Tag Archives: Missouri Merchandising Practices Act

Can I Collect Attorney’s Fees in my Missouri Construction Dispute?

When I receive a phone call from a new potential client, the most common question that I get is:

“Can we collect attorney’s fees from the opposing party?”

The answer to this question is generally NO—unless, you have a contractual or statutory basis for collecting the same. In certain limited cases, the Courts may award fees on the basis of equity, but this exception is virtually non-existent from a practical standpoint.

Our law firm reviews and intakes a variety of different cases on an average day. Given our focus on construction litigation, we see cases involving issues arising on both residential and commercial construction projects, ranging from defective work claims to failure to pay claims to disputes arising from delay and timing issues to contractors or subcontractors disappearing with the money, among others.

Whether the potential client can recover attorney’s fees is incredibly important and can significantly change the leverage that the potential client has in the case because attorney’s fees can get very costly, depending on the case, and in some instances, the more complex cases can span a period of over several years, thus making the question of collecting attorney’s fees a critical piece of information.

We understand that it is also an important consideration for our potential clients to know their rights prior to getting involved in expensive construction litigation, and it is well-advised for all individuals to know their rights prior to undertaking an expensive construction project.

As noted above, the short answer is that Missouri does not allow for the recovery of attorney’s fees in construction disputes, except in a few select scenarios:

“Missouri follows the American rule which precludes recovery of attorney fees with these exceptions: (1) a statute or a contractual provision allows for their recovery; (2) the fees are incurred due to involvement in collateral litigation; or (3) equity demands it.” Marcomb v. Hartford Fire Ins. Co., 934 S.W.2d 17 (Mo. App. 1996).

Typically, parties to construction disputes are limited only to the first exception stated above: if a statute or contractual provision allows for the recovery of attorney’s fees. The collateral litigation exception involves a unique set of factual circumstances and, could conceivably be asserted if the stars align, but it is not commonly seen in construction litigation. The equitable exception is limited to very narrow circumstances, and Missouri courts are often reluctant to entertain utilizing such exception to allow recovery of fees because it would be such a drastic (or proactive) departure from the norm by the Court, which is not usually favored.

Accordingly, due to the fact that parties involved in construction litigation are typically limited to recovery of fees only if such recovery is provided for in the contract or pursuant to some applicable statute, this article will briefly discuss contracts and will go into a more in-depth discussion as to the governing statutory rights of parties involved in construction projects.

In order for a party to have a right to collect attorney’s fees based on a contract, there must be a provision in the contract specifically allowing for such recovery. Because construction contracts come in all shapes and sizes and can include innumerable provisions or language regarding the same, it is virtually impossible to cover every potential attorney’s fees provision that could exist in a contract.

One example includes a scenario where the contract allows for the recovery of fees “if the contractor retains counsel to collect on an outstanding balance that exists on the contract.” In this particular situation, the contractor can likely collect attorney’s fees if the contractor is successful in prosecuting a claim for collection of an outstanding balance. However, if the contractor is defending a claim in which the owner alleges defective work, then the contractor would not be able to recover attorney’s fees, even if the contractor is successful in defending the claim. As a sidebar, the contractor would be well-advised to have an experienced attorney craft a contractual provision that is broader and more encompassing to be able to collect attorney’s fees in the successful defense of a defective work claim.

The foregoing example poses a situation where the attorney’s fees provision is incredibly fact specific, and thus, it would be futile to try to cover the endless possibilities, speculating as to what the contractual language may be. However, there are some constants when analyzing recovery of attorney’s fees in construction disputes, and those arise from the applicable statutes.

Accordingly, the focus of this article is to explore various scenarios a contractor or owner may face where no applicable attorney’s fees provision is set forth in the contract governing the parties’ relationship. In an effort to do so, we will proceed with an analysis of a number of commonly seen scenarios involving construction projects.

We will start by looking at the statues (or Acts) that are the most applicable, when it comes to construction disputes, in an effort to provide preliminary information to the reader prior to undertaking the analysis.

1.     Missouri Prompt Payment Act (Public or Private)

As you may be able to gather from the name of the Act, the purpose of the Missouri Prompt Payment Act is to encourage prompt payment to those persons or entities providing work on a construction project.

The Missouri Public Prompt Payment Act is set forth under R.S.Mo. § 34.057 and requires payment to be made promptly and on a monthly basis, based on estimates provided by the contractor. R.S.Mo. § 34.057(1).

The Missouri Private Prompt Payment Act is set forth under R.S.Mo. § 431.180 and states: “[a]ll persons who enter into a contract for private design or construction work after August 28, 1995, shall make all scheduled payments pursuant to the terms of the contract.” R.S.Mo. § 431.180.1.

The Private Prompt Payment Act provides the remedy in the second paragraph, allowing for the recovery of actual damages, attorney’s fees, and 18% interest per annum on any outstanding balance:

“[a]ny person who has not been paid in accordance with subsection 1 of this section may bring an action in a court of competent jurisdiction against a person who has failed to pay.  The court may in addition to any other award for damages, award interest at the rate of up to one and one-half percent per month from the date payment was due pursuant to the terms of the contract, and reasonable attorney fees, to the prevailing party.” R.S.Mo. § 431.180.2.

There are certain limitations to the Missouri Private Prompt Payment Act, however, and we usually attempt to convey to clients the notion that the Private Prompt Payment Act only applies in the commercial context as opposed to those projects involving consumers. However, from a technical standpoint, that would be inaccurate, as the statute specifically states: “The provisions of this section shall not apply to contracts for private construction work for the building, improvement, repair or remodeling of owner-occupied residential property of four units or less.” R.S.Mo. § 431.180.3.

 

2.     Missouri Merchandising Practices Act

The Missouri Merchandising Practices Act (“MMPA”) is set of statutes which aims at protecting consumers. Typically, we describe the MMPA to clients as the equivalent of the Federal Consumer Protection Act but at a state level. The goal of the MMPA is to prevent businesses and larger entities from taking advantage of consumers through the use of deceptive, fraudulent, or other unfair business practices.

The operative statutes of the MMPA are set forth under R.S.Mo. § 407.020 and R.S.Mo. § 407.025. Specifically, R.S.Mo. § 407.020 states:

The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce…is declared to be an unlawful practice.

R.S.Mo. § 407.025.1 creates a private cause of action for consumers:

Any person who purchases or leases merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 407.020, may bring a private civil action in either the circuit court of the county in which the seller or lessor resides or in which the transaction complained of took place, to recover actual damages.

The same statutory section also allows for recovery of punitive damages and attorney’s fees: “The court may, in its discretion, award punitive damages and may award to the prevailing party attorney’s fees, based on the amount of time reasonably expended, and may provide such equitable relief as it deems necessary or proper.” R.S.Mo. § 407.025.1.

The language in the statute gives the Court broad discretion in awarding attorney’s fees to the prevailing party. However, there is substantial case law discussing the purpose of the statute is to protect consumers, so it is incredibly difficult for an entity (or non-consumer) to obtain an award of attorney’s fees, even if the entity/non-consumer prevails.

Analysis of Common Construction Dispute Scenarios

Below consists of a discussion of various scenarios that are regularly observed in the construction context. While the analyses are not comprehensive, the purpose of this article is to examine whether legal authority exists to recover attorney’s fees in the examples provided. In all of the scenarios, the contract does not allow for the recovery of attorney’s fees, as we know from above, the contract would provide a basis for recovery. The idea behind excluding the right to recover fees in the hypothetical scenarios is to conduct an in-depth examination of the parties’ statutory rights to collect fees on construction projects.

Scenario 1: Contractor performs construction work on residential property and seeks payment of outstanding balance owed

Tommy owns a construction company, TM Construction, LLC (“TM Construction”). TM Construction provides interior construction services on both residential and commercial projects. On this specific project, TM Construction is working on Sarah Johnson’s personal residence to provide framing work, hanging drywall, and painting. TM Construction’s contract with Sarah requires her to make payment of half of the job up front and the remaining amount will be paid at the completion of the project. Payment is made at the beginning of the job as contemplated, and TM Construction completes the work on the project. TM Construction demands payment from Sarah, but she refuses to make payment. The contract does not include any provision for the recovery of attorney’s fees, can TM Construction collect attorney’s fees?

The short answer is no. The contract does not afford TM Construction rights to recover fees. Further, TM Construction does not have any statutory basis to do so because the Missouri Private Prompt Payment Act does not apply to owner-occupied residential property of four units or less. The Missouri Public Prompt Payment Act and the Missouri Merchandising Practices Act are wholly inapplicable to this situation.

Scenario 2: Contractor performs work on commercial building and seeks payment of outstanding balance owed

ABC Electrical, Inc. (“ABC Electrical”) is providing electrical rough-in work on a three-story office building owned by XYZ Developers, LLC (“XYZ Developers”). ABC Electrical performs the work and is paid according to the payment schedule set forth in the contract. The payment schedule is based on percentage of completion, which is supervised and monitored by an architect and the owner. The contract is silent as to collection of attorney’s fees.

Throughout the project, ABC Electrical is performing the work and the owner is making payment in accordance with the payment schedule set forth in the project. Once the Project is about 70% complete, the owner starts to withhold any further payment. ABC Electrical completes the job and the architect has no objection as to the work. ABC Electrical’s owner pleads with the owner of XYZ Developers, but XYZ Developers’ owner refuses to make the final payment.  Can ABC Electrical collect attorney’s fees?

The answer is that ABC Electrical has the right to collect attorney’s fees pursuant to the Missouri Private Prompt Payment Act. The party that prevails in the claim, ABC Electrical or XYZ Developers, will have the right to collect attorney’s fees. The award of attorney’s fees is at the discretion of the court, but typically the courts will award attorney’s fees if one of the parties is deemed to have prevailed.

Scenario 3: General Contractor hires Subcontractor who performs defective work on commercial project which General Contractor has to repair/replace

Exito Construction, Inc. (“Exito”) is a general contractor constructing a commercial building. S&S Exteriors, LLC (“S&S Exteriors”) is hired as a subcontractor to perform the masonry work on the building. The contract calls for monthly progress payments that correspond with the percentage of completion.  S&S Exteriors is more than halfway through with completion of the project when Exito notices and complains that the bricks are not being laid evenly and that the building is missing lintels that were specifically called for in the design and specifications. Exito withholds payment to S&S Exteriors until the issues with the masonry work are repaired. Exito has the right to withhold payment until the architect approves the work. S&S Exteriors refuses to make any repairs until payment is made.

After numerous exchanges of correspondence between counsel for the parties, Exito has no other option but to proceed with the hiring of another masonry subcontractor, J&J Masonry, Inc., to complete the work. J&J Masonry charges significantly more to complete the job than S&S Exteriors charged for the entire job. Exito wants to recover damages incurred for having to hire J&J Masonry to complete S&S Exteriors’ work. The contract is silent as to attorney’s fees.

Typically on large construction projects like that described above, the parties are sophisticated and usually have provisions in the contracts which would govern attorney’s fees. However, in this particular instance, there was no contractual provision accounting for recovery of fees. Can Exito recover attorney’s fees if it is successful in proving that S&S Exteriors was properly terminated from the project and that additional costs were incurred as a result of bringing J&J Masonry onto the project to complete the work?

The answer is generally no. Without a contractual provision, there is no legal authority from which to recover attorney’s fees, as the Missouri Private Prompt Payment Act does not govern this scenario because Exito is not bringing a claim that relates to payment.

However, the caveat is that S&S Exteriors would likely bring counterclaims in the lawsuit based on the Missouri Prompt Payment Act, and then the successful party would be entitled to collect attorney’s fees. This would be a situation where the opposing party opens the door to allowing for the recovery of attorney’s fees for Exito, if Exito is successful in its defense of the Prompt Payment Act claim and if the judge decides to award attorney’s fees.

Scenario 4: Contractor performs allegedly defective work on residential property and is defending homeowner’s claim of defective work

John Bruiser owns a remodeling company, Bruiser Construction, LLC. He typically remodels bathrooms, kitchens, and basements, and he’s been in business for 25 years. He meets a young couple, the Smiths, in their late 30s, early 40s, and Bruiser agrees to remodel their kitchen for a fixed price of $45,000.00, which includes the replacement of cabinets and flooring, as well as some painting, and minor drywall work. He also agreed to build the cabinets himself, which would be included in that price as well. There was no specific schedule, but he told the Smiths that he would have the project completed in no more than 3 months.

As construction progresses, the Smiths can tell that this project is going to take a lot longer than 3 months. The cabinets are not even fully constructed within the first 5 months, and the flooring is not lining up and is not level in certain areas. The contractor clearly did not know how to perform this job in a good and workmanlike manner. The project is going on 14 months, and the Smiths are irate. The contractor had bit off more than he could chew, and after the Smiths raised numerous complaints, Bruiser stopped answering their text messages or calls. He essentially disappeared.

Can the Smiths recovery attorney’s fees?

In this case, the question depends on whether the home on which Bruiser was performing work was the personal residence of the Smiths. If it was, then it also depends on whether the contract was merely negligent or committed some fraudulent, unscrupulous or unfair business practice. The simple failure to perform the work in a good and workmanlike manner is not sufficient. However, if there was something suspect going on with the contractor, there may be a statutory right to recover attorney’s fees pursuant to a claim based on violations of the MMPA.

Scenario 5: Contractor collects down payment for residential construction project and disappears with homeowner’s money

Randy Cognito (“Cognito”) is a fly by night contractor who performs roofing work. He is operating under the fictitious name (d/b/a) of Quality Roofing. Randy is a smooth talking salesman who convinces the homeowner to rebuild her deck for the “modest” fee of $42,000.00. The payment plan is to be structured into 3 installment payments of $14,000.00 each. The payments will be made (1) prior to Cognito commencing the work, (2) at the 50% completion point, and the last payment will be made (3) when the project is completed.

The homeowner wants to get the job moving because winter is quickly approaching, so she presses Cognito to start the work. Cognito explains to her that they cannot do anything until the first $14,000.00 payment is made in full. So, the homeowner writes a check and mails it to Cognito. Several weeks pass, and the homeowner does not hear anything from Cognito. Although, the check that she sent to him was cashed a few days after it was sent. The homeowner continues calling Cognito and never receives a response.

After numerous months pass without hearing from Cognito, the homeowner has a discussion with a neighbor who had the same thing happen to him. Cognito took his money and ran off with it.

Sadly, this situation happens all of the time. Can the homeowner collect attorney’s fees in this situation?

The answer is yes, but this article would neglect an important analysis if it did not briefly discuss throwing good money at bad. For every client who calls inquiring about this type of situation, our law firm discusses the possibility that we may never find the fraudulent contractor (Cognito) or that we might find him, but when we find him and take judgment, he has no money to collect on or is hiding assets.

These are all factors that the homeowner must take into consideration before proceeding against an unscrupulous or fraudulent contractor. However, after the homeowner has conducted an analysis and believes that it is in her best interests to proceed against the contractor, can she recover attorney’s fees?

The answer is: yes, there is a basis to seek recovery of attorney’s fees. The Missouri Merchandising Practices Act allows for the recovery of attorney’s fees when a contractor or company commits unlawful practices (i.e., deceptive, fraudulent, misrepresentations, false pretenses, omissions of material facts, etc.) against a consumer. In this case, Cognito duping the homeowner into paying $14,000.00 and then running off with her money would rise to the level of unlawful practices. This is a potential tool at the client’s disposal, but the client should also alert the Missouri Attorney General to prevent other unsuspecting victims from having to suffer through the same unfortunate and sad situation.

Scenario 6: Contractor begins residential construction project and changes pricing in middle of project

Sammy Samson (“Samson”) is a self-proclaimed general contractor. He pretty much does it all as far as interior repairs. He was hired by John Goodson to perform repairs and rehab work on a variety of different areas in the property, including drywalling, mudding, taping, and painting a bedroom; complete remodel of a kitchen; and replacement of shower enclosure in the bathroom. Samson prepared an estimate for Mr. Goodson, breaking down the project into 3 categories. Each scope of work had a fixed price for each portion. After Mr. Goodson reviewed the estimate, he liked the price and signed a contract with Samson, which reflected the fixed price amounts that Samson set forth in his estimate.

Samson began the project promptly and completed the drywalling, mudding, and taping portions of the work. However, shortly after beginning the painting, he submitted an additional invoice to Mr. Goodson, which was not included as part of the original estimate. He stated that the price of paint was rising due to tariffs and that Mr. Goodson owed him an additional $1,500.00, which must be paid before Samson will continue performing any additional work.

At this point, Mr. Goodson had already paid $5,000.00, and he feels like he’s being held hostage because he is stuck in the middle of the project and has to pay more amounts (that were not agreed to) in order to complete the work. Mr. Goodson does not feel like he’s being treated fairly, so he contacts the lawyer.

The first question Mr. Goodson asks after he tells his story is: “Can I collect attorney’s fees if we go after this guy?”
The answer is that there is a legal basis to support collection of attorney’s fees. The Missouri Merchandising Practices Act was designed to protect consumers from fraudulent billing practices like those which Samson was attempting to employ. The collection of attorney’s fees is at the discretion of the judge, but if Mr. Goodson can successfully prove his claim under the MMPA, then a judge is likely to award the same.

Conclusion

This article covers whether parties involved in construction litigation have the legal right to collect attorney’s fees.

Generally, the parties do not have a right to collect attorney’s fees on a construction project, unless there is a provision in the contract allowing the same or some statutory basis for collection of the same.

Missouri typically follows the American Rule:

“…which precludes recovery of attorney fees with these exceptions: (1) a statute or a contractual provision allows for their recovery; (2) the fees are incurred due to involvement in collateral litigation; or (3) equity demands it.” Marcomb v. Hartford Fire Ins. Co., 934 S.W.2d 17 (Mo. App. 1996).

Apart from a contractual basis, the two most common bases for collection of fees in a construction dispute are through the Missouri Prompt Payment Act and the Missouri Merchandising Practices Act.

There are two types of Prompt Payment Acts in Missouri (public and private). However, for purposes of this article, the Prompt Payment Act’s effect is essentially covered in the following excerpt from the applicable statute: “[a]ll persons who enter into a contract for private design or construction work after August 28, 1995, shall make all scheduled payments pursuant to the terms of the contract.” R.S.Mo. § 431.180.1.

The Missouri Merchandising Practices Act is governed primarily by the following two statutory sections:

The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce…is declared to be an unlawful practice. R.S.Mo. § 407.020

Any person who purchases or leases merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 407.020, may bring a private civil action in either the circuit court of the county in which the seller or lessor resides or in which the transaction complained of took place, to recover actual damages. R.S.Mo. § 407.025.1

In an effort to apply the foregoing statutes/acts, we explored a variety of scenarios and provided an analysis as to whether attorney’s fees were recoverable in each situation. The scenarios were the following (see above for a full analysis of each):

Scenario 1: Contractor performs construction work on residential property and seeks payment of outstanding balance owed

Scenario 2: Contractor performs work on commercial building and seeks payment of outstanding balance owed

Scenario 3: General Contractor hires Subcontractor who performs defective work on commercial project which General Contractor has to repair/replace

Scenario 4: Contractor performs allegedly defective work on residential property and is defending homeowner’s claim of defective work

Scenario 5: Contractor collects down payment for residential construction project and disappears with homeowner’s money

Scenario 6: Contractor begins residential construction project and changes pricing in middle of project

Ultimately, there is no bullet proof strategy to ensure that your construction project will go smoothly 100% of the time. However, there are certain precautionary measures that may be taken to account for situations that commonly arise in the construction realm.

The construction contract that you sign should be fair and should account for situations that may pose a problem later down the road. Most importantly, the contract should include an attorney’s fees provision. That will often ensure that the parties to a construction dispute are more cautious about their actions, and, ultimately, it demands that they act with some level of accountability.

If you have any questions regarding your construction project, dispute or potential issue, or if you need a contract drafted or reviewed, please contact our law firm to assist you.

Daniel P. Gabris | Gabris Law, LLC

Elements of the Missouri Merchandising Practices Act

Elements of the Missouri Merchandising Practices Act

3 Defenses Missouri Construction Lawyers Can Assert in Consumer Cases

Hammer and nails

Defending Missouri Merchandising Practices Act Claims

Any contractors who work on residential property will inevitably have to deal with a difficult customer at some point in their career.

The customer may raise various issues about your work. like complaining about whether the work is defective or not, the aesthetic appeal, and a garden variety of other issues that arise in these situations.   

In the event that a consumer, or “putative consumer,” brings a claim against a contractor on the basis of the Missouri Merchandising Practices Act, the contractor’s attorney should know several defenses to protect the client from such claims.  

This article was designed to provide a few but certainly not all, common defenses used by a contractor in a Missouri Merchandising Practices Act claim case.  

The first defense deals with the issue of damages.

1.No ascertainable damages – the work was not defective, or even if it was defective, no damages resulted

One of the elements of a Missouri Merchandising Practices Act claim is that the damages need to be ascertainable.  Oftentimes the homeowner may be unpleased with the work product of a contractor, but the homeowner will not have actually incurred damages.  

The homeowner’s dissatisfaction with the aesthetics of a contractor’s work product might be an example of an area that may not cause the homeowner actual damages.

This is not always the case, however, as it may be a question of fact for the judge or jury to make a judgment call on as to what the contract says regarding aesthetics and/or whether the work was performed in a good and workmanlike manner.   

Another situation where the homeowner may not incur damages is if a contractor performs defective work on a project but subsequently remedies that defective work.

In any event, the damages element of the Missouri Merchandising Practices Act is a susceptible place which your lawyer should consider attacking in the event you are sued in these types of situations.

2. Superseding/Intervening Force (i.e., third party) caused damages

If the contractor was not the cause of the damages, then obviously the consumer’s claim is subject to attack.  This is a common defense as many projects consist of a slew of different people working on the job simultaneously.  

The work performed by one contractor may cause damage to or adversely affect the work of another contractor.  In these situations, the superseding/intervening force (another contractor) can be a defense to a Missouri Merchandising Practices Act claim.  

Depending on the language contained in the contract, acts of God may also relieve a contractor from contractual duties.  As this defense is specific to the factual circumstances, and in particularly the language in the contract, each case needs to be individually assessed.  

If you have a question about a construction law case, please feel free to contact one of our attorneys.

3. The construction work was not for personal, family, or household purposes

If you’re working on a residence, you still cannot be sure that the residence is owned by a consumer.  This element must be proven by the alleged consumer.  

However, when a project has commercial aspects or when the owner of the property, even if it appears residential, is a commercial entity, you may have a defense to a Missouri Merchandising Practices Act claim.

One example of a susceptible area of attack would be work performed on a rental home. Often times limited liability companies will own rental homes and will have a contractor perform work on their property.  

If you are a construction company defending a consumer protection act claim, you should always check the deed of the property and be cognizant of the entity that is making the payments.

Depending on the factual circumstances, a lawyer defending one of these cases may be well-advised to assert a defense attacking the personal, family, or household element.  

Conclusion: Contractor Defenses Against Consumers on a Construction Project

This article gives a few defenses that you can assert as a contractor if you’re caught in the middle of a consumer protection case.  There are other defenses out there, but you should always consult an experienced construction law attorney when preparing your defense in a case.  

The following is a list of the three potential defenses discussed in this article:

  • No ascertainable damages – the work was not defective, or even if it was defective, no damages resulted
  • Superseding/Intervening Force (i.e., third party) caused damages
  • The work was not for personal, family, or household purposes

Depending on the facts of your case, these defenses could be your liability shield. Your lawyer should be aware of these defenses and, more importantly, should assert them in any applicable cases.  

If you need help with defending a construction defect case or other construction project defense case, contact a construction law attorney here.

3 Safeguards Consumers Have Against General Contractors

Tape Measure

Consumer Protection in a Construction Law Case

Most people get their homes remodeled or perform some type of addition or other construction project on their homes. This is just a part of life, and it usually signifies moving up the ladder.  However, most people do not anticipate that a contractor will destroy their kitchen or use poor craftsmanship when repairing a roof, which causes substantial water damage to the home.  

In these situations, most people don’t know what to do.  They spent most of their reserve cash on the remodel. They have never been involved in a lawsuit, and they don’t know what to do.  

This article was written by a St. Louis Construction law attorney and was meant to address the issues described above and talk about some of the benefits that consumers have in a situation like that.

While it seems like a tough road, and perhaps will be, consumers do have certain advantages when a construction project goes south in Missouri.

1. Jury usually sides with the little guy & awards big damages

The U.S. Department of Justice (“USDOJ”) conducted a 2005 study on damage awards in cases in the state courts throughout the United States.

The USDOJ found that juries awarded an average of $74,000 in contract cases versus a petty $25,000 when the case was decided by a judge. http://www.bjs.gov/content/pub/ascii/cbjtsc05.txt

Many members of a jury decide a case based on emotion, regardless of whether it is a construction law claim or not.  

They’ll ask themselves what would be a fair outcome, but they’ll also consider the financial positions of the parties involved. Often times, a construction company has a lot of money and can overpower a consumer.  

The jury can see this and will account for this factor, usually empathizing with the little guy.  This fact alone makes it extremely important to hire a well-versed St. Louis construction lawyer, so you don’t fall victim to the caprice of the jury.  

A good construction lawyer will usually be able to preclude evidence that leads to the financial status of the company involved in the proceeding.  To the contrary, a good construction law attorney who represents a consumer may be able to expose this fact and capitalize on it with the jury.  

In any event, it is important to know that that when you deal with a jury, it is always a roll of the dice because of the emotional factor.  

Construction companies have to ask themselves whether they are willing to bet the business on the litigation.  A good lawyer can advise the construction companies as to the proper way to proceed in such instances.

To make an example of the contrary, a good construction law attorney representing a consumer will play the jury’s emotions by telling a captivating story, keeping the jury’s attention and swaying their emotions.  

For those reasons, choosing the right attorney to represent your company, or you as a homeowner, is critical, especially if the stakes are high.

The next question you might ask yourself then, is how am I going to afford a good St. Louis Construction lawyer?

The answer is: your construction lawyer could potentially be free…

2. Attorneys Fees Could be Paid for Under the Missouri Merchandising Practices Act

The Missouri Merchandising Practices Act (“MMPA”) is an act in Missouri that allows for attorney’s fees to the prevailing party (at the court’s discretion).  

R.S.Mo. 407.025, denominated the Merchandising Practices Act, states the following:

The court may, in its discretion, award punitive damages and may award to the prevailing party attorney’s fees, based on the amount of time reasonably expended, and may provide such equitable relief as it deems necessary or proper.

http://www.moga.mo.gov/mostatutes/stathtml/40700000251.HTML

Beware and note, the phrase: may award to the prevailing party attorney’s fees…  

First, the term may means discretionary, and in practice, the Court decides attorney’s fees under the MMPA. So really whatever the court believes the outcome should be.

Also, to the prevailing party: this makes it a high stakes game because the loser could end up footing two attorneys’ bills.

Missouri courts are supposed to take into consideration the purpose of the statute, which is typically lenient toward consumers, thus giving the consumers more incentive to pursue their claims against the contractors.

There’s also the underlying goal of reaching an equitable result, which means that the more egregious the case is–for example if a contractor tries to scam a consumer–the more likely the court will award attorney’s fees.

In order to pursue attorney’s fees, you first must have expenses from an attorney first–this is the difficult task, but you may be able to arrange a contract with the attorney to help you survive the litigation process from a financial standpoint (with the hopes or expectation that you will ultimately recover attorney’s fees).

3. Construction Law Cases under the MMPA are Fairly Easy to Prove

Usually a consumer case is fairly easy to prove in the context of a construction law proceeding.  

That’s because there are four elements in a Missouri Merchandising Practices claim (consumer construction law claim), and many of them, by the the nature of the MMPA elements, are already proven (or stipulated to) in a construction law case.

The elements of the MMPA relating to construction law are roughly the following:

  1. The homeowner purchased merchandise from the general contractor
  2. The purchase was for personal, family, or household purposes
  3. The homeowner suffered an ascertainable loss of money or property
  4. The loss occurred as a result of an unlawful act under the Merchandising Practices Act.

Below, each element will be discussed:

A.The homeowner purchased merchandise from the general contractor

Merchandise is defined in the Missouri Revised Statutes section 407.010 as “any objects, wares, goods, commodities, intangibles, real estate or services”.

Services is the key word in the statute.  Any general contractor hired by a homeowner is providing services.  That alone satisfies the first element.  

B. The purchase was for personal, family, or household purposes

This is an easy element to satisfy as well.  One of the few difficulties that may arise is if the home upon which the general contractor is working happens to be a rental home.  Otherwise, the work being performed on the home is clearly for personal, family, or household purposes.  

C. The homeowner suffered an ascertainable loss of money or property

This element again is easily satisfied if the contractor screws up your home.  The money that you spent on the renovation or construction project was basically just wasted on the contractor’s failed performance.  

If the contractor did not cause a loss of money or property against the contractor, then the homeowner has no business bringing the lawsuit in the first place.  Accordingly, suffering an ascertainable loss of money or property is yet another element that a homeowner can prove by showing that the work was not performed according to the contract or that it was not performed in a good and workmanlike manner.  

Usually in a trial, this element can be proven through a subsequent contractor who came to perform the repairs or to provide an estimate regarding what it takes to repair the defective work.

D. The loss occurred as a result of an unlawful act under the Merchandising Practices Act

The following is a list of unlawful acts that can be committed under the Missouri Merchandising Practices Act:

  • deception
  • fraud
  • false pretense
  • false promise
  • misrepresentation
  • unfair practice
  • concealment of a material fact
  • suppression of a material fact
  • omission of a material fact

This is by far the most difficult element of the MMPA that a homeowner has to prove. Most attorneys will argue that defective work under a contract is merely defective work, and perhaps breaches the warranty that each construction contract imposes: the duty to perform the work in a good and workmanlike manner.  

The lawyer will continue to arue: “without some conscious, intentional misrepresentation, all the homeowner has is a breach of contract claim.”

However, Missouri law has been pretty clear that in an MMPA claim, the conduct of the actor is what is the most important.  

Thus, the rebuttal argument from opposing counsel (homeowner’s attorney) becomes the following: “the contractor made representations to the homeowner that he was competent and experienced in performing the renovation work, but the contractor either (1) did not have the experience and competence as represented or (2) committed an unfair practice by cutting corners to save money when the contractor knew the procedure to perform the work properly.

Accordingly, many homeowners, despite all odds seemingly stacked against them, do have a legitimate chance in a battle against a big construction company.  

In order to fully protect these rights, you should always contact a competent construction law attorney in St. Louis.  

Conclusion as to Why Construction Law Cases are Teed up for Consumers

This article told you 3 reasons why consumers may have an advantage in a Missouri construction law case.  

  1. The jury usually sides with the consumer because they feel empathy for that person or for the family suffering from the shoddy work.
  2. Attorney’s fees are a potential threat to the contractor–beware, however, attorney’s fees could be imposed against the consumer, but such cases are rare
  3. Elements of the claim (MMPA) are fairly easy to prove

While it may seem like a daunting task for a consumer to fight against a big construction company, we have St. Louis construction law attorneys that will help you fight back.  

We know construction law well, and we know how to protect consumers from these terrible situations.  

Please contact our lawyers if you are faced with a situation like this.  Our lawyers have handled numerous cases like this in the past, and we are happy to discuss your case with you.  

Contact a St. Louis Construction Lawyer here.

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