HARLEY ROGERS, )
)
Plaintiff-Respondent, )
)
vs. ) No. SD33696
)
SUPERIOR METAL, INC., ) Filed: February 4, 2016
RANDY MUELLER, and )
JONATHAN HOLTZMAN, )
)
Defendants-Appellants. )
APPEAL FROM THE CIRCUIT COURT OF LAWRENCE COUNTY
Honorable Judge Scott S. Sifferman
AFFIRMED AND REMANDED
Superior Metal, Inc. ("Contractor") and Contractor's owners, Randy
Mueller ("Mr. Mueller") and Jonathan1 Holtzman ("Mr. Holtzman"),2 appeal
from the trial court's judgment for Harley Rogers ("Owner"). Contractor raises
1 Mr. Holtzman's first name is spelled in different ways in different documents in the record on
appeal. For consistency's sake, we adopt the spelling used in the transcript, Jonathan. No
disrespect is intended.
2 When Contractor, Mr. Mueller, and Mr. Holtzman are discussed collectively, they will be
referred to as "Appellants."
four points on appeal. These points are without merit, and we affirm the trial
court's judgment.
Factual and Procedural Background
There was conflicting evidence at trial. In preparing this summary, we
view that evidence in the light most favorable to the trial court's judgment. Ken
Cucchi Const., Inc. v. O'Keefe, 973 S.W.2d 520, 523-24 (Mo. App. E.D.
1998).
Contractor is a construction company which installs metal buildings,
roofing, siding, and windows. In March 2013, Owner decided he wanted to build
a shed on his property for storage. Owner discussed the building project with Mr.
Mueller, and Mr. Mueller told him that "it would be a stand-up product" and that
"the building would be straight, free of defects, and it would be good lumber."
Contractor and Owner then entered a written agreement in which Owner was to
pay $13,500 for Contractor to build a pole barn on Owner's property.
During the construction process, Owner noticed defects in the
construction and mentioned his concerns to Mr. Holtzman. After completion, the
building had numerous construction defects. Owner demanded his money back,
and Mr. Mueller refused to issue a refund.
Thereafter, Owner sued Appellants. The petition sought damages from
Contractor based on breach of contract, unjust enrichment, fraudulent
misrepresentation, negligence, and violations of the Missouri Merchandising
Practices Act ("MMPA"). Owner also sought damages from Mr. Mueller and Mr.
Holtzman based on the theory of piercing the corporate veil. Prior to trial, Owner
amended the allegation of fraudulent misrepresentation to seek recovery from
2
Appellants collectively rather than Contractor alone and voluntarily dismissed
the allegations regarding piercing the corporate veil.
The parties had a bench trial. The trial court found for Owner on all
counts submitted. The trial court awarded Owner $23,500 in damages, $10,000
in attorney's fees, and $1 in punitive damages. Appellants appeal.
Standard of Review
As this was a court-tried case, this Court will "affirm the trial court's
judgment unless there is no substantial evidence to support it, unless it is against
the weight of the evidence, or unless it erroneously declares or applies the law."
Kelley v. Widener Concrete Const., LLC, 401 S.W.3d 531, 539 (Mo. App.
S.D. 2013). "The trial court's judgment is presumed valid, [and] the burden is on
the appellant to demonstrate its incorrectness[.]" Id. (quoting Harness v.
Wallace, 167 S.W.3d 288, 289 (Mo. App. S.D. 2005)). Additionally, "this Court
defers to the trial court's credibility determinations." Id. "That is because
credibility of witnesses and the weight to be given their testimony is a matter for
the trial court, which is free to believe none, part, or all of any witness's
testimony." Id. (quoting Watson v. Moore, 8 S.W.3d 909, 911 (Mo. App. S.D.
2000)).
Point I: Measure of Damages
In their first point on appeal, Appellants argue the trial court erred in
applying the cost measure of damages rather than the diminished-value measure
of damages because Owner "presented no evidence to support the correct
measure of damage." We disagree.
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"[T]he goal of damages in a contract action is to place the injured party in
the same position that the party would have been in had the contract been
performed[.]" Kelley, 401 S.W.3d at 541 (quoting White v. Marshall, 83
S.W.3d. 57, 62 (Mo. App. W.D. 2002)). In Missouri, two tests have been applied
to calculate damages in cases involving defective performance of a building
contract: the cost-to-repair method and the diminished-value method. Id. "The
'cost rule' measures damages by the cost of repairing the defective work." Id.
"The 'diminished value rule,' an exception to the 'cost rule,' is 'the difference
between the value of the property with the defective work and what its value
would have been if it had been constru[ct]ed according to the terms of the
contract." Id. (quoting White River Dev. Co. v. Meco Systems, Inc., 806
S.W.2d 735, 741 (Mo. App. S.D. 1991)). The cost rule is the preferred measure of
damages while the diminished-value rule is used when the cost of repair would
cause "unreasonable economic waste." Id.
The choice between these methods is determined by a shifting burden of
proof. "Once the landowner presents evidence on the cost of repair or
replacement, the contractor has the burden of presenting evidence that the cost
of repairing or replacing the property is disproportionate to the diminution in
value of the property." Ken Cucchi Const., Inc. v. O'Keefe, 973 S.W.2d 520,
527 (Mo. App. E.D. 1998) (emphasis added). If the contractor presents no
evidence of the value of the building as actually constructed, a trial court does not
err in applying the cost measure of damages. Id.
Here, Appellants presented no evidence regarding the value of the building
as actually constructed. The only evidence of the value of the building was the
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contract price of $13,500. Although Appellants' expert disagreed with Owner's
expert regarding the extent of the repairs needed, Appellants' evidence on
damages comprised cost-to-repair estimates. Appellants' expert testified it would
cost $445 to repair the defects in the building. Under these circumstances, there
was no evidence regarding the difference between the value of the building as
actually constructed and the value the building would have had if constructed in
accordance with the terms of the contract. The trial court did not err in applying
the cost rule rather than the diminished-value rule. See id.
Appellants' first point is denied.
Point II: Individual Liability
In their second point, Appellants argue the trial court erred in entering
judgment against Mr. Mueller and Mr. Holtzman individually because there was
no evidence that Mr. Mueller and Mr. Holtzman acted in their individual
capacities and because Owner dismissed his claim involving piercing the
corporate veil. This argument ignores the other claims in the petition.
Appellants are correct that generally, "merely holding a corporate office
does not subject one to personal liability for the misdeeds of the corporation."
Constance v. B.B.C. Dev. Co., 25 S.W.3d 571, 590 (Mo. App. W.D. 2000).
But the shield is not absolute: "A corporate officer may be held liable if it is
'shown by evidence of probative force that he had actual or constructive
knowledge of the actionable wrong and participated therein.'" Estate of
Overbey v. Chad Franklin Nat'l Auto Sales North, LLC, 361 S.W.3d 364,
371 (Mo. banc 2012) (quoting Wolfersberger v. Miller, 39 S.W.2d 758, 764
5
(1931)). One situation in which such liability may be found includes fraud. E.g.,
id.
Here, the trial court found against Appellants regarding Owner's claim for
fraudulent misrepresentation. The trial court's discussion of that claim includes
the finding that Mr. Mueller made affirmative misrepresentations and that
Appellants omitted material facts in their communications with Owner. These
communications with Owner required Mr. Mueller and Mr. Holtzman's
affirmative participation in the actionable wrong and so justify imposition of
individual liability. See id. Appellants do not challenge those findings on appeal,
and without a challenge to those findings, they cannot show imposition of
individual liability was erroneous.
Appellants' second point is denied.
Point III: Attorney's Fees
In Point III, Appellants argue the trial court erred in awarding $10,000 in
attorney's fees under the MMPA because Owner "submitted no evidence as to
itemization of time spent on the case on [Owner's] behalf." This argument is
without merit.
"In Missouri, the general rule is that 'attorney fees are not awarded to
every successful litigant.'" Berry v. Volkswagen Group of Am., Inc., 397
S.W.3d 425, 431 (Mo. banc 2013) (quoting Lucas Stucco & EIFS Design,
LLC v. Landau, 324 S.W.3d 444, 445 (Mo. banc 2010)). "However, attorneys'
fees may be awarded when they are provided for in a contract or when they are
authorized statutorily." Id. Here, Count V of Owner's petition sought damages
for violations of the MMPA. Under the MMPA, besides actual damages, the trial
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court may award punitive damages and "attorney's fees, based on the amount of
time reasonably expended[.]" § 407.025.1.3 Appellants seize on the statutory
language to argue that an itemized list or some evidence of the actual hours
expended is necessary to support recovery of attorney's fees under the statute.
But that argument ignores the plain language of the statute.
Nothing in the statute requires an itemized list of the attorney's services.
Nor does the statute mention actual hours expended. Rather, the statue says "the
amount of time reasonably expended," without further definition. "The circuit
court is deemed an expert at fashioning an award of attorneys' fees and may do so
at its discretion." Western Blue Print Co., LLC v. Roberts, 367 S.W.3d 7,
23 (Mo. banc 2012). "The circuit court that 'tries a case and is acquainted with all
the issues involved may "fix the amount of attorneys' fees without the aid of
evidence."'" Id. (quoting Essex Contracting, Inc. v. Jefferson County, 277
S.W.3d 647, 656 (Mo. banc 2009)).
Here, the judge who awarded the fees also presided over the trial. He was
familiar with the issues and the conduct of the attorneys and so had a basis for
determining the amount of time that would be reasonably expended without the
aid of additional evidence. See id.
Appellants' third point is denied.
Point IV: Material Breach of Contract
In Point IV, Appellants argue the trial court erred in finding Appellants
materially breached the contract "because the evidence from both parties was
that [Appellants] substantially performed the agreed upon construction
3 All statutory references are to RSM0 Cum. Supp. (2013).
7
contract." However, we need not address this point because the trial court gave
other grounds for its ruling that Appellants do not challenge.
"[T]he fundamental requirement for an appellate argument is that it
demonstrate the erroneousness of the basis upon which a lower court or agency
issued an adverse ruling." Knight v. Con-Agra Foods, Inc., No. WD78591,
2015 WL 8238917, at *2 (Mo. App. W.D. December 8, 2015). "As a corollary to
this principle, if a trial court or administrative agency relies on multiple,
independently sufficient grounds in issuing an adverse ruling, the appellant must
challenge each of those independent grounds of decision." Id. This is because
reversal requires a finding "that all of the reasons that the circuit court
articulated in its judgment were wrong." Id. (quoting City of Peculiar v.
Hunt Martin Materials, LLC, 274 S.W.3d 588, 591 (Mo. App. W.D. 2009)).
Where the trial court states numerous reasons to support the judgment and
where the appellant does not challenge each reason on appeal, the appellant does
not meet his or her burden of establishing circuit court error. Id.
Here, the trial court stated numerous grounds supporting the damage
award. Specifically, besides finding Appellants materially breached the contract,
the trial court found Owner was entitled to judgment based on unjust
enrichment, fraudulent misrepresentation, negligence, and violation of the
MMPA. Appellants do not challenge these rulings, any of which would support
the judgment. Appellants have failed to meet their burden of proving trial court
error.
Appellant's fourth point is denied.
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Attorney's Fees on Appeal
While this appeal was pending, Owner moved for attorney's fees on appeal
under Section 407.025. When a statute permits an award of attorney's fees, full
compensation can involve an award of attorney's fees on appeal. DeWalt v.
Davidson Surface Air, 449 S.W.3d 401, 407 (Mo. App. E.D. 2014). Even
though this Court has "the expertise to fix attorney['s] fees on appeal, 'the trial
court is in a much better position to hear evidence and argument on this issue
and make a determination of the reasonableness of the requested fees and
costs[.]"' Percy's High Performance, Inc. v. Krough, 445 S.W.3d 577, 583
(Mo. App. S.D. 2013) (quoting SE Co-Op Serv. Co. v. Hampton, 263 S.W.3d
689, 696-97 (Mo. App. S.D. 2008)). We remand this case to the trial court with
instructions to conduct a hearing regarding attorney's fees on appeal and to enter
judgment accordingly. See id.
Decision
The trial court's judgment is affirmed. The case is remanded for
consideration of an award of attorney's fees on appeal.
MARY W. SHEFFIELD, C.J. - OPINION AUTHOR
DANIEL E. SCOTT, P.J. – CONCURS IN SEPARATE OPINION
JEFFREY W. BATES, J. – CONCURS
9
HARLEY ROGERS, )
)
Plaintiff-Respondent, )
)
vs. )
) No. SD33696
SUPERIOR METAL, INC., )
RANDY MUELLER, and )
JONATHAN HOLTZMAN, )
)
Defendants-Appellants. )
CONCURRING OPINION
I concur. As to Point I, cost to repair or replace was the preferred
measure of damages unless Appellants proved that would cause
“unreasonable economic waste.” See, e.g., Kelley v. Widener Concrete
Const., LLC, 401 S.W.3d 531, 540-41 (Mo.App. 2013) (contractor’s burden to
prove that repair cost would result in unreasonable economic waste); Matt
Miller Co. v. Taylor-Martin Holdings, LLC, 393 S.W.3d 68, 84
(Mo.App. 2012) (same).
The trial court heard the evidence and found that Appellants did not
carry this burden; that cost of repair or replacement would not be
unreasonable economic waste. As in Kelley, the trial court weighed
competing testimony, and “credibility of the witnesses and that testimony was
for the trial court’s determination as the trier of fact.” 401 S.W.3d at 543. We
are not free to reweigh the testimony or second-guess the trial court’s
determination that Defendants did not carry their burden of proving that cost
of repair or replacement would be unreasonably wasteful.
DANIEL E. SCOTT, P.J. – CONCURRING OPINION AUTHOR
2
HARLEY ROGERS, Plaintiff-Respondent v. SUPERIOR METAL, INC., RANDY MUELLER, and JONATHAN HOLTZMAN
Combined Opinion