White River Development Co. v. Meco Systems, Inc.

• Decision Date: 28 February 1991
• Docket Number: No. 16835,16835
• Parties: WHITE RIVER DEVELOPMENT COMPANY, Plaintiff-Respondent, v. MECO SYSTEMS, INC., A Missouri Corporation. FIDELITY and DEPOSIT COMPANY OF MARYLAND, Defendants and Third Party Plaintiffs-Appellants, v. GREAT SOUTHERN SAVINGS AND LOAN ASSOCIATION and Great Southern Financial Corporation, Third Party Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 735

806 S.W.2d 735

WHITE RIVER DEVELOPMENT COMPANY, Plaintiff-Respondent, v. MECO SYSTEMS, INC., A Missouri Corporation.

FIDELITY and DEPOSIT COMPANY OF MARYLAND, Defendants and Third Party Plaintiffs-Appellants, v. GREAT SOUTHERN SAVINGS AND LOAN ASSOCIATION and Great

Southern Financial Corporation, Third Party

Defendants-Appellants.

No. 16835.

Missouri Court of Appeals,

Southern District,

Division One.

Feb. 28, 1991.

Motion for Rehearing and/or Transfer to

Supreme Court Denied March 22, 1991.

Application to Transfer Denied May 3, 1991.

Emory Melton, Donald L. Cupps, Ellis, Ellis and Cupps, Cassville, for plaintiff-respondent.

John R. Lewis, Mary Lou Martin, Law Offices of John R. Lewis, P.C., Springfield, for defendants and third party plaintiffs-appellants.

M. Brent Hendrix, Springfield, for third party defendants-appellants.

PREWITT, Judge.

Plaintiff sought damages against defendant Meco Systems, Inc. (Meco) and defendant Fidelity and Deposit Company of Maryland (Fidelity). Plaintiff's claim was based on breach of a construction contract which it had with Meco to construct condominium residential buildings consisting of two four-plexes and two eight-plexes on the same tract. Fidelity was the surety on a performance bond and a "Labor and Material Payment Bond" provided by Meco on the project.

Meco filed a counterclaim, seeking additional sums which it claims were due it under the contract and change orders amending it, and sought to impose a mechanics lien on a portion of the tract. Meco brought in as parties Great Southern Savings and Loan Association and Great Southern Financial Corporation. Great Southern Financial Corporation was the trustee and Great Southern Savings and Loan Association the beneficiary of a deed of trust on the property. Great Southern Savings and Loan Association loaned plaintiff funds for construction of the project.

Following nonjury trial, the trial court made extensive findings of fact and entered judgment in favor of plaintiff and against Meco and Fidelity on the petition for $189,464.74. Meco was denied recovery on its counterclaim. Meco contends that the trial court erred in its findings of fact and determination of law in several respects, including that the award of damages "was against the weight of the substantial evidence".

I. REVIEW STANDARDS

Review is under Rule 73.01(c). As that rule is interpreted, this court is to affirm the judgment unless there is no substantial evidence to support it, the judgment is against the weight of the evidence, erroneously "Weight of the evidence" means its weight in probative value, not its quantity. Looney v. Estate of Eshleman, 783 S.W.2d 164, 165 (Mo.App.1990). "The weight of evidence is not determined by mathematics, but on its effect in inducing belief." Id.

declares the law, or erroneously applies the law. Plunkett v. Parkin, 788 S.W.2d 356, 357 (Mo.App.1990). A judgment is to be set aside because it is against the weight of the evidence only with caution and with a firm belief that the decree or judgment is wrong. Id.

Due regard is given to the trial court's determination on the credibility of witnesses. Rule 73.01(c)(2); Centennial Insurance Co. v. International Motor Car, 581 S.W.2d 883, 885 (Mo.App.1979). The trial judge as the trier of fact can disbelieve testimony even where uncontradicted. Robinson v. Estate of Robinson, 768 S.W.2d 676, 677 (Mo.App.1989).

II. DENIAL OF MECO'S COUNTERCLAIM

A. Monetary Amount

Meco's first point states that the trial court erred in finding that the contract between it and plaintiff "was a guaranteed maximum cost contract" and in denying it recovery on its counterclaim because the $102,333.50 it sought was based upon pay applications approved for payment by plaintiff's president. Not all were paid because the construction loan at Great Southern Savings and Loan Association was exhausted by prior payments, including $1,317,405.76 to Meco. Some payments were made to Meco thereafter from sales of condominiums on the project. In the findings of fact, the trial court determined that Meco's claim was not "proved by substantial evidence introduced by Meco."

The parties agree that numerous changes were made in the plans and specifications which would entitle Meco to more than the contract initially provided. They disagree as to the extent of the modifications and whether Meco was entitled to anything more than it received.

Homer A. White III, was the president and "major stockholder" of plaintiff. As such, he executed the contract between plaintiff and Meco. White was on the premises during construction and was plaintiff's primary representative on the project. White testified that he signed, giving approval to, all the pay applications made by Meco and usually picked up the checks from Great Southern Savings and Loan Association and took them to Meco. The contract provided for a "maximum cost" of $1,247,667.00. White testified that through the 13th pay application of Meco the cost of the project reached $1,225,201.17 and he calculated that the additional cost to complete it would be $185,761.00. This would bring the cost to $1,410,962.17.

Plaintiff presented evidence through White's daughter, an employee of plaintiff, questioning certain items included in the pay applications, totaling $5,657.43. During trial, Meco reduced its claim on its counterclaim from $104,760.53 to $102,333.50, apparently conceding that there had been overbilling of $2,427.03.

The trial court found that Meco was overpaid $5,103.52, for items never delivered or overbilled. As the trial court included them in the damages awarded plaintiff, it necessarily found that the items were included in the applications of Meco which had been paid. In the judgment plaintiff was awarded slightly over 90% in amount of the items questioned.

By White approving the applications and questioning only a few of the items contained in them, Meco established with substantial evidence it was entitled to the amount finally sought. We have a firm belief that any contrary finding was against the weight of the evidence. Whether the contract was a "guaranteed maximum cost" contract or a "cost plus a fee" contract need not be decided as the parties agree that changes were made raising the contract limits. White approved the pay applications and, in effect, agreed that Meco was entitled to payment except for the items and amounts questioned.

This court is obligated to order the judgment that should have been entered effective

on the date of the judgment in the trial court. In re Marriage of Runez, 666 S.W.2d 430, 433 (Mo.App.1983); Rule 84.14. Meco is entitled to recover $102,333.50 on its counterclaim, with interest from October 30, 1986, (thirty days after its last payment) as provided by § 408.020, RSMo 1986, effective as of the date of the judgment, January 9, 1990.

B. Denial of Mechanic's Lien

Meco sought a mechanic's lien, but that was denied by the trial court because it was not entitled to recover any amount from plaintiff, and because it failed to give the notice required by § 429.012 RSMo 1986. That section is set forth marginally: ¹

Meco admits that it did not give the notice. Relying primarily upon Overberg Decorating Center, Inc. v. Selbah Properties, 741 S.W.2d 879 (Mo.App.1987), Meco contends that as White was a "knowledgeable developer" who understood the mechanic's lien law, the notice was not required. Although Overberg contains language supporting Meco's position, there, notice substantially equivalent to that required in the statute was given. 741 S.W.2d at 881.

As Meco suggests, the purpose of the statute "is to warn inexperienced property owners of the danger to them which lurks in the mechanics' lien statute." BCI Corp. v. Charlebois Const. Co., 673 S.W.2d 774, 779 (Mo. banc 1984); Overberg, 741 S.W.2d at 881. However, the statute does not limit the necessity of this notice to those inexperienced with, or having lack of knowledge about, the mechanics' lien laws.

The statute has no exceptions. When a statute is without exceptions, courts should not create them. Matter of A-- F--, 760 S.W.2d 916, 918 (Mo.App.1988). Allowing a lien when there was not substantial compliance with this section would add another issue to each mechanic's lien case, the property owner's knowledge of the mechanic's lien law. It seems unlikely the legislature intended such a result, as there are no limitations or exceptions to the giving of the notice. Meco is not entitled to a mechanic's lien.

III. AWARD OF DAMAGES TO PLAINTIFFS

Plaintiffs Meco and Fidelity, in their second point, contest, in several particulars, the propriety of the trial court's award of damages of $189,464.74 to plaintiff.

A. Compliance with Rule 73.01(a)(2)

Rule 73.01(a)(2) provides in part "[i]f any party so requests before final submission of the case, the court shall dictate

to the court reporter, or prepare and file, a brief opinion containing a statement of the grounds for its decision and the method of determining any damages awarded". Meco and Fidelity made such a request and contend that the trial court "failed to include in its judgment a statement of its method of determining damages". The parties cite no cases construing this provision of Rule 73.01 and we have found none. The complaint made is that the court did not include such a statement "in its judgment". We do not think the rule requires that the grounds be stated there, but it is sufficient if it is stated in its findings. Those findings include the detail set forth marginally. ² After making the findings set forth below, the trial court again summarized the damages by finding that plaintiff was entitled to damages against Meco and Fidelity as follows:

DAMAGES PLAINTIFF IS ENTITLED

TO, IF ANY, AND REASONS AND

AMOUNTS THEREOF

1. The defendant has breached its contract to perform the project in a

workmanlike manner.

2. Plaintiff is entitled to certain sums for items not received, for...