Justia Mississippi Supreme Court Opinion SummariesArticles Posted in Arbitration & Mediation
Hillhouse v. Chris Cook Construction, LLC, et al.
Timothy and Rebecca Hillhouse entered into a contract with Chris Cook Construction for the construction of their home. The contract contained an arbitration provision mandating that arbitration be conducted before a forum that was unavailable at the time the contract was executed. The trial court entered an order compelling arbitration and appointing an arbitrator. The Mississippi Supreme Court concluded the trial court erred in so doing: because the forum was a contract requirement, the arbitration provision was unenforceable, and appointing an arbitrator required courts to reform the contractual agreement between the parties. Judgment was reversed and the trial court’s order compelling arbitration and remanded the case for further proceedings. View "Hillhouse v. Chris Cook Construction, LLC, et al." on Justia Law
Delta Electric Power Assn. v. Campbell
Members of Delta Electric Power Association filed a lawsuit against the cooperative seeking the return of excess revenue and receipts. Delta moved to compel arbitration. The trial court found that the arbitration clause contained in the bylaws was procedurally unconscionable and denied Delta’s motion to compel. After Delta appealed the trial court’s decision, the Mississippi Supreme Court decided Virgil v. Southwest Mississippi Electric Power Association, 296 So. 3d 53 (Miss. 2020), in which it found an arbitration agreement contained in a cooperative’s bylaws to be valid and enforceable. Because the Supreme Court determined the issues in this case were almost identical to the issues decided in Virgil, precedent required it Court to reverse the trial court’s decision denying Delta’s motion to compel arbitration. View "Delta Electric Power Assn. v. Campbell" on Justia Law
B&S MS Holdings, LLC v. Landrum
David and Jill Landrum began developing land in Livingston, Madison County, Mississippi, in approximately 2006. David sought financial assistance from Michael Sharpe. Michael invested substantial sums in the business, and his wife, Marna Sharpe, gained a membership interest in the business. In 2010, Livingston Holdings, LLC (Livingston), a Mississippi limited-liability company, was formed. The original members of the company were Jill, Marna, and Sara Williams. Livingston acquired Williams’s ownership interests, and Marna later assigned her membership interest to B&S Holdings, LLC (B&S). The development became the Town of Livingston. The members of Livingston consisted of B&S and Jill. In this dispute between the members of the limited-liability company, the question presented for the Mississippi Supreme Court's review was whether statutory provisions prevented the enforcement of an arbitration provision and waiver contained in the operating agreement of the company. Because the Court determined the statutory provisions did not control over the terms of the operating agreement, it affirmed the trial court’s decision to compel arbitration. View "B&S MS Holdings, LLC v. Landrum" on Justia Law
Virgil v. Southwest Mississippi Electric Power Association
Southwest Mississippi Electric Power Association (Southwest) was a nonprofit, member-owned electric cooperative corporation created by statute to provide electricity to rural Mississippians. Plaintiffs Ray Virgil, Barbara Lloyd, and Cassandra Johnson were are members of Southwest who filed a lawsuit alleging Southwest failed to return excess revenues and receipts to its members. Southwest moved to compel arbitration. The trial court granted Southwest’s motion to compel arbitration. Plaintiffs appealed. Finding no reversible error in that judgment, the Mississippi Supreme Court affirmed. View "Virgil v. Southwest Mississippi Electric Power Association" on Justia Law
Jackson Mac Haik CDJR, Ltd. v. Hester
Mac Haik appeals the circuit court’s denial of its motion to compel arbitration. In 2016, plaintiff Brenda Hester purchased a used 2014 Dodge Ram from Jackson Mac Haik CDJR, Ltd. (Mac Haik). Hester executed a retail-installment sale contract with Mac Haik for the purchase of the vehicle. The contract contained an arbitration provision. In 2017, Hester sued Mac Haik, American Financial Warranty Corporation (American Warranty), Randy Miggins d/b/a M&S Towing, and Randy Miggins, alleging that the vehicle she bought from Mac Haik “was defective in materials and workmanship from and after the date of purchase” and “that said defects have existed since the Plaintiff started using said vehicle.” She alleged further that American Warranty issued her a warranty but failed to repair her truck. Hester never served American Warranty with a summons and copy of her complaint. Hester alleged that Mac Haik took possession of her vehicle to make warranted repairs and later allowed it to be towed. Mac Haik, finding that all of Hester’s claims, which sounded in tort or contract and related to her purchase or condition of the vehicle at issue, argued that the claims were subject to arbitration. Mac Haik appealed the circuit court’s denial of its motion to compel arbitration. Because the Mississippi Supreme Court found that the claims fell within the scope of the valid arbitration provision, and that no defenses existed to bar arbitration, it reversed reverse the circuit court’s order denying Mac Haik’s motion to compel arbitration and ordered the claims to arbitration. View "Jackson Mac Haik CDJR, Ltd. v. Hester" on Justia Law
LAGB, LLC v. Total Merchant Services, Inc.
Federico Garcia, president of Mama Kio’s, entered into an agreement with Total Merchant Services (TMS) for credit-card financial services for the restaurant. Two months after opening Mama Kio’s, Garcia noticed that the bank deposits through TMS were considerably less than expected. TMS later discovered the cause was an improper code in its software that had failed to collect the tips authorized by the customers. The missing tips totaled approximately $14,000. TMS attempted to remedy the error by running the credit cards again for the uncharged tip amounts. However, the customers were charged not only for the uncollected tips but also for the entire charged amounts. More than three thousand customers’ transactions were double and/or triple billed, resulting in more than $400,000 taken from Mama Kio’s customers’ accounts. Mama Kio’s worked with the credit-card companies for more than a month to repair and mitigate the damages. Mama Kio’s was forced to close its restaurant for lack of customers. LAGB, LLC, a commercial landlord, filed suit against Mama Kio’s for breach of its lease contract and sought damages for rent, insurance, taxes, and capital improvements. LAGB also sued the companies that provided credit-card processing services to Mama Kio’s, alleging that the negligence of the credit-card processing companies caused Mama Kio’s to breach its lease with LAGB. Mama Kio’s filed a cross-claim against the credit-card processing companies, alleging misrepresentations and tortious interference with its business. The credit-card processing companies filed motions compelling LAGB and Mama Kio’s to arbitrate. The trial court granted the motions. The Mississippi Supreme Court determined that while the trial court did not err by compelling Mama Kio’s to arbitrate its cross-claims, it did err by compelling LAGB to arbitrate its claims. View "LAGB, LLC v. Total Merchant Services, Inc." on Justia Law
Dalon v. MS HUD Ocean Springs LLC
Carol Dalon died in the care of Ocean Springs Health and Rehabilitation Center (OSHRC). As administrator of her estate, Carol’s son Emile Dalon, sued the center for wrongful death, alleging OSHRC and its employees negligently caused Carol’s death. The circuit court granted the defendants’ motion to compel arbitration, and Emile appealed. The Mississippi Supreme Court found Emile presented no evidence he lacked the opportunity to study the arbitration agreement and to inquire about its terms. Emile did not argue he was time pressured when signing the agreement. Additionally, the arbitration agreement explained that Emile had the right to seek legal counsel concerning the arbitration agreement. If Emile had concerns or questions about the arbitration agreement, he could have asked the facility, researched the question on his own, or hired an attorney to assist him. Emile argues he was forced to sign the arbitration agreement in order to get his mother the care she needed. The Court found this claim meritless, concluding Emile entered into the arbitration agreement knowingly and voluntarily. Therefore, the trial court made no reversible error in granting a motion to compel arbitration. View "Dalon v. MS HUD Ocean Springs LLC" on Justia Law
Jackson County, Mississippi v. KPMG, LLP
The Mississippi Supreme Court previously unanimously held that KPMG, LLP could not enforce arbitration agreements attached to five annual engagement letters with Singing River Health System (Singing River), a community hospital, because the terms and condition of the letters were not sufficiently spread upon the hospital board’s minutes to create an enforceable contract. In this appeal, KPMG sought to enforce the very same arbitration agreements attached to the very same engagement letters with Singing River - this time against Jackson County, Mississippi, which acted as Singing River’s bond guarantor. For the same reason the Supreme Court affirmed the trial court’s denial of KPMG’s motion to compel arbitration in KPMG, LLP v. Singing River Health System, the Court reversed and remanded the trial court’s grant of KPMG’s motion to compel arbitration in this case. View "Jackson County, Mississippi v. KPMG, LLP" on Justia Law
Nethery v. CapitalSouth Partners Fund II, L.P.
Gregory Nethery appealed a Circuit Court’s decision to grant a motion to compel arbitration filed by Defendants CapitalSouth Partners, Harbert Mezzanine Partners, and On-Site Fuel Services (collectively, “Defendants”). Nethery retained a minority thirty-percent ownership interest in OSFS through his stock interest in OSFH. CapitalSouth and Harbert each held the remaining interest. In October 2016, Nethery filed suit in circuit court against CapitalSouth and Harbert, claiming breach of fiduciary duty, corporate freeze out, unjust enrichment, constructive trust, civil conspiracy, and negligence and mismanagement. As he claimed in the circuit court, Nethery argued on appeal that, based upon a choice-of-law provision contained in the Stockholders Agreement, Delaware law governed interpretation of the agreement. Nethery contended that under Delaware law, the arbitration clause did not apply because Nethery’s complaint did not allege breach of the Stockholders Agreement, nor did Nethery seek legal relief under the agreement. Rather, Nethery asserted only noncontractual state-law claims and his legal claims existed independently from the contract. Unpersuaded, the Mississippi Supreme Court found the circuit court correctly found Nethery’s claims were subject to the agreement’s arbitration provision. View "Nethery v. CapitalSouth Partners Fund II, L.P." on Justia Law
KPMG, LLP v. Singing River Health System
Singing River Health System a/k/a Singing River Hospital System (“Singing River”) sued KPMG, LLP, alleging separate counts of breach of contract and negligence and/or professional malpractice based on the audits KPMG performed for Singing River in fiscal years 2008 through 2012. Singing River alleged that KPMG failed to comply with the professional auditing and accounting standards expressed in GAAS (Generally Accepted Auditing Standards), GAGAS (Generally Accepted Government Auditing Standards), and GAAP (Generally Accepted Accounting Principles), which KPMG had agreed to follow. Singing River specifically alleged that KPMG’s audits were replete with computational errors and incorrect assumptions, and that KPMG had not performed basic tests to substantiate its opinions. Singing River separately alleged that KPMG was negligent and committed professional malpractice by failing to use the skill, prudence, and diligence other reasonable and prudent auditors would use in similar circumstances, as expressed in the GAAS, GAGAS and GAAP. Singing River alleged, inter alia, that, as a direct and proximate result of KPMG’s audits, Singing River was unaware that its employee-pension plan was underfunded by approximately one-hundred-fifty million dollars ($150,000,000.00). Further, Singing River alleged that it was unaware that it was not in compliance with certain bond covenants due to KPMG’s negligence. KPMG sought to compel arbitration of Singing River’s claims. The circuit court declined to order Singing River to arbitration. The Mississippi Supreme Court determined KPMG’s 2008, 2009, 2010, 2011, and 2012 letters were not spread across the Board’s minutes. The Court could not enforce these contracts or the dispute-resolution clauses attached to them. KPMG’s additional arguments concerning the delegation clause, collateral estoppel, and direct-benefit estoppel were without merit. The trial court’s order denying KPMG’s motion to compel arbitration was affirmed, and the case was remanded for further proceedings. View "KPMG, LLP v. Singing River Health System" on Justia Law