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Bates & Associates, Inc. v. Providence Bank & Vision Ventures, LLC

Court of Appeals of Missouri, Eastern District, Fourth Division

September 17, 2019

BATES & ASSOCIATES, INC., Appellant,
v.
PROVIDENCE BANK & VISION VENTURES, LLC Respondent.

          Appeal from the Circuit Court of St. Louis County 16SL-CC00187 Honorable David L. Vincent, III

          OPINION

          ROBIN RANSOM, J.

         In these consolidated appeals, Bates & Associates, Inc. ("Bates") appeals from the judgment of the trial court in its petition for breach of contract against Vision Ventures, LLC ("Vision") and for enforcement of its architect lien against Providence Bank ("Providence"). Bates asserts the trial court erred in denying its claim for lien enforcement against Providence because it was entitled to a lien under the statute even though actual construction of the planned work had not yet commenced, and because its lien was timely filed. We affirm.

         Background and Procedure

         The parties agree to the following. Bates is a licensed architectural firm, and Bates entered into a contract with Vision in October 2013 for architectural design and construction services related to a senior care facility ("the Project"). Prior to the contract between Bates and Vision, in 2007, the predecessor in interest to Vision entered into a commercial loan agreement with Premier Bank to borrow funds of $2, 480, 000.00 ("the Loan"). The Loan was secured by a Deed of Trust, granted by Vision to Premier Bank, encumbering 17655 Wild Horse Creek Road, Chesterfield, Missouri ("the Property"). In 2008, Vision executed and delivered a promissory note to Premier Bank for an additional amount of $1, 366, 862.00 ("the Note"), secured by a modification to the Deed of Trust. Following the closure of Premier Bank, the Loan, the Deed of Trust, and the Note were assigned to Providence. In March 2015, Vision filed for Chapter 11 bankruptcy and listed Bates as an unsecured creditor with a claim in the amount of $279, 200.00. Vision defaulted on the Loan and Note by failing to pay all amounts owed, and Providence elected to foreclose on the Deed of Trust to the Property. On July 15, 2015, Bates filed a mechanic's lien upon the Property for the work performed under the contract with Vision. On July 17, 2015, the non-judicial foreclosure took place, and Providence obtained title to the Property.

         Bates filed a three-count Petition to enforce its mechanic's lien against Vision and Providence. In Counts I and III, it requested damages against Vision in the amount of $305, 279.00, plus interest and attorneys' fees, under theories of breach of contract and quantum meruit, asserting Vision failed to pay the sums owed Bates for design services rendered pursuant to their contract; and in Count II, it requested a judgment declaring its mechanic's lien in the amount of $305, 279.00 against the Property was superior to and had priority over Providence's interest, and an order enforcing the lien. Providence filed affirmative defenses, including that Bates failed to comply with the statutory requirements of Chapter 429, in that its mechanic's lien was not timely filed, and that no development work or improvement had occurred at the Property. Providence also filed, as relevant to this appeal, a counterclaim to quiet title to the Property and for a declaratory judgment that Bates had no right to or interest in the Property.

         At a bench trial, Steven Warlick ("Warlick"), an architect from Bates, and Bo Hagerman ("Hagerman"), the director of design at Bates, testified to the following. Bates initially contracted with Vision in October 2013 to provide schematic designs, design development, construction documents, and construction administration for a senior care facility. After the initial design was approved by the City of Chesterfield, Vision requested so many design changes to reduce costs that Chesterfield withdrew its approval. In January 2015, Warlick had a meeting with Rodney Henry ("Henry") of Vision, during which they discussed providing additional work to comply with Chesterfield zoning requirements. Warlick sent Vision a proposal for these services and, although Henry did not sign the proposal, Warlick testified Henry agreed verbally. In accordance with their agreement, Bates performed additional architectural work for Vision in January through March of 2015, including reworking the design plans to regain approval from Chesterfield. Warlick agreed, however, that Bates's invoices to Vision did not reflect work performed past July 2014; that the July 2015 lien did not include documentation showing work was performed in 2015; and that Bates's internal timesheets between January and March 2015 documented only client communications and internal discussions about the proposal, rather than design work. In contrast to Bates's evidence, Providence submitted deposition testimony from Henry stating he did not request additional architectural services from Bates, and he did not provide approval for Bates to begin additional services because he had not vetted the proposed scope changes.

         The trial court granted Bates's breach-of-contract claim against Vision in the amount of $276, 250.00 and denied the alternative quantum-meruit claim against Vision. The trial court denied Bates's claim to enforce its mechanic lien against Providence, and granted Providence's counterclaim for quiet title to the Property. The trial court concluded Bates's architectural services were not directly connected with any construction or other improvements upon the Property. Further, the trial court concluded Bates did not timely file its lien. This appeal follows.

         Discussion

         Bates raises two points on appeal. First, Bates argues the trial court erred in denying its claim to enforce the mechanic's lien because the services it performed under the contract were lienable. Second, Bates argues the trial court erred in denying its claim to enforce its mechanic's lien because the lien was timely filed, in that it provided services under the contract within six months before filing the lien on July 15, 2015. We disagree. Because the second point is dispositive, our analysis is limited to this point.

         This Court reviews a bench-tried case for whether there is substantial evidence to support the judgment, it is against the weight of the evidence, or it erroneously applies the law. Ivie v. Smith, 439 S.W.3d 189, 198-99 (Mo. banc 2014). We defer to the trial court's findings of fact, so long as they are supported by substantial evidence. Royal Forest Condominium Owners' Ass'n v. Kilgore, 416 S.W.3d 370, 373 (Mo. App. E.D. 2013). However, because the interpretation and application of a contract is a question of law, we review such issues de novo, giving the words of the agreement their plain and ordinary meaning, so as to best ascertain the intent of the parties. Shocklee v. Albers Chiropractic Health Centre, P.C., 558 S.W.3d 83, 86 (Mo. App. E.D. 2018); McHugh v. Slomka, 531 S.W.3d 588, 593 (Mo. App. E.D. 2017).

         Section 429.015 provides that those persons or corporations who provide architectural work or services directly connected with the erection or repair of any building or other improvement upon land "under or by virtue of any contract with the owner or lessee thereof" shall, upon complying with the provisions of this chapter, have a lien upon the building or other improvements and upon the land on which the building or improvements are situated, regardless of whether or not actual construction of the planned work or improvement has commenced. See Section 429.015.1, .5, RSMo. (cum. supp. 2011). However, any person seeking a lien under chapter 429 must file with the circuit court within six months after the indebtedness has accrued, a just and true account of the demand due that has given rise to the lien. See Section 429.080.

         Providence and Vision assert that Bates is not entitled to a lien under chapter 429 because it did not file a just and true account of the demand due within six months after the indebtedness accrued. The term accrued has been construed to mean "when the indebtedness becomes complete; when the last labor is performed or the last material is furnished under an agreement." United Petroleum Serv., Inc. v. Piatchek, 218 S.W.3d 477, 481-82 (Mo. App. E.D. 2007) (citation omitted); see also Brentwood Glass Co., v. Pal's Glass Serv., Inc., 499 S.W.3d 296, 303 (Mo. banc 2016).

         The record here shows that the original 2013 contract between Bates and Vision agreed for Bates to provide design services, bid documents, construction documents, and construction administration services for a total price of $325, 000.00. In Bates's final invoice to Vision in July 2014, Bates claimed it had performed design services and document development and had provided construction documents and construction administration services valued at $305, 279.01.[1] According to the invoice, the last date that work was performed was July 7, 2014. Similarly, in its petition to enforce the lien, Bates again asserted the amount it was owed for work performed under the contract totaled $305, 279.01. Based on the July 2014 invoice, the final ...


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