Smith Moore & Co. v. J.L. Mason Realty & Inv., Inc., Nos. 58146

• Decision Date: 06 August 1991
• Docket Number: 58147,Nos. 58146
• Citation: 817 S.W.2d 530
• Parties: SMITH MOORE & CO., Respondent, v. J.L. MASON REALTY & INVESTMENT, INC., and C.F. Services, Inc., Appellants.
• Court: Missouri Court of Appeals

Page 530

817 S.W.2d 530

SMITH MOORE & CO., Respondent, v. J.L. MASON REALTY & INVESTMENT, INC., and C.F. Services, Inc., Appellants.

Nos. 58146, 58147.

Missouri Court of Appeals,

Eastern District,

Division Two.

Aug. 6, 1991.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Oct. 3, 1991.

Application to Transfer Denied Nov. 19, 1991.

John L. Davidson, St. Louis, for appellants.

Joseph H. Mueller, Robyn G. Fox, St. Louis, for respondent.

CRIST, Judge.

J.L. Mason Realty & Investment, Inc. (J.L. Mason) and C.F. Services, Inc. (C.F. Services) appeal a judgment in favor of Smith, Moore & Company (Smith, Moore) on Smith, Moore's petition for breach of contract and damages. The jury returned a verdict against J.L. Mason and C.F. Services in the amount of $143,650.00. We affirm.

The facts of this case reveal: Sugarpines Venture, Limited (Sugarpines project) was a joint venture between J.L. Mason and C.F. Services. This joint venture was formed to construct and operate the Sugarpines apartment project in North St. Louis County.

In May, 1985, William Sheahan, an officer of C.F. Services, contacted Martin Crowe, Chairman of the Board and Chief Executive Officer of Smith, Moore. Sheahan told Crowe he was interested in investigating methods to finance the construction of the Sugarpines project. On May 9, 1985, Martin Crowe met with William Sheahan, Tim Sheahan (President of C.F. Services) and other representatives of J.L. Mason. Crowe recommended using bonds guaranteed by the Federal National Mortgage Association (Fannie Mae) to finance the project. On May 29, 1985, the parties met again. Representatives of J.L. Mason and C.F. Services informed Crowe that the joint venture had agreed that bonds guaranteed by Fannie Mae would be the best way to finance the project. At this meeting, Jimmie New (President of J.L. Mason) requested Crowe to submit a written agreement to the joint venture detailing Smith, Moore's commitment and responsibilities with respect to the financing of the project and the joint venture's responsibilities.

On May 24, 1985, Smith, Moore sent a written agreement to the Sugarpines venture. The May 24, 1985, agreement stated the following:

Smith, Moore & Co., does hereby propose and agree to purchase the above described bonds subject to the following terms and conditions:

(1) The Bonds shall be secured ... by ... 'Fannie Mae' pursuant to its Multifamily Tax Exempt Financing Plus Program or secured in such other manner as is mutually agreeable to Sugarpines Venture, Ltd., and Smith, Moore & Co.

(2) The Bonds shall be issued in such amount, shall mature on such date ... shall bear such rate ... of interest and shall provide for such other provisions as shall be mutually agreeable....

(3) Smith, Moore & Co., shall purchase the Bonds at an underwriter's discount of 2% from the initial public offering prices. Smith, Moore & Co. will be obligated to purchase all such Bonds ... if any such Bonds are purchased.

(4) Costs associated with the issuance and sale of the Bonds shall be paid from the proceeds of the sale of the Bonds or by Sugarpines Venture, Ltd. Such costs include, but not limited to, fees of Bond counsel; fees of the Trustee; fees and costs of any bond rating service; costs of printing of the Bonds and any documents relating to the Bonds ... any expenses incurred in the verification of the cash flows relating to the Bonds ... and any fees or charges required to be paid to the [Industrial Development Authority of St. Louis, Missouri].

If the foregoing proposal is satisfactory to [the joint venture], please so indicate by signing and returning to Smith, Moore & Co., a copy of this letter, whereupon this proposal and your acceptance will then constitute our agreement with respect to the underwriting of the Bonds.

At the close of the letter, Martin Crowe signed for Smith, Moore in his capacity as Chairman of the Board. The letter was "accepted and agreed this 30th day of May, 1985" by the signing of Jimmie W. New for J.L. Mason in his capacity as Division President and by Timothy D. Sheahan for C.F. Services in his capacity as President.

Further communication between Smith, Moore and the joint venture established that the financing should be secured by December, 1985.

In November, 1985, the joint venture was notified by phone that the Federal National Mortgage Association would insure the project for $11,050,000.00. This was lower than the amount of $14,000,000.00 as discussed by the parties earlier.

That same month, Martin Crowe discovered that the joint venture was utilizing the services of Stifel, Nicholaus (another St. Louis investment banking company) to secure and underwrite the financing of the joint venture. When confronted with questions about the involvement of Stifel, Nicholaus, Jimmie New and William Sheahan informed Smith, Moore that despite Stifel, Nicholaus' involvement, Smith, Moore would still be included in the underwriting of the bonds.

However, in late December, 1985, Smith, Moore was informed that it would not be allowed to participate further in the arranging of the financing of the project. On December 23, 1985, Martin Crowe wrote a letter to both J.L. Mason and C.F. Services stating the joint venture had breached the written agreement dated May 24, 1985.

Smith, Moore brought this action for breach of contract against J.L. Mason and C.F. Services seeking money damages. The jury returned a verdict against both J.L. Mason and C.F. Services in the amount of $143,650.00. Thereafter, the trial court denied J.L. Mason's and C.F. Services' post-trial motions. Both appeal.

In their first point, J.L. Mason and C.F. Services argue the trial court erred in denying their motions to dismiss because Smith, Moore failed to state in its petition all the essential elements of a breach of contract claim.

In determining whether Smith, Moore stated a cause of action, we assume every pleaded fact as true and take every favorable inference in favor of Smith, Moore which may reasonably be drawn from the facts pleaded. Connell v. Whiteley, 779 S.W.2d 781, 782-783 (Mo.App.1989). If the facts pleaded and the reasonable inferences to be drawn show any ground that would entitle Smith, Moore to relief, the petition should not have been dismissed. Id.

Smith, Moore was required to plead the following elements to state a cause of action for breach of contract: (1) an agreement between parties capable of contracting; (2) mutual obligations arising thereunder with respect to a definite subject matter; (3) a valid consideration; (4) part performance by one party and prevention of further performance by the other; and (5) damages measured by the contract and resulting from its breach. Berra v. Papin Builders, Inc., 706 S.W.2d 70, 73-74 [3, 4] (Mo.App.1986).

It is J.L. Mason's and C.F. Services' contention that there was no contract between the parties because the May 24, 1985 letter left open essential terms for future determination. However, as shown above in the facts, the May 24, 1985 letter clearly set forth that Smith, Moore was to arrange financing for the Sugarpines project. The agreement set forth the party issuing the bonds; the purpose of the issuance of the bonds; the terms and conditions under which financing would be provided; the parties to the joint venture; the security for such bonds; the discount rate applicable to the purchase; included a provision of costs for: fees of bond counsel, fees of the trustee, fees and costs of any bond rating service, costs of printing the bonds and documents relating thereto; expenses incurred in the verification of cash flow as relating to the bonds and any fees paid to the industrial development authority. Furthermore, the letter stated: "If the foregoing proposal is satisfactory to [the joint venture], please so indicate by signing and returning to Smith, Moore & Co., a copy of this letter, whereupon this proposal and your acceptance will then constitute our agreement with respect to the underwriting of the Bonds." All parties signed the letter.

Although by necessity there were outstanding items to be decided in the future, the parties did agree that Smith, Moore would arrange the financing for the Sugarpines project and would in turn receive a two percent underwriter discount of the amount arranged to be financed. The fact that some terms of the written agreement were not capable of ascertainment at the time the agreement was entered into and these precise terms were to be determined by mutual agreement in the future when they became ascertainable did not make the contract unenforceable. See Allied Disposal v. Bob's Home Service, 595 S.W.2d 417, 420 (Mo.App.1980). This point is denied.

In defendants' second point, they contend the trial court erred in refusing to grant their motion for a directed verdict because the evidence did not show the parties had mutually agreed to the essential terms of a contract to provide financing including: the principal amount to be borrowed, the due date, the rate of interest, the security for the loan and the date which the loan was to be repaid.

In determining if Smith, Moore made a submissible case, we must regard the evidence in the light most favorable to Smith, Moore, giving Smith, Moore...