Court Opinion

ID: 9638163
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:36:23.418501+00
Date Added: 2024-06-11T18:10:04.446133
License: Public Domain

LOWENSTEIN, Judge,
dissenting.
I dissent. The majority first holds the plaintiff’s last petition was improperly drafted in that it left out a vital element of its case, and, secondly, that there is no cause of action in Missouri by a sub-contractor who fails to perfect his mechanic’s lien against a landowner. I respectfully disagree with both holdings and address the latter first.
I.
The majority would penalize a sub-contractor who has failed to perfect a mechanic’s lien by foreclosing his right to quasi-contractual relief. No other class of persons or entities is denied equitable relief for such a failure. The result here seems unfair and unduly harsh i.e, denying equitable relief for failure to follow the lien statutes. The very nature of equitable relief is bottomed on the claimant having failed to protect himself in some particular way. Quasi-contractual relief is available when the recipient of the benefit should have known the provider expected to be paid. State ex rel. Danforth v. K.C. Firefighters, 585 S.W.2d 94, 97 (Mo.App.1979).
In this case payment by the landowners to the general contractor or its trustee in bankruptcy “pays all bets.” Payment would destroy any basis for a suit in equity by the sub-contractor against the landowners. The simple matter here is, on this record, no one knows whether the landowners have paid for the rock they received. All the concerns raised by the majority as to double payment and impingement upon the bankruptcy laws are valid. Allowing this suit to determine whether the landowner got something for nothing, however, does not raise those concerns.
Contrary to what the majority opinion would predict, allowing the sub-contractor to pursue his quasi-contract petition will not lead to sub-contractors eschewing perfecting their mechanics’ liens in favor of a personal judgment against the unknown solvency of the landowner. Only the truly reckless would deliberately forsake the priority afforded a mechanic’s lien to risk *269standing in line with a judgment in hand behind a host of other creditors. The majority opinion permits the fortuitous bankruptcy of the general contractor to inure to the benefit of the landowner for all items he had not paid the general. Simply, the landowner is allowed to be unjustly enriched.
The majority would make the mechanic’s lien the exclusive remedy for a sub-contractor. Failure to obtain the lien prevents any other recourse. A mechanic’s lien was unknown at common law or in equity. Doellner v. Rogers, 16 Mo. 340 (1852). These liens are creatures of statute. Ward v. Nolde, 259 Mo. 285, 168 S.W. 596 (1914). Although the general rule is that statutes in derogation of common law are to be strictly construed, mechanic lien statutes are remedial in nature and should be liberally construed to preserve the benefits intended. Although lien laws are for protection and security of suppliers, nothing in the Missouri statutory scheme makes the procurement of a lien the exclusive remedy available to a material supplier.
As noted in the majority there are several primary reasons given by courts in not recognizing a sub-contractor’s action against the property owner. The first, the insufficiency of the evidence to show unjust enrichment, simply does not apply to the dismissal of a petition. There can be no proof if the case is thrown out of court, and as will be discussed infra, if the case is allowed to proceed and the owner proves payment the matter is closed. The sub-contractor’s case would then fail since the owner’s payment for the materials precludes unjust enrichment.
The second reason, the failure of the sub-contractor to avail himself of the mechanic’s lien laws, is more troublesome. Two alternate theories have been used to support this reason. The first theory, inapplicable to Missouri law, is used where the statute itself specifically makes the lien the only form of recovery and expressly precludes any other type of suit. Where the statutes are silent, as in Missouri, the second theory argues that the passage by legislatures of mechanic’s lien laws, since unavailable at common law, serves to erase common law actions. The fact that a statute stands in derogation of the common law, however, is normally used by courts as a rule favoring narrow statutory interpretation and not as an erasure of other available remedies. Here the competing rule of statutory construction that remedial statutes are to be liberally construed applies with equal force and weakens the argument that the lien laws were intended to wipe out all other available remedies.
None of the reasons provided should apply to this case in its present posture. For the limited purpose of preventing unjust enrichment this plaintiff should be allowed to proceed. The fact of the bankruptcy of the general contractor has no bearing on the issue of whether a sub-contractor may sue in quantum meruit. Irrelevant is the fear of scholars that unfair preferences will result. Even if relevant, their arguments are fallacious. While the sub-contractor’s position may be improved as against the landowner who has been unjustly enriched because of non-payment, the sub-contractor cannot improve his position to the detriment of other creditors resulting in a bankruptcy “preference.” If payment has been made, no preference results because the sub-contractor cannot recover against the landowner. If no payment has been made, the competing positions of other creditors pursuing the general in bankruptcy court is not affected, and likewise, no preference results. The bankruptcy of the general contractor should not, alone, give a landowner who contracted with him a windfall.
The cases from other states provided by the majority really stand for the doctrine that there can be no personal judgment against an owner by a sub-contractor because no privity exists between the parties. Utschig v. McClone, 16 Wis.2d 506, 114 N.W.2d 854 (1962); Rogers v. Whitson, 228 Cal.App.2d 662, 39 Cal.Rptr. 849 (1964); Johnson & Peterson, Inc. v. Toohey, 285 Minn. 181, 172 N.W.2d 326 (1969). In Gebhardt Bros. Inc. v. Brimmel, 31 Wis.2d *270581, 143 N.W.2d 479, 481 (1966) the court said there could be no implied contract between the supplier and landowner so long as there existed a contract between the supplier and the general contractor.
Nothing in Missouri case law negates a claim of implied contract based upon lack of privity. The theory here was in quantum meruit for the reasonable value of rock supplied. As stated in Berra v. Bieg Plumbing Co., Inc., 584 S.W.2d 116, 118 (Mo.App.1979); the sole elements for quantum meruit are:
To recover in quantum meruit, a plaintiff must plead and prove that it provided to defendant materials or services at the request or with the acquiescence of defendant, that those materials or services had a certain reasonable value, and that defendant, despite demands of plaintiff, has failed and refused to pay the reasonable value of those materials and labor.
Privity of contract is not required in an action for money had and received. The law implies privity in such cases where the defendant has obtained money or its equivalent from the plaintiff under such circumstances that in equity and good conscience he should repay the plaintiff. Lively v. Ridgewood Construction Corporation, 371 S.W.2d 659, 661 (Mo.App.1963). Since privity is not an element of an implied contract, injecting this as an element in cases involving construction work can only rest upon the rationale behind the statutory lien laws. Some courts hold either expressly or by implication the lien laws cut off any other form of recovery not enunciated by statute. This all or nothing approach runs contrary to the purpose of providing security for the suppliers of work and materials through the mechanic lien laws. If the mechanic’s lien is intended as the sole remedy, and if noncompliance therein defeats any other rights at law or equity, let the legislature say so. It should not be for the courts to say that the law of implied contract or recovery for unjust enrichment does not exist where the claimant did not present his right to a lien on real estate. To do so, within the facts here and at the stage of this case, would result in the possibility of the landowner getting a substantial amount of rock for nothing. This result would allow the lien law in Chapter 429 to thwart rather than help mechanics and materialmen as the law intended. Cf. R.L. Sweet Lumber Company v. Lane, 513 S.W.2d 365, 370-71 (Mo. banc 1974); R.J. Stephens, v. Taylor-Morley-Simon, Inc., 628 S.W.2d 375-75 (Mo.App.1982).
The Vanderlann v. Berry Construction Co., 119 Ill.App.2d 142, 255 N.E.2d 615 (1970) case relied upon by the majority is inapplicable. Illinois law, according to that opinion at page 617, does not allow, in the absence of an express contract, any contract theory recovery by a sub-contractor against an owner. See also Hill Behan Lumber Company v. Marchese, 1 Ill.App.3d 789, 275 N.E.2d 451, 453 (1971). Nowhere is there any authority or reason for a similar declaration of law in Missouri, that recovery in quantum meruit for unjust enrichment is precluded by the lien statutes. The one great variable which will protect the owner, the element of payment to the general contractor, will serve to defeat any equitable relief if the proponent cannot prove the owner has not paid for the work or materials.
Paschall’s, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150 (1966), mentioned in the majority opinion, presents the most logical and just approach. There the Supreme Court of Tennessee held, “privity between the parties is no obstacle to recovery under quasi contract.” (Citations omitted.) Id. 407 S.W.2d at 154. As noted in Paschall’s, actions for quantum meruit are based on the idea of a party, “receiving a benefit desired by him, under circumstances rendering it inequitable to retain it without making compensation....” Id. The court there concludes the most important requirement of quasi contract is that the enrichment to the defendant be unjust. The privity requirement, the court concludes, should not deter a sub-contractor supplying materials or labor from pursuing an action for unjust enrichment against a landowner. Id. 407 S.W.2d at 155. The *271Paschall’s court also emphasized, as should this court, recovery in quasi contract should not be afforded in every instance, but limited to certain factual situations, “decided according to the essential elements of quasi contract.” Id. 407 S.W.2d at 155; see also Christmas Lumber Company, Inc. v. Shell, 574 S.W.2d 742, 843-44 (Tenn.App.1978) (reversed on other grounds).
Nothing in Chapter 429 limits personal recovery after failure of the lien method. This court has allowed a general contractor to maintain a personal action with attendant jurisdiction and obtain a personal judgment against a landowner, after failing to serve a required lien law notice. Esser v. Fowler, 638 S.W.2d 327 (Mo.App.1982). That opinion went on to say the failure to create a valid mechanic’s lien did not extinguish the debt sought to be enforced by a personal judgment, noting the existence of the lien cannot be had without the underlying personal judgment. Esser, supra, page 329. The same rights to recovery have not been barred to sub-contractors.
The opportunity arose in Rolla Lumber Company v. Evans, 482 S.W.2d 519 (Mo.App.1972), for the court to declare that no cause of action existed by the supplier against the owner for improvements made by the tenant, as declared by the majority here. See, Ward v. Nolde, 168 S.W. 596 (Mo.1914). Instead of saying no cause of action existed in quantum meruit, the court states, 482 S.W.2d on page 522, “... plaintiff was not entitled to recover on the evidence presented.” If no cause of action exists it is unnecessary to receive evidence. In Williams v. Cass, 372 S.W.2d 156, 160 (Mo.App.1963) the court does recognize the right of the supplier to obtain a personal judgment against the landowner if the lien had failed. Within the factual confines of this case the plaintiff should not have been dismissed at the pleading stage. There is nothing in Missouri law deterring the plaintiff from proceeding in quantum meruit. If its proof fails that question is reserved for another day.
II.
The majority recites the applicable elements a party must plead and prove to sustain a case for unjust enrichment. The crucial element in this case is whether the landowner has paid the general contractor. The principal Missouri case relied upon by the majority, Rackers & Baclesse, Inc. v. Kinstler, 497 S.W.2d 549, 554 (Mo.App.1973), involved a direct appeal after trial in which there was evidence of payment to the contractor. In contrast, this case’s only question is whether the petition should have been dismissed. At this stage of the case, the focus lies exclusively with whether the pleading states a claim for which relief can be granted, and not with evidence that may be presented. Plato Reorganized School District No. R-5 of Texas, et al Counties v. Intercounty Electric Cooperative Association, 425 S.W.2d 914, 915 (Mo.1968).
The standard of review for dismissal for failure to state a claim need not be repeated, but if the facts pleaded and the reasonable inferences to be drawn therefrom viewed most favorably from the plaintiff’s standpoint show any ground upon which relief may be granted, the plaintiff has a right to proceed. Laclede Gas Company v. Hampton Speedway Company, 520 S.W.2d 625, 630 (Mo.App.1975). The quoted paragraph eleven of the petition here in question is subject to the reasonable inference and interpretation that the landowner has not paid the contractor for the material supplied and therefore would not be subjected to a double payment. In paragraph 8 of the petition Green Quarries alleges it filed a claim against the Anchor Estate in bankruptcy court. Without more, the inference is it got nothing. This is unlikely if $8,174.10 had been added to the bankruptcy estate because of the trustee’s action against the landowners. If the plaintiff is allowed to proceed, the pivotal question, whether the landowner paid Anchor or its trustee, can be answered without too much difficulty. If the plaintiff chooses to treat the matter of payment as an affirmative defense and presents its evi*272dence at trial without showing the defendant had paid Anchor or its trustee, then it would be subject to a directed verdict. Whether the landowners paid the contractor or the trustee can be easily determined by discovery. A clear picture can then be presented for either a summary disposition of the matter, or for a sufficiently framed issue presented for a determination on the merits.
Since this matter is still in the pleading stage, and giving the plaintiff every favorable intendment, the case should be allowed to proceed. “Plaintiffs cause of action is imperfectly or perhaps defectively stated, but that is not a defect reached by a motion to dismiss.” Ingalls v. Neufeld, 487 S.W.2d 52, 56 (Mo.App.1972). It cannot be said the plaintiff can prove no set of facts in support of its claim of unjust enrichment, and under modern pleading principles, should not be subject to dismissal. Laclede, supra, at 680.
When the majority states at page 6 of the slip opinion that the failure of a subcontractor to allege non-payment of the landowner to the general contractor constitutes a failure to state a claim for unjust enrichment, it cites Wisconsin, California and Iowa authority. A Missouri plaintiff should not suffer a non-suit for failure to comply with out-of-state pleading requirements.
If the deficiency in the petition had been so obvious as to contain no reference to the Quarry being paid, then the drastic remedy of dismissal would be in order. But aborting the suit because the petition fails to allege the defendant didn’t pay the contractor or the bankruptcy estate seems unduly harsh. There will be no chance of a judgment resulting in a double payment in this case if the plaintiff fails in the required proof. The result of the majority opinion insures no chance of double payments but also insures the chance there has been no payment at all.
Shifting the emphasis from the technicality of the pleading to a disposition of the cause on the merits, Hampton, supra, 631, I would hold the sustaining of the motion to dismiss as error. The judgment should be reversed and remanded to allow the plaintiff to proceed.