Juengel Const. Co., Inc. v. Mt. Etna, Inc., 42327

• Decision Date: 28 July 1981
• Docket Number: No. 42327,42327
• Citation: 622 S.W.2d 510
• Parties: JUENGEL CONSTRUCTION CO., INC., Plaintiff-Respondent, v. MT. ETNA, INC., a corporation, et al., Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 510

622 S.W.2d 510

JUENGEL CONSTRUCTION CO., INC., Plaintiff-Respondent, v. MT. ETNA, INC., a corporation, et al., Defendants-Appellants.

No. 42327.

Missouri Court of Appeals, Eastern District, Division Two.

July 28, 1981.

Motion for Rehearing and/or Transfer to Supreme Court Denied

Sept. 21, 1981.

Application to Transfer Denied Nov. 10, 1981.

Albert A. Michenfelder, Jr., David C. LaPee, Ziercher, Hocker, Tzinberg, Human & Michenfelder, Clayton, for Mt. Etna, Inc. & Grasso Brothers, Inc.

Richard B. Dempsey, David L. Baylard, Shifrin, Treiman, Barken, Dempsey & Ulrich, Clayton, Robert J. Koster, King & Koster, St. Louis, for Nat'l Super-Mkts. & Hastings & Chivetta, Architects, Inc.

GUNN, Acting Presiding Judge.

Plaintiff-respondent Juengel Construction Co., Inc. (Juengel) brought suit against defendants-appellants, Mt. Etna, Inc., Grasso Brothers, Inc. (Grasso), National Supermarkets, Inc. (National) and Hastings & Chivetta Architects, Inc. (Hastings & Chivetta), arising out of the renovation and remodeling of a building for National. Count I was against Grasso and Mt. Etna and sought damages for lost profits for breach of a construction contract. Count II sought actual and punitive damages from National and Hastings & Chivetta for tortious interference of contract. A third count alleging defamation was dismissed by Juengel before trial.

In a jury waived case judgment was for Juengel against Mt. Etna and Grasso on Count I for $44,770.78 for lost profits by reason of breach of contract. Judgment was against Hastings & Chivetta on Count II for $1.00 actual and $10,000 punitive damages for tortious interference of contract.

On appeal Grasso and Mt. Etna raise the following points: (1) the contract was unenforceable for failure of performance of conditions precedent; (2) Juengel failed to prove the amount of lost profits with sufficient certainty. Additionally, National and Hastings & Chivetta allege that proof is lacking for tortious interference of contract that even if there were such interference, it was justified.

We affirm the judgment.

The Grasso brothers are the sole stockholders of Mt. Etna, Inc., which in turn owns Grasso Plaza, a shopping center in St. Louis County. National Supermarkets, Inc. is the principal tenant at Grasso Plaza. In late 1975 the Grassos contemplated remodeling a portion of Grasso Plaza, and notified Juengel Construction Company, Inc., which had previously performed various construction jobs for them, of their expectations.

In February, 1976, Mt. Etna, as lessor, and National, as lessee, executed a lease which provided for remodeling and expansion of the National store at Grasso Plaza. The parties agreed that Mt. Etna would pay $400,000 of the construction costs and National would pay the excess; the amount of Mt. Etna's obligation was later increased to $500,000.

The complicated series of interactions between the parties effectively commenced with a meeting in March, 1976 at the Grasso Plaza jobsite for a discussion of the construction project. Attending were representatives of Juengel, Mt. Etna, National and Hastings & Chivetta, the architects retained by National.

On May 3, 1976, Juengel and Mt. Etna executed the agreement written by Juengel that is the subject of this lawsuit. The instrument, entitled "Construction Contract and Agreement between Owner and General Contractor," names Juengel as the general contractor and delineates its duties regarding the Grasso Plaza project. The contract provides that Juengel perform according to the specifications of Hastings & Chivetta Architects, with Mt. Etna and National being entitled to name the subcontractors and suppliers to submit bids for the project. The contract further provides that "(t)he General Contractor, Owner and National Supermarkets will jointly decide which of the sub bidders will be awarded a contract on their phase of the work."

Subsequently, in a letter dated June 17, 1976, addressed to Mt. Etna, a National representative set out terms of agreement between National and Mt. Etna on the Grasso Plaza project. National substantially duplicated portions of the Juengel-Mt. Etna contract, providing that the "Lessor and the Lessee ... shall jointly name the subcontractors and suppliers to submit prices" for the project and that "(t)he General contractor (Juengel Construction Co., Inc.), Lessor and Lessee will jointly decide which of the subcontractors will be awarded a contract on their phase of the work."

Juengel and all defendants met several times in the spring and summer of 1976. They agreed that Juengel would solicit subcontractor bids upon receipt of architectural plans from Hastings & Chivetta. Juengel prepared a list of subcontractors to be invited to submit bids and circulated the list for the approval of the other parties, allowing them to add or delete names of subcontractors. Juengel also initiated the demolition of the area to be renovated, which was one of its contractual duties.

By the end of the summer, Hastings & Chivetta completed the project's plans and forwarded them to Juengel, which in turn invited subcontractor bids. After Juengel had received, compiled and tabulated the bids, the parties met in late September to review them. The total projected cost of the job was $759,442.00, to which was added the general contractor's fee described as overhead and profit of 6% of cost, or approximately $45,567.00, resulting in a total price of $805,009.00. ¹ National objected at the meeting that the overall price was too high, but individual subcontractor bids were not discussed.

Shortly after this encounter, National informed the Grassos of its intent to have the project rebid. When the Grassos protested that they had a contract with Juengel, National assured them that it would indemnify if Juengel sued, a fact denied by National.

Mr. Grasso notified Juengel of National's intent to rebid the project and sought a meeting of the parties to resolve differences, but National refused to meet. National proceeded to invite bids for general contractor and subcontractor positions. Bids from the lowest successful bidders amount to a total projected price of $712,388.00, with the job ultimately costing approximately $795,000.00.

For their first point of error defendants Mt. Etna and the Grasso Brothers contend that their contract with Juengel was unenforceable because a condition precedent to their duty to perform joint agreement on subcontractors by Juengel, the Grassos and National had not been fulfilled. The Grassos maintain that they in good faith attempted to secure satisfaction of the condition and that failure of the condition was due to the noncooperation of National, a third party which was beyond the control of the parties to the contract.

A condition precedent is an act or event that must be performed or occur, after the contract has been formed, before the contract becomes effective. Globe American Corp. v. Miller Hatcheries, Inc., 110 S.W.2d 393, 396 (Mo.App.1937). Conditions precedent are disfavored, and contract provisions are construed as such only if unambiguous language so requires or they arise by necessary implication. Kansas City Southern Railway Co. v. St. Louis-San Francisco Railway Co., 509 S.W.2d 457, 460 (Mo.1974); Miran Investment Co. v. Medical West Building Corp., 414 S.W.2d 297, 304 (Mo.1967); Servco Equipment Co. v. C. M. Lingle Co., 487 S.W.2d 869, 871 (Mo.App.1972).

The requirement in a contract of a third party's acquiescence or the performance of some act by him may or may not be a condition precedent to enforcement of the contract. On the one hand, if the fulfillment of the contract depends on the act or consent of a third party, the contract is unenforceable until the third party so acts or consents. However, if a party to a contract unconditionally undertakes to perform an act that is not impossible, but merely requires a third party to acquiesce or perform a preceding act, the party's performance is not deemed to be conditional on the third party's acquiescence or performance. 17A C.J.S. Contracts § 456(f) (1963). In the latter situation, inability to secure the necessary permission or acts of the third party does not excuse performance of the contract. Hensler v. City of Los Angeles, 124 Cal.App.2d 71, 83, 268 P.2d 12, 21 (1954); St. Paul Dredging Co. v. State, 259 Minn. 398, 407, 107 N.W.2d 717, 723-24 (1961); Barcroft Woods, Inc. v. Francis, 201 Va. 405, 409, 111 S.E.2d 512, 516 (1959); 18 S. Williston, a Treatise on the Law of Contracts § 1932 (3d ed. 1978); Annot., 84 A.L.R.2d 12, 108 (1962).

While recognizing that the dividing edge between these two categories of contracts is not sharp and some imbrication appears, we find that the contract between Juengel and Mt. Etna falls within the latter category. The conduct of the parties indicates that they deemed the contract to be effective, with Juengel commencing its performance of the contract attending meetings, soliciting and compiling bids, initiating demolition and Mt. Etna clearly regarding Juengel as its general contractor. If the parties intended the contract or further performance of it to be conditional on National's consent to subcontractors, they could have explicitly so provided. See, e. g., New Haven Tile and Floor Covering Co. v. Roman, 137 Conn. 462, 78 A.2d 336 (1951) (where builder and homeowner stipulated that before they could establish any agreement, approval of third party who was to pay for the repairs must be obtained; there was no contract unless and until third party granted approval); Benes v. Hickox Building Co., 112 N.E.2d 553 (Ohio App.1952) (where contract between building contractor and owner specified that contractor could begin work on building's foundation and could begin balance of construction upon approval of contract by third party who was building's tenant; such approval was essential to further enforcement of the contract). In view of the ambiguous language of the...