Mabin Const. Co., Inc. v. Historic Constructors, Inc.

• Decision Date: 13 April 1993
• Docket Number: No. WD,WD
• Parties: MABIN CONSTRUCTION COMPANY, INC., Respondent, v. HISTORIC CONSTRUCTORS, INC., et al., Appellants. 46790.
• Court: Missouri Court of Appeals

Page 98

851 S.W.2d 98

MABIN CONSTRUCTION COMPANY, INC., Respondent, v. HISTORIC CONSTRUCTORS, INC., et al., Appellants.

No. WD 46790.

Missouri Court of Appeals,

Western District.

April 13, 1993.

Lawrence J. Zimmerman, Kansas City, for appellants.

Ronald K. Barker, Kansas City, for respondent.

Before SMART, P.J., and KENNEDY and FENNER, JJ.

FENNER, Judge.

Appellants, Historic Constructors, Inc. (Historic), Roger E. Buford, Benjamin F. Bolt, and Deborah A. Bolt (hereinafter collectively known as Individual Defendants), appeal the Amended Judgment entered by the Circuit Court of Jackson County at Kansas City on August 27, 1992. The judgment awarded breach of contract damages to respondent, Mabin Construction Co., Inc. (Mabin), a subcontractor for the construction project described herein.

The record reflects that on August 2, 1989, Mabin and Historic entered into a written subcontract agreement wherein Mabin agreed to perform and complete parking lot paving and paint striping work for the project known as the Old Spaghetti Factory located at 302-306 West 8th Street in Kansas City, Missouri. In exchange for the work, labor, and materials furnished by Mabin for this project, Historic, the general contractor, was to pay Mabin $8,325.00. ¹ It is uncontroverted that Mabin performed its agreement and substantially completed all the work under its contract with Historic. It is also uncontroverted that Historic failed to pay the contract sum of $8,325.00 or any part of it to Mabin. The record further shows that despite Mabin's demands for payment from Historic, Historic failed to pay Mabin for its work.

On June 6, 1991, Mabin filed a Petition alleging four separate counts arising out of Historic's failure to pay Mabin for its work, labor, and materials furnished with regard to the Old Spaghetti Factory project. ² On September 4, 1991, Mabin filed a First Amended Petition which, except for its addition of the three Individual Defendants as the last officers and directors, or statutory trustees, of Historic, restated the allegations of the original Petition. It also alleged that Historic had been administratively dissolved by the Missouri Secretary of State on May 13, 1991, for its failure to pay its franchise tax.

On November 4, 1991, Historic filed a Motion To Dismiss Mabin's First Amended Petition, alleging that the court lacked subject matter jurisdiction and that Mabin failed to state a claim against the Individual Defendants who are improper parties. The allegation that the court lacked subject matter jurisdiction was based on an equitable mechanic's lien suit filed on May 22, 1990 by SKC Electric, Inc. (SKC), an electrical subcontractor involved in the same Old Spaghetti Factory project. Mabin was not made a party to this action. In its Motion To Dismiss, Historic argued that this equitable mechanic's lien suit, which was filed before the instant suit, rendered the instant suit a nullity and, thus, the court was without jurisdiction to entertain the instant suit. The court, however, overruled the Motion To Dismiss on February 4, 1992.

On July 28, 1992, the case was scheduled for trial, but Historic failed to appear and judgment was entered in favor of Mabin and against Historic and the Individual Defendants in the amount of $8,325.00, together with interest from and after September 30, 1989, and the costs of the action. The judgment was amended on August 27, 1992 to show that it was against Historic and each Individual Defendant in his or her representative capacity as a last officer and director of Historic, rather than against the Individual Defendants personally, as reflected in the original judgment. ³

In their first point on appeal, Historic and the Individual Defendants argue that the court erred in entering judgment for Mabin because the court lacked subject matter jurisdiction to entertain a suit for contract damages arising in connection with a construction project which was the subject of a prior equitable mechanic's lien action.

Section 429.290, RSMo 1986, ⁴ provides that after an equitable mechanic's lien action is commenced, this action is exclusive of other remedies for the enforcement of mechanics' liens. Section 429.300 states, in pertinent part:

The equitable action ... shall be brought in the proper court of record regardless of the amount claimed by the plaintiff or plaintiffs in such action, and all other suits that may have been brought on any mechanic's lien claim or demand shall be stayed and no further prosecuted, and the parties in any such other suit shall be made parties to such equitable action ..., and any costs rightfully accrued in behalf of any lien claimant in any such other action shall be and become a part of the lien claim of such party. After the institution of such equitable action no separate suit shall be brought upon any mechanic's lien or claim against said property, or any of it, but the rights of all persons shall be adjusted, adjudicated and enforced in such equitable suit (emphasis added).

Under section 429.280, all parties claiming an interest in the real estate involved in the equitable action, as disclosed by public records, shall be made parties to the action and those whose rights are not so disclosed are bound by the proceedings therein, but upon application may be made parties to the action and participate in the further adjudication of the claims.

A fundamental rule of statutory construction is to ascertain the intent of the legislature from the language used, to give effect to that intent if possible, and to consider the words used in their plain and ordinary meaning. State ex rel. Osborne v. Goeke, 806 S.W.2d 670, 672 (Mo. banc 1991). The first source in determining legislative intent is to examine the words used in the statute, but a proper analysis also considers the context in which the words are used and, importantly, the problem the legislature sought to address with the statute's enactment. Fowler v. Director of Revenue, 823 S.W.2d 134, 135 (Mo.App.1992).

The plain intent of the equitable mechanic's lien act is that all persons who have filed liens must be made parties to any equitable action when it is commenced and should be served with summons promptly so that there will be no need for them to begin any suit themselves or do anything to preserve their liens except plead at the proper time in the equitable action. State ex rel. Erbs v. Oliver, 361 Mo. 836, 237 S.W.2d 128, 131 (Mo. banc 1951). The equitable mechanic's lien action, established and governed by statute, is designed primarily for the purpose of enforcing multiple mechanics' lien claims filed against the same real estate, together with an adjudication of the rights claimed under all conflicting liens, encumbrances or other interests in the property. Dierks & Sons Lumber Co. v. McSorley, 289 S.W.2d 164, 168 (Mo.App.1956). When such an action is commenced, it preempts the field of remedies for the enforcement of mechanics' liens on the property. Id.

It has been repeatedly held that a non-mechanic's lien claimant may assert a personal action for breach of contract without resort to the protection afforded by the mechanic's lien statute. State ex rel. Power Process Piping, Inc. v. Dalton, 681 S.W.2d 514, 517 (Mo.App.1984). In Dalton, the court rejected counsel's argument that the equitable mechanic's lien statute preempts non-lien suits once a mechanic's lien suit is filed by any claimant under the mechanic's lien statute. Id. at 516. The court stated:

We do not accept the view that the legislature intended by enactment of the mechanic's lien statute to abrogate common law contract actions on construction contracts where a claimant, not a party to the contract, brings a mechanic's lien suit asserting a claim with regard to the same construction project. We do not believe that the [equitable mechanic's lien suit] was intended by the legislature to become a shield for the property owner against other laborers, materialmen or contractors on the construction project who elected not to avail themselves of the mechanic's lien statute.... Had the legislature intended such a radical result they would have expressly so provided.

Id. at 517. ⁵ The Dalton court's statement, which is consistent with the plain language and intent of the mechanic's lien statute, indicates that it is proper for a claimant who has elected not to avail himself of the mechanic's lien statute to bring a contract claim on the same construction project that is the subject of a separate equitable mechanic's lien suit.

Appellants rely on two cases to support their first point, both of which are either distinguishable or fail to address the precise issue as in the case at bar. The first case, State ex rel. Great Lakes Steel Corp. v. Sartorius, 249 S.W.2d 853, 855-56 (Mo. banc 1952), held that a breach of contract suit filed after an equitable mechanic's lien suit could not be maintained where the causes arose out of the same construction project and that, because the contract suit was a nullity, the court did not have jurisdiction to entertain the suit. Sartorius, however, involved a claimant who had filed a notice of lien prior to the institution of the equitable lien suit and was a named party in the equitable lien suit. The statutory language clearly applies to this type of claimant who has asserted an interest in the property, i.e., by filing a notice of lien.

The second case that appellants rely on is State ex rel. Kirkwood Excavating, Inc. v. Stussie, 689 S.W.2d 131 (Mo.App.1985). In Stussie, relators sought to prohibit the respondent judge from dismissing their contract petition and from denying their motion to consolidate their contract action into a pending mechanic's lien action. Id. at 131. The breach of contract suit filed by relators arose out of the same construction project as the previously filed equitable mechanic's lien suit. Id. at 133. The court stated:

The supreme court has ruled that...