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Donald Bucklin Construction v. McCormick Construction Co.

Supreme Court of South Dakota

July 31, 2013

DONALD BUCKLIN CONSTRUCTION, A D/B/A OF DONALD BUCKLIN, Plaintiff and Appellant,
v.
MCCORMICK CONSTRUCTION CO., A D/B/A OF MCC, INC., A MINNESOTA CORPORATION; ET AL., Defendant and Appellee.

ARGUED Date: MAY 21, 2013

APPEAL FROM THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT DAY COUNTY, SOUTH DAKOTA THE HONORABLE JON S. FLEMMER Circuit Court Judge

RONALD A. PARSONS, JR. STEVEN M. JOHNSON SHANNON R. FALON of Johnson, Heidepriem & Abdallah, LLP, Attorneys for plaintiff and appellant.

MATTHEW P. BOCK WILLIAM G. BECK of Woods, Fuller, Shultz & Smith, PC, Attorneys for defendant and appellee.

OPINION

SEVERSON, Justice

[¶1.] McCormick Construction contracted with Donald Bucklin Construction to build flat grain storage facilities at two locations in northern South Dakota. After beginning construction on the facilities, Bucklin stopped work, alleging that McCormick failed to make progress payments. Bucklin filed lawsuits seeking to foreclose liens on the properties and alleging McCormick was unjustly enriched. McCormick answered and counterclaimed. McCormick later moved for default judgment on its counterclaims against Bucklin and for summary judgment on Bucklin's claims. The trial court granted McCormick's motions for default judgment on the counterclaims and granted McCormick's motions for summary judgment in both cases. Bucklin appeals. We reverse and remand.

BACKGROUND

[¶2.] In early 2010, the South Dakota Wheat Growers Association (SDWGA) hired McCormick Construction as a general contractor to build large grain storage complexes in Edmunds County and Day County. SDWGA requested that Donald Bucklin Construction build "Bucklin buildings" for the grain storage portion of both complexes. "Bucklin buildings, " which have a fabric roof and a concrete base, are used for flat storage of grain as an alternative to vertical grain towers or outdoor storage of grain. McCormick subcontracted the construction of the flat grain storage buildings to Bucklin.

[¶3.] The contracts between Bucklin and McCormick specified that each building would be constructed for $2, 109, 500. For each building, a one-third payment would be made up front to Bucklin, a one-third payment would be due on delivery, and progress payments would be made throughout the construction. A portion of all payments made to Bucklin would be retained by McCormick until the buildings were complete. The contracts required any change orders on the buildings to be in writing and signed by each party.

[¶4.] After the receipt of $650, 000 for each building, Bucklin began work on the buildings near Andover in Day County and near Roscoe in Edmunds County. Bucklin alleges that change orders to the construction of both buildings increased the total amount due under the contracts by more than $1, 000, 000. Bucklin also alleges that after construction began, McCormick sought to impose delays to avoid making progress payments owed to Bucklin. Bucklin asserts that because the company did not receive certain payments, Bucklin stopped work on both projects. McCormick alleges that it should not have to pay Bucklin because of Bucklin's deficient work at both sites.

[¶5.] On March 17, 2011, McCormick received a notice from SDWGA's insurance carrier describing construction defects in the buildings. McCormick then made emergency repairs to the buildings because of safety concerns.

[¶6.] On March 23, 2011, Bucklin recorded mechanic's liens against both project sites. Bucklin stated that the company was owed $912, 057.13 for the Day County facility and $769, 257.93 for the Edmunds County facility. Bucklin attached invoices submitted to McCormick for his company's work on the buildings to the liens. Bucklin did not attach any written change orders to the liens.

[¶7.] On April 1, 2011, SDWGA served a written demand on Bucklin pursuant to SDCL 44-9-26, requesting that Bucklin either sue for foreclosure on the mechanic's liens or forfeit the liens. On May 2, 2011, Bucklin sued SDWGA to foreclose on the mechanic's liens for both projects.[1] Bucklin also sued McCormick, alleging unjust enrichment. McCormick answered and counterclaimed against Bucklin for breach of contract, negligence, breach of express and implied warranties of good workmanship, and other claims. McCormick and SDWGA moved to dismiss Bucklin's mechanic's liens because the liens were not sufficiently itemized.

[¶8.] On October 19, 2011, the trial court held a hearing on the motions to dismiss the mechanic's liens claims on both buildings. On October 28, 2011, the trial court issued a memorandum decision dismissing the mechanic's liens claims in both complaints. The trial court ordered the liens cancelled on both buildings on November 10, 2011.

[¶9.] In January 2012, SDWGA moved for permission to withdraw and be dismissed as a party defendant because the mechanic's liens on both properties were dismissed and Bucklin's remaining claims on both projects was against McCormick alone. SDWGA, Bucklin, and McCormick stipulated to SDWGA's dismissal from both lawsuits and the trial court granted the order.

[ΒΆ10.] After the dismissal of SDWGA from both lawsuits, McCormick moved for summary judgment against Bucklin on the unjust enrichment claims. On March 18, 2012, Bucklin moved to amend both complaints to allege breach of contract claims and to forfeit the claims of unjust enrichment. On April 16, 2012, McCormick and Bucklin stipulated to Bucklin's amended complaints. The trial court allowed McCormick to rely on its ...


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