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Gravina Siding and Windows Co. v. Frederiksen.

2022 COA 50. No. 20CA1465.  Breach of Contract—Unjust Enrichment—Negligent Supervision—Attorney Fees.

May 5, 2022

The Frederiksens contracted with Gravina Siding and Windows Co. (Gravina Co.) to replace their home’s cedar siding with steel siding for $42,116. Plaintiffs put down a $10,000 deposit toward the contract price. The work was to commence within 10 and 14 weeks after the contract was signed and was estimated to take up to four weeks to complete. Four and a half months after work began, and before the work was completed, Gravina Co. requested final payment on the outstanding contract balance. Plaintiffs terminated the contract and denied Gravina Co. further access to their property.

Gravina Co. sued, alleging breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment. The Frederiksens answered and counterclaimed against Gravina Co., its owner, and two of its employees (collectively, Gravina). Gravina moved to dismiss, and the trial court dismissed all claims except the breach of contract claim against Gravina and the negligent supervision claim against the three individual third-party defendants. The trial court found that Gravina had materially breached the contract and the Frederiksens had properly terminated it, and it awarded Gravina a net judgment of $19,000 on its unjust enrichment claim. The court rejected the negligent supervision claim and request for attorney fees.

On cross-appeal, Gravina argued that the trial court erred by finding it materially breached the contract. Whether a party materially breached a contract is a question of fact. Here, the trial court found, with record support, that the delays resulting from Gravina’s problems with subcontractors were not due to matters for which the contract made allowance. Therefore, the trial court did not err in determining that by failing to complete the work in a timely and satisfactory manner, Gravina breached the contract’s material terms, and the Frederiksens were entitled to terminate the contract and recover actual damages.

The Frederiksens contended that it was error for the trial court to allow Gravina to recover under an unjust enrichment theory because there was a contract, Gravina had unclean hands, and they received no benefit from Gravina. However, where a contract exists that does not provide explicitly for remedies with respect to a default at issue, a breaching party may recover for the other party’s unjust enrichment. Further, the record does not show intentional misconduct on Gravina’s part to warrant application of the unclean hands concept, and the Frederiksens received a benefit from installation of siding on a portion of their home. Therefore, Gravina was entitled to pursue the unjust enrichment claim.

The Frederiksens also argued that the court erred by not applying the doctrine of res ipsa loquitur to their negligent supervision claim. However, regardless of whether the subcontractors’ negligence caused the Frederiksens’ injuries, the individual third-party defendants did not owe the Frederiksens a legal duty to supervise them.

The Frederiksens further contended that the trial court erred by excluding expert witness evidence related to the repair costs of roof damage. Here, the trial court did not abuse its discretion in excluding the belatedly disclosed expert evidence.

The Frederiksens also argued that the trial court should have awarded them damages rather than awarding restitution to Gravina. As noted above, the Frederiksens were entitled to recover damages for Gravina’s breach of contract but were not entitled to be unjustly enriched at Gravina’s expense. Consequently, Gravina could recover the reasonable value of the benefit conferred upon the Frederiksens less the damages the Frederiksens incurred as a result of the breach of contract. However, based on the record, it is unclear how the trial court arrived at the $19,000 award to Gravina.

Lastly, the Frederiksens contended that the trial court erred by denying their request for attorney fees. However, although unsuccessful, Gravina presented credible evidence to support its breach of contract and breach of covenant of good faith claims, so the court did not abuse its discretion when it denied the fee request. Further, given the manner in which the issues were resolved here, neither party is entitled to an award of attorney fees and costs incurred on appeal.

The judgment was affirmed in part and reversed in part, and the case was remanded for further proceedings.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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