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Mississippi Supreme Court - 683 So. 2d 396
Tags: Contracts, Breach, Remedies, Expectation damages
tl;dr:
General contractor Defendant works with subcontractor Plaintiff cabinet company, and Defendant unilaterally terminated the contract after a dispute arose.Video Summary
Case Summary
In the case between J.O. Hooker & Sons, Inc. and Roberts Cabinet Co. (1996), the Mississippi Supreme Court ruled on a dispute over a breached subcontract for cabinet installation.
The case involved a renovation project in Bessemer, Alabama, where Hooker had a contract with the Bessemer Public Housing Authority (BPHA) to renovate residences. The contract stated that the BPHA had the option to keep or salvage fixtures, and if they chose to keep the cabinets, Hooker would be required to remove and move them to a location of the BPHA's choosing. If the BPHA chose not to keep the cabinets, they would become the property of Hooker and be removed by them. Hooker entered into a subcontract agreement with Roberts Cabinet Co., Inc. for the renovation project, which required Roberts to furnish cabinets and other materials. The agreement included the cost of tear-out and installation of new cabinets. Roberts later demanded an additional $23,000 due to underestimating the costs. A dispute arose between Hooker and Roberts regarding, in part, the duty to dispose of the cabinets as required in the general contract with BPHA.
The subcontractor, Roberts Cabinet Co., won the case in the trial court, claiming the general contractor, J.O. Hooker & Sons, did not pay the balance due. J.O. Hooker & Sons appealed, saying they didn't breach the subcontract, and Roberts Cabinet Co. wasn't entitled to damages or specific performance.
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The appellate court ordered a remittitur of $1,260 to the amount of damages awarded in a dispute between a general contractor and a subcontractor over the duty to dispose of cabinets during a renovation project. The court ruled that the subcontract did not impose any duty on the subcontractor to dispose of the cabinets, and the general contract was not explicitly incorporated into the subcontract. The court found that the general contractor was in error as a matter of law in unilaterally terminating the contract and that it needs to be established whether the subcontractor materially breached the contract before the general contractor's actions can be evaluated. The court disallowed some of the subcontractor's claimed damages but found that the claim for damages relating to the general manager's salary is valid. The damages awarded by the jury were expectation damages, which included the subcontractor's lost profit and expenses incurred in manufacturing the cabinets that could not be mitigated. The jury's award of the subcontractor's direct expenses in partially performing the contract, in addition to lost profits, was proper to avoid under-compensating the subcontractor.
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