Steinberg v. Fleischer, 47597

Decision Date11 March 1986
Docket NumberNo. 47597,47597
Citation706 S.W.2d 901
PartiesErwin E. STEINBERG and Jack Tyrer, d/b/a Gravois Associates, Respondents, v. Alfred J. FLEISCHER, et al., Appellants.
CourtMissouri Court of Appeals

Leritz, Reinert & Duree, P.C., Bernard A. Reinert, Mark A. Helfers, St. Louis, for appellants.

Blumenfeld, Sandweiss, Marx, Tureen, Ponfil & Kaskowitz, Gary A. Growe, Clayton, for respondents.

CRANDALL, Presiding Judge.

Plaintiffs, Erwin E. Steinberg and Jack Tyrer, d/b/a Gravois Associates, brought, an action against defendants, Alfred J. Fleischer, et al., d/b/a Fleisher-Seeger Construction Co., for breach of a construction contract. Defendants counterclaimed based on theories of breach of contract, quantum meruit, negligence and fraud. Defendants appeal from the judgment, in a jury-tried case, in favor of plaintiffs on their claim for damages in the amount of $137,000 and in favor of plaintiffs on defendants' counterclaim. We affirm in part and reverse and remand in part.

The evidence established that, on December 7, 1977, plaintiffs entered into a contract with defendants to construct a supermarket. The contract called for completion within nine months, which was later extended to ten months. The construction contract consisted of a standard form prepared by the American Institute of Architects (AIA). The parties agreed to modify the form contract by deleting (1) the phrase excusing the date of completion because of "adverse weather conditions" 1 and (2) the section providing for an equitable adjustment in the contract sum if "concealed conditions" below the surface of the ground were encountered during construction. 2 Defendants commenced site preparation work immediately, but then stopped all work until late March of 1978 due to severe winter weather. In April, a subcontractor hit rock while digging a new sewer line. The rock had to be blasted. In June, excavation of the building site began, but then another subcontractor encountered difficulties compacting the soil. A myriad of other problems surfaced. In December 1978, work resumed and the building was substantially completed on October 10, 1979.

In their first point, defendants contend that the trial court erred in granting partial summary judgment in favor of plaintiffs on the issue of defendants' liability for breach of contract.

In reviewing the trial court's ruling on a motion for summary judgment the appellate court must scrutinize the record in the light most favorable to the party against whom judgment was rendered, resolving all doubts in favor of that party. First Nat. Bank of St. Charles v. Chemical Products, Inc., 637 S.W.2d 373, 375 (Mo.App.1982). When a party is confronted with a motion for summary judgment supported by affidavits, he must set forth specific facts showing that there is a genuine issue of fact for trial. Clayton Brokerage Co. v. Raleigh, 679 S.W.2d 376, 379 (Mo.App.1984).

In their motion for partial summary judgment, plaintiffs alleged that defendants failed to comply with Article 8.3.2 3 of the General Conditions of the contract; and therefore any excuse defendants might have had for delay beyond the date specified for completion in the contract was waived. In support thereof, plaintiffs submitted the architect's affidavit and one defendant's deposition testimony which acknowledged that no such requests had been made. Defendants, in their response to the motion for summary judgment, urged that written requests should not be required when the delay was caused solely by the other party. Additionally, in their supplemental response to summary judgment and in their motion for reconsideration, defendants countered that progress letters had been written to plaintiff-owner, not plaintiff-architect. They claimed that these letters were effective as requests for extensions of time and that the owner's failure to respond to these letters was tantamount to acquiescense to the delays. Defendants also argued that the contract was unenforceable because, based on deposition testimony, plaintiffs had fraudulently induced them to enter the contract by failing to disclose either the existing subsurface conditions at the building site or the architect's ownership interest in the project.

The meaning of Article 8.3.2 is plain on its face. In Herbert & Brooner Construction Co. v. Golden, 499 S.W.2d 541, 549 (Mo.App.1973), the court interpreted the same contractual provision, stating:

[I]t is incumbent upon the contractor, in order to avail of an extension of time ... to lay claim therefor at the time and within the time and manner stipulated. Otherwise no such extension of time is available to him on the grounds of waiver ... in the very face of a provision stiplating a precise time.... (Citations omitted.)

The contract in this case, although a "standard" contract, was freely negotiated. The parties could have included any reasonable terms dealing with construction delays that they thought appropriate. Having agreed on the terms, they ordinarily would be bound by them. The question here is whether defendants have raised any factual issues which would preclude strict enforcement of Article 8.3.2 of the contract. In considering that question, we look to the record at the time the motion for summary judgment was submitted.

Defendants argue, inter alia, that plaintiffs fraudulently misrepresented the subsoil conditions at the time of entering into the contract. If, in fact, there was fraud in the inducement there could be no legally enforceable contract. Fraud avoids all contracts, where it can be shown that, but for the fraud, the defrauded party would not have entered into the contract. Taggart v. School Dist. No. 52, Carroll County, 339 Mo. 223, 96 S.W.2d 335, 337 (Mo.1936). In the present case, it was for the jury to decide whether representations were made, whether the representations were false, and whether defendants were entitled to rely on the representations. See, e.g., Essex v. Getty Oil Co., 661 S.W.2d 544, 550-551 (Mo.App.1983). Plaintiffs' fraudulent inducement was therefore a genuine issue of fact for trial.

If the facts establish that plaintiffs fraudulently induced defendants to contract, the next question is whether defendants' actions after discovering the fraud constituted a waiver. Waiver can be found in either the words or actions of defendants. To be construed as an implied waiver, defendants' acts must be so manifestly consistent with and indicative of an intention to renounce a particular right or benefit that no other reasonable explanation of their conduct is possible. Meyer v. Brown, 312 S.W.2d 158, 162 (Mo.App.1958).

The evidence submitted at the time of the motion for summary judgment established that defendants did not walk off the job; they remained and substantially completed the project. If defendants, with full knowledge of the material facts, chose to honor the contract they may have waived the fraud. This would depend on many factors, including but not limited to: whether substantial work had been done on the project prior to the discovery of the subsurface conditions; whether the problem was severe; whether serious financial obligations had been incurred by defendants; and whether the facts were only discovered piecemeal as the work progressed. These questions are questions of fact that cannot be resolved as a matter of law based upon the record in this case. See 13 A.L.R.2d 807, 846-854 (1950).

There is another cogent reason for not strictly enforcing the extension of time provision of the contract. The architect, although he was hired by the owner and served as his agent, occupied a quasi-judicial position. As such, he was contractually bound by Article 2.2.7 of the General Conditions to be "the interpreter of the requirements of the Contract Documents and the judge of the performance thereunder." In that capacity he was obligated under Article 2.2.10 to "not show partiality to either" party. Here the architect is a co-owner and a party plaintiff. Defendants allege that he was an undisclosed co-owner. If that is factually correct, then the contract provision providing that extensions of time be requested from the architect is a nullity. Clearly, it would be unjust to require plaintiffs to abide by such a contractual provision when secretly the "impartial judge" has a direct financial interest in the outcome of the project.

Defendants, in their response to plaintiffs' motion for summary judgment, set forth sufficient facts demonstrating that there were genuine issues of fact for trial. The jury should have been permitted to decide whether or not defendants actually breached the contract by not completing the project after the date specified in the contract. We therefore hold that the trial court erred in granting summary judgment in favor of plaintiffs on the issue of liability.

Defendants raise fourteen other points on appeal. We have carefully reviewed the record and have determined that an extended opinion on Points II, XII and XIV would have no precedential value. Further, no error of law appears. Those points are therefore denied in accordance with Rule 84.16(b).

Defendants' Points III, IV and V have no citation to authority. The points raised are not ones of first impression nor are they just matters of logic or of language construction. Citation to authority is appropriate. We therefore consider the points abandoned. Wright v. Martin, 674 S.W.2d 238, 242 (Mo.App.1984); Ortmeyer v. Bruemmer, 680 S.W.2d 384, 396 (Mo.App.1984).

In view of our holding on Point I, it is unnecessary to consider Points VI, VIII, IX, X and XV which relate to the judgment on plaintiffs' claim. The parties should consider the points raised in the briefs on the re-trial of plaintiffs' claim.

We turn now to the remaining points. In Point VII defendants allege error in the trial court's refusal to admit defendants' Exhibit No. 89, which delineated the attorney's fees expended...

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