Superior Steel, Inc. v. Ascent at Roebling's Bridge, LLC
540 S.W.3d 770
| Mo. Ct. App. | 2017Background
- The Ascent at Roebling's Bridge project: Ascent (owner) hired Corporex (design-builder); Corporex hired Dugan & Meyers (D&M) as construction manager/general contractor. D&M subcontracted steel fabrication to Superior Steel and steel erection to Ben Hur.
- Revised structural drawings produced extra steel work (forces table, roof edge, roof tip). Superior and Ben Hur performed extra work at D&M's direction but were not paid for those extras or Superior's retainage ($195,143.40).
- Superior and Ben Hur sued D&M, Ascent, and Corporex asserting contract, unjust enrichment, negligence, promissory estoppel and related claims; D&M cross-claimed against Corporex/Ascent for indemnification and breach.
- Jury found (unanimously): a contract existed between Superior and D&M; Superior and Ben Hur performed extra work and quantified its value; D&M was not negligent. Trial court awarded Superior and Ben Hur damages against D&M and unjust enrichment against Ascent/Corporex; Superior was awarded attorneys’ fees under its subcontract.
- Kentucky Court of Appeals vacated the judgment and ordered a new trial. The Supreme Court (this opinion) affirms in part, reverses in part, and remands: it reinstates the unjust enrichment award against Ascent/Corporex, affirms that D&M’s breach judgment must be vacated because of the pay‑if‑paid clause, reverses the attorneys’ fee award against D&M, and remands other issues for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Availability of unjust enrichment against owner (Ascent/Corporex) | Superior/Ben Hur: Owner received and benefited from unpaid extra work; unjust enrichment available because contractor (D&M) wasn't paid so subcontractors had no adequate contractual remedy. | Ascent/Corporex: Existence of chain of contracts (subcontract) provides adequate legal remedy and bars equitable relief. | Court: Unjust enrichment claim against owner can proceed where contractual remedies are ineffective (here D&M not paid); trial court's award reinstated. |
| Breach of contract against D&M (Superior) given pay‑if‑paid clause | Superior: Can still litigate breach to establish facts and potentially invalidate pay‑if‑paid on public policy or other grounds. | D&M: Contract's clear pay‑if‑paid (condition precedent) relieves D&M of payment obligation until owner pays, so no breach. | Court: Pay‑if‑paid clauses in this subcontract are unambiguous and enforceable; Court of Appeals correctly reversed the breach judgment and directed consideration of those clauses. |
| Award of attorneys' fees to Superior under subcontract | Superior: Prevailing party provision entitles it to fees because it prevailed on the dispute over extras. | D&M/Ascent: Fees provision applies to disputes against the contracting party; fee award against D&M is improper because Superior prevailed on equitable (owner) claim, not a contract victory against D&M (and pay‑if‑paid absolves D&M). | Court: Reverses fee award—Subcontract's fee clause does not authorize recovering fees from D&M under the facts (Superior prevailed against owner, not on a contractual breach by D&M). |
| Whether jury should have been instructed on Corporex/Ascent breach claim vs negligence | Corporex/Ascent: Both breach of contract and negligent performance were supported by evidence and should have been submitted to jury. | D&M: Some claims overlap; trial court properly submitted negligence alone; alternatively, issue waived. | Court: Trial court abused discretion by not submitting breach claim; breach instruction should have been given. However, the negligence instruction was not erroneous as given. |
Key Cases Cited
- Furlong Dev. Co. v. Georgetown-Scott Cty. Planning & Zoning Comm'n, 504 S.W.3d 34 (Ky. 2016) (elements and limits of unjust enrichment)
- Codell Constr. Co. v. Commonwealth, 566 S.W.2d 161 (Ky. Ct. App. 1977) (unjust enrichment unavailable where explicit contract governs)
- Brown Sprinkler Corp. v. Somerset-Pulaski Cty. Dev. Found., Inc., 335 S.W.3d 455 (Ky. Ct. App. 2010) (mechanics' lien or other legal remedies do not necessarily preclude unjust enrichment claims)
- MidAmerica Constr. Mgmt., Inc. v. MasTec N. Am., Inc., 436 F.3d 1257 (10th Cir. 2006) (typical pay‑if‑paid clause language and effect)
- BMD Contractors, Inc. v. Fidelity & Deposit Co., 679 F.3d 643 (7th Cir. 2012) (discussion of pay‑if‑paid clauses and condition precedent meaning)
- Presnell Constr. Managers, Inc. v. EH Constr., 134 S.W.3d 575 (Ky. 2004) (tort claims must be independent of contractual duties to survive; negligent misrepresentation vs negligent performance)
- Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 908 S.W.2d 104 (Ky. 1995) (equitable claims are for the court; jury findings on facts are advisory for equitable relief)
- Giddings & Lewis, Inc. v. Industrial Risk Insurers, 348 S.W.3d 729 (Ky. 2011) (contract construction is a question of law; economic loss considerations)