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Hall v. Dillard

April 06, 1999

JOHN W. HALL, JR. APPELLANT
v.
WILLIAM E. DILLARD, SR., AND MISSISSIPPI CONTROLS, INC. APPELLEES



Before Thomas, P.j., Coleman, And Diaz.

The opinion of the court was delivered by: Diaz, J.

DATE OF JUDGMENT: 09/02/97

TRIAL JUDGE: HON. JERRY G. MASON

COURT FROM WHICH APPEALED: LAUDERDALE COUNTY CHANCERY COURT

NATURE OF THE CASE: CIVIL - OTHER

TRIAL COURT DISPOSITION: TWO CORPORATIONS DISSOLVED; ASSETS DIVIDED BETWEEN 2 SHAREHOLDERS

DISPOSITION: REVERSED AND RENDERED-04/06/99

¶1. John W. Hall, Jr., appeals the decision of the Lauderdale County Chancery Court awarding William E. Dillard, Sr., $12,857. This figure represents half of the $25,714 in a retirement account in Hall's name paid for by Mississippi Controls, Inc., over a period of September 1, 1986 through January 31, 1996. Hall raises the following issues in this appeal: (1) whether the claim is a derivative action for an alleged breach of fiduciary duty or an unwritten contract for employment, (2) whether the trial court applied the wrong standard of review, (3) whether the trial court applied the wrong statute of limitations, (4) whether the trial court has the authority to toll or disregard the statute of limitations, (5) whether the claim asserted by Dillard is an obligation of Mississippi Controls, Inc. or of Hall and the consequences of that obligation, (6) whether the trial court erroneously made an adjustment to the retirement accounts, (7) whether the trial court failed to apply the doctrine of laches, (8) whether the trial court abused its discretion in refusing to take judicial notice of Hall's compilation of data pursuant to M.R.E. 1006, and (9) whether the trial court failed to award to Hall an offset of one-half the gross profits from the Meridian office of Mississippi Controls, Inc. Finding error, we reverse and render.

FACTS

¶2. On October 26, 1995, Hall filed a complaint for declaratory judgment in the Lauderdale County Chancery Court against William E. Dillard, Sr., Dillard Hall, Inc., (DHI) and Mississippi Control, Inc., (MCI). An answer, defenses, and a counter complaint were filed by Dillard and the two corporations on November 27, 1995. Hall sought to dissolve MCI and DHI, each owned equally by Hall and Dillard.

¶3. On January 1, 1996, Hall filed a motion for temporary relief. On February 5, 1996, Dillard, MCI, and DHI filed an answer and defenses to this motion for temporary relief and a counter motion for temporary relief. On February 20, 1996, the trial court conducted a hearing to determine the status of the ongoing corporations pending their dissolution. In its memorandum opinion and order, the court found as undisputed that Hall and Dillard were each fifty percent owners of MCI and DHI. The court acknowledged that the corporations were engaged in ongoing business matters and that it would be in the best interest of the corporations for those business matters to continue.

¶4. The parties were seeking a judicial dissolution of the two corporations under Mississippi Code Annotated Section 79-4-14.30 with an equitable dissolution of the assets. The parties attempted to agree on a valuation of the assets; however, an irreconcilable distrust existed between them.

¶5. On March 19, 1996, the parties reached a stipulation of partial settlement agreement. This began the process of equitably dividing the two corporations between Hall and Dillard with each stockholder receiving fifty percent of the assets of both corporations and fifty percent of the corporations themselves. Through the terms of this settlement agreement, the parties acknowledged that certain assets, liabilities, profits, losses, equipment, and other assets and liabilities of the two corporations would be equally divided between Hall and Dillard. The end result of this settlement agreement would be that Hall would be the sole owner of DHI and Dillard would be the sole owner of MCI with both corporations having equal assets and liabilities.

¶6. The parties did not completely agree on the division of all of the assets of the respective corporations. They acknowledged that three issues remained unresolved. Hall and Dillard submitted testimony, evidence, and arguments on these issues and agreed to be bound by the court's ruling. The stipulation of partial settlement agreement was amended and changed to reflect these were the only remaining issues. On December 16, 1996, the court entered an agreed order that acknowledged these issues as the only unresolved issues.

¶7. On April 23, 1997, a trial was held again in this matter. The chancellor announced at the commencement of the hearing that the matter was before the court pursuant to the agreed order. Hall announced, and the court recognized, that the first two of the three unresolved issues were being withdrawn. The sole remaining disputed issue was whether or not Dillard was entitled to an adjustment for the retirement account funds that were in Hall's name.

¶8. Hall also sought to dictate into the record affirmative defenses to the remaining issue of the retirement accounts. The court allowed Hall to enter the affirmative defenses of statute of frauds, statute of limitations, laches, and offset into the record. Hall also asked the court to take judicial notice of a compilation of data that was previously produced at the temporary hearing. The court declined to take notice of the data compilation pursuant to M.R.E. 201. Thereafter, a trial was conducted on the sole issue of whether or not an adjustment should be made concerning retirement accounts. At the close of testimony, additional information was needed from the Plumbers and Pipe Fitters National Pension Fund. This information was obtained, stipulated to by the parties, and reduced to a writing. Thereafter, the court entered a memorandum opinion on September 2, 1997, equitably dividing the retirement accounts.

ΒΆ9. On September 12, 1997, Hall filed a motion pursuant to Mississippi Rules of Civil Procedure Rule 52(b) and Rule 59 seeking post judgment relief. On October 8, 1997, an order was entered overruling these ...


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