Inline Electric Supply Co. v. Eskildsen

Citations: 198 So. 3d 524; 2015 Ala. Civ. App. LEXIS 288; 2015 WL 8567254Docket: 2140917

Court: Court of Civil Appeals of Alabama; December 10, 2015; Alabama; State Appellate Court

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Inline Electric Supply Company, Inc. appeals a summary judgment from the Jefferson Circuit Court that favored Samuel and Jennifer Eskildsen regarding Inline's attempt to enforce a materialman’s lien for an unpaid balance. The Eskildsens had contracted with Rusert Homes, LLC for a $550,000 construction project, during which Inline provided materials valued at $6,690.68. Eskildsen’s affidavit indicated that Rusert defaulted and abandoned the project, leaving defects and incomplete work. Eskildsen stated that he incurred additional costs to complete the project and claimed no balance was owed to Rusert at the time Inline filed its lien on June 19, 2013. The Eskildsens made payments totaling $18,411.34 to two subcontractors under joint check agreements prior to Inline's notice of intent to lien. Inline filed a civil action against the Eskildsens on July 5, 2013, solely to enforce the lien. The Eskildsens moved for summary judgment, asserting no unpaid balance existed at the time of Inline’s notice, and the trial court granted their motion on May 26, 2015. Inline had previously obtained a judgment against Rusert for $106,682.38.

The trial court ruled that Inline's lien claim against the Eskildsens was limited by the unpaid balance owed to Rusert, finding no such balance existed. Consequently, the Eskildsens were granted a judgment in their favor, which became final on June 23, 2016. Inline appealed this decision to the Alabama Supreme Court, which transferred the case to the current court. The court follows a de novo standard in reviewing summary judgments, assessing whether the movant has demonstrated no genuine issue of material fact exists, and whether they are entitled to judgment as a matter of law. The court must view evidence favorably to the nonmovant, and once the movant establishes a prima facie case, the burden shifts to the nonmovant to present substantial evidence indicating a genuine issue of material fact.

Inline contends the trial court erred by accepting Samuel Eskildsen’s affidavit, claiming it lacked supporting evidence for his assertion of no unpaid balance. While Inline characterizes this statement as a conclusory allegation, the court notes that Inline did not move to strike the affidavit, which affects its admissibility. Precedents affirm that parties must object and move to strike affidavits to successfully challenge their admissibility in summary judgment proceedings.

In Ware v. Deutsche Bank Nat’l Trust Co., the court established that a party challenging the admissibility of an affidavit under Rule 56(e) must formally object and move to strike it. In Blackmon v. Brazil, the plaintiffs' failure to object to the affidavits in the trial court resulted in a waiver of their objections on appeal. Similarly, in Ex parte Unitrin, the lack of objection to the materials presented meant they were properly considered by the court. The court reaffirmed the necessity of a motion to strike to bring an objection to the trial court’s attention for preserving the issue for appeal.

Inline contended that the trial court wrongly granted summary judgment to the Eskildsens, arguing that it provided evidence countering their claim of not owing Rusert any money at the time Inline intended to file a lien. The creation and enforcement of materialman’s liens are governed by Alabama Code § 35-11-210, which allows for liens by those providing labor or materials under contract with the property owner or their agents. This statute provides for two types of liens: a full-price lien and an unpaid-balance lien. Inline's case only potentially allows for an unpaid-balance lien, as there was no express or implied contract with the Eskildsens. The unpaid-balance lien allows a supplier to claim a lien on funds owed by the owner to the contractor.

To establish this lien, the owner must prove that any unpaid balance was used for completing the project as per the original contract. However, if a contractor abandons their duties, the owner can use the unpaid balance for necessary expenses outside the original scope, provided they relate to completing the project as originally contracted.

To determine the unpaid balance owed to a contractor who abandoned a construction project, the court must assess the percentage of completion at the time of abandonment. The unpaid balance is calculated as the difference between the total contract amount and the expenses incurred by the property owners to complete the project according to the contract. The Eskildsens claimed that Rusert, the contractor, abandoned the project and that they incurred additional costs to complete it, asserting there was no unpaid balance owed to Rusert at the time of Inline's notice of intent to file a lien. In contrast, Inline presented evidence of payments made after the notice, arguing these payments indicate an unpaid balance existed. The contract was valued at $550,000, but neither party provided evidence of the abandonment date, remaining work, or expenses incurred by the Eskildsens to complete the project. Consequently, the trial court lacked sufficient information to conclude there was no unpaid balance owed to Inline. As a result, the Eskildsens did not demonstrate that they were entitled to summary judgment, leading to a reversal of the judgment and remand for further proceedings.