G&G Mech. Constructors, Inc. v. Jeff City Indus., Inc., No. WD80840, 2018 Mo. App. LEXIS 271 (Mar. 20, 2018)

This case arose out of a project in Columbia, Missouri on which Jeff City Industry, Inc. (“JCI”) was the general contractor and G&G Mechanical Constructors, Inc. (“G&G”) was a subcontractor.

The draft subcontract contained an interest provision which provided that overdue payments “shall bear interest at the annual rate of 18% or the highest rate allowed by law, if lower. Retainage shall not be held out of payment.”  JCI struck through this provision, wrote “5% Retiange [sic]” in the margin, initialed it, and sent it to G&G.  G&G also initialed the revision.

When JCI failed to pay G&G for its work, G&G sued JCI for breach of contract, unjust enrichment, and violation of Missouri’s Prompt Pay Act.  A jury returned a verdict against JCI, and the trial court entered a judgment against it which included prejudgment interest at the rate of 9% pursuant to Missouri Revised Statute § 408.020.
Continue Reading If You Want to Avoid Prejudgment Interest You Have to Expressly Say So in the Contract, Merely Striking the Interest Provision From the Contract May Not Work