Schreiner Excavating Inc V Smith Loveless Inc

Key Facts

Transaction Type

Issues

• Schreiner claimed equitable estoppel because S&L inconsistently required lien releases. The appellate court found this argument was not preserved for appeal, as it was first raised in a posttrial brief without explanation or exception to the preservation rule, and lacked sufficient development.
• Schreiner challenged the district court's interpretation of the contract provisions allowing S&L to require lien releases as a condition to payment. The appellate court upheld the ruling, stating the contracts granted S&L discretion to mandate releases, and Schreiner's argument that the language was not 'mandatory' was unpersuasive.
• The primary issue is whether Schreiner's payment requests were undisputed under the Kansas Fairness in Private Construction Contract Act (KFPCCA), which would entitle it to prejudgment interest and attorney fees. The district court denied these claims, finding the amounts were disputed, and the appellate court affirmed this decision.

Holdings

• The court found Schreiner's public policy argument was not preserved for appeal because it was first raised in the posttrial brief and no exception to the preservation rule applied. Schreiner failed to meet the requirements under Supreme Court Rule 6.02(a)(5), which requires justification for raising new arguments on appeal, and the district court never ruled on the issue.
• The district court correctly interpreted the contracts to allow S&L to require lien releases as a condition to payment. The court upheld the district court's ruling that the contract provisions gave S&L discretion to mandate lien releases, and Schreiner's claim that the language was not mandatory was rejected.
• The $10,463.75 retainage claim was disputed as the contract was not terminated, and Schreiner's pretrial and trial claims for retainage conflicted. The court affirmed the district court's denial of interest and attorney fees under the KFPCCA for this amount.
• The $7,100 for Change Order 478 on the three tanker project was disputed due to duplication and lack of prior approval. Schreiner admitted part of the charge was duplicative, and the district court's decision to deny KFPCCA fees and interest on this amount was affirmed.
• The court determined Schreiner's equitable estoppel argument was not preserved as it was not included in the pretrial order or raised in the posttrial hearings. Schreiner failed to develop the argument or explain how the elements of equitable estoppel were satisfied, and the district court had no opportunity to address it.
• The $62,782.50 for demolition work on the three tanker project was disputed because Schreiner sought a different amount and failed to meet the contract's condition of executing a lien release. The court upheld the denial of KFPCCA relief for this category.
• The court found Schreiner's claim for $29,738.26 on the dirty tanker project was disputed because S&L legitimately questioned the change order costs. Schreiner's argument that S&L approved the change orders was unsupported by evidence, and the district court's denial of KFPCCA relief for this amount was affirmed.

Remedies

• The district court awarded Schreiner $104,846.25 for work on the three tanker project, itemized as $7,100 for change order work, $62,782.50 for demolition work, $21,000 for piping, $3,500 for demobilization, and $10,463.75 for retainage. However, the court denied prejudgment interest and attorney fees under the KFPCCA due to disputes over the payment amounts.
• The district court awarded Schreiner $29,738.26 for work on the dirty tanker project. This amount was not accompanied by prejudgment interest or attorney fees under the KFPCCA because the court found the payment amount was disputed.

Monetary Damages

Legal Principles

• The Kansas Fairness in Private Construction Contract Act (KFPCCA) was central to the court's decision. The statute requires contractors to pay undisputed subcontractor claims within seven business days, with interest and attorney fees available for noncompliance. The court found Schreiner's payment requests were disputed, rendering the KFPCCA inapplicable to its claims for interest and attorney fees.
• The court determined Schreiner failed to properly preserve its equitable estoppel argument. Equitable estoppel requires showing (1) another party induced reliance on certain facts, (2) reasonable reliance on those facts, and (3) prejudice from such reliance. Schreiner did not demonstrate these elements were satisfied, nor did it raise the argument in pretrial proceedings or obtain a ruling from the district court.

Precedent Name

• Cosgrove v. Young
• Casper v. Kansas Dept. of Revenue
• Becker v. The Bar Plan Mut. Ins. Co.
• State v. Rhoiney
• In re N.E.
• In re Estate of Broderick

Key Disputed Contract Clauses

• The contracts between S&L and Schreiner included provisions granting S&L the discretion to condition payments on the execution of partial or final lien releases. Schreiner disputed whether this language created a mandatory condition precedent, but the court upheld the district court's interpretation that S&L could validly exercise its contractual discretion to require releases.
• The retainage provisions in both contracts stipulated that S&L would pay Schreiner's 10% retainage 'Upon Owner Acceptance of The Project Work.' Schreiner claimed retainage was due upon termination, while S&L argued the project's incomplete status prevented fulfillment of this condition. The court affirmed the district court's finding that the payment trigger was genuinely disputed.

Cited Statute

Judge Name

• Coble
• Warner
• Cline

Passage Text

• The KFPCCA only provides for interest and attorney fees related to undisputed requests for payment, and Schreiner did not establish the amounts it sought were undisputed or that S&L wrongfully withheld retainage owed to Schreiner.
• Schreiner is not entitled to interest or attorney fees under the KFPCCA because its payment requests were not undisputed.
• Schreiner failed to explain to the district court why it believed that court could consider its posttrial argument when the argument was not included in the pretrial order or presented at trial.

Damages / Relief Type

• Compensatory Damages for $104,846.25 related to the three tanker project.
• Compensatory Damages for $29,738.26 related to the dirty tanker project.