Pallardy v. Link's Landing, Inc.

• Decision Date: 22 April 1976
• Docket Number: No. 9761,9761
• Parties: Roy J. PALLARDY and Seth Evans, Plaintiffs-Appellants, v. LINK'S LANDING, INC., Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 512

536 S.W.2d 512

Roy J. PALLARDY and Seth Evans, Plaintiffs-Appellants, v. LINK'S LANDING, INC., Defendant-Respondent.

No. 9761.

Missouri Court of Appeals, Springfield District.

April 22, 1976.

John E. Burruss, Jr., Hendren & Andrae, Jefferson City, for plaintiffs-appellants.

Charles E. McElyea, Ronald K. Carpenter, Phillips & McElyea Corp., Camdenton, for defendant-respondent.

Before STONE, P.J., and HOGAN and FLANIGAN, JJ.

HOGAN, Judge.

Plaintiffs brought this action claiming that the sum of $11,989.30 remained due them under the terms of a contract pursuant to which plaintiffs performed architectural services for the defendant. Upon trial to the court plaintiffs had judgment in the amount of $2,192.50, plus interest in the sum of $401.15. Plaintiffs appeal, contending for various reasons that the award of damages was inadequate.

In briefest sketch and outline, the background facts are that on June 30, 1969, James Muff, then vice president of Link's Landing, Inc., contacted plaintiff Roy Pallardy, an architect, concerning proposed improvement and expansion of defendant's docking and parking facilities. The improvements included substantial excavation, the construction of retaining walls, the addition of a parking structure and paving. Pallardy proceeded to prepare estimates and a preliminary sketch of the proposed site improvements, and submitted these to Muff in August 1969; there was considerable disagreement about the possible cost of the project. Pallardy originally estimated $363,140 as the total cost of the improvements; Muff, using estimates obtained from local (Camden County) contractors, insisted that the project could be completed for $259,200. On trial Muff indicated that a $250,000 maximum was a prerequisite to his undertaking the venture. Plaintiffs denied that any limit was placed upon construction costs, but admit they were aware Muff undertook the project in the belief it could be completed for approximately $259,000.

On August 15, 1969, Muff signed a 'letter of intent' which Pallardy had written and sent forward for approval. As material here, the letter reads (emphasis is ours):

'First, the fee for the entire project will be 6% of the cost of project, for full services. This includes preliminary design and estimates of cost, production of construction drawings and specification (sic), obtaining of bids from Contractors if desired, and preparation of construction contracts, and finally, casual supervision of construction . . . checking contractor's monthly estimates for payment . . . and final inspection of the project for Owner's acceptance. The fee is divided as follows: On approval of preliminary design, with instructions from the Owner to proceed with construction drawings, 25% of the fee is due. Preparation of construction drawings and specifications shall comprise 50% of the fee, this amount payable monthly in proportion to completion of the work and due fully at the time of requesting bids or granting contracts. The final 25% of the fee is payable monthly during the construction phase, in proportion to contractor's completion of the project. In the event the services of the Architect are no longer desired by the Owner during the construction phase, the basic fee shall be reduced by 25%, to 4 1/2% of the project cost. In this event, the Architect will require a release of responsibility for the project, inasmuch as he will no longer have control of the construction. Fee payments will be based on the estimated cost until such time as contracts are signed and project cost is actually determined, and shall be adjusted to actual contract amounts.

'We will break our cost estimates down by various parts of the work, so that you may decide to do all or part of the work, or plan it in stages. We will base the parking structure cost on one or several multiples of a basic unit.'

Muff signed this letter, and on August 24, 1969, requested Pallardy to prepare contracts for the excavation. On September 18 Muff instructed plaintiffs to complete the preliminary drawings, 'bill him for the drawings and hold up.' The project was held in abeyance until April 1970 when Muff requested an artist's rendering for use in obtaining a loan. The artist's rendering was supplied and Muff obtained a loan, $250,000 of which was set aside for the planned site improvements. In August 1970, after receiving preliminary designs, Muff instructed Pallardy to proceed with the project.

Controversy arose after the excavation work had been begun. On November 9 and 10 plaintiffs' designs and specifications for the retaining walls were taken to contractors for bids. The lowest bid obtained was $150,800; plaintiffs' estimate had been $50,640, and defendant rejected plaintiffs' design. Depending on whose viewpoint one accepts, this disparity was a) caused by plaintiffs' failure to ascertain the condition of the subsoil and design the type of wall required, or was b) the result of Muff's desire to complete the project as quickly as possible, which required the plaintiffs to anticipate 'the worst conditions for subsurface materials.' One of the walls was redesigned and constructed at a total cost of $54,000. The other wall was not built.

By December 17 plaintiffs had completed drawings and specifications for the parking structure. These were mailed to a contractor, and computation of the amounts of rock and concrete required indicated that the parking structure would cost $191,000 as compared with plaintiffs' estimated $120,000. Muff complained to Pallardy, who suggested that bids be obtained before the design was changed. Muff said 'to hell with that' and discharged Pallardy's firm. Thereafter plaintiffs requested payment of 1) full fees based on contract prices for the excavation and for construction of one retaining wall: 2) 75% of the fee for one retaining wall (designed but not constructed, based on the estimated cost); 3) 75% of the fee for the parking structure (designed but not constructed, based on the estimated cost); 4) 25% of the fee for paving (based on preliminary work and estimated cost); and 5) sundry expenses, altogether amounting to $15,736.80, with credit allowed for prior payments of $3,747.50. Muff declined to remit this amount and this action followed. After hearing evidence, the trial court made voluntary findings and entered judgment as follows:

'(1) (T)hat Plaintiffs and Defendants (sic) entered into a contract on August 15, 1969, whereby Plaintiffs agreed to provide architectural services for Defendant, and Defendant agreed to compensate Plaintiffs therefor pursuant to the terms of said contract; (2) that the terms of said contract, inter alia, vested Defendant with the right to do, as the project, 'part or all of the work' upon which Plaintiffs were to provide architectural services; (3) that Plaintiffs' compensation for the project, if it progressed beyond feasibility study phase, was to be six (6%) per cent of the cost of the project; (4) that the project . . . consisted of excavation of construction site and construction of one (1) retaining wall at cost of $45,000.00 and $54,000.00 respectively; (5) that the fee to which Plaintiffs are entitled for said project is $5,940.00; (6) that Plaintiffs have heretofore received payments applicable to said fee totaling $3,747.50; (7) that Defendant owes Plaintiffs a balance thereon in the amount of $2,192.50; (8) that Plaintiffs made demand upon Defendant for payment of sum owed for the aforesaid services on February 27, 1971.

'Judgment for Plaintiffs and against Defendant in the sum of $2,192.50 principal, together with $401.15 accrued...