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IN THE COURT OF APPEALS 12/03/96 OF THE STATE OF MISSISSIPPI
NO. 94-CA-00790 COA

DENOTEE MARTIN CONTRACTORS, INC. APPELLANT v. CARR OIL COMPANY, BANK OF NEW ALBANY, MISSISSIPPI STATE TAX COMMISSION, AND BILL KIZER APPELLEES

THIS OPINION IS NOT DESIGNATED FOR PUBLICATION AND MAY NOT BE CITED, PURSUANT TO M.R.A.P. 35-B

TRIAL JUDGE: HON. R. KENNETH COLEMAN COURT FROM WHICH APPEALED: UNION COUNTY CIRCUIT COURT ATTORNEY FOR APPELLANT: RODNEY E. SHANDS ATTORNEY FOR APPELLEES: LESTER F. SUMNERS NATURE OF THE CASE: CONTRACT - PRIORITY OF JUDGMENT LIENS AND LIENS TO SECURE ASSIGNMENTS PER UNIFORM COMMERCIAL CODE IN GARNISHMENT ACTION TRIAL COURT DISPOSITION: RENDERED JUDGMENT FOR SECURED CREDITORS OF SUBCONTRACTOR AGAINST GENERAL CONTRACTOR'S CLAIM FOUND TO BE UNSECURED PURSUANT TO THE UNIFORM COMMERCIAL CODE

BEFORE BRIDGES, P.J., COLEMAN, AND DIAZ, JJ. COLEMAN, J., FOR THE COURT: This case began as a simple garnishment action by Carr Oil Company (Carr Oil) against Denotee Martin Contractors, Inc. (Martin) to obtain a portion of some money that Martin owed to Bill Kizer (Kizer). Martin owed Kizer for work Kizer had done as Martin's subcontractor on a road construction project in Pontotoc County. Because the Mississippi State Tax Commission, the Bank of New Albany, and Kizer had competing claims to the money that Martin owed Kizer, Carr Oil moved to add these three parties to the garnishment proceeding. The trial court sustained Carr Oil's motion, and after Bank of New Albany, the State Tax Commission, and Kizer were made parties to this litigation, Martin filed a cross-claim against Kizer. The trial court conducted a bench trial of the issues, which were (1) the extent to which the Uniform Commercial Code (UCC) determined the priorities of the various parties' claims and (2) whether Kizer had breached his subcontract with Martin. The trial court held that a certain post-contractual agreement between Martin and Kizer was Kizer's assignment to Martin of the proceeds from another Martin-Kizer subcontract for work on a road construction project in Lafayette County. The trial court found that Martin's failure to file a UCC notice of lien, or financing statement, on this assignment rendered it's assignment unsecured. Thus, the court held, Martin's claim against Kizer based on this post-contractual agreement fell last in priority among all four competing claims. The sum of the other three superior claims was $116, 684.06. Martin owed Kizer $116,894.50. Thus, if the three other claims which totaled $116,684.06 were superior to Martin's claim, only $210.44 was Martin's. Martin now appeals from the trial court's ruling that its claim had last priority. Because we agree that the post-contract agreement between Martin and Kizer was an assignment and was therefore subject to the recording requirements of the Uniform Commercial Code, we affirm that part of the trial court's judgment, but we reverse the trial court's dismissal without prejudice of Martin's cross-claim against Kizer. I. Facts A. Relationship between Martin and Kizer Martin as general contractor and Pontotoc County entered into a contract for a road construction project in Pontotoc County (the Pontotoc project). On October 17, 1989, Martin and Kizer entered into a subcontract in which Kizer agreed to perform the "dirt work" and other construction on this project. Originally, the Pontotoc project was to be completed within three hundred and twenty calendar days, but the Pontotoc County later extended this period by an additional forty calendar days. By February 2, 1990, Martin had contracted with the Mississippi State Highway Department to serve as the general contractor on another road construction project in Lafayette County (the Lafayette project). On February 2, 1990, Martin and Kizer entered into a second subcontract by which Kizer agreed to perform the "dirt work" and other construction on the Lafayette project. Kizer began working on the Pontotoc project in October, 1989, but he stopped working on this project in December, 1989. Kizer did not resume work on the Pontotoc project until June, 1990,

when he put one employee back to work on the Pontotoc project for several days. However, on or about November 29, 1990, Kizer finally abandoned the unfinished Pontotoc project. After Kizer's abandonment of the project, a Pontotoc County supervisor attempted to work on the project. Martin sought an injunction from the federal court against the Pontotoc County Board of Supervisors' interference with its completion of the Pontotoc project. In response to the federal court's urging Martin and the board of supervisors to resolve their differences short of further litigation, Martin and Pontotoc County agreed to replace Kizer as the Pontotoc project's "dirt work" subcontractor. To effect the agreement, Kizer and Martin then entered into an agreement, dated June 14, 1991, the entirety of which read as follows: Date: June 13, 1991

To: Bill Kizer Kizer Contractors, Inc. Route 1, Box 289 Myrtle, MS 38650

Re: CDBG #8-1125-058-CE-01 Pontotoc County, MS

This agreement entered into between Denotee Martin Contractors, Inc., (noted hereafter as Prime Contractor) and Bill Kizer dba Kizer Contractors, Inc. (noted hereafter as Subcontractor). Be it understood that the Subcontractor is currently working on Project No. CDGB#8-1125-058-CE-01 under a previous agreement. Be it further understood that on June 17, 1991, the Prime Contractor will move to the aforementioned project certain items of construction equipment and certain skilled workmen as he deems fit to complete the aforementioned project in a timely manner. The costs incurred for the additional labor will be charged against any monies due to the Subcontractor as may be required to complete this project. This in no way voids the previous agreement the Subcontractor is now working under.

This agreement entered into on the 14th day of June 1991 between Denotee Martin dba Denotee Martin Contractors, Inc., and Bill Kizer dba Kizer Contractors, Inc.

S/Bill Kizer S/Denotee Martin Bill Kizer, Owner Denotee Martin, President

KIZER CONTRACTORS, INC. DENOTEE MARTIN CONTRACTORS, INC.

This agreement freed Kizer to work exclusively on the Lafayette project, and Martin finished the Pontotoc project without Kizer's further help. Martin and Kizer also finished the Lafayette project. B. Kizer's creditors On November 27, 1987, the State Tax Commission (Commission) enrolled a sales tax lien against Kizer in the amount of $47, 631.46 on the judgment roll of Union County. On August 5, 1991, a writ of garnishment was served on Martin in the amount of $17,793.41, pursuant to this lien. Kizer paid $2,586.79 on this obligation on or about November 7, 1991, and $3,013.27 on November 26, 1991. These two payments plus the interest which had accrued on the unpaid balance resulted in an unpaid balance of $14,587.11. On August 23, 1991, the Union County Circuit Court granted a default judgment to Carr Oil against Kizer for $52,873.11. By the time that this case was tried, this amount, along with accrued interest, had increased to $61,906.20. Bank of New Albany had loaned Kizer fifty thousand dollars in September, 1990, to alleviate Kizer's cash flow problem while he was working on the Pontotoc project. Because it appeared to be in Martin's interest for Kizer to continue working on the Pontotoc project, Donatee Martin encouraged the bank to make the loan to Kizer. As security for this loan, Kizer assigned his subcontract for the Pontotoc project to the Bank of New Albany. Martin subsequently executed an acknowledgment of Kizer's assignment. This acknowledgment read as follows: Denotee Martin Contractors, Inc., by and through the President, Denotee Martin, and pursuant to authority given to him as such President, does hereby acknowledge the assignment of the Rental Agreement dated October 17, 1989 between Denotee Martin Contractors, Inc. and Kizer Construction Co. to the Bank of New Albany, New Albany, Mississippi as collateral on a Promissory Note between Kizer Construction Co. and said Bank and does hereby agree and consent to make the Bank of New Albany a joint payee with Kizer Construction Co. on all future payments under said Rental Agreement until notified by said Bank that said Note has been satisfied. Denotee Martin Contractors, Inc., does agree to be responsible to said Bank of New Albany to the extent of the sum of any payment for which the Bank is not listed as a joint payee. In the event Denotee Martin Contractors, Inc., listed as Party One in said Rental Agreement, takes over for Kizer due to any of the conditions and/or failures of Kizer, listed as Party Two in said Agreement, to do or perform any act or work or for failure to do or perform any act or work, and no further payments are due Kizer, then Denotee Martin Contractors, Inc. shall have no further responsibility to Bank for any remaining balance due Bank by Kizer. Denotee Martin Contractors, Inc. is not in any way guaranteeing nor incurring liability on the note between Kizer and Bank other than making Bank a copayee as and when Kizer is paid by Denotee Martin Contractors, Inc. for work performed under this Rental Agreement.

Dated this the 7th day of September, 1990.

DENOTEE MARTIN CONTRACTORS, INC.

BY: S/Denotee Martin Denotee Martin, President

Bank of New Albany filed a UCC-1 Financing Statement in the Uniform Commercial Code Index in the office of the Union County Chancery Clerk on September 11, 1990, to secure Kizer's assignment of the Pontotoc subcontract to the bank. More than one year later, Kizer executed an assignment of his interest in the Lafayette project subcontract to Bank of New Albany. The text of Kizer's assignment of his Lafayette project subcontract read as follows: ASSIGNMENT OF CONTRACT PROCEEDS LAFAYETTE COUNTY CONTRACT #BR 0848(6)A

GENERAL CONTRACTOR: Denotee Martin Contractors, Inc. New Albany, MS

SUBCONTRACTOR Bill Kizer Myrtle, MS

I, Bill Kizer, having been contracted by Denotee Martin Contractors, Inc., to perform certain jobs associated with the above numbered contract in Lafayette County, Mississippi, do hereby assign to Bank of New Albany, for security on loans presently and heretofore afforded me, all proceeds derived from execution of jobs associated with said contract, and hereby direct Denotee Martin Contractors, Inc., to name Bank of New Albany as co-payee on any and all future payments under terms of said contract. I, also, relinquish the privilege to cancel this assignment with the expressed intent being that, Bank of New Albany is now owner of all future payments, and shall apply all payments on my loans with said institution; and that Bank of New Albany, only, has the authority to cancel this assignment.

ATTEST: Dated: 11-12-91 S/ James R Collins James R Collins, Senior Vice Pres. S/Bill Kizer Bill Kizer

Bank of New Albany filed a UCC-1, Financing Statement, in the Uniform Commercial Code Index in the office of the Union County Chancery Clerk on November 15, 1991, to secure its interest in Kizer's assignment of his Lafayette subcontract to the bank. II. Litigation On September 4, 1991, Carr Oil filed a suggestion of garnishment in which it stated that Martin was indebted to Kizer. The circuit court clerk then issued a writ of garnishment, which was served on Martin on September 6, 1991. On September 13, 1992, Martin filed its answer to the writ of garnishment, in which it stated the following: Denotee Martin Contractors, Inc., is indebted to Defendant for equipment rental in the Lafayette County Project No. BR-0848(6)A in the current sum of Ten Thousand Three Hundred Forty-Seven Dollars Fifteen Cents ($10,347.15). This sum is due but not yet payable. A prior garnishment exists on this sum from the Mississippi Tax Commission which will take precedence over this garnishment. Future sums will probably be due in the future depending on certain aspects of the contract between the parties and will be subject to previous garnishments. Defendant is engaged in another project with Garnishee being Pontotoc County Road Project Number CDGB-#8-1125-058-CE-01. All payments under this contract have been assigned and made jointly payable to the Bank of New Albany in New Albany, Mississippi and thus are not subject to garnishment without the consent of said joint payee.

On September 8, 1992, almost one year after it filed its first suggestion of garnishment, Carr Oil filed a second suggestion for garnishment demanding a total of $58,084.67. The circuit court clerk again issued a writ of garnishment, which a Union County deputy sheriff again served on Martin. On October 5, 1992, Martin filed its answer to this second writ of garnishment. This time the answer read as follows: Denotee Martin Contractors, Inc., is indebted to Defendant for equipment rental in the Lafayette County Project No. BR-0848(6)A in the current sum of Twenty-three Thousand

Seven Hundred Ninety-six Dollars ($23,796). This sum is due and payable pursuant to the liens, garnishments, and agreements between various payees. A prior Garnishment exists on this sum from the Mississippi State Tax Commission which will take precedent over this Garnishment. Garnishee has, pursuant to Contract and Agreement, withheld retainage for expenses incurred in this job as well as a related job in Pontotoc County. The retainage is withheld pursuant to Contract and Agreement as stated hereinabove, primarily, and set off and/or recoupment additionally. Garnishee anticipates that Defendant may be entitled to additional future payment the amount of which is unknown at this time on said job.

Garnishee has the payment as stated hereinabove in his possession at this time and is awaiting direction and agreement from the various Garnishors as to the amount of payment to each party.

After Martin filed its answer to the second writ of garnishment, Carr Oil moved to add Kizer, the State Tax Commission, and the Bank of New Albany as parties to the action. In its motion, Carr Oil stated on information and belief that Martin was withholding an additional $68,534 by way of satisfaction of an alleged debt owed by Kizer to Martin on a separate transaction between it and Kizer. Carr Oil further alleged that Kizer disputed that he owed Martin the amount of $68,534 or any other amount and that Kizer therefore had "a claim to some part or all of the funds potentially subject to the garnishment." Carr Oil advised the Court of the Bank of New Albany's competing claim to some portion of the debt between Martin and Kizer and that this competing claim resulted from Kizer's November 13, 1991, assignment of his right to payment on the Lafayette County project subcontract. Carr Oil further alleged that Bank of New Albany had "perfected said assignment by filing notice thereof in the UCC filing books of the Union County Chancery Clerk." Carr Oil averred that Bank of New Albany's claim exceeded thirty thousand dollars. In apparent response to Carr Oil's motion to add parties, Martin Contractors filed an amended answer to the garnishment petition in which it stated: [T]he Agreement . . . was between Defendant [Kizer] and Garnishee and was in the nature of an assignment from Defendant to Garnishee."

Martin also attached a copy of the June 14, 1991, agreement between it and Kizer. Martin further stated that: [T]he agreement . . . predated all garnishments and liens against [Kizer] and . . ., pursuant to the original Contract and subsequent Agreement (assignment) between the parties, the only funds which are subject to garnishment are the funds to which [Kizer] has an interest and in which his right to recover has matured, being the sum of Twenty-three Thousand Seven Hundred Ninety-six Dollars ($23,796).

Notwithstanding Martin's objections to Carr Oil's motion for joinder, the trial court sustained the motion, which made Kizer, the State Tax Commission, and the Bank of New Albany parties to the garnishment action. Kizer then filed his Contest of Garnishee's Answer by Defendant in which he alleged that Martin owed him $92,330.00 rather than the $23,796.00 that Martin admitted in its amended answer. As authority for asserting this position, Kizer cited Section 11-35-47 of the Mississippi Code of 1972. Subsequently, Carr Oil also filed a contest of garnishment answer in which it alleged, inter alia, that Martin owed Kizer $92,330.00 rather than $23,796.00. Bank of New Albany filed its Response or Claim of Bank of New Albany in which it asserted its claim against the funds that Martin had received for the Lafayette project in an amount sufficient to retire its loan, which was then $32,485.00. Bank of New Albany asserted that it had "assignment of all contract proceeds due on both the Pontotoc and Lafayette County jobs perfected by acknowledgment from Martin as to the Pontotoc job and by a UCC filing on November 13, 1991, as to the Lafayette County job, with actual notice of such filing being delivered to Martin on a timely basis." Martin filed another answer in which it again alleged that: [Kizer] had previously assigned future funds which might become due [Kizer] to [Martin] by a valid, written assignment and that [Kizer] had defaulted under the terms of the original Rental Agreement Contract between [Kizer] and [Martin]. (emphasis added)

Martin also alleged that Kizer was "contractually obligated to [it] for retainage . . . ." Martin also responded to Kizer's contest of garnishee's answer and filed a cross-claim in which it affirmatively alleged that "[Kizer] had previously assigned all future funds due [it] under the terms of a Rental Agreement, [which] . . . [Kizer] failed to complete in a timely fashion, his portion of the Contract between the parties." (emphasis added). Martin then included in this pleading a cross-claim against Kizer for breach of his Pontotoc County subcontract with it. Once more Martin referred to the agreement dated June 14, 1991, in which Kizer assigned future funds to which he might be entitled unto Martin. As its final pre-trial response to all of the foregoing pleadings and motions, Martin filed one last amended answer in which it reduced the amount of its debt to Kizer from $23,796.00, as it had pleaded in an earlier amended answer, to $11,750.38. It explained that it had incurred $105,144.42 in excess cost for completing the Pontotoc project, rather than the $68,534.00 that it had originally pleaded. Martin also explained that the State Highway Commission had paid the previously withheld retainage on the Lafayette project and that it had credited Kizer with $24,564.88 as his share of the retainage. Thus, Kizer had earned a total credit of $116, 894.50 as his share of the income from the Lafayette project. Martin then proposed to debit Kizer's share of $116, 894.50 for its excess cost of completing the Pontotoc project in the amount of $105,144.42, leaving a balance of $11,750.38. Put another way, Martin proposed that Carr Oil, Bank of New Albany, and the State Tax Commission should accept $11,750.38 as the entire balance of its obligation to them as a result of the garnishment.

On June 16, 1994, after a bench trial, the court rendered its judgment. The court found that: [T]he instrument signed on or about June 14, 1991, which Martin argues constituted an assignment by Kizer to Martin of all payments from the Lafayette County job for expenses Martin incurred in finishing the Pontotoc County job, is a document governed and controlled by the provisions of the Uniform Commercial Code. The Court further finds that since Martin did not perfect his interest by following the requirements of the Mississippi Uniform Commercial Code, that his interest is subordinate to the other parties who did perfect their interest pursuant to Mississippi Uniform Commercial Code filing requirements or by garnishment proceedings, etc. The Court, therefore, finds that the Mississippi Tax Commission has first priority. Carr Oil Company has second priority, and that Bank of New Albany has third priority on the money earned by Kizer under his subcontract with Martin on the the Lafayette County project, which at the time of the hearing was in the amount of $116,894.50. It is therefore ordered and adjudged that the Mississippi State Tax Commission have and receive the sum of $16,935.16. That Carr Oil Company have and receive the sum of $64,146.20. That the Bank of New Albany have and receive the sum of $38,602.70. It is further ordered and adjudged that the Court does not at this time make any ruling regarding the contested claim of Martin for any alleged losses suffered by virtue of the Pontotoc County project to which it might be entitled to recover from Kizer, and that part of this case is dismissed without prejudice as being rendered moot by this proceeding which was limited to the determination of the priority of competing rights to a fixed sum of money.

After the trial court rendered its judgment, Martin filed a motion for a new trial or in the alternative, amendment of judgment, which the trial court denied. III. Issues and the law Martin raises thirteen issues in its appellate brief. These issues are as follows: ISSUE I. Whether the trial court erred in finding that the document between General Contractor and Subcontractor was an instrument governed by the UCC rather than a contract modification addendum between two private contracting parties?

ISSUE II. Whether the trial court erred in determining that the UCC umbrella extended to contracts between parties simply because they entered into more than one contract?

ISSUE III. Whether the trial court erred in not determining that MCA 75-9-104(f) was applicable even if the instrument between General Contractor and Subcontractor was governed by the UCC?

ISSUE IV. Whether the trial court erred in not finding that MCA 75-9-104(i) was applicable as an exception to the recording requirement of the UCC in this case even if the UCC was applicable to the contract?

ISSUE V. Whether the trial court erred in not finding that the instrument between the General Contractor and Subcontractor fell within the exception contained in MCA 75-9302(1)(a) even if governed by the UCC?

ISSUE VI. Whether the trial court erred in not finding that MCA 75-9-318 should apply as an exception even if the instrument between the General Contractor and Subcontractor modifying earlier contracts was governed by the UCC?

ISSUE VII. Whether the trial court erred in finding that funds held by General Contractor had inured to the Subcontractor's benefit thus putting the funds within the grasp of creditors?

ISSUE VIII. Whether the trial court erred in overruling Appellant's objection to the Circuit Court's joinder of parties and jurisdiction of the Circuit Court to litigate, in a granishment proceeding, contract issues between a general contractor and a subcontractor and when creditors pleadings sought equitable relief?

ISSUE IX. Whether the trial court erred in not applying equity as originally pled by garnishees in awarding large judgments to Appellees?

ISSUE X. Whether the trial court erred in finding that the Appellees, despite approving General Contractor's previous deductions from Subcontractor's draw in accordance with the contract agreement, were entitled to priority over the General Contractor?

ISSUE XI. Whether the trial court erred in finding that the Bank was entitled to priority

over General Contractor despite the fact that the Bank subsequently sought and obtained a Financing Statement from Subcontractor after learning of the prior existence of the contract addendum agreement between Subcontractor and General Contractor?

ISSUE XII. Whether the trial court erred in overlooking the evidence that the General Contractor stood in the position of surety for the Subcontractor and is entitled to be indemnified for sums paid to laborers, materialmen, equipment, and other expenses in completing the subcontract for Subcontractor?

ISSUE XIII. Whether the trial court erred in refusing to consider the Crossclaim filed by General Contractor?

This Court considers each of Martin's thirteen issues in the order in which he presented them to it. A. ISSUE I. Whether the trial court erred in finding that the document between General Contractor and Subcontractor was an instrument governed by the UCC rather than a contract modification addendum between two private contracting parties?

Martin argues that the only way that its June 14, 1991, agreement with Kizer could be found to be an instrument governed by the UCC, would be if the document had been labeled as a "simple lien assignment." Martin argues that if this agreement is not an assignment, then the UCC does not apply. The trial judge's determination that the June 14 agreement was an assignmmet subject to the UCC depended on his interpretation of that agreement and the other relevant contracts and agreements. In Dennis v. Searle, 457 So. 2d 941, 945 (Miss. 1984), the Mississippi Supreme Court stated: Where a contract is clear and unambiguous, its meaning and effect are matters of law which may be determined by the court. On the other hand, where the contract is ambiguous and its meaning uncertain, questions of fact are presented which are to be resolved by the trier of the facts after plenary trial on the merits. (citations omitted).

Martin does not argue that the terms of the subcontracts or the June 14 agreement are ambiguous. If the instruments are not ambiguous, then the trial court may interpret them as a matter of law. The terms of June 14 agreement were interpreted by the trial judge to constitute an assignment, and we cannot reverse this determination unless we become persuaded that he erred as a matter of law. We note with considerable interest that in some of its initial pleadings filed at the outset of this litgation, Martin referred to the ageement as "an assignment." We also note that in his opening argument before the trial judge, Martin's counsel made the following assertions:

The Bank of New Albany in late 1990 after Mr. Kizer was obligated to Mr. Martin under these two subcontracts, made a loan to their customer, Bill Kizer, for which Bill Kizer assigned his interest under a Pontotoc County project only. That was acknowledged by Denotee Martin Contractors, Incorporated; and payments made subsequent . . . to that acknowledgment that the bank would be made co-payee which was done. After that time the defendant, Mr. Kizer, before any other liens or garnishments attached, made an agreement which is in the nature of an assignment, we contend, to Denotee Martin Contractors that he was having to leave the Pontotoc project for underperformance and was going to the Lafayette County project which he was equally obligated on; and he was assigned or agreed to any future monies that he might be due would be payable to Denotee Martin Contractors for Denotee Martin Contractors taking up his portion of the Pontotoc subcontract and completing it for him. On August -- seventy days later the Mississippi State Tax Commission gives a lien. Excuse me, issues a garnishment. They're number two. A month later from that on September 4, 1991, Carr Oil issues a garnishment. They're number three. In November 1991 the bank issues a notice of a lien of assignment that Kizer had given on the Lafayette County project, which we contend he had assigned back in June of `91. They're number four. The question is priority of lien. (emphasis added).

Notwithstanding its previous descriptions of the June 14 agreement as an assignment, Martin now contends that it was not an assignment but was instead a "contractual addendum agreement." Martin argues that its change of appellation from an "assignment" to a "contractual addendum agreement" occurred because the June 14 agreement was "a contractual modification agreement between two contracting parties that were already in a contractual relationship with each other as to how proceeds from one would apply to the other." Martin asserts that this agreement "was a contractual transfer of the right to monies pursuant to an existing contract between the parties and a transfer of funds to satisfy an indebtedness that existed as a result of the failure to perform under the contract." In Carr & Howard Construction Co. v. Panhandle State Bank, 347 S.W. 2d 793, 795 (Tex. Civ. App. 1961), the Texas Court of Civil Appeals defined "assignment" as follows: "[t]he term 'assignment' designates the act by which one person causes to vest in another his right or property or interest therein." The Mississippi Supreme Court has also stated: To constitute an assignment there must ordinarily be a valid and perfected transaction between the parties wherein the intent to vest the assignee with a present right in the thing assigned is manifest, and there must be a present transfer of the assignor's right, which is so far complete as to deprive the assignor of his control over the subject of assignment.

Service Fire Ins. Co., v. Reed, 220 Miss. 72 So. 2d 197, 199 (1954) (emphasis added) (citations

omitted).

The first subcontract executed on October 17, 1989, was for the Pontotoc project. The parties to the primary contract for the Pontotoc project were Pontotoc County and Martin. The site of the project was in Pontotoc County. The second Martin-Kizer subcontract, which was for the Lafayette project, was executed on February 2, 1990. The parties to the primary contract for the Lafayette County project were Martin and the State Highway Department. Lafayette County was the site of the second project. Kizer was to receive different amounts of compensation for performing similar, but not identical, dirt and pipe-laying work on the two different projects. The subject of the agreement dated June 14, 1991, was the Pontotoc project. The testimony of Denotee Martin and other witnesses established that Martin and Kizer made this June 14 agreement to mollify the Pontotoc County Board of Supervisors' dissatisfaction with Martin's difficulties in completing the Pontotoc project. By that time Denotee Martin had filed an action in the federal district court to enjoin a Pontotoc County supervisor's interference with his company's completion of its contract with Pontotoc County. Denotee Martin testified that Kizer and Martin Contractors made this June 14 agreement in response to the federal judge's encouragement to Martin and the board of supervisors that they resolve their differences without resorting to further litigation. The phrase "Lafayette County" appeared nowhere in the June 14 agreement. The June 14 agreement also did not state that Kizer would continue to work full time on the Lafayette County project. The agreement was silent about the Lafayette project as well as Kizer's responsibility as a subcontractor for Martin on that project. However, the June 14 agreement stated that "[t]he costs incurred for the additional labor will be charged against any monies due to the Subcontractor as may be required to complete this project." (emphasis added). We find that this statement communicated Kizer's effective transfer of his right, title, and interest in and to "any monies due to [him] as may be required to complete this project." Because it transferred Kizer's interest in "any monies due him" from any project, it necessarily served the function of Kizer's assigning to Martin his interest in "any monies due him" from the Lafayette County project. Thus, this Court finds that the June 14 agreement was an assignment as that word has been defined and employed by the Mississippi Supreme Court. Section 75-9-102 of the Mississippi Code determines whether the June 14 agreement is covered by the UCC. Included within its terms are assignments which are created by contract. We therefore hold that the June 14 agreement, which we have interpreted to have been Kizer's assignment of his income from his subcontract on the Lafayette County project to Martin, was subject to the UCC. We thus affirm the trial court's determination that the June 14 agreement was governed and controlled by the provisions of the UCC and conclude that Martin's argument that the June 14 agreement was a "contractual addendum agreement," -- and not an agreement -- fails. We affirm the trial court's adjudication as a matter of law that the June 14 agreement was an assignment and that it was subject to the provisions of the Uniform Commercial Code. B. ISSUE II. Whether the trial court erred in determining that the UCC umbrella extended to contracts between parties simply because they entered into more than one contract?

The court's judgment does not specifically determine "that the UCC umbrella extended to contracts between parties because they entered into more than one contract." However, to support its position on this issue, Martin's brief contains the following argument: The contract addendum agreement entered into in June, 1991, is the bridge that connects the Pontotoc contract and the Lafayette contract. Pursuant to the contract addendum agreement between the parties executed in June, 1991, General Contractor retained the sum of $105,144.42 which he had received pursuant to the general contract on the Lafayette County project and applied the same to the indebtedness incurred for and on behalf of the Subcontractor in completing the subcontract on the Pontotoc County project between the parties.

We reject the proposition that the June 14 agreement "is the bridge that connects the Pontotoc contract and the Lafayette contract" because nowhere in the June 14 agreement is the Lafayette project mentioned. Instead, only the Pontotoc project is the subject of the June 14 agreement. The relationship between the June 14 agreement and the Lafayette project is only that Kizer assigned to Martin that portion of his compensation for completing the Lafayette project as Martin determined was necessary to reimburse it for its "costs incurred for the additional labor" required to complete the Pontotoc project. That those costs were to be charged "against any monies due to the Subcontractor" was broad enough to include more than just Kizer's payment for his completing his subcontract for the Lafayette project. A second reason to reject Martin's argument that the June 14 agreement "bridged" the two subcontracts so that it became a "contract addendum agreement" for the Lafayette project is that Kizer's earlier assignment of his interest to Bank of New Albany in the Pontotoc project had become void. Kizer had abandoned the Pontotoc project to Martin. Martin's acceptance of Kizer's assignment to the Bank of New Albany of the Pontotoc project provided: In the event Denotee Martin Contractors, Inc., . . . takes over for Kizer due to any . . . failures of Kizer to do or perform any act or work or for failure to do or perform any act or work, and no further payments are due Kizer, then Denotee Martin Contractors, Inc. shall have no further responsibility to Bank for any remaining balance due Bank by Kizer. Denotee Martin Contractors, Inc. is not in any way guaranteeing nor incurring liability on the note between Kizer and Bank other than making Bank a copayee as and when Kizer is paid by Denotee Martin Contractors, Inc. for work performed under this Rental Agreement.

Martin does not dispute that Kizer agreed to leave the Pontotoc project so that Martin might complete it. Martin's agreement that he would not be liable for any further payment to the Bank of New Albany on Kizer's assignment to the bank if Kizer failed to complete his work on the Pontotoc County project clearly left Kizer's later assignment of his Lafayette County project subcontract as the

only effective assignment to Bank of New Albany. Thus, if the June 14 agreement ever built a bridge between the two subcontracts for the Pontotoc County and the Lafayette County projects as Martin Contractors argues, Kizer's abandonment of the Pontotoc County project demolished that bridge under the terms of Martin's acceptance of Kizer's assignment of his Pontotoc County project to the bank. The June 14 agreement was not a bridge between Kizer's and Martin Contractors' two subcontracts for the Pontotoc and the Lafayette County projects. C. ISSUE III. Whether the trial court erred in not determining that MCA 75-9-104(f) was applicable even if the instrument between General Contractor and Subcontractor was governed by the UCC?

On this issue, Martin Contractors argues that Kizer "is specifically transferring a right of payment, under a contract, to General Contractor [Martin Contractors], who is also to do the performance under the contract. Thus, Section 75-9-104(f) of the Mississippi Code exempts the June 14 agreement from the UCC's application to it. Section 75-9-104(f) reads as follows: This chapter does not apply (f) to a sale of accounts or chattel paper as part of a sale of the business out of which they arose, or an assignment of accounts or chattel paper which is for the purpose of collection only, or a transfer of a right to payment under a contract to an assignee who is also to do the performance under the contract or a transfer of a single account to an assignee in whole or partial satisfaction of a pre-existing indebtedness . . . . Miss. Code Ann.

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