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Maness v. K & A Enterprises of Mississippi, LLC

Supreme Court of Mississippi

February 8, 2018

PHYLLIS MANESS AND JAMES A. MANESS
v.
K & A ENTERPRISES OF MISSISSIPPI, LLC

          DATE OF JUDGMENT: 01/05/2017

         MICHAEL J. CASANO JIMMY D. McGUIRE R. WAYNE WOODALL HAROLD W. DUKE, HON. CARTER O. BISE, TRIAL JUDGE:

          ATTORNEY FOR APPELLANTS: JOHN H. DUNBAR.

          ATTORNEY FOR APPELLEE: NICHOLAS VAN WISER.

          BEFORE WALLER, C.J., COLEMAN AND CHAMBERLIN, JJ.

          CHAMBERLIN, JUSTICE.

         ¶1. K&A Enterprises of Mississippi, LLC, filed suit against Phyllis and James Maness for breach of contract. The claim arose from Phyllis and James Maness's termination of the Option Contract between the parties. K&A Enterprises of Mississippi, LLC, alleged that Phyllis and James Maness failed to provide clear title, and in response, Phyllis and James Maness filed a Counterclaim for Declaratory Judgment. K&A Enterprises of Mississippi, LLC, filed a Partial Motion for Summary Judgment on Liability, a Partial Motion for Summary Judgment on Damages, and a Motion to Dismiss the Counterclaim, or in the alternative, for Summary Judgment. The trial court granted all three motions, denied the subsequent motions for reconsideration, and the Manesses appealed. For the reasons expounded upon herein, the Court affirms.

         STATEMENT OF FACTS AND PROCEDURAL HISTORY

         ¶2. Phyllis and James Maness (the Manesses) entered into an Option Agreement for Purchase of Real Estate (Option Contract) with K&A Enterprises, LLC (K&A) on May 7, 2004. Under the contract, K&A had an option to purchase "Lots 13, 14, 15 and 16, Block 110, GULFVIEW SUBDIVISION, Lakeshore, Hancock County, Mississippi" for $1, 000, 000 to be paid over a period of time with interest payments, and the option was extended for one year. The Option Contract also provided a specific subsection on the Manesses' duty to cure title defects; it stated:

Cure of Title Defects. Optionors shall have thirty (30) days from notice by the Optionees of any title defects to cure such defects, unless curative measures require action by a public entity or a court of law. In that event, the thirty (30) day limit shall not apply, but Optionors shall be obligated to pursue diligently and in good faith all necessary filings and application necessary to cure title.

         ¶3. On April 25, 2005, K&A and the Manesses executed the "Notice of Exercise of Option, " whereby K&A accepted and exercised the Option Contract. The Notice included a paragraph stating that K&A was giving notice to the Manesses of the cloud on the title caused by the inclusion of a piece of the property on a deed with an unrelated party, Eric Nelson.

         ¶4. On June 15, 2005, Amy Gillespie Smith provided a letter detailing title issues with the subject property. In the record on appeal, the letter is missing the second page, and K&A states that it is not in possession of the second page. Regardless, it is clear that the letter covered two issues that clouded the title. It mentioned the Dynasty Lawsuit and the Walker Avenue issue. Further, K&A maintains that the subsequent Orgler Report[1] makes the Smith letter clear.

         ¶5. The Dynasty Lawsuit was filed by the Manesses in 2006 and is styled: Maness v. Dynasty, Inc., et al. According to the complaint, the lawsuit covered three main issues.

         ¶6. The first issue is the lack of the "less and except" language in a subsequent deed. In 1998, Dynasty began acquiring property adjacent to Block 110 in the Gulfview Subdivision. The deed to Dynasty excluded the Manesses' property[2] by including a clause stating that the property sold was "less and except" the Manesses' property. Dynasty then conveyed its property to Eric Nelson. The deed between Dynasty and Nelson failed to contain the "less and except" provision. Therefore, the deed included the Manesses' property, and the same property also is included as part of the property being sold under the Option Contract.

         ¶7. The second issue in the lawsuit is a cause of action to quiet and confirm title for the part of the Manesses' property that was obtained through adverse possession. The adversely possessed property was generally[3] described as the following, "A parcel of land situated in part of Blocks 110 and 111, GULFVIEW SUBDIVISON, Lakeshore, Hancock County . . . ." Further a second parcel is described generally[4] as the following, "A parcel of land located in Block 111, GULFVIEW SUBDIVISON, Lakeshore, Hancock County, Mississippi and also part of Walker Avenue . . . ."

         ¶8. The third issue in the lawsuit is the Walker Avenue dedication. Walker Avenue was included on surveys of the Gulfview Subdivision, and it was dedicated to Hancock County. Subsequently, the Board of Supervisors attempted to vacate the portion of Walker Avenue that ran through the subdivision. However, it was never done properly because newspaper publication was required.

         ¶9. Turning back to the instant suit, due to the "less and except" issue (as covered in the Dynasty Lawsuit), the Smith title opinion and later two additional title opinions concluded that it clouded the title. Further, due to the Walker Avenue dedication issue (as covered in the Dynasty Lawsuit), the Smith title opinion and an additional title opinion concluded that there was a second cloud on the title.

         ¶10. On July 15, 2005, the parties entered into a Modification of the Option Contract [July 2005 Modification], whereby they agreed that K&A would stop making interest payments due to the "lack of clear title." Further, it provided that the parties understood that the matter was in litigation, and there was "no merchantable title." On March 27, 2007, Dynasty Inc., Dynasty Limited, Eric Nelson and his company, LSN Nevada Trust, signed a quitclaim deed conveying the "less and except" property to the Manesses. The quitclaim deed did not address the Walker Avenue dedication issue.

         ¶11. Thereafter, K&A began making interest payments again. The payments continued until August 2009. According to K&A, it was eventually discovered that the quitclaim deed did not fix the title issues. Further, the Manesses continued to litigate the Maness v. Dynasty, et al. suit. The Manesses then terminated the agreement with K&A on September 8, 2009. The termination letter stated that "this action is based primarily upon [K&A's] failure to remit funds."

         ¶12. K&A filed suit against the Manesses on April 21, 2010. They alleged that the Manesses unilaterally terminated the contract and breached the contract by failing to provide merchantable title and failing to pursue it diligently, despite K&A's paying approximately $479, 941.04 over the life of the contract. K&A alleged $479, 941.04 in damages. In response, the Manesses answered and filed a Counterclaim for declaratory relief. The Counterclaim requested that the court enter a declaratory judgment adjudicating that all agreements between K&A and the Manesses have been terminated. Further, they alleged that K&A collected rent, and the declaratory judgment should require K&A to "disgorge any funds wrongfully withheld by it . . . ."

         ¶13. K&A filed a Partial Motion for Summary Judgment on Liability, a Motion to Dismiss the Counterclaim Pursuant to Rule 12 or, in the alternative, for Partial Summary Judgment, and a Partial Motion for Summary Judgment on Damages. After oral argument on each motion, the trial court granted all three motions, and denied the Motions for Reconsideration. The cumulative effect of the trial court's grant of all three motions amounted to a final disposition regarding all issues of the case. The Manesses appealed.

         STATEMENT OF THE ISSUES

         ¶14. The parties have styled the issues around the three rulings of the trial court: the grant of partial summary judgment on liability and denial of the motion for reconsideration, the grant of partial summary judgment on damages and denial of the motion for reconsideration, and the dismissal of the counterclaim. Due to the volume of arguments made for each ruling of the trial court, the issues and subissues remain divided by the three rulings of the trial court.

         I. The Motion for Partial Summary Judgment on Liability

         (A) Whether K&A, the movant, successfully illustrated the absence of a genuine issue of material fact as to liability.

         (I) Whether the Option Contract and July 2005

         Modification were ambiguous.

         (ii) Whether the quitclaim deed cured the title issues.

         (iii) Whether the Manesses' need to cure had a deadline.

         (iv) Whether the course of conduct of the parties can be considered.

         (v) Whether K&A failed in its burden on summary judgment.

         (B) Whether the trial court abused its discretion in failing to grant the motion for reconsideration.

         II. The Motion for Partial Summary Judgment on Damages

         (A) Whether K&A, the movant, successfully illustrated the absence of a genuine issue of material fact as to damages.

         (B) Whether the trial court abused its discretion in failing to grant the motion for reconsideration.

         III. The Dismissal of the Counterclaim under Rule 12.

         ANALYSIS

         I. The Motion for Partial Summary Judgment on Liability

         (A) Whether K&A, the movant, successfully illustrated the absence of a genuine issue of material fact as to liability.

         ¶15. On appeal, the grant or denial of a motion for summary judgment is reviewed de novo, viewing the evidence "'in the light most favorable to the party against whom the motion has been made.'" Karpinsky v. Am. Nat'l Ins. Co., 109 So.3d 84, 88 (Miss. 2013) (quoting Pratt v. Gulfport-Biloxi Reg'l Airport Auth., 97 So.3d 68, 71 (Miss. 2012)). Summary judgment is proper when 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 judgment as a matter of law.'" Karpinsky, 109 So.3d at 88 (quoting Miss. R. Civ. P. 56(c)).

         ¶16. The movant bears the burden of persuasion, "persuading the trial judge that: (1) no genuine issue of material fact exists, and (2) on the basis of the facts established, he is entitled to judgment as a matter of law." Karpinsky, 109 So.3d at 88 (internal quotation omitted). Further, if at trial, the movant would bear the burden of proof, he also bears the burden of production at summary judgment. Id. However, the nonmovant may not sit ideally nor "rest upon the mere allegations or denials of his pleadings." Miss. R. Civ. P. 56(e). The nonmovant must respond "by affidavit or as otherwise provided in [Rule 56], " and he "must set forth specific facts showing that there is a genuine issue for trial." Id. Further, "[i]f he does not so respond, summary judgment, if appropriate, will be entered against him." Id.

         ¶17. Here, K&A bore the burden of persuasion and the burden of production, as it would bear the burden of proof at trial. See Karpinsky, 109 So.3d at 88. In support of the Partial Motion for Summary Judgment on Liability, K&A produced the following documents: the Option Contract between the parties, the April 25, 2005, Notice to the Manesses of K&A's exercise of the option, the Smith Report[5] issued in June of 2005, the July 2005 Modification, the Manesses' termination of the Option Contract, the Orgler Report, the Manesses' Response to the Requests for Admissions, the Second Amended Complaint in Maness v. Dynasty, Inc. et al., and finally, the Motion for Partial Summary Judgment in Maness v. Dynasty, Inc, . et al. Further, at the hearing, K&A also submitted an expert report of John Howard Shows.

         ¶18. In response, at the summary judgment hearing, the Manesses offered the quitclaim deed that they argued cleared up and removed the cloud from the title. The Manesses then argued that a number of issues of material fact were left unresolved. On appeal, the Manesses address some of the arguments made before the trial court, and they raise a couple of new ...


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