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Meco Systems2/14/2001
setting a condition precedent to the general contractor's obligation to pay. Conversely, if such a provision is ambiguous, it will be interpreted as fixing a reasonable time for the general contractor to pay. American Drilling also teaches, at least inferentially, that when a general contractor puts a risk-shifting provision in a subcontract, the burden of clear expression is on the general contractor. See Graue v. Missouri Property Ins. Placement Facility, 847 S.W.2d 779, 785 (Mo.banc 1993) (holding an ambiguous contract will be construed against the party drafting the same); Dec Elec., Inc. v. Raphael Const. Corp., 558 So.2d 427, 429 (Fla.1990).
Here, Subcontractors' principal claim of "pay if paid" ambiguity is based on clauses found in the Main Contract and accompanying general conditions between MECO and DBE. Subcontractors insist any subcontract analysis must include consideration of provisions in the Main Contract, including its general conditions, because they were expressly included as part of Subcontractors' agreements with MECO. We agree. Writings made a part of a contract by annexation or reference are to be considered in deciding if it is ambiguous. J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261, 264 (Mo.banc 1973).
The Main Contract between MECO and DBE was a "COST OF THE WORK PLUS A FEE" type of contract that required MECO to pay its subcontractors before DBE reimbursed MECO. Any doubt that the Main Contract required MECO pay Subcontractors before DBE paid MECO is removed by the General Conditions. Article 9.10.2 thereof required MECO to submit an affidavit certifying that Subcontractors had been paid before final payment from DBE became due. In contrast to these Main Contract provisions, Articles 2.1 and 2.4 of the subcontracts purport to require payment from DBE to MECO as a condition precedent to final payment becoming due to Subcontractors. The direct conflict between the subcontracts and the Main Contract (including the General Conditions section) creates, at a minimum, an ambiguity regarding who must bear the risk of DBE's nonpayment.
In reaching our conclusion, we rely heavily on OBS Company Inc. v. Pace Construction Corp., 558 So.2d 404 (Fla. 1990). The "pay if paid" clause in the Pace subcontract differed from the ones here to the extent it used the term, "conditions precedent." Id. at 405. Otherwise, the Pace subcontract was similar as it incorporated and referenced all Owner/Contractor agreements, including general conditions. Id. at 406 n.1. Also, the Owner/Contractor agreement in Pace had language which, as here, obligated the contractor to pay the subcontractor before the owner reimbursed the contractor. Id. at 406 n.2, 3. Because of the conflict, the Pace court concluded that "when [the pay if paid] provision . . . of the subcontract is read in conjunction with the general contract and conditions, ambiguity exists and prevents the provision from effectively shifting the risk of the owner's nonpayment from [the contractor] to [the subcontractor.]" Id. at 407. Pace is factually akin to this case in most material respects. We find the Pace court's reasoning persuasive and in keeping with the teaching of American Drilling.
In so stating, we do not ignore MECO's claim that a clause in its subcontracts, but allegedly not in the Pace subcontract, makes Pace inappositive. Specifically, MECO points to this proviso at the end of Article 1.2 of its subcontracts: "Provided, however, to the extent that any provision of the [Main] Contract is inconsistent with any provision of this [Subcontract], this [Subcontract] shall govern." See note 8. MECO argues that this "supremacy" clause "becomes a part of both the Main Contract and the Su
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