Aladdin Const. Co. v. John Hancock Life Ins. Co.
| Docket Number: | 2004-CA-00090-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 10-27-2005 Opinion Author: RANDOLPH, J. Holding: Reversed and Remanded |
|
| Additional Case Information: |
Topic: Contract - Agency relationship - General contractor - Construction manager - Section 85-7-181 - Section 31-3-15 - Privity Judge(s) Concurring: Smith, C.J., Waller and Cobb, P.JJ., Easley, Carlson and Graves, JJ., Non Participating Judge(s): Diaz, J., Dissenting Author : Dickinson, J., Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
|
| Trial Court: |
Date of Trial Judgment: 01-28-2004 Appealed from: Jackson County Chancery Court Judge: Jaye A. Bradley, Sr. Disposition: The Jackson County Chancery Court concluded that there were no genuine issues of material fact and granted John Hancock’s motion for summary judgment. Case Number: 2001-1202-JB |
|
| Party Name: | Attorney Name: | |||
| Appellant: | ALADDIN CONSTRUCTION COMPANY, INC.,
BRIGHTWAY SERVICES, INC., JONES SIGN
COMPANY, INC. AND ROBERT JOE HILL d/b/a
J-N-H CONSTRUCTION |
JOSEPH Q. WHITE, JR., JOHN G. McDONNELL, HENRY P. PATE |
||
| Appellee: | JOHN HANCOCK LIFE INSURANCE COMPANY | RICK ANDREW LA TRACE |
|
|
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. |
|
| Topic: | Contract - Agency relationship - General contractor - Construction manager - Section 85-7-181 - Section 31-3-15 - Privity |
| Summary of the Facts: | John Hancock Mutual Life Insurance Company, owner of Singing River Mall, entered into a contract with McMo, Inc. to provide project management services, in addition to design and construction documentation services, for a renovation of the mall. Thereafter, McMo entered into separate agreements with Aladdin Construction Company, Brightway Services Inc., Jones Sign Company, and J-N-H Construction, as contractors, whereas McMo is identified as the “construction manager,” retained by “Owner” John Hancock. John Hancock routed all payments due those companies through McMo, up to the full contract price. However, McMo failed to pay either all or part of what was owed to the companies. McMo subsequently filed for bankruptcy. The companies sought recovery from John Hancock arguing that McMo was an agent of John Hancock. Separate actions were filed in both the Circuit Court of Jackson County and the Chancery Court of Jackson County. The circuit court case was transferred to chancery court, and all cases were consolidated. The court granted John Hancock’s motion for summary judgment, and the companies appeal. |
| Summary of Opinion Analysis: | The companies argue that McMo, as construction manager, was an agent of John Hancock because of which the stop-notice limitations of section 85-7-181 are inapplicable. Whether an agency has in fact been created is to be determined by the relations of the parties as they exist under their agreements or acts, with the question being ultimately one of intention. A person may be an independent contractor as to certain work and a mere agent as to other work for the same employer. The heart of the dispute, the lack of payment receipt by the companies, without doubt involves an agency relationship between John Hancock and McMo. The “Manage Construction Funds and Pay Applications” provision of the John Hancock-McMo agreement provides, “[McMo] will receive, process and approve all applications for payment submitted by the Fabricator/Suppliers. We will submit a summarized package to [John Hancock] on a monthly basis containing all approved pay applications and necessary paperwork for check preparation by [John Hancock]. [John Hancock] will route all payments through McMo.” Thus, there is evidence that John Hancock contractually obligated itself and factually controlled the manner of payment to the companies. McMo was unquestionably an escrow agent for John Hancock, as payments from the Vendor Funds Escrow account were contractually to be routed through McMo for payment to the Fabricator/Supplier-plaintiffs, and John Hancock should be estopped from now seeking to presently disclaim such judicial admission. A general contractor is charged with the total construction, while a manager is a person who administers or supervises the affairs of a business, office, or other organization. As a “construction manager,” McMo clearly fits within such agency definitions. McMo was contractually required to recommend Fabricator/Suppliers to John Hancock, to act as the conduit for routing payments to the companies, and to act in the interests of John Hancock, all of which are genuine issues of contested material facts regarding the existence of an agency relationship between John Hancock and McMo. An entity which acts as agent for an owner intending no profit from the construction itself is not a contractor or master workman for the purposes of section 85-7-181. If McMo’s role regarding the payment of the companies was not as a contractor or master workman, but as an agent, then section 85-7-181 is altogether inapplicable. Furthermore, McMo’s status as a general contractor is called into question by its failure to obtain a contractor’s license in the state of Mississippi as required under section 31-3-15. John Hancock argues that it was not privy to the contracts between McMo and the companies and the companies were not privy to the John Hancock-McMo contract. However, privity is not required to establish contractual obligations. A third party can enforce a contractual provision made primarily for his benefit even if he was not a party to the contract. For the third person beneficiary to have a cause of action, the contracts between the original parties must have been entered into for his benefit, or at least such benefit must be the direct result of the performance within the contemplation of the parties as shown by its terms. Because the companies are directly referenced under the terms of the “Negotiate Construction Agreement(s)” provision as the “Fabricator/Suppliers,” each company is a party whose performance was contemplated. Under the “Manage Construction Funds and Pay Applications” provision, John Hancock assumed the obligation to pay the companies, albeit through McMo. Therefore, the companies’ status vel non as third-party beneficiaries of the John Hancock-McMo agreement is a contested issue of material fact. |
Home | Terms of Use | About the JDP | Feedback | Using JDP | MC Law Library | Mississippi Supreme Court
