Spirtas Co. v. Division of Design and Cons.

• Decision Date: 13 April 2004
• Docket Number: No. WD 61494.,WD 61494.
• Citation: Spirtas Co. v. Division of Design and Cons., 131 S.W.3d 411 (Mo. App. 2004)
• Parties: SPIRTAS COMPANY, Respondent, v. DIVISION OF DESIGN AND CONSTRUCTION, Appellant.
• Court: Missouri Court of Appeals

131 S.W.3d 411

SPIRTAS COMPANY, Respondent, v.DIVISION OF DESIGN AND CONSTRUCTION, Appellant.

No. WD 61494.

Missouri Court of Appeals, Western District.

April 13, 2004.

Jeremiah W.(Jay) Nixon, Atty. Gen., Mark E. Long, Assistant Attorney General, Jefferson City, for appellant.

Steven M. Cockriel, St. Louis, for respondent.

RONALD R. HOLLIGER, Judge.

Missouri Division of Design & Construction("Division") appeals from a judgment, after jury verdict, in favor of Spirtas Company("Spirtas") on its claims that the Division breached a demolition contract for a state owned building and violated the Prompt Pay Act, Section 34.057, RSMo 1994.Spirtas contended that the Division breached the contract by hiring a third party to remove some of the asbestos from the building because Spirtas had the exclusive right to do the work under the contract.It, therefore, sought lost profits for that portion of the work that was awarded to another contractor by a change order.The court awarded partial summary judgment in favor of Spirtas on the liability issue for the breach of contact claim.Damages for that claim and liability and damages under the Prompt Pay Act count were submitted to a jury.The jury awarded Spirtas $360,898.52 on the breach of contract claim and penalties under the Prompt Pay Act.

The Division contends on appeal that the trial court erred in granting partial summary judgment on liability, committed trial error on various grounds, and erred in the submission of the Prompt Pay Act claim.We agree that the trial court erred in granting partial summary judgment.The judgment is reversed and remanded.

The contract for demolition of the Eastern Region Mental Health Facility was for a price of $2,030,645, "subject to additions and deductions as provided herein."The contract in addition to general demolition work included abatement of various asbestos-containing materials that had been identified in various portions of the building.Because the parties were unable to determine the exact quantities and locations of all asbestos containing materials, the contract contained estimates as to the quantity and location of those materials.Specified quantities of various materials in various parts of the building were included in the base bid and contract amount.

The parties agreed that the contract amount would be adjusted upwards or downwards as exact quantities were discovered and removed.The contract provided for unit prices for these adjustments.Because the type and location of asbestos containing materials varied widely, the contract provided various unit prices for each material and location.In fact, the contract included at least seven different unit prices for removing asbestos for various size pipes and joints.The contract documents estimated that 16,000 square feet of asbestos containing duct covering would need to be removed from the building's mechanical room.The contract further stated that more or less duct covering might be present and that "change orders shall be issued for the increased or decreased amount."The contract set a unit price of $4.75 per square foot of asbestos-containing duct covering removed or found that was not included in the base bid.

During the demolition, it was discovered that ductwork above the ceilings elsewhere in the building was also encased in asbestos-containing coverings.The parties estimated this additional covering to be approximately 100,000 square feet.The Division took the position that the composition of the duct covering in the ceilings differed from the covering used in the mechanical room and would require a different means of removal.The Division asked Spirtas to provide a separate bid for the abatement of the additional asbestos.The Division did not accept that bid.The Division then opened the bidding process to other contractors.Spirtas submitted a second bid, which was also rejected.The Division ultimately accepted the bid provided by Environmental Abatement Services ("EAS").EAS removed 168,000 square feet of asbestos-containing duct covering under their contract with the Division.

Work was substantially completed in April 1999.In March 2000, Spirtas submitted a claim for lost profits against the Division, claiming that it was deprived of lost profits by the Division's decision to have EAS perform the additional abatement work.It sought damages in the amount of $360,898.52 (the net result of the 168,000 square feet of additional duct covering multiplied by the unit price of $4.75 per square foot, less $437,101.48 for Spirtas' estimated costs of removal).The claim was rejected, leading to the present suit by Spirtas against the Division, in which it sought lost profits based upon a breach of contract theory, together with penalties under the Prompt Pay Act, Section 34.057, RSMo 1994.

While the suit was pending, Spirtas brought a motion for partial¹ summary judgment, arguing that it was entitled to a change order reflecting the additional asbestos removal work.It also argued that the contract required the Division to compensate Spirtas for that work at the previously agreed unit price of $4.75 per square foot.The trial court granted Spirtas' motion in part.In a brief order, the trial court granted summary judgment to Spirtas "as to liability only."With regard to the issue of damages, the partial summary judgment stated that damages were "to be determined at [a] later date based upon further evidence."

The remaining issues proceeded to trial.At the conclusion of trial, the Division moved for directed verdict on the issue of damages and liability.It also moved for the dismissal of the case for lack of standing, arguing that the suit was actually brought by Environmental Control and Abatement ("ECA"), one of Spirtas' subcontractors, and not Spirtas itself.The trial court denied these motions.The jury awarded Spirtas $360,989.52 in lost profits and found that the Division had violated the Prompt Pay Act.Based on the latter finding, the trial court awarded interest at the rate of 1.5% per month from April 2000 and attorney's fees in the amount of $32,188.75.

Discussion

The Division appeals, raising six claims of error.First, it contends that the evidence did not support the amount of damages awarded by the jury.Second, the Division claims that the trial court erred in granting partial summary judgment in favor of Spirtas on the issue of liability, as Spirtas was not entitled to judgment on that issue as a matter of law.Third, the Division argues that the trial court committed error in denying its motion for directed verdict and in refusing its non-MAI instruction limiting the amount of damages.Fourth, the Division argues that the trial court erred by refusing to dismiss Spirtas' suit on standing grounds.Fifth, the Division contends that the trial court committed reversible error by failing to sustain its objection to closing argument by Spirtas that misstated the law.Sixth, the Division argues that the trial court erred by imposing penalties under the Prompt Pay Act, Section 34.057, RSMo, because Spirtas failed to establish that its claim met the requirements of that statute.

Because we find that the trial court erred in granting summary judgment to Spirtas on the issue of liability, we sustain the Division's second point on appeal.In that point, the Division complains that the trial court erred in granting summary judgment on the issue of liability for Spirtas' breach of contract claim leaving only the issue of damages for the jury.We agree, and reverse and remand for further proceedings.Preliminarily, however, we must consider, out of order, the Division's fourth point on appeal, which contends that suit should have been dismissed on standing grounds.

The Trial Court Did Not Err in Refusing to Dismiss the Suit on Standing Grounds

In its fourth point on appeal, the Division argues that the trial court should have dismissed the suit for lack of standing.It contends that the suit was brought not by Spirtas, but instead by its subcontractor, ECA.The Division points out that ECA did not have standing to sue the Division and was barred from bringing suit by sovereign immunity, as it was not a party to the contract with the Division.The Division also contends that Spirtas could not assign any rights to ECA.Spirtas replies that the trial court's decision was correct, as Spirtas, and not ECA, was the plaintiff in the action.

The Division relies upon two principal facts in support of its argument.First, the Division notes that Spirtas did not have a corporate representative at trial (either for testimonial purposes or merely to be present during trial).Second, it directs the Court's attention to the testimony of witnesses from ECA, which discussed damages in terms of the lost profits incurred by ECA, not those incurred by Spirtas.The Division's argument, however, is, nevertheless, at odds with the pleadings in this case, which name Spirtas as the plaintiff in the action.Further, Spirtas did appear at trial, through its counsel.The Division points us to no rule or case law which sets out a requirement that a plaintiff(or any other party) must personally attend trial when they are represented by counsel, absent a subpoena or similar compulsion requiring the party's attendance at trial.

Point denied.

Standard of Review

Appellate review of a grant of summary judgment is essentially de novo.ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Co.,854 S.W.2d 371, 376(Mo. banc 1993).We do not defer to the trial court's order granting summary judgment because the propriety of such grant is purely a question of law.Id.We view the record in the light most favorable to the Division as the non-movant.The facts supporting the motion are deemed true unless contradicted by the non-movant in response to the motion.The non-movant, however, is accorded all reasonable inferences from the record.Id.Even if the facts...