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UNIVERSAL COMPUTER SERVICES, INC. v. BARRY L. LYALL

FEBRUARY 13, 1985

UNIVERSAL COMPUTER SERVICES, INC.
v.
BARRY L. LYALL



BEFORE ROY NOBLE LEE, DAN LEE AND PRATHER

PRATHER, JUSTICE, FOR THE COURT:

Attachment in chancery of personalty is the subject matter of this appeal. Barry L. Lyall (Lyall) filed in the

First Judicial District of Hinds County a bill for an attachment in chancery and a complaint for breach of contract against his employer, Universal Computer Services, Inc., a non-resident corporation. The chancellor granted judgment to Lyall, impressed a lien against Universal's automobile held by Lyall to satisfy the costs, judgment, and interest, and ordered the sheriff to sell the car in accordance with law. Upon motion of Universal for appeal with supersedeas, the trial court permitted such an appeal upon the posting of the required bond. The defendant/appellant then took possession of the auto under bond.

 Appellant urges this Court to reverse the judgment below assigning that the chancery court committed error in:

 (1) Applying the Mississippi Rules of Civil Procedure to attachment in chancery;

 (2) Assuming jurisdiction of this cause of action;

 (3) Admitting the Employment Agreement as an exhibit and permitting testimony regarding it; and

 (4) Failing to recognize appellant's defense and counterclaim of setoff.

 Universal Computer Services, Inc. (Universal) is a non-resident corporation, incorporated under the laws of the State of Texas and qualified to do business in the State of Mississippi. It sells computer systems primarily to General Motors Auto dealership parts and service departments designed to facilitate parts inventory control, record on repair work, and inter-dealership inventory checks. Since September 24, 1981 Lyall was an employee of Universal as marketing representative who sold the computer systems on a salary and commission basis. In addition he had signed an" Employment Agreement, "referred to herein as" Exhibit 2, "covering duties of employment, non-competition restrictions, etc., but which did not cover renumeration of Lyall. Lyall was furnished use of a company automobile, the object of the attachment in this suit. Effective January 3, 1983 Lyall resigned from his employment and made demand upon Universal for commissions of $2,000 due him for sales for the corporation and salary of $400.00, totaling $2,400.00. According to Universal, the corporation owed Lyall only $9.42 and sent him a check in that amount in full satisfaction. Lyall refused the check and filed this suit for breach of contract and attachment in chancery. The attachment is sought against Lyall's company furnished automobile, a 1981 Chevrolet Chevette automobile.

 Procedurally, the appellant/defendant was made a party by service of process by and through the Secretary of State under Miss. Code Ann. 13-3-57 (Supp. 1982). *fn1 The complaint alleged that the parties had entered into a contract to be performed in whole or in part in this state and that the defendant by said actions had denominated the Secretary of State as his agent for process.

 Attached to the complaint were several documents which were: (1) the sales plan for quote and commissions exhibited to all salesmen of Universal, later introduced as" Exhibit 2 ", (2) letter of resignation, (3) Employment Agreement, and (4) affidavit complying with Miss. Code Ann. 11-31-2 for an application for order of attachment in chancery.

 A hearing before the chancellor was had on the attachment features of this suit and at this ex parte judicial hearing the plaintiff showed to the chancellor a need for attachment. The chancellor found in his order that the plaintiff's ability to recover his underlying claim may be significantly impaired or impeded without attachment, that the attached affidavit of plaintiff made out a prima facie case of the plaintiff's right to recovery from the defendant, that the plaintiff filed a bond of $2,400.00 properly conditioned in accord with the statute, and that attachment should issue on the automobile.

 The process served on the Secretary of State on February 2, 1983, was properly noticed to Universal. Thereafter on February 9, Universal wrote the chancery clerk of Hinds County a letter seeking a" request for clarification "of the details of Mr. Layll's claim in order to respond to process. On February 22, 1983, Universal wrote the clerk a letter, again asking the clerk for additional information. In this second letter Universal stated that" no additional compensation "was due Lyall and that as such, the company had responded in court as required to the Lyall claim. Additionally, within this letter, Universal stated that the 1981 Chevrolet Chevette" rightfully belonged to the company "and asked the clerk to see that all claims be declared null and void and the automobile released to it. Both letters reflected that a carbon copy of the letter was mailed to Lyall's attorney. A third letter to the clerk reiterated substantially the same message.

 On March 7, 1983, docket of entry of default was filed by Lyall's attorney, and default entered by the clerk. A notice of setting of the case for trial was entered setting the case for May 24, 1983, and later continued to June 28. A motion for summary judgment was filed by Lyall's attorney pursuant to Rule 56, M.R.C.P. In the alternative, Plaintiff requested

 that the requests for admissions filed by the plaintiff under Rule 36 M.R.C.P., which the defendant failed to answer, be taken as admitted. On the appointed date, the chancellor entered summary judgment for the plaintiff Lyall. (These requests for admissions were later answered by Universal).

 At this late time, Universal employed an attorney who filed a motion to set aside the summary judgment, which motion the trial court granted. As for defendant Universal's responsive pleading, Universal's attorney asked for and was granted permission to file an amended answer supplementing the informal and pro se letter response filed by Universal formerly. The amended answer of October 17, 1983 challenged the court's jurisdiction, denied Lyall's claim, and a set-off of $289.19 as expense advancement to Lyall. The answer admitted that the car rightfully belonged to the defendant.

 A second amended answer was filed by Universal on December 1, 1983, and leave of the court to file same granted on December 5, 1983 before trial began on December 6, 1983. This second amended answer was sworn and omitted the allegation that the car rightfully belonged to the defendant, and denied that the car was in the possession of the plaintiff Lyall.

 II.

 Initially, a review of attachment in chancery would be of help as we proceed. Attachment in chancery is a statutory procedure set forth in Miss. Code Ann. 11-31-1 et seq. (Supp. 1984) for the collection of debts against non-resident, absent or absconding debtors. One feature of our former attachment in chancery statute was held violative of the state law and of the Fourteenth Amendment to the United States Constitution, which guarantees against the taking of private property without due process of law. Mississippi Chemical Corp. v. Chemical Construction Corp., 444 F. Supp. 925 (S.D., Miss. 1977) (as to personalty); MPI, Inc. v. McCullough et al., 463 F. Supp. 887 (N.D.Miss. 1978) (as to realty). Thereafter, the Mississippi Legislature enacted amendments effective July 1, 1980 which provided judicial monitoring, security in an amount satisfactory to the chancellor and an immediate post-seizure hearing for the defendant to satisfy the mandates of due process under both state and federal constitutions. See Adm'r. of Tulane Ed. Fund v. Cooley (No. 54,500, decided 12/12/84, not yet reported); Penrod Drilling Co. v. Bounds, 433 So.2d 916 (Miss. 1983); Shaffer v. Heitner, 433 U.S. 186 (1977). See generally 52 Miss. L.J. 183 (1982).

 III.

 The numerous assignments made by the appellant appear to be summarized as follows: (A) are the new Mississippi Rules of Civil Procedure adopted January 1, 1982 applicable to an attachment in chancery proceeding, (B) was there subject matter jurisdiction of the ...


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