In this week’s ALWU, we report on two cases from the Alabama Supreme Court – the first regarding a county board of education’s entitlement to sovereign immunity and the second regarding the recoverability of damages attributable to a breach-of-warranty claim.
Ex parte Jackson County Board of Education _____So. 2d. _______ (Ala. 2014) (holding that Board of Education entitled to sovereign immunity from breach-of-contract claim).
Pruett Contracting Company, Inc. (“Pruett”) submitted to the Jackson County Board of Education (the “Board”) a proposal for renovations to the Pisgah High School gymnasium, which was accepted by the Jackson County Superintendent of Education. After Pruett began renovations, the State of Alabama Building Commissioner directed Pruett to cease all work because the project had not been submitted to or approved by the Building Commission. Pruett ceased work and submitted an invoice to the Board for past services rendered. The Board refused to pay the invoice and Pruett sued the Board, alleging breach-of-contract and seeking damages.
The Board moved the Circuit Court to dismiss the complaint, arguing that it was entitled to sovereign immunity and that the Court lacked jurisdiction over the case. Pruett subsequently amended its compliant, naming as additional defendants the members of the Board in their official capacities and the Jackson County Superintendent of Education in his official capacity. The trial court denied the Board’s motion to dismiss and the Board appealed.
The Alabama Supreme Court reversed the Circuit Court. The Court concluded that the Board was entitled to sovereign immunity. The Court also concluded that Pruett’s amendment to its complaint to add as parties the proper officials in the official capacities did not create jurisdiction because the amendment did not relate back to the initial filing, depriving the Circuit Court of jurisdiction to hear the complaint from its outset.
Barko Hydraulics, LLC v. Shepherd, _____ So. 2d. _______ (Ala. 2014) (holding that mental anguish damages not available for breach-of-warranty claim absent showing of nexus between damages and intention of the parties at time of contract).
Shepherd purchased timber equipment from G&S Equipment Company (“G&S”). In connection with the purchase, Barko Hydraulics, LLC (“Barko”), the manufacturer of the equipment, issued a 3-year warranty. Shepherd had several problems with the equipment, causing G&S to repair the equipment on multiple occasions. Despite the repairs, Shepherd had a significant issue with the equipment shortly after the warrant period lapsed. Barko refused to cover the needed repairs, asserting that the warranty had expired. Barko abandoned the unusable equipment and sued Barko, asserting a breach-of-warranty claim. After a trial, the jury returned a $450,000 verdict, which included damages for mental anguish, in favor of Shepherd, and Barko appealed.
On appeal, Barko argued that the trial court erred by denying Barko’s motion for a judgment as a matter of law on the breach-of-warranty claim, arguing that Shepherd never identified a specific, existing defect in the equipment. Barko also argued the trial court erred by allowing the jury to award damages for mental anguish which exceeded the cost of the equipment.
As to the first issue, the Alabama Supreme Court determined the identification of a specific existing defect was not essential to recovery on a breach-of-warranty claim. As to the second issue, however, the Court concluded that, although mental anguish damages are recoverable in a breach-of-contract claim in some instances, there must be some nexus between the mental-anguish damages and the intention of the parties at the time the contract or warranty was made. The Court then concluded there was no evidence to support such an intention in the present instance because the mental anguish damages were not directly connected to the breach-of-warranty claim. Accordingly, the Court reversed the judgment against Barko and remanded the case for entry of an order granting Barko’s motion for a new trial.