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Mauck v. Columbus Hotel Company

November 25, 1998

EDWIN C. MAUCK AND KENNETH L. SMOTHERMAN
v.
COLUMBUS HOTEL COMPANY, A DELAWARE CORPORATION, FIRST FEDERAL BANK FOR SAVINGS, AND THE CITY OF COLUMBUS, MISSISSIPPI COLUMBUS HOTEL COMPANY, A DELAWARE CORPORATION
v.
ELMER PIERCE, JR., CHARLES N. WHITE, D/B/A EL ARK, INC., AN ARKANSAS CORPORATION, KENNETH L. SMOTHERMAN, AND EDWIN C. MAUCK, FIRST FEDERAL BANK FOR SAVINGS, AND THE CITY OF COLUMBUS, MISSISSIPPI



Before Sullivan, P.j., Roberts And Waller, JJ.

The opinion of the court was delivered by: Sullivan, Presiding Justice

CONSOLIDATED WITH 90-CA-00846-SCT

DATE OF JUDGMENT: 09/30/96

TRIAL JUDGE: HON. DOROTHY WINSTON COLOM

COURT FROM WHICH APPEALED: LOWNDES COUNTY CHANCERY COURT

NATURE OF THE CASE: CIVIL - OTHER

DISPOSITION: AFFIRMED IN PART, REVERSED AND REMANDED IN PART - 11/25/98

MOTION FOR REHEARING FILED:

MANDATE ISSUED:

¶1. This appeal arises from a decision of the Chancery Court of Lowndes County, Mississippi that followed the reversal and remand by this Court of the case Columbus Hotel Co. v. Pierce, 629 So. 2d 605 (Miss. 1993). That opinion canceled a long term lease that Columbus Hotel Company (hereafter CHC) sought to have forfeited and remanded the case to the lower court in order to determine the proper amount of the attorney's fees and expert fees to be awarded to CHC. Id. at 611. Following remand, defendant interveners First Federal Bank For Savings (hereafter First Federal) and the City of Columbus (hereafter City) filed motions to dismiss, or in the alternative for summary judgment. Both First Federal and the City argued that they were not parties to the lease agreement, and consequently are not liable to CHC for fees or expenses incurred in the litigation. Chancellor Woodrow W. Brand, Jr. denied both motions by order entered September 26, 1994.

¶2. The chancery court, upon its own motion, granted certification pursuant to Miss.R.App.P. 5(a). With permission from the lower court, First Federal and the City filed a Petition for Interlocutory Appeal with this Court seeking clarification of the issues to be decided by the chancery court on remand. Both petitions were denied by this Court on April 11, 1995, when this Court found the petitions to be "without merit".

¶3. After the denial of the Interlocutory Appeal, another Chancellor, Dorothy W. Colom, assumed the case. CHC filed a motion and supporting brief for award of attorney fees and expenses. In both the City and First Federal's response to CHC's motion for award of attorney fees and expenses, each party once again argued that it was not responsible for CHC's attorney fees and expenses.

¶4. On September 4, 1996, Chancellor Colom entered her Opinion Awarding Attorney's Fees, which awarded CHC all fees and costs requested on an hourly basis, with a reduction of ten percent for attorney Lipscomb's failure to maintain contemporaneous time records for a total award of $97,696.25. The Chancellor rejected CHC's request for enhancement of the fee award but the opinion further awarded $22,072.26 for expenses relating to the litigation of the action. In addition, the Chancellor granted First Federal and the City its motion to dismiss on the issue of attorney fees by finding "Neither First Federal nor the City of Columbus qualify as lessees, assignees or sublessess [sic]." A Final Judgment in favor of CHC was entered against El-Ark, Inc., Smotherman and Mauck on September 30, 1996.

¶5. We hold that the chancellor's finding that neither First Federal nor the City are liable for the attorney's fee award to CHC was in error based on the law of the case doctrine and therefore this case requires reversal. However, we conclude that the trial court was correct in the amount of the attorney's fees awarded to CHC and further that there was no error in the chancellor's finding that this is not a proper case for a fee enhancement and that prejudgment interest is not warranted in this case.

Summary of Facts

¶6. This matter originated from a complaint to Cancel Lease filed on May 13, 1988, by CHC seeking to cancel a lease agreement dated July 19, 1979, between CHC as lessor and El-Ark, Inc. as lessee. The lease concerned property upon which was situated a hotel and the former Continental Trailways Bus Station, now a city parking lot. Randolph Lipscomb, the attorney for CHC, was retained on March 23, 1988 when a contingent fee agreement with CHC was executed. The original defendants were El-Ark, Smotherman and Mauck. Subsequently, alleging a special financial interest in upholding the lease, First Federal was allowed to intervene on December 19, 1988, and the City of Columbus was allowed to intervene on March 24, 1989. First Federal and the City asserted affirmative defenses which were personal to the parties to the lease agreement such as waiver, estoppel, laches and compliance with the lease, and First Federal vigorously defended the claims asserted by CHC, including major participation in the discovery phase as well as at trial. First Federal also retained an accounting firm to perform an audit of the hotel business in an effort to comply with the lease agreement.

¶7. A three day trial on the merits was held with Chancellor William E. Bearden, Jr. presiding. In the written opinion dated November 21, 1989, the court held that the defendants had in fact breached the lease agreement but did not grant a forfeiture of the lease on grounds of unconscionability. Thereafter on May 8, 1990, the chancery court entered its final decree denying CHC all damages, all attorney fees and all expert witness fees.

¶8. On the first appeal, we reversed the decision of the chancellor and rendered a judgment of forfeiture of the lease agreement. Columbus Hotel Co. v. Pierce, 629 So. 2d 605 (Miss. 1993). We rendered our opinion on December 23, 1993, and on January 15, 1994, the Mandate issued without any motion for rehearing or clarification having been filed by any party. We remanded the case to the Chancery Court of Lowndes County "for a determination of the proper amount of attorney's fees and expert costs." Columbus Hotel Co., 629 So. 2d at 610.

¶9. On remand CHC hired attorney Liston to aid Lipscomb in preparing a motion for attorney fees. Lipscomb filed a motion for attorney fees which was accompanied by affidavits by himself and Liston and several exhibits in support of his motion. The chancery court granted CHC its requested expenses and also accepted that Lipscomb expended 654.25 hours and Liston expended 57.25 hours in litigation of this action at the rate of one hundred fifty (150) dollars per hour finding that this rate is within the range of fees customarily charged. The amount awarded is disputed by both parties. Following the denial of the Petitions to reconsider filed by Mauck and CHC , Mauck and Smotherman brought this appeal in which CHC cross appealed and filed notice of appeal against First Federal and the City. Several issues and sub issues were presented for this Court's consideration.

LEGAL ANALYSIS

I. Did the Chancery Court of Lowndes County, Mississippi err in determining that First Federal Bank for Savings was not liable to Appellee for attorney's fees or expenses upon remand by the Mississippi Supreme Court solely for a determination by the Chancery Court of the amount of attorney's fees and expenses to be awarded to Appellee.

II. Did the Chancery Court of Lowndes County, Mississippi err in determining that the City of Columbus, Mississippi was not liable to Appellee for attorney's fees or expenses upon remand by the Mississippi Supreme Court solely for a determination by the Chancery Court of the amount of attorney's fees and expenses to be awarded to Appellee.

Cross -appeal

I.

Chancellor Dorothy W. Colom erred in limiting the Opinion and Mandate of the Mississippi Supreme Court and in overruling Chancellor Woodrow W. Brand, Jr. in failing to enter judgment for attorney's fees and expert fees against First Federal Bank for Savings and the City of Columbus, Mississippi.

A. Standing

¶10. The City of Columbus and First Federal assert that Mauck and Smotherman lack standing to challenge their dismissal on appeal. In support of this contention they cite Section 11-3-37 of the Mississippi Code of 1972. This section reads as follows:

§ 11-3-37. Appellant not entitled to reversal for error as to another.

In all cases, civil and criminal, a judgment or decree appealed from may be affirmed as to some of the appellants and be reversed as to others; and one of several appellants shall not be entitled to a judgment of reversal because of an error in the judgment or decree against another, not affecting his rights in the case. And when a judgment or decree shall be affirmed as to some of the appellants and be reversed as to others, the case shall thereafter be proceeded with, so far as necessary, as if the separate suits had been begun and prosecuted; and execution of the judgment of affirmance may be had accordingly. Costs may be adJudged in such cases as the supreme court shall deem proper. Miss. Code Ann. § 11-3-37 (1991) (emphasis supplied).

The City argues that no matter what the outcome of this appeal, Mauck and Smotherman will not be relieved of their obligation to pay attorney fees, and consequently their rights remain unaffected by the chancellor's decision to dismiss the City. The City cites to Capital Transport Co. v. McDuff, 319 So. 2d 658 (Miss. 1975) in support of its argument that Mauck and Smotherman do not have standing to appeal. In Capital Transport Co., the jury returned a verdict against the master but failed to return a verdict against the servant when the master's liability depended upon the negligence of the servant. In finding that the master did not have standing to raise the issue and reversal was not required, this Court stated that, "[o]f what avail should it be to appellant that its co-defendant (servant) was so fortunate as to be let out or even given a windfall? The appellee (plaintiff) is the only one who has posture to raise such a complaint and he has not cross-appealed." Capital Transp. Co., 319 So. 2d at 661. See also D.W. Boutwell Butane Co. v. Smith, 244 So. 2d 11, 12 (Miss. 1971) (holding "where the employee is exonerated and the master held liable, the case will not be reversed for that reason alone"); Meena v. Wilburn, 603 So. 2d 866, 872-73 (Miss. 1992) (reiterating the holding of Capital Transport that just because the jury returned a verdict against one defendant and not the other in a negligence action does not require reversal of the verdict).

¶11. In response to this argument Mauck argues that by dismissing First Federal and the City, his potential liability was increased dramatically and such a direct impact on his rights in this case gives him standing to seek review of the Chancellor's ruling. Mauck asserts that he is not liable for any attorney's fees incurred by CHC as a result of First Federal's or the City's involvement in the case. Although Mauck fails to cite any controlling authority he does cite to other jurisdictions that have held that a party is aggrieved, and thus has standing to appeal any judgment that affects his rights. Koller v. Liberty Mut. Ins. Co., 526 N.W.2d 799, 802 (Wis.Ct.App. 1994) (explaining that in order for a person to have standing to appeal, the judgment must bear on his "direct interests in the apportionment of negligence"); Weina by Peyton v. Atlantic Mut. Ins. Co., 501 N.W.2d 465, 467 (Wis.Ct.App. 1993) (holding that the dismissal of some defendants in a personal injury action that seeks to impose joint and several liability "diminishes the pool of resources available to satisfy any judgment . . .[T]he dismissal increases the potential liability" therefore the remaining defendants have standing to appeal as an aggrieved party); Newport Elec. Corp. v. Public Utils. Comm'n, 454 A.2d 1224, 1225 (R.I. 1983) (explaining that a person is aggrieved by a judgment and therefore has standing to appeal when the judgment "results in injury in fact, economic or otherwise"). This would be persuasive except for this Court's statement in Capital Transport Co. when it explained that "this state has a statute, Mississippi Code Annotated section 11-3-37 (1972) which places the appellant here in a different posture from that which he would occupy in other states having no such statute." Capital Transp. Co., 319 So. 2d at 661.

¶12. First Federal argues that Mauck failed to demonstrate how the Mississippi cases construing section 11-3-37 of the Mississippi Code of 1972 are distinguishable from the facts before the Court. First Federal contends that the statute is designed to prohibit co-defendants from complaining when other defendants are dismissed and a judgment is entered against remaining defendants. Although the cases cited are based on negligence and consider either joint tortfeasors or master-servant liability rather than breach of contract, the language of section 11-3-37 applies to all cases, both civil and criminal. Consequently, we find that Mauck and Smotherman do not have standing to raise the alleged error of the chancery court in dismissing the City and First Federal from the case.

¶13. That does not mean the issue of First Federal and the City's responsibility to pay the attorney fees of CHC is barred from review because CHC did assign this as an issue in its cross-appeal. Furthermore CHC stated in its brief that it was in agreement with Mauck and supports his position and consequently his arguments that the chancery court did err in determining that First Federal and the City was not liable for attorney's fees and expenses. In essence CHC adopted the arguments of Mauck and Smotherman as their arguments pertain to the responsibility of First Federal and the City to pay for CHC's attorney's fee award.

B. Judicial Estoppel of CHC from seeking attorney's fees and expert fees

¶14. Both First Federal and the City advance the argument that CHC is estopped from seeking expert and attorney's fees from them. They argue that CHC's complaint only named El-Ark, Smotherman and Mauck as defendants and only on remand did CHC seek attorney fees from First Federal and the City. They further argue that CHC consistently opposed their intervention in the case because CHC did not have any relationship with First Federal or the City and it maintained that position through the appeal of cause # 90-CA-0846. Both First Federal and the City cite to Banes v. Thompson, 352 So. 2d 812, 816 (Miss. 1977) for the rule that a party cannot assume one position at one stage of a proceeding and then assert a contrary position later in the same action based on judicial estoppel.

¶15. With regard to the doctrine of judicial estoppel, this Court has previously stated that the doctrine of judicial estoppel "is based on expedition of litigation between the same parties by requiring orderliness and regularity in pleadings." Thomas v. Bailey, 375 So.2d 1049, 1052 (Miss.1979) (citing Great Southern Box Co. v. Barrett, 231 Miss. 101, 94 So. 2d 912 (1957)). "[J]udicial estoppel will be applied in civil cases where there is multiple litigation between the same parties and one party knowingly 'assert(s) a position inconsistent with the position in the prior' litigation." Hoover v. State, 552 So.2d 834, 838 (Miss.1989) (finding that judicial estoppel does not apply in criminal cases when the parties are not identical); State ex rel. Holmes v. Griffin, 667 So.2d 1319, 1324 (Miss.1995); Merchants Nat'l. Bank v. Stewart, 608 So. 2d 1120, 1127 (Miss. 1992). However, this Court has explained that where the first position asserted was taken as a result of mistake, judicial estoppel should not be invoked. Thomas, 375 So. 2d at 1053. In addition the Court in Thomas stated:

It has been held that when the party making the prior statement, which is inconsistent with his position in the present action, has not benefited by the assertion, the doctrine should not be applied. Id. (citing McFry v. Stewart, 219 Ala. 216, 121 So. 517 (1929)).

The Thomas Court held that judicial estoppel was inapplicable to that case because the inconsistent statement was a result of a mistake, the one making the statement did not benefit and his opponent was not injured by the assertion and ...


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