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Meco Systems2/14/2001
all financing to be provided to for acquisition of the site and construction of the improvements described herein."
On August 26, 1993, MECO obtained a grading permit. However, neither the financing nor building permit had been obtained by August 31, 1993. Accordingly, on August 31, 1993, DBE's lawyer sent a letter to MECO that provided, inter alia:
"[DBE's] financing contingency is not yet satisfied . . . . Although we do not expect any problems . . . is not yet in a position to waive the contingency for the closing of financing under the Addendum. However, . . . does not want to hold up MECO . . . from its time schedules. Therefore, has instructed me to advise [MECO] to proceed with grading and work under the contract for the next ten (10) days subject to a Stop Work Order in the event any problems arise in satisfying the financing contingencies. Proceeding in this manner, will be responsible only for the work actually performed during this period of time until a Stop Work Order is issued."
DBE's letter advised MECO if it found the proposal agreeable, it should sign and return a copy of the letter to DBE. MECO did agree, signed the letter, and returned it as directed. MECO then commenced and worked on site preparation for ten days.
On September 10, 1993, DBE's lawyer wrote to MECO and authorized an additional ten days' work "pursuant to the terms of my letter of August 31, 1993, and the above-referenced contract and the Addendum thereto." As before, DBE cautioned that its "authorization [for ten days' site work] is without waiver of any provision in the contract or its addendum."
When the second ten-day period passed without DBE's financing in place, MECO wrote DBE on September 20, 1993, as follows:
"We understand you anticipate closing . . . the financing . . . September 21, which will enable you to waive the [financing] contingency . . . and release us to proceed with all buy-out of the project. We look forward to that release.
"In the meantime, please sign and return a copy of this letter authorization for MECO . . . to order . . . steel . . . and Building parts
"Signing of this letter will also authorize continuance of the site preparation past today's date. . . ."
DBE signed and returned the letter to MECO with this notation: "Authorization to continue work extended to September 30, 1993 pursuant to terms of prior correspondence authorizing commencement of work."
On September 29, 1993, DBE's lawyer wrote MECO advising DBE was releasing "the financing contingency set forth in the Addendum." On October 4, 1993, MECO sent DBE a labor and material invoice that covered the period July 9 through September 25, 1993. The invoice amount was $52,938.41. It did not, however, contain the mechanic's lien notice mandated by section 429.012. In late October 1993, DBE paid the invoice amount ($52,938.41) without having previously received a section 429.012 notice from MECO.
MECO next billed DBE on November 4, 1993, with a document entitled "Invoice 2." This invoice contained the notice mandated by section 429.012, as did all subsequent monthly invoices submitted by MECO to DBE. DBE timely paid MECO on the invoices until June 1994. MECO in turn promptly paid its subcontractors during those periods.
On June 2, 1994, MECO billed DBE for $872,344.91 for work from May 1, 1994, through May 28, 1994. DBE only paid part of this billing and never fully paid later invoices submitted by MECO.
Once DBE quit paying MECO, it (MECO) stopped paying its subcontractors. MECO's refusal to pay its "subs" was based on a "pay if paid" provision in the contrac
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