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10 Step Checklist for Material Suppliers Filing a Mechanic’s Lien in Missouri

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Material Suppliers often face collection issues due to contractors running up accounts and running out of funds on large projects. This can happen for any number of reasons including the contractor’s failure to properly bid the job, issues with cash flow, or complaints regarding the quality or condition of the materials supplied.

Regardless of the reason, suppliers find themselves in collection situations quite frequently, and in many cases, the only manner in which the supplier can collect is by filing a mechanic’s lien on the owner’s property.  In an effort to provide general guidance relating to Missouri mechanic’s liens, we have prepared a checklist that suppliers can reference which utilizes and references or is based upon Missouri’s lien statutes and case law.

It is always advised to seek the counsel of an attorney licensed in the state of Missouri who is familiar and knowledgeable regarding the lien laws.  A mechanic’s lien filing can be a meticulous and difficult process. You should proceed with caution and strongly consider using this checklist as a general reference rather than utilizing it to prepare your own lien.

Step 1. Determine whether the work or material furnished is considered lienable under Missouri Mechanic’s Lien Laws

Ordinarily, common sense will dictate whether work performed or materials supplied are lienable.  However, to make a few examples, Missouri case law describes the following items as those which may give rise to the assertion of a lien: lumber, paneling, sheet rock, tape, paint, paint brushes, sandpaper, saw blades.

Many of the foregoing items would give rise to an invoice that would not likely necessitate a lien due to their modest cost.  However, if a material supplier provides any appreciable amount of product or supplies, which are later incorporated into the subject property, there is a high probability that the supplier has a lienable claim. R.S. Mo. § 429.010

Step 2. Determine the Date that Indebtedness Accrued and Ensure Timely Filing of Lien

The date indebtedness accrued is typically treated as the last day the claimant provided labor or materials to the property that is the subject of the lien. R.S. Mo. § 429.080. “It shall be the duty of every original contractor, every journeyman and day laborer, including persons who use rented machinery or equipment in performing such work or labor, and every other person seeking to obtain the benefit of the provisions of sections 429.010 to 429.340, within six months after the indebtedness shall have accrued.” R.S. Mo. § 429.080.

Step 3. Obtain Legal Information Pertaining to the Subject Real Estate

Typically a title report or letter report is obtained from a local title company. This report is necessary for the preparation of the lien (it is not always necessary for the preparation of the notice but can be helpful in compiling the necessary information). Some of the important reasons to obtain the title report is to ascertain the identity of the owner of record and the exact legal description of the subject property.

Step 4. Determine the Classification of the Entity/Individual with Whom You Have Contracted

Construction projects can have numerous different trades and contractors.  It is important to establish your classification as a supplier or subcontractor or whatever you may be. If the claimant is a subcontractor or supplier (or any person on the project other than the original contractor), the claimant, in order to properly preserve its lien rights, is required to prepare a notice of intent to file a mechanic’s lien statement and serve it on the owner. Said notices are to be served within six months from the date indebtedness accrued less ten days pursuant to R.S. Mo. § 429.100. This notice is sometimes referred to in the industry as a Notice of Intent to File a Mechanic’s Lien.

For Suppliers of Rental Equipment, the claimant must comply with a number of rigid requirements set forth in R.S.Mo § 429.010, and said claimant should refer to the rental equipment supplier lien filing article, which references other statutes because the checklist set forth herein is not adequate to satisfy the rental equipment supplier lien claimant’s requirements. However, in an effort to give a rough overview, the following relates to liens involving rental of machinery/equipment:

  There shall be no lien involving the rental of machinery or equipment unless:

  • (1) The improvements are made on commercial property;
  • (2) The amount of the claim exceeds five thousand dollars; and
  • (3) The party claiming the lien provides written notice within fifteen business days of the commencement of the use of the rental machinery or equipment to the property owner that rental machinery or equipment is being used upon their property. Such notice shall identify the name of the entity that rented the machinery or equipment and the machinery or equipment being rented.

Step 5. Ensure the 10 day Notice of Intent to File a Mechanic’s Lien Contains the Required Elements

Notice of Intent to File a Mechanic’s Lien should contain the following information:

  1. The name of the person or persons to whom notice must be given
  2. The name of the claimant
  3. A description of the improvement (e.g., performed electrical work in the entirety of the two-story brick building)
  4. The location of the property, preferably the legal description that will be used in the lien statement
  5. The name of the person or persons with whom the claimant made the contract
  6. The amount of the claim
  7. The basis of the claim (i.e., whether for labor, for materials, or for labor and materials)
  8. A statement that, unless the account is paid before a specified date (which should be a date at least ten days after the date of service of the notice but in no event later than the date the lien statement must be filed), a lien statement will be filed
  9. The date of the notice
  10. The signature of the claimant–see Towner v. Remick, 19 Mo. App. 205 (W.D. 1885), and Schulenburg v. Bascom, 38 Mo. 188 (1866) (requiring the claimant’s name and signature); Miller v. Hoffman, 26 Mo. App. 199, 202 (E.D. 1887) (upheld a notice signed “Miller & Fathman, by Julian Laughlin, their attorney”)
  11. The return of service

 Step 6. Check the records of the clerk of the circuit court for other Lienholders or Individuals/Entities with Equitable Interests in the Property

It is well-advised to determine whether any other claimants maintain a lien or other equitable interest against the subject property. From a practical standpoint, many times the letter report or title report will identify those interested parties.  However, it is important to conduct your own investigation as your claim progresses to ensure that each interested party becomes a party to your enforcement lawsuit. If so, the claimant should be joined in that suit in order to properly adjudicate each interested party’s rights with respect to the lien. § 429.270

Step 7. Prepare and Timely file a Mechanic’s Lien Statement with the Clerk of the Circuit Court in the County where the Property is Located

Lien Statement should contain (§429.080):

  1. “[A] just and true account of the demand due . . . after all just credits have been given”
  2. “[A] true description of the property, or so near as to identify the same, upon which the lien is intended to apply”
  3. “[T]he name of the owner or contractor, or both, if known to the person filing the lien”
  4. Verification by the claimant or some credible person for the claimant

Step 8. Bring a Lawsuit to Foreclose on the Mechanic’s Lien within Six Months of Filing the Statement of Lien

The claimant must file a petition in the circuit or associate circuit division to foreclose the mechanic’s lien within six months from the date the lien statement was filed by the claimant. §429.170.

Step 9. Ensure that process is served as soon as possible to avoid vitiation of the lien due to failure to prosecute. §429.170

 Step 10. Take judgment on the Foreclosure of the Mechanic’s Lien Claim

After presenting the evidence and allowing the court or jury to review the merits of the case, you will request that the judge or jury render a judgment/verdict in your favor to take judgment in the case.

Conclusion

The foregoing steps merely provide to suppliers to provide some structure in pursuing claims for unpaid materials. However, the list is not exhaustive and lien filing process may include additional steps that are not covered herein. While this article may be helpful in many respects, it should not be used as a substitute for retaining competent counsel to assist with the preparation of a lien filing, including the notice provisions, as often that poses the greatest difficulty for clients. If you need assistance with filing your mechanic’s lien, please do not hesitate to contact our firm, and we can discuss your options and how to best proceed.

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

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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

5 Rights Missouri Contractors Have When Storing Homeowners’ Property

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General Contractors Vice & Tools

Contractors’ Rights on a Remediation Project

The phone rings at 5am.

It’s a call from the insurance adjuster.

One of their insured clients’ home flooded.

Your company is tasked with performing the remediation work after the flood. As part of the work, you had to remove personal property for the homeowner.

You also agreed to store the personal property for the homeowner, and you’re billing the homeowner an agreed upon amount for said storage.

After you have completed all of the work, the homeowner refuses to pay your company for the work and will not pay for the transportation of the personal property to storage, or for the storage of the goods. The owner refuses to pay anything, claiming that the work was defective.

What are your rights?

This article was written by a St. Louis Construction Lawyer and is designed to provide general guidance for Missouri contractors with respect to rights against a homeowner when personal property is transported and stored in conjunction with a remediation project.  

However, the information in this article should never be used as a substitute for advice from a competent construction lawyer, as the facts of each case will be determinative of the contractors’ rights.

Below is a discussion on contractors’ rights against homeowners in the event of nonpayment as it pertains to (1) the work performed, (2) the transportation costs of the personal property, and for (3) the costs of storage for the property.

1. Lien Rights for Transporting Consumer’s Personal Property

The Uniform Commercial Code provides that a warehouseman has a lien on goods that are in his possession for charges for storage, transportation, insurance, and/or labor.  R.S.Mo. § 400.7-209 (2015).

The lien on the personal property does not include a lien on the personal property for the amounts incurred by the homeowner for the remediation services—meaning that the lien only applies to the amount owing for the storage, transportation, and labor (to transport and store the personal property).

“If storage charges are due, a bailee…can assert a warehouseman’s lien under § 400.7-209, RSMo 1978. He may retain the goods or sell them.

If an action is brought against the bailee, he can assert his enforcement of its lien as a defense to his non-delivery. See § 400.7-403(1)(c).” Church v. Richfer Corp., 618 S.W.2d 29 (Mo., 1981). This means that the contractor has the right to hold the personal property as collateral for payment for the transport and storage of the goods.

2. Right to Hold the Owner’s Property for Non-Payment

Generally, you have the right to hold the owner’s property until the debt is satisfied (lien is paid off). After the lien is paid off, who has the responsibility of transporting the property back to the owner? This is likely a subject of negotiation between the parties.  The contractor can often accomplish such a task much easier that the owner as the contractor was the party that moved the property in the first place. Carpenter Tools on Wall If the contractor is responsible for returning the property, however, in most instances, Missouri law may permit them to roll that expense into the warehouseman’s lien on the property. The statute allows the lien for general transportation and storage. Additionally, the insurance company will likely cover, most if not all, of the bill. The contractor can’t rack up exorbitant expenses during the transportation, however, they have to be reasonable. If it’s a large amount of property, the expenses may rise proportionately.

3. Right to Sell the Consumer’s Personal Property

Yes, if you provide the proper notice and strictly comply with the foreclosure procedure enumerated in the Missouri statutes, you can liquidate (foreclose on) the homeowner’s personal property to satisfy the amounts due to you.

As a rule of thumb, a sale of more goods than is apparently necessary to insure satisfaction of the amount owed is not commercially reasonable, except in rare cases.

4. Right to Waive Negligence During the Storage and/or Transport of the Homeowner’s Property

A warehouseman can potentially be held liable for damages to the goods if that damage is the result of the contractor’s failure to exercise the care of an ordinarily prudent person would exercise under like circumstances.

The property owner and the warehouseman have what’s called a bailment relationship.

The bailment, by virtue of the relationship between the owner and the contractor, creates a duty to exercise ordinary care when handling and storing the property.

Can the Contractor Include a Provision in the Contract to Absolve Himself from Liability?

Yes. The Uniform Commercial Code, which was adopted by Missouri, allows the warehouseman to limit the liability exposure to the bailor or, in essence, to waive claims of negligence:

“Damages may be limited by a term in the warehouse receipt or storage agreement limiting the amount of liability in case of loss or damage, and setting forth a specific liability per article or item, or value per unit of weight, beyond which the warehouseman shall not be liable…” R.S.Mo. § 400.7-204

5. Right to Terminate Homeowner’s Storage Lease

A warehouseman may on notifying the person on whose account the goods are held and any other person known to claim an interest in the goods require payment of any charges and removal of the goods from the warehouse at the termination of the period of storage fixed by the document, or, if no period is fixed, within a stated period not less than thirty days after the notification. If the goods are not removed before the date specified in the notification, the warehouseman may sell them in accordance with the provisions of the section on enforcement of a warehouseman’s lien (section 400.7-210). Section 400.7-206.1

Is a Missouri Contractor who stores a Homeowner’s Property governed by the Missouri Warehouse Statute and Self-Storage Facilities Statute?

Chapter 415 of the Missouri Revised Statutes sets forth the persons, entities, and subject matter that govern self-storage facilities.

Most notably, Chapter 415 designates the term “operator” as the owner, operator, lessor or sublessor of a self-service storage facility.

R.S.Mo. Section 415.405, which is the definitions section of Chapter 415, lays out two relevant definitions: (1) Operator and (2) Self-service Storage Facility.

  • Operator is “the owner, operator, lessor or sublessor of a self-service storage facility, or an agent or any other person authorized to manage the facility; except that, the term “operator” does not include a warehouseman, unless the operator issues a warehouse receipt, bill of lading, or other document of title for the personal property stored.
  • Self-Service Storage Facility – “any real property used for renting or leasing individual storage spaces in which the occupants themselves customarily store and remove their own personal property on a self-service basis”

According to the definitions section, operator under the self-storage statutes specifically excludes a “warehouseman.”

Therefore, the Self-Service Storage Facility statutes do not govern contractors who transport and store personal property in conjunction with a remediation project.

What is the Procedure for Foreclosing on a Warehouseman’s Lien in Missouri?

Except as provided in subsection (2), a warehouseman’s lien may be enforced:

  • by public or private sale of the goods in bloc or in parcels,
  • at any time or place and on any terms which are commercially reasonable,
  • after notifying all persons known to claim an interest in the goods.

R.S.Mo. Section 400.7-210. (1)

What does the Lien Sale Notice Have to Include?

  • the amount due,
  • the nature of the proposed sale, and
  • the time and place of any public sale.

*All sales must be carried out in a commercially reasonable manner.

How is Commercially Reasonable Manner Defined?

R.S.MO. 400.9-627 sets forth the elements to categorize a sale as conducted “in a commercially reasonable manner,” as follows, if the disposition is made:

(1) In the usual manner on any recognized market;

(2) At the price current in any recognized market at the time of the disposition; or

(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.

Other methods of carrying out a collection, enforcement, disposition, or acceptance will be commercially reasonable if approved:

(1) In a judicial proceeding;

(2) By a bona fide creditors’ committee;

(3) By a representative of creditors; or

(4) By an assignee for the benefit of creditors.

* The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.

Enforcement of a Warehouseman’s Lien on Goods Other than Merchant Stored Goods

A warehouseman’s lien on goods other than goods stored by a merchant in the course of his business  may be enforced only as follows:

(a) All persons known to claim an interest in the goods must be notified;

(b) The notification must be delivered in person or sent by registered or certified letter to the last known address of any person to be notified;

(c) The notification must include an itemized statement of the claim, a description of the goods subject to the lien, a demand for payment within a specified time not less than ten days after receipt of the notification, and a conspicuous statement that unless the claim is paid within that time the goods will be advertised for sale and sold by auction at a specified time and place

(d) The sale must conform to the terms of the notification.

(e) The sale must be held at the nearest suitable place to that where the goods are held or stored.

(f) After the expiration of the time given in the notification, an advertisement of the sale must be published once a week for two weeks consecutively in a newspaper of general circulation where the sale is to be held.

The advertisement must include a description of the goods, the name of the person on whose account they are being held, and the time and place of the sale. The sale must take place at least fifteen days after the first publication.

Conclusion

Each case is fact specific.

However, the above describes the general laws that govern a frequent situation in the construction remediation industry.

It is commonplace for contractors performing remediation work to transport and store an owner’s property.

As you can see above there are very specific statutes regarding the Missouri laws that apply to the storage of an owner’s property.

The above discussion includes a few questions that contractors often ask their attorney and the law pertaining to such questions.

Please note that this article is only a general discussion and should not be applied to your case unless and until you consult an experienced construction lawyer to evaluate your specific factual circumstances.

If you are in a similar situation, you should contact an experienced construction law attorney to advise you as there may be statutory nuances that affect your rights.

The above is merely general information regarding statutes and case law in Missouri, which pertain to contractors’ rights on a construction project.

A lawyer should always evaluate the facts of your case to determine whether these rights are applicable.

St. Louis Landlord-Tenant Lawyer

Litigation, St. Louis Landlord-Tenant Law, St. Louis Real Estate, , , , , , ,

Federal Courthouse St. Louis Arch St. Louis Landlord-Tenant Litigation Attorney

Are you a landlord looking to resolve issues with a problem tenant?

Perhaps you’re just looking to evict a tenant from your property, so you can get a paying tenant into the property…

In either case, you will likely need a St. Louis landlord-tenant lawyer to help you accomplish this task.

Our lawyers know the intricacies of St. Louis’ landlord-tenant laws and can help you achieve your desired outcome.

Between tenants who refuse to pay, complaints about habitability or warranty issues, and the threat of destruction to the real estate, our attorneys have dealt with a wide array of landlord tenant issues in St. Louis.

We know that it can be difficult and time consuming to follow all of the statutes and regulations pertaining to the landlord-tenant laws and that’s why our attorneys do the legwork for you.

We can advise you of your rights with respect to the tenant and allow you to make an informed decision. The attorney handling your case will then move expeditiously and in a calculated manner to bring about your desired goal.

Our attorneys will not stop with resolving your issue with the tenant, however. The lawyer will advise you as to how you might be able to prevent this landlord-tenant issue in the future.

These prevention techniques can be implemented by the lawyer through proper drafting of the lease agreement, counseling on the St. Louis landlord tenant laws, and taking the necessary precautions.

Some precautions include providing notice or taking other steps to preserve the landlord’s right in the case.

Further, our St. Louis landlord-tenant attorneys will help you execute on any orders or judgments entered by the court in order to free up your property, so you can rent to paying tenants.

If you need assistance with a landlord-tenant issue in St. Louis, contact a litigation attorney here.

St. Louis Commercial Litigation Attorney

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Scales of Justice in the Boardroom

Litigation Lawyer

A litigator is a special breed of attorney. Litigation is the most adversarial, intense experience one can face when dealing with the law. That’s why litigators are so special.

To be a litigator you have to be forged through the rigors of heavy motion work and through the trial process.

While the trials you’ve seen on television or movies may seem interesting and exciting, the reality is that they are intense, stressful, and the slip of a tongue can cost thousands to millions of dollars.

But there are other things that can cost or save you thousands to millions of dollars also, and those things are motions.

Good Trial Lawyer v. Good Litigation Attorney

Litigation is not just arguing trials. True litigation attorneys have the ability to craft motions in a manner that limits the other side from asserting claims or defenses. The motion work can, at times, limit their recovery or narrow their case to prevent the admission of certain evidence or preclude damaging testimony.

A lawyer can file various motions throughout the various phases of the case to strengthen your position and limit unwanted evidence.  That’s why it’s important to have a competent St. Louis litigation attorney who can help you file the right motions to protect your rights.

This differs from a good trial lawyer who merely walks into the trial without knowing the contours of the landscape and simply “wings it.”

A good litigation lawyer knows the issues that may arise, is prepared to argue each of these issues with case law or statutes backing his position, and limits many of these issues from ever touching the jurors’ ears, all before the trial even begins.

To carry out such precision in the litigation game, the lawyer has to act with deliberated moves and a well thought-out strategy.

We have attorneys who are trained in doing that.

We represent many corporate clients including privately held companies, publicly traded companies, as well as individuals involved in a number of commercial litigation disputes.

We are capable of representing the foregoing entities and individuals in a number of settings and venues in Missouri, including in arbitrations, in state courts, in federal courts, and in front of administrative agencies.

With the ever changing political and legal environment, our attorneys rely on their technological and business acumen to assist and guide you in taking the necessary steps to protect your most prized possession–your business and the assets you have worked so hard to acquire.

Commercial litigation can be the gateway through which your business thrives or dies. That’s why it is important to find and hire an experienced commercial litigation attorney.

You can trust our attorneys to represent you and your company in a variety of different matters whether you are dealing with a contractual dispute, construction defect claim, partnership dispute, or other serious matter.

We have a wealth of experience litigating for and against commercial entities.

If you’re involved in commercial litigation and need an attorney, we have the resources to provide you an expeditious and competent defense, so you can spend your time focusing on your business and not on litigation.

Call one of our St. Louis Litigation Attorneys today!

St. Louis Real Estate Attorney

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Keys to Real Estate

Real Estate Lawyer

Purchasing real estate may be one of the most important decisions that you make in your life. When you’re considering the various options regarding a real estate purchase in St. Louis, you would be well-advised to consult with an experienced attorney who can inform you of your options.

Our attorneys are honored and privileged to assist our clients with a number of different St. Louis real estate transactions and other real property matters on a daily basis.

In our view, a real estate transaction is a process. Like any other process, there are numerous phases which a purchaser of real estate must go through in order to realize a successful transaction.

The first phase includes research and preparation.

Real Estate Research and Preparation

In order to have a smooth real estate transaction, common sense dictates that you need to do the proper research.

Some of this research includes finding the right real estate agent, finding the right attorney, performing background research on the property, performing searches on comparable sales in that area (your real estate agent can usually assist with this).

There are also a number of other things you need to do before diving into the real estate game, and your lawyer and real estate agent can likely assist with any preliminary questions or matters.

Some examples of issues to review before purchasing real estate include, but are not limited to:

  • checking the crime rate in the area in which the property is located
  • public school district in which the property is located
  • access to libraries, parks, malls, major interstates
  • noise from traffic or other disturbances
  • water drainage issues from neighboring properties
  • other general caveats for the buyer are discussed throughout this website

As part of the preparation process, the purchaser needs to be familiar with the material terms of the contract.

There are some complex provisions as well as boilerplate provisions in the typical real estate contract, and your real estate attorney can help you distinguish the two.

This preparation is necessary, so you know what you’re undertaking when you enter into the real estate purchase contract.

The bottom line is that you’re about to make an incredibly large investment, so you probably should rely on the advice of an attorney who deals with real property transactions on a regular basis.

Real Estate Contract Review and Preparation

Many people wait until after a dispute arises to contact an attorney, but you should inform yourself of the terms in the real estate contract as well as have a lawyer review the language contained in the contract.

This should all be done prior to purchasing the property in order to avoid the pitfalls that may accompany the purchase.

Sometimes the realtor may have a form contract that is approved by the local or regional real estate association, and these are often drafted to be fair for both parties.

However, if you have additional leverage in a real estate transaction, or have potential leverage, your attorney can provide suggestions to help you arrive at your desired outcome.

Additionally, there may be boilerplate language in the contract that significantly impacts your rights in the transaction.

Your lawyer can explain these things to you. This is particularly important when the language is complex, and you are unable to understand it.

So, in accordance with the above, regardless of whether you are a buyer or seller of real estate, you should have an attorney prepare or review your agreement to ensure that it is free from potentially hazardous provisions.

As noted above, a real estate transaction often involves a significant amount of money. When a lot of money is involved, logic dictates that the buyer or seller could potentially lose a lot of money if the transaction goes south.

As such, the assistance of an attorney can help you gain, preserve, or prevent the loss of valuable assets and/or money.

We have attorneys with experience litigating issues that arise from a real estate sale, attorneys who prepare all the documentation relating to the sale of property, and counselors who can help guide you and negotiate a home purchase or sale.

If you need assistance, contact a St. Louis Lawyer today.

Entrusting an Attorney to Handle Your Real Estate Transaction

While it may seem cost effective to negotiate the deal on your own, if any problems occur, it’s all on you. Hiring a lawyer to take on some of these issues can often allocate the burden of managing the case yourself.

Plus, you dish off the work to an attorney, whose job is specifically dedicated to litigation and preparing a case for you.

Ultimately, the attorney will take his time pursing the insurance carrier, or the other party with whom you’ve entered into the transaction.

That will allow you more time to focus on your business. If things work out correctly, your claim may even provide for attorney’s fees which would take care of the legal fees.

If you need assistance with a real estate matter, we can provide legal counsel with a number of different matters such as:

  • purchase and sale disputes,
  • construction claims,
  • landlord-tenant disputes,
  • claims involving adverse possession,
  • prescriptive easements,
  • quiet title and
  • other issues arising from or relating to real estate.

In addition to contractual language, other potential dangers in the purchase of property can result from defective titles, undisclosed facts on the seller’s disclosures, liens on the property, contingencies in the contract, and disputes with the real estate that remain unresolved.

These are just a few of the issues we can help you with.

We are happy to hear any real property issue that you have, and if we can’t help you with it, we can assist you in finding a competent attorney who can.

Please continue to research our site for more information and if you need further guidance, contact one of our St. Louis real estate attorneys today.

If you specifically need assistance with litigating a real estate matter, contact a litigation attorney here.