Carlund Corp. v. Crown Center Redevelopment Corp.

Decision Date05 September 1995
Docket NumberNos. WD,s. WD
Citation910 S.W.2d 273
PartiesCARLUND CORPORATION, Appellant, v. CROWN CENTER REDEVELOPMENT CORP., et al., Defendant, Elgard Corporation, Appellant-Respondent, J.H. Mackay Electric, et al., Respondent-Appellant. 49430, WD 49476.
CourtMissouri Court of Appeals

Peter E. Strand, Kelly W. Schemenauer, M. Kevin Underhill, Shook, Hardy & Bacon P.C., Kansas City, for Elgard, appellant-respondent.

Greg T. Spies, Leonard L. Wagner, Watson & Marshall, L.C., Kansas City, for J.H. Mackay Elec., et al., respondent-appellant.

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

ULRICH, Presiding Judge.

Elgard Corporation (Elgard) appeals from the judgment entered following jury trial in favor of J.H. Mackay Electric Company, Inc. (Mackay) for breach of a construction contract under which Elgard was the general contractor and Mackay was an electrical subcontractor. Damages of $193,120 were awarded to Mackay consisting of $7,620 for electrical work performed by Mackay and $185,500 for attorney fees incurred by Mackay. Elgard claims the trial court erred in (1) awarding attorney fees to Mackay under the collateral litigation doctrine; (2) submitting four claimed erroneous instructions; (3) denying its motion for judgment n.o.v., asserting that damages arising from events occurring before October 11, 1989, could not have been the result of any alleged breach of contract by Elgard; and (4) allowing submission of "irrelevant and prejudicial evidence" submitted by Carlund. Mackay appeals from the trial court's order directing verdict in favor of Elgard on Mackay's claim of fraudulent misrepresentation, claiming sufficient evidence supported its claim.

The original plaintiff, Carlund Corporation (Carlund), sued Mackay, Crown Center Redevelopment Corporation (Crown Center), and Elgard. Elgard and Mackay asserted counter and cross-claims. Additionally, Elgard sued Federal Insurance Company (Federal), Mackay's surety. Carlund's claims were stayed, and the case proceeded on the cross-claims between Mackay and Elgard, Elgard's claim against Federal, and Mackay's counterclaim against Carlund.

The judgment in favor of Mackay is affirmed in part, reversed in part and is remanded to the trial court. The order directing verdict in favor of Elgard for fraudulent misrepresentation is affirmed.


Dispute arose from a construction project at a parking garage owned by Crown Center. The project involved installation of a "cathodic protection system", an electrical system which retards deterioration of reinforced concrete structures. Various contractors were hired to work on the project.

On June 9, 1989, Crown Center signed a written contract naming Elgard the general contractor for the Crown Center project. By letter, on June 13, 1989, Elgard engaged Mackay as prime subcontractor for the project and requested Mackay to begin work on the project in accordance with its bid. The letter stated that a written subcontract would follow. On the same day, Mackay sent a similar letter to Carlund as Mackay's subcontractor requesting it to begin work in accordance with its bid.

On July 31, 1989, Elgard sent Mackay a formal subcontract which Mackay signed on August 31, 1989. Likewise, Mackay offered Carlund a formal contract. Carlund found the contract unacceptable and refused to sign it. Mackay never secured a signed contract, a performance bond, or a certificate of insurance from Carlund.

Disputes arose between Mackay and Carlund. Carlund demanded further payments to continue working, and Mackay found Carlund's work inadequate. On October 6, 1989, Carlund ceased working and left the project.

On October 10, 1989, representatives of Elgard and Carlund met in an effort to resolve the disputes and complete the project timely. The next day, October 11, 1989, Clem Firlotte and Michael Mazzuca of Elgard met with Mackay's representatives, Jack Feeney and John Mackay. Mackay expressed its wish to engage a different subcontractor to replace Carlund. Elgard, however, agreed to relieve Mackay of the portion of its bond pertaining to Carlund, to obtain and provide written confirmation that Carlund would not sue Mackay for work performed on the project, to hold Mackay harmless for work performed by Carlund for the entire project, and to issue an amended contract to Mackay reflecting these changes. Based on these statements, Mackay permitted Carlund to return to the job site to work under Elgard. Carlund, however, did not provide written confirmation that it would not initiate litigation.

On October 13, 1989, Mr. Mazzuca sent a letter of intent by facsimile to Mackay outlining the terms of the agreement discussed on October 11. The letter was unsigned, and Elgard contended that it was only a summary of negotiating points which had been raised in the October 10 and 11 meetings. Elgard never issued a formal amendment to Mackay's contract, released Mackay's bond, or obtained a release of Mackay from Carlund. Ultimately, Elgard terminated Carlund on October 31, 1989, for unsatisfactory performance.

Carlund sued Crown Center, Elgard, and Mackay to enforce a mechanic's lien, for breach of contract, and in quantum meruit. Elgard and Mackay filed cross-claims against each other asking for attorney's fees. Elgard sought to recover fees under a contractual provision. Mackay claimed recovery of fees was justified by the collateral litigation doctrine. At trial, evidence of Elgard and Mackay's attorney fees was introduced pursuant to the parties' stipulation.

On the eve of trial, the trial court stayed Carlund's claims because the company was not registered to do business in Missouri. Thus, the trial was bifurcated, and only the cross-claims between Elgard and Mackay, Mackay's counter-claims against Carlund, and Elgard's claims against Federal were tried.

The trial court directed a verdict in favor of Elgard on Mackay's cross-claim for fraudulent misrepresentation. The jury returned its verdict against Elgard in favor of Mackay and awarded Mackay damages of $193,120, and judgment was entered accordingly. The award consisted of $7,620 for electrical work performed by Mackay on the project after October 11, 1989, and $185,500 for attorney fees. The award for attorney fees was in the aggregate and did not distinguish between fees incurred pursuing different claims. The judgment also included an obligation to indemnify Mackay for any damages Mackay paid to Carlund. Elgard's and Mackay's appeals followed.

Elgard's Appeal

As its first point on appeal, Elgard claims the trial court erred in awarding attorney fees to Mackay under the collateral litigation doctrine. It argues that the trial court improperly denied its motion for summary judgment, motion in limine, motion for directed verdict, and motion for judgment notwithstanding the verdict regarding the issue.

First, Mackay asserts the issue of attorney fees was not preserved for review on appeal because evidence of Mackay's attorney fees was admitted at trial without objection and by stipulation. Elgard, however, argues that the issue was raised and preserved in its motion for summary judgment, motion in limine, motion for directed verdict, and motion for judgment notwithstanding the verdict. Mackay argues that denial of the motion for summary judgment and motion in limine are not reviewable on appeal and that Elgard did not raise the collateral litigation doctrine issue in its motion for directed verdict. Additionally, it claims that since the doctrine was not raised in the directed verdict motion, it cannot be raised in a motion for judgment notwithstanding the verdict.

An appellate court may not address an issue that was not put before the trial court. Stone v. City of Columbia, 885 S.W.2d 744, 747 (Mo.App.1994). The denial of a motion for summary judgment is not subject to appellate review, even when the appeal is taken from a final judgment. State ex rel. Missouri Div. of Transp. v. Sure-Way Transp., Inc., 884 S.W.2d 349, 351 (Mo.App.1994). Likewise, a motion in limine preserves nothing for appeal absent an objection to the evidence when it is presented at trial. Williams v. Enochs, 742 S.W.2d 165, 168 (Mo. banc 1987). Thus, Elgard's motion for summary judgment and motion in limine regarding the collateral litigation issue are not appealable and did not preserve the issue for review on appeal.

Additionally, Elgard did not raise the issue in its written motion for directed verdict. It, however, made an oral motion for directed verdict in which it objected to an award of attorney fees to Mackay. It stated, "Also, a formal objection renewed to submission of collateral litigation requirements for attorneys fees as pled in our motions in limine and renewed at the close of the evidence. I don't believe they are entitled as a matter of law to attorneys fees." Likewise, Elgard raised the objection in its motion for judgment notwithstanding the verdict, or in the alternative, for a new trial and suggestions in support of the motion. Elgard, therefore, preserved the issue for review on appeal.

Elgard does not argue that the attorney fees were not incurred in good faith or that the fees were unreasonable. Additionally, it does not contend as a point on appeal that it did not have an agreement with Mackay or that it did not breach that agreement. Instead, Elgard's argument centers on whether the litigation was collateral, the proximate result of the breach by Elgard, and what amount of attorney fees is recoverable. Specifically, Elgard asserts that the award of attorney fees to Mackay was not authorized by the collateral litigation doctrine as a matter of law because (1) the third-party lawsuit between Mackay and Carlund was not a separate, distinct, collateral proceeding; (2) Mackay was awarded attorney fees that were not incurred in third-party litigation; (3)...

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