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Ground Control, LLC v. Capsco Industries, Inc.

Supreme Court of Mississippi, En Banc

March 9, 2017


          DATE OF JUDGMENT: 09/16/2015






         ¶1. When this case was before this Court on interlocutory appeal, we reversed in part. Ground Control, LLC v. Capsco Indus., Inc., 120 So.3d 365, 367 (Miss. 2013) (Ground Control I). Because it was undisputed that neither sub-subcontractor Ground Control, LLC, (Ground Control) nor subcontractor Capsco Industries, Inc., (Capsco)-both Alabama companies-had a statutorily required certificate of responsibility to work in this State, this Court agreed that the subcontract was void. But we found, despite the void contract, "Ground Control should not be precluded from having the opportunity to proceed in court under a claim for the value of what it expended in labor and supplies on the project." Id. at 371. So we remanded this case to the trial court so Ground Control could pursue the non-barred "claims of unjust enrichment and quantum meruit." Id. at 367.

         ¶2. Despite this clear holding, Ground Control argues in this appeal that the trial court erred by limiting its claims on remand to unjust enrichment and quantum meruit. But we find no error. Instead, the trial court properly limited the issue at trial to Ground Control's claim for quantum meruit damages.

         ¶3. We do, however, find W.G. Yates and Sons Construction Company (Yates) and Capsco have raised reversible errors in their cross-appeals. Based on the evidence presented at trial, we find Yates was entitled to a directed verdict because Ground Control failed to prove Yates's liability for quantum meruit damages. We also find the quantum meruit damages award against Capsco was against the overwhelming weight of the evidence. Consequently, Capsco is entitled to a remittitur.

         ¶4. We affirm on Ground Control's and Ground Control owner Frank Beaton's direct appeals. On cross-appeal, we reverse the $36, 644.69 judgment against Yates and render a judgment in Yates's favor. We also reverse the $825, 583.31 judgment against Capsco. We remand the quantum meruit claim against Capsco, instructing the trial court to conduct a new trial on damages alone, unless a remittitur of $626, 407.31, making the damage award $199, 096, is accepted by Ground Control and Capsco.

         Background Facts and Procedural History I. Interlocutory Appeal

         ¶5. This is the second time this case has come before this Court on appeal.

         ¶6. In 2009, sub-subcontractor Ground Control sued subcontractor Capsco over work performed on the Margaritaville Hotel in Biloxi. Ground Control also sued the project's general contractor, Yates, and owner, Harrah's Entertainment, Inc. (Harrah's). But the trial court discovered Ground Control's subcontract with Capsco was void by statute, because neither party had a certificate of responsibility. See Miss. Code Ann. § 31-3-15 (Rev. 2010). So the trial court granted the defendants summary judgment on all of Ground Control's claims, because they stemmed from the void subcontract.

         ¶7. On interlocutory appeal, we reversed in part. Ground Control I, 120 So.3d at 367. "Although we agree[d] with the trial court's finding that the lack of certificates of responsibility rendered the parties' contract null and void, we f[ou]nd that Ground Control's claims for unjust enrichment and quantum meruit were not barred by Mississippi Code Section 31-3-21." Id. at 373. We also reversed the grant of summary judgment in favor of Harrah's and Yates on purely procedural grounds-namely, the " failure to give proper notice of the conversion of the Rule 12 motion to dismiss to a Rule 56 motion for summary judgment." Id. at 371 (citing M.R.C.P. 12 and M.R.C.P. 56).

         II. Supplemental Complaint

         ¶8. On September 24, 2013, the mandate issued on the interlocutory appeal.

         ¶9. Despite the clear directive in Ground Control I-remand for further proceedings on the issue of unjust enrichment and quantum meruit-Ground Control immediately moved to "supplement" its complaint with claims against Capsco and its principal, Christopher Killion, [1] based on a panoply of equity-based and nonequity-based theories, such as contract, statutory rights, and tort.[2] Against Yates and Harrah's, Ground Control sought statutory relief under Mississippi Code Section 85-7-131 or Section 85-7-181 (Rev. 2011), [3] as well as contract damages based on its claim that it was a "third-party beneficiary" to the contract between Harrah's and Yates. Ground Control also asserted a claim for quantum meruit-as well as other unspecified "equitable claims"-seeking Yates and Harrah's be jointly and severally liable with Capsco. In total, Ground Control requested $1.16 million in damages.

         ¶10. Operating under the assumption that its prior grant of summary judgment had been reversed in full, the trial court granted Ground Control's motion to supplement its complaint. Capsco responded with a third-party claim for fraud against Ground Control's principal, Frank Beaton. Beaton then asserted third-party counterclaims against Capsco and its officers for abuse of process, tortious interference with business relations, and repayment of a $75, 000 construction loan, which Beaton had personally guaranteed.

         III. Pretrial Motions

         ¶11. Before trial, several parties moved for summary judgment. Harrah's and Yates's motion was denied, as was Ground Control's. But Beaton's motion for summary judgment on the claims against him personally was granted. So the trial court dismissed Beaton as a third-party defendant.[4] This left Killion as the only individual defendant.

         ¶12. Also before trial, Capsco filed a motion in limine requesting Ground Control's damages claims be limited to the costs expended and materials purchased for the Margaritaville project. The trial court granted this motion. Specifically, the trial court ordered that Ground Control was limited to presenting evidence under a quantum meruit theory, based on this Court's mandate in Ground Control I. Consequently, the trial court ordered that "[a]ny alleged tort claims are dismissed and will not be presented at trial."

         IV. Trial and Verdict

         ¶13. A six-day trial was held in October 2014. Beaton testified Ground Control had expended $920, 252.80 in unpaid labor and materials. But on cross-examination, he admitted some expenses were counted twice or did not apply to the Margaritaville project. He also admitted that his company had been paid more than a half-million dollars before it stopped working on the project. When pressed, Beaton conceded that, once the figures were added up, Ground Control's claim for unpaid labor and services was only $199, 096.

         ¶14. At the end of Ground Control's case-in-chief, Killion moved for a directed verdict in his favor individually. The trial court granted this motion, finding Ground Control had failed to present any evidence supporting its claim Killion was individually liable. The trial court also directed a verdict in Yates's and Harrah's favor on Ground Control's statutory-based claims, as well as its claim that it was a third-party beneficiary to the contract between Yates and Harrah's.

         ¶15. At the end of trial, on October 21, 2014, the jury was instructed that any recovery by Ground Control from Capsco, Yates, and/or Harrah's would be based on quantum meruit only and limited to the value of unpaid labor and services rendered. The jury found Ground Control was entitled to $862, 228. And using the agreed-to form supplied to it, the jury apportioned 95.75% liability ($825, 583.31) to Capsco, 4.25% liability ($36, 644.69) to Yates, and 0% liability ($0) to Harrah's.

         V. Post-trial Motions

         ¶16. What should have signaled the end of this case at the trial level actually set off protracted post-trial litigation. As the trial court noted in one of its many post-trial orders, there were ninety-nine docket entries following trial.

         ¶17. Among these voluminous motions were Ground Control's motion to amend the verdict to "remove surplusage" (i.e., the apportionment of liability), its motion for pre- and post-judgment interest, and a motion for a new trial on the limited issue of Killion's personal liability.[5] All of Ground Control's motions were denied, [6] except that in its final order, the trial court awarded post-judgment interest. This interest was set to accrue from the date of the final order, which was entered eleven months after the jury's verdict, due to Ground Control's multiple post-trial filings.

         ¶18. Capsco, Yates, and Harrah's filed a motion for judgment notwithstanding the verdict (JNOV). Alternatively, Capsco requested remittitur. These motions were denied.

         ¶19. Beaton, individually, also filed a post-trial motion. On September 9, 2015-the date of the final judgment[7]-Beaton moved for entry of a scheduling order or, alternatively, for a final judgment on his third-party claims. The trial court denied this motion, finding "no further action is required . . . as all claims alleged by any Party in this Cause have been adjudicated in the Final Judgment entered herein[.]"

         VI. Appeal and Cross-Appeals

         ¶20. With the final judgment being entered, finally, Ground Control and Beaton appealed. Capsco and Yates cross-appealed.[8] Harrah's is part of this appeal as appellee only.

         Issues on Appeal / Cross-Appeal

         ¶21. Ground Control raises six issues on appeal-primarily challenging the limitation of its recovery to quantum meruit damages, the special verdict form apportioning liability, and the denial of pre-judgment interest.[9]

         ¶22. On cross-appeal, Capsco attacks the $825, 583.31 judgment against it, arguing it was entitled to a JNOV, alternatively, a remittitur. Yates also cross-appeals, similarly asserting its motion for summary judgment, motion for directed verdict, and motion for JNOV should have been granted.

         ¶23. Finally, Beaton appeals in his capacity as third-party plaintiff. He claims his due-process rights were violated when the trial court denied him a jury trial on his ...

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