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G&G Mechanical Constructors, Inc. v. Jeff City Industry, Inc.

Court of Appeals of Missouri, Western District, Third Division

March 20, 2018

G&G MECHANICAL CONSTRUCTORS, INC., Respondent,
v.
JEFF CITY INDUSTRY, INC., A/K/A JC INDUSTRIES, INC. and LIBERTY MUTUAL INSURANCE COMPANY, Appellants.

         APPEAL FROM THE CIRCUIT COURT OF BOONE COUNTY, MISSOURI THE HONORABLE JODIE C. ASEL

          Before Gary D. Witt, Presiding Judge, Lisa White Hardwick, Judge, and Edward R. Ardini, Jr., Judge

          EDWARD R. ARDINI, JR., JUDGE

         Jeff City Industry, Inc. ("JCI") entered into an agreement with the City of Columbia, Missouri, to serve as general contractor on the Hominy Trail Water and Sewer Project. JCI subcontracted certain boring work related to the project to G&G Mechanical Constructors, Inc. ("G&G"). A dispute arose over JCI's failure to pay G&G for its work, which resulted in G&G bringing claims for breach of contract, unjust enrichment, and violation of Missouri's Prompt Pay Act against JCI. In addition, a breach of surety bond claim was brought against JCI and its surety, Liberty Mutual Insurance Company ("Liberty Mutual").

         The jury returned a verdict against JCI and Liberty Mutual in the amount of $445, 408.94. The trial court entered judgment in favor of G&G and included prejudgment interest at the rate of nine percent pursuant to section 408.020.[1] JCI and Liberty Mutual assert in their single point on appeal that the trial court erred in awarding prejudgment interest, arguing the parties agreed that no interest would be charged on amounts due. We affirm.

         I. Preservation of Error

         We must first consider whether the alleged error was preserved for our review given the failure of JCI and Liberty Mutual to file a motion for new trial pursuant to Rule 78.07(a).[2] Rule 78.07(a) generally provides that "[i]n jury tried cases . . . allegations of error must be included in a motion for a new trial in order to be preserved for appellate review." "The purpose of a motion for new trial is to give the [trial] court the opportunity to correct its own errors without appellate court intervention." Smith v. Brown & Williamson Tobacco Corp., 410 S.W.3d 623, 640 (Mo. banc 2013) (citations omitted).

         The issue of whether G&G was entitled to prejudgment interest pursuant to section 408.020 was first raised on March 16, 2017, in a motion for directed verdict filed by JCI and Liberty Mutual. The trial court heard argument on the issue and denied the motion. On March 20, 2017, JCI and Liberty Mutual filed a Trial Brief on Statutory Interest. The trial court heard from the parties on that day and revisited the issue on March 21, 2017. On March 30, 2017, G&G filed a Motion for Award of Pre-Judgment Interest on Jury Verdict and Entry of Judgment along with supporting suggestions. JCI and Liberty Mutual filed a Memorandum in Opposition, and the trial court heard argument on May 15, 2017. On May 18, 2017, the trial court entered Judgment in favor of G&G, which included an award of prejudgment interest at a rate of nine percent. No after-trial motions were filed by JCI or Liberty Mutual.

         The Missouri Supreme Court has held that "[t]he issue of prejudgment interest was properly presented to the trial court and adequately preserved for appeal" where, after the jury verdict, "both parties corresponded with the trial court about prejudgment interest[] and the court held two conferences on the issue." Brown v. Donham, 900 S.W.2d 630, 632 (Mo. banc 1995). While not specifically discussing the requirement found in Rule 78.07(a) that, following a trial by jury, a motion for new trial be filed in order to preserve an issue for appellate review, Brown clearly permits appellate review of an alleged error relating to an award of prejudgment interest that was first raised to and decided by the trial court.[3]

         In light of the extensive briefing and argument by the parties before the trial court on the issue of prejudgment interest, we conclude, consistent with the Missouri Supreme Court in Brown, that the issue was properly preserved for appeal.

         II. Prejudgment Interest Pursuant to Section 408.020

         Having found that the issue was properly preserved for our review, we now consider whether the trial court erred by awarding G&G prejudgment interest at the statutory rate of nine percent.

         A. Factual Background

         The contract, including Attachment A containing the interest provision at issue, was signed by G&G on December 28, 2011, and transmitted to JCI on December 29, 2011. The interest provision stated: "Any pay estimate overdue by 60 days shall bear interest at the annual rate of 18% or the highest rate allowed by law, if lower. Retainage shall not be held out of payment." Douglas Adrian ("Adrian"), on behalf of JCI, struck through the entire provision with a single line, initialed "DA", and wrote "5% Retiange [sic]" in the margin. The contract was returned to William Dooley ...


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