Rainbow Rental and Fishing Tools, Inc. v. Delta Underground Storage, Inc.
Docket: 58362
Court: Mississippi Supreme Court; March 28, 1989; Mississippi; State Supreme Court
Rainbow Rental and Fishing Tools, Inc. initiated legal action against Delta Underground Storage, Inc. in the Mississippi Supreme Court, seeking recovery on an open account and attorney's fees. The circuit court awarded only part of the account to Rainbow and granted attorney's fees to Delta. Rainbow appealed, contending that Delta did not provide the necessary counter-affidavit for its itemized account and argued entitlement to attorney's fees under Mississippi Code Annotated § 11-53-81 (1980). The court upheld the findings regarding the counter-affidavit and denied Rainbow's claim for attorney's fees. However, it found the award of attorney's fees to Delta to be erroneous, leading to a reversal of that order.
The facts establish that Delta was engaged in underground propane storage and had hired Rainbow for a fishing operation to retrieve a lodged drilling pipe. There was no prior agreement on payment for any lost or damaged tools. After unsuccessful attempts to retrieve the pipe, Delta's management decided to write off the lost pipe and discontinue the operation. Rainbow's personnel submitted a bill for $5,050, which included rental and service charges, but did not assign specific prices for the lost tools. Rainbow later invoiced Delta for a total of $33,529, reflecting costs for tool rental and substantial charges for lost and damaged tools.
Scott contacted Roy Wyrick, president of Rainbow, to dispute charges related to lost and damaged tools, proposing to pay $5,050 for tool rental and services. Rainbow rejected the offer and sued Delta for a total of $32,357.98, which included rental charges, personnel costs, and tool replacement/repair costs, plus interest and attorney's fees, amounting to $39,152.96. In their answer filed on June 13, 1986, Delta admitted to ordering and receiving services but denied other allegations. They acknowledged a demand for payment but contested their indebtedness regarding the charges for lost tools.
On the trial date, Delta submitted a counter affidavit asserting that they had only contracted for services, not for lost or damaged tools. Rainbow claimed that industry custom required well owners to pay for lost tools, while Delta contended they operated in the storage well business, not bound by oil and gas industry customs. Delta admitted a debt of $5,529 for rental and service items, and the jury was instructed to consider industry customs. The jury ultimately found in favor of Delta for $5,529. Following the verdict, both parties sought attorney's fees, and Delta was awarded $4,260. Rainbow appealed, arguing Delta's counter affidavit lacked sufficient detail to deny liability for the lost tools. Delta countered that they did not dispute the accuracy of the charges but claimed they were not liable for them based on their contracted services. The statute requiring affidavits aims to simplify the proof of account correctness in open account cases.
In *Motive Parts Warehouse, Inc. v. D. H Auto Parts Co. Inc.*, 464 So.2d 1162 (Miss. 1985), the court established that a defendant's failure to challenge the accuracy of a billing through a counter affidavit does not prevent them from contesting the underlying contractual liability. Specifically, Mississippi Code § 13-1-141 serves as a rule of evidence, not a rule of pleading or practice, allowing defendants to assert their defenses.
Previous cases, such as *Gwin v. Fountain* and *Stockstill v. Gerson*, illustrate that while a counter affidavit may be necessary to contest the correctness of a sworn account, it does not eliminate the defendant's ability to deny liability based on a lack of contractual obligation. In *Sanders, Alexander, Inc. v. Jones*, the court ruled that although the defendant did not file a counter affidavit, he could still contest his liability concerning certain materials, affirming that the absence of a counter affidavit limited his ability to question the correctness of the account but not his liability.
In the present case, Delta denied liability for lost and damaged tools by asserting it had never contracted for those items. The court deemed the counter affidavit irrelevant to this defense. Additionally, the court reiterated in *McLaurin v. Smith's Poultry, Farm Supply* that failure to submit a proper counter affidavit does not bar a defendant from asserting defenses against an open account claim.
Finally, both parties sought attorney's fees post-verdict under Mississippi Code Ann. § 11-53-81, with the court's decisions on these motions being called into question.
The circuit court denied Rainbow's motion for attorney's fees while granting Delta $4,260 in fees. Rainbow appeals, arguing it was entitled to fees and that the court erred in awarding them to Delta. The court agrees with Rainbow that it was not entitled to fees but finds an error in awarding fees to Delta. According to Miss. Code Ann. 11-53-81, a party can recover attorney's fees only if they prevail in a suit on an open account. Rainbow's claim of $32,357.98 resulted in a judgment of $5,529, which was the amount Delta had previously offered to pay. Since Rainbow did not secure a judgment on the full amount claimed, it was not considered a prevailing party. Delta, despite acknowledging the debt, did not take necessary actions to entitle it to fees under the statute. The court affirms the judgment in favor of Delta but reverses the award of attorney's fees. A dissenting opinion argues that Delta did prevail in the suit since no suit was needed to collect the amount owed, asserting the trial judge's award of fees was correct.
Fishing is a term in the oil field industry referring to the retrieval of stuck drilling pipe from a well casing. Under Mississippi Code Annotated (MCA) 13-1-141, an individual wishing to sue on an open account can file an affidavit asserting the account's correctness and that it is owed by the opposing party. This affidavit, when attached to the account, grants the plaintiff judgment unless the defendant files a counter-affidavit specifying inaccuracies in the account. In such cases, the plaintiff is entitled to judgment for the undisputed portion of the account. This provision does not apply to accounts against deceased individuals or their executors. Defendants can utilize an open account as a set-off under this statute, which aligns closely with Rule 10(d) of the Mississippi Rules of Civil Procedure (MRCP) and MCA 11-7-45 (1988).
Additionally, Rule 68 of the MRCP outlines the process for an offer of judgment, allowing a defending party to propose a judgment offer to the opposing party at least fifteen days before trial. If the opposing party accepts the offer within ten days, they can file it with the court, which will then enter judgment. If the offer is not accepted, it is withdrawn and cannot be used as evidence, except for cost determinations. If the judgment obtained is less favorable than the offer, the offeree must pay the costs incurred after the offer was made. Prior decisions, such as McKendrick v. Lyle Cashion Co. and Stableford v. Schulingkamp, provide context for tender under earlier legal frameworks.
