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TJ'S Western Ware, Inc. v. Jefcoat

Court of Appeals of Mississippi

September 17, 2013

TJ'S WESTERN WARE, INC. AND JEAN H. RAMEY HOLDER, APPELLANTS
v.
RONALD K. JEFCOAT, APPELLEE

COURT FROM WHICH APPEALED: FORREST COUNTY CIRCUIT COURT. DATE OF JUDGMENT: 04/18/2011. TRIAL JUDGE: HON. ROBERT B. HELFRICH. TRIAL COURT JURY VERDICT IN FAVOR OF APPELLEE.

FOR APPELLANTS: L. CLARK HICKS JR.

FOR APPELLEE: S. CHRISTOPHER FARRIS.

BEFORE IRVING, P.J., BARNES AND MAXWELL, JJ. LEE, C.J., GRIFFIS, P.J., BARNES, ROBERTS, MAXWELL AND JAMES, JJ., CONCUR. CARLTON, J., DISSENTS WITH SEPARATE WRITTEN OPINION, JOINED BY ISHEE, J. FAIR, J., NOT PARTICIPATING.

OPINION

Page 1074

NATURE OF THE CASE: CIVIL - TORTS - OTHER THAN PERSONAL INJURY AND PROPERTY DAMAGE

IRVING, P.J.

¶1. TJ's Western Ware Inc. (TJ's) and Jean H. Ramey Holder filed suit in the Forrest County Circuit Court against Ronald K. Jefcoat, alleging breach of contract, breach of the duty of good faith and fair dealing, tortious interference with a contract, fraud, conversion, and unjust enrichment. Jefcoat countersued TJ's and Holder

Page 1075

for damages resulting from his alleged partial ownership of the business, but later abandoned these claims during the jury-instruction conference. After a two-day trial, the jury returned a verdict in favor of Jefcoat. The circuit court denied TJ's and Holder's subsequent motion for a judgment notwithstanding the verdict or, in the alternative, a new trial. Feeling aggrieved, TJ's and Holder appeal and argue that the circuit court erred in giving jury instruction D-1 and that the jury's verdict is against the overwhelming weight of the evidence.

¶2. We agree with TJ's and Holder's contention that the circuit court erred in giving jury instruction D-1 and that the verdict is against the overwhelming weight of the evidence. Therefore, we reverse the judgment of the circuit court and remand this case for further proceedings.

FACTS

¶3. Holder opened TJ's in 1993 in Hattiesburg, Mississippi, as a retail business that sells western apparel. Soon after TJ's opened, Holder hired Jefcoat, who was married to Holder's daughter, Tina, at the time, to manage the business. Jefcoat eventually became president and treasurer of TJ's. Holder and TJ's allege that after Jefcoat became an officer within the company, he loaned himself $74,300 from the corporate account and unlawfully pocketed some of the business's profits.

¶4. At trial, Holder testified that she was the sole owner of TJ's. When Holder opened TJ's, she invested approximately $125,000 in the business. She did not collect a paycheck initially, but hoped that the business would become successful enough that she would eventually be able to recover her investment. She admitted that she made Jefcoat an officer in the company after he began working for her, but she never agreed to sell him any percentage of the business. Holder allowed Jefcoat and the business's accountant to handle the business's tax filings. Therefore, any information that the accountant received reflecting TJ's ownership percentages was provided by Jefcoat. Holder insisted that even though the tax returns showed that Jefcoat owned twenty-four percent of the business, she never sold Jefcoat any percentage of the business, and Jefocat has never invested any money in the business.

¶5. Additionally, Holder admitted that the company does not have any bylaws. Therefore, there are no documents that outline the responsibilities or the scope of authority for any of the company's directors or officers. Holder stated that she learned that Jefcoat was writing multiple payroll checks to himself when she started reviewing the bank statements for the corporate account. She noted that she probably would not have objected to the increase in pay that Jefcoat gave himself as long as the business could afford it. However, she disagreed with Jefcoat writing himself two or three paychecks per week and loaning money to himself out of the corporate account. Holder insisted that she fired Jefcoat after discovering that he had been misappropriating money and not as a result of the pending divorce proceedings between Jefcoat and Tina.

¶6. Jefcoat admitted that he loaned money to himself from TJ's corporate account after Holder placed him in charge of the business. He also admitted that he wrote multiple payroll checks to himself. However, Jefcoat insisted that TJ's owed him money because he was a partial owner of the business. Jefcoat stated that he and Tina " paid the store off," but Holder told the store's accountant that Jefcoat only owned a twenty-four percent interest in the business. He admitted that he never invested any of his personal funds into

Page 1076

the business but that he and Tina " paid the business off with the business." He mentioned that he listed his withdrawal of money from the business account as a loan so that he could later create a tax shelter to avoid paying taxes on the money. Jefcoat stated that he and Tina borrowed approximately $60,000 from the business account, but he could not prove that the outstanding balance on the loans was not $74,300.

¶7. Jefcoat testified that he never tried to hide the store's financial records from Holder. All of the financial transactions were documented in the store's financial ledgers. The transaction ledger and other records would have been made available to Holder any time that she wanted to review them. Holder fired Jefcoat shortly before Tina initiated divorce proceedings against him. Jefcoat and his brother opened a western-ware store in close ...


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