Residential Construction Contract Dispute in Herkimer County

This was originally published on the SGR Blog.

Court Analyzes Proof of Work, Labor, and Materials

Laura Cruz sued Carl Backell Rodriguez for $5,000 for failure to complete work pursuant to a construction contract. The matter proceeded to trial in the City Court of Little Falls in Herkimer County.

Cruz testified that she paid Backell $6,929 to install siding, windows, repair her porch, and other work pursuant to contracts between the parties executed in September 2021. Elizabeth Pritchard testified that she gave Cruz the referral for Backell; there was an issue that involved contacting the codes department; testified about various text messages; and Backell stopped showing up to work.

Cruz testified that Backell worked on the property for eight days (Gene every day for eight days; Loren for two hours on one day; and two other employees on and off for eight days). On the eighth day one of the workers showed up; told Cruz she was being scammed; grabbed some tools and left. Cruz spoke with a couple of other workers who confirmed that the other worker had quit. Cruz confronted Backell, was not able to resolve the dispute, and directed that further communications go through her husband.

Backell testified that he had a disagreement with Cruz about when the windows would arrive which ended in the parties telling each other to direct further inquiries to their respective attorneys. Backell had a conversation with Cruz’ husband and agreed to resume work, but then didn’t continue working because of various negative social media posts by Cruz about him. He submitted receipts of the materials purchased and that his employee’s labor was valued at $2,200, and denied taking Cruz’ materials from the worksite. Backell explained that the materials he put in his truck were from a separate order on a separate worksite.

Cruz sought from Backell the jurisdictional amount of the Court ($5,000) for a breach of a contract for uncompleted work where she paid $6,929 on the contract. It was undisputed that Backell did not complete the work for which he was contracted and was paid $6,929 (approximately 2/3 of the contract price) to perform. Both parties gave different reasons for the breach of the contract. The Court found that the reason for the breach was irrelevant. What was relevant was that Backell was paid $6,929 to start a project that he did not complete. With that background, the Court was required to decide the proceedings in such a manner as to do substantial justice between the parties according to the rules of substantive law.

Cruz sought the full amount of the contract subject to this Court’s jurisdictional limit, but such a remedy would put her in a position of unjust enrichment because she would essentially get the benefit of the building materials and labor for free at Backell’s expense. Whatever judgment the Court made would also take into account Backell’s claim to receive reimbursement for the labor and materials expended on the legal theory of quantum meruit.

It was undisputed the Cruz paid Backell $6,929. But there was a dispute about two things: the value of the materials delivered to Cruz as well as the value of the labor performed Backell.

With respect to the value of the materials that were delivered to the property, Cruz could only speculate regarding any difference between what materials appeared on the receipts and what was delivered to her home and what ended up in Backell’s truck. But Cruz had the burden of prosecuting and proving her case with credible evidence. Cruz could have (but did not) present evidence of an inventory of the materials on the ground and materials attached to her home. If that was outside of her area of expertise, she could have (but did not) have a contractor submit an estimate with respect to what materials were on her property and what materials were affixed to her home. Cruz also could have (but did not) provide the Court with estimates from contractors to show what it would cost to complete the job.

Had that evidence been presented, the Court could have then make a determination about whether an award for the difference between the contract price and the price to complete the work following Backell’s breach would have been proper. Such a decision would also have taken into consideration Cruz’ testimony that Backell’s fee was lower than she expected after speaking with some of her friends about the costs of similar work. The Court could not render judgments based on speculation. So the Court found that substantial justice dictated that the dispute with respect to the price of the building materials supplied by Backell should be resolved in favor of Backell who submitted documentary evidence that the materials cost $3,659.14.

The other dispute was about the value of the work performed by Backell—who submitted a printout of his payroll at the Cruz worksite. Although Backell testified that he expended $2,200 in payroll, the spreadsheet detailed $3,898 in payroll expenditures. When questioned about this difference by the Court, Backell explained that he excluded his time from the calculation because his fee was earned when the job was completed. However, even after excluding Backell’s $1,000 fee the total payroll would still be $2,898 rather than $2,200. The Court was perplexed by the difference, but Backell remained firm that the correct payroll amount was $2,200, so the Court considered $2,200 to be the amount Backell was seeking as the reasonable calculation for the work his laborers performed on the contract. Cruz disagreed with that amount and thought it should be much less. Cruz testified that: Gene worked for eight days; Loren for two hours on one day; and two other unknown workers worked on and off during the eight days.

If the Court took the work testified by Cruz at the pay rates testified by Backell using the lowest rates of pay found on the payroll memorandum for Unknown Worker #1 ($18 per hour) and Unknown Worker #2 ($20 per hour) for half (four out of the eight work days), the following would be the value of the work:

  • Gene: 8 hours per day for 8 days is 64 hours times $20 per hour is $1,280
  • Loren: 2 hours on 1 day is 2 hours times $30 per hour is $60
  • Unknown Worker #1: 8 hours per day for 4 days is 32 hours times $18 per hour is $576
  • Unknown Worker #2: 8 hours per day for 4 days is 32 hours times $20 per hour is $640

That resulted in a grand total of $2,556. Meaning that if the Court was to find Backell’s testimony credible with respect to the valuation of the labor, Cruz would recover $356 less than if the Court was to find Backell’s testimony about the valuation of the labor credible. But the Court found that substantial justice dictated that Cruz should get the benefit of Backell’s own testimony that that the proper valuation of the labor should be valued at $2,200 (rather than her own testimony which would value the labor at $2,556).

Accordingly, the Court found that substantial justice dictated that Cruz should recover $1,069.86 from Backell – the amount left over from the $6,929 paid by Cruz after deducting Backell’s expenses of $3,659.14 for materials and $2,200 for labor.

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