Justia Mississippi Supreme Court Opinion Summaries

In a contract dispute between film producer Adam Rosenfelt and the Mississippi Development Authority ("MDA"), Rosenfelt claimed the MDA promised loan guarantees so he could make movies in Mississippi. He made one film, which was not financially successful, and the MDA refused to guarantee the loan for his next project. Rosenfelt claimed the MDA breached a contract with him, personally. The Mississippi Supreme Court concluded Rosenfelt lacked standing to file suit: the actual documents showed any agreement was between the MDA and one or more LLCs, not Rosenfelt personally. Furthermore, the Court determined no error has been shown as to the dismissal of one of those LLCs, Element Studios, LLC, for want of standing. View "Rosenfelt v. Mississippi Development Authority" on Justia Law

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

From November 2004 to January 2011, The Door Shop, Inc., used $36,081.86 of electricity from Alcorn County Electric Power Association (ACE). But because of a billing error, it was charged only $10,396.28. Upon discovering the error, ACE sought to recover the $25,658.58 difference via supplemental billing. The Door Shop refused to pay, which prompted ACE to file suit. ACE maintained that The Door Shop was liable for the underbilled amount and moved for summary judgment, which the circuit court granted. This appeal followed. Finding no reversible error, the Mississippi Supreme Court affirmed. View "The Door Shop, Inc. v. Alcorn County Electric Power Association" on Justia Law

The trial court granted summary judgment in favor of George McKee and Brownsville Station, LLC, dismissing Monty Brown’s claims against them. Brown and McKee were former business partners. At one time they each owned a fifty percent interest in Brownsville Station, which owned and operated an apartment complex in Starkville, Mississippi. But beginning in 2003, Brown began selling his interest to McKee. From July 2003 to January 2006, through a series of four agreements, Brown transferred all his interest units to McKee in exchange for money and title to the company tractor. As part of the final agreement, both parties agreed to a full and final release of any and all claims against each other. For six years, Brown had no dealings with McKee or Brownsville Station. Then, in September 2012, Brown received notice from the Secretary of State that McKee had filed articles of reinstatement for Brownsville Station and its subsidiary, BrownE, LLC. According to Brown, the September 2012 notice prompted him to tell his boss about his former business relationship with McKee. And his boss, who was also an attorney, suggested McKee had engaged in wrongdoing. Almost ten years after the first transfer and seven years after the final transfer, Brown sued McKee and Brownsville Station, alleging McKee formed the new LLC “solely to provide a vehicle to take secret or uniformed [sic] advantage of [Brown] by enabling [McKee], among other things, to change provisions of Brownsville LLC’s Operating Agreement without [Brown’s] informed consent.” Brown further alleged that, during the 2003-2006 transactions, McKee hid important financial information and documentation about Brownsville Station and its true value, violating the fiduciary duties McKee owed as both Brown’s attorney and fellow LLC member. Brown appealed, arguing the judge wrongly granted summary judgment without first allowing discovery. The Mississippi Supreme Court disagreed, finding that had summary judgment been granted based on the clear running of the statute of limitations. “And, as the trial judge rightly found, none of Brown’s discovery requests were aimed at establishing his claims were timely. Instead, they were zeroed in on proving his untimely claims.” Therefore, the trial judge did not abuse his discretion by denying Brown’s Rule 56(f) motion for a continuance. View "Brown v. McKee" on Justia Law

Plaintiffs John Davis and Shad Denson filed a complaint seeking declaratory and injunctive relief against the City of Jackson, Mississippi (“City”). The plaintiffs, both taxicab drivers, sought: (1) a declaratory judgment that the City’s taxicab ordinances violate the Mississippi Constitution; and (2) an injunction to prevent the City from denying the plaintiffs a Certificate of Public Necessity for their failure to comply with the City’s ordinances. The City filed a motion to dismiss the plaintiffs’ complaint for lack of subject-matter jurisdiction, citing Mississippi Code Section 11-51-75 (Rev. 2012), which required a bill of exceptions to be filed and transferred to circuit court when the complaining party was aggrieved by a discretionary action of a municipal governing authority. The chancery court granted the City’s motion to dismiss, finding it lacked jurisdiction to consider the case. The plaintiffs appealed. The Mississippi Supreme Court found the dismissal for lack of jurisdiction was proper, but for a different reason: plaintiffs lacked standing to challenge the constitutionality of the City’s taxi ordinances because they failed to file or complete the required application to start a taxicab company in Jackson. View "Davis v. City of Jackson" on Justia Law

Biel REO, LLC (“Biel REO”), filed a breach of contract and guaranty action. Note 1 was secured by property in Okaloosa County, Florida. While the Mississippi case remained pending, Biel REO foreclosed on the Florida collateral and obtained a deficiency judgment against Lee Freyer Kennedy Crestview, LLC (“LFK Crestview”). Biel REO appealed a circuit court finding that because Biel REO had obtained a judgment pursuant to Note 1 in Florida solely against LFK Crestview and because Biel REO’s pleadings requested relief based on Note 1 itself, Note 1 no longer existed. Thus, the Continuing Guaranty signed by Lee Freyer Kennedy (“Kennedy”) individually had nothing left to guarantee as to Note 1. Therefore, Kennedy was not personally liable on any obligations relating to Note 1. The Kennedy Defendants cross-appealed the circuit court finding that LFK Crestview was liable under Note 2 and that the Guaranty Agreement unambiguously encompassed Note 2. The Kennedy Defendants also appealed the trial court’s decision to award Biel REO attorneys’ fees and pre- and post-judgment interest in the amount of Note 2’s stated default rate of eighteen percent. With respect to Note 1, the Mississippi Supreme Court held that the Florida judgments were sufficient evidence of an obligation of LFK Crestview to Biel REO, and the trial court erred in its determination that Biel REO was required to amend its pleadings to include the Florida judgments. With respect to Note 2, the Supreme Court affirmed the trial court's finding that the Kennedy Defendants failed to submit sufficient evidence to prove the assignments were not effective. In addition, the Supreme Court held the trial court correctly found Kennedy to be personally liable for the indebtedness of LFK Crestview pursuant to Note 2. Lastly, the trial court’s award of pre- and post-judgment interest and its award of attorneys’ fees was affirmed. View "Biel Reo, LLC v. Lee Freyer Kennedy Crestview, LLC" on Justia Law

Turtle Creek Crossing, LLC, a minority interest holder in Kimco Hattiesburg, L.P., filed an action in circuit court after it learned it would receive no distribution from the sale of the partnership’s only asset, a multimillion-dollar shopping center. In its complaint, Turtle Creek alleged its fellow partners breached their fiduciary duties and conspired with each other, the partnership, and a sister partnership to market and sell the asset in such a way as to keep Turtle Creek from profiting. According to the defendants, the predominant claim was for an accounting - an equitable claim that belonges in chancery court; had this case been filed in chancery court, there would be a strong argument for the chancery court’s original jurisdiction over the accounting claim, as well as pendant jurisdiction over the legal claims. Turtle Creek did not file this action in chancery court. It filed it in circuit court. And the circuit court also had original jurisdiction, not only over the accounting claim, but also Turtle Creek’s other legal claims. Because Turtle Creek chose a forum with proper subject-matter jurisdiction, the Mississippi Supreme Court determined that choice must be respected. The Supreme Court affirmed the circuit court’s denial of the motion to transfer and remanded for further proceedings. View "KD Hattiesburg 1128, Inc. v. Turtle Creek Crossing, LLC" on Justia Law

The Chancery Court found that Ronald Lampkin had breached his fiduciary duties to Limestone Products, Inc. (“Limestone”). Lampkin and James Oldrum Smith Jr. jointly owned and operated Limestone with a line of credit they each personally guaranteed. Upon Smith’s death and his estate’s refusal to guarantee the line of credit, Lampkin formed Delta Stone, a new corporation which operated on the same property, used the same facilities, and sold rock to the same clients to whom Limestone had sold. Lampkin sought a declaratory judgment against the estate that he was not violating his fiduciary duties to Limestone. The executors of the estate counterclaimed for lost profits and attorney’s fees. At the liability stage of the bifurcated trial, the chancellor determined that Lampkin had breached his fiduciary duty to Limestone by usurping a corporate opportunity. In the damages stage of the trial, the chancellor considered expert testimony, awarded damages, and denied the executors’ request for attorney’s fees, expert-witness fees, and punitive damages. The executors appealed and the Court of Appeals affirmed. The Mississippi Supreme Court reversed the Court of Appeals and found that the chancellor had abused his discretion in calculating the damages award. The Supreme Court remanded for the chancellor to re-evaluate damages. On remand, the chancellor reassessed the damages due to Limestone as a result of Lampkin’s breach of his fiduciary duties. The executors appeal again. After review, the Supreme Court affirmed the chancellor’s judgment on every issue except for the calculation of lost assets. Concerning the calculation of lost assets, it reversed and rendered judgment for $64,363.50. View "Lane v. Lampkin" on Justia Law

In this auditing malpractice case, Thomas L. Wallace and T.L. Wallace Construction, Inc. appealed the Circuit Court's grant of summary judgment to McArthur, Thames, Slay, and Dews, PLLC (“McArthur Thames”) for lack of causation. Wallace filed suit against McArthur Thames, alleging that the accounting firm had negligently audited the financial statements of Wallace Construction and ultimately had caused the destruction of the company by failing to discover hundreds of personal credit card purchases by certain company employees, failing to discover transactions involving hundred of thousands of dollars spent by Wallace Construction to pay for personal home improvements of nonshareholder employees, and by failing to discover inappropriate accounting practices that resulted in an overstatement of income. Wallace sought to recover damages of approximately $14,000,000 allegedly suffered by him as a result of accounting work done by McArthur Thames. The trial court excluded the testimony of Wallace Construction’s sole expert on causation, finding that his opinion was unreliable and insufficient to establish proximate cause. Because the trial court mistakenly believed that expert testimony establishing causation was required in all malpractice cases, and because Wallace Construction presented sufficient lay testimony to overcome summary judgment on the issue of causation, the Mississippi Supreme Court affirmed in part, reversed in part, and remanded the case the trial court for further proceedings. In addition, the Supreme Court found the trial court abused its discretion in disallowing reasonable access to the financial information of Wallace Construction subsequent to June 30, 2012, and in its denial of discovery of the Wallaces’ personal accounts. View "T.L. Wallace Construction, Inc. v. McArthur, Thames, Slay, and Dews, PLLC" on Justia Law

This appeal arose out of a breach-of-contract action between Marc Daniels, Sandra Daniels, Crocker & Associates, Inc., and Maxx Investments, LLC (collectively, “the Danielses”) and Dennis Crocker, Gail Crocker and Crocker, Ltd. (collectively, “the Crockers”). The Danielses entered into an Asset Purchase Agreement (the “Agreement”) with the Crockers to acquire Crocker & Associates, Inc. (“C&A”). Within eighteen months of the sale, C&A lost a number of important contracts and its employees resigned. The Danielses sued the Crockers for failing to disclose all material information about C&A as required by the Agreement. The Crockers answered the suit and brought counterclaims. After extensive discovery, the trial court granted the Crockers’ motion for summary judgment on the Danielses’ claims against them. The Danielses now appeal the trial court’s grant of summary judgment. Because the record contained a genuine issue as to material fact concerning the Danielses’ contract claims and negligent and fraudulent misrepresentation claims, the Mississippi Supreme Court concluded the trial court erred in granting summary judgment on these claims. Further, because the Court remanded these claims for a jury to determine if the Danielses were entitled to compensation, the Court reversed the trial court’s grant of summary judgment on the punitive damages claim. The Court affirmed in all other respects, and remanded the case for further proceedings. View "Daniels v. Crocker" on Justia Law