Missouri Supreme Court asked to clarify appeal-reservation rule

A $40,000 dispute between two contractors is headed to the Missouri Supreme Court after the full Court of Appeals Southern District split on whether a recently revised court rule allowed it to review one of the appellant’s arguments.

The procedural conflict stems from a home renovation gone wrong. Fox Creek Construction was hired to perform extensive updates to a couple’s house in Blue Eye, Missouri. Fox Creek hired a subcontractor, Opie’s Landscaping, to build a waterfall outside one of the home’s windows.

The waterfall was built in the wrong location, however, and it leaked extensively. After six months of trying to fix the water feature, Opie removed it.

Fox Creek sued Opie for breach of contract. After a bench trial, Christian County Circuit Judge Jennifer Growcock ruled in favor of Fox Creek and ordered Opie to pay $40,250, representing the $35,000 cost of the waterfall, plus the 15 percent profit Fox Creek was supposed to make on the project.

On appeal, all seven judges of the Southern District affirmed the ruling. Yet they split 4-3 on whether one of Opie’s points on appeal was properly preserved and ordered the case transferred to the Supreme Court for a final ruling.

Among Opie’s arguments was that the trial judge’s damage assessment didn’t rest on substantial evidence. Fox Creek’s witness had testified that it would have cost at least $35,000 to reconstruct a functioning waterfall, but Opie argued that was a “conclusory opinion by a non-expert offering little testimony of probative value.” The landscaper’s expert had testified that the waterfall could have been repaired for just $2,500.

Chief Judge Nancy Steffen Rahmeyer, writing for the majority, said the trial judge was free to believe Fox Creek’s expert. But in a partial concurrence, Judges Don E. Burrell, Gary W. Lynch and William W. Francis Jr. said Opie filed a post-trial motion to amend the judgment but never specifically asked the trial court to reconsider whether the award was supported by substantial evidence.

Until two years ago, Supreme Court Rule 78.07(b) said that, in bench-tried cases, “neither a motion for a new trial nor a motion to amend the judgment or opinion is necessary to preserve any matter for appellate review.” In 2017, the court added the phrase “if the matter was previously presented to the trial court” to the end of that sentence.

That amendment, Burrell wrote in his concurring opinion, appears to flow from a 2014 Supreme Court case, Brown v. Brown, in which the court said that despite the language of the old rule, an issue “must be presented to the trial court to be preserved for appeal.”

“Because we are constitutionally obligated to follow the most recent pronouncements of our supreme court . . . we should not be reviewing the merits of a claim on appeal that was not first presented to the trial court for its consideration and ruling,” Burrell wrote.

It’s not clear, though, what “presented” means in the context of a case in which the judge heard and weighed the testimony at trial. In a footnote, Rahmeyer said the trial judge “was not confused or uninformed as to what each party was contending” and that Opie had adequately preserved the issue.

“The trial court’s opinion made it clear that the trial court made credibility findings that the waterfall could not be repaired and awarded the full amount of the waterfall plus profit to [Fox Creek]” she wrote.

Judges Jeffrey W. Bates and Mary W. Sheffield joined Rahmeyer. Judge Daniel E. Scott also concurred, but he wrote separately to say that the judges who disagreed “offer a valuable warning about this rule change and its potential implications.”

“We all agree except on why Point 2 fails,” Scott wrote. “Maybe three judges are right and our supreme court meant its 2017 amendment to push Rule 78.07(b) that far. But I’m too unsure to go that way when Point 2 plainly fails on the merits.”

The case originally was heard June 4 by Rahmeyer, Burrell and Lynch. But the court later took up the case en banc on its own motion before transferring it to the Supreme Court.

Richard L. Schnake of Neale & Newman in Springfield, an attorney for Fox Creek, said the case presented an interesting issue, even if it did prolong the ligation for his client.

“My client won 7-0 on the merits,” he said. “But it’s a question of how does the appellate court apply this new rule and what’s the extent of this new rule. They’re looking at that as an issue of general interest or importance statewide that the Supreme Court ought to look at.”

Russell Schenewerk of Schenewerk & Finkenbinder in Branson, pointed to a state statute that appears to allow an appellate court to consider the sufficiency of the evidence even without a specific motion.

“I think any time there’s a conflict between a rule and a statute and the Supreme Court has a chance to come in and resolve it, it’s probably good for all lawyers in Missouri,” he said. But, he added, the Supreme Court could choose to resolve the case on other grounds.

The case is Fox Creek Construction Inc. v. Opie’s Landscaping LLC, SD35668.