Patrick V. Koepke Const., Inc. v. Woodsage Const. Co., 60161

• Decision Date: 17 November 1992
• Docket Number: No. 60161,60161
• Citation: 844 S.W.2d 508
• Parties: PATRICK V. KOEPKE CONSTRUCTION, INC., Plaintiff-Respondent, v. WOODSAGE CONSTRUCTION COMPANY, Defendant, and Palcor Capital Investors, Inc., et al., Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 508

844 S.W.2d 508

PATRICK V. KOEPKE CONSTRUCTION, INC., Plaintiff-Respondent, v. WOODSAGE CONSTRUCTION COMPANY, Defendant and Palcor Capital Investors, Inc., et al., Defendants-Appellants.

No. 60161.

Missouri Court of Appeals,

Eastern District,

Division Three.

Nov. 17, 1992.

Motion for Rehearing and/or Transfer to

Supreme Court Denied

Dec. 23, 1992.

Application to Transfer Denied Jan. 26, 1993.

Theodore D. Ponfil, James D. Bass, Clayton, for defendants-appellants.

William J. Travis, St. Louis, for plaintiff-respondent.

STEPHAN, Judge.

Patrick V. Koepke Construction, Inc. (hereinafter "Koepke Construction") initiated this action in the trial court by filing a two count petition for a mechanic's lien and unjust enrichment following non-payment for site improvements Koepke Construction had made to property located in St. Louis County. Koepke Construction named as defendants all those persons with any interest in the property in question. The trial court found in favor of Koepke Construction on both counts. All defendants, except Woodsage Construction, Joseph E. Liebold, and Frank Stevens who were in default, appeal the judgment of the trial court. We affirm in part and reverse and remand in part.

Palcor Capital Investors, Inc. ("Palcor"), a real estate investment and acquisition company, owned a twenty-three acre tract located on Dietrich Road in west St. Louis County (the "Property"). Richard Paletta was the president and sole owner of Palcor. He hired Clayton Engineering sometime in 1986 to obtain appropriate zoning for a multi-family development known as Dietrich Village Apartments on the Property and to draft a preliminary set of plans for construction of the apartments. Palcor then transferred its title to the Property in September 1987 to Dietrich Road Associates, a Missouri joint venture and general partnership of Trent Realty Investors and Realty Venture I, Inc. Richard Paletta had joined up as an investor with the developer Bruce Michelson of the Michelson Organization in the creation of the Dietrich Road Associates in order to undertake the real estate project along Dietrich Road. The Michelson Organization, as the developer, owned Realty Venture. Richard Paletta owned Trent Realty.

In May 1988 Dietrich Road Associates decided not to develop the property because the financial market had taken a downturn. Dietrich Road Associates subsequently entered into a contract with Joseph E. Liebold through JEL Real Estate, a corporation affiliated with Liebold, on June 27, 1988, for the sale of the Property for 1.5 million dollars. Prior to the contract, Richard Paletta had introduced David Colvin of Clayton Engineering to Joseph Liebold in March or April 1988, informed Colvin that Liebold was going to purchase the property and told Colvin to cooperate fully with Liebold in continuing the design and work on the project.

Before the contract of sale for the Property between Joseph Liebold and Dietrich Road Associates closed, Liebold (apparently also doing business as Woodsage Construction) entered into a verbal agreement with Koepke Construction in August 1988 to do certain site improvements on the Property. Liebold told Clayton Engineering that Koepke Construction would do the grading on the project. That same month Clayton Engineering received a call from Koepke Construction requesting that Clayton Engineering stake the project so Koepke Construction could proceed with the grading. On August 31, 1988, Clayton Engineering sent its bill for "stake-out of cleaning and grading" of the Property site to Dietrich Road Associates, in care of Palcor to the attention of Rick Paletta. Dietrich Village Associates or Palcor later paid the bill.

In August and September 1988 Koepke Construction made site improvements, including the removal of an abandoned sewage treatment plant. However, the real estate sale between Dietrich Road Associates and Liebold, scheduled to close on September 30, 1988, fell through. Liebold never bought the Property. Joseph Liebold also never paid Koepke Construction for its work on the property.

After the sales contract terminated, title to the Property reverted from Dietrich Road Associates to Palcor sometime in January or February 1989. Shortly thereafter, Palcor entered into a sales contract on February 6, 1989, to sell the Property for 1.3 million dollars to Krupp Cofer Development Limited Partnership. ("Krupp Cofer") In March 1989 the parties executed a warranty deed for the sale of the Property with Palcor as seller and Dietrich Krupp Cofer 2 Limited Partnership ("Dietrich-Krupp") listed as buyer. Richard Paletta attributed $31,650.00 of the Property's 1.3 million dollar sale price to site work. Nevertheless, Koepke Construction was never paid for its work on the Property. Koepke Construction later valued the cost of its improvements to the Property at over $77,000.00.

Koepke Construction then initiated this lawsuit to impose a mechanic's lien upon the Property. Count one of Koepke Construction's first amended petition sought judgment against Woodsage Construction and the enforcement of a mechanic's lien for $77,705.50 for labor, materials, and equipment for certain site improvements, including clearing, demolition and grading, made by Koepke Construction to the Property. Count two sought recovery for unjust enrichment for the same improvements against defendants Dietrich-Krupp, Dietrich Road Associates through its partners and joint venturers Trent Realty and Realty Venture, and Palcor.

Palcor, in turn, filed its two count petition for declaratory judgment and slander of title against Koepke Construction and a second contractor, Frank Stevens d/b/a Tree Transplanting. In its lengthy findings of fact and conclusions of law, the trial court found that Joseph Liebold and Woodsage Construction were in default. Frank Stevens, who never appeared, was also in default. The trial court entered judgment against Woodsage Construction and in favor of Koepke Construction on count one of Koepke Construction's petition for a mechanic's lien. The trial court granted Koepke Construction a mechanic's lien against the property and also determined the lien had priority over a deed of trust held by Krupp Cofer Development Limited Partnership, and Robert F. Flynn, its trustee. The trial court found in favor of Koepke Construction and against Palcor, Trent Realty and Realty Venture on count two of Koepke Construction's petition for unjust enrichment. ¹ On Palcor's two count petition, the trial court declared the mechanic's lien of Koepke Construction to be valid and enforceable; discharged the mechanic's lien of Frank Stevens for failure to prosecute; and dismissed with prejudice Palcor's second count for slander of title. All defendants except Woodsage Construction, Joseph E. Liebold and Frank Stevens (who were in default) appeal the judgment of the trial court.

Appellants raise two issues on appeal. They assert that the judgment ordering enforcement of the mechanic's lien under count one of Koepke Construction's first amended petition should be reversed because the judgment had no substantial evidence to support it, is against the weight of the evidence, and erroneously declares and applies the law. Their second contention attacks the trial court's entry of judgment in favor of Koepke Construction for unjust enrichment under count two of Koepke Construction's first amended petition upon the same grounds.

We address each point in turn, keeping in mind the standard of review that in a bench-tried case we must sustain the judgment unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Brownstein v. Rhomberg-Haglin and Assoc., 824 S.W.2d 13, 15 (Mo. banc 1992). Of equal importance, we defer to the trial court's resolution of credibility, Rule 73.01(c)(2), and we consider only those facts and inferences favorable to the prevailing party. Slay Warehousing Co. v. Leggett, 762 S.W.2d 63, 64 (Mo.App.1988).

Appellants' first point targets two of the trial court's conclusions: (1) that appellants impliedly authorized and ratified Koepke Construction's work and made Joseph Liebold an agent of appellants with respect to the property and (2) that Koepke Construction, by virtue of its contract with Joseph Liebold, had a contract with the property owner sufficient to subject the property to a mechanic's lien. The statutory provision of Chapter 429.010, RSMo Cum.Supp.1991 governing mechanics' liens provides in pertinent part as follows:

Any person who shall do or perform any work or labor upon, or furnish any material, fixtures, engine, boiler or machinery for any building, erection or improvements upon land, ... under or by virtue of any contract with the owner or proprietor thereof, or his agent, trustee, contractor or subcontractor, upon complying with the provisions of sections 429.010 to 429.340, shall have for his work or labor done ... a lien upon such building, erection or improvements, and upon the land belonging to such owner or proprietor on which the same are situated ...

(Emphasis ours.)

We recognize the principle that the provisions of our mechanic's liens statutes, being remedial in nature, should be construed liberally to carry out their just and beneficent objects. Hertel Electric Co. v. Gabriel, 292 S.W.2d 95, 101 (Mo.App.1956). Nevertheless, a mechanic's lien is purely a creature of the statutes; the policy of liberal construction of the lien statutes does not relieve a claimant of the necessity of reasonable and substantial compliance with statutory requirements. Id. In an action to enforce a mechanic's lien, the burden is on the plaintiff to prove such compliance with essential statutory requirements. Id.

Under the terms of section 429.010, Koepke Construction would be entitled to a mechanic's lien on appellants' property if it established that the work it performed on the property under...