W.J. Bachman Mechanical Sheetmetal Co. v. Wal-Mart Real Estate Business Trust

#24931, #24941-aff in pt, rev in pt & rem-SLZ
2009 SD 25

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA

* * * *

W.J. BACHMAN MECHANICAL
SHEETMETAL COMPANY, INC., Plaintiff,

PAR GOLF CONSTRUCTION, Plaintiff and Appellee,

v.

WAL-MART REAL ESTATE BUSINESS
TRUST; BODELL CONSTRUCTION Defendants, Third Party
COMPANY, INC. (Intervenor) Plaintiffs and Appellants,

and FRONTIER MECHANICAL, INC.;
DALSIN, INC. d/b/a M.J. DALSIN; Defendants and Third
and SPEARFISH EXCAVATING, INC., Party Plaintiffs,

v.

WAL-MART STORES, INC., Third-Party Defendant,
and Appellants,
TRAVELERS CASUALTY AND SURETY
COMPANY OF AMERICA and BODELL
CONSTRUCTION COMPANY, INC., Defendants and Appellants.

* * * *

APPEAL FROM THE CIRCUIT COURT OF
THE FOURTH JUDICIAL CIRCUIT
LAWRENCE COUNTY, SOUTH DAKOTA

* * * *

HONORABLE WARREN G. JOHNSON
Judge

* * * *

ARGUED ON FEBRUARY 18, 2009

OPINION FILED 04/08/09
* * * *

TIMOTHY R. JOHNS of
Johns & Kosel, Prof. LLC
Lead, South Dakota Attorneys for appellee.

SCOTT SUMNER
BARTON R. BANKS of
Banks, Johnson, Colbath,
Sumner & Kappelman, PLLC
Rapid City, South Dakota Attorneys for appellants.
#24931, #24941

ZINTER, Justice

[¶1.] A subcontractor sued a property owner seeking enforcement of a

mechanic’s lien, or in the alternative, a claim under the theory of unjust

enrichment. The circuit court awarded the subcontractor a judgment enforcing the

portion of the mechanic’s lien that was properly itemized and a judgment for the

remainder of the claim on the theory of unjust enrichment. The property owner,

general contractor, and its bonding company appeal from those judgments and the

award of attorney fees. We affirm in part, reverse in part, and remand.

Facts and Procedural History

[¶2.] Bodell Construction Company, Inc., entered into contract with Wal-

Mart Stores, Inc. (Wal-Mart Stores) to build a Wal-Mart Supercenter in Spearfish,

South Dakota. Wal-Mart Real Estate Business Trust (Wal-Mart Trust), a separate

entity from Wal-Mart Stores, owned the property.

[¶3.] Bodell subsequently entered into a $291,245.87 subcontract with Par

Golf, a landscaping contractor, for the purpose of installing plantings and an

irrigation system on the project. The subcontract contained an arbitration clause,

which provided:

In the event of any dispute between [Bodell] and [Par Golf]
covering the scope of work, the dispute shall be settled in the
manner provided by the contract documents. If none be
provided, or if there arises any dispute concerning matters in
connection with this Agreement, and without the scope of the
work, then such disputes shall be settled by a ruling of a board
of arbitration[.]

[¶4.] Par Golf began work on the project in September 2004. Before Par

Golf finished its work, Bodell authorized change orders for: the installation of an 18-

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inch strip of sod in the curb/gutter areas; an additional island planter; and a

temporary irrigation system. The change order regarding sod made no mention of

watering. 1 Further, Bodell requested Par Golf to provide labor, materials, and

equipment for watering new seed on another portion of the project. This included

the use of Par Golf’s water truck and laborers. In a letter dated June 24, 2005, Par

Golf informed Bodell that Par Golf did not have watering in its bid, and Par Golf,

therefore, inquired of Bodell whether Par Golf would be paid extra for the watering.

Bodell’s project manager wrote “OK” behind the request and added his initials. Par

Golf subsequently provided all of these items.

[¶5.] Pursuant to the subcontract, Par Golf had seeded the west end of a

detention pond in the spring of 2005. A subsequent rain flooded the area and

washed out most of the topsoil. The flooding occurred because a spillway had been

improperly constructed by another contractor. At Bodell’s instructions, Par Golf

reseeded the area in June 2005, but Bodell would not authorize additional topsoil.

Bodell later contended that Par Golf’s seeding did not result in the uniform stand of

grass required by the contract specifications. Bodell therefore spent $17,814.90 2 to

satisfy the grass requirement, which involved hiring another contractor to sod the

area.

1. The subcontract did not include sod, but stated that “[s]od will be addressed
by change order if required.”

2. This amount is disputed.

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[¶6.] Following Par Golf’s completion of the project in August 2005, Bodell

requested Par Golf to return to repair some damage to the irrigation system caused

by vandalism. Par Golf performed this work on September 23 and 24, 2005.

[¶7.] Bodell subsequently paid Par Golf $279,220, which was the

subcontract amount, less a retainage. Par Golf, however, contended that $64,560.30

remained due and owing for its work. This amount included compensation for labor

and materials for sodding, watering, temporary irrigation, the additional planter,

sprinkler repair, and the retainage. Bodell refused to pay.

[¶8.] Following failed negotiations, Par Golf filed a mechanic’s lien on

January 17, 2006, against Wal-Mart Trust in the amount of $64,560.30. This filing

was more than 120 days after Par Golf had completed the project in August 2005,

but was within 120 days of Par Golf’s September 23-24, 2005, return to repair the

vandalism damage to the irrigation system.

[¶9.] Following commencement of this suit against Wal-Mart Trust to

enforce the mechanic’s lien, Bodell moved to intervene. It also moved to dismiss

based upon the arbitration clause. The circuit court heard the motions, allowed

intervention, and denied Bodell’s motion to dismiss. Par Golf subsequently

amended its complaint, adding Bodell and Travelers 3 as defendants. Par Golf also

added an alternative unjust enrichment claim against Wal-Mart Trust for any

portions of Par Golf’s mechanic’s lien claim that might be determined to be invalid.

3. Pursuant to the Bodell-Wal-Mart Stores contract, Bodell had obtained a bond
from Travelers Casualty and Surety Company of America (Travelers) to
satisfy the claim and release the lien.

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#24931, #24941

Wal-Mart Trust, Bodell, and Travelers (Defendants) answered and again moved to

dismiss based upon the arbitration clause. The circuit court denied Defendants’

motion.

[¶10.] Following trial, the circuit court found that Par Golf had filed its lien

within 120 days of when it last performed work on the property (the September 23-

24 vandalism repair work). The court further found that although almost seventy

percent of Par Golf’s mechanic’s lien was concededly not itemized, $20,252.52 was

itemized. Accordingly, the court entered a mechanic’s lien judgment against

Travelers for $20,252.52. With respect to the action for unjust enrichment, the

circuit court found that although Wal-Mart Stores had paid Bodell on their contract,

Wal-Mart Trust would be “unjustly enriched if allowed to retain the benefits of [Par

Golf’s] extra work [and retainages] without payment to Par Golf.” The court,

therefore, entered judgment against Wal-Mart Trust for the balance of Par Golf’s

claim ($44,370.78). Finally, the circuit court denied Wal-Mart Trust’s request for

attorney fees in defending the mechanic’s lien claim and awarded Par Golf $12,500

in attorney fees for its prosecution of the mechanic’s lien. 4

[¶11.] Defendants appeal, raising the following issues: (1) whether the action

should have been dismissed for failure to arbitrate; (2) whether Par Golf’s lien was

timely; (3) whether Par Golf’s lien was sufficiently itemized; and, to the extent that

it was, whether a partially itemized mechanic’s lien may be enforced; (4) whether

4. The court denied the balance of Par Golf’s attorney fees because there was no
statute or agreement allowing the recovery of attorney fees on the claim of
unjust enrichment.

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Par Golf may recover from Wal-Mart Trust on the theory of unjust enrichment; (5)

whether Bodell was entitled to offsets against Par Golf’s claims; and (6) whether the

circuit court abused its discretion in awarding Par Golf attorney fees. By notice of

review, Par Golf raises one protective issue: if this Court disallows any portion of

the mechanic’s lien, whether Par Golf should be permitted to recover the disallowed

portion under the theory of unjust enrichment. Par Golf has also moved this Court

for appellate attorney fees.

Decision

Issue I: Arbitration

[¶12.] “[T]he construction and legal effect of a written [arbitration] contract

are to be determined by the court as a question of law except where the meaning of

the language depends upon disputed extrinsic evidence.” Flandreau Public Sch.

Dist. No. 50-3 v. G.A. Johnson Const., Inc., 2005 SD 87, ¶7, 701 NW2d 430, 434.

“We review legal questions concerning arbitration agreements de novo.” Id. (citing

First Options of Chicago, Inc. v. Kaplan, 514 US 938, 947-48, 115 SCt 1920, 1926,

131 LEd2d 985, 996 (1995)). “A circuit court’s factual findings supporting its

[arbitration] decision, however, are reviewed under the clearly erroneous standard

of review.” Masteller v. Champion Home Builders Co., 2006 SD 90, ¶9, 723 NW2d

561, 563-64.

[¶13.] The circuit court concluded that the arbitration clause in the Par Golf-

Bodell subcontract did not require Par Golf to arbitrate with Wal-Mart Trust before

suing that property owner to enforce the mechanic’s lien. The circuit court also

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concluded that Bodell, the only defendant with a contractual arbitration clause,

waived its right to assert that clause in this litigation. The circuit court stated:

The arbitration provision in the subcontract does not preclude
Par Golf from proceeding against the landowner. [Further,]
Bodell agreed to diligently seek from Wal-Mart all sums owing
to Par Golf. There is no evidence of any efforts. On the contrary
Bodell, Wal-Mart and Travelers are united in their efforts to
defeat Par Golf’s claim for payment. Bodell waived its right to
compel Par Golf to arbitrate the claims.

[¶14.] Before addressing Defendants’ appeal of these rulings, we address Par

Golf’s assertion that Defendants waived the right to challenge the circuit court’s

arbitration decision. Par Golf points out that although Bodell sought to enforce the

arbitration clause in two related lawsuits, 5 those cases have not been appealed. Par

Golf further contends that Bodell failed to sufficiently raise the failure to arbitrate

issue in this case. Defendants respond that they did not waive the arbitration issue

because they attempted to enforce the arbitration provision in this litigation on two

occasions. We agree with the Defendants.

[¶15.] Bodell formally moved to dismiss in October 2006, arguing that the

subcontract required arbitration. The court heard the motion and decided the issue

at a November 2, 2006 motions hearing. Furthermore, when Par Golf amended its

complaint, Defendants answered and again moved to dismiss for failure to

arbitrate. Ultimately, the circuit court expressed its reasoning for denying the

5. Par Golf notes that Bodell moved to compel arbitration in two other, separate
actions (Par Golf Const. v. Bodell Const. Co. (Lawrence County Civil Action
07-439)) and Bodell Const. Co. v. Grant Noonkester, dba Par Golf Const. and
Par Golf Const. Inc. (Lawrence County Civil Action 07-438).

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#24931, #24941

motion in a written decision. The record reflects that Defendants preserved this

issue for appeal by raising it before the circuit court.

[¶16.] With respect to the merits of the arbitration issue, the parties do not

specifically address the circuit court’s joinder/waiver analysis. Instead, Par Golf

points out that it had no arbitration agreement with Wal-Mart Trust, the property

owner and party Par Golf sued. Therefore, Par Golf argues that even though it was

contractually obligated to arbitrate with Bodell over disagreements arising from the

subcontract, the arbitration provision in the subcontract with Bodell did not

obligate Par Golf to arbitrate before asserting mechanic’s lien and unjust

enrichment claims against Wal-Mart Trust. Apparently conceding that Par Golf

had no direct contractual duty to arbitrate with Wal-Mart Trust, Defendants argue

that a property owner should be able to assert against the subcontractor any

defense (including arbitration) that the general contractor could assert against the

subcontractor.

[¶17.] We decline to consider Defendants’ assignment of defenses argument.

We do so because, even if Wal-Mart Trust were entitled to assert Bodell’s defenses

against Par Golf, Defendants have failed to cite authority suggesting that this right

includes the “defense” of arbitration. More specifically, Defendants have submitted

no authority indicating that a subcontractor, who has an arbitration clause with its

general contractor but no contract to arbitrate with the property owner, must

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nevertheless arbitrate before pursuing mechanic’s lien and unjust enrichment

claims against the owner. 6

[¶18.] This failure to cite authority gives us significant cause for concern in

light of “the underlying principle that ‘arbitration is a matter of contract and a

party cannot be required to submit to arbitration any dispute which he has not

agreed so to submit.’” Flandreau Public School, 2005 SD 87, ¶10, 701 NW2d at 435

(citing AT&T Tech., Inc. v. Commc’n Workers of Am., 475 US 643, 648, 106 SCt

1415, 1418, 89 LEd2d 648 (1986)). Further, Defendants have failed to identify how

Par Golf could have obtained relief on its mechanic’s lien and unjust enrichment

claims against Wal-Mart Trust in an arbitral forum only involving Bodell. Under

those circumstances arbitration is generally not enforced. See Franke v. Poly-

6. Although Defendants cite numerous cases for a general assignment of
defense argument, arbitration is unique and it was not the “defense”
considered in any of Defendants’ cases except Oakdale Park, Ltd. v. Byrd, 346
So2d 648 (FlaCtApp 1977). Further, Oakdale Park is distinguishable.
Oakdale Park is distinguishable because that arbitration clause was in the
contract between the property owner and the mechanic’s lien claimant.
Therefore, there was a contractual agreement to arbitrate. Further, the
Florida Court of Appeals recognized that if the jurisdictional time for filing a
mechanic’s lien were about to expire, a subcontractor would have the right to
pursue mechanic’s lien foreclosure. Id. at 649-50. The Florida court finally
adopted a sister court’s reasoning that its ruling “should not be deemed as an
attempt to oust the trial court of its jurisdiction over the lien foreclosure.
Instead, the operation of both the Arbitration Code and the Mechanic’s Lien
Law is interdependent and compatible.” Id. at 649 (citation omitted).

Defendants’ reliance on Burgi v. Rudgers, 108 NW 253 (SD 1906), is also
misplaced. First, arbitration was not the “defense” at issue in Burgi. Second,
this Court acknowledged that although the general contractor’s substantive
defenses may be asserted by the owner, “[t]hey do not require the
subcontractor to exhaust his remedies against the contractor before
proceeding against the property.” Id. at 254. Therefore, the Burgi Court
concluded that a subcontractor may pursue a mechanic’s lien claim.

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America Med. and Dental Benefits Plan, 555 F3d 656, 658 (8thCir 2009) (concluding

that “arbitration agreements are to be enforced unless a party can show that it will

not be able to vindicate its rights in the arbitral forum”) (quoting Faber v. Menard,

Inc., 367 F3d 1048, 1052 (8thCir 2004)). In light of these principles and the absence

of any authority supporting Defendants’ argument, we decline to consider whether a

general contractor may assign to the property owner the general contractor-

subcontractor’s contractual agreement to arbitrate. See Hart v. Miller, 2000 SD 53,

¶45, 609 NW2d 138, 149 (concluding that the failure to submit authority on an

issue constitutes a waiver of the argument on appeal).

Issue II: Whether Par Golf’s Lien Was Timely

[¶19.] The circuit court concluded that Par Golf’s lien was filed within 120

days of its last performance of work on the project. There are no disputes of fact

regarding the completion of work, Par Golf’s return to the project, and the date of

filing the lien. Therefore, this issue presents a question of law and we review the

circuit court’s conclusions of law de novo. Hanson v. Vermillion Sch. Dist. No. 13-1,

2007 SD 9, ¶24, 727 NW2d 459, 467.

[¶20.] There is no dispute that Par Golf completed its work in August 2005,

and filed its mechanic’s lien on January 17, 2006. Therefore, unless the time for

filing was extended, Par Golf’s lien claim was untimely because it was not filed

within 120 days of completion of work. See SDCL 44-9-16 (providing that a lien

must be filed within 120 days “after doing the last of such work, or furnishing the

last item of such skill, services, material, or machinery”). See also F.H. Peavey &

Co. v. Whitman, 82 SD 367, 369, 146 NW2d 365, 366 (1966) (providing that a

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mechanic’s lien “absolutely terminates unless such filing is made within the

prescribed time”). Par Golf contends that its filing was extended because it

returned to the project on September 23-24, 2005, pursuant to Bodell’s request, to

repair the irrigation system, which had been damaged by vandalism.

[¶21.] Defendants disagree, arguing that this repair work did not extend the

time for filing a mechanic’s lien. Defendants rely on Thorson v. Pfeifer, 82 SD 313,

316, 145 NW2d 438, 439-40 (SD 1996). Thorson adopted the rule that:

[A]fter the installation of fixtures, machinery, or attachments in
a building, services in the form of examination or regulation of,
or repairs to, such fixtures, machinery, or attachments,
performed by the seller or the one making the installation,
should not be regarded as a part of the act of sale or installation,
so as to make the time within which to file a mechanic’s lien
based on such original act run from the time of performance of
such additional services.

Id. (emphasis added).

[¶22.] The circuit court acknowledged this rule, but concluded that Par Golf’s

repair work extended the time to file the lien. The court reasoned that although

Par Golf’s return to the project involved repair work, it was not unsolicited, trifling,

or done for the purpose of extending the time to file a lien. The court stated:

Par Golf’s lien was filed within 120 days of the last item of work
performed on the property. This was repair work required by
Bodell and/or Wal-Mart. It did not involve unsolicited or trifling
work performed for the purpose of extending the period of
limitation for filing a lien claim.

Although we agree that the requested repair work was requested and was not

trifling or performed for the purpose of extending the period of limitation, we

disagree that this repair extended the time to file the lien.

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[¶23.] As previously noted, Thorson adopted the general rule that once a

project is completed, repair work “should not be regarded as a part of the act of sale

or installation” when computing the time to file a mechanic’s lien. 82 SD at 316,

145 NW2d at 439-40. Further, in an earlier case, we explained that when the

contractor returns to a project, in order “for the mechanic’s lien to include all of the

services provided by [the contractor] on the contract, the [latest] work . . . would

have to be part of the [contractor’s] continuing obligation under the contract.”

Wefel v. Harold J. Westin and Assoc., Inc., 329 NW2d 624, 626-27 (SD 1983). 7

7. This Court also listed many examples of returns to the worksite that do not
extend the time for filing the lien:

Several times this court has addressed whether supplies or
services were part of a continuing obligation under a contract.
In several of these cases, we have held that the 120-day period
cannot be extended by a return to the worksite. In Thorson v.
Pfeifer, 82 SD 313, 145 NW2d 438 (1966), where a heating
subcontractor returned voluntarily over three months after
installation to inspect and winterize the unit, this court held
that the 120-day filing period ran from installation and not the
voluntary service call. Similarly, in Big Sioux Lumber Co. v.
Miller, 57 SD 506, 234 NW 31 (1930), a contractor returned over
two years after construction of a building to strengthen it.
There, this court refused to permit the contractor’s statement
filed within ninety days of that visit to relate back to the
original construction contract. Also, in F.H. Peavey & Company
v. Whitman, 82 SD 367, 146 NW2d 365 (1966), where a
materialman furnished adhesive to glue loose shingles blown up
by high winds, this court held that the subsequently filed
mechanic’s lien did not attach to materials furnished a year
earlier under a contract to build plaintiff’s house. Most recently,
in McLaughlin Elec. Supply v. Am. Empire Ins., 269 NW2d 766
(SD 1978), we refused, for purposes of the 120-day period, to
allow a contractor to count the period from a return to worksite
to determine whether the work was completed and whether the
workmen picked up their tools.

(continued . . .)
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[¶24.] In this case, the repair work did not extend the time for filing because,

even if Par Golf’s repair was solicited and non-trifling, the repair was not a part of

Par Golf’s continuing obligation under the contract for which it sought a lien. On

the contrary, the repair was requested and performed only because of a fortuitous

and independent act of vandalism that arose after Par Golf had completed its work

under its subcontract. Because Par Golf had no continuing obligation under the

subcontract to repair the vandalism, the circuit court erred in concluding that the

requested repair extended Par Golf’s time to file its lien. Because Par Golf’s repair

work did not extend the time to file the lien for work performed pursuant to the

subcontract, only that portion of Par Golf’s lien claim for the September 23-24

repair work ($1,245) was timely. We reverse the remainder of the court’s

$20,252.52 judgment.

Issue III: Lien Itemization

[¶25.] Because we have concluded that Par Golf did not timely file its

mechanic’s lien with respect to its work before the September 23-24 repair, we need

only determine whether Par Golf properly itemized its lien for the repair work, a

claim of $1,245.

[¶26.] SDCL 44-9-16(7) requires “[a]n itemized statement of the account upon

which the lien is claimed.” While this statutory language is construed liberally, the

lien claimant must substantially comply with its requirements. Crescent Elec.

Supply Co. v. Nerison, 89 SD 203, 232 NW2d 76 (1975). Substantial compliance is

_________________
(. . . continued)
Wefel, 329 NW2d at 626-27.

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required to protect others with an interest in the property from fraud and

imposition. Ringgenberg v. Wilmsmeyer, 253 NW2d 197 (SD 1977). “Failure to

sufficiently itemize the account renders the lien invalid.” R&L Supply, Ltd. v.

Evangelical Lutheran Good Samaritan Soc’y, 462 NW2d 515, 519 (SD 1990). The

test is whether the itemization provided sufficient detail “to notify an ordinarily

intelligent and careful person that work was actually accomplished on the property

in question.” H&R Plumbing & Heating, Inc. v. Fed. Deposit Ins. Corp., 406 NW2d

151, 153 (SD 1987); see also Ringgenberg, 253 NW2d 197 (SD 1977). As noted in

R&L Supply, “a lien statement which list[s] the destination of the materials,

quantity of each item, together with a description of the item and its price”

constitutes sufficient itemization. 462 NW2d at 519; see also H&R Plumbing, 406

NW2d at 153 (providing that sufficient detail includes a description of “the type of

work done and materials used by the subcontractor”).

[¶27.] In this case, the circuit court concluded that Par Golf’s lien for the

repair work was sufficiently itemized:

Par Golf itemized the repairs to the irrigation system including
a $200.00 mobilization fee, $145.00 for material and 20 hours
labor at $45.00 per hour, for a total of $1,245.00. The
information is sufficient to notify an ordinary, intelligent and
careful person of the details of the claim.

Par Golf also included the dates this work was provided. We conclude that Par

Golf’s itemization was sufficiently detailed “to notify an ordinarily intelligent and

careful person that work was actually accomplished on the property in question.”

H&R Plumbing, 406 NW2d at 153.

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[¶28.] Defendants, however, argue that if a mechanic’s lien is not sufficiently

itemized to the full extent of the claim, the lien may not be imposed even for those

portions that are sufficiently itemized. Because Defendants have not supported this

argument with any authority, we decline to consider this issue. The failure to

submit supporting authority constitutes a waiver of the argument. Hart, 2000 SD

53, ¶45, 609 NW2d at 149. We affirm the award of a mechanic’s lien in the amount

of $1,245.

Issue IV: Unjust Enrichment

[¶29.] An action for unjust enrichment is an action in equity. Himrich v.

Carpenter, 1997 SD 116, ¶21, 569 NW2d 568, 573. “This Court’s standard of review

. . . is abuse of discretion.” Action Mech., Inc. v. Deadwood Historic Pres. Comm’n,

2002 SD 121, ¶14, 652 NW2d 742, 748. “The term ‘abuse of discretion’ refers to a

discretion exercised to an end or purpose not justified by, and clearly against,

reason and evidence.” Edinger v. Edinger, 2006 SD 103, ¶8, 724 NW2d 852, 855

(citation omitted).

[¶30.] The circuit court entered judgment against Wal-Mart Trust on the

unjust enrichment claim in the amount of $44,370.78, which was the portion of Par

Golf’s total outstanding bill that had not been allowed as a mechanic’s lien. The

award included: $12,025.78 in retainages; $3,072 relating to the change order for

sod; and $29,210.00 for additional watering charges that Par Golf contended were

extras not included in its original bid and subcontract.

[¶31.] On appeal Defendants note that Bodell was paid in full under the

Wal-Mart Stores-Bodell contract. Therefore, Defendants argue that Wal-Mart

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Trust fully paid for all improvements and Wal-Mart Trust could not have been

unjustly enriched as a matter of law. Defendants note that several states have held

that an owner cannot be unjustly enriched by retaining the benefits of work

performed by subcontractors where the owner has paid the general contractor in

full. See e.g. County Asphalt Paving Co., Inc. v. Mosley Const., Inc., 239 SW3d 704

(MoCtApp 2007); SLR Plumbing and Sewer, Inc. v. Turk, 757 NE2d 193 (IndCtApp

2001); Joest Vibratech, Inc. v. N. Star Steel Co., 109 FSupp2d 746 (ND Ohio 2000);

Moore v. Henley, 969 SW2d 266 (MoCtApp 1998); Breckenridge Mat. Co. v. Allied

Home Corp., 950 SW2d 340 (MoCtApp 1997); Columbia Wholesale Co., Inc. v.

Scudder May N.V., 312 SC 259, 440 SE2d 129 (SC 1994); Sundance Mech. & Util.

Corp. v. Atlas, 880 P2d 861 (NM 1994); Seegers v. Sprague, 70 Wis2d 997, 236

NW2d 227 (1975); Rogers v. Whitson, 228 CalCtApp2d 662 (CalAppDist1 1964);

Cohen v. Delmart Drive-In Theatre, 46 Del 427, 84 A2d 597 (DelSuperCt 1951).

[¶32.] We need not consider Defendants’ request to apply that rule in this

case, however, because even though Wal-Mart Stores may have paid Bodell under

their agreement, Wal-Mart Trust is the owner of this property and there is no

evidence that Wal-Mart Trust paid anything for the additional improvements to its

property. 8 Because there is no evidence that Wal-Mart Trust paid Bodell anything,

8. At oral argument, Defendants argued that Par Golf failed to sustain its trial
burden of raising and establishing a distinction between Wal-Mart Trust as
the owner and Wal-Mart Stores as an entity not a part of Wal-Mart Trust.
The record, however, reflects that Wal-Mart Trust was treated as a distinct
legal owner from the initial pleadings to the circuit court’s memorandum
opinion, and in the appellate briefs filed with this Court. We decline to
redefine Wal-Mart’s business structure at this point in appellate review.
Moreover, it is the Defendants that have raised this issue by requesting this
(continued . . .)
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we decline to consider Defendants’ proposed unjust enrichment rule from cases

involving a property owner’s payment for the subcontractor’s improvements through

payment of the general contractor. 9

[¶33.] We do, however, address Defendants’ factual argument that the most

significant “extra” sought (watering) was actually included in Par Golf’s

subcontract. In response to this argument, Par Golf’s principal testified that

watering was an extra expressly excluded by its bid. Although Par Golf did not

introduce that written bid into evidence, Par Golf’s June 24, 2005 letter confirmed

that it had told Bodell that Par Golf “did not have watering in our bid.” The letter

then inquired of Bodell if Par Golf would be paid extra for the watering and for the

water truck. Bodell’s project manager wrote “OK” behind the request and added his

initials. 10 Thus, while Defendants argue that the watering was expressly required

_________________
(. . . continued)
Court to apply a non-restitution rule in cases where the “owner” has paid for
the improvements. Therefore, it was Defendants’ burden to establish the
absence of an ownership distinction between Wal-Mart Stores and Wal-Mart
Trust, and Defendants failed to satisfy that burden.

9. We acknowledge Defendants’ point in oral argument that in many situations
payment of the general contract necessarily includes payment for all work
contemplated by the general contract whether performed by the general
contractor or a subcontractor. Therefore, in many situations, full payment of
the general contract may include payment of the item at issue: the only
dispute being whether the general contractor or the subcontractor must
absorb the cost of the improvement. As previously indicated, however, this
record does not reflect that Wal-Mart Trust, the owner, paid Bodell anything.
Therefore, we need not address this issue.

10. In light of this evidence of a post-subcontract agreement, we also reject
Defendants’ argument that project’s general specifications incorporated in the
subcontract (requiring watering) could not have been modified by a pre-
contract bid.

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under the general specifications that were incorporated in the subcontract, there

was contrary evidence of a writing confirming a post-subcontract agreement that

Bodell would pay for these items as “extras.” In light of this dispute in the evidence,

we find no clear error in the circuit court’s finding that Par Golf’s unjust enrichment

claims were for extra work not contemplated by the original subcontract.

[¶34.] In sum, we find no clear error in the circuit court’s finding that Wal-

Mart Stores’ payment to Bodell did not include the “extras” for which unjust

enrichment was awarded. We conclude that, because the circuit court found that

Wal-Mart Trust had not paid the general contractor for the items at issue,

Defendants’ cases are inapplicable. We affirm the circuit court’s unjust enrichment

award.

Issue V: Was Bodell Entitled to an Offset against Par Golf’s Claims

[¶35.] Bodell claims that it is entitled to offsets against Par Golf’s claims for

alleged failures of Par Golf to perform in accordance with the subcontract. See

Hoaas v. Griffiths, 2006 SD 27, ¶20, 714 NW2d 61, 67 (providing that the right of

an offset allows entities that owe each other money to apply their mutual debts

against each other, thereby avoiding the “absurdity of making A pay B when B owes

A”). At trial, Bodell sought to recover approximately $18,000, largely relating to the

materials and labor needed to water and sod the detention pond. The circuit court

disagreed, concluding that Par Golf was not obligated to provide the watering. The

circuit court’s memorandum decision noted:

Change order No. 1 pertained to the sod but made no mention of
irrigation. Par Golf warned Bodell in several letters that this
was non-irrigated sod and will not live. Par Golf installed the
sod but did no watering. Soon Bodell was complaining that the

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sod was shrinking and the grass was not growing. Bodell
maintained that the specifications called for watering of the
sod. Par Golf countered that watering was not included in the
change order so it would be an extra. The plans contemplated
that the area now to be sodded were originally to be planted in
native grasses. There was no irrigation water then available in
these curb and gutter areas.

We agree with Par Golf that there was sufficient evidence for the circuit court to

find that Bodell was responsible for any losses suffered because of the failure to

water this sod. Because Defendants have not established that this finding was

clearly erroneous, they failed to establish entitlement to an offset.

[¶36.] Regarding the sodding, the record reflects that the need for sod at the

detention pond arose after a 2005 spring flood washed out Par Golf’s grass seeding

and Par Golf was not responsible for that damage. Bodell, however, argues that Par

Golf’s reseeding was inadequate to meet contract specifications, thus requiring

sodding. The circuit court, however, found:

Bodell has sought a set-off for additional sod it had installed and
watering it had done after Par Golf left the job site. Whether
the sodding, for which Bodell now claims an offset[,] was
necessary[ ]has not been established by a preponderance of the
evidence.

We affirm this factual finding because Defendants have not identified any evidence

suggesting that the circuit court was clearly erroneous.

Issue VI: Attorney Fees

[¶37.] Both Wal-Mart Trust and Par Golf moved for attorney fees under

SDCL 44-9-42. That statute provides that in mechanic’s lien cases, a circuit court

“shall have authority in its discretion to allow such attorney’s fees . . . and other

expenses as to it may seem warranted and necessary according to the circumstances

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of each case[.]” SDCL 44-9-42. The circuit court denied Wal-Mart Trust’s

application and granted $12,500 of Par Golf’s $28,114.79 attorney fees.

[¶38.] Defendants argue that the circuit court abused its discretion in

awarding Par Golf this amount, when nearly two-thirds, approximately seventy

percent ($44,379.78), of Par Golf’s claimed lien was invalid. Defendants argue that

Par Golf’s award essentially included fees relating to the unjust enrichment claim.

[¶39.] In its findings of fact, the court noted that Defendants did not object to

the reasonableness of the hourly rates charged, nor did they argue that the amount

of work was unnecessary in the prosecution of the mechanic’s lien claim and the

defense of Bodell’s setoff claim. Further, the circuit court’s findings of fact and

conclusions of law reflect that, in awarding Par Golf less than half of what they

requested in attorney fees: “the sum of $12,500 in attorney fees was reasonable and

necessary to prosecute Par Golf’s claim on the lien foreclosure[.]” Therefore, we see

no abuse of discretion in the circuit court’s analysis. Nevertheless, in light of our

reversal of most of the remaining claimed mechanic’s lien, we remand this issue for

reconsideration.

[¶40.] Defendants also contend that the circuit court abused its discretion

when it denied Wal-Mart Trust’s motion for attorney fees in defense of the lien

foreclosure. Defendants note that Wal-Mart Trust had secured a bond from

Travelers that released the lien from Wal-Mart Trust’s property and fully secured

Par Golf’s claim, yet Par Golf refused to dismiss Wal-Mart Trust from the case.

Defendants argue that under these circumstances, Wal-Mart Trust should not have

been forced to bear the cost of defending Par Golf’s mechanic’s lien claims. In light

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of our reversal of the mechanic’s lien claim in substantial part, we also remand this

issue for reconsideration.

Notice of Review

[¶41.] Par Golf filed a protective notice of review in the event we invalidated

any portion of its mechanic’s lien award. Par Golf requests this Court to modify

“the judgment allowing for a damage award of $64,623.30 plus interest on . . .

[u]njust enrichment, or in the alternative, that we remand to the trial court the

question of what portion of the remaining $20,252.52 [disallowed as a mechanic’s

lien] plus interest should be awarded[.]” Because we have concluded that a major

portion of the mechanic’s lien relating to the original project was not timely, we

remand for a consideration of Par Golf’s unjust enrichment claim.

Appellate Attorney Fees

[¶42.] Par Golf seeks appellate attorney fees in the amount of $4,759.40

under SDCL 44-9-42 and 15-26A-87.3. Par Golf indicates that this amount equals

one-half of the total fees incurred in appealing the case. Par Golf argues that it

should be allowed $4,759.40 for the time spent on the issue regarding foreclosure of

the mechanic’s lien. Defendants object, arguing that Par Golf’ failed to provide “any

meaningful detail in its submission” and did not “make any attempt to separate the

fees and charges relating to its lien claims from those relating to its other claims on

appeal.” Defendants contend that Par Golf “simply claims an entitlement to one-

half of all of its fees.” Our review of Par Golf’s statement of attorney fees confirms

Defendants’ objections. Additionally, in light of our reversal of most of Par Golf’s

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claimed mechanic’s lien, we deny Par Golf’s motion for appellate attorney fees under

SDCL 44-9-42.

Conclusion

[¶43.] We decline to review the circuit court’s conclusion that Par Golf was

not required to arbitrate before pursuing mechanic’s lien and unjust enrichment

claims against Wal-Mart Trust. We reverse that portion of the circuit court’s

mechanic’s lien award that was not timely filed, and we affirm the portion of the

court’s mechanic’s lien award for the September 23 and 24, 2005 repair work. We

affirm the unjust enrichment award and the circuit court’s decision that Bodell is

not entitled to offsets. We remand the matter for reconsideration of trial attorney

fees and Par Golf’s notice of review issue regarding further entitlement to unjust

enrichment.

[¶44.] GILBERTSON, Chief Justice, and MEIERHENRY, Justice, and

SABERS, Retired Justice, and BARNETT, Circuit Judge, concur.

[¶45.] BARNETT, Circuit Judge, sitting for KONENKAMP, Justice,

disqualified.

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