City of Independence for Use of Briggs v. Kerr Const. Paving Co., Inc.
| Decision Date | 12 August 1997 |
| Docket Number | No. WD,WD |
| Parties | CITY OF INDEPENDENCE, Missouri, for the Use of Wilbur D. BRIGGS, Appellant, v. KERR CONSTRUCTION PAVING COMPANY, INC., and The Hartford Fire Insurance Company, Respondents. 51016. |
| Court | Missouri Court of Appeals |
Richard W. Mason, Kansas City, for appellant.
Don R. Lolli, Kansas City, for Respondent Kerr Construction Paving Co.
George S. Ruprecht, Kansas City, for Respondent Hartford Fire Insurance Co.
Before SMART, P.J. and SPINDEN and ELLIS, JJ.
This is an appeal of an action under the "Public Works Prompt Pay Statute," § 34.057, RSMo 1994. The statute provides for penalties for late payment of subcontractors and material suppliers on public works projects, and allows recovery of attorney's fees by the prevailing party in such litigation. In this case, as to the major issue of attorney's fees, the trial court denied attorney's fees to the subcontractor, the prevailing party. Because we conclude that the trial court erred in its interpretation of the statute, we reverse the judgment in part and affirm in part.
Kerr Construction Paving Company, Inc. ("Kerr") entered into a contract with the City of Independence ("City") to perform work, including asphalt paving, concrete curbing and sod work on a project known as the Vaile Mansion Project. The Hartford Fire Insurance Company ("Hartford"), as surety, furnished a payment and performance bond on behalf of Kerr, its principal. Wilbur D. Briggs d/b/a Briggs Sodding ("Briggs") entered into a subcontract with Kerr to do sodding work on the project. The dispute in the instant case concerns the terms of that subcontract.
On August 19, 1991, Kerr entered into the contract with the City. Doug Smith, a vice-president of Kerr, contacted Briggs to solicit a bid for sod work. Two thousand yards of sod were estimated to be needed on the project. Briggs bid $1.40 per square yard of sod. Briggs testified that he told Smith that his bid did not include grading, maintenance or watering. Briggs' bid was accepted and on September 19, 1991, Kerr told Briggs that it had received notice to proceed on the project. Kerr claimed that it had provided Briggs with a written subcontract with the City's specifications, including the rolling and watering of the sod and fifteen days of maintenance watering. Briggs denied having received a subcontract. Briggs' signature does not appear on any document.
Briggs began laying the sod on September 23, 1991 and, over the next few days, laid a total of 2,050 yards of sod. Briggs testified that when he laid the sod it looked good, handled well, and was alive, green and healthy. No one, according to Briggs, complained about the condition of the sod to Briggs. Briggs testified that each day that he laid the sod he called Smith and told him that the sod needed to be watered. Mr. Kerr testified that he understood that Briggs was to water the sod, and that some of the sod was not in good condition when it was installed. Apparently, no one watered the sod and, as a result, the sod died in some areas. The City's inspection report listed the replacement of the dead sod as an item needing correction. Briggs replaced 800 yards of sod after Smith called him and told him to do so.
After Briggs had finished the initial sod work, he sent a bill to Kerr for 2,050 yards of sod at $1.40 per yard ($2,870.00). The City paid Kerr for the installation of 2,050 square yards of sod. Kerr did not pay Briggs' bill.
After Briggs had finished laying the additional 800 yards of sod he sent a second bill to Kerr. He did not bill Kerr for the full 800 yards of additional sod, deciding to charge Kerr for only 400 of the 800 yards so that both Briggs and Kerr would share the burden. His second bill was for 2,450 yards at $1.40 per yard. Kerr still did not pay Briggs. Briggs received a statement of account from Kerr dated November 19, 1991, showing a balance due to Briggs of $885.78. In the statement of account, Kerr reflected that Briggs had earned $1,578.50 (1,025 square yards of sod at $1.40 per square yard). Kerr then had made several deductions from the amount owed to Briggs for Kerr's watering of the sod, and for an alleged overpayment made to Briggs on a previous job.
Kerr's next move was to attempt to get Briggs to sign a lien waiver before Kerr would release any money due to Briggs. Mr. Kerr told Briggs that when the waiver was signed, two checks would be sent to Briggs, one for $885.78 and one for $1,291.50. Briggs refused to execute the waiver, claiming that Kerr was chiseling. After receiving Mr. Kerr's letter concerning the lien waiver, Briggs went to Mr. Kerr's office to pick up a Briggs filed suit against both Kerr and Hartford 1, pursuant to § 34.057, RSMo 1994, the Public Works Prompt Payment Statute. Count I of Briggs' petition sought damages against Kerr for breach of contract. Count II sought damages against both Kerr and Hartford for breach of contract and breach of the surety bond. In Count III, Briggs sought additional damages for statutory interest and attorney fees for withholding, in bad faith and without reasonable cause, prompt payment balances due under the subcontract, pursuant to § 34.057, RSMo 1994, against both Kerr and Hartford.
check for the full amount due to him. Mr. Kerr ordered Briggs off of his property. Briggs' attorney then wrote a claim letter to Hartford, the surety on the bond demanding payment from Hartford. Hartford also declined to pay Briggs.
Trial on the matter began December 19, 1994. The jury returned a verdict in favor of Briggs and against Kerr on Briggs' claim for breach of contract. Damages of $3,430.00, with interest of $926.00, were awarded to Briggs. The jury also found against Kerr on Briggs' claim for statutory interest and attorney fees under § 34.057. The jury awarded interest in the amount of $2,066.00 and attorney fees in the amount of $20,000.00. On Briggs' claims for payment of bond damages and for penalties, the jury returned a verdict in favor of Hartford. The jury was discharged, and the trial court entered judgment on the jury verdicts.
On January 17, 1995, Briggs filed a motion to set aside the verdicts in favor of Hartford or, in the alternative, to grant judgment notwithstanding the verdict or for a new trial. On February 1, 1995, Kerr filed a motion for judgment notwithstanding the verdict, or in the alternative, for new trial.
On April 4, 1995, the trial court entered a revised judgment, ordering that Briggs have judgment on his claim for breach of contract against Kerr in the amount of $3,430.00 together with $926.00 interest. The trial court further ordered that Briggs take nothing on any of his other claims. The trial court rendered a Summary of Proceedings and Order, explaining its decision:
The dispute between the parties centered around the installation of sod at a publicly financed project. There was no written sub-contract between plaintiff and defendant. The entire case was whether the oral discussions relieved the plaintiff of the obligation to water the sod once it was installed and whether the sod installed was defective when installed. The jury resolved those issues in favor of plaintiff. The court still must make certain determinations if the jury awards beyond the plaintiff's assessed damages can be allowed to stand.
In that regard, the verdict form submitted by plaintiff and returned by the jury is beneficial only to the extent that it provides insight into the jury's findings. Verdict A permitted the jury to return verdicts requiring findings on three separate issues. The plaintiff's damages emanating from the balance due under the installation agreement was $3,430. Interest thereon was awarded in the sum of $926. The remaining portion of the verdict awarding attorney fees and interest based on the plaintiff's claim of violation of Chapter 34 R.S.Mo. are subject to review at this point to determine the propriety of their submission in the first instance.
The Court is of the belief that it was in error to submit the verdict form as offered by plaintiff. The error was primarily centered around submission of attorneys' fees and prompt payment act interest issues to the jury. The court in examining the act of submission did so without giving due regard to the defenses in § 34.057(5) and § 34.057(6). These sections permit a defendant such as Kerr to withhold payment from a sub-contractor in the event of disputes and insulate defendants such as Kerr from liability for attorneys fees and late payment interest.
Accordingly, the court finds and determines as a matter of law that defendant Kerr's payment to plaintiff was withheld pursuant to § 34.057(5) in good faith and for reasonable cause. The jury's verdicts awarding plaintiff $20,000 attorney fees and $2,066 interest under the prompt payment act are set aside. Judgment in the cause is revised and amended this date.
Briggs appeals.
In Point I, Briggs contends that the trial court erred in denying Briggs' motion for judgment notwithstanding the verdict and in entering judgment in favor of Hartford on the breach of bond claim because, as a matter of law, Hartford's liability as surety is coextensive with Kerr's liability. Briggs submitted the breach of contract claim against Kerr in Instruction No. 7, which read:
Your verdict must be for plaintiff, if you believe:
First, plaintiff and defendant Kerr Construction Paving Company, Inc., entered into an agreement whereby plaintiff agreed to install sod for the Vaile Mansion Project with no maintenance and no watering after installation and defendant Kerr Construction Paving Company, Inc., agreed to pay plaintiff $1.40 per square yard of all sod installed on the project, and
Second, plaintiff performed his...
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