Envirotech, Inc. v. Thomas

• Decision Date: 15 July 2008
• Docket Number: No. ED 89087.,ED 89087.
• Citation: 259 S.W.3d 577
• Parties: ENVIROTECH, INC., Appellant, v. Donald THOMAS, Claudia Thomas, Thomas Industrial Coatings, Inc., Thomas Equipment & Management Company, Riverfront Industrial Coatins, Inc., George Johnson, William Johnson, St. Louis Bridge Company and Thomas Industrial Coatings, LLC, St. Louis Bridge Construction Company, G.M. Johnson Companies, Inc., and SLBC, LLC, Respondents.
• Court: Missouri Court of Appeals

259 S.W.3d 577

ENVIROTECH, INC., Appellant, v. Donald THOMAS, Claudia Thomas, Thomas Industrial Coatings, Inc., Thomas Equipment & Management Company, Riverfront Industrial Coatins, Inc., George Johnson, William Johnson, St. Louis Bridge Company and Thomas Industrial Coatings, LLC, St. Louis Bridge Construction Company, G.M. Johnson Companies, Inc., and SLBC, LLC, Respondents.

No. ED 89087.

Missouri Court of Appeals, Eastern District, Division Two.

July 15, 2008.

John Davidson, St. Louis, MO, for appellant.

Sarah Rodeman, Michael McAvoy, Roger Pecha, Reiad Khouri, Mark Menghini, St. Louis, MO, for respondent.

NANNETTE A. BAKER, Judge.

Introduction

Envirotech Inc. ("Envirotech") appeals the dismissal of its Second Amended Petition in the Circuit Court of Jefferson County. The trial court dismissed the petition with prejudice finding that Envirotech had "alleged no causal connection between any actions by the Defendant [sic] and any alleged damages suffered by the Plaintiff." On appeal, Envirotech contends that it did allege a causal connection between the actions of the Defendants and its damages. We reverse and remand.

Factual and Procedural Background

On June 13, 2006, Envirotech filed a four-count Second Amended Petition against Defendants.¹ Envirotech's Second Amended Petition was more than 60 pages long,² with 80 pages of exhibits. In summary,³ the petition alleged that:

To obtain the award of a $5.4 million Missouri Department of Transportation project, ("the Highway Project")⁴ Defendants conspired to defraud the Missouri Department of Transportation. The Department of Transportation gives preferential treatment to bids involving certain businesses, known as "disadvantaged business enterprises." DKW Enterprises, which is not a party to this action, was a "disadvantaged business enterprise" for Department of Transportation bidding purposes.

St. Louis Bridge Company⁵ bid on the Highway Project and included DKW in its bid as a subcontractor. The contact was awarded to St. Louis Bridge. However, DKW never performed any work on the project. The work that DKW was contracted to perform was actually performed by TIC.⁶ TIC was not a "disadvantaged business enterprise." In an attempt to hide TIC's work on the project, employees obscured TIC logos on their trucks and otherwise represented themselves as DKW employees throughout the project.⁷

Meanwhile, DKW was the general contractor on a project at the St. Louis Renaissance Hotel ("the Hotel Project"). DKW hired Envirotech as its sole subcontractor to do interior demolition on the Hotel Project. During the time Envirotech worked on the Hotel Project, the work schedule was accelerated and DKW otherwise made it difficult for Envirotech to perform its duties. DKW withheld payment from Envirotech.

Envirotech substantially completed its work under the contract. DKW certified that Envirotech's work was 95% complete on March 12, 2001, and projected the completion date as March 20, 2001. However, Defendants induced DKW to force Envirotech to be unable to perform. DKW failed to provide Envirotech with water to complete the work. DKW also demanded that Envirotech work on holidays and weekends and DKW accelerated Envirotech's work schedule, increasing Envirotech's costs. Because of DKW's actions, induced by Defendants, Envirotech did not complete the work on March 20, 2001.

On April 2, 2001, DKW terminated Envirotech. DKW did not properly give Envirotech termination notice as set out in the contract. DKW also withheld a $2.3 million payment and hired TIC to finish the job. DKW then falsely accused Envirotech of defaulting on the subcontract and made a false claim on Envirotech's surety, causing the surety to stop issuing bonds for Envirotech on new projects.

Envirotech alleged that Defendants instigated this scheme in order to funnel money to TIC. Although DKW was being paid for work on the Highway Project, TIC actually performed the work. Defendants could not directly pay TIC for its work on the Highway Project, because that would leave a "paper trial" that could be followed by state or federal investigators. Thus, the Defendants induced DKW to hire Envirotech to substantially complete the work on the Hotel Project, then terminated Envirotech and hired TIC. DKW overpaid TIC for its work on the Hotel Project, thereby untraceably compensating TIC for its work on the Highway Project. DKW also converted Envirotech's tools and supplies from the Hotel Project for TIC's use on the Hotel Project.

Envirotech's petition was based on the foregoing allegations. More specifically, the petition (incorporating all above facts) alleged in Count One, titled "Combination to Injure or Destroy Envirotech's Business," that the Defendants conspired with DKW "to injure or destroy Envirotech's business." Envirotech alleged that on December 9, 2000 it was hired by DKW to do demolition work on the Hotel Project, and the agreement was embodied in a written contract on January 3, 2001. However, DKW never intended to be bound by the contract because it had agreed with Defendants to wrongfully terminate Envirotech and replace Envirotech with TIC. In paragraphs 144-149, Envirotech specifically alleged:

knowing that...DKW had hired Envirotech to perform millions of dollars in interior demolition, lead and asbestos abatement work at the Gateway Renaissance Hotel, Defendants herein caused and induced DKW to terminate and stop paying Envirotech for the reasonable value of such services on and after April 2, 2001, without lawful justification or excuse. In furtherance of the conspiracy, after April 2, 2001, DKW refused to pay any of the amounts due to Envirotech for the reasonable value of Envirotech's work...terminating Envirotech in the manner in which DKW acted and then notifying Envirotech's bonding company, the Defendants intended to cause such damage [to] Envirotech that Envirotech would fail as a business and because of such failure be unable to discover the reason for its termination— so that DKW could hire TIC and launder the proceeds for the [Highway] Project, through overpayments for TIC's work on the [Hotel Project] project...

In the second count, titled "Interference with Prospective Advantage," Envirotech alleged that DKW created a valid business expectancy when it hired Envirotech. Envirotech substantially completed the work, but Defendants caused and induced DKW to terminate Envirotech on April 2, 2001, without lawful justification or excuse, so that DKW could hire TIC to replace Envirotech. Defendants further induced DKW to refuse to pay Envirotech for the work it had already performed.

In Count Three, Envirotech alleged "Conspiracy to Breach and Tortious Interference with Contract." Envirotech included specific contents of the December 9, 2000, contract and specific instances of breach by DKW. One such allegation is that DKW forced Envirotech to work more than eight hours per day, on Saturdays and on Sundays, but refused to compensate Envirotech for overtime. However, within days of terminating Envirotech, TIC began working at the site and was paid "overtime rates." Envirotech contends that the motivation for such breaches of the contract was an attempt to force Envirotech to "fail" so that DKW could hire TIC. Envirotech alleged that DKW's actions were induced by Defendants.

In its fourth count, Envirotech alleged "Conspiracy to Breach and Tortuous Interference with Contract" "in the alternative to Counts 1, 2, and 3." In this count Envirotech alleged breach of a September 18, 1999, contract between Envirotech and DKW. Envirotech alleged that it performed all work associated with the contract by March 2000, but DKW did not pay Envirotech for such work. Envirotech alleged that Defendants induced DKW to refuse to pay Envirotech "so as to help create a cover story so that DKW could hire TIC" and launder the proceeds of the Highway Project.

Also in the petition, although not in a separately numbered count, Envirotech alleged:

At the time DKW terminated Envirotech, DKW seized tools, equipment, and supplies of Envirotech which were on the Gateway job site, converting such to the use of DKW and TIC. Although Envirotech demanded a return of its tools, equipment and supplies, DKW or TIC or both used Envirotech's wrongfully seized tools, equipment and materials during TIC's work on the Gateway Renaissance Hotel.

After Envirotech filed its Second Amended Petition, Defendants filed motions to dismiss. St. Louis Bridge argued, inter alia, that the Second Amended Petition failed to prove a proximate cause "between [Envirotech's] alleged contract damages and the St. Louis Bridge Defendant's alleged conspiratorial acts on a project wholly unrelated to Plaintiff's project." TIC argued, inter alia, in its motion that Envirotech's petition failed to state a claim because "Plaintiff has alleged no theory of causation which can be attributed to the conduct of the Thomas Defendants." It also alleged that Envirotech commingled causes of action within the petition.

The court heard the motions on November 15, 2006 and dismissed Envirotech's Second Amended Petition with prejudice, stating only "The plaintiff has alleged no causal connection between any actions by the Defendant [sic] and any alleged damages suffered by the Plaintiff."

Envirotech appealed. On appeal, Envirotech claims that the trial court erred in dismissing its Second Amended Petition on the grounds that it alleged no causal connection because (a) Envirotech did plead that it was damaged by one or more unlawful acts of a co-conspirator, done in furtherance of the conspiracy and the acts of one conspirator are the acts of all conspirators, for which all parties to the conspiracy are jointly and severally liable; and (b) Envirotech pleaded all five elements of a civil tort conspiracy. In its second point, Envirotech argues that the trial court erred in dismissing its petition on the grounds that it alleged no causal connection...