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Eisenmann v. Podhorn

Court of Appeals of Missouri, Eastern District, First Division

May 9, 2017

CARL EISENMANN, et al., Plaintiffs,
RICHARD PODHORN, et al., Defendants, BERIS CONSTRUCTION, L.L.C., Respondent/Cross-Appellant, and C.B. ENGINEERING, INC., Appellant/Cross-Respondent.

         Appeal from the Circuit Court of St. Charles County 1311-CC00219 Honorable Nancy L. Schneider


         C.B. Engineering, Inc. ("Appellant") appeals the judgment entered upon a jury verdict awarding Beris Construction, L.L.C. ("Respondent") $51, 500 on Respondent's claims for professional negligence and contribution. Respondent cross-appeals the jury's damages award. We affirm in part, reverse in part, and remand for a new trial on damages.

         I. BACKGROUND

         A. Facts Giving Rise to the Underlying Dispute

         Carl and Jessica Eisenmann (collectively "Plaintiffs")[1] contracted with Parkway Joint Venture to build a home at 115 Place de Yeager ("Lot Eight"), part of the Chateau Du Bois subdivision in the City of Lake Saint Louis, Missouri ("the City"). Parkway Joint Venture then contracted with Respondent to serve as the general contractor for the project. Respondent was owned by Richard Podhorn, who was also the manager of Parkway Joint Venture. Respondent hired Michael Schwada as the project manager to oversee construction of Plaintiffs' home.

         Parkway Joint Venture hired M Engineering to prepare grading plans for the Chateau Du Bois subdivision and the plot plan for Lot Eight, which showed the final planned grades and location of the home on the lot. The plot plan for Lot Eight contained no specifications for the grading to be performed on the lot prior to construction, therefore, the grading was conducted pursuant to the specifications contained in the subdivision grading plans. In relevant part, these specifications provided that all the fill used must consist of low plastic soils as approved by the soils engineer.

         Before construction could begin on Lot Eight, soil work was needed including leveling the lot down to the natural earth and bringing in a significant amount of soil fill. The fill brought onto Lot Eight had to be laid, leveled, packed, and tested. Because Respondent did not employ engineers, Respondent hired Appellant to perform soil testing and observation on Lot Eight and to provide a letter from a professional engineer to the City certifying the soil was properly compacted and would support the home.[2]

         Once Lot Eight was excavated down to reach natural dirt, Schwada had Appellant inspect the excavation and verify that it was sufficient. Then, fill dirt was laid on the lot in one-foot lifts and compacted. After each lift of fill was laid and compacted on Lot Eight, Schwada contacted Appellant to test or observe the fill on the site, in order to verify the lift's compaction rate was acceptable before the next lift was laid. However, Appellant did not test or observe at least one lift's compaction rate. The layer of fill not tested or observed by Appellant was the lift between six and seven feet below grade.

         Before issuing a building permit, the City required: "Prior to the placement of concrete the sub grade shall be tested by an approved geotechnical firm to insure the bearing capacity of the sub grade. A report of this test shall be provided to the Lake Saint Louis Building Department." This report was part of the work for which Respondent hired Appellant. On December 2, 2011, Appellant sent Schwada the certification letter for Lot Eight, which was completed by Appellant's employees Blake Marquart and Karen Albert, a professional geotechnical engineer.

         The certification letter, bearing Albert's professional seal, stated, "Cochran was on site to perform compaction observation and testing services on the fill materials placed to bring the lot to basement subgrade elevation." The letter then outlined the services performed by Appellant and its findings. The letter explained fill materials "consisting of high plastic clay, clayey rock, and low plastic silty clay" were placed in approximately one-foot thick lifts, and "the materials were tested to meet project specifications. Materials not able to be tested were visually observed and approved." The letter concluded, "[n]o soft unacceptable areas were observed, " and, "the materials placed under observation met or exceeded the minimum compaction requirements and are suitable for support of the residential construction."

         The certification letter contained no limitation or qualification as to the extent of Appellant's testing or observation of the soils on Lot Eight. There was no disclaimer that Albert did not review the grading specifications, which mandated no high plastic soils were to be used in the fill material. Further, the letter did not indicate Appellant did not test or observe placement of all the lifts of fill laid on Lot Eight. Appellant did not state in the certification letter or inform Respondent or the City that it did not test or observe the lift of fill between six and seven feet below grade.[3]

         Respondent relied on the certification letter to ensure the soil would support the weight of Plaintiffs' home. Respondent then provided the letter to the City, and the City relied on its certifications when issuing the building permit to allow Respondent to proceed with construction on Lot Eight. If the letter had not been supplied to the City, the City would not have issued a building permit and Plaintiffs' home would not have been built. Further, if the letter had indicated Appellant did not test or observe all of the lifts placed on Lot Eight, the City would have rejected the certification letter and would have required the proper certification.

         On March 17, 2012, Carl noticed cracking and leaking in the basement of the house and informed Respondent of the issue. On or around March 26 or 27, 2012, Tom Rothermich of Flint Hill Engineering went to Lot Eight to consult on the installation of a retaining wall at the request of Podhorn and Cochran. Rothermich was not informed of any problems regarding slope failure when he was asked to design and install the retaining wall. Therefore, Rothermich did not perform any additional soil stability or global stability analysis of the area where the retaining wall was to be installed. After the wall was completed on April 4, 2012, Rothermich provided a letter stating the construction of the wall with Redi-Rock was acceptable and conformed with or exceeded the design criteria.

         Subsequently, Plaintiffs observed more cracks in the walls and foundation prior to closing on the home, brought the cracks to Podhorn's attention, and the cracks were sealed. In an email sent on June 10, 2012, Carl demanded an additional warranty to specifically address the "significant settling and cracking of the foundation" to cover future repairs for no less than ten years. On June 22, 2012, no cracks remained and Plaintiffs closed on the house, purchasing it for approximately $615, 000. Plaintiffs had not received the additional warranty prior to that date, but received a warranty shortly after closing.

         The cracks observed in the house prior to closing resurfaced and were progressively expanding at the time of trial, and the house slid down the lot's rear slope. On October 5, 2012, Plaintiffs' home was condemned by the City, as it was determined the house was unsound and no longer suitable for habitation. The City found that, inter alia, the foundations did not adequately support the structure.

         B. Relevant Procedural Posture

         On November 27, 2012, Plaintiffs filed a multi-count petition against Respondent, Appellant, Podhorn, and M Engineering[4] in the Circuit Court of St. Louis County, and venue was later changed to the Circuit Court of St. Charles County. Respondent filed crossclaims against Appellant for professional negligence, negligent misrepresentation, fraudulent misrepresentation, indemnification, and contribution.[5] Respondent filed additional crossclaims for indemnity and contribution against Crossroads Development, Inc. and Schrieter Concrete Company, two other subcontractors who worked on Lot Eight. The trial court granted all parties leave to amend their pleadings, to plead setoffs due to settlements, through the end of trial.

         A few days before the trial was set to begin, Plaintiffs settled their claims against Respondent and Podhorn for $515, 000. A settlement and release agreement was executed, which included a dismissal of any claims Plaintiffs had against Respondent, Podhorn, Appellant, and M Engineering. Respondent also stipulated to settlement of its crossclaims against Crossroads Development, Inc. and Schreiter Concrete Company for $75, 000 and $5, 000, respectively.

         Respondent's crossclaims against Appellant proceeded to a jury trial, which was held May 5, 6, 7, and 11, 2015. In addition to the facts recounted in Section I.A. above, both parties presented their own theory as to the cause of the damage to Plaintiffs' home and introduced evidence to support their theories.[6] At the end of Respondent's case-in-chief and again at the end of all the evidence, Appellant and M Engineering filed motions for a directed verdict. All motions for directed verdict were denied by the trial court.

         During the jury instruction conference, Appellant tendered Instruction Eight, which the trial court accepted. Instruction Eight provided for the subtraction of any damages from Respondent's total award if the jury found Plaintiffs failed to mitigate their damages. Respondent timely objected to Instruction Eight and requested that the trial court submit Missouri Approved Instruction ("MAI") 4.01, [7] but the request was denied. The court submitted four verdict directors to the jury, Instructions Nine through Twelve. Instruction Nine explained to the jury how they were to determine the reasonableness of the settlement between the Plaintiffs and Respondent. Instructions Ten through Twelve provided for the specific claims against Appellant and M Engineering. Each of these verdict directors required the jury to find, "[Respondent's] settlement of the claims of [Plaintiffs] was reasonable." Verdict Form 2, which required the jury to apportion fault between Appellant and M Engineering, did not allow the jury to allocate any fault to Respondent and did not require the jury to ensure the percentages of fault added up to 100%.

         On May 11, 2015, the jury returned a verdict in favor of Respondent on its professional negligence claim against Appellant, assessed Respondent's damages at $51, 500, and found Appellant 100% at fault.

         Subsequently, Appellant filed a motion for reduction or setoff against the jury verdict based on Respondent's settlements with Crossroads Development, Inc. and Schreiter Concrete Company. Appellant also moved for a judgment notwithstanding the verdict, arguing, (1) there was no evidence showing Appellant was professionally negligent; (2) there was no evidence to prove Appellant's alleged negligence caused the damage to Plaintiffs' home; (3) Respondent could not recover in contribution because it did not prove its own liability to Plaintiffs; and (4) the requested reduction or setoff of $80, 000 would eliminate any damage award to Respondent as it exceeded $51, 500, so judgment must be entered in favor of Appellant.

         Respondent timely filed responses to Appellant's motions. Respondent then filed a motion for additur, or in the alternative, a motion for new trial on the issue of damages, arguing its damages were fixed by the jury's finding Respondent's settlement with Plaintiffs was reasonable, and that the non-MAI Instruction Eight was improper.

         On June 4, 2015, the trial court denied all relevant post-trial motions. On June 5, 2015, the trial court entered its judgment in accordance with the jury's verdict. Both parties appeal.


         Appellant raises three points on appeal, and Respondent raises two points on cross-appeal. In its first and second points on appeal, Appellant argues the trial court erred in denying its motions for directed verdict and motion for judgment notwithstanding the verdict, because Respondent failed to present a submissible case for contribution. In Appellant's third point on appeal, it alleges trial court error regarding its requested setoffs. In Respondent's first point on cross-appeal, it argues the trial court erred in denying Respondent's motion for additur, or alternatively, motion for new trial because Respondent's damages were fixed by the jury's finding that Respondent's settlement with Plaintiffs was reasonable. Finally, in its second point on cross-appeal, Respondent contends the trial court erred in giving Instruction Eight to the jury, because the non-MAI instruction on mitigation of damages was improper and confused the jury.

         A. Points on Appeal Relating to Submissibility of Respondent's Claim for Contribution

         In its first and second points on appeal, Appellant argues the trial court erred in denying its motions for directed verdict and motion for judgment notwithstanding the verdict, because Respondent failed to present a submissible case for contribution. In Appellant's first point on appeal, Appellant asserts Respondent failed to present "any evidence" to establish its own liability to Plaintiffs. In its second point on appeal, Appellant contends Respondent failed to present "any evidence" that Appellant's negligence caused Plaintiffs' injury.

         1. Standard of Review and General Law Relating to Contribution

         Appellate review of the denial of a motion for directed verdict and the denial of a motion for judgment notwithstanding the verdict is essentially the same. Sanders v. Ahmed, 364 S.W.3d 195, 208 (Mo. banc 2012). Pursuant to our standard of review, we must determine whether the plaintiff made a submissible case, which is a question of law we review de novo. Delacroix v. Doncasters, Inc., 407 S.W.3d 13, 26, 39 (Mo. App. E.D. banc 2013). To make a submissible case, the plaintiff must support each element of its claims with substantial evidence. Id. at 26. Substantial evidence is described as "that which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide a case." Arkansas-Missouri Forest Products, LLC v. Lerner, 486 S.W.3d 438, 447 (Mo. App. E.D. 2016) (quotations omitted).

         In determining whether the plaintiff made a submissible case, we view the evidence and all reasonable inferences therefrom in the light most favorable to the plaintiff, and all contrary evidence and inferences are disregarded. Delacroix, 407 S.W.3d at 26. "The jury's verdict will be reversed only if there is a complete absence of probative facts to support the jury's conclusion." Id. (quoting Keveney v. Missouri Military Academy, 304 S.W.3d 98, 104 (Mo. banc 2010)). Thus, if reasonable minds could differ as to the question before the jury, an appellate court will not disturb the jury's verdict. Dubinsky v. U.S. Elevator Corp., 22 S.W.3d 747, 749 (Mo. App. E.D. 2000).

         Respondent brought the present action seeking contribution from Appellant, as a joint tortfeasor, for a portion of the damages Respondent paid to Plaintiffs. "When two or more persons become liable in tort to the same person for the same harm, there is a right of contribution among them." Miles ex rel. Miles v. Rich, 347 S.W.3d 477, 482 (Mo. App. E.D. 2011) (quoting Gramex Corp. v. Green Supply, Inc., 89 S.W.3d 432, 442 (Mo. banc 2002)) (internal quotations omitted). The purpose of the right to contribution is to proportionately divide the injured party's overall damage figure according to the joint tortfeasors' relative degrees of fault. Union Elec. Co. v. Metropolitan St. Louis Sewer Dist., 258 S.W.3d 48, 54-55 (Mo. banc 2008). To maintain an action for contribution, the party seeking contribution as well as the party against whom contribution is sought must be joint tortfeasors, both originally liable to the injured party. Miles, 347 S.W.3d at 482.

         2. Whether Respondent Presented Evidence of its Liability to Plaintiffs

         Regarding Appellant's first point challenging the evidence presented as to Respondent's liability to Plaintiffs, we must first address whether Appellant has sufficiently preserved each of its arguments on appeal. In support of this point, Appellant argues Respondent cannot seek contribution from Appellant because Respondent failed to admit its own liability at trial, and even if Respondent was not required to admit liability, it failed to present "any evidence" of its own liability to Plaintiffs. Appellant also argues, "[t]here is no cause of action in tort for a builder's alleged negligence in the construction of a residence, " and Plaintiffs could have only recovered from Respondent via contract remedies. Thus, according to Appellant, Respondent is not a "joint tortfeasor, " and cannot seek contribution from Appellant.

         Generally, we conclude Appellant preserved its claim that Respondent failed to present evidence of its own liability to the Plaintiffs, because it was raised in Appellant's motion for directed verdict at the close of all the evidence. See Sanders, 364 S.W.3d at 207 (when a defendant presents evidence at trial, "[a] motion for directed verdict at the close of all evidence becomes the meaningful motion to preserve the issue"). However, our review of the record reveals Appellant's argument that tort remedies were unavailable to Plaintiffs against Respondent was never presented to the trial court, and may not be raised for the first time on appeal. See Marquis Fin. Servs. of Indiana Inc. v. Peet, 365 S.W.3d 256, 259-60 (Mo. App. E.D. 2012) and Gill Const., Inc. v. 18th & Vine Authority, 157 S.W.3d 699, 722 (Mo. App. W.D. 2004) (an issue not raised in a motion for directed verdict cannot be used to seek a judgment notwithstanding the verdict on that ground, nor will it be a basis for appellate review of the trial court's denial of a judgment notwithstanding the verdict on that issue). Therefore, we decline to address said argument.[8] See id.

         Moving to Appellant's assertion that Respondent was required to admit its liability, Appellant bases its argument on the following question asked by Respondent's attorney to potential jurors during voir dire:

What you will hear in this case is that we have settled our claim, our dispute or issue with the homeowners, [Plaintiffs]. But that's not an admission of liability. Does everyone here understand that? Is there anyone who believes that just because we settled our dispute with the [Plaintiffs] that we somehow are admitting liability or we must have been at fault?

         Appellant contends this question essentially precluded Respondent from being able to prove its liability to Plaintiffs. However, the Missouri Supreme Court has declared a settling party who is seeking contribution is not required to admit fault. Travelers Property Cas. Co. of America v. Manitowoc Co., Inc., 389 S.W.3d 174, 175-76, 179 (Mo. banc 2013). Additionally, statements made and questions asked by attorneys during voir dire are not evidence. Andersen v. Osmon, 217 S.W.3d 375, 381 (Mo. App. W.D. 2007); Pollard v. Whitener, 965 S.W.2d 281, 298 n.3 (Mo. App. W.D. 1998) (Stith, J., dissenting).

         Nevertheless, after reviewing the actual evidence adduced at trial, in the light most favorable to the jury's verdict and disregarding all contrary evidence, we find Respondent satisfied its burden of proving its own liability. See Miles, 347 S.W.3d at 482; see also Delacroix, 407 S.W.3d at 26. During trial, Respondent elicited testimony from at least two witnesses regarding the settlement ...

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