by James R. Keller
This article appeared in St. Louis Construction News & Review, p. 22-27, November-December, 2000.
After three trials, four appeals, and twelve years, Massman Construction Company finally may have a judgment that it can keep for $850,000-unless the Missouri Supreme Court grants the motion of the Missouri Highways and Transportation Commission filed October 23, 2000 to transfer its appeal. Since the late 1980s, Massman has been fighting the Commission over substructure work it did on the Highway 40 bridge across the Missouri River near St. Charles and Chesterfield.
The case is Massman Construction Co. v. Missouri Highways and Transportation Comm., No. 57228 (Mo. App. W.D. August 29, 2000).
The Missouri Court of Appeals for the Western District (located in Kansas City) agreed on August 29, 2000 that the trial court correctly entered a judgment in favor of Massman after a jury verdict for $850,000. Massman had sued the Commission for breach of warranty ex contractu.
This particular claim is brought against the government, such as the Highway Commission. Massman had to prove that the Commission made a false representation of material fact, that Massman did not know that it was false, that Massman relied on the representation and, as a direct result of such reliance, Massman incurred damage.
The case is a prime example of just how time-consuming, unpredictable and expensive construction litigation can be, not to mention the emotional toll on the parties.
The dispute began after Massman had submitted a bid to the Commission to do the bridge's substructure work on this high-profile project. When Massman prepared its bid, the Commission's plan did not show that there was a rock revetment in the river that may affect construction and thus, Massman's bid. A revetment typically is a built-up area of stone, concrete or similar material used to create an embankment.
Ironically, it was Massman that had built the revetment in question some ten years earlier. In fact, Massman had participated in more than 40 contracts with the United States Army Corps of Engineers to build more than 2000 structures in the river, including revetments.
Massman's role in building the revetment in dispute may have hampered Massman's case, but it did not prevent ultimate victory. Here is why.
The evidence showed that Massman knew that the revetment was close to the bridge, but not that it necessarily would interfere with construction of a new bridge pier. Further, none of the Corps of Engineers' documents showed a conflict between the new bridge and the existing revetment.
The Commission offered contrary evidence, but as the appellate court noted, the jury was free to disregard such evidence and award a sizable verdict to Massman.
After the jury's verdict, the appellate court held that the trial court properly denied the Commission's post-jury motion for a judgment in its favor. The court noted that "reasonable minds could differ as to whether Massman knew that the revetment would interfere with the construction of Pier 6 of the bridge." Thus, Massman had enough evidence to merit letting the jury determine who should win.
The jury responded by awarding Massman $850,000. The $850,000 judgment differs greatly from the results in the prior trials. The first trial netted Massman a hefty $1,922,821.28. The second trial yielded far less, only $250,000. Each trial had a different jury.
While it is always difficult to compare jury verdicts, the first trial did not include evidence that Massman had put in the revetment. This evidence alone may explain the significant size of the first verdict compared to the next two trials.
After the first trial, the appeals court sent the case back to the trial court for a second trial. The appeals court believed that the jury needed to know about Massman's prior role in the revetment.
After the jury verdict in the second trial yielded only $250,000, the trial court agreed with Massman that the verdict was too small. The trial court declined Massman's request to increase the jury's award to $1,922,821.28. It did, however, order a new trial on the question of damages only.
The Commission appealed this decision. The Supreme Court then transferred the case to itself and reversed the trial court's decision to have a new trial only on damages. The Supreme court ordered the trial court to enter a proper response to Massman's previous request to increase the verdict beyond $250,000.
The trial court obliged by tripling the judgment to $750,000. Then, administering what may have seemed like a form of Russian roulette, the trial court offered the Commission the option of accepting the new verdict of $750,000 or retrying the case but only on the issue of damages.
The Commission declined both options, and instead, asked the appellate court for help, once again. This time the appellate court instructed the trial court to offer the Commission the choice of accepting the $750,000 or retrying the case on all issues. The Commission chose a new trial on all issues.
The next trial produced the present judgment of $850,000. Obviously, as it now stands, the Commission would have been better off taking the offer of $750,000. There is no way, however, that either party could have predicted this result.
James R. Keller is a partner at HERZOG, CREBS & MCGHEE, LLP, St. Louis, Missouri, where he concentrates on construction law, real estate and business litigation. He is also a panelist with the American Arbitration Association.