Settling Terms Through Course of Performance–Hall v. Fox, 2014 WL 284530 (Mo. Ct. App., W.D.)

A dispute arises whether a contractor had an enforceable contract with a client.  judgment was entered for the contractor, who the brief reports claimed compensation on a time-and-materials basis. The client’s argument that the contract was for a fixed price was evidently rejected below.  We seem to have an issue of whether subsequent actions of the parties can cure an otherwise fatal indefinitness of the terms of their bargain, though the brief does not seem to capture this aspect of the case.

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Making a Useful Counterclaim–Gordon v. Heller

Gordon v. Heller, 2014 WL 462933 (Mo. Ct. App. E.D.), provides an interesting illustration of the desirability of making a counterclaim.

The case involves claims by a real estate agent, who also provided staging furniture, against the former client/homeowners.  As reported in the brief of the appellants/homeowners, following termination of the listing, the staging furniture remained for quite some time. The brief reports an evident judgment for the provider of staging furniture, although the brief challenges the existence of a pertinent contract.  It notes there was not a signed contract–the precise terms of any oral or implicit agreement as to terms are not detailed.

The brief does not discuss application of UCC Article 2A to the arrangements (e.g., Mo. Rev. Stat. 400.2A-201 (writing requirements)). Perhaps additional briefing will illuminate that choice.

For the moment, however, we can note the homeowners make an interesting argument. They sought in a counterclaim recovery for the value of having had their house used as a storage facility for the furniture. They allege the lessor undertook to remove the furniture but did not do so promptly. I look forward to seeing the respondent’s discussion of these issues.

 

Third-Party Beneficiaries of Municipal Contracts–More on Drury Co. v. Jackson R-2 School District

There does not appear to be an inherent inability at common law for an intended beneficiary to maintain a claim as a third-party beneficiary under a local government contract:

Whenever local law permits third-party beneficiaries to sue on contracts between others, they can sue on comparable local government contracts.

Chester James Antieau, Antieau on Local Government Law, § 32.12  (Sandra M. Stevenson, ed.) (2d ed., Lexis database, through December 2013; Release No. 126).  Were one to review 10A Eugene McQuillen, The Law of Municipal Corporations § 29:136 (3d ed. 2009 rev. vol), one would see, “The right of a third person to sue on a municipal contract has been denied in several decisions. However, in some circumstances such an action may be maintained ….”  McQuillen’s footnotes have such authority as referencing no recovery by an “incidental beneficiary” or “ordinarily, under New Mexico law, the obligations arising out of a contract are due only to those with whom it was made”.  So, without attempting to read each case cited by McQuillen, it would appear that Antieau has better-expressed the view.

Law Mo. Stat. 432.070 states:

No county, city, town, village, school township, school district or other municipal corporation shall make any contract, unless the same shall be within the scope of its powers or be expressly authorized by law, nor unless such contract be made upon a consideration wholly to be performed or executed subsequent to the making of the contract; and such contract, including the consideration, shall be in writing and dated when made, and shall be subscribed by the parties thereto, or their agents authorized by law and duly appointed and authorized in writing.

The school district in Drury Co. v. Jackson R-2 School District, 2014 WL 462916 (Mo. Ct. App., E.D. 2014), takes the position that the statute prevents third-party beneficiary claims against counties, etc.

An initial step in construing a provision, a statute as well as a contract, is ascertainment of the evident sense of the provision as a whole.  Let’s see if the argument is persuasive, particularly in regards to:

  • What particular language in the statute does the school district identify as the basis for holding third-party beneficiaries cannot enforce a written contract?
  • What statutory purposes does the school district identify that would be inhibited by allowing third-party beneficiaries to maintain actions?

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Duty to Obtain Insurance and Third-Party Beneficiary Status–Drury Co. v. Jackson R-2 School District

In the ongoing saga of a governmental entity’s claims a subcontractor cannot sue the governmental entity for failure to obtain insurance covering the subcontractor (discussed previously concerning a brief at 2013 WL 6169464), we now have a brief on behalf of the governmental entity.  Drury Co. v. Jackson R-2 School District, 2014 WL 462916 (Mo. Ct. App., E.D. Jan. 13, 2014). The brief discusses a claim brought by a subcontractor against the governmental entity.  The basis for the claim on which we will focus is the entity entered into a written contract with a prime contractor.  According to the subcontractor’s brief, the written contract provides:

[Respondent] shall purchase and maintain… insurance written on a builder’s risk “all-risk” or equivalent policy… [that] shall include the interests of the. . Subcontractors… in the Project.

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