Killian Const. Co. v. Tri-City Const. Co., TRI-CITY
| Decision Date | 14 May 1985 |
| Docket Number | TRI-CITY,No. WD,WD |
| Citation | 693 S.W.2d 819 |
| Parties | KILLIAN CONSTRUCTION COMPANY, Respondent, v.CONSTRUCTION COMPANY, Appellant. 35032. |
| Court | Missouri Court of Appeals |
Richard D. Rhyne, Kansas City, for appellant.
Donald R. Duncan, Turner, Reid, Duncan, Loomer & Patton, P.C., Springfield, for respondent.
Before PRITCHARD, P.J., and SHANGLER and BERREY, JJ.
The plaintiff Killian Construction Company subcontracted with the defendant Tri-City Construction Company to complete certain portions of the work Tri-City, as general construction contractor, agreed to perform for the United States Army Corps of Engineers. The suit by Killian against Tri-City pleaded four causes of action: Count I, for the balance owed under the contract; Count II, for the reasonable value of extra work done and accepted; Count III, for reimbursement for the cost of money borrowed to complete the subcontract project; Count IV, for punitive damages for the tortious breach of the subcontract. The defendant Tri-City counterclaims for breach of contract.
The court submitted Counts I, II, and III to the jury, and directed a verdict against Killian on Count IV. The jury found for plaintiff Killian on Count I [$54,000], found for defendant Tri-City on Count II, and found for plaintiff Killian on Count III [$35,000]. The jury found for the plaintiff Killian on the defendant Tri-City counterclaim. The appeal is by Tri-City from the judgments entered in favor of Killian on Counts I and III.
The construction of the Truman Dam in Henry County made necessary the relocation of roads in the vicinity, now threatened with inundation. On June 23, 1977, Tri-City Construction Company undertook the relocation project as general construction contractor for the United States Army Corps of Engineers. The weather was inclement that first year, and Tri-City did not accomplish much under the general contract. Tri-City then determined to subcontract a portion of the relocation project, and on June 7, 1978, contracted with B & K Excavation for that purpose. B & K was a partnership of the Bam Construction Company and the Killian Construction Company. On August 17, 1978, the amount of work was modified by a supplemental agreement. The work did not progress well, due in measure to the lack of skill of the subcontract project overseer, Butts [president of Bam Construction Company, a B & K partner], some laggardly preparatory performance by Tri-City, and other reasons. The partnership was terminated on December 15, 1978, and Butts assigned the subcontract interest to Killian--and Tri-City acceded. Killian then engaged one Carr, an engineer, to supervise the remainder of the relocation project. On August 2, 1979, the original subcontract was once again modified by another supplemental agreement. The amount of work to be done was again redefined, and the completion date was extended to October 14, 1979. The work was actually completed in December of 1979, and was given final approval, in quadrants, by the Corps of Engineers in April of 1980.
The subcontract between Tri-City and Killian [as does the general contract between the Army Corps of Engineers and Thus, the subcontract terms render the amount as an estimated sum: that is, a calculation based on a projected quantity of work to be furnished at a fixed unit price. The subcontract provided for partial payment to Killian by the month during the work progress, computed on the basis of the engineer estimate of the work quantity performed, but the final payment was due according to the work units actually "completed by the subcontractor based on the engineer's completed unit quantities" and subject to the final approval and acceptance of the subcontractor work by the Corps of Engineers [Subcontract, § 3 Payment(a) ]. The relocation project was completed by Killian in December of 1979. The subcontractor submitted the pay estimate of $27,187.39 for work done that December, but Tri-City never remitted. 2 That default [according to Killian] left him without the means to pay suppliers and other creditors. In May of 1980, Tri-City agreed to release sufficient funds to pay sixty percent of the amounts of the debts [except for the claim of International Harvester, still in litigation, for the cost of certain leases of construction equipment]. Killian then negotiated a bank loan and paid the balances owed on the debts. The International Harvester suit was settled by payment from Tri-City [the named defendant] of $12,000. Killian was still without final payment from Tri-City at the time of suit.
Tri-City 1 defines performance in terms of unit quantity and payment in terms of unit price. Section 2 of the subcontract describes the scope of the work Killian undertakes to perform:
The performance assumed by Killian under the subcontract was to complete a project already begun by Tri-City under the original general contract with the Corps of Engineers. A term of the subcontract [§ 25.1] recites:
Tri-City Corporation has been paid for the
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following quantities of work as listed below
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Common Excavation 45,265 CY
Rock Excavation 0
Embankment 38,090 CY
Aggregate Surfacing 498.3 Tons
(emphasis added)
The relocation project was completed by Killian in December of 1979. The Corps of Engineers then computed the earthwork by survey, and verified the quantities [among the others] for final payment to Tri-City as:
Description Unit Final Quantity Amount
------------------- ---- -------------- -----------
Common Excavation CY 153,382 $122,705.60
Rock Excavation CY 23,150 85,655.00
Embankment CY 262,110 327,637.50
Aggregate Surfacing CY 16,500 82,500.00
This determination of final payment quantities was transmitted to the general contractor Tri-City by the Corps of Engineers on April 22, 1980, although full payment was not remitted until May of 1981. Tri-City made no further payment to Killian, however, other than as partial liquidation of the supplier accounts and to discharge the International Harvester claim against Killian.
The Tri-City records reflect that, after payment of $42,184.51 on the supplier accounts and to discharge the International Harvester litigation, a balance of $40,366.12 remained owed to Killian on the completed subcontract. 3 To compute that balance, Tri-City subtracted from the final quantity determined by the Corps of Engineers as actually performed as to each work item [i.e., common excavation, rock excavation, etc.] the estimated quantity of each item for which Tri-City received payment on the general contract before assignment of the road relocation project to the B & K partnership [and thence to Killian] for completion. The contract to perform the road relocation project was between Tri-City and the Corps of Engineers, and hence the computation of the final quantities units actually completed was determined and reported by the Corps of Engineers to Tri-City without allocation of the work quantities actually performed by the contractor and subcontractor, respectively. Killian challenged both the amount reckoned and the method used by Tri-City to reckon the payment due on the completed subcontract. Killian asserted that payment on the road relocation project was due, not on the basis of work quantities estimated, but on work quantities actually performed. To that end, Killian directed engineer Carr, road relocation project manager, to consult the Corps of Engineers cross-sections and other records to determine the quantities actually performed by Killian and Tri-City. These records confirmed and reconfirmed to Carr that the estimates of work for which the Corps of Engineers had paid Tri-City were never actually performed. 4 Carr computed that, after allowance for the amounts paid on the creditor accounts and to International Harvester, Tri-City still owed Killian $67,017.74 for work actually performed under the subcontract.
The subcontract [§ 25.1] recites: "Tri-City Construction has been paid for the following quantities of work as listed below: ..." These units of work, Killian contends and shows by evidence, were never performed. Tri-City contends that the term has been paid for the following quantities of work [when considered within The subcontract adopts by reference, as terms of agreement, "the contract between the Owner [United States Corps of Engineers] and the Contractor [Tri-City]" [Subcontract § 1]. The original contract was never formally tendered as evidence, but the subcontract merely continues the uncompleted performance of Tri-City under the original general contract, and necessarily replicates its essential terms. Tri-City acknowledges that the subcontract and the general contract were unit-bid, and hence undertaken as unit-price construction bargains. See Rock Hill Asphalt & Construction Company v. State Highway Commission, 452 S.W.2d 810, 811 (Mo. banc 1970). The unit-price contract is a device used when the final quantities of work cannot be determined accurately until final completion of the work. There are periodic payments made to the general contractor during the work progress--usually per the month--based upon the estimate of the architect or engineer, but payment to the contractor under such a device is only for completed construction units. Johnson, Drake & Piper, Inc. v. United States, 483 F.2d 682, 684 (8th Cir.1973).
the full context of subcontract] so explicitly means work actually done as to preclude an extraneous aid to interpretation--and entitle Tri-City to judgment on Count I as a matter of law.
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