Brennaman v. Andes & Roberts Bros. Const. Co.
| Decision Date | 03 December 1973 |
| Docket Number | No. KCD,KCD |
| Citation | 506 S.W.2d 462 |
| Parties | Alan R. BRENNAMAN and Barbara L. Brennaman, Appellants, v. ANDES & ROBERTS BROTHERS CONSTRUCTION COMPANY, a corporation, and Farm & Home Savings Association, a corporation, Respondents. 26129. |
| Court | Missouri Court of Appeals |
Wayne R. Starr, Jr., Independence, for appellant.
Alan B. Slayton, Independence, for Andes & Roberts Bros. Const. Co.
James E. Woodfill, Ewing, Ewing, Carter, Wight & Woodfill, Nevada, for Farm & Home Savings Assn.
Before DIXON, C.J., PRITCHARD and SOMERVILLE, JJ., and DONALD B. CLARK, Special Judge.
This appeal presents for review the judgment of the Circuit Court of Jackson County dismissing plaintiffs' fourth amended petition for failure to state a cause of action. Suit was originally commenced January 20, 1971 and during the interval thereafter, to November 23, 1971, three successive amended petitions were filed, each of which was challenged by the defendants on the same general grounds. The judgment of dismissal will be viewed in accordance with procedures applicable to summary judgment. The propriety of the dismissal depends on whether the petition invokes substantial principles of law which entitle plaintiffs to relief. Pollard v. Swenson, 411 S.W.2d 837, 840 (Mo.App.1967). The sufficiency of the petition will be weighed by assuming all factual allegations as true and plaintiffs will be given the benefit of every favorable and reasonable intendment the facts alleged will allow. Commonwealth Insurance Agency, Inc. v. Arnold, 389 S.W.2d 803, 806 (Mo.1965).
Respondent Andes and Roberts Brothers Construction Company, (hereafter Andes and Roberts), is engaged in the business of developing residential subdivisions in Jackson County and prior to the time in question had constructed several hundred homes in the course of such business. Respondent Farm and Home Savings Association (hereafter Farm and Home), as a savings and loan institution in connection with its business provides mortgage loan financing for individual residence purchases.
On or about July 12, 1969, appellants visited a residential community in Independence then under development by Andes and Roberts and were shown model homes from which purchasers could select style, floor plan, and other features and arrange for the construction and purchase of a residence on a lot within the subdivision.
Appellants reached agreement with Andes and Roberts for the construction of a home described as 'Queen (KC 67--1) Plan--Design No. 7' to be located on Lot No. 1353, Far View Heights. A real estate contract was prepared by Andes and Roberts on a printed form and was signed by appellants on July 12, 1969. The contract purchase price of $20,650.00 was to be paid by the purchasers with a down payment of $650.00 consisting of $400.00 work equity credit, $250.00 each due ten days prior to taking possession, and the balance of $20,000.00 was represented by an FHA insured loan available under Section 235 of the National Housing Act. In accordance with a general program in the development of the subdivision, advance arrangements had been made by Andes and Roberts with Farm and Home to provide the mortgage loan financing on such sales transactions. Appellants qualified for the loan from Farm and Home by completing certain forms presented to them by Andes and Roberts with the sales agreement.
Among the term of the real estate sale contract, Andes and Roberts agreed that the home would be built 'to FHA plans and specifications'. No closing date was specified in the contract nor was there any agreed date for completion of the improvements. Appellants' petition includes no allegations as to consummation of the sale, but the claim that appellants were subsequently ejected from the property following a mortgage foreclosure leads to the conclusion that appellants did, at some point, assume possession of the property. Andes and Roberts executed on November 13, 1969 a standard form FHA Warranty of Completion which was delivered to appellants on the same day and which presumably coincided with delivery of possession.
Appellants refused to make any payments to Farm and Home on the mortgage loan or to complete the down payment required at closing and unsuccessfully attempted to block disbursement of the mortgage loan proceeds by Farm and Home. The date on which appellants first made objection to the quality of construction is uncertain but on May 6, 1970, they directed a letter to the Federal Housing Administration in Washington, D.C. noting various deficiencies in construction details of their home compared to FHA specifications as interpreted by appellants. Allegations of inferior materials and design included complaints as to dimension and spacing of floor joists and studs, attachment of gutters, proportionate material content of cement foundation, driveway, floors and walkways, cross bridging and sheet rock installation.
As actual damages, appellants ask recovery in their petition for sums representing subsequent increased cost in new homes attributable to an inflationary trend, the subsidy payment under Section 235 of the National Housing Act for the unexpired loan term as of the date of foreclosure and the work equity contribution of $400.00 under the contract. Exemplary damages are prayed for slander of credit, harassment and embarrassment. Liability of both respondents is contended to result from a conspiracy in which Andes and Roberts participated as the contractor and Farm and Home as the source of financing under a scheme to defraud appellants.
The issue resolved in the lower court against appellants and now presented on this appeal is the availability of relief to a claimant in an action for fraud where the material fact misrepresented is the contemporaneous intention of the promissor concerning performance of the agreement made. Although appellants' fourth amended petition is less than a model of concise factual allegations, the substance of the claim against Andes and Roberts is that the contract to sell appellants a home was procured by the false representation that the home would be constructed according to certain specifications when, in fact, Andes and Roberts then had a current intention to substitute inferior construction practices and materials.
A review of prior decisions indicates that the question presented has not been resolved uniformly under all fact situations. The early case of Reed v. Cooke, 331 Mo. 507, 55 S.W.2d 275 (banc 1932) held that fraud can not be predicated on a mere promise even though accompanied by a present intention not to...
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