Building Erection v. Plastic Sales & Mfg.

• Decision Date: 31 May 2005
• Docket Number: No. WD 63383.,WD 63383.
• Citation: 163 S.W.3d 472
• Parties: BUILDING ERECTION SERVICES COMPANY, Appellant, v. PLASTIC SALES & MFG. CO., INC. d/b/a Sunglo Skylight Products, et al., Respondent.
• Court: Missouri Supreme Court

Page 472

163 S.W.3d 472

BUILDING ERECTION SERVICES COMPANY, Appellant, v. PLASTIC SALES & MFG. CO., INC. d/b/a Sunglo Skylight Products, et al., Respondent.

No. WD 63383.

Missouri Court of Appeals, Western District.

April 12, 2005.

Motion for Rehearing and/or Transfer to Supreme Court Denied May 31, 2005.

As Modified May 31, 2005.

COPYRIGHT MATERIAL OMITTED

Kurt S. Brack and Judd L. Herbster, Overland Park, KS, for appellant.

Andrea G. McCarthy, Kansas City, MO, for respondent.

Before SMART, P.J., ELLIS and HARDWICK, JJ.

LISA WHITE HARDWICK, Judge.

Building Erection Services Company (BESCO) filed claims against Plastic Sales & Manufacturing Company, Inc., d/b/a Sunglo Skylight Products (Sunglo) for an action on account, quantum meruit, and breach of contract. After a bench trial, the circuit court awarded BESCO damages of $4,904 on the quantum meruit claim and denied the remaining claims. BESCO appeals, contending the circuit court erred in denying the contract-based claims, the request for attorney's fees, and additional damages on the quantum meruit claim. We affirm.

FACTUAL AND PROCEDURAL HISTORY

Viewed in a light most favorable to the judgment, the facts underlying BESCO's claims are as follows. In April 1996, Sunglo entered into a contract with J.E. Dunn, as general contractor, to fabricate and install three skylights as part of a remodeling project at Terminal C of the Kansas City International Airport (KCI). Sunglo planned to fabricate the skylights and then have its regular subcontractor, Royal Remodeling, perform the installation work. After the subcontractor submitted a bid of $6,500 to install the three skylights, Sunglo learned that Royal Remodeling was working on another job and would be unavailable in March 1998, when the installation was to begin.

In late February or early March 1998, Sunglo contacted BESCO to request a bid on the KCI skylight installation. BESCO's representative, Todd Riggs, visited Terminal C to review the scope of work with Sunglo's representative, Tim Driller. Driller pointed out the rough openings for three skylights and explained that two of the openings were nearly complete and ready for installation. The third opening was scheduled for completion in one or two months. Driller told Riggs that Sunglo's regular subcontractor had bid $6,500 on the project and that Sunglo was unlikely to pay any more than $7,000 for the entire installation. Prior to bidding on the project, Riggs reviewed the shop drawings which reflected that three skylights were to be installed.

Riggs made a verbal bid of slightly more than $7,000 and then negotiated further with Brian Wilson, a Sunglo representative. In early March 1998, BESCO and Sunglo reached a verbal agreement that the skylights would be installed for $7,000. BESCO began the installation on March 9, 1998, and completed two of the skylights by March 30, 1998. Although Sunglo prepared a "Subcontract for Installation" dated March 8, 1998, neither party executed the written agreement until several weeks after the two skylights were installed.

The Subcontract was eventually signed by Sunglo on April 21, 1998, and by BESCO on May 5, 1998. The written agreement provided that Sunglo would pay BESCO the sum of $7,000 for "the full, faithful, and prompt performance of [the] Subcontract." The only reference to the scope of work was set forth in Article 3, which stated:

ARTICLE 3—DESCRIPTION OF WORK

3.1 Subcontractor agrees to furnish all labor, material, plant, equipment, tools, hoisting, temporary power, safety equipment, skills, services, supervision, administration, taxes, insurance, secure all field measurements and all other items necessary to complete the Work described as follows (hereinafter "Work") in accordance with the terms of the Subcontract Documents:

3.2 Subcontractor shall provide a 1 year leak warranty for its Work on this project. This warranty shall be in writing and shall be provided to Contractor upon completion of Subcontractors Work.

Although the Subcontract referenced the "KCI Terminal C" project, it did not include any specific mention of the skylight installation work or the number of skylights to be installed. The written agreement also did not define the term "Subcontract Documents" as referenced in Section 3.1.

Two weeks after signing the subcontract, BESCO submitted to Sunglo a "subcontractor warranty" and an application for payment in the amount of $8,350. The application, dated May 19, 1998, included charges for the $7,000 sum set forth in the subcontract and $1,350 for additional costs incurred during the installation of the two skylights. The application stated that "100%" of the subcontract work had been completed. Sunglo objected to paying the invoice because the $1,350 in additional costs were not covered by the written subcontract and had not been otherwise approved.

Sometime in mid-May 1998, Sunglo notified BESCO that the third skylight opening was complete and ready for installation. At that time, no discussions took place between the parties regarding any additional costs associated with the third skylight. BESCO began installing the third skylight on May 22, 1998, and completed the work on June 25, 1998. BESCO thereafter notified Sunglo that an additional $4,904 would be billed for installation of the third skylight. Sunglo disputed that any additional money was due and paid BESCO $6,300, consistent with the subcontract price of $7,000 minus a 10% retainage.

In addition to the KCI project, Sunglo and BESCO entered into a subcontract in July 1998 for skylight installation work on the ETC Institute. BESCO agreed to perform the installation for $9,500. Upon completion of the work, Sunglo paid BESCO $9,000 and retained $500, pending BESCO's submission of a warranty and lien waiver.

In July 2001, BESCO filed a petition against Sunglo alleging an action on account (Count I), an action in quantum meruit (Count II), and a breach of contract claim (Count III). All three counts alleged that Sunglo failed to pay the reasonable value of BESCO's materials, equipment, and labor for skylight installation work on the KCI and ETC projects. BESCO sought $7,454 in damages under each count, plus interest and attorney's fees. The damages claim included $1,350 for additional costs incurred for installation of the first two skylights at Terminal C, $4,904 for installation of the third skylight at Terminal C, the $700 retainage on the KCI project, and the $500 retainage on the ETC project.

After a bench trial, the circuit court denied the action on account and breach of contract claims. The court found that no contract existed on the KCI project because the terms of the subcontract were indefinite and the parties did not have a "meeting of the minds" regarding the number of skylights to be installed by BESCO. The court further found that Sunglo did not breach the terms of the subcontract on the ETC project. The court ruled in favor of BESCO on the quantum meruit claim, finding that Sunglo failed to pay the reasonable value of installation work performed on the third skylight. The judgment awarded BESCO $4,904 in damages, plus prejudgment interest. BESCO's request for attorney's fees was denied. BESCO appeals.

POINTS ON APPEAL

BESCO brings seven points on appeal. BESCO contends the circuit court erred in: (I) determining no subcontract existed on the KCI project; (II) considering parol evidence to determine whether the subcontract existed; (III and IV) denying the retainage claims on the KCI and ETC projects; (V) denying the recovery, under a quantum meruit theory, of additional costs incurred on installation of the first two skylights on the KCI project; and (VI and VII) denying the requests for attorney's fees under Sections 34.057 and 431.180, RSMo.2000. We will address these points as related to the claims set forth in BESCO's petition.

In reviewing this court-tried case, we must affirm the circuit court's judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). We give deference to the circuit court's factual determinations, reviewing the evidence and inferences in light most favorable to the judgment, while disregarding all contrary evidence and inferences. Langdon v. United Rests., Inc., 105 S.W.3d 882, 886 (Mo.App.2003). Questions of law, however, are reserved for the independent judgment of the appellate court without deference to the trial court's determination. Id.

ACTION ON ACCOUNT AND BREACH OF CONTRACT CLAIMS

The action on account¹ and breach of contract claims were premised on BESCO's allegation that it had a valid subcontract with Sunglo on the KCI project. The circuit court denied these claims because it determined there was no meeting of the minds on an essential term of the alleged subcontract and, thus, no contract existed. On appeal, BESCO asserts the terms of the subcontract were unequivocal, plain, and clearly expressed the parties' intention that two skylights were to be installed on the KCI project. Accordingly BESCO argues the circuit court erred, as a matter of law, in considering parol evidence and in ultimately determining that no contract was formed.

Under Missouri law, the essential elements of a contract are: (1) competency of the parties to contract; (2) subject matter; (3) legal consideration; (4) mutuality of agreement; and (5) mutuality of obligation. Ketcherside v. McLane, 118 S.W.3d 631, 635 (Mo.App.2003). At issue here is the fourth element, which requires the parties to have "a mutuality of assent or a meeting of the minds on the essential terms of a contract." Id.

Courts can determine whether there has been a meeting of the minds by "looking to the intention of the parties as expressed or manifested in their words or acts." Smith v. Hammons, 63 S.W.3d 320, 325 (Mo.App.2002). The essential terms of the contract must be...