Justia Mississippi Supreme Court Opinion SummariesArticles Posted in Bankruptcy
Clarke County, Mississippi v. Quitman School District
The Supreme Court of Mississippi examined whether a school district was entitled to funds recovered by a county from the bankruptcy proceedings of a delinquent taxpayer. The taxes, if collected normally, would have been used to fund the school district. However, the county board of supervisors had anticipated the delinquency and adjusted the levy of ad valorem taxes to compensate, ensuring the school district did not experience a shortfall. The school district argued it was entitled to its original portion of the recovered bankruptcy funds, but the county claimed that this would result in a double recovery outside the statutory scheme for public school funding. The Supreme Court of Mississippi found in favor of the county, ruling that the recovery of delinquent taxes through bankruptcy proceedings is outside the statutory funding scheme for public school districts in Mississippi. The court found that the school district was not entitled to receive delinquent taxes recovered years later in bankruptcy proceedings and reversed and remanded the lower court's award to the school district. View "Clarke County, Mississippi v. Quitman School District" on Justia Law
Saunders v. National Collegiate Athletic Association
A Mississippi trial court dismissed David Saunders’s claims against the National Collegiate Athletic Association (NCAA) based on judicial estoppel because Saunders did not list these claims in his prior Chapter 7 bankruptcy. Until December 2010, Saunders served as football operations coordinator at the University of Mississippi. From January 2011 to October 2014, Saunders worked as an assistant football coach for the University of Louisiana. Based on Saunders’s alleged rule violations while at each institution, the NCAA conducted separate investigations and enforcement proceedings against both schools. The NCAA concluded Saunders had violated NCAA rules while at Louisiana. As punishment, the NCAA issued a show-cause directive to any NCAA member institution that may want to employ Saunders in an athletics position from January 2016 to January 2024. Saunders retained an attorney to represent him in NCAA proceedings. The attorney insisted financial strain prevented Saunders from traveling to defend himself personally. After a second show-cause directive, Saunders and his attorney discussed suing the NCAA, but at that time he did not pursue a lawsuit. Months later, Saunders filed a voluntary petition for Chapter 7 bankruptcy averring he had no claims against third parties. Saunders received a bankruptcy discharge in July 2018. Almost two years later, Saunders sued the NCAA: it was not until another football coach sued the NCAA, and made it past the summary judgment stage, that Saunders believed he had an actual shot at taking on the NCAA in court. The NCAA simultaneously filed an answer and a motion for summary judgment. In both, it asserted Saunders’s claims were barred by the doctrine of judicial estoppel because Saunders had not disclosed these claims against the NCAA in his 2018 bankruptcy proceedings. The court ruled that Saunders’s claims against the NCAA belonged to Saunders’s bankruptcy estate, so the bankruptcy trustee was substituted as the real party in interest and plaintiff in the action. Further, while judicial estoppel did not bar the trustee from pursuing these claims for the benefit of the bankruptcy estate, Saunders himself was barred by judicial estoppel from pursuing his claims against the NCAA, including the declaratory-relief claim abandoned by the bankruptcy trustee. The Mississippi Supreme Court concluded the trial court erred for two reasons: (1) the trial judge erred by estopping Saunders from pursuing this type of declaratory relief; and (2) it was error for the trial court to presume Saunders should be estopped based on his mere knowledge of the facts giving rise to his claims against the NCAA, coupled with his failure to list these claims on his bankruptcy schedule. View "Saunders v. National Collegiate Athletic Association" on Justia Law
Jones v. Alcorn State University, et al.
Ernest Jones appealed a circuit court’s grant of summary judgment in favor of the Board of Trustees of the State of Institutions of Higher Learning of the State of Mississippi (IHL) because the doctrine of judicial estoppel barred his claims. Jones became the head football coach at Alcorn State University. Subsequently, he filed a breach of contract action against the IHL on in 2008. Jones was fired in January 2009. In October 2015, Jones petitioned a bankruptcy court in Florida for protection from his creditors. Jones failed to disclose the breach of contract suit against the IHL in the bankruptcy schedule’s “list of suits and administrative proceedings to which the debtor was a party within one year immediately preceding the filing of this bankruptcy case.” A jury returned a verdict in Jones’ favor in his breach of contract suit. On the day of the verdict, he voluntarily dismissed his bankruptcy proceeding. IHL moved for a judgment notwithstanding the verdict, and the circuit court set aside the verdict. Then in April 2017, while Jones’s appeal was pending before the Court of Appeals, he filed a second bankruptcy petition, this time, Jones proposed and filed a Chapter 13 plan. Despite the pending appeal, Jones again failed to disclose the IHL suit to the bankruptcy court, attesting under oath that no such claims existed. The Court of Appeals reversed and remanded the IHL suit. Back at the circuit court, IHL moved for summary judgment, arguing judicial estoppel barred Jones from recovery. Within ten days of the IHL’s seeking dismissal, Jones moved to amend his bankruptcy plan and for the first time disclosed the IHL lawsuit. Thereafter, the circuit court held a hearing on the IHL’s motion for summary judgment. The Mississippi Supreme Court found no abuse of the circuit court’s discretion in applying judicial estoppel to the facts found in this record. View "Jones v. Alcorn State University, et al." on Justia Law
Lefoldt v. Rentfro
After Natchez Regional Medical Center (“NRMC”) filed for Chapter 9 bankruptcy, H. Kenneth Lefoldt, who had been appointed trustee for the NRMC Liquidation Trust, sued NRMC’s former directors and officers in the United States District Court for the Southern District of Mississippi, alleging breach of fiduciary duties of care, good faith, and loyalty. The directors and officers sought dismissal under Federal Rule of Civil Procedure 12(b)(6) and argued that they were immune under the Mississippi Tort Claims Act (“MTCA”). The district court agreed and granted dismissal to the directors and officers. Lefoldt appealed, and the Fifth Circuit certified questions of Mississippi Law to the Mississippi Supreme Court pertaining to the MTCA as the exclusive remedy for a bankruptcy trustee standing in the shoes of a public hospital corporation against the employees or directors of that public corporation. If indeed the MTCA was the exclusive remedy, then did the MTCA permit the trustee to pursue any claims against the officers and directors in their personal capacity? The Mississippi Supreme Court answered the first question in the negative: the MTCA did not furnish the exclusive remedy for the bankruptcy trustee. View "Lefoldt v. Rentfro" on Justia Law
Mississippi Department of Environmental Quality v. Pacific Chlorine, Inc.
Vicksburg Chemical Company (VCC) filed for bankruptcy in 2002. Included in its bankruptcy estate was over 500 acres of real property, a portion of which was contaminated. Pursuant to an agreed order, the bankruptcy court allowed VCC to abandon the property and allowed the Mississippi Department of Environmental Quality (MDEQ) to choose the purchaser. Without the aid of any guidelines or statutory law regarding this process, MDEQ, at the suggestion of the Attorney General's Office (AG), published a Request for Proposals (RFP) to identify interested parties capable of removing the contamination. The plaintiff, Pacific Chlorine, Inc. (PCI), was one of several companies to submit a proposal. MDEQ did not select PCI's proposal, but instead selected Harcros Chemicals, Inc. (Harcros), a company which worked closely with the City of Vicksburg (the City) on its proposal. Aggrieved, PCI sued MDEQ and the City. PCI settled with the City. Following a bench trial, the trial court rendered a judgment against MDEQ. MDEQ appealed to the Supreme Court, raising six assignments of error that fall into three categories: whether PCI is required to exhaust its administrative remedies, whether the trial court erred by denying MDEQ's motion to dismiss/motion for summary judgment, and whether MDEQ is immune from suit under the Mississippi Tort Claims Act (MTCA). This case presented an issue of first impression, the issue being whether MDEQ acted within the scope of its authority when assisting a bankruptcy court with finding a purchaser for contaminated land. The Court found that it was. View "Mississippi Department of Environmental Quality v. Pacific Chlorine, Inc." on Justia Law
Trustmark National Bank v. Meador
Dr. Carroll Meador filed a complaint against Mississippi Baptist Health Systems, Inc. (MBHS), Trustmark National Bank (Trustmark), and Doe Defendants 1 through 10, for breach of fiduciary duties, interference with fiduciary duties, interference with contract rights, interference with prospective business advantage, intentional infliction of emotional distress, deceit, fraud, and retaliatory discharge. The complaint stemmed from the doctor's employment with MBHS and a large line of credit he obtained from Trustmark. A dispute between the parties ended with the bank suing the doctor for defaulting on the loan, and the doctor declaring bankruptcy. Several defendants sought to remove the case to the federal district court. The district court granted remand of the case, finding the federal bankruptcy proceedings in the case had been concluded and only state claims remained. Then Defendants Trustmark, MBHS and several codefendants filed a motion for summary judgment and motion to dismiss. The doctor appealed the ultimate outcome of the trial court's decision in favor of Defendants. Upon review, the Supreme Court found that the trial court abused its discretion in refusing to strike portions of the doctor's affidavit, and in denying Trustmark and MBHS' motions for summary judgment. The Court reversed the trial court's decision and remanded the case for further proceedings. View "Trustmark National Bank v. Meador" on Justia Law
Phillips v. Kelley
Charles Phillips and RJK Investments, LLC, appealed a circuit court's order dismissing with prejudice all of its claims pursuant to a compromise and settlement order entered in the United States Bankruptcy Court. Phillips, through RJK, owned and managed a restaurant franchise. After a fire damaged the restaurant, Defendants Joey Kelley and other creditors attempted to seize control of the remaining assets. Phillips and RJK sued the creditors on multiple grounds. While this case was pending, Phillips individually filed for Chapter 7 bankruptcy. The bankruptcy court's order plainly directed the trustee to execute an Order of Dismissal as to all claims in this action. The order released the defendants from any further responsibility and liability, which necessarily would include any claims of RJK. Accordingly, the Supreme Court found that the trial court did not err in dismissing Phillips' and RJK's suit. View "Phillips v. Kelley" on Justia Law