Morris Concrete, Inc. v. Warrick

• Decision Date: 23 May 2003
• Citation: 868 So.2d 429
• Parties: MORRIS CONCRETE, INC. v. Jessie WARRICK d/b/a Speed Tech Automotive, and Bennie Childress.
• Court: Alabama Court of Civil Appeals

868 So.2d 429

MORRIS CONCRETE, INC. v. Jessie WARRICK d/b/a Speed Tech Automotive, and Bennie Childress.

2011265.

Court of Civil Appeals of Alabama.

May 23, 2003.

Opinion on Return from Remand July 25, 2003.

Carroll H. Sullivan and Benjamin C. Heinz of Clark, Scott & Sullivan, P.C., Mobile, for appellant.

Michael A. Dasinger III of Hoiles, Dasinger & Hollon, P.C., Robertsdale, for appellee Jessie Warrick.

C. Andrew Harrell, Jr., of Herbert & Harrell, LLC, Gulf Shores, for appellee Bennie Childress.

CRAWLEY, Judge.

Morris Concrete, Inc., appeals from the trial court's judgment in favor of Jessie Warrick d/b/a Speed Tech Automotive, and Bennie Childress. We affirm in part, reverse in part, and remand.

Childress, who was at the time an employee of Morris Concrete, purchased concrete from Morris Concrete at an employee-discounted rate and supplied it to Warrick in exchange for Warrick's waiving a down payment on a pickup truck that he was selling to Childress. Warrick used the concrete as a foundation slab for a metal building, attached to his existing business, that he intended to use as a tire service shop. When Childress ordered the concrete, he specified that it needed to be capable of withstanding 3,000 pounds of pressure per square inch ("PSI"), which was required for the automobile lifts Warrick was going to have installed. After being informed by a representative of the automobile-lift company that there might be a problem with the quality of the concrete, Warrick contacted Morris Concrete. Morris Concrete subsequently employed an engineering company to test the concrete. The testing results indicated that the concrete's tolerance was well below 3,000 PSI.

Warrick sued Childress and Morris Concrete alleging that he was a third-party beneficiary of the contract of sale between them and seeking damages on counts of breach of contract, breach of express warranty, breach of implied warranties of fitness for a particular purpose and merchantability, and fraud. Childress filed an answer and an amended answer to Warrick's complaint; he also filed a cross-claim against Morris Concrete, seeking to be indemnified for any amount that the trial court awarded against him to Warrick. Morris Concrete filed an answer to Warrick's complaint; it also filed a cross-claim against Childress, seeking to be indemnified by him to the extent that the trial court found against it and in favor of Warrick.

Morris Concrete filed a motion requesting the trial court to allow it to enter onto Warrick's property to test the concrete; that motion was initially granted by the trial court. However, upon receiving a motion to reconsider that ruling by Warrick and a response thereto by Morris Concrete, the trial court conducted a hearing and set aside its previous ruling, thus preventing Morris Concrete from testing the concrete for a second time.

After conducting a bench trial on the parties' claims, the trial court entered a judgment that stated:

"This cause having come before this Court for a final hearing on June 25, 2002[,] and the parties being present, with counsel, and the Court, on the evidence presented, finds in favor of [Warrick] and against [Childress] on breach of contract, in favor of [Warrick] and against [Morris Concrete] on breach of contract as [Warrick] being a third[-]party beneficiary, and in favor of [Warrick] and against [Morris Concrete] on breach of implied warranty and negligence and awards compensatory damages in the amount of $75,000.00, plus costs of court.

"The Court finds in favor of [Morris Concrete and Childress] and against [Warrick] on fraud and express warranty claims.

"On the cross[-]claim by Childress against Morris [Concrete] the Court finds in favor of Childress and awards damages in the amount of $75,000.00.

"On the cross[-]claim by Morris [Concrete] against Childress the Court finds in favor of Childress."

Morris Concrete filed a motion for a new trial or for the trial court to alter, amend, or vacate the judgment. The trial court denied that motion. Morris Concrete filed a notice of appeal to the supreme court. This case was transferred to this court by the supreme court, pursuant to § 12-2-7(6), Ala.Code 1975.

On appeal, Morris Concrete argues that the trial court erred by entering judgment in favor of Warrick and Childress because, it says, (1) Warrick was not a third-party beneficiary to a contract between it and Childress; (2) it did not breach the implied warranties of merchantability and fitness for a particular purpose; (3) Warrick provided no evidence to support an allegation of negligence¹; (4) the amount of damages awarded were excessive; (5) Childress was not entitled to damages in the amount of $75,000 on his cross-claim; (6) the trial court erred by not allowing it to enter onto Warrick's property to test the concrete; and (7) the trial court erred by denying its motion for a new trial without conducting a hearing on the motion.

The trial court conducted a bench trial on the parties' claims. Our review is therefore governed by the ore tenus standard of review.

"`We note that under the ore tenus standard of review, the trial court's findings of fact based on oral testimony, and a judgment based on those findings, are given a presumption of correctness. A judgment based on such findings will not be reversed unless it is shown to be plainly and palpably wrong. The appellate courts are not allowed to substitute their own judgment for that of the trial court if the trial court's decision is supported by reasonable inferences to be drawn from the evidence. The reason for giving such deference to the trial judge's findings based on disputed evidence in ore tenus proceedings is that the trial judge has the benefit of observing the witnesses' manner and demeanor and has the better opportunity to pass upon the credibility of their testimony.'

"Ex parte Pielach, 681 So.2d 154, 154-55 (Ala.1996)

(citations omitted). `Under the ore tenus rule, the trial court's judgment and all implicit findings necessary to support it carry a presumption of correctness and will not be reversed unless found to be plainly and palpably wrong.' Transamerica Commercial Fin. Corp. v. AmSouth Bank, N.A., 608 So.2d 375, 378 (Ala.1992) (citations and internal quotation marks omitted)."

Creel v. Crim, 812 So.2d 1259, 1260-61 (Ala.Civ.App.2001). This court has further stated that:

"However, when the trial court improperly applies the law to facts, no presumption of correctness exists as to the trial court's judgment. Allstate Ins. Co. v. Skelton, 675 So.2d 377 (Ala.1996); Marvin's, Inc. v. Robertson, 608 So.2d 391 (Ala.1992); Gaston [v. Ames], 514 So.2d [877,] 878 [(Ala.1987)]; Smith v. Style Advertising, Inc., 470 So.2d 1194 (Ala.1985); League v. McDonald, 355 So.2d 695 (Ala.1978). `Questions of law are not subject to the ore tenus standard of review.' Reed v. Board of Trustees for Alabama State Univ., 778 So.2d 791, 793 n. 2 (Ala.2000). A trial court's conclusions on legal issues carry no presumption of correctness on appeal. Ex parte Cash, 624 So.2d 576, 577 (Ala. 1993). This court reviews the application of law to facts de novo. Allstate, 675 So.2d at 379 (`[W]here the facts before the trial court are essentially undisputed and the controversy involves questions of law for the court to consider, the [trial] court's judgment carries no presumption of correctness.')."

City of Prattville v. Post, 831 So.2d 622, 628 (Ala.Civ.App.2002).

I. Third-Party Beneficiary

Morris Concrete first argues that the trial court erred by determining that Warrick was a third-party beneficiary to a contract between it and Childress.

"`[I]t has long been the rule in Alabama that one who seeks recovery as a thirdparty beneficiary of a contract must establish that the contract was intended for his direct, as opposed to his incidental, benefit.' Mills v. Welk, 470 So.2d 1226, 1228 (Ala.1985). `To recover under a third-party beneficiary theory, the complainant must show: 1) that the contracting parties intended, at the time the contract was created, to bestow a direct benefit upon a third party; 2) that the complainant was the intended beneficiary of the contract; and 3) that the contract was breached.' Sheetz, Aiken & Aiken, Inc. v. Spann, Hall, Ritchie, Inc., 512 So.2d 99, 101-02 (Ala.1987)."

McGowan v. Chrysler Corp., 631 So.2d 842, 848 (Ala.1993).

At trial, Childress testified (1) that he informed Charlie Tolbert, a general manager at Morris Concrete, that he was going to purchase some concrete for Warrick as part of an agreement that they had made to exchange the concrete for a down payment on a pickup truck; (2) that he specified that the concrete needed to be able to withstand 3,000 PSI; and (3) that no one from Morris Concrete told him that he could not purchase the concrete for another person's use. Warrick also testified that, when he was ready for the concrete to be delivered, he telephoned Morris Concrete's plant, told the person on the line about his arrangement with Childress, and requested that the concrete be delivered. Morris Concrete subsequently delivered the concrete to Warrick. There was other evidence to support a finding that there was a contract between Childress and Morris Concrete and that the concrete provided did not meet the 3,000 PSI specification.

Representatives of Morris Concrete testified that it was against company policy for employees to use their employee discount to purchase concrete for other parties; however, that testimony did not tend to dispute Childress's testimony that he had informed Charlie Tolbert, who did not testify at trial, about his arrangement with Warrick before he purchased the concrete. In light of the testimony presented and the presumption of correctness afforded a trial court's judgment under the ore tenus standard of review, we cannot say that the trial court erred by determining that Warrick was a third-party beneficiary to the contract between Childress and...