Williams Constr., Inc. v. WEHR Constr., L.L.C.

Decision Date08 November 2012
Docket NumberNo. SD 31542.,SD 31542.
Citation403 S.W.3d 660
PartiesWILLIAMS CONSTRUCTION, INC., Plaintiff–Respondent, v. WEHR CONSTRUCTION, L.L.C., Defendant–Appellant.
CourtMissouri Court of Appeals

OPINION TEXT STARTS HERE

Richard E. Walters, Springfield, MO, for Appellant.

Jason Coatney, Springfield, MO, for Respondent.

JEFFREY W. BATES, J.

Wehr Construction, L.L.C. (Wehr) appeals from a judgment awarding damages for breach of contract to Williams Construction, Inc. (Williams). Wehr contends the trial court erred by: (1) finding Wehr's termination of a purchase order was a breach of the agreement when Williams' earlier noncompliance with the agreement's terms was the first breach; and (2) awarding damages for lost profits and overhead expenses. The trial court correctly determined that there was a breach of contract by Wehr and that Williams sustained a $30,000 loss of profits from that breach. The trial court's award of an additional $5,000 for overhead expenses, however, was not supported by the evidence. Therefore, we affirm the judgment as modified. The cause is remanded with directions to enter an amended judgment in Williams' favor in the net amount of $15,028.

In this court-tried case, our review is governed by Rule 84.13(d) and the principles set out in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).1 We must affirm the trial court's judgment unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law.” Salem United Methodist Church v. Bottorff, 138 S.W.3d 788, 790 (Mo.App.2004). The trial court's judgment is presumed correct, and an appellant has the burden of proving it erroneous. Surrey Condominium Ass'n, Inc. v. Webb, 163 S.W.3d 531, 535 (Mo.App.2005). We accept all evidence and inferences therefrom in the light most favorable to the prevailing party; all contrary evidence and inferences are disregarded. Essex Contracting, Inc. v. Jefferson County, 277 S.W.3d 647, 652 (Mo. banc 2009); Strobl v. Lane, 250 S.W.3d 843, 844 (Mo.App.2008). The credibility of the witnesses and the weight to be given to their testimony is for the trial court, which is free to believe none, part or all of the testimony of any witness. Christian Health Care of Springfield West Park, Inc. v. Little, 145 S.W.3d 44, 48 (Mo.App.2004). We defer to the credibility determinations of the trial court “because it is in a better position to not only judge the credibility of witnesses directly, but also their sincerity and character as well as other trial intangibles which may not be completely revealed by the record.” Tichenor v. Vore, 953 S.W.2d 171, 174 (Mo.App.1997); Rule 84.13(d)(2). The following summary of the facts has been prepared in accordance with these principles.

Williams sells metal building packages, and Wehr constructs buildings. On October 18, 2004, Wehr executed Purchase Order No. 003 (the purchase order), requesting that Williams provide four pre-engineered steel buildings for a total cost of $299,435. The four buildings included a warehouse, retail strip center, convenience store and car wash. These buildings were to comprise the “Kansas Plaza,” located at the corner of Kansas Expressway and Sunset Boulevard in Springfield, Missouri (hereinafter referredto as the project). In connection with the project, Williams submitted an invoice to Wehr to cover the “mobilization” fee for $14,972, which Wehr paid in full in early November. 2 On November 11, 2004, Wehr notified Williams by letter that Wehr was placing the project on hold.

In a letter dated December 9, 2004, Wehr canceled the purchase order. Wehr explained that it had been “forced to reassess costs” to build the project and “with regrets [is] forced to cancel the order” because the “costs of construction materials, especially steel, have increased tremendously.” Thereafter, Williams stopped its work on the project.

In a letter dated December 29, 2004, Williams acknowledged Wehr's cancellation. Williams stated that, according to the terms and conditions of the purchase order, “project cost does not appear to be a just reason” for termination. Instead, Williams stated that the “Termination by The Owner for Convenience” clause applied. Cancellation pursuant to that clause entitled Williams to receive payment for work executed and costs incurred by reason of the termination, along with reasonable overhead and profit on the work not executed. Williams stated that it was owed $60,986.25 because of the cancellation, calculated as follows: (1) $35,000 for lost profit and overhead expenses; and (2) $25,986.25 owed to Williams' supplier, American Buildings Company (ABC) for engineering services. After reducing that sum to account for the prior $14,972 mobilization fee payment, Williams demanded payment in the amount of $46,014.25 on the purchase order.

Wehr responded in a January 3, 2005 letter. Wehr acknowledged that it paid $14,972 for “5% mobilization” and admitted that amount was “quite fair and standard procedure in the construction industry,” but Wehr denied that it owed any additional amount on the purchase order. In February 2005, Williams again made a demand for payment, but Wehr refused. Wehr completed the project with steel buildings purchased from a different supplier.

Williams sued Wehr for breach of contract, and Wehr filed a counterclaim seeking the return of its $14,972 payment. In May 2011, the case was tried to the court. The only witnesses were Williams' president, David Williams (Mr. Williams), and Wehr L.L.C. member Scott Wehr (Mr. Wehr). After hearing the witnesses' testimony and considering a number of exhibits, the trial court found in favor of Williams on its breach of contract claim and against Wehr on its counterclaim.3 The court found that Williams had sustained damages in the amount of $20,027.97.4 The court denied Williams' request for $25,986.25 to pay ABC. This appeal followed. Additional facts necessary to the disposition of the case are included below as we address Wehr's two points on appeal.

Point I

Wehr's first point challenges the trial court's determination that Wehr breached the agreement by terminating the purchaseorder. The following facts are relevant to this issue.

Paragraphs 5 and 10 of the purchase order apply to Williams as “Supplier” and Wehr as “Contractor.” Paragraph 5 states:

All submittals (shop drawings, samples, cut sheets, etc....) as required by the Contract Documents, are due in Contractor's office no later than three (3) weeks from the date of this Agreement. Included shall be all anticipated lead times involved with submittals. Failure to comply with the above unless approved by Contractor in writing, may impose liability for job delays.

Paragraph 10 states:

Contractor may at any time terminate this Purchase Order after Two (2) days written notice to Supplier at his last known mailing address for either of the following reasons:

a. Material not in compliance with the specifications or meeting Architect's approval.

b. Failure by Supplier to deliver the specified material in a timely manner or as required by the construction schedule.

In Wehr's letter dated January 3, 2005 refusing to pay Williams, Wehr admitted to receiving “2 of the 4 submittals.”

Wehr signed the purchase order on October 18, 2004. The project was to be completed in phases. The order of construction was the warehouse, retail strip center, convenience store, and then the car wash. ABC's engineers were supposed to prepare the engineering plans for the buildings. It took approximately six weeks from the date of the order for ABC to generate engineering plans. Williams provided to Wehr an engineering development design document, which was used by Wehr to obtain a foundation permit, and erection blueprints for the warehouse. At the time the project was canceled, ABC had done the following engineering design work on the project: (1) $7,785 on the warehouse; (2) $4,000 on the retail strip center; (3) $2,000 on the convenience store; and (4) $898 on the car wash. All of the engineering work, drawings and specifications had been completed for the warehouse. Because these drawings and specifications were specific to an ABC building, they could not be used to build a steel building from another supplier. Mr. Williams testified that he did not provide all four submittals and “erection drawings” to Wehr within three weeks, as required by Paragraph 5, because it was impossible to do so within that time frame.

In Point I, Wehr contends the trial court erred in holding that Wehr's termination of the purchase order was a breach of the agreement. Wehr argues that Williams was actually the first party to breach, which authorized Wehr's termination of the purchase order. According to Wehr, it properly terminated the purchase order “for non-compliance, in that Williams did not provide building and erection drawings and other submittals within three (3) weeks of October 18, 2004.” We find no merit in this argument.

Wehr's argument is based upon the first-to-breach rule, which “holds that a party to a contract cannot claim its benefit where he is the first to violate it.” R.J.S. Sec., Inc. v. Command Sec. Services, Inc., 101 S.W.3d 1, 18 (Mo.App.2003). Only a material breach, however, may excuse the other party's performance. Id. “Whether a breach is material or immaterial is a question of fact.” Campbell v. Shaw, 947 S.W.2d 128, 132 (Mo.App.1997); Classic Kitchens & Interiors v. Johnson, 110 S.W.3d 412, 417 (Mo.App.2003); see, e.g., Schaefer v. Rivers, 965 S.W.2d 954, 958 (Mo.App.1998) (substantial,though incomplete, performance of contractual duties with only slight deviations from the contract is sufficient evidence of performance by party seeking to enforce the agreement).

Wehr argues that [f]ailure to provide the drawings in this case was a material breach because had Wehr wanted to move forward with the project, it could not have done so without the drawings in hand to submit...

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