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Triangle Construction Company, Inc. v. Fouche and Associates, Inc., 218
So. 3d 1180 (Mississippi 2017), Triangle Construction Company, Inc.
(“Triangle”) contracted with East Madison Water Association (“EMWA”) to build a
water system in Madison and Leake Counties in Mississippi. The contract designated Fouche and Associates
(“Fouche”) as the project engineer, although Fouche was not a signatory to the
contract. Triangle nevertheless argued
Fouche was a party to the contract because Fouche’s seal was affixed to the
contract’s cover, was designated as the project engineer and was designated as
the agent and representative of the owner.
brought suit against EMWA and Fouche for breach of contract alleging EMWA and
Fouche did not obtain easements in a timely manner, and prematurely and
negligently issued a Notice to Proceed.
Triangle argued this resulted in unnecessary delays. Triangle also asserted
EMWA and Fouche expanded the scope of the project “long after the [p]roject had
been designed, sealed by [Fouche], and long after the Notice to Proceed . .
. had been issued to Triangle.”
completion of the project, EMWA issued a check to Triangle marked as “Final
Payment.” Triangle cashed the check, but contended this check did not fully
compensate Triangle for its increased construction costs as a result of the
delays or the project expansion. Triangle
subsequently provided a letter to EMWA stating the amount was insufficient and
that “Triangle does not waive, in any way, its contractual claims to additional
funds under the terms of the bid contract.”
Court held that cashing the final payment check, despite Triangle’s assertions
that EMWA’s payment did not constitute final payment, constituted accord and
satisfaction. The Court stated,
“Mississippi law is clear that, despite whatever contentions a party may make
to the contrary, cashing a check marked ‘final payment’ constitutes an
accord-and-satisfaction agreement.” Such
an accord and satisfaction agreement precludes a party from bringing future
claims for additional payment.
accord and satisfaction would normally apply to a claim by the contractor against
the owner only, the Court also found it barred the claim against Fouche. While Triangle argued on one hand that
Triangle and Fouche were in a quasi-contractual relationship, because Fouche
acted as EMWA’s representative or agent, it argued on the other hand that EMWA
and Fouche were separate entities for its accord and satisfaction
argument. The Court “refuse[d] to allow
Triangle to have it both ways.”
Accordingly, the Court held that Triangle’s claims against Fouche were
barred pursuant to the doctrine of accord and satisfaction.
holding in this case is a good reminder that any party to a contract should not
accept a check marked as “final payment” if the party intends to pursue a
claim. More importantly, it reminds parties that they should be careful what
they ask for. In this case, Triangle’s
claims against Fouche were dismissed because it asked the Court to accept the
extraordinary argument that a non-signatory to a contract is still obligated by
its terms. Had Triangle proceeded against Fouche under a negligence theory, the
accord and satisfaction defense would most likely have been inapplicable.