Opinion
No. WD 62876
January 25, 2005
Appeal from the Circuit Court of Cass County, Missouri, Honorable Jacqueline A. Cook, Judge.
Before Newton, P.J., Lowenstein and Holliger, JJ.
This case is an appeal from a judgment for a subcontractor who sued its general contractor. The trial court's award of attorney fees to the respondent/subcontractor is the sole issue presented on appeal.
Defendant/Appellant Obermiller Construction Services, Inc. ("Obermiller") was the general contractor for several Wal-Mart stores. On November 6, 2000, Obermiller entered into a written contact with a subcontractor, Plaintiff/Respondent Vance Brothers, Inc. ("Vance"), to apply microsurfacing to Wal-Mart parking lots in Fort Scott and Topeka, Kansas. After the contract was executed, Obermiller discovered it contained a mistake; in all but one location, the contract provided that Vance would apply a "Type II Slurry Seal" to the parking lot rather than the "Type II Microsurfacing" as agreed. Obermiller contacted Vance upon discovering this discrepancy. Although the parties did not formally amend their written contract, they nevertheless understood that they were each operating under a specified set of conditions.
A dispute ultimately arose between the parties concerning the quality of work performed after the Fort Scott parking lot was completed. Because Obermiller thought Vance's work to be substandard, it withheld payment. Vance then brought suit against Obermiller. Vance's petition contained only one count, denominated as "petition on account." Obermiller counterclaimed, including claims for breach of contract, breach of express warranty, breach of implied warranty, and negligent misrepresentation. Neither Vance's petition nor Obermiller's counterclaim requested attorney fees. Only Vance's petition on account claim and Obermiller's breach of implied warranty counterclaim were ultimately submitted to the jury; Obermiller voluntarily dismissed its other three counterclaims.
Prior to trial, the parties stipulated that they would allow each other to amend their pleadings to include a prayer for attorney fees pursuant to the Private Prompt Payment Act, as contained in Section 431.180. The stipulation only allowed the parties to amend the pleadings. By so stipulating, neither party conceded that the prevailing party would be entitled to fees. Additionally, Vance and Obermiller agreed that attorney fees would be decided by the trial judge at a post-verdict hearing rather than by the jury.
All statutory references are to RSMo. (2002) unless otherwise indicated. The pertinent portion of Section 431.180 is set out infra.
After the jury returned a verdict in favor of Vance both on its petition on account and on Obermiller's counterclaim, Obermiller moved the trial court to "exercise its discretion" and not award fees to Vance based upon Obermiller's good faith in withholding payment. The court denied the motion and awarded Vance $61,400.00 in attorney fees. Obermiller now appeals.
STANDARD OF REVIEW
Judgments awarding attorney fees are generally reviewed under an abuse of discretion standard. See Lamont v. Lamont , 922 S.W.2d 81, 86 (Mo.App. 1996). However, such reviews are only conducted when the trial court had the authority to make the award. In instances where the authority to award attorney fees is in issue, an appellate court need not afford such a high level of deference to the trial court. Because the alleged lack of statutory authority presents a question of law, appellate review is de novo. See Pavlica v. Dir. of Revenue , 71 S.W.3d 186, 189 (Mo.App. 2002).
ARGUMENT
Obermiller alleges, for the first time on appeal, that the trial court lacked jurisdiction to award attorney fees under Section 431.180. Prior to the trial court awarding Vance fees, Obermiller merely urged the court to exercise its discretion not to award fees; he did not raise the issue of the inapplicability of the statute to the nature of the facts as litigated. Respondent Vance, accordingly, now argues that Obermiller's theory was not properly preserved for appeal.
Generally, a litigant must preserve a claim of error in the trial court in order to be afforded appellate review. An exception exists, however, when an appellant cites the trial court's lack of jurisdiction. The question of jurisdiction may be raised at any stage of the proceedings, even for the first time on appeal. State Tax Comm'n v. Admin. Hearing Comm'n , 641 S.W.2d 69, 73 (Mo. banc 1982); see also Rule 55.27(g)(3). Because the alleged lack of statutory authority questions the jurisdiction of the court to enter the particular judgment in the particular case, such allegations need not be advanced to the trial court in order to be heard on appeal. See State ex rel Lambert v. Flynn , 154 S.W.2d 52, 57 (Mo. banc 1941); Ringeisen v. Insulation Services, Inc. , 539 S.W.2d 621, 625-26 (Mo.App. 1976).
In a jury-tried case, an appellant must raise the alleged error in a motion for new trial in order to preserve the issue for appellate review. Rule 78.07(a)(1). This requirement need not be fulfilled, however, to preserve an allegation of error in a court-tried case. Rule 78.07(b) provides that in "cases tried without a jury or with an advisory jury, neither a motion for new trial nor a motion to amend the judgment or opinion is necessary to preserve any matter for appellate review."
Having determined that this matter may be reviewed, this court must next determine whether the trial court had jurisdiction to award fees to Vance. Missouri "follow[s] the 'American Rule' which provides that litigants should bear the expense of their own attorney fees." Moore v. Weeks , 85 S.W.3d 709, 723 (Mo.App. 2002). Recovery of fees from the opposing party are permitted, however, when "provided for by statute or contract, or when needed to balance benefits in a court of equity." Id.
The judgment expressly provides that attorney fees were awarded under Section 431.180, the "Private Prompt Payment Act." Although no cases currently exist interpreting the statute, the plain language of the Private Prompt Payment Act indicates that an award of attorney fees must be predicated by the finding of a contractual relationship that contemplates scheduled payments. Section 431.180 provides, in pertinent part:
(1) All persons who enter into a contract for private design or construction work . . . shall make all scheduled payments pursuant to the terms of the contract.
(2) Any person who has not been paid in accordance with subsection 1 of this section may bring an action in a court of competent jurisdiction against a person who has failed to pay. The court may in addition to any other award for damages, award interest at the rate of up to one and one-half percent per month from the date payment was due pursuant to the terms of the contract, and reasonable attorney fees, to the prevailing party.
(emphasis added).
A reading of this statute reveals that in order to be awarded fees under subsection (2), a prevailing party must have initially fulfilled the requirements set forth in subsection (1). To reiterate, the parties must have entered into a private construction contract and the contract must provide for scheduled payments. In its first point on appeal, Obermiller contends that because Vance did not prove it fulfilled one or both of these requirements, the trial court did not have jurisdiction to award attorney fees under Section 431.180
Obermiller first argues that because Vance brought a petition on account claim rather than a breach of contract claim, a contractual relationship did not or does not exist. This distinction ignores the common overarching principles under which each respective claim is brought. Specifically, an action on account and a breach of contract claim both require proof of offer, acceptance, and consideration. Welsch Furnace Co. v. Vescovo , 805 S.W.2d 727, 728 (Mo.App. 1991) (stating that because an "action on account is an action based in contract . . . proof . . . depends upon . . . showing an offer, an acceptance, and consideration between parties as well as correctness of account and reasonableness of charges").
In this case, Vance and Obermiller initially entered into a written contract. Despite not modifying or amending the contract to reflect the correct type of surfacing to be applied, the parties still performed according to the terms of their agreement. Although this lack of formal modification may have led Vance to plead his claim as a petition on account rather than as a breach of contract, it does not automatically result in the inapplicability of Section 431.180. See Fru-Con/Flour Daniel Joint Venture v. Corrigan Bros., Inc , No. ED 82587, 2004 WL 2340690, at *6 (Mo.App.E.D. Oct. 19, 2004) (holding quantum meruit award did not preclude award of attorney fees under the Private Prompt Payment Act).
The requisite contractual relationship may still be found to exist in the case at bar. Here, Vance and Obermiller initially entered into a written agreement. Although the parties never modified or amended the contract to reflect the correct type of surfacing to be applied to the parking lot, they still performed according to their agreement. The jury returned a verdict in favor for Vance on its petition on account claim, thereby demonstrating a finding of offer, acceptance, and consideration. Obermiller did not challenge this verdict. Consequently, because Vance brought "an" action (a petition on account), as mandated in subsection (2), to receive payment, it satisfies the first requirement.
Next, Obermiller argues that an action on account compensates a successful plaintiff for the "reasonable value of goods and services" rather than for missed "scheduled payments," as contemplated by the statute. This court must agree. Vance resurfaced the Wal-Mart parking lot in Fort Scott, Kansas, pursuant to Obermiller's request. Notably, Obermiller agreed to compensate Vance $39,467.75 for his services. Because Obermiller was to compensate Vance in one lump-sum payment, rather than in scheduled intervals, their agreement does not fall within the purview of Section 431.180. The trial court's award of attorney fees is reversed.
While not explicitly stated, the intent behind Section 431.180 seems to be ensuring that private contractors who are working on large-scale projects receive scheduled payments promptly in order to be able to finance completion of the project. Evidence of the legislature's intent may be gleaned, in part, from Section 431.180(3), which states, "The provisions of this section shall not apply to contracts for private construction work for the building, improvement, repair or remodeling of owner-occupied residential property of four units or less."
Although the first issue is dispositive, this court notes that a good faith requirement should not be read into the Private Prompt Payment Act, by analogy from Missouri's Public Works Prompt Payment Act ("MPPA"), Section 34.057. The language between the Private Prompt Payment Act and the MPPA is strikingly similar. However, important differences do exist. The MPPA provides, in pertinent part:
If it is determined by a court of competent jurisdiction that a payment . . . was not withheld in good faith for reasonable cause, the court may impose interest at the rate of one and one-half percent per month calculated from the date of the invoice and may, in its discretion, award reasonable attorney fees to the prevailing party. Section 34.057.
Importantly, the MPPA's good faith requirement is not included in the Private Prompt Payment Act. The Private Prompt Payment Act unambiguously states that "[t]he court may . . . award interest at the rate of up to one and one-half percent per month from the date payment was due pursuant to the terms of the contract, and reasonable attorney fees, to the prevailing party." § 431.180.2 Because the plain language of the Private Prompt Payment Act is clear on its face, there is no need to look to the MPPA for guidance. See State ex rel. Md. Heights Fire Prot. Dist. v. Campbell , 736 S.W.2d 383, 387 (Mo. banc 1987) ("Courts look elsewhere for interpretation only when the meaning is ambiguous or would lead to an illogical result defeating the purpose of the legislature.").
Section 431.180 provides, in full:
1. All persons who enter into a contract for private design or construction work after August 28, 1995, shall make all scheduled payments pursuant to the terms of the contract.
2. Any person who has not been paid in accordance with subsection 1 of this section may bring an action in a court of competent jurisdiction against a person who has failed to pay. The court may in addition to any other award for damages, award interest at the rate of up to one and one-half percent per month from the date payment was due pursuant to the terms of the contract, and reasonable attorney fees, to the prevailing party. If the parties elect to resolve the dispute by arbitration pursuant to section 435.350, RSM, the arbitrator may award any remedy that a court is authorized to award hereunder.
3. The provisions of this section shall not apply to contracts for private construction work for the building, improvement, repair or remodeling of owner-occupied residential property of four units or less.
4. For purposes of this section, design or construction work shall include design, construction, alteration, repair or maintenance of any building, roadway or other structure or improvement to real property, or demolition or excavation connected therewith, and shall include the furnishing of surveying, architectural, engineering or landscape design, planning or management services, labor or materials, in connection with such work.
Furthermore, the order in which the MPPA and the Private Prompt Payment Act were enacted indicates that the legislature intended to omit the good faith requirement from Section 431.180. The Private Prompt Payment Act was enacted five years after the MPPA. Because it is clear that the legislature, therefore, knew how to include such language, this court may not now read the good faith requirement into the Private Prompt Payment Act. See Mo. Div. of Employ. Sec. v. Labor Indus. Relations Comm'n. of Mo. , 637 S.W.2d 315, 318 (Mo.App. 1982) (citing State ex rel. Igoe v. Bradford , 611 S.W.2d 343 (Mo.App. 1980) ("Effect must be given to the legislative intent from what the legislature said and not from what the legislature may have intended to say or inadvertently failed to say.").
CONCLUSION
The award of attorney fees under Missouri's Private Prompt Payment Act must be predicated by a finding that the two requirements set forth in Section 431.180(1) have been fulfilled. First, the prevailing party must have brought an action sounding in contract; the award is not reserved strictly for breach of contract claims. Second, the agreement between the parties must have provided for scheduled payments rather than a lump sum payable upon completion. Because Vance and Obermiller's agreement did not satisfy the second requirement, the trial court's award of attorney fees is reversed.
Obermiller's Motion to Dismiss the Appeal and Motion for its Appellate Attorney Fees are denied.
The judgment is reversed.
All concur.