Kc Excavating and Grading, Inc. v. Crane Const. Co.

• Decision Date: 29 June 2004
• Docket Number: No. WD 62271.,WD 62271.
• Citation: 141 S.W.3d 401
• Parties: KC EXCAVATING AND GRADING, INC., Respondent, v. CRANE CONSTRUCTION COMPANY, W.H. Koch, Inc., William H. Koch, individually and as trustee of the William H. Koch Trust Agreement, and PHYLLIS L. KOCH, individually and as trustee of the Phyllis L. Koch Trust Agreement, Appellants.
• Court: Missouri Court of Appeals

141 S.W.3d 401

KC EXCAVATING AND GRADING, INC., Respondent, v. CRANE CONSTRUCTION COMPANY, W.H. Koch, Inc., William H. Koch, individually and as trustee of the William H. Koch Trust Agreement, and PHYLLIS L. KOCH, individually and as trustee of the Phyllis L. Koch Trust Agreement, Appellants.

No. WD 62271.

Missouri Court of Appeals, Western District.

June 29, 2004.

Motion for Rehearing and/or Transfer to Supreme Court Denied August 31, 2004.

Appeal from the Circuit Court, Johnson County, Jacqueline A. Cook, J James McManus, Kansas City, for Appellant.

Theodore C. Beckett, Kansas City, for Respondent.

PAUL M. SPINDEN, Presiding Judge.

In this construction dispute, a subcontractor, KC Excavating and Grading, Inc., charged the general contractor, Crane Construction Company, with breach of contract after Crane fired it before it had completed excavation of a commercial building site in Warrensburg owned by the trusts of William H. Koch and Phyllis L. Koch. The dispute arose in 1997 when KC Excavating decided that contract documents did not specify the scope of the work properly and Crane concluded that KC Excavating was not working quickly enough.

Apparently because KC Excavating had not signed Crane's proposed written contract, the parties operated on the basis of an oral contract. During October 1997, KC Excavating notified Crane that, to satisfy the project's plans and specifications, it would have to excavate more dirt than contract documents indicated. Crane, however, was concerned that KC Excavating was not working quickly enough to keep construction on schedule. Crane told KC Excavating that Crane would consider it to have breached their contract materially if it did not provide written assurances immediately that it would perform its work on time. KC Excavating did not provide the assurances.

On October 14, 1997, amidst continuing disagreement over the amount of excavation required, Crane told KC Excavating not to continue working until the dispute had been resolved. The firms did not resolve the dispute, and, during the following week, Crane terminated its contract with KC Excavating and obtained a replacement subcontractor to complete excavation.

By that time, KC Excavating had excavated 35,000 cubic yards of dirt in addition to what was specified in the contract documents. It spread most of the extra dirt over the property at Crane's direction and stockpiled the remainder for removal. Crane did not pay it for the additional work or other extra work that Crane had requested. Crane also did not pay for a portion of the work indicated in the project's plans and specifications that KC Excavating contracted to complete for the sum stated in its amended bid.

KC Excavating filed a mechanic's lien on the property and filed this lawsuit to enforce the lien, to collect damages from Crane for breach of contract, and to collect in quantum meruit from all defendants the reasonable value of its services not covered by contract. The circuit court issued judgment for KC Excavating for $220,435.86, plus costs of the action, on each count. The defendants appeal.

Because this was a court-tried case, the standard set forth in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976), governs our review: We must affirm the judgment unless it is not supported by substantial evidence, is against the weight of evidence, erroneously declares the law, or erroneously applies the law. Because the circuit court did not make findings of fact, we deem it to have resolved factual disputes in accord with its judgment. Weaks v. Rupp, 966 S.W.2d 387, 392 (Mo.App.1998).

In its first point, Crane argues that the circuit court erred in ruling that it had breached its contract with KC Excavating because KC Excavating was the party who had failed to perform its contractual obligations and thereby relieved it of its obligation to perform. Crane argues that KC Excavating breached the contract by walking off the job, by not attending to burn pits, by leaving the job site early each afternoon during construction, and by taking more than a day to aerate the soil after rains. We find no merit to the claim.

First, the record contains sufficient evidence to support the circuit court's apparent conclusion that KC Excavating did not walk off the job. KC Excavating's president Gary Wyatt testified that his company stopped working because Crane's representative told him not to do any more work until the firms had resolved their dispute concerning additional excavation. He said that KC Excavating did not complete the work because Crane terminated the contract before it could do the work. Faced with conflicting evidence, the circuit court had the discretion to determine witness credibility and to accept all, none, or some portion of the witnesses' testimony. Leonard v. Leonard, 112 S.W.3d 30, 32 (Mo.App.2003).

Second, even had KC Excavating acted as Crane alleged and even had those acts violated the contract, the acts did not bar KC Excavating from recovering under the contract. A central issue in resolving a claim of breach of contract is materiality of the alleged breach. That Crane was dissatisfied with KC Excavating's work or even that KC Excavating had breached the contract did not excuse Crane's performance unless KC Excavating's breach was material. Health Related Services, Inc. v. Golden Plains Convalescent Center, Inc., 806 S.W.2d 102, 105 (Mo.App.1991). A party cannot claim the benefit of a contract that it was the first to breach, but this rule applies only when the breach is material. Classic Kitchens and Interiors v. Johnson, 110 S.W.3d 412, 417 (Mo.App.2003). We find nothing in this record supporting Crane's contentions that KC Excavating was obligated to be on the job site during certain hours, attend to its burn pits, or aerate the soil on any particular schedule. It may have been, but Crane did not establish at trial that KC Excavating had those obligations, but, of more significance, even had KC Excavating been required to do these things, Crane did not establish that KC Excavating's not doing them was material.

This leaves Crane's argument that KC Excavating was not entitled to recover additional sums under the contract. Crane first argues that the contract was a lump-sum contract, paying KC Excavating $98,297 for all the work necessary, and that it could not recover additional sums even had it encountered additional work. It further argues that KC Excavating was required to obtain a change order for extra work.¹

The parties' contract apparently was oral and was supported by written contract documents, including KC Excavating's bid the plans and specifications, and Crane's letter of acceptance. Crane submitted a formal, written contract to KC Excavating for signing, but KC Excavating did not sign it. KC Excavating asserts that it never received it. In any event, neither party contends in this appeal that the parties executed a signed, written contract governing their business deal. Instead, they tried the case on the basis that their agreement was reflected in various other documents.

Crane rests its argument that the contract called for a lump-sum payment on KC Excavating's written bid, which said, "Bid for structural excavation and backfill is contingent on KC Excavating & Grading doing the total site grading package." Crane interprets this sentence, and the bid's not making an exclusion for the removal of excess dirt, to mean that it was agreeing to do the total job for $98,297. It reasons:

The integrated contract is not ambiguous. Crane Construction's subcontract with K.C. Excavating plainly provided for Crane to pay [$98,297] for "doing the total site grading package." The "total site grading package" references the plans and specifications, which mandate that "[e]xcavated material suitable for fill and not required for the site shall be removed from the site."

To the contrary, KC Excavating's bid did not say that it would do the total site grading package for $98,297. It said that its bid was contingent on its doing the total site grading package.

Because the parties had only an oral agreement and because the documents that the parties refer us to do not resolve the issue at hand, the circuit court obviously was obligated to accept parole evidence to discern what their agreement was. Wyatt testified that his firm's bid of $98,297 was for doing the work specified on the bid for site grading and structural excavation and backfill and that "unit prices" referred to additional work not reflected in the plans and specifications. He said that, for "[a]nything above and beyond what [the plans and specifications] reflect to do, those would be the prices to perform that work on site." The plans and specifications reflected that KC Excavating would be required to cut and fill specified amounts of soil to reach plan elevation. They did not reflect that the excavation of an additional 35,000 cubic yards of soil would be required.

Thus, even if Crane is correct that KC Excavating's bid must be interpreted in light of the plans and specifications, those documents did not resolve what was to happen if KC Excavating encountered more soil than contemplated in the plans and specifications. The circuit court, as arbiter of witness credibility, was free to accept Wyatt's explanation of the contract.

Crane further argues that an owner or general contractor providing plans to a subcontractor does not guarantee the accuracy of those plans and that a subcontractor must make his own investigation. Granted, but it makes no difference to the outcome of this appeal. That Crane did not guarantee the accuracy of the plans and specifications and that KC Excavating began without investigating the site would be significant only were Crane correct that KC Excavating had agreed to do the entire project for one lump sum, including work beyond that reflected in the plans and specifications. The circuit court had a sufficient basis for...