Court of Appeals of Missouri, Eastern District, Second Division
from the Circuit Court of Cape Girardeau County Cause No.
09CG-CV00243 Honorable Benjamin F. Lewis
Colleen Dolan, Judge
Construction Company, Inc. ("Penzel"), on the
behalf of Total Electric, Inc. (Total Electric) through a
liquidating agreement, brought a breach of contract action
against Jackson R-2 School District ("the
District") based on a breach of implied warranty for
furnishing "deficient and inadequate plans and
specifications" to Penzel for a construction project.
The District brought third-party claims against Henthorn,
Sandmeyer and Company ("Henthorn") and
Warner-Nease-Bost ("WNB"). The District, Henthorn,
and WNB (hereinafter collectively "Respondents")
filed motions for summary judgment in July of 2015, and the
trial court granted the motions on November 30, 2015. We
reverse and remand for further proceedings consistent with
Procedural and Factual Background
District entered into a contract with WNB as architect to
build an addition to the Jackson High School ("the
Project") on October 10, 2005. Subsequently, WNB entered
into a subcontract with Henthorn to produce electrical plans
and specifications for the Project. During the bidding phase,
the District furnished the plans and specifications
("the Plans") for the Project to Penzel, who in
turn gave a copy of the Plans to Total Electric. Neither
Penzel nor Total Electric noticed any errors in the Plans
during the bidding process. Based on the Plans, Total
Electric submitted a bid of $1, 040, 444 to Penzel to furnish
and install electrical work for the Project. On September 15,
2006, the District entered into a contract ("the
Contract") with Penzel to be a general contractor for
the Project. In turn, Penzel entered into a subcontract
("the Subcontract") with Total Electric to provide
electrical work on the Project based on the submitted bid.
The District issued a notice to proceed to Penzel on
September 18, 2006, requiring substantial completion of the
Project within 550 days. Total Electric substantially
completed its contracted work around May 27, 2009 and claims
this sixteen month delay was the direct result of the
Plans' defects and inadequacies.
procedural history surrounding the Contract and the
Subcontract is fairly complicated. It involves multiple
parties and causes of action that are not relevant to this
appeal.The case on appeal involves only Count V: a
breach of contract claim by Penzel against the District under
the theory that the District made an implied warranty that
the Plans for the Contract were adequate and complete,
pursuant to the Spearin Doctrine. Penzel claims the
District breached this warranty by rendering defective plans
and specifications that caused damages to Total Electric.
Additionally, derivative of Penzel's breach of contract
claim, the District, as a third-party plaintiff and
cross-appellant, filed third-party claims against Henthorn
and WNB as the third-party defendants and
cross-respondents. Our analysis focuses on Penzel's
breach of contract claim against the District, although all
five parties play relevant roles.
of 2010, Penzel executed a liquidating agreement with Total
Electric authorizing Penzel to prosecute Total Electric's
claim for damages caused by its reliance on the Plans
furnished by the District. Penzel filed its First Amended
Petition on July 21, 2010 seeking recovery for Total
Electric's damages, as well as damages for Penzel's
markup for overhead and profit caused by the Plans'
inadequacies and deficiencies.
claims that, under the Spearin Doctrine, the
District impliedly warranted that the Plans it furnished were
adequate for completing the Project, and the District
breached the Contract by providing inadequate and defective
plans and specifications, which caused damages to Total
Electric. Penzel alleges the Plans were defective in a number
of material ways, including (1) the inadequate low voltage
switching and wiring design affecting the gymnasium and some
student areas; (2) incorrect kitchen drawings; (3) the
failure of the plans and specifications to call for emergency
ballasts; (4) incorporating a defective gymnasium lighting
design; (5) the failure to depict all the water heaters and
circulating pumps requiring wiring; (6) specifications
calling for outdated products; (7) non-compliance with
building codes; and (8) an incorrect depiction of some site
electrical work as work to be performed by others.
further alleges that Total Electric's damages were
compounded by the District's and WNB's slow response
time in dealing with problems on the Project. Penzel stated
that Total Electric notified Penzel by e-mail of various
problems encountered with the Plans, and Penzel then
forwarded the e-mails to the District and WNB. Total Electric
alleges it would frequently have to wait several weeks, and
"sometimes months, " for a response. Moreover,
oftentimes the responses did not resolve the initial issue.
Penzel contends that the delayed, and often ineffective,
responses caused inefficiencies for Total Electric,
obligating it to pay workers for being at the work site
without making progress on the Project. Accordingly, Total
Electric was forced to pay for an increased total of labor
hours to finish the Project, which significantly increased
its cost. Total Electric also claims the deficiencies and
delayed responses caused the company to incur higher hourly
costs for manual labor due to trade labor wage escalation.
Total Electric created daily logs for the Project to track
the deficiencies in the Plans and their associated damages.
However, Total Electric stopped maintaining these logs as
problems persisted. Total Electric claimed it was unable to
specifically track the amount of damages and extra hours
attributable to each delay or distribution because the
"sheer volume and variety of interfering and disruptive
events" made it highly impractical. Total Electric
further stated that accurately tracking and categorizing the
defects and corresponding damages would have required the
company to "devote multiple professionals to tracking
costs, " which would further increase its costs.
prove damages for Total Electric's electrical labor loss
of productivity, Penzel sought to use the "total cost
method" or "modified total cost method."
Penzel contends it can prove the remaining four categories of
damages-consisting of (1) additional project management and
supervision costs, (2) wage escalation, (3) unpaid change
order work, and (4) its electrical consultant's estimated
fee-without relying on either total cost method.
the complexity and volume of facts in this case, we will
adduce additional facts as necessary under the relevant
portions of the Discussion in Sec. III.
Standard of Review
a court should grant summary judgment is purely an issue of
law. Storey v. RGIS Inventory Specialists, LLC, 466
S.W.3d 650, 654 (Mo. App. E.D. 2015). Accordingly, appellate
review of a circuit court's grant of summary judgment is
de novo. Id. Summary judgment is only
appropriate "when the moving party has demonstrated, on
the basis of facts as to which there is no genuine dispute, a
right to judgment as a matter of law." Binkley v.
Am. Equity Mortgage, Inc., 447 S.W.3d 194, 196 (Mo. banc
2014); Rule 74.04(c). We review the record in the light most
favorable to the party against whom summary judgment was
entered. Binkley, 447 S.W.3d at 196.
Court has articulated the standard a defendant-movant must
meet to make a prima facie case on a motion for summary
A defendant, as the movant can establish a prima facie case
for summary judgment by showing any of the
following: (1) facts that negate any one of the elements of a
claimant's cause of action; (2) that the non-movant,
after an adequate period of discovery, has not been able to
produce, and will not be able to produce, evidence sufficient
to allow the trier of fact to find the existence of any one
of the claimant's elements; or (3) that there is no
genuine dispute as to the existence of each of the facts
necessary to support movant's properly pleaded
Storey, 466 S.W.3d at 654 (emphasis added). After
the movant-defendant has made a prima facie case showing that
he is entitled to judgment as a matter of law under Rule
74.04(c), "the [plaintiff's] only recourse
is to show-by affidavit, depositions, answers to
interrogatories, or admissions on file-that one or more of
the material facts shown by the movant to be above any
genuine dispute is, in fact, genuinely disputed."
ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply
Corp., 854 S.W.2d 371, 381 (Mo. banc 1993).
purposes of summary judgment, a "genuine dispute"
exists if the record contains competent evidence of two
plausible, but contradictory, accounts of essential facts.
Id. at 382. In the context of summary judgment,
there is a genuine dispute of a material fact only if the
factual disputes might affect the outcome of the case.
Am. Standard Ins. Co. of Wis. v. Stinson, 404 S.W.3d
303, 311 (Mo. App. E.D. 2012).
addressing Penzel's points on appeal, we will address
Respondents' joint motion to strike Penzel's
statement of facts and dismiss this appeal. Rule 84.04(c)
controls the contents for the statement of facts in appellant
and respondent briefs, stating:
The statement of facts shall be a fair and concise statement
of the facts relevant to the questions presented for
determination without argument. All statements of facts shall
have specific page references to the relevant portion of the
record on appeal, i.e., legal file, transcript, or exhibits.
If the matter cited is contained in the appendix, a page
reference to the appendix shall be included.
purpose of 84.04(c) is to "define the scope of the
controversy and afford the appellate court an immediate,
accurate, complete, and unbiased understanding of the facts
of the case." In re Adoption of C.M., 414
S.W.3d 622, 628 (Mo. App. S.D. 2013). We find Penzel's
brief complies with Rule 84.04(c) and does not offend its
purpose. Accordingly, we deny Respondents' motion to
strike Penzel's statement of facts, and we will review
the points on appeal.
relies on the Spearin Doctrine to establish a breach
of contract by the District. Before addressing whether Penzel
has produced sufficient evidence to survive a motion for
summary judgment, we must address whether its claim based on
an implied warranty under the Spearin Doctrine
constitutes an actionable theory of recovery in Missouri.
This type of action has not previously been expressly
accepted or rejected in our State. After examining
Spearin and Missouri precedent, we believe
Spearin claims are acceptable vehicles for bringing
causes of actions based on deficient plans and specifications
in construction projects involving a governmental
stands for the proposition that when a governmental entity
includes detailed specifications in a contract, it impliedly
warrants that  if the contractor follows those
specifications, the resultant product will not be defective
or unsafe, and  if the resultant product proves defective
or unsafe, the contractor will not be liable for the
consequences." Caddell Const. Co. v. United
States, 78 Fed.Cl. 406, 410 (2007) (quoting Hercules
Inc. v. United States, 24 F.3d 188, 197 (Fed. Cir.
1994), aff'd, 516 U.S. 417 (1996)). However,
Spearin is not merely a shield to protect the
contractor from liability; it can also be used to compensate
a wronged contractor. See Essex Electro Engineers,
Inc. v. Danzig, 224 F.3d 1283, 1289 (quoting
Chaney & James Constr. Co. v. United States, 421
F.2d 728, 732 (Ct. Cl. 1970)) ("[A]ll delay due to
defective or erroneous Government specifications are per
se unreasonable and hence compensable."). The
government impliedly warrants that the design plans are
"reasonably accurate"; however, the specifications
need not be perfect. Caddell Const., 78 Fed.Cl. At
413 (internal quotations omitted). In determining whether the
District's plans were defective, we look at the
cumulative effect of these alleged errors. Id.
aligns with principles established by Missouri precedent.
Ideker, Inc. v. Mo. State Highway
Comm'n may be the most analogous case decided by our
State's courts. 654 S.W.2d 617 (Mo. App. W.D. 1983).
Ideker was a "highway contractor, " that entered
into a construction contract with the Missouri State Highway
Commission ("the Commission"). Id. at 619.
Relying upon the Commission's description of the work in
its plans and specifications for the highway project, Ideker
submitted a bid, which it won. Id. After starting
the project, Ideker ran into problems that made the plans and
specifications impossible to follow, and thus made the job
impossible to complete without expending significantly more
hours and money than it would have required if the plans and
specifications were adequate. Id. at 619-620. Ideker
brought a breach of contract action "in the nature of a
breach of warranty" against the Commission. Id.
at 620. Ideker argued the Commission warranted that the plans
and specifications furnished to Ideker were an accurate
representation of what Ideker would be required to perform.
Id. The Western District affirmed the trial
court's judgment in favor of Ideker, reasoning:
Syllogistically, where a governmental entity makes a positive
representation of a material fact relied upon by a contractor
in calculating its bid, which turns out to be false or
incorrect after work is commenced and occasions additional
expense, the contractor finds himself in the position of one
who undertakes one contract but is confronted with
performance of another. The governmental entity,
pragmatically speaking, gets the benefit of another contract.
If performance thereof by the contractor entails more expense
than was calculated in submitting its bid, the governmental
entity should bear the added cost rather than the contractor
because the former is the beneficiary of necessary but
unbargained for work resulting from its positive
representation of a material fact which turned out to be
false or incorrect.
Id. at 621. Although the current case is based on an
"implied warranty" as opposed to a "positive
representation, " the logic used in Ideker
still holds: if a contractor makes a bid in reliance on a
governmental entity's representations of what a project
will entail, he should not be punished-and the entity should
not receive a windfall-because the entity's renderings
were defective. See id. In effect, the contractor
would be punished for having to perform a contract he did not
truly agree to enter. Id. On the other hand, the
governmental entity would be rewarded for failing to
accurately represent the performance it sought by inducing
artificially low bids from inculpable contractors.
Id. This result is at odds with the notion that we
should try to place parties in the same position they would
be in if the contract agreed upon was performed without a
breach. Id. Thus, considering contract principles
established by Missouri precedent, we believe
Spearin claims should be permissible causes of
action in our State.
core, a Spearin claim is a breach of contract
action. See Spearin, 248 U.S. at 137-38. In
Missouri, "[a] breach of contract action includes the
following essential elements: (1) the existence and terms of
a contract; (2) that plaintiff performed or tendered
performance pursuant to the contract; (3) breach of the
contract by the defendant; and (4) damages suffered by the
plaintiff." Keveney v. Mo. Military Acad., 304
S.W.3d 98, 104 (Mo. banc 2010). Thus, a trial court should
only grant summary judgment in favor of a defendant in a
breach of contract action if the plaintiff fails to adduce
sufficient evidence for a reasonable fact-finder to conclude
that all four of the essential elements have been satisfied.
See Binkley, 447 S.W.3d at 196 ("A defending
party may demonstrate entitlement to summary judgment by
showing that the plaintiff cannot prove one or more elements
of the claim."); Rule 74.04(c). There are two elements
of concern in this appeal: (1) whether the defendant actually
breached the contract, and (2) whether Penzel suffered
damages that it can prove with reasonable certainty. First,
we will address whether Penzel has produced sufficient
evidence to establish a breach.
Point I - Proof that the Plans were
"defective" within the meaning of the
establish a claim for breach of contract under
Spearin, the plans and specifications must be
defective or "substantially deficient." Caddell
Const. Co., 78 Fed.Cl. at 413. Plans and specifications
are considered "defective" if they are "so
faulty as to prevent or unreasonably delay completion of the
contract performance." Id. (citing
Wunderlich Contracting Co. v. United
States, 351 F.2d 956, 964 (Ct. Cl. 1965)). Because
the District, as the movant-defendant, made a prima facie
showing that it is entitled to summary judgment as a matter
of law, Penzel is required to produce evidence to create a
genuine issue of material fact. Rule 74.04(c). Penzel relies
on deposition testimony from several witnesses to support its
contention that the Plans were defective. Nonetheless, the
District contends Penzel failed to meet its burden for
proving defectiveness for several reasons: (1) Penzel was
required to produce "expert testimony" to
demonstrate the Plans were defective, and none of the
witnesses qualified as "experts" under §
490.065; (2) even if Penzel's witnesses
qualified as experts, their testimony was inadmissible
because their opinions lacked an adequate factual basis; and
(3) even if this Court rejects the District's first two
arguments, the testimony proffered was insufficient to prove
the Plans were defective within the meaning of
Spearin. We disagree with all three of the
admissibility of expert testimony is governed by §
490.065. Am. Eagle Waste Indus., LLC v. St. Louis City,
Missouri, 463 S.W.3d 11, 25 (Mo. App. E.D. 2015).
"A trial court has considerable discretion in the
admission of evidence, and its decision will not be reversed
unless there is a clear abuse of discretion."
Id. at 23 (quoting Lozano v. BNSF Ry. Co.,
421 S.W.3d 448, 451 n.2 (Mo. banc 2014). In the present case,
WNB and Henthorn filed motions to exclude the expert
testimony of Joseph Manzi and Myron Bernard, which the
District later joined in a motion in limine. We give strong
credence and great deference to the trial court's
conclusion on the admissibility of expert testimony.
Id. In this case, however, the trial court did not
rule on any motion to exclude Penzel's expert testimony
in deciding summary judgment. Accordingly, there is no ruling
to which we may defer.
Is Expert Testimony Required?
District contends that Penzel is required to produce
"expert testimony" to establish the Plans were
"defective." This argument is premised on the
District's belief that implied warranty claims in
Missouri "are considered fault-based claims." The
District reasons that "within the context of design
documents, 'fault' is established by proving that a
design professional negligently prepared the design
documents, " which requires expert testimony. We
disagree. The implied warranty in a Spearin claim is
that the plans are free from significant defects; it is not
simply a guarantee that a particular level of care and
competency was used to create the plans. "When the
government provides a contractor with defective
specifications, the government is deemed to have breached the
implied warranty that satisfactory contract performance will
result from adherence to the specifications, and the
contractor is entitled to recover all of the costs
proximately flowing from the breach." Essex
Electro Engineers, 224 F.3d at 1289. In Ideker,
the Missouri case we found most similar to Spearin,
the Western District listed six necessary elements "to
constitute a cause of action…in the nature of a breach
of warranty by a contractor against a governmental entity,
" none of which involved fault or negligence by the
government-owner. 654 S.W.2d at 621. Accordingly, Penzel need
not show the District fell below a reasonable standard of
care to prevail on its Spearin claim, and an expert
witness is not required to attest to standard of care.
in Missouri, expert testimony is only required "when a
fact at issue is so technical or complex that no fact-finder
could resolve the issue" without it. Stone v. Mo.
Dep't of Health & Senior Servs., 350 S.W.3d 14,
21 (Mo. banc 2011). A trial court's determination of
whether the facts in a case are so complicated that they
require expert testimony lies within its discretion. Hill
v. City of St. Louis, 371 S.W.3d 66, 78 (Mo. App. E.D.
2012). In the present case, however, the trial court did not
make a ruling on any of Respondents' motions to exclude
the testimony of Joseph Manzi or Myron Bernard.
electrical engineering is highly technical and complicated in
general, most of the problems alleged by Penzel, and
testified about by its witnesses, were simple enough for a
layperson to understand. For example, testimony that the
Plans omitted critical components, called for outdated or
non-existent products, and failed to comply with building
codes are issues a layperson without any technical training
could understand. Accordingly, Penzel was not required to
produce expert testimony to prove the Plans were
Do either Joseph Manzi or Myron Bernard qualify as experts,
and is their "expert testimony"
expert testimony is not required, it is
admissible "when the topic at issue is one with
which lay witnesses and fact-finders are unfamiliar."
Stone, 350 S.W.3d at 21. We allow expert testimony
to address issues in areas in which the fact-finder lacks
experience or knowledge. Id. Essentially, the
admissibility of expert testimony hinges on whether it ...