By JAMES R. KELLER
St. Louis CNR celebrated 50 years in 2019. By coincidence, I wrote an article for The St. Louis Bar Journal in its summer 2019 edition entitled “Missouri Construction Delay Law: A 50-Year Review.”
The article was penned for lawyers, containing about 50 Missouri appellate reported cases over the past 50 years. These 50 cases made the short list as the most important from the more than 2,000 I had reviewed.
The first section focused on owners and the second on contractors and subcontractors.
Here are a few observations about delay disputes during the last 50 years:
Delays so dominate construction disputes that few cases do not include a delay claim.
Missouri case law does not favor any particular party in the construction food chain over any other party on delay issues. Both owners and contractors (including subcontractors) benefit from clearly, fairly worded contracts that cover potential delay issues. The courts will enforce such provisions as written.
Absent contract direction, the courts tend to look to common-sense solutions to decide which party or parties are at fault for the delay(s). If there are multiple parties responsible, the consequences may be shared on a pro-rata basis.
Contract provisions specifically addressing delay issues protect everyone, but owners tend to benefit the most from such provisions.
Missouri courts generally will enforce contract requirements for timely written notice of potential claims. This means that if there is no notice, the claim may collapse for procedural reasons. The particular facts of any case, of course, could provide an exception and there have been some during the last 50 years. (That is why lawyers have a job.)
The decisions of a contractually designated professional on how to enforce the contract and interpret it are final. This should be comforting news to architects and engineers who are typically named as the contract referees.
Surprisingly, no Missouri case has specifically addressed if a “no damage for delay” clause is enforceable. In my opinion, most Missouri construction lawyers believe they generally are.
Missouri has not adopted the concept of cardinal change. Contractors apply this concept to “throw out” the contract – especially its restrictions on delay claims and recovery – when the project experiences rampant, widespread or substantial changes in scope through no fault of the contractor, thereby drastically altering the contract’s original intent and purpose. Contractors then ask judges, juries and arbitrators to award them their “total costs” as opposed to the contract-specified amounts.
A contractor’s best legal friend to compensate for delays is establishing they are excusable. Missouri’s Supreme Court affirmed this concept in 1972, upholding a trial court decision that the contractor’s delays were the owner’s fault. Owner nonpayment is another reason to excuse delay.
James R. Keller is counsel with Sandberg Phoenix & von Gontard P.C. where he concentrates his practice on construction law, complex business disputes, real estate and ADR. He also is an arbitrator and a mediator. Keller can be reached at (314) 446-4285 or jkeller@sandbergphoenix.com.