                    IN THE SUPREME COURT OF MISSISSIPPI

                                NO. 2009-CA-00559-SCT

TRUSTMARK NATIONAL BANK d/b/a CREDIT
CARD CENTER

v.

ROXCO LTD.


DATE OF JUDGMENT:                         02/02/2009
TRIAL JUDGE:                              HON. TOMIE T. GREEN
COURT FROM WHICH APPEALED:                HINDS COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT:                  CHRISTOPHER A. SHAPLEY
                                          WILLIAM ‘TREY’ JONES, III
ATTORNEYS FOR APPELLEE:                   JAMES A. BOBO
                                          PRECIOUS TYRONE MARTIN, SR.
NATURE OF THE CASE:                       CIVIL - CONTRACT
DISPOSITION:                              ON DIRECT APPEAL: REVERSED AND
                                          RENDERED. ON CROSS-APPEAL:
                                          DISMISSED - 12/08/2011
MOTION FOR REHEARING FILED:               01/05/2012; DENIED AND MODIFIED AT ¶1
                                          AND ¶7 - 03/22/2012
MANDATE ISSUED:


       EN BANC.

       KING, JUSTICE, FOR THE COURT:

¶1.    Roxco, Ltd., was hired as the general contractor for several public-construction

projects for the State of Mississippi, including four building projects at the University of

Mississippi, Jackson State University, and Alcorn State University. State law requires that

a certain percentage of the cost of construction be retained to ensure completion. However,

Mississippi Code Section 31-5-15 (Rev. 2010) allows the contractor to access that retainage
by depositing with the State other acceptable security. Pursuant to Section 31-5-15, in order

to access the retainage on its state-construction projects, Roxco substituted securities valued

at $1,055,000. These securities were deposited in a safekeeping account at Trustmark

National Bank. Upon being notified of Roxco’s default, the State instructed Trustmark to

transfer the funds from the treasury bills into the state treasury account. By letter, Roxco

directed Trustmark not to transfer the funds from the treasury bills to the State’s account.

Notwithstanding Roxco’s letter, Trustmark deposited the funds into the State’s account.

Roxco filed suit against Trustmark for breach of contract and conversion in Hinds County

Circuit Court. Trustmark argued that Section 31-5-15 permitted the release of the funds in

the safekeeping account. A jury found in favor of Roxco and awarded $3,720,000 in

damages. Aggrieved, Trustmark filed this appeal.1 Finding that the trial court should have

granted the motion for judgment notwithstanding the verdict, we reverse and render.

                         FACTS AND PROCEDURAL HISTORY

¶2.    Roxco is a former2 construction company, owned and operated by Benjamin Turnage,

that contracted with the State to perform various public-construction projects throughout the

State. In 1994, Roxco hired David Carter, a former employee of Trustmark, to act as its chief

financial officer. Based on Carter’s recommendation, on April 26, 1996, Roxco opened a

safekeeping account at Trustmark. The safekeeping account was opened to purchase and


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        Roxco filed a cross-appeal with this Court regarding the trial court’s denial of
Roxco’s motion to reconsider ruling on punitive damages and Roxco’s motion for attorneys’
fees, costs, and expenses. In response, Trustmark filed a motion to dismiss Roxco’s cross-
appeal. Based on the Court’s disposition in the case, the cross-appeal and motion to dismiss
are now dismissed as moot.
       2
           Roxco no longer works within the construction industry.

                                              2
hold treasury bills. The agreement governing the safekeeping account clearly stated that the

“Bank will follow the specific written instruction of the depositor.” During his employment,

Carter was authorized to interact with Trustmark concerning Roxco’s safekeeping account.

¶3.    Throughout the next four years (1994-1998), Roxco was hired as the general

contractor for numerous public-construction projects for the State, including four building

projects at the University of Mississippi, Jackson State University, and Alcorn State

University. During construction, Roxco attempted to substitute securities (certificates of

deposit/treasury bills) pursuant to Mississippi Code Section 31-5-15, in lieu of the retainage

being withheld by the State.

¶4.    To effect this substitution of securities in lieu of the retainage, by letter dated April

11, 1996, Roxco authorized Trustmark to accept for safekeeping a United States Treasury

bill and directed that the safekeeping receipt be sent to the State Treasurer’s Office. During

the next several years, many similar and related documents were exchanged among Roxco,

the Bureau of Buildings within the State Department of Finance and Administration, and

Trustmark for this same purpose. With each transaction, Trustmark entered on its books, and

on the face of each treasury bill, that the securities were pledged to the State. Trustmark

generated and provided, to both Roxco and the State, written safekeeping receipts reflecting

that the treasury bills were pledged to the State. It provided to the parties a monthly report

of the safekeeping account, which reflected the specific treasury bills pledged to the State in

lieu of retainage for specific contracts, information on the substitution of additional collateral

when new contracts were secured, and the specific treasury bills purchased as replacements

for matured treasury bills.


                                                3
¶5.    Early in 1998, Roxco began having a dispute with its bond company, American Home

Assurance Company. In October 1998, in a step towards resolution, Roxco agreed to write

letters of default, to be held in trust by American Home Assurance Company, as a condition

of receiving a $2,000,000 credit line. Only one month later, in November 1998, Roxco’s

bond company mailed the default letters to the State. The State received the default letters,

which were on Roxco’s company letterhead and signed by its president, informing it that

Roxco “is in default” and that Roxco “irrevocably and voluntarily abandons and terminates”

the four projects at the public universities. The State accepted the letters as Roxco’s

voluntary default on the projects. At trial, Roxco claimed that the default letters were sent

by its bond company and were “bogus.” However, in November 1998, Roxco ceased work

on all of the state construction projects.

¶6.    On April 9, 1999, the Bureau wrote then-State Treasurer Marshall Bennett and asked

that he notify Trustmark of Roxco’s default and the need for the $1,055,000, the amount

pledged in lieu of retainage, to be deposited into the State’s account. On April 12, 1999,

Bennett forwarded the letter and the written receipts for the funds at issue to Trustmark and

directed Trustmark to deposit the funds into the State’s account to be used to complete the

four projects.

¶7.    On April 14, 1999, after learning that State was attempting to collect the funds, Steve

Williams, attorney for Roxco, notified Trustmark that the funds at issue were subject to a

security agreement between Roxco and First Tennessee Bank and objected to the release of

the funds to anyone other than First Tennessee Bank or Roxco.

¶8.    On April 21, 1999, Trustmark officials met with State officials, including Bennett, and


                                              4
were provided copies of the default letters, which were signed by Roxco and stated

unequivocally that Roxco had irrevocably and voluntarily defaulted and abandoned the

contracts. Trustmark complied with the State’s request and deposited the funds into the

State’s account.

¶9.    On April 2, 2002, Roxco filed suit against Trustmark in Hinds County Circuit Court

for breach of contract, conversion, negligence, breach of duty of good faith and fair dealing,

and breach of a fiduciary relationship. A jury found in favor of Roxco and awarded

$3,720,000 in damages.

                                       DISCUSSION

¶10.   Trustmark raises the following issues on appeal: (1) Whether the trial judge erred in

failing to grant Trustmark’s motions for directed verdict and judgment notwithstanding the

verdict; (2) whether the trial judge erred in failing to grant Trustmark a new trial, given the

overwhelming evidence contrary to the jury’s verdict; (3) whether the trial judge granted

erroneous jury instructions; (4) whether Trustmark should be granted a new trial because the

trial judge allowed inadmissible evidence and excluded admissible evidence; (5) whether the

trial judge erred in failing to grant Trustmark’s request for a setoff against the jury verdict

from Roxco’s prior recovery in the settlement of the suit against the bonding company; and

(6) whether the trial judge committed reversible error in failing to grant Trustmark’s request

for a remittitur.

       1. Directed Verdict and Judgment Notwithstanding the Verdict

¶11.   Trustmark’s first issue can be resolved by determining whether Mississippi Code

Section 31-5-15 permitted Trustmark to release the funds in the safekeeping account to the

                                              5
State. If Section 31-5-15 permitted the release of funds to the State, Trustmark cannot held

be liable for breach of contract or conversion.

¶12.   Mississippi Code Section 31-5-15 states:

       Under any public contract heretofore or hereafter made or awarded by the
       State of Mississippi, or any agency or department of the State of Mississippi,
       or by any political subdivision thereof, the contractor may, with the written
       consent of his or its surety, from time to time, withdraw the whole or any
       portion of the amount retained from payments due the contractor pursuant to
       the terms of the contract by depositing with the State Treasurer of the State of
       Mississippi, or the treasurer or secretary of the political subdivision of the
       State of Mississippi holding funds belonging to the contractor, the following
       security, or any combination thereof in an amount equal to or in excess of the
       amount so withdrawn, said securities to be accepted at the time of deposit at
       market value but not in excess of par value, to wit:

              (1) U.S. Treasury Bonds, U.S. Treasury Notes, U.S. Treasury
              Certificates of Indebtedness, or U.S. Treasury Bills, or

              (2) Bonds or notes of the State of Mississippi, or

              (3) Bonds of any political subdivision of the State of Mississippi, or

              (4) Certificates of deposit issued by commercial banks located in the
              State of Mississippi, provided that such certificate is negotiable or is
              accompanied by a power of attorney executed by the owner of the
              certificate in favor of the Treasurer of the State of Mississippi or of the
              treasurer or the secretary of the political subdivision involved, or

              (5) Certificates of deposit issued by savings and loan associations
              located in the State of Mississippi, the accounts of which are insured by
              the Federal Savings and Loan Insurance Corporation, or whose
              accounts are insured by a company approved by the State Board of
              Savings and Loan Associations, provided that such certificate is made
              payable with accrued interest on demand and is accompanied by a
              power of attorney executed by the owner of the certificate in favor of
              the Treasurer of the State of Mississippi or the treasurer or secretary of
              the political subdivision involved, and provided that any such
              certificate from any of the savings and loan associations referred to in
              this subparagraph shall not be for an amount in excess of the maximum
              dollar amount of coverage of the Federal Savings and Loan Insurance


                                               6
              Corporation.

       The agency or department of the state shall notify the State Treasurer of the
       amount of deposit required and shall also notify the State Treasurer when to
       release the deposit. The political subdivision of the state shall notify its
       treasurer or secretary of the amount of deposit required and shall also notify
       him when to release the deposit.

       The State Treasurer, or the secretary or treasurer of the political subdivision
       holding said security, shall, from time to time, collect all interest or income on
       the security so deposited and shall, by and with the written consent of
       contractor's surety, pay the same when and as collected to the contractor or
       contractors who deposited said obligations. If the deposit be in the form of
       coupon bonds, the coupons as they respectively become due shall be delivered
       to the contractor.

       If in the event of an overpayment to a contractor the contracting authority is
       unable to obtain reimbursement for such overpayments from the contractor, the
       chief administrative officer of the contracting authority shall notify the
       contractor, its surety and the State Treasurer or other holder of the security, of
       the nature of the overpayment and of the failure to obtain reimbursement.
       Upon such notification, the security holder shall retain the income on the
       deposited security until an amount equal to the overpayment is accumulated
       and paid to the contracting authority.

       In the event the contractor shall default in the performance of the contract or
       any portion thereof, the securities deposited by him in lieu of retainage and all
       interest and coupons and income accruing on said securities after said default
       may be sold by the state or any agency or department thereof, or any political
       subdivision, and the proceeds of said sale used as if such proceeds represented
       the retainage provided for under the contract.

Miss. Code Ann. § 31-5-15 (Rev. 2010).

¶13.   This appeal concerns the interpretation of a statute, which is a question of law that we

review de novo. Finn v. State, 978 So. 2d 1270, 1272 (¶ 6) (Miss. 2008). This Court has

stated the following rule regarding the interpretation of a statute:

       We will not engage in statutory interpretation if a statute is plain and
       unambiguous. However, statutory interpretation is appropriate if a statute is
       ambiguous or is silent on a specific issue. In either case, the ultimate goal of


                                               7
       this Court is to discern the legislative intent. The best evidence of legislative
       intent is the text of the statute; the Court may also look to the statute's
       historical background, purpose, and objectives. If a statute is ambiguous, it is
       this Court's duty to carefully review statutory language and apply its most
       reasonable interpretation and meaning to the facts of a particular case.

Buffington v. Miss. State Tax Comm'n, 43 So. 3d 450, 454 (¶13) (Miss. 2010) (citation

omitted).

¶14.   Roxco argued, and the trial court agreed, that Section 31-5-15 did not apply to the

contract between Trustmark and Roxco. Roxco argued that the requirements of the statute

were not met for the State to take control of the securities. Roxco argued that no securities

were deposited with the State Treasurer and that Roxco did not default on the construction

projects. In order to effectuate Section 31-5-15, the State Treasurer does maintain some

securities in his vault. However, the majority of these securities are maintained by

commercial-banking institutions, with whom the State has entered into service contracts to

provide safekeeping accounts. The safekeeping accounts allow the banks to hold securities

on behalf of the State. A contractor may then select a bank, authorized to hold securities on

behalf of the State, in which to open a safekeeping account.

¶15.   Trustmark argues that its performance was consistent with Roxco’s understanding and

expectations with respect to the funds in the safekeeping account. This was consistent with

testimony from Roxco personnel. Roxco’s former Chief Financial Officer Carter, who

signed the safekeeping-account agreement, testified that, while acting in his authorized

capacity for Roxco, he pledged the funds in the safekeeping account to the State under

Section 31-5-15. Carter further testified that it was his understanding that, once the funds

were pledged, Roxco forfeited the right to have the funds back without the State’s


                                              8
permission. Carter’s successor as Roxco’s Chief Financial Officer, H.G. Morgan, provided

the same testimony.

¶16.   The language of Section 31-5-15 is clear and unambiguous, and our rules of statutory

construction insist that the best evidence of the Legislature's intent is the text of the statute.

The Legislature enacted Section 31-5-15, which specifies the procedure a contractor must

use to substitute securities in lieu of retainage fees being withheld on a government contract.

To obtain a release of the retainage, the statute requires a contractor to deposit funds with

the State Treasurer, or to deposit a certificate of deposit issued by a commercial bank,

provided that the certificate is negotiable or accompanied by a power of attorney executed

by the owner of the certificate in favor of the Treasurer of the State.

¶17.   In this case, the deposit requirements of Section 31-5-15 were met. It is true that the

treasury bills were not physically delivered to the state treasurer himself. However, under

the State’s agreement with Trustmark to serve as a safekeeper of securities, Trustmark

became the agent of the State. Under general principles of agency law, delivery to the agent

is delivery to the principle. But additionally, Roxco gave written instructions to Trustmark

pledging these securities to the State of Mississippi pursuant to Section 31-5-15. Roxco

having done so, Trustmark entered a notation on the securities, specifying that they were

pledged to the State of Mississippi.3

¶18.   The term “pledged” has several definitions, among them, “delivery of goods or



       3
        Once pledged, the following language was entered on the face of the treasury bill:
       PLEDGED TO:
       TREASURER, STATE OF MISSISSIPPI FOR THE BUREAU OF
       BUILDINGS, GROUNDS AND REAL PROPERTY MANAGEMENT.

                                                9
personal property as security for a debt or obligation.” American Heritage Dictionary 1956

(3d ed. 1992). “Pledged” also has been defined as “a bailment or delivery of goods or

property by way of security for a debt or engagement, or as security for the performance of

an act.” Black's Law Dictionary 1153 (6th ed. 1990). The meanings of “deposit” include:

“The giving of the possession of personal property by one person to another, with his consent

to keep for the use, benefit, and safekeeping of the first or of a third person.” Black’s Law

Dictionary 438 (6th ed. 1990).

¶19.   Under these definitions and the facts of this case, the formal pledging of the treasury

bills to the State of Mississippi was effective as delivery and compliance with Section 31-5-

15. Having obtained effective delivery of the securities, upon default, the State of Mississippi

was authorized to receive those funds substituted for the retainage.

¶20.   Roxco argues that, contrary to its orders, Trustmark released the pledged funds to the

State of Mississippi and is therefore indebted to it. However, once Roxco pledged and

effectively delivered those funds to the State, it lost control of them and could take no action

to control them without the permission of the State.

¶21.   Accordingly, the trial judge improperly denied Trustmark's motions for a directed

verdict and judgment notwithstanding the verdict. Because we find dispositive error here, all

other issues are moot.

                                       CONCLUSION

¶22.   Based on this discussion, we reverse and render the judgment of the trial court.

¶23. ON DIRECT APPEAL: REVERSED AND RENDERED. ON CROSS-APPEAL:
DISMISSED.



                                              10
    WALLER, C.J., CARLSON AND DICKINSON, P.JJ., RANDOLPH, LAMAR,
KITCHENS AND CHANDLER, JJ., CONCUR. PIERCE, J., NOT PARTICIPATING.




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