Hadley v. Burton

• Decision Date: 30 September 2008
• Docket Number: No. 28420.,No. 28405.,28405.,28420.
• Citation: 265 S.W.3d 361
• Parties: Joe Dean HADLEY, d/b/a Hadley Builders, Plaintiff-Appellant/Cross-Respondent, v. Shawn BURTON and De'Ann Burton, Defendants-Respondents/Cross-Appellants.
• Court: Missouri Court of Appeals

265 S.W.3d 361

Joe Dean HADLEY, d/b/a Hadley Builders, Plaintiff-Appellant/Cross-Respondent, v. Shawn BURTON and De'Ann Burton, Defendants-Respondents/Cross-Appellants.

No. 28405.

No. 28420.

Missouri Court of Appeals, Southern District, Division One.

September 30, 2008.

Kevin M. Fitzgerald, Springfield, MO, for appellants.

Stuart H. King, Springfield, MO, for respondents.

JEFFREY W. BATES, Judge.

Joe Dean Hadley, d/b/a Hadley Builders (Hadley) filed a two-count amended petition against homeowners Shawn and De'Ann Burton (collectively, the Burtons) for: (1) perfection of a mechanic's lien; and (2) breach of a construction contract (the contract). In the contract, the Burtons agreed to pay attorney's fees for enforcement and 10% interest on unpaid balances. The Burtons filed a counterclaim that included a count for breach of contract.

A jury found in Hadley's favor on the mechanic's lien and awarded him $85,000. On the breach of contract count, however, the jury determined that Hadley had sustained zero damages, even though the jury purported to find in Hadley's favor on that count. The jury found against the Burtons on their breach of contract count. After trial, the court denied Hadley's request for attorney's fees and a 10% rate of post-judgment interest. Instead, the judgment awarded Hadley $85,000 with post-judgment interest at the statutory rate of 9%. See § 408.040.1.¹

Both Hadley and the Burtons have appealed from the judgment. Hadley contends the trial court erred by denying his request for attorney's fees and setting the rate of post-judgment interest at 9%. The Burtons present three points on appeal. First, they contend the trial court erred by denying the Burtons' motion for directed verdict at the close of all evidence because Hadley failed to submit substantial evidence of a "just and true account" of the claim as required by § 429.080. Second, they contend the court erred in giving Instruction No. 7 because it failed to follow substantive law on mechanic's liens in two respects. Third, they contend the court erred in granting partial summary judgment, denying a motion for judgment notwithstanding the verdict (JNOV) and allowing Hadley to amend the property description after trial because he did not comply with the requirement that the mechanic's lien include "a true description of the property." Finding no merit in any the parties' various contentions, the judgment is affirmed in all respects.

I. Factual and Procedural History

On November 30, 2002, the Burtons and Hadley entered into the contract hiring Hadley to be the general contractor for construction of the Burtons' new home in Barry County, Missouri. Shawn Burton is a physical therapy assistant with construction experience, but he is not a general contractor. De'Ann Burton is an occupational therapist and program coordinator with some bookkeeping experience. The Burtons spent about five years working on the plans for construction of their new home and at least a year interviewing general contractors. They eventually decided on Hadley, who had 26 years of experience building mostly custom homes.

The Burtons and Hadley signed a written contract in which the Burtons agreed to pay the "net cost to [Hadley] of all expenses, plus 10% of said amount as commission for [Hadley]." The net cost was defined as "the actual cost for any and all expenses associated with this project." Thus, the Burtons agreed to pay actual cost plus commission directly to Hadley, who would pay his suppliers, subcontractors, and workers. The contract further required the Burtons to pay Hadley "Progress Payments to the Sum of $250,782.40 Estimated Cost." Payments were to be made to Hadley at thirty-day intervals, and any amount remaining unpaid after thirty days would accrue interest at the rate of 10%. In the event of enforcement or collection of the contract, the Burtons were to pay Hadley "all costs and expenses for such enforcement and/or collection, including reasonable attorney fees."

The parties arrived at the total estimated cost of $250,782.40 pursuant to a "Cost Estimate & Analysis" (the estimate) attached to the contract. The estimate was divided into three columns. The first column described the items to be included in the home. The middle column was Hadley's cost estimate for the items, and the third column, under the heading "Sub-Contractor," consisted of a list of items the Burtons had already done or were going to do themselves. Hadley agreed not to take a fee on any items contained in the third column, and a notation of "No %" was placed in the column. Hadley's fee was to be calculated based upon the payments for items in the second column, and the Burtons understood this. Before executing the contract, Hadley and the Burtons went through the estimate in detail at least twice.

On February 11, 2003, Hadley submitted his first request for payment (draw request) in the amount of $20,224.62. The draw request included a summary of items and backup documentation of bills and invoices associated with each item listed in the summary. Labor charges came from time sheets that were available for review by the Burtons. Hadley submitted the draw request to De'Ann Burton. She reviewed the documents, approved them and prepared a payout authorization to Fidelity Title Company (Fidelity). Fidelity handled all of the disbursements for the Burtons. The amount of Hadley's first draw request was paid the next day. On February 22, 2003, Hadley submitted his second draw request for $9,338.98, and that amount was similarly approved and paid about ten days later. This second draw request, as well as all subsequent ones, was prepared in the same manner and with the same supporting documentation as the first one.

Kay Concrete was one of Hadley's suppliers for the Burton job, and the cost estimate for this work was included in the second column of the contract. In early March 2003, Hadley went to Kay Concrete to pay his bill for materials used in the construction of the Burtons' home. If Hadley paid early, he received an "early pay" discount. Hadley discovered that the Burtons had already paid this bill directly. Hadley learned that the Burtons had made a similar direct payment to Meeks, another of Hadley's suppliers for the Burtons' home construction job. The Burtons had learned about the early pay discount from Fidelity and requested funds to pay Kay Concrete and Meeks directly. Hadley told the Burtons that the early pay discount belonged to the contractor, and he insisted that the money paid to Kay Concrete and Meeks be refunded. The Burtons complied. The payments were returned, and the funds were re-issued to Hadley in accordance with the contract. Hadley was paid his 10% commission on these items.

After this occurred, the Burtons consulted with an attorney. He advised the Burtons that, before they authorized any further draw requests, Hadley should be required to sign a "Reservation of Rights Acknowledgment" (the acknowledgment). In relevant part, this document stated:

[T]his Acknowledgement constitutes the entire understanding among the parties so far as reservation of rights and non-waiver by payment and supercedes [sic] all prior agreements or acknowledgements of the same between the parties. This Agreement arises under and is to be construed in accordance with Missouri law, the parties hereby expressly agreeing that Greene County, Missouri shall hold the only appropriate venue for resolution of any dispute arising from this agreement and that the prevailing party shall be entitled to reasonable attorney's fees and costs.

The acknowledgment provisions relating to non-waiver by payment, Greene County venue and potential recovery of attorney's fees by the Burtons if they prevailed in a later dispute were new terms favorable to them that had not been included in the original contract.

On March 29, 2003, Hadley submitted his third draw request in the amount of $34,506.25. The Burtons reviewed the request and offered to pay that amount in full, but only if Hadley signed the acknowledgment. Hadley refused to do so because that document changed the terms of their contract. The Burtons did not pay the third draw request. In the meantime, the scheduled work continued. The last supplies delivered to the Burtons' home were incorporated into the project on April 15, 2003.

On April 26, 2003, Hadley submitted his fourth draw request in the amount of $32,717.26. Once again, the Burtons offered to pay that amount, but only if Hadley signed the acknowledgment. Hadley refused to do so. The Burtons did not pay the fourth draw request either. Hadley used his own funds to pay the subcontractors, suppliers and workers who provided the materials and labor included in the third and fourth draw requests. Hadley was not reimbursed by the Burtons for these payments. In early May 2003, Hadley filed a mechanic's lien statement with the Barry County Circuit Clerk, and he retained the services of an attorney to enforce the contract.

In July 2003, Hadley filed suit against the Burtons. As later amended, the petition included one count to enforce a mechanic's lien and another count for breach of contract. The Burtons filed an answer and a counterclaim containing counts for (1) breach of contract; (2) breach of implied warranty of habitability; (3) voidance of the mechanic's lien; (4) slander of title; and (5) slander. During discovery, Hadley propounded an interrogatory which the Burtons answered as follows:

31. Do you allege that the mechanic's lien filed by Joe Dean Hadley does not comply with the requirements of Missouri law for the filing and perfection of a mechanic's lien and, if so, identify each alleged defect in the lien.

ANSWER

Shawn and DeAnn Burton

Missouri law requires a true and fair accounting of the debts owed. The numbers advanced by the Plaintiff are incorrect and thereby not a true and fair accounting of the debt owed.

In April 2005, Hadley moved for summary...