Gilmartin Bros., Inc. v. Kern

• Decision Date: 19 December 1995
• Docket Number: No. 67160,67160
• Citation: 916 S.W.2d 324
• Parties: GILMARTIN BROTHERS, INC., Plaintiff/Respondent, v. Fernando and Reynalda KERN, Defendants/Appellants.
• Court: Missouri Court of Appeals

Page 324

916 S.W.2d 324

GILMARTIN BROTHERS, INC., Plaintiff/Respondent, v. Fernando and Reynalda KERN, Defendants/Appellants.

No. 67160.

Missouri Court of Appeals,

Eastern District,

Division Three.

Dec. 19, 1995.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Feb. 20, 1996.

Application to Transfer Denied

March 26, 1996.

John A. Kilo, H. Clay Billingsley, Michael H. Izsak, St. Louis, for appellants.

James J. Sauter, St. Louis, for respondent.

RHODES RUSSELL, Judge.

Defendants Fernando and Reynalda Kern ("Kerns") appeal from a judgment in favor of Plaintiff Gilmartin Brothers, Inc. ("Gilmartin") in a court-tried action for breach of contract for construction of a residence and from a judgment in favor of Gilmartin on their counterclaim. We affirm.

The facts, viewed in the light most favorable to the result reached by the trial court, establish the following. Gilmartin was in the business of developing real estate and building and selling homes. On June 4, 1991, the Kerns, as husband and wife, entered into a new home sale contract with Gilmartin for the construction of a three bedroom home for a base price of $145,000.00. The Kerns paid $15,000.00 in earnest money.

Approximately two weeks after the contract was signed the parties became aware that the sewer line in the street had collapsed, making the sewer hookup impossible. The cost of the repair of $10,000.00 was divided equally between Gilmartin and the Kerns. The parties agreed to increase the base price of the contract to $150,000.00 to accommodate the change. The written contract was changed by hand and initialed by the parties. Before the contract was changed, Gilmartin advised the Kerns that they could renounce the contract if they so chose. The Kerns declined.

In August of that year, the Kerns decided to include certain upgrades and extras to the house, including the addition of a gas fireplace, crown molding, window grills, brick porches, a special front door and a Jaccuzi tub for the bath. The price for the upgrades and extras totaled $6,935.00, which was paid by the Kerns separate from the contract terms.

Then, in September of 1991, another problem arose. When the construction crew started construction and first broke ground they encountered rock. The crew continued the excavation but after two days they determined that to dig to the proposed depth of the basement would increase costs considerably. The general contractor, along with the Kerns, decided the chipping should stop and that the foundation should be poured at that depth, thereby raising the foundation of the house and thwarting their plans for a home with no stairs. At that point, the cost to chip the rock and pour the foundation at that depth increased the contract price by $7,000.00. The costs were explained to the Kerns and the parties agreed to increase the base price for the house to $157,000.00. The contract was marked accordingly and initialed by the parties.

Due to the problems with the sewer in the street and the rock during excavation, the general contractor was concerned it would run into rock in the street when putting in the sewer. The general contractor explained this to the Kerns and everyone agreed to go forward with the plans.

The plans were again modified while doing the inside work. At the request of the Kerns, the plans were changed to make the house have two bedrooms instead of three as originally planned. Gilmartin agreed to the change and proceeded to remove the interior wall between the two rooms.

In January of 1992, when the house was almost complete, the contractors were preparing to do the sewer work and make the lateral hookup. On January 7th, an additional work authorization was given to do the sewer work required by the Metropolitan Sewer District ("MSD"). This work totaled $4,217.00, which included charges for permits, increases due to the changes and rerouting of the sanitary right-of-way, the removal of an existing manhole and the construction of a new outside drop manhole. The crew doing this work also ran into rock. Therefore, on January 20th another work authorization was issued allowing a tractor with a hydraulic breaker to remove the rock at a cost of $95.00 per hour. The crew expended 80 hours of work for a total of $7,600.00. Thereafter, on January 29th, another work authorization was given to the sewer company to cut the asphalt and excavate for the water service, break the rock, backfill with limestone, repair the pavement and construct an additional outside drop and new manhole with encasements, all as required by MSD. This work was $2,270.00. In addition, the bill to complete the project included $800.00 for rock fill and hauling for the lateral hookup and $800.00 for extra rock for coverage of the main. The sum total for this work was $15,687.00.

During the month of January the Kerns were notified of problems as they arose. In fact, the Kerns were at the construction site on average three or four times a week throughout the construction. The Kerns knew there would be additional costs to remedy the problem with the sewer and remove the rock found at the site. At the time the work authorizations were made, it was impossible to itemize the cost or predict what the total would be because the total cost depended on the number of hours worked, which depended on the amount of rock encountered.

As the home was completed the Kerns prepared for the move. They applied for occupancy and water permits, acquired insurance, put down money for deposits, and even started to receive mail at the new home. The Kerns also moved a chandelier from their old home and affixed it to the dining room in the new home.

On February 13, 1992, Gilmartin was informed by the sewer company of the final amount due for the work done in January. On that same day Gilmartin made out an itemized list of extras for the house, totaling $20,971.00. Included in that total was $15,687.00 for "extra sewer & rock" for the work performed in January. Also included on the list were the following items: fireplace marble and mantel for $318.00, electrical extras for $2,300.00, chair rail for breakfast room for $50.00, extra crown molding for $325.00, horseshoe driveway for $800.00, tie wall for $900.00, and porch rails for $591.00. The list was given to the Kerns in mid-February. The exact date of delivery was disputed. Upon reviewing the list the Kerns requested a copy of the complete sewer bill. Gilmartin and the general contractor hand delivered the bill to the Kerns on either February 14th or 19th. Again, the actual date of delivery was subject to dispute among the parties.

On February 25, 1992, Gilmartin received a letter, by courier, from Henry M. Miller, an attorney. The Kerns had sought advice from Miller concerning the construction and purchase of the house. In the letter, Miller notified Gilmartin that the Kerns wished to rescind the contract and to recover all monies paid. The parties had been set to close pursuant to the contract two days later on February 27, 1992.

Upon receipt of the letter, Gilmartin signed a listing agreement with Laura McCarthy, Inc., a real estate broker, to sell the house. On August 20, 1992, the two bedroom house was sold for $139,650.00, for a net sale price of $130,920.16.

Gilmartin thereafter filed suit against the Kerns for breach of contract asserting they improperly repudiated the contract. ¹ The Kerns counterclaimed for rescission of the contract and the return of the earnest money plus damages, for misrepresentation and for breach of contract. The trial court issued its ruling without specific findings of fact and conclusions of law. The court rendered judgment in Gilmartin's favor on its contract claim and awarded $53,339.16 in damages. ² All charges contained in the counterclaim were disposed of in favor of Gilmartin.

The standard of review in a court-tried case is governed by the principles enunciated in Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). We will sustain the judgment of the trial court unless it is not supported by substantial evidence, unless it is against the weight of the evidence, or unless it erroneously declares or applies the law. Id. at 32. In reviewing court-tried matters, the appellate courts give due deference to the trial court and its unique ability to judge the credibility of the witnesses. Trapp v. Barley, 897 S.W.2d 159, 164 (Mo.App.1995). We must uphold the judgment of the trial court if the result was correct on any tenable basis. Id.

In their point one, the Kerns challenge the judgment in Gilmartin's favor on the breach of contract claim. The Kerns argue the court's order is against the weight of the evidence and contrary to the law. We note at the outset that this court is to exercise its power to set aside a judgment on the ground it is against the weight of the evidence with caution and with a firm belief that the judgment is wrong. Murphy v. Carron, 536 S.W.2d at 32.

The relevant contract provisions read in pertinent part:

4. In the event rock is encountered upon excavating, or in the event of increased costs after the approval of this Contract by Seller, Seller shall have the option to increase the sale price, which Seller shall exercise by notifying Purchasers by certified mail of the amount of such increase. Purchasers shall within ten (10) days thereafter, have the option to pay such increase or to cancel this Sale Contract, in which latter event the earnest deposit (and any other sums paid by Purchasers to Seller hereunder) shall be returned and both parties shall thereupon be relieved of all obligations hereunder. Purchasers' failure to elect (by written notice to Seller by certified mail) to cancel this Sale Contract shall be deemed acquiescence by Purchasers to payment of such increase.

....

16. The entire and whole agreement between the parties is contained in the Sale Contract and Addendum if attached hereto, and there are and shall be no additions, amemdments ...