Triangle Construction Co., Inc. v. Fouche and Associates, Inc.

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2015-CA-01585-COA
TRIANGLE CONSTRUCTION CO., INC. APPELLANT
v.
FOUCHE AND ASSOCIATES, INC. APPELLEE
DATE OF JUDGMENT: 10/07/2015
TRIAL JUDGE: HON. WILLIAM E. CHAPMAN III
COURT FROM WHICH APPEALED: RANKIN COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT: MACY DERALD HANSON
ATTORNEY FOR APPELLEE: CECIL MAISON HEIDELBERG
NATURE OF THE CASE: CIVIL - CONTRACT
TRIAL COURT DISPOSITION: SUMMARY JUDGMENT GRANTED IN
FAVOR OF APPELLEE
DISPOSITION: AFFIRMED – 05/09/2017
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
IRVING, P.J., FOR THE COURT:
¶1. Triangle Construction Company (Triangle) filed suit in the Circuit Court of Rankin
County against East Madison Water Association (EMWA) and Fouche1 and Associates
(Fouche). In the suit, Triangle alleged that it had entered into a contract with EMWA that
had been breached by both EMWA and Fouche, the designated engineer in the contract. It
further alleged, based upon several theories, that it was entitled to recover damages from
Fouche. Both Fouche and EMWA filed separate motions for summary judgment. The record
1
Documents in the record vary with respect to the spelling of “Fouche”—in some
instances, it is spelled “Fouché,” while in other instances, it is spelled “Fouche.” For
consistency, we use “Fouche” throughout this opinion.
does not inform us as to the status of EMWA’s motion. However, the circuit court granted
Fouche’s motion and entered judgment accordingly pursuant to Rule 54(b) of the Mississippi
Rules of Civil Procedure. Triangle now appeals, arguing that there existed genuine issues
of material fact regarding:
(1) whether Fouche, as the designing engineer of the water-installation project
at issue in this lawsuit, breached the tort-based duties that it owed to Triangle,
the contractor, to design and manage the project in a reasonable and prudent
manner; (2) whether Fouche had entered into the terms of the Specifications
for Water Distribution System Addition 2009 contract either as a signatory or
through its conduct, as an implied[-]in-fact contract; (3) whether Fouche was
the responsible party for obtaining easements for this project, on behalf of
[EMWA]; and (4) whether an accord-and-satisfaction agreement had been
reached between Triangle and Fouche related to the claims pleaded by
Triangle against Fouche.
Finding no genuine issue of material fact, we affirm.
FACTS
¶2. Triangle won a bid offered by EMWA for a construction project to build a water
system in Madison and Leake Counties. On February 9, 2010, Triangle and EMWA entered
into the “Specifications for Water Distribution System Addition 2009” agreement, which
incorporates many contractual documents as part of the “Contract” between Triangle and
EMWA that is now at the center of this dispute.2 Triangle argues on appeal that Fouche, the
2
For clarity, “Contract,” as the word is used throughout this opinion, will refer to all
contract documents encompassed within the “Specifications for Water Distribution System
Addition 2009” agreement between EMWA and Triangle for the construction project of the
water system, including “General Conditions (pages GC-1 to GC-57, inclusive),” which we
reference several times throughout this opinion.
2
project’s engineer, was also a party to the Contract; however, Fouche disagrees.
¶3. Triangle asserts that while it performed its obligations satisfactorily under the
Contract’s terms, EMWA and Fouche did not. Specifically, Triangle argues that EMWA and
Fouche did not obtain easements in a timely manner, as they had agreed to do in the Contract.
Triangle further argues that EMWA and Fouche prematurely and negligently issued a notice
instructing Triangle to proceed with its work (“Notice to Proceed”) far before the easements
necessary to continue that work had been acquired. Triangle maintains that these failures
resulted in delays, as “Triangle could not perform its contractually obligated work” in
“significant areas of the [p]roject.” Furthermore, Triangle asserts that, even after the
appropriate easements had finally been attained, neither EMWA nor Fouche gave Triangle
notice that it could continue its work, resulting in more unnecessary delays.
¶4. Triangle also argues that Fouche elected to expand the size and scope of the project
“long after the [p]roject had been designed, sealed by [Fouche], and long after the Notice to
Proceed . . . had been issued to Triangle.” Triangle asserts that, as a result, EMWA and
Fouche “made repeated oral promises to Triangle that [they] would execute a ‘Summary
Change Order’ that would fairly compensate Triangle for the greatly-expanded scope of work
that it was commanded to perform”; however, Triangle maintains that it never received such
an order.
¶5. Triangle contends that, upon ultimate completion of the project, EMWA sent Triangle
a check marked “Final Payment,” but the check did not compensate Triangle for its increased
3
construction costs as a result of the delays or for the extracontractual project expansion.
Triangle concedes that it cashed the check, but argues that it repeatedly asserted to
EMWA—including in a letter sent to Fouche—that it did not consider EMWA’s “final
payment” to be final and that it would continue seeking the remainder of what it was owed.
¶6. Triangle’s lawsuit against both EMWA and Fouche, as codefendants, alleged breach
of contract, unjust enrichment or quantum meruit, breach of the covenant of good faith and
fair dealing, and negligence. As stated, the circuit court granted Fouche’s motion for
summary judgment, leading to this appeal.
¶7. Additional facts, as necessary, will be discussed throughout the opinion.
DISCUSSION
¶8. Rule 56(c) of the Mississippi Rules of Civil Procedure provides that a motion for
summary judgment shall be granted if “the pleadings, depositions, answers to interrogatories
and admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.” M.R.C.P. 56(c). “We review the grant or denial of a motion for summary judgment
de novo, viewing the evidence ‘in the light most favorable to the party against whom the
motion has been made.’” Karpinsky v. Am. Nat’l Ins., 109 So. 3d 84, 88 (¶9) (Miss. 2013)
(quoting Pratt v. Gulfport-Biloxi Reg’l Airport Auth., 97 So. 3d 68, 71 (¶5) (Miss. 2012)).
“However, to survive summary judgment, the party opposing the motion may not rest upon
the mere allegations or denials of his pleadings, but his response . . . must set forth specific
4
facts showing there is a genuine issue for trial.” Huynh v. Phillips, 95 So. 3d 1259, 1262 (¶6)
(Miss. 2012) (citation and internal quotation marks omitted). “Summary judgment is
appropriate where a non-moving party who will bear the burden of proof at trial does not
establish the existence of an essential element to his case.” Gorman-Rupp Co. v. Hall, 908
So. 2d 749, 757 (¶ 25) (Miss. 2005) (citation omitted).
¶9. For clarity, we will first address whether Triangle’s negotiation of EMWA’s check
marked “final payment” operated as an accord and satisfaction of its claims against EMWA
and Fouche; next, we will address Triangle’s contract claims, including both Fouche’s status
as a party to the Contract and whether Fouche was contractually obligated to acquire the
easements; finally, we will address Triangle’s claims with respect to whether Fouche
breached any duties in tort that it may have owed to Triangle.
1. Accord and Satisfaction
¶10. Triangle maintains that there are genuine issues of material fact regarding whether it
reached an accord-and-satisfaction agreement with EMWA and Fouche, such that summary
judgment should not have been granted.
¶11. Mississippi law requires satisfaction of four elements for an accord and satisfaction
to exist:
(1) something of value must be offered “in full satisfaction of a demand”; (2)
the offer must be “accompanied by acts and declarations [that] amount to a
condition that if the thing is accepted, it is accepted in satisfaction”; (3) “the
party offered the thing of value” must “understand that if he takes it, he takes
subject to such conditions”; and (4) the party offered the item must “actually
. . . accept the item.
5
Stewart v. Bridge Props., LLC, 62 So. 3d 979, 986-87 (¶18) (Miss. Ct. App. 2010) (quoting
Waggoner v. Williamson, 8 So. 3d 147, 156 (¶18) (Miss. 2009)).
¶12. In Dix v. Trigger Contractors, Inc., 337 So. 2d 694, 696-97 (Miss. 1976), the
Mississippi Supreme Court held that an accord and satisfaction existed where the debtor gave
a creditor a check labeled “Final Payment” for less than the full amount owed to the creditor,
and the creditor cashed the check but struck through the word “final” and inserted the word
“part” in its place. The court held that the creditor accepted the payment notwithstanding his
strikethrough of the word “final,” and stated, “[t]hat a creditor protests against receiving less
than the full amount of his claim, but, nevertheless, accepts it, is of no consequence[.]” Id.
at 697. A creditor is “duty-bound to either accept the . . . check . . . as conditioned or refuse
to accept it,” and “[t]he cashing of the . . . check, conditioned by the debtor as ‘Final
Payment,’ constituted an accord and satisfaction.” Id.
¶13. Here, Triangle maintains that it did not accept EMWA’s “Final Payment,” because it
repeatedly told EMWA that its acceptance of the check did not waive its claim for further
payment. The record includes both the check from EMWA for $129,090.07 marked “Final
Payment,” and a letter from Triangle’s attorney to Fouche, in which Triangle asserts that
$129,090.07 is insufficient payment “for all the work that Triangle performed on this job,”
and that “Triangle does not waive, in any way, its contractual claims to additional funds
under the terms of the bid contract.” However, Mississippi law is clear that, despite whatever
contentions a party may make to the contrary, cashing a check marked “final payment”
6
constitutes an accord-and-satisfaction agreement, which precludes that party from bringing
future claims for additional payment.
¶14. Without speaking to Triangle’s claim against EMWA, we find that Triangle’s claim
against Fouche is likely barred as an accord-and-satisfaction agreement. Although the check
marked “Final Payment” was specifically provided by EMWA and did not include Fouche’s
name anywhere on the check, Triangle argues repeatedly on appeal that Fouche acted as
EMWA’s representative or agent, and that Fouche directly controlled the management of the
construction project on behalf of EMWA. Further, the very letter written by Triangle
asserting that it would continue to seek payment, despite cashing the “final payment” check,
was written to Fouche, not EMWA. Triangle has centered much of its argument upon the
contention that Fouche acted as EMWA’s agent. However, with respect to its argument
regarding accord and satisfaction, it argues that EMWA and Fouche are separate entities. We
refuse to allow Triangle to have it both ways. It cannot now argue that Fouche and EMWA
are separate entities solely for the sake of its accord-and-satisfaction argument. Thus, we
hold that Triangle’s claims against Fouche are barred pursuant to the doctrine of accord and
satisfaction. This fact notwithstanding, we address the remainder of Triangle’s claims
against Fouche.
2. Issues in Contract
¶15. Triangle maintains that genuine issues of material fact exist as to whether Fouche
owed a contractual duty to Triangle—either expressly or through a contract implied in
7
fact—to obtain the easements on behalf of EMWA.
a. Whether Fouche was an express party to the Contract
¶16. Triangle maintains that Fouche was a party to the Contract, either expressly or implied
in fact from Fouche’s conduct throughout the duration of the construction project. Fouche
disagrees. “A de novo standard of review is applied to questions of contract construction.”
Epperson v. SOUTHBank, 93 So. 3d 10, 16 (¶16) (Miss. 2012) (citation omitted). When
presented with a contractual dispute in the context of summary judgment, the reviewing court
need not go through the traditional analysis of contract construction. Id. at 17 (¶20). Rather,
the court
should determine only whether the contract is ambiguous. Questions of
contract construction and ambiguity are questions of law that are committed
to the court rather than questions of fact committed to the fact finder. If the
reviewing Court finds the terms of the contract to be ambiguous or subject to
more than one interpretation, the case must be submitted to the trier of fact,
and summary judgment is not appropriate.
Id. (internal citation and quotation marks omitted). Although Triangle does not assert in its
brief that the Contract was ambiguous, the parties dispute whether Fouche was a party to the
Contract. Thus, we will analyze the Contract to determine whether it is ambiguous with
respect to Fouche’s role therein.
¶17. As stated, Triangle asserts that Fouche was a party to the Contract, despite the fact that
Fouche did not actually sign the agreement. Triangle’s argument is premised on the fact that
Fouche’s company’s seal was affixed to the Contract’s cover and Fouche was designated as
the project’s engineer in the Contract’s terms. Triangle points to Section 3.01 of the
8
Contract, which provides that Fouche “is to act as [EMWA’s] representative, assume all
duties and responsibilities, and have the rights and authority assigned to [Fouche] in the
Contract Documents in connection with the completion of the Work in accordance with the
Contract Documents.” Triangle maintains that, as EMWA’s representative, Fouche was
liable for failing to obtain the easements in a timely manner, pursuant to Section 4.01 of the
Contract3 requiring EMWA—as the project-owner—to “obtain in a timely manner and pay”
for easements necessary for completing the project. Finally, Triangle references Section
12.03 of the Contract,4 which provides:
If [EMWA], [Fouche], or other contractors or utility owners performing other
work for [EMWA] as contemplated by Article 7, or anyone for whom
[EMWA] is responsible, delays, disrupts, or interferes with the performance
or progress of the Work, then Contractor shall be entitled to an equitable
adjustment in the Contract Price or the Contract Times, or both.
¶18. Fouche disagrees and argues that it is not a party to the Contract. First, Fouche
references Section 9.09(A) of the Contract,5 which provides:
Neither [Fouche’s] authority or responsibility under this Article 9 or under any
other provision of the Contract Documents nor any decision made by [Fouche]
in good faith either to exercise or not exercise such authority or responsibility
or the undertaking, exercise, or performance of any authority or responsibility
by [Fouche] shall create, impose, or give rise to any duty in contract, tort, or
3
Section 4.01 is located on page GC-12, which is expressly deemed part of the
“Contract Documents.” Thus, we include it in discussion of the “Contract,” as a whole.
4
Section 12.03 is located on page GC-41, which is expressly deemed part of the
“Contract Documents.” Thus, we include it in discussion of the “Contract,” as a whole.
5
Section 9.09(A) is located on page GC-33, which is expressly deemed part of the
“Contract Documents.” Thus, we include it in discussion of the “Contract,” as a whole.
9
otherwise owed by [Fouche] to [Triangle] . . . .
Fouche further argues that it is not an agent of EMWA, and its role as EMWA’s
representative is limited to only those duties and responsibilities “assigned to [Fouche] in the
Contract Documents in connection with the completion of the Work in accordance with the
Contract Documents.” Fouche maintains that the Contract expressly limits Fouche’s
involvement and that, while it may be EMWA’s representative in title, it holds no duty in
contract or tort to Triangle.
¶19. We agree with Fouche that it is not an express party to the Contract. We note that the
specific portion of the Contract in dispute—the “Specifications for Water Distribution
System Addition 2009” agreement—is entitled “AGREEMENT BETWEEN OWNER AND
CONTRACTOR FOR CONSTRUCTION CONTRACT (STIPULATED PRICE) FUNDING
AGENCY EDITION.” The title makes no mention of Fouche, and expressly provides that
this Contract is between the Owner (EMWA) and the Contractor (Triangle). Fouche’s role
in the project is not even mentioned until Section 3.01. While Triangle relies on this
language to argue that Fouche is EMWA’s agent and is therefore responsible for any
shortcomings committed by EMWA, Triangle overlooks the critical language limiting
Fouche’s role only to that specified by the Contract. Section 4.01 provides that EMWA is
responsible for obtaining the easements; Section 9.09(A) of the Contract provides that no
provision of the Contract or behavior by Fouche will “create, impose, or give rise to any duty
in contract, tort, or otherwise owed by [Fouche] to [Triangle].” These provisions explicitly
10
limit Fouche’s duties and do not include the responsibility of obtaining easements. Triangle
acquiesced to this language when it signed the contract. Thus, we find no merit to this
argument.
b. Whether Fouche and Triangle had a contract, implied in
fact, for Fouche to procure the easements
¶20. Triangle alternatively contends that if Fouche is not an express party to the Contract,
Fouche had a contractual duty to obtain the easements, implied in fact from the parties’
behavior throughout the duration of the construction project. “A contract that arises from the
conduct of the parties, also known as a contract implied in fact, has the same legal effect as
an express contract.” Franklin v. Franklin ex rel. Phillips, 858 So. 2d 110, 120 (¶34) (Miss.
2003) (citations omitted). A contract implied in fact—also referred to as a quasi-
contract—“is an obligation created by law, in the absence of an agreement, when and
because the acts of the parties or others have placed in the possession of one person money
under circumstances that in equity and good conscience he ought not to retain and which in
justice and fairness belong to another.” Id. at 120-21 (¶35). “[A]ny conduct of one party
from which the other party may draw the inference of a promise is effective as such and the
conduct of the parties is viewed as a reasonable man would to determine the existence or not
of the contract implied in fact.” Id. at 121 (¶35) (citation omitted). “To collect under an
unjust enrichment or quasi-contract theory, the claimant must show ‘there is no legal contract
but . . . the person sought to be charged is in possession of money or property which in good
conscience and justice he should not retain, but should deliver to another.’” Id. (citation
11
omitted).
¶21. Triangle maintains that its only communication regarding the project was with
Fouche, and that Fouche controlled when and where Triangle worked. Triangle also
contends that, “despite provisions in the [C]ontract to the contrary, Fouche . . . controlled the
day-to-day ground operations, including giving Triangle instructions on where to lay pipe as
well as to where and what private easements had been obtained.” In response, Fouche again
references Section 4.01 of the Contract, which unambiguously provides that EMWA—not
Fouche—had the duty to procure the easements for the project, and that Triangle may not
now offer parol evidence suggesting otherwise. Further, Fouche provides evidence that
EMWA accepted responsibility for obtaining the easements. In a letter dated December 27,
2010, from Fouche to Triangle, Fouche’s president stated, “The Owner has informed us that
they have obtained sufficient private and/or public easements for you to complete this
project.” The Owner, as specified by the Contract, was EMWA. Finally, Fouche presented
evidence that EMWA’s president, Arthur Tate, stated in a deposition, “No, [Fouche] didn’t
get no [sic] easements. We get the - - East Madison Water Association is the one who gets
easements. Engineers don’t do easements. We do easements.”
¶22. Given these facts, it is evident that EMWA was responsible for procuring the
easements for the project. Again, we find no merit to this issue.
3. Issues in Tort
¶23. Triangle maintains that genuine issues of material fact exist as to whether Fouche
12
breached its duty to Triangle to act in a reasonable and prudent manner in its professional
capacity. Triangle argues that Fouche breached this duty in the following ways: (1) in
negligently designing the project; (2) in extracontracually expanding Triangle’s scope of
work long after the written Contract had been executed by the parties; (3) in issuing a notice
to Triangle to proceed with the project months before obtaining the necessary easements; and
(4) in failing to provide notice to Triangle until early 2013 that permits were obtained on
October 4, 2010. In response, Fouche contends that it did not owe any duty to Triangle at
all, referencing Section 9.09(A) of the Contract. Further, Fouche maintains that even if it
owed a duty and consequently breached that duty, there is no evidence that the alleged breach
proximately caused Triangle’s damages.
¶24. Both Triangle and Fouche cite Magnolia Construction Co. v. Miss. Gulf South
Engineers, Inc., 518 So. 2d 1194, 1202 (Miss. 1988), in support of their arguments regarding
whether Fouche owed any duty in tort to Triangle. In Magnolia, our supreme court reversed
a grant of summary judgment where it found that a genuine issue of material fact existed with
respect to a project-engineer’s duties to the project-contractor who was engaged in
construction as part of an agreement with the project-owner. Id. at 1197. Triangle points to
the portion of the Magnolia opinion providing that certain design professionals, such as
project-engineers, still owe a duty to project-contractors to exercise ordinary professional
skill and diligence—even where the engineer and contractor are not in a direct contractual
relationship—because of the inherent nature of the engineer’s contract with the project-
13
owner:
[W]here the engineer does not have a direct contractual relationship with the
contractor, the legal duty which forms the basis of the contractor’s negligence
claim still must arise from a contract-based obligation of the engineer to the
[party with whom the contractor has actually contracted and for whom the
engineer works]. Indeed, Mississippi law imposes on design professionals
(architects/engineers) the duty to exercise ordinary professional skill and
diligence. Further, Mississippi law allows third parties to rely on a design
professional’s contractual obligation to the owner.
Id. at 1202 (internal citation and quotation marks omitted). In response, Fouche references
the portion of the opinion providing that any duty a project-engineer owes to a project-
contractor as part of its contractual duty to the project-owner must be determined by the
contract between the engineer and the owner:
The trial judge was correct in trying to determine the intent of the parties to the
contract from the four corners of the document. Early on, this Court stated the
principle that in construing a contract, the instrument as a whole will be looked
to and its meaning determined for the entire agreement as written in order to
ascertain the intentions of the parties from the contract.
Id. at 1203-04 (citations and internal quotation marks omitted).
¶25. Magnolia is distinguishable from this case for several reasons: First, the Magnolia
court directly referenced the contract between the project-owner and project-engineer in its
decision, whereas we cannot do so because our record does not include any separate
contractual agreement between the EMWA, the project-owner, and Fouche, the project-
engineer; the extent of any contractual dealings between Triangle and Fouche appears to be
limited to the terms of the Contract, in which Fouche’s duties are expressly limited. Id.
Further, our supreme court referenced several pieces of evidence in Magnolia—including
14
affidavits from the project-contractor’s president and a crew member and a deposition from
the project-engineer’s staff—which gave rise to a genuine issue of material fact regarding
whether the project-engineer had actually owed and breached a duty to the project-contractor.
Id. In contrast, here, there is insufficient evidence to suggest that Fouche actually owed any
extracontracual duties in tort to Triangle, as Triangle suggests. Not only do the terms of the
Contract explicitly provide otherwise, as evidenced by Section 9.09(A), quoted above, but
we also have the deposition of Triangle’s president, Robert King, in which King indicates
that Fouche was not even responsible for the duties that Triangle now argues it was. When
asked specifically about being given the directive to continue work after the necessary
easements had been obtained, King answered that Triangle only knew it was able to proceed
“[a]t the direction of the engineer and Mr. Meyer[6].” However, this statement is directly
contradicted later in King’s deposition, where he explains the function of a notice to proceed:
The directive to be able to go out and do the work in an easement, whether it’s
public or private, to direct me to continue doing work, whether that be from
Mr. Meyer, as an agent of [Fouche], or whether it was an actual member of
[Fouche], you know, or [EMWA]. Somebody would direct me to go and say,
[“]You can continue your work here in this area.[”] Outside of that, you know,
that’s the only direction that we have to be able to go to work.
The only other evidence provided by Triangle suggesting that Fouche owed extracontractual
duties to Triangle includes an affidavit by Triangle’s president, Robert King, in which King
maintained that Triangle’s communications were exclusively with Fouche, not EMWA.
6
Ronald Meyer was the project inspector on behalf of Fouche.
15
However, this evidence is insufficient to show that Fouche owed a duty to Triangle outside
of those expressly delineated within the Contract, particularly in light of the Contract’s direct
language limiting Fouche’s duties to Triangle. In light of these facts, we cannot say that
Fouche owed any extracontractual duties to Triangle regarding this project.
¶26. As previously stated, Triangle has the burden of establishing that there is a genuine
issue of material fact regarding an essential element of its case. Given the evidence before
us, we cannot find that there is a genuine issue of material fact with respect to the issues put
forth by Triangle, and that the circuit court erred in granting summary judgment. Thus, we
find that Fouche owed no duty to Triangle. We find that this is dispositive of any issue
regarding breach or proximate cause and therefore decline to consider these issues.
¶27. In summary, we find that the circuit court did not err in granting Fouche’s motion for
summary judgment. Although the circuit court offered no reason for its decision, our de
novo analysis of these issues on appeal leads us to conclude that (1) Triangle’s act of cashing
EMWA’s check marked “final payment” constituted an accord-and-satisfaction agreement
and subsequently barred Triangle from bringing claims against Fouche, and (2) Triangle
failed to show any genuine issue of material fact with respect to its other claims.
Accordingly, we affirm.
¶28. THE JUDGMENT OF THE CIRCUIT COURT OF RANKIN COUNTY IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLANT.
LEE, C.J., GRIFFIS, P.J., BARNES, ISHEE, CARLTON, FAIR, GREENLEE
AND WESTBROOKS, JJ., CONCUR. WILSON, J., CONCURS IN PART AND IN
THE RESULT WITHOUT SEPARATE WRITTEN OPINION.
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