134 So. 3d 799
Miss. Ct. App.2014Background
- West Rankin Utility Authority awarded a public sewer rehabilitation contract to Hemphill; Hemphill subcontracted pipe-cleaning and TV-inspection work to Ace for $464,718.50.
- Ace began work without a Mississippi certificate of responsibility and stopped after nonpayment; Ace sued Hemphill for breach of contract and quantum meruit for $266,312.18 and sued the project surety (Federal) on the payment bond.
- Hemphill and Federal moved for summary judgment, arguing section 31-3-15 renders contracts with unlicensed contractors void and bars recovery, and that a surety inherits the contractor’s defenses.
- The trial court granted summary judgment for Hemphill and Federal, finding the subcontract void and quantum meruit barred; Ace appealed.
- After briefing, the Mississippi Supreme Court decided Ground Control, allowing a subcontractor to recover in quantum meruit even when the subcontract is void for lack of a certificate; this court applied that authority on rehearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ace was a "contractor" required to hold a certificate under §31-3-15 | Ace: pipe cleaning is not within the statutory contractor definition; no certificate required | Hemphill: pipe cleaning is related construction/maintenance and Board classifications cover TV inspection and specialty work; owner required certificates | Held: Ace’s pipe-cleaning work falls within reconstruction/repair/maintenance; Ace needed a certificate; subcontract is void as to breach-of-contract claim |
| Whether Hemphill is estopped from asserting the subcontract is void because it accepted Ace’s work | Ace: Hemphill knew Ace lacked a certificate and accepted benefits, so cannot disavow contract | Hemphill: contract was void as a matter of law under §31-3-15; it had no power to accept/ratify | Held: No estoppel; void contract cannot be ratified; summary judgment proper on breach claim |
| Whether Ace may recover in quantum meruit despite the subcontract’s invalidity | Ace: performed valuable services, expected payment, and was entitled to restitution | Hemphill: §31-3-15 bars recovery where contract is void for lack of certificate | Held: Following Ground Control, public policy does not bar quantum meruit where contract is void for certificate defect; reversed and remanded for quantum meruit adjudication |
| Whether surety Federal was entitled to same summary judgment as Hemphill | Federal: surety has same rights/defenses as principal; no liability if principal not liable | Ace: surety not entitled if Ace can recover in quantum meruit | Held: Surety may assert same defenses as Hemphill; but because quantum meruit claim survives, Federal’s summary judgment is reversed and remanded to allow defenses/proof |
Key Cases Cited
- Ground Control, LLC v. Ccupsco Indus., 120 So.3d 365 (Miss. 2013) (subcontractor may recover in quantum meruit though subcontract void for lack of certificate)
- Clancy’s Lawn Care & Landscaping, Inc. v. Miss. State Bd. of Contractors, 707 So.2d 1080 (Miss. 1998) (Board may classify work and determine when certificate required; 50% rule for mixed projects)
- United Plumbing & Heating Co. v. AmSouth Bank, 30 So.3d 343 (Miss. Ct. App. 2009) (standard for finding contract void under §31-3-15)
- Fid. & Guar. Ins. Co. v. Blount, 63 So.3d 453 (Miss. 2011) (surety’s rights and obligations mirror principal’s)
- In re Estate of Fitzner, 881 So.2d 164 (Miss. 2003) (elements and theory of quantum meruit)
- Wastewater Plant Serv. Co. v. Harrison Cnty. Util. Auth., 28 So.3d 686 (Miss. Ct. App. 2010) (distinguishing maintenance operations that do not require a certificate)
- Wood Naval Stores Export Ass’n v. Latimer, 71 So.2d 425 (Miss. 1954) (accepting benefits may ratify a transaction but cannot apply where contract is void)