Woods of Somerset, LLC v. Surety

• Decision Date: 04 February 2014
• Docket Number: Nos. WD 75533,WD 75534.,s. WD 75533
• Citation: 422 S.W.3d 330
• Court: Missouri Court of Appeals
• Parties: WOODS OF SOMERSET, LLC, et al., Respondent, v. DEVELOPERS SURETY AND INDEMNITY COMPANY, Appellant.

422 S.W.3d 330

WOODS OF SOMERSET, LLC, et al., Respondent,
v.
DEVELOPERS SURETY AND INDEMNITY COMPANY, Appellant.

Nos. WD 75533, WD 75534.

Missouri Court of Appeals,
Western District.

Sept. 24, 2013.
Motion for Rehearing and/or Transfer to the Supreme Court Denied Oct. 29, 2013.
Application for Transfer Denied Feb. 4, 2014.

[422 S.W.3d 332]

John W. Roe, for respondent.

Lawrence Lerner, Kansas City, for appellant.

Before Division I: VICTOR C. HOWARD, Presiding Judge, JOSEPH M. ELLIS, Judge and ANTHONY REX GABBERT, Judge.

VICTOR C. HOWARD, Judge.

This case arises from the cross-claims and third-party claims of Developers Surety and Indemnity Company (“DSI”) against Daniel Waldberg, Brenda Waldberg, Barney Ashner, Marlene Ashner, and Woods of Somerset, LLC (“the Somerset defendants”) relating to an indemnity agreement they signed to obtain a payment bond in connection with the development of a subdivision. The trial court entered judgment in favor of the Somerset defendants concluding that the indemnity agreement was unenforceable because it was not properly executed and because there was no meeting of the minds. On appeal, DSI contends that the indemnity agreement was properly executed because all four individuals with any ownership interest in any of the Somerset entities signed the document, that it applies to each of the Somerset defendants, and that it was accepted by its use in obtaining the bond that the agreement was made to induce and delivering it to the City of Kansas City. DSI also contends that the trial court erred in concluding that there was no meeting of the minds because such conclusion was irrelevant due to the indemnity agreement being unambiguous. The judgment of the trial court is reversed, and the case is remanded.

FACTS

Bardan, Inc. was a company owned by Barney Ashner, Marlene Ashner, Daniel Waldberg, and Brenda Waldberg or their personal or family trusts. Somerset Development, Inc. is a subsidiary of Bardan, Inc., and is the sole member of Woods of Somerset, LLC. Woods of Somerset, LLC owned land that was being developed into

[422 S.W.3d 333]

the Woods of Somerset subdivision. For the development of the subdivision, Woods of Somerset, LLC needed to extend the City of Kansas City's (“the City”) water main, so it submitted plans for an extension that listed “Somerset Development” as the applicant, and the plans were accepted by the City. After receipt and acceptance of a bid for the water main extension from Haines & Associates Construction Co., Inc. (“Haines”), the Somerset defendants entered into a contract for the extension with the City on behalf of “Somerset Development.” Pursuant to statute and city charter, the City required the Somerset defendants to procure a payment bond to cover the water main extension work.

The Somerset defendants asked their insurance agent, Michael Schroeger, to procure an appropriate payment bond for them. Subsequently, Mr. Schroeger presented the Somerset defendants a two-page Subdivision/Plat Short Form Application (“Application”) for signing. Page one of the Application document was a fill-in-the-blanks form calling for principal information and information regarding the owners, the project, and the bond. Page two of the Application document stated in all capital letters in bold at the top, “INDEMNITY AGREEMENT—READ CAREFULLY.” Below was preprinted indemnity contract language filling approximately half the page, followed by a text box which read, in pertinent part: “IMPORTANT.... If a Limited Liability Company, two managers/members must sign on behalf of the company. The two authorized managers/members and their spouses must sign personal indemnity below.”

Below the text were eleven lines for names and signatures, in two columns. In the left column were six lines—one for the “Company Name,” two for the “Name/Title” of the persons signing on behalf of the company, and two for their signatures. In the right column were six lines—two for the names of “Indemnitor,” two for their signatures, and two for their spouse's signatures.

The Somerset defendants signed the second page of the Application and left Mr. Schroeger's office. Thereafter, the hand-printed portions were filled in. Somerset Development, LLC was printed on the Company Name line. Barney Ashner's name was printed on the Name/Title line below it as a person signing on behalf of the company. His signature appeared on the signature line below his printed name. Marlene Ashner's name was printed on the next Name/Title line for a person signing on behalf of the company, and her signature appeared on the signature line below her printed name. In the right column, Dan Waldberg's name was printed on the first Indemnitor line, and his signature appeared below that on the signature line. Brenda Waldberg's signature was on the spouse's signature line. Her name was then printed on the second Indemnitor line. Nobody signed their name on the second Indemnitor's signature or spouse's signature lines.

Following the submission of the Application, DSI issued the Somerset defendants a payment bond listing Somerset Development, LLC as the principal and applicant, to cover the contract for water main extension with the City. Barney Ashner signed the bond, and it was delivered to the City....