Parkway Constr. Servs., Inc. v. Blackline LLC

• Decision Date: 26 March 2019
• Docket Number: No. ED 106326,ED 106326
• Citation: 573 S.W.3d 652
• Parties: PARKWAY CONSTRUCTION SERVICES, INC., Respondent and Cross-Appellant, v. BLACKLINE LLC d/b/a Blackline Design and Construction, and Magnolia Halliday LLC, Appellants.
• Court: Missouri Court of Appeals

573 S.W.3d 652

PARKWAY CONSTRUCTION SERVICES, INC., Respondent and Cross-Appellant,

v.BLACKLINE LLC d/b/a Blackline Design and Construction, and Magnolia Halliday LLC, Appellants.

No. ED 106326

Missouri Court of Appeals, Eastern District, DIVISION FOUR.

FILED: March 26, 2019 Motion for Rehearing and/or Transfer to Supreme Court Denied April 29, 2019

Jill R. Rembusch, 8909 Ladue Road, St. Louis, MO 63124, for appellant.

James Carroll Morris, 7800 Forsyth Blvd, Suite 600, St. Louis, MO 63105, for respondent.

KURT S. ODENWALD, Presiding Judge

Introduction

A general contractor and plumbing subcontractor both appeal the trial court’s judgment on breach-of-contract and equitable claims raised in the subcontractor’s petition. The underlying dispute involves the renovation of two apartment buildings and whether the subcontractor exceeded the scope of work authorized by the contract it entered into with the general contractor. The general contractor appeals the judgment finding it liable for breach of contract and awarding attorneys' fees to the subcontractor as the prevailing party. The subcontractor appeals the judgment finding against it on its equitable claims of unjust enrichment and quantum meruit.

Although the subcontractor voluntarily dismissed its breach-of-contract claim, the trial court properly exercised its authority when reinstating the claim prior to trial where the voluntary dismissal was made without prejudice by the plaintiff/subcontractor and the reinstatement caused no harm to the defendant/general contractor. While the record contains sufficient evidence to support much of the subcontractor’s breach-of-contract claim, the trial court erred when it included the shower-valve work within the contract, and that part of the judgment is reversed.

As to the subcontractor’s equitable claims, the record supports the trial court’s finding that the subcontractor waived said claims. Lastly, we find that the subcontractor was the prevailing party, and therefore was entitled to an award of attorneys' fees under the contract. However, we remand the award of attorneys' fees to the trial court to reexamine the amount of the attorneys' fee award and ensure that the award does not include fees for work that was completely severable and related exclusively to the equitable claims upon which the subcontractor did not prevail.

Factual and Procedural History

I. The Contract

Parkway Construction Services, Inc. ("Parkway") and Blackline LLC ("Blackline") entered into a construction contract (the "Contract") pertaining to a renovation of two apartment buildings (the "Project") located on 2804-2820 S. Compton in St. Louis, Missouri (the "Property"). Magnolia Halliday, LLC ("Magnolia") owned the Property. Magnolia hired Blackline as the general contractor for the Project. Blackline subsequently entered into the Contract with Parkway, the plumbing subcontractor on the Project. Under the Contract, Parkway agreed to perform construction work relating to the plumbing system for buildings situated on the Property, including the provision of both labor and materials. Blackline agreed to pay Parkway $96,000 for this work. Although, Parkway was to supply materials necessary for the scope of its work under the Contract, Blackline agreed to provide shower valves, faucets, tubs, and sinks. Parkway committed to "[r]ework all existing water supply lines and waste drains at tubs, sinks, and showers to accommodate new fixtures and locations per plans." The Contract defined Parkway’s objective as "provid[ing] a complete working plumbing system[.]"

Both Parkway and Blackline believed it was likely that some of the drain/waste/vent ("DWV") piping in the walls would not need to be replaced as part of Parkway’s rework of the plumbing systems. However, the parties were uncertain as to how much of the DWV piping would need to be replaced to complete the Project. Because Parkway was unwilling to accept the risk of replacing all of the DWV piping, the parties stipulated that Parkway would be responsible under the Contract for repairing or replacing up to a maximum of fifty percent of the DWV piping. The record before us suggests that this "fifty-percent threshold" was not clearly defined. Both parties defined the threshold differently at trial and in their briefs. However, the record is clear that any work exceeding the fifty-percent threshold was beyond the scope of work under the Contract, and would be considered either an additional cost or extra work. The Contract expressly precluded Parkway from performing extra work beyond the scope of the Contract without first obtaining written authorization by Blackline.

Pertinent to this appeal, the Contract included a change-order provision, mandating that: Any adjustment in the [Contract] Amount or time of performance shall be authorized by a Change Order. No adjustments shall be made for any changes performed by [Parkway] that have not been ordered by [Blackline]. A Change Order is a written instrument prepared by [Blackline] and signed by [Parkway] stating their agreement upon the change in [Contract] Work.

The Contract also provided that all progress payments were "subject to receipt of such lien waivers, affidavits, warranties, guarantees or other documentation required by this Agreement or [Blackline]." Additionally, "[f]inal payment shall constitute a waiver of all claims by [Parkway] relating to [Contract] Work[.]"

The Contract also contained an attorneys' fee provision, stating that "[t]he prevailing party in any dispute that goes beyond mediation arising out of or relating to this [Contract] or its breach shall be entitled to recover from the other party reasonable attorneys' fees, costs and expenses incurred by the prevailing party in connection with such dispute." The Contract did not define "prevailing party."

II. Performance under the Contract

As Parkway began work under the Contract, the Project quickly began to fall behind schedule due to factors beyond Parkway’s control. Blackline continuously pressured Parkway to stay on schedule. As Parkway’s plumbers performed the plumbing work on the Project, they repaired or replaced almost all stacks/DWV piping in the two apartment buildings.¹ The plumbers replaced both horizontal and vertical piping from a few feet above the basement floor to the highest drain connection at each stack. Parkway did not replace the cast-iron vent stacks that did not carry water or waste and allowed only for air venting. Parkway did not obtain a written change order or even a definite verbal authorization from Blackline to replace more than fifty percent of that piping. On May 8, 2015, Parkway emailed Blackline stating in pertinent part:

I know we conceded to replacing up to [fifty percent] of the stacks without additional cost. We are there. How do you want to handle this going forward? This has been a tough job with a ton of additional costs we could not have foreseen. I am sure that is true for both of us. We are keeping track of the time and materials but want to know if we need to talk about it before we get too far into the process. Be assured we will do all we can to limit any additional work but the inspectors are being less than forgiving and much of the existing stacks are cracked.

Blackline responded three days later, telling Parkway that it disagreed that Parkway had reached the fifty-percent threshold. Blackline further stated that there should not be an issue completing the job within the fifty-percent allowance. On June 1, 2015, Parkway sent Blackline another email informing Blackline that Parkway had replaced all forty-three stacks.

Parkway created two change-order forms: one form relating to the extra DWV-piping work and a second form relating to extra shower-valve work. Parkway submitted the shower-valve change-order form to Blackline before commencing work on the shower valves. Blackline approved Parkway's change-order request for the shower-valve work for $1051. Parkway submitted the DWV-piping work change-order form to Blackline only after completing the work. Parkway continued working on installing a complete, working plumbing system, but did not detail the precise hours spent on each task to Blackline.

Due to the parties' dispute and Blackline’s refusal to grant retroactively Parkway’s change-order request for the extra DWV-piping work, Parkway stopped performing work under the Contract. Blackline was required to hire another plumbing contractor to complete the remainder of the work for which Parkway was obligated under the Contract.

III. Payment

Despite the disagreement between Blackline and Parkway as to the amount Blackline owed Parkway for the DWV piping replacement, Parkway executed a lien waiver in return for Blackline’s payment of $25,200 (the "Waiver") on June 16, 2015. The Waiver read:

Contractor/Supplier hereby waives all right, title and interest to any claim of any kind for payment for its Work through today’s date; including, but not limited to, claims to a mechanic’s or other form of lien or claim on or against: (a) the Property or the improvements thereon; (b) any funds for the Property or the Project, whether held by the Owner or otherwise; or (c) any funds due or to become due any higher-tier contractor. This is a partial waiver with respect to the Work, and Contractor/Supplier expressly reserves the right to assert claims for payment (including mechanic’s liens) for Work performed after the date listed below.

The Waiver defines "Work" as labor and/or materials furnished on or for the Project.

After Parkway ceased working, Blackline offered Parkway a check for $8712.97, which Blackline calculated as the remaining amount due to Parkway on the Contract after subtracting Black line’s cost of hiring a second subcontractor to complete the job. Parkway refused to accept the final payment, fearing it would preclude Parkway from seeking payment relief for the extra work Parkway performed on the Project. At trial, Blackline admitted to owing Parkway...