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I-D Electric Inc. v. Gillman

Court of Appeals of Utah

August 10, 2017

I-D Electric Inc., Appellee,
v.
Linda Gillman, Appellant.

         Third District Court, Salt Lake Department The Honorable Richard D. McKelvie No. 110917777

          Mark D. Stubbs and Barnard N. Madsen, Attorneys for Appellant.

          Jeffrey T. Colemere and Brady T. Gibbs, Attorneys for Appellee.

          Judge Kate A. Toomey authored this Opinion, in which Judges Gregory K. Orme and Jill M. Pohlman concurred.

          TOOMEY, Judge.

         ¶1 This case involves a contract for electrical services between a company and a homeowner and a mechanic's lien to secure payment for those services. What began as a dispute over less than $2, 000 has ballooned into a judgment exceeding $36, 000. Linda Gillman, the homeowner, appeals the district court's decision in favor of I-D Electric. We affirm in part, reverse in part, and remand for further proceedings.

         BACKGROUND

         ¶2 On Thursday, March 10, 2011, Gillman approached Chet Hunter at an electrical wholesale supply store. She asked if he was an electrician and if he could do some emergency electrical work at her house in Herriman. Hunter, a journeyman electrician, told Gillman to arrange an appointment through his employer I-D Electric (I-D). Later that day, I-D sent Hunter to Gillman's house to assess the scope of the work needed. Hunter spent approximately two hours discussing it with Gillman, who asked him how much the work would cost. Hunter told her he did not price the materials and therefore did not know how expensive the job would be. I-D usually used a "cost-plus"[1]system, under which the cost of materials and the hourly rate of the labor are calculated after a job is completed. Alternatively, at the customer's request, I-D used a bid system, under which it calculated the cost of the labor and materials in advance, and the price of the job is fixed at this amount. Gillman did not request a bid.

         ¶3 Hunter testified there was "a lot of work to be done, " but Gillman's "priority" was work in the attic above the garage. Contractors were coming the following week to install a floor in the garage attic, and Gillman needed an electrician to move "all of the wires draped over the trusses in the attic." Because the work "needed to be done immediately, " I-D rearranged Hunter's schedule to work on Gillman's project the very next day.

         ¶4 On Friday, Hunter returned to the Herriman house with two associates, a residential journeyman and an apprentice. They arrived before eight thirty that morning, and spent the entire day working on the projects Gillman had assigned. Gillman arrived later the same morning and occasionally went to the garage where the men were working. That afternoon, Hunter left briefly to buy additional supplies. While he was gone, the residential journeyman had Gillman sign a work order prepared by Hunter. The order, as it was initially presented to Gillman, did not indicate prices, but listed the materials used, summarized the completed jobs, and, under the heading "labor hours, " identified each of the three electricians by first name. The work order also addressed the interest I-D would charge if the payment became past due and stated that the "[p]urchaser agrees to pay all costs and expenses including reasonable attorney's fees in the event collection becomes necessary." Gillman signed the work order and had left the house for the day by the time Hunter returned. The three men finished their work and left for the evening.

         ¶5 The following Monday morning, Kim Olson, I-D's president, calculated the cost of the electrical work at $1, 827.61. He wanted to inform Gillman of this before I-D did additional work on the house. When Olson called her, Gillman was "stunned" by the amount. Olson offered to send her an itemization of the work order and have Hunter discuss the bill with her. Gillman asked how much the rest of the work would cost, which Olson interpreted as a request for a bid on the remaining work. Later that week, Hunter went to the Herriman house and tried to enter the garage, but the security access code had been changed and Gillman did not return his calls.

         ¶6 I-D sent Gillman an itemized invoice on March 24 and called her several times without reaching her and without receiving any return calls.[2] Gillman returned the invoice and requested a labor breakdown and a list of the professional credentials of the electricians, which I-D provided at the beginning of April.

         ¶7 The next month, Gillman sent a letter to I-D, which read in part:

[I]t is my considered judgment that the 25.5 hours charged for what was accomplished is commensurately unreasonable and warrants careful reconsideration. As you undertake that reconsideration, you might want to factor into your deliberation other salient information: I work in both construction and the practice of law. I am very familiar with job sites and courtrooms. I just completed the first $4.47 million phase of a 15-month construction project in December. The second $1.5 million phase is now underway and will be finished this summer. This recent construction project resulted from a multi-million construction defect lawsuit, out of state. The last five adversaries who lined up on the other side of a courtroom from me are out a total of more than $11 million.
I hired another licensed electrician to finish the work in my house and garage[, ] . . . [which was] substantially more complicated, representing at least five times more work. I paid $650 for all of it (labor only).
I am willing to pay a realistic amount for the work that was done, but no more. Please recalculate it.

         The letter's heading identified Gillman's return address as the Salt Lake City condominium in which Gillman lived. She used that address as a billing address and "in all of her correspondence."

         ¶8 Olson interpreted the letter as an attempt to "intimidate and bully" him and hired counsel. He instructed counsel to file a mechanic's lien on Gillman's property to secure payment of the bill. Counsel filed the lien, but erroneously listed Gillman's Salt Lake City billing address instead of the address of the Herriman house where the electrical work was done.[3]

         ¶9 I-D sent Gillman a Notice of Mechanic's Lien by certified mail, but it did not hear back from her. Later, I-D sent Gillman, also by certified mail, a notice of its intention to initiate a lien foreclosure action. Gillman testified she was out of town and did not receive either notice.[4] She testified that when she learned of the mechanic's lien, she checked with the county recorder's office but found no record of it.

         ¶10 I-D filed a complaint in district court in September 2011, and Gillman testified she did not discover the lien had listed the wrong address until the middle of October. In November, she and her counsel collaborated in drafting another letter, also using Gillman's Salt Lake City address, which Gillman delivered directly to I-D. The letter stated:

Hasn't this already gone too far? First you file a lien on my property and I understand that has recently been followed by a lis pendens. Neither is either reasonable or justified under the circumstances, and without a legal basis. Please remove both immediately. There is no point in the senseless . . . accumulation of any more legal fees. It's about time to do the right thing.

         The letter did not notify I-D that its lien erroneously identified Gillman's Salt Lake City property and not her Herriman house.[5]

         ¶11 I-D was informed of the mistake by its counsel in December 2011, and it immediately released the lis pendens from Gillman's Salt Lake City property. I-D also recorded an amended lien with the address of the Herriman house.

         ¶12 I-D's complaint against Gillman alleged causes of action for breach of contract and lien foreclosure. Gillman filed a petition to nullify the lien as wrongful. In a partial motion for summary judgment, the district court dismissed the lien foreclosure action because the lien, originally listing the Salt Lake City address but amended with the correct Herriman address, was amended well outside the statutory deadline for filing a mechanic's lien. After a bench trial, the court determined that although the mechanic's lien was unenforceable, it was not wrongful. The court also determined the work order was a binding contract, even though it lacked a specific price term. Finally, the court awarded attorney fees to I-D under the contract, because the action was an "effort to collect a valid debt." The court did not award attorney fees to ...


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