Kansas City Hill Restaurant Corp. v. Dean's Fairmount Co.

847 S.W.2d 472, 1992 Mo. App. LEXIS 995, 1992 WL 443756
CourtMissouri Court of Appeals
DecidedJune 9, 1992
DocketNo. WD 44944
StatusPublished
Cited by3 cases

This text of 847 S.W.2d 472 (Kansas City Hill Restaurant Corp. v. Dean's Fairmount Co.) 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
Kansas City Hill Restaurant Corp. v. Dean's Fairmount Co., 847 S.W.2d 472, 1992 Mo. App. LEXIS 995, 1992 WL 443756 (Mo. Ct. App. 1992).

Opinion

FENNER, Judge.

Appellant, Specialty Restaurants Corporation (SRC), appeals from a judgment of the trial court, without a jury, in favor of respondent, Dean’s Fairmount Company (Dean), in the amount of $1,501,685.80.

SRC was in the business of operating various theme restaurants. A wholly owned subsidiary of SRC, Kansas City Hill Restaurant Corporation (K.C. Hill) operated a restaurant in Kansas City known as Baby Doe’s Matchless Mine Restaurant (Baby Doe’s). Baby Doe’s was constructed by K.C. Hill and SRC on a hill southwest of downtown Kansas City, Missouri, with a panoramic view from the site overlooking the city. The restaurant site was owned by Dean and leased to K.C. Hill under a Lease Agreement entered into between the parties on April 1, 1978, (Lease Agreement). The term of the Lease Agreement was for 50 years to March 31, 2028.

The Lease Agreement provided for the letting of approximately 174,240 sq. ft. of Dean’s ground for a minimum rent over the term of the lease of $999,996.00. The rent was to be paid in monthly installments of $1,666.66. In addition to the minimum monthly rent, percentage rent was provided whereby Dean was to receive a sum, if any, by which 2.5% of the monthly gross receipts from the restaurant’s sales exceeded the minimum monthly rent.

The Lease Agreement provided that K.C. Hill was to construct the restaurant at its expense, with the work performed in a good and workmanlike manner in accordance with sound construction practices. Under the terms of the Lease Agreement, K.C. Hill was required, prior to construction, to obtain a site test which indicated to its satisfaction that the existing site condition, including, but not limited to, soil conditions and lateral and subjacent support of the leased premises, was acceptable for KC Hill’s intended use.

SRC guaranteed performance of the Lease Agreement by K.C. Hill and provided there was “no default,” the guarantee would expire “when, and only when, each of the following conditions had been met: (a) the improvements (as defined in the Lease) have been completed, paid for and are ready for use in accordance with the Lease Agreement and other documents, (b) [Dean] shall have been paid in full, including interest thereon, for all liabilities, and, (c) when (1) year has expired since the opening of the restaurant for business.”

Default was defined under the terms of the Lease Agreement as “a failure to perform any other covenant or condition of this Lease on the part of the Tenant.”

SRC acted as general contractor on the construction of Baby Doe’s. SRC encountered problems during construction of the restaurant with support piers slipping and tilting away from the position in which they were set and some support posts being off center.

These problems were monitored by SRC during construction and after Baby Doe’s opened for business in September of 1980. The situation in regard to the tilting piers continued to be monitored until July 30, 1985, when Baby Doe's suffered major damage as a result of the structure sliding on the hill on which it was built. The restaurant was torn down as a result of extensive damage from sliding on the hill.

The Lease Agreement provided that in the event of any damage or loss to the restaurant, the tenant was required to promptly repair or rebuild the restaurant so as to make the building at least equal in value to the building existing immediately prior to such occurrence. Before beginning any such repairs or rebuilding, or letting any contracts in connection therewith, the tenant was required to submit for Dean’s approval, which approval Dean agreed not to unreasonably withhold, completed and detailed plans and specifications for the rebuilding of the restaurant.

Prior to obtaining Dean’s approval, SRC entered into a construction contract for the rebuilding of the restaurant with A.L. Huber & Son, Inc. Dean was not satisfied with the construction contract, did not ap[474]*474prove said contract and the restaurant was not rebuilt.

Insurance proceeds of approximately $1,000,000.00 were paid as a result of the loss to the restaurant facility and this litigation ensued by way of claim and counterclaim with all parties arguing entitlement to damages for breach of the terms of the Lease Agreement. At the conclusion of the court tried case, judgment was entered in favor of Dean and against K.C. Hill and SRC in the amount of $1,501,685.80.

We review the points raised in this appeal under the standard providing that upon appellate review of cases tried by the court without a jury, the judgment of the trial court will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). Appellate courts should exercise the power to set aside a judgment of the trial court on the ground that it is against the weight of the evidence with caution and with a firm belief that the decree or judgment is wrong. Id. Conflicts in the evidence are for the trial court to resolve and the facts and all reasonable inferences must be taken in accordance with the result reached by the trial court. Arnett v. Johnson, 689 S.W.2d 836 (Mo. App.1985).

In its first point on appeal, SRC argues that the trial court erred in finding that the Lease Agreement was violated by failure to construct the restaurant in a good and workmanlike manner and in violation of the plans and specifications.

There is no dispute that the Lease Agreement required that the restaurant be constructed in a good and workmanlike manner and in accordance with the plans and specifications. However, SRC argues that any variances from the plans and specifications were de minimis.

SRC’s own construction superintendent testified that not only was Baby Doe’s not built in accordance with the plans and specifications, but that in almost forty years of construction experience he had never seen any other buildings constructed more out of sync with the plans and specifications than Baby Doe’s. Furthermore, there was expert testimony that the foundation elements for Baby Doe’s were not constructed in accordance with the plans and specifications and that necessary soil testing and soil preparation was not done.

Contrary to SRC’s argument, there was substantial evidence in the record to show that the restaurant was not constructed in a good and workmanlike manner and that construction was not in accordance with the plans and specifications. SRC’s first point is denied.

SRC argues second that the trial court erred in holding that the Lease Agreement had been breached by the failure of SRC to provide complete plans and specifications for the rebuilding of the restaurant.

The Lease Agreement provided that in the event that construction was to be performed by an outside general contractor, K.C. Hill and SRC were to provide Dean with a performance and completion bond. No such bond was provided and there was expert testimony that the failure to provide a performance bond renders plans and specifications inadequate. Additionally, there was evidence presented to show that the plans and specifications presented to Dean for rebuilding the restaurant were inadequately specific regarding engineered fill to ensure that the same structure deficiencies evident in the original construction would not be repeated.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Stoup v. Robinson
933 S.W.2d 935 (Missouri Court of Appeals, 1996)
Stewart v. Stewart
866 S.W.2d 154 (Missouri Court of Appeals, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
847 S.W.2d 472, 1992 Mo. App. LEXIS 995, 1992 WL 443756, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kansas-city-hill-restaurant-corp-v-deans-fairmount-co-moctapp-1992.