Vic Koepke Excavating & Grading Co. v. Kodner Development Co.

• Citation: 571 S.W.2d 253
• Decision Date: 12 September 1978
• Docket Number: No. 60106,60106
• Parties: VIC KOEPKE EXCAVATING & GRADING COMPANY, a corporation, Respondent, v. KODNER DEVELOPMENT COMPANY, a corporation, Appellant.
• Court: Missouri Supreme Court

Page 253

571 S.W.2d 253

VIC KOEPKE EXCAVATING & GRADING COMPANY, a corporation, Respondent, v. KODNER DEVELOPMENT COMPANY, a corporation, Appellant.

No. 60106.

Supreme Court of Missouri, En Banc.

Sept. 12, 1978.

Rehearing Denied Oct. 10, 1978.

Alan G. Kimbrell, St. Louis, Stanley J. Goodkin, Clayton, for appellant.

Stefan J. Glynias, Clayton, for respondent.

SEILER, Judge.

We ordered this case transferred from the court of appeals, St. Louis district, largely to resolve a conflict in the case law over whether the issue of workmanlike performance is an indispensable component of plaintiff's verdict-directing instruction in an action on a contract.

Defendant is a general contractor. Plaintiff is a dirt-moving subcontractor. The parties had worked together on construction projects since 1960 or 1961. The present controversy centers on construction work done between 1970 and 1972 on Big Bend Woods subdivision.

Plaintiff sued in four counts for recovery of balance plus interest allegedly due for dirt-moving operations and various other construction tasks. An additional count sought recovery of the balance on a promissory note. Defendant denied the allegations of each count of the petition and as to each count asserted that:

"7. For further answer and defense . . . plaintiff improperly performed grading and filling operations as a direct and proximate result of which defendant was caused to expend $15,277.26. Said amount should be set off against any amounts to which plaintiff is entitled." ¹

Trial before a jury resulted in verdicts for plaintiff on all five counts in the amounts sought, a total of $21,729.65, subject to a set off of $2,612.00 on defendant's claim. ² Defendant appeals on a variety of grounds from the jury verdicts on all counts and challenges the amount of the set off as grossly inadequate and against the weight of the evidence.

Count I of plaintiff's petition sought $5,361.36 plus interest as the balance due on a promissory note executed by defendant to plaintiff in January of 1971.

By count II and count V of its petition, plaintiff sought recovery of balances due plus interest for grading, cutting and filling operations performed on specified lots of plat 2-B and plat 1, respectively, of the subdivision. According to written contracts of the parties, plaintiff was to be paid a specified amount per lot for a specified number of lots. The contracts provided that "(a)ll work (was) to be completed in a workmanlike manner according to standard practices. . . ."

Counts III and IV of plaintiff's petition sought balances due plus interest for grading equipment and labor furnished on plats 3 and 4 by plaintiff at the special instance and request of defendant for which services defendant agreed to pay an amount based on an hourly charge as set forth in a pleaded schedule.

As said, as the basis for a set off against plaintiff's recovery, defendant asserted in its answer to each count that the work was done improperly and as a result defendant was forced to expend additional sums to correct the errors.

Defendant seeks reversal of plaintiff's verdicts on counts II and V, alleging error in verdict director instructions submitted by plaintiff. Plaintiff's witness testified that all grading, cutting and filling on the specified lots had been completed. Plaintiff's ledger accounts and invoices showing the balances allegedly due were introduced. Plaintiff's verdict directors on both counts were essentially identical and provided that:

"INSTRUCTION NO. 3

"Your verdict must be for plaintiff on plaintiff's claim for damages in Count II if you believe:

"First, that the defendant did not pay the plaintiff, and

"Second, because of such failure defendant's contract obligations were not substantially performed, and "Third, plaintiff was thereby damaged,

"Unless you believe that plaintiff is not entitled to recover, or should be limited to a lesser recovery by reason of Instruction No. 7."

Defendant's verdict director on its set off was as follows:

"INSTRUCTION NO. 7

"If your verdict is for plaintiff under Instruction Nos. 2, 3, 4, 5, and 6, or any of them, then you must determine whether plaintiff failed to complete all work in a workmanlike manner according to standard practices and whether, as a direct result of such failure, if any, defendant was damaged.

"If you believe:

"First, plaintiff failed to complete all work in a workmanlike manner according to standard practices, and

"Second, as a direct result thereof, defendant was damaged, then you must deduct the amount of such damage from plaintiff's damage. In the event such damages is equal to or exceeds plaintiff's damage, your verdict must be for defendant."

Defendant attacks plaintiff's instruction on two grounds. First, defendant asserts that plaintiff's instructions should have specifically required the jury to find whether plaintiff performed at all. We, however, agree with plaintiff that there was sufficient evidence of performance derived from both plaintiff's oral testimony and defendant's testimony to remove the issue of performance from consideration by the jury. See Missouri Approved Jury Instructions, XLIX (2d ed. 1969); Bender v. Colt Industries, Inc., 517 S.W.2d 705, 709 (Mo.App.1974).

As the second ground, defendant asserts that instructions 3 and 6 were prejudicially erroneous by virtue of their failure to require the jury specifically to find that plaintiff performed its obligation in a workmanlike manner. The court of appeals reversed and remanded on this ground, pointing out that in Baerveldt & Honig Construction Company v. Szombathy, 365 Mo. 845, 289 S.W.2d 116, 120 (1956), we found a similar contention persuasive and held that:

". . . (in the absence of affirmative evidence by defendant conceding that nondefective materials were used and conceding that such materials were applied in a workmanlike manner and in the absence of defendants otherwise eliminating those issues), plaintiff would need to include as essential findings prerequisite to recovery that plaintiff complied with the implied provisions of its contract, viz., that the contract was performed and that the performance thereof was accomplished in a workmanlike manner. . . ."

Plaintiff, in response, contends the court of appeals action is in conflict with the Baerveldt case and also with an earlier opinion of the court of appeals, Brush v. Miller, 208 S.W.2d 816 (Mo.App.1948). ³ Plaintiff argues that its instruction No. 3 included a specific reference to instruction 7 which hypothesized the missing element. At first blush this may appear correct, but closer examination shows it is not. Under instructions 3 and 7, the jury could first find for plaintiff as to the contract price without any consideration of the quality of the performance and then consider any evidence of defective performance as the basis only for deductions from the contract price. The result could be a damage award far different from an award made were the jury properly to recognize that plaintiff is only entitled to recovery of any portion of the contract price if plaintiff is able to persuade the jury that its performance was workmanlike. The omission of any numbered paragraph in plaintiff's verdict directing instruction requiring the jury to determine whether plaintiff performed in a workmanlike manner requires reversal of plaintiff's verdict and judgment on counts II and V.

Brush v. Miller, supra, was action upon a contract to recover the agreed price for labor performed and materials furnished in redecorating defendant's residence, where defendant pleaded only a general denial, but sought to introduce evidence that the services were rendered in an unskillful and unworkmanlike manner. The court held that defendant could not show the work was done in an unworkmanlike manner unless he pleaded such defense, 208 S.W.2d at 821, but earlier in the opinion there is language indicating that where the defense is merely a general denial plaintiff need only prove the fact of performance and is not required also to prove performance in a good and workmanlike manner. This is not correct. Plaintiff as a part of its case in an action on a building or construction contract has the burden of proving that the building was constructed in a good workmanlike manner. Honig Construction Company v. Szombathy, 345 S.W.2d 111, 115 (Mo.1961); Baerveldt & Honig Construction Company v. Szombathy, 365 Mo. 845, 289 S.W.2d 116, 120 (1956). To the extent that Brush v. Miller holds otherwise, it is no longer to be followed. ⁴

Our decision does not change the burden of proof in contract actions. The burden of proof is on the plaintiff with respect to compliance with the contract provision of workmanlike performance. Plaintiff logically is the one in the best position to prove his performance was up to standard. As to defendant's set off or recoupment for unworkmanlike performance or his counter-claim in that respect, the burden is on defendant to prove the same. Logically he is the one in the best position to prove that what he received was of poor quality and workmanship. He is the one who uses and observes the work after plaintiff has finished with it.

Defendant makes several attacks on the treatment in the trial court of plaintiff's counts III and IV, the counts involving work done on an hourly pay basis. One contention is that the plaintiff pleaded an express contract and not an action on account and, therefore, use of MAI 26.03, the verdict director for an action on account, constituted a fatal variance between proof and instruction. Defendant claims that the action was one on an express contract because plaintiff pleaded "that defendant agreed to pay the plaintiff for its services an amount based on an hourly charge for all grading equipment furnished by the plaintiff necessary to perform the grading work requested by the defendant" according to a certain schedule of hourly rates. Therefore, continues defendant, plainti...