All posts by StLConLaw

7 Important Tips Roofing Contractors Should Know Before Performing Work in Missouri

The purpose of this article is to provide roofing contractors a general overview of some common compliance issues that roofers experience when conducting business in the state of Missouri. In hopes that businesses and contractors will have better statutory compliance in the future and to reduce customer complaints and unscrupulous business practices, we have prepared a general rundown of some caveats and tips that contractors should be aware of when carrying out roofing work in Missouri.

1.     Do not offer to pay any part of the customer’s deductible or provide a discount or rebate as part of the roof sale

Although you could sell the job a lot easier if the customer had no out-of-pocket expenses, Missouri law prohibits contractors from offering to pay the insurance deductible or otherwise creatively working around the statute.

The specific statute set forth under section 407.725.6, R.S.Mo., states:

“A contractor shall not advertise or promise to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services.  As used in this section, a promise to pay or rebate includes granting any allowance or offering any discount against the fees to be charged or paying the insured or any person directly or indirectly associated with the property any form of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value for any reason.” R.S.Mo. § 407.725.2 (2014); https://revisor.mo.gov/main/OneSection.aspx?section=407.725

As you can imagine, unscrupulous contractors regularly attempt to employ this tactic on unwary customers. Replacing a roof is a lot more appealing for the customer when the customer has no expenses. However, the Missouri legislature found that the negative impact on society outweighs the benefit and have prohibited such conduct. Accordingly, roofing contractors should not utilize such techniques or make any of the above-mentioned offerings to induce the customer into entering into the contract.

If you have questions regarding advertising or the legality of other sales techniques, please do not hesitate to contact us.

2.     Do not offer to negotiate insurance claims for customers

While it may seem natural to speak to the insurance company on behalf of the customer, such conduct is prohibited in Missouri.

The statutory section, 407.725.6, R.S.Mo., which bars such conduct, states the following, in relevant part:
“A contractor shall not represent or negotiate, or offer or advertise to represent or negotiate, on behalf of an owner or possessor of real estate on any insurance claim in connection with the repair or replacement of roof systems, or the performance of any other exterior repair, replacement, construction, or reconstruction work.” R.S.Mo. § 407.725.6 (2014); https://revisor.mo.gov/main/OneSection.aspx?section=407.725.

The consequence of representing or negotiating on a customer’s behalf will likely constitute a violation of the Missouri Merchandising Practices Act and could evoke a response from the Missouri Attorney General or could potentially lead to punishment for the unauthorized practice of law.

If the customer has a valid insurance claim due to hail or storm damage or some other covered claim, you should make your observations and analysis and refer the homeowner to competent legal counsel to assist with obtaining coverage from the insurance company. Do not risk the potential consequences that can result from violations of the Missouri Merchandising Practices Act. The risk is not worth the reward. If you have questions regarding your statutory duties or questions about insurance contract negotiations.

3.     Include Statutory Lien Notice in your Contract

Although many contractors do not know how mechanic’s liens work, they do know that mechanic’s liens can be an effective tool to collect payment on an outstanding balance from owners or other contractors. Depending on the situation, mechanic’s liens can be instrumental in getting you paid. Thus, it is critical to ensure that you preserve the right to file a mechanic’s lien on your project. Missouri mechanic’s liens can be trick and have a few rigid statutory requirements.

One of the most important requirements of filing a mechanic’s lien is providing proper notice. Missouri requires general contractors to provide notice to owner as a prerequisite or a condition precedent to filing a mechanic’s lien. Specifically, the applicable portion of section 429.012, R.S.MO., states the following:

Every original contractor, who shall do or perform any work or labor upon, or furnish any material, fixtures, engine, boiler or machinery for any building, erection or improvements upon land, or for repairing the same, under or by virtue of any contract…shall provide to the person with whom the contract is made or to the owner if there is no contract, prior to receiving payment in any form of any kind from such person, (a) either at the time of the execution of the contract, (b) when the materials are delivered, (c) when the work is commenced, or (d) delivered with first invoice, a written notice which shall include the following disclosure language in ten-point bold type:

NOTICE TO OWNER

FAILURE OF THIS CONTRACTOR TO PAY THOSE PERSONS SUPPLYING MATERIAL OR SERVICES TO COMPLETE THIS CONTRACT CAN RESULT IN THE FILING OF A MECHANIC’S LIEN ON THE PROPERTY WHICH IS THE SUBJECT OF THIS CONTRACT PURSUANT TO CHAPTER 429, RSMO. TO AVOID THIS RESULT YOU MAY ASK THIS CONTRACTOR FOR “LIEN WAIVERS” FROM ALL PERSONS SUPPLYING MATERIAL OR SERVICES FOR THE WORK DESCRIBED IN THIS CONTRACT. FAILURE TO SECURE LIEN WAIVERS MAY RESULT IN YOUR PAYING FOR LABOR AND MATERIAL TWICE.

Any contractors who collect payment of any type on a construction project without first having provided the above-cited notice will have waived their right to file a mechanic’s lien. This does not preclude you from pursuing the owner or contractor under breach of contract or quantum meruit claims. However, it is well-advised to preserve all of your rights, so you have these respective collection tools at your disposal in case you need them. Accordingly, this notice to owner must be provided by any general contractor on the project that wants to later assert mechanic’s lien rights against the property upon which the work was performed.

4.     Include a provision in your contract that allows for the recovery of attorney’s fees

In Missouri, parties to a lawsuit can typically only recover attorney’s fees if there is some statutory or contractual basis providing for the recovery of the same. Alternatively, if there is an incredibly unique situation where equities have to be be balanced or if litigation occurs as the result of a wrong committed by a third-party, courts may allow the recovery of attorney’s fees. “Generally, awards of attorney’s fees are permitted “only when called for by a contract; when provided by statute; when incurred as an item of damages because of involvement in collateral litigation; or ‘when a court of equity finds it necessary to adjudge them in order to balance benefits.’” Boone Valley Farm, Inc. v. Historic Daniel Boone Home, Inc., 941 S.W.2d 720 (Mo. App. 1997).

Nearly every roofing contractor that calls seeking counsel asks whether they can recover attorney’s fees. Many of those contractors find that they do not have any basis for recovering attorney’s fees.

This is an easy fix, however, but it has to be implemented before the project by including the provision into the contract. A contract that includes an attorney’s fees provision gives the contractor significantly more leverage when pursuing their claim.

Obviously, the factual situation must also be evaluated because there may be some statutory basis to recover attorney’s fees despite not having the desired contractual language.  However, generally speaking, there is typically no recovery of attorney’s fees on residential projects, unless the attorney’s fees provision is in the contract, whereas there may be a right to recover attorney’s fees on a commercial project by way of the Missouri Prompt Payment Act.

For purposes of this article, we will not discuss the Missouri Prompt Payment Act. However, you should take heed to the warnings contained in this article, avoid the potential loss of leverage if the case goes to court, and protect yourself by including an attorney’s fees/costs/expenses provision in your contract. That goes for contracts with homeowners as well as those with subcontractors.

If you have questions about drafting up an attorney’s fees provision or other contractual provisions, please contact us.

5.     Include a provision that allows for the collection of interest on outstanding balances

When someone refuses to pay you, it is frustrating feeling. Not only do you want to recover the balance, but you also want to tack on an extra $100 per day or charge them anything and everything you can. The only way to get equitable recourse during the pursuit of an outstanding debt is to have the debt accruing interest. Another tool to increase the pressure is the inclusion of a liquidated damages provision. Liquidated damages are discussed at length in another article on this website, but the focus of this article is to express the importance of including an interest provision in all roofing contracts.

The industry rate that we typically see is 1.5% per month or 18% per annum interest rate on outstanding balances. That means that if you are owed $10,000 for a year, you would be entitled to collect $1,800 per year in interest in addition to the $10,000 principal amount owed. This is critical especially when many lawsuits can be stretched out over the course of a one to several years. The interest provision creates leverage against the debtor to pressure them into paying the amount that is rightfully due. Alternatively, if the case goes to trial and you prevail, the debtor will have to pay the principal and the 18% interest on that principal.

If you need help collecting from someone who owes you money for work performed, please contact us now.

6.     Form a Missouri Limited Liability Company to provide protection and to have standing to pursue any legal claims the company may have

A limited liability company can be formed under chapter 347 of the Missouri Revised Statutes. In order to be afforded limited liability protection in the state of Missouri, the organizers/management of a company must register with the Missouri Secretary of State.

Additionally, the Missouri Courts will not recognize a business entity that is not registered in the state. Thus, if the contractor is dealing with a non-paying customer, the contractor will have to standing prior to instituting a formal lawsuit in court. In order to have standing in Missouri, a limited liability company, including any roofers, whether individuals, entities, or contractors, conducting business in the state of Missouri, must register their company with the Missouri Secretary of State.

Many banks will not allow you to open a company bank account without first creating an LLC and preparing an operating agreement, obtaining an articles of organization and an EIN. Additional, there may be tax ramifications on a state and/or federal level for those companies who fail to register their LLC and/or obtain an EIN.

For numerous reasons, it is important to take care of the LLC formation and getting all of your other organizational documentation and affairs in order before conducting business in Missouri. If you need assistance in setting up or modifying an existing business, LLC, or corporation, please contact one of our lawyers for further assistance.

7.     You must allow customers who are paying through their insurance company the opportunity to cancel the roofing contract within 5 days of receiving acceptance or denial from insurance company.

Contractors have to give customers the opportunity to cancel the roofing contract in the event that the insurance company denies their claim.

The relevant portion of section 407.725.3, R.S.Mo., states:

“A person who has entered into a written contract with a contractor to provide goods or services to be paid under a property and casualty insurance policy may cancel the contract prior to midnight on the fifth business day after the insured party has received written notice from the insurer that all or any part of the claim or contract is not a covered loss under the insurance policy.”

Failure to give the customer the option to cancel the contract will be deemed a violation of the Missouri Merchandising Practices Act. Violations of the Missouri Merchandising Practices Act can come with steep consequences and a serious headache that takes the focus off of running your business.

Please call if you have questions regarding statutory or contractual rights relating to roofing jobs.

Conclusion

This article was intended to inform the general public and roofing contractors about some of the important issues surrounding roofing projects and associated contracts/documentation. The article covered several provisions that should be included in roofing contracts as well as certain acts that are prohibited pursuant to Missouri law.

Specifically, the article discussed:

  1. Not using deductibles as a way to induce roof sales;
  2. Refraining from negotiating or representing customers in the insurance claims process;
  3. Include the statutory mechanic’s lien notice in your contract;
  4. Include an attorney’s fees provision in your contract;
  5. Include an interest provision in your contract for outstanding balances.

For those roofing contractors who follow these suggestions, so long as you are generally complying with OSHA requirements, other general statutes, and otherwise conducting fair business, your approach will comport with best business practices in the roofing industry.

If you need assistance or specific guidance from a Missouri construction law attorney, please do not hesitate to contact us. We offer free consultations and can provide you direction in how to move forward in your case.

Please call us now if you’re looking to learn more about your rights as a contractor.

H-2B Nonimmigrant Program – Frequently Asked Questions

The H-2B Nonimmigrant Program can be greatly beneficial to employers around the United States, but it also has numerous regulations to ensure that employers provide U.S. workers and H-2B workers safeguards and an equal opportunity to work in a safe, healthy and respectable work environment. This post lays out the rules that an employer needs to know in order to comply with the federal laws and regulations governing the employment of nonimmigrant workers.

This website is not intended to serve as legal advice. It is always well-advised to seek the counsel of an experienced attorney to assist you in achieving your desired outcome. No attorney-client relationship is created by viewing or taking information from this website. The choice of an attorney is an important decision and should not be based solely off advertisement. 

General information regarding H-2B Nonimmigrant Employment Program

What is the H-2B Nonimmigrant Employment Program?

This program consists of the hiring of employees outside of the United States by U.S.-based businesses to satisfy workforce needs outside of agricultural work. The Department of Labor describes the H-2B workers as: The temporary employment of foreign workers for seasonal skills in areas other than agriculture

Back to top

What is the Purpose of the H-2B Nonimmigrant Program?

The goal is to find a balance between providing opportunities to U.S. Workers and satisfying the workforce needs of U.S. Employers. The program seeks to give U.S. employees a fair opportunity to find and apply for jobs for which employers are seeking H-2B workers, and at the same time, giving employers the opportunity to hire foreign workers on a temporary basis in the event that U.S. workers are not available.

Back to top

What are the Objectives of the Rules Surrounding the H-2B Program?

The Rules surrounding the H-2B program look to enhance and expand the real-time recruitment efforts of U.S. Workers. This means that employers must first offer U.S. employees job opportunities in certain instances. The rules also establish a national electronic job registry to give U.S. workers better access to job searching tools/facilities. Further, the rules look to fortify worker protections regarding: (a) wages, (b) working conditions, and (c) benefits to all workers, including H-2B and U.S. workers alike, which fall under the protections of the applicable federal regulations. They also establish the prevailing wage methodology for the H-2B program, reinstating the use of employer-provided surveys to set the prevailing wage in certain limited situations

Back to top

What are the Requirements for the U.S. Department of Labor to Issue an H-2B Certification to an Employer?

The U.S. Department of Labor must make certain determinations and findings prior to issuing an H-2B Certification to employers.  The following are some of the requirements:

  1. The Department of Labor must determine that there are not sufficient workers to fulfill the temporary service or labor needs in the area in which the employer is looking to hire; and
  2. The wages and working conditions of U.S. workers cannot be adversely affected by the hiring of H-2B workers.

Back to top

How are the Rules for Employer Requirements and Worker Protections Established?

The U.S. Department of Homeland Security, the Immigration and Nationality Act and Federal regulations relating thereto set forth the Employer requirements and worker protections. In addition to the foregoing bodies of law, the Department of Labor’s Wage and Hour Division controls contracts with employees and the enforcement of laws regarding worker wages.

Back to top

Which Governmental Entity Controls the Issuance of the H-2B Certifications?

The U.S. Department of Homeland Security (DHS) oversees the issuance of H-2B Certifications. Specifically, the U.S. Citizenship and Immigration Services (USCIS) division controls the specifics of the application and certification process.

Back to top

What are the Requirements of an Employer Applicant to Obtain H-2B Certification?

There are a number of requirements an employer must satisfy to be eligible to obtain H-2B Certification. The following are a number of the requirements:

  1. The employer must have a Federal Employer Identification Number (FEIN);
  2. The employer must have a physical location (address—not just a PO Box);
  3. The employer must have contact information through which workers and other can contact the employer regarding employment information/possibilities.

Back to top

What are the Job Categories for H-2B Certification?

There are several types of job categories that an employer seeking to hire under the H-2B certification program, including the following:

  1. Full-Time (this category is for employment of 35 or more hours per week);
  2. Temporary (this category is for employment for a time period of nine months or less, with the exception of one-time occurrences);
  3. Non-Agricultural Employment (within specified areas of intended employment only).

Back to top

What does the Employer have to Establish to Hire for Non-Agricultural Services?

In order to hire for non-agricultural services, the employer must first establish that the need for labor is temporary in nature. This requirement applies whether or not the position is temporary or permanent.

Back to top

How is Temporary Need Established?

An employer can establish temporary need by showing that there is a need for any of the following:

  1. One-Time Occurrence;
  2. Seasonal Need;
  3. Peakload Need; or
  4. Intermittent Need.

Back to top

What is the Maximum Length of Time that a Temporary Need H-2B Employee will be approved?

The maximum amount of time that DHS will approve a temporary need employee is 9 months. There is an exception, however, for One-time occurrence needs, which could be approved for up to 3 years.

Back to top

Where does the Employer submit the H-2B Application?

The employer should submit the H-2B Application (Form ETA-9142B and Appendices) with supporting documentation and a copy of the job order filed with the SWA to the Chicago National Processing Center.

Back to top

Timing

When Should the Employer Begin Registering for the H-2B Application?

The employer seeking to hire under the H-2B visa program should register 120 to 150 days prior to the date that the employer will need the workers. There is a lead time for processing applications, and a number of requirements that must be satisfied prior to approval. Thus, an employer is advised to begin the process as soon as possible to ensure that the workers will be approved in a timely manner.

Back to top

Prevailing Wage Determination

How does an Employer make a Prevailing Wage Determination?

At least 60 days prior to the time the prevailing wage determination is required, an employer can obtain a prevailing wage determination (“PWD”) from the National Prevailing Wage Center (“NPWC”) by submitting an Application for Prevailing Wage Determination (Form ETA-9141).

Back to top

Job Order

When Should the Employer File a Job Order and Submit the H-2B Application?

Approximately 75 to 90 days prior to the date the workers are needed, the employer should file a job order with the State Workforce Agency (“SWA”).

Back to top

What Must be Included in the Job Order?

The Job Order has numerous requirements and must be strictly followed in order for the Employer to obtain the issuance of certification under the H-2B program, including, but not limited to the following:

  1. The qualifications and requirements for the job
  2. The qualifications and requirements must be consistent with the normal and accepted qualifications and requirements imposed by non-H-2B employers in the same occupation and geographic area;
  3. Any minimum productivity standard which the workers must meet in order to retain the job (such standard must be normal and reasonable for non-H-2B employers for the same occupation and geographic area);
  4. Employer is required to offer employment for at least 75% of the workdays for a 12-week period—this requirement is known as the “three-fourths guarantee.”

Back to top

Employment Requirements, Three-Fourths Guarantee, & Termination

When does the “Three-Fourths Guarantee” Work Period Begin?

The period begins on the later of: (a) the first workday after the worker arrives, or (b) the advertised first day of need.

Back to top

When does the “Three-Fourths Guarantee” Work Period End?

The three-fourths guarantee work period ends on the last day of the job order.

Back to top

What Happens if the Employer does not Offer Sufficient Hours to Satisfy the “Three-Fourths Guarantee?”

Regardless of whether the employer offers the worker the sufficient number of hours to satisfy the “three-fourths guarantee,” the employer is still responsible for paying for the time period as if the worker had worked such minimal number of workdays/hours.

Back to top

What are the Employer’s Options if the Services of a Worker are No Longer Required (before the end date listed on the job order)?

The answer of this depends on the reason the employer no longer requires the services of the laborer. If the basis for no longer needing the worker’s services is due to unforeseeable reasons that are beyond the control of the employer, such as those that may fall under a force majeure clause (i.e., Acts of God, fire, weather, riot, man-made catastrophic event, etc.), then the employer may terminate the job order with approval of the Certifying Officer.

Back to top

What if a Termination is Approved?

If termination is approved, the employer must still:

  • Fulfill the three-fourths guarantee up to the time of termination; and
  • Make reasonable efforts to assist the worker in transferring to comparable employment by taking steps such as searching the State Workforce Agencies and/or national job registry.

If the worker is not transferred, the employer must provide the worker return transportation back to the place where the worker came from (which does not include interim employment by the worker). Typically, this would be the country from where the worker came.

Back to top

Payment, Expenses, and Wages

What type of Wages does an Employer have to Offer to H-2B Workers?

The H-2B Program requires employers to promise to offer workers a wage that equals or exceeds the prevailing wage rate, the federal, state, or local minimum wage for the occupation in the area of intended employment during the period of the approved H-2B labor certification.

Back to top

How Frequently does the H-2B Worker Need to Be Paid?

The H-2B workers need to be paid at least every 2 weeks or in accordance with the normal practice in the area of intended employment.

Back to top

What are Reasonable Deductions from a H-2B Worker’s Paycheck?

See 29 CFR Part 531

Back to top

What Costs is the Employer Responsible for with Respect to H-2B Workers?

Employers are responsible for paying for numerous costs and expenses, including the following:

  1. All visa, border crossing, and visa-related expenses to H-2B workers. The employer must pay for these in advance or within the worker’s first workweek.
  2. Inbound transportation and subsistence costs to workers traveling to the employer’s worksite;
  3. Return transportation and daily subsistence.

Back to top

Who is Responsible for Providing the Workers with Equipment and Tools?

The employer is responsible for providing the workers with all equipment, tools, supplies, and materials necessary for the work. Employer is not allowed to charge the workers or require a deposit for such equipment, tools, supplies, or materials.

Back to top

What Types of Payments are Employers Prohibited from taking from Workers?

Employers and their agents are prohibited from any taking any money from workers for activities related to obtaining employment certification. This includes attorney’s or agent’s fees, application fees, DHS petition fees, or recruitment costs. Payment includes, but is not limited to, monetary payments, wage concessions (including deductions from wages, salary, or benefits), kickbacks, bribes, tributes, in-kind payments, and free labor.

Back to top

What are some other Restrictions Regarding Employers Seeking H-2B Certification?

Employers seeking to hire workers under the H-2B certification program have certain limitations on the job that they are offering. The following are some of the Restrictions imposed upon employers seeking H-2B certification:

  1. The job opportunity cannot discriminate based on race, color, national origin, age, sex, religion, handicap, or citizenship.
  2. There cannot be a lockout or strike at any of the employer’s worksites within the area of intended employment.
  3. Employer may not lay off any similarly-employed U.S. employee in the job and intended area of employment within 120 days prior to the end of the job order, unless all H-2B workers are laid off first.
  4. H-2B workers are only permitted to work in the area of employment that is listed on the approved application, unless a new, revised application is obtained from the Department of Labor.
  5. Employers must notify the Department of Labor and Division of Homeland Security of any separation of a worker from a job within 2 days of such separation.
  6. Employer is prohibited from knowingly holding, destroying, or confistcating workers’ passports, visa, or other immigration documents.

Back to top

Documentation Retention by Employer

What Type of Documentation does the Employer have to Keep for the Workers?

Given that this is a federal program, the employer would be wise to keep all documentation related to the worker’s employment. This includes: (a) accurate records of the worker’s earnings, (b) hours of work offered to the worker, (c) hours actually worked by the worker. Each worker must receive a paystub showing hours offered, hours actually worked, hourly rate, and/or piece-rate of pay, and if piece-rate pay, the number of units produced. The paystub must also include total earnings for the pay period and any deductions from the wages.

Back to top

How Long does an Employer have to Retain Documentation Relating to an H-2B Worker?

Employers must retain documentation relating to the H-2B worker, including application and registration documentation, recruitment-related documents, payroll records, and related documents for a period of no less than 3 years.

Back to top

Corresponding Employment

What is a Corresponding Worker?

A corresponding worker is a non-H-2B worker who works for the employer during the period of a job order and who performs substantially the same work included in a job order or substantially the same work as the H-2B workers.

Back to top

What Workers are not Included Under the Definition of Corresponding Workers?

There are two categories of workers who do not fall under the definition of Corresponding Worker:

  1. Incumbent Employees who meet the following requirements:
    1. Had continuous employment with the employer during the 52 weeks prior to the time set forth in the job order; and
    2. Who worked for at least 35 hours per week in at least the last 48 out of 52 workweeks; and
    3. Whose terms and working conditions have been significantly reduced by the employer during the period of the job order.

 

  1. Incumbent Employees covered by a collective bargaining agreement or employment agreement that contains a promise to provide a minimum of 35 hours per week of work and falls under the period of the job order.

Back to top

Recruit Requirements Under the H-2B Program

What are the Requirements for Recruiting Employees under the H-2B Program?

Employers are required to conduct certain recruitment to verify that there are no U.S. workers who are qualified for the position listed in the Application for H-2B Certification. Employers are required to accept referrals from The Office of Foreign Labor Certification (“OFLC”) and the State Workforce Agency (“SWA”) up to and including 21 days prior to the date of need. Both of said organizations will maintain the job posting on their registries, websites, or databases to provide U.S. workers the opportunity to apply for the position with the employer.

Back to top

On what grounds can an Employer Reject the hiring of a Qualified U.S. Worker Applicant?

The employer must hire qualified U.S. applicant workers who are available during the period of the job order, unless the employer has lawful, job-related reasons.

Back to top

What types of Interviews Can the Employer Conduct?

The Employer wishing to interview U.S. workers must conduct interviews by phone or provide a procedure for interviews to be conducted in the location where the worker is being recruited. The idea is to prevent the worker from incurring costs associated with the interview. The employer is not allowed to give preferential treatment to any H-2B worker as compared to any U.S. worker.

Back to top

How does the Employer Demonstrate Compliance with Recruitment Requirements?

At the conclusion of the recruitment process, the employer must prepare a document called a recruitment report. The document will outline several items, in accordance with 20 CFR § 655.48, including the following:

  1. The names and contact information of all U.S. applicants, whether they were offered a position or rejected, and
  2. The lawful, job-related reasons for any rejections.

The employer must continue to supplement the report and maintain an updated version up to and including 21 days from the date of the need. Further, employers are responsible for advertising the position as described in further detail below.

Back to top

What Advertising is required for Employer’s Seeking Workers through the H-2B Program?

The employer is required to obtain an advertisement on two separate days, which may be consecutive, one of which must be a Sunday, in a newspaper of general circulation. The advertisement must be located in the area where the employment is intended and must be appropriate to the occupation and the workers that are likely to apply for the position. Newspaper advertisements must satisfy requirements described in 20 CFR § 655.41.

The employer is required to keep copies of the newspaper pages (with date of publication and full copy of the advertisement), or other proof of publication furnished by the newspaper, which is consistent with the document retention requirements set forth in 29 CFR 503.17.

Back to top

What Does the Employer’s advertising for the H-2B Program have to Include?

All advertising by the employer regarding the open position must include:

  1. The employer’s name and contact information;
  2. The geographic area of intended employment with enough specificity to apprise applicants of any travel requirements and where applicants will likely have to reside to perform the job;
  3. A description of the job sufficient to apprise workers of the services that will be performed, as well as minimum education requirements, work hours/days, and anticipated start and end dates;
  4. A statement that the position is temporary or full-time, including total number of openings the employer intends to fill;
  5. A statement as to overtime pay, if applicable, and the amount of such pay;
  6. A statement that on-the-job training will be provided, if applicable;
  7. The wage the employer is offering;
  8. Any board or lodging provided by the employer or employer will assist in securing, if applicable;
  9. A list of all deductions from worker’s paycheck that are not required by law;
  10. A statement that transportation and subsistence from the place where the worker has come to work for the employer to the place where the worker will work for the employer will be provided;
  11. A statement that work tools, supplies, and equipment will be provided to the worker free of charge, if applicable;
  12. A statement that daily transportation will be provided to and from the worksite by the employer, if applicable;
  13. A statement summarizing the three-fourths work guarantee; and
  14. A statement directing applicants to apply at the nearest office of the SWA, SWA’s contact information, and job order number, if applicable.

Back to top

Construction Terms Glossary with Missouri References

This is a basic glossary of commonly used terms in the construction world. The descriptions and definitions were not meant to be comprehensive but rather a summation of a number of fairly complex terms and concepts.

The Missouri law cited throughout this article may not be the most up-to-date information available. It is always advised to consult with an attorney or keycite the referenced case(s) or laws to confirm that the law is in fact authoritative.

This article was strictly intended to be a resource for Missouri contractors and the general public who are interested in learning more about construction law in Missouri.

1.     All-Risk Builders’ Risk Insurance

All-Risk Builders’ Risk Insurance is a type of insurance that is designed to account for a number of occurrences that cause damage to the building, usually including machinery, equipment, materials, supplies, and fixtures that are appurtenant to the structure. This usually does not include insurance coverage defective work (but oftentimes will for ensuing damages).

When referring to all-risk insurance, there’s a “general understanding…that ‘recovery under an ‘all-risk’ policy will, as a rule, be allowed for all fortuitous losses not resulting from misconduct or fraud, unless the policy contains a specific provision expressly excluding the loss from coverage.’” Missouri Commercial Inv. Co. v. Employers Mut. Cas. Co., 680 S.W.2d 397, 400 (Mo. Ct. App. 1984)(citing 13A G. Couch, Cyclopedia of Insurance Law § 48:141 at 139 (R. Anderson 2d ed. 1982). See also : Annot., 88 A.L.R.2d 1122, 1125 (1963)).

Back to top

2.     Arbitration

A form of alternative dispute resolution that is used as a vehicle for resolving disputes on a construction project or with a construction contract (though not specifically limited to construction disputes), in which an arbitrator is chosen and decides the matter. Often times the evidentiary and procedural standards are more lenient in an arbitration as compared to a case that is litigated through the court system. This also typically saves the parties money as the case is expedited and does not typically demand the heavy motion and discovery process involved in a formal court proceeding.

Back to top

3.      Architect

An architect is a person who is licensed by the Missouri Division of Professional registration (in Missouri) to practice architecture. Typically, to qualify for the licensing application, an architect must have a degree in Architecture from a school or university that is accredited by the National Architecture Accrediting Board.

The architect usually facilitates the completion of the project by performing an evaluation of the project requirements and communicating with the general contractor to ensure that the work is performed in compliance with the specifications.

The architect is also usually in the best position to communicate with the general contractor regarding such matters as the architect is often responsible for preparing the specifications and designs.

On certain projects the architect will also be involved with evaluating pay applications or working with the owner or its representative to ensure that proper payment is made.

Back to top

4.     At-Will Employment

A type of employment in which an employer can terminate the employee at any time. The employer does not have to have reason for the termination.  Equally, the employee does not have an obligation to stay with the company and can leave at any time.

In most cases, when engaged in an employment-at-will relationship, the employer can terminate the employee for virtually any reason.

However, in Missouri there are certain safeguards. The Missouri Human Rights Act, section 213.055, states: It shall be an unlawful employment practice: “For an employer, because of the race, color, religion, national origin, sex, ancestry, age or disability of any individual: (a) To fail or refuse to hire or to discharge any individual…” R.S.Mo. § 213.055.

Back to top

5.     Bid

A formal offer to a general contractor or the owner to perform certain work set forth in the contract, its terms and conditions, specifications, and any other documents incorporated therein.

On a construction project, the bid would typically require the bidder to furnish all labor, materials, and other necessaries on the project and reach substantial completion in the time prescribed in the contract documents.

Back to top

6.     Bid Bond

A bid bond is a type of bond the ensures that the contractor will perform the specified work at the bid price. Once the contractor secures the job by entering into a contract with the owner, the contractor and surety are absolved from duties to satisfy the contractor’s inability to carry out the bid. At that time, the contractor is typically required to purchase a payment and performance bond, which would be the party responsible for making payment in the event of any subsequent failure to carry out the terms and conditions of the contract.

Bid bonds are required on a number of public projects in Missouri. For example, in Missouri the statute requires 10% down or requires a bid bond “[w]henever it shall be ordered by the county commission, township board or district commissioner, as the case may be, that any road, bridge or culvert in the county be constructed, reconstructed or improved or repaired by contract, and the engineer’s estimated cost thereof exceeds the sum of five hundred dollars…”

The specific statute is R.S.Mo. § 229.050, and with respect to the aforedescribed requirements of 10% or a bid bond, states the following, in pertinent part:

“All bids shall be accompanied by a certified check equal to ten percent of the engineer’s estimate of cost, payable to the county treasurer, to the use of the county, township or road district, as the case may be, or a bidder’s bond executed by some surety company authorized to do business in this state or other good and sufficient surety in a like sum shall be given, as a guarantee on the part of the bidder that if his bid be accepted he will, within ten days after receipt of notice of such acceptance, enter into contract and bond to do the work advertised, and in case of default forfeit and pay sum of ten percent of the engineer’s estimate of cost.” R.S.Mo. § 229.050.3

In the State ex rel. Missouri State Highway Comm’n v. Hensel Phelps Const. Co., the Missouri Supreme Court case cited a California case to express its rationale in determining that a contractor can rescind a bid and be relieved from the obligation to perform on the project:

There is a difference between mere mechanical or clerical errors made in tabulating or transposing figures and errors in judgment, as, for example, underestimating the cost of labor and materials. (Emphasis added) The distinction between the two types of errors is recognized in the cases allowing rescission and in the procedures provided by the state and federal governments for relieving contractors from mistakes in bids on public work. (Citations omitted) Generally, relief is refused for error in judgment and allowed only for clerical or mathematical mistakes. (Citations omitted) Where a person is denied relief because of an error in judgment, the agreement which is enforced is the one he intended to make, whereas if he is denied relief from a clerical error, he is forced to perform an agreement he had no intention of making. State ex rel. Missouri State Highway Comm’n v. Hensel Phelps Const. Co., 634 S.W.2d 168, 171 (Mo. 1982)(citing M. F. Kemper Construction Co. v. City of Los Angeles, 37 Cal.2d 696, 235 P.2d 7 (1951).

The Court in State ex rel. Missouri State Highway Comm’n v. Hensel Phelps Const. Co. stating that “[i]f a contractor is allowed to rescind its bid, the bid bond would be cancelled. Certainly, the state may not require forfeiture of the bid bond either as a penalty or liquidated damages if the contractor has no legal obligation to fulfill its bid.” State ex rel. Missouri State Highway Comm’n v. Hensel Phelps Const. Co., 634 S.W.2d 168, 171 (Mo. 1982).

The Court went on to perform an analysis to determine whether the contractor had a right to rescind its bid. The Missouri Supreme Court ultimately deferred to the decision reached by the jury, which was in favor of the Missouri commission.  The ultimate legal holding by the Missouri Supreme Court was that the contractor could not rescind the contract based on a unilateral mistake and therefore could not avoid forfeiting the bid bond to the Commission.

Back to top

7.     Bid Documents

The bid documents is a general term used to describe the bid package prepared by a contractor in an effort to secure a construction contract.

Some of the documents that may be included in the bid documents include, but are not limited to:

  • An invitation to bid
  • Bid sheets
  • Bidder’s Questionnaire regarding experience
  • Proof of Financial Responsibility or ability to obtain adequate insurance/bonding
  • Bid instructions
  • Bid Schedule
  • Contract
  • Specifications incorporated into the contract
  • Addenda
  • Any documentation incorporated into the contract
  • Any documentation that would modify amount of time or price of project

Back to top

8.    Bid Peddling

Bid peddling is when a subcontractor, who was not the lowest bidder after the first round of bidding, offers a lower bid price to secure the award of the contract from the general contractor.

Bid peddling is when subcontractors will offer to perform the work for a lower amount contractor a lower amount than their original bid to secure the award of the contract from the general contractor. Usually the general contractor may entertain these subsequent bids to create cost savings for the general contractor, but bid peddling, in some cases, can also save the general contractor money.

Bid peddling is a practice that is not encouraged and could subject those implementing such practices to potential liability. Accordingly, it is good practice to simply move onto the next project and avoid interference or some type of tortious interference claim against you.

Back to top

9.    Bid Rigging

Bid rigging occurs when contractors conspire by submitting their bids in a manner aimed at driving up or rigging the bid to increase the amount that the lowest bidder submits and is thereby awarded. This type of behavior is unethical in that it is conspiring with other contractors to manipulate the system.

Back to top

10.  Bid Shopping

Bid Shopping is when the general contractor receives the first round of bids and takes those bids to the other bidding subcontractors to leverage lower bids from those subcontractors. In extreme circumstances, a contractor or subcontractor may try to create a bidding war between the other bidders to drive down the price by creating a competitive dynamic between them.

“Bid shopping occurs when a general contractor solicits estimates from specialty contractors to compute his lump sum bid and then, after being awarded the contract, again canvasses the specialty contractors in an effort to obtain prices lower than those previously given. This practice may deprive the specialty contractors who strove to be the first round low bidders from receiving the work after the wheeling and dealing in the second round. Moreover, the general contractor realizes savings rather than the owner, unless the general contractor lowered his initial bid anticipating that he could procure the specialty work at less than the estimated prices. Further, fierce competition in the second round may result in underbidding by the specialty contractors and consequent shoddy work as they attempt to keep costs within their bid.” Nash, Jr. and Love, Jr., Innovations in Federal Construction Contracting, 45 Geo. Wash. L. Rev. 309, 315 (1977).

Back to top

11. Boilerplate Provisions

Boilerplate provisions are what the average person might refer to as the fine print. Boilerplate provisions are those provisions which appear to be “form” provisions that are typical in most contracts.  Oftentimes boilerplate provisions are found at the end of the project.

If you’d like to learn more about boilerplate provisions, you should read this short article discussing terms that should be in every contract.

Back to top

12. Breach of Contract

“To recover for breach of contract [in Missouri], a plaintiff must plead the following elements: (1) the existence of an enforceable contract between the parties to the action; (2) mutual obligations arising under its terms; (3) the party being sued failed to perform obligations imposed by the contract; and (4) the party seeking recovery was thereby damaged.” Jackson v. Williams, Robinson, White & Rigler, P.C., 230 S.W.3d 345, 348 (Mo. Ct. App. 2007) (citing Superior Ins. Co. v. Universal Underwriters Ins. Co., 62 S.W.3d 110, 118 (Mo.App. S.D.2001)).

Back to top

13. Certificate of Inspection

In the vast majority of municipalities in St. Louis, Missouri a certificate of inspection must be obtained prior to occupying or renting a structure.

The St. Louis municipal code makes it an ordinance violation if a certificate of inspection is not obtained prior to occupying or renting:

“It shall be unlawful for any person, firm, partnership, corporation, or any other legal entity to occupy or permit the occupancy for any purpose or collect the rent of any occupied dwelling unit when a complete change of occupancy has occurred without first securing a Certificate of Inspection for said dwelling unit.”

Who is responsible for obtaining the certificate of inspection in St. Louis City?

“It is the responsibility of the owner or grantee to secure a Certificate of Inspection. It shall be the responsibility of the owner or the owner’s agent and/or the tenant to provide access to all applicable areas subject to inspections as provided in this chapter.”

St. Louis City Municipal Code – 25.56.040 – Certificate of Inspection requirements.

Back to top

14. Certificate of Occupancy

A certificate of occupancy is issued by a building inspector when the structure satisfies the necessary code requirements for the locality. The certificate of occupancy is typically required prior to allowing individuals to legally reside or utilize such structure.

In Creve Coeur, Missouri, there are a number of requirements prior to obtaining a temporary certificate of occupancy. The City of Creve Coeur as well as the fire department are required to issue the partial certificate of occupancy, requiring the following to be satisfied:

  • St. Louis County mechanical, electrical, plumbing and heath inspections or specific approval of each of these inspectors to allow temporary occupancy
  • Emergency egress lights and exit signs
  • Emergency operation of elevators
  • Egress doors on hold open devices
  • Egress doors utilizing special locking arrangements and/or access-control devices
  • Any atrium smoke-control or removal system
  • Fire protective signaling system
  • Smoke and HVAC detectors
  • Fire sprinkler system
  • Any other fire suppression system
  • All fire resistance rated fire separation assemblies
  • All components comprising of means of egress
  • All other building construction per all building permits
  • Emergency generators

The above requirements are merely the requirements necessary to qualify for a temporary in certificate of occupancy in the Creve Coeur area. Each municipality has its own requirements to qualify for such certificate.

Back to top

15. Certificate of Substantial Completion

A certificate of substantial completion is a certificate issued by the architect designating the project as substantially complete. Substantial completion can assume a wide array of meanings depending on the contractual language and the nature of the project being performed.

However, the typically accepted, case law definition of substantial completion in Missouri is the following:

“[A] building is substantially complete so as to entitle the contractor to the full contract price when it has reached the state of its construction so that it can be put to the use for which it was intended.” L.L. Lewis Const., L.L.C. v. Adrian, 142 S.W.3d 255, 260 (Mo. Ct. App. 2004).

Back to top

16. Code of Federal Regulations (CFR)

The Code of Federal Regulations often assists in fleshing out the specifics of many federal statutes as well as its own standalone rules.

The Code of Federal Regulations are divided into 50 general titles which are each broad categories. Each of these broad categories are updated once a year on a staggered basis.

A number of OSHA regulations are set forth in the Code of Federal Regulations. Additionally, the Code of Federal Regulations has a vast number of regulations governing the Housing and Urban Development as well as the construction of manufactured homes and the safety standards related thereto.

Back to top

17. Code of State Regulations (CSR)

The Missouri Code of State Regulations contain a number of regulations that articulate many Missouri statutes and establish a framework of rules to assist in the administration of various matters within the state.

One specific example of a regulation that is commonplace in many government funded construction projects is Division 30 of the Rule of the Office of Administration. Chapter 5 of said Division creates Minority Business Enterprises (MBEs) and Women Business Enterprises (WBEs). Various governmental funding programs use tax credits and other incentives to promote the use of MBEs and WBEs on publicly funded projects.

Back to top

18. Change Order

A change order is a modification to the contract. Typically a change order is written and signed by the owner and architect (if an architect is on the project).  However, in Missouri, an oral change order is typically enforceable so long as the contractor and owner have mutually agreed upon the terms.  In the event that they did not, then the contractor may still have recourse by virtue of its equitable remedies such as quantum meruit and unjust enrichment.

Back to top

19. Clean Air Act

The Clean Air Act regulates air emissions and is set forth under

42 U.S.C. §7401 et seq. “The Clean Air Act (the Act) was enacted by the United States Congress on December 17, 1963. With the Clean Air Amendments of 1970, Congress enacted a comprehensive national program that made the federal government partners with the states in the fight against air pollution, requiring the Environmental Protection Agency (the EPA) Administrator to promulgate national ambient air quality standards (NAAQS) for certain pollutants.” Friends of Agric. for Reform of Missouri Envtl. Regulations v. Zimmerman, 51 S.W.3d 64, 66 (Mo. Ct. App. 2001)(citing General Motors Corp. v. U.S., 496 U.S. 530, 532–33, 110 S.Ct. 2528, 2530, 110 L.Ed.2d 480 (1990)).

Generally, the Federal Clean Air Act preempts the Missouri air conservation commission from enacting laws that have already been covered by U.S. Congress in the Federal Clean Air Act. “The Commission continues to have rulemaking authority to regulate Missouri air quality in all ways, and in all areas, not covered by the federal Clean Air Act.” Friends of Agric. for Reform of Missouri Envtl. Regulations v. Zimmerman, 51 S.W.3d 64, 80 (Mo. Ct. App. 2001).

Back to top

20. Clean Water Act

The Clean Water Act regulates the discharge of contaminants and pollutants into stormwater and wastewater systems in the United States. The Clean Water Act is set forth under 33 U.S.C.A. §§ 1251 et seq. (1981).

Missouri has its own parallel law called the Missouri Clean Water Law, which is set forth under R.S.Mo. § 644.006 et seq.

The policy of the Missouri Clean Water Act is set forth under R.S.Mo. § 644.011 and states the following, in pertinent part:

“it is hereby declared to be the public policy of this state to conserve the waters of the state and to protect, maintain, and improve the quality thereof for public water supplies and for domestic, agricultural, industrial, recreational and other legitimate beneficial uses and for the propagation of wildlife, fish and aquatic life; to provide that no waste be discharged into any waters of the state without first receiving the necessary treatment or other corrective action to protect the legitimate beneficial uses of such waters and meet the requirements of the Federal Water Pollution Control Act…” R.S.Mo. § 644.011

Back to top

21. Commercial General Liability Insurance (CGL)

Commercial General Liability Insurance is a type of insurance that typically covers bodily injury and damage caused to property. The Missouri Court of Appeals describes the intent of Commercial General Liability Insurance policies: “to protect against the unpredictable and potentially unlimited liability that can result from accidentally causing injury to other persons or their property.” Am. States Ins. Co. v. Mathis, 974 S.W.2d 647, 649 (Mo. Ct. App. 1998)(citing Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 74, 78 (Mo. banc 1998)).

The Court of Appeals goes further to make a distinction, indicating what commercial general liability insurance policies are not:

A commercial general liability policy is not intended to protect business owners against every risk of operating a business. Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 74, 78 (Mo. banc 1998)).

“Business risks are those risks that are the ‘normal, frequent, or predictable consequences of doing business, and which business management can and should control and manage.’ ” Columbia Mut. Ins. Co. v. Schauf, 967 S.W.2d 74, 78 (Mo. banc 1998)(quoting James T. Hendrick & James P. Wiezel, The New Commercial General Liability Forms—An Introduction and Critique, 36 F ed’n Ins. & Corp. Couns. Q. 319, 322 (Summer 1986)).

“It is not the function of the CGL policy to guarantee the technical competence and integrity of business management. The CGL policy does not serve as a performance bond, nor does it serve as a warranty of goods or services. It does not ordinarily contemplate coverage for losses which are a normal, frequent or predictable consequence of the business operations. Nor does it contemplate ordinary business expense, or injury and damage to others which results by intent or indifference.” Hendrick & Wiezel, supra, at 322 n. 6 (quoting George H. Tinker, Comprehensive General Liability Insurance—Perspective and Overview, 25 Fed. Ins. Couns. Q. 217, 224 ((Spring 1975)). Am. States Ins. Co. v. Mathis, 974 S.W.2d 647, 649 (Mo. Ct. App. 1998).

Back to top

22. Completed Operations Liability Insurance

Completed Operations Liability insurance is a type of insurance coverage for an employer or construction company that protects said entity from liability that arises out of injury or damage that occurs after the operations are completed. Typically operations are considered “completed” under completed operations liability insurance policies once the employer or construction company completes the work in accordance with that set out in the contract.

Back to top

23. Completion Bond

In Missouri a completion bond is used interchangeably with a performance bond. A performance bond is often required on construction projects to ensure the completion of the performance of the contractors.

For example, if a subcontractor hired by the general contractor goes bankrupt, the general contractor can call on the surety who issued the performance bond to pay for the new subcontractor to come in and complete the work.

Back to top

24. Contract

A contract is typically composed of an exchange of promises between parties which is supported by legal consideration. A contract usually contains a promise, offer, and acceptance. Consideration is sometimes referred to as a bargained-for exchange.

Contracts in Missouri are enforceable whether they are oral or written.

However, it is always good practice to reduce the terms of an agreement to writing. It helps to avoid future confusion and reflects the true terms of the contract.

Back to top

25. Corporation

A corporation is an entity that is created pursuant to statute that is recognized as a legal entity. Corporations are governed by Chapter 351 of the Missouri Revised Statutes. Corporations differ from limited liability companies in that corporations (when referring to c-corporations) are double-taxed.  Corporations usually act as a shell or veil for the shareholders and officers unless certain acts are employed which would be ultra vires (acts outside the scope of the authority granted to agents of the corporation).

In Missouri, a corporation is treated as a separate legal entity from the shareholders who make up the ownership of the corporation. Thus, a corporation’s actions will not typically subject the shareholders to civil liability unless those actions are criminal or ultra vires, as noted above.

Back to top

26. Cost Proposal

A cost proposal is a document that is submitted by a contractor or subcontractor to the owner or general contractor for approval or denial of a certain scope of work on the project.  The cost proposal contains the projected costs that the subcontractor or contractor is requesting for that portion of the work.

Back to top

27. Critical Path Method (CPM)

The United States Court of Claims defined the critical path method as:

Essentially, the critical path method is an efficient way of organizing and scheduling a complex project which consists of numerous interrelated separate small projects. Each subproject is identified and classified as to the duration and precedence of the work. (E.g., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion of the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire project will be delayed. These latter items of work are on the “critical path.” A delay, or acceleration, of work along the critical path will affect the entire project.

Haney v. United States, 676 F.2d 584, 595 (Ct. Cl. 1982).

Back to top

28. Davis-Bacon Act

The Davis-Bacon Act is a federal law that governs construction projects that are federally funded or assisted and requires the local prevailing wage to be paid to the workers on the project.

Back to top

29. Design/Build Contract

A design/build contract is a contract where the owner hires a general contractor to provide a team of workers to carry out the entirety of the project. In order to carry out these projects, the general contractors are responsible for providing engineers, architects, and other construction professionals to carry out the various tasks required on the project.

In Missouri, pursuant to the Metropolitan sewer district statute, R.S.Mo. § 249.425, a design-build contract is defined as: “a contract between a sewer district and a designbuild contractor to furnish the architecture, engineering, and related design services, and the labor, materials, and other construction services required for a specific construction project.” . R.S.Mo. § 249.425 (2011).

Pursuant to R.S.Mo. § 67.5070, wastewater or water treatment projects, a design-build contract is defined as “any contract that furnishes architecture or engineering services and construction services either directly or through subcontracts.” R.S.Mo. § 67.5070 (2016).

Under Missouri Statutes, Chapter 327, Architects, Engineers, Land Surveyors and Landscape Architects, a design-build contract is defined as “a contract between the owner, owner’s agent, tenant, or other party and a design-build contractor to furnish the architecture, engineering, and related design services, and the labor, materials, and other construction services required for a specific public or private construction project.” R.S.Mo. § 327.465 (2002).

Back to top

St. Louis Business Litigation Lawyer

Business and Commercial Litigation

Litigating a business dispute can often get messy.

In many instances businesses or commercial entities litigate over disputes or issues that often arise from the obligations or duties set forth in the contract between the parties.

These contracts often involve a lot of money, and in many cases a number of parties could be involved, especially when the transaction involves commercial entities.

We have sorted through some incredibly complex cases, and our attorneys know the procedure and the caveats of trying commercial litigation cases.

Our litigation attorneys represent a number of participants in the commercial context, including:

  • borrowers,
  • lenders,
  • suppliers,
  • vendors,
  • purchasers
  • collection agencies,
  • other law firms,
  • manufacturers,
  • limited liability companies,
  • distributors,
  • corporations
  • other commercial entities.

Success in Litigation Comes from Preparation

So how do our attorneys obtain a successful outcome for our clients?

While the outcome of a case can never be guaranteed, we understand the importance of preparing for trial and the advantages of using every tool at our disposal.

Long before the jury is called in, lawyers are battling intensely in the trenches.  This includes discovery strategy, motion work, and any other litigation tactics you can implement into the case.

The attorney who prepares the most and dominates the discovery and motion phases of the case lays the groundwork for success at trial.

Success in the motion phase of the litigation gives the attorney and his client the opportunity to better proceed with their case because they will be able to introduce evidence without a problem or even win the case summarily in some instances.

Regardless, the discovery phase and motion work allow the attorneys to create leverage for their client or require the opposing side to produce evidence or admissions that can change the posture of the case.

Discovery documents and information are used as evidence. 

The important and relevant information (and documentation) obtained during the discovery phase of the litigation is used at the trial.

Without conducting discovery, the parties may be left with some unwanted surprises at trial.  For that reason, it is important to leave no stone unturned by thoroughly propounding discovery on the opposing party.

Motion Practice

Motions give the attorney the ability to limit the other side’s ability to present evidence or to limit the issues the opposition plans to argue.

There are thousands of types of motions that can be filed throughout the course of a case. A good attorney will learn the background and preferences of the judge to determine whether a motion is worth filing and whether that motion will be fruitful.

In circumstances where the motion will merely annoy the judge or will not accomplish any real objective, the attorney is best advised to refrain from preparing and filing such a motion—for several reasons, it saves the client money, and the attorney does not go into the courtroom to argue a losing motion.

Some lawyers have the philosophy that if you lose one motion, you are now associated as a loser in the eyes of the judge.

Those same attorneys believe you should only proceed with a motion if you believe there is a high probability for success. Otherwise, you are setting yourself up for failure in several other aspects of your case.

Conclusion

There are obvious advantages that accompany a knowledgeable and well-prepared attorney. As discussed above, adequate preparation and an aggressive, thought-out pre-trial strategy can be critical to the client’s success.

Our attorneys know how to prepare, and we’ll be intimately familiar with the facts and legal issues surrounding your case, and we’ll employ vigorous litigation techniques to defend the rights of your business.

If you have a dispute that arises out of a commercial transaction, and you need legal assistance, our attorneys are more than happy to advise or litigate, whatever the situation necessitates.

Please contact us today to discuss how to proceed.

Missouri Mechanic’s Liens: Determining the Last Day Work was Performed

A mechanic’s lien must be filed within the time prescribed by statute, or it will not be valid.

So, how long does a contractor performing work in Missouri have to file a mechanic’s lien?

R.S.Mo. § 429.080 governs the time in which a mechanic lien must be filed and states, in pertinent part, that it must be filed: “[w]ithin six months after the indebtedness shall have accrued …” R.S.Mo. § 429.080 (2014) (emphasis added).

Thus, the next logical question is, when does the indebtedness accrue?

“The date the ‘indebtedness has accrue[s’] is the last day work was performed…When a job is finished and indebtedness has accrued is a question of fact.” Midwest Floor Co. v. Miceli Dev. Co., 304 S.W.3d at 247.

When is Work Lienable?

It is important to recognize the rigidity of the deadline as a contractor could be precluded from filing a mechanic’s lien if it is not timely filed.  The right and power to file a mechanic’s lien is created by statute, and thus the “lien claimant must substantially comply with statutory requirements.Midwest Floor Co. v. Miceli Dev. Co., 304 S.W.3d 243, 246 (Mo. Ct. App. 2009.

Accordingly, a contractor should know exactly what Missouri uses as the last day that work is performed. “If labor is performed after it is accepted as substantially complete under the contract, the work will not be lienable. See S & R, 610 S.W.2d at 694 (holding that if labor is done after the owner accepts the work as substantially complete under the contract, the work will not be lienable).” Brown v. Davis, 249 S.W. 696, 698 (Mo.App.St.L.1923).

“A subcontractor cannot, after the termination of an account, extend the mechanic’s lien filing time by rectifying some fault of his in performing the contract.” S & R Builders & Suppliers, Inc. v. Marler, 610 S.W.2d 690, 693 (Mo. Ct. App. 1980).

Last Day Work was Performed Case Summaries

The following is directly quoted from Manning Const. Co. v. MCI Partners, LLC, 419 S.W.3d 134, 139 (Mo. Ct. App. 2013) regarding that last day work is performed and is organized to facilitate legibility:

  • See, e.g., United Petroleum, 218 S.W.3d at 482 (“work performed by a subcontractor that is not intended to simply extend the mechanic’s lien account filing time but is necessary to complete the project in a workmanlike manner operates to extend the lien deadline if it is reasonably within the purview of the original contract” (emphasis added));
  • E. Birk & Son Plumbing & Heating, Inc. v. Malan Constr. Co., 548 S.W.2d 611, 616 (Mo.App.1977) (finding that later work extended lien-filing deadline where “[i]t cannot be denied that this work was essential for the completion of the project, and was not performed for the mere purpose of preserving a mechanic’s lien, but, rather, was reasonably within the purview of the original contract”);
  • Brown v. Davis, 249 S.W. 696, 697–98 (Mo.App.1923) (“It could not be said as a matter of law that the plaintiff performed the [later] work … merely for the purpose of extending the time for filing his lien …”);
  • Badger Lumber Co. v. W.F. Lyons Ice & Power Co., 174 Mo.App. 414, 160 S.W. 49, 53 (1913) (affirming trial court’s holding that later supply of materials to construction project extended deadline for lien filing as to earlier-supplied materials, where “the court, in its findings of fact, states that these items were not charged to the account by appellant for the purpose of extending the time for filing its lien, but were sold in good faith for the purpose of being used, and the same were used, in the construction of the building in question”);
  • Fire Extinguisher, 65 S.W. at 323 (noting evidence that “the [later] work done by the plaintiff … was not a mere scheme on its part to extend the period for filing the lien,” and that owner’s knowledge of, and acquiescence in, later work was “not [intended] as making a new contract for extending the period of limitations”);
  • see also School Dist. of Univ. City ex rel. H & M Mech. Corp. v. Reliance Ins. Co., 904 S.W.2d 253, 256 (Mo.App.E.D.1995) (applying mechanic’s-lien principles to suit on construction performance bond; “Where the reason for the furnishing of small additional items is only to circumvent the notice provision, the time for filing will not be extended.”).

Manning Const. Co. v. MCI Partners, LLC, 419 S.W.3d 134, 139 (Mo. Ct. App. 2013).

Can a Tenant Subject a Landlord’s Property to a Mechanic’s Lien in Missouri?

In the late 70’s and 80’s, there were a number of cases that came down addressing and analyzing a situation where tenants entered into a contract for improvements to the real property and subjected, or almost subjected (depending on how the court ruled), the landlord’s property to a mechanic’s lien.

The analysis at that time hinged greatly upon whether an agency relationship existed and whether the landlord bestowed sufficient authority upon the tenant for the tenant to be able to subject the property to a mechanic’s lien.

Several cases articulated various principles, essentially holding that such a determination required more than just a landlord-tenant relationship:

“[t]he fundamental principle is that the ‘mere relation(ship) of landlord and tenant does not in itself create an agency in the tenant within the meaning of the statutes covering mechanic’s liens.’” Paul A. Medley, Inc. v. Money Town, Inc., 581 S.W.2d 46, 49 (Mo. Ct. App. 1979)(quoting Sol Abrahams & Son Const. Co. v. Osterholm, 136 S.W.2d 86, 92 (Mo.App.1940); Ward v. Nolde, 259 Mo. 285, 168 S.W. 596, 600 (1914); McGuinn v. Federated Mines and Milling Co., 160 Mo.App. 28, 141 S.W. 467, 468 (1911)).

“A corollary principle is that the mere fact that the landlord or lessor consented to the lessee’s making of alterations for the Lessee’s convenience does not create an agency for purposes of the lien.” Paul A. Medley, Inc. v. Money Town, Inc., 581 S.W.2d at 49 (citing Ward v. Nolde, 259 Mo. 285, 168 S.W. 596, 600 (1914); Curtin-Clark Hardware Co. v. Churchill, 126 Mo.App. 462, 104 S.W. 476, 477 (1907); Winslow Bros. Co. v. McCully Stone Mason Co., 169 Mo. 236, 69 S.W. 304, 305 (1902)).

The cases point to the importance of the contractual language between the landlord and the tenant.  “For an agency to exist that would allow the tenant to encumber the interest of the landlord in the property, a right ‘must spring from (the) contract, express or implied, between the tenant and landlord.’” Paul A. Medley, Inc. v. Money Town, Inc., 581 S.W.2d at 49 (citing Powell v. Reidinger, 234 S.W. 850, 852 (Mo.App.1921)).

However, in order for a contractor to have a lien, the Court of Appeals, in the Paul A. Medley case held that the landlord must have some intent in requiring that the tenant make some alterations which amount to a “permanent and substantial benefit to the leasehold.” Id.

“In Messina,…the court summarized certain principles that have developed in determining whether a lessee is the agent of the lessor so as to impress the lessor’s interest with a lien. Those principles are as follows:

(a) mere relationship of lessor lessee does not create agency;

(b) at the time of the execution of the lease the lessee must be obligated to make the changes or improvements;

(c) the improvements must be of substantial and permanent benefit to the leasehold;

(d) mere consent by lessor allowing change or improvements is insufficient; and

(e) in ascertaining the requisite intent, both the lease instrument and the whole of the circumstances may be considered.” Bates v. McKay, 724 S.W.2d 565, 571 (Mo. Ct. App. 1986)(citing Messina Brothers Construction Co. v. Williford,630 S.W.2d 201, 210 (Mo.App.1982)).

“In determining whether the improvements were of permanent and substantial benefit to the leasehold, it is appropriate to consider the improvement in question in relation to the size of the building, whether the improvements substantially altered the character of the premises, and the value to the lessor.” Bates v. McKay, 724 S.W.2d 565, 572 (Mo. Ct. App. 1986)

(citing Paul A. Medley, Inc. v. Money Town, Inc., 581 S.W.2d 46, 49 (Mo.App.1979)).

These factors are important because they weigh the interests of the general contractor and the owner of the property in an attempt to arrive at the most equitable outcome. The underlying principle is that Missouri courts seek to determine whether the burden of payment (or loss of payment) should fall on the owner or general contractor in an effort to reduce or prevent any unjust enrichment to the parties involved.

Conclusion Regarding Tenant’s Ability to Subject a Landlord’s Property to a Mechanic’s Lien in Missouri

The answer to whether a tenant can subject a landlord’s property to a mechanic’s lien is very fact intensive.  As explained above, there are a number of factors that are weighed before a court will make a determination regarding whether the tenant was deemed an agent for purposes of subjecting the landlord’s property to a valid mechanic’s lien. If you find yourself in a similar situation involving the filing or necessary removal of a mechanic’s lien, please contact one of our experienced attorneys to advise you of your rights.

Elements of the Missouri Merchandising Practices Act

Elements of the Missouri Merchandising Practices Act

Definitions of Unlawful Acts under the Missouri Merchandising Practices Act

Definitions of Unlawful Acts under the Missouri Merchandising Practices Act

Unlawful Act or Practice

Definition

Authority

Deception

“Deception is any method, act, use, practice, advertisement or solicitation that has the tendency or capacity to mislead, deceive or cheat, or that tends to create a false impression.–Reliance, actual deception, knowledge of deception, intent to mislead or deceive, or any other culpable mental state such as recklessness or negligence, are not elements of deception” 15 CSR 60-9.020

Fraud

“It is a misrepresentation for any person in connection with the advertisement or sale of merchandise to make any fraudulent assertion. — An assertion is fraudulent if the person intends his/her assertions to induce a consumer to purchase merchandise, and the person: (A) Knows or believes that the assertion is not in accord with the facts; or (B) Knows that he does not have a reasonable basis for his/her assertion” 15 CSR 60-9.100

False and Misleading Statements

“A seller shall not make a representation or statement of fact in an advertisement that is false or has the capacity to mislead prospective purchasers.” 15 CSR 60-7.020

False Pretense

“False pretense is any use of trick or deception, forgery, or false and fraudulent representation, statement, pretense, instrument or device with the intent to defraud–Reliance and injury are not elements of false pretense” 15 CSR 60-9.050

False Promise

“False promise is any statement or representation which is false or misleading as to the makerís intention or ability to perform a promise, or likelihood the promise will be performed.” 15 CSR 60-9.060

Half-Truth

“It is a misrepresentation for any person in connection with the advertisement or sale of merchandise to omit to state a material fact necessary in order to make statements made, in light of the circumstances under which they are made, not misleading.” 15 CSR 60-9.090

Misrepresentation

“A misrepresentation is an assertion that is
not in accord with the facts”
15 CSR 60-9.070; see Restatement,
Second, Contracts, section 159; Packard v. K
C One, Inc.
, 727 SW2d 435 (Mo.App.,
W.D. 1987).

Unfair Practice

“An unfair practice is any practice which—
(A) Either—1. Offends any public policy as it has been established by the Constitution, statutes or common law of this state, or by the Federal Trade Commission, or its interpretive decisions; or 2. Is unethical, oppressive or unscrupulous; and
(B) Presents a risk of, or causes, substantial
injury to consumers–Proof of deception, fraud, or misrepresentation is not required to prove unfair practices”
15 CSR 60-8.020

Concealment of Material Fact

“Concealment of a material fact is any method, act, use or practice which operates to hide or keep material facts from consumers.” 15 CSR 60-9.110 (1)

Suppression of Material Fact

“Suppression of a material fact is any method, act, use or practice which is likely to curtail or reduce the ability of consumers to take notice of material facts which are stated.” 15 CSR 60-9.110 (2)

Omission of Material Fact

“A seller shall not omit any material fact in an advertisement.” — “[A]ny failure by a person to disclose material facts known to him/her, or upon reasonable inquiry would be known to him/her.” 15 CSR 60-7.030; 15 CSR 60-9.110 (3)

Sources:

http://www.sos.mo.gov/cmsimages/adrules/csr/current/15csr/15c60-7.pdf

http://www.sos.mo.gov/cmsimages/adrules/csr/previous/15csr/15csr0611/15c60-8.pdf

http://www.sos.mo.gov/cmsimages/adrules/csr/current/15csr/15c60-9.pdf

Missouri Mechanic’s Lien Requirements [Infographic]

MO Mechanics Lien Requirements Infographic

TIMING

  • Must be filed within six months after the indebtedness accrues
  • Indebtedness accrues on the last day work is performed
  • “A subcontractor cannot, after the termination of an account, extend the mechanic’s lien filing time by rectifying some fault of his in performing the contract.” S & R Builders & Suppliers, Inc. v. Marler, 610 S.W.2d 690, 693 (Mo. Ct. App. 1980).

Back to top

NOTICE

1. General Contractor

NOTICE TO OWNER

FAILURE OF THIS CONTRACTOR TO PAY THOSE PERSONS SUPPLYING MATERIAL OR SERVICES TO COMPLETE THIS CONTRACT CAN RESULT IN THE FILING OF A MECHANIC’S LIEN ON THE PROPERTY WHICH IS THE SUBJECT OF THIS CONTRACT PURSUANT TO CHAPTER 429, RSMO. TO AVOID THIS RESULT YOU MAY ASK THIS CONTRACTOR FOR “LIEN WAIVERS” FROM ALL PERSONS SUPPLYING MATERIAL OR SERVICES FOR THE WORK DESCRIBED IN THIS CONTRACT. FAILURE TO SECURE LIEN WAIVERS MAY RESULT IN YOUR PAYING FOR LABOR AND MATERIAL TWICE. ~ R.S.Mo. § 429.012  

2. Subcontractor

A. Residential Owner Occupied Property of 4 Units or Less

  • Consent to Mechanic’s Lien must be in 10 point bold font signed writing, stating:

CONSENT OF OWNER

CONSENT IS HEREBY GIVEN FOR FILING OF MECHANIC’S LIENS BY ANY PERSON WHO SUPPLIES MATERIALS OR SERVICES FOR THE WORK DESCRIBED IN THIS CONTRACT ON THE PROPERTY ON WHICH IT IS LOCATED IF HE IS NOT PAID.” R.S.Mo. § 429.013.2

B. Other Real Property: 10 day Notice of Intent to File Mechanic’s Lien Statement

“Every person except the original contractor, who may wish to avail himself of the benefit of the provisions of sections 429.010to 429.340, shall give ten days’ notice before the filing of the lien, as herein required, to the owner, owners or agent, or either of them, that he holds a claim against such building or improvement, setting forth the amount and from whom the same is due.” ~ R.S.Mo. § 429.100

Back to top

MECHANIC’S LIEN STATEMENT CONTENTS

 (a) a just and true account of the demand;

-inaccuracies are unintentional and are the result of honest inadvertence, accident, or oversight, and do not result from deliberate intention or design;

-inclusion of a nonlienable item is the result of honest mistake or inadvertence without intent to defraud and if the nonlienable items can be separated from the lienable items

-no rigid definition of just and true– depends on the facts of each particular case

Back to top

General Contractors

“if [] lien statement simply states his account in a lump sum, without itemization.’ Commercial Openings, Inc. v. Mathews, 819 S.W.2d 347, 349–50 (Mo. 1991)(internal citations omitted).

Subcontractors

must  have “an itemized statement of the labor and materials furnished.’” Commercial Openings, Inc. v. Mathews, 819 S.W.2d 347, 349–50 (Mo. 1991)(internal citations omitted).

Back to top

(b) a true description of the property, or so near as to identify the same;

  • “need not be letter perfect…” Breckenridge Material Co. v. Byrnesville Const. Co., 842 S.W.2d 551, 552 (Mo. Ct. App. 1992).
  • only be sufficient to enable one familiar with the locality to identify the premises intended to be covered by the lien.” Breckenridge Material Co. v. Byrnesville Const. Co., 842 S.W.2d 551, 552 (Mo. Ct. App. 1992).

Back to top

(c) the name of the owner or contractor, or both if known to the person filing the lien; and

(d) verification by the oath of himself or some credible person for him

  • Must be Notarized ~ S.Mo. § 429.080

Back to top

EXAMPLES OF LIENABLE ITEMS

If used in improving the property:

  • lumber
  • paneling
  • sheet rock
  • tape
  • paint
  • paint brushes
  • sandpaper
  • saw blades

Back to top

LAWSUIT TO FORECLOSE MECHANIC’S LIEN

  • An action to foreclose a mechanic’s lien must be commenced within 6 months of filing the lien ~ S.Mo. § 429.170

Back to top