Leo Journagan Const. Co. v. City Utilities

• Decision Date: 01 October 2003
• Docket Number: No. 24787.,No. 24772.,No. 24768.,24768.,24772.,24787.
• Citation: 116 S.W.3d 711
• Parties: LEO JOURNAGAN CONSTRUCTION COMPANY, INC., Plaintiff-Appellant, v. CITY UTILITIES OF SPRINGFIELD, MISSOURI, Defendant-Respondent-Cross-Appellant.
• Court: Missouri Court of Appeals

116 S.W.3d 711

LEO JOURNAGAN CONSTRUCTION COMPANY, INC., Plaintiff-Appellant, v. CITY UTILITIES OF SPRINGFIELD, MISSOURI, Defendant-Respondent-Cross-Appellant.

No. 24768.

No. 24772.

No. 24787.

Missouri Court of Appeals, Southern District, Division One.

October 1, 2003.

Stephen R. Miller and Michael T. Metcalf, Miller Law Firm, P.C., Kansas City, MO, for Appellant.

David Frensley and Dennis Owens, Kansas City, MO, for Respondent/Cross-Appellant.

JAMES K. PREWITT, Judge.

Leo Journagan Construction Company ("JCC") sued City Utilities of Springfield, Missouri ("CU") for damages related to the construction of a pipeline. Following a four-week trial, the jury found in favor of JCC on all three counts submitted to it, including breach of contract due to interference, breach of contract for failure to pay for rock excavation, and breach of implied warranty ex contractu (Ideker claim). The trial court granted CU a new trial on the breach of contract counts and granted it a judgment notwithstanding the verdict on the Ideker claim. The trial court also reiterated previous directed verdicts in favor of CU on two remaining counts based on theories of quantum meruit and a violation of the Prompt Pay Act § 34.057, RSMo 1994.¹

JCC filed a notice of appeal (No. 24768) after the trial court's orders described above were reflected in a docket entry. CU filed a cross appeal (No. 24772) a few days later. JCC filed a second notice of appeal (No. 24787) after the trial court entered a "Judgment and Order" in which it supplied reasons for the orders that were not provided in the previous docket entry. As detailed below, we affirm the trial court's actions and dismiss CU's cross appeal as well as JCC's second appeal.

FACTS

In 1995, CU invited bids for the construction of a pipeline to transport water from Stockton Lake to Fellows Lake ("the Project") to provide an additional water supply for the City of Springfield. The Project was bid as two separate contracts, the first involving the construction of 13.5 miles of pipeline from Stockton Lake to the Greene County line and the second the remaining 16.6 miles from the Greene County line to Fellows Lake, on the northeast edge of Springfield.²

JCC was the low bidder for both contracts and the Project was awarded to the company on March 29, 1995. Pursuant to the contracts, which were executed in April 1995, JCC agreed to construct the 30.1-mile pipeline and CU agreed to pay JCC a lump sum of $16,496,000, which included a $50,000 deduction because JCC was awarded both contracts. In addition to the lump sum payment, the contracts provided that CU would pay JCC $25 per cubic yard for rock removed during the pipeline construction.

The contracts required that work on the Project be completed within 400 days of the notice to proceed, which was issued on April 19, 1995. The pipeline was completed on May 17, 1996. CU paid JCC the lump sum contract price plus $787,700 for excavation of 31,508 cubic yards of rock. Based on JCC's request, CU held back $1,000 from the amounts paid so that JCC could reserve its right to claim additional compensation.

JCC filed two claims with CU requesting additional compensation. One for alleged disruption and interference on CU's part during JCC's performance of the contract, and the second for payment for rock excavation beyond the 31,508 cubic yards. CU denied the claims.

On December 28, 1998, JCC filed suit against CU. The petition contained five counts that asserted the following claims: breach of contract for interference and failure to pay for additional rock excavation, quantum meruit, breach of warranty relating to plans and specifications of contract that led to drilling and blasting of rock for which JCC was not paid, breach of contract ex contractu also related to the rock excavation, and violation of the Prompt Pay Act.³

The first trial began in November 2000; however, a mistrial was declared because "[c]ounsel and court [were] unable to impanel jury panel." The trial at issue here was held in October and November 2001.

The trial court directed verdicts on the quantum meruit and Prompt Pay Act counts. Three claims were ultimately presented to the jury, including breach of contract due to interference, breach of contract for failure to pay for rock excavation, and breach of implied warranty ex contractu. The jury returned verdicts in favor of JCC on all three counts and awarded damages as follows: $2,385,506 for breach of contract due to interference, $2,545,550 for breach of contract for failure to pay for rock excavation, and $2,545,550 for breach of implied warranty ex contractu.⁴

CU filed separate motions for new trial and judgment notwithstanding the verdict (JNOV) on the three counts on which the jury returned a verdict. A hearing was held on the motions on February 7, 2002. After hearing arguments on the motions, the trial court first restated that it had directed verdicts on Counts II and V, the quantum meruit and Prompt Pay Act claims, respectively. The trial court then granted CU's motion for JNOV on Count IV, the Ideker claim or breach of implied warranty ex contractu. Finally, "based upon the actions of [JCC], the lack of the evidence to support an award of $5 million, [and] the confusing verdict of the jury concerning the three counts," the trial court granted CU's motion for new trial.

On February 11, 2002, a docket entry was made that reflected the results of the hearing on post-trial motions, which read, in pertinent part:

[T]he [c]ourt granted a directed verdict once again on Counts II and V of [JCC's] Petition; the [c]ourt granted [CU's] Motion for Judgment Not Withstanding the Verdict as to Count IV (the Ideker Claim); the court does grant [CU's] Motion for New Trial as to Counts I and III.

Per the trial judge's request, and pursuant to local rules, the case was transferred to the presiding judge for reassignment.

A few days after the docket entry was made, JCC filed its first notice of appeal. On February 21, 2002, another docket entry indicates that the presiding judge reassigned the case back to the trial judge "for entry of a formal judgment." In a subsequent docket entry also dated February 21, 2002, the trial judge stated that "the court does hereby enter its formal judgment and order granting [CU's] motion for new trial." The Judgment and Order outlines the court's rulings on the various post-trial motions and expresses the reasons for the grant of the new trial on Counts I and III that had been orally stated an the motion hearing.⁵

CU filed its cross appeal on February 22, 2002, and JCC filed a second notice of appeal on February 27, 2002. Additional facts necessary to the disposition of the case are included below as we address the issues on appeal.

CU's CROSS APPEAL

CU raises two points in its cross appeal. The points refer to the trial court's decision to grant a new trial on Counts I and III, thereby denying CU's motion for JNOV on the same counts, which were breach of contract due to interference and breach of contract for failure to pay for rock excavation. CU contends it was error for the court to deny JNOV on the counts. CU addresses each count in a separate point.

The trial court's order granting a new trial on these two counts (which, when we address JCC's points on appeal, will be shown to be valid) removed any adverse judgment against CU on the counts. Trinity Lutheran Church v. Lipps, 68 S.W.3d 552, 556 (Mo.App.2001). Therefore, CU is not an aggrieved party and its cross appeal must be dismissed. Community Title Co. v. Roosevelt Fed. Sav. & Loan Ass'n, 796 S.W.2d 369, 370 (Mo.banc 1990).

SUBMISSIBILITY OF JCC'S BREACH OF CONTRACT CLAIMS

However, we agree with CU that it has consistently disputed the submissibility of the two claims in post-trial motions and in its response to JCC's appeal of the trial court's grant of a new trial. Based on JCC's appeal, CU is permitted to challenge the submissibility and we are permitted to determine whether JCC made a submissible case on the two counts. Id. at 370-71. If JCC failed to make a submissible case, the trial court's order for new trial for Counts I and III must be reversed and the cause remanded with directions for the trial court to enter a JNOV. Id. at 371.

In analyzing whether JCC made submissible claims on the two breach of contract counts, we use the same standard of review that we would if reviewing the denial of CU's motion for JNOV on these counts. We view the evidence in the light most favorable to JCC, giving it all reasonable beneficial inferences from that evidence, and ignoring all evidence that is to the contrary. Resnik v. Blue Cross & Blue Shield of Missouri, 912 S.W.2d 567, 570 (Mo.App.1995); see also Community Title, 796 S.W.2d at 371. We presume that JCC's evidence is true. Carter v. St. John's Reg'l Med. Ctr., 88 S.W.3d 1, 8 (Mo.App.2002).

Counts I and III were each submitted to the jury as breach of contract claims; thus, the essential elements we will consider for submissibility are the same. To make a submissible case for breach of contract, a party must establish: (1) mutual agreement between parties capable of contracting; (2) mutual obligations arising out of the agreement; (3) valid consideration; (4) part performance by one party; and (5) damages resulting from the breach of contract. Bowles v. All Counties Inv. Corp., 46 S.W.3d 636, 641 (Mo.App.2001). JCC must present substantial evidence to support each element. Carter, 88 S.W.3d at 8.

Submissibility of breach of contract due to interference claim.

CU does not dispute that JCC established the first four elements for the breach of contract due to interference claim. CU's argument against the submissibility of this claim is that JCC failed to prove that a breach occurred and that damages resulted from such a breach. We disagree.

The contracts for the Project included specifications that the backfill was not to exceed four inches "within 12 inches of pipe or...