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Waste Management of Mississippi Inc. v. Jackson Ramelli Waste LLC

Court of Appeals of Mississippi

August 6, 2019


          DATE OF JUDGMENT: 10/13/2017





          CARLTON, P.J.

         ¶1. Pursuant to a subcontract that became effective on November 1, 2009, Waste Management of Mississippi Inc. contracted with Jackson Ramelli Waste LLC for Jackson Ramelli to perform trash-collection services in Jackson, Mississippi. Jackson Ramelli subsequently sued Waste Management to recover compensation for trash-collection services it continued to perform, through its subcontractor, after the written subcontract between it and Waste Management expired on September 30, 2010. Waste Management filed a counterclaim against Jackson Ramelli, alleging breach-of-contract and fraud-based causes of action. After a five-day trial, the trial court granted Jackson Ramelli's motion for a directed verdict on Waste Management's counterclaim, and the Hinds County Circuit Court jury issued a general verdict in Jackson Ramelli's favor, awarding it $1, 017, 527.56 in damages.

         ¶2. Waste Management appeals. For the reasons addressed below, we reverse and render a judgment on Jackson Ramelli's breach-of-contract claim; reverse and remand on Jackson Ramelli's quantum meruit claim with instructions to the trial court that Waste Management be allowed time for discovery to explore and establish any defenses to this claim; and we affirm the trial court's grant of a directed verdict on Waste Management's counterclaim for breach-of-contract and fraud-based causes of action.


         ¶3. On July 30, 2015, Jackson Ramelli sued Waste Management to recover damages for trash-collection work performed for Waste Management from approximately 2012 through 2015. Jackson Ramelli brought the following claims in its complaint: breach of contract, tortious breach of the contract, and breach of the implied covenant of good faith and fair dealing. In support of its claims, Jackson Ramelli alleged that Waste Management failed to pay it for (1) trash-collection services for additional houses in the City of Jackson between 2012 and 2015; (2) consumer price index (CPI) increases between 2012 and 2015; and (3) work performed in March 2015.

         ¶4. Waste Management answered and also filed a counterclaim against Jackson Ramelli, alleging causes of action for misrepresentation, fraud, fraudulent inducement, tortious interference with a contract, breach of contract, and breach of the implied covenant of good faith and fair dealing. In support of its claims, Waste Management alleged that Jackson Ramelli falsely represented to it that Jackson Ramelli, an EBO subcontractor, would perform the trash-collection services covered by the subcontract between Waste Management and Jackson Ramelli. Although the record reflects that Red K Contracting (RKC), a non-minority owned business, actually performed the trash-collection services under a subcontract with Jackson Ramelli, Waste Management claims that it did not know RKC was performing these services for Jackson Ramelli during the course of Waste Management's business relationship with Jackson Ramelli.

         ¶5. In January 2016, Waste Management moved to dismiss Jackson Ramelli's lawsuit because it was brought in the name of the wrong entity-the lawsuit was filed in the name of "Jackson/Ramelli, LLC," but the subcontract at issue was between Waste Management and "Jackson Ramelli Waste, LLC." Shortly thereafter, Jackson Ramelli moved to amend its complaint to add a claim for quantum meruit. At the hearing on both of these motions, Jackson Ramelli moved, ore tenus, to correct the legal entity named in its complaint to "Jackson Ramelli Waste, LLC," the name of the entity that entered into the subcontract with Waste Management. Jackson Ramelli did not raise the issue of amending its complaint to add its quantum meruit claim at this hearing. The trial court granted Jackson Ramelli's request to amend the name, denied Waste Management's motion to dismiss, and entered an order on these rulings on July 27, 2016. The trial court's order did not address Jackson Ramelli's request to add a quantum meruit claim. Jackson Ramelli did not challenge or seek clarification of the trial court's order.

         ¶6. Discovery ensued, and trial was set for October 2, 2017. In the joint pre-trial order the parties submitted in September 2017, Jackson Ramelli raised the quantum meruit claim, asserting that the trial court had not ruled upon its request for leave to amend the complaint to add this claim. Waste Management objected, asserting that the quantum meruit claim had been abandoned. On the first day of the trial, Waste Management raised its objection to Jackson Ramelli's attempt to bring the quantum meruit claim. At that time the trial court found that "the law requires the court to consider it abandoned . . . [and that Jackson Ramelli was] limited to [its] original complaint."

         ¶7. At trial, the evidence showed that on October 20, 2009, Waste Management and the City of Jackson executed a waste-collection services agreement. The contract required that Waste Management subcontract a portion of the waste-collection work to minority-owned or women-owned businesses and adhere to the City's requirements for an equal-business opportunity (EBO) plan. To fulfill this requirement, Waste Management entered into an agreement with Jackson Ramelli, a certified minority subcontractor pre-approved by the city, to perform certain portions of the waste collection services (the subcontract). The record reflects that Robert Ramelli and Jacque Jackson formed Jackson Ramelli in late 2005. Jackson Ramelli is a company and lists Jackson, an African-American, as the majority 55% owner, and Ramelli, who is Caucasian, as a 45% owner. Ramelli testified at trial that he is the managing partner of Jackson Ramelli. Jackson testified in his deposition, which was read at trial, that Ramelli was responsible for the operational side of the business, while he was responsible for the "marketing side" of the business and did not have any kind of active or sustaining role in the company once he obtained a job.

         ¶8. The subcontract between Waste Management and Jackson Ramelli became effective on November 1, 2009, but was not executed until March 2010. The subcontract provided that Jackson Ramelli would be paid $7.40 per residential unit, and exhibit A to the subcontract provided that there were "approximately 11, 175 residential units" in the designated service areas.[1] The subcontract also provided that Jackson Ramelli's payment rate would be adjusted annually in accordance with the CPI. Section 6F of the subcontract provided that "[t]his Subcontract may not be assigned in whole or in part by one party without the prior written consent of the other party." By its terms, the subcontract expired on September 30, 2010. The subcontract did not have a specific provision allowing either party to renew or extend the term of the agreement, but the subcontract generally provided that it "may be modified or amended by a written instrument executed by both parties hereto."

         ¶9. As noted, the parties do not dispute that RKC, as Jackson Ramelli's subcontractor, performed all the trash-collection services during the term of the subcontract between Jackson Ramelli and Waste Management and after it expired through March 2015 when Jackson Ramelli and Waste Management's business relationship ended. RKC was not a minority-owned business. The testimony at trial established that Jackson Ramelli did not employ any of the workers, own any of the equipment, or lease any of the facilities used to perform the trash-collection services. The employees, equipment, and facilities all belonged to or were leased by RKC.

         ¶10. According to Waste Management it did not know that RKC was performing the trash-collection services for Jackson Ramelli during the relevant time period, and it did not consent to allow Jackson Ramelli to transfer its responsibilities under the subcontract to RKC, a non-minority contractor. The record reflects that Jim Funderburg, a senior district manager for Waste Management, communicated frequently with David Starks, the owner of RKC, and also communicated with Itoya Robinson, a route manager with RKC, about issues relating to the Jackson Ramelli collection routes. According to Funderburg, however, Starks told him he "worked for Ramelli" and the record reflects that both Starks and Robinson had "JacksonRamelli" or "Ramelli" e-mail addresses. The evidence also reflects that in emails and correspondence from Starks to Funderburg, Starks was identified as "CEO Ramelli Waste." Starks testified at trial that the title "CEO Ramelli Waste" was a "self-appointed title." He further testified that he did not work for Ramelli, but that "[Ramelli] agreed to allow me to use the CEO title."

         ¶11. Starks also testified, however, that there was no question that he was with RKC-that "everybody knew" that he "owned the garbage company . . . [and that] Mr. Ramelli owned the contract." He testified that when he met with Funderburg, he had on a shirt with a large RKC company logo on the sleeve, his business cards showed "Red K. Contracting," and he remembered talking with Funderburg about the logo. Starks also testified that his trucks were used to service the routes, and both truck doors had RKC on the side. Funderburg, however, testified that he does not recall seeing an RKC logo on Starks' clothing, and other Waste Management witnesses testified that the trucks used on the collection routes had "Ramelli" or "Ramelli Waste" on the side. Photos were introduced at trial showing trucks with "Ramelli Waste, LLC" on the side and these trucks were identified as trucks seen on the collection routes. Waste Management witnesses also testified that they did not see any RKC logo or identification on the trucks.

         ¶12. Ramelli testified at trial that Waste Management was familiar with the Ramelli Group (Ramelli's companies) through work both companies did in Kenner, Louisiana in 2005 shortly after Hurricane Katrina. Ramelli Group assumed a year of Waste Management's Kenner contract at that time, and Ramelli testified that he used RKC to perform this work. Ramelli further testified that in late 2006 or early 2007, Tim Hawkins, a representative of Waste Management, approached him about trash-collection work in Jackson, Mississippi, because "[h]e was very happy [about] the service that RKC was providing in Kenner . . . and that's why he asked me to expand to Mississippi."

         ¶13. Ramelli also testified that the Ramelli Group, using RKC as a subcontractor, began assisting Waste Management with trash collection in Jackson in 2007. There was no written agreement between the entities at that time. Ramelli testified that in late 2007 or early 2008 Hawkins approached him about needing an EBO for the Jackson contract, and Ramelli told him that Jackson Ramelli was an EBO "and [Hawkins] was more than welcome to use that name." Jackson Ramelli, using RKC, continued to collect garbage for Waste Management, and eventually Jackson Ramelli and Waste Management entered into the written subcontract that became effective on November 1, 2009.

         ¶14. Evidence and testimony at trial reflect that in October 2011, after the written subcontract expired, Waste Management gave Jackson Ramelli a CPI increase. Starks had asked Funderburg about the 2011 CPI increase in an email dated July 15, 2011. In his email responding to Starks and a representative from another entity, Funderburg stated that "[t]he CPI increase indicated in your respective contracts will be effective October 1, 2011 concurrent with the [City of Jackson] increase outlined in the master agreement." At trial, Funderburg admitted that he was referring to the subcontract between Waste Management and Jackson Ramelli when he said "respective contracts" in his email. Funderburg also testified that Jackson Ramelli submitted an invoice for the 2011 CPI increase and that Waste Management never received an invoice for CPI increases for any subsequent years.

         ¶15. In January 2012, Jackson Ramelli acquired Metro Waste Systems LLC ("Metro Waste"), the other certified EBO on the contract between Waste Management and the City. Waste Management was not a party to this agreement, but Jackson Ramelli sought Waste Management's approval prior to consummating the transaction and Waste Management and the City modified the EBO plan to reflect that Jackson Ramelli assumed Metro Waste's service routes.

         ¶16. After acquiring Metro Waste, Jackson Ramelli increased the amount it invoiced Waste Management. Itoya Robinson, the route manager for RKC, testified that the new invoices were adjusted for service to approximately 21, 000 homes, although the number of homes was not reflected on the invoices. Jackson Ramelli's monthly invoices increased from $93, 660.60 to $165, 823.10. According to Robinson, Waste Management continued to assign additional routes to Jackson Ramelli, which further increased the number of homes serviced by Jackson Ramelli.

         ¶17. The record reflects that from January 2012 through March 2015, Jackson Ramelli submitted regular monthly invoices to Waste Management but did not invoice Waste Management for any CPI adjustments or house number increases, other than the increase following the Metro Waste acquisition. All of the invoices stated they represented amounts due for "services rendered" during the applicable month. Waste Management paid these invoices through March 2015, and Jackson Ramelli accepted payment and continued to provide service.

         ¶18. Testimony at trial established that Jackson Ramelli, primarily through Starks, requested that Waste Management provide CPI increases for the years after the last increase in October 2011. Starks and Robinson also made repeated requests for compensation for the additional homes being serviced following the Metro Waste acquisition and assignment of additional routes by Waste Management. Funderburg, on behalf of Waste Management, responded to some of these communications, conveying in a letter to Ramelli dated October 27, 2014, for example, that "Waste Management is agreeable to a joint house count verifying the number of homes currently serviced by Jackson Ramelli, LLC in Jackson, Mississippi," and suggesting a way in which this could be accomplished. In that same letter, Funderburg also suggested that "we postpone any discussion of an increase in your compensation until after the house count is completed. In order to increase Ramelli's compensation, Waste Management would need to receive a corresponding increase from the City." In closing, Funderburg's letter provided, "I hope you will be able to continue performing your contractual duties under our agreement. I look forward to working with you in this regard."

         ¶19. In November 2014, Jackson Ramelli presented Waste Management with a house count unilaterally performed by Jackson Ramelli, showing that it was servicing approximately 23, 926 homes. In his letter to Funderburg submitting the house count, Starks acknowledged that the count "may be inaccurate" and Starks testified that Funderburg "didn't agree with [the] numbers" and insisted that the "math was off." A 2016 house count by Jackson Ramelli was also admitted at trial, and it reflected 23, 721 serviced homes.

         ¶20. In the end, the record reflects that from 2012 through 2015 Waste Management did not agree to any CPI increases or an increase corresponding to an increase in homes Jackson Ramelli claimed to be servicing. As noted, Jackson Ramelli did not invoice Waste Management for any additional increases above the approximately 21, 000 homes it had been invoicing since 2012 after Jackson Ramelli acquired the Metro Waste routes. Ramelli testified that he did not send any invoices for additional houses without an agreed-upon house count because he believed Waste Management would dispute the amount and that he could not afford to keep doing the work and not get paid.

         ¶21. Testimony from witnesses for Waste Management and for Jackson Ramelli reflects that in 2014 and in 2015, after the written subcontract had expired, Waste Management demanded and received indemnity from Jackson Ramelli under the indemnification provision of the subcontract. The indemnification related to Waste Management's defense of a lawsuit that was filed in 2014 based upon an accident that occurred in 2012.

         ¶22. On March 3, 2015, Ramelli sent Funderburg a letter terminating the parties' "subcontractor's agreement" and gave Jackson Ramelli's "official thirty . . . day notice to withdraw collection services in Jackson, Mississippi." The record reflects that Jackson Ramelli attempted to service the route for half of the month of March, but on March 17, Starks furnished Funderburg with "immediate notice" that it could not service the entire route. Funderburg responded the next day, stating in his email that Waste Management would "take over half of [Jackson Ramelli's] collection responsibilities until the end of this agreement, March 31, 2015." Funderburg testified that Waste Management ended up servicing more than half the route during that time period. Jackson Ramelli invoiced Waste Management for March 2015, but that invoice was not paid.

         ¶23. On the last day of trial, after Waste Management had presented its case-in-chief, it renewed its motion for a directed verdict on Jackson Ramelli's breach-of-contract claims. The court denied Waste Management's motion, finding that although the written subcontract expired by its terms on September 30, 2010, "there did exist an agreement between Ramelli and Waste Management beyond that date, the terms of which must come from the conduct and operation of the parties after September 30," which is a factual issue for the jury.

         ¶24. The trial court also allowed Jackson Ramelli to amend the complaint "to comply with the proof that has been advanced" by adding a quantum meruit claim. Waste Management objected, asserting that Jackson Ramelli did not allege a quantum meruit claim in its complaint and that it had abandoned its February 2016 motion to amend its complaint to add this claim. Additionally, Waste Management moved for a directed verdict on this claim, asserting that Jackson Ramelli waived any right to additional pay for CPI increases or increases for servicing additional homes because it accepted the monthly invoice payments from Waste Management and did not demand more money. The trial court denied Waste Management's motion, finding that "the evidence sufficiently raises the issue for fact determination [by the jury]."

         ¶25. Jackson Ramelli moved for a directed verdict on each of the breach-of-contract and fraud-based causes of action in Waste Management's counterclaim, and the trial court granted that motion.

         ¶26. Jackson Ramelli's claims for breach of contract and quantum meruit were submitted to the jury. After deliberating, the jury returned a general verdict of $1, 017, 527.56 for Jackson Ramelli.

         ¶27. Waste Management subsequently filed a motion for judgment notwithstanding the verdict (JNOV) or, in the alternative, for a new trial or a remittitur of damages, which the trial court denied. Waste Management appeals, asserting that: (1) Jackson Ramelli's breach- of-contract claim should have been dismissed because the subcontract expired in 2010, and there was no other agreement that supported the payment of any additional compensation to Jackson Ramelli; (2) the trial court erred by allowing Jackson Ramelli to amend its complaint on the last day of trial to add a quantum meruit claim; (3) even if the trial court did not err by allowing Jackson Ramelli to amend the complaint to add a quantum meruit claim, Waste Management was entitled to a JNOV because Jackson Ramelli admitted that it did not perform the work and the quantum meruit claim was otherwise legally insufficient; (4) in the alternative, the jury's damages award should be vacated or remitted to an amount supported by the law and the evidence; and (5) Waste Management is entitled to a new trial because the trial court improperly entered a directed verdict on its breach-of-contract and fraud-based counterclaims.


         I. The Jury's General Verdict

         ¶28. As detailed above, Jackson Ramelli sued Waste Management to recover compensation for (1) trash collection from additional homes that it performed during 2012 through 2015, and (2) annual CPI increases for 2012 through 2015. Two theories of recovery were submitted to the jury: breach-of-contract and quantum meruit. The jury issued a general verdict in Jackson Ramelli's favor, awarding it $1, 017, 527.56 in damages. Waste Management argues that "a general verdict must be set aside if the jury was instructed that it could rely on any two or more independent grounds, and one of these grounds is insufficient, because the verdict may have rested exclusively on the insufficient ground." Thorson v. State, 895 So.2d 85, 106-07 (¶47) (Miss. 2004).

         ¶29. We find that Waste Management's argument does not apply in this case. The Mississippi case Waste Management relies upon for its argument, Thorson v. State, is a criminal case in which the Mississippi Supreme Court was analyzing a specific principle under Stromberg v. California, 283 U.S. 359 (1931). Thorson, 895 So.2d at 106-07 (¶47). Stromberg was a case in which the Supreme Court reversed a conviction when one of three possible bases for the jury's verdict was unconstitutional. Stromberg, 283 U.S. at 370; see Rodriguez v. Riddell Sports Inc., 242 F.3d 567, 577 n.8 (5th Cir. 2001). As explained by the Rodriguez court, the Stromberg rule is applied "in the criminal context." Id. Further, as "the [Supreme] Court explained [in Griffin v. United States, 502 U.S. 46, 59-60 (1991)], . . . the Stromberg rule should be applied only when jurors have been left the option of relying on a legally inadequate theory, not a factually inadequate theory." Rodriguez, 242 F.3d at 577 n.8. The case before us is not a criminal case, and Waste Management does not argue that the jury instructions were wrong or that the jury was instructed on an incorrect legal theory. Waste Management argues that there were insufficient facts supporting either theory, an argument that makes the Thorson analysis inapplicable.

         ¶30. As such, we will independently examine both theories of liability before the jury in this case under the general principle that on appeal the Court may not negate a jury verdict on the basis that the jury's verdict rests on one ground "that was not supported by adequate evidence when there existed alternative grounds for which the evidence was sufficient." Griffin, 502 U.S. 59-60 (citing United States v. Townsend, 924 F.2d 1385, 1414 (1991)) (internal quotation mark omitted). See generally, 89 C.J.S. Trial § 1033 at 486 (2012) ("[W]here a case is submitted to the jury on two or more issues and a general verdict is returned, the verdict will be upheld if it is supported by at least one issue."); 5 Am. Jur. 2d Appellate Review § 736 at 580 (2018) ("If there is one alternative ground that is sufficient to support the trial court's decision, the case will normally not be reversed on appeal regardless of whether other grounds are erroneous."). We address the breach-of-contract and quantum meruit theories in turn below.

         II. The Breach-of-Contract Claim

         ¶31. Waste Management asserts that the trial court erred in denying its motions for directed verdict and a JNOV on Jackson Ramelli's breach-of-contract claim because Jackson Ramelli's trial evidence was legally insufficient to establish that Waste Management ever agreed to pay additional compensation for (1) uninvoiced trash collection from additional homes and (2) CPI rate adjustments for the years 2012-2015. In particular, Waste Management asserts that Jackson Ramelli's breach-of-contract claim fails because it is not supported by any written agreement, any invoices submitted by Jackson Ramelli to Waste Management, or any course of dealings between the parties indicating a "mutual assent" to this additional compensation or to contract for such. For the reasons addressed below, we agree with Waste Management on this issue and find that the trial court committed reversible error in allowing Jackson ...

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