IN THE MISSISSIPPI SUPREME COURT NO TS ON APPEAL FROM THE CIRCUIT COURT FOR THE SECOND JUDICIAL DISTRICT OF HARRISON COUNTY, MISSISSIPPI

Transcription

1 E-Filed Document Aug :57: CA Pages: 31 IN THE MISSISSIPPI SUPREME COURT NO TS GROUND CONTROL, LLC VERSUS CAPSCO INDUSTRIES, INC., W.G. YATES & SONS CONSTRUCTION CO., HARRAH S ENTERTAINMENT, INC., and CHRISTOPHER KILLION APPELLANT / CROSS- APPELLEE APPELLEES / CROSS- APPELLANTS ON APPEAL FROM THE CIRCUIT COURT FOR THE SECOND JUDICIAL DISTRICT OF HARRISON COUNTY, MISSISSIPPI BRIEF OF APPELLEES / CROSS-APPELLANTS CAPSCO INDUSTRIES, INC. AND CHRISTOPHER KILLION IN RESPONSE TO BRIEF OF APPELLANT, GROUND CONTROL, LLC ORAL ARGUMENT REQUESTED R. Mark Alexander, Jr. (MB No ) Matthew W. McDade (MB No ) BALCH & BINGHAM LLP 1310 Twenty Fifth Avenue Gulfport, MS Telephone: (228) Facsimile: (228) ATTORNEYS FOR APPELLEES / CROSS- APPELLANTS, CAPSCO INDUSTRIES, INC. and CHRISTOPHER KILLION

2 CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that the Justices may evaluate possible disqualification or recusal pursuant to Miss. R. App. P Honorable Judge Roger T. Clark, Circuit Judge for the 2 nd Judicial Circuit, Mississippi 2. Capsco Industries, Inc., Appellee/Cross-Appellant 3. Harrah s Entertainment, Inc., Appellee/Cross-Appellant 4. Caesar s Entertainment, Corp., successor to Harrah s Entertainment, Inc., Appellee/Cross-Appellant 5. W. G. Yates & Sons Construction Company, Appellee/Cross-Appellant 6. Christopher Killion, Appellee/Cross-Appellant 7. Balch & Bingham LLP, Counsel for Appellees/Cross-Appellants 8. R. Mark Alexander, Esq., Counsel for Appellees/Cross-Appellants 9. Matthew W. McDade, Esq. Counsel for Appellees/Cross-Appellant 10. Ground Control, LLC, Appellant/Cross-Appellee 11. Blewett Thomas, Esq., Counsel for Appellant/Cross-Appellee 12. Frank A. Beaton, Other Party CAPSCO INDUSTRIES, INC. and CHRISTOPHER KILLION BY: BALCH & BINGHAM LLP BY: /s/ R. Mark Alexander, Jr. Counsel for Appellees / Cross-Appellants R. Mark Alexander, Jr. (MB No ) Matthew W. McDade (MB No ) i

3 STATEMENT REGARDING ORAL ARGUMENT This case presents no unique or novel areas of the law with respect to Ground Control, LLC s ( Ground Control ) claims against Capsco Industries, Inc. ( Capsco ) or Christopher Killion ( Killion ). The law-of-the-case doctrine provides that a trial court cannot take action to circumvent a prior appellate ruling in the same case. In accordance therewith, this case was to be tried under a quantum meruit or unjust enrichment theory to determine the value, if any, for any unpaid labor and services that Ground Control provided to Capsco under its ill-fated subsubcontract. Notwithstanding, given Ground Control s attempt to muddy the waters in this near decade-long litigation, Capsco and Killion respectfully request oral argument to the extent the same is granted at Ground Control s request ii

4 TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS... i STATEMENT REGARDING ORAL ARGUMENT... ii STATEMENT OF THE ISSUES ON APPEAL...1 STATEMENT OF THE CASE...2 I. Nature of the Case...2 II. Summary of Judicial Proceedings...4 SUMMARY OF THE ARGUMENT...7 STANDARD OF REVIEW...8 ARGUMENT...9 I. The Only Claims Ground Control Had Against Capsco After the First Appeal Were Premised on the Equitable Theories of Unjust Enrichment and Quantum Meruit...9 II. III. IV. Ground Control s Entire Award Should Be Reversed and The Case Should Be Dismissed All of Ground Control s Work on the Project was Performed Under Its Ill- Fated Sub-Subcontract Agreement with Capsco...13 Ground Control Should Have Been Limited to Evidence of Restitution Damages and Not Expectation Damages...15 A. Traditional breach of contract damages are not allowed in this case B. The proper measure of damages for equitable claims for quantum meruit is restitution damage V. The Trial Court Erred in Not Granting Capsco s Motion for JNOV, or in the Alternative, Its Motion for Remittur VI. The Court Correctly Denied Ground Control s Request for Prejudgment Interest...19 A. Pre-Judgment Interest is Not Appropriate for Quantum Meruit Claims B. Prejudgment interest is only allowed on liquidated sums VII. The Trial Court Correctly Granted Killion s Motion for Directed Verdict...21 CONCLUSION...23 CERTIFICATE OF SERVICE iii

5 TABLE OF AUTHORITIES CASES Barriffe v. Estate of Nelson, 153 So. 3d 613 (Miss. 2014) Bradley v. Kelley Bros. Contrs., Inc., 117 So. 3d 331 (Miss. Ct. App. 2013) Citizens Nat l Bank v. L. L. Glascock, Inc., 243 So. 2d 67 (Miss. 1971) Citizens National. Tupelo Redev. Agency v. Gray Corp., 972 So. 2d 495 (Miss. 2007) Contracting Corp. v. Kimmins Indus. Serv. Corp., 743 So. 2d 954 (Miss. 1999) Demahy v. Schwarz Pharma, Inc., 702 F.3d 177 (5th Cir. 2012) Falkner v. Stubbs, 121 So. 3d 899 (Miss. 2013) Fourth Davis Island Land Co. v. Parker, 469 So. 2d 516 (Miss. 1985) Gen l Univ. Sys., Inc. v. HAL, Inc., 500 F.3d 444 (5th Cir. 2007) Gray v. Edgewater Landing, Inc., 541 So.2d 1044 (Miss. 1989) Ground Control, LLC v. Capsco Indus., 120 So. 3d 365 (Miss. 2013)... passim J.O. Hooker & Sons, Inc. v. Roberts Cabinet Co., 683 So. 2d 396 (Miss. 1996) Leard v. Breland, 514 So. 2d 778 (Miss.1987) Lee v. Thompson, 167 So. 3d 170 (Miss. 2014) Magnolia Federal Savings and Loan Ass n v. Craft Realty, 342 So.2d 1308 (Miss. 1977) McLain v. West Side Bone & Joint Ctr., 656 So. 2d 119 (Miss.1995) Moeller v. Am. Guar. & Liab. Ins. Co., 812 So. 2d 953 (Miss. 2002) Penn Nat l Gaming, Inc. v. Ratliff, 954 So. 2d 427 (Miss. 2007)... 22, iv

6 Pope v. Brock, 179 So. 3d 1120 (Miss. 2015)... 9 In re Prisock, 5 So. 3d 319 (Miss. 2008) Sarris v. Smith, 782 So. 2d 721 (Miss. 2001)... 9 Seaward Marine Servs. v. Grillot Constr., LLC, 2010 U.S. Dist. LEXIS 82479, 4 (S.D. Miss. Aug. 3, 2010)... 14, 15 Southland Enters. v. Newton County, 838 So. 2d 286 (Miss. 2003)... 17, 19 Theobald v. Nosser, 752 So. 2d 1036 (Miss. 1999) Willis v. Rehab Solutions, PLLC, 82 So. 3d 583 (Miss. 2012) OTHER AUTHORITIES Black s Law Dictionary 1313 (6th ed. 1990) Fed. R. Civ. P. 30(b)(6)... 3, 4 Webster s New College Dictionary 36 (2001), v

7 STATEMENT OF THE ISSUES ON APPEAL 1. Whether Plaintiff s remedy against Capsco was limited to the equitable remedies of quantum meruit and unjust enrichment following the mandate issued by this Honorable Court on the First Appeal. 2. Whether the Trial Court s allowance of Ground Control to amend its Complaint and add Killion and re-assert claims involved in the First Appeal was in violation of the law-of-the-case doctrine. 3. Whether Plaintiff has waived and conceded that it does not have a claim against Capsco for quantum meruit and unjust enrichment. 4. Whether all of Ground Control s work was performed under its illegal Sub- Subcontract Agreement with Capsco and, thus, it was entitled to restitution damages and not expectation damages. 5. Whether the Trial Court erred in denying Capsco s Motion for Judgment Notwithstanding the Verdict due to Ground Control s admission that the evidence it submitted exceeded restitution damages. 6. Whether the Trial Court erred in denying Capsco s remittur based on Ground Control s admission that it introduced evidence at trial that exceeded its restitution damages. 7. Whether the Trial Court properly granted Killion s directed verdict on alleged piercing the veil allegations. 8. Whether the Trial Court properly denied Ground Control s request for prejudgment interest on quantum meruit claims that were unliquidated

8 STATEMENT OF THE CASE I. NATURE OF THE CASE This case revolves around the construction of the Margaritaville Spa and Hotel (the Project ) in Biloxi, Mississippi. Harrah s Entertainment, Inc. ( Harrah s ) was the owner of the Project, and contracted with W.G. Yates & Sons Construction Company ( Yates ) to complete all construction work. (Tr. Ex. J-2) 1 Yates then sub-contracted with Capsco Industries, Inc. ( Capsco ) for certain piping and other related work for the Project. (Tr. Ex. J-4). Capsco, in turn, sub-subcontracted with Ground Control, LLC ( Ground Control ) to perform part of this work. (Tr. Ex. J-1) (RE-1). 2 From the onset of Ground Control s work on the Project there were problems. These problems ranged in scope from Ground Control not properly staffing the site to handle the work under the scope of its contract with Capsco to its complete inability to pay suppliers. (Tr. Trans., Vol. 7, p. 919) (Tr. Trans. Vol. 7, pp ). In fact, Capsco was left to pick up the tab on several of Ground Control s suppliers in order to make sure that material continued to be delivered to the Project. (Tr. Trans., Vol. 7, p. 919) (Tr. Trans. Vol. 7, pp ) (Tr. Ex. 18 and 19). Ground Control lacked both the experience and expertise to complete its work on the Project. 1 Ground Control s recitation of facts is almost completely void of record citations. In fact, many of the alleged facts were not evidence before the jury. For instance, Ground Control goes through a long narrative about Capsco s employees stealing money from Ground Control; however, Ground Control does not give one single record cite for such facts. Ground Control cannot provide this Honorable Court with any record cites on this narrative because that information was never introduced or proffered to the Trial Court. 2 Due to the numerous pleadings and Motions filed by Ground Control throughout this litigation, the record on this appeal is voluminous. Additionally, since there was a prior appeal, there are various designations. Thus, designations to the record that was before this Court previously (and re-designated as part of this appeal) are as follows: (i) 2012 Appeal Supplemental Record ( 2012 S.R. ); and (ii) 2012 Record ( 2012 R. ). Other citations are to the record or the trial transcript in this appeal

9 All of the work that Ground Control performed on the Project was within the scope of the Capsco-Ground Control contract, i.e. in-ground water line installation. (Rule 30(b)(6) Depo. Tr. of Beaton, pp. 228:17-20, :13-12, R. at 538 and R. at ) (JE-3) (used at trial for impeachment purposes) (Tr. Trans., Vol. 8, pp ) (RE-4) and (Tr. Trans., Vol. 7, pp ) (RE-2). Either Ground Control s work was provided for in the scope of the contract or the work was payable under a change order provision of the contract to compensate for certain extra-contractual work within the general scope of their original contract. (Tr. Ex. J-1, 5) (RE-1) (Tr. Trans., Vol. 7, p. 912) (RE-2). Ground Control s testimony at trial confirmed that all of its work on the Project was performed under its contract with Capsco and the subsequent change orders to that contract. Ground Control s representative, Mr. Beaton, stated that: Ground Control s contract with Capsco included a change order mechanism by which it could be paid for the extra-contractual work it claims to have performed. (Tr. Trans., Vol. 7, pp ) (RE-2). The extra work Ground control allegedly performed on the Project was charged directly to Capsco through such change orders. (Tr. Trans., Vol. 7, pp ) (RE-2) (Tr. Ex. J-7) (RE-8). Indeed, as is evident from the face of the change order invoices themselves, every single change order invoice of Ground Control was billed directly to Capsco. (Tr. Ex. J-7) (RE-8). Mr. Beaton s trial testimony regarding the change orders mirrored his deposition testimony, which unequivocally shows that all work performed by Ground Control on the Project including change order work was performed pursuant to its contract with Capsco: Q. These changes that came down were still within the scope of installing underground utilities as provided in your subcontract agreement; correct? A. Yes. Q. Okay. These didn t create new contracts? A. Just change orders. Q. That s right. It was still operating under that same subcontract?

10 A. That s correct. Q. And all your work performed on the project operated under that same scope of those same subcontracts? A. We were all under the same -- that s correct -- under the same contract. And any repairs or any change orders -- right. Q. Sure. It was all done pursuant to your subcontract? A. Pursuant to Q. Including the changes to that? A. That s correct. Including the change orders. That s right. Q. All right. Okay. What I m getting at, is, you didn t have any separate contracts with Yates, did you? A. No. Q. You didn t have any contracts with Harrah s, did you? A. No. My only contract I had was with the contractor, Capsco. (Rule 30(b)(6) Depo. Tr. of Beaton, pp. 228:17-20, :13-12, R. at 538 and R. at ) (RE-3) (emphasis added) (see also Tr. Trans. Vol. 7, pp ) (RE-2). At some point in time, all of the work on the Project ceased and was ultimately abandoned. Ground Control brought this litigation against Capsco, Capsco s owner, Christopher Killion, Harrah s and Yates, seeking recovery for the value of unpaid labor and materials allegedly expended by Ground Control during the performance of its contract with Capsco. II. SUMMARY OF JUDICIAL PROCEEDINGS This case was filed in the Circuit Court of Harrison County, Second Judicial District (the Trial Court ) on August 25, 2009 by Ground Control, the plaintiff, against Harrah s, Yates and Capsco. Later in 2009, Ground Control added Loye McIlveene ( McIlveene ) and Jason Dollar ( Dollar ) as co-defendants. (Compl., 2012 S.R. at 12-52) (RE-17). Early on it became apparent that Ground Control lacked all requisite certificates of responsibility required by the Mississippi

11 State Board of Contractor to perform work in Mississippi. Capsco moved for and was granted a summary judgment on all claims against it, including, but not limited to, allegations that Capsco engaged in tortuous conduct in concert with its officers and officials towards Ground Control. (Order Granting Capsco s Mot. For Summary Judgment, 2012 R. at ) (RE-12). Ground Control appealed that decision. Upon appeal of the grant of Capsco s Motion for Summary Judgment on all of Ground Control s original claims, this Court affirmed, in part, and reversed, in part, the grant of summary judgment in favor of Capsco. See Ground Control, LLC v. Capsco Indus., 120 So. 3d 365, 367 (Miss. 2013) (the First Appeal ). This Court s reversal as to the Capsco Motion for Summary Judgment was limited to remanding Ground Control s claims for the value of any unpaid labor and services expended on the Project for a trial based on equitable theories. Id. ( we reverse the grant of summary judgment in part and remand this case for further proceedings on whether Ground Control is entitled to recover based on claims of unjust enrichment and quantum meruit. ). Despite the clear direction from this Court on the limited purpose of the remand of this case and over the objection of Capsco, Ground Control was allowed to amend its Complaint and essentially re-assert every cause of action it asserted before the First Appeal and add one of Capsco s officers and a shareholder, Killion. (Order Granting Motion to File Supplemental Complaint, R. at ) (Supp. Complaint, R. at ) (RE-18). This action was done in an effort to circumvent this Court s mandate and ultimately led to a trial that included a truckload of claims against numerous parties. Again, all of this was in contradiction to the mandate issued by this Court to try this case solely on whether Ground Control had a claim for any unpaid labor and services provided to the Project and whether any statutory penalties should be assessed for the performance of unlicensed contractor work. Ground Control, LLC, 120 So. 3d at

12 Prior to trial, Capsco again attempted to limit the evidence that would be presented to strictly restitution damages that were available under quantum meruit and unjust enrichment. (Capsco s Motion in Limine, R. at ). That Motion was granted and the Trial Court issued an order specifically limiting damages to restitution amounts and specifically held that Ground Control was not allowed to submit expectation damages. (Order on Various Motions, R. at ). However, it is clear from Ground Control s own admissions that it put on evidence that exceeded the Trial Court s Order and the mandate issued by this Court. (Ground Control s Mot. for Assessment of Interest, R. at ) (RE-14) and (Ground Control s Mot. for Amendment of Verdict, R. at ) (RE-15). Following a six (6) day jury trial, the jury returned a verdict awarding Ground Control $862, (Jury Verdict, R. at 1712) (RE-10). Pursuant to the parties agreed-to jury instruction to apportion the liability for any damage award among the Defendants, the jury found the respective liability of each of the parties as follows: Capsco 95.75%, Harrah s 0% and Yates 4.25% liable. (Jury Verdict, R. at 1712) (RE-10). Final Judgment was rendered on September 9, 2015, in the amount of $825, against Capsco, $36, against Yates and $0.00 against Harrah s, representing the jury s allocation of their respective liability for the damage award. (Jury Verdict, R. at 1712 and Corrected Final Judgment, R. at ) (RE-10 and RE-9). 3 Following entry of the Final Judgment, Ground Control filed numerous post-trial motions in which it readily admitted that the damage award provided by the jury greatly exceeded the amount of Ground Control s unpaid labor and costs for its work on the Project. Stated differently, Ground Control admits through its post-trial motions that it was successful in circumventing this Honorable Court s mandate (Ground Control s Mot. for Assessment of 3 The Trial Court subsequently issued a Corrected Final Judgment on September 18, 2015 to properly reflect the grant of a JNOV in favor of Harrah s and Yates on Ground Control s third-party beneficiary claim. (Corrected Final Judgment, R. at ) (RE-9)

13 Interest, R. at ) (RE-14) (Ground Control s Mot. for Amendment of Verdict, R. at ) (RE-15). SUMMARY OF THE ARGUMENT On April 7, 2011, the Trial Court granted summary judgment in favor of Capsco on all of Ground Control s claims, including the allegation that Capsco and its officers and officials acted in a tortuous manner towards Ground Control. (Corrected Final Judgment, R. at ) (RE-9). The Trial Court found that since Ground Control failed to obtain the proper contractor s license that all of its claims for unlicensed contractor work were barred. (Id.). This included all of the numerous causes of action alleged by Ground Control for the main purpose of skirting its licensure requirements under Mississippi law. On Ground Control s interlocutory appeal of this ruling in 2013, the Mississippi Supreme Court affirmed, in part, and reversed, in part, summary judgment granted in favor of Capsco. See Ground Control, LLC v. Capsco Indus., Inc., et al., 120 So. 3d 365, 374 (Miss. 2013). The Supreme Court made the limited holding that, because Ground Control s contract with Capsco was null and void due to its own failure to obtain a contractor s license, Ground Control could proceed on its quantum meruit claim against Capsco for the value of what it expended in labor and supplies on the project. Id. at 371. Additionally, this Court left the window open for potential statutory penalties for the performance of unlicensed contractor work. Id. at 374. However, at no point in the opinion issued in the First Appeal did this Honorable Court provide that Ground Control had the right to assert a litany of tort claims against Capsco and pursue Capsco s owners for tort claims. Despite this not being part of the mandate, Ground Control was allowed to pursue all these issues at trial. Capsco raised these issues on post-trial motions. In particular, Capsco requested that Ground Control s damage claims be reversed and not allowed or that, at the very least, the

14 damages be remitted to the amount that Ground Control admits represents it s unpaid labor and costs on the Project. (Mot. For JNOV, R. at ) (RE-16). The Trial Court denied these Motions and Capsco has sought an appeal of that denial. (Order, R. at ). Allowing Ground Control to admit evidence of claims other than quantum meruit claims for its unpaid labor and services on the Project was a direct violation of this Honorable Court s mandate. Under the law-of-the-case doctrine, the Trial Court was bound by this Court s mandate and the mandate only allowed for Ground Control to pursue its claims for unpaid labor and services provided to the Project. With this limitation, the entire award rendered in the jury verdict should be overturned because Ground Control has conceded in its briefing before this Court that it did not meet the elements of a quantum meruit claim. Thus, by Ground Control s own admission its only remaining claim should have been dismissed. Alternatively, Ground Control s post-trial briefs indicate that the only damages it introduced that were related to its unpaid labor and services was the amount of $199, (Ground Control s Mot. for Assessment of Interest, R. at ) (RE-14) and (Ground Control s Mot. for Amendment of Verdict, R. at ) (RE-15). Therefore, by Ground Control s own admission this is the absolute most it should have been entitled to recover at trial. Because of this, the verdict and Corrected Final Judgment should be reduced to an amount of $199,096.00, at the most. Finally, Mississippi law is absolutely clear that no prejudgment interest is assessed on quantum meruit type damages, and the Trial Court was correct in denying Ground Control s request for same. STANDARD OF REVIEW Determining whether the law-of-the-case doctrine applies to a matter on appeal for the second time is a question of law. See Pope v. Brock, 179 So. 3d 1120, 1125 (Miss. 2015) ( The question before this Court is not dependent on resolution of any factual dispute which should be

15 submitted to a finder of fact. Therefore, the question before us is one of law, which we review de novo. ) (citing Sarris v. Smith, 782 So. 2d 721, 723 (Miss. 2001)). As a question of law, it is subject to a de novo review by this Honorable Court. Similarly, a motion for JNOV is a challenge to the legal sufficiency of the evidence, and this Court will affirm the denial of the JNOV only where substantial evidence supports the verdict. Denbury Onshore, LLC. v. Precision Welding,Inc., 98 So. 3d 449, 452 (Miss. 2012) (quotation omitted) (reversing trial court s denial of contractor s motions for summary judgment, directed verdict and JNOV). This Court defines substantial evidence as evidence of such quality and weight that reasonable fair-minded jurors in the exercise of impartial judgment might have reached different conclusions. Id. ARGUMENT I. THE ONLY CLAIMS GROUND CONTROL HAD AGAINST CAPSCO AFTER THE FIRST APPEAL WERE PREMISED ON THE EQUITABLE THEORIES OF UNJUST ENRICHMENT AND QUANTUM MERUIT Ground Control brought this action in August of 2009 alleging, among other things, that Capsco and its officers and officials engaged in tortuous and wrongful conduct towards Ground Control. (Compl., 2012 S.R. at 12-52) (RE-17). Then on December 24, 2009, Ground Control filed, without leave of court, a Revised Complaint Naming Unknown Defendants in which it maintained its claims against Capsco and its officials and officers for an accounting, negligent supervision, tortious interference with a business relationship and joint and several liability. (2012 S.R. at ). Also, on December 24, 2009, Ground Control filed a Motion to File Supplemental Complaint in which it attached its Supplemental Complaint to the Motion. (S.R. at ). It is unclear whether the Motion was granted, but it was noticed for hearing before the Trial Court prior to the first summary judgment being granted in favor of Capsco. With all of these claims pled, the Trial Court granted summary judgment dismissing all claims

16 against Capsco. (Order Granting Capsco s Mot. For Summary Judgment, 2012 R. at ) (RE-12). In doing so, the Trial Court clearly recognized that Ground Control pled all of these claims in an attempt to do one thing collect for unlicensed contractor work performed on the Project. When that issue came before this Court on the First Appeal, this Court reviewed the summary judgment granted in favor of Capsco. In its opinion, this Honorable Court affirmed, in part, and reversed, in part, the summary judgment granted in favor of Capsco and remanded the case for a very specific purpose. Ground Control, LLC v. Capsco Indus., 120 So. 3d 365, 367 (Miss. 2013) ( While we affirm the court s finding that the lack of certificates of responsibility rendered the parties contract null and void, we reverse the grant of summary judgment in part and remand this case for further proceedings on whether Ground Control is entitled to recover based on claims of unjust enrichment and quantum meruit. ). Specifically, the remand was to allow Ground Control the opportunity to present a claim for the value of what it expended in labor and supplies on the project under quantum meruit and unjust enrichment. Id. at 371. It was clear that this Court remanded the case for the limited purpose of allowing Ground Control to assert unjust enrichment or quantum meruit claims against Capsco and not to open the flood gate for every cause of action that Ground Control could dream up. 4 Notwithstanding the clarity of this Court s Opinion, upon remand, Plaintiff attempted to and was allowed by the Trial Court to amend his Complaint and assert the same claims that he asserted prior to the First Appeal against Capsco and to add Killion as a party-defendant. (Order Granting Motion to File Supplemental Complaint, R. at ) (Supplemental Complaint, R. 4 This Court s opinion also stated that [w]e do not address the issue of other penalties, if any, that may be appropriate for the trial court to address. This is in regards to the discussion in the opinion regarding the statutory penalties designed to deter unlicensed contractors. See Ground Control, 120 So. 3d at

17 at ) (RE-18). Capsco objected to Ground Control s Motion to Amend its Complaint, and the Trial Court erred in allowing Ground Control to use its pleadings to circumvent this Court s mandate that this case was remanded for (i) an opportunity for Ground Control to assert a quantum meruit claim for the value of the services rendered to the Project and (ii) for any assessment of statutory penalties for the failure to obtain a contractor s license. Capsco, 120 So. 3d 371. (Defendants Response to Motion to File Supplemental Complaint, R. at ). When this Court remands a case for further proceedings, the mandate binds the trial court s conduct unless an exception to the law-of-the-case doctrine applies. Moeller v. Am. Guar. & Liab. Ins. Co., 812 So. 2d 953, (Miss. 2002). Under the mandate rule, a corollary to the law of the case doctrine, the trial court may not deviate from the appellate court s rulings on issues that were actually decided, either expressly or by necessary implication. Lee v. Thompson, 167 So. 3d 170, (Miss. 2014). The trial court must implement both the letter and the spirit of the appellate court s mandate and may not disregard the explicit directives of that court. Demahy v. Schwarz Pharma, Inc., 702 F.3d 177, 184 (5th Cir. 2012). If necessary to resolve any ambiguities in the mandate, the trial court should consult the appellate court s opinion and the circumstances it embraces. Gen l Univ. Sys., Inc. v. HAL, Inc., 500 F.3d 444, 453 (5th Cir. 2007). This Court s mandate, as informed by its underlying opinion, was both clear and limited. The Court remanded the case against Capsco for Ground Control to have an opportunity to proceed in court under a claim for the value of what it expended in labor and supplies on the project. Ground Control, 120 So. 3d at 371. The remand and mandate were for this specific purpose and not for Ground Control to conjure up as many causes of action as possible in its goal to collect payment for its unlicensed contractor work; therefore, the Trial Court improperly allowed Ground Control to amend its Complaint and assert the exact same claims that were

18 asserted prior to the First Appeal. The claims re-asserted by Ground Control outside of equitable claims for the value of the services and labor provided were subject to the summary judgment granted by the Trial Court, and this Court s mandate remanding the case for the limited purpose of claims for unjust enrichment and quantum meruit. Additionally, the Trial Court erred when it allowed Ground Control to add Killion as a party-defendant. The Trial Court s November 13, 2013 Order allowing Ground Control leave to file its amended Complaint should be reversed under the mandate rule. Upon a determination that Ground Control was improperly allowed to plead and pursue claims outside of the mandate, this Honorable Court should either reduce Ground Control s damage award as outlined in Section V herein or reverse the entire aware and dismiss Ground Control s claims against Capsco based on Section II herein. Alternatively, this Honorable Court should reverse the award and remand the case for a new trial against Capsco that is limited solely to evidence of Ground Control s unpaid labor and services on the Project. II. GROUND CONTROL S ENTIRE AWARD SHOULD BE REVERSED AND THE CASE SHOULD BE DISMISSED. In its brief before this Court, Ground Control concedes that there was no evidence to support an award of quantum meruit damages. (Br. of Ground Control, at pp ). In particular, Ground Control states the following in its brief: Ground Control would further show that quantum meruit damages could not have been awarded by the jury [sic] to a lack of evidence that either Harrah s, Yates or Capsco held money claimed by Ground Control at the time of trial. Under Mississippi law, quantum meruit damages can only be awarded when a defendant still retains funds that are subject to the plaintiff s claims. The jury could not have awarded quantum meruit damages due to the fact that neither Harrah s, Yates not [sic] Capsco possessed any money claimed by Ground Control at the time of trial. The trial testimony by Harrah s and Yates senior vice-present Chet Nadolski confirmed that both Harrah s and Yates disbursed all funds claimed by Ground Control through its final settlement with Capsco during October Christopher Killion s [Capsco owner] testimony confirms that Capsco did not possess or control any funds claimed by Ground Control as of December 31, The trial evidence was clear that none of the

19 Appellees possessed money claimed by Ground Control at the time of trial, therefore no evidence at trial would substantiate an award of quantum meruit damages under Mississippi law. It is impossible to attribute any of the jury s verdict as being an award of quantum meruit damages. (Br. of Ground Control, at pp ) (emphasis added). Since Ground Control has conclusively admitted that it has no viable claim against Capsco for quantum meruit or unjust enrichment, these equitable claims should no longer be at issue in this litigation. Since this is the only type of claim that was subject to this Honorable Court s mandate on remand, the entire award should be reversed and this Honorable Court should render a dismissal of the lawsuit against Capsco and Killion. Alternatively, if this Court finds that there was evidence of a quantum meruit claim presented against Capsco, then this Court should reduce the verdict amount to reflect the evidence submitted to support a claim for unpaid labor and services or remand the case for a new trial limited to this issue. III. ALL OF GROUND CONTROL S WORK ON THE PROJECT WAS PERFORMED UNDER ITS ILL-FATED SUB-SUBCONTRACT AGREEMENT WITH CAPSCO After Ground Control s contract with Capsco in this case was deemed null and void for its failure to comply with Mississippi law and obtain a contractor s license, Ground Control then began to claim that it had multiple ad hoc contracts on this Project. What Ground Control is referring to as ad hoc contracts are change order charges to its contract with Capsco. Oddly enough, Ground Control s brief argues repeatedly that these contracts were with Yates; however, the undisputed evidence of Ground Control s representative before trial and at trial is that these change orders were all within the scope of its illegal contract with Capsco and were all billed to Capsco for payment. (Compare Tr. Transcript, Vol. 7, pp (RE-2) and Vol. 8, pp (RE-4), with Br. of Ground Control, p. 18). In reality, the argument that the change orders are ad hoc contracts is an attempt to assert a claim against Yates that does not exist and an attempt to bring a contractual claim against

20 Capsco, despite the fact that this Honorable Court has already determined that the Capsco- Ground Control contract is null and void as a matter of law. Moreover, Mississippi courts have rejected Ground Control s approach of treating change orders under a contractual provision as separate contracts or quasi-contracts. Under Mississippi law, work is within the scope of a construction contract if: (i) the work was expressly provided for in the contract; or (ii) the contract provides a mechanism (such as a change order provision) wherein the additional work would be compensated. See Seaward Marine Servs. v. Grillot Constr., LLC, 2010 U.S. Dist. LEXIS 82479, 4-9 (S.D. Miss. Aug. 3, 2010) (citing Contracting Corp. v. Kimmins Indus. Serv. Corp., 743 So. 2d 954, 970 ( 49) (Miss. 1999); Citizens Nat l Bank v. L. L. Glascock, Inc., 243 So. 2d 67, 70 (Miss. 1971); and Citizens National. Tupelo Redev. Agency v. Gray Corp., 972 So. 2d 495, 515 ( 59) (Miss. 2007). In Grillot, the question was whether certain debris removal was within the scope of the general contract, or if the subcontractor and contractor s remedies were limited to quasicontractual claims. Id. That court found that the work was included in the contract because even if it was not within the scope of work provided in the contract, the general contract had a change order provision that allowed for compensation for work done outside the original scope of the contract. Id. at *7-8. In particular, Judge Guirola held: For this claim, the Court need not consider whether the work at issue (debris removal from the barge tops) came under the Oyster or Debris Removal provisions of the contract. The contract either expressly provided for this work or it did not. If it did, the quantum meruit claim would fail under the first prong of the Citizens National test; i.e., it would be labor anticipated by the contract. If it did not, the quantum meruit claim fails on the second part of the test. This is because it is undisputed that the contract had a change order provision Id. at *7-8. Stated differently, even if the debris removal was extra work outside the original scope of the contract, the work was still performed under the contract because there was a

21 change order mechanism in place to allow the contractor to be compensated for that work. (Tr. Ex. J-1, 5) (RE-1). During the trial, Ground Control admitted that its agreement with Capsco, albeit nullified by this Honorable Court, provided Plaintiff with a change order mechanism by which it could be paid for the extra-contractual work it claims to have performed. (Tr. Trans., Vol. 7, pp and Vol. 8, pp ) (RE-2 and RE-4) (Tr. Ex. J-1, 5) (RE-1). Additionally, Plaintiff admitted that the extra work it performed on the Project was charged to Capsco through change orders. (Id. and Tr. Ex. J-7) (RE-8). Thus, under Mississippi law, all of Ground Control s work was performed under its illegal contract with Capsco; therefore, all of Ground Control s recovery is limited to quantum meruit and unjust enrichment. IV. GROUND CONTROL SHOULD HAVE BEEN LIMITED TO EVIDENCE OF RESTITUTION DAMAGES AND NOT EXPECTATION DAMAGES A. Traditional breach of contract damages are not allowed in this case. Traditionally, the court s role in a breach of contract case is to put the party in the same position it would have been had there been no breach. See Theobald v. Nosser, 752 So. 2d 1036, 1042 (Miss. 1999) (quoting Leard v. Breland, 514 So. 2d 778, 782 (Miss.1987) and J.O. Hooker & Sons, Inc. v. Roberts Cabinet Co., 683 So. 2d 396, 405 (Miss. 1996)). This is often referred to as expectation damages and is intended to give the non-breaching party the benefit of the bargain. It is clear from this Honorable Court s prior decision that Ground Control s contract is null and void and, thus, it is not entitled to recover benefit of the bargain damages. Instead Ground Control is limited to recover a lesser amount under equitable theories; thus, since all of Ground Control s work was performed under this ill-fated contract, it is not entitled to any expectation damages. Despite the Trial Court s grant of Capsco s Motion in limine excluding expectation damages, Ground Control nevertheless proceeded to introduce its expectation damages at trial

22 (Order on Various Motions, R. at ). The amount awarded by jury includes expectation damages or benefit of the bargain damages, which are above and beyond the value of the labor and services provided by Ground Control to Capsco on the Project. When pressed on how Ground Control arrived at its alleged damage figures, Frank Beaton Ground Control s owner and representative at trial repeatedly indicated the amounts he was seeking was what he agreed to do certain change order work for on the Project. (Tr. Trans. Vol. 5, pp ) (RE-5). Furthermore, when it was pointed out to Ground Control that its damage calculations were double dipping on certain days, i.e. it was seeking payment for change order work performed on days that Ground Control was also seeking quantum meruit damages based on a per diem of the exact same days, Ground Control s representative actually offered not to seek nearly $200, in restitution damages. (Tr. Trans., Vol. 7, pp ) (RE-2) ( If I will get those invoices, that will be good. You give me those invoices and some of the other claims that we have, and we will be good and I won t talk about the 200 [thousand] dollars on top of that. ). Such a statement seems to admit that Ground Controls own witness was conceding the absurdity of the request for damages. The problem with this statement is the change order damages amount to expectation damages or benefit of the bargain damages to which Ground Control is not entitled. There was zero testimony that the arbitrary amounts listed in the change orders were the value of the labor and materials provided to the project by Ground Control, but instead were the amount it alleges it agreed to do the work. (Tr. Trans. Vol. 5, pp ) (RE-5) (Ground Control s Mot. for Assessment of Interest, R. at ) (RE-14) (Mot for Amendment of Verdict, R. at ) (RE-15). Such damages are expectation damages and should not have been put before the jury in this case

23 B. The proper measure of damages for equitable claims for quantum meruit is restitution damage. The general measure of damages for unjust enrichment and quantum meruit is the reasonable value of the services rendered, which is exactly what this Court remanded the case to be decided upon at trial. See Southland Enters. v. Newton County, 838 So. 2d 286, 291 (Miss. 2003). However, case law is scarce on how to actually calculate reasonable value for partial performance on a construction project that was eventually abandoned and demolished. Ground Control failed to designate an expert to testify as to the reasonable value of the work it performed and the only evidence it offered was what it expected to get paid or the amount for which it agreed to perform work. (Tr. Trans. Vol. 5, pp ) (RE-5). As discussed above, this evidence seeks damages for breach of contract for which Ground Control was not entitled. Given that quantum meruit is an equitable remedy, the more appropriate measure of damages in this matter is restitution damages. The principle of restitution is that a person who has been unjustly enriched at the expense of another is required to make restitution to that other. Fourth Davis Island Land Co. v. Parker, 469 So. 2d 516, 524 (Miss. 1985) (citing Restatement of Restitution, 1, and Magnolia Federal Savings and Loan Ass n v. Craft Realty, 342 So.2d 1308 (Miss. 1977)). As the Court in the Magnolia Federal Savings case stated: A quasi-contract, or constructive contract, is based on the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another. In this respect the terms unjust enrichment and restitution are modern designation for the doctrine of quasi-contracts and the basis for an action for unjust enrichment lies in a promise, which is implied in law, that one will pay to the person entitled thereto which in equity and good conscience is his. Magnolia Federal Savings, 342 So. 2d at 1311 (citing 17 C.J.S. Contracts 6); see also Bradley v. Kelley Bros. Contrs., Inc., 117 So. 3d 331, 338 (Miss. Ct. App. 2013) ( This restitution-based remedy applies in situations where no legal contract exists, and the person charged is in

24 possession of money or property which, in good conscience and justice, he or she should not be permitted to retain, causing him or her to remit what was received. ) (quoting Willis v. Rehab Solutions, PLLC, 82 So. 3d 583, 588 ( 14) (Miss. 2012)); Barriffe v. Estate of Nelson, 153 So. 3d 613, 628 (Miss. 2014) ( Where unjust enrichment is found, the party making the claim is entitled to restitution. ) (citations omitted). To make restitution is a return to or restoration of a former state or position. In re Prisock, 5 So. 3d 319, 323 (Miss. 2008) (quoting Webster s New College Dictionary 36 (2001), 945). In other words, the claiming party should be restored to his or her original position prior to the loss. Barriffe, 153 So. 3d at 628 (quoting Black s Law Dictionary 1313 (6th ed. 1990)). Simply stated, restitution in this case is awarding Ground Control any unpaid amounts equal to the value of labor and services that were provided by Ground Control while working on the Project or putting Ground Control back in the position it was in before it entered the contract with Capsco. This should have been the measure of Ground Control s damages, if any. Ground Control readily admits in its briefing and to some extent through the testimony of its own witness at trial that its damages have greatly exceeded the amount necessary to put it in the same position it would have been prior to the contract with Capsco. (Tr. Trans., Vol. 7, p. 909) (RE-2). Therefore, as outlined below, this Honorable Court should reduce Ground Control s damages or remand this case for a new trial limited strictly to the issues of what should have been tried originally, whether Ground Control had any unpaid labor and expenses for its work on the Project. V. THE TRIAL COURT ERRED IN NOT GRANTING CAPSCO S MOTION FOR JNOV, OR IN THE ALTERNATIVE, ITS MOTION FOR REMITTUR. Most of the evidence showing Ground Control s restitution damages was introduced during the cross-examination of Frank Beaton and Judy Beaton. This evidence included receipts, credit card statements, bank statements and other documentary evidence showing the actual cost,

25 including payroll cost, incurred by Ground Control during its work on the Project. Once the sum of this documentation was added up and the net of the payments received by Ground Control were totaled, the great weight of the evidence showed that Ground Control had received full compensation for the amount that it actually cost Ground Control to perform labor and services on the Project. (Judy Beaton, read into the record as Tr. Ex. D-5 and the Cross-Examination of Frank Beaton, Tr. Trans., Vol. 6, p. 887 to Vol. 7, p. 954) (RE-6 and RE-7) (Tr. Exs. J-5, J-6, J- 13 (RE-19), J-25, J-26, J-27, J-28, J-38, J-39 and D-1). This means that Ground Control has already been returned to the same position as if it had never entered into the agreement with Capsco. Stated differently, it has received full restitution and is not entitled to any further damages. Alternatively, Ground Control has admitted several times in the voluminous briefs it has submitted post-trial and through its own witnesses testimony, that its unpaid costs of being on the Project was $199, (Mot for Amendment of Verdict, R. at ) (RE-14) (Tr. Transcript, Vol. 7, p. 909) (RE-2). Thus, due to Ground Control s own admission, its restitution damages in this matter should have been no more than $199, and this Honorable Court should reverse and render judgment in no more than this amount. VI. THE COURT CORRECTLY DENIED GROUND CONTROL S REQUEST FOR PREJUDGMENT INTEREST Ground Control s entire argument is premised on its judgment being based on several different causes of action, other than quantum meruit. However, in light of this Honorable Court s mandate, quantum meruit was the only cause of action that survived the First Appeal. Following remand, the only issue left to be tried was whether Ground was entitled to quantum meruit recovery for the value, if any, of its unpaid labor and materials. See Ground Control, LLC v. Capsco Indus., 120 So. 3d 365, 373 (Miss. 2013) (the Mandate, R. at 55) (RE-20)

26 A. Pre-Judgment Interest is Not Appropriate for Quantum Meruit Claims. Mississippi law is clear that a suit based on quantum merit precludes recovery of prejudgment interest and attorney fees. Southland Enters. v. Newton County, 838 So. 2d 286, 291 (Miss. 2003) (citing McLain v. West Side Bone & Joint Ctr., 656 So. 2d 119, 123 (Miss.1995)); see also Falkner v. Stubbs, 121 So. 3d 899, 902 (Miss. 2013). Since the only remaining issue to be tried in this matter was quantum meruit recovery, Plaintiff is not entitled to any pre-judgment interest under clear Mississippi precedent. B. Prejudgment interest is only allowed on liquidated sums. Even if Ground Control were allowed to recover damages under any other legal theory, pre-judgment interest is not appropriate when the sum of the award is not a liquidated amount. In particular, Ground Control s contract was null and void, thus, there is no contract upon which the sum Ground Control claimed to have been entitled to could have been calculated. This in and of itself renders Ground Control s claim that its damages were liquated to be wrong. Additionally, this Court has denied pre-judgment interest and attorneys fees finding that there was a bona fide dispute as to the amount of damages as well as the responsibility for liability. Falkner, 121 So. 3d at 903. Ground Control s own demands and claims throughout this litigation show that the amount it claimed to be owed was not liquidated. For instance, Ground Control s original demand letter to Yates requested $1,191, from Yates. (Tr. Ex. J-30). Ground Control s Motion for Assessment of Interest states that its claim was for $920, (Ground Control s Mo. for Assessment of Interest, R. at ) (RE-14) (Ground Control s Mot for Amendment of Verdict, R. at ) (RE-15). Even in closing arguments, Ground Control s counsel gave several scenarios and different amounts as to how much Ground Control may be entitled to recover. (Tr. Transcript, pp. Vol. 8, p ). Ground Control s own inconsistent demands during this matter show that even the amount

27 claimed by Ground Control was not liquidated and was subject to a bona fide dispute. Moreover, Ground Control whiteboarded $920, to the jury at the close of trial, yet the jury only awarded Plaintiff $862, (Tr. Transcript, Vol. 8, pp ) (Jury Verdict, R. at 1712) (RE-10). This is due to the fact that the amount owed to Ground Control was disputed up through and throughout trial, and the jury at least considered and agreed with a portion of such dispute. Therefore, since the amount was not liquidated, this Court should affirm the Trial Court s denial of Ground Control s Motion for Assessment of Prejudgment Interest and its denial of Ground Control s jury instruction on prejudgment interest. VII. THE TRIAL COURT CORRECTLY GRANTED KILLION S MOTION FOR DIRECTED VERDICT Ground Control, LLC is asking this Honorable Court for a second chance to prove its claim to pierce the corporate veil and hold Killion liable for the debts of Capsco. After Ground Control rested its case-in-chief at the trial of this matter, its claims against Killion were properly dismissed on directed verdict because Ground Control failed to put on any evidence whatsoever that Killion had improperly taken money out of Capsco or that Killion was using Capsco as his personal alter ego. In fact, the opposite was shown to be true. The reality is that Killion, like most small business owners, lost many of his personal assets when Capsco went under. The testimony at trial is that Killion had put more than $3,000, into Capsco that he lost when the company went belly up. (Tr. Trans., Vol. 4, pp ) (RE-21). Killion s testimony was that other than a $10, salary, he never took a draw, distribution or dividend from Capsco when the company was insolvent in (Tr. Trans., Vol. 4, p. 592) (RE-21). Additionally, during Killion s testimony, Ground Control introduced an internal accounting spreadsheet which had a line item for Dist of Sub-S Earnings in the amount of $3,951, Plaintiff s counsel attempted to imply that this meant that Killion took this money out of the company in 2011; however, the only testimony given on this