International Paper Co. v. Futhey, s. 55869

• Decision Date: 27 March 1990
• Docket Number: 55926,Nos. 55869,s. 55869
• Citation: 788 S.W.2d 303
• Court: Missouri Court of Appeals
• Parties: INTERNATIONAL PAPER COMPANY, Appellant/Respondent, v. Gregory FUTHEY, et al., and Steven Sinkler & Marsha Sinkler, Respondents/Appellants.

Page 303

788 S.W.2d 303

INTERNATIONAL PAPER COMPANY, Appellant/Respondent, v. Gregory FUTHEY, et al., and Steven Sinkler & Marsha Sinkler,

Respondents/Appellants.

Nos. 55869, 55926.

Missouri Court of Appeals,

Eastern District,

Division Four.

March 27, 1990.

Rehearing Denied April 25, 1990.

Donald E. Heck, Clayton, for appellant/respondent.

James E. Carmichael, St. Charles, for respondents/appellants.

CARL R. GAERTNER, Judge.

Defendants, Marsha and Steven Sinkler, appeal from a jury verdict and judgment of $24,500 for plaintiff, International Paper, on its claim in quantum meruit. International appeals the denial of prejudgment interest. We reverse the judgment of $24,500 and dismiss the appeal of International as moot.

On July 26, 1985, the Sinklers entered into a contract for the construction of their house for $74,454 with defendant, Gregory Futhey. The Sinklers borrowed $75,000 to finance the construction from Community Federal Saving and Loan. As a condition to the mortgage, Community Federal required the Sinklers to enter into a disbursing agreement with Construction Escrow Services. The funds in escrow would be paid to, or on behalf of, the general contractor, Futhey, during construction through a voucher system, and thus safeguard the Lender's interest.

By late August, 1985, after the parties signed the respective agreements, Futhey began construction of the Sinklers' house. Futhey hired the services of several subcontractors and purchased materials from several suppliers. Futhey purchased lumber products from plaintiff, International, with whom Futhey maintained an open account. International sold the materials to Futhey for the Sinklers' house and delivered the items to the construction site, and added these charges to the unpaid balance of $2,401.37 on Futhey's open account. International, when keeping its records, failed to distinguish between the balance of Futhey's open account and the charges incurred solely from the construction of the Sinklers' home.

International furnished building materials to Futhey for the Sinklers' house from September 11, 1985 until December 20, 1985. While International did receive partial payment from Construction Escrow Services during that time, International applied those funds first to the $2,401.37 of Futhey's prior balance and then to the charges incurred during the construction of the Sinklers' house.

On December 20, 1985, Futhey defaulted on his open account with International and abandoned construction of the Sinklers' house. At the time of the default with International, Futhey had accumulated on account, a balance of $27,094.28--of which $24,627.18 was attributable to the Sinklers' construction. At the time of the breach with the Sinklers', approximately $62,000 of the $75,000 in escrow had been paid according to the terms of the disbursing agreement. Yet, the Sinklers' home was incomplete and uninhabitable.

Because of Futhey's abandonment, the Sinklers' were forced to complete the construction of their house at their own expense. International, also realizing that Futhey would not complete his obligations, approached the Sinklers and requested payment for the balance of Futhey's open account. When the Sinklers refused, International filed a mechanics lien on March 6, 1986, against the Sinklers' property in the amount of $27,094.28. Upon learning that International filed a mechanics lien, Construction Escrow Services required the Sinklers to add $15,000 to the approximately $12,500 in the construction disbursing account to satisfy International's lien. Upon deposit of the additional funds, Construction Escrow Services executed a final affidavit to Community Federal stating that all bills were either paid, or provided for, thus allowing the Sinklers to close on their house. Prior to trial, the balance in the Sinklers' escrow account reached $31,446.81, which included the Sinklers' deposits plus interest earned since 1986.

On March 27, 1987, International filed an amended petition against the Sinklers and Futhey in three counts alleging in Count I, a Suit to Enforce a Mechanics Lien against the Sinklers' property in the amount of $27,094.28; in Count II, a Suit on Account against Gregory Futhey in the amount of $27,094.28; and in Count III, a Suit in Quantum Meruit against the Sinklers "in the sum of $27,094.28, plus interest as allowed under law from December 20, 1985, for the materials furnished...."

The trial court, upon the appropriate motions of the parties, directed a verdict on Count I against International on its Suit to Enforce a Mechanics Lien. The trial court directed its verdict because International improperly included Futhey's prior balance of $2,401.37 in the mechanics lien against the Sinklers. Therefore, the lien was not a just and true account of the demand due and failed to meet the requirements of § 429.080 RSMo.1986. International has not appealed from this judgment. On Count II, the trial court directed a verdict for International on its Suit on Account against Futhey for the requested $27,094.28. On Count III, the trial court denied the Sinklers' motions for a directed verdict and submitted the count in quantum meruit to the jury. The jury returned a verdict in favor of International and against the Sinklers for $24,500, but denied prejudgment interest. This appeal and cross appeal followed.

In their first point on appeal, the Sinklers contend the trial court erred in denying their motions for a directed verdict because the exclusive remedy for an unpaid subcontractor, not in privity with the landowner, is under the mechanics lien statute, Chapter 429 RSMo.1986. They argue that since International failed to perfect its mechanics lien against the property, no other form of recovery against the owner is...