Busico v. Carver

542 P.3d 956

2023 UT App 162

2023 UT App 162

Alexandra BUSICO, Louise Busico, Joe Busico, and E. Ann Busico, Appellants and Cross-appellees,

v.Paige CARVER and Phipps Incorporated dba Complete Construction, Appellees and Cross-appellants.

No. 20210847-CA

Court of Appeals of Utah.

Filed December 29, 2023

Rehearing Denied February 21, 2024

Third District Court, Salt Lake Department, The Honorable Andrew H. Stone, No. 190902484

Stephen K. Christiansen, Heidi K. Gordon, and Ryan R. Bolander, Sandy, Attorneys for Appellants and Cross-appellees

Chase B. Ames, Salt Lake City, Nathan D. Anderson, and Michael D. Lichfield, Salt Lake City, Attorneys for Appellees and Cross-appellants

Judge Ryan D. Tenney authored this Opinion, in which Judges David N.

Mortensen and John D. Luthy concurred.

Opinion

TENNEY, Judge:

¶1 In late 2018, Joe and Ann Busico contracted with Complete Construction to repair some damage that had been done to a condo they owned. After Complete Construction began its work, the Busicos became dissatisfied and terminated the contract. The Busicos later sued Complete Construction, raising several causes of action relating to breach of contract. Complete Construction counterclaimed, raising a contract claim of its own, as well as a claim seeking to foreclose on a construction lien that it had filed on the condo.¹ The case was ultimately decided by the district court after a bench trial. Of note, the court ruled in the Busicos’ favor on the lien foreclosure claim, but it denied their request for attorney fees incurred defending against that particular claim. The court also ruled in Complete Construction’s favor on the competing contract claims filed by the parties.

¶2 Both parties have now appealed. In their appeal, the Busicos challenge the district court’s denial of their request for the attorney fees they incurred defending against the lien foreclosure claim. In its cross-appeal, Complete Construction challenges the court’s denial of its lien foreclosure claim, and Complete Construction also challenges the court’s denial of its request for attorney fees relating to certain pretrial motions.

¶3 As explained below, we affirm most of the court’s ruling on the lien foreclosure claim, though we do reverse one aspect of it. As a result of that reversal, we reverse the court’s ruling on the Busicos’ request for attorney fees on the lien foreclosure claim, and we remand that issue for further consideration in light of principles set forth below. Finally, we reject Complete Construction’s challenge to the denial of its request for fees relating to certain pretrial motions.

BACKGROUND

Complete Construction’s Work and Construction Lien

¶4 Joe and Ann Busico own a condo in Salt Lake City, and Joe’s mother Louise has an ownership interest in the condo as well. In 2018, Alexandra Busico (who is Joe and Ann’s daughter) began leasing the condo from her parents and grandmother.

¶5 On September 5, 2018, Alexandra returned home after work and discovered that a sewer backup had caused raw sewage to flood onto the condo’s floors. Alexandra soon submitted a homeowner’s claim to the insurer. On September 20, Alexandra received a letter from the insurer denying coverage because, in the company’s view, the backup was excluded under the homeowner’s policy.

¶6 On September 27, the Busicos contacted Paige Carver. Carver owns and helps run Complete Construction, a company that specializes in "insurance rebuilds[,] repairs," and "remodels" for residential projects. As part of her role, Carver typically made "the initial contact with the new claims," after which she acted as the "go-between between the insurance company and the homeowner or business." The Busicos contacted Carver because they had used Complete Construction on a project a few years earlier.

¶7 On September 27 or 28, Carver met with Ann and Alexandra at the condo and did a walk-through to assess the damage. At the conclusion of this walk-through, Carver told Ann and Alexandra that she thought the Busicos had a "really good shot" at getting the insurance company to cover the necessary repairs. She explained that the first step would be to get a plumber to certify where the clog in the sewage line was that had caused the backup, because this would help Carver determine whether the homeowners’ association or, instead, the Busicos’ insurer would be responsible for the damage. She explained that the next step would be to "get everything disinfected and cleaned" before any repair work could start.

¶8 The next day, Carver arranged for a plumber to come out to the condo, and the plumber soon completed the necessary work. Although the Busicos were responsible for paying the plumber (because they had not yet officially hired Complete Construction), Complete Construction paid the invoice in an attempt to move the project along. Around the same time, the Busicos personally removed some of the flooring, baseboards, and carpeting from the condo.

¶9 On October 4, Complete Construction submitted a bid to the Busicos for the proposed project, estimating the cost to be $11,106.88. On October 31, Joe, Ann, Alexandra, and Carver met with a claims adjuster from the insurance company at the condo. Complete Construction submitted a bid to the Busicos’ insurer later that day. On November 2, the Busicos’ insurance company agreed to cover Complete Construction’s repair work on the condo. That same day, Alexandra directed Complete Construction to begin work.

¶10 On November 5, Carver sent a subcontractor to the condo with instructions to "sanitize [the] floors and hopefully … get to the kitchen sink." Alexandra went to the condo that night. Although she didn’t "see any evidence of any construction," she noticed that someone had "started some carpet removal in the bedroom and the closet area" and that items had been "moved around in the kitchen underneath the sink." Between November 6 and 20, the subcontractor re- turned to the condo several times to continue its work. During this period, its workers "pressure steam clean[ed]" some of the flooring in the condo and also used a "hospital grade disinfectant" to sanitize the areas that had been impacted by the sewage backup.

¶11 On November 20, Complete Construction purchased flooring materials that Alexandra had personally selected to replace the damaged flooring in the condo. The next day, a Complete Construction crew began installing the new flooring.

¶12 Between November 21 and November 30, the Busicos expressed frustration with various aspects of Complete Construction’s work. Much of their unhappiness was about baseboards—Alexandra didn’t want baseboards installed, but Complete Construction believed that baseboards were necessary with the kind of flooring that Alexandra had selected and that not installing baseboards would void the warranty. During this same period, the Busicos also complained about Complete Construction’s work on other issues, including some wiring and electrical issues, issues relating to the flooring installation, and issues relating to drywall repair and removal.

¶13 On the morning of November 30, Complete Construction filed a preliminary lien notice with the Utah State Construction Registry. That same day, Alexandra returned to the condo during her lunch break and became unhappy with some work that had been done by Complete Construction’s crew. Alexandra arranged for another construction company to come to the condo that day to survey the project and provide a second opinion. After consulting with this second company, Alexandra contacted the city "to find out if a permit had been filed," explaining that she had been told by the second company that "a permit should have been filed" before performing some of the work that had been done. The city told her that no permit had been filed. Alexandra then had a locksmith change the locks on the doors so that Complete Construction would no longer have access to the condo. After doing so, Alexandra texted a picture of the removed locks to Complete Construction, faulted Complete Construction for not obtaining permits, and instructed Complete Construction to "come remove the flooring" that it had installed. Complete Construction’s supervisor understood this text as being Alexandra’s way of terminating Complete Construction from the project. At trial, Alexandra confirmed that by sending this text, she was indeed intending to terminate the contract.

¶14 After receiving Alexandra’s text, Complete Construction contacted Joe and Ann and expressed its view that a permit wasn’t required for the kind of work it had performed, as well as its view that the flooring had been installed correctly. But the Busicos still insisted that Complete Construction "make arrangements for the floor to be removed." On December 6, Complete Construction returned to the condo and removed the flooring that it had installed. Complete Construction subsequently issued an invoice to the Busicos requesting payment of $8,499.15 for the work that it had performed on the project. The Busicos declined to pay Complete Construction, and on January 24, 2019, Complete Construction filed a notice of a construction lien.

The Busicos’ Complaint and Complete Construction’s Counterclaim

¶15 On March 26, 2019, the Busicos filed a complaint against Complete Construction, pleading causes of action for breach of contract, intentional or negligent misrepresentation, slander of title, and a violation of the Utah Consumer Sales Practices Act. The Busicos sought damages relating to the delays in the project and costs of repair, damages for emotional distress they had allegedly suffered, and damages relating to slander of title and harm to their credit. In total, the Busicos sought $44,726 in damages, plus "exemplary damages in amounts to be determined by the Court, plus costs of suit and attorneys fees."

¶16 On April 22, the Busicos’ counsel received an email from an attorney informing them that "Complete Construction [was] in the process of...