Summerall Elec. Co., Inc. v. Church of God at Southaven
| Docket Number: | 2008-CA-02120-COA | |
| Court of Appeals: |
Opinion Link Opinion Date: 01-05-2010 Opinion Author: Myers, P.J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Stop notices - Section 85-7-181 - Agency relationship Judge(s) Concurring: King, C.J., Lee, P.J., Irving, Griffis, Barnes, Ishee, Roberts and Maxwell, JJ. Dissenting Author : Carlton, J., without separate written opinion. Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 10-27-2008 Appealed from: DeSoto County Chancery Court Judge: Mitchell M. Lundy, Jr. Disposition: FOUND IN FAVOR OF THE CHURCH OF GOD Case Number: 07-02-0252 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | SUMMERALL ELECTRIC CO., INC., DON SOUTH PLUMBING, INC. AND SOUTH AND
SON CONSTRUCTION CO., INC. |
JOSEPH M. SPARKMAN |
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| Appellee: | CHURCH OF GOD AT SOUTHAVEN | WILLIAM ALBERT BROWN, GORDON CHARLES SHAW | ||
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 - Stop notices - Section 85-7-181 - Agency relationship |
| Summary of the Facts: | Summerall Electric Company, Inc., Don South Plumbing, Inc., and South and Son Construction Company, Inc., brought suit against the Church of God at Southaven, alleging that the Church, as the property owner, was liable for costs owed to the subcontractors by the general contractor, National Church Services, Inc., which was not a party to the suit. The subcontractors alleged that they had not been paid for their work in the construction of a sanctuary building. The chancellor found that the subcontractors could not recover from the Church because they had failed to give stop payment notices before the Church made its final payment to NCS, the general contractor. The chancellor also found that the subcontractors could not recover against the Church on an agency theory because no principal-agent relationship existed between the Church and NCS. The subcontractors appeal. |
| Summary of Opinion Analysis: | Issue 1: Stop notices Section 85-7-181 prescribes a remedy against the owner for a subcontractor who may have furnished materials used in the erection, construction, alteration, or repair of any house and who is not paid by the contractor. When the unpaid subcontractor gives written notice (commonly termed a “stop notice”) to the owner, the subcontractor becomes entitled to payment from the owner up to the amount in which the owner is indebted to the general contractor as of the date the notice is served. Absent such notice, an owner has no obligation to a subcontractor who has provided materials or services pursuant to an agreement with a contractor. It is uncontroverted that none of the subcontractors filed stop notices before the owner, the Church, had paid its obligations to NCS, the general contractor. Issue 2: Agency The subcontractors argue that the chancellor erred in finding that no agency relationship existed between the Church and NCS. The key is determining whether the agent acts on the principal’s behalf and is subject to the principal’s control. The subcontractors argue that the Church entrusted NCS with the authority to contract on its behalf. This, however, is supported only by citation to vague admissions in the record that the Church entrusted NCS with the authority to do what was necessary to construct the building. On the other hand, the Church cites to the instruments executed between it and NCS that define their relationship as one between owner and contractor. The subcontractors were employed through contracts with only NCS; these instruments referred to each of the subcontractors as “subcontractor,” while NCS was called “contractor.” The subcontractors also argue that the chancellor erred in not finding that NCS had the apparent authority to bind the Church or act on its behalf. Apparent authority exists when a reasonably prudent person, having knowledge of the nature and the usages of the business involved, would be justified in supposing, based on the character of the duties entrusted to the agent, that the agent has the power he is assumed to have. While the subcontractors do cite some acts of the Church indicating the apparent authority of NCS to bind the Church, they fail to offer any evidence or argument concerning reliance by the subcontractors; in fact, none of the witnesses called by the subcontractors testified as to any belief that he or she was employed by the Church or on its behalf. |
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