GRIFFIS, P.J., for the Court:
¶ 1. This is the second time this Court has considered the appeal of the lawsuit that James and Sandra Cooper filed against Woodkrest Custom Homes Inc., Nationwide Custom Construction LLC, and Robert Kress Sr., individually (the "Defendants"). In Woodkrest Custom Homes Inc. v. Cooper, 24 So.3d 340, 347 (¶ 30) (Miss.Ct.App.2009), this Court vacated the award of damages in the default judgment and remanded the case for the circuit court to conduct an on-the-record hearing on damages.
¶ 2. On remand, the circuit court entered a judgment and awarded compensatory damages, emotional-distress and mental-anguish damages, punitive damages, and attorney's fees. The defendants return to this Court with an appeal of that judgment. Here, the Defendants argue that the circuit court erred when it: (1) awarded damages for emotional distress and mental anguish; (2) awarded punitive damages; (3) did not consider the Defendants' financial condition and net worth; and (4) awarded attorney's fees based on the award of punitive damages. Having considered the circuit court's judgment, we reverse and render in part and affirm in part as set forth below.
¶ 3. The Coopers entered into a contract with Woodkrest for the construction of their home. Nationwide was to serve as the contractor and builder.
¶ 4. The Coopers' complaint alleged that materials were not produced, a deposit was never made to secure the price of an elevator, and the project was not adequately supervised or timely constructed. The Coopers asserted claims for breach of contract, negligent and fraudulent misrepresentation, misappropriation, and conversion of money. The complaint did not request a specific sum for damages. The complaint did not allege a claim for intentional infliction of emotional distress.
¶ 5. The Defendants were served with process and failed to respond. Upon proper request, the clerk entered a default, and the Coopers filed a motion for a default judgment. Attached to the motion was an affidavit that asked for "$119,387.14 [in] compensatory damages, together with $268,161.42 in punitive damages, $5,000 [in] attorney's fees and expenses, pre-judgment and post-judgment interest and all costs incurred herein."
¶ 6. The affidavit also stated, "Defendants, through their intentional misrepresentations and abandonment of this project have caused delays of at least six months in completing the project for which the Plaintiffs should be entitled to a minimum of $30,000 compensation." The affidavit was the first mention of the request for $30,000, which evolved into a request for mental-anguish damages based on delay and misrepresentations.
¶ 7. The circuit court entered a default judgment. The judgment awarded damages in the amount of $119,387.14 in compensatory damages, together with $268,161.42 in punitive damages, $5,000 in attorney's fees and expenses, and pre-judgment and post-judgment interest at the legal rate. The judgment did not award any damages for emotional distress.
The supreme court has recognized that:
Woodkrest Custom Homes, 24 So.3d at 346-47 (¶¶ 24-30).
¶ 9. On April 13, 2010, the circuit court held a hearing on damages. On January 14, 2011, the circuit judge executed the court's findings of fact and conclusions of law, which were filed on January 18, 2011 (the "Judgment").
¶ 10. The standard of review for a judgment entered after a bench trial is well settled. "A circuit court judge sitting without a jury is accorded the same deference with regard to his findings as a chancellor[.]" Turner v. Terry, 799 So.2d 25, 30 (¶ 10) (Miss.2001) (citation omitted). The circuit judge's findings will be upheld on appeal "so long as the ruling is supported by substantial, credible, and reasonable evidence." Callahan v. Ledbetter, 992 So.2d 1220, 1230 (¶ 25) (Miss.Ct.App. 2008). We review questions of law de novo. Warren v. Derivaux, 996 So.2d 729, 735 (¶ 10) (Miss.2008).
¶ 11. The Appellants' brief raises four issues. None of the issues contest the award of compensatory damages.
¶ 12. In the first issue, the Defendants appeal the following finding by the court:
¶ 13. The complaint does not assert a claim for mental anguish or emotional distress. The complaint asserts claims for breach of contract, misrepresentation, conversion, misappropriation, and for an accounting. The complaint also asks "for all money which may be due ... together with punitive damages, and attorney's fees. Mississippi Rule of Civil Procedure 9(g) requires that "[w]hen items of special damage are claimed, they shall be specifically stated." The claim for damages for mental anguish or emotional distress are special damages, which must be plead. They were not. However, the Defendants did not raise this matter before the circuit court, and do not raise it here. Therefore, we will not grant relief on grounds not presented to the circuit court, and such objection is waived.
¶ 14. We recognize that the default judgment has been entered. "When a judgment by default is entered, it is treated as a conclusive and final adjudication of the issues necessary to justify the relief awarded and is given the same effect as a judgment rendered after a trial on the merits." M.R.C.P. 55 cmt. Therefore, the Coopers' claims for breach of contract, misrepresentation, conversion, misappropriation, punitive damages, and for an accounting, which were asserted in the complaint, have been properly established.
¶ 15. "A judgment entered pursuant to [Mississippi] Rule [of Civil Procedure] 55(b) may be reviewed on appeal to the same extent as any other judgment[.]" M.R.C.P. 55 cmt. In this appeal, we review the award of damages to determine if the damages awarded were proper based on the findings of fact and conclusions of law entered by the court to support the award.
¶ 16. The supreme court has held that damages for emotional distress are not recoverable in a breach-of-contract claim unless there is a finding of a separate independent intentional tort. Univ. of S. Miss. v. Williams, 891 So.2d 160, 172 (¶ 30) (Miss.2004). The court held that for emotional-distress damages in a breach-of-contract action, a plaintiff must show:
Id. at 173 (¶ 31).
¶ 17. Here, before construction began, the Coopers paid the Defendants the sum of $186,997.80 for the Defendants to buy materials. This included payment for windows and doors. When it was almost time for the window installations, the windows had not been delivered. Dr. Cooper questioned the Defendants about this through a fax. A couple of weeks later, Dr. Cooper called Kress and asked if the windows had been ordered. According to Dr. Cooper, Kress answered that he would check with the factory and find out when they would be delivered. Dr. Cooper called the Defendants multiple times and was led to believe that the windows had been ordered. After several months, it was apparent the windows had not been ordered. Yet, the Defendants never refunded the Coopers' money. Kress testified that the windows were not ordered because the Coopers were constantly making changes.
¶ 18. The Coopers also paid the Defendants the sum of $13,000 as a down payment for an elevator. The Defendants were to send the $13,000 to the manufacturer
¶ 19. Further, the contract provided for an addition of fifteen percent to labor invoices. The invoices mathematically included the addition of 17.6%. The Defendants had divided by .85, instead of multiplying by .15 and then adding. Dr. Cooper confronted Kress about this mistake. Nevertheless, Dr. Cooper continued to pay the invoices with the addition of 17.6% because they could not agree what fifteen percent meant when they signed the contract.
¶ 20. The court also concluded that the Defendants exaggerated the extent of the Coopers' requested changes. The circuit court found this exaggeration affected its determination of witness credibility. Kress testified that they had to tear up the foundation to make some of the Coopers' requested changes. Then, Kress admitted he did not recall that any of the Coopers' requested changes required the foundation work to be torn up and reworked. Kress testified that "these particular changes were requested apparently before the slab was poured."
¶ 21. Dr. Cooper's wife, Sandra, suffered from severe fibromyalgia. The house plans included an endless swimming pool with heat and controllable current to help relieve pain that accompanied her disease. Dr. Cooper told the Defendants about the pool's purpose. The Coopers argue the Defendants' misrepresentations were intentional. They argue the misrepresentations produced delay, and the delay caused distress.
¶ 22. This Court reviews the evidence that supports the circuit court's finding to determine whether it is "supported by substantial, credible, and reasonable evidence." Callahan v. Ledbetter, 992 So.2d 1220, 1230 (¶ 25) (Miss.Ct.App. 2008). Damages for emotional distress or mental anguish, where there is no physical injury, can only be awarded where the "defendant's conduct is outrageous or `evokes outrage or revulsion.'" Wilson, 883 So.2d at 65 (¶ 34) (citation omitted). "[T]he standard is whether the defendant's behavior is malicious, intentional, willful, wanton, grossly careless, indifferent or reckless." Leaf River Forest Prods., Inc. v. Ferguson, 662 So.2d 648, 659 (Miss. 1995). It appears that there is evidence to support the circuit court's conclusion that the Defendants' conduct was such that would support an independent tort or punitive damages.
¶ 23. Regardless, to recover damages, the Coopers must establish that they actually suffered mental anguish and emotional distress. Williams, 891 So.2d at 173 (¶ 31). Because they seek such damages in a breach-of-contract action, the Coopers "must provide more than general declarations of emotional distress" and must "show specific suffering during a specific time frame." Id. at (¶¶ 31, 33).
¶ 24. Dr. Cooper's testimony to support damages for mental anguish and emotional distress was limited, conclusory, and vague. There were no specific examples, specific time frames, or specific details of suffering. No witness testified about how the delay affected Dr. Cooper and Sandra. Dr. Cooper only testified that the delay "was somewhat distressing." There was
¶ 25. We find that the allegations to support an award of damages for mental anguish and emotional distress were vague and inadequate. Such generalizations are insufficient as a basis for a damages award for emotional distress and mental anguish. Id. at (¶ 31). The Coopers failed to meet the second prong of Williams. The Coopers did not show that any mental anguish and emotional distress was a foreseeable result of the Defendants' actions or inactions. Id.
¶ 26. Also, there was an error of law in the circuit court's findings of fact and conclusions of law. To award damages for mental anguish and emotional distress, the circuit court pointed to the fact that the Defendants did not set up a trust account. The circuit court then found that the Defendants should have held the money paid under the contract in trust for the Coopers. The circuit court held this failure to hold funds in trust resulted in a breach of trust and fiduciary duties. This is not a correct application of Mississippi law.
¶ 27. Where the relationship is contractual, such as that of a lessor/lessee, a fiduciary relationship does not arise. Pursue Energy Corp. v. Abernathy, 77 So.3d 1094, 1100 (¶ 22) (Miss.2011). Typical fiduciary relationships are "physician and patient, attorney and client, guardian and ward, and trustee and cestui que trust." Hendricks v. James, 421 So.2d 1031, 1041 (Miss.1982).
¶ 28. The circuit court essentially held suppliers, builders, and contractors to the duties owed by doctors, lawyers, and partners. There is simply no authority to support this conclusion.
¶ 29. The Coopers and the Defendants were parties to a contract. The Coopers bargained with the Defendants to pay for the delivery of certain materials. The Defendants bargained to provide the materials according to the contract's terms. The Defendants simply failed to perform. The Defendants breached the contract. This was not a breach of fiduciary duty because no fiduciary duty arose.
¶ 30. For these reasons, we find that an award of damages for mental anguish and emotional distress was in error. As to the award of $30,000 for such damages, we reverse and render the circuit court's judgment.
¶ 31. The Defendants argue that the record is devoid of any testimony or allegations of outrageous conduct or mistreatment of the Coopers by the Defendants. Therefore, the Defendants claim that any claim for punitive damages is without foundation.
¶ 32. As discussed above, we must recognize that the default judgment has been entered. "When a judgment by default is entered, it is treated as a conclusive and final adjudication of the issues necessary to justify the relief awarded and is given the same effect as a judgment rendered after a trial on the merits." M.R.C.P. 55 cmt. Therefore, the Coopers' claim for punitive damages has been properly established. However, "[a] judgment entered pursuant to Rule 55(b) may be reviewed on appeal to the same extent as any other judgment[.]" M.R.C.P. 55 cmt. Our role
¶ 33. The default entitled the Coopers to an award of punitive damages. The law on the review of an award of punitive damages was succinctly stated in Warren, 996 So.2d at 737-38 (¶ 25):
Accordingly, we review the circuit court's findings of fact and conclusions of law to determine whether the ruling was supported by substantial, credible, and reasonable evidence. If the amount awarded was "arbitrary or unreasonable, against the overwhelming weight of the evidence," we must reverse and remand the award for further consideration.
¶ 34. An award for punitive damages is proper where "the violation of a right or the actual damages sustained[] import insult, fraud, or oppression and not merely injuries, but injuries inflicted in the spirit of wanton disregard for the rights of others." Warren, 996 So.2d at 738 (¶ 27) (quoting Bradfield v. Schwartz, 936 So.2d 931, 936 (¶ 17) (Miss.2006)).
¶ 35. The circuit court awarded $100,000 in punitive damages and relied on several factual findings. As discussed in the previous section, specifically paragraphs 17 through 22, there was sufficient evidence to support the court's conclusion that the Defendants' conduct would support an independent tort or punitive damages.
¶ 36. The Defendants' conduct went beyond a mere breach of contract. There was evidence offered, without objection, from the Better Business Bureau to show that other customers of the Defendants had suffered similar problems. The Defendants' corporations were not properly formed and compliant with the corporate laws of the States of Tennessee or Mississippi. Amounts paid for deposits and payment of materials were not sent to the manufacturers or suppliers, and instead were held by the Defendants, without notice to or approval of the Coopers. The Defendants admitted that the amounts of the deposits had not been returned and were still owed.
¶ 37. The Coopers payment of $186,997.80 for the materials package was not placed in either an escrow or a trust account. For example, the Defendants had been paid for and instructed to order the windows and doors. Yet the Defendants never ordered the windows and doors; they were never delivered, and payment was never made to the manufacturer. The Defendants failed to respond promptly to Dr. Cooper's inquiries about the windows. The Defendants went so far as to lead Dr. Cooper to believe that the windows had been ordered, when they had not. The payment for the windows has never been refunded, even though the Defendants admit that it was owed.
¶ 38. The court viewed the actions of the Defendants as gross misconduct,
¶ 39. Our standard of review requires that we give deference to the trier of fact. Here, the court awarded punitive damages in the amount of $100,000. Were it not for the default, this issue could have been litigated and presented to a jury to resolve. However, based on the standard of review, the evidence presented, and the findings of the circuit court, we find that the award of punitive damages must be affirmed.
¶ 40. The Defendants next argue that the circuit court erred when it did not consider the Defendants' ability or inability to pay when it awarded punitive damages. Mississippi Code Annotated section 11-1-65(1)(e) (Supp.2012) provides the factors to consider when awarding punitive damages:
(Emphasis added).
¶ 41. The Defendants argue that the Coopers' failure to prove some net worth of the Defendants precludes an award of punitive damages. The Defendants, however, fail to recognize that proof of net worth is not required to award punitive damages. C & C Trucking Co. v. Smith, 612 So.2d 1092, 1102 (Miss.1992). There, the supreme court "reject[ed] the expressions... that proof of net worth is prerequisite to an award of punitive damages." Id. at 1105-06. The court expressly overruled cases that held to the contrary. Id.
¶ 42. The court also held that, for a defendant to mitigate potential punitive damages, it is his responsibility to present proof of his net worth and financial condition. See id. at 1105. A defendant can introduce "evidence to demonstrate that a minimal award of exemplary damages would serve the punishment and deterrence functions." Id. at 1104. Also, a plaintiff can introduce evidence of the defendant's net worth or financial condition "to demonstrate the need for a large award of exemplary damages." Id. However, if either party fails to present such evidence, that failure would not invalidate a claim for exemplary damages. Id.
¶ 44. The Defendants argue that the Coopers were not entitled to an award of attorney's fees because punitive damages should not have been awarded. The circuit court found that in addition to punitive damages, reasonable attorney's fees in the amount of $29,798.86 should be awarded as well, representing attorney's fees incurred through the preparation and submission of proposed findings of fact and conclusions of law by the parties. The Coopers argue that this award is reasonable under DynaSteel Corp. v. Aztec Industries, Inc., 611 So.2d 977, 987 (Miss.1992).
¶ 45. As discussed above, the entry of default required that we treat the Cooper's claim for attorney's fees as "a conclusive and final adjudication of the issues necessary to justify the relief awarded [that] is given the same effect as a judgment rendered after a trial on the merits." M.R.C.P. 55 cmt. Therefore, the Coopers' claim for attorney's fees has been properly established. However, "[a] judgment entered pursuant to Rule 55(b) may be reviewed on appeal to the same extent as any other judgment[.]" M.R.C.P. 55 cmt. Accordingly, we review the circuit court's findings of fact and conclusions of law to determine whether the ruling was supported by substantial, credible, and reasonable evidence. If the amount awarded was arbitrary or unreasonable, against the overwhelming weight of the evidence, we must reverse and remand the award for further consideration.
¶ 46. The circuit court awarded attorney's fees in the amount of $29,798.86. The standard of review for an award of attorney's fees is abuse of discretion. Regency Nissan, Inc. v. Jenkins, 678 So.2d 95, 103 (Miss.1995). The award must be supported by credible evidence. Id. The supreme court has held:
Mauck v. Columbus Hotel Co., 741 So.2d 259, 269 (¶ 32) (Miss.1999).
¶ 47. The reasonableness of an attorney's fee award is determined by reference to the factors set forth in Rule 1.5 of the Mississippi Rules of Professional Conduct. Miss. Power & Light Co. v. Cook, 832 So.2d 474, 486 (¶ 40) (Miss.2002). The supreme court has held:
Cook, 832 So.2d at 486-87 (¶ 40).
¶ 48. Here, there was evidence of the actual attorney's fees incurred by the
¶ 49.
LEE, C.J., IRVING, P.J., BARNES, ISHEE, ROBERTS, MAXWELL AND FAIR, JJ., CONCUR. CARLTON, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. JAMES, J., NOT PARTICIPATING.