Southland Enterprises, Inc. v. Newton County, Mississippi ( 2000 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2001-CA-00838-SCT
SOUTHLAND ENTERPRISES, INC.
v.
NEWTON COUNTY, MISSISSIPPI
DATE OF JUDGMENT: 12/7/2000
TRIAL JUDGE: HON. V. R. COTTEN
COURT FROM WHICH APPEALED: NEWTON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: G. MARTIN WARREN, JR.
CHRISTIAN BLUE WADDELL
ATTORNEY FOR APPELLEE: DANNY K. CLEARMAN
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: AFFIRMED IN PART AND REVERSED AND
REMANDED IN PART - 02/20/2003
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
DIAZ, JUSTICE, FOR THE COURT:
¶1. Southland Enterprises, Inc. sued Newton County, Mississippi, demanding payment of $84,800.98
for work it performed on the Chunky-Duffee Road. The complaint also demanded statutory interest
pursuant to Miss. Code Ann. § 31-7-305 (2000) and reasonable attorney's fees pursuant to § 31-7-309.
¶2. At the conclusion of the trial, the jury returned a verdict in favor of Southland in the amount of
$21,697.24. Final judgment was entered on that verdict, and the trial court denied Southland's motion to
amend the final judgment to include statutory interest and attorney's fees. On appeal, Southland raises two
issues:
I. DID THE TRIAL COURT ERR IN REFUSING TO GIVE JURY
INSTRUCTION P-12?
II. DID THE TRIAL COURT ERR IN REFUSING TO AMEND THE
FINAL JUDGMENT TO INCLUDE STATUTORY INTEREST AND
ATTORNEY'S FEES?
FACTS
¶3. On November 29, 1999, Southland entered into a contract with Newton County to resurface
approximately seven miles of the Chunky-Duffee Road. The bid on the contract was $68,661.42. The
contract specified that the road work, including the leveling, chipping, and sealing of the road, was to be
completed by December 30, 1999, according to the 1998 Mississippi Standard Specifications for State
Aid Road and Bridge Construction, 1989 edition (State Aid Specifications).
¶4. During December 1999, Southland leveled the road and applied the sealant and stone. Shortly
after completion of the road, it became apparent that the stone did not adhere to portions of the road where
tires traveled. At the same time of the Chunky-Duffee Road work, Newton County employees also
applied sealant and stone on a paving project on the Providence Road, a road which intersects the Chunky-
Duffee Road. Unlike the stone applied by Southland, the stone put down by the county employees did
adhere to the road.
¶5. Newton County Engineer Jimmy Kemp approved a final payment to Southland of $84,800.98.
Southland claims that, due to a miscalculation, the correct amount due was $98,800.98. However, later
on, when the problems with the road became apparent, the county engineer recommended to James Smith,
a Newton County supervisor, that the County pay Southland $21,697.24 for the leveling work, but not for
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the remainder of the work. Dissatisfied with the overall results of the project, the County refused payment.
The County ultimately contended that the entire road had to be resurfaced again, including leveling work.
Southland was forced to file its complaint to seek payment.
¶6. Evidence presented at trial by Southland included the testimony of Ronald W. Blackledge,
President of Southland; Willie McDaniel, Southland's Superintendent; County Engineer Kemp; and County
Supervisor Smith. Their testimony revealed that performing sealing work during the winter months was
atypical and actually prohibited by the State Aid Specifications. Low temperatures during the winter
months prevent rocks from adhering to the emulsion. Following completion of the road work, temperatures
remained in the twenties for approximately one week. Based on this evidence, Southland argued at trial that
the County was aware that performing sealing during the winter months was ill-advised. Nevertheless, the
County requested the project be completed by December 30, 1999.
¶7. The County presented some evidence in an attempt to show that the workmanship and quality of
the materials used by Southland was defective. County Engineer Kemp testified that Southland had a
responsibility to furnish test results for the rock used on the road work. The rocks could have been out of
specification due to moisture, dirt, or size. Bussy Clark, the inspector on location for the County, testified
that he requested the test results, but he did not receive any sample reports on the emulsion or stone and
thus had no way to tell if the emulsion and stone were good. Furthermore, the testimony of Jerry Cooley
and James Smith revealed that the emulsion and rock that the County used in its simultaneously performed
project, on the intersecting road, did adhere according to specifications. Therefore, based on this evidence,
the County argued that the issue of defective material was properly before the jury.
DISCUSSION
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¶8. The standard of review when considering the grant or denial of jury instructions is whether, taking
the evidence in the light most favorable to the party requesting the instruction, and considering all reasonable
favorable inferences which may be drawn from the evidence, that no hypothetical, reasonable jury could
find the facts in accordance with the theory of the requested instruction. Church v. Massey, 697 So. 2d
407, 410-11 (Miss. 1997). A party is entitled to have the jury instructed regarding a genuine issue of
material fact so long as there is credible evidence in the record which would support the instruction.
Tharp v. Bunge Corp. 641 So.2d 20, 26 (Miss. 1994).
¶9. On the other hand, it would be error to grant an instruction which is likely to mislead or confuse
the jury as to the principles of the law applicable to the facts in evidence. McCary v. Caperton, 601
So.2d 866, 869 (Miss. 1992). Further, the court must view the instruction in light of all the other
instructions which were given to determine whether the jury was properly instructed. Munford, Inc. v.
Fleming, 597 So.2d 1282, 1286 (Miss. 1992). If other instructions granted adequately instruct the jury,
a party may not complain of a refused instruction on appeal. Purina Mills, Inc. v. Moak, 575 So.2d
993, 996 (Miss. 1990). Lastly, the trial court has considerable discretion in instructing the jury. Splain
v. Hines, 609 So.2d 1234, 1239 (Miss. 1992).
I. DID THE TRIAL COURT ERR IN REFUSING TO GIVE JURY
INSTRUCTION P-12?
¶10. The trial court refused to give Southland's proposed jury Instruction P-12:
You are instructed that a construction contractor who has followed plans or
specifications furnished by the owner, and which have proven to be defective or
insufficient, will not be responsible to the owner for loss or damage which results solely
fromthe defective or insufficient plans or specifications, in the absence of negligence on the
contractor's part, or any express warranty by him as to the plans and specifications being
sufficient or free from defects.
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Therefore, if you find by a preponderance of the evidence that the Plaintiff followed
plans and specifications provided by the Defendant, that these plans and specifications
were defective or insufficient, and that there was no negligence by the Plaintiff or express
warranty provided by the Plaintiff, then you may find that the Plaintiff, Southland
Enterprises, is not responsible to Newton County for any damage to the Chunky Duffee
Road which resulted from these plans and specifications.
¶11. Southland argues that the law is clear in Mississippi that when a construction contractor follows
plans and specifications furnished by the owner which then prove to be defective or insufficient, it is not
responsible to the owner for the loss of damage that results from the defective or insufficient plans or
specifications when the contractor has not been negligent or provided any express warranty. Trustees
of First Baptist Church of Corinth v. McElroy, 223 Miss. 327, 334, 78 So. 2d 138, 141 (1955).
Further, "if, without fault on his part, the contractor fulfills his obligations to complete the work in
accordance with plans and specifications provided by the owner, he is not responsible for the adequacy
of the final product." Mayor & City Council of City of Columbus v. Clark-Dietz &
Associates-Engineers, Inc., 550 F. Supp. 610, 625 (N.D. Miss. 1982), appeal denied sub nom.
Clark-Dietz & Assocs-Engineers, Inc. v. Basic Constr. Co., 702 F.2d 67 (5th Cir. 1983). See
also Employers Ins. of Wausau v. Miss. State Highway Comm'n, 575 So. 2d 999, 1002 (Miss.
1990).
¶12. Southland contends that the substantial evidence at trial showed that the road work problems
occurred because the County required the project to be completed in December, when it is not
recommended to perform sealing work. Southland submits that the refusal to grant Instruction P-12 was
reversible error and that the case should be reversed and remanded for a new trial on the issue of damages
only, as the jury has already found that Newton County is liable.
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¶13. The County argues that the proposed instruction would have been improper because it would have
misled the jury and it would not have allowed the jury to consider the probability that Southland used
defective materials. The trial court refused to give the instruction because it was "bothered about the issue
of whether the material was defective or not."
¶14. In addition, the County submits that the jury was adequately informed by Instruction D-3 that the
State Aid Specifications were part of the contract and that the jury might consider those specifications in
light of the evidence to determine whether Southland had fulfilled its obligation under the bid contact. Also,
Instruction P-3 directed the jury that the burden of proof was on the County to prove that there was failure
of consideration by Southland to complete the project in a workmanlike manner that would pass without
objection in the trade.
¶15. In this case, the jury was left to decide between two theories: (1) whether the County or Southland
was at fault for allowing the road work to be performed during cold winter months; and (2) the probability
of whether Southland used defective materials that could have contributed to the failure of rock to adhere
to the road. Although the jury found for Southland, the jury must have either considered the possibility that
Southland used defective material or it must have considered that the County was not entirely responsible
for performing the work when the temperature was too low. This is evident from the jury's award of only
$21,697.24, the cost for the completion of the leveling work alone. If the jury awarded the amount to
Southland entirely on the basis of the probability that Southland used defective materials, then the jury's
verdict was in accordance with the law. However, we find that if the jury considered Southland even
partially responsible for performing the work when the temperature was too low, then the jury's verdict was
in error according to the law. Unfortunately, the instructions given to the jury did not preclude the jury from
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considering whether Southland was at fault for performing the road work during a time period that is not
within the normal specifications.
¶16. Southland argues that, if P-12 had been granted, the jury might have awarded Southland the entire
amount of the contract. The trial judge, on the other hand, was concerned that Instruction P-12 may have
misled the jury into believing that it could not consider the probability that Southland used defective
material. However, Instruction P-12 allows the jury to consider any negligence attributable to Southland.
This Court finds that the jury, given Instruction P-12, could have still considered the probability that
Southland used defective material.
¶17. Most importantly, Instruction P-12 would have ensured that Southland could not be liable for any
damages resulting from the County's requirement that the project be completed by December 30, 1999.
The County was aware that sealing work should not be performed during the colder winter months, yet it
still required the work to be performed before December 30. Unfortunately, as a whole, Instruction D-3,
which allowed the jury to consider the evidence in light of the State Aid Specifications, and Instruction P-3,
which directed the jury that the burden of proof was on the County to prove that there was failure of
consideration on the part of Southland to complete the project in a workmanlike manner, do not adequately
instruct the jury on the law. Without Instruction P-12, there is a possibility that the jury might have
considered Southland to be partly at fault for performing the road work at a time prohibited by the State
Aid Specifications. According to McElroy, Southland should not be at fault for performing the
construction work as per the specifications provided by the County. McElroy, 78 So. 2d at 141. The
trial court erred in refusing Instruction P-12.
II. DID THE TRIAL COURT ERR IN REFUSING TO AMEND THE
FINAL JUDGMENT TO INCLUDE STATUTORY INTEREST AND
ATTORNEY'S FEES?
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¶18. In a letter dated January 6, 2000, Newton County Engineer Kemp recommended that the leveling
work, which cost $21,697.24, was not in dispute and that the County pay for that work. However, the
County refused to make any payment. Southland contends that because the leveling work was not in
dispute, the circuit court should have amended the final judgment to include interest in the amount of 1 1/2
percent a month from February 5, 2000, 45 days after the invoice was submitted, until the time payment
was made on the Final Judgment, December 17, 2000, in accordance with Miss. Code Ann. § 31-7-305(2000).
¶19. The County notes that the interest provisions in the statute only apply to those amounts which are
not in dispute. Miss. Code Ann. § 31-7-305(3). The County contends that there was a bona fide dispute
as to the leveling work because the contract was an entire contract and not severable. The jury was
instructed that if Southland had substantially performed the terms of the contract, the jury was justified in
awarding, on the basis of quantum merit, the reasonable value of the materials and services. The trial court
found that Stanton & Associates, Inc., v. Bryant Construction Co., 464 So. 2d 499, 502 (Miss.
1985), was applicable to the case sub judice. Stanton stands for the proposition that a suit based on
quantum merit precludes recovery of prejudgment interest and attorney fees. See also McLain v. West
Side Bone & Joint Ctr., 656 So.2d 119, 123 (Miss.1995). The trial court reasoned that,
notwithstanding the letter and testimony of Engineer Kemp, the County ultimately, before suit was filed,
determined that it would reject the road work in its entirety. The County's position was that the defect ran
throughout the entire project. Because Southland was awarded an amount in quantum merit, we find that
the County is not liable for statutory interest or attorney's fees.
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CONCLUSION
¶20. The jury was not adequately instructed on the law. The instructions provided to the jury failed to
address the rule of law which states that the contractor shall not be liable for defects in the specifications
that are provided by the owner. The proposed instruction would have allowed the jury to consider the
probability that Southland was negligent for using defective material. This Court concludes that the denial
of Instruction P-12 resulted in prejudicial error; therefore, the ruling of the trial court is reversed. Also,
since the action was based on quantum merit, we find that an award of statutory interest or attorney's fees
would be inappropriate. The trial court did not err in denying an award of statutory interest or attorneys'
fees. Accordingly, the trial court's order denying an award of statutory interest and attorneys' fees is
affirmed, but its judgment is reversed in part and this case is remanded for a new trial on damages only,
consistent with this opinion.
¶21. AFFIRMED IN PART AND REVERSED AND REMANDED IN PART.
PITTMAN, C.J., McRAE, P.J., EASLEY AND GRAVES, JJ., CONCUR. SMITH,
P.J., DISSENTS WITH SEPARATE OPINION JOINED BY WALLER, COBB AND
CARLSON, JJ.
SMITH, PRESIDING JUSTICE, DISSENTING:
¶22. In determining whether error lies in the granting or refusal of various instructions, the instructions
actually given must be read as a whole. Coleman v. State, 697 So.2d 777, 782 (Miss.1997). If the
instructions, when so read, fairly announce the law of the case and create no injustice, no reversible error
will be found. Id. Further, instructions on damages must furnish the jury with a guide to be used in
awarding damages. Gerodetti v. Broadacres, Inc., 363 So.2d 265, 266 (Miss.1978). In my view,
considering all jury instructions given as a whole, this jury was adequately instructed.
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¶23. Instruction P-12 was refused because of the trial court’s concern about Southland’s use of
defective materials. The trial judge was concerned that the jury would be misled into believing that it could
not consider the probability that Southland used defective materials. I agree with the trial court that
confusion could result from the words found in the first paragraph of that instruction specifying that a
contractor “will not be responsible to the owner for loss or damage which results solely from the defective
or insufficient plans or specifications.” Although that instruction goes on to say that there must be “no
negligence by the Plaintiff or express warranty by the Plaintiff,” the refused instruction unnecessarily
overemphasizes Southland’s dependence on the plans and specifications belonging to the county. Further,
the cases cited by the majority and Southland, although correctly stating the law regarding Southland’s
responsibility to the County in regard to furnished specifications, fail to specifically address the issue of the
use of defective materials, the county’s sole theory of its case. Under contract law, the contractor is liable
even in the absence of negligence and in the absence of express warranty because of the implied warranties
that the work would be acceptable in the trade without objection. The evidence presented at trial clearly
supports the jury's verdict.
¶24. There are two means for calculating damages in construction disputes such as this. Where a project
is substantially completed according to plans and specifications, the measure of damages may be
determined by: (1) the cost rule which is the cost of repairing the defects to make the building or structure
conform to the specifications where such may be done at a reasonable expense if unreasonable economic
waste is not involved, or (2) the diminished value rule which is the difference in the value of the property
with the defective work and what the value would have been if there had been strict compliance with the
contract. Gerodetti v. Broadacres, Inc., 363 So.2d 265, 267-68 (Miss.1978). If substantial
compliance with the contract has occurred and cost rule damages for complete compliance would cause
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economic waste, the diminished value rule is used to measure damages. Id. at 268. This measures the
difference in the value of the defective construction and that of the construction specified under the contract.
Id. Stated in other terms, when there is substantial performance but the work fails to meet the
specifications of the contract, the owner's damages are equal to the cost to remedy the defects or to do the
work as required.
¶25. A more complete statement of the rule found in Trustees of the First Baptist Church v.
McElroy, 223 Miss. 327, 78 So. 2d 138, 141(1955), is as follows:
The rule has become well settled, in practically every American jurisdiction in which the
matter has been involved, that a construction contractor who has followed plans or
specifications furnished by the contractee, his architect or engineer, and which have proved
to be defective or insufficient, will not be responsible to the contractee for loss or damage
which results solely from the defective or insufficient plans or specifications, in the absence
of negligence on the contractor’s part, or any express warranty by him as to their being
sufficient or free from defects.
Id. In McElroy, this Court looked at all of the facts and circumstances before deciding that the plaintiff
did not prove by the preponderance of the evidence that the defendant did not protect his work and that
the defendant’s negligence did not in any way contribute to the collapse of that building. Id. This Court
found that it was beyond question that the basic underlying cause of the collapsed building was either faulty
design, bad soil conditions or both. Id. The defendant had no responsibility for either of those things.
¶26. It is implied in every building contract that the work of the builder be performed in a good
workmanlike manner, free from defect either in material or workmanship. Gilmore v. Garrett, 582 So.
2d 387 (Miss. 1991). In Gilmore, this Court addressed the issue of negligence in performance of a
contract. Gilmore, the builder, testified that the plans and specifications were furnished to him and that he
complied with those plans. Id. at 388. However, Gilmore made no soil borings or other soil preparatory
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tests prior to construction nor did he advise that any be made. Id. At the time of construction and the time
of trial, there was no custom or practice of builders to make such test nor did the VA or FHA require such
testing. Id. Several years after construction, the house developed serious cracks as a result of yazoo
clay. Id. at 389. Gilmore was sued by the owners who alleged breach of the implied warranty to build
in a workmanlike manner and negligent construction. Id.
¶27. This Court quoted a North Carolina case which outlined the duty:
The duty may arise specifically by mandate or statute, or it may arise generally by
operation of law under application of the basic rule of common law which imposes on
every person engaged in the prosecution of any undertaking an obligation to use due care,
or to so govern his actions as not to endanger the person or property of others...Moreover,
while this duty of care, as an essential element of actionable negligence, arises by operation
of law, it may and frequently does arise out of a contractual relationship, the theory being
that accompanying every contract is a common law duty to perform with ordinary care the
thing agreed to be done, and that a negligent performance constitutes a tort as well as a
breach of contract...But it must be kept in mind that the contract creates only the relation
out of which arises the common law duty to exercise ordinary care. Thus in legal
contemplation the contract merely creates the state of things which furnishes the occasion
of the tort.
Id. at 391 (quoting Pinnix v. Toomey, 87 S.E.2d 893, 897-98 ( N.C. 1955)). This Court
also went further in describing such a duty in stating that:
Where a person contracts to do certain work he is charged with the common law duty of
exercising reasonable care and skill in the performance of the work required to be done
by the contract, and the parties may not substitute a contractual standard for this
obligation...Accompanying every contract is a common law duty to perform with care, skill
and reasonable experience, and a negligent failure to observe any of these conditions is a
tort as well as a breach of contract.
Gilmore, 582 So. 2d at 391 (quoting 65 C.J.S. Negligence, §4(6), pp 494, 496 (1966)). Following
along these guidelines, our Court went on to state that the public no longer tolerates “shoddy” products and
services, whatever the source. Id. at 392. This Court stated that it would grant relief whenever the
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product sold or service rendered is “less than the customer or client is fairly and reasonably entitled to
expect under current and existing states of skill, knowledge and technology.” Id.
¶28. The next issue addressed was whether Gilmore’s compliance with the plans and specifications and
the subsequent inspection and passage on his work by the VA relieved him of liability to the homeowners.
Id. at 393. This Court held that the VA standards, the plans and specifications and trade customs were
not conclusive on Gilmore’s negligence. Id. As a matter of law, his compliance with these guidelines alone
did not relieve him of his obligation. Id. This Court observed that:
It is well settled in the jurisprudence that a contractor is bound to warrant his work and is
responsible for damages occasioned by defective workmanship or installation. It is implied
in every building contract that the work will be performed in a skillful, careful, diligent and
good workmanlike manner.
Id. at 395 (quoting Wetmore v. Blueridge, 391 So. 2d 952, 953 (La. Ct. App. 1980)). In sum, this
Court stated:
It is of course true that a builder/contractor in an ordinary case should not be required to
go beyond the plans and specifications, they after all being a part of his contract spelling
out his obligations. Neither should plans and specifications which clearly do not take into
account a construction problem of which the builder/contractor, the man with expertise
should be well aware, remove from him all duty to warn. In such case, the plans and
specifications should not constitute an absolute defense.
Id. at 396 (citations omitted).
¶29. Having emphasized our controlling case authority, we need only apply it to the case at bar. In the
case sub judice, the trial court correctly noted that the issue of defective materials was before the jury.
The County Engineer, Jimmy Kemp, testified to the effects of use by Southland of defective materials. He
testified that when the CRS-2 emulsion used was not within specifications that the rock would not adhere.
He also testified that the rock would not properly adhere if the rock was dirty, contained moisture or was
not the correct size. He testified that Southland failed to furnish any test results to the inspector on location
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even though they were responsible for doing so. Further, the on site inspector, Bussy Clark testified to
having requested those results. He verified that he did not receive any sample reports on the emulsion or
the stone. Because he had no samples, he had no way to tell whether the materials used by Southland were
adequate.
¶30. The evidence presented at the trial clearly supports the jury’s verdict which was for an amount less
than the original contract price between Southland and Newton County such finding clearly reflects the view
of the jury that Southland used defective materials. The jury, properly instructed, found that the County
would incur additional costs to re-pave the road as a result of the use of defective materials by Southland.
As this Court has stated, we do not consider rejected jury instructions in a vacuum. Wright v. Stevens,
445 So.2d 791, 795 (Miss.1984). That the rejected instruction may state a sound principle of law does
not mean its refusal was error. Id. Rather, we look at all the instructions given. Id. We consider the court's
total charge to the jury. Id. If the point encompassed by the rejected instruction was fairly included in other
instructions given the jury, which in this case, it was, reversal is not required. Id. (citing Hickombottom
v. State, 409 So.2d 1337, 1339 (Miss.1982); Norman v. State, 385 So.2d 1298 (Miss.1980);
Knight v. State, 57 So.2d 161 (Miss.1952)). The jury was properly instructed and its verdict should
be upheld.
¶31. For these reasons, I respectfully dissent.
WALLER, COBB AND CARLSON, JJ., JOIN THIS SEPARATE OPINION.
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