Grant Renne & Sons, Inc. v. J. E. Dunn Const. Co.

• Citation: 633 S.W.2d 166
• Decision Date: 23 March 1982
• Docket Number: No. WD,WD
• Court: Court of Appeal of Missouri (US)
• Parties: GRANT RENNE & SONS, INC., Plaintiff-Appellant, v. J. E. DUNN CONSTRUCTION COMPANY, Defendant-Respondent. 31856.

Page 166

633 S.W.2d 166

GRANT RENNE & SONS, INC., Plaintiff-Appellant, v. J. E. DUNN CONSTRUCTION COMPANY, Defendant-Respondent.

No. WD 31856.

Missouri Court of Appeals, Western District.

March 23, 1982.

Motion for Rehearing and/or Transfer to Supreme Court

Overruled and Denied May

4, 1982.

Application to Transfer Denied June 14, 1982.

Bart L. Strother, Morris & Faust, Kansas City, for plaintiff-appellant.

Duane J. Fox, William J. Burrell, Burrell, Seigfreid & Bingham, Kansas City, for defendant-respondent.

Before NUGENT, P. J., and TURNAGE and LOWENSTEIN, JJ.

TURNAGE, Judge.

Grant Renne & Sons, Inc. filed suit against J. E. Dunn Construction Company to recover $29,745 as the amount claimed to be due on a construction contract. Dunn asserted as a defense a release given by Renne. The jury found in favor of Renne for the amount claimed, but the court sustained Dunn's motion for judgment notwithstanding the verdict and entered judgment in favor of Dunn. ¹ On this appeal Renne contends the court erred in entering judgment notwithstanding the verdict because it had shown facts which proved the release was given under duress. Affirmed.

Dunn had a contract with Providence St. Margaret's Health Center in Kansas City Kansas, for the construction of a new hospital building. Dunn's contract called for the hospital to pay Dunn the cost of construction, as set out in the contract, plus 41/2% to cover Dunn's overhead costs. Dunn, in turn, entered into a subcontract with Renne by which Renne agreed to drill holes for the pouring of piers which would support the building. The plans called for the piers to go to specified depths. The holes to the depth specified in the plans were referred to as holes drilled "in plan." Holes which were drilled deeper than the plans called for were called holes "below plan."

The amount of the Renne contract was $30,865. Rock was encountered when the holes were drilled, both "in plan" and "below plan." Renne made a claim for extra compensation for removing rock both "below" and "in plan." The amount claimed for rock "below plan" was paid and no controversy surrounding that work is involved in this case. The claim made by Renne for the extra costs of removing rock "in plan" was referred to the architect, because the construction contract called for the architect to be the final arbitrator of any dispute concerning the interpretation of the contract. The architect decided that Renne's contract called for him to remove any material "in plan" of whatever nature and, therefore, Renne was not entitled to any extra compensation for the removal of rock. The question was also referred to Bevan McAnany, the attorney for the hospital, who gave the hospital a written opinion in which he concluded that the Renne claim for extra compensation for removing rock "in plan" should be denied.

In July, 1975, Renne retained Clem Fairchild as his attorney concerning his claim for extra compensation for rock. Portions of the deposition of Fairchild were read in evidence. He stated that he had represented a number of architects and contractors and knew that in this situation that Dunn would have to submit the question of Renne's claim to the hospital board of directors and that body would have to make the final decision. That was true, because under Dunn's contract, if the hospital did not agree to pay, then the only way Renne could be paid would be for Dunn to pay out of his own pocket.

The evidence revealed that Renne encountered serious financial difficulties in December, 1975, when the IRS made a demand for unpaid withholding taxes. Fairchild stated that when Renne encountered financial difficulties Dunn began advancing money to Renne to pay his payroll before the monthly progress reports were received by Dunn. After the demand from IRS, Renne's financial condition continued to worsen. Renne told the IRS of its claim against Dunn, which amounted to $72,244, and the IRS served a levy on Dunn for $41,589.52 as the amount due it.

In February, 1976, the IRS seized Renne's bank account which caused checks for payroll and materials to be returned. At that time Renne had no assets, very little in accounts due and its real estate loans were overdue. Renne had mortgaged his own home and put that money in the business, and all the business equipment was mortgaged so that Renne had no other source of funds to put into the business. The corporation was solely owned by Grant Renne. Renne testified that about this time the IRS threatened to padlock his business and liquidate all of his assets.

While Renne's financial conditions deteriorated, Dunn was trying to get the hospital to make some settlement of the Renne claim for rock. Mr. Dunn appeared at a hospital board of directors meeting in January, 1976, along with McAnany, and presented the matter to the board. The board requested McAnany to look into the matter and determine if the claim could be settled.

After that meeting, McAnany and Fairchild negotiated, with Fairchild reducing his demand from the $72,244 and McAnany making some offer in the $30,000 range.

In early March, 1976, Fairchild agreed to settle the claim for the amount of the IRS claim, plus Fairchild's attorney fee. As a result of this settlement, Renne executed a full release and settlement agreement by which he agreed to settle his claim for extra compensation for $42,500.

While the memories of McAnany, Dunn and Fairchild were somewhat dim as to exactly who negotiated the final settlement, a fair inference from the evidence would be that Fairchild had talked with both Dunn and McAnany and agreed to...