Kiesel Co. v. J & B Properties, Inc.

• Decision Date: 02 January 2008
• Docket Number: No. ED 89002.,ED 89002.
• Citation: 241 S.W.3d 868
• Parties: The KIESEL COMPANY, Plaintiff/Respondent, v. J & B PROPERTIES, INC, et al., Defendants/Appellants.
• Court: Missouri Court of Appeals

241 S.W.3d 868

The KIESEL COMPANY, Plaintiff/Respondent, v. J & B PROPERTIES, INC, et al., Defendants/Appellants.

No. ED 89002.

Missouri Court of Appeals, Eastern District, Division Two.

January 2, 2008.

Michael A. Gross, Robert Herman; co-counsel, St. Louis, MO, for appellant.

Richard Evan Greenberg, Jacqueline Louise Blocker, co-counsel, St. Louis, MO, for respondent.

BOOKER T. SHAW, Judge.

J & B Properties, Inc. (J & B), Glasgow Enterprises, Inc. (Enterprises), Glasgow Realty, LLC (Realty), and their owner William Glasgow (collectively Appellants) appeal the trial court's denial of their motions for judgment notwithstanding the verdict (JNOV) and the court's entry of judgment on the jury's verdict in favor of The Kiesel Company (Respondent) on its breach, of contract claim. Appellants assert that the trial court erred because Respondent failed to make a submissible case that Enterprises and Realty were parties to the contract, and, in the absence of those defendants, the jury's verdict as to the remaining defendants is insufficient. We affirm in part and reverse in part.

I. Facts and Procedural History

Mr. Glasgow is the sole owner of J & B, Enterprises, and Realty.. All three companies are in the business of buying and selling real estate. Respondent is in the environmental clean-up business. In December 2002, Enterprises purchased a defunct gas station at a St. Louis County tax sale. In January 2003, at the advice of Appellants' accountant, Enterprises conveyed the property by quitclaim deed to Realty. Shortly thereafter, Respondent's executive vice president, Larry Gooden, received a call from Patrick McQuay, a contractor who performs significant work for Appellants. McQuay said that he was "with Glasgow" and that J & B had purchased a property requiring an environmental assessment. Respondent performed the assessment, invoiced J & B, and received payment from Realty. McQuay then requested a bid for the remediation work (i.e., clean-up) indicated in the assessment. Respondent submitted to J & B, care of Mr. Glasgow, a proposal dated February 14, 2003, containing an estimate that can be summarized as follows:

• $18,570 for excavation and removal of five tanks and piping,

• Collection and removal of tank contents at $35 per drum and $175 per drum disposal, plus $1 per gallon pumped,

• $10,000 insurance deductible for the remediation of contaminated soil and groundwater, the remainder to be reimbursed by the Missouri Petroleum Storage Tank Insurance. Fund (PSTIF),

• $2000-4000 for clean-up of the interior of the structure on the property.

McQuay contacted Respondent's operations manager, Robert Kiesel, and instructed him to proceed. Respondent performed the work in February and March 2004 and submitted to J & B an itemized invoice, dated March 31, in the amount of $80,476.24, of which $55,595.24 was for soil remediation. With Respondent's assistance, Glasgow submitted to the PSTIF a claim form dated June 15 naming J & B as owner of the property and peeking reimbursement of the soil, remediation cost, The Secretary of State promptly issued to Respondent's address a check for 845,595.24 (after the $10,000 deductible) payable to J & B and Respondent jointly. McQuay used Glasgow's signature stamp to endorse the check and deposited it into J & B's bank account without Respondent's endorsement. Respondent sent J & B invoice reminders in May, July, and August 2004. In October, Glasgow replied in a letter, printed on J & B letterhead, in which he acknowledged receipt and deposit of the PSTIF check and essentially refused to pay Respondent's invoice because it was more than he expected.

Respondent filed suit against all Appellants alleging breach of contract and other counts that have since been dismissed or abandoned.¹ The jury found in favor of Respondent against all four Appellants and awarded damages of $105,476.24. Upon Appellants' motion for remittitur, Respondent agreed to a reduction of $25,000. Appellants also moved for judgment notwithstanding the verdict (JNOV). The trial court denied those motions and entered judgment for $80,496 plus interest, costs, and attorney fees.

In their first and second points, Appellants assert that the trial court erred by denying their motions for JNOV as to Realty and Enterprises essentially because neither entity was in privity of contract with Respondent. In their third, point, Appellants contend that the court erred by entering judgment on the jury's verdict because the jury might have assessed damages differently in the absence of defendants Realty and Enterprises.

II. Discussion

Enforceability of the Contract Against Enterprises and Realty (Points I-II)

When reviewing" a trial court's denial of a motion for JNOV, an appellate court examines whether, viewing the evidence and inferences in the light most favorable to the plaintiff, the plaintiff made a submissible case by presenting substantial evidence for every fact essential to liability. Coggins v. Laclede. Gas Co., 37 S.W.3d 335, 338 (Mo.App. E.D.2000). Whether evidence in a case is substantial and whether inferences drawn are reasonable are questions of law. Id.

In order to make a submissible case for breach of contract, a plaintiff must first establish that a contract existed between the parties. McClain v. Papka, 108 S.W.3d 48, 53, (Mo.App. E.D.2003). Appellants maintain that Realty and Enterprises were not parties to the agreement. All communication and documentation identified J & B as the recipient of Respondent's services.

Respondent points to three facts supporting the jury's finding that Realty and Enterprises were parties to the agreement. First, Mr. McQuay was an agent for all Appellants and did not distinguish between entities when he contacted Mr. Kiesel to authorize the work. But the record shows that McQuay approached Respondent specifically on behalf of J & B to request the initial assessment in January 2003. As such, Respondent reasonably understood that J & B would be the recipient of the clean-up services recommended in the assessment, and Appellants 1.failed to correct Respondent's understanding when they received its written proposal naming J & B as the customer.

Second, Respondent notes, Enterprises and Realty successively owned the property on which the work was performed, so the jury could have inferred that McQuay was acting on their behalf, too. But, again, McQuay represented to Respondent that J & B owned the property, and nothing in the record indicates that McQuay even, knew Enterprises or Realty to be the true owner. Mr. Glasgow signed forms that Respondent prepared and submitted to the Missouri PSTIF naming J & B as the owner. If anything, Realty could have been a third-party beneficiary of the agreement. Such a status confers a right to sue a breaching party in some circumstances,² but Appellant offers, and we have found, no authority permitting suit against a beneficiary for breach of a contract to which it was not a party. Respondent cites Marro v. Daniels, 914 S.W.2d 16 (Mo.App. E.D.1995), where a landlord was able to recover rents from the original lessee's sister company, who took possession of the property after expiration of the lease, but with whom the landlord had no written agreement. Marro is inapposite because it involved an implied contract where no current written agreement existed with another party. The court there found that the defendant's conduct exhibited a mutual understanding. Here, by contrast, there is no conduct on the part of Realty or Enterprises from which to infer any understanding, much less an implied contract, particularly when a writing on the same subject names another entity.

Third, Respondent posits that, because McQuay and Glasgow led Respondent to believe that it was contracting with the actual owner of the property, the actual owner should be liable. We reject the notion that a principal can, be bound unwittingly by a contract that its agent enters sloppily on behalf of a different principal. Respondent emphasizes that...