E. C. Ernst, Inc. v. Manhattan Const. Co. of Texas
| Decision Date | 14 September 1977 |
| Docket Number | No. 75-1794,75-1794 |
| Parties | E. C. ERNST, INC., Plaintiff-Appellant Appellee, v. MANHATTAN CONSTRUCTION COMPANY OF TEXAS, Providence Hospital, Fairbanks-Morse, Inc., Charles H. McCauley Associates, Inc., Defendants-Appellees Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Edward S. Sledge, III, Mobile, Ala., Glower W. Jones, Atlanta, Ga., Arthur Friedman, New York City, for plaintiff-appellant appellee.
Willis C. Darby, Jr., Mobile, Ala., for Providence Hospital.
Louis E. Braswell, Mobile, Ala., for Fairbanks-Morse, Inc.
Clarence L. McDorman, Jr., Birmingham, Ala., for C. McCauley.
David M. Thornton, Tulsa, Okl., for Manhattan Const. Co.
Appeals from the United States District Court for the Southern District of Alabama.
ON PETITION FOR REHEARING AND PETITION FOR REHEARING EN BANC
(Opinion May 9, 5 Cir., 1977, 551 F.2d 1026.)
Before GODBOLD, McCREE * and TJOFLAT, Circuit Judges.
Ernst, McCauley and Providence have petitioned for a rehearing of numerous aspects of our original opinion in this case, 551 F.2d 1026 (CA5, 1977). We modify that opinion in the following regards.
1. Ernst challenges our agreement with the district court's calculation of damages due from Fairbanks for fraud in connection with its generator contract, 551 F.2d at 1035, asserting that it was shortchanged by $5,541, the amount that it would have charged Manhattan for installation had Fairbanks actually supplied the generator.
By requiring Fairbanks to compensate Ernst only for the amount Ernst paid to Manhattan to make Manhattan whole, we essentially returned Ernst to its position prior to the contract (except for its alleged delay damages, to be determined on remand). This was wrong. Damages awarded for breach of contract should return the party to the position he would have occupied had the contract not been violated. Jewell v. Jackson & Whitsitt Cotton Co., 331 So.2d 623, 625-26 (Ala.1976). Ernst should therefore be entitled to the profit that it would have earned for installing the generator, not the full $5,541 that it would have charged Manhattan but the profit on the installation job. Of course, this recovery will be predicated on ability to show the amount with reasonable certainty. Paris v. Buckner Feed Mill, Inc., 279 Ala. 148, 182 So.2d 880 (1966).
2. For the first time in this court, McCauley raises the statute of limitations as a bar to possible recovery by Ernst and Manhattan for its negligence in failing to rule on the acceptability of the generator and for its alleged negligence in drawing plans and in rejecting Palco bedlight fixtures. McCauley asserts that it pleaded this affirmative defense in the trial court. It cites no pleading to substantiate this assertion, and our search of the record reveals none. Rather than engage in any further search, we think it appropriate to include the entire statute of limitations question in the issues to be determined upon remand of Ernst's and Manhattan's negligence claims. Remand will also give these parties an opportunity to respond to the views first propounded here by McCauley concerning the dates of accrual and tolling of their various causes of action.
3. Providence correctly points out that the April 7, 1970, telephone call by Providence's attorney, threatening to sue Manhattan if it attempted to arbitrate the generator matter, was made to Alabama state officials and not, as we said at 551 F.2d 1040, to Manhattan itself. However, this does not affect our holding that Providence's extensive postsuit actions in...
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