Chase Oncescu - v. -, 2014 SKPC 98

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2014 SKPC 098 Date: April 30, 2014 File: 89/12 Location: Moose Jaw _____________________________________________________________________________ Between: Chase Oncescu - and - Homestyle Floors & Interiors

(2009) Ltd. Self-Represented For the Plaintiff Ms. Lee Mountain For the Defendant _____________________________________________________________________________ JUDGMENT D. KOVATCH , J _____________________________________________________________________________ BACKGROUND [ 1 ] The defendant, Homestyle Floors & Interiors

(2009) Ltd., owns and operates a retail outlet located in the Town of Assiniboia. The defendant sells a number of different building materials and in particular various flooring materials. In December 2009, the defendant company and the plaintiff entered into a written contract, entitled “Service Contract”. The defendant would sell flooring

materials to various customers, and then direct the plaintiff to install those flooring materials in the homes of the defendant’s customers. The plaintiff terminated this arrangement in 2012. When the plaintiff wasn’t paid for one of his installations, he launched this action. The defendant defended this action and counterclaimed on the basis that the plaintiff’s work, in relation to a number of installation jobs, was not proper or complete.

The defendant counterclaimed for damages it suffered to correct problems with the plaintiff’s work. [ 2 ] In this decision, I must interpret and apply the contracts entered into by the plaintiff and defendant and those contracts entered into by the defendant and his customers. In addition, I must determine and assess the damages suffered by the defendant for the various jobs addressed in the counterclaim. I will address the evidence as I deal with the individual issues. DETERMINATION OF THE PLAINTIFF ’S CLAIM -

INTERPRETATION OF THE CONTRACTS [ 3 ] The plaintiff and defendant entered into a document entitled “Service Contract”. It is very clear that this is a form agreement prepared by the defendant. The defendant’s full corporate name appears in typing in the document. The plaintiff’s name is printed in by hand and inserted in blanks in the agreement. In the agreement the defendant is referred to as the corporation and the plaintiff is referred to as the “contractor”. The

preamble reads as follows: Whereas the contractor warrants and represents that he has the skill, knowledge, knowhow and experience necessary to enable him to carry out services as a flooring installer and is desirous of entering into a service contract with the corporation; And whereas the corporation requires the services of the contractor and is desirous of entering into a service contract with the contractor; ... [ 4 ] The agreement also has the following conditions which are relevant to this matter: 1) The relationship of the contractor to the corporation shall in all respects be that of an independent contractor, ... 2) The corporation shall refer to the contractor, third parties requiring the services of a flooring installer.

The contractor shall be solely responsible for billing the third party for any and all fees and costs associated with the contractor’s services to the third party for installation. ... 4) The contractor shall perform the services with due diligence and warrants that its employees and agents, have the skills and experience necessary to perform the services provided.

The contractor shall be responsible for any loss or damages caused by improper or incorrect installation and shall save the corporation harmless from any and all claims in this regard. [ 5 ] When customers entered the defendant’s store and purchased flooring, they entered into a written contract of purchase. The written contract is entered on forms provided by the corporate defendant. It has their name and address information on it. It is entitled “Quotation”. There is a place to enter the customer’s name, address, contact information, etc. There is then substantial space under the heading “Job Description”.

In this section, the defendant lists various materials and quantities of materials that are purchased for each of the rooms in the customer’s house. Each of these materials are also priced. They are then totalled, and the taxes are added for another total. [ 6 ] There is then another

section entitled “Installation Breakdown”. In this section, various steps regarding installation are listed. Beside each one is a blank. The salesman would enter prices beside the various installation steps. The salesman would add the GST. There is then a blank where the salesman would fill in “Approximate Total Labour”. Immediately below this blank is the following notation “Please pay installer upon completion”. At the bottom of the page is the notation “Price Total” and a blank to insert this number.

In all of the completed invoices filed with the Court, under the heading “Job Description”, the total material costs are added together and a subtotal figure reached. Under the heading “Installation Breakdown”, there is a subtotal of “Approximate Total Labour”. Then these two figures are added together to reach the “Price Total”. [ 7 ] At the bottom of the page are two signature blanks. Most of these invoices are executed by Mr. Embury on behalf of the corporate defendant. There is then a place for “Customer Approval” and a signature blank.

I note there is nothing on these invoice documents to indicate that the plaintiff would do the installation or that the plaintiff ever approved of the deal or became a party to this purchase contract.

[ 8 ] Both the plaintiff and the defendant testified as to the practices and procedures utilized on a daily and weekly basis regarding these contracts. There is no conflict in their evidence on these points. Customers would of course come into the defendant’s store. They would make their purchase arrangements with Mr. Embury. He would complete and execute the quotation document on behalf of the corporation. This included completing the details regarding the installation breakdown. He would contact the plaintiff and make arrangements for the plaintiff to do the work on a particular day.

The plaintiff would come to the defendant’s establishment and pick up all of the materials, and a copy of the quotation sheet. The defendant would then go to the customer’s home and install the materials, as per the agreement. [ 9 ] If no insurance company was involved, then, at completion, the plaintiff would ask the customer to pay to the plaintiff the installation amount shown on the quotation sheet. If the work was being done pursuant to an insurance claim, then the corporate defendant would submit the entire quotation sheet to the insurer and the insurer would make one payment to the defendant.

The defendant would then make payment to the plaintiff of the installation amount. [ 10 ] Mr. Embury, speaking on behalf of the corporation, repeatedly spoke about the customer being satisfied. He stated that if the customer wasn’t satisfied, then Mr. Embury would contact the plaintiff and direct him to fix it. The plaintiff was then to attend at the customer’s residence to discuss the problem and fix it to the customer’s satisfaction. [ 11 ] The plaintiff’s claim against the defendant is related to installations at the Pinsonneault residence.

A number of quotation documents were entered related to this residence. The Court was advised that $6,354.60, including taxes, was related to purchases and installation for an insurance claim made by the Pinsonneaults. This sum was to be payable to the defendant by the insurance company, and thereafter the defendant would make payment of this amount to the plaintiff. At the same time as the Pinsonneaults ordered these materials for their insurance claim, they also purchased and requested the installation of various other materials.

This resulted in a separate installation agreement with the plaintiff for the sum of $4,324.95, including taxes. As a result, the plaintiff’s total claim against the defendant is for the sum of $10,679.55. [ 12 ] There is no question that the plaintiff has done this work. The defendant says that he did not make payment of the $6,354.60, as the Pinsonneaults have not signed off on the work, because they were dissatisfied with some aspects of it. As a result, the insurance company has not made payment and the defendant has not paid the plaintiff.

With respect to the balance of the claim, in a written argument, counsel for the defendant states: He (Mr. Oncescu) stated he billed Angie Pinsonneault for $4,324.95, yet he is suing Homestyle for this unpaid bill, not Angie Pinsonneault, even though his contract with Homestyle says in paragraph 2: The contractor shall be solely responsible for billing third parties for any and all fees and costs associated with the contractor’s services to third parties for installation.

I would suggest that the plaintiff has no grounds to claim any amount from Homestyle. [ 13 ] I turn now to examine and interpret the contract documents. I begin with the service contract. To begin with, I note it is a form contract prepared by the defendant. It is an extremely one-sided document. In it, the defendant agrees to do nothing for the plaintiff. There is no money that he agrees to pay to the plaintiff. In the contract, the defendant attempts to make the plaintiff solely responsible for collecting all of the installation fees from the defendant’s customers.

But there is no contract entered in to by the plaintiff and the customer, and thus the plaintiff has no right of action in contract against the customer. I would suggest that the purchaser’s only contractual obligations are to the defendant Homestyle. [ 14 ] In my view, the service contract must be strictly construed against its maker, the defendant. The defendant repeatedly attempted to make the plaintiff “satisfy the customer”. In the service contract document, there is no clause wherein the plaintiff provides any warranty as to the quality of work.

As a result, I would imply the normal implied term in construction contracts. That is, that the plaintiff, as contractor, was required to do all work in a good and workmanlike fashion. On other occasions, I have stated that this is lesser than the “satisfaction guaranteed or money refunded” guarantee generally used in the retail industry. As a result, in my view, the plaintiff was not required to satisfy the customer as he had no contract with the customer and had provided no such warranty. Meeting the satisfaction of the customer was the defendant’s responsibility, not the plaintiff’s.

[ 15 ] I have discussed above the quotation document and how the defendant entered into that written contract with the customer. I have noted how that written document only mentions the customer and the defendant, and makes no mention and does not provide for the execution by the plaintiff. There is nothing to indicate the plaintiff was made a party to the contract of purchase. No customers came to testify in these proceedings.

Nevertheless, I am satisfied that if a customer had testified, he would have said words to the effect of: If I knew a flooring installer, I would have simply purchased the materials, and had my installer install those materials. Because I didn’t know a flooring installer, I purchased the materials from the defendant and paid the installation fee. [ 16 ] Further, that the customer did not even know the plaintiff, until the plaintiff arrived at his door to do the installation. Under these circumstances, it is clear to me that there is one purchase contract between the customer and the defendant.

Under that contract, the defendant sold the materials to the plaintiff, and agreed to install them. In order to meet this obligation, the defendant then entered into a subcontract arrangement with the plaintiff. The subcontract is a separate and independent contract from the original purchase contract. Under that subcontract, as mentioned above, the plaintiff was required to do the work in a good and workmanlike fashion. In addition, under that subcontract, the defendant was obligated to make payment to the plaintiff.

There is nothing inappropriate in the quotation document with the defendant asking the customer to pay the installation fee directly to the plaintiff. However, if for any reason the customer failed or refused to make that payment to the plaintiff, then the defendant remained contractually obligated to make that payment to the plaintiff. In fact, as mentioned above, because Mr.

Oncescu had no contractual relationship with the customer, he had no right to sue the customer for the installation fee. [ 17 ] Based upon the above analysis, I conclude there was a subcontract arrangement between the defendant and plaintiff, pursuant to which the plaintiff did work on the Pinsonneaults’ house. He apparently did the work and has not been paid. Under the terms of the subcontract, the defendant is liable for that entire payment. Subject to the counterclaims, to which I will now turn, the plaintiff’s entire claim of $10,679.55 against the defendant is allowed.

COUNTERCLAIMS The Okrancee, Clark, Hutch Ambulance and Trish Heagy Counterclaims [ 18 ] In the case of 617359 Sask. Ltd. o/a End of the Roll v. Evelet Home Improvements Ltd. o/a Rock N Tile Services , 2013 SKPC 27 , His Honour Judge Agnew dealt with a dispute between a flooring retailer and subcontractor, just as here. End of the Roll had a similar provision in its general contract with the contractor, that the contractor would remedy all defects in its work, or be responsible in damages for repair of defects.

Judge Agnew determined that the plaintiff was not simply claiming its out-of-pocket expenses as damages, but was claiming a markup for a profit, administrative fees, costs, overhead, etc. At paragraphs 11 and 12, he stated as follows: From these and other difficulties, as well as the experience of observing Mr. Mellquist on the witness stand, I have concluded that I cannot rely on his testimony with respect to damages.

That is unfortunate, because it is clear that the plaintiff has suffered some damage, in that it has been put to some expense to purchase new materials and to pay another subcontractor to repair the problems encountered: but I have no reliable information as to the amount of those expenses. What is certain is that the plaintiff’s figures, however flawed, include what amounts to claims not just for compensation for amounts paid out to third parties to remedy the breaches, but also for amounts to pay the plaintiff’s office expenses, and profit.

I have no hesitation in saying that damages do not include profit: the purpose of damages is compensatory, and the plaintiff is not entitled to be put in a better position than he would have been in had the breaches not occurred. With respect to overhead, in essence this amounts to a claim for costs - the normal expenses that a party is put to in pursuing rectification of a legal wrong.

A claim for costs should be laid out separately in the evidence, and argued as costs, rather than being smuggled into the claim in the guise of compensatory damages. [ 19 ] As a result, I conclude that Homestyle Floors is required to prove its out-of-pocket damages if it wishes those sums to be offset against the plaintiff’s claim. The defendant cannot simply attach a number of some work done or guesstimate the cost of its labour to remedy the problem.

[ 20 ] The four counterclaims mentioned in this

section involve no material costs to the defendant. Each of these counterclaims involve only a labour charge to complete or to redo some work. Two of the counterclaims are for $200.00 each, one is for $400,00, and one is for $262.50. No documentation or invoice of any kind has been filed with the Court in relation to the Okrancee or the Trish Heagy claim. With respect to these two claims, Mr.

Embury simply testified that was the labour charge for him to conclude or repair the work. [ 21 ] With respect to the Clark and Hutch Ambulance counterclaims, in each case an invoice from Waylon Feenstra was filed with the Court. The plaintiff called Mr. Feenstra as a witness and showed him the invoice. At first, Ms. Mountain and Mr. Embury objected to this document on the basis that the plaintiff had never disclosed it. Mr. Oncescu said that he received these documents as part of the disclosure package from Ms. Mountain. Mr. Embury and Ms. Mountain then agreed with that and relented in their objection.

When asked about the invoices from Mr. Feenstra to Homestyle, Mr. Feenstra said these were not his invoices. He said they were not in his writing, and he had never prepared or issued such invoices to Homestyle. He said he wasn’t paid those amounts. Mr. Embury later suggested to Mr. Feenstra that Mr. Feenstra wasn’t keeping any or proper records regarding the subcontracting work. Mr. Embury suggested that his bookkeeper was attempting to assist Mr. Feenstra. As a result, Homestyle’s bookkeeper prepared invoices for Mr. Feenstra, directed to Homestyle for this labour, so that Homestyle could pay them and Mr.

Feenstra could be paid. [ 22 ] A similar invoice was prepared for Mr. Feenstra regarding the Pinsonneault job. However, Mr. Embury had to agree that Mr. Feenstra was never on the Pinsonneault job. There are proper invoices from an individual named Churchill respecting the Pinsonneault job. Supposedly, the Feenstra invoice for the Pinsonneault job was simply a mistake, and should be related to Mr. Embury’s personal labour for the Pinsonneault job.

All of this leaves me without any reliable evidence upon which I can determine what labour expenses were incurred by Homestyle for these four above mentioned counterclaims. I cannot determine what amounts were paid or whether any amounts were even paid or to whom they were paid. As a result, these four counterclaims are dismissed. The Pinsonneault Counterclaim [ 23 ] There were problems with the plaintiff’s work on the Pinsonneault home. He left a gap behind the baseboard as a result of which they were moving.

He did not have sufficient material, and cut the boards in a number of short lengths which resulted in them being poorly matched. Mr. Embury and Mr. Churchill testified about replacing these baseboards. I am satisfied that happened. These baseboards were tigerwood and were expensive. Mr. Embury testified that his own out-of-pocket cost to replace these baseboards was $3,059.00. Mr. Churchill testified that he presented two invoices to Homestyle Floors for his work on the Pinsonneault home. These were entered as exhibits. One invoice is in the amount of $714.00 and the other is in the amount of $204.75.

There is good evidence regarding these counterclaims. As a result, the counterclaim related to the Pinsonneault residence in the total amount of $3,977.75 will be allowed and set-off against the plaintiff’s judgment. The Dallas Heagy Counterclaim [ 24 ] With respect to this matter, both parties agreed that Mr. Embury made a mistake in the initial measurements. This resulted in the piece in the hallway being too short. When the plaintiff did the original install, he attempted to seam and piece carpet together in the hallway. The customer felt this did not look right.

Homestyle supplied a new piece of carpet for the hallway which the plaintiff then reinstalled free of charge. Mr. Embury said “The customer still wasn’t happy”. Mr. Embury then decided to replace all of the carpet in the living room and the hallway. He utilized this carpet and installed it in one of the customer’s bedrooms. Homestyle purchased all new carpet for the living room and hallway and subcontracted with Mr. Feenstra to install this new carpet in the living room and hallway. Homestyle counterclaims against the plaintiff for the cost of the new carpet for this project and for the expense of Mr.

Feenstra to install it. [ 25 ] There is however, a major problem with respect to this counterclaim. Mr. Embury did not say in his evidence that Mr. Oncescu’s install in the living room and hallway were not done in a good and workmanlike fashion. He said “The customer was still not happy”. At another point in his evidence, he said that he represents the customer on whether they accept or don’t accept the install. He said if there is a problem with the product then they call the appropriate representative. If the customer refused to accept the install, then the installer has to fix it. [ 26 ] When Mr.

Oncescu testified about this project, he said that when he concluded this work, Mr. Heagy had no problem with it. Further, that Mr. Heagy immediately paid him for the install. Mr. Oncescu thought that this work was completely acceptable and up to standards. Mr. Feenstra did the reinstall and testified in this matter. Mr. Feenstra said that the seams, as done by Mr. Oncescu, were as good as one could do them. Mr. Feenstra said that he told Mr. Heagy that.

[ 27 ] With all due respect to Mr. Embury, he misapprehends his legal position and the respective rights and obligations of the parties. As mentioned above, Mr. Heagy’s contract was with Homestyle. Mr. Heagy had no contract with Mr. Oncescu. I don’t know what all was said between Mr. Heagy and Mr. Embury, and certainly don’t know what guarantees or warranties Mr. Embury gave to Mr. Heagy. If Mr. Embury wanted to be sure that Mr. Heagy was satisfied, he was perfectly entitled to do that. However, in my view, Homestyle could not, at least under this service contract with Mr.

Oncescu, delegate or impose the obligation to satisfy the customer upon Mr. Oncescu. [ 28 ] As mentioned above, Mr. Oncescu’s only contract was with Homestyle. That contract imposes no obligation upon Mr. Oncescu to satisfy the customer. There is an implied agreement that Mr. Oncescu will do work in a good and workmanlike fashion. The fact that a customer was not satisfied may or may not be indicative of whether the work was done in a good and workmanlike fashion. Simply stated, respecting this counterclaim, no one has testified that Mr. Oncescu’s work was not done in a good and workmanlike fashion.

Accordingly, this counterclaim must fail. The Zopf Counterclaim [ 29 ] The evidence was that some of the product laid at the Zopf residence was a “free lay product”. It was a product that did not require glue. Mr. Oncescu testified that Mr. Embury directed him to glue it around the perimeter, and he did that. Mr. Embury denied that he provided any such direction to glue around the perimeter. The evidence is clear that there was some stretching or expansion of the product. Further, the gluing around the perimeter caused bubbling or rising when the product stretched or expanded and could not move at the perimeter.

Mr. Feenstra tore out and installed new lino. Mr. Feenstra testified that the first install was completely unacceptable and had to be redone. Even if I accept Mr. Oncescu’s evidence that he was directed to perimeter glue the product, I still must conclude that as the installer, Mr. Oncescu should have known this was not a proper install. This counterclaim must be allowed and Mr. Oncescu must be held liable for the cost of the reinstall. [ 30 ] In argument, counsel for Homestyle asked for material costs for this of $1,476.00 plus glue costs of $115.56, for a total of $1,591.56.

Given that this was a free lay product, I don’t know why there would be a cost for glue. I also don’t know whether the $1,476.00 price for lino was Homestyle’s actual cost, or the price he would have sold that product for. However, Mr. Feenstra did the reinstall and would have been paid for that. As a result, I will allow Homestyle’s counterclaim for the total sum of $1,476.00. The McDonald Counterclaim [ 31 ] Counsel withdrew this counterclaim prior to the beginning of argument. CONCLUSION [ 32 ] The plaintiff’s claim is allowed in damages fixed in the total sum of $10,679.55.

The defendant’s counterclaim with respect to the Pinsonneault job is allowed and damages are set at $3,059.00 for materials plus $918.75 for labour, for a total of $3,977.75. The Zopf counterclaim is allowed and damages set at $1,476.00. The damages respecting the Pinsonneault and Zopf counterclaims will be offset against the plaintiff’s judgment. When these sums are deducted from the total allowed plaintiff’s claim of $10,679.55, the balance is $5,225.80. The plaintiff will have judgment in this amount against the defendant.

This sum will bear interest under The Prejudgment Interest Act from the date of issuance of the claim, October 19, 2012, to the date of judgment. In addition, the plaintiff shall have the cost of issuing the claim in the amount of $100.00. [ 33 ] Dated at the City of Moose Jaw, in the Province of Saskatchewan, this 30 th day of April 2014.

D. Kovatch, J