Mississippi State Highway Com'n v. Patterson Enterprises Ltd., 89-CA-408
| Decision Date | 11 March 1993 |
| Docket Number | No. 89-CA-408,89-CA-408 |
| Citation | 627 So.2d 261 |
| Parties | MISSISSIPPI STATE HIGHWAY COMMISSION v. PATTERSON ENTERPRISES LTD., Michael R. Smith and Amco Construction Company, Inc. 1 |
| Court | Mississippi Supreme Court |
Michael C. Moore, Atty. Gen., Alan M. Purdie, Asst. Atty. Gen., James W. Nobles, Jr., Jackson, for appellant.
Pat H. Scanlon, and E. Stephen Williams, Young Scanlon & Sessums, Jackson, for appellee.
Luther S. Ott, Ott Purdy & Scott, Jackson, for amicus curiae.
EN BANC.
BANKS, Justice, for the Court:
I
This is an appeal from the Hinds County Circuit Court of a $1,177,392.00 jury award against appellant, the Mississippi State Highway Commission, for breach of contract. The case presents the question of whether the terms of a prime contract between the highway commission and a contractor were incorporated into the terms of a subsequent contract between the contractor and Patterson, a subcontractor. Finding the terms were incorporated in the subcontract, we reverse and render.
II
On December 9, 1977, the Mississippi State Highway Commission awarded a contract to Mallette Brothers Construction Company, Inc., of Gautier, Mississippi. The contract required Mallette Brothers to complete construction on Highway 63 between the City of Pascagoula and the Town of Wade, Jackson County, Mississippi. Mallette, with permission from the state highway commission, delegated some of its contractual duties to Patterson Enterprises, Ltd., of Jackson, Mississippi, which, in turn, entered a joint venture with Michael R. Smith and Amco Construction Company, Inc. On January 25, 1978, Mallette subcontracted with Patterson to perform certain engineering work on the highway project. Difficulties arose during the completion of the project which Patterson claimed increased its costs. In particular, Patterson alleged original plans submitted by the state highway commission were inadequate, causing Patterson to devote more resources to the project than it had anticipated in agreeing to act as a subcontractor.
On September 22, 1981, Patterson sent a letter to Mallette demanding that Mallette refuse final payment from the state highway commission until Patterson had an opportunity to calculate cost overruns and submit a claim for compensation to the commission. The letter indicated Patterson would forward its claim to Mallette which, as prime contractor, would then have the obligation to send the complaint to the commission.
On September 26, 1981, Patterson mailed its claim to Mallette. The claim was subsequently forwarded to the commission.
On January 27, 1982, the commission notified Mallette that the highway project had been satisfactorily completed and that Mallette was formally released from any further contractual duties pertaining to the highway project.
On February 12, 1982, the commission notified Mallette that Patterson's claim had been denied as "without merit." Eleven days later, the commission issued final payment to Mallette.
On March 24, 1982, Mallette executed a check for $23,824.19 the amount allowed by the Commission, to Patterson. This check was negotiated by Patterson. Patterson's contract with Mallette called for compensation in the amount of $1,456,799.70. The final estimate accompanying the $23,824.19 last payment to Patterson reflected total payments in the amount of $1,808,163.01.
Over the next year, Patterson continued to seek an arbitration of its claim against the commission. The commission, however, refused to enter into arbitration with Patterson, asserting the final payment it made to Mallette operated as a release of claims or liability under the December 9, 1977, contract with Mallette.
On April 18, 1984, Patterson filed suit against the commission and Mallette in Hinds County Circuit Court. The complaint alleged the commission negligently completed the plans and specifications on which Patterson had relied. Patterson also claimed the commission failed to cooperate with Patterson and Mallette in completing the project, and thus, breached its contract with both parties. Finally, on the contingency that the trial court determined Mallette's acceptance of final payment from the commission constituted a bar to Patterson's claim against the commission, Patterson sought a claim of negligence and breach of contract against Mallette. This claim against Mallette, however, was dismissed before trial.
From March 9 through March 13, 1987, a trial was held in the Hinds County Circuit Court. The jury returned a verdict for Patterson awarding $58,896 in damages. This verdict was set aside by the court on Patterson's motion and a new trial was ordered.
In September of the same year, a jury returned a verdict for Patterson, awarding $1,177,392 in damages, the amount claimed by Patterson to be the difference between its original estimate and its actual costs, less additional payments made in accordance with supplemental agreements, adjustments and change orders.
Post-trial motions were denied.
III
The question of law before this Court is whether the contract provisions regarding final payment on the prime contract between the commission and Mallette were met. If so, Patterson would not be entitled to a recovery.
The subcontract between Mallette and Patterson bound Patterson to the terms of the prime contract Mallette held with the commission. The prime contract between Mallette and the commission incorporated sections 100 through 199 of the Mississippi Standard Specifications for Road and Bridge Construction, 1976 Edition. Section 109.09 of these specifications mandates that acceptance by the contractor of the last payment from the commission...
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