899 F.3d 511
8th Cir.2018Background
- U.S. Army Corps of Engineers awarded general contract for Grand Prairie Pump Station to Kinder in June 2010; Kinder subcontracted MSEW work to Manning for $950,000.
- The project suffered extensive, excusable delays (weather, scheduling, prerequisite work by Kinder and third parties); Manning was repeatedly prevented from starting on schedule.
- Kinder repeatedly threatened Manning with delay-related damages and demanded strict tolerances; Kinder told COE a much later completion date while pressuring Manning to finish sooner.
- Manning mobilized in August 2011, changed panel suppliers after COE rejected the first supplier’s panels, completed ~27.5 of 40 vertical feet, and was directed by Kinder to suspend work in March 2012; another contractor finished the wall and COE accepted work containing defects similar to those Kinder had criticized.
- Kinder sued Manning for breach; Manning counterclaimed for wrongful termination and unpaid labor/materials. After a five-day bench trial the district court found Kinder committed the first material breach, wrongfully terminated Manning, and awarded Manning $215,578.24 for work performed prior to termination.
Issues
| Issue | Plaintiff's Argument (Kinder) | Defendant's Argument (Manning) | Held |
|---|---|---|---|
| Which party committed the first material breach? | Manning first materially breached by failing to pay suppliers and lacking stamped shop drawings. | Kinder’s threats, interference with Manning’s supplier (EarthTec), and failure to give assurances were the first material breaches. | Court: Kinder committed the first material breach; Manning’s failures were not material. |
| Whether Kinder’s termination of Manning was wrongful | Kinder contends Manning should have continued performance and sought government remedies; FAR obligations require continuing performance. | Manning continued performing until Kinder directed suspension; termination by Kinder was a breach. | Court: Termination was wrongful breach by Kinder; Manning was not required to continue after termination. |
| Whether Manning’s alleged defects were material | Kinder contends Manning’s panels violated specs and justified termination. | Manning argued alleged defects were not material; industry tolerances were tighter than customary and COE’s interpretation was unreasonable. | Court: Alleged defects were not material; Manning substantially performed. |
| Whether damages awarded were supported by the record | Kinder argues evidence insufficient to support the $215,578.24 award. | Manning testified to labor/materials expended (27.5 of 40 ft completed), supporting the claimed costs. | Court: Award supported; damages for labor/materials before wrongful termination were not speculative. |
Key Cases Cited
- PHL Variable Ins. Co. v. 2008 Christa Joseph Irrevocable Tr., 782 F.3d 976 (8th Cir.) (standard of review for bench trial: legal conclusions de novo, factual findings for clear error)
- Bennie v. Munn, 822 F.3d 392 (8th Cir.) (describing clear-error standard and deference to trial court credibility findings)
- Matt Miller Co. v. Taylor-Martin Holdings, LLC, 393 S.W.3d 68 (Mo. Ct. App.) (materiality of breach is a question of fact)
- Barnett v. Davis, 335 S.W.3d 110 (Mo. Ct. App.) (Missouri’s “first to breach” rule)
- R.J.S. Sec., Inc. v. Command Sec. Servs., Inc., 101 S.W.3d 1 (Mo. Ct. App.) (only a material breach excuses other party’s performance; Restatement §241 factors)
- Guidry v. Charter Commc’ns, Inc., 269 S.W.3d 520 (Mo. Ct. App.) (continuing to accept benefits can waive right to assert prior breach)
- High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493 (Mo.) (damages are question of fact)
- Overcast v. Billings Mut. Ins. Co., 11 S.W.3d 62 (Mo.) (measure of contract damages: place injured party in position contract performed)
- Best Buy Builders, Inc. v. Siegel, 409 S.W.3d 562 (Mo. Ct. App.) (certainty required for damages amount)
- Harvey v. Timber Res., Inc., 37 S.W.3d 814 (Mo. Ct. App.) (when fact of damage is clear, less certainty required as to amount)