Cork Plumbing Co., Inc. v. Martin Bloom Associates, Inc.

• Decision Date: 03 October 1978
• Docket Number: No. 38968,38968
• Citation: 573 S.W.2d 947
• Parties: 25 UCC Rep.Serv. 1245 CORK PLUMBING COMPANY, INC., Plaintiff-Respondent, v. MARTIN BLOOM ASSOCIATES, INC., et al., Defendants-Appellants. . Louis District, Division Two
• Court: Missouri Court of Appeals

Page 947

573 S.W.2d 947

25 UCC Rep.Serv. 1245

CORK PLUMBING COMPANY, INC., Plaintiff-Respondent, v. MARTIN BLOOM ASSOCIATES, INC., et al., Defendants-Appellants.

No. 38968.

Missouri Court of Appeals, St. Louis District, Division Two.

Oct. 3, 1978.

Motion for Rehearing and/or Transfer to Supreme Court Denied

Nov. 17, 1978.

Theodore F. Schwartz, Michael C. Rose, Clayton, for defendants-appellants.

Joseph P. Conran, Husch, Eppenberger, Donohue, Elson & Cornfeld, St. Louis, for plaintiff-respondent.

REINHARD, Judge.

This appeal arises from an action instituted by respondent Cork Plumbing Company, Inc. (hereafter referred to as Cork), which sought a judgment for the imposition of a mechanic's lien upon certain real property located in St. Louis County, Missouri. Appellant, Martin Bloom Associates, Inc. (hereafter referred to as M.B.A.), was the owner of the improved real property and sought damages for breach of contract in a counterclaim. The trial court ordered a mechanic's lien against the real property, in the form of special execution to be levied only against that property, and held against M.B.A. on its counterclaim.

Respondent has made a motion to dismiss this appeal for failure to make a "fair and concise" statement of facts as required by Rule 84.04(c). We deny respondent's motion.

In October 1972, M.B.A. entered into a joint venture with Grand Glaize Village Co. for the construction of the Grand Glaize Apartments in St. Louis County. This joint venture was known as Grand Glaize Apartments Co., with each company holding a 50% Interest. Grand Glaize Village Co. was to provide land for the project, and M.B.A. was to provide for the construction of the buildings. In October or November of 1973, Grand Glaize Village Co. encountered financial difficulties; consequently, the project was sold to a limited partnership, of which M.B.A. was one of two general partners. Appellant Security Properties '73 was the second general partner. M.B.A. was involved in this project as owners to this extent until February or March of 1976, at which time M.B.A. sold its interest and ceased being a general partner. Appellants Gershman Investment Corporation, Solon Gershman and Oritani Savings and Loan Association were involved here originally as holders of the Deed of Trust for the subject real property. However, this Deed of Trust has been satisfied and released of record. Consequently, these appellants hold no present interest in the real property.

On August 29, 1972, Cork submitted a proposal to M.B.A. for the materials and labor necessary for the completion of plumbing and sewer work in 176 apartment units in the Grand Glaize apartment complex. The proposal was accepted thereafter, subject to final commitment by the Federal Housing Administration. In November of 1972, the commitment was received. On February 12, 1973, M.B.A. sent Cork a second contract which covered the same work as the August 29, 1972 contract and requested that it be signed. Cork signed this contract and returned it to M.B.A. Thereafter, on May 22, 1973, Cork sent M.B.A. a letter informing M.B.A. that the prices quoted in the August 29, 1972 contract would be honored for only one year, and that a 61/2% Increase should be anticipated at the end of that period. On June 26, 1973, M.B.A. authorized Cork to begin work as per the August 29, 1972 contract and agreed to pay the increase starting in August, 1973. Shortly thereafter, on June 28, 1973, Cork began its work.

On April 10, 1974, Cork submitted an additional proposal to M.B.A. for plumbing work to be done on a "clubhouse" in the Grand Glaize apartment complex. Thereafter on May 22, 1974, the proposal was accepted less the cost for labor and materials for certain minor items which were excluded from the original proposal. In addition to these written agreements there were also several minor oral agreements between Cork and M.B.A. for extra work which arose during this period.

The payment terms of the two contracts at issue here are different. The August 29 1972 agreement called for payments "to be billed as the job progresses." The February 12, 1973 contract, however, called for monthly progress payments due on or about the 20th day of each month for 90% Of all labor performed, and for all the materials incorporated in the work or suitably stored at the jobsite during the preceding month. Cork billed M.B.A. monthly for the work completed. Billings were made and payments were received until May of 1974, when M.B.A. failed to pay for its May invoices. In the latter part of June 1974, the president of Cork, Willard Swyers, contacted M.B.A. in regard to the late payment. M.B.A. made assurances to Swyers that they did not have the money to make payment, but that they would have the money to do so in the near future.

An additional period of time passed in which Cork did not receive payment. At this time, Don Cork, another Cork officer, contacted Frank Malone, M.B.A.'s executive vice-president, and informed him that if payments were not received, Cork would be forced to pull off the job site. Malone indicated that M.B.A. could not pay the May, June or July invoices. Consequently, because of this failure to make current payments and M.B.A.'s statements that it would not make payments in the future, Cork pulled its men off the job on July 17, 1974. Subsequent to the removal of his men from the job, Mr. Cork and his foreman, Fred Richter, at the request of M.B.A., came back to make an adjustment on some completed ground work so that a particular building could pass inspection. This occurred on July 24, 1974, and was the last work performed by Cork for M.B.A. Cork alleged the balance due was $39,830.90.

Thereafter, in a letter dated July 30, 1974, M.B.A. proposed a different payment plan. This plan would have called for an immediate payment of $6,600 with weekly payments of $1,200 for two weeks to cover the required payroll for the project. Thereafter, upon receipt of the latest FHA-approved draw, M.B.A. would promptly pay Cork an additional $7,000. One-half the balance due would then be deferred until the final FHA-approved draw, and the rest of the balance due would be paid in monthly installments. Cork refused this plan. Subsequently, M.B.A. contracted the uncompleted work out to other plumbing contractors. M.B.A. in its counterclaim, claims the excess costs of $58,009.27 caused by the refusal of Cork to complete the work in accordance with the contracts.

On September 5, 1974, Cork filed a mechanic's lien statement in the office of the Clerk of the Circuit Court of St. Louis County in the amount of $39,830.90, pursuant to § 429.010 et seq., RSMo. 1969. Thereafter, on October 4, 1974, Cork filed suit in the Circuit Court of St. Louis County to enforce its mechanic's lien.

On June 30, 1975, M.B.A. filed a petition for arrangement under Chapter XI in the United States District Court of the Eastern District of Missouri. Subsequently, on November 25, 1975, Cork and M.B.A. entered into an agreement whereby any allowances given Cork in the Chapter XI proceeding would be without prejudice to the rights of Cork or M.B.A. and would not be deemed res judicata in the mechanic's lien litigation. Further, pursuant to Rule 11-44(d) of the Bankruptcy Act, Cork prayed for relief from the stay that had been issued by the Bankruptcy Court so that Cork could proceed in the mechanic's lien suit. Such relief was granted on October 17, 1975, by order of the Bankruptcy Court in which Cork was allowed to enforce its lien. However, Cork was limited to seeking a finding of indebtedness against M.B.A. and obtaining satisfaction through execution upon the subject improved real property, rather than enforcing a money judgment against M.B.A. On December 15, 1975, M.B.A. was discharged in bankruptcy. Cork received an allowance of $6,329.63.

After a trial in the circuit court without a jury, a judgment was entered in favor of Cork in the amount of $38,522.90. This amount represented the value of labor and materials supplied by Cork to M.B.A. which were incorporated into the real property, plus interest, the total of which was reduced by the amount which Cork received in the Chapter XI proceeding ($6,329.63). In accord with the Bankruptcy Court order, the trial court's judgment was limited to satisfaction through execution upon the subject real property. A personal money judgment was not given.

Appellants first contend that the trial court erred in imposing a mechanic's lien because the Cork account had been merged and extinguished by the allowance given in M.B.A.'s Chapter XI proceedings.

Appellants rely on Wycoff v. Epworth Hotel Construction & Real Estate Co., 146 Mo.App. 554, 125 S.W. 550 (1910). In Wycoff the plaintiff performed certain work on the construction of a project. Before the lien time had expired defendant made a voluntary assignment for the benefit of creditors under the Missouri statute. ¹ In the assignment proceedings Wycoff presented his demand to the assignee and was given judgment. Subsequent thereto, Wycoff filed a suit to enforce same in the Circuit Court of St. Louis County. The trial court held against Wycoff and was sustained on appeal. This court held:

"Our statute concerning mechanics' liens . . . contemplates that proceedings to enforce such liens Shall be founded on the account as to materials or labor furnished . . . . In view of these provisions it has been frequently ruled by the courts of this state that, where the plaintiff has merged his lien account in a judgment, given either by a court of law or an assignee for the benefit of creditors Of the original owner or contractor, he is thereby precluded from thereafter employing the same as a basis for the purpose of enforcing a mechanic's lien. Although the indebtedness may continue to exist by virtue of the judgment which is unpaid, the account, which in contemplation of the lien statutes must be the basis of all proceedings . . . is...