Tupelo Redevelopment Agency v. Gray Corp., 2006-CA-00218-SCT.

Decision Date18 October 2007
Docket NumberNo. 2006-CA-00218-SCT.,2006-CA-00218-SCT.
Citation972 So.2d 495
PartiesThe TUPELO REDEVELOPMENT AGENCY v. The GRAY CORPORATION, INC. and The Gray Corporation, Inc. v. Ronald J. Ragland, Sr. d/b/a Ragland Engineering and Ragland Construction and Ronald J. Ragland, Sr. d/b/a Ragland Engineering and Ragland Construction v. The Tupelo Redevelopment Agency.
CourtMississippi Supreme Court

B. Sean Akins, Ripley, Thomas W. Prewitt, Kenneth Martin Heard, III, attorneys for appellees.

Before DIAZ, P.J., CARLSON and RANDOLPH, JJ.

CARLSON, Justice, for the Court.

¶ 1. After a jury trial, the Circuit Court of Lee County entered a judgment in favor of the Gray Corporation, Inc., and against the Tupelo Redevelopment Agency for $258,118; and likewise entered a judgment in favor of Ronald J. Ragland, Sr., d/b/a Ragland Engineering and Ragland Construction and against the Gray Corporation for $1,216,605.20. The Tupelo Redevelopment Agency appeals from the judgment entered against it, and the Gray Corporation, Inc., and Ronald J. Ragland, Sr., d/b/a Ragland Engineering and Ragland Construction, cross-appeal. After consideration of the record before us and the applicable law, we affirm on all issues raised both in the direct appeal and the cross-appeals.

FACTS AND PROCEEDINGS IN THE TRIAL COURT

¶ 2. On October 20, 2000, the Tupelo Redevelopment Agency (TRA) entered into a contract with the Gray Corporation, Inc. (Gray) for the construction of the Tupelo Fairgrounds Redevelopment Project (the Project). Gray was bonded by the Hartford Fire and Insurance Company (Hartford). The original price contemplated by the contract was $1,725,347.08 and consisted of three components: Component A, water and sewer improvements; Component B, site work; and Component C, electrical, CATV, telephone and duct system. Allen & Hoshall provided the electrical plan and specifications to TRA for Component C of the Project. Jesco, Inc. (Jesco)1 was hired to serve as Construction Manager, and Tupelo Water & Light (TWL) was hired to inspect and approve the Component C work. For the Component C work, Gray2 entered into a oral subcontract with Ronald Ragland, Sr., d/b/a Ragland Engineering and Ragland Construction (Ragland),3 whereby Ragland agreed to perform some of the layout work contemplated by Gray's contract with TRA, and to construct portions of the Project.

¶ 3. After beginning work on Component C, Ragland noticed there were problems with the plans given to it by Gray. After Allen & Hoshall spent nearly three months trying to correct the electrical plans and specifications with no solution, TRA, Jesco and Allen & Hoshall enlisted Ragland's help to properly identify quantities of work and the scope of the Project requirements. Because these revisions required extra work on the part of Gray and Ragland, TRA, through its representative Jesco, promised Gray and Ragland a future change order. On February 15, 2001, Ragland presented Brister with a narrative explaining the need for a change order to the Project. On March 2, 2001, Gray obtained change order number 1, as required by the contract terms with TRA for modifications to the electrical plan and specifications to Component C. Additionally, Gray requested and received two more change orders, number 2 and number 3. The three change orders brought about net additions of $283,209.20 to the original contract terms. Gray and Ragland proceeded with the contemplated work on the Project without receiving any additional change orders for any extra work or time delays associated with Component C.4

¶ 4. After Ragland completed the work and requested payment from Gray, which was never received, Ragland made a ore tenus motion to intervene in a suit which already had been filed in the Circuit Court of Lee County, styled "W.G. Construction, Inc. v. The Gray Corporation, Inc. and The Hartford Fire and Insurance Company," civil cause number CV02-133(G)L on the docket of that court.5 The motion to intervene was granted on August 12, 2002.

¶ 5. Thereafter, Ragland filed an intervention complaint against Gray and Hartford. In the complaint, Ragland alleged:

Ragland's work at the project was made difficult, more costly, and time consuming by Gray and/or third parties for which Gray is responsible. In addition to the work that it initially contracted to perform, Ragland was required by Gray to perform and did perform additional and different work than the work originally contemplated by the parties. Further, Ragland was unable to perform its work in the manner originally contemplated and as scheduled. It was denied access to portions of the work; Ragland's construction efforts were interfered with; and, Ragland encountered different conditions at the project than had been reasonably anticipated. Likewise, Gray improperly performed administrative tasks and aspects of the project were changed. As a consequence of all of the above, Ragland became entitled to additional compensation and although Ragland was entitled to additional contract time, Gray continued to insist that Ragland perform at an unreasonable rate.

Ragland periodically billed Gray for its work; however, although Gray made some payments, Gray refused and still refuses to pay Ragland $534,454.11 being the total amount due it and which has been due for many months.

Based on Ragland's allegations, Ragland's prayer for relief is as follows:

WHEREFORE, PREMISES CONSIDERED, Ronald J. Ragland, Sr. demands judgment against The Gray Corporation, Inc. and The Hartford Fire and Insurance Company in the amount of at least Five Hundred Thirty-Four Thousand, Four Hundred Fifty Four Dollars and 11/cents ($534,454.11), plus pre-judgment interest, the penalty and interest required by § 31-5-27 Miss.Code Ann. (Supp.2001), interest, costs and attorneys fees anticipated under § 31-5-57 Miss.Code Ann. (Supp.2001).

Both Gray and Hartford filed Answers and Affirmative Defenses on September 23, 2002, denying any liability. Particularly Gray and Hartford contended that Ragland:

engaged in a direct relationship with the owner [TRA] and architect for the Project, made agreements directly with the Owner and Architect and not as a subcontractor to Gray. As a result, Gray [and Hartford] ha[ve] no liability to Ragland for any claims Ragland asserts for delays, interference or extra work resulting from work performed on the Project.

Gray and Hartford also assert that Gray was not indebted to Ragland for any work Ragland performed as subcontractor; or that Gray had not been paid by TRA and thus was not obligated to pay Ragland.

¶ 6. On November 6, 2002, Gray filed a Motion for Leave to File Third-Party Complaint and to File Additional Claims Against the Third Party Defendant, TRA, and on November 22, 2002, the Lee County Circuit Court granted Gray's motion for leave to file a third-party complaint. Gray filed its third-party complaint on December 5, 2002.

¶ 7. In its third-party complaint, Gray asserted, inter alia:

On or about March 1, 2002[6], counsel for Gray made a formal claim for equitable adjustment for additional work, delays and loss in efficiency resulting from the delays and additional work.... Gray is entitled to an equitable adjustment in the amount of not less than $771,912.91 for delays. Further, Gray is entitled to recover for extra work in an amount to be determined at trial.

In addition to the amounts due Gray for equitable adjustment to the Contract, the TRA has yet to pay the contract balance for the original contract work [in the amount of $207,551.76]. As a result, Gray has likewise not made final payments to its subcontractor[ ] Ragland. .... Gray is not liable pursuant to the terms of its subcontracts and Mississippi law to make final payment to said subcontractors until final payment is received by Gray from the owner, TRA.

¶ 8. While Gray admittedly asserts that it is not liable to Ragland, Gray contends that "if Gray is liable to Ragland for work performed or delays encountered on the Project pursuant to the subcontract between Ragland and Gray, then ... TRA is liable to Gray under the general contract" and "pursuant to the doctrine of common law indemnity." On October 23, 2003, TRA filed its Answer and Defenses to Third Party Complaint.

¶ 9. On May 21, 2004, Gray filed a Motion for Leave to File Amended Third-Party Complaint and To File Additional Claims Against the Third-Party Defendant, Allen & Hoshall Ltd. Architects Engineers ("Allen & Hoshall").7 On August 3, 2004, the trial judge heard Gray's Motion to File Amended Third-Party Complaint. Concluding that the motion was not well-taken, the trial judge entered an order denying Gray's motion on August 10, 2004.

¶ 10. On December 13, 2004, Ragland filed a Motion to Amend Intervention Complaint, alleging that discovery had been conducted, and, based on that discovery Ragland desired to seek punitive damages against Gray and Hartford. Both Gray and Hartford opposed Ragland's Motion to Amend Intervention Complaint on January 25, 2005, and January 26, 2005, respectively. After a hearing on Ragland's Motion to Amend Intervention Complaint, the trial court entered an order denying the motion on February 23, 2005.

¶ 11. Ragland filed yet another Motion to Amend Intervention Complaint on June 27, 2005. However, this motion was based on Ragland's assertion that the amount of damages sought should be increased from $534,454.11 to $1,339,658.63. In addition, Ragland sought to add the allegation that March 1, 2002, should be the date from which prejudgment interest should begin to run. On July 7, 2005, Gray and Hartford filed a joint Response to Ragland's Motion to Amend Intervention Complaint opposing Ragland's motion on grounds of equitable estoppel and undue delay. In addition, Gray asserted that if Ragland was allowed to amend its Intervention Complaint, Gray should be allowed to amend its...

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