Liberty Mut. Ins. Co. v. Miss. Transp. Comm'n
| Decision Date | 06 May 2021 |
| Docket Number | NO. 2009-CA-00053-SCT,NO. 2019-IA-01483-SCT,2019-IA-01483-SCT |
| Court | Mississippi Supreme Court |
| Parties | LIBERTY MUTUAL INSURANCE COMPANY and Hill Brothers Construction Company, Inc. v. The MISSISSIPPI TRANSPORTATION COMMISSION |
¶1. This case involves a dispute between Liberty Mutual Insurance Company (Liberty Mutual), Hill Brothers Construction Company (Hill Brothers) and the Mississippi Transportation Commission (the Commission) regarding a fuel-adjustment clause (the FAC) in a highway-construction contract. See generally Hill Bros. Constr. Co., Inc. v. Miss. Transp. Comm'n , 42 So. 3d 497, 497 (Miss. 2010) ( Hill Bros. I ). In 2019, the Commission filed a motion to alter or amend the circuit court's judgment under Mississippi Rule of Civil Procedure 59(e) (the Rule 59(e) Motion), which the circuit court granted (the 2019 Order), vacating its prior entry of partial summary judgment in favor of Liberty Mutual on the issue of liability (the 2018 Order), and effectively1 denying Liberty Mutual's motion for summary judgment.
¶2. Liberty Mutual sought, and this Court granted, interlocutory appeal, arguing that the 2019 Order was entered in violation of the Court's mandate in Hill Brothers I . We find that the circuit court erred by granting the Rule 59(e) Motion, effectively denying Liberty Mutual's motion for partial summary judgment. Accordingly, we reverse the circuit court's 2019 Order and reinstate the circuit court's 2018 Order granting Liberty Mutual partial summary judgment on the issue of liability.
FACTS AND PROCEDURAL HISTORY
¶3. In 2000, the Commission awarded a contract to D.B. Johnson Construction Company, Inc. (D.B. Johnson) for the construction of a stretch of highway. Hill Bros. I , 42 So. 3d at 498. After D.B. Johnson defaulted, the Commission called on D.B. Johnson's bonding company, Travelers Casualty and Surety Company of America (Travelers), to complete the project. Id. Travelers and Hill Brothers entered into a completion agreement that incorporated all of the contract documents and special provisions contained in the contract between D.B. Johnson and the Commission. Id. "Special Provision # 907-109-01 [sic]2 entitled ‘Measurement & Payment for Changes in Costs of Construction Materials (Fuel and Asphalt),’ hereinafter referred to as the ‘FAC,’ required certain monthly cost-adjustments for the purposes of reimbursing Hill Brothers for diesel fuel and asphalt used in the project." Id. The FAC established a base price for fuel to be utilized during the contract bidding process, with actual reimbursements during the contract period "determined by comparing the base price to a cost index published monthly by the Mississippi Department of Transportation and, where the difference exceeded five percent, reimbursement rates would be adjusted accordingly." Id.
¶4. Before our decision in Hill Brothers I , the FAC read as follows:
¶5. The remaining portion related to the above-quoted language of the FAC entitled "Cost Adjustment Factors for Fuel Usage" provided different items of work, units of measure, codes and corresponding factors for diesel and gasoline fuel. The portion entitled "Construction Materials" defined adjustment codes for certain construction materials. The third page of the FAC provided as follows:
Finally, the FAC contained the following language (the Violating Clause): "After the expiration of contract time, including all authorized extensions, adjustments will be computed using fuel and material prices that are in effect at the expiration of contract time." Id.
¶6. The Commission extended the contract deadline to March 13, 2004, and Hill Brothers completed the contract on March 13, 2006. Id. Before the contract deadline in March 2004, the Commission, through the Mississippi Department of Transportation, "calculated monthly payments for designated pay items affected by oil prices by adjusting the baseline price of petroleum products (established when the contract was originally awarded)." Id. After the contract deadline, the Commission made reimbursements based on the Violating Clause. Id. at 498-99. The calculation change had little impact on Hill Brothers' bottom line—that is, until Hurricane Katrina struck the Mississippi Gulf Coast in August 2005, resulting in a sizable increase in petroleum prices. Id. at 499. Utilizing the Violating Clause that determined reimbursements using prices in effect on March 13, 2004, Hill Brothers received far less in reimbursements than the amount it actually expended for fuel. Id.
¶7. Hill Brothers filed suit against the Commission for breach of contract through improper application of the FAC. Id. In September 2008, the Commission filed motions for partial and full summary judgment, and Hill Brothers filed a motion for partial summary judgment on the issues of the FAC's ambiguity and Hill Brothers' entitlement to damages for underpayment under the FAC. Id. The circuit court found that the FAC was unambiguous and denied Hill Brothers' motion for partial summary judgment. Id. Hill Brothers then filed a response to the Commission's motion for summary judgment and filed a cross-motion for summary judgment, arguing that the Commission's interpretation of the FAC conflicted with the authorizing statute, Mississippi Code Section 31-7-13(i) (Rev. 2008). Id.
¶8. The circuit court found "that the FAC as written, interpreted, and applied by the Commission was not ambiguous, contrary to the statute, or unconscionable," that "there were no genuine issues of material fact and ... [that] the Commission was entitled to summary judgment as a matter of law." Id. Hill Brothers appealed, arguing that the circuit court improperly interpreted the FAC and that the Commission's interpretation violated the authorizing statute such that the final clause ought to be struck. Id. In Hill Brothers I , we struck the Violating Clause since it locked in price adjustments upon the expiration of contract time and, as a result, violated Mississippi Code Section 31-7-13(i) (Rev. 2008). Id. at 502. We reversed the decision of the circuit court and remanded the case for further proceedings. Id. In December 2015, following Hill Brothers' motion to substitute Liberty Mutual as the plaintiff, which the Commission opposed, and a hearing the Commission did not attend,3 the circuit court ordered that Liberty Mutual be substituted as the plaintiff at the trial court, leaving Liberty Mutual "stand[ing] in the place of the former [p]laintiff, Hill Brothers ..., for purposes of the litigation and any remaining proceedings ...."4
¶9. On November 13, 2018, the circuit court granted Liberty Mutual's motion for partial summary judgment on the issue of liability (the 2018 Order). In the 2018 Order, the circuit court recognized the Court's holding in Hill Brothers I : the Violating Clause violated Mississippi Code Section 31-7-13(i) and, therefore, the Court struck it from the FAC. The circuit court held that "pursuant to the plain and unambiguous language of the contract, that Plaintiff is entitled to recover fuel adjustments after the expiration of the ‘contract time’ but during the ‘lifetime of the contract.’ " Therefore, the circuit court denied the Commission's motion to dismiss and/or motion for summary judgment and granted Liberty Mutual's motion for partial summary judgment, holding that Liberty Mutual was entitled to monthly fuel adjustments following the expiration of contract time.
¶10. Then, the circuit court determined that the appropriate...
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