IN THE SUPREME COURT OF MISSISSIPPI

NO. 93-CA-00144-SCT

J. O. HOOKER AND SONS, INC.

v.

ROBERTS CABINET CO., INC.

DATE OF JUDGMENT: 12/16/92

TRIAL JUDGE: HON. JOHN B. TONEY

COURT FROM WHICH APPEALED: RANKIN COUNTY CIRCUIT COURT

ATTORNEY FOR APPELLANT: ANSELM J. MCLAURIN

ATTORNEY FOR APPELLEE: WES W. PETERS

NATURE OF THE CASE: CIVIL - CONTRACT

DISPOSITION: AFFIRMED ON CONDITION OF REMITTITU

IF REMITTITUR REFUSED, REVERSED AND

REMANDED FOR NEW TRIAL ON DAMAGE

11/7/96

MOTION FOR REHEARING FILED:

MANDATE ISSUED: 12/2/96

BEFORE PRATHER, P.J., BANKS AND SMITH, JJ.

PRATHER, PRESIDING JUSTICE, FOR THE COURT:

I. INTRODUCTION

¶1. This case calls upon this Court to review the granting of a motion for summary judgment in favor

of a subcontractor against a general contractor who breached a subcontract agreement. This Court

considers the granting of the summary judgment motion to have been well taken, but we order a

remittitur of $1,260 to the amount of $41,610.

II. STATEMENT OF THE FACTS

¶2. In 1991, J.O. Hooker & Sons, Inc. ("Hooker") served as the general contractor for the

renovation of residences owned by the Bessemer Public Housing Authority ("BPHA") in Bessemer,

Alabama. The renovation involved tearing out fixtures, such as cabinets, and Hooker's contract with

the BPHA provided that the BPHA, as the owner of the property, had the option to either keep or

salvage fixtures which needed to be torn out during the renovation process. The contract further

provided that, in the event that the BPHA elected to keep the cabinets, Hooker would be required to

remove the cabinets and move them to a location of the BPHA's choosing. Under said general
contract, the cabinets were to become the property of Hooker and to be removed by him in the event

that the BPHA elected not to keep said cabinets.

¶3. Hooker entered into a subcontract agreement with Roberts Cabinet Co., Inc. ("Roberts"),

pursuant to which Roberts was required to "furnish cabinets, tops, plastic laminates on walls and furr

down materials and fronts for hot water heaters as per plans and specs for the price listed below."

The agreement also provided that "the price includes the cost of tear-out (sic.) old cabinets and

installation of new cabinets."

¶4. As the date when the cabinets would be needed approached, Roberts informed Hooker that he

had underestimated the costs of the job and demanded an additional $23,000, which, Hooker asserts,

he had no choice but to pay given the time constraints which were present. Later, a dispute arose

between Hooker and Roberts as to which party had the duty to dispose of the cabinets as the BPHA

required in the general contract. Roberts asserted that the subcontract did not obligate him to dispose

of the cabinets, but Hooker contends that the "as per specs and plans" language in the subcontract

agreement served to incorporate by reference the general contract and that Roberts thus assumed

Hooker's duties to dispose of the cabinets.

¶5. The parties were unable to resolve their dispute, and on December 13, 1991, Hooker sent

Roberts a fax in which he stated that he had consulted with his lawyer and was considering the

contract null and void. Hooker offered to buy from Roberts the cabinets that Roberts had already

constructed, but the parties were unable to come to an agreement.

III. STATEMENT OF THE CASE

¶6. On December 18, 1991, Roberts Cabinet Co., Inc. filed suit against J.O. Hooker & Sons, Inc.,

alleging that Hooker had wrongfully breached a subcontract agreement with Roberts after Roberts

had already begun performance. On September 16, 1992, the trial court granted summary judgment

in favor of Roberts, finding that Hooker had no legal right to unilaterally terminate the contract in the

present case.

¶7. On December 10, 1992, a trial was held for the sole purpose of determining the amount of

damages suffered by Roberts as a result of Hooker's actions, and a jury determined Robert's damages

to be in the amount of $ 42,870. On January 8, 1993, the trial court denied Hooker's motions for a

new trial or in the alternative a remittitur of the jury's verdict, and Hooker filed a timely appeal.

IV. WHETHER THE LOWER COURT ERRED IN GRANTING SUMMARY

JUDGMENT AGAINST J. O. HOOKER & SONS, INC., ON THE ISSUE OF

LIABILITY.

A. Was there a genuine issue of material fact with regard to whether Hooker or Roberts

had the duty to dispose of the cabinets in question ?

¶8. This Court reviews de novo the record on appeal from a grant of a motion for summary

judgment. In Brown v. Credit Center, Inc. 444 So.2d 358, 362 (Miss. 1983) this Court interpreted

Rule 56 and the standards that the trial court should use in considering a motion for summary

judgment. This Court explained that:
The trial court must review carefully all of the evidentiary matters before it -- admissions in

pleadings, answers to interrogatories, depositions, affidavits, etc. The evidence must be viewed

in the light most favorable to the party against whom the motion has been made. If in this view

the moving party is entitled to judgment as a matter of law, summary judgment should forthwith

be entered in his favor. Otherwise the motion should be denied. Brown, 444 So.2d at 362.

Northern Electric Co. v. Phillips, 660 So.2d 1278, 1281 (Miss. 1995), quoting Brown v. Credit

Center, Inc. 444 So.2d 358, 362 (Miss. 1983)

¶9. Hooker argues that the trial court was in error in granting Roberts' motion for summary judgment

on the issue of liability, given that disputed issues of fact remained which, Hooker contends, should

have been resolved by the jury rather than the judge. Specifically, Hooker asserts that there was a

disputed issue of fact as to whether Roberts had the duty of carrying away and disposing of the

cabinets which were removed from the dwellings in question.

¶10. Hooker asserts that the contract in question should be interpreted in the context of Article 2 of

the Uniform Commercial Code, Miss. Code Ann. §75-2-101 et seq., given that the transaction

involved was for the sale of goods, namely cabinets. Hooker cites no authority for this proposition,

and Roberts does not address this issue at all, but it is of importance to determine what law should

apply to the contract. There appear to be no Mississippi cases directly on point, but this Court finds

that, although the transaction in this case did involve a sale of goods, the dispute in this case actually

concerns the performance of services and the delegation of duties under a contract.

¶11. A number of states which have considered this issue have concluded, based on an interpretation

of UCC § 2-102, that Article 2 does not apply to construction or service contracts. See Perlmutter v.

Don's Ford, Inc., 409 N.Y.S. 2d 628 (1978); Christiansen Bros., Inc. v. State, 586 P.2d 840

(Wash. 1978). The present contract, however, is properly viewed as a mixed transaction of goods

and services, and courts have reached differing conclusions as to whether the UCC should apply to

such mixed transactions.

¶12. In Snyder v. Herbert Greenbaum & Associates, Inc., 380 A.2d 618 (Md. App. 1977), the

Maryland Court of Appeals held that a contract for the installation of carpeting in a large apartment

complex was primarily a contract for sale, rather than installation, of such carpeting and thus was

subject to UCC Article 2. In Freeman v. Shannon Const., Inc., 560 S.W.2d 732 (Tex. Civ. App.

7th Dist. 1977), by contrast, a Texas appellate court held that a contract between a general

contractor and subcontractor, pursuant to which the subcontractor was to complete cement

construction work on an apartment project, was in essence a service contract, even though it did

involve the transfer of goods, and thus the UCC should not apply.

¶13. It is very often the case that a construction contract will involve the furnishing of goods by a

subcontractor, and this Court holds that, in such a mixed transaction, whether or not the contract

should be interpreted under the UCC or our general contract law should depend upon the nature of

the contract and also upon whether the dispute in question primarily concerns the goods furnished or

the services rendered under the contract. The present case clearly does not concern the cabinets

manufactured, but rather the refusal of Roberts to assume duties which Hooker contractually

obligated itself to perform. This Court would not hesitate to apply Article 2 if the present case

involved, for example, a dispute over the quality of the cabinets, but the present case is in actuality a
fairly standard contract dispute involving delegation of duties under a contract and the right to

unilaterally rescind said contract. The fact that goods were furnished in the present contract has no

bearing on the legal analysis involved, given that the dispute in this case clearly concerns the service

aspect of this mixed transaction.

¶14. Hooker's desire to have this contract interpreted under the provisions of the UCC is based on

the fact that Miss. Code Ann. § 75-2-202 (1972), which contains the UCC version of the parol

evidence rule, provides a more permissive approach for the admission of extrinsic evidence than that

found in our general body of law. Specifically, § 75-2-202 does not require that the agreement in

question first be found to be incomplete or ambiguous before evidence of course of dealing and usage

of trade may be considered.

¶15. Under our general, non-UCC, parol evidence rule, by contrast, a document must first be found

to be incomplete or ambiguous before said document may be explained, but not contradicted, by

extrinsic evidence. Busching v. Griffin, 542 So.2d 860 (Miss. 1989). In Busching, Griffin sold an

option to purchase property for $50,000, and, upon deciding that said price was too low, breached

the option contract, asserting that she thought that the option price was a loan to pay her taxes.

Busching, 542 So.2d at 861. The trial court accepted Griffin's argument, but this Court reversed,

finding that the contract in question was not ambiguous and thus that Griffin could not introduce

extrinsic evidence to supplement said contract. Id. at 865.

¶16. As in Busching, the subcontract in the present case is clear and unambiguous in that it clearly

provides that Roberts' bid price includes the cost of tearing out and installing new cabinets, but is

completely silent as to any duty on the part of Roberts to dispose of the cabinets. Hooker concedes

that the subcontract with Roberts was silent on this issue, but argues that the "specifications for the

general contract disclosed that this was within the kitchen cabinet portion of the job." Hooker argues

that the general contract between himself and the BPHA was incorporated by reference into the

subcontract with Roberts, given that the subcontract provides in part that:

We agree to furnish cabinets, tops, plastic laminate on walls and furr down materials and fronts

for hot water heaters as per plans and specs for the price listed below. (emphasis added).

Hooker asserts that "[t]he specifications on the kitchen cabinet portion of the job, included in the

Roberts-Hooker contract by reference, provided that the scope of the job included removing all

existing kitchen cabinets and shelves and disposing of them in accordance with local laws and

ordinances." It is true that the subcontract refers to the "plans and specs" of the general contract, but

said language does not in any way indicate an intent by Roberts to assume additional and expensive

duties which were not set forth in the subcontract. The term "as per specs and plans" is better

understood as applying to the "furnish[ing]" of cabinets and not to their "removal."

¶17. The parties cite several cases in support of their respective positions. Roberts cites Perry v.

Newell, 146 F.2d 398 (5th Cir. 1945), which is factually similar to the present case. In Perry, the

subcontract in question similarly incorporated by reference the "plans and specifications" of the

general contract, which general contract included provisions for electrical work on the exterior of

buildings being constructed. Perry, the general contractor, asserted that said incorporation by

reference of the general contract served to obligate Newell as the subcontractor to the performance

of the outside electrical work, given that Newell was responsible for electrical work. The trial court
and the Fifth Circuit found in favor of Newell, but only upon a finding that the subcontract "expressly

limit(ed) the work to be done by him to the wiring inside the buildings referred to in it". Perry, 146

F.2d at 400. The Fifth Circuit stated in Perry:

We reaffirm here ... that while a reference in a subcontract to the provisions, plans, and

specifications of a general contract imports them into the subcontract where not inconsistent

with its terms, it is quite well settled that such a reference is not effective beyond this, and that

if the subcontract contains words of definite limitation (emphasis added) they will be given

effect and the reference limited accordingly. Id.

As noted by Hooker, the subcontract in the present case clearly does not provide such "words of

definite limitation," and the value of Perry as persuasive authority in favor of Roberts' position is

limited.

¶18. Roberts also cites the case of Garrett v. Hart, 250 Miss. 822, 168 So.2d 497 (1964), but

Garrett is factually dissimilar to the present case, given that, in Garrett, "it was impossible to tell

from the contract and plans and specifications how much of a house `ready for occupancy' was

contemplated." Garrett, 250 Miss. at 836, 168 So.2d at 503. Thus, the plans and specifications in

Garrett did not assist in resolving the main issue in said case, and the case centered largely around

matters which are dissimilar from the present case.

¶19. Hooker cites the case of Roberts v. Robertson, 232 Miss. 796, 100 So. 2d 586 (Miss. 1958), in

which this Court held that:

It is generally held that where a building contract refers to plans and specifications and so

makes them a part of it, the contract is to be construed as to its terms and scope together with

the plans and specifications. Robertson, 232 Miss. at 802, 100 So.2d at 588.

In Robertson, the dispute centered around whether the subcontractor was required under the

subcontract to insulate the pipes, and this Court determined that he did have such a duty based partly

on the incorporation by reference of the plans and specifications of the general contract. As Roberts

notes in his brief, however, Robertson is distinguishable from the present case in that the subcontract

in Robertson clearly provided that the subcontractor would perform "all work" relating to the piping.

Thus, none of the cases cited by either party provide strong authority with regard to the issues in the

present case, and this Court turns instead to an analysis of whether Hooker presented a genuine issue

of material fact as to whether Roberts had a duty to dispose of the cabinets in question.

¶20. In arguing that a fact issue existed, Hooker asserted in his affidavit that:

It is very rare for a subcontractor such as Roberts not to do their own cleanup. The only time

we have ever contracted with a sub-contractor who did not handle their own cleanup was when

the job was within driving distance of our office in Thaxton, Mississippi.

The duty of Hooker to remove the cabinets in the present case, however, arose from specific and

detailed contractual provisions entered into between Hooker and the BPHA. The subcontract

agreement, as noted earlier, expressly provided that the bid price included the "tear-out" and

installation of the cabinets. If Hooker had desired that Roberts be obligated to assume the specific
contractual obligations set forth in the general contract to dispose of the cabinets, then it would have

been a simple matter to include in the subcontract language obligating Roberts to do so.

¶21. It would have been highly advisable for Hooker to have insisted on such language in the

subcontract, regardless of his understandings regarding industry customs. This Court is hesitant to

find that parties have impliedly assumed obligations to perform expensive duties based on vague

assertions of industry custom when the assumption of said duties could easily have been provided for

in the subcontract. This Court is especially reluctant to do so in the present case, given that the duties

involved are not general obligations to remove materials, but rather specific tasks which Hooker

contractually obligated himself to perform.

¶22. On these facts, this Court concludes that, as a matter of law, Roberts did not assume the specific

contractual duties relating to the removal of the cabinets, and that there accordingly exists no genuine

issues of material fact with regard to this issue. The trial judge was therefore correct in granting

summary judgment in favor of Roberts with regard to the issue of liability.

B. Assuming that a material issue of fact does exist with regard to the duty to dispose of

the cabinets, was Hooker nevertheless in error as a matter of law in unilaterally

terminating the contract as a result of Robert's alleged breach thereof ?

¶23. As noted above, this Court concludes that Hooker failed to raise a genuine issue of material fact

regarding the responsibility of Roberts to dispose of the cabinets. Even if this Court had found that

there existed a genuine issue of material fact regarding the duty of disposing of the cabinets, this

Court is faced with the actions of Hooker in unilaterally terminating the contract. In his summary

judgment ruling, the trial judge ruled that:

The Defendant did not have the right to unilaterally rescind or otherwise terminate its contract

with Plaintiff, and that the Plaintiff is entitled to Judgment as to the Liability as a matter of law.

As such, the language of the Chancellor's ruling indicates that he considered Hooker to have had no

right to terminate the contract, and that said consideration motivated the summary judgment ruling

with regard to the issue of liability.

¶24. It is a matter of basic contract law that every breach does not give a party the right to

unilaterally terminate a contract, as long as the breaching party has substantially performed his duties

under the contract. Gulf South Capital Corp. v. Brown, 183 So.2d 802 (Miss. 1966). If Hooker had

felt that Roberts had breached the contract, then he could have assumed the responsibilities for

removing the cabinets himself and filed suit against Roberts for the $4,000 to $6,000 cost of doing

so. Given the eventual jury verdict of over forty thousand dollars against Hooker, such a decision

may well have been the prudent one for him. Instead, Hooker chose to terminate the contract, and in

doing so, subjected his actions to a rather stringent legal analysis.

¶25. In evaluating Hooker's actions in unilaterally rescinding the contract, it must be determined

whether Roberts materially breached the contract, thus entitling Hooker to legally rescind said

contract. This Court held in UHS-Qualicare v. Gulf Coast Community Hosp., Inc., 525 So.2d 746,

756 (Miss. 1987), that:
The termination of a contract is an "extreme" remedy that should be "sparsely granted."

[citations omitted]. Termination is permitted only for a material breach. A breach is material

when there "is a failure to perform a substantial part of the contract or one or more of its

essential terms or conditions, or if there is such a breach as substantially defeats its purpose,"

Gulf South Capital Corp. v. Brown, 183 So.2d 802, 805 (Miss. 1986), or when "the breach of

the contract is such that upon a reasonable construction of the contract, it is shown that the

parties considered the breach as vital to the existence of the contract," Matheney v. McClain,

248 Miss. 842, 849, 161 So.2d 516, 520 (1964).

¶26. Hooker asserts that his rescission of the contract arose in large part from Roberts' successful

efforts to secure additional monies from Hooker as the date when the cabinets were needed

approached. To wit, Hooker stated in his affidavit that:

Around the middle of October, 1991, as the job was nearing the time when the cabinets would

be needed, Kevin Roberts called and stated that his father had made a mistake on their bid of

about $23,000.00, and that they would be unable to do the job. At this time, we were in a

serious time constraint and were at the mercy of Roberts Cabinet Co., Inc. We felt that we had

no recourse but to go up on the price to be paid for them and we agreed to let them increase

their price even though this was going to cause us to lose money on this portion of the work.

Thus, it is Hooker's assertion that he was concerned with a general course of conduct on the part of

Roberts, which, Hooker asserts, amounted to a coercive attempt to secure additional funds for tasks

which Roberts was already obligated to perform.

¶27. In response to an interrogatory from Roberts, Hooker explained his reason for terminating the

contract thusly:

After we determined that Roberts Cabinet Co. was, in our opinion, only out to increase the

amount of their contract by any means possible and we had already exceeded our allowance for

this portion of the contract, we felt we had no alternative but to trade with someone else.

Hooker may have genuinely felt that Roberts was attempting to "squeeze" additional money from

him, but the fact remains that Hooker could have insisted that the subcontract with Roberts contain

language obligating Roberts to assume the duties of disposing of the cabinets, but he failed to do so.

Further, once it became clear that Roberts would not perform the removal of the cabinets, Hooker

could have, as mentioned earlier, removed the cabinets himself and sued Roberts for the cost of doing

so. Based on these facts, the actions by Roberts did not amount to a material breach of the contract

entitling Hooker to unilaterally rescind the entire contract.

¶28. Accordingly, the summary judgment ruling granted by the trial judge with regard to the issue of

liability is affirmed.

V. WERE THE DAMAGES AWARDED BY THE JURY WERE THE RESULT OF

BIAS, PASSION AND PREJUDICE, AND/OR AGAINST THE WEIGHT OF THE

OVERWHELMING EVIDENCE ?

¶29. Hooker alternatively argues that this Court should grant a substantial remittitur based on the
damages in the jury's verdict being against the overwhelming weight of the evidence. Miss. Code

Ann. § 11-1-55, "Authority to impose condition of additur or remittitur", provides:

The supreme court or any other court of record in a case in which money damages were

awarded may overrule a motion for new trial or affirm on direct or cross appeal, upon condition

of an additur or remittitur, if the court finds that the damages are excessive or inadequate for

the reason that the jury or trier of the facts was influenced by bias, prejudice, or passion, or that

the damages awarded were contrary to the overwhelming weight of the credible evidence. If

such additur or remittitur be not accepted then the court may direct a new trial on damages

only. If the additur or remittitur is accepted and the other party perfects a direct appeal, then the

party accepting the additur or remittitur shall have the right to cross appeal for the purpose of

reversing the action of the court in regard to the additur or remittitur.

¶30. Plaintiff's Exhibit 6 listed the following damages:

$ 5,117.28 Net Loss on Manufactured Cabinets

$ 3,775.04 Countertops

$ 886.25 Laminate

$ 72.38 Travel Expenses

$ 1,760.00 Administrative Time

$ 1,440.00 Storage of Cabinets

$30,000.00 Lost profit on job (lowered)

$43.050.95 Total Damages

¶31. Although Roberts originally requested $51,309.29 in total damages, he was shown on crossexamination to have overestimated his lost profits, and Roberts accordingly lowered his total

damages requested during closing arguments to $43,050.95. The excessive amount claimed was due

to an accounting error and is not a subject of dispute in this appeal. Hooker does not contest on

appeal the jury's awards with regard to the first four items listed above, namely the net loss on the

manufactured cabinets, as well as the countertops, laminate, and travel expenses. Hooker does,

however, contest the jury's awards relating to the storage and administrative costs, and, especially,

the lost profits. These damages will be considered separately.

A. Storage and Administrative Costs

¶32. With regard to the storage costs for the cabinets, it is clear that Roberts would have incurred

said costs regardless of any breach on the part of Hooker, given that the cabinets were stored in

space which Roberts had already leased. Roberts argues that:

As to the cost of storage, Hooker suggests that Roberts cannot allocate any costs for storage,

because it was storing them in a building that it was paying rent on anyway. However, it was

paying rent for a 30,000 square foot building. As a result of Hooker's breach, it was paying the
same rent but on a reduced square foot building. Roberts only applied the percentage of the

lease which was specifically attributable to the area being used to store Hooker's cabinets.

Therefore, these costs are directly attributable to Hooker's breach.

¶33. Roberts' argument is without merit. Roberts is only entitled to recover damages for expenses in

storing the cabinets that it would not otherwise have incurred absent Hooker's breach. As noted by

Hooker, Roberts was not forced to rent additional space to store the cabinets, but merely utilized

storage facilities that it had already leased. Roberts' rental fees were not raised a single penny by the

storage of the cabinets in question, and it was not forced to rent additional space to store other

materials as a result of a lack of space arising from the storage of the cabinets. Roberts' claim for

recovery in this regard is based solely on the abstract economic value of previously empty storage

space which it filled with the cabinets in question. Allowing Roberts to recover for the cost of storing

the cabinets would place it in a better position than if the contract had been fully performed. Under

these facts, Roberts' claimed damages of $1,440 for storage costs are disallowed in their entirety.

¶34. A somewhat similar analysis may appear to apply with regard to the "administrative time"

damages of $1,760 which were cited by Roberts as having been incurred in paying Kevin Roberts for

his time as general manager. With regard to these damages, Roberts argues that:

Finally, as to the percentage of the general manager's salary allocated as damages, Hooker

suggests that this percentage of the salary which was applicable to time spent on Hooker's

project was not recoverable, because the general manager was paid this salary anyway.

However, Hooker misses the point. The general manager is not the Plaintiff in this action.

Rather, Roberts is the Plaintiff in this action. Paying the general manager a salary to work on a

contract which cannot be performed is the equivalent of paying the general manager a salary for

reading the newspaper. It is wasted money and time that could have been spent on a contract

that it was allowed to perform. Consequently, although the general manager may not have lost

his salary, Roberts lost the benefit from paying its general manager this salary.

As with the expenses relating to storage space, Roberts' expenses in paying Kevin Roberts were

exactly the same as they would have been if Hooker had not breached the contract. Kevin Roberts'

salary, however, is not comparable to the storage costs in an important respect.

¶35. It is clear that the time which Kevin spent working on the Hooker project could, and presumably

would, have been spent productively in other projects. As such, Roberts suffered an economic loss by

having to pay an important employee his salary for working on a contract which would eventually be

canceled. Kevin testified that he spent approximately forty percent of his working hours over a twomonth period on the Hooker project. It is true that Roberts would have paid Kevin regardless of

whether he had spent that time working on the Hooker project. However, the distinction is that,

unless reimbursed for these expenses, the salary paid by Roberts for this time spent will have been

paid for no resulting economic value. Given that Kevin Roberts was a salaried employee of Roberts

who was directly engaged in working on the Hooker project, it can not be disputed that Roberts

suffered expenses related to the contract in question by paying Kevin for his work.

¶36. The issue arises as to whether compensating Roberts for both its lost profits and for the salary of

Kevin Roberts would amount to a double recovery. The answer to this question depends upon

whether Kevin Roberts' salary was included in the $120,000 in expenses which Roberts estimated it
would have incurred in completing the project. If said salary was included in the expenses, then the

recovery would not amount to a double recovery, given that the amount of the salary would have

already served to reduce the amount of profits in the calculation of damages.

¶37. The record does not reveal whether Roberts included an estimate of Kevin Roberts' salary

allocable to the Hooker contract in his determination of his expenses. It is reasonable to assume,

however, that a subcontractor includes in his bid estimate the salaries which he will be required to

pay to all employees who will be directly involved in the project in question. It naturally adds to the

expense of a project if a company is required to utilize the services of managerial personnel who may

be unable to perform other tasks as a result of said project. Roberts suffered expenses by paying

Kevin Roberts his salary without being able to utilize his expertise on other jobs for which they would

be receiving the full amount of contract value. On these facts, it can not be said that the jury's

awarding of these administrative costs was against the overwhelming weight of the evidence.

B. Lost Profits

¶38. The main issue with regard to damages in this appeal concerns the extent of Roberts' lost profits

as a result of the breach by Hooker. In awarding damages for breach of contract, this Court's purpose

is to put the injured party in as good a position as he would have been in but for the breach.

Universal Life Ins. Co. v. Veasley, 610 So.2d 290, 295 (Miss. 1992). 22 AmJur2d "Damages" §45

notes that:

Contract damages are ordinarily based on the injured party's expectation interest and are

intended to give him the benefit of the bargain by awarding him a sum of money that will, to the

extent possible, put him in as good a position as he would have been in had the contract been

performed.

It is clear that damages awarded by the jury were in the nature of expectation damages, and said

damages included Roberts' lost profit from the deal, along with expenses that Roberts incurred in

manufacturing the cabinets that it was unable to mitigate. The jury's awarding of Roberts' direct

expenses in partially performing the contract in addition to lost profits was entirely proper, given that

failing to do so would under-compensate Roberts by forcing him to pay for said expenses out of his

net profits.

¶39. Of considerable dispute at trial was Robert's claimed profit percentage on the deal with Hooker

of twenty-six percent. Hooker testified that such a percentage was not a "usual and ordinary profit to

be expected in the construction business" and that one would be unable to "win any jobs on public

works with bids including a 26% profit margin." Hooker testified that his usual profit margin was

approximately 4%, although Roberts argued that a manufacturer such as Roberts should expect a

greater profit margin than a general contractor such as Hooker.

¶40. Also in dispute at trial was the evidence regarding the daily manufacturing output of Roberts'

factory and the number of days that the production was curtailed at said factory as a result of the

breach by Hooker. Kevin testified at trial that Roberts' average daily manufacturing output was

between $6,000 and $8,000 in 1991, although he estimated during discovery that such output

amounted to only $6,000. Hooker asserts that, even assuming that the twenty-six percent profit

margin is correct, the $6,000/day output constitutes a gross sales figure, and that Roberts would thus
only expect a profit of approximately $1,500/day from the contract.

¶41. Hooker thus argues that Roberts' lost profits should be measured by the four-day period during

which production at Roberts' factory was shut down. However, the shut-down period at the factory

would be much more relevant with regard to determining the amount of consequential damages

resulting from the breach rather than measuring Roberts' amount of lost profits. The relevant inquiry

is not the amount of profit that Roberts would have been able to make in the four days that the

factory was shut down, but rather the amount of profit it would have been able to make on the deal

as a whole had the contract not been breached by Hooker.

¶42. Roberts' daily manufacturing output would only be relevant in determining the amount of lost

profits on the deal as a whole if it could be shown exactly how many days it would have taken for

Roberts to manufacture the cabinets, and there was no exact proof in this regard at trial. Given the

bid price of over $150,000, however, it is clear that it would have taken Roberts many more than

four days to complete the contract, considering the daily manufacturing output of the factory of only

$6,000/day. Kevin testified that the factory was capable of generating a daily production output

considerably in excess of $6,000/day, but the completion of the contract would have taken weeks

even at an increased rate of production.

¶43. Kevin testified that, in making his bid, he estimated the costs that his company would have

incurred in manufacturing the cabinets to be approximately $120,000, and then factored in his desired

profit margin of twenty-six percent, for a total of an approximately $151,000 total bid. Thus, Kevin

testified that, had the contract been completed, Roberts expected to receive a profit of around thirty

thousand dollars. Bids in construction situations are rarely susceptible of exact proof as to what the

manufacturing costs and profits would have been, and, while the profit margin of twenty-six percent

may appear high, Hooker's sole proof regarding the excessive nature of Roberts' claimed profit

margin was his testimony regarding his own experiences as a general contractor, rather than a

manufacturer/subcontractor.

¶44. This Court thus has only the conflicting testimony of Hooker and Roberts with which to

determine the true profit margin, and, on these, facts, it can not be said that the jury's verdict was

against the overwhelming weight of the evidence. This Court has a rather limited scope of review on

appeal of a denial of a motion for remittitur. This Court noted in Odom v. Roberts, 606 So.2d 114,

121-22 (Miss. 1992), that:

Where the trial court has denied a remittitur, the defendant may appeal to this court on grounds

(that) the trial court abused its discretion in failing to order the remittitur and, if he can convince

the court on that score, may argue that the damage award be reduced to such amount as would

no longer be contrary to the overwhelming weight of credible evidence. If the defendant should

be successful, to any extent, the plaintiff would then have the option of accepting the remittitur

or going to trial again on the issue of damages only.

¶45. The only damages granted by the jury which this Court considers to be against the

overwhelming weight of the evidence are the damages for the storage of the cabinets. While the

storage costs constitute a rather insignificant portion of the damages, the fact remains that the

awarding of the $1440 in storage costs was clearly erroneous and an abuse of discretion, given that

Hooker suffered no real economic loss as a result of being forced to store the cabinets at his factory.
Having established that a rather minor remittitur is in order, this Court's role is to reduce the damages

to such an amount that the verdict is not in conflict with the overwhelming weight of the evidence.

¶46. Accordingly, this Court grants a remittitur of $1,260.00, which constitutes the difference

between the $42,870.00 sum awarded by the jury and the sum of $41,610.00, which, this Court

concludes, is not against the overwhelming weight of the evidence.

$ 5,117.28 Net Loss on Manufactured Cabinets

$ 3,775.04 Countertops

$ 886.25 Laminate

$ 72.38 Travel Expenses

$ 1,760.00 Administrative Time

$30,000.00 Lost profit on job

= $41,610.00 proper amount of damages

¶47. AFFIRMED ON CONDITION OF REMITTITUR; IF REMITTITUR REFUSED,

REVERSED AND REMANDED FOR A NEW TRIAL ON DAMAGES ONLY.

SULLIVAN, P.J., PITTMAN, BANKS, SMITH AND MILLS, JJ., CONCUR. LEE, C.J.,

AND McRAE, J., CONCUR IN RESULT ONLY. ROBERTS, J., NOT PARTICIPATING.