Lucent Technologies, Inc. v. Mid-West Electronics, Inc.

49 S.W.3d 236, 2001 Mo. App. LEXIS 1143, 2001 WL 725372
CourtMissouri Court of Appeals
DecidedJune 29, 2001
DocketWD 58668
StatusPublished
Cited by17 cases

This text of 49 S.W.3d 236 (Lucent Technologies, Inc. v. Mid-West Electronics, Inc.) 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
Lucent Technologies, Inc. v. Mid-West Electronics, Inc., 49 S.W.3d 236, 2001 Mo. App. LEXIS 1143, 2001 WL 725372 (Mo. Ct. App. 2001).

Opinion

THOMAS H. NEWTON, Judge.

I. Factual and Procedural History

Lucent Technologies, Inc. (Lucent), 1 by and through its predecessor AT & T Corporation (AT & T) and Mid-West Electronics, Inc. (Mid-West) entered into a purchase agreement on September 13, 1995, by which Mid-West agreed to purchase Kansas City Works for $45 million. Kansas City Works was a large manufacturing facility located in Lee’s Summit, Missouri. Lucent also entered into a written license agreement granting Mid-West access to a portion of the property. Lu- *239 cent also gave Mid-West express authorization to access a portion of the facility that is now the subject to this dispute, known as the KC-1 clean room 2 for the purpose of making improvements to the area and obtaining the proper certification.

Mid-West made a down payment of $250,000 as a deposit. And if on January 5, 1996, Midwest was not satisfied with the clean room, it could terminate the purchasing agreement and receive a full refund of the entire down payment. The purchasing agreement had an initial closing date thirty days after November 13, 1995, but several extensions were granted.

In order to prepare for closing, Mid-West contacted Air Filtration Engineering Company in Tucson (AFECT) to renovate the KC-1 clean room. Lucent recommended AFECT to Mid-West because Lu-cent had hired AFECT to do some work in the past. AFECT recommended replacing all of the filters at a cost of approximately $700,000. Mid-West accepted AFECT’s bid. The work continued until January 5, 1996, when the due diligence period expired, and Mid-West was not prepared to close on the property. Again, the parties executed an extension agreement where Mid-West agreed to continue its repairs to the facility and pay the costs out of its own funds requiring a deposit in an escrow account of $750,000. Midwest entered into an escrow agreement with Old Republic Title Company (Old Republic). As the escrow agent, Old Republic would disburse the funds after a request from Midwest and final approval by Lucent. If Mid-West purchased the property, the remaining escrow funds would be returned; but if the sale did not close, Lucent would retain the deposit and the improved clean room. The contract was silent as to who was responsible for costs incurred above the $750,000 set aside in the escrow account.

The extension agreement also required Mid-West to supply copies of all third-party purchase orders or repair agreements executed by Mid-West, and further reserved Lucent the reasonable right to approve payments made out of the escrow account. Lucent approved all AFECT’s transactions to improve and complete the required work to repair the KC-1 clean room via Mid-West. All but the four following invoices were paid (1) $72,277.18 for filters, installation, and repairs at the facility, invoice number 8665, request for payment made to Mid-West on June 14, 1996; (2) $52,250.00 for certification of the KC-1 facility as a Class 1 clean room, invoice number 8650, request for payment made to Mid-West July 23, 1996; and (3) and (4) $7,700.00 for repairs and services to the defective filters, invoice numbers 8739 dated August 2, 1996, and 8792 submitted September 6,1996.

A new closing date was scheduled requiring Mid-West to either purchase the property or Lucent would obtain an improved clean room and all remaining funds in the escrow account. Leakage problems, however, caused a delay in the renovation process and more extensions were granted. AFECT hired Donaldson Company (Donaldson) to supply and repair the filters for the clean room, but during the course of installing the filters, leaks were discovered. Donaldson was responsible for 87.5% of the defective filters, which caused the leaks. AFECT attributed 12.5% fault to the installers that Mid-West hired. AFECT sent Mid-West invoices to cover the costs of the additional repairs totaling $61,606.70. Mid-West did not reimburse AFECT for any of the costs asso *240 ciated with the faulty filtration system. AFECT eventually reached an agreement with Donaldson, and, therefore, AFECT is only seeking damages for $7,700 of that amount to cover the 12.5% in installation costs.

After resolving the leakage problems, AFECT certified that the room was a KC-1 clean room in October 1996. A new closing date of December 13, 1996, was scheduled. Mid-West failed to close, defaulting on its agreement with Lucent. This was the final closing date, and Lucent would not agree to any more extensions. AFECT submitted the invoices for payment to Mid West prior to this final closing date, but Lucent did not reimburse AFECT out of the remaining $12,402.00 in escrow funds.

Lucent broke off all negotiations with Mid-West and obtained the KC-1 clean room. Lucent also kept the remaining funds in the escrow account. Lucent then entered a purchasing agreement with Townsend Summit, LLC (Townsend) for the sale of Kansas City Works, including the clean room. Lucent used the certified status of the KC-1 clean room as a marketing tool to draw potential buyers. Townsend purchased the facility and acquired the clean room. Lucent advised Townsend that a dispute existed as to the ownership of the new filters, but Lucent agreed to hold Townsend harmless of all claims and damages arising from that dispute. Lucent collected $28 million from this sale, and collected $12,402 from the escrow account.

AFECT’s claims include damages in quantum meruit against Lucent for receiving the benefit of the filters and the clean room, without compensating the supplier or laborer. AFECT demanded payment on September 24, 1997, but Lucent refused to pay.

A bench trial was held on the matter, and the trial court found that AFECT was entitled to $72,277.18 for filters, installation, and repairs at the facility and $52,250.00 for certification of the KC-1 facility as a Class 1 clean room for a total of $124,527.18 in damages. Lucent brought this appeal, and AFECT filed a cross-appeal.

Lucent raises three points on appeal, two of which arise out of AFECT’s quantum meruit claim. The first alleges that the trial court erred in rendering judgment for AFECT because an action in quantum meruit requires proof that Lu-cent accepted and retained the renovated clean room under inequitable circumstances, and no such evidence was presented. Lucent, further, argues that the evidence showed that Mid-West was not Lucent’s agent, Lucent created no expectation of payment, and AFECT looked only to Mid-West for payment. Lucent also contends that AFECT, as a contractor, should not be allowed a quasi-contractual recovery because a contractor has a statutory remedy available, and AFECT failed to avail itself of a mechanic’s lien. Finally, Lucent asserts that a quantum meruit claim requires proof that the owner received a benefit from the plaintiff, and the evidence showed that Lucent did not receive a benefit from AFECT in that the renovated clean room has never been used, and it did not add value to the property.

In its cross-appeal, AFECT argues that the trial court should have rendered judgment for AFECT in the amount of $7,700.83 because the work and activities represented by that sum were part of the overall benefit conferred upon Lucent, and Lucent was aware and appreciated the benefit.

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

Related

Ledeaux v. Motorola Inc.
2018 IL App (1st) 161345 (Appellate Court of Illinois, 2018)
Travelers Commercial Casualty Co. v. Kagan Construction, L.L.C.
408 S.W.3d 249 (Missouri Court of Appeals, 2013)
City of Cape Girardeau ex rel. Kluesner Concreters v. Jokerst, Inc.
402 S.W.3d 115 (Missouri Court of Appeals, 2013)
Tennille v. Western Union Company
751 F. Supp. 2d 1168 (D. Colorado, 2010)
Overka v. American Airlines, Inc.
265 F.R.D. 14 (D. Massachusetts, 2010)
Jablonski v. Barton Mutual Insurance Co.
291 S.W.3d 345 (Missouri Court of Appeals, 2009)
Moran v. Hubbartt
178 S.W.3d 604 (Missouri Court of Appeals, 2005)
QHG of Lake City, Inc. v. McCutcheon
600 S.E.2d 105 (Court of Appeals of South Carolina, 2004)

Cite This Page — Counsel Stack

Bluebook (online)
49 S.W.3d 236, 2001 Mo. App. LEXIS 1143, 2001 WL 725372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lucent-technologies-inc-v-mid-west-electronics-inc-moctapp-2001.