Serv. Elec. Supply Co., Inc. v. Hazlehurst Lumber Co., Inc.
| Docket Number: | 2004-CA-02135-COA Linked Case(s): 2004-CA-02135-COA |
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| Court of Appeals: |
Opinion Link Opinion Date: 02-28-2006 Opinion Author: CHANDLER, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Contractual relationship - Section 85-7-181 - Estoppel Judge(s) Concurring: King, C.J., Lee and Myers, P.JJ., Barnes, Ishee and Roberts, JJ. Dissenting Author : Irving, J. Dissent Joined By : Griffis, J. Concurs in Result Only: Southwick, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 09-29-2004 Appealed from: Copiah County Circuit Court Judge: Lamar Pickard Disposition: SUMMARY JUDGMENT WAS GRANTED IN FAVOR OF THE DEFENDANT. Case Number: 2002-0509 |
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| Party Name: | Attorney Name: | |||
| Appellant: | SERVICE ELECTRIC SUPPLY COMPANY, INC. |
DEREK ANDREW HENDERSON |
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| Appellee: | HAZLEHURST LUMBER COMPANY, INC. | DENNIS L. HORN, SHIRLEY PAYNE |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Contractual relationship - Section 85-7-181 - Estoppel |
| Summary of the Facts: | Service Electric Supply Company, Inc. sold electrical parts to Magnum Industrial and Controls, Inc. for use in a building project owned by Hazlehurst Lumber Company, Inc. Magnum was the general electrical contractor on the project. Service Electric filed suit against HLC for the value of certain materials which Service Electric had delivered to the job site. HLC moved for summary judgment. Service Electric filed a response and a cross-motion for partial summary judgment. The court granted summary judgment in favor of HLC and denied Service Electric's cross motion for partial summary judgment. Service Electric appeals. |
| Summary of Opinion Analysis: | Issue 1: Contractual relationship Service Electric argues that a letter from HLC to Magnum and Service Electric created a contractual relationship between HLC and Service Electric. Though it experienced problems securing payment from Magnum, Service Electric never availed itself of the statutory lien under section 85-7-181 by serving HLC with a stop notice. Therefore, Service Electric stood as a general creditor of Magnum and did not have any right to recovery from HLC. However, Service Electric argues that no statutory lien was necessary because it had a direct contractual relationship with HLC that arose from the letter. While HLC did agree to issue joint checks for any materials which Service Electric sold to Magnum for the project, Service Electric had no return obligation to HLC to sell materials to Magnum. Had Service Electric chosen to stop selling materials to Magnum, or had declined to sell Magnum any materials whatsoever, HLC would have had no recourse in contract. Consequently, there was no mutuality of obligation between HLC and Service Electric and, thus, no contract. Service Electric's sale of goods to Magnum was not consideration to support a contract between HLC and Service Electric. Under the HLC-Magnum construction contract, HLC was to pay Magnum for materials used in the project. The letter was an agreement between HLC and Magnum as to how HLC would pay Magnum for materials for which it owed payment to Magnum under the contract. Since no contract existed between HLC and Service Electric, the latter stands as a general creditor of Magnum. Issue 2: Estoppel Service Electric argues that, even if there was no contract between it and HLC, HLC was estopped by its representations from denying its liability to Service Electric. An estoppel may arise from the making of a promise, even though without consideration, if it was intended that the promise should be relied upon and in fact it was relied upon, and if a refusal to enforce it would be virtually to sanction the perpetuation of fraud or would result in other injustice. Service Electric claims an estoppel arose because, in shipping materials to Magnum, it detrimentally relied upon HLC's promise "to pay for materials used on our project NO. 699-01 by joint check." It is impossible to discern from the language of the letter whether HLC promised to pay for all materials used in the project, or simply promised to issue joint checks as a method of payment to Magnum for materials. However, due to the contractual relationships between HLC and Magnum and between Magnum and Service Electric, Service Electric could not reasonably have construed the letter as HLC's agreement to pay for all materials ordered. Since HLC had a contract for parts with Magnum, Service Electric could not reasonably have construed the letter to signify that HLC would buy parts directly from Service Electric. Service Electric argues that it relied on HLC's assurance to its detriment because HLC made one check for $13,787.05 payable to Magnum alone. Magnum cashed the check and absconded with the funds which it owed Service Electric. Service Electric did incur detriment from HLC's failure to issue a joint check as promised. However, any injustice that resulted from HLC's failure to issue a joint check was abrogated by Service Electric's negligent failure to assure itself that Magnum's check was good before notifying HLC that it could release funds to Magnum. HLC resumed paying Magnum in reliance upon Service Electric's assurance that it had been paid the $13,787.05. |
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