Custom Constr. Sols. v. B & P Constr.
| Docket Number | ED111253 |
| Decision Date | 28 November 2023 |
| Parties | CUSTOM CONSTRUCTION SOLUTIONS, LLC, and CANNON DESIGN, INC., Plaintiffs/ Respondents, v. B & P CONSTRUCTION, INC., et al. Defendants, and HH ST. LOUIS RAILWAY L.P., and GAMMA REAL ESTATE CAPITAL, LLC, Defendants/Appellants and GEOTECHNOLOGY, INC., TRUSTEES SERVICES, INC., and CONCRETE STRATEGIES, LLC, Defendants/ Respondents. |
| Court | Missouri Court of Appeals |
Appeal from the Circuit Court of the City of St. Louis Cause No 1822-CC11468 Honorable Christopher E. McGraugh
Following a bench trial, the trial court found the mechanic's liens filed by Custom Construction Solutions, LLC ("Custom Construction"); Cannon Design, Inc. ("Cannon"), and Concrete Strategies, LLC ("Concrete Strategies") (collectively, "lien claimants") had priority over the deed of trust filed by Gamma Real Estate Capital, LLC ("Gamma") for a project involving the Railway Exchange Building and parking garage in downtown St. Louis. On appeal, Gamma raises four points. Gamma argues the trial court erred in finding the mechanic's liens had priority over the deed of trust, in finding Gamma waived the priority of its deed of trust, in finding the mechanic's liens were valid, and in admitting Cannon's letter of registration after the trial.
In a consolidated action, the trial court also found HH St. Louis Railway, LP ("HH St. Louis") breached its contracts with Custom Construction, Cannon, Concrete Strategies, and Geotechnology, Inc. ("Geotechnology") by failing to pay them. HH St. Louis raises six points on appeal. HH St Louis argues the trial court erred in finding it breached the contracts, in finding Concrete Strategies was unjustly enriched, in finding the mechanics liens were valid, in admitting Geotechnology's and Cannon's letters of registration after the trial, and in awarding attorneys' fees.
We affirm in part and reverse in part the judgment of the trial court.
In January 2017, HH St. Louis purchased the Railway Exchange Building, the parking garage, and the surface parking lot to redevelop them into retail, office, and residential space. The total purchase price was approximately $29.7 million. Gamma, HH St. Louis's financial lender, lent HH St. Louis $19.7 million. At the time of closing, HH St. Louis executed a deed of trust in favor of Gamma as a security interest in the loan. Gamma recorded the deed of trust on February 14 2017.
Gamma placed a portion of the loan proceeds into a predevelopment reserve fund. This fund contained $5 million. HH St. Louis used this fund to complete predevelopment work, which included remediation and demolition. To access the funds, HH St. Louis submitted draw requests to Gamma, which required HH St. Louis to provide all bills, invoices, and receipts. The draw requests referred to the loan agreement as a "construction loan agreement." As part of the draw requests, HH St. Louis "agree[d] to provide, if requested by [Gamma], a vendor payee listing showing the name and amount currently due each party to whom [HH St. Louis] is obligated for labor, material, and/or services supplies." Gamma approved some draw requests and rejected others.
HH St. Louis retained Concrete Strategies to provide all necessary materials, labor, and construction for mitigation repairs to strengthen the Railway Exchange Building and garage. Specifically, this required various repairs and installation of temporary shoring to keep the building in an operating manner. Concrete Strategies began work on the project, but to take advantage of tax incentives, it brought in B&P Construction, a minority-owned contractor. B&P Construction took over as the general contractor, and Concrete Strategies became a subcontractor. Concrete Strategies performed shoring work on the garage until May 8, 2018. After HH St. Louis and B&P Construction failed to pay invoices submitted by Concrete Strategies, Concrete Strategies filed a lien against the garage in the amount of $378,041.35.
In addition to Concrete Strategies's work on the garage, HH St. Louis, through its authorized representative, S.M.,[1] asked Concrete Strategies to provide labor and equipment for selective demolition on the Railway Exchange Building. Concrete Strategies performed the selective demolition at a rate of $1,900 per day and submitted the invoices to HH St. Louis. HH St. Louis failed to pay Concrete Strategies for its work on the Railway Exchange Building. Concrete Strategies therefore filed a lien against the Railway Exchange Building in the amount of $155,000.
In November 2017, HH St. Louis and Cannon entered into a contract for Cannon to provide architecture and engineering services for the redevelopment of the Railway Exchange Building. Under the contract, HH St. Louis was required to pay Cannon $3.65 million. Cannon began work on the project and completed the first two stages of the architectural and engineering process. This included producing multiple schematic designs for HH St. Louis. Cannon's work continued until June 28, 2018. Up to that point, some of Cannon's invoices went unpaid. After unsuccessfully attempting to resolve the nonpayment, Cannon filed a lien on the Railway Exchange Building on August 24, 2018, in the amount of $1,758,585.
Concrete Strategies hired Custom Construction on May 1, 2017 to provide materials to assist in supporting the garage while it was being repaired. After B&P Construction became the general contractor, Custom Construction began sending its invoices to B&P Construction. Some of the invoices were paid, but others were not. Due to the unpaid invoices, Custom Construction filed a lien against the Railway Exchange Building, garage, and surface parking lot in the amount of $47,186.22.
B&P Construction joined the Railway Exchange Building project in June 2017. Soon after, B&P Construction entered into a contract with HH St. Louis. B&P Construction began work on the Railway Exchange project in November 2017. Its main roles were cleaning up the garage and serving in an administrative role as the general contractor. In the administrative role, B&P Construction received and sent invoices from the subcontractors to HH St. Louis for payment. It sent these invoices to S.M., an authorized representative of HH St. Louis. HH St. Louis would send the funds to B&P Construction, which in turn would disburse the funds to the subcontractors. Eventually, some of Concrete Strategies's invoices went unpaid because HH St. Louis failed to pay B&P Construction and B&P Construction failed to pay Concrete Strategies. Because HH St. Louis failed to pay B&P Construction for four pay applications from Concrete Strategies, B&P Construction filed a cross-claim against HH St. Louis to recover damages for the amounts of the pay applications.
In December 2017, HH St. Louis retained Geotechnology to perform engineering work on the Railway Exchange Building. Specifically, Geotechnology would perform materials testing to provide data and analysis for the existing structure of the Railway Exchange Building. Geotechnology performed its work and submitted invoices to HH St. Louis for $45,066.13. HH St. Louis failed to pay the invoices. Due to the nonpayment of its invoices, Geotechnology filed a breach of contract cross-claim against HH St. Louis and a lien against the Railway Exchange Building.
In October 2018, Custom Construction filed suit against B&P Construction, HH St. Louis, and Gamma to enforce its lien against the Railway Exchange Building, garage, and surface parking lot. In February 2019, Cannon filed suit against HH St. Louis, Gamma, Custom Construction, B&P Construction Geotechnology, and Concrete Strategies to enforce its lien, among other things. In response, Geotechnology filed a counterclaim and cross-claim seeking enforcement of its lien and additionally filed a cross-claim against HH St. Louis for breach of contract. Concrete Strategies filed a cross-claim against all parties seeking enforcement of its liens, and a cross-claim against HH St. Louis for unjust enrichment. B&P Construction filed a cross-claim against HH St. Louis for breach of contract.
Gamma raised affirmative defenses alleging its deed of trust maintained priority over the mechanic's liens, and it had not waived the priority of its deed of trust. HH St. Louis raised affirmative defenses alleging the lien claimants failed to comply with the lien statute.
The trial court conducted a bench trial over four non-consecutive days. Following the close of all lien claimants' evidence, HH St. Louis moved for judgment against the lien claimants under Rule 73.01.[2] HH St. Louis argued neither Cannon nor Geotechnology proved they were registered with the Board for Architects, Professional Engineers, and Surveyors, or that they obtained a certificate of authority to practice in Missouri. In response, Cannon and Geotechnology moved to re-open evidence to offer further proof they were registered in Missouri and obtained certificates of authority. Over Gamma's opposition, the trial court re-opened evidence for the sole purpose of accepting Cannon's and Geotechnology's letters of registration.
The trial court entered judgment finding:
To continue reading
Request your trial