Joe Bonura, Inc. v. Hiern

Citation: 419 So. 2d 25Docket: 13108

Court: Louisiana Court of Appeal; July 30, 1982; Louisiana; State Appellate Court

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Joe Bonura, Inc., a general contractor, initiated a lawsuit against Livingston Hiern and Housemaster Corporation to recover $29,440.93 for unpaid work related to the renovation of two apartment buildings at 4443 and 4445 Wilson Avenue in New Orleans. The dispute arose from an oral construction contract where Bonura was to make extensive renovations to prepare the units for sale as condominiums. Work commenced in June 1979 and continued until October 1979, during which Bonura billed a total of $175,440.93, while the defendant paid $146,000. Disagreements emerged over the agreed price and the circumstances leading to a work stoppage. Bonura claimed he quoted a price based on a cost-plus structure and noted that he had initially underestimated the renovation costs due to unforeseen vandalism and additional requests from the defendant. Hiern contended that Bonura had indicated the total cost would be $70,000 for both buildings. The trial court dismissed the plaintiff's suit, prompting Bonura to appeal. The case highlighted conflicting testimonies regarding the contract terms and the quality of work completed, as well as the financial responsibilities of the parties involved.

The contract amount included $57,000 plus an additional $13,000 for roofing and balcony repairs. The plaintiff initially proposed a cost-plus arrangement with a 10% overhead and 15% profit but later quoted a firm price of $70,000. The defendant clarified that he understood the property was owned by Housemaster Corporation, with all work permits and payments processed through the corporation. Mr. Hiern, representing the defendant, stated there were no changes to the initially agreed-upon work, despite vandalism that involved stolen paint and broken windows, which he believed were part of the project scope.

Billing concerns arose for the defendant between June and September 1979, with payments ranging from $10,000 to $15,000 every two weeks. After expressing concerns to the general foreman and discussing increasing costs with the plaintiffs, the defendant ordered a halt to work in October 1979 when costs escalated to between $90,000 and $100,000, ultimately reaching $176,000.

On appeal, the plaintiff contended that the contract was a cost-plus arrangement and claimed $29,440.93 in owed amounts. He challenged the trial court's finding of unreasonable costs, arguing the expert testimony from Marion Fritscher was irrelevant due to a lack of comparative analysis with his project. The court must resolve key issues regarding the nature of the contract, the plaintiff's burden of proving costs, the reasonableness of those costs, and the trial court's reliance on the expert testimony. The document outlines the three main types of construction contracts and asserts that the lower court favored the plaintiff's testimony, suggesting a cost-plus contract was indeed established.

The trial court's findings were upheld, indicating no clear error in its decision. The plaintiff testified to a cost-plus agreement with the defendant, which included a ten percent overhead and a fifteen percent profit margin, with an initial job estimate of $70,000. The plaintiff did not provide a firm price due to the poor condition of the premises. Evidence was presented, including bills from Bonura, Inc., showing the agreed-upon overhead and profit percentages. General foreman Garland Russell supported the plaintiff's claim, stating the job was meant to be calculated on a time-plus basis.

The defendant, unfamiliar with cost-plus contracts, argued that the $70,000 figure was a ceiling but authorized the completion of multiple apartments despite knowing costs would exceed this figure. The plaintiff claims the defendant owes $29,440.93, the difference between total billings and payments made. The defendant denied further debt and required strict proof from the plaintiff.

In a cost-plus agreement, if the owner cancels the contract, the contractor is entitled to reimbursement for labor and materials along with profit at cancellation, while the owner cannot recover costs for completion. The contractor must prove each expense incurred, which the plaintiff did by presenting a series of bills and statements related to the job. Under such contracts, the contractor is responsible for providing value to the owner and must ensure work efficiency to avoid excessive costs. The trial court found the charges excessive and unreasonable, influenced by expert testimony from Marion Fritscher.

The plaintiff failed to provide expert testimony to demonstrate that the charges were reasonable, relying instead on the testimony of Mr. Bonura, the corporation's president, and a lay witness, which did not persuade the trial court. The court found no clear error in its findings. Only one expert, Mr. Marion Fritscher, testified regarding the costs, establishing his qualifications as a general contractor since 1957 with extensive experience. He provided details about the apartment complexes involved, including their completion status and renovation costs. 

Fritscher indicated that the total cost for the renovation of the twenty one-bedroom apartments at 4415 and 4435 Wilson Avenue was $123,016.69, while the twelve two-bedroom apartments at 4443 and 4445 Wilson Avenue cost $152,050.00, which included additional completion costs. He analyzed costs per apartment, concluding that the charges by the plaintiff were excessive. Although he acknowledged minor discrepancies between his work and the plaintiff's, he noted a significant unexplained cost difference despite comparable work and materials.

The trial judge's findings were upheld, affirming the judgment that the plaintiff's costs were excessive, with costs assessed against the appellant. The work involved various trades, including plumbing, electrical, and carpentry. The plaintiff claimed work ceased due to the defendant's payment issues, while the defendant contended he halted work due to cost overruns.