Ford Motor Credit Co. v. Housing Authority of Kansas City

849 S.W.2d 588, 1993 Mo. App. LEXIS 134, 1993 WL 18818
CourtMissouri Court of Appeals
DecidedFebruary 2, 1993
DocketNo. WD 45669
StatusPublished
Cited by4 cases

This text of 849 S.W.2d 588 (Ford Motor Credit Co. v. Housing Authority of Kansas City) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ford Motor Credit Co. v. Housing Authority of Kansas City, 849 S.W.2d 588, 1993 Mo. App. LEXIS 134, 1993 WL 18818 (Mo. Ct. App. 1993).

Opinion

BERREY, Presiding Judge.

Ford Motor Credit Company appeals the amount of the judgment entered by the trial court following a trial to a jury of this breach of contract case. Housing Authority of Kansas City, Missouri appeals the trial court’s judgment as to liability. The judgment as to liability is affirmed and the judgment as to damages is amended to conform with this opinion.

On August 1, 1988, Ford Motor Credit Company (“FMCC”) and Housing Authority of Kansas City (“HAKC”) entered into an Equipment Lease-Purchase Agreement (“Agreement”) whereby FMCC would finance HAKC’s purchase of computer and software equipment at a cost of approximately $230,000.00. Pursuant to the Agreement, payments were to be made over a five year period. Then-Executive Director Ben Montijo conducted all negotiations and signed the contract for HAKC.

There was uncontradicted testimony that portions of paragraphs 5 and 7 of the Agreement had been lined through at the time Montijo executed the document. Neither Montijo nor anyone representing HAKC had initialed the lined-through portions. Paragraph 5 pertains to non-appropriation of funds and provides for termination of the lease if funds were not “appropriated, budgeted or otherwise available” in any fiscal year covered by the lease. HAKC informs this court that the purpose of including this language is to protect the public from expenditure of funds by public entities that may not be in the public’s best interest.

HAKC is a Missouri Municipal Corporation created pursuant to § 99.010, RSMo 1986. HAKC, a public housing authority, derives most of its operational funds through Annual Contributions Contracts between HAKC and the United States Department of Housing and Urban Development (“HUD”).

David Rainer, FMCC’s agent, who had the first contact with HAKC, testified that Montijo told him that the cancellation provisions contained in the form contract would not be applicable to this Agreement. In a letter dated May 2, 1988, Montijo informed Rainer that “unlike other municipal corporations, [HAKC is] able to make a long term financing commitment.” In the same letter, Montijo itemized the budgeted expenses for the computer system then in use and compared those to the system being purchased, indicating that the proposed new system would actually cost HAKC $13,000.00 less per year than the current system.

Montijo also provided FMCC with a copy of the minutes of the April 13, 1988, meeting of the Board of Commissioners of HAKC, which memorialized the Board’s discussion about the purchase of the new computer system and the resolution authorizing its acquisition. The resolution states in part:

WHEREAS, the Housing Authority proposes the establishment of an Enterprise Fund to purchase, own and sell use of the computer system to the various HUD programs operated by the Housing Authority;
NOW THEREFORE BE IT RESOLVED by the Board of Commissioners that the Executive Director is authorized to acquire the above-reference [sic] McDonnell Douglas computer system through the use of a Housing Authority Enterprise Fund.

The computer equipment was delivered to HAKC on August 1, 1988. On or about September 25, 1988, FMCC received a check in the amount of $4,831.79, the amount of the initial payment due under the Agreement.

In mid-August 1988, Montijo resigned and Venita Fain was appointed acting Executive Director. On September 26, 1988, FMCC sent three copies of page one of the Agreement to Montijo at HAKC requesting that he initial the lined-through portions of paragraph 5. Those pages were never returned to FMCC. Upon receiving the request to initial, Fain, who had been unaware of the Agreement, contacted HUD to determine her course of action. Thereafter, Fain notified FMCC that HAKC was exercising its right to terminate the Agreement pursuant to the provisions of paragraph 5, even though the termination language had been lined through. HAKC re[591]*591quested that FMCC pick up the equipment and further notified them that no additional payments would be made because HUD had denied HAKC’s budget request for the new equipment. FMCC refused to release HAKC from the contract alleging that the termination language had been lined through and, therefore, was no longer part of the Agreement.

The new computer system was never installed and, in fact, remained in the shipping crates. HAKC was unable to resell the equipment and in March 1990, FMCC sold the system for approximately $19,-000.00. FMCC sued HAKC for the deficiency on the contract.

Paragraph 9 of FMCC’s original petition states, “That pursuant to § 18(i) all past due payments and payments due through the fiscal year 1989 are immediately due and payable.” FMCC prayed for $82,-140.48, the amount due under the Agreement through December 1989. By letter of October 17, 1990, counsel for FMCC advised HAKC that it would ask leave of court to amend “by interlineation” paragraph 9 of its petition to read, “That pursuant to Section 18(i), all past due payments and payments due are immediately due and payable.” FMCC also advised that the prayer would be amended to remove the specific amount and pray “for such sums as are due and payable.” The final paragraph of FMCC’s letter states, “It is our intention by the above interlineation to ask for damages at the time of trial those sums that have accrued to that time.”

By letter dated October 18, 1991, counsel for FMCC reminded HAKC of its intent to amend by interlineation, referencing the letter of October 17, 1990. No written motion to amend was filed with the court. By oral motion the first day of trial, FMCC moved to amend pursuant to the letter of October 17, 1990. The court sustained FMCC’s motion over HAKC’s objection.

The issue of liability under the Agreement was tried to the jury. By agreement of the parties, damages were determined by the court. The crux of the issue submitted to the jury was whether the parties to the agreement intended to delete the non-appropriation language from the contract. The jury found in favor of FMCC and the court assessed damages against HAKC as follows: $105,934.36 in damages, interest and late charges of $18,826.67 giving HAKC a credit of $19,272.00 for the amount received on the sale of the equipment. The court ordered that FMCC recover from HAKC the sum of $105,489.03.

FMCC appeals the amount of the judgment claiming that the trial court erred in limiting FMCC’s damages to payments that had accrued as of December 31, 1990, because FMCC was entitled to anticipate HAKC’s continued breach and, therefore, to the full amount under the contract. FMCC also claims trial court error in not assessing FMCC’s attorney’s fees against HAKC, as allowed under the Agreement.

On cross-appeal, HAKC claims the trial court erred in denying HAKC’s motion for judgment notwithstanding the verdict because (1) judgment was barred by Article VI, Section 26(a) of the Missouri Constitution; (2) as a matter of law, there was no enforceable agreement because (a) FMCC rejected HAKC’s offer and HAKC did not accept FMCC’s counteroffer, or (b) the agreement lacks mutuality of assent to the same terms at the same time; and (3) HAKC had a common law or statutory right to terminate the agreement based on non-availability or non-appropriation of funds. HAKC also claims the trial court erred in allowing testimony by David Rain-er concerning the oral agreement by Monti-jo to exclude the termination language contained in paragraph 5 of the Agreement because the testimony violated the statute of frauds or the parole evidence rule.

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Bluebook (online)
849 S.W.2d 588, 1993 Mo. App. LEXIS 134, 1993 WL 18818, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ford-motor-credit-co-v-housing-authority-of-kansas-city-moctapp-1993.