Scheck Industrial Corporation v. Tarlton Corporation, Defendant/Respondent.

In the Missouri Court of Appeals
Eastern District

DIVISION FOUR

SCHECK INDUSTRIAL CORPORATION, )
) No. ED100371
Plaintiff/Appellant, )
) Appeal from the City of St. Louis
vs. ) Circuit Court
)
TARLTON CORPORATION, ET AL., ) Honorable Joan L. Moriarty
)
Defendant/Respondent. ) Filed: July 15, 2014

Introduction

In this dispute involving the breach of a construction contract, subcontractor

Scheck Industrial Corporation (Plaintiff) appeals the amended judgment of the Circuit

Court of the City of St. Louis entered after a bench trial in favor of general contractor

Tarlton Corporation (Defendant) on Plaintiff‟s claims for account stated and breach of

contract and on Defendant‟s counterclaims for breach of contract, breach of warranty,

and indemnification, and for Defendant‟s request for attorney fees. On appeal, Plaintiff

claims that the trial court abused its discretion by barring Plaintiff‟s retained expert from

testifying. Plaintiff also claims that the trial court‟s amended judgment against Plaintiff

on its claims of account stated and breach of contract is “against the manifest weight of
the evidence and a misapplication of the law” because: (1) Defendant did not dispute

Plaintiff‟s invoices and admitted it owed Plaintiff compensation for work performed; (2)

Plaintiff performed its obligations under the Subcontract in a “workmanlike manner” and

Defendant accepted Plaintiff‟s work thereby waiving its right to object; and (3) the

Subcontract‟s “pay-if-paid” clause is inapplicable. Plaintiff further claims that the trial

court‟s amended judgment for Defendant on its counterclaims is “against the manifest

weight of the evidence and a misapplication of the law” because: (1) Defendant did not

prove that Plaintiff‟s work was not performed in a “workmanlike” manner and Defendant

failed to perform its obligations under the Subcontract, the Subcontract‟s warranty

provision is inapplicable, and Defendant failed to mitigate its damages; (2) Defendant

failed to establish it was entitled to indemnification under the Subcontract; and (3)

Defendant failed to establish that it was entitled to damages or attorney fees. We affirm.

Factual Background1

In March 2008, Defendant entered into a Contract with the electric utility

company Ameren under which Defendant agreed to perform certain work related to the

repair of Ameren‟s Taum Sauk hydroelectric power plant. Defendant was the general

contractor on the project, charged with performing general contracting services pursuant

to the terms of the Contract. Pertinent to this dispute, the Contract required Defendant to

cut eight drain access ports into the lower section of the plant‟s “penstock,” weld steel

collars composed of A572 carbon steel around each port, and install removable covers or

1
The facts are presented in a light most favorable to the trial court‟s amended judgment. Wildflower Cmty. Ass’n,
Inc. v. Rinderknecht, 25 S.W.3d 530, 534 (Mo. App. W.D. 2000).

2
doors over these ports.2 The penstock is a one-mile long tunnel, 18 feet in diameter,

which transfers water from a water reservoir to turbines in an electricity-generating

facility. The upper portion of the penstock is composed of A201 steel, while the lower

portion, where the drain access collars were to be installed, is composed of T-1 steel.3

The Subcontract

Because Defendant did not have the requisite expertise to install the collars on

each of the eight drain access ports required under the Contract, it entered into a

Subcontract with Plaintiff in January 2009, under which Plaintiff agreed to complete

these repairs of the penstock on a “time and materials” basis.4 The Subcontract‟s opening

paragraph incorporated the Contract making it part of the Subcontract, as well as all the

“contract documents” that made up the Contract. These contract documents included

numerous drawings and specifications as identified in “Attachment A” of the

Subcontract, of which drawing 8304-X-26058 specified that the lower portion of the

penstock is composed of T-1 steel and the upper portion of A201 steel.

Pertinent to this appeal, the Contract contained a warranty provision, under which

Plaintiff warranted “that the Work performed under the Contract will be free from defects

in design, [the] workmanship . . . will be suitable for its intended purpose [and] the Work

will comply with the specifications, drawings, samples and other descriptive information

2
Each port is about 22 feet wide. The steel collars are inch-thick plates that were welded onto the inside of the
penstock around each port to provide strength.
3
T-1, A201, and A572 carbon steel are different types of steel. T-1 is a low-alloy high-strength quenched and
tempered steel, whereas A201 is a lighter, lower strength steel. A572 has a higher strength than T-1 steel.
4
The Subcontract‟s Attachment B identified the scope of work to be completed, including assisting in the drilling of
the penstock, patching “grout nipple holes,” and installing and welding plates “per drawings and specifications.”
The specifications did not include a welding procedure.

3
as furnished or specified in the Contract . . . .” In addition, paragraph 33 of the Contract

included the following provision pertaining to attorney fees:

In the event it shall become necessary for [Defendant] to retain the services
of an attorney for the purposes of enforcing any provisions of this Contract,
[Plaintiff] shall pay the costs of the court and the reasonably [sic] attorneys‟
fees incurred.

Regarding the relevant provisions of the Subcontract, Part I of the Subcontract

concerned “payment” and included the following “pay-if-paid” clause, applicable to both

progress payments and final payments:

Progress payments will be made each month from funds received
from [Ameren] as and when the funds are received for the proportionate
contract value of work completed and/or materials delivered to [the]
site . . . . Such partial payments shall not become due [Plaintiff] unless and
until 7 days after [Defendant] has received payment for such work and
materials, it being a condition precedent to [Defendant‟s] obligation to pay
[Plaintiff] that [Defendant] has received payment from [Ameren] for work
and materials referred to.

Final payment shall not be due until the work described in this
contract is fully completed and performed in accordance with the Contract
Documents . . . and final payment from [Ameren] is received by
[Defendant], it being a condition precedent to [Defendant‟s] obligation to
pay [Plaintiff] that [Defendant] has received final payment from [Ameren]
for work and materials referred to. (Emphasis in original).

Part II of the Subcontract contained certain “special requirements” and, under

subpart (H), listed numerous “general” provisions pertaining to Plaintiff‟s obligations and

further agreements between the parties. Paragraph 17 of Part (II)(H) is an indemnity

clause, which provides:

[Plaintiff] agrees to indemnify and hold harmless [Defendant], its Directors,
Officers and Employees from and against any and all loss, claims, suits,
causes of action, liability, damages, costs, expenses and/or attorney fees
incurred by [Defendant] or its successors, assignees and sureties as a result

4
 of any failure, neglect or inability of [Plaintiff] to pay its suppliers, material
men or subcontractors (i.e., sub-subcontractors of [Defendant]) or as a
result of [Plaintiff‟s] breach or alleged breach of, or any dispute in
connection with, any contract or order, whether expressed or implied, with
any such sub-subcontractors, or with suppliers or material men to
[Plaintiff], or as a result of any claim made by such sub-subcontractor,
suppliers or material men to [Plaintiff] to [Defendant] or on any
Performance and/or Payment Bond posted by [Defendant] in connection
with the construction job which is the subject of this Agreement, or as a
result of any personal injury or property damage arising out of or in
connection with this Subcontract or any work or operations under or in
connection with this Subcontract, and from personal injury or property
damage resulting from use by [Plaintiff] or its sub-subcontractors of any
equipment owned or rented by [Defendant].

Further, under paragraphs 30 and 32 of Part (II)(H), Plaintiff and Defendant

agreed that Plaintiff would undertake personal investigation of the conditions affecting its

work and independently determine the criteria necessary to complete its obligations.

Those provisions provide as follows:

[Plaintiff] agrees he is fully informed regarding all conditions affecting
work to be done under, and material, equipment, apparatus and labor to be
furnished for completion of this Subcontract; and also agrees and certifies
that his information was secured by personal investigation and research and
not from any estimates or representations of any officer, agent or employee
of [Defendant].
* * *

[Plaintiff] shall independently determine and verify all field measurements,
field construction criteria, etc., as required to accomplish, erect and
complete his work requirements.

Execution of the Subcontract

In March 2009, Plaintiff selected a welding procedure appropriate for welding

A572 carbon steel to the A201 steel in the upper portion of the penstock. After Plaintiff

had successfully completed the placement of the invert plates on this upper portion of the

5
penstock, it began, in early June 2009, the welding work on the eight drain access ports

located in the lower portion of the penstock. Although the lower portion of the penstock

is composed of a different type of steel than the upper portion of the penstock, Plaintiff

did not investigate whether a different base metal was present and did not submit a new

welding procedure for welding the A572 carbon steel collars to the T-1 steel of the

penstock. Shortly thereafter, on June 25th when 85 percent of the welding on the drain

access ports was complete, Plaintiff identified cracking in the penstock just outside the

completed welds and reported this information to Defendant.

Welding continued based on the parties‟ belief that the cracking was an isolated

incident. However, by July 2, 2009, the parties realized that the cracking was widespread

and Defendant directed Plaintiff to stop its welding work and requested Plaintiff to

submit a new welding method. Around the same time, James Sopata, Plaintiff‟s

superintendent for the project, learned for the first time that the lower portion of the

penstock was composed of T-1 steel.

Several weeks later, around July 29th, Plaintiff applied its new proposed welding

method to a single access collar. This required Plaintiff to remove the faulty access

collar, remove the cracks in the penstock, and re-weld a new access collar using the new

method. After its application, Plaintiff discovered additional cracks in the penstock and

the new welding method was rejected. Plaintiff made a second attempt, again removing

the defective weld, fixing the cracks and placing a new weld, but cracks in the penstock

appeared again.

6
 Consequently, by August 10th, rewelding ceased entirely. Because six or seven

weeks had passed since the first discovery of the cracks and no solution had been found,

Defendant contacted a metallurgist engineering firm, Briem Engineering, to develop a

solution. After conducting an investigation, Briem Engineering‟s final report concluded

that the cracking was due to “weld shrinkage stresses and pre-existing residual stress

levels” and recommended an alternative welding procedure appropriate for welding A572

carbon steel to T-1 steel.5 Ultimately, Plaintiff applied Briem‟s recommended welding

procedure beginning in October and successfully completed the work in December 2009.

In anticipation that it would have to submit a claim to Ameren for payment of

Plaintiff‟s repair and rework of the drain access welds, Defendant asked Plaintiff to track

its time separately for the repair and rework of the welds. This work included removing

all the defective welds, fixing the cracks in the penstock, and re-welding anything that

had already been welded once. Defendant submitted the claim to Ameren based on its

understanding at that point, as Plaintiff asserted to Defendant, that the cracking was

related to problems in the penstock, not Plaintiff‟s welding procedure. Defendant sought

a total of $733,416 from Ameren, reflecting both Plaintiff‟s costs in completing the repair

and rework and Defendant‟s costs to support that work.

In June 2010, Ameren rejected the claim in its entirety, indicating in a letter to

Defendant that Ameren had only approved a welding procedure for the upper portion of

5
At trial, Jim Briem explained that the “pre-existing residual stress levels” would exist in the penstock as a result of
forming the penstock into a round-shaped pipeline and that a “weld shrinkage stress” is “inherent in any weldment”
and occurs because “whenever you make a weld in a metal, you are applying molten metal, and that molten metal as
it cools, contracts, and as it contracts, it pulls the adjacent metal in . . . . As it pulls the adjacent metal in, in the heat-
affected zone, that creates residual stresses.”

7
the penstock and that “improper welding practices” caused the lower portion of the

penstock to crack. Subsequently, and after further conversation with Briem Engineering,

Defendant realized that Plaintiff‟s position—that problems with the penstock caused the

cracking—was not scientifically supportable in that “there was absolutely no engineering

or metallurgical support to [Plaintiff‟s] claim . . . .” Ultimately, Plaintiff received

payment for all its work on the project except the $553,133.51 related to the repair and

rework.

The Lawsuit

Plaintiff then filed this account stated and breach of contract action against

Defendant seeking $553,133.51, the amount allegedly owed for the repair and rework. 6

Defendant answered the petition, raising counterclaims for breach of contract, breach of

warranty, and indemnification and alleging that it was owed $220,094, plus attorney fees,

for costs and expenses it incurred as a result of Plaintiff‟s breach.

After a four-day bench trial, the trial court entered a judgment for Defendant on

Plaintiff‟s claims of account stated and breach of contract and on Defendant‟s

counterclaims for breach of contract, breach of warranty, and indemnification. In

essence, the trial court found that the evidence did not support Plaintiff‟s account stated

and breach of contract claims, but instead established that Plaintiff breached the

Subcontract by failing to complete the welds in a workmanlike manner and by failing to

investigate and independently identify the proper welding procedure to be applied to the

6
Plaintiff‟s petition also included a count for quantum meruit against Ameren and a count for enforcement of its
mechanics lien against both Defendant and Ameren. These claims were dismissed before trial.

8
penstock. The trial court further found that Plaintiff breached the Subcontract by failing

to indemnify Defendant for costs and expenses incurred as a result of Defendant‟s breach

and that Plaintiff‟s failure to perform its obligations in a workmanlike manner constituted

a breach of the Subcontract‟s warranty provision. Accordingly, the trial court awarded

Defendant $220,093.80 in “labor and general conditions costs” that Defendant incurred

as a result of Plaintiff‟ breach. The judgment also awarded Defendant $141,097.99 in

attorney fees pursuant to Paragraph 33 of the Contract.

Plaintiff moved for a new trial and Defendant moved for additional attorney fees.

The trial court denied Plaintiff‟s motion and entered an amended judgment granting

Defendant the additional attorney fees, for a total amount of $190,383.19 in fees. This

appeal followed.

Standard of Review

Plaintiff‟s first point on appeal relates to the trial court‟s decision to strike the

testimony of Plaintiff‟s retained expert, which we review for an abuse of discretion.

Kivland v. Columbia Orthopaedic Group, LLP, 331 S.W.3d 299, 311 (Mo. banc 2011).

A trial court abuses its discretion when its “ruling is clearly against the logic of the

circumstances then before the court and is so arbitrary and unreasonable as to shock the

sense of justice and indicate a lack of careful consideration.” Blake v. Irwin, 913 S.W.2d

923, 931 (Mo. App. W.D. 1996). No abuse of discretion occurs where “reasonable

persons can differ about the propriety of the action taken by the trial court . . . .” Id.

When reviewing the trial court‟s decision regarding issues arising from pre-trial

discovery, of which appellate courts grant trial court decisions great deference, “[w]e

9
look only for an abuse of this broad discretion which results in prejudice or unfair

surprise.” Day Advertising Inc. v. Devries & Assocs., 217 S.W.3d 362, 366 (Mo. App.

W.D. 2007) (citation and quotations omitted); Ellis v. Union Elec. Co., 729 S.W.2d 71,

74 (Mo. App. E.D. 1987).

Plaintiff‟s remaining points allege that the trial court‟s amended judgment

misapplies the law or is against the manifest weight of the evidence. In a court-tried case,

“we will affirm the circuit court‟s judgment unless there is no substantial evidence to

support it, it misstates or misapplies the law, or it goes against the weight of the

evidence.” Brooke Drywall v. Building Constr. Enterprises, Inc., 361 S.W.3d 22, 26

(Mo. App. W.D. 2010) (citation and quotations omitted). “The trial court‟s judgment is

presumed valid, [and] the burden is on the appellant to demonstrate its incorrectness[.]”

Harness v. Wallace, 167 S.W.3d 288, 289 (Mo. App. S.D. 2005). Even if we find error,

we cannot reverse the judgment unless we determine that the error “materially affect[ed]

the merits of the action.” Rule 84.13(b).

“Substantial evidence is evidence which has probative force and from which the

trier of fact could reasonably find the issues in harmony with its decision.” Grider v.

Tingle, 325 S.W.3d 437, 440 (Mo. App. S.D. 2010). “[A]n against-the-weight-of-the-

evidence challenge presupposes the threshold issue of the existence of substantial

evidence supporting a proposition necessary to sustain a judgment, but, nevertheless,

challenges the probative value of that evidence to induce belief in that proposition when

viewed in the context of the entirety of the evidence before the trier of fact.” Houston v.

Crider, 317 S.W.3d 178, 186 (Mo. App. S.D. 2010). However, we defer to the trial

10
court‟s determination of the facts and matters of witness credibility, such that “[t]he

evidence and all reasonable inferences drawn therefrom must be viewed in the light most

favorable to the trial court‟s judgment, and all contrary evidence and inferences must be

disregarded.” Wildflower Cmty. Ass’n, Inc. v. Rinderknecht, 25 S.W.3d 530, 534 (Mo.

App. W.D. 2000). A judgment should be set aside as “against the weight of the

evidence” only with caution and only when the reviewing court has a firm belief that the

judgment is wrong. Houston, 317 S.W.3d at 186.

To the extent Plaintiff‟s arguments require us to interpret the Subcontract, our

review is de novo, as questions of contract interpretation are questions of law.

Wildflower Cmty. Ass’n, Inc., 25 S.W.3d at 534. When a contract is unambiguous, the

parties‟ intent is determined based on the contract‟s language and parol evidence is not

permitted. Baker-Smith Sheet Metal, Inc. v. Building Erection Serv. Co., 49 S.W.3d 712,

716 (Mo. App. W.D. 2001).

Discussion

At the outset, we note that many of Plaintiff‟s points relied on fail to comply with

the briefing requirements set forth in Rule 84.04. Points II, III, IV, VI, and VII challenge

the trial court‟s amended judgment with respect to Plaintiff‟s claims and Defendant‟s

counterclaims as “against the manifest weight of the evidence and an improper

application of the law.” Challenging the substantial evidence to support the trial court‟s

finding and the trial court‟s application of law identifies more than one ruling or action of

the trial court. Additionally, Points III, V, and VII challenge multiple rulings of the trial

court pertaining to different substantive matters: Point III combines challenges the trial

11
court‟s decision on Plaintiff‟s breach of contract claim and affirmative defense of waiver;

Point V addresses Defendant‟s counterclaims for breach of contract, breach of warranty,

and Plaintiff‟s affirmative defense of mitigation; and Point VII challenges both the award

of damages and attorney fees.

Therefore, Plaintiff‟s points relied on run afoul of Rule 84.04(d)(1)(A)‟s

requirement that a point “identify the trial court ruling or action that the appellant

challenges[.]” Inadequate briefs are a disservice to the parties and a burden on the justice

system. Thummel v. King, 570 S.W.2d 679, 686 (Mo. banc 1978). However, given the

result we reach in this case, suspension of Rule 84.04‟s application will result in no

hardship to Defendant. Accordingly, and because we are able to discern the basic

contentions of Plaintiff‟s points relied on, we exercise our discretion to review Plaintiff‟s

claims. See Reynolds v. Brill, 302 S.W.3d 716, 718-19 & n.3 (Mo. App. S.D. 2010).

Point I: Motion to Strike Retained Expert

In its first point relied on, Plaintiff asserts that the trial court abused its discretion

by barring the testimony of its retained expert witness because the expert was timely

disclosed five weeks before trial, the parties had waived the scheduling order‟s deadlines,

and Defendant had already commenced deposition of the expert.7 Therefore, Plaintiff

contends that admission of the expert‟s testimony would not have prejudiced Defendant,

while exclusion of the expert affected the merits of the case and prejudiced Plaintiff. In

response, Defendant asserts that the trial court did not abuse its discretion by striking the

7
A “retained expert” is an individual who has no knowledge of the case or facts in controversy before being retained
and is engaged by a party in anticipation of litigation to testify to scientific or other technical matters. See Kehr v.
Knapp, 136 S.W.3d 118, 123 (Mo. App. E.D. 2004).

12
witness because Plaintiff failed to timely designate the witness by naming the retained

expert nine months after the court-ordered deadline and just five weeks before trial.

“Missouri caselaw has consistently held that courts have broad discretion to strike

expert witnesses who are not timely filed.” Legg v. Certain Underwriters at Lloyd’s of

London, 18 S.W.3d 379, 386 (Mo. App. W.D. 1999). This discretion should be aimed

toward achieving fundamental fairness and avoiding unfair disadvantage. Ellis, 729

S.W.2d at 76. “[U]ntimely disclosure of an expert witness‟ identity is so offensive to the

underlying purposes of the discovery rules that prejudice may be inferred.” Alberswerth

v. Alberswerth, 184 S.W.3d 81, 101 (Mo. App. W.D. 2006) (citation and quotations

omitted). Exclusion of expert testimony that was untimely disclosed does not constitute

reversible error unless the testimony would have changed the outcome of the case. Legg,

18 S.W.3d at 386.

Here, the record reflects that Plaintiff, pursuant to the scheduling order, was

required to name any retained experts by July 1, 2011, which was five months and five

days before the original December 5, 2011 trial date. Plaintiff did not name any retained

experts in its initial answer to Defendant‟s request for interrogatories. On September 27,

2011, Plaintiff moved for a continuance of the trial date indicating that written discovery

had not been completed, as Plaintiff had allegedly not received complete written

discovery from Defendant, and that oral discovery was yet to ensue, despite the

scheduling order‟s October 1, 2011 deadline for completion of all discovery. Although

Defendant did not agree to the continuance, the trial court granted Plaintiff‟s motion and

reset the trial date for February 27, 2012. About a month before trial, on January 19,

13
2012, Plaintiff moved for another continuance, noting that although “the parties have

been diligent in taking discovery” and that written discovery had been completed,

Plaintiff still needed to take the depositions of multiple witnesses. Defendant did not

agree to the continuance, but the trial court granted Plaintiff‟s motion and reset trial for

April 30, 2012, indicating that Plaintiff needed to take additional depositions.

Five weeks before the trial date, Plaintiff filed an amended answer to Defendant‟s

request for interrogatories designating, for the first time, Doctor Kent Johnson, P.E., 8 as a

retained expert. Plaintiff‟s amended answer indicated that Johnson would testify about

the “characteristics and welding of the steel in the penstock and the materials installed on

the penstock,” and generally about “industry standards relating to time and materials

contracts as well as the dissemination of information required to perform under such

contracts.” Defendant moved to strike Plaintiff‟s designation of the retained expert and

to prohibit Johnson from testifying at trial. The trial court granted Defendant‟s motion,

finding that undue prejudice would result to Defendant to allow Plaintiff to designate a

retained expert at this “very late date” and that it would be “unfair” to address such

prejudice by granting another continuance.

Contrary to Plaintiff‟s position, Plaintiff did not timely disclose Johnson as a

retained expert. The original scheduling order required designation of Plaintiff‟s retained

experts by July 1, 2011, more than five months before the original trial date. Plaintiff did

not designate a retained expert by that deadline. Instead, while the lawsuit remained

pending for nearly a year and a half, Plaintiff did not designate a retained expert until just

8
P.E. means “professional engineer.”

14
five weeks before trial, at which time the scheduling order precluded Defendant from

obtaining its own retained expert witness. Under the circumstances, the disclosure was

untimely. See Wilkerson v. Prelutsky, 943 S.W.2d 643, 649 (Mo. banc 1997) (failure to

disclose expert witness until a “few weeks” before trial untimely when opposing party

was subject to order prohibiting it from retaining new experts).9 Because Plaintiff had

the responsibility to timely disclose any retained experts it intended to call at trial, but did

not do so, the record reflects that Plaintiff abused the discovery process. See Goede v.

Aerojet Gen. Corp., 143 S.W.3d 14, 23-4 (Mo. App. E.D. 2004) (failure to timely

disclose witness was an abuse of discovery procedures).

Notwithstanding its clear violation of the scheduling order‟s deadline for

disclosing retained expert witnesses, Plaintiff asserts that because neither party complied

with the scheduling order that the deadlines were waived and that Plaintiff‟s disclosure of

Johnson was, therefore, timely.10 First, even assuming that Defendant contributed to

some delay, such noncompliance with the scheduling order‟s October 2011 discovery

9
Plaintiff supports its position that it made a timely disclosure by comparing the five weeks between its disclosure
and trial with numerous cases in which the disclosure was closer to the trial date and deemed untimely. See
Missouri Bd. of Nursing Home Administrators v. Stephens, 106 S.W.3d 524, 526-29 (Mo. App. W.D. 2003)
(untimely disclosure nine days before trial); Legg, 18 S.W.3d at 386 (untimely disclosure 19 days before trial); State,
ex. rel., Missouri Highway & Transp. Comm’n v. Meramec Valley Elevator, Inc., 782 S.W.2d 642, 644-45 (Mo.
App. E.D. 1989) (untimely disclosure one day before trial). However, the number of days between the disclosure of
a witness and trial is not dispositive with respect to whether the disclosure was timely. As this Court has previously
noted, “The infinite variety of situations which develop in pre-trial discovery renders impossible the adoption of a
hard, fast rule designating exact and inflexible time limitations for disclosure of witnesses. For this reason the
requirement of „seasonable‟ disclosure is not defined, but is left to the exercise of sound discretion in each case.”
Ellis, 729 S.W.2d at 75-6.
10
In support of this argument, Plaintiff also asserts that Defendant engaged in equally objectionable conduct by
supplementing its expert disclosures six weeks before trial. However, Defendant‟s supplemental answer to
Plaintiff‟s first set of interrogatories is not part of the record on appeal. Accordingly, because it is the appellant‟s
duty to prepare the record on appeal, we will not construe the record favorably to Plaintiff. See Wilkerson, 943
S.W.2d at 649. Nonetheless, we note that the scheduling order did not designate any deadline for disclosing non-
retained experts and Defendant‟s supplemental answer pertained to Defendant‟s non-retained expert.

15
deadline does not unequivocally constitute a waiver of the deadlines for disclosing

retained experts. See Acetylene Gas Co. v. Oliver, 939 S.W.2d 404, 409 (Mo. App. E.D.

1996) (“A waiver is the intentional relinquishment of a known right” and waiver by

conduct requires that no other reasonable explanation of the conduct is possible).

Second, the fact remains that the original scheduling order required disclosure of

Plaintiff‟s retained experts more than five months before trial, but Plaintiff named

Johnson on March 26, 2012, just five weeks before the ultimate trial date. Thus, even

assuming that the continuances extended the other deadlines in the scheduling order,

Plaintiff‟s disclosure of retained experts would still have been due five months and five

days before trial. The record simply does not support Plaintiff‟s contention that the

disclosure was timely.

Plaintiff also asserts that no prejudice would result from allowing Johnson‟s

testimony because Defendant was not surprised by the untimely disclosure and Defendant

was able to adequately prepare for Johnson‟s testimony. However, with only five weeks

remaining before trial, it was not unreasonable for the trial court to conclude that unfair

prejudice would result to Defendant, in that Defendant would have no realistic

opportunity to review the documents Johnson relied on, depose Johnson, and, if

necessary, retain and prepare an expert witness of its own to rebut Johnson‟s testimony.

In concluding that Johnson‟s testimony be excluded, the trial court implicitly found that,

absent another continuance of the trial date, Defendant‟s ability to adequately prepare for

Johnson‟s testimony, given the complex matters involved in this case, would be

compromised. Moreover, “[t]he purpose of discovery is not merely to prevent surprise at

16
trial. An equally important purpose is to narrow the issues and thereby facilitate a speedy

and less expensive disposition of the case.” Wilkerson, 943 S.W.2d at 649. Had Plaintiff

been allowed to present Johnson‟s testimony, Defendant would undoubtedly have

suffered an unfair disadvantage, as well as undue delay and unnecessary expense.

Finally, despite Plaintiff‟s assertion to the contrary, we fail to see how the

prejudice that Defendant would have sustained is outweighed by any potential prejudice

to Plaintiff. This is because the testimony‟s exclusion did not materially affect the

outcome of the case, given that Johnson‟s proposed testimony was either inadmissible or

cumulative of evidence presented at trial.11 We therefore cannot conclude that striking

the untimely disclosed expert‟s testimony constituted reversible error. See Legg, 18

S.W.3d at 386.

Given the foregoing, we perceive no fundamental unfairness in the trial court‟s

decision to strike Johnson‟s testimony where Plaintiff‟s disclosure was untimely,

Defendant would have suffered unfair disadvantage, delay, and expense, and admission

of Johnson‟s testimony would not have changed the outcome of the case. The trial court

did not abuse its discretion by sustaining Defendant‟s motion to strike Johnson‟s

11
Plaintiff cites to eight opinions of Johnson‟s deposition testimony, which it alleges were essential to its case.
However, six of these statements are inadmissible legal conclusions, e.g., statements pertaining to the interpretation
of the Subcontract or Defendant‟s legal duty. See State v. Cochran, 365 S.W.3d 628, 634 (Mo. App. W.D. 2012)
(“An expert may not substitute his . . . conclusions for the . . . conclusions of the jury upon the issue, or issues,
before the triers of fact.” (citation and quotations omitted)). The remaining statements—that Ameren‟s engineer
failed to call attention to the fact that the lower portion of the penstock was composed of T-1 steel and that Plaintiff
reasonably believed that the entire penstock was composed of the same type of steel given that the materials
provided were carbon steel—were established through other evidence. Finally, we note that Johnson‟s deposition is
not part of the record on appeal and we have merely considered Plaintiff‟s argument ex gratia. Because it is the
appellant‟s duty to prepare the record for appeal, Rule 81.12, we cannot presume that Johnson‟s testimony would
have affected the trial‟s outcome as such a conclusion would be pure speculation.

17
testimony on the basis that Plaintiff untimely designated its retained expert. Point I is

denied.

Point II: Account Stated

In its second point relied on, Plaintiff asserts that the trial court‟s amended

judgment against Plaintiff on its account stated claim is against the “manifest weight of

the evidence and a misapplication of the law” because Defendant acknowledged the

account since it did not dispute Plaintiff‟s invoices and admitted that it owed Plaintiff

compensation for work performed. In support, Plaintiff likens the present case to Chisler

v. Staats, 502 S.W.2d 424 (Mo. App. 1973), where the defendant did not object to

invoices for work completed and this Court held that the evidence established an account

stated. Defendant responds that Plaintiff did not plead or prove an action for account

stated.

“An account stated is an agreement between parties, having had previous financial

transactions, that a balance struck is correct and due between them, and a promise by the

debtor, either express or implied, to pay the balance.” Grant Selsor & Sons Lumber Co.

v. Wood, 872 S.W.2d 150, 153 (Mo. App. S.D. 1992). To establish a claim for account

stated, the claimant must establish that “(1) the parties had prior financial dealings, an

open account; (2) the parties reached an agreement as to the amount due and owing on

that account; and (3) the debtor acknowledged this obligation and made an unconditional

promise to pay.” Id. “In the absence of an express promise to pay, the retention of the

account rendered for a reasonable time without objection admits to the account and

18
implies a promise to pay.” Interstate Distrib. v. Freeman, 904 S.W.2d 481, 483 (Mo.

App. S.D. 1995).

In the instant matter, the trial court found that Plaintiff did not prove that: (1) “the

parties reached an agreement that [Defendant] owed [Plaintiff] any of the money claimed

by [Plaintiff] as owed” and (2) “that [Defendant] acknowledged an obligation to

[Plaintiff] in the amounts [Plaintiff] claims or that it made an unconditional promise to

pay [Plaintiff].” Accordingly, the trial court ruled in favor of Defendant on Plaintiff‟s

account stated claim.

On appeal, Plaintiff relies primarily on the testimony of Kris Kestner, Defendant‟s

senior project manager responsible for oversight of the project. Kestner, however, never

testified that Defendant and Plaintiff reached an agreement as to the amount Plaintiff

claimed it was owed or that Defendant promised to pay Plaintiff that amount. Kestner

merely explained that Defendant submitted to Ameren, on Plaintiff‟s behalf, a claim

reflecting the time and materials Plaintiff expended in completing the repair and rework

and, that once Ameren rejected the claim, Defendant concluded that Plaintiff was not

entitled to remuneration. Kestner made clear that Defendant‟s initial belief that Plaintiff

was owed compensation for the repair and rework, and never disputed Plaintiff‟s related

invoices, was due to the fact that Defendant “took [Plaintiff] fully at [its] position that

there was nothing wrong with [Plaintiff‟s] work.” In short, Kestner‟s testimony does not

provide evidence of an agreement between the parties that a balance is due or that

Defendant promised to pay that amount, both of which are required to establish a claim

for account stated. See Grant Selsor & Sons Lumber Co., 872 S.W.2d at 153. Rather, the

19
thrust of Kestner‟s testimony is that Defendant‟s obligation to pay Plaintiff was

contingent on the successful resolution of the Ameren claim.

Plaintiff, however, asserts that Defendant acknowledged the account since

Defendant did not dispute Plaintiff‟s invoices and admitted that it owed Plaintiff

compensation for work performed. Kestner did testify that Defendant did not dispute the

invoices Plaintiff submitted to Defendant, that some invoices remained unpaid, and that

Defendant never indicated in correspondence that it would not pay Plaintiff. Plaintiff,

however, infers too much from this testimony and reads Kestner‟s statements in isolation.

When viewed as a whole and in context, Kestner‟s testimony simply indicates that

Defendant did not dispute the content of the invoices, i.e., that these invoices correctly

reflected the costs Plaintiff incurred executing the repair and rework and that these

invoices remained unpaid because Defendant had submitted a claim to Ameren for

payment. Further, Defendant‟s failure to expressly disagree with the amount allegedly

owed in correspondence with Plaintiff, was not an implied promise to pay Plaintiff for the

repair and rework, but was consistent with Defendant‟s acknowledgment that Plaintiff

would be paid if Defendant prevailed on the claim against Ameren. Indeed, the emails

between Plaintiff and Defendant‟s representatives that Plaintiff cites in support of its

account stated claim reflect this same understanding.12

Therefore, this case is unlike Chisler, on which Plaintiff relies, because there the

defendant reassured the plaintiff in writing that the balance of an unpaid invoice would be

12
These emails indicate Defendant‟s acknowledgement that some invoices had been unpaid and forwarded to
Defendant‟s accounting department for processing with the understanding that Plaintiff would be paid only if
Ameren reimbursed Defendant.

20
paid. 502 S.W.2d at 426-27. No such reassurance occurred in this case. Contrary to

Plaintiff‟s position, the trial court did not “disregard” the evidence supporting an account

stated claim. Rather, the evidence that Plaintiff relies on does not support such a claim

and, therefore, does not instill in this Court a firm belief that the trial court‟s judgment is

wrong. See Houston, 317 S.W.3d at 186. Accordingly, the trial court‟s amended

judgment against Plaintiff on its account stated claim is not against the weight of the

evidence. Point II is denied.

Point III: Breach of Contract and Waiver

In its third point relied on, Plaintiff asserts that the trial court‟s amended judgment

against Plaintiff on its breach of contract claim is “against the manifest weight of the

evidence and a misapplication of the law” because the evidence established that it

performed its work in a “good and workmanlike” manner and, even assuming arguendo

that it had not, Defendant accepted Plaintiff‟s work, thereby waiving its right to assert

otherwise. In response, Defendant argues that the trial court‟s judgment against Plaintiff

on its breach of contract claim is supported by substantial evidence on the record.

Because this point is multifarious, we address each claim separately.

1. Breach of Contract

To establish a claim for breach of contract, the party asserting the claim must

establish the existence of a contract, the rights and obligations imposed by the contract, a

breach, and damages. Hanna v. Darr, 154 S.W.3d 2, 5 (Mo. App. E.D. 2004). “In the

context of construction contracts . . . proof of breach requires proof that payment was not

made for work performed in a good and workmanlike manner.” See R.K. Matthews Inv.,

21
Inc. v. Beulah Mae Housing, LLC, 379 S.W.3d 890, 897 (Mo. App. W.D. 2012).

Workmanlike in this context is defined as “work which is completed in a skillful manner

and is non-defective.” Evans v. Werle, 31 S.W.3d 489, 491 (Mo. App. W.D. 2000)

(citation omitted). The burden of proof rests with the party claiming breach of contract.

R.K. Matthews Inv., Inc., 379 S.W.3d at 897.

In this matter, Plaintiff‟s breach of contract theory was that it fully and

satisfactorily performed its obligations under the Subcontract and that Defendant failed to

remit amounts due. In considering Plaintiff‟s claim, the trial court found that: (1)

Plaintiff was responsible under the terms of the Subcontract for preparing a welding

procedure; (2) Plaintiff did not identify the type of steel in the lower portion of the

penstock and did not submit a new welding procedure for welding to T-1 steel before

beginning its work on that portion of the penstock; and (3) Plaintiff‟s welding of the drain

access collars caused the penstock to crack. Accordingly, the trial court concluded that

Plaintiff failed to meet its burden of proof to establish that “the work it seeks payment for

was performed in a good and workmanlike manner” and further concluded that

Defendant was not obligated to pay Plaintiff for defective work.

At trial, several of Plaintiff‟s and Defendant‟s witnesses testified that Plaintiff did

not determine the type of steel located in the lower portion of the penstock before

beginning its work there and that Plaintiff‟s welding procedure used at that location was

defective and caused the penstock to crack. Sopata, Plaintiff‟s superintendent on the

project, testified that Plaintiff would typically “find out what [we were] welding on first,”

but that Plaintiff did not follow this process and only discovered that the lower portion of

22
the penstock was composed of T-1 steel after numerous defective welds had been

completed. Steve Weber, Plaintiff‟s first superintendent on the project, similarly testified

that Plaintiff typically informs its “quality control man . . . what the steel is,” i.e., both the

base metal and material to be welded, and that he did not know what information was

given to Plaintiff‟s quality control consultant. Carl Davis, Plaintiff‟s quality control

consultant who submitted Plaintiff‟s welding procedures for the drain access collars,

testified that he never saw or asked for the drawings or specifications for the project and

that, in hindsight, the welding procedures he submitted and that Plaintiff used were not

appropriate for welding A572 carbon steel to T-1 steel and would cause the penstock to

crack. James Briem, Defendant‟s metallurgical expert, explained that the cracking in the

penstock was caused by Plaintiff‟s improper welding process, which applied too much

heat to the T-1 steel embrittling it and causing it to crack. Briem Engineering‟s final

report was also admitted into evidence and reflected its conclusion that the “excess weld

shrinkage” of Plaintiff‟s weldments caused the penstock to crack. Given the foregoing,

we agree with Defendant that the trial court‟s conclusion, that Plaintiff failed to establish

that it performed its obligations in a workmanlike manner, is supported by substantial

evidence.

Notwithstanding the substantial evidence supporting the trial court‟s conclusion,

Plaintiff challenges the probative value of that evidence by referencing two pieces of

evidence that allegedly indicate that its welds were not defective: (1) the claim for

payment that Defendant submitted to Ameren, as well as (2) Kestner‟s testimony that the

23
“metal surrounding the welds” failed.13 The claim for payment, however, does not

support a conclusion that Plaintiff satisfactorily performed under the Subcontract.

Defendant submitted the claim to Ameren based on its good faith belief that Plaintiff‟s

assertions—that the penstock caused the cracking, not Plaintiff‟s weldments—were true

in order to assist Plaintiff in its effort to obtain payment for the repair and rework. Later,

after Ameren denied the claim, Defendant realized that Plaintiff‟s claim was not

scientifically supportable. As to Kestner‟s statement, Plaintiff again reads his testimony

in isolation and mischaracterizes his explanation of the damage caused by Plaintiff‟s

welds as an assertion that Plaintiff successfully completed the welds. However, when

Kestner‟s testimony is read as a whole, it is clear that he was explaining the damage

Defendant perceived at the time of its discovery. Plaintiff has not, as our review of the

record confirms, identified evidence that its welding procedure was non-defective

sufficient to challenge the probative value of the evidence supporting the trial court‟s

conclusion. See Houston, 317 S.W.3d at 187. Accordingly, Plaintiff has failed to

demonstrate that the trial court‟s conclusion, that Plaintiff failed to perform its work in a

workmanlike manner, is against the weight of the evidence.

2. Waiver

In the alternative, Plaintiff contends that even if its work was defective, Defendant

accepted the welding and, thus, waived its right to complain of the defects. Defendant

13
Plaintiff also says that no evidence supported a causal connection between Plaintiff‟s alleged failure to perform its
work in a workmanlike manner and the cracks in the penstock. This argument is not encompassed by the point
relied on and is therefore abandoned. See Rule 84.04(e).

24
responds that the evidence was “undisputed that everyone involved” knew the cracks

were a defect that had to be repaired.

In the context of a construction contract, waiver is an affirmative defense that may

excuse a contractor‟s breach if the owner accepts the defective work. See Leonards v. U-

Jin Enterprises, Inc., 811 S.W.2d 480, 485 (Mo. App. S.D. 1991); Forsythe v. Starnes,

554 S.W.2d 100, 109 (Mo. App. 1977). “A waiver of defects in construction can occur

when there is knowledge [of the defect] and acquiescence.” Leonards, 811 S.W.2d at

485. To establish waiver, Plaintiff must show that Defendant intentionally relinquished a

known contractual right—here, the right to work free from defects. See Matt Miller Co.

v. Taylor-Martin Holdings, LLC, 393 S.W.3d 68, 79 (Mo. App. S.D. 2012). “If waiver is

implied from conduct, the conduct must clearly and unequivocally show a purpose to

relinquish the right.” O’Connell v. School Dist. of Springfield R-12, 830 S.W.2d 410,

417 (Mo. banc 1992).

At trial, witnesses for both Plaintiff and Defendant agreed that, once the cracking

was discovered around June 25, 2009, that work was continued for about a week because

the parties believed the cracking was isolated. Once the parties discovered the cracking

was widespread, Defendant directed Plaintiff to stop welding and to develop a new

welding method, which was tested on a single drain access collar. This method failed

and Plaintiff made another attempt. When Plaintiff discovered cracks again after its

second attempt, further attempts at rewelding were stopped and Defendant hired Briem

Engineering to develop a successful method. In its amended judgment, the trial court

implicitly concluded that Plaintiff‟s affirmative defense of waiver failed when it found

25
that Defendant “stopped [Plaintiff‟s] work when it became apparent that [Plaintiff‟s]

work caused the cracks,” and that Defendant “did not accept this work without complaint

. . . .”

Contrary to the trial court‟s findings, Plaintiff asserts that Defendant waived its

right to complain of Plaintiff‟s defective performance because Defendant initially

directed Plaintiff to continue using the original welding procedure and Defendant, after

the project was complete, represented to Ameren that Plaintiff‟s work did not cause the

cracking. These facts, while true, do not establish that Defendant waived its contractual

rights because this evidence does not show that Defendant knowingly accepted Plaintiff‟s

defective work. See Leonards, 811 S.W.2d at 485. That Defendant did not initially cease

further welding when the first cracks were discovered was due to the fact that the parties

believed the cracking to be isolated to a single access collar. Further, that Defendant

represented to Ameren that Plaintiff‟s work was not defective was due to Defendant‟s

good-faith belief that Plaintiff‟s assertions were true and to Defendant‟s obligation to

seek payment from Ameren for Plaintiff‟s work. Plaintiff, therefore, has not identified

any evidence to instill in this Court a firm belief that the trial court‟s determination was

wrong as to justify reversal. See Houston, 317 S.W.3d at 186. Instead, having reviewed

the record, it is clear that substantial evidence supports the trial court‟s conclusion and

Plaintiff has failed to demonstrate why that evidence is lacking probative value.

In sum, substantial evidence supports the trial court‟s conclusion that Plaintiff did

not perform its obligations under the Subcontract in a “workmanlike manner” and that

Defendant did not accept Plaintiff‟s defective performance. Plaintiff has not established

26
that these conclusions are against the weight of the evidence. Accordingly, the trial court

did not err by entering judgment against Plaintiff on its breach of contract claim. Point

III is denied.

Point IV: Pay-If-Paid Clause

In its fourth point relied on, Plaintiff asserts that the trial court‟s amended

judgment for Defendant on its breach of contract counterclaim is “an improper

application of the law” because the Subcontract‟s pay-if-paid clause is inapplicable.

Plaintiff asserts that the clause is ambiguous, similar to the one in Meco Systems, Inc. v.

Dancing Bear Entertainment, Inc., 42 S.W.3d 794 (Mo. App. S.D. 2001), and therefore

the trial court erred by construing it as creating a condition precedent to Defendant‟s

obligation to pay Plaintiff.

Because Point III is dispositive as to this claim, we need not consider the merits of

this argument. As explained, Plaintiff‟s breach of contract claim fails because it did not

perform its work satisfactorily under the Subcontract. It follows that Plaintiff is not

entitled to payment for the repair and rework and the pay-if-paid clause is not implicated.

Therefore, the legal question whether the pay-if-paid clause is inapplicable due to a

supposed ambiguity is moot. Point IV is denied.

Point V: Counterclaim for Breach of Contract and Breach of Warranty, Mitigation

In its fifth point relied on, Plaintiff asserts that the trial court‟s amended judgment

for Defendant on its breach of contract counterclaim is “against the manifest weight of

the evidence and a misapplication of the law” because Plaintiff performed its obligations

in a workmanlike manner and because Defendant failed to perform its obligations under

27
the Subcontract. Plaintiff further asserts that the warranty provision did not apply and

that Defendant failed to mitigate its damages. In response, Defendant argues that the trial

court‟s judgment in Defendant‟s favor on its breach of contract counterclaim is supported

by substantial evidence on the record. Defendant further contends that it timely asserted

its warranty claim and that the evidence does not support Plaintiff‟s assertion that

Defendant did not mitigate its damages. Because this point is multifarious, we address

each claim separately.

1. Counterclaim for Breach of Contract

Defendant‟s breach of contract theory was that Plaintiff breached the Subcontract

by failing to perform its work in a workmanlike manner and, more generally, by failing to

investigate and select appropriate welding procedures as Part II(H) paragraphs 30 and 32

of the Subcontract required. As a counterclaimant, Defendant affirmatively asserted a

claim for a relief and the burden therefore shifted to Defendant to prove both the poor

quality of Plaintiff‟s work and the damage incurred as a result. See R.K. Matthews Inv.,

Inc., 379 S.W.3d at 897. In concluding that Defendant satisfied its burden, the trial court

found, in relevant part, that: (1) Plaintiff‟s welding that caused the penstock to crack was

not performed in a workmanlike manner; (2) Plaintiff had a contractual obligation to

review all “contract documents” and inform itself of all conditions before beginning its

welding work; and (3) Plaintiff failed to inform itself about the conditions of the lower

penstock before beginning its work at that location.

At the outset, we reject Plaintiff‟s assertion that because Plaintiff allegedly

performed its work satisfactorily, that the trial court‟s amended judgment was erroneous.

28
We have already determined under Point III that the trial court did not err by concluding

that Plaintiff failed to establish that it performed its obligations in a workmanlike manner.

We also noted under Point III the substantial evidence supporting the trial court‟s

conclusion that Plaintiff‟s performance was deficient. Accordingly, the trial court did not

err by concluding that Defendant established that Plaintiff‟s work was not performed in a

workmanlike manner.

Our conclusion in this regard, however, is not dispositive as to Defendant‟s breach

of contract counterclaim because Plaintiff, relying on the first-to-breach rule, asserts that

Defendant breached the Subcontract first and thereby hindered Plaintiff‟s performance.

See Williams Constr., Inc. v. Weher Constr. LLC, 403 S.W.3d 660, 664 (Mo. App. S.D.

2012) (“[A] party to a contract cannot claim its benefit where he is the first to violate it.”

(citation and quotations omitted)). Specifically, Plaintiff explains that the Subcontract

obligated Defendant to provide Plaintiff with “contract documents” pertaining to the

specifications of the penstock, which Defendant allegedly failed to do.14

Regarding the obligation to provide “contract documents,” the Subcontract‟s

opening paragraph states:

In accordance with this Agreement, the Agreement between
[Ameren] and [Defendant], and in accordance with the General Conditions
of the Contract, Supplementary General Conditions, Special Conditions, the
Drawings and Specifications and addenda as listed in Attachment “A”
prepared by the Architect, or [Ameren‟s] authorized agent, all of which
documents form a part of the Contract between the [Defendant] and
[Ameren] and hereby become a part of this Contract, and which herein
referred to as the Contract Documents, and shall be made available to the

14
Plaintiff does not cite any specific provision of the Subcontract in support of its argument.

29
 Subcontractor upon his request prior to and at anytime [sic] subsequent to
signing this Subcontract. (Emphasis added.)

The final clause of this paragraph expressly states that contract documents “shall

be made available to the Subcontractor upon his request,” meaning that it was ultimately

Plaintiff‟s responsibility to request any of the contract documents that it wished to

review. The implication of this language is that Defendant‟s obligation to provide the

contract documents was entirely contingent upon Plaintiff‟s request for contract

documents, and that in the absence of such a request, Defendant had no obligation to

provide them. Because Defendant was not obligated to provide the contract documents in

the absence of a request from Plaintiff, the contractual obligation that Plaintiff alleges

Defendant breached does not exist.15 Defendant‟s alleged failure to provide the

documents did not constitute a breach of the Subcontract. Consequently, the first-to-

breach rule has no applicability to the facts of this case.16

Nonetheless, Plaintiff asserts that ambiguities exist in the Subcontract‟s

identification of the “contract documents,” meaning that Plaintiff should have been

entitled to rely solely on the information it received from Defendant and also that

Defendant failed to prove that Plaintiff should have known of the penstock‟s

composition. In other words, this ambiguity, according to Plaintiff, nullifies Plaintiff‟s

obligations under paragraphs 30 and 32 of Part II(H) of the Subcontract, which required

15
Notably, Plaintiff does not allege that it requested the documents but did not receive them.
16
Plaintiff also asserts that the trial court‟s finding that the Subcontract obligated Plaintiff to inform itself of the T-1
steel in the penstock is contrary to Defendant‟s obligation to provide the contract documents. Given that Defendant
had no obligation to provide the contract documents in the absence of a request, no such conflict exists.

30
Plaintiff to personally investigate conditions affecting the penstock and to independently

verify field construction criteria.

As noted, the Subcontract‟s opening paragraph clearly delineates the “contract

documents.” Plaintiff‟s argument that the Subcontract is ambiguous is, therefore, belied

by the Subcontract‟s evident clarity. Accordingly, we will not construe the Subcontract

against Defendant as to relieve Plaintiff of its duties under the Subcontract to request the

contract documents, to personally investigate and inform itself of conditions affecting its

work on the penstock, and to independently determine and verify the construction criteria

required to complete its work. Plaintiff‟s argument is merely an attempt to avoid its

contractual obligations. The trial court did not err by ruling in Defendant‟s favor on its

breach of contract counterclaim.

2. Counterclaim for Breach of Warranty

Next, Plaintiff claims that the Subcontract‟s warranty provision is inapplicable

because Defendant failed to assert its counterclaim for breach of warranty within one

year from the completion of Plaintiff‟s work.17 Defendant argues that Plaintiff

misconstrues the contractual language.

The warranty provision states in relevant part:

[Plaintiff] warrants that the Work performed under the Contract will
be free from defects in design, workmanship and materials, will be suitable
for its intended purpose as specified in the Contract . . . . [Plaintiff] further
warrants that the Work will comply with the specifications, drawings,

17
In its reply brief, Plaintiff additionally argues for the first time on appeal that it complied with the warranty
provision because it performed the repairs and replaced the defective work. However, this Court does “not review
an assignment of error made for the first time in the reply brief.” Arch Ins. Co. v. Progressive Cas. Ins. Co., 294
S.W.3d 520, 524 n. 5 (Mo. App. W.D. 2009) (citation and quotations omitted).

31
 samples and other descriptive information as furnished or specified in the
Contract . . . .

If any of the Work does not comply with any of the warranties
contained in this Section during the first year after [Defendant‟s] final
acceptance of the Work, or longer if specified elsewhere, [Plaintiff] shall at
its own expense promptly correct by repair or replacement any
noncomplying work.

In considering Defendant‟s breach of warranty counterclaim, the trial court found that

Plaintiff “expressly warranted its work against defects of design, workmanship and

materials . . . .” It further concluded that Defendant established that “the work [Plaintiff]

performed that caused cracks in the penstock [was not performed in a workmanlike

manner] in breach of express contractual warranties . . . that [Plaintiff] would perform its

work in a good and workmanlike manner.”

As Plaintiff points out, the record reflects that Defendant asserted its breach of

warranty counterclaim more than a year after Plaintiff completed its work. This fact,

however, is immaterial because the warranty provision does not require Defendant to

initiate a legal claim for breach of warranty within a year of Plaintiff‟s completion of the

work. In arguing that the warranty clause establishes a deadline for filing a claim,

Plaintiff simply misconstrues the contractual language. As Defendant explains, the

warranty provision unambiguously indicates that Plaintiff breaches the warranty

provision if Plaintiff‟s work fails to comply with its warranties within one year of the

work‟s completion. Plaintiff breached the warranty provision well within this time

frame, when the parties discovered the cracks in the penstock around the welds within

days of their completion. Thereafter, Defendant invoked the warranty provision by

32
directing Plaintiff to remove and replace the defective work.18 The trial court did not err

by concluding that the warranty provision is applicable and by entering judgment for

Defendant on its counterclaim for breach of warranty.

3. Mitigation of Damages

Plaintiff next asserts that the trial court ignored evidence that Defendant failed to

mitigate its damages, which is an affirmative defense that defeats Defendant‟s

counterclaims in their entirety. Defendant counters that it did not fail to mitigate

damages.

Under the rule of mitigation of damages, “one damaged through alleged breach by

another of some legal duty or obligation [has to] make reasonable efforts to minimize the

resulting damage.” Cunningham v. Cunningham, 805 S.W.2d 363, 365 (Mo. App. S.D.

1991) (quotations omitted). Thus, losses that could reasonably have been avoided are not

recoverable. Business Men’s Assurance Co. of Am. v. Graham, 891 S.W.2d 438, 448

(Mo. App. W.D. 1994). “The duty to mitigate damages, however, does not arise until the

promisee learns that the contract has been breached.” A.G. Edwards & Sons v. Drew, 978

S.W.2d 386, 391 (Mo. App. E.D. 1998).

The trial court did not expressly address Plaintiff‟s affirmative defense that

Defendant failed to mitigate its damages. However, the trial court implicitly concluded

that this defense failed when it found that Defendant “stopped [Plaintiff‟s] work when it
18
Plaintiff also asserts that Defendant waived its warranty claim because Defendant allegedly paid Plaintiff for a
portion of the defective work. However, other evidence on the record establishes that Defendant did not pay for any
of the repair and rework and Plaintiff has not demonstrated why this evidence lacks probative value. We therefore
defer to the trial court‟s determination. Evans, 31 S.W.3d at 491 (“The trial court was free to believe none, part or
all of the testimony presented at trial” and matters of credibility and weight of the evidence are the province of the
trial court).

33
became apparent that [Plaintiff‟s] work caused the cracks,” and that Defendant “did not

accept this work without complaint but instead immediately directed [Plaintiff] to begin

repairing and removing the defective work.”

We have already noted the evidence, under Point III, showing that Defendant

acted promptly to cease further defective welding, worked with Plaintiff for a reasonable

amount of time for it to develop a solution, and when Plaintiff could not do so, retained

an outside consultant. Thus, the record refutes Plaintiff‟s assertion that Defendant “did

nothing” and permitted Plaintiff to continue using a defective welding procedure through

September 2009, thereby incurring unnecessary damages. Indeed, having reviewed the

pertinent portions of the record that Plaintiff cites, it is evident that Plaintiff has simply

mischaracterized the record to support its argument. Plaintiff has failed to sufficiently

challenge the probative value of the substantial evidence supporting the trial court‟s

conclusion to induce a firm belief in this Court that the trial court‟s judgment is wrong. 19

See Houston, 317 S.W.3d at 186. Substantial evidence supports the trial court‟s implicit

conclusion that Defendant mitigated its damages to the extent reasonably possible and

Plaintiff has failed to demonstrate that this conclusion is against the weight of the

evidence.

To summarize, the trial court‟s ruling in favor of Defendant on its breach of

contract counterclaim is not against the weight of the evidence, the trial court did not err

by concluding that the warranty provision is applicable, and the trial court‟s conclusion

19
In addition, Plaintiff again argues that Defendant‟s acceptance of Plaintiff‟s work constitutes a waiver of
Defendant‟s breach of contract and warranty claims. However, we have already concluded that substantial evidence
supports the trial court‟s conclusion that Defendant did not accept Plaintiff‟s work. See supra, point III.

34
that Defendant mitigated its damages is not against the weight of the evidence. Point V is

denied.

Point VI: Counterclaim for Indemnification

In its sixth point, Plaintiff asserts that the trial court‟s judgment for Defendant on

its claim for indemnification is “against the manifest weight of the evidence and a

misapplication of the law” because Defendant failed to establish it was entitled to

indemnity under the Subcontract‟s indemnity provision. Plaintiff explains that the

Subcontract‟s indemnity clause is limited to indemnity against liability and because

Defendant did not claim that Defendant was liable to Ameren, the trial court erred by

finding that Plaintiff had an obligation to indemnify Defendant. In response, Defendant

argues that the Subcontract‟s indemnity provision is not limited to “liability to others.”

Generally, there are two types of indemnity contracts: those that indemnify against

liability and those that indemnify against loss. Burns & McDonnell Engineering Co. v.

Torson Constr. Co., 834 S.W.2d 755, 758 (Mo. App. W.D. 1992). Regarding indemnity

against liability, such “[a] claim for indemnity is ripe for adjudication when the defendant

has suffered a judgment and liability has attached.” Fast v. Marston, 282 S.W.3d 346,

348 (Mo. banc 2009). “If the indemnity is against loss, the cause of action accrues when

the indemnitee sustains actual loss.” Burns & McDonnell Engineering Co., 834 S.W.2d

at 758. Some indemnity contracts are intermixed, providing for indemnification against

both liability and loss. Superintendent of Ins. v. Livestock Market, 709 S.W.2d 897, 903

(Mo. App. W.D. 1986).

35
 In the instant case, the indemnity provision required Plaintiff to “indemnify and

hold harmless [Defendant] from and against any and all loss, claims, suits, causes of

action, liability, damages, costs, [and/or] expenses . . . incurred by [Defendant] . . . as a

result of . . . any work or operations under or in connection with this Subcontract.”

(Emphasis added). Based on this language, the trial court concluded that the Subcontract

required Plaintiff to indemnify Defendant for Defendant‟s “costs and expenses arising out

of [Plaintiff‟s] breach of the [Sub]contract” and that Plaintiff‟s “failure to indemnify

[Defendant] for these costs is a breach of the Subcontract.”

Looking to the contractual language, it is clear that the terms “loss” and “liability”

refer to indemnification against both losses and liability. Thus, the indemnity provision

required Plaintiff to indemnify Defendant for both actual losses and liabilities arising

from Plaintiff‟s performance of the Subcontract. See Burns & McDonnell Engineering

Co., 834 S.W.2d at 758 (indemnity contract is mixed where it protected against “all

claims . . . [and] losses.”). In order to establish that Plaintiff breached the indemnity

provision, Defendant had to show that it suffered a loss or incurred a liability as result of

Plaintiff‟s performance in connection with the Subcontract. Under the plain terms of the

Subcontract it is not necessary, as Plaintiff suggests, that Defendant exclusively establish

that it suffered a “liability.” Plaintiff misconstrues the contractual language.

The trial court did not err by concluding, consistent with the unambiguous

contractual language, that the indemnity clause applied and required Plaintiff to

indemnify Defendant for loss arising out of Plaintiff‟s breach of the Subcontract. Point

VI is denied.

36
 Point VII: Damages and Attorney Fees

In its seventh point relied on, Plaintiff asserts that the trial court‟s amended

judgment in Defendant‟s favor on Defendant‟s breach of contract counterclaim is

“against the manifest weight of the evidence and a misapplication of the law” because

Defendant failed to establish that it was entitled to damages and attorney fees.

Specifically, Plaintiff claims that the trial court improperly awarded Defendant

consequential damages and that the indemnity clause of the Subcontract, upon which

Defendant claimed entitlement to attorney fees, does not afford Defendant such fees.

Because this point is multifarious, we address each claim of error separately.

1. Damages

Regarding its claim that the trial court misapplied the law in awarding damages,

Plaintiff asserts that the proper measure of damages was the cost of repair and that the

trial court‟s award improperly awarded Defendant consequential damages. Defendant

responds that that measure of damages is inapplicable because the present matter is not a

“defective construction” case.

“The proper measure of damages is a question of law for determination by the trial

court.” Business Men’s Assurance Co., 891 S.W.2d at 449. The party claiming damages

bears the burden to establish the existence and amount of damages within a reasonable

degree of certainty. Manors at Village Green Condo., Inc. v. Webb, 341 S.W.3d 162, 164

(Mo. App. E.D. 2011). “The trial court‟s findings as to damages are entitled great weight

and this Court will not disturb these findings unless the damages awarded are clearly

wrong, could not have been reasonably determined, or were excessive.” Id. at 165.

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 Here, the trial court awarded Defendant $220,093.80 in damages that Defendant

incurred as a result of Plaintiff‟s breach of the Subcontract. The trial court determined

that $94,599 of this amount reflected costs incurred for “support labor and remedial

work” and that $125,494.80 of this amount reflected general conditions costs, including

“project management time, forklifts, job trailer rental, trucks, fuel, amounts paid to Briem

Engineering, testing costs for the rewelds, and other items.”

Although the trial court‟s amended judgment does not expressly specify a measure

of damages, it is clear that the trial court premised its award on the terms of the

Subcontract. Specifically, in its conclusions of law, the trial court determined that the

Subcontract required Plaintiff “to indemnify [Defendant] for its costs and expenses

arising out of [Plaintiff‟s] breach of the contract[,]” and “to be responsible for all costs

and expenses incurred [including Defendant‟s costs and expenses] in repairing the cracks

it caused in the penstock.” (Emphasis added). Indeed, the indemnity clause of the

Subcontract expressly states that Plaintiff agrees to indemnify Defendant for “all loss, . . .

damages, costs, [and] expenses” incurred as a result of Plaintiff‟s breach of the

Subcontract. Thus, the trial court‟s damages award reflects those losses for which the

parties expressly agreed Plaintiff would be liable in the event of Plaintiff‟s breach of the

Subcontract. See Kracman v. Ozark Electric Coop., Inc., 816 S.W.2d 688, 691 (Mo.

App. S.D. 1991) (measure of damages for breach of an indemnity agreement against loss

is actual amount of loss sustained or paid). Whether cost of repair as a measure of

damages is applicable, then, is irrelevant. The damages awarded are not clearly improper

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but are premised upon the parties‟ express agreement. Accordingly, we cannot conclude

that the trial court erred in calculating Defendant‟s damages.

2. Attorney Fees

With respect to the award of attorney fees, Plaintiff asserts that the trial court erred

by awarding attorney fees under paragraph 33 of the Contract because Defendant‟s

pleadings did not request attorney fees under that provision, but rather asserted

entitlement to attorney fees under the indemnity clause. Plaintiff again argues that the

indemnity clause is inapplicable, and that even if Defendant had properly pleaded

entitlement to attorney fees under paragraph 33, that that provision is inapplicable

because the Subcontract is ambiguous. Defendant counters that it met the pleading

requirements and that Plaintiff raised no objection to Defendant‟s request for fees under

paragraph 33 of the Contract during trial.20

Missouri follows the “American Rule,” meaning that each party generally pays for

its own attorney fees. Washington University v. Royal Crown Bottling Co., 801 S.W.2d

458, 468 (Mo. App. E.D. 1990). However, “[a]ttorney fees are recoverable in two

situations: when a statute specifically authorizes recovery and when the contract provides

for attorney fees.” Lucas Stucco & EIFS Design, LLC v. Landau, 324 S.W.3d 444, 445

(Mo. banc 2010). Further, it is established that attorney fees are special damages that

must be pleaded specifically. Bailey v. Hawthorn Bank, 382 S.W.3d 84, 107 (Mo. App.

W.D. 2012); Rule 55.19. A plaintiff in a breach of contract case can recover special

20
Defendant‟s argument implies that Plaintiff has waived this claim by failing to raise an objection in the trial court,
but Defendant does not cite to the pertinent portion of the record establishing Plaintiff‟s alleged failure in this
regard. Accordingly, we exercise our discretion to consider the merits of Plaintiff‟s argument as if it were properly
preserved.

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damages “if those special damages have been pleaded and made known to the person

who breaches the contract.” Allen v. Foster, 668 S.W.2d 277, 280 (Mo. App. S.D. 1984).

Here, each counterclaim of Defendant‟s answer pleaded entitlement to attorney

fees and expenses under Part II(H), paragraph 17 of the Subcontract, i.e., the indemnity

clause. Each counterclaim was also followed by a prayer for relief specifically requesting

“attorney fees and expenses.” Attached to Defendant‟s answer was both the Subcontract

and the Contract. Ultimately, the trial court‟s amended judgment awarded Defendant

“reasonable attorney‟s fees” under paragraph 33 of the Contract.

That Defendant‟s answer did not specifically reference paragraph 33 of the

Contract is immaterial because the facts pleaded and relief prayed sufficiently placed

Plaintiff on notice that Defendant sought an award of attorney fees. See Foster, 668

S.W.2d at 280 (special damages recoverable if made known to breaching party); cf. Lucas

Stucco & EIFS Design, 324 S.W.3d at 444 (pleading requirements satisfied where all

elements of statutory claim pleaded and prayer for “reasonable attorneys‟ fees” was

made). Plaintiff cites no authority indicating that the specific contractual provision, or

provisions, entitling a litigant to attorney fees must be cited in the pleadings. Moreover,

Plaintiff‟s allegation that the indemnity clause and paragraph 33 of the Contract create an

ambiguity, such that paragraph 33 is inapplicable, is specious. The indemnity clause

affords attorney fees in the event the indemnity clause is triggered, whereas paragraph 33

permits attorney fees in the event an attorney is hired to enforce any provision of the

Subcontract. Paragraph 33 is consistent with, and merely supplements, the indemnity

provision.

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 In sum, the trial court did not err by awarding Defendant damages or attorney fees.

The damages award was contemplated by the Subcontract, as was the award of attorney

fees. Point VII is denied.

Conclusion

The amended judgment of the trial court is affirmed.

________________________________
Philip M. Hess, Judge

Lisa Van Amburg, P.J. and
Patricia L. Cohen., J. concur.

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