Herbert & Brooner Const. Co. v. Golden

Decision Date04 September 1973
Docket NumberNos. KCD26146,KCD26151,s. KCD26146
Citation499 S.W.2d 541
PartiesHERBERT & BROONER CONSTRUCTION CO., Appellant, v. Donald GOLDEN et al., Respondents. Herbert & Brooner Construction Co., Respondent, v. Donald Golden, Appellant.
CourtMissouri Court of Appeals

Brown, Douglas & Brown, Wendell E. Koerner, Jr., St. Joseph, for respondent-appellant.

Kranitz & Kranitz, Theodore M. Kranitz, St. Joseph, for appellant-respondent.

Before WASSERSTROM, P.J., and SHANGLER and SWOFFORD, JJ.

SHANGLER, Judge.

Plaintiff Herbert & Brooner Construction Company, Inc., brought an action to enforce a mechanic's lien upon land and improvements owned by defendant Golden and to impress the lien with priority over the first deed of trust of defendant New England Mutual Life Insurance Company and the second deed of trust of defendant Metcalf State Bank. Defendant Golden counterclaimed for damages from delay in construction and defective work. The court awarded $33,916.77 on the petition and $5,799.40 on the counterclaim--less than the full monetary relief sought by either--and accordingly entered judgment for plaintiff for $28,117.37, but denied judgment of special lien. Only plaintiff construction company and defendant Golden have appealed.

The defendant Golden, owner of the Hillcrest Shopping Center in St. Joseph, Missouri, invited bids for the construction of two shops and a theater complex. On February 14, 1969, plaintiff construction company submitted a proposal for the project at a cost of $390,986.00 for completion within 250 days after contract date. Plaintiff was selected as the general contractor in April of 1969, but the Contract for Construction was not formally executed until May of 1969, after changes in the plans and specifications had reduced the cost of construction to $352,212.77, a level acceptable to Golden and to Durwood-American, Inc., the theater-tenant surcharged by the lease for excessive construction costs. One formal change was made during construction which increased the cost by $550.00. Plaintiff had actually begun work on the project about a month before the contract date of May 20, 1969, under a letter of promise from defendant Golden that plaintiff had been awarded the contract. The letter stated also that a written contract was in preparation which would provide that construction be completed within five months of April 18, 1969.

As finally executed, the contract specified September 15, 1969 as the completion date. The contract authorized changes in work only by written work order signed by the owner and architect and provided for extension of the contract time by written claim submitted to the architect. No request for extension of time was made during the construction of the project. The writing also included as a contract document the original bid by plaintiff Herbert & Brooner which called for completion within 250 days after contract date.

As each phase of construction was completed Herbert & Brooner submitted a certificate for payment to the architect who approved payment and forwarded the certificate to Golden for his approval and payment. Each certificate of payment was accompanied by a Waiver and Release of Lien executed by Herbert & Brooner and which recited as condition subsequent that the waiver would be without effect if payment for the work was not made. Golden paid every certificate approved by the architect except the last two which totaled $33,916.77 and which represented the 10% retainage and final payment. Golden conceded he owed the amount but that he withheld payment because of his own claim for recoupment of damages caused by Herbert & Brooner's defective work and delay in performance. Payment for two items of extra work was also in dispute. The plans and specifications had incorrectly located a water main. Additional expense became necessary to extend the water main from its actual location to the new building. A change order in the amount of $1,247.00 was prepared by the architect, signed by the contractor, but not by Golden. The work was nevertheless done by the contractor and Golden admits that if he is found to owe for the work on the main, the figure stated is a fair one. Herbert & Brooner made changes also, without approval by Golden by formal change, order, in the structural supports of air conditioners and claims $960.00 for this extra work.

Construction was not substantially completed until the first week of December, 1969, well after the contract date of September 15, 1969. The theater-tenant, Durwood, took possession sometime in November under a lease provision that upon substantial completion of the construction of the theater premises Durwood would have 60 days to install furnishings and fixtures without rental obligation. Durwood commenced paying rent to Golden on December 25, 1969.

Golden financed his interim construction loan of $325,000.00 through General Savings & Loan Association. The loan agreement and deed of trust were dated June 19, 1969. Golden's permanent loan was financed by New England Mutual Life Insurance Company and Metcalf State Bank of Overland Park, Kansas. New England's loan of $275,000.00 was secured by a first deed of trust and Metcalf State Bank's loan of $50,000.00 was secured by a second deed of trust. On December 11, 1969, these end loans were closed and the interim loan of General Savings repaid.

The mechanic's lien of Herbert & Brooner was perfected in conformance with statute and suit to enforce the lien was timely filed. The petition sought judgment against Golden for $36,123.77 with interest. This claim consisted of $33,916.77 admittedly owed on the two unpaid certificates of payment, $1,247.00 for the installation of the water main not required by the original contract and $960.00 for modification of the structural supports of the air conditioners. The petition also sought the enforcement of a special lien upon the property and a declaration that such lien was prior to the deeds of trust arising out of the permanent financing. In their separate answers, Golden and New England pleaded waiver and release of lien by Herbert & Brooner. Golden also counterclaimed for breach of contract for the delay of completion beyond September 15, 1969. He claimed as damages loss of rental income from Durwood, payment of additional interest on the construction loan, the fee for the extension of the loan, and further counterclaimed for breach of warranty of quality of construction.

In rendering judgment, the court found that the two provisions for completion date in the integrated contract were conflicting but that the September 15, 1969 date must control. The court further found, however, that Golden anticipated the delay in completion from the beginning and actually expected completion around November 1, 1969. Accordingly, the court denied Golden's claims for damages between September 15 and November 1, 1969. Defendant Golden was awarded damages of $3,250.00 for the fee for extension of the construction loan from November 1 to December 15, 1969 and for interest of $2,549.40 paid on that loan between those dates. Golden's claim for lost rentals was denied as was his claim for damages from defective construction. Plaintiff's claim for additional work was denied because not done in accordance with the change order procedure of the contract. Judgment was entered for plaintiff for $28,117.37 but the enforcement of special lien and declaration of its priority over the existing deeds of trust sought by plaintiff were denied by the court.

The lien of the mechanic or materialman is a remedy in the nature of a charge on the land given by statute to secure a priority of payment for the performance of labor or the supply of material to buildings or other improvements to be enforced against the particular property in which they have become incorporated. §§ 429.010 through 429.060, RSMo 1969, V.A.M.S., Phillips on Mechanics' Liens, p. 16. The lien is exclusively a creature of statute and the right to enforce it derives solely from legislative enactment. Fleming-Gilchrist Constr. Co. v. McGonicgle, 338 Mo. 56, 89 S.W.2d 15, 18(2) (1935). 'Our lien statutes are based on and justified by the principle that those who have contributed labor or material to the improvement of property are entitled to look to the property for compensation.' Putnam v. Heathman, 367 S.W.2d 823, 828(2) (Mo.App.1963). And where the mechanic builds a new building, § 429.050, RSMo 1969 charges the construction with his lien and favors such lien with absolute priority over existing encumbrances. Trout's Investments, Inc. v. Davis, 482 S.W.2d 510, 515(3) (1972); Haeussler v. Thomas, 4 Mo.App. 463, 467 (1877). A claim of lien as well as the preference accorded the lien by statute may be waived, but the intention to do so must be clearly manifested. Lee v. Hassett, 39 Mo.App. 67, 71 (1889); Langdon v. Kleeman, 278 Mo. 236, 211 S.W. 877, 878(2, 3) (1919). To be valid a lien waiver must be supported by consideration or have induced a detrimental change of position in reliance upon such waiver. Giammarino v. J. W. Caldewey Constr. Co., 72 S.W.2d 159, 160(1--3) (Mo.App.1934); St. Louis Flexicore, Inc. v. Lintzenich 414 S.W.2d 787, 790(1) (Mo.App.1967); 57 C.J.S. Mechanics' Liens § 224 p. 795.

The trial court denied Herbert & Brooner judgment for a special lien upon the improvements and real property of defendant Golden on the ground that plaintiff had waived claim to its statutory lien and defendants New England Mutual Life Insurance Company and Metcalf State Bank had changed their positions in reliance on the lien waiver. Plaintiff Herbert & Brooner does not deny execution of waiver of lien on December 3, 1969, but contends that the purported waiver was invalid for want of consideration, and thus its right to assert the lien remained as unimpaired as if the waiver had never been executed. The evidence was that as a condition to the disbursement of the permanent loan...

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