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Falkner v. Stubbs

Supreme Court of Mississippi, En Banc

August 22, 2013


DATE OF JUDGMENT: 09/01/2010.






¶1. John Stubbs's motion for rehearing is granted. The original opinion is withdrawn, and this opinion is substituted therefor.

¶2. Stubbs was awarded damages for breach of contract after he sued Martin and Valerie Falkner to enforce a construction lien on their home. The Court of Appeals affirmed the circuit court's judgment, but reversed its award of attorney's fees and prejudgment interest, finding that Stubbs's recovery was based in quantum meruit and thus, attorney's fees and prejudgment interest were unavailable remedies. Stubbs petitioned for certiorari, arguing that the Court of Appeals failed to consider various statutory grounds for an award of attorney's fees and prejudgment interest and requested that we reinstate the circuit court's award. We granted certiorari on the issue of prejudgment interest and attorney's fees. Although the Court of Appeals did not discuss the statutes Stubbs raises, we find that those statutes provide an insufficient basis for an award of either prejudgment interest or attorney's fees in this case; therefore, we affirm the Court of Appeals' decision. The judgment of the Chickasaw County Circuit Court is affirmed in part and reversed in part, and the case is remanded to the circuit court for a final determination of Stubbs's award without prejudgment interest or attorney's fees.


¶3. In April 2000, Martin Falkner and John Stubbs orally agreed that Stubbs would construct a basement for the Falkners' planned log-cabin home near Houston, Mississippi, at a total cost of $25, 000. The parties had little discussion concerning the itemized costs of the project. Stubbs completed the basement and received full compensation for that work. After he completed the basement, the Falkners asked Stubbs to help them build additional portions of the home "step by step." At no time was there any written agreement between Stubbs and the Falkners regarding the scope of the work to be done or the price Stubbs was to be paid. Stubbs's testimony was that he agreed to undertake the nonbasement work at the cost of his actual time and material expenses.

¶4. Before agreeing to the basement work, the parties discussed how much the entire home would cost to build. Martin Falkner testified that Stubbs told him the entire house could be built for $100, 000, with the nonbasement work costing $75, 000. Stubbs maintained that his estimate had been that the entire house would cost at least $150, 000 to $200, 000 to complete, even though the Falkners already had acquired most of the logs needed for the home. Stubbs testified that he told the Falkners his hourly labor rate was $25 per hour plus half that amount for travel time, while Martin Falkner maintained he was told Stubbs's labor would be $18 per hour and that there was no discussion of travel time. The parties' only discussion of the total price to build the home or of Stubbs's hourly rate took place during negotiations to build the basement, and Stubbs's labor and travel rates were not discussed again when the Falkners asked Stubbs to work beyond the original basement agreement.

¶5. Stubbs provided no invoices or statements during the time he worked on the house, but he received periodic advances or "draws" from the Falkners to cover his expenses. W hen the length and costs of the project surpassed the Falkners' expectations, the Falkners told Stubbs to stop work on the house. Stubbs testified that, up to that time, the Falkners had paid him $45, 840.25 and that he was owed $25, 256.43 for outstanding costs. The Falkners' position was that, based on the $100, 000 they believed to be the total cost of the home and the amount of work left to be done, they actually had overpaid Stubbs at that point.

¶6. Stubbs filed a construction lien on the Falkners' home and sued the Falkners for outstanding construction costs. After a bench trial, the circuit court found that the parties had entered into and performed an oral contract for Stubbs to build the basement for $25, 000. Further, it found that the Falkners had asked Stubbs to continue to work on the home "without a full understanding or written contract, " and that the parties had entered an "oral contract for the purpose of constructing the dwelling and the compensation was not adequately discussed." The circuit court awarded Stubbs the value of "his services, the services of his workmen, travel expense and materials purchased by Plaintiff for the dwelling, " with Stubbs's and his workmen's hourly labor and travel rates determined on a quantum meruit basis. In addition, the circuit court awarded Stubbs prejudgment and post-judgment interest at the rate of eight percent each, along with the cost of Stubbs's attorney's fees, which totaled nearly $20, 000. The final judgment explicitly stated that "Plaintiff is entitled to attorney fees, pre-judgment interest and post-judgment interest for Defendant's breach of the oral contract, " and it mentioned only a monetary award based on the breach of contract. It did not include any provision for the sale of the property or execution of Stubbs's lien.

¶7. The Court of Appeals upheld the circuit court's judgment with the exception of the award of attorney's fees and prejudgment interest. Because the circuit court had used quantum meruit to determine Stubbs's hourly fee, the Court of Appeals held that "the instant case involves a contract implied in law . . . and is, therefore a quantum meruit suit, " such that "the circuit court's award of pre-judgment interest and attorney's fees was improper." Stubbs petitioned for certiorari, arguing that the Court of Appeals had failed to consider whether there was a statutory basis for the circuit court's award of ...

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