Tri-City Const. Co. v. A.C. Kirkwood and Associates

• Decision Date: 27 October 1987
• Docket Number: TRI-CITY,No. WD,WD
• Citation: 738 S.W.2d 925
• Parties: CONSTRUCTION COMPANY, Appellant, v. A.C. KIRKWOOD AND ASSOCIATES, Respondent. 38950.
• Court: Missouri Court of Appeals

Page 925

738 S.W.2d 925

TRI-CITY CONSTRUCTION COMPANY, Appellant, v. A.C. KIRKWOOD AND ASSOCIATES, Respondent.

No. WD 38950.

Missouri Court of Appeals Western District.

Oct. 27, 1987.

Charles R. Svoboda, Kansas City, for appellant.

Kenneth O. Smith, Kansas City, for respondent.

Before SHANGLER, P.J., and PRITCHARD and CLARK, JJ.

CLARK, Judge.

This suit presented a dispute between a construction contractor, Tri-City Construction Company, and a firm of professional engineers, A.C. Kirkwood and Associates, over the design, supervision and installation of a waste water system for the city of Coffeyville, Kansas. The issues on appeal are whether summary judgment granted to Kirkwood was appropriate either because the statute of limitations barred Tri-City's claim or, because a release given by Tri-City to the city of Coffeyville also operated to release claims against Kirkwood.

The facts applicable to the questions of the limitations statute and the release were not in dispute, the only issues being matters of law.

Kirkwood was employed by the city of Coffeyville, as design engineer, to prepare plans for improvements to the city of Coffeyville's waste water system and to act for the city in processing contractors' bids and in supervising the work for contract compliance. The contract for construction was awarded to Tri-City December 10, 1980 and work commenced March 1, 1981. On June 21, 1982, the city notified Tri-City that its rights to continue on the job were terminated, there having been various disputes earlier over the nature and extent of Tri-City's performance.

The rights and obligations between Tri-City and the city of Coffeyville under the terminated contract remained a subject of controversy and resulted in a suit and counterclaim filed in the State of Kansas. That action, which did not involve Kirkwood as a named party, was settled in April, 1984. The city of Coffeyville paid Tri-City $975,000.00 and Tri-City executed a release of claims against the city of Coffeyville and "its officials, officers, agents and employees." Tri-City reserved any claims it might have against anyone other than the persons and entities described in the release.

Some twenty days later, Tri-City commenced this suit against Kirkwood. On May 16, 1984, the petition was filed alleging that Kirkwood was negligent in its administration of the construction contract and that the plans for the construction failed to satisfy an implied warranty of fitness. Liberally construed, the petition substantively contended that the problems Tri-City encountered in performing its contract with the city of Coffeyville were attributable to a failure by Kirkwood to resolve disputes, process change orders and submit pay estimates as the job was in progress and to various deficiencies in the original plans and specifications prepared by Kirkwood.

Kirkwood moved for summary judgment and Tri-City was permitted to file an amended petition. In that petition, filed May 12, 1986, Tri-City undertook to plead a contract theory as third party beneficiary of the agreement between Kirkwood and the city of Coffeyville. It also restated the original claim that Kirkwood had breached an implied warranty of fitness in the plans it prepared. The motion for summary judgment was renewed and the court granted judgment in favor of Kirkwood.

The two grounds Kirkwood relied on for entry of summary judgment were: (1) Tri-City's cause of action, whether in tort or contract, was barred under the Kansas statute of limitations; and (2) Kirkwood was released from liability when Tri-City settled its claims with the city of Coffeyville because Kirkwood was an agent of the city in dealings with Tri-City during the construction of the waste water system. The trial court did not indicate in its entry of summary judgment which ground was adopted as a basis for its ruling. The two subjects will therefore be considered separately here, applying the doctrine that the trial court's judgment must be affirmed if it is sustainable on any theory as a matter of law. City of Wright City v. Cencom of Eastern Missouri, Inc., 699 S.W.2d 41, 42 (Mo.App.1985).

THE STATUTE OF LIMITATIONS

Tri-City and Kirkwood are both Missouri corporations and each maintains its office in Missouri. With respect to the contracts between Tri-City and the city of Coffeyville and between Kirkwood and the city of Coffeyville, however, all work was to be performed in Kansas where the construction project was located. Under the petition allegations, the negligent acts or omissions of Kirkwood, if any, and any breach of a contract obligation occurred in Kansas. It follows, of necessity, that monetary losses suffered by Tri-City must have been sustained in Kansas where Tri-City performed the extra work and uncompensated work comprising the damages sought.

A cause of action accrues when and where the damages are sustained and are capable of ascertainment. Elmore v. Owens-Illinois, Inc., 673 S.W.2d 434, 436 (Mo. banc 1984). Under the facts pleaded in Tri-City's petition, its cause of action accrued in Kansas because its damages were sustained there. The limitation period for commencement of suit against Kirkwood is therefore determined by Kansas law. That law operates to govern Tri-City's right to maintain this action. If the cause of action was barred under the Kansas limitation statute, then that limitation is a complete defense to any action brought in Missouri. Section 516.190, RSMo 1986. Where the statute of limitations of another state is borrowed under § 516.190, supra, the effect is to make as Missouri's own the law of the foreign state including the decisions of that state interpreting and applying the law. Bowling v. S.S. Kresge Co., 431 S.W.2d 191, 193 (Mo.1968).

The Kansas limitation statutes are K.S.A. § 60-512 (1983) which provides a limitation of three years for filing actions on contract and K.S.A. § 60-513 (1983) which allows two years to bring an action for injury to the rights of another not arising on contract. Under Kansas law, a cause of action accrues as soon as the right to maintain a legal action arises. The true test is at what time the plaintiff could first have filed and prosecuted his action successfully. Chavez v. Saums, 1 Kan.App.2d 564, 565-66, 571 P.2d 62, 64 (1977); Yeager v. National Cooperative Refinery Association, 205 Kan. 504, 512-13, 470 P.2d 797, 803 (1970).

The latest date on which Tri-City's cause of action against Kirkwood could have accrued was June 18, 1982, the last date on which Tri-City performed any work in connection with the water system project. Under Kansas law, Tri-City had until June 18, 1985 in which to bring suit against Kirkwood if the claim were upon a contract, but only until June 18, 1984 if the cause of action were in tort.

Tri-City filed two petitions in this case, the first on May 16, 1984 and an amended petition on May 12, 1986. The latter filing was plainly beyond any period allowed by the Kansas statute and therefore the timeliness of the action is to be determined with reference to the first petition. The allegations made in the first petition dwelt upon the negligence of Kirkwood. Tri-City does not contest the classification of the cause of action asserted as sounding in tort and therefore it is subject to the Kansas limitation period of two years.

The date on which the first petition was filed was within the two year limitation (May 16, 1984 vis-a-vis June 18, 1984), but concurrently with the filing of the petition, the court clerk was instructed to withhold summons and service of process until further notice. On June 25, 1984, the clerk received instructions by letter from Tri-City to issue the summons. Service on Kirkwood was made July 3, 1984. Thus, when Tri-City ordered out process on its suit, the limitation period for commencing the action had expired.

The issue to be determined with respect to the statute of limitations is whether the filing of the suit with instructions that service of process on the defendant not be attempted was sufficient to commence the lawsuit and toll the statute. This is a matter of procedure and is governed by Missouri law. State of Kansas ex rel. American Steel Works v. Hartford Accident & Indemnity Co., 426 S.W.2d 720, 723 (Mo.App.1968).

Rule 53.01 reads, "A civil action is commenced by filing a petition with the court." This rule must be read in conjunction with the next following rule, Rule 54.01, which states, "Upon the filing of the petition, the clerk shall forthwith issue the required summons * * * and deliver it for service to the sheriff * * *." Commencement of suit under the rules therefore contemplates not only the filing of the petition, but issuance of a summons and delivery of the papers to the sheriff for service. Where instructions are given which interdict this procedure, the suit is not commenced within the contemplation of the rules.

A number of Missouri decisions have dealt with the question of what conditions must be met to toll a statute of limitations by the commencement of suit. In most, such as Votaw v. Schmittgens, 538 S.W.2d 884, 886 (Mo.App.1976), the statement is made that the running of the statute is conditionally halted by the filing of a petition and the issuance of summons, conjunctive events corresponding to the two stages described in the rules. Quite apparently, if summons is withheld, the cause will never advance, there is no prospect for a judgment on the controversy under any circumstance and the cause, so far as the defendant is concerned, is as dormant as though the petition lay unfiled in the office of the plaintiff's attorney.

Even in cases where summons was issued, it is a further requirement for tolling the statute of limitations that plaintiff exercise due diligence in obtaining...