Nicholas Acoustics & Specialty Co. v. H & M Const. Co., Inc.

Decision Date17 January 1983
Docket NumberNos. 81-4489,s. 81-4489
PartiesNICHOLAS ACOUSTICS & SPECIALTY COMPANY, et al., Plaintiffs-Appellees, v. H & M CONSTRUCTION COMPANY, INC. and Insurance Company of North America, Defendants-Appellants. to 81-4492.
CourtU.S. Court of Appeals — Fifth Circuit

Christopher A. Shapley, Jackson, Miss., Lee J. Chase, III, Memphis, Tenn., for defendants-appellants.

Barry K. Cockrell, Jackson, Miss., for other interested parties.

Robert B. Sessums, Bobby B. DeLaughter, Jackson, Miss., for plaintiffs-appellees.

Appeals from the United States District Court for the Southern District of Mississippi.

Before GOLDBERG, GEE and HIGGINBOTHAM, Circuit Judges.

GOLDBERG, Circuit Judge:

These are four consolidated appeals from four related summary judgments against a general contractor in four actions in diversity by four subcontractors suing the general contractor for breach of their subcontracts. Though the results are not the same, the legal issues are identical and the factual circumstances are closely related, so we will treat all four cases together in this opinion.

I. BACKGROUND
A. Facts

Around October 9, 1978, Chef Pierre, Inc. entered into a construction contract with defendant-appellant H & M Construction Company ("H & M") to build a frozen dessert factory for Chef Pierre in Forest, Mississippi. Among other things, the construction contract provided that time was of the essence and included a schedule of completion times for various phases of the project and a schedule of liquidated damages for delays in completion of each phase. The contract further stated that Chef Pierre would make monthly progress payments of 90% of the compensation earned under the contract each month. The remaining 10% retainage would be paid upon completion of the project. Most important to this case, the contract also provided 8. Upon completion by the CONTRACTOR of all work covered by the Contract and prior to final payment to the CONTRACTOR for the work performed, the CONTRACTOR shall deliver to the OWNER in the forms attached hereto: (a) releases of all liens and of rights to claim any liens, from all Subcontractors and material suppliers furnishing labor and/or materials for the project; and (b) an affidavit by the CONTRACTOR to the effect that payment has been made for all labor used on or for the construction of the project.

Supplemental Record at II-125.

During October and December, 1978, H & M entered into subcontracts with the four plaintiff-appellee subcontractors: Nicholas Acoustics & Specialty Co. ("Nicholas"), United Piping Systems, Inc. ("United"), South Central Heating & Plumbing Co. ("South Central"), and Niehaus, Inc. ("Niehaus"). 1 Among other things, the subcontracts provided:

2. ORIGINAL CONTRACT: The terms, conditions, specifications, drawings, schedules and contract documents forming a part of the Original Contract between Contractor and the Owner are hereby made a part of this subcontract by reference as fully as if set out in detail. Subcontractor shall be bound to the same extent that Contractor is bound by each and every covenant, obligation and provision of said Original Contract insofar as the same is applicable to the work of Subcontractor.

* * *

* * *

4. PROGRESS AND COMPLETION: Unless herein otherwise specially provided, Subcontractor shall commence work promptly or upon notice from Contractor. Subcontractor shall, in any event, prosecute the work diligently and so as to avoid delaying the progress of Contractor or other subcontractors on other portions of the project work. Subcontractor shall keep and maintain on the project a sufficient number of properly qualified workmen and a sufficient quantity of materials, equipment and supplies to efficiently perform the work as required without delay. Should Subcontractor cause delay in the progress or completion of the project, the damages resulting therefrom, including liquidated damages assessed by Owner and attributable thereto, shall be the obligation of Subcontractor.

* * *

* * *

5. PAYMENT: Subject to other provisions hereof, Contractor agrees to pay Subcontractor the stated consideration for said work on the basis of the quantities allowed and paid for by Owner, and to make payment within ten (10) days from the time that Contractor is paid by Owner, less ten (10) percentage retainage, which percentage may be retained until completion of the Original Contract and final payment by the Owner.

Record at 13-14.

The basic contract between Chef Pierre and H & M required H & M to procure a surety bond. On September 21, 1978, H & M executed such a bond with the Insurance Company of North America ("INA") as surety. The bond provided, in part, that:

2. The above named Principal and Surety hereby jointly and severally agree with the Owner that every claimant as herein defined, who has not been paid in full before the expiration of a period of ninety (90) days after the date on which the last of such claimant's work or labor was done or performed, or materials where furnished by such claimant, may sue on this bond for the use of such claimant, prosecute the suit to final judgment for such sum or sums as may be justly due claimant, and have execution thereon. The Owner shall not be liable for the payment of any costs or expenses of such suit.

Record at 9. Some of the provisions of this bond were necessary to satisfy the requirements of Miss.Code Ann. Sec. 85-7-185. 2

On January 23, 1981, Chef Pierre filed suit against H & M in a separate proceeding alleging that H & M had breached the construction contract in various ways, primarily claiming damages for delay. This litigation is still pending, and Chef Pierre has never made final payment to H & M of the ten percent retainage. Consequently, H & M has not paid the subcontractors their ten percent retainage.

B. Proceedings Below

In April, May, and June, 1981, the four subcontractors filed claims against H & M and INA for the ten percent retainage not yet paid them. In all four actions H & M filed a third-party complaint against Chef Pierre, and Chef Pierre filed counterclaims against H & M. In June and July, 1981, these four actions were consolidated into the original action between Chef Pierre and H & M.

In November, 1981, the four subcontractors moved for summary judgment in each of their causes against H & M and INA. On November 18, 1981, the trial court entered final judgment in favor of all four subcontractors against H & M and INA, jointly and severally. These final judgments removed everything from the consolidated cases except the various claims between Chef Pierre and H & M. 3 The trial court concluded that paragraph five of the subcontracts, as a matter of law, allowed the contractor to delay final payment to the subcontractors only for a reasonable time after the subcontractors had completed their work. Finding that the subcontractors had completed their work and that a reasonable time had elapsed, the trial judge entered judgments in favor of the subcontractors. H & M and INA now appeal.

C. Issues on Appeal

Summary judgment is proper given two conditions: (1) the moving party is entitled to judgment as a matter of law; and (2) there is no genuine issue of material fact. Fed.R.Civ.P. 56(c). H & M and INA appeal on both conditions. First, they argue that by the very terms of the subcontract, final payment is not due to the subcontractors until final payment has been made by Chef Pierre to H & M. Thus, according to the appellants, nothing is yet due the subcontractors because Chef Pierre has not yet paid H & M. Second, appellants argue that the litigation pending between Chef Pierre and H & M raises issues of material fact as to whether these four subcontractors might owe some of the damages Chef Pierre alleges. We agree with the subcontractors that the clause of the subcontract allowing H & M to withhold final payment must be read as allowing withholding only for a reasonable We disagree with the appellants' argument that the ongoing litigation between Chef Pierre and H & M raises issues of fact with regard to all four subcontractors--more specific allegations are needed to counter the subcontractors' motion for summary judgment. We find that H & M's and INA's pleadings and briefs regarding South Central do raise a genuine disputed issue of material fact; our own review of the record further discloses a genuine issue of material fact with regard to Niehaus. We find no disputed issue of material fact with regard to Nicholas and United.

time. Accordingly, the only factual issues are whether the subcontractors performed their subcontracts--whether any of the subcontractors caused any delay or inadequately performed.

II. CONSTRUCTION OF THE CONTRACT

In order to determine which facts are material, we must first address the legal issue of the construction of the contract and subcontracts. The subcontract provides in paragraph five that ten percent of the subcontract price "may be retained [by the contractor] until completion of the Original Contract and final payment by the Owner." Record at 14. H & M and INA argue that the plain language of the contract denies the subcontractors the present right to claim the retainage. The subcontractors make two arguments for not enforcing the plain language of the subcontracts. First, they argue that paragraph five conflicts with provisions of the main contract and so should not be read literally. Second, they argue that Mississippi state policy, as expressed by Miss.Code Ann. Sec. 85-7-185, supplants clauses such as these. Because we agree that the contract and subcontracts taken together are internally contradictory, we need not address the subcontractors' policy arguments.

The two contradictory provisions are paragraph eight of the contract and paragraph five of the subcontract. Paragraph eight of the contract provides that the owner need not make final payment to the contractor until all liens are released by the subcontractors...

To continue reading

Request your trial
97 cases
  • Brown v. Reardon
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • August 19, 1985
    ...that neither this court nor the district court should be expected to do. Judges are not ferrets. Nicholas Acoustics & Specialty Co. v. H & M Construction Co., 695 F.2d 839, 847 (5th Cir.1983). Thus, while plaintiffs have in my opinion asserted a theory of the case that, if proven, would ent......
  • Walton v. Alexander
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • May 19, 1994
    ...which do not reveal detailed and precise facts will not prevent the award of summary judgment." Nicholas Acoustics, Etc. v. H & M Const. Co., Inc., 695 F.2d 839, 844 (5th Cir.1983) (quoting Liberty Leasing Co. v. Hillsum Sales Corp., 380 F.2d 1013, 1051 (5th Cir.1967)). The court must then ......
  • Udoewa v. Union
    • United States
    • U.S. District Court — Southern District of Texas
    • November 15, 2010
    ...(5th Cir.2005) (quoting United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991)); see also Nicholas Acoustics & Specialty Co. v. H & M Constr. Co., Inc., 695 F.2d 839, 846–47 (5th Cir.1983) (“Judges are not ferrets!”). 18. Udoewa argues that contrary to Moore's testimony, the board approv......
  • Env't Tex. Citizen Lobby, Inc. v. ExxonMobil Corp.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • July 29, 2020
    ...district court's original rejection of Exxon's section 101.222 defenses: "Judges are not ferrets!" Nicholas Acoustics & Specialty Co. v. H&M Const. Co., 695 F.2d 839, 847 (5th Cir. 1983) ; see also Chavez v. Sec. Fla. Dep't of Corrections , 647 F.3d 1057 (11th Cir. 2011) ("[D]istrict court ......
  • Request a trial to view additional results
1 books & journal articles
  • The Proper Use of Animal References in Law
    • United States
    • Colorado Bar Association Colorado Lawyer No. 46-8, September 2017
    • Invalid date
    ...Records 1964). [10] U.S. v. Dunkel, 927 F.2d 955, 756 (7th Cir. 1991). [11] Nicholas Acoustics & Specialty Co. v. H&M Constr. Co. Inc., 695 F.2d 839, 846–47 (5th Cir. 1983). [12] Wright et al., 5 Federal Practice and Procedure, Wright &Miller, Civ. § 1281 (3d ed. Thomson West). [13]Balles v......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT