BRIAN ALDRIDGE AND TOUCHED BY AN ANGEL MINISTRIES, INC., APPELLANTS
FLORENCE A. ALDRIDGE, APPELLEE
[Copyrighted Material Omitted]
COURT FROM WHICH APPEALED: LEE COUNTY CHANCERY COURT. DATE OF JUDGMENT: 05/23/2012. TRIAL JUDGE: HON. C. MICHAEL MALSKI. TRIAL COURT DISPOSITION: JUDGMENT OF $218,355 AGAINST BRIAN ALDRIDGE AND $218,455 AGAINST TOUCHED BY AN ANGEL MINISTRIES, INC.
FOR APPELLANTS: T.K. MOFFETT, W. BRENT MCBRIDE.
FOR APPELLEE: RHETT R. RUSSELL, FRANK A. RUSSELL.
BEFORE GRIFFIS, P.J., BARNES AND ISHEE, JJ. LEE, C.J., IRVING, P.J., BARNES, ISHEE, ROBERTS, MAXWELL, FAIR AND JAMES, JJ., CONCUR. CARLTON, J., NOT PARTICIPATING.
NATURE OF THE CASE: CIVIL -- TORTS - OTHER THAN PERSONAL INJURY AND PROPERTY DAMAGE
[¶1] The chancellor entered a final judgment for Florence Aldridge against Louis Aldridge, Janice Aldridge, Brian Aldridge, and Touched by an Angel Ministries, Inc. (" TBAAM" ). Brian and TBAAM appeal; they argue that the chancellor erred when he failed to dismiss the case based on the statute of limitations, held Brian personally liable, found that an officer of a nonprofit entity has an implied duty to investigate the source of contributions, and increased the judgment based on a post-trial motion. Florence filed a cross-appeal; she argues that the award of damages was insufficient and punitive damages were warranted. We find no error and affirm.
FACTS AND PROCEDURAL HISTORY
[¶2] Florence Aldridge is the widow of David Lee Aldridge. Louis Aldridge was David's brother. After David's death and prior to 2003, Florence lived in Lakeland, Florida. She suffered a long medical history of bipolar disorder, extreme depression, and adverse effects of cancer. After the death of both her mother and her husband, Florence's medical condition worsened.
[¶3] In January 2003, Louis went to Florida to help Florence. On January 23, 2003, Louis and Florence went to a Florida attorney. The attorney prepared a durable power of attorney that appointed Louis. Florence signed the power of attorney, and it stated that the powers granted to Louis " shall be exercised solely in a fiduciary capacity for my [(Florence's)] benefit and on my behalf."
[¶4] In December 2004 or January 2005, Florence moved to Tupelo, Mississippi, to live with Louis and his wife, Janice Aldridge. Florence lived on the property owned by Louis and Janice, and they helped to care for her. Shortly thereafter, Florence was committed to a mental institution for treatment based on a court order that Louis obtained. Florence was discharged in 2006, and she returned to live with Louis and Janice.
[¶5] In the summer of 2007, Florence was prescribed a new medication that dramatically improved her capacity to function in everyday activities. As a result, Florence began to ask about her financial situation, which had been under Louis's complete control. Louis refused to discuss it with her. Eventually, Louis told Florence that he had spent all of her savings on her medical treatment.
[¶6] On July 21, 2008, Florence talked to Joe Tetter, her late husband's former accounting partner, and told him of her financial affairs. Tetter expressed his concern. Tetter was familiar with Florence's finances. Tetter told Florence that her medical insurance should have paid for her treatment, and she should be financially solvent. Florence began to investigate her finances. She hired an attorney. She asked Louis to provide her with an accounting of her funds. Louis failed to comply. Florence revoked Louis's power of attorney in November 2008.
[¶7] On December 22, 2008, Florence filed a complaint in chancery court. The complaint named Louis as the only defendant. The complaint demanded that Louis provide an accounting and inventory of Florence's property. The complaint also asked for an award of damages for any actions or inactions taken by Louis inconsistent with the fiduciary duty he owed Florence.
[¶8] Through discovery, Florence learned that Louis had written checks from her accounts and deposited funds with Janice and TBAAM. The chancellor noted that TBAAM " was established as a nonprofit corporation in 1996 for a very laudable purpose, to provide a camping experience for mentally challenged young people and adults." Louis had formed TBAAM. Louis named Brian as TBAAM's chief executive officer (CEO) upon its incorporation. In 2010, the Mississippi Secretary of State's Office investigated TBAAM and removed its charitable tax-exemption status. The charitable status was later reinstated on the condition that Louis and Janice have no involvement.
[¶9] On April 28, 2010, Florence filed her first amended complaint. The complaint added Janice and TBAAM as defendants and asserted claims of fraud, embezzlement, and unjust enrichment.
[¶10] After additional discovery, Florence learned that Brian Aldridge, who is Louis's son, used some of her money, which had been transferred to TBAAM, for his personal benefit. Thereafter, on November 24, 2010, Florence filed a second amended complaint that added Brian as a defendant. This complaint asserted claims for forgery, conspiracy, and a violation of the Mississippi Uniform Fraudulent Transfer Act.
[¶11] The trial began on August 23, 2011. An appearance was made by counsel for Florence, counsel for Louis and Janice, and counsel for Brian and TBAAM. The chancellor heard testimony from one witness. The chancellor then considered and denied the motion to dismiss filed by Brian and TBAAM. Thereafter, counsel for Louis and Janice provided the chancellor with a notice of their bankruptcy filing. The chancellor recognized that the stay of bankruptcy would not permit the court to proceed with the claims against Louis and Janice. The trial was then continued.
[¶12] The trial resumed on December 7, 2011, and ended on December 20, 2011. Both Louis and Janice were called to testify. But they both invoked their Fifth Amendment right against self-incrimination and refused to testify. Other evidence was presented that revealed over $552,000 of Florence's assets were transferred by Louis to himself, Janice, Brian, TBAAM, or another venture controlled by Louis - Touched by an Angel Ministry Enterprises, Inc. (" Enterprises" ).
[¶13] Brian testified about his role with TBAAM. Brian was named CEO of TBAAM in 1996, when he was nineteen years old. Brian stated that he knew little about TBAAM and knew nothing about its funding. As CEO for TBAAM, from 1996 until the trial, Brian was paid approximately $15,000 for his work at TBAAM. Brian testified that he took an active role in helping with campers, but Louis ran the finances of TBAAM. Brian stated that he
loved his father, but they had a personality conflict. Brian also testified that one does not say no to his father without there being consequences. Brian also signed TBAAM's tax returns, but he said that he did not look at them. Brian was not aware that TBAAM owed over $35,000 in unpaid taxes, and he was unaware that thousands of dollars in bank overdraft fees were owed by TBAAM.
[¶14] The evidence also revealed that Florence's money was used by TBAAM and Enterprises. From TBAAM and Enterprises, the Aldridge family paid off personal debts, made mortgage payments, bought clothing, paid for car repairs, paid for vacations, paid a relative's college tuition, and made political contributions. Specifically, there was evidence that funds from TBAAM or Enterprises paid Brian's expenses for a honeymoon in Hawaii, his mortgage payments, his personal-debt payments, his wife's car repairs, his wife's college tuition, and clothing.
[¶15] When Florence resumed control of her finances, she learned that her credit reputation was tarnished. She had lost her house, two cars, and all of her savings. She was also left with a tax debt from Louis's failure to report the $30,000 withdrawal from a certificate of deposit. Florence's only retirement income is a small pension and Social Security benefits. She rents an apartment and must continue to work to pay off the federal tax lien.
[¶16] At the end of the trial on December 20, 2011, the chancellor announced his ruling from the bench. The chancellor entered a final judgment on January 12, 2012, and a copy of the transcript of the oral ruling was attached. The final judgment read:
ORDERED, ADJUDGED AND DECREED, that Florence Aldridge be and she is hereby granted judgment jointly and severally against Louis Aldridge and Janice Aldridge in the amount of [$552,000,] for which let execution issue. It is further,
ORDERED, ADJUDGED AND DECREED, that Florence Aldridge be and she is hereby awarded judgment against [TBAAM], in the amount of [$140,100,] for which let execution issue . . . .
[¶17] On January 20, 2012, Florence filed a motion for additional findings of fact and conclusions of law and to amend the judgment based upon additional findings and conclusions. The motion asked the chancellor to increase the amount of the judgment against TBAAM and to enter a judgment against Brian. TBAAM and Brian responded. The motion was set for a hearing on February 28, 2012. The record does not indicate whether a hearing was held and does not contain a transcript of a February 28 hearing.
[¶18] On May 23, 2012, the chancellor entered a memorandum opinion and judgment. In this judgment, the chancellor increased the judgment against TBAAM to $218,455 and entered a judgment against Brian for $218,355.
[¶19] TBAAM and Brian then filed a motion for a new trial. After a hearing, the chancellor entered an order that denied the motion for a new trial.
STANDARD OF REVIEW
[¶20] " A chancellor's findings of fact will not be disturbed unless manifestly wrong or clearly erroneous." Consol. Pipe & Supply Co. v. Colter, 735 So.2d 958, 961 (¶ 13) (Miss. 1999). The appellate court " will not disturb the findings of a chancellor when supported by substantial evidence unless the chancellor abused his discretion, was manifestly wrong . . . [or] clearly erroneous[,] or [applied] an erroneous legal standard[.]" Kilpatrick v. Kilpatrick,
732 So.2d 876, 880 (¶ 13) (Miss. 1999) (citation omitted).
I. Issues Presented by Brian and TBAAM
A. Whether Florence's claims against Brian and TBAAM are barred by the statute of limitations.
[¶21] Brian and TBAAM argue that the statute of limitations barred Florence's claims against them. The chancellor rejected this defense when he denied their motion to dismiss.
[¶22] The parties agree that the three-year general statute of limitations period applies here. Mississippi Code Annotated section 15-1-49 (Rev. 2012) provides:
(1) All actions for which no other period of limitation is prescribed shall be commenced within three (3) years next after the cause of such action accrued, and not after.
(2) In actions for which no other period of limitation is prescribed and which involve latent injury or disease, the cause of action does not accrue until the plaintiff has discovered, or by reasonable diligence should have discovered, the injury.
[¶23] Brian and TBAAM argue that the three-year limitations period began to run when the last transaction occurred on March 9, 2007. Florence's claim against TBAAM was filed on April 28, 2010, and her claim against Brian was filed on November 24, 2010. Brian and TBAAM also point to the fact that Florence testified that she regained her health, discovered her loss due to Louis's action, and started to review her own bank statements in the summer of 2007. As a result, they argue that the three-year limitations period expired on March 8, 2010, or, at the latest, sometime in the summer of 2010.
[¶24] Florence disagrees. Florence claims that the limitations period began to run on July 21, 2008, the date of her conversation with Tetter. Based on this conversation, Florence claims that she realized that she had been wronged by Louis, began to investigate her assets, and retained an attorney. Florence filed her complaint against Louis on December 22, 2008. She amended the complaint to add Janice and TBAAM on March 5, 2010. She filed a motion to amend her complaint on October 4, 2010, to add Brian. Thus, Florence claims that her claims were filed before the limitations period would have expired on July 20, 2011.
[¶25] Florence also argues that her injury was a latent injury. Thus, she claims that the discovery rule, under section 15-1-49(2), governs. Florence also argues that her claims had been fraudulently concealed from her. Thus, she claims Mississippi Code Annotated section 15-1-67 (Rev. 2012) also applies. It states:
If a person liable to any personal action shall fraudulently conceal the cause of action from the knowledge of the person entitled thereto, the cause of action shall be deemed to have first accrued at, and not before, the time at which such fraud shall be, or with reasonable diligence might have been, first known or discovered.
[¶26] Fraudulent concealment is an affirmative act to conceal the underlying tortious conduct. Robinson v. Cobb, 763 So.2d 883, 887 (¶ 19) (Miss. 2000). To succeed on a claim of fraudulent concealment, the plaintiff must show he failed to discover the factual basis of the claims despite exercising due diligence. Id. Fraudulent concealment is an exception to any applicable statute of limitations. O'Neal Steel, Inc. v. Millette, 797 So.2d 869, 875 (¶ 22) (Miss. 2001). " Due diligence
ordinarily requires the plaintiff to make the best use of the facts available to him." Anderson v. Equitable Life Assurance Soc'y of U.S., 248 F.Supp.2d 584, 590 (S.D.Miss. 2003). When the fraudulent-concealment doctrine is applicable, the limitations period does not begin to run until the claims are discovered. Ross v. Citifinancial, Inc., 344 F.3d 458, 463 (5th Cir. 2003).
[¶27] The chancellor's ruling on the motion to dismiss did not specify the date that he determined the statute of limitations began to run. Instead, the chancellor determined that the statute of limitations expired prior to the filing of the amended complaints against Brian and TBAAM. Nevertheless, the chancellor ruled that, pursuant to Mississippi Rule of Civil Procedure 15(c), Brian and TBAAM were ...