McInnis Elec. Co. v. Brasfield & Gorrie

384 So.3d 485

MCINNIS ELECTRIC COMPANY

v.BRASFIELD & GORRIE, LLC, and James Mapp

NO. 2021-CA-01115-SCT, NO. 2021-CA-01300-SCT

Supreme Court of Mississippi.

10/19/2023

HINDS COUNTY CIRCUIT COURT, HON. WINSTON L. KIDD, JUDGE

ATTORNEYS FOR APPELLANT: DENNIS L. HORN, Madison, R. LANE DOSSETT, Hattiesburg, SHIRLEY PAYNE, Madison, LEIGH KATHRYN PAYNE HORN

ATTORNEYS FOR APPELLEES: RALPH B. GERMANY, JR., SIMON TURNER BAILEY, RANKIN SUMNER FORTENBERRY, Jackson

EN BANC.

COLEMAN, JUSTICE, FOR THE COURT:

¶1. The instant matter stems from disagreements and a broken contract between a contractor and subcontractor allegedly brought on by the COVID-19 pandemic. They contest whether arbitration is appropriate to settle their disputes. The trial court compelled arbitration, and we affirm.

FACTS

¶2. Construction firm Brasfield & Gorrie, LLC, received the prime contract to expand the University of Mississippi Medical Center Children’s Hospital in 2017. Electrical contractor McInnis Electric Company secured the winning bid to install the electrical and low voltage systems package for the project and subsequently signed a subcontract with Brasfield & Gorrie. Terms of the subcontract incorporated the prime contract, which were related to the same project by reference.

¶3. The subcontract signed by both parties states, "THIS CONTRACT IS SUBJECT TO ARBITRATION." It also provides a specific provision regarding "CLAIMS AND DISPUTES; ARBITRATION." There, the parties stipulated that they "intend[ed] that all claims of Subcontractor (McInnis) shall be resolved in accordance with the provisions of the Contract Documents and this Subcontract …. " Later in the same article, the process for all claims handled and resolved under a dispute resolution process with the owner, i.e., the children’s hospital, is outlined. It further provides as follows:

any disputes between Contractor and Subcontractor not resolved under Paragraph 29.2, including any disputes in which Subcontractor has a claim against another subcontractor, shall be finally determined by binding arbitration in accordance with the current Construction Industry Rules of the American Arbitration Association by one or more arbitrators selected in accordance with said Rules. The parties acknowledge that this Subcontract evidences a transaction involving interstate commerce and that this agreement to arbitrate is enforceable under 9 U.S.C. §§ 1, et seq.¹

¶4. Additionally, the terms of the contract provided that work was set to begin on the project on February 15, 2018. However, McInnis, was directed not to report on site until June 4, 2018, and, due to delays, was unable to begin until July 23, 2018. McInnis’s work began with underground construction of a complex web of conduits, which were successfully installed, with the exception of damage caused by the concrete contractor. As work progressed, the schedule allegedly became delayed as a result of Brasfield & Gorrie’s failure to coordinate the work of file various subcontractors. By August 1, 2019, scheduled construction was six months behind. By fall 2019, nearly a thousand Requests for Information and Construction Products Regulation had been issued, revealing significant issues with contractual documents and drawings.

¶5. McInnis avers that Brasfield & Gorrie’s failure to coordinate and facilitate the work of the various subcontractors worsened as the project progressed, and Brasfield & Gorrie experienced turnover in management. For example, the sheetrock contractor and the plumbing contractor were required to complete the patient rooms of the upper floors in specific sequence coordinated with all trades, but allegedly no attempt was made for sequencing. Additionally, there were instances in which patient room electrical conduit installations were delayed because windows and headwalls had not yet been installed by other subcontractors. The failure of these and other predecessor activities allegedly delayed McInnis’s work, which was not on the path toward completion, supposedly through no fault of its own.

¶6. Construction issues were amplified when on March 11, 2020, Mississippi experienced its first reported case of COVID-19. Five days later, the National Electrical Contractors Association announced a national disease emergency response agreement with the National Electrical Union. McInnis received such notice and informed Brasfield & Gorrie. On March 24, 2020, McInnis notified Brasfield & Gorrie of workplace safety concerns related to COVID-19, but these concerns were supposedly ignored. Brasfield & Gorrie, realizing that the predecessor activities had resulted in substantial delays, sought to make up for lost time by "squeezing" McInnis. As the threat of the pandemic increased, Brasfield & Gorrie declined to implement additional health and safety measures² and instead increased contribution to McInnis’s workforce through workforce contractor workers from an outside workforce management group. The intermingling of new employees from a job site that had been shut down due to COVID-19 created fear among some workers. As the project and its timeline deteriorated, one of Brasfield & Gorrie’s supervisors, Defendant James Mapp, allegedly destroyed McInnis’s materials on the job site, evidencing the growing animosity between the companies.

¶7. On April 1, 2020, Governor Tate Reeves instituted a shelter in place order in response to the ongoing pandemic, requiring certain nonessential businesses to close and recommending social distancing to reduce the spread of the coronavirus in Mississippi. Executive Order Number 1463 provided that building and construction should be halted during the ongoing pandemic except for maintaining essential preexisting infrastructure. The children’s hospital was not classified as an existing infrastructure as it was a nonoperational work in progress and thus was not subject to the executive order’s exception to the governmental shutdowns.

¶8. By May 8, 2020, McInnis had suffered an approximately 40 percent loss in its workforce due to employees testing positive for COVID-19. Despite the decrease in the available workforce, Brasfield & Gorrie demanded McInnis perform under its contractual obligation. McInnis took measures to continue the work, including making $94,000 in hazard payments to incentivize its workers to remain on site. McInnis also requested a ten-day suspen- sion of the work as an accommodation to finish the work safely.

¶9. On May 13, 2020, Brasfield & Gorrie responded to McInnis’s requests by stating that when any worker tested positive for COVID-19, that worker should self-quarantine. The same day, Brasfield & Gorrie issued a detailed response to McInnis’s other requests for additional pandemic relief with a letter denying all of McInnis’s allegations of potential harm, ignoring Brasfield & Gome’s expert’s directive for added safety precautions, denying the scope of illness in the McInnis workforce, and demanding that McInnis continue to perform or face expulsion from the project. Brasfield & Gorrie further declined requests for accommodation and instead terminated McInnis on May 13, 2020.

¶10. After McInnis’s supposed default, the parties conferred. On April 5, 2021, while conferral was ongoing and believing that a demand for arbitration was imminent, McInnis filed the underlying lawsuit. It then amended its complaint. McInnis’s complaint attached the prime contract and referenced the subcontract throughout, including allegations that Brasfield & Gorrie committed breach of contract by failing to provide a safe work environment under article 10 of the prime contract and by failing to "stop work … once the job site was deemed unsafe" under article 17 of the subcontract. Each count in the complaint, including tort claims, referenced the subcontract.

¶11. Brasfield & Gorrie argues in its brief that in an apparent attempt to defeat diversity jurisdiction and removal, McInnis joined Brasfield & Gorrie Superintendent James Mapp, alleging that he was a Mississippi resident. McInnis alleged that Mapp disposed of a pallet of steel conduit that McInnis left at the job site, claiming that Mapp committed conversion and trespass to chattel. The subcontract required McInnis to keep the job site clean and authorized Brasfield & Gorrie to clean up if McInnis failed to do so. Brasfield & Gorrie ratified and embraced the cleanup work Mapp did on its behalf.

¶12. The circuit court held the initial hearing on the arbitration issue on August 23, 2021, and granted McInnis’s motion to temporarily enjoin arbitration in an Order Granting Temporary Restraining Order for fourteen days to "allow the Court to issue an opinion and order." On September 13, 2021, in his final order, the trial judge granted Brasfield & Gorrie’s motion to compel arbitration and to stay litigation.

¶13. On October 1, 2021, McInnis petitioned for interlocutory appeal. Since that time, the Mississippi Supreme Court has entered numerous orders. First, on November 30, 2021, we held that McInnis’s petition for interlocutory appeal should be deemed a notice of appeal and that the appeal of the matter should proceed under Mississippi Rule of Appellate Procedure 3. A panel of this Court then granted McInnis’s motion to stay. Third, the panel passed for consideration along with the merits the motion to dismiss the appeal filed by Defendants. The motion to dismiss was then withdrawn. On January 20, 2022, the Court ordered the consolidation of McInnis’s interlocutory appeal with the appeal of the underlying trial court order. We denied Brasfield & Gorrie’s "Motion to Suspend Rules [to] Expedite Appeal."

¶14. On appeal is the trial court’s granting of Brasfield & Gorrie’s motion to compel arbitration and stay litigation arising from McInnis’s original complaint, addressed here in a two-part analysis. First, whether the parties entered into an agreement which requires arbitration, and, second, whether the claims raised by Mcinnis may be compelled under the...