IN THE SUPREME COURT OF MISSISSIPPI

NO. 2004-CA-00894-SCT

G. B. “BOOTS” SMITH CORPORATION

v.

HENRY R. COBB, JR. AND RICHARD COBB

DATE OF JUDGMENT: 04/01/2004

TRIAL JUDGE: HON. WILLIAM G. WILLARD, JR.

COURT FROM WHICH APPEALED:

ATTORNEY FOR APPELLANT: COAHOMA COUNTY CHANCERY COURT

TOM T. ROSS, JR.

ATTORNEY FOR APPELLEES: C. KENT HANEY

NATURE OF THE CASE: CIVIL - CONTRACT

DISPOSITION: REVERSED AND REMANDED - 05/26/2005

MOTION FOR REHEARING FILED:

MANDATE ISSUED:

BEFORE SMITH, C.J., EASLEY AND GRAVES, JJ.

EASLEY, JUSTICE, FOR THE COURT:

PROCEDURAL HISTORY

¶1. Henry R. Cobb, Jr., and Richard Cobb (collectively “the Cobbs”) filed suit in the

Chancery Court of Coahoma County, Mississippi, against G. B. “Boots” Smith C orporation

(Smith) alleging breach of contract for the sale of fill dirt and seeking damages. Chancellor

William G. Willard, Jr., held a trial, found breach of contract by Smith an d awarded a judgment

in favor of the Cobbs. Smith appealed the decision to this Court. In an opinion written by then

Justice William L. Waller, Jr., this Court affirmed the find ing that there had been a breach of

contract by Smith. However, the chancellor’s award of damages was reversed and remanded2

for a recalculation

of damages consistent with the Court’s opinion. G. B. “Boots” Smith Corp.

v. Cobb, 860 So.2d 774 (Miss. 2003) ( Smith I ).

¶2. The chancellor determined that the amoun t of fill dirt to be used on the project was

706,553.3 cubic yards, that the Cobbs had been paid for 443,716.3 cu bic yards, leaving a

balance of 262,8 3 7 cubic yards to be purchased from the Cobbs. Therefore, the chancellor

found damages in the amount of $105,134.80 (262,837 cubic yards x $.40 per cubic yard =

$105,13 4.80). On appeal, we found that the $105,134.80 figure was erroneous and remanded

for recalculation. This Court stated:

The principle governing breaches of sale s contracts is to give the aggrieved party

the benefit of the contract by putting the party in as good a position as the party

would have been in had the breaching party performed the agreement. The

appropriate measure of damag es is found in Miss.Code Ann. § 75-2-708

(Rev.2002), "Seller's damages for no nacceptance of goods or repudiation of the

sales contract." S ee, e.g.

, Chem. Distribs.

, 1 F.3d at 1486. Subsection (1)

provides for damages equal to the difference between the agreed price and the

market value of the g oods. If subsection (1)'s damages are inadequate,

subsection (2)'s measure of damages, "the profit (including reasonable

overhead) which the seller would have made from full perfor mance by the buyer,

together with any incidental damages," ap plies. The chancellor awarded the

Cobbs the full sales price as damages. Bec a use the Cobbs are still in

possession of the dirt they were to sell and presumably could still sell,

they are entitle d only to the lost profits and any incidental damages under

§ 75- 2-708.

Smith I , 860 So.2d at 778-79 (emphasis added).

¶3. On remand, the chancellor awarded the Cobbs a ju dgment in the amount of $103,

259.80 plus interest from January 28, 2002, the date of the original judgment th at was appealed

to this Court in Smith I at an annual interest rate of 8%. The chancellor, in deriving the

$103,259.80 figure, deducted $1,875.00 from $105,134.80. The $1,875.00 represented a

credit for the amount o f the fill dirt contracted to be sold to Smith that was sold to another3

purchaser. Smith now appeals to this Court contending that the chancellor did not comply with

the opinion of this Court on remand, effectively overrulin g the decision rendered by this Court

in Smith I w hich reversed the chancellor’s findings as to assessment of damages. Smith also

disputes the 8% interest awarded to the Cobbs on their judgment.

FACTS

¶4. In Smith I , we described the pertinent facts:

Smith is a Mississippi corporati on engaged in, among other things, the

road construction business. Smith entered into a contract with the State of

Mississippi to construct a bypass on U.S. Highway 61 in Coahoma County. The

completion of this co ntract would require Smith to purchase a large amount of

fill dirt. Smith ent ered into a contract with the Cobbs as follows: "The Sellers

(the Cobbs) hereby sell to Buyer (Smith) all fill dirt for Project No.

SDP-009-4(34) on Highway 61 Bypass South from the Sunflower River West

to the end of said project, in Coahoma County, Mississip pi." The contract

further stated that the quantity of fill dirt needed would b e approximately

550,000 cubic yards, and that Smith would purcha se the fill dirt at the rate of

$.40 per cubic yard.

After Smith had removed 443,716.30 cubic yards from the Cobbs'

property, it began purchasing fill dirt from a third party. When the Cobbs

discovered that Smith was acqui ring fill dirt elsewhere, they filed suit alleging

that the contract required Smith to purchase all fi l l dirt for the project solely

from the Cobbs.

The chancery court found that, as a matter of law, the contract was

unambiguous, was a mutual contract between the parties, required the C obbs to

provide all the fill dirt for the project, and required Smith to purchase all fill dirt

for the project from t

he Cobbs. The chancery court then allowed the parties to

put on testimony as to the amount of damages that the Cobbs suffered as a result

of Smith's breach of contract.

The chancery court awarded $105,134.80, which is the contractual value

of the amount of fill di

rt used on the project that was not purchased from the

Cobbs at $.40 per cubic yard. The chancery court further found that, because

Smith was receiving monthly checks from the State of Mississippi for supplies

for the project, Smith was considered a contractor, and the Cobbs were

considered subcontractors, a fifteen percent (15%) damages penalt y pursuant

to Miss.Co de Ann. § 31-5-27 (Rev.2000) should be imposed against Smith. The

total judgment entered against Smith was for $120,905.02. Smith appeals.4

Smith I , 860 So.2d at 776.

DISCUSSION

¶5. When reviewing a decision of a chancellor, this Co urt applies a limited abuse of

discretion standard of review. M cNeil v. Hester

, 753 So.2d 1057, 1063 (Miss. 2000). This

Court will not disturb the findings of a chancellor “unless the chancellor was manif estly wrong,

clearly erroneous, or applied the wrong legal standard.” Id

. See P ilgrim Rest Missionary

Baptist Church ex rel. Bd. of Deacons v. Wallace

, 835 So.2d 67, 71 (Miss. 2003). Issues

regarding the construction of contra cts are questions of law. P arkerson v. Smith

, 817 So.2d

529, 532 (Miss. 2002); M iss. State Hwy. Comm'n v. Patterson Enters

., Ltd

. , 627 So.2d 261,

263 (Miss. 1993). The standard of review for questio ns of law is de novo. P arkerson

, 817

So.2d at 532; Starcher v. Byrne , 687 So.2d 737, 739 (Miss. 1997).

I. Whether the chancellor erred by no t complying with this Court’s

decision on remand

.

¶6. The mandate issued by an app ellate court is binding on the trial court on remand. D unn

v. Dunn, 695 So. 2d 1152, 1155 (Miss. 1997). However, the chancellor did not follow the

directives issued by this Court in Smith I

. Rather than comply with the Court’s opinion, the

chancellor determined that the case turned more on general contract law. The chancellor

stated:

Justice Waller[,] writing in the Court’s opinion[, ] said “presumably could sell”

sa ying that Cobb[,] who is still in possession of the dirt[,] could presumably sell

the dirt that was remaining. His statement is contained in the opinion in its

determination that if in fact Cobb received all of its damages, that is the

$105,134.80, and then went and sold the dirt that Cobb would be unjustly

enriched. This is a unique sale of a particular dirt that meets certain criteria that

was acceptable to Smith. The [c]ourt is under the opinion that Smith should not5

reap any benefit, a nd Cobb should not be penalized because of Smith[’]s failure

to perform under the contract. This court turns this case more on general

contract law, and the duty and obligations of two parties u nder contract law to

perform their obligations under it.

¶7. In Smith I

, we held that “[t]he appropriate measure o f damages is found in Miss. Code

Ann. § 75-2-708 (Rev.2002).” 860 So.2d at 778. This Court held that the Cobbs were only

entitled to the lost profits and any incidental damages under Miss. Code Ann. § 75-2-708 and

remanded the case for the chancellor to recalculation the damages and make the award. I d. at

779. The Court further stated:

Use of this calculation, however, woul d result in unjust enrichment because the

Cobbs would receive lost profits and still be in possession of the fill dirt, which

t hey could sell to another purchaser. The Cobbs would be paid almost double

what the fill dirt was worth in the first place...

Id.

¶8. Accordingly, as th e chancellor did not comply with the previous directives of this Court

stated in Smith I

, we reverse the chancellor’s judgment in favor of the Cobbs and remand the

case for the recalculation and award of damages for Smith’s breach of contract.

II. Whether the chancellor erred in awarding the 8% interest.

¶9. S mith argues that the chancellor erred in awarding prejudgment inte rest and cites

authority for when it is appropriate to award prejudgment in terest. In the chancellor’s opinion,

he stated, “the judgment of th is [c]ourt is that the judgment to [the] Cobb[s] is $103, 259.80

plus interest from 1/28/02, which is the date of the original trial of this cause, at 8%.”

¶10. The Cobbs correctly contend that the interest awarded by the chancellor is postjudgment interest, not prejudgment interest. Therefore, Smith’s analysis on appeal of the law

regarding award of prejudgment interest is misplaced. This issue is without merit.6 CONCLUSION

¶11. For the foregoing reasons, we reverse the judgment of the Chancery Court of Coahoma

County and remand thi s case to the chancery court for a reassessment of damages and entry

of a new judgment in accordance with Smith I and this opinion.

¶12. REVERSED AND REMANDED.

SMITH, C.J., WALLER AND COBB, P. J J., CARLSON, GRAVES, DICKINSON

AND RANDOLPH, JJ., CONCUR. DIAZ, J., NOT PARTICIPATING.