Encore Hotels of Columbus, LLC v. Preferred Fire Protection
Docket: 03A04-0108-CV-380
Court: Indiana Court of Appeals; March 28, 2002; Indiana; State Appellate Court
Preferred Fire Protection filed a cross-claim against Encore Hotels of Columbus, LLC, seeking $16,745 for materials and labor provided for a hotel construction project. The trial court ruled in favor of Preferred Fire after a bench trial, determining that Encore was unjustly enriched. Encore appealed this judgment.
The case began on April 11, 1997, when Encore and S.C. Bodner Construction, Inc. entered into a no-lien contract for constructing a hotel, with Bodner as the general contractor responsible for hiring subcontractors. Bodner hired Preferred Fire to install a fire protection system for $54,000. By December 20, 1997, Preferred Fire had billed Bodner $37,950 and received $34,155, leaving some retainage. On February 11, 1998, Preferred Fire sent another invoice for $11,655 for work done after December 21, but Encore did not pay Bodner for this work, and Bodner did not pay Preferred Fire.
Encore terminated its contract with Bodner on February 4, 1998, taking over as the general contractor. At this point, Preferred Fire had only two days of work remaining but needed another subcontractor to finish the ceilings before completing its work. On February 18, Encore's representative, Jim Huff, contacted Preferred Fire, seeking information about outstanding balances and project completion. However, Huff could not authorize payment for overtime work requested by Preferred Fire.
On February 19, 1998, Robert Peters, President of Preferred Fire, sent a letter to Huff stating that for Preferred Fire to resume work, Encore needed to sign an affidavit acknowledging responsibility for a remaining balance of $19,845, plus any additional costs incurred. Encore failed to respond, leading Preferred Fire to cease further work and retrieve its equipment from the site.
Encore contracted United Fire Protection for a fire protection system at a cost of $18,732.37, but failed to pay Preferred Fire $11,655 for work completed between December 21, 1997, and January 31, 1998. In response, Preferred Fire filed a cross-claim against Encore for payment. After a bench trial, the court ruled in favor of Preferred Fire, awarding $11,655 plus $5,090 for retainage, along with prejudgment interest and costs. Encore appealed, arguing the trial court erred in finding for Preferred Fire under unjust enrichment.
The legal standard of review involves two tiers: first assessing if evidence supports the findings, and then if the findings support the judgment. The findings are deemed erroneous only if the record strongly indicates a mistake. To establish unjust enrichment, a plaintiff must show that a measurable benefit was conferred on the defendant under circumstances that render retention of that benefit unjust. In this case, the general rule applies since Encore has not paid for the labor and materials provided by Preferred Fire.
The court noted that while Indiana courts have criteria to assess unjust enrichment claims involving owners and general contractors, these criteria do not apply here. Instead, the focus is on whether Preferred Fire conferred a measurable benefit on Encore, which it did by completing work without payment. The evidence indicated that Encore accepted Preferred Fire as a subcontractor and did not dispute the quality of the work, nor did it pay for the services rendered. Therefore, the assertion that unjust enrichment requires a contract between the parties is unfounded, as the law allows for quasi-contractual liability to prevent unjust enrichment.
Preferred Fire left the project site after Encore requested weekend work that would incur overtime costs, which Encore did not guarantee to cover. Preferred Fire's departure was deemed reasonable, as Encore failed to demonstrate any unreasonableness in this refusal. Encore incurred $18,732.37 to complete the fire protection system with a new subcontractor and claimed it was not unjustly enriched by the total payment of $52,888.37, though it provided no supporting authority, leading to a waiver of this claim. The evidence indicated it is typically more challenging for a new contractor to finish a job than for the original contractor, and Preferred Fire had offered to complete the work with only overtime costs. Furthermore, Encore did not prove any defects in the work already completed by Preferred Fire. The court concluded that Encore was unjustly enriched by accepting Preferred Fire's work without compensation, affirming the trial court's decision in favor of Preferred Fire. Additionally, the trial court's findings regarding the quality of Preferred Fire's work and the judicial notice of the hotel's operational status were upheld. Finally, the court found no error in awarding retainage to Preferred Fire based on the elapsed time since the final building inspection, which was supported by the hotel's operation for over a year.
