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Ace Pipe Cleaning, Inc. v. Hemphill Construction Co., Inc.

Court of Appeals of Mississippi

January 7, 2014

ACE PIPE CLEANING, INC. APPELLANT
v.
HEMPHILL CONSTRUCTION COMPANY, INC. AND FEDERAL INSURANCE COMPANY APPELLEES

DATE OF JUDGMENT: 02/28/2012

RANKIN COUNTY CIRCUIT COURT, HON. WILLIAM E. CHAPMAN III, TRIAL JUDGE

ATTORNEYS FOR APPELLANT: C. DALE SHEARER, JAMES DENNIS BOONE

ATTORNEYS FOR APPELLEES: DAVID W. MOCKBEE, JUDSON ROY JONES

EN BANC.

MODIFIED OPINION ON MOTION FOR REHEARING

GRIFFIS, P.J.

¶1. This case is before the Court on a motion for rehearing. The motion for rehearing is granted. The original opinion is withdrawn and substituted with this opinion.

¶2. Ace Pipe Cleaning Inc. commenced this action for payment for services provided on a public construction project. The circuit court granted summary judgment in favor of the general contractor and the bonding company and found that the contract was void and unenforceable, under Mississippi Code Annotated section 31-3-15 (Rev. 2010), because Ace did not have a certificate of responsibility. In this appeal, Ace argues that the circuit court was in error to grant the summary judgment based on section 31-3-15, to not allow Ace's equitable claim for quantum merit, and to allow the surety the same rights as the general contractor.

¶3. After the original opinion was issued, the Mississippi Supreme Court decided Ground Control, LLC v. Capsco Industries Inc., 120 So.3d 365, 371 (¶13) (Miss. 2013). The court held that a subcontractor may recover on a quantum meruit theory even though the underlying contract is void because the sub-contractor failed to obtain a certificate of responsibility. Accordingly, finding reversible error, we affirm in part and reverse and remand in part for further proceedings consistent with this opinion.

FACTS

¶4. West Rankin Utility Authority awarded a public contract to Hemphill Construction Company Inc. to install 30, 000 feet of sewer pipe. The project was divided into six parts: (1) clean segments of the sewer main; (2) control flow in segments of the sewer main; (3) perform point repairs as directed; (4) install slip lining in segments of the sewer main; (5) rehabilitate manholes; and (6) provide a television inspection of the rehabilitated sewer and manholes.

¶5. On October 31, 2008, Hemphill and Ace entered a subcontract. Ace agreed to perform a portion of the work on the project in exchange for the payment of $464, 718.50. Ace was to clean the pipes and perform the television inspection of the pipe after it was cleaned. Ace did not have a certificate of responsibility when it submitted its bid or when it entered into the subcontract.

¶6. Ace began work on the project on or about November 3, 2008. On December 31, 2009, Ace stopped work due to Hemphill's failure to pay.

¶7. In the complaint, Ace asserted claims against Hemphill for breach of contract, for failure to pay Ace $266, 312.18 under the parties' subcontract, and for quantum meruit, seeking $266, 312.18 for the reasonable value of services Ace had provided to the project for which it had not been compensated. The complaint also asserted a claim against Federal Insurance Company on the payment bond that it issued on the project, due to Hemphill's failure to pay Ace for services rendered pursuant to the subcontract.

¶8. On September 8, 2011, Hemphill and Federal filed a motion to dismiss or, alternatively, for summary judgment. They argued that Ace had violated Mississippi Code Annotated section 31-3-15 because it did not obtain a certificate of responsibility from the Mississippi State Board of Contractors. As a result, they argued that the subcontract was void, and the statute also barred Ace's quantum meruit claim. They also argued that the payment-bond claim failed because a surety holds the same rights and defenses as the contractors they insure.

¶9. Ace responded that the subcontract was not void because the pipe-cleaning work did not qualify Ace as a contractor and, as a result, Ace did not need a certificate under section 31-3-15. Ace also argued that Hemphill knew that Ace did not have a certificate and did not raise the issue until after Hemphill accepted the benefits of Ace's services. Ace also argued that section 31-3-15 did not foreclose its equitable claim for quantum meruit. Finally, Ace claimed that Federal was not entitled to summary judgment for the same reasons Hemphill was not.

¶10. On March 1, 2012, the circuit court entered an order that granted Hemphill and Federal summ ary judgment. The circuit court held that Ace was required to have a certificate of responsibility and, because it did not, the subcontract was void. The circuit court also held the quantum meruit claim was barred by section 31-3-15. The circuit court concluded that Ace's claim against Federal was invalid because its claim against Hemphill was invalid. It is from this judgment that Ace now appeals.

STANDARD OF REVIEW

¶11. When this Court reviews a "grant of summary judgment, [we] employ[] a de novo standard of review." United Plumbing & Heating Co. v. AmSouth Bank, 30 So.3d 343, 345 (¶4) (Miss. Ct. App. 2009). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." M.R.C.P. 56(c).

¶12. We consider "all of the evidence before the [trial] court in the light most favorable to the non-moving party." United Plumbing, 30 So.3d at 345 (ΒΆ4). The party that opposes the motion "may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in Rule 56 rule, must set forth specific facts showing that there is a genuine issue for trial." M.R.C.P. 56(e). Summary judgment must be entered if the non-movant does not sufficiently show "the existence of an element essential to that party's case, and on which that party will bear the burden of ...


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