United Plumbing & Heating Co. v. AmSouth BankUnited Plumbing & Heating Co. v. AmSouth Bank
for the Court.
FACTS AND PROCEDURAL HISTORY
¶ 1. W.D. Russum рlanned to build a Wee Care Child Care Center (Wee Care) in Byram, Mississippi, and selected Am-South Bank to finance the project. Rus-sum and AmSouth entered into a loan agreement in which Russum agreed to repay the funds loaned for the project and grant AmSouth the project’s deed of trust. Russum then chose United Plumbing
&
Heating Company, Inc. (United) to serve as the project’s general contractor. Rus-
¶ 2. In 2003, United employed several subcontractors to perform various tasks during the building process. As progress was made, United asked Russum to release funds borrowed from AmSouth through pay applications. AmSоuth hired FAS, a construction management company, to oversee the pay applications on the project. United and Russum also executed an agreement consenting to FAS’s role. Wee Care then filed for bankruptcy, and the contractors went unpaid. United, Price’s Glass & Mirror Co., Inc.; James Thomas d/b/a T’s Tile; Carr Plumbing Supply, Inc.; Ricky Jackson d/b/a Jackson Sheet Metal and Construction; Tommy Meadows d/b/a F & M Construction; Precision Ceiling, LLC; and Ronnie DeForest (colleсtively referred to as United) subsequently filed suit against Russum, Wee Care, AmSouth, and FAS in the Circuit Court of Hinds County asserting various claims including breach of contract, negligence, stop-notice violation, fraud, and quantum meruit.
¶ 3. AmSouth filed a motion for summary judgment, which was granted by the trial court. United now appeals the summary judgment and asserts that the trial court erred in (1) reading Mississippi Code Annotated section 31-3-15 (Rev.2008) to require the construction contract to be null and void, (2) finding that no claims for breach of contract could be maintained against AmSouth, and (3) granting summary judgment in favor of AmSouth.
STANDARD OF REVIEW
¶ 4. In reviewing a lower court’s grant of summary judgment, this Court employs a de novo standard of review.
Anglado v. Leaf River Forest Prods., Inc.,
¶ 5. The party opposing the motion “may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule, must set forth sрecific facts showing that there is a genuine issue for trial.” M.R.C.P. 56(e). The entry of summary judgment is mandated if the non-movant “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.”
Galloway v. Travelers Ins. Co.,
DISCUSSION
I. INTERPRETATION OF MISSISSIPPI CODE ANNOTATED SECTION 31-3-15
¶ 6. In its first issue on appeal, United argues that the trial court incorrectly found that the construction contract entered into between Wee Care and United was null and void under Mississippi Code
No contract for public or private projects shall be issued or awarded to any contractor who did not have a current certifícate of responsibility issued by said board at the time of the submission of the bid.... Any contract issued or awarded in violation of this section shall be null and void.
¶ 7. The trial court found that even though United held a current certifícate of responsibility, it was not the appropriate certificate for the work United contracted to perform. Thе trial court stated in its findings:
There are no regulations, minutes, or orders promulgated by the Board that interpret whether or not “certificate of responsibility” in § 31-3-15 means any certificate or the specific certificate necessаry to work on a particular project. However, the Court believes that the rules, orders, and minutes of the Board implicitly accept this Court’s interpretation that § 31-3-15 is designed to enforce the overall purpose of the Act. Thus, ... thе Court interprets § 31-3-15 to mean that a contractor must have a specific certificate of responsibility to prevent the contract being null and void.
United argues that the language of the statute simply refers to “a current certificate of responsibility” and does not require any certain classification. Thus, United asserts that since it held a current certificate of responsibility issued by the State Board of Contractors of the State of Mississippi (Board), regardless of which classification, the contract with Wee Care was valid.
¶ 8. Despite not specifying if a specific certificate of responsibility is required by statute, the Board is given the power by this section of the code “[t]o adopt rules аnd regulations setting forth the requirements for certificates of responsibility, the revocation or suspension thereof, and all other matters concerning same....”
¶ 9. According to the Rules and Regulations of the State Board of Contractors, the Board has seven major classifications of work from which an applicant for a certificate of responsibility must choose: building construction; highway, street, and bridge construction; heavy construction; municipal and public works construction; electrical work; mechanical work; and specialty work. State Board of Contractors Rule 2(b). According to Rule 2(a) of the Rules and Regulations of the State Board of Contractors, an applicant for a certificate of responsibility “will not be classified or permitted to bid on or perform a type or types of work not included in his request.” The Rules go on to state the penalty for bidding on a рroject out
In any case in which a holder of a Certificate of Responsibility has bid outside the classification contained in his, her or its Certificate of Responsibility, the Executive Secretary of the State Board of Contractоrs shall notify each holder to appear before the Board at its next regular meeting and show cause, if possible, why the holder’s Certificate of Responsibility shall not be suspended.
State Board of Contractors Rule 5.
¶ 10. Norman Brooks, executive secretary of thе Board, testified by affidavit that he reviewed the Board’s records for the legal classifications of United and found that it held the following specialty classifications: asbestos abatement or removal; heat, air conditioning, and ventilаtion; plumbing; and renovations. Brooks testified that an entity contracting to do work as a construction manager must have a certificate of responsibility in construction management or the major classification of building construction.
See
State Board of Contractors Rule 19. An exception is made to the specific classification requirement when the project is a private project totaling less than $100,000.
¶ 11. We find that the contract entered into between United and Wee Care was null and void because United failed to possess the appropriate certificate of responsibility for the type of work it undertook to perform. Having found that United’s contraсt with Wee Care was void, it follows that any contractual obligations AmSouth may have owed the subcontractors are also void. Therefore, we find that this issue is without merit.
II. BREACH OF CONTRACT
¶ 12. In its second issue on appeal, United argues that the trial court errеd in finding no claims for breach of contract against AmSouth. In order to establish a breach of contract claim, United bore the burden of proving: (1) the existence of a valid and binding contract between it and AmSouth, (2) that AmSouth breached thе contract to which it was a party, and (3) that United was damaged monetarily.
Suddith v. Univ. of S. Miss.,
¶ 13. Questions concerning the construction of a contract are questions of law to be reviewed by the trial court.
Miss. State Highway Comm’n v. Patterson Enters. Ltd.,
III. SUMMARY JUDGMENT
¶ 15. In its third issue on appeal, United arguеs that the trial court erred in granting AmSouth’s motion for summai'y judgment because it has a valid negligence claim. United argues that AmSouth had a duty to protect it from an unreasonable risk of damage and that AmSouth breached that duty which ultimately causеd it damage. United attempts to bolster this argument by claiming that AmSouth failed to investigate why Russum asked Am-South to withhold payments designated for United or to follow AmSouth’s own dispute resolution policies. United also claims the proper standard of сare owed to them by AmSouth was that of “reasonable diligence.”
¶ 16. We disagree with United’s argument and hold its negligence claim invalid as a matter of law. We find no contract, statute, or law that would establish that AmSouth had a duty to (1) pay money tо a party it was not obligated to pay; (2) investigate or contradict a valid request made by its client, Russum; or (3) adhere to its own dispute resolution policies when United was neither a client nor a party to any valid contract involving Am-South. As tо United’s reasonable-diligence argument, the supreme court held in
Riley Building Supplies, Inc. v. First Citizens National Bank,
¶ 17. THE JUDGMENT OF THE HINDS COUNTY CIRCUIT COURT IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANTS.