Brooke Drywall of Columbia, Inc. v. Building Construction Enterprises, Inc.
361 S.W.3d 22
Mo. Ct. App.2011Background
- Contractor obtained a Missouri University project and obtained a surety bond from Hartford Fire Insurance Company.
- Subcontractor Brooke Drywall performed part of the work but was not fully paid due to delays caused by steel shortages.
- The University withheld payment to Contractor, who in turn withheld from Subcontractor; Subcontractor demanded final payment in spring 2005.
- The subcontract contained an interest provision: unpaid payments bear interest from due date; and a prevailing-party attorney fees provision for disputes.
- After litigation, the principal was settled for the full amount; interest and attorneys' fees were reserved for court decision.
- The circuit court ruled Subcontractor entitled to interest and to attorneys' fees, and Hartford Insurance was liable for those fees; appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Interest on principal amount | Subcontractor entitled to interest from due date per contract | Interest only under prejudgment statutes; not applicable here | Subcontractor entitled to interest under contract terms |
| Prevailing party for attorneys' fees | Litigation on interest sufficed to prevail; thus prevailing party | Settlement for principal amount precludes prevailing-party status | Subcontractor prevailed on interest issue and is prevailing party |
| Surety liability for attorneys' fees | Bond broad enough to cover attorneys' fees as 'such payment due' | Bond only covers payments for materials, labor, etc. | Bond language broad enough to cover attorneys' fees; Surety liable |
Key Cases Cited
- Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598 (U.S. Supreme Court 2001) (prevailing party requires some relief; no mere settlement)
- Marcomb v. Hartford Fire Ins. Co., 934 S.W.2d 17 (Mo. App. W.D. 1996) (attorneys' fees may be included where contract permits)
- Knecht, Inc. v. United Pac. Ins. Co., 860 F.2d 74 (3d Cir. 1988) (bond scope limits on payments for labor/materials)
- City of Kansas City ex rel. Jennings v. Integon Indem. Corp., 857 S.W.2d 233 (Mo. App. W.D. 1993) (surety liability generally coextensive with principal)
- City of Independence ex rel. Briggs v. Kerr Constr. Paving Co., 957 S.W.2d 315 (Mo. App. W.D. 1997) (surety obligation limited to contract terms)