Wades Welding LLC v. Tioga Props., LLC

966 N.W.2d 912

WADES WELDING LLC, Plaintiff and Appellee

v.TIOGA PROPERTIES, LLC, Defendant and Appellant

No. 20210107

Supreme Court of North Dakota.

FILED NOVEMBER 26, 2021

Erich M. Grant, Minot, ND, for plaintiff and appellee; submitted on brief.

Taylor D. Olson (argued), Peter H. Furuseth and Dustin A. Richard (on brief), Williston, ND, for defendant and appellant.

Crothers, Justice.

[¶1] Tioga Properties, LLC, appeals from a district court judgment awarding Wades Welding, LLC $27,669.90 relating to Wades Welding's lawsuit for enforcement of construction liens and unjust enrichment. Tioga Properties also appeals from the court's orders denying its motions to continue and an order allowing testimony by reliable electronic means. We affirm.

I

[¶2] Janice Ellsworth is the owner of Tioga Properties. Tioga Properties owned a restaurant and home (referred to by the parties as a "mobile home") adjacent to each other in Tioga, North Dakota. Susan Gordon leased the restaurant from Tioga Properties. Gordon delivered rent payments to John Ellsworth Jr., Janice Ellsworth's son. Gordon resided in the home but had no written lease for that property.

[¶3] In late 2016 and early 2017, Gordon hired Wades Welding to repair the home and restaurant. Wades Welding repaired the heat at the restaurant and repaired a sewer pipe at the home. Wades Welding performed $19,840 of work on the home and $2,500 of work on the restaurant. Wades Welding delivered the invoices for its work to Ellsworth Jr.

[¶4] A day after Wades Welding completed the sewer pipe repair at the home, Ellsworth evicted Gordon from the restaurant and home. Ellsworth Jr. supervised the eviction and Gordon left both properties within 48 hours.

[¶5] In December 2017, Wades Welding recorded construction liens against the properties after Tioga Properties failed to pay for the repairs. Tioga Properties sold the restaurant in July 2019. In September 2019, Tioga Properties served on Wades Welding a demand to enforce the home lien. In October 2019, Wades Welding sued Tioga Properties for breach of contract, foreclosure of the construction liens and unjust enrichment. Tioga Properties denied the allegations, claiming it did not authorize Wades Welding's work on the properties.

[¶6] Prior to the scheduled December 2020 bench trial Tioga Properties moved for a continuance asserting Covid-19 precluded Janice Ellsworth from attending in person. The district court denied the motion, stating Tioga Properties’ witnesses could testify by reliable electronic means. Three days before the bench trial, Wades Welding filed a request to allow Gordon to testify by reliable electronic means because she did not want to travel from Washington state to North Dakota. The court allowed Gordon to testify by telephone.

[¶7] After trial, the district court found Wades Welding's construction liens on both properties were valid and ordered foreclosure of the home lien. The court concluded the lien on the restaurant was unenforceable due to a service error; however, it awarded Wades Welding the amount of the repairs under the doctrine of unjust enrichment. The court ordered Tioga Properties to pay Wades Welding $27,669.90.

II

[¶8] Tioga Properties claims the district court abused its discretion in denying its motion to continue the December 2020 trial.

[¶9] Under the version of N.D. Sup. Ct. Admin. Order 25, ¶ 5(3) in effect during trial, the district court had discretion to continue trials and hearings due to Covid-19. The order also stated "[c]ontinuances and extension requests related to COVID-19 should be presumptively granted." Id. at ¶ 5(6). A court abuses its discretion if it acts in an arbitrary, unreasonable, or unconscionable manner, it misinterprets or misapplies the law, or its decision is not the product of a rational mental process leading to a reasoned determination. Ryberg v. Landsiedel , 2021 ND 56, ¶ 21, 956 N.W.2d 749.

[¶10] In Tioga Properties’ brief in support of its motion to continue, Janice Ellsworth stated she "[felt] uncomfortable traveling to North Dakota for the [trial] due to the rapid spike in COVID-19 cases in North Dakota." Ellsworth claimed her attendance and testimony was necessary for a proper defense.

[¶11] The district court denied the motion to continue without explanation and allowed Ellsworth to testify by telephone under N.D. Sup. Ct. Admin. R. 52. Although the court should have explained its decision, the administrative order granted the court discretion to allow or deny the continuance. Ellsworth requested to continue the trial so she could attend in person; however, she has not otherwise shown how she was prejudiced by the court's denial of the motion to continue. See Flattum-Riemers v. Peters-Riemers , 2001 ND 121, ¶ 15, 630 N.W.2d 71 (stating a party must show prejudice resulted from the denial of the motion to continue). Ellsworth was not the only witness unable to attend the trial in person. Three of the four witnesses who provided testimony resided out of state and also testified by telephone. Due to the nature of the pandemic at the time, it could have been several months or more until all of the out-of-state witnesses were able to attend in person. The court did not abuse its discretion in denying the motion to continue.

III

[¶12] Tioga Properties argues the district court erred in allowing Susan Gordon to testify by telephone because Wades Welding did not properly file a motion and brief with its request.

[¶13] Under N.D. Sup. Ct. Admin. R. 52, Sec. 2(a), a district court "may conduct a proceeding by reliable electronic means on its own motion or on a party's motion." A party requesting to use reliable electronic means must obtain prior approval from the court after providing notice to other parties. N.D. Sup. Ct. Admin. R. 52, Sec. 2(b).

[¶14] A few days before the bench trial, Wades Welding served a request for Gordon to testify by reliable electronic means. Wades Welding filed its request with the district court and served it on Tioga Properties. The court allowed witnesses for both parties to testify by telephone. The court had discretion whether to allow Gordon to testify remotely and means by which that testimony was provided. The district court did not abuse its discretion by allowing Gordon and other witnesses to testify by telephone.

IV

[¶15] Tioga Properties argues Wades Welding was not entitled to a construction lien because no contract existed between the parties. Tioga Properties asserts Susan Gordon and John Ellsworth Jr. were not its agents and had no authority to contract on its behalf. Tioga Properties claims it did not have actual or constructive notice of the improvements because it had no knowledge of the repairs made by Wades Welding.

[¶16] Chapter 35-27, N.D.C.C., governs construction liens. "Any person that improves real estate, whether under contract with the owner of such real estate or under contract with any agent, trustee, contractor, or subcontractor of the owner, has a lien upon the improvement and upon the land on which the improvement is situated." N.D.C.C. § 35-27-02. Under N.D.C.C. § 35-27-01(3), improvements include repairs. Under N.D.C.C. § 35-27-24, a person having a construction lien "may bring an action to enforce the lien."

[¶17] Our standard of review in an appeal from a bench trial is well established:

"In an appeal from a bench trial, the district court's findings of fact are reviewed under the clearly erroneous standard of review, and its conclusions of law are fully reviewable. A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, after reviewing all of the evidence, this Court is convinced a mistake has been made. In a bench trial, the district court is the determiner of credibility issues and we will not second-guess the district court on its credibility determinations. Findings of the trial court are presumptively correct."

Gimbel v. Magrum , 2020 ND 181, ¶ 5, 947 N.W.2d 891 (cleaned up).

[¶18] The district court found Wades Welding's construction liens against each property were valid. As to the home property, the court found Gordon was an "owner" under N.D.C.C. § 35-27-01(5), because she had "immediate use and benefit" of the improvements. The court treated Gordon as an "owner" of the home because no written lease existed between Gordon and Tioga Properties for Gordon's use of the home property. The court found "there was no evidence presented that the mobile home property was subject to any lease agreement."

[¶19] We disagree with the district court's finding that no lease existed for the home. Although no written lease existed for the home, the testimony at trial established Gordon leased both properties from Tioga Properties. Ellsworth testified the written lease was for the restaurant, but "the deal with the [home] was the same as with the restaurant." Gordon testified the restaurant and home were a "package deal." We conclude Gordon leased both properties from Tioga Properties.

[¶20] Because Gordon leased both properties, N.D.C.C. § 35-27-07 applies and provides in part:

"When improvements are made by one person upon the land of another, all persons interested therein ... are deemed to have authorized such improvements, insofar as to subject their interests to liens therefor. Any person who has not authorized the same may protect the person's interest from such liens by serving upon the person doing work or otherwise contributing to such improvement within five days after knowledge thereof, written notice that the improvement is not being made at the person's instance, or by posting like notice, and keeping the same posted, in a conspicuous place on the premises. As against a lessor no lien is given for repairs made by or at the instance of the lessor's lessee, unless the lessor has actual or constructive notice thereof and does not object thereto."

In Struksnes v. Kevin's Plumbing & Heating, Inc. , 1997 ND 245, ¶ 9, 572 N.W.2d 815, ...