Court Opinion

ID: 862367
Source: CourtListenerOpinion
Date Created: 2013-04-26 23:37:51.785322+00
Date Added: 2024-06-11T15:25:56.055772
License: Public Domain

IN THE SUPREME COURT OF MISSISSIPPI
                                    NO. 97-CA-01042-SCT
GEORGE GARNER
v.
LANA HICKMAN AND RUSSELL HICKMAN

DATE OF JUDGMENT:                                 8/06/97
TRIAL JUDGE:                                      HON. JERRY OWEN TERRY, SR.
COURT FROM WHICH APPEALED:                        HARRISON COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT:                           WILLIAM CARL MILLER
ATTORNEY FOR APPELLEES:                           WYNN E. CLARK
NATURE OF THE CASE:                               CIVIL - CONTRACT
DISPOSITION:                                      REVERSED AND REMANDED - 1/14/99
MOTION FOR REHEARING FILED:                       1/28/99
MANDATE ISSUED:                                   4/8/99

     BEFORE PRATHER, C.J., McRAE AND WALLER, JJ.

     McRAE, JUSTICE, FOR THE COURT:

¶1. This case arises from an August 6, 1997 order of the Harrison County Circuit Court granting the
Hickman's motion for a directed verdict against George Garner and awarding them attorney fees while also
granting Garner's motion for a directed verdict against Russell and Lana Hickman on their counter-claim
against him. Finding that the issues raised on appeal and cross-appeal should have been resolved by a jury,
we reverse and remand for proceedings consistent with this opinion. We further reverse and render the
award of attorney fees to the Hickmans.

                                                     I.

¶2. On November 17, 1995, George Garner entered into a written agreement with Russell and Lana
Hickman to complete their 3,100 square foot house in Harrison County, Mississippi within ninety days for a
total of $82,400. The bid price included redoing much of the work already done on the house by the
Hickmans' previous contractor whom they had terminated after the structure was framed because they
didn't like his work.(1) The contract contained no provisions for a payment schedule.

¶3. During the course of construction, Garner went to the Hickmans' attorney's office on five separate
occasions and signed five separate forms entitled Contractor's and Owner's Waiver and Disbursement
Agreement. Even Russell Hickman acknowledged that he signed the various papers without reading them
because they were necessary to get his bank loan. Each was accompanied by an Affidavit and Agreement
for the First American Title Insurance Company, with regard to the issuance of a policy of title insurance on
the property or an endorsement thereto, which included a paragraph providing that:

     The contractor has been paid in full for work and services performed and materials furnished on the
     above project to date and does hereby waive, release and surrender any and all lien or claim or right
     of lien, including amounts earned but retained under contract with owner, to the date for which
     payment is made, for labor, services and/or materials furnished by the undersigned upon the premises
     described above, except: (If none, state "None").

Garner signed the first agreement on November 17, 1995, and received a $12,000 draw check. He signed
a second such agreement on December 27, 1995, but no check was issued to him at that time. Garner
testified that the Hickmans told him this document was necessary for him to receive the next draw. It turned
out, however, that the funds drawn by Hickman were used to pay the Goldin Industries claim. On January
8, 1996, he signed a third agreement and received a check for $30,000 with the notation, "Hickman Const.
Loan (4th Draw) Payment to Contractor." Garner signed another such agreement on March 1, 1996,
which, he recalled, was for Hickman to pay for the carpet ordered for the house. On March 28, 1996,
Garner signed a fifth copy of the agreement and a check was issued to one of his workmen, Wally Lott, for
$665. On each of the agreements in question, the word "NONE" was typed in the agreement after the
"release" paragraph.

¶4. Garner began work on the Hickman's house in late October, 1995, without any upfront money. While
he stated that the contractor generally receives draws when the foundation is poured, when the building is
ready for sheetrock and upon completion, he had nothing in writing from the Hickmans as to when he would
receive payments on the contract. He received two draws totaling $42,000 out of the $82,400 contract
price (less $7,100 allowances for carpeting and well drilling).

¶5. Construction proceeded slowly. The contract called for redoing the roof trusses installed by the original
contractor; Hickman tore them out himself after Garner began work on them, allegedly scattering trusses
and newly cut lumber everywhere. Garner and Lott both estimated that Hickman's antics set the project
back by about three weeks. Hickman also ran boards up under the cedar siding to show where nails were
missing instead of simply tagging them with tape. Lana Hickman regularly changed her mind about details
like cabinets and moldings after they were installed. In addition to delays caused by the owners, the weather
was cold and rainy and Garner had trouble finding a brick mason because the inclement weather had put
them all behind schedule.

¶6. In late March, 1996, Garner was locked out of the job. Hickman told Wally Lott that he was shutting
the project down and was going to finish the job himself. At Garner's request, Lott went to the site and
packed up the tractor, the trailer and all of the tools on March 29,1996, the day after Garner signed the
papers to obtain a $665 check for Lott's labor.

¶7. The Hickman's expert witness, Steve Foster, a general contractor from Gulfport, estimated that it would
cost about $20,143 to complete the house to the Hickman's satisfaction. Although Garner testified that he
had replaced two to three hundred studs, Foster noted that some of the walls in the house still were not
straight, requiring the replacement of some of the studs. He further stated that the painting wasn't done
properly; there were pits and scratches because the sheetrock wasn't dusted and the paint had been applied
too thin.

¶8. Foster further testified that the kitchen cabinets were only a utility room grade and not kitchen quality.
He noted also that the window sills and closet shelves were made from a rough grade of lumber, rather than
a finish grade and that the interior trim was not fir, as specified in the contract. Garner had testified that he
used MDF (medium density fiber board) for the trim because it would look better painted after Lana
Hickman decided that she wanted painted woodwork instead of natural wood with a clear finish.

¶9. Looking at the structure and exterior features of the house, holes for soffit vents had been cut all around
the house, but the actual vents had not yet been installed. As on the inside, Foster believed that the exterior
paints and sealants were not properly applied. The windows, in Foster's opinion, were not properly framed
and foam board could be seen between the sheets of cedar siding. He further noted that the "roof cricket"
was not installed properly, which could result in water being diverted to the wrong places, there was no
moisture barrier in the roof insulation, various electrical wires were pulled a little tight and the bathroom vans
vented into the attic insulation. Foster also noted some problems with the installation of the air conditioning
system; that, however, was something Hickman had decided he was going to do himself.

                                                        II.

¶10. Garner filed a complaint against the Hickmans in the Circuit Court of Harrison County, First Judicial
District on June 10, 1996. He alleged that he was owed the balance due on his contract with them to finish
their house and that the Hickmans had refused to allow him to complete the work remaining. He averred
that he would file a lis pendens or construction lien against the property in light of the Hickmans' intentional
breach of contract. In their answer to the complaint, the Hickmans both raised as a defense and counter-
claimed that Garner breached the contract by "a. failing to timely and adequately perform the contract in a
workmanlike manner; b. breached an implied duty of good faith and fair dealing; c. negligently attempting to
perform the contract; and d. abandoning the contract." They further alleged in their counterclaim that Garner
slandered the title to the property by filing an improper lis pendens or construction lien, withdrawing that
claim at trial. In their amended answer, defenses and counterclaim, the Hickmans added an eleventh
defense, asserting that Garner's claim was barred by accord and satisfaction, release and by the doctrines
of waiver and estoppel.

¶11. At the close of Garner's case-in-chief, the circuit court granted the Hickmans' motion for a directed
verdict. Then, at the close of the Hickmans' case-in-chief on their counterclaim for breach of contract and
negligence, the circuit court granted Garner's motion for a directed verdict. Despite this ruling, the judge
stated, "[t]he Court is satisfied that the plaintiff contractor breached the contract." In his final judgment, the
circuit judge, who had reserved the issue of attorney fees and other equitable relief arising from the liens
against the Hickmans' property, dismissed the claim and counterclaim with prejudice, finding that neither
party should take anything by his complaint. He ordered the liens against the Hickmans' property canceled
and held for naught. The Hickmans were awarded $3000 in attorney fees.

                                                        III.

¶12. When reviewing a trial court's decision to grant or deny a motion for directed verdict, this Court must
do so with great care. Benjamin v. Hooper Elec. Supply Co., 568 So. 2d 1182, 1187 (Miss.1990). Just
as the trial court is required to do, this Court must consider the motion in the light most favorable to the
party opposing the motion. Id. (citing Guerdon Indus., Inc. v. Gentry, 531 So. 2d 1202, 1205
(Miss.1988)). As reiterated in Benjamin, not only has this Court emphasized the jury's role in a trial, but
also the United States Supreme Court has noted:

      Credibility determination, the weighing of the evidence, and the drawing of legitimate inferences from
      the facts are jury functions, not those of a judge, whether he is ruling on a motion for summary
      judgment or for a directed verdict. The evidence of the non-movant is to be believed, and all
      justifiable inferences are to be drawn in his favor.

Id. at 1187 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, (1986)). Thus, a motion for
a directed verdict should be granted only where the facts and inferences so considered point so
overwhelmingly in favor of the moving party that reasonable men and women could not have arrived at a
verdict for the non-movant. Id. (citing Smith v. Wendy's of the South Inc., 503 So. 2d 843, 844
(Ala.1987)(if, by any possible interpretation, the evidence can support a conclusion in favor of the non-
moving party, reversal is required)).

¶13. The circuit court granted the Hickmans' motion for a directed verdict, expressly finding that Garner
had failed to make a prima facie case on his breach of contract claim. Accepting the Hickmans' arguments,
the circuit court found that there was no provision in the contract for progress payments to be made, and
that the waiver and disbursement agreements Garner signed served to preclude him from recovering since
each of the five affidavits stated that there were no outstanding liens or monies due or payable to the
contractor.

¶14. As Garner acknowledges, in any suit for breach of contract, the plaintiff has the burden of proving by a
preponderance of the evidence the existence of a valid and binding contract, that the defendant has broken
or breached it, and that the plaintiff has suffered monetary damages as a result. Warwick v. Matheney,
603 So. 2d 330, 336 (Miss. 1992)(citing 17A C.J.S. Contracts, § 590(d) at 1148). Both Garner and the
Hickmans admit the existence of a binding contract. Garner contends that the Hickmans breached the
contract by locking him off the site and not allowing him to finish the job. He further states that he suffered
damages in that he only received $42,665 of the $82,400 contract price even though work on the house
was substantially complete. He suggests that the circuit court might have premised its ruling on the erroneous
assumption that he intentionally waived any claim for monies due by signing the March 28, 1996 release and
thus there were no damages which could be proven. Finally, as an alternate theory of recovery, Garner
asserts that the jury should have been allowed to consider whether he substantially performed his contract
with the Hickmans.

¶15. Looking at the evidence in a light most favorable to Garner, it cannot be said that the evidence, as well
as all inferences that may be drawn therefrom, so favors the moving party, the Hickmans, that a reasonable
and fair-minded jury could not have found in favor of Garner, the non-moving party. There exists a jury
question of whether the Hickmans made it impossible for Garner to perform the contract. "Where a
contract is performable on the occurrence of a future event, there is an implied agreement that neither party
will place any obstacle in the way of the happening of such event, and where a party is himself the cause of
the failure he cannot rely on such condition to defeat his liability." Warwick, 603 So. 2d at 337. Given that
there was no provision in the contract for a payment schedule, final payment could be construed as being
predicated upon a future event, the timely completion of the house. There is evidence that the Hickmans
locked him off the site before the house was completed. Throughout the construction project, there is
evidence that the Hickmans, themselves, contributed to delays in the project making it impossible for
Garner to complete the project within ninety days, regardless of adverse weather conditions. Moreover,
there was no provision made in the contract for any penalty should the house not be completed in
accordance with the time frame specified in the contract nor was there any provision for termination of the
contract upon certain specified (or unspecified) conditions. See Warwick, 603 So. 2d at 336 (absent some
provision in a contract for its termination or cancellation, it is presumed irrevocable).

¶16. The so-called "releases" signed by Garner are problematic, but should not as a matter of law, warrant
the grant of a motion for directed verdict against him. The Hickmans correctly assert that release of claims
provisions have been construed as reaching all claims a contractor has against the client at the time each
release was signed. Galin Corp. v. MCI Tel. Corp., 12 F.3d 465, 469 (5th Cir. 1994)(applying New
York law). However, as distinguished from the case sub judice, the releases in Galin were made expressly
in consideration for payment of monies owed. The releases therein provided in relevant part:

      In consideration of payments made heretofore, or to be made based upon this invoice for labor,
      material, equipment, subcontract work, and any and all costs incurred for the performance of the
      contract work invoiced thus far, the Contractor hereby unconditionally and without reservation
      releases and indemnifies MCI and their officers, agents, employees, assignees and heirs from any and
      all liens, claims, demands, penalties, losses, costs, damages and liability in any matter whatsoever.

Galin, 12 F.3d at 468. These releases were part and parcel of invoices for specific labor performed and
materials provided, as distinguished from the case sub judice, where the agreements Garner signed made
no reference to any contract work performed and were, in fact, part of documents required by the title
insurance company or the bank which had provided Hickman's loan. Further, it does not appear that
Garner signed them in consideration for payments made to him for work done since he received only two
drafts and the three remaining times he signed the documents, funds were paid to Hickman, or in the case of
the March 28, 1996, a payment was made directly to Wally Lott for labor performed. The circumstances
are such a jury should also have been allowed to consider whether the so-called release was void because
of an absence of good faith and a full understanding of legal rights, misrepresentation of the nature and effect
of the document or lack of adequate consideration. Willis v. Marlar, 458 So. 2d 722, 724 (Miss. 1984).
Looking at the evidence in light most favorable to Garner, it does not point so overwhelmingly in favor of
the Hickmans that a reasonable jury could not have found in favor of Garner.

¶17. Garner also asserts that the issue of substantial performance should have been put before a jury. In
Bevis Construction Co. v. Kittrell, 243 Miss. 549, 139 So. 2d 375 (1962), this Court stated:

      substantial performance is not literal, full or exact performance in every slight or unimportant detail, but
      performance of all important particulars; and that substantial performance exists where the building or
      structure as a whole is not impaired, where it can be used for its intended purpose after erection,
      where the defects can be remedied without any great expenditure and without material damage to
      other parts of the structure and may without injustice be compensated for by deductions from the
      contract price.'

Id. at 558-59, 139 So. 2d at 379 (quoting Jackson v. Caffey, 223 Miss. 368, 78 So. 2d 361 (1955)).
See also Standard Mill Work & Supply Co. v. Mississippi Steel & Iron Co., 205 Miss. 96, 110, 38
So. 2d 448 (1949)(overruled on other grounds by IP Timberlands Operating Co. v. Denmiss Corp.,
No. 96-CA-00140-SCT (Miss. April 2, 1998))(substantial performance of construction contracts
generally will support a recovery either on the contract or on a quantum meruit basis because "materials and
labor upon a building are such that even if rejected by the owner of the land he receives benefit thereof;" it is
therefore equitable to require him to pay for what he gets; "it is next to impossible for a builder to comply
literally with all the minute specifications in a building contract;" and "the parties are presumed to have
impliedly agreed to do what is reasonable under all the circumstances with reference to the subject of
performance.") Looking at the evidence in a light most favorable to Garner, there is evidence that he did,
indeed, substantially comply with the terms of the contract and the issue should be put to a jury.

¶18. The evidence is such that a reasonable and fair-minded jury could have found in favor of Garner, the
non-moving party. Further, there are a variety of issues which could - and should - have been left to the
jury to resolve. The circuit court, therefore erred in taking the case away from the jury and granting a
directed verdict in favor of the Hickmans.

                                                      IV.

¶19. The Hickmans counterclaimed that Garner breached his contract with them, asserting that he failed to
timely and adequately perform the contract in a workmanlike manner and that he breached an implied duty
of good faith and fair dealing, negligently attempted to perform the contract and abandoned the contract.
Although the circuit judge stated when granting the Hickmans' motion for a directed verdict on Garner's
claim that "[t]he Court is satisfied that the plaintiff contractor breached the contract," he granted Garner's
motion for a directed verdict on the Hickman's counterclaim. On cross-appeal, they now assert that the
circuit court erred in granting Garner's motion.

¶20. The Comment to M.R.C.P. 50, which provides for motions for a directed verdict and for judgment
notwithstanding the verdict, states that "Rule 50 is a device for the court to enforce the rules of law by
taking away from the jury cases in which the facts are sufficiently clear that the law requires a particular
result." Without citing any authority, the Hickmans' argument focuses solely on summarizing the testimony of
their expert witness, contractor Steve Foster, who inspected the house three times. Foster pointed out a
variety of alleged deficiencies and/or deviations from the contract specifications, itemizing particular
problems with the quality of the workmanship or the materials used. He found that it would cost some $20,
143.00 to rectify the problems he found. Even looking at the evidence presented in a light most favorable to
the Hickmans, however, we cannot say that the facts, and the inferences that can be drawn therefrom, are
sufficiently clear that the law might dictate a particular result or that the evidence so plainly favors Garner,
the movant, that reasonable jurors could not have found in favor of the non-movants, the Hickmans.
Indeed, even the circuit court's ruling is less than clear in that it granted Garner's motion for a directed
verdict despite finding that he had breached the contract. Further, looking at the record, including the trial
transcript, Garner's itemized bid for the project and the photographs of the house, there exists a jury
question as to whether the evidence shows that Garner's workmanship was negligent or substandard, that
the house lacked finishing details because Garner was not given an opportunity to complete the project or
because he abandoned it, or that the Hickmans simply got what they paid for: a 3,1000 square foot house
for well under $100,000. Moreover, there exists a jury question as to what, if any, damages the Hickmans
suffered. Thus, the circuit court further erred in taking the issues raised by the Hickman's counterclaim away
from the jury.

                                                       V.

¶21. Although the circuit court entered a directed verdict in favor of Garner on the Hickmans' cross-claim,
he awarded the Hickmans $3000 in attorney fees. It appears from the record that the award and the grant
of the directed verdict were based on the circuit court's finding that although Garner breached his contract
with the Hickmans, the Hickmans suffered no monetary damages and because the Hickmans' attorney
asserted that they were entitled to an award of attorney fees pursuant to Miss. Code Ann. § 85-7-151.

¶22. In breach of contract cases, attorney fees generally are not awarded absent provision for such in the
contract or a finding of conduct so outrageous as to support an award of punitive damages. Greenlee v.
Mitchell, 607 So. 2d 97, 108 (Miss. 1992); Central Bank of Mississippi v. Butler, 517 So. 2d 507,
512 (Miss. 1987). In cases involving insurance contracts, we have found that extra-contractual damages
such as attorney fees may be warranted even where the facts are not such to support a punitive damages
claim. Universal Life Ins. Co. v. Veasley, 610 So. 2d 290, 295 (Miss. 1992). Thus, pursuant to the
Litigation Accountability Act of 1988, Miss. Code Ann. § 11-55-5 (Supp. 1998), an award of attorney
fees would be appropriate as extra-contractual damages where a claim or defense was raised for purposes
of harassment or delay or a party acted to unreasonably protract the proceedings.

¶23. There was no contractual provision in the case sub judice for attorney fees in the event of litigation.
Even had we found that the circuit court properly granted the directed verdicts, both in favor of the
Hickmans on Garner's claim and in favor of Garner on the Hickmans' cross-claim, there is nothing on the
record to suggest that Garner's initial claim was brought solely for the purpose of harassment or delay or
that his actions were such that extra-contractual damages were warranted pursuant to Veasley or §11-55-
5. The record clearly indicates that the Hickmans contributed significantly to their own problems. Thus,
while Veasley damages would be appropriate in many construction contract cases where neither the
contract nor any statutory authority provide for attorney fees, they are not warranted under the facts of the
case sub judice.

¶24. The Hickmans' contention that attorney fees were warranted pursuant to Miss. Code Ann. § 85-7-
151 (1991) further is unfounded. Section 85-7-151 specifically addresses costs and attorney fees on
judgments in suits on builder's and contractor's liens, providing:

      In case judgment be given for the plaintiff against the builder, it shall, in case he was actually served
      with process, be entered against him generally, with costs, as in other cases, and with attorney's fees
      as provided below, and with a special order for the sale of the property upon which the lien exists for
      the payment thereof, and for an execution, as in other cases, for the residue of what may remain
      unpaid, after the sale of the property; and if the defendant be brought in by publication only, and have
      not appeared, the judgment shall be entered specially for the debt and costs, to be made of the
      property in the petition described; and in case a general judgment be not given against the builder,
      such proceedings or recovery shall not be a bar to any suit for the debt, except for the part thereof
      actually made under such recovery. When judgment is rendered in favor of the plaintiff against the
      builder, the builder shall be liable for reasonable attorney's fees to be set by the judge for the
      prosecution and collection of such claim.

Miss. Code Ann. §§ 85-7-141 through 85-7-157 provide for suits to enforce a mechanic's, materialman's
or contractor's lien. Garner did not bring suit against the Hickmans to enforce the construction lien he had
filed against their property; rather, he brought only a breach of contract action. The issue of the lien was
addressed first in the Hickmans' counterclaim, where they asserted that Garner had slandered their title by
filing the lien; that claim, however, was withdrawn by the Hickmans at trial. This is not the sort of action for
which § 85-7-151 is intended to provide attorney fees.

                                                    VI.

¶25. Garner's claim and the Hickmans' counterclaim both raise issues of fact which should have been
allowed to go to a jury for resolution. In neither instance does the evidence so overwhelmingly favor the
moving party that a fair-minded jury could not have found in favor of the non-moving party. The point is
well-illustrated by the circuit court's conflicting findings that Garner breached the contract and yet was
entitled to a directed verdict on the Hickman's counterclaim against him for breach of contract. While it
appears that the circuit court, upon hearing evidence and finding that the cost of finishing the house to the
Hickmans' satisfaction was less than what was owed Garner under the terms of the contract, took the case
from the jury in an attempt to fashion a settlement between the parties, we find that he erred in granting
directed verdicts on both the Garner's claim and the Hickman's counterclaim as well as in awarding attorney
fees to the Hickmans. We therefore reverse and remand for proceedings consistent with this opinion.

¶26. REVERSED AND REMANDED ON DIRECT APPEAL AND CROSS APPEAL;
REVERSED AND RENDERED AS TO AWARD OF ATTORNEY FEES.

PRATHER, C.J., SULLIVAN AND PITTMAN, P.JJ., BANKS, ROBERTS, SMITH, MILLS
AND WALLER, JJ., CONCUR.

1. As of November 17, 1995, Sellers had a claim against the Hickmans for $8,156.31 for unpaid labor and
services as well as an additional $225 for materials. There further was a claim for materials by Goldin
Industries, Inc. in the amount of $4,163.76.