MARC B. DANIELS, SANDRA DANIELS, CROCKER & ASSOCIATES, INC. f/k/a D & D ENVIRONMENTAL, INC. AND MAXX INVESTMENTS, LLC
J. DENNIS CROCKER, GAIL CROCKER, CROCKER, LTD., A SOUTH CAROLINA CORPORATION AND GENERATIONAL EQUITY, LLC
OF JUDGMENT: 04/06/2016
COUNTY CIRCUIT COURT HON. JOHN HUEY EMFINGER, Judge
COURT ATTORNEYS: ROY H. LIDDELL RICHARD L. FARLEY STEPHEN
HUWE C. MICHAEL ELLENBURG ERIC F. HATTEN
ATTORNEY FOR APPELLANTS: ROY H. LIDDELL
ATTORNEYS FOR APPELLEES: ERIC F. HATTEN CHRISTOPHER D. MEYER
RICHARD L. FARLEY REBECCA K. LINDAHL
RANDOLPH, P.J., KITCHENS AND CHAMBERLIN, JJ.
This appeal arises from a breach-of-contract action between
Marc Daniels, Sandra Daniels, Crocker & Associates, Inc.,
and Maxx Investments, LLC (collectively, "the
Danielses") and Dennis Crocker, Gail Crocker and
Crocker, Ltd. (collectively, "the Crockers"). The
Danielses entered into an Asset Purchase Agreement (the
"Agreement") with the Crockers to acquire Crocker
& Associates, Inc. ("C&A") on March 31,
2011.Within eighteen months of the sale, C&A
lost a number of important contracts and its employees
The Danielses then sued the Crockers for failing to disclose
all material information about C&A as required by the
Agreement. The Crockers answered the suit and brought
counterclaims against the Danielses. After extensive
discovery, the trial court granted the Crockers' motion
for summary judgment on the Danielses' claims against
them. The Danielses now appeal the trial court's grant of
summary judgment. After review of the record, we affirm in
part and reverse in part the grant of summary judgment and
remand the case for further proceedings.
OF FACTS AND PROCEDURAL HISTORY
In 1969, Dennis Crocker cofounded Aqua Aerobic Systems
("Aqua"), an applied engineering business that
provides solutions to municipal and industrial wastewater and
water-treatment customers. In 1977, Dennis left Aqua and
founded C&A in Rock Hill, South Carolina. Despite leaving
Aqua, Dennis retained his minority shareholder's interest
in Aqua as well as a seat on Aqua's board. C&A was a
sales representative firm for manufacturers of water and
wastewater-treatment equipment. It represented Aqua
exclusively in several territories-Virginia, North Carolina,
South Carolina, Georgia, Alabama, and portions of Florida and
Tennessee. Aqua guaranteed these territories to C&A by
entering into contracts for each territory; the contracts
were terminable with thirty days' notice. Since its
founding, C&A was regularly Aqua's number one
representative firm in sales. Aqua represented fifty to
seventy percent of C&A's revenue, depending on the
C&A's business model functioned on a long cycle. From
the time it booked a project until it received the commission
from the booking was, generally, twelve to eighteen months.
Therefore, it was possible to look at a base year of bookings
and project a picture of future revenue twelve to twenty-four
months in the future.
Dennis retired from C&A in 2003 and turned over the
management of C&A to his wife Gail Crocker; later, in
2010, he gave Gail fifty percent of his interest in C&A.
While Gail testified that she was "scared to death"
that Aqua would cancel its contracts with C&A after
Dennis retired, Aqua did not cancel its contracts with
C&A until years later after C&A was sold.
In 2010, Marc Daniels, a certified public accountant (CPA),
reviewed an offering memorandum for C&A. Generational
Equity ("GE"), a business broker, had compiled the
memorandum based on information it had received from the
Crockers. After reviewing the offering memorandum, Marc and
his brother Stephen Daniels, met the Crockers in South
Carolina for an initial due-diligence meeting.
After the initial meeting, the Crockers provided the
Danielses with financial disclosures of past revenue and
present bookings at the request of the financial institution
that was going to finance a portion of the transaction. Over
a period of months, the Crockers and the Danielses exchanged
financial information concerning C&A, negotiated, and
settled on a purchase price of $4, 000, 000 for C&A. Of
this figure, $2, 800, 000 was financed by a bank, and the
remaining $1, 200, 000 was owner-financed by the Crockers.
On March 23, 2011, eight days before the parties signed the
Agreement, Dennis attended an Aqua board meeting at which the
sale of Aqua was discussed. Dennis did not disclose this to
The Danielses and the Crockers entered into the Agreement on
March 31, 2011. On May 1, 2011, Marc-through Maxx
Investments-agreed to pay $365, 000 to the Crockers for
Crocker, Ltd.'s goodwill.
In October 2011-seven months after the sale of C&A and
after the possibility of selling Aqua had dissipated, Dennis
requested that Aqua redeem his stock. Aqua redeemed the stock
in December, and Dennis retired from Aqua's board. In
June 2012, Aqua canceled its representation contract with
C&A for North and South Carolina. Soon after this,
C&A's sales representatives resigned, and C&A
lost its remaining contracts with Aqua.
On October 11, 2012, the Danielses filed suit in Madison
County circuit court against the Crockers, alleging that the
Crockers had breached the Agreement by not disclosing
"all material information relating to [(C&A)] or the
transactions contemplated by this Agreement." The
Crockers answered the complaint and alleged counterclaims
against the Danielses. The parties took several depositions
and conducted discovery. The Danielses also designated Robert
Cunningham as an expert. Cunningham was deposed and prepared
an expert report.
In December 2014, the Crockers filed a motion for summary
judgment on the Danielses" claims against them. On May
5, 2015, the trial court granted the Crockers' motion for
summary judgment (the "May 5 order"). The Danielses
filed a motion for reconsideration or, in the alternative, to
certify the May 5 order under Mississippi Rule of Civil
Procedure 54(b). The trial court denied the motion,
specifically denying both the reconsideration and the
Next, the Danielses and the Crockers filed competing motions
for summary judgment on the Crocker's counterclaims. On
January 8, 2016, the trial court resolved the motions. On
April 6, 2016, pursuant to the Danielses' renewed motion,
the trial court certified its earlier May 5 order. The trial
court also stayed the proceedings "pending the
appeal" of the May 5 order.
The Danielses now appeal a number of issues that each relate
to the trial court's grant of summary judgement in favor
of the Crockers. We will first address where the trial
court erred in granting summary judgment before addressing
where the trial court properly granted summary judgment.
The Crockers also cross-appealed the trial court's stay
of their claims against C&A. By order filed March 2,
2017, this Court granted the Crockers' unopposed motion
to dismiss their cross-appeal for lack of subject-matter
jurisdiction. Due to the factually intensive nature of this
appeal and the extensive record, additional facts and
procedural history will be related throughout the analysis as
We review a trial court's grant of summary judgment de
novo. Mitchell v. Ridgewood E. Apartments, LLC, 205
So.3d 1069, 1073 (Miss. 2016) (citing Borries v. Grand
Casino, Inc. 187 So.3d 1042, 1045 (Miss. 2016)). Under
Rule 56 of the Mississippi Rules of Civil Procedure,
"[t]he judgment sought shall be rendered forthwith if
the pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a
matter of law." Miss. R. Civ. P. 56(c). The burden of
demonstrating that no genuine issue of fact exists is on the
moving party and "the non-moving party should be given
the benefit of every reasonable doubt" Borries,
187 So.3d at 1046. "The evidence is to be viewed in the
light most favorable to the nonmoving party."
Mitchell, 205 So.3d at 1073 (citing Stribling
Inv., LLC v. Mike Rozier Constr. Co., Inc., 189 So.3d
1216, 1219 (Miss. 2016)).
Due to the Crockers' argument on the issue, we initially
note that Cunningham's expert testimony and report is
properly before the Court. It was not challenged in the trial
court below other than argument of counsel at the summary
judgment hearing. We consistently have held that we
"will not consider issues raised for the first time on
appeal." Anderson v. LaVere, 136 So.3d 404, 410
(Miss. 2014) (citing Flagstar Bank, FSB v.
Danos, 46 So.3d 298, 311 (Miss. 2010)); see
Alexander v. Daniel, 904 So.2d 172, 183 (Miss. 2005)
(recognizing "the practical effect of depriving the
trial court of the opportunity to first rule on the
issue."); see also Univ. of Miss. Med. Ctr. v.
Peacock, 972 So.2d 619, 625 (Miss. Ct. App. 2006)
(noting the lack of any Daubert challenge at the
trial level). The report and testimony is in the record
before us. To exclude it would require us to make a
determination as to its admissibility de novo. Our settled
review for the admission or exclusion of expert witnesses,
though, is a review for an abuse of discretion. See
Patterson v. Tibbs, 60 So.3d 742, 748 (Miss.
"The law by which a contract is to be governed is that
which parties intended or may fairly be presumed to have
intended." Cox v. Howard, Weil, Labouisse,
Friedrichs, Inc., 619 So.2d 908, 911 (Miss. 1993). Here,
the Agreement's choice-of-law provision reads:
(d) Law Governing. This Agreement shall be governed
by and construed in accordance with the law of the State of
South Carolina without regard to the choice of law principles
of the State of South Carolina.
this provision, we will apply South Carolina law to the
contract between the Danielses and the Crockers.
As a "[c]hoice of law analysis arises only when there is
a true conflict between the laws of two states, " we
will apply Mississippi law to the remainder of the
Danielses' claims. Zurich Am. Ins. Co. v.
Goodwin, 920 So.2d 427, 432 (Miss. 2006). There is no
"true conflict between the laws of" Mississippi and
South Carolina on any of the Danielses' noncontractual
The trial court erred in granting summary judgment on
the Danielses' contract, negligent and fraudulent
misrepresentation, and punitive damages claims.
Because the record contains a genuine issue as to material
fact concerning the Danielses' contract claims and
negligent and fraudulent misrepresentation claims, the trial
court erred in granting summary judgment on these claims.
Further, because we are remanding claims to be tried by a
jury to determine if the Danielses are entitled to
compensation, we reverse the trial court's grant of
summary judgment on the punitive damages claim.
In South Carolina, "[a]n action for breach of contract
is an action at law." Lee v. Univ. of S.C., 757
S.E.2d 394, 397 (S.C. 2014). "To recover for a breach of
contract, the plaintiff must prove: (1) a binding contract;
(2) a breach of contract; and (3) damages proximately
resulting from the breach." Hennes v. Shaw, 725
S.E.2d 501, 506 (S.C. Ct. App. 2012) (citing Fuller v. E.
Fire & Cas. Ins. Co., 124 S.E.2d 602, 610 (S.C.
1962)). Under South Carolina law, "[t]he primary concern
of the court interpreting a contract is to give effect to the
intent of the parties." N. Am. Rescue Prod., Inc. v.
Richardson, 769 S.E.2d 237, 240 (S.C. 2015). "A
contract is ambiguous when it is capable of more than one
meaning or when its meaning is unclear." Id.
"If a contract's language is unambiguous, the plain
language will determine the contract's force and
The warranty provision at issue here governed the
Crockers' duty to disclose material information to the
Danielses. The warranty stated:
8. Representations and Warranties of the Seller. To
induce the Buyer to enter into this Agreement, the Seller and
the Crockers make the following ...