Opinion ID: 6349
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: L & A Construction Company (L & A), the general contractor on a project to build a bridge in Apalachicola, Florida, 1 subcontracted with Southern Concrete Services (Southern) to provide concrete for the project. Southern, as required by the subcontract, obtained a performance bond from Fidelity & Deposit Company of Maryland (F & D). Southern began supplying concrete to L & A in early 1987. We need not chronicle the ensuing deterioration in business relations between L & A and Southern. It suffices for this opinion to say that Southern failed to provide sufficient concrete to L & A in a timely manner and breached the subcontract in numerous other particulars. L & A repeatedly complained to Southern about its slow delivery rates and the poor quality of the concrete Southern supplied. On May 29, 1987, L & A sent Southern a letter stating that Southern had breached the contract and giving Southern five days to cure the deficiencies in its performance. L & A sent a copy of the letter to F & D. Southern's performance apparently improved after the May 29 letter. In response to a routine inquiry from F & D on August 3, 1987, L & A stated that Southern was performing satisfactorily. Southern's improved performance did not last long, and L & A soon resumed its periodic complaints. On January 12, 1988, L & A sent another letter to Southern and F & D in which it requested that the Bonding Company take the necessary steps to fulfill this contract to prevent any further delays and costs to L & A. F & D did not respond to the letter and took no action. Southern completed its obligations under the subcontract on May 27, 1988. At no time did L & A refuse to accept Southern's performance. 2 L & A sued Southern and F & D for breach of contract in Mississippi state court on August 19, 1988. The defendants promptly removed the case to the United States District Court for the Southern District of Mississippi on the basis of diversity of citizenship.1 Southern counterclaimed against L & A alleging various breaches of the subcontract. The district court conducted a six-day bench trial beginning on August 17, 1992. On September 22, 1992, the district court, applying Florida law,2 held that both Southern and L & A had breached the subcontract. The district court, after offsetting the award from Southern's counterclaim, held that L & A was entitled to recover damages of $642,269 plus postjudgment interest from Southern and F & D.3 After the district court overruled their 1 Southern averred in its petition for removal that it was a Michigan corporation having its principal place of business in Michigan, F & D was a Maryland corporation, and L & A was a Mississippi corporation. The amount in controversy indisputably exceeded the statutory minimum of 28 U.S.C. § 1332(a). 2 The parties agree on appeal that the district court correctly chose to apply Florida law. See Restatement (Second) of Conflict of Laws §§ 188, 194 (1971); Boardman v. United Servs. Auto. Ass'n, 470 So.2d 1024, 1032-34 (Miss.1985). 3 The district court appears to have miscalculated the damage award. In its judgment of September 22, 1992, the district court itemizes its damage award: Base damages $349,152 Prejudgment interest 178,269 Attorneys' fees 115,048 The sum of those figures is $642,469, or $200 more than the $642,269 the district court awarded. Because neither party called the discrepancy to our attention, however, we consider any argument over that $200 difference waived. Although the district court's judgment does not so state, it 3 posttrial motions, the defendants appealed to this Court. L & A cross-appealed from the district court's judgment but later dismissed its cross-appeal. Only the defendants' appeals remain for us to decide. This case turns on the language of the subcontract and Southern's performance and payment bond. A bond is a contract, and, therefore, a bond is subject to the general law of contracts.4 We review de novo questions involving the construction or interpretation of contracts.5