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Latham v. Johnson

Court of Appeals of Mississippi

June 26, 2018

ROGER DALE LATHAM APPELLANT/CROSS-APPELLEE
v.
TERRY W. JOHNSON, JOHN W. ROBINSON III AND CRAIG TRAHAN APPELLEES/CROSS-APPELLANTS

          DATE OF JUDGMENT: 04/18/2016

          SUNFLOWER COUNTY CIRCUIT COURT HON. MARGARET CAREY-MCCRAY, JUDGE

          ATTORNEY FOR APPELLANT: J. EDWARD RAINER

          ATTORNEYS FOR APPELLEES: JOHN W. ROBINSON III JOHN P. SNEED

         EN BANC.

          GRIFFIS, P.J.

         ¶1. Roger Dale Latham owned land in the Mississippi Delta. He used his land primarily to hunt ducks.

         ¶2. In 2004, Latham hired Terry W. Johnson to perform excavation work on his land. Latham and Johnson continued their business relationship with other projects, and they became friends.

         ¶3. John W. Robinson III and Craig Trahan were also Latham's friends. Robinson and Trahan paid Latham for the right to hunt ducks on his land.

         ¶4. In the summer of 2007, Johnson told Latham about his interest in certain land in Sunflower County, Mississippi. This tract of land consisted of 170 acres of abandoned catfish ponds, and it was offered for sale at a price of $750 per acre. Johnson and Latham looked at the property and agreed that it would be a good investment for duck hunting. They determined that the property was offered for sale at an amount below the land's market value. They asked Robinson, Trahan, and Mike Dickson (another of Latham's friends) if they were interested in purchasing the property. Dickson declined.

         ¶5. Latham, Johnson, Robinson, and Trahan met in August of 2007 to look at the property. They met again at the property on September 15, 2007, and they discussed the purchase of the property in more detail. Their discussions included the financing, improvements, and access rights to the property.

         ¶6. According to Johnson, Robinson, and Trahan, they agreed to form a partnership to purchase the property during their September 2007 meeting. In fact, Johnson, Robinson, and Trahan claim that they, along with Latham, agreed to purchase the property as a partnership, and each man would contribute an equal amount of money for the purchase. In addition, they testified that they agreed that Latham would investigate financing options for the purchase, Johnson would determine what improvements needed to be made to the property, Trahan would bush hog the property, and Robinson would research and investigate the adjacent landowner's claim of access rights over the property.

         ¶7. On October 8, 2007, Latham submitted a loan application to the Federal Land Bank Association of North Mississippi (the "Land Bank") for the proceeds necessary to purchase the property. On the loan application, in the section about ownership, Latham checked "partnership." Johnson, Robinson, and Trahan contend they were not aware of Latham's loan application with the Land Bank.

         ¶8. In October of 2007, Latham called Robinson to discuss the financing. Robinson testified that Latham said he had talked to Johnson and Trahan, and because of their personal issues, [1] the group should finance the purchase of the property in Latham's name, individually. Latham also said that the group could convey title to the property to the partnership when they were ready.

         ¶9. Johnson, Robinson, and Trahan also testified that the decision to finance the purchase of the property in Latham's name only was a group decision. They agreed to share equally in the expenses and understood that, upon Latham's receipt of title to the property, it would be partnership property, not Latham's property individually.

         ¶10. On October 18, 2007, Latham submitted a second loan application to the Land Bank. This application was solely in his name. As a result, Latham obtained a loan commitment for $144, 500, which included the purchase price of $127, 500 and an additional amount for settlement charges, adjustments, and property improvements.

         ¶11. Latham executed a promissory note to the Land Bank, on November 8, 2007, and closed on the purchase of the property. A warranty deed was executed, and the property was conveyed to Latham, individually. The warranty deed was recorded among the land records of Sunflower County. At the closing, Latham was disbursed $13, 454.58 for property improvements. Latham deposited this money into a bank account at Wachovia Bank. The account was opened in the names of Latham and his wife d/b/a "Lonesome Pine." Shortly after closing, Latham gave the original closing documents to Robinson for safekeeping.

         ¶12. The promissory note was to be paid in fifteen annual installments beginning October 1, 2008. On October 1, 2008, Trahan wrote a check to Latham for $3, 626.40, and he included a note on the memo line of the check that it was for "land." On October 19, 2008, Johnson wrote a check to Latham for $3, 625.40, and he included a note on the memo line of the check that it was for "land payment." On October 22, 2008, Robinson wrote Latham a check for $3, 625.40, and he included a note on the memo line that it was for "Lonesome Pine." The checks totaled $10, 877.20, and they were deposited in Latham's "Lonesome Pine" bank account at Wachovia on October 31, 2008, along with Latham's check in the amount of $3, 623.60. Shortly thereafter, Latham wrote a check from the "Lonesome Pine" account and paid the Land Bank the full amount of the 2008 payment due.

         ¶13. The following year, in 2009, Johnson, Robinson, and Trahan again gave Latham checks for their share of the Land Bank note. On October 21, 2009, Johnson wrote a check to Latham for $3, 668 for "Land Payment Lonesome Pine." On October 27, 2009, Robinson wrote a check to Latham for $3, 700 for "Lonesome Pine." On November 1, 2009, Trahan wrote a check to Latham for $3, 787. The checks totaled $11, 155, and Latham deposited these checks and his check for $3, 115.81, in the "Lonesome Pine" account at Wachovia. Latham then wrote a check from the "Lonesome Pine" account to the Land Bank for the amount necessary for the 2009 loan payment.

         ¶14. In early 2010, Mike Retzer bought the property adjacent to Lonesome Pine. Gil Ray, Retzer's manager, hired Johnson to do some work on Retzer's property. As part of their discussion, Ray informed Johnson that he thought Retzer would also be interested in buying Lonesome Pine. Johnson then told Latham, Robinson, and Trahan about Retzer's possible interest in the property.

         ¶15. Retzer called Latham and offered to buy Lonesome Pine. Retzer agreed to purchase Lonesome Pine for a price of $2, 150 per acre or $365, 500.[2] The sale closed on March 16, 2010. Before the closing, Latham received $15, 000 as an earnest money deposit. As a result of the closing, the Land Bank note was paid in full, along with all other expenses of the sale - including commissions, taxes, and attorney fees. Latham received a check for the net proceeds in the amount of $223, 963.31.

         ¶16. On March 31, 2010, Latham deposited this check into his company's commercial checking account at Trustmark National Bank. The check was not deposited in the Lonesome Pine account.

         ¶17. On May 20, 2010, Robinson wrote a letter to Latham. In this letter, Robinson asked for all information and documents related to the sale of the property; the amount and whereabouts of all partnership funds in his possession, custody or control; and all other information and documents necessary for the partnership to settle its accounts and to make final distributions to the partners. Robinson indicated that the letter was also on behalf of Johnson and Trahan.

         ¶18. Latham testified that he did not receive this letter. However, Latham admitted that he went to Robinson's house on May 23, 2010. Latham testified that he spent two hours with Robinson discussing this matter. Latham also testified that Robinson made clear, during this meeting, that there was a partnership among Latham, Johnson, Robinson, and Trahan. ¶19. After several months, on September 25, 2010, Robinson had another conversation with Latham. He again explained to Latham that the proceeds from the sale, $223, 963.31, and any remaining funds borrowed from the Land Bank for property improvements, should be divided equally among the partners. The following week, Johnson had another conversation with Latham. In this conversation, it was clear to Robinson that Latham did not agree with his position.

         ¶20. On March 14, 2011, Johnson, Robinson, and Trahan filed a complaint against Latham in the Circuit Court of Sunflower County. The complaint asserted claims for breach of partnership agreement; breach of fiduciary duties; misappropriation and conversion of partnership assets; malicious, intentional, and wanton conduct; and fraud, deceit, and misrepresentation. The complaint asserted claims for both compensatory and punitive damages, and it asked for equitable relief in the form of an accounting, judicial dissolution of the partnership, and settlement of accounts.

         ¶21. Latham served his answer and defenses. As part of his answer, Latham claimed that venue was improper in Sunflower County. Latham filed a motion to dismiss the case for lack of venue or, in the alternative, to transfer the case to the Circuit Court of Rankin County, where Latham resided. The circuit court found a substantial alleged act or omission and a substantial event that caused injury had occurred in Sunflower County and denied the motion.

         ¶22. Latham also asserted an affirmative defense on the grounds that the claims were barred by the statute of limitation and statute of frauds. Latham filed a motion to dismiss on these grounds, and it too was denied.

         ¶23. In his answer, Latham denied that a partnership existed. He testified that the money paid by Johnson, Robinson, and Trahan in 2008 and 2009 was "only for rights to hunt" on the property.

         ¶24. At trial, Latham agreed that the parties formed a partnership to purchase the property in September 2007. He further agreed "that the idea was that all of the partners would contribute equally, both money and time and effort." However, Latham claimed that sometime between October 8 and October 18, 2007, he advised Johnson, Robinson, and Trahan that "they [would] need to sign a promissory note if they wanted it to be a partnership." Because Johnson, Robinson, and Trahan did not submit individual loan applications to the Land Bank by October 18, 2007, Latham claimed that the partnership no longer existed. However, Johnson, Robinson, and Trahan disagreed, and each testified that Latham never asked them to submit a loan application or to sign a promissory note. They also testified that the 2008 and 2009 checks they sent to Latham were for their one-fourth shares of the Land Bank note.

         ¶25. This case was tried before a jury in Sunflower County. The jury returned a verdict for Johnson, Robinson, and Trahan in the amount of $176, 352.24. The circuit court denied their request to for a hearing on punitive damages. The court also denied their motion for attorney fees and prejudgment interest but granted their motion for post-judgment interest. The court entered a judgment that was consistent with the jury's verdict. Latham then filed a motion for a judgment notwithstanding the verdict (JNOV) or, in the alternative, for a new trial. The court denied this post-trial motion.

         ¶26. Latham now appeals from this judgment, and he asserts ten assignments of error. He argues that the circuit court erred in: (1) denying his motion to dismiss or, alternatively, to transfer venue; (2) denying his motion to dismiss based on the applicable statutes of limitation; (3) denying his motion to dismiss based on the statute of frauds; (4) denying his motion to dismiss for Johnson, Robinson, and Trahan's failure to perform an accounting; (5) denying his ore tenus motion regarding an alleged discovery violation; (6) allowing the use of a deposition for impeachment; (7) allowing the admission of parole evidence to explain a series of emails between Robinson and a third party, (8) denying his motion for a mistrial; (9) denying his motion for a JNOV; and (10) denying his motion for a new trial.

         ¶27. Johnson, Robinson and Trahan cross-appeal and argue the circuit court erroneously denied their request for prejudgment interest.

         ANALYSIS

         I. Latham's Appeal

         A. Venue

         ¶28. Latham contends that the circuit court committed reversible error when it determined that venue was proper in Sunflower County, Mississippi. Latham argues that the court should have dismissed the case or transferred venue to Rankin County, where he resided. Latham claims venue was improper in Sunflower County because "no party to the suit retain[ed] any interest [in] said real property" and "the real property is no longer vested in any of the parties to this action."

         ¶29. "The standard of review for a change in venue is abuse of discretion." Hedgepeth v. Johnson, 975 So.2d 235, 237 (¶7) (Miss. 2008). A circuit court's decision on venue will not be disturbed "unless it clearly appears that there has been an abuse of discretion or that the discretion has not been justly and properly exercised under the circumstances of the case." Id.

         ¶30. Venue is determined by Mississippi Code Annotated section 11-11-3(1)(a)(i) (Rev. 2004), which provides:

Civil actions of which the circuit court has original jurisdiction shall be commenced in the county where [1] the defendant resides, or, [2] if a corporation, in the county of its principal place of business, or [3] in the county where a substantial alleged act or omission occurred or [4] where a substantial event that caused the injury occurred.

         ¶31. Latham cites section 11-11-3 for the proposition that since he is a resident of Rankin County, Mississippi, he was entitled to venue in Rankin County. If the plaintiffs had filed the complaint in Rankin County, under Mississippi Code Annotated section 11-11-3, venue would have been proper in Rankin County. But, the plaintiffs did not file their complaint in Rankin County.

         ¶32. Because the complaint was filed in Sunflower County, we must determine whether venue was proper there. The plaintiffs argue that venue is proper in Sunflower County because that is "in the county where a substantial alleged act or omission occurred or where a substantial event that caused the injury occurred." Id.

         ¶33. We agree. As discussed above, Sunflower County is where the land was located, where the decision was made to purchase the property, where the partnership was formed, and where the sale occurred that resulted in the profit. Indeed, virtually all of the conduct occurred that gave rise to the plaintiffs' claims and where the events that caused the injury occurred. The fact that the property was subsequently sold to a third party and "is no longer vested in any of the parties to this action" is of no consequence.

         ¶34. We find that venue was proper in Sunflower County, pursuant to section 11-11-3(1)(a)(i), and the circuit court did not abuse its discretion in denying Latham's motion.

         B.Statutes of ...


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