a house. Brian and Karen McMahon (defendants) engaged various construction companies to contribute to the project of building a house and barn on their Block Island property. The plaintiff, South County Post & Beam, Inc., is one of the subcontractors which worked on the project. The plaintiff filed a civil suit for breach of contract, book account, and unjust enrichment, seeking payment for the work it had completed but for which it had not been paid. After a bench trial, a Superior Court justice entered judgment for the plaintiff on its claim of unjust enrichment, but judgment for the defendants on the plaintiff's claims of breach of contract and book account. The trial justice also entered an order granting the plaintiff's posttrial " Application for Taxation of Costs" for the entire amount requested, including fees for the expert witness who testified on the plaintiff's behalf. The defendants appealed from both the judgment and the order, and we consolidated the appeals.

This case came before the Supreme Court pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After considering the parties' written and oral submissions and reviewing the record, we conclude that cause has not been shown and that this case may be decided without further briefing or argument. For the reasons set forth in this opinion, we affirm the Superior Court's judgment, but vacate and remand the order.


Facts and Travel

In 2010, defendants bought approximately eleven acres of forested property on Block Island with the intention of building a house. They hired an architect who helped them select S. Heinz Construction & Design, Inc. (Heinz Construction) as the general contractor. During the process of designing the 2,500-square-foot house, defendant Brian McMahon testified that he and his wife decided to also build a barn as an " overflow room" for their three young-adult sons. At Heinz Construction's recommendation, defendants agreed that plaintiff, a company that specialized in timber frame design, fabrication, and installation, would be engaged to build the roof for the house, as well as to design and build the timber frame of the barn. In July 2010, Heinz Construction and plaintiff signed work orders describing the scope of the work that plaintiff was to perform on the house and barn. Over the next three months, Heinz Construction and plaintiff executed five change orders relating to the scope of the work for the barn. During this time, plaintiff also performed work outside the scope of the initial work order for the roof of the house--viz., the construction of a tower and deck on the roof of the house--but this additional work was not memorialized in a change order. Throughout its work on the house and barn, plaintiff addressed all of its invoices and statements to Heinz Construction. Heinz Construction sent two payments to plaintiff, and, at Heinz Construction's request, defendants sent one payment directly to plaintiff. Between October and December 2010, plaintiff, defendant Brian McMahon, and Heinz Construction exchanged several emails regarding the outstanding balances claimed by plaintiff.

In May 2011, plaintiff initiated a civil action against defendants, seeking damages for breach of contract (count 1), book account (count 2), and unjust enrichment (count 3). The defendants counterclaimed

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for breach of the duty to perform in a good and workmanlike manner and breach of contract. In October 2013, a two-day bench trial was held before a justice of the Superior Court.[1] Before trial, the parties filed an agreed statement of facts, which included the parties' agreement that plaintiff's total unpaid invoices equaled $41,549.45. During the trial, plaintiff presented testimony from two fact witnesses, Kenneth Bouvier (plaintiff's founder and president) and Dennis Scott Heinz (Heinz Construction's principal), and one expert witness, Robert L. Brungraber, Ph.D., a civil engineer in the field of heavy timber structures. Brian McMahon testified on behalf of defendants.

Kenneth Bouvier testified that plaintiff became involved in the construction of the roof tower and deck on the house--work beyond the scope of the executed work orders--through conversations with Heinz. Bouvier also testified that a change order was not created for the roof tower work because, " based on a good relationship with [Heinz], and the fact that these were areas that we were going to support him on, we just went forward, basically, on a time-and-material basis." In October 2010, plaintiff delivered an invoice to Heinz Construction that detailed the work plaintiff performed to advance the construction of the roof tower and deck.

Bouvier further testified that, after receiving two payments for plaintiff's work from Heinz Construction, he was told by Heinz that he " would be getting paid directly from [defendants]." Bouvier recalled receiving only one payment directly from defendants. Bouvier testified that he had received compliments from McMahon on plaintiff's work, and that he did not recall receiving any criticism about plaintiff's work prior to the billing dispute. Bouvier also testified that plaintiff had future work with Heinz Construction scheduled and that some projects were in the proposal stage.

Dennis Scott Heinz, Heinz Construction's principal, testified that he had sought defendants' review of the work orders and change orders throughout the construction project by forwarding the documents which he had received from Bouvier by email to McMahon and then securing McMahon's approval by email. In the agreed statement of facts, the parties stated that plaintiff had received only two payments from Heinz Construction for the work it had performed on defendants' property: $20,000 paid on July 29, 2010, and $24,012.50 paid on August 28, 2010. Heinz testified that he was not aware of any other payments from Heinz Construction to plaintiff for the work which plaintiff performed on defendants' house and barn. Heinz also testified that he had asked McMahon to pay plaintiff directly one time because " the scope of work changed, and they added the barn, and I was financing a lot of it myself, so I couldn't afford to pay everything out of my pocket." Heinz recalled that defendants had timely paid many invoices that he had submitted to them on behalf of Heinz Construction. Heinz also testified that Heinz Construction did not make any profit from the work plaintiff performed on defendants' property because he had not added any markups to plaintiff's work before billing defendants, so that it made no difference to Heinz Construction whether defendants paid plaintiff directly or whether defendants paid Heinz Construction, which then paid plaintiff.

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Robert L. Brungraber, plaintiff's expert witness, testified that he operated a company that provided structural engineering consultations, design, and analysis on traditional heavy timber structures. In preparation for his testimony in this case, Brungraber testified that he had reviewed various engineering drawings created by plaintiff as well as various work orders, change orders, purchase orders, and invoices. Brungraber repeatedly opined that the amounts plaintiff charged for each component it had designed and constructed were " very reasonable" ; and, while sometimes at the low end of the reasonable price range for each component, they ...

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