T.C.B. Constr. Co., Inc. v. W. C. Fore Trucking, Inc.
| Docket Number: | 2010-CA-00177-COA Linked Case(s): 2010-CT-00177-SCT ; 2010-CA-00177-COA ; 2010-CT-00177-SCT ; 2010-CT-00177-SCT |
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| Court of Appeals: |
Opinion Link Opinion Date: 06-12-2012 Opinion Author: Maxwell, J. Holding: AFFIRMED IN PART, REVERSED AND RENDERED IN PART, AND REMANDED |
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| Additional Case Information: |
Topic: Contract - Modified subcontract - Quasi-estoppel - Waiver - Prejudgment interest - Section 75-17-1 - Section 75-17-7 - Punitive damages - Attorney's fees Judge(s) Concurring: Griffis, P.J., Barnes and Roberts, JJ. Judge(s) Concurring Separately: Russell, J., Concurs in Part Without Separate Written Opinion Concur in Part, Dissent in Part 1: Carlton, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 11-03-2009 Appealed from: Harrison County Circuit Court Judge: Roger T. Clark Disposition: DENIED MOTION FOR SUMMARY JUDGMENT AND ALLOWED THE JURY TO DECIDE IF THE CONTRACT HAD BEEN MODIFIED AND DETERMINE DAMAGES Case Number: A2401-2007-25 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | T.C.B. Construction Company, Inc. |
LAWRENCE CARY GUNN JR.
WILLIAM F. GOODMAN JR. |
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| Appellee: | W. C. Fore Trucking, Inc. | JAMES K. WETZEL MICHAEL E. COX | ||
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 - Modified subcontract - Quasi-estoppel - Waiver - Prejudgment interest - Section 75-17-1 - Section 75-17-7 - Punitive damages - Attorney's fees |
| Summary of the Facts: | The motion for rehearing is denied, and this opinion is substituted for the original opinion. T.C.B. Construction Company, Inc. sued W.C. Fore Trucking, Inc. for breach of contract. The suit was based on Fore’s non-payment for work TCB performed removing debris south of Highway 53 in Harrison County after Hurricane Katrina. Fore disagreed that the subcontract between the two companies was modified to include this area. Although the jury found Fore had modified the subcontract, it awarded TCB only $3,577,583.34 in damages, which in effect compensated TCB for only half of the work it undisputably performed. TCB appeals, and Fore cross-appeals. |
| Summary of Opinion Analysis: | Issue 1: Modified subcontract The circuit court found W.C.’s denial of the subcontract’s modification was sufficient to create jury questions on the issues of modification and damages. However, there were no jury issues to be resolved. Fore admits it did not reject a single one of TCB’s daily truck tickets or weekly invoices. Likewise, prior to TCB filing suit, Fore did not protest that TCB was working in an area outside of the area covered in the subcontract. Fore also admits it billed the County—and received payment from the County—for TCB’s work represented by these invoices. Mississippi law prevents Fore from simultaneously benefitting from the modified subcontract—by receiving over $8.5 million from the County because of TCB’s work south of Highway 53—and then in turn repudiating any obligation to pay TCB its approximately $7.15 million share. Quasi-estoppel is an equitable principle that applies to certain bars, such as ratification, acquiescence, or acceptance of benefits. This long-standing doctrine is applied to preclude contradictory positions by preventing a person from asserting, to another’s disadvantage, a right inconsistent with a position previously taken. Where one having the right to accept or reject a transaction takes and retains benefits thereunder, he ratifies the transaction, is bound by it, and cannot avoid its obligation or effect by taking a position inconsistent therewith. Here, the unambiguous contractual language stated the subcontract between Fore and TCB “can and will be modified based upon facts and circumstances of all debris removal.” TCB essentially argues Fore is estopped from denying the modification of its subcontract with TCB since the “facts and circumstances of all debris removal” undisputedly showed (1) Fore’s previous acceptance and ratification of TCB’s invoices for debris removed south of Highway 53, (2) Fore’s submissions of these invoices to the County for payment, (3) Fore’s receipt of payment from the County for debris TCB removed south of Highway 53, and (4) the fact that TCB—not Fore nor any other company—was the only contractor that had removed debris south of Highway 53. Fore does not deny its previous conduct but instead admits it accepted the benefits of the modified subcontract—a contract that explicitly provided it “can and will be modified based upon facts and circumstances of all debris removal.” And for months, Fore accepted daily truck tickets and weekly invoices that showed TCB was removing debris south of Highway 53, without any protest by Fore that TCB was working outside the bounds of the area covered in the subcontract. Proof of W.C.’s actual knowledge that TCB was working south of Highway 53 is not necessary to apply quasi-estoppel because Fore indisputably accepted the benefits of TCB’s work. Quasi-estoppel applies because “the conscience of the court is repelled” by Fore taking the position it does not have to pay TCB its contract rate when Fore operated as if the subcontract included debris removal south of Highway 53. Thus, the trial court should have granted TCB’s motion for a directed verdict. Just as the issue of modification was not a jury issue, neither was the issue of damages. Fore presented no evidence to dispute the amount of cubic yards TCB removed. And the subcontract provided for a rate $8.90 per cubic yard, leaving no jury question about the amount of TCB’s compensation under the modified subcontract. TCB is entitled to be placed in the same position it would have been absent Fore’s breach of the modified subcontract. Therefore, judgment is rendered in TCB’s favor in the amount of $6,634,436.69. Issue 2: Waiver Fore argues TCB did not plead estoppel—only breach of contract—and, therefore, cannot recover under this equitable theory of quasi-estoppel. Quasi-estoppel is not an independent claim that must be pled. Rather, quasi-estoppel is an affirmative defense. Typically, it is the defendant who affirmatively pleads quasi-estoppel to show the plaintiff’s claim is based on an inconsistent position. But a plaintiff like TCB may also assert quasi-estoppel in response to the defendant’s answer. TCB did not waive the defense of quasi-estoppel at the pleadings stage because TCB alleged sufficient facts in its complaint to support the theory. TCB pled that the subcontract existed because Fore accepted the benefit of the modified subcontract. And in its motions for summary judgment and motion for a directed verdict, TCB argued W.C.’s inconsistent testimony that the subcontract had not been modified could not be used to dispute Fore’s previous conduct. While TCB did not use the magic word “estoppel,” it did argue W.C.’s denial of the modification was not “sufficient to overcome the completion of the contract and the acceptance of the work and the money . . . .” Thus, TCB sufficiently raised and argued the application of quasi-estoppel to the circuit court. Issue 3: Prejudgment interest Both TCB and Fore appeal the circuit court’s award of prejudgment interest. A trial judge may award prejudgment interest to the prevailing party in a breach of contract suit if prejudgment interest was requested in the complaint. When damages are liquidated or there has been a bad-faith denial of payment, the prevailing party in a breach of contract suit is entitled to have added legal interest on the sum recovered computed from the date of the breach of the contract to the date of the decree. No award of prejudgment interest is allowed where the principal amount has not been fixed prior to judgment. Fore argues the amount of damages was disputed; thus, the circuit court abused its discretion by awarding prejudgment interest at all. Fore denied it owed anything for work south of Highway 53 because the subcontract had not been modified. But it did not dispute the amount of work TCB performed south of Highway 53. Indeed, it used the exact figures from TCB’s invoices to generate the bills Fore sent to the County. There is no dispute as to how much is owed on these invoices. Thus, TCB’s damages are liquidated and were fixed at the time Fore breached the subcontract by failing to pay TCB for its work. The circuit court correctly awarded TCB eight-percent prejudgment interest. But it erroneously set the date the interest began to accrue as the date TCB filed suit. Pursuant to section 75-17-1 and 75-17-7, this interest actually began to run at the time of breach. On remand, the circuit court should calculate the eight-percent prejudgment interest from the earlier date of the breach. Issue 4: Punitive damages TCB seeks remand of the issue of punitive damages and attorney’s fees. The prevailing party in a breach-of-contract action may recover punitive damages where such breach is attended by intentional wrong, insult, abuse, or such gross negligence as amounts to an independent tort. Attorney’s fees are also recoverable when a punitive damages award would be proper. Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that the defendant against whom punitive damages are sought acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud. Here, the circuit court granted Fore’s motion for a directed verdict on the issue of punitive damages because it found no evidence of malicious conduct by Fore. The punitive-damages statute establishes a high evidentiary burden—clear and convincing evidence—and accords the trial court discretion over this issue. And the Supreme Court cautions punitive damages are for the extreme cases. Though the question is admittedly close, the trial court did not abuse its discretion as gatekeeper by finding Fore’s actions did not necessitate submission of the punitive-damages issue. Thus, the denial of attorney’s fees is also affirmed. |
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