MECO Systems, Inc. v. Dancing Bear Entertainment, Inc.

• Decision Date: 25 June 1997
• Docket Number: No. 21209,21209
• Citation: 948 S.W.2d 185
• Parties: MECO SYSTEMS, INC., Plaintiff-Respondent, Artisan Construction Services, Inc., Plaintiff, v. DANCING BEAR ENTERTAINMENT, INC., Defendant-Appellant, Marshall-Waters-Woody, Inc., Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 185

948 S.W.2d 185

MECO SYSTEMS, INC., Plaintiff-Respondent Artisan Construction Services, Inc., Plaintiff, v. DANCING BEAR ENTERTAINMENT, INC., Defendant-Appellant Marshall-Waters-Woody, Inc., Defendant-Respondent.

No. 21209.

Missouri Court of Appeals,

Southern District,

Division Two.

June 25, 1997.

Kendall R. McPhail, Lowther, Johnson, Joyner, Lowther, Cully & Housley, L.L.C., Springfield, for appellant.

John R. Lewis, Timothy J. Harris, Lewis & Moon, Springfield, for respondent MECO.

John R. Lightner, Baird, Lightner & Millsap, P.C., Springfield, for respondent Marshall-Waters-Woody.

SHRUM, Judge.

This case involves a construction contract whereby MECO Systems, Inc. (Contractor) agreed to build a theater for Dancing Bear Entertainment, Inc. (Owner). The trial court entered summary judgment denying Owner's claim against Contractor for liquidated damages. Owner claimed entitlement to liquidated damages as Contractor failed to complete the work within the time set by their contract. In a separate summary judgment, the trial court denied Owner's cross-claim against Marshall-Waters-Woody, Inc. (Architect). The cross-claim alleged that Architect breached its contractual duties and obligations when it granted Contractor extra time to complete construction. We reverse both judgments and remand for further proceedings.

STANDARD OF REVIEW

Review of summary judgment is governed by Rule 74.04, which provides in pertinent part:

"(c)(3) ... [Summary] judgment sought shall be entered forthwith if a motion for summary judgment and response thereto show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."

The granting of summary judgment is purely a question of law. Therefore, appellate review of a grant of summary judgment is essentially de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo.banc 1993).

" 'When reviewing the entry of summary judgment, we view the evidentiary record in the light most favorable to the party against whom summary judgment was granted, determine if any genuine issue of fact exists which would require a trial, and determine if the judgment is correct as a matter of law.' "

Judy v. Arkansas Log Homes Inc., 923 S.W.2d 409, 414 (Mo.App.1996) (quoting State ex rel. Conway v. Villa, 847 S.W.2d 881, 886 (1993)). A genuine issue of fact exists where the record contains competent evidence that two plausible but contradictory accounts of essential facts exist. ITT Commercial Fin. Corp., 854 S.W.2d at 382.

FACTS AND PROCEDURAL BACKGROUND

Owner and Contractor signed a contract (herein called "construction documents") whereby Contractor agreed to build the Charley Pride Theater in Branson, Missouri. In a separate instrument (herein called Architect/Owner contract), Owner contracted for Architect to provide the architectural services necessary to design and construct the theater.

When the theater was completed, Contractor filed suit to impose mechanics liens on the property. As part of its defense, Owner claimed a set-off of $300,000 for liquidated damages as Contractor failed to "substantially complete" the work by April 1, 1994. In a counterclaim against Contractor, Owner sought $300,000 as liquidated damages resulting from unexcused delay by Contractor in completing the work. In responsive pleadings, Contractor alleged that Architect "authorized additional time for substantial completion of the project ... pursuant to the terms of the [construction documents] and that "the project was substantially completed within the extended date."

Next, Owner filed a cross-claim against Architect, alleging that if Owner was bound by any action taken by Architect to extend the completion date, such action was in breach of Architect's contractual duties and obligations to Owner. Accordingly, Owner sought from Architect a sum equal to any amount that Owner was unable to recover from Contractor because of Architect's extending the time for completion of the work.

In June 1996, Contractor and Architect filed motions that resulted in the trial court's entry of summary judgments denying both Owner's liquidated damage claim/defense as to Contractor and that part of Owner's cross-claim charging Architect with breach of contract for extending the completion date.

Contractor's Motion for Summary Judgment

As originally written, the "construction documents" set the date of "substantial completion of the entire work" for April 1, 1994. A subsequent amendment to the "construction documents" included the following:

"[P]aragraph 4.2 of Article 4 of [of the Standard Form of Agreement] is hereby modified to add ... that [if] the date of commencement is later than September 1, 1993, the substantial completion date shall be extended by an equal number of days corresponding to the delay in the date of commencement, provided, however, that such delay in the date of commencement is not due to any failure by Contractor to timely apply for and provide all information and perform all acts necessary to be performed by Contractor for the issuance of the building permit. Said paragraph is further amended to provide that if the Contractor shall fail to complete the work by April 1, 1994, except for delays caused by Contractor's failure to receive plans and specifications in a timely manner from Architect, delays occurring because of the failure of the City of Branson or any ... agency thereof to timely approve plans, specifications or perform inspections, or delays resulting from inclement weather ..., the Contractor shall pay or allow to Owner the sum of Five Thousand Dollars ($5,000) per day as liquidated ... damages for every day the work shall remain uncompleted beyond the said completion date. In the event of such delays, the Architect shall establish a new date by which the work should reasonably be completed...."

Summarized, Contractor's facts in support of its motion for summary judgment were that Contractor requested an extension of the completion date and Architect granted 66 additional days for completion, thus extending the substantial completion date from April 1, 1994, to June 6, 1994. Contractor relied on a November 4, 1994, letter from Architect to Owner's lawyer as evidence that Architect granted the time extension. Architect's two-page letter concluded with: "[W]e feel [Contractor] has a legitimate claim requesting 53 days delay because of inclimate [sic] weather condition and 13 days delay because of the City's lack to timely issue the building permit."

Continuing, Contractor established that the project was in fact substantially completed by May 30, 1994, well within the completion date as allegedly extended. Citing paragraph 2.6.18 of the Architect/Owner contract, Contractor argued to the trial court that the Architect's "ruling" on the extension question was binding on both parties in the absence of fraud or gross mistake. ¹ Since Owner never charged Architect with fraud or gross mistake in granting the time extension, Contractor arrived at its position that no disputed fact issues remained as to liquidated damages and thus, summary judgment on that issue was warranted.

To support its motion for summary judgment, Contractor submitted the "Standard Form" component of the "construction documents," an Amendment to the "Standard Form of Agreement," the Architect/Owner contract, monthly letters by Contractor to Ric Cooper (Cooper) (Owner's president) requesting "weather delays," a copy of Architect's November 4, 1994, opinion letter, and the affidavit of Contractor's project manager (Gabby) stating that in January 1994 he gave Cooper documents explaining fifteen days' loss of construction time due to the City of Branson's failure to issue a building permit. Gabby attached to his affidavit what he identified as the documents delivered to Cooper on January 24, 1994. Language in one of those document reads: "EVENTS AFTER ALL PARTIES CONCERNED WERE NOTIFIED OF THE MAY 15, 1994 COMPLETION DATE, WHICH EXCLUDED WEATHER, BUILDING PERMIT AND OTHER DELAYS NOT CONTROLABLE [SIC] BY MECO."

In response, Owner asserted Contractor was not entitled to summary judgment as (1) the Architect/Owner contract did not vest Architect with authority to make a binding decision on extending the contract and (2) Contractor did not request time delays in the manner required by the "construction documents." Owner attached to its response the "General Conditions" component of the "construction documents" and then quoted various sections in both contracts to support its claim that Architect's decision regarding time extension was not contractually binding and final. ²

Owner made the additional argument that disputed issues of material fact existed as to why construction was not completed by April 1, 1994. To support that argument, Owner filed an affidavit by Cooper. In his affidavit, Cooper cited reasons other than weather and permit delay which he claimed caused Contractor not to complete the project by April 1. In part, Cooper pointed to Contractor's failure to construct parking lots, curbs, and gutters in the fall of 1993 as had been discussed. In November 1993, Contractor told Cooper that it was being delayed by the steel fabricator. In that same time period, Contractor told Cooper that obtaining permits was not going to be a problem "with respect to the construction schedules." Once Cooper learned that Contractor would not meet the April 1 completion date, he told Architect that Owner would not agree to an extension of the completion date. Cooper stated Owner opposed the time extension because Contractor had not performed the work in a "timely manner." Moreover, Cooper claimed delay occurred because Contractor did not do the work in the order originally discussed, i.e., parking lots in the fall, with theater construction during the winter. When Owner was finally told about Contractor's time extension claim in October...