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Swartzfager v. Saul

Supreme Court of Mississippi, En Banc

February 16, 2017

JON A. SWARTZFAGER
v.
THOMAS R. SAUL

          DATE OF JUDGMENT: 07/08/2015

         JONES COUNTY CHANCERY COURT HON. HOLLIS McGEHEE TRIAL JUDGE

          ATTORNEY FOR APPELLANT: GLENN S. SWARTZFAGER

          ATTORNEYS FOR APPELLEE: CORY NATHAN FERRAEZ SAMUEL STEVEN McHARD

          MAXWELL, JUSTICE

         ¶1. Thomas R. Saul and Jon A. Swartzfager initially reached a verbal agreement for Saul's purchase of a piece of property located within a larger tract of land Swartzfager owned. But another person came along and offered Swartzfager a significant sum to buy the whole tract. So Swartzfager approached Saul and asked if he would forego their original land deal and in exchange accept a separate parcel within a different tract of land. Saul agreed to Swartzfager's new offer, and Swartzfager reduced their agreement to writing-stating that for "good and valuable consideration" already received, he would transfer the second parcel to Saul upon request. However, Swartzfager later backed out and never transferred any land to Saul.

         ¶2. Saul filed suit against Swartzfager seeking damages and specific performance. The chancellor found a valid contract existed between Saul and Swartzfager, and awarded him damages, attorney's fees, and prejudgment interest. After review, this Court finds the chancellor correctly ruled that Saul and Swartzfager had a contract. And even absent the contract, Saul proved he detrimentally relied on Swartzfager's offers and promises. So Swartzfager is equitably estopped from denying the land deal. Additionally, we find the chancellor's awards for intentional infliction of emotional distress and attorney's fees are supported. But the chancellor did err in awarding prejudgment interest, because Saul did not plead a request for prejudgment interest. We thus affirm in part, reverse in part, and remand for a recalculation of damages and attorney's fees that does not include prejudgment interest.

         Background Facts and Procedural History

         ¶3. Swartzfager, an attorney in Jones County, approached Thomas Saul in January 2007 at his home. He offered Saul an opportunity to purchase acreage of his choosing at a low price, in a large tract of land. Swartzfager owned approximately sixty-three acres near Saul's home, which he planned to develop into a subdivision-Deerfield. Swartzfager wanted Saul, who was a Mississippi highway patrolman, to be one of the first homeowners so the neighborhood "would have a law enforcement presence." Saul agreed and had a five-acre tract surveyed near the center of the development. He presented the survey to Swartzfager and tried to close on the transaction numerous times. But Swartzfager either did not respond or delayed delivering closing documents. Meanwhile, relying on Swartzfager's representations, Saul and his family sold their home and planned to build a "shop" on the property. Saul intended to live in the shop with his family while his new house was under construction.

         ¶4. With the closing on their own home approaching and no closing in sight for the Deerfield acreage, Saul and his family were forced to purchase and live in a mobile home. They also had to pay to store their belongings. Saul continued to ask Swartzfager to close on the property. But Swartzfager dodged him. During this time, Swartzfager was ironing out a separate proposal with a man named Bill Jenkins. And Jenkins eventually offered to purchase the entire sixty-three acre Deerfield tract. The offer would net Swartzfager a substantial profit.

         ¶5. Swartzfager first floated the idea of selling Jenkins the tract, less Saul's five acres. But eventually he approached Saul with a separate proposal. He asked Saul if he would relinquish any interest in the five acres at Deerfield, and in exchange accept six acres in the Grand View Estates subdivision. Saul agreed to this proposal. And on June 7, 2007, Swartzfager drafted a basic agreement to this effect on his letterhead and signed it.

         ¶6. In his letter, Swartzfager wrote:

I, Jon A. Swartzfager, do hereby contract to sell to Thomas "Sonny" Saul and wife six acres of land of the twelve acres belonging to me within Grandview subdivision on the Sharon Moss road in the Second Judicial District of Jones County, Miss. This contract is made after I have received good and valuable consideration from Mr. Saul and the transfer of property by warranty deed from me to him is to take place within 10 days of a request for same by Mr. Saul.
/s/ Jon A. Swartzfager Dated: June 7, 2007

         ¶7. Saul visited the Grand View Estates property and picked the northern six acres. He then drew a map of the chosen land. With both the drawing and agreement in hand, Saul made requests for Swartzfager to close on the Grand View Estates property. But again, Swartzfager either did not respond or delayed. So, on August 23, 2007, Saul filed suit against Swartzfager, his wife Helen, and Helen's real estate company, Pinehurst Realty, LLC. Saul sought to enforce his agreement with Swartzfager, claiming breach of contract, equitable estoppel, and promissory estoppel. And he requested related damages. Saul filed his complaint in Jones County, and it was assigned to Chancery Judge Franklin McKenzie Jr. But Judge McKenzie recused, citing conflicts, and requested a special chancellor be appointed. This Court appointed Judge James Thomas Jr. on September 5, 2007.

         ¶8. After conducting some initial discovery, the parties met with Judge Thomas and prepared a scheduling order for the remaining discovery, which he signed on July 1, 2008. By August 26, 2008, Saul filed for summary judgment. Soon after, the defendants responded and likewise filed a motion for summary judgment. Judge Thomas considered the arguments and granted partial summary judgment to Saul on February 12, 2009. In doing so, Judge Thomas declared the June 7, 2007 writing by Swartzfager a valid, enforceable contract. Judge Thomas then set the matter for trial. But before he could conduct the trial, Judge Thomas passed away. And on March 15, 2011, this Court appointed Judge Ray H. Montgomery to hear the case. On June 29, 2011, Judge Montgomery held a hearing on all pending motions and granted summary judgment to Helen Swartzfager and Pinehurst Realty, LLC-dismissing all claims against them. This left only the claims against Jon Swartzfager individually.

         ¶9. The parties then conferenced with Judge Montgomery and, by agreed order, the matter was set for a November 29, 2012 trial. The trial took place over November 29, 2012; January 25, 2013; and April 8, 2013. But Judge Montgomery also died before rendering a final decision. And on December 19, 2014, this Court appointed Judge Hollis McGehee to preside over the case. Judge McGehee met with the parties and, after discussion, the parties agreed that Judge McGehee should review the existing record and render a decision. The parties agreed this was a better course than conducting an entirely new trial. Judge McGehee entered an agreed order memorializing this method for handling the case.[1]

         ¶10. On May 6, 2015, Judge McGehee mailed the parties a letter opinion and decision. He asked Saul's attorney to incorporate the rulings into a final opinion and judgment. On May 21, 2015, the final memorandum and judgment was signed by Judge McGehee and acknowledged by both attorneys. Judge McGehee found Saul had given Swartzfager valuable consideration for the Grand View Estates property by relinquishing any interest in the Deerfield property. He also found Swartzfager's testimony supported this, along with his apparent authority to act on his wife's behalf. Judge McGehee held Saul had relied on Swartzfager's original and "substitute" offers and promises, resulting in the sale of his family home, moving his family to a mobile home, and requiring he secure storage for many of their personal belongings.

         ¶11. As the judge saw it, "the June 7, 2007 alternate offer was, in essence, a pay back or payment to [Saul] and his wife" for the troubles they suffered while acting "in full detrimental reliance on [Swartzfager's] unsolicited offers and promises." Judge McGehee described these representations as "[p]romises and offers which [Swartzfager] fully failed to perform on for the purpose of making a substantial profit."

         ¶12. Judge McGehee found the June 7, 2007 letter clearly stated Swartzfager "was giving the six acres to [Saul] and the consideration was [Saul's] foregoing his right to buy five acres of his choosing in Deerfield which facilitated the sale of the sixty three acres in Deerfield which greatly benefitted [Swartzfager]."

         ¶13. Based on Swartzfager's intentional breach, Judge McGehee found Saul was entitled to monetary damages-$53, 400 for breaching the contract, plus $79, 098.81 in prejudgment interest.[2] The chancellor also held Swartzfager liable for $22, 785 in losses and costs incurred by Saul, as a "direct and proximate result of the egregious actions and omissions by [Swartzfager]." And he awarded Saul $50, 000 for his emotional distress. All tallied, the judgment against Swartzfager totaled $205, 283.81.

         ¶14. Furthermore, because of Swartzfager's actions, Judge McGehee found a separate hearing on attorney's fees was necessary. Saul filed a memorandum in support of attorney's fees. But Swartzfager did not. And after an unsuccessful conference on the issue, the parties filed a joint motion to determine attorney's fees. At that point, Judge McGehee ruled on the matter. Both parties acknowledged his amended memorandum opinion and judgment, which was entered on July 8, 2015. In it, he found Swartzfager's actions were so egregious and intentional that Saul was entitled to attorney's fees in the amount of $88, 362.40-raising the total judgment against Swartzfager to $293, 646.21.

         ¶15. Swartzfager now appeals. He claims the chancellor erred by-(1) finding the June 7, 2007 writing a valid and enforceable contract; (2) not, alternatively, finding the June 7, 2007 writing was an undelivered promise for a gift; (3) awarding damages for emotional distress; (4) ...


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