Rand Construction Company v. Caravan Ingredients, Inc., D/B/A Corbion F/K/A CJ Patterson Company
Date Filed2022-12-13
DocketWD84933
JudgeAhuja, J., and Ardini, Jr., J., concur.
Cited0 times
StatusPublished
Full Opinion (html_with_citations)
IN THE MISSOURI COURT OF APPEALS
WESTERN DISTRICT
RAND CONSTRUCTION COMPANY, )
)
Appellant-Respondent, )
)
v. ) WD84933
) Consolidated with WD84959
CARAVAN INGREDIENTS, INC., ) Opinion filed: December 13, 2022
D/B/A CORBION F/K/A CJ )
PATTERSON COMPANY, )
)
Respondent-Appellant. )
APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY, MISSOURI
THE HONORABE KEVIN D. HARRELL, JUDGE
Division One: W. Douglas Thomson, Presiding Judge,
Alok Ahuja, Judge and Edward R. Ardini, Jr., Judge
Rand Construction Company (âRandâ) appeals the trial courtâs judgment
denying it relief for its claims for enforcement of a mechanicâs lien (Count I), breach
of contract (Count II), action on account (Count III), and quantum meruit (Count IV)
against Caravan Ingredients, Inc. (âCorbionâ). Rand brought suit against Corbion,
claiming Corbion owed it additional compensation on a construction contract (the
âContractâ). Rand brings nine points on appeal, claiming that the trial court erred in
finding: (1) Rand was not entitled to relief on its claim to enforce its mechanicâs lien;
(2) Rand was not entitled to relief on its claim for breach of contract; (3) that Rand is
prohibited from recovering under Section 4.5 of the Contract; (4) that Rand failed to
provide Corbion with detailed information concerning scope change requests as
required by the Contract; (5) that Rand failed to provide Corbion with notice of its
claim for additional labor hours until four months after Rand was aware of its claims
in violation of the Contract; (6) that Randâs calculations of damages were âtoo
speculative;â (7) that Rand used the âtotal cost methodâ to calculate its damages; (8)
that the full Contract included an âAppendix E;â and (9) that Rand had a contractual
obligation to provide Corbion with detailed schedules of its work.
Corbion brings a cross-appeal, arguing that the trial court erred in not
awarding it attorneyâs fees and costs because it is the âprevailing party.â
We affirm in part, and reverse and remand in part for further proceedings
consistent with this opinion.
Statement of Facts1
Factual Background
Rand is an industrial and processing mechanical contractor located in Kansas
City, Missouri. Corbion is an international corporation based in the Netherlands that
owns a food product manufacturing facility in Grandview, Missouri (âGrandview
facilityâ).
The dispute in the case centers around a construction contract involving a
complex, technical piping system project the parties called Project Hercules (the
1 In a court tried case, we view âthe facts in the light most favorable to the trial courtâs
judgment.â Tenampa, Inc. v. Bernard, 616 S.W.3d 327, 330 n.4 (Mo. App. W.D. 2020) (internal citations
and quotations omitted).
2
âProjectâ). Corbion solicited bids from four mechanical contractors for the Project,
including Rand. Rand and Corbion had worked together previously and were familiar
with each otherâs business practices. Rand bid the Project for $2,900,000 with an
anticipated 15-person crew working a 40-hour work week through completion in
February 2016. Rand was awarded the bid and began work on the Project on July
20, 2015.
The construction contract (the âContractâ) for the Project included Corbionâs
Purchase Order, Corbionâs Master Services Agreement, and various plans and
specifications for the Project. Corbion drafted the contract and sent it to Rand via
email on August 21, 2015. The email included a Dropbox link where all of the
Contract documents were saved. The Contract included an âAppendix E,â which set
forth certain requirements regarding scheduling. Although the Contract specified a
fixed price for performance of the scope of work specified in the base contract, the
Contract also included a âtime and materialsâ provision that stated, âAny other scope
changes requiring additional labor are to be charged according to the [time and
materials] bill rates.â Rand provided the time and materials billing rates to Corbion
and those rates were incorporated into the Contract.
Central to this appeal is the process Rand and Corbion used to identify and
implement changes to the Project. Change orders on the Project were frequent.
Randâs standard form for change orders was a scope change request (âScope Changeâ),
while Corbion and the contract called them Variance Order Requests (âVORâ). The
3
VOR form provided Corbion much more detail about the changes than Randâs Scope
Change form.2
Once a needed change was identified, Randâs project manager provided
Corbionâs project manager with a change order request outlining the work needed to
implement the change and costs associated with that change. Randâs change order
request then had to receive approval from Corbionâs Steering Committee, made up of
Corbion executive staff. Once requested scope changes were approved by the Steering
Committee, Rand could begin the change order work.
In November 2015, Rand presented Corbion with a number of change order
requests consisting primarily of work that Rand had already performed on the
Project. These were submitted on Randâs Scope Change request form, and not
Corbionâs VOR form, as required by the Contract. After receiving those change order
requests, Corbion requested that Rand timely submit each change order request with
pricing and detailed supporting data for approval before performing the work per the
VOR form request process contained in the Contract, which included using Corbionâs
VOR form.
The VOR form required Rand to provide information regarding pricing and the
data supporting Randâs pricing calculations. Rand claims that these pricing
calculations were estimates, not actual costs to perform the change order work. Rand
tracked their change order requests through a Change Order Request Log (âCOR
2 For ease, we refer to any changes made to the original Contract work as a âchange orderâ
unless the difference between one form and the other is the issue, at which time we will refer to them
as the Scope Change or VOR form, as the case may be.
4
Logâ). For billing purposes, Rand used the approved pricing from Corbionâs VOR form
to bill Corbion for change order work. With each monthly invoice, Rand issued
Corbion a âWaiver & Release of Lienâ that waived any claims for additional
compensation for work described in the invoice once the invoice was paid. These lien
waivers do not include releases for any overtime or lost productivity.
For various reasons, Corbion issued a number of change orders that caused
Rand numerous work flow disruptions. There were 187 changes to Randâs work on
the Project. 136 of those 187 changes were made during the final three months of the
Project. Due to those scope changes, Corbion granted Randâs request to extend the
Project by five weeks.
In January 2016, Corbionâs project manager told Randâs project manager that
Rand was behind schedule and needed to take corrective action to stay on track with
the schedule Rand provided to Corbion. In February 2016, Rand, for the first time,
asserted claims for what they then termed as âindirect costs and lost productivityâ
damages due to the numerous change order requests on the Project, despite knowing
as early as October 2015 that it may have a claim to these damages.
The Contract was originally set to be completed on February 19, 2016. Rand
last performed work on the Project for Corbion on approximately May 10, 2016. On
May 26, 2016, Rand issued Corbion an invoice for $178,265.28 with a lien release and
waiver that stated that all of the change order work was â100%â complete. Rand
never provided, nor did Corbion request, a final lien waiver. Corbion paid this and
every other invoice received.
5
Procedural History
On September 12, 2016, Rand timely filed a Statement of Claim of Mechanicâs
Lien, stating it is entitled to $875,033.85 for âlabor, materials, equipment, and
services.â3 Rand asserted that the monthly invoices it sent Corbion included only
partial payments for its estimates on the change order work, not actual costs, and
that its mechanicâs lien was for the âactual time and materialsâ it expended on the
change order work over and above the alleged partial payments previously invoiced.
On March 9, 2017, Rand filed a Petition to Enforce Mechanicâs Lien in Jackson
County, Missouri. Rand filed an Amended Petition on June 20, 2018 with several
claims: enforcement of a mechanicâs lien (Count I), breach of contract (Count II),
action on account (Count III), and quantum meruit (Count IV).
The trial court held a four-day bench trial on February 1-4, 2021. The trial
court entered its Judgment on July 16, 2021. The trial court determined that Rand
was ânot entitled to additional compensation from Defendant Corbion on its claims
for enforcement of mechanicâs lien, breach of contract, quantum meruit, and action
3 Randâs claim for damages centers around its assertion that it was not paid pursuant to the
âtime and materialsâ clause of the contract for its âactual time and materialsâ costs incurred due to the
Projectâs change orders. Rand presented evidence that it calculated its âindirect costs and loss of
productivityâ claim relating to change order work as follows: $56,814 in additional supervisor hours;
$56,510.40 on overtime between November 2015 and February 2016; $15,391 for additional time for a
site safety representative; $5,600.12 on site overhead during the five-week extension Rand sought from
Corbion, and; $24,293.79 for rental equipment. Rand also presented evidence of âcost impacts due to
productivity loss/inefficienciesâ that concluded Rand had spent an additional 7,566 labor hours
completing the contract and was owed an additional $716,424.54 in labor. In total, Rand claimed it
suffered $875,033.85 in damages.
6
[on] account.â4 The trial court found that (1) both Rand and Corbion were bound by
the scheduling and reporting requirements in Appendix E, which was incorporated
into the contract; (2) Rand failed to timely notify Corbion of its claims for indirect
costs, lost productivity, and other scheduling impact damages as required by the
Contract; and (3) Rand failed to establish its entitlement to any additional damages
for additional labor hours or costs associated with the Project. The trial court ordered
both parties to bear their own costs and pay their own attorneyâs fees.
Rand timely filed a motion to modify the Judgment, which the trial court
denied. Thereafter, Rand filed a notice of appeal. Corbion filed a notice of cross-
appeal. Both appeals have been consolidated into this case.
Discussion
Rand brings nine points on appeal.5 In its first point, Rand argues that the
trial court erred in concluding that Rand was not entitled to judgment on its claim
4 The trial courtâs denial of relief on Randâs claims for quantum meruit and action on account
are not at issue in this appeal.
5 All nine of Randâs points state three separate and distinct standards for court-tried cases:
unsupported by substantial evidence, against the weight of the evidence, and erroneously declares and
applies the law. Rand correctly identifies these standards as applicable to court tried cases but does
not identify which of the three standards it is using to challenge the trial courtâs judgment. See Murphy
v. Carron, 536 S.W.2d 30, 32(Mo. banc 1976). âIn order to comply with the rules of appellate procedure in Rule 84.04, a point on appeal must proceed under one of the Murphy v. Carron grounds, each of which requires a distinct analytical framework.â Ebert v. Ebert,627 S.W.3d 571
, 580 (Mo. App. E.D. 2021) (emphasis in the original). âIf a point on appeal fails to identify which of the Murphy v. Carron grounds applies, Rule 84.04 directs us to dismiss the point.âId.
However, we prefer to decide cases on the merits where we can readily ascertain the partyâs
arguments without acting as an advocate for that party. See, e.g., State v. Clark, 503 S.W.3d 235, 237
(Mo. App. W.D. 2016). Bearing this in mind, we are addressing Randâs case on the merits for two
reasons. First, we can discern that several of Randâs points address the issue of damages, which is an
essential element to both causes of action Rand appeals (breach of contract and enforcement of a
mechanicâs lien), and proof of damages is dispositive in this case. Second, each of Randâs points
regarding damages contain a subsection titled âErroneous Conclusions of Lawâ that, although in
conflict with Randâs stated Points Relied On, states a single Murphy standard. Thus, we proceed to
review Randâs points as to damages using the âerroneous conclusions of lawâ standard.
7
for enforcement of its mechanicâs lien. Similarly, in its second point, Rand argues
that the trial court erred in concluding that Rand was not entitled to judgment on its
claim for breach of contract. The rest of Randâs points can be divided into two
categories: Randâs arguments as to what the Contract stated and the obligations it
imposed on Rand (Points III, IV, V, VIII, and IX),6 and Randâs argument relating to
its calculation and proof of damages (Points VI and VII).
As we explain below, whether Rand properly proved that it suffered damages
is dispositive in the case. Accordingly, we address Points II, IV, and VII together and
Point I separately. Because the issue of damages is dispositive, Randâs remaining
points become moot and are not addressed.
Corbion brings one point on cross-appeal, arguing that the trial court erred in
denying it an award of attorneyâs fees because it is the âprevailing partyâ pursuant to
the Contract.
The parties agree that the Contract is governed by Kansas law, and thus
Kansas law applies to all substantive claims relating to the Contract: Randâs Points
II through IX and Corbionâs single point on cross-appeal.7 Randâs first point,
6 Point III argues that the trial court erred in concluding that Rand is prohibited from
recovering under Section 4.5 of the Contract because the Contract did not impose any obligations on
Rand that would bar its recovery. Point IV alleges that the trial court erred in determining that Rand
was prohibited from recovering because Rand failed to provide Corbion with detailed information
concerning its change order requests. Point V challenges the trial courtâs conclusion that Rand is
barred from recovering for certain additional labor hours because Rand did not timely notify Corbion
of its claims. In Point VIII, Rand argues that the trial court erred in concluding the Contract included
an Appendix E. In Point IX, Rand asserts that the trial court erred in concluding that Rand had a
contractual obligation to provide Corbion with detailed schedules of their work.
7 Section 17.10 of the Contract states all disputes over the interpretation of the Contract will
be governed by the âlaws of the state of Kansas.â Parties may choose which state law shall govern
interpretation of their contractual rights and duties. Peoples Bank v. Carter, 132 S.W.3d 302, 304(Mo. App. W.D. 2004). The partiesâ choice of law provision applies only to substantive law; on procedural questions, Missouri law will govern.Id. at 304-05
.
8
regarding the procedural enforcement of its mechanicâs lien, is brought pursuant to
Missouriâs mechanic lien statute.
We address Randâs claims first, beginning with its claims relating to its breach
of contract. We next address Randâs claims associated with its action to enforce its
mechanicâs lien. We lastly address Corbionâs cross-appeal for attorneyâs fees and
costs.
Randâs Appeal
Standard of Review
We review a court tried case for whether the judgment is unsupported by
substantial evidence, is against the weight of the evidence, or erroneously declares
and applies the law. See Murphy v. Carron, 536 S.W.2d 30, 32(Mo. banc 1976). We review claims that the trial court misapplied the law de novo. Smith v. Great American Assur. Co.,436 S.W.3d 700
, 704 n.3 (Mo. App. S.D. 2014).
Randâs briefing includes an âErroneous Conclusions of Lawâ section in the
points we address, leading us to apply a de novo standard to Randâs claims.
Randâs Claims for Damages (Points II, VI, and VII)
Points II, VI, and VII address the trial courtâs rulings concerning Randâs proof
of damages. Because each of these points address damages, an essential element of
Randâs breach of contract claim, we address them together. First, in Randâs second
point on appeal, Rand argues that the trial court erred in denying Rand relief as to
Count II because Rand satisfied all elements of its breach of contract claim, including
damages. In Randâs sixth point, it alleges that the trial court erred in concluding that
9
its damages calculations were âtoo speculative.â Finally, in its seventh point, Rand
argues that the trial court erred in determining that Randâs damages were calculated
using the âtotal cost method.â
Damages is an essential element to a breach of contract claim in Kansas.
Stechschulte v. Jennings, 298 P.3d 1083, 1098(Kan. 2013). âThe basic principle of contract damages is to make a party whole by putting it in as good a position as the party would have been had the contract been performed.â State ex rel. Stovall v. Reliance Ins. Co.,107 P.3d 1219, 1228
(Kan. 2005). A party must demonstrate both a breach of contract and resulting damages, and âthere [must] be a reasonable basis for computation of damages.âId.
âA party is not entitled to recover damages ânot the proximate result of the breach of contract and those which are remote, contingent, and speculative in character.ââId.
(quoting Apperson v. Security State Bank,528 P.2d 1211, 1212
(Kan. 1974)). âOne who claims damages on account of a breach of contract must not only show the injury sustained, but must also show with reasonable certainty the amount of damage suffered as a result of the injury or breach.â Venable v. Import Volkswagen, Inc.,519 P.2d 667, 674
(Kan. 1974) (emphasis added).
Rand divides its claim for damages into two categories: âcost impacts due to
productivity loss/inefficienciesâ and âcost impacts due to schedule.â8 At issue in this
case is whether Rand used a type of calculation called the âtotal cost methodâ to
calculate its âproductivity loss/inefficienciesâ damages, and, if so, whether the total
8 Despite this labeling, Rand argued at trial that these damages calculations reflect its âactual
time and materialsâ incurred due to the scope change work.
10
cost method satisfies Kansasâ requirement that damages be proven with âreasonable
certainty.â
Kansas law does not specifically address the usefulness of the âtotal cost
methodâ in calculating damages in construction cases. However, other jurisdictions,
including Missouri, express skepticism with the total cost method:
The [total cost method] allows a contractor to calculate his damages by
subtracting his amount bid (or the âcontract priceâ) from the total cost he
incurred to fulfill its contractual obligations. Sunshine Constr. & Engâg, Inc.
v. United States, 64 Fed.Cl. 346, 371 (2005). This approach presumes that the
breaching party is the sole and exclusive cause of the non-breaching partyâs
damages, even though the additional costs incurred by the contractor could
have actually been caused or contributed to by a myriad of factors. See Cavalier
Clothes, Inc. v. United States, 51 Fed.Cl. 399, 417â18 (2001). Effectively, the
[total cost method] is an all-or-nothing approach, and on some occasions it
would allow a plaintiff to recover damagesâeven damages he is partially at
fault for causingâbeyond what was anticipated when the parties entered into
the contract.
Penzel Const. Co. v. Jackson R-2 Sch. Dist., 544 S.W.3d 214, 234(Mo. App. E.D. 2017) (emphasis in the original); see also Youngsdale & Sons Const. Co. v. United States,27 Fed.Cl. 516, 541
(1993) (âUse of [the total cost] method is highly disfavored by the
courts, because it blandly assumesâthat every penney [sic] of the plaintiffâs costs are
prima facie reasonable, that the bid was accurately and reasonably computed, and
that the plaintiff is not responsible for any increases in cost.â) (emphasis in original).
We find a comparison between Missouri and Kansas law persuasive in guiding
our decision because both states require damages to be proved with âreasonable
certainty.â See, e.g., Venable, 519 P.2d at 674; Penzel Const. Co.,544 S.W.3d at 234
.
In that regard, persuasive case law indicates the total cost method and its âall-or-
nothingâ approach lacks the specificity to prove damages with reasonable certainty.
11
Additionally, both states have a policy that an award of damages should make the
non-breaching party whole without resulting in a windfall, which the total cost
method is prone to do. See, Stovall, 107 P.3d at 1228; Penzel Const. Co.,544 S.W.3d at 234
.
Rand presented evidence at trial that it suffered $716,424.54 in âproductivity
loss/inefficienciesâ damages, which the trial court determined was calculated using
the total cost method. Rand alleges that Corbion still owes it payment for 7,566
additional labor hours at the billing rate of $94.69 per hour, and that each of the
monthly invoices it sent to Corbion contained only estimates for change order work
and not the actual time and materials it used to complete change order work.
The trial court found Rand calculated its claim for âproductivity
loss/inefficienciesâ by:
Adding its alleged âOriginal Man-Hoursâ for base scope work and âCOR/VOâ
[change order request/variance order] hours for changes on the Project (17,560
+ 9,937 = 27,497);
Subtracting that amount from its actual âTotal hoursâ on the Project (35,063 â
27,497 = 7,566); and
Multiplying those hours [the difference] by its T&M [time and materials]
billing rate for pipefitters (7,566 * $94.69 = $716,424.54).
Essentially, Rand adds all original Contract hours to all change order hours, and
deducts that sum from all hours they allegedly incurred in the entire project, the
difference resulting in the hours they allege remain unpaid.
Rand explicitly denies that it used the total cost method to calculate damages.9
Rand argues that the total cost method requires âa lump-sum contract for original
9 Despite this denial, Rand also argues that its calculations are calculated using the modified
total cost method, which is an accepted method of calculating damages in Missouri. Even if true, such
12
scope work based upon a lump-sum bid, and a subsequent cost to actually perform
the original scope work which exceeds the value of the lump-sum contract.â (emphasis
in the original). Rand asserts that change orders are not contemplated when
determining whether the total cost method was used, it only contemplates work
under the original Contract. Rand provides no authority for such assertion.
We need not decide whether Randâs calculations fall squarely under the total
cost method, because Randâs calculations suffer from the same defect courts note
about the total cost method, and under Kansas law, are too speculative to meet the
reasonable certainty requirement. Randâs calculation of its damages relating to
âproductivity loss/inefficienciesâ use its bid for labor hours plus the hours it billed for
change order work, subtracting that sum from the total hours it actually spent on the
project. Such a calculation necessarily presumes Randâs bid proposal was reasonable,
and Corbion was the sole and exclusive cause for the additional labor hours.
However, these two presumptions are the very factors that courts have pointed out
make the total cost method problematic as a measurement of damages. See Penzel
Const. Co., 544 S.W.3d at 234; Youngsdale & Sons Const. Co.,27 Fed.Cl. at 541
.
These presumptions are not the only flaw in Randâs calculation. Rand also
failed to present evidence that clearly separates hours Rand spent on the original
work versus hours Rand spent on change order work. The only evidence Rand
an argument is irrelevant in this case, as both parties acknowledge that Kansas law applies to Randâs
breach of contract claim, and thus its calculation of damages. Rand cites no Kansas case, nor have we
identified one, discussing whether the modified total cost method is an appropriate measure of
damages in Kansas. In any event, although Rand claims that its evidence justified application of the
modified total cost method, it makes only a conclusory statement to that effect in its opening brief,
with no citation to relevant evidence in the record.
13
provided showing that it spent a total of 35,063 hours on the project is a âjob cost
detail reportâ that lists the name of the employee, the employeeâs job title, the date
the employee worked, and the number of hours they worked. This total timesheet
does not describe the work performed or whether that work was attributed to original
contract work or change order work. Therefore, Rand did not submit evidence
reflecting when its original base work stopped and when each additional change order
work started. Rand also failed to submit evidence showing how many hours were
spent completing each change order over and above what it invoiced Corbion for each
month.
Further, Rand is also requesting compensation for what it calls ârejected scope
change work;â that is, change order work that Rand sought permission to perform
and Corbion expressly rejected. Corbion is clearly not responsible for costs Rand
incurred in completing work that Corbion never approved. Randâs inclusion of work
that Corbion expressly rejected means they have not proven that Corbion is solely
responsible for each additional labor hour for which they seek compensation.
Further, as the trial court noted, Randâs reliance on lump sum hours means we cannot
know whether Rand spent additional labor hours on change order work that Rand
told Corbion would not change costs when Rand sought approval to perform such
work. Clearly, Randâs lumping together of all labor hours provided no specificity by
which the trial court could determine damages with reasonable certainty. 10
10 Rand also presented the testimony of a lost productivity expert, Michael Callahan, in support
of its claim for additional labor hours. The trial court found Callahanâs testimony âto be lacking,
without substance, of no assistance to the court, and void.â We do not question the trial courtâs witness
credibility determinations on appeal and thus do not consider Callahanâs testimony. See Essex
14
Rand also argued at trial that it suffered âcost impacts due to schedule,â which
included additional supervisor hours, overtime, site safety representatives, site
overhead, and rental equipment costs. These damages are also too speculative to
meet Kansasâ reasonable certainty standard. Randâs claim for these additional costs,
like Randâs claims for additional compensation for labor hours, lacks any
documentation linking these additional costs to any change orders, as opposed to
being a result of the initial work contemplated by the Contract. Additionally, Randâs
claim for overtime includes overtime hours Corbion was not aware of and did not
agree to pay. Rand cannot now claim it incurred damage by paying overtime that it
never requested Corbion to authorize, such authorization being a requirement under
the Contract. Without any evidence linking these costs with specific change orders,
Rand fails to prove its damages with reasonable certainty as required by Kansas law.
Ultimately, whether Rand had presented sufficient credible evidence to prove
damages attributable to its performance of approved change order work presents a
factual question for the fact-finder to decide. It is evident from the trial courtâs
judgment that it found Randâs damages evidence to be speculative, vague, and
insufficiently persuasive to prove its damages with reasonable certainty. We will
generally not second guess a fact-finderâs rejection of evidence offered by the party
with the burden of proof:
Contracting, Inc. v. Jefferson Cty., 277 S.W.3d 647, 652 (Mo. banc 2009) (stating, â[o]n appeal of a
court-tried case, the appellate court defers to the trial court on factual issues because it is in a better
position not only to judge the credibility of witnesses and persons directly, but also their sincerity and
character and other trial intangibles which may not be completed revealed by the record.â) (internal
citations and quotations omitted).
15
âWhen the burden of proof is placed on a party for a claim that is denied, the
trier of fact has the right to believe or disbelieve that partyâs uncontradicted or
uncontroverted evidence. If the trier of fact does not believe the evidence of
the party bearing the burden, it properly can find for the other party.
Generally, the party not having the burden of proof on an issue need not offer
any evidence concerning it. Consequently, substantial evidence supporting a
judgment against the party with the burden of proof is not required or
necessary.â
Davis v. Davis, 582 S.W.3d 100, 109 (Mo. App. W.D. 2019) (quoting Adoption of K.M.W.,516 S.W.3d 375, 382
(Mo. App. S.D. 2017)) (emphasis added); Maly Commercial Realty, Inc. v. Maher,582 S.W.3d 905
, 911 (Mo. App. W.D. 2019).
As such, we agree with the trial court that Randâs calculations of damages are
too speculative and without reasonable certainty as required by Kansas law. Randâs
damages calculations lack supporting documentation and thus are speculative in
nature. Further, because Rand fails to prove it was damaged, its breach of contract
claim fails. Randâs Points II, VI, and VII are denied.
Randâs Point I
We next address Randâs claim for enforcement of a mechanicâs lien. Rand
argues that the trial court erred in concluding that Rand was not entitled to relief as
to Count I (enforcement of mechanicâs lien) because Rand satisfied all conditions
precedent and elements of its mechanicâs lien.11
In Missouri, mechanicâs liens are governed by Sections 429.010 through
429.360.12 âA mechanicâs lien is an equitable remedy with âthe purpose of giving
security to mechanics and material[men] for labor and materials furnished in
11 The parties and the trial court agree that Missouri law applies to Randâs Count I.
12 All statutory references are to RSMo 2016, as updated by supplement unless otherwise
indicated.
16
improving the ownerâs property.ââ Brentwood Glass Co. v. Palâs Glass Serv., Inc., 499
S.W.3d 296, 300(Mo. banc 2016) (quoting Bob DeGeorge Assocs., Inc. v. Hawthorne Bank,377 S.W.3d 592, 598
(Mo. banc 2012)). The parties agree that Rand satisfied
the timeliness requirements of the mechanicâs lien statute. At issue is whether Rand
properly provided a âjust and true accountâ of its lien and whether Rand has properly
proved its lien.
Section 429.080 requires every original contractor to file âa just and true
account of the demand due to him or them after all just credits have been givenâŚ.â
The just and true account must âprovide a property owner with sufficient information
to investigate whether the material and labor described in the lien has actually been
used to improve the property and whether the amount charged is reasonable and
proper.â R.K. Matthews Inv., Inc. v. Beulah Mae Housing, LLC, 379 S.W.3d 890, 898(Mo. App. W.D. 2012) (citing Commercial Openings, Inc. v. Mathews,819 S.W.2d 347, 349
(Mo. banc 1991)).
A just and true account of a mechanicâs lien should only include lienable
amounts; that is, amounts for work or labor actually performed. See Section 429.010,
RSMo.; Mo. Land Dev. Specialties, LLC v. Concord Excavating Co., 269 S.W.3d 489,
498-99(Mo. App. E.D. 2008). âA lien statement may be regarded as âjust and true,â so as not to vitiate the entire lienâŚif the nonlienable [items] can be separated from the lienable items.ââ Mo. Land Dev. Specialties, LLC,269 S.W.3d at 499
(quoting Sears, Roebuck & Co. v. Seven Palms Motor Inn, Inc.,530 S.W.2d 695, 698-99
(Mo.
banc 1975)). âIt is axiomatic that a mechanicâs lien will not be imposed on a property
17
if the lien claimant fails to establish that it is entitled to payment.â R.K. Matthews
Inv., Inc., 379 S.W.3d at 900. If a trial court determines independent of a mechanicâs lienâs validity that a plaintiff has failed to sustain its burden to prove that it is entitled to any additional payment from the defendant, then the plaintiffâs mechanicâs lien necessarily fails.Id.
Randâs claim for enforcement of its mechanicâs lien fails for the same reason
its breach of contract claim fails: Rand has failed to prove it is entitled to additional
payments from Corbion. As we explain above, Randâs claim for additional
compensation for labor hours does not separate labor hours completed on the original
contract work versus labor hours attributable solely to change orders. Further,
Randâs calculations include work Rand performed on change order work that was not
approved by Corbion, for work Rand told Corbion would not result in additional costs,
and for overtime Rand did not seek authorization from Corbion before incurring as
required by the Contract. Randâs evidence did not separate out any portion of the
work done such that Corbion, the property owner, had âsufficient information to
investigate whether the material and labor described in the lien has actually been
used to improve the property and whether the amount charged is reasonable and
proper.â R.K. Matthews Inv., Inc., 379 S.W.3d at 898. In total, Rand has failed to
prove it is entitled to any additional payments from Corbion.
Point I is denied.
18
Because Rand failed to prove damages, a necessary element of both its claims
for breach of contract and enforcement of mechanicâs lien, Points I, II, VI, and VII are
denied and the trial courtâs judgment is affirmed.13
Corbionâs Cross-Appeal
Standard of Review
To successfully challenge a trial courtâs award of attorneyâs fees on appeal in
Missouri, a party must show that the award is an abuse of discretion. Cullison v.
Thiessen, 51 S.W.3d 508, 513(Mo. App. W.D. 2001). âAn abuse of discretion is demonstrated by showing that the award is clearly against the logic of the circumstances and so arbitrary and unreasonable as to shock one's sense of justice.âId.
In Missouri, a trial court abuses its discretion if it does not award attorneyâs
fees when a contract expressly permits the payment of attorneyâs fees. âIf a contract
provides [for] the payment of attorney fees and expenses incurred in the enforcement
of a contract provision, the trial court must comply with the terms of the contract and
award them to the prevailing party.â Magruder v. Pauley, 411 S.W.3d 323, 336(Mo. App. W.D. 2013) (quoting Cowbell, LLC v. BORC Bldg. & Leasing Corp.,328 S.W.3d 399, 407
(Mo. App. W.D. 2010)). Although the trial court may exercise discretion in
13 Randâs remaining points, Points III, V, VI, VIII, and IX, are denied as moot. These points
each discuss the scope of Randâs contractual obligations during the Project, and in each, Rand argues
that it met its contractual obligations. However, whether Rand ultimately complied with certain
Contract terms is not relevant to our decision in this appeal. As explained above, Rand has failed to
specifically prove damages, which is an essential element of both of its claims against Corbion.
Therefore, regardless of whether Rand met all of its contractual obligations, Rand cannot recover
against Corbion on its breach of contract and enforcement of mechanicâs lien claims because of the
failure to prove damages. Randâs compliance with specific contract terms does not affect its ability to
prove its case against Corbion.
19
determining the amount to award in attorneyâs fees, when a contract contains an
attorneyâs fees provision, ââ[a]n award in some amount is required by the contract as
a matter of law and is not within the trial courtâs discretion.ââ Marthaâs Hands, LLC
v. Rothman, 328 S.W.3d 474, 483(Mo. App. W.D. 2010) (quoting Mihlfeld & Associates, Inc. v. Bishop & Bishop, L.L.C.,295 S.W.3d 163, 174
(Mo. App. S.D. 2009)).
Analysis
First, we must determine when Kansas substantive law permits the recovery
of attorneyâs fees. Under Kansas law, attorneyâs fees âincurred by a prevailing party
are not recoverable against the defeated party in the absence of a clear and specific
statutory provision or an agreement between the parties.â Idbeis v. Wichita Surgical
Specialists, P.A., 173 P.3d 642, 646 (Kan. 2007).
Here, the Contract provides for the recovery of attorneyâs fees by the prevailing
party. Section 17.11 of the Contract states that in any proceeding or other action
brought by either of the parties pertaining to a dispute or any other matter arising
out of the Contract, the âprevailing [p]arty in such proceeding ⌠shallâ be entitled to
âcosts incurred in connection with the proceeding or action, including reasonable fees
and disbursements of its attorneys.â
Having determined that Kansas law permits a party to recover attorneysâ fees
pursuant to the Contract, we next analyze when a party âprevailsâ in Kansas. Kansas
case law has defined âprevailing partyâ as:
[T]he party to a suit who successfully prosecutes the action or
successfully defends against it, prevailing on the main issue, even
though not necessarily to the extent of his original contention. The one
20
in whose favor the decision or verdict is rendered and judgment entered
. . . The party ultimately prevailing when the matter is finally set at rest.
Schuh v. Educ. Reading Servs. of Kansas, Inc., 626 P.2d 1219, 1220(Kan. Ct. App. 1981) (quoting Prevailing Party, BLACKâS LAW DICTIONARY (5th ed. 1979)). Further, in the context of attorneyâs fees, âa prevailing party is the party who has an affirmative judgment rendered in his favor at the conclusion of the entire case.â Schuh,626 P.2d at 1220
.
Here, the trial court acknowledged the Contractâs attorneyâs fees provision in
the judgment, stating that the Contract provides âthe âprevailing partyâ in any lawsuit
to recover its attorneyâs fees, costs, and other disbursements from the other party.â
However, the trial court declined to award attorneyâs fees to either party, finding that
both Rand and Corbion failed to act âin accordance to the specific and original terms
of their agreement and, when beneficial, both Rand and Corbion were selective,
casual, and repeatedly indifferent in their application and enforcement of the
contract.â The judgment did not conduct any analysis as to which party was deemed
the âprevailing party,â despite finding that, âPlaintiff Rand is not entitled to
additional compensation from Defendant Corbion on its claims for enforcement of
mechanics [sic] lien, breach of contract, quantum meruit, and action [on] account.â
Instead, the trial court summarily concluded that neither party was entitled to its
attorneyâs fees or costs.
We note that the Contract is clear that âthe prevailing Party in such proceeding
or action shall be entitledâ to its costs and attorneyâs fees. (emphasis added).
Therefore, the trial court is bound by the Contract terms and cannot substitute its
21
own judgment for the plain language of the Contract. At issue, then, is which party
meets Kansasâ definition of âprevailing party.â
We find that under Kansasâ definition of âprevailing party,â Corbion is the
prevailing party and is entitled to its attorneyâs fees and costs. Because a party
prevails when a judgment is entered in their favor, we examine the judgment and not
the trial courtâs reasoning to determine whether Corbion is the âprevailing partyâ as
used in the Contract and defined by Kansas law. Here, Rand brought four causes of
action against Corbion, and the trial court denied relief on all four claims, including
its breach of contract claim against Corbion, which the trial court found was â[t]he
main claim Rand presented at trial for the Courtâs considerations.â Because Rand
failed to attain any additional compensation on any of their claims, judgment was
rendered in favor of Corbion and against Rand. Said another way, Corbion
âsuccessfully defended againstâ all four claims brought by Rand. Through their
successful defense, Corbion is the âparty in whose favorâ the decision is rendered. See
Schuh, 626 P.2d at 1220. Corbion, as the prevailing party, is entitled under the
Contract to an award of attorneyâs fees in some amount.
Moreover, the trial courtâs finding that neither party acted according to the
original Contract and thus are not entitled to attorneyâs fees does not mean that
Corbion is not the âprevailing party.â Corbion does not need to be blameless in order
to be the prevailing party. Rather, Corbion must âprevail on the main issue,â which,
as the trial court duly noted, it did. Ultimately, to be the prevailing party, Corbion
must be the party in whose favor judgment is entered. The trial courtâs judgment
22
found that Rand is not entitled to any additional compensation from Corbion and all
of Randâs counts were denied. Corbion is the prevailing party.
In failing to conduct an analysis to determine the prevailing party and award
an amount of attorneyâs fees accordingly, the trial court has abused its discretion. See
Mihlfeld, 295 S.W.3d at 174. We therefore reverse the trial courtâs judgment as to
attorneyâs fees and remand the issue back to the trial court for further proceedings
consistent with this opinion. 14
Conclusion
Rand failed to prove a necessary element of both its breach of contract and
enforcement of its mechanicâs lien claims; namely, that Rand suffered damages
attributable to Corbionâs actions. As such, Randâs Points I, II, VI, VII are denied.
Randâs Points III, IV, V, VIII, and IX are denied as moot.
Corbionâs single point on cross appeal is granted, and the trial courtâs judgment
as to Corbionâs attorneyâs fees is reversed and remanded for further proceedings
consistent with this opinion.
As explained above, the trial courtâs judgment is affirmed in part and reverse
and remanded in part.
__________________________________________
W. DOUGLAS THOMSON, JUDGE
All concur.
14 Corbion has filed its motion for attorneyâs fees and costs on appeal. Because, as explained
above, Corbion is the prevailing party, we grant Corbionâs motion for attorneyâs fees and costs on
appeal. We remand to the trial court to determine the amount of fees and costs to which Corbion is
entitled on appeal. Rand filed a similar motion for attorneyâs fees and costs on appeal. Because Rand
did not prevail in either the trial court or this Court, it is not entitled to attorneyâs fees or costs. Randâs
motion for attorneyâs fees and costs on appeal is thus denied.
23