Bullmaster v. Krueger

• Decision Date: 21 December 2004
• Docket Number: No. WD 62780.,WD 62780.
• Citation: 151 S.W.3d 380
• Parties: Ed BULLMASTER d/b/a Bullmaster Excavating & Demolition, Respondent, v. Michael G. KRUEGER and Robin D. Krueger, Appellants, Environmental Response & Technologies, Inc., Defendant, Fides Capital, L.L.C., Appellant.
• Court: Missouri Court of Appeals

151 S.W.3d 380

Ed BULLMASTER d/b/a Bullmaster Excavating & Demolition, Respondent, v. Michael G. KRUEGER and Robin D. Krueger, Appellants, Environmental Response & Technologies, Inc., Defendant, Fides Capital, L.L.C., Appellant.

No. WD 62780.

Missouri Court of Appeals, Western District.

December 21, 2004.

Arthur D. Peppard, Memphis, MO, for appellants Kruegers.

Charles G. Larson, St. Joseph, MO, for appellant Fide Capital, L.L.C.

Jere L. Loyd, St. Joseph, MO, for respondent.

Before BRECKENRIDGE, P.J., HOWARD and SMART, JJ.

PATRICIA BRECKENRIDGE, Judge.

Ed Bullmaster, d/b/a Bullmaster Excavating & Demolition, sued Michael Krueger and Robin Krueger to enforce a mechanic's lien on property now owned by the Kruegers. Before the Krueger's purchased the property, Constance Miller owned and operated a service station on the property. After the station was closed, Ms. Miller contracted with Environmental Response & Technologies, Inc., for the removal of the underground storage tanks located on the property. Environmental subcontracted the excavation and removal of the tanks to Mr. Bullmaster. The mechanic's lien Mr. Bullmaster sought to enforce arose from excavation work Mr. Bullmaster performed on the property as a subcontractor.

The Kruegers filed a counterclaim in interpleader requesting that they be allowed to deposit $55,269 in funds they received from the state for payment on a claim presented to the Missouri Petroleum Storage Tank Insurance Fund (PSTIF) for removal of the underground tanks.¹ In their counterclaim for interpleader, the Kruegers named Mr. Bullmaster, Environmental, and Fides Capital, LLC, as defendants. Fides' claim arose from a security interest in and an assignment of the accounts receivable of Environmental.

Following a bench trial, the trial court entered a default judgment for $81,328, plus interest, in favor of Mr. Bullmaster and against Environmental. The trial court also entered judgment against the Kruegers and in favor of Mr. Bullmaster on Mr. Bullmaster's petition to enforce his mechanic's lien, specifically entering a special lien against the Kruegers' property. The trial court also entered judgment in favor of Mr. Bullmaster on the Krueger's interpleader action and ordered the circuit clerk to disperse the $55,269 PSTIF funds to Mr. Bullmaster.

In their joint brief on appeal, the Kruegers and Fides assert that the trial court erred in failing to dismiss Mr. Bullmaster's petition to enforce mechanic's lien because Mr. Bullmaster failed to give notice to the property owner, as required by section 429.100, RSMo 2000,² and in entering judgment awarding the interpled funds to Mr. Bullmaster.³ The Kruegers and Fides further contend that the trial court erred in denying the Kruegers' motion to dismiss because the mechanic's lien Mr. Bullmaster seeks to enforce did not contain a just and true account of the work performed by Mr. Bullmaster. Because Mr. Bullmaster failed to give notice to Ms. Miller, who owned the property on the date the work commenced, as required by section 429.100, the trial court lacked jurisdiction to impose a special lien in favor of Mr. Bullmaster and against the Kruegers' property. Therefore, the case is remanded with directions to sustain the Kruegers' motion to dismiss. Furthermore, because neither Mr. Bullmaster nor Fides has established a valid claim to the funds deposited by the Kruegers with the circuit court, the case is remanded for retrial to determine the proper disposition of the disputed funds.

Factual and Procedural Background

In 1999, Constance Miller was the owner of DX Service Station in Gower, which contained underground petroleum storage tanks. After the station was closed, it became necessary to remove the underground storage tanks. Ms. Miller contracted with Environmental to remove and dispose of the underground storage tanks, to test the soil and remove and dispose of any contaminated soil, and to provide clean backfill as needed. Environmental, owned by Martin Altman, was the general contractor on the project. Part of the cost of the project was to be paid by the state through the PSTIF. Environmental subcontracted with Mr. Bullmaster to perform excavation of the site, removal of the tanks, hauling the contaminated soil, and providing clean backfill. Mr. Bullmaster performed these tasks in November 1999 and March 2000.

In July 2000, Ms. Miller conveyed the property to the Kruegers. Mr. Bullmaster demanded payment from Environmental and the Kruegers for $81,328, the alleged balance owed under his contract with Environmental for the work he performed in excavating the underground storage tanks. After failing to receive payment, on September 4, 2000, Mr. Bullmaster served the Kruegers with notice of his intent to file a mechanic's lien. Mr. Bullmaster did not serve notice on Ms. Miller. On September 20, 2000, Mr. Bullmaster filed a mechanic's lien affidavit, which included an account of the amount due, and claimed a lien upon the real estate owned by the Kruegers. Thereafter, Mr. Bullmaster filed a petition to enforce the mechanic's lien naming the Kruegers and Environmental as defendants.

On July 3, 2001, the trial court entered an interlocutory default judgment against Environmental for $81,328. On August 13, 2002, the Kruegers filed a counterclaim in interpleader naming Environmental and Mr. Bullmaster as defendants and Fides as a third-party defendant. The Kruegers sought to interpled $55,269 they received from the PSTIF. The Kruegers alleged that Fides claimed an interest in the funds through a judgment it held against Mr. Altman and Environmental. Fides answered claiming a perfected security interest in and an assignment of the accounts receivable of Environmental, represented by the interpled funds. The trial court subsequently entered an order authorizing the Kruegers to deposit the funds into the circuit clerk's office.

The trial court held a bench trial on January 17, 2003. At the beginning of trial, the Kruegers moved for judgment on the pleadings based on Mr. Bullmaster's failure to provide notice to Ms. Miller, the owner of the property at the time Mr. Bullmaster commenced work on the property, as required by section 429.100. The trial court denied the Krueger's motion. At the conclusion of Mr. Bullmaster's case, the Kruegers again moved to dismiss Mr. Bullmaster's petition on the grounds that (1) Mr. Bullmaster failed to provide notice to Ms. Miller, (2) Mr. Bullmaster's lien failed to contain a just and true account of the work allegedly performed, and (3) Mr. Bullmaster failed to include all contracting parties, i.e., Ms. Miller, in the action. The trial court again denied the Kruegers' motion.

On March 20, 2003, the trial court entered its final judgment. Specifically, the trial court entered judgment in favor of Mr. Bullmaster and against Environmental for $81,328 plus interest, and entered judgment in favor of Mr. Bullmaster for a mechanic's lien against the real estate owned by the Kruegers. In addition, the trial court entered judgment in favor of Mr. Bullmaster on the Kruegers' counterclaim for interpleader, awarded the deposited funds to Mr. Bullmaster, and ordered the circuit clerk to disperse the funds to Mr. Bullmaster in partial satisfaction of the judgment against Environmental and the Kruegers' real estate. Following denial of both the Kruegers' and Fides' motions for new trial, the Kruegers and Fides filed this appeal.

Standard of Review

When reviewing a court-tried mechanic's lien case, an appellate court "will sustain the judgment of the trial court `unless there is no substantial evidence to support it, unless it is against the weight of the evidence, unless it erroneously declares the law, or unless it erroneously applies the law.'" Gauzy Excavating & Grading Co. v. Kersten Homes, Inc., 934 S.W.2d 303, 304 (Mo. banc 1996) (quoting Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976)).

Mechanic's Lien Invalid Because of Improper Notice

In their first point, the Kruegers and Fides contend that the trial court erred in failing to dismiss Mr. Bullmaster's petition because the trial court lacked subject matter jurisdiction to impose a mechanic's lien.⁴ Specifically, the Kruegers and Fides argue that under section 429.100, Mr. Bullmaster was required to serve notice of his intent to file a mechanic's lien with the owner of the property at least ten days prior to filing his mechanic's lien affidavit. The Kruegers and Fides assert that the owner to which Mr. Bullmaster was required to give notice was Ms. Miller, not the Kruegers. This is so, argue the Kruegers and Fides, because Ms. Miller was the owner of the property at the time Mr. Bullmaster performed the work. The Kruegers and Fides contend that Mr. Bullmaster was not required to provide the Kruegers with notice as subsequent purchasers of the property and, therefore, because Mr. Bullmaster conceded that he did not provide notice to Ms. Miller, the trial court erred in failing to dismiss Mr. Bullmaster's petition.

"Actions to establish and enforce a mechanic's lien are purely statutory in nature and the averments must plead and the evidence must prove the statutory elements before recovery is permitted." Kenny's Tile & Floor Covering, Inc. v. Curry, 681 S.W.2d 461, 472 (Mo.App.1984). Proper notice is a condition precedent to the creation, existence or validity of a mechanic's lien. Id. Under section 429.100, a subcontractor "shall give ten days' notice before the filing of the lien, as herein required, to the owner, owners or agent, or either of them, that he holds a claim against such building or improvement, setting forth the amount and from whom the same is due." Strict compliance with the notice provisions contained in the mechanic's lien statutes is required. Gauzy Excavating & Grading, 934 S.W.2d at 305.

Mr. Bullmaster maintains that he provided proper notice of his intent to file a mechanic's lien by notifying the Kruegers, the current...