Hernandez v. Westoak Realty & Inv., Inc.

• Decision Date: 30 May 1989
• Docket Number: No. 53922,53922
• Citation: 771 S.W.2d 876
• Parties: Guadalupe HERNANDEZ and Wilma Hernandez, his wife, Plaintiffs/Appellants, v. WESTOAK REALTY & INVESTMENT, INC., Defendant/Respondent. Guadalupe HERNANDEZ and Wilma Hernandez, his wife, Plaintiffs/Respondents, and Cross-Appellants, v. CUSTOM BUILDERS CORPORATION, Defendant/Appellant, and Cross-Respondent.
• Court: Missouri Court of Appeals

Page 876

771 S.W.2d 876

Guadalupe HERNANDEZ and Wilma Hernandez, his wife, Plaintiffs/Appellants, v. WESTOAK REALTY & INVESTMENT, INC., Defendant/Respondent.

Guadalupe HERNANDEZ and Wilma Hernandez, his wife, Plaintiffs/Respondents, and Cross-Appellants, v. CUSTOM BUILDERS CORPORATION, Defendant/Appellant, and Cross-Respondent.

No. 53922.

Missouri Court of Appeals,

Eastern District,

Division Four.

May 30, 1989.

Clinton B. Roberts, Geoffrey L. Pratte, Farmington, for Guadalupe and Wilma Hernandez.

David L. Colson, Thomas L. Ray, Jr., Farmington, for Westoak & Custom Builders.

SATZ, Judge.

Seventeen years ago, plaintiffs, Guadalupe and Wilma Hernandez (Hernandezes), contracted with defendant Custom Builders Corporation (Custom Builders) for Custom Builders to build the Hernandezes the "shell of a home". The Hernandezes financed the construction loan for the shell by executing a promissory note to defendant Westoak Realty and Investment, Inc. (Westoak), secured by a deed of trust on the land on which the shell was to be built. These transactions spawned litigation which has continued until today and includes three prior trips to this Court, Hernandez v. Westoak Realty & Inv., Inc., 549 S.W.2d 906 (Mo.App.1977) (Hernandez I); Hernandez v. Westoak Realty & Inv., Inc., 585 S.W.2d 548 (Mo.App.1979) (Hernandez II); Westoak Realty & Inv., Inc. v. Hernandez, 682 S.W.2d 120 (Mo.App.1984) (Hernandez III).

The present appeal is the consolidation of three appeals taken from two cases which were tried as a consolidated case below. The two cases tried were the Hernandezes' suit against Custom Builders for damages and their suit against Westoak for a declaratory judgment that any action on the deed of trust is barred, and for a cancellation of the note and a release of the lien. After a jury waived trial, the court awarded the Hernandezes damages and prejudgment interest against Custom Builders in the former suit and entered judgment in favor of Westoak in the latter suit. Both Custom Builders and the Hernandezes appeal from the damages award, and the Hernandezes appeal from the judgment in favor of Westoak. We reverse in part and affirm as modified.

The Hernandezes purchased land in Ste. Genevieve County in 1969. In 1972, they contracted with Custom Builders to build a shell of a house on the land. The Hernandezes were to act as their own general contractor and were responsible for the excavation, foundation and "finishing work" on the house. The price for construction as specifically expressed in the contract was $12,498. Custom Builders' work was to be done in the "best workmanlike manner." The Hernandezes were away from the area for three weeks just after the contract was signed. When they returned they found the excavation done and the foundation poured. This work was done without their authorization.

Custom Builders, however, proceeded to erect a shell on the foundation. Construction stopped sometime in August 1972. Apparently, most of the shell was then in place. According to Mr. Hernandez, defects in the construction made the house uninhabitable. Mr. Hernandez along with the Hernandezes' then attorney met two of Custom Builders' "representatives" ¹ at the site to discuss the defects. After that meeting, the Hernandezes signed a voucher authorizing Westoak to pay Custom Builders $11,898 from the Hernandezes' construction loan. ²

The Hernandezes remained dissatisfied with Custom Builders' work. They sued Custom Builders in two counts. The theory of Count II was a breach of implied warranty of habitability. The court found for Custom Builders on that count and the Hernandezes do not appeal from that.

At trial, Mr. Hernandez testified that the defective construction of the shell caused him to incur expenses for rental of a house to live in, for appraisals and estimates of the costs of repairing the shell and for the cost of tearing down the shell. The court entered a judgment of $12,398.00 and prejudgment interest in favor of the Hernandezes on Count I. The exact theory of Count I is in issue in this appeal.

Custom Builders' Appeal of the Damages Award

Custom Builders attacks this judgment for damages in favor of the Hernandezes on four grounds. Two have merit.

Custom Builders argues the proper theory of a home buyer for recovery caused by defective construction sounds in contract, not tort. The Hernandezes' theory in Count I of their petition, Custom Builders argues, sounds in negligence, not contract; therefore, Custom Builders argue, the Hernandezes failed to state a claim upon which relief can be granted. We disagree.

Custom Builders may, as it does, raise this issue for the first time on appeal. Rule 55.27(g)(2); Commercial Bank of St. Louis County v. James, 658 S.W.2d 17, 21 (Mo. banc 1983). Custom Builders, however, reads the Hernandezes' allegations too narrowly. The Hernandezes allege the existence of the contract requiring Custom Builders to do the the carpentry work "in the best workmanlike manner" and also allege specific defects which reflect the "unworkmanlike manner" in which the "construction work" was done. However, in addition, the Hernandezes allege several types of specific damages, each allegedly caused by "the negligent and defective construction of the house by ... Custom Builders...." It is the use of the term "negligence" and its juxtaposition with "defective construction" which leads Custom Builders to read the allegations as sounding in tort. We read the allegations differently.

The Hernandezes' allegations may not be a model of precision. However, they can be understood. We read them liberally but reasonably. See, e.g., U.S. Suzuki Motor Corp. v. Johnson, 673 S.W.2d 105, 106 (Mo.App.1984). Rather than stating a claim in tort, they simply reflect the legal mind's long, lasting love affair with redundancy. As used, the term "negligence" is just another way of saying "defective construction." The basis of the allegations is still Custom Builders' "unworkmanlike" performance. "Negligence" and "defective" are simply used to repeat and mean such an "unworkmanlike" performance that it constitutes a breach of contract. The essential thrust and the approach to damages is, nonetheless, a contract one. ³

Custom Builders, however, has another string to this bow. Even if the count sounded in contract, Custom Builders argues, the allegations still fail to state a claim because there is no allegation of the performance by the Hernandezes of the conditions precedent essential to their claim. This argument is misdirected and, thus, misses the mark.

If a contract requires the performance of a condition by one party in order to trigger the duty of the other party to perform, the latter cannot be in breach of his duty until the former performs the condition or has a sufficient excuse for the non-performance. Thus, it has been said:

'performance of a condition precedent must be alleged or an excuse given for its non-performance to make the pleading [for breach of contract] a good one'

State ex rel. MFA Ins. Co. v. Murphy, 606 S.W.2d 661, 663 (Mo. banc 1980).

That principle, however, is not applicable here.

Simply stated, in the contract here, the Hernandezes promised to pay Custom Builders for building the shell of a house in a workmanlike manner. There was no condition the Hernandezes had to perform before the duty of Custom Builders was triggered. To the contrary, the Hernandezes had no duty to pay until Custom Builders fulfilled its duty. The Hernandezes' allegations properly reflect this legal relationship. U.S. Suzuki Motor Corp., supra, 673 S.W.2d at 106.

Custom Builders also contends an accord and satisfaction was reached precluding any right of the Hernandezes to damages. The record does not support this contention.

We review the facts in this court tried case under the well known principles of Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). We defer to the trial court's determinations of credibility, view the evidence and permissible inferences most favorably to the judgment and disregard all contrary evidence and inferences. See, e.g., Snowden v. Gaynor, 710 S.W.2d 481, 483 (Mo.App.1986).

So viewed, the operative facts supporting this argument are: Mr. Hernandez, the Hernandezes' then attorney, Custom Builders' president and a member of its board met at the site to discuss a list of construction defects prepared by the Hernandezes; subsequent to that meeting the Hernandezes signed a voucher authorizing Westoak to release $11,898 to Custom Builders; this payment was less than the contract price for the shell.

Custom Builders, however, fails to consider the testimony of both of the Hernandezes that no settlement was reached. The trial court, apparently, credited this testimony and interpreted the noted operative facts in light of this credited testimony. We defer to the trial court's determination of credibility, St. Charles County v. McPeak, 730 S.W.2d 611, 612 (Mo.App.1987), and find it reasonable for the court to have implicitly interpreted the operative facts as failing to show an accord and satisfaction.

Custom Builders next contends the proper measure of damages for the defective performance of a building construction contract is either the cost of repairing the defects in the construction or the diminution in value of the building caused by the defects. Neither of these measure of damages, Custom Builders contends, was pled or proved by the Hernandezes; therefore, Custom Builders argues, the award of damages made was improper. We agree the award was improper but for different reasons.

The goal in awarding damages for breach of a building construction contract, no different than the goal in the breach of most contracts, "is to award a sum that will put the non-breaching party in as good a position as he would have been had the contract been performed." Dobbs, supra, §§ 12.1, 12.21. Most often, this goal is achieved by awarding the non-breaching party damages...