United States Ex Rel. Shannon v. Federal Insurance , 251 F. App'x 269 ( 2007 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
September 4, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
06-60906
Summary Calendar
UNITED STATES OF AMERICA
for the use and benefit of ROY SHANNON,
Plaintiff-Appellant,
v.
FEDERAL INSURANCE COMPANY; FIDELITY & DEPOSIT COMPANY OF
MARYLAND; WHITESELL-GREEN INC., Individually and jointly with
W.G. Yates & Sons Construction Co., a Mississippi Corporation;
W.G. YATES & SONS CONSTRUCTION CO., Individually and jointly
with Whitesell-Green Inc., a Florida Corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Mississippi, Gulfport
1:05-CV-54
Before HIGGINBOTHAM, BARKSDALE, and BENAVIDES, Circuit Judges.
PER CURIAM:*
Plaintiff Roy Shannon (“Shannon”) was employed as a project
manager at Whitesell-Green, Inc. (“WGI”). WGI entered into a joint
venture (“Joint Venture”) with another company, W.G. Yates & Sons
*
Pursuant to 5th Cir. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5th Cir. R. 47.5.4.
Construction Company (“Yates”), so that they could pool their
resources and bid on construction contracts at Keesler Air Force
Base in Biloxi, Mississippi (“Keesler”). Shannon assumed the
position of project manager for the Joint Venture. He was put on
the Joint Venture’s payroll in October of 1998. Shannon remained
the project manager of the Joint Venture at Keesler until February
2004, when he was terminated.
Shannon’s contract with the Joint Venture was unwritten, and
though the parties to this case all agree that a contract existed,
they disagree about the terms. It is undisputed that Shannon’s
position carried a salary of $2,000 per week, plus an annual
Christmas bonus of at least $50,000. It is also undisputed that
Shannon received this sum for approximately five and a half years.
However, Shannon claims that he was entitled to receive additional
compensation of three types. First, he claims that he was entitled
to one-half the profits above and beyond the originally anticipated
profits, if any, earned by the Joint Venture on the first project.
Second, he says that once the Joint Venture began to bid on
additional contracts, there was an unwritten agreement that he
would receive one percent of the contract amount of each subsequent
contract, regardless of profit. Third, Shannon says that an SUV,
which was purchased by the company but used exclusively by him, was
his to keep, and that the Joint Venture breached its unwritten
agreement by repossessing the vehicle some six months after his
termination. Having not received the compensation to which he
2
believed he was entitled, Shannon filed this lawsuit, asserting
claims for breach of contract, quantum meruit, and wrongful
discharge.
Shannon also included a federal claim under the Miller Act, 40
U.S.C. §§ 3131, 3133, which explains how an otherwise ordinary
contract case, raising several questions of Mississippi state law,
ended up in federal court. Under the Miller Act, before any
contract of more than $100,000 for the construction, alteration, or
repair of any public building or public work of the United States
is awarded to any person, such person is required to furnish to the
United States both a performance bond and a payment bond. The
performance bond guarantees federal taxes on wages paid by the
contractor to his or her employees. The payment bond is “for the
protection of all persons supplying labor and material in carrying
out the work provided for in the contract for the use of each
person.” 40 U.S.C. § 3131(b)(2). The purpose of the Act is “to
protect those whose labor and materials go into public projects,”
MacEvoy Co. v. United States, 322 U.S. 102, 107 (1944) (citations
omitted). On this basis, Shannon brought a federal claim against
the sureties charged with protection of the payment bond.
The district court granted summary judgment for the defendants
on all four of Shannon’s claims, and Shannon appealed. We review
motions for summary judgment de novo, applying the same standards
as the district court. FED R. CIV. P. 56. Summary judgment is
3
inappropriate whenever a genuine issue of material fact exists. A
genuine issue of material fact exists when, in the context of the
entire record, a reasonable fact-finder could return a verdict for
the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248–49 (1986). All evidence must be construed in the light most
favorable to the party opposing summary judgment. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587–88 (1986)
(citations omitted).
1. Breach of Contract
The district court granted summary judgment on Shannon’s
breach of contract claim after finding that it was barred by the
statute of limitations. There is no dispute that the relevant
limitations period for breach of an unwritten contract is one year
from the time the cause of action accrued. Miss. Code § 15-1-29
(1972). The only dispute is the date of accrual. In Mississippi,
a cause of action accrues as soon as the cause of action exists.
See, e.g., Greenlee v. Mitchell, 607 So. 2d 97, 110 (Miss. 1992).
In breach of contract cases, that is the time “when the breach, not
the injury, accrues,” or, in other words, “at the time of the
breach regardless of when damages resulting from the breach occur.”
First Trust Nat’l Ass’n v. First Nat’l Bank of Commerce, 220 F.3d
331, 334–35 (5th Cir. 2000). Because the plaintiff, in effect, is
alleging two different breaches, one for the first project and one
for all subsequent projects, we treat them separately.
4
As to the first project, Shannon claims that he was entitled
to one half of the profits above and beyond $2.5 million, which was
the original estimated profit. As of September 29, 2003, Shannon
knew that the operation would be more profitable than originally
anticipated, and thus that he was entitled to some gain. However,
at that point Shannon says he could not have known exactly how
profitable the project would be, and thus could not know exactly
how much money he would receive. Instead, he argues that the
accrual date is the date the project was physically completed,
which occurred some time in December of 2004. Shannon did not file
his lawsuit until February, 2, 2005.
We find Shannon’s argument unavailing. First, the foregoing
case law makes plain that the date of breach, not the date of
injury (or, in Shannon’s case, the date on which the full extent of
the injury was finally calculable) is the controlling date for
accrual purposes. Shannon has presented no case law to support the
proposition that a party must know to a mathematical certainty the
amount of recovery to which he is entitled. In fact, the analogous
case law in Mississippi suggests otherwise. See, e.g., Jackson v.
State Farm Mut. Auto. Insur. Co., 880 So. 2d 336, 341 (Miss. 2004)
(holding, in uninsured motorist context, that action accrues once
someone “knows, or reasonably should know, that the damages he or
she claims to have suffered exceed the limits of insurance
available to the alleged tortfeasor”). Second, we must note that
5
Shannon drastically overstates his uncertainty as of September
2003. Shannon stated in his response to an interrogatory that on
September 29, 2003, he knew “as a fact [that] 99% of the job costs
were complete,” because he “was provided a written copy of the
profits from Yates.” At that time, then, Shannon had nearly
perfect knowledge of the amount of money to which he was
purportedly entitled, and he further knew that so long as the
defendants had not paid him his due, they were in breach of the
unwritten contract. In fact, he stated in both his complaint and
his deposition that he had made repeated demands on the Joint
Venture to pay him what he was owed on the first project since
August of 2000, or roughly four and a half years before he filed
this lawsuit. In sum, the record clearly indicates that any breach
as to the first project occurred more than a year before the suit
was filed, and that Shannon knew as much. Summary judgment was
therefore proper.
Summary judgment was also proper as to the additional
projects. Shannon alleges that he was to receive one percent of
the contract price of each additional project that he secured for
the Joint Venture. Under the terms of the agreement, Shannon would
be entitled to payment once the contracts were awarded. The Joint
Venture won several additional contracts, the last of which came on
December 29, 2003. Any breach as to these additional projects
therefore occurred more than a year before this suit was filed, and
6
summary judgment was proper.1
2. The Miller Act
As we have said, the Miller Act protects those “whose labor
and materials go into public projects.” MacEvoy Co. v. United
States, 322 U.S. 102, 107 (1944) (citations omitted). Shannon’s
claim under the Act turns on whether or not he performed “labor” as
that term is used in the statute. The district court found that he
did not, and we agree. Shannon concedes that any duties he was
required to perform as project manager are irrelevant for purposes
of the Miller Act because he was already compensated for them. The
Miller Act only affords him relief if he performed additional labor
for which he was not compensated. Shannon alleges that he did
perform such additional duties, which he describes as “negotiating
new contracts, determining bid amounts and change orders, preparing
bid proposals, negotiating and signing new subcontracts and
purchase orders.” He also claims that his labor included living on
the job site, cleaning the office and bathrooms, and other such
tasks.
The term “labor” in the Miller Act was primarily designed to
encompass physical or manual labor. See United States ex rel.
Constructors, Inc. v. Gulf Ins. Co, 313 F. Supp. 2d 593, 597 (E.D.
1
Shannon’s claim for equitable estoppel as to the statute of
limitations is similarly unavailing. The record does not reveal
any representations on the part of the Joint Venture that could
reasonably have induced Shannon’s reliance to his own detriment.
7
Va. 2004) (holding that “[p]aying invoices, reviewing proposals,
and supervising hiring are clerical or administrative tasks which,
even if performed at the job site, do not involve the physical toil
or manual work necessary to bring them within the scope of the
Miller Act”); see also United States for the Use of Barber-Colman
Co. v. United States Fid. & Guar. Co., 19 F.3d 1431 (4th Cir. 1994)
(unpublished opinion) (noting that “labor” includes “physical toil,
but not work by a professional, such as an architect or engineer”
(internal quotation omitted)); United States ex rel. Olson v. W.H.
Cates Constr. Co., Inc., 972 F.2d 987, 990 (8th Cir. 1992) (“[O]nly
certain professional supervisory work is covered by the Miller Act,
namely, skilled professional work which involves actual
superintending, supervision, or inspection at the job site.”
(internal quotation omitted)); Glassell-Taylor Co. v. Magnolia
Petroleum Co., 153 F.2d 527, 529–30 (5th Cir. 1946) (discussing
purpose of Act and surveying cases of qualifying labor, all of
which are manual or physical in nature). The additional labor that
Shannon claims to have provided does not match this description.
Moreover, any potentially qualifying “supervisory” work that he
might have provided at the site fell under his role as a project
manager, and he has already been compensated for it. Summary
judgment was therefore proper as to Shannon’s Miller Act claim.
3. Quantum Meruit
Shannon proffers an alternative theory under quantum meruit,
8
in the event that a contract is not found to exist. Because the
district court found, by the parties’ own admissions, that an
enforceable agreement did exist, it denied any recovery under
quantum meruit, noting that under Mississippi law, “[w]here there
is a contract, parties may not abandon same and resort to quantum
meruit.” Sentinel Indus. Contracting Corp. v. Kimmins Indus. Serv.
Corp., 743 So. 2d 954, 970 (Miss. 1990) (internal quotation
omitted). On appeal, Shannon argues that the parties do not
concede that a contract exists. His argument seems to be that the
purported agreements for additional compensation were new
contracts, that the defendants deny their existence, and therefore
that recovery is available in quantum meruit. We are not
persuaded. Clearly the parties all admit that an enforceable
contract existed; they simply dispute some of its terms. On the
basis of that contract, Shannon provided services to the Joint
Venture for over five years, during which time he collected payment
in excess of $2,000 per week, plus an annual bonus. He now claims
that, under the terms of that contract, was entitled to more. That
is a contract claim, plain and simple, and had Shannon filed it in
time, it would have been actionable. Having failed to do so,
however, he cannot now sidestep that agreement and pursue a theory
of quantum meruit. Summary judgment was proper as to this claim.
4. Wrongful Discharge
Finally, Shannon includes a claim for wrongful discharge. The
9
district court dismissed this claim on the basis that Shannon was
an “at will” employee, and thus cannot bring a suit for wrongful
discharge under Mississippi law. See Levens v. Campbell, 733 So. 2d
753, 760 (Miss. 1999) (“[A]bsent an employment contract expressly
providing to the contrary, an employee may be discharged at the
employer’s will for good reason, bad reason, or no reason at all,
excepting reasons only declared legally impermissible.”); see also
Perry v. Sears, Roebuck & Co., 508 So. 2d 1086, 1088 (Miss. 1987)
(explaining longstanding rule that “at will” employment is inferred
where there is no contract of employment or contract does not
specify definite term of employment). Shannon’s contract of
employment did not expressly specify a definite term, rendering him
an “at will” employee. Thus, the district court properly granted
summary judgment as to this claim.
CONCLUSION
For the reasons stated herein, the district court’s grant of
summary judgment is AFFIRMED.
10