KEHRER BROTHERS CONSTRUCTION, INC. v. EDWIN J. GIRE, and BANK OF VERSAILLES, and KENNETH L. MCCUTCHEON, JR., and BUSEY BANK, Defendants-Respondents. ( 2014 )

KEHRER BROTHERS CONSTRUCTION, INC., )
)
Plaintiff-Appellant, )
)
vs. ) No. SD33069
) Filed: November 21, 2014
EDWIN J. GIRE, and )
BANK OF VERSAILLES, and )
KENNETH L. MCCUTCHEON, JR., and )
BUSEY BANK, )
)
Defendants-Respondents. )
APPEAL FROM THE CIRCUIT COURT OF CAMDEN COUNTY
Honorable Kenneth M. Hayden, Circuit Judge
REVERSED AND REMANDED WITH DIRECTIONS
Kehrer1 Brothers Construction, Inc. (“Kehrer Brothers”), appeals the judgment of the trial
court denying its petition to enforce a mechanic’s lien. Finding merit to one of Kehrer Brothers’
points, we reverse and remand with instructions.
1
In the judgment and transcript, “Kehrer” is inadvertently misspelled as “Keher.” For purposes of this appeal, we
use the correct spelling of “Kehrer.”
Facts and Procedural History
In March 2006, Edwin J. Gire (“Gire”) executed two deeds of trust and two $200,000
promissory notes in favor of Busey Bank, an Illinois Banking Corporation, secured by the
following described real estate:
All of Lot 9R of a subdivision of Lots 8, 9, and 10, amended plat to Harbor
Heights Estates, a subdivision in Camden County, Missouri, according to the plat
thereof on file and of record in the office of the Recorder of Deeds, Camden
County, Missouri.
(“the property”).
On October 26, 2007, Kehrer Brothers, as “Contractor,” entered into a “Subcontract
Agreement”2 with Gire, as “Subcontractor,” to perform excavating work for Gire at a “Job
Address” shown as “1171 Greenwood Circle[,] Osage Beach, MO 65065” (“jobsite”). There
was no real estate description set forth in the Subcontract Agreement for the jobsite address.
On November 1, 2007, Kehrer Brothers began the excavation work and supplied the
materials and machinery used in the excavation. The last work performed by Kehrer Brothers at
the jobsite was on August 15, 2010. At that time, Kehrer Brothers claimed the sum of
$480,637.50 was still due and unpaid by Gire.
On April 21, 2009, Busey Bank, by the terms of a subordination agreement, subordinated
its two deeds of trust and promissory notes—secured by the property—to the Bank of Versailles.
Thereafter, on April 30, 2009, the Bank of Versailles became the holder of a promissory note in
the original principal amount of $1,650,000, and a deed of trust secured by the property, both
executed by Gire.
2
Joseph Kehrer testified that Kehrer Brothers had not changed their contract form since 1988 when they first started
business and that is why the written agreement between Kehrer Brothers and Gire was a “Subcontract Agreement.”
Most of Kehrer Brothers’ work was subcontracting work rather than general contracting. The header at the top of
the Subcontract Agreement shows Kehrer Brothers’ name, address and phone number.
2
On November 10, 2010, Kenneth L. McCutcheon, Jr. (“McCutcheon”), in his capacity as
trustee under the Gire deed of trust, foreclosed on the Gire promissory note and deed of trust on
behalf of the Bank of Versailles. Thereafter, on November 12, 2010, a trustee’s deed on the
property was recorded on behalf of the Bank of Versailles.
On February 14, 2011, Kehrer Brothers filed its “Statement of Mechanic’s Lien”
(“mechanic’s lien”) with the Circuit Clerk of Camden County.
In the mechanic’s lien, Kehrer Brothers claimed a lien
for work and labor performed and materials and services furnished by it under
contract and/or pursuant to a continuous running account with Edwin J. Gire,
upon and for the building and improvements in Camden County and described as
follows:
All of Lot 9R of A SUBDIVISION OF LOTS 8, 9, AND 10,
AMENDED PLAT TO HARBOUR [sic] HEIGHTS ESTATES, a
subdivision in Camden County, Missouri, according to the Plat
thereof on file and of record in the Office of the Recorder of
Deeds, Camden County, Missouri.
Together with a 2 well encapsulated steel and concrete dock.
Subject to all restrictions, reservations and easements of record.
Together with all improvements thereon. Said real estate, buildings and
improvements belonging to and being owned by Edwin J. Gire at the time the
contract was entered into, at the time said work and labor were performed and the
materials were furnished, and subsequently acquired by the Bank of Versailles
through the foreclosure of its Deed of Trust on November 10, 2010, and,
therefore, the owner of said real estate at the time of the filing of this statement of
Mechanics [sic] Lien.
The mechanic’s lien also contained an “Amended Notice of Rights (Pursuant to Section
429.016)”3 directed to the Bank of Versailles as the ‘“Grantor’ (Property Owner/s)” of the
‘“Property’ Address” at 1171 Greenwood Circle, Osage Beach, Missouri 65065, and included
the aforementioned legal description of the property.
3
All references to statutes are to RSMo 2000, unless otherwise indicated.
3
On May 17, 2011, Kehrer Brothers filed its original petition for enforcement of its
mechanic’s lien, which was amended on June 13, 2012. The First Amended Petition consisted of
two counts: “Count I Suit for Enforcement of Mechanic’s Lien” requested judgment against
Gire in the amount of $480,637.50, as well as a judgment against the Bank of Versailles
declaring Kehrer Brothers’ mechanic’s lien superior to that of the bank, that the bank’s
foreclosure and acquisition of ownership of the property be subject to the Kehrer Brothers’
mechanic’s lien, and that if sufficient property of Gire could not be found to satisfy the
judgment, that Kehrer Brothers have special execution against any “building, appurtenances,
improvements and land above described to satisfy said judgment”; and “Count II Declaratory
Judgment,” declaring Busey Bank had no interest or lien, by way of its two prior promissory
notes and deeds of trust, in and to the property.
A bench trial was held on May 20, 2013. Kehrer Brothers appeared by counsel, and
McCutcheon appeared as counsel for Bank of Versailles and representing himself as trustee.
Gire appeared without counsel. No appearance was made on behalf of Busey Bank. The parties
stipulated that the Subcontract Agreement between Kehrer Brothers and Gire was a construction
contract.
Joseph Kehrer testified on behalf of Kehrer Brothers and a portion of his testimony was
directed to the address of the property:
Q And was the address of this -- of Ed Gire’s property 1171
Greenwood Circle, Osage Beach, Missouri?
A I couldn’t say for sure that’s the address.
....
Q Let me have, if I could, Exhibit 2 again. And on page 5 of 26 of
Plaintiff’s Exhibit 2, what you call the summary statement, there’s no customer
name on that page, is there?
4
A No.
Q And there’s not any address for the customer on that page 5 of 26
of Plaintiff’s Exhibit 2?
A No.
....
Q Would it be true that Edwin J. Gire was building a residential
house on the land that Keher[sic] Brothers Construction, Inc. worked on?
A I wouldn’t think it would be considered residential, but yeah, he
was building a place on his land. I assume it was his land.
Gire testified on behalf of Kehrer Brothers. He stated that he was “the former owner of
the property at 1171 Greenwood Circle” in Osage Beach, and in 2007, he decided to add an
addition to the existing house on that property and asked Kehrer Brothers to assist with the
excavation work for that addition. Gire identified the Subcontract Agreement as the agreement
he signed with Kehrer Brothers. Gire, a general contractor himself, was periodically at the
jobsite overseeing the project. Gire testified that the 1171 Greenwood Circle property was zoned
for residential use and that in November 2007, there was an existing house on that land.
Kehrer Brothers then rested, at which time McCutcheon announced that neither he, nor
the Bank of Versailles, had evidence to present. Both sides presented closing arguments to the
trial court. McCutcheon argued that Kehrer Brothers failed to prove the work it performed for
Gire at the jobsite address was the same real estate described by the legal description in its
mechanic’s lien. It was argued that Kehrer Brothers did not put a deed into evidence that would
have proven that the jobsite address and the real estate described in the mechanic’s lien were one
and the same property and was owned by Gire.
McCutcheon argued several times that in order for Kehrer Brothers to prove they were
entitled to a mechanic’s lien, Kehrer Brothers was required to put the deed to the property into
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evidence and the absence of that proof required the trial court to rule against them. Thereafter,
the following exchange occurred:
[KEHRER BROTHERS’ COUNSEL]: Your Honor, I don’t want to get
hung -- if the Court would permit to reopen the evidence for submission of the
deed, we’d certainly be willing to do that. I don’t want to have the Court hung up
on this. I do think that the lien and the contract are enough, along with the
testimony, and I don’t think there’s been any dispute that Mr. Gire is the owner of
that property.
THE COURT: I don’t think there was any dispute he owned the property
located at whatever that address is, 1171[]Greenwood Circle. We just don’t know
what 1171 Greenwood Circle is.
[MCCUTCHEON]: We’d object to any reopening of the case.
THE COURT: I’m not going to allow us to reopen.
The trial court then announced it was taking the matter under advisement and gave each party ten
days to submit trial briefs.
On August 28, 2014, the trial court entered its “Judgment, Entry and Order.” The trial
court found:
2. It is further alleged in the First Amended Petition that [Gire] was the
owner of the afore described real estate at the time he entered into a time
and materials contract to perform certain earth moving and excavating
activities on the afore described real estate with [Kehrer Brothers].
[Kehrer Brothers] bears the burden of proving compliance with the
essential elements of the applicable statutes in order to be entitled to a
Mechanic’s Lien. In the case at bar, Plaintiff therefore is required to
establish that [Gire] was the owner of the afore described real estate and
that [Kehrer Brothers’] work, labor, materials and services were furnished
for improvements on the afore described real estate.
6
3. [Kehrer Brothers] offered evidence at trial that [Gire] owned a residence
located at 1171 Greenwood Circle, Osage Beach, Missouri. [Kehrer
Brothers] did not offer any evidence at trial that [Gire] was the owner of
[the real estate described in the Mechanic’s Lien Statement]. The only
evidence offered at trial that ties the residence located a[t] 1171
Greenwood Circle, Osage Beach, Missouri to the afore described real
estate was the lien statement admitted at trial as Plaintiff’s Exhibit 2.
Although admitted at trial to establish the statutory requirements of
Section 429.080 had been complied with by [Kehrer Brothers], [Kehrer
Brothers], nevertheless, bears the burden of proving evidence which
proves that the contents of its Mechanic’s Lien Statement are true. If this
were not the case, the Mechanic’s Lien Statement would be self-proving
and there would be no need for a trial.
4. Therefore the Mechanic’s Lien Statement admitted by this [c]ourt as
Exhibit 2 in and of itself is not evidence that [Gire] owned the real estate
[described in the Mechanic’s Lien Statement]. Neither is the Mechanic’s
Lien Statement itself evidence that [Kehrer Brothers’] work, labor,
materials and services were furnished for improvements on the afore
described lands. Therefore as to Separate Defendants Bank of Versailles
and [McCutcheon], [Kehrer Brothers] has failed to prove the essential
elements required for the establishment of a Mechanic’s Lien as to those
two Separate Defendants.
The trial court entered judgment on Count I in favor of the Bank of Versailles and
McCutcheon, and a judgment in favor of Kehrer Brothers against Gire in the amount of
$480,637.50. In Count II, the trial court declared Busey Bank had no interest in or lien upon the
property.
On September 26, 2013, Kehrer Brothers filed its “Motion to Amend or Modify the
Judgment or, in the Alternative, for a New Trial” as to enforcement of its mechanic’s lien. That
motion was denied by the trial court on November 22, 2013. This appeal followed.
On appeal, Kehrer Brothers presents two points. In its second point, Kehrer Brothers
contends that the trial court erred in failing to reopen the evidence to allow Kehrer Brothers to
introduce further evidence that Kehrer Brothers performed work at the property described in the
mechanic’s lien. We agree.
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Standard of Review
We review a trial court’s decision on a request to reopen evidence for abuse of discretion.
In re Marriage of Parmenter, 81 S.W.3d 234, 240 (Mo.App. S.D. 2002). “[T]o demonstrate an
abuse of discretion, the complaining party must show the trial court’s decision was against the
logic of the circumstances and so arbitrary and unreasonable as to shock one’s sense of justice.”
Howard v. City of Kansas City, 332 S.W.3d 772, 792 (Mo. banc 2011).
A circuit court has broad discretion in deciding whether to admit or exclude evidence,
and we accord the ruling substantial deference and presume it to be correct. KC Excavating and
Grading, Inc. v. Crane Constr. Co., 141 S.W.3d 401, 407 (Mo.App. W.D. 2004). “It is the
appellant’s burden to persuade us that the circuit court abused its discretion and that the abuse
resulted in prejudice. Even an erroneous evidentiary ruling will not warrant a reversal in the
absence of prejudice.” Id. at 408 (internal citation omitted). “We recognize that ordinarily when
there is no inconvenience to the court nor unfair advantage to one of the parties it would be an
abuse of discretion upon the refusal to permit the introduction of material evidence which might
substantially affect the merits of the case.” Matter of Viviano’s Estate, 624 S.W.2d 130, 133
(Mo.App. E.D. 1981) (citing Pride v. Lamberg, 366 S.W.2d 441 (Mo. banc 1963)); see also In
re Estate of Mapes, 738 S.W.2d 853, 856 (Mo. banc 1987) (remanding for new trial where the
trial court refused to reopen the case so that a party could present “clearly material and possibly
outcome determinative” evidence).
Analysis
The trial court abused its discretion in refusing to reopen the evidence. Mapes, 738
S.W.2d at 856. “Pride and its progeny have repeatedly stated the principle that if the court is not
inconvenienced and there is no unfair advantage, then it is an abuse of discretion to refuse to
8
reopen to receive evidence that is material and possibly outcome determinative.” LaFevers v.
Clothiaux, 403 S.W.3d 653, 658 (Mo.App. S.D. 2012) (bold emphasis added).
In Mapes, the heirs at law and residuary legatees of a will brought an action to discover
estate assets alleging that joint deposits in the name of decedent, decedent’s attorney and
attorney’s brother were the product of fraud and undue influence. Id. at 854. At the close of
plaintiffs’ case, the trial court granted a request for directed verdict in favor of defendants,
concluding that plaintiffs failed to meet their burden of proving fraud or undue influence, and
that they failed to establish that the transfer to attorney and his brother was made during the
course of the attorney-client relationship between attorney and decedent. Id. During argument
on the motion to direct a verdict in favor of defendants, plaintiffs requested leave to reopen their
case, seeking to introduce defendants’ answers to interrogatories and to call defendant-attorney
to the witness stand to show the existence of an attorney-client relationship at the time the joint
accounts were created. Id. The trial court denied plaintiffs’ request. Id.
On transfer, our Supreme Court held:
Under the holding in Pride, plaintiffs should have been permitted the
opportunity to reopen their case at trial. Plaintiffs sought to examine defendant
[attorney] and admit his answers to interrogatories for the purpose of establishing
that an attorney-client relationship existed between [decedent] and [attorney] at
the time the joint deposits were created. By establishing this fact, the plaintiffs
could have avoided a directed verdict. Thus, the evidence which they sought to
present was clearly material and possibly outcome determinative. Furthermore,
granting leave to reopen would not have inconvenienced the court or prejudiced
the defendants given the fact that the request was made prior to the granting of a
directed verdict, and, at a time when the jury and witnesses were readily available.
If a plaintiff, by mistake or inadvertence, fails to produce sufficient evidence at
trial to prove his claim, in a situation where the proof seems to be available, the
case should be remanded to permit the introduction of additional evidence.
9
Here, plaintiffs mistakenly believed that the trial court would recognize a
presumption of fraud and undue influence which would allow them to take their
case to the jury. As a result they earlier failed to call and examine defendant
[attorney] or introduce his answers to interrogatories. Plaintiffs should be given
an opportunity to present such evidence at trial.
Id. at 855-56 (internal citations omitted).
Kehrer Brothers was required to put on proof of “a true description of the property, or so
near as to identify the same” under section 429.080. In its judgment, the trial court premised its
decision to deny Kehrer Brothers’ request to enforce its mechanic’s lien on the fact that Kehrer
Brothers failed to provide a true legal description of the property under section 429.080, and that
the address in evidence and the legal description were the same property owned by Gire at the
time the work was done.
As the trial court noted, Kehrer Brothers did put on evidence that Gire “owned a
residence located at 1171 Greenwood Circle, Osage Beach, Missouri.” Kehrer Brothers, as is
evident from the transcript, apparently believed that this evidence, combined with the statement
of mechanic’s lien, was sufficient to meet its burden under section 429.080. To the extent that
the trial court believed that this evidence was insufficient, it should have granted Kehrer
Brothers’ request to reopen the evidence.
This additional evidence relating to the property description under section 429.080 was
clearly material, as was directly alluded to by McCutcheon, and as reflected by the trial court’s
reliance on the absence of such evidence in rendering judgment in favor of McCutcheon and the
Bank of Versailles. Further, granting leave to reopen would not have inconvenienced the trial
court or prejudiced McCutcheon and Bank of Versailles as the request to reopen was made prior
to the entry of judgment, witnesses would still have been available to both parties, and
10
McCutcheon and the Bank of Versailles would have had the opportunity to put on their own
evidence in response after the evidence was reopened.
It was further evident that the evidence was readily available. As counsel for Kehrer
Brothers explicitly stated: “Your Honor, I don’t want to get hung -- if the Court would permit to
reopen the evidence for submission of the deed, we’d certainly be willing to do that. I don’t
want to have the Court hung up on this.”4
Further, we are also struck by the minimal consideration given by the trial court to Kehrer
Brothers’ request to reopen in order to present material and possibly outcome-determinative
evidence. After counsel for Kehrer Brothers requested the evidence be reopened, the trial court,
without the benefit of argument, research, or briefing, abruptly ruled that it would not reopen the
evidence.
Under these facts, it was an abuse of discretion for the trial court to refuse to reopen the
evidence to allow Kehrer Brothers to present evidence of the property description pursuant to
section 429.080.
By our decision, we express no opinion as to whether admission of the deed, or further
evidence concerning the property, satisfies Kehrer Brothers’ burden of proof as to its mechanic’s
lien. Likewise, our decision is not to be read to require that a deed to real property is always
required as a part of proof in a mechanic’s lien claim. Our decision is limited to the record
before us here.
This matter is remanded with instructions that the trial court reopen the evidence to
permit Kehrer Brothers to introduce further evidence establishing that Kehrer Brother’s work
4
Additionally, as was discussed in oral arguments, the Camden County recorder’s office was in the same building as
the courtroom where these arguments were taking place.
11
was performed at the real property described in the lien statement and for any other proceedings
consistent with this opinion.
WILLIAM W. FRANCIS, JR., C.J./P.J. - OPINION AUTHOR
JEFFREY W. BATES, J. - Concur
DANIEL E. SCOTT, J. - Concur
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