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Jones v. Mississippi Institutions of Higher Learning

Court of Appeals of Mississippi

August 14, 2018

ERNEST T. JONES APPELLANT
v.
MISSISSIPPI INSTITUTIONS OF HIGHER LEARNING, ALCORN STATE UNIVERSITY, DARREN J. HAMILTON, PH.D., INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY, AND GEORGE E. ROSS, PH.D., INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY APPELLEES

          DATE OF JUDGMENT: 07/11/2016

          CLAIBORNE COUNTY CIRCUIT COURT HON. LAMAR PICKARD TRIAL JUDGE

          ATTORNEYS FOR APPELLANT: JIM D. WAIDE III WAYNE E. FERRELL JR.

          ATTORNEYS FOR APPELLEES: ALAN M. PURDIE CHRISTOPHER H. CORKERN

          BEFORE LEE, C.J., CARLTON AND WILSON, JJ.

          WILSON, J.

         ¶1. In December 2008, Alcorn State University's head football coach, Ernest Jones, sued the university. He alleged that Alcorn had breached his contract and the implied covenant of good faith and fair dealing in a number of ways, including by firing seven of his assistant coaches and by failing to provide necessary equipment for his team. Jones's complaint also sought an injunction to prevent Alcorn from firing him. The following month, Alcorn fired Jones. For the next seven years, litigation continued in three different cases until Jones's original lawsuit finally proceeded to a jury trial. The jury found that Alcorn breached its implied covenant of good faith and fair dealing and awarded Jones damages of $500, 000. However, the circuit court granted Alcorn's post-trial motion for judgment notwithstanding the verdict (JNOV). Jones then appealed.

         ¶2. On appeal, Jones argues that the circuit court erred by granting Alcorn's motion for JNOV. Jones also argues that the circuit court erred by denying his pretrial motion to amend his complaint, which prevented him from pursuing a claim that Alcorn breached his contract by firing him without cause. Finally, Jones argues that the circuit court erred by dismissing his claim against Alcorn's former athletic director for tortious interference with contract on the ground that the claim was barred by the Mississippi Tort Claims Act (MTCA).

         ¶3. We reverse and remand. First, we hold that Jones has a viable claim for breach of the implied covenant of good faith and fair dealing. However, that claim is subject to the MTCA. Because Jones did not satisfy the MTCA's pre-suit notice requirement, the claim must be dismissed without prejudice. Jones may refile the claim, but it must be decided by the circuit judge "without a jury," as required by the MTCA. Miss. Code Ann. § 11-46-13(1) (Rev. 2012). Second, we hold that Jones should have been allowed to pursue a claim that Alcorn breached his contract by firing him without cause. Third, we reverse the dismissal of Jones's claim against Hamilton based on our Supreme Court's recent decision in Springer v. Ausbern Construction Co., 231 So.3d 980, 988-89 (¶¶32-35) (Miss. 2017), which held that the MTCA does not apply to such a claim.

         FACTS AND PROCEDURAL HISTORY

         ¶4. Jones played wide receiver for Alcorn in the mid-1990s and graduated from the university in 1995. After graduation, he briefly played arena and semi-pro football before going into coaching. Jones eventually became an assistant coach at Central Michigan University under head coach Brian Kelly. When Kelly became the head coach at the University of Cincinnati, Jones joined his staff at Cincinnati as the running backs coach. Jones's salary at Cincinnati was $190, 000. In 2007, the NCAA recognized Jones as one of ten up-and-coming minority assistant coaches with the potential to become Division I head coaches. Other coaches who received this recognition later became head coaches at the University of Texas, Texas A&M, Penn State, Vanderbilt, and Stanford.

         ¶5. In 2007, Jones was hired as Alcorn's head coach with an annual salary of $140, 000. Jones was willing to take a significant pay cut because of the opportunity to return to his alma mater as a head coach. The contract that Jones eventually signed was short on details. It consisted of a single page with five additional, standard form clauses attached. The contract was for a term of four years with an annual salary of $140, 000. The contract provided that Jones could be fired only for (a) "[f]inancial exigencies as declared by the Board [of Trustees of the State Institutions of Higher Learning (IHL)]"; (b) "[t]ermination or reduction of programs . . . as approved by the Board"; (c) "[m]alfeasance, inefficiency or contumacious conduct"; or (d) "[f]or cause."

         ¶6. Darren Hamilton became Alcorn's athletic director in April 2008. Hamilton clashed with Jones almost immediately. Alcorn's then-president, George Ross, testified that the "two men didn't like each other," although Ross said he did not know why. On May 12, 2008, only six weeks after Hamilton arrived at Alcorn, Hamilton wrote a strongly worded "Letter of Reprimand" to Jones, with copies to Jones's personnel file and Alcorn's director of human resources. Hamilton alleged that Jones had violated the university's code of conduct by "inexcusable neglect of duty or insubordination." Specifically, Hamilton alleged that Jones and an assistant coach, Keith Majors, failed to attend a scheduled meeting with him. Jones denied the allegation in a written response. According to Jones, he and Majors went to see Hamilton at the appointed time, but Hamilton looked at them and turned and walked away without saying a word. Jones testified that Hamilton called the meeting because Hamilton wanted Jones to fire Majors, but Jones refused because Majors was a valued member of his staff. However, Hamilton testified that he did not tell Jones to fire Majors.

         ¶7. When Alcorn began fall practice in late July 2008, the team had no helmets, pads, shoes, or uniforms. The few items of used equipment that the team did have had not been certified as safe for use as required by NCAA rules. Players had to supply their own helmets, pads, and shoes for practice. For much of the preseason, the team practiced in plain white t-shirts with handwritten numbers. Pads, helmets, shoes, and uniforms finally arrived only a week before the team's first game. Jones and the team's equipment manager, Dante Tyson-Bey, testified that they repeatedly asked Hamilton to approve orders for desperately needed uniforms and equipment, but Hamilton delayed. Tyson-Bey, who had years of experience with college and pro sports teams, described the 2008 preseason as "the most embarrassing thing [he had] ever been a part of." Jones and others also testified that the athletic department failed to provide meals for the team during fall practice and failed to pay medical insurance premiums. As a result, Jones and his staff provided peanut butter and jelly sandwiches and box lunches, and injured players had to wait to see doctors.

         ¶8. Jones also testified that, before Hamilton arrived, Ross promised Jones that he could raise money for the football program and supplement his base salary by soliciting sponsors for TV and radio shows. According to Jones, this practice is customary in college football, and the previous coach at Alcorn, Johnny Thomas, had done the same. Jones testified that Ross directed him to talk to Thomas about the shows. Based on conversations with Ross and Thomas, Jones opened a bank account that he named the "Run and Gun" account and solicited donations and sponsorships for the shows. However, after Hamilton was hired, he ordered Jones to close the account and transfer the money to the ASU Foundation, a nonprofit organization affiliated with the university. Jones testified that he did as Hamilton instructed. Jones testified that he did pay vendors for fundraising-related expenses that were incurred before he was ordered to close the account. But Jones transferred all remaining funds, which was most of what he had raised, to the Foundation. Nonetheless, Hamilton accused Jones of opening an unauthorized bank account and refusing to turn over funds to the Foundation. A May 22, 2008 memorandum shows that, based on Hamilton's allegation, Alcorn's human resources director contacted a special assistant attorney general for advice about possible "disciplinary actions and/or termination of [Jones's] employment."

         ¶9. Jones also testified that Hamilton gave him permission to book hotel rooms for all games in advance of the season. Jones delegated this responsibility to an assistant coach, who then booked hotels for all games, including the Capital City Classic-the season finale in Jackson against Jackson State University. Unbeknownst to Jones and his assistant coach, another Alcorn employee booked hotel rooms for the Capital City Classic at a different hotel. Hamilton later claimed that Jones had mishandled football finances by double-booking rooms for the team.

         ¶10. Jones testified that he met with Hamilton in June 2008 to discuss a potential shoe contract with New Balance. After discussing the issue with Hamilton, Jones agreed to a deal with New Balance, and Hamilton approved the agreement subject to certain modifications to the terms of the contract. However, in October the Southwestern Athletic Conference signed an agreement to make Nike the exclusive shoe provider for the entire conference. Hamilton directed Jones to get out of the contract with New Balance. In addition, Hamilton alleged that the agreement with New Balance was unauthorized. Jones testified that this harmed his reputation with New Balance and other companies in the industry. Jones also testified that Hamilton ordered him to cancel the New Balance contract in retaliation for Jones's continued refusal to fire Majors.

         ¶11. Hamilton also alleged that Jones made an $11, 000 order from a Russell Athletics vendor without proper authorization. However, Jones testified that the vendor eventually acknowledged that Jones did not place the order and that the shipment and invoice were in error. Jones offered a note from the vendor's salesman to corroborate his testimony. However, even after the vendor acknowledged its error, Hamilton accused Jones of "inefficiency in resolving" the issue.

         ¶12. Alcorn struggled through a 2-10 season in 2008. On November 26, 2008, seven of Jones's assistant coaches received identical notices that their contracts would "not be renewed" and that their "employment at Alcorn . . . [would] end on December 31, 2008." Although Ross signed the notices, each stated that the decision not to renew the coach's contract was based on Hamilton's recommendation. Ross testified that he simply followed Hamilton's recommendations, and he could not recall or lacked personal knowledge of the reasons for the non-renewals. Jones was not given any advance warning or any reason for the non-renewal notices. He first learned about the notices from his assistant coaches. Jones then filed the instant lawsuit against Alcorn on December 5, 2008.[1] Jones testified that Alcorn's abrupt termination of his assistant coaches made it impossible for him to do his job and harmed his reputation.

         ¶13. At trial, Ross claimed that the assistant coaches were never really fired. He testified that the assistant coaches were on one-year contracts, and the fact that their existing contracts were not being renewed did not mean that they would not be offered new contracts for the following year. None of this was explained to the assistant coaches, who understandably were confused and upset by the non-renewal notices. However, after Jones filed suit against Alcorn, all of his assistant coaches were asked to remain with the program.

         ¶14. Five days after Jones filed suit, Alcorn gave him notice of his possible termination for cause. In the notice, Hamilton stated that he was recommending Jones's termination "due to inefficiency and malfeasance" on four grounds: (1) "[o]pening a bank account in [his own] name and depositing fundraising monies without proper authority . . . and without following the proper procedures"; (2) buying shoes from a "non-approved" vendor "when [Alcorn] ha[d] an exclusive footwear contract with Nike"; (3) "[i]nefficiency in resolving" the alleged unauthorized order of Russell Athletics apparel; and (4) booking hotel rooms for the Capital City Classic "without authority and without following proper procedures." The notice informed Jones that he had the right to request a due process hearing before a hearing committee, which would make a recommendation to Ross.

         ¶15. Jones exercised his right to a hearing, and the hearing was held on January 16, 2009. The hearing committee was comprised of three Alcorn employees appointed by Ross. Jones was allowed to attend the hearing and to call and question witnesses. Jones's attorneys were allowed to attend as advisors but were not allowed to examine witnesses or present evidence. After the hearing, the committee recommended that Ross terminate Jones for malfeasance and contumacious conduct. Ross concurred in the committee's recommendation and terminated Jones effective January 28, 2009.

         ¶16. Jones appealed the hearing committee's decision and his termination to the Claiborne County Circuit Court by petition for a writ of certiorari. See Miss. Code Ann. § 11-51-93 (Rev. 2012). In April 2011, the circuit court dismissed Jones's petition and upheld the committee's decision. Jones appealed, and in August 2013, this Court affirmed the circuit court's order dismissing Jones's petition. This Court held that Jones's hearing comported with due process and that Jones could not show that the hearing committee's decision was "arbitrary and capricious." See generally Jones v. Alcorn State Univ., 120 So.3d 448 (Miss. Ct. App. 2013).

         ¶17. On January 28, 2009, the same day that Ross officially terminated Jones, Alcorn asked Jones's associate head coach and defensive coordinator, Earnest Collins, to serve as Alcorn's interim head coach for the 2009 season. Collins initially declined. He and Jones were close friends, [2] and he testified that he "didn't want to be in that environment" or work for a school that would treat an alumnus like Jones had been treated. However, after Jones encouraged Collins to take the job, Collins agreed to stay on one condition: he would not report to or deal with Hamilton. Alcorn agreed that Collins could report to Ross's chief of staff and would not have to deal with Hamilton.[3] Hamilton left Alcorn during 2009. Collins remained at Alcorn as the interim head coach for the 2009 and 2010 seasons before he was hired as the head coach at his alma matter, the University of Northern Colorado.

         ¶18. In May 2010, Alcorn filed a motion to dismiss this case for lack of subject matter jurisdiction. Alcorn argued that Jones's complaint in this case was "premature" because Jones's petition for writ of certiorari, which challenged his termination, remained pending in the circuit court. Alcorn argued that both cases arose "out of the same operative facts, events, and/or occurrences." Alcorn further argued that Jones was required to "exhaust his administrative remedies"-i.e., pursue his certiorari petition to a final decision-before he could pursue his complaint for damages in this case. Indeed, Alcorn argued that there could not even be a "justiciable controversy" on Jones's complaint for damages until there was "a final determination of [his] appeal seeking reinstatement of his employment." The circuit court never ruled on Alcorn's motion.

         ¶19. Also in May 2010, while Jones's petition for certiorari and separate complaint for damages both remained pending in circuit court, Jones filed suit in federal court against Alcorn, IHL, Hamilton, and Ross. Jones's federal complaint alleged violations of his constitutional rights and sought damages under 42 U.S.C. § 1983 and injunctive relief under Ex Parte Young, 209 U.S. 123 (1908). Jones also asserted state law claims, including breach of contract, breach of the duty of good faith and fair dealing, and tortious interference with contract. Jones's reasons for filing the federal complaint are unclear. In any event, in 2012, the district court ruled that the Eleventh Amendment to the United States Constitution provided Alcorn and IHL with immunity from suit in federal court. Therefore, the court dismissed all claims against Alcorn and IHL "without prejudice pursuant to the Eleventh Amendment." Jones's claims against Hamilton and Ross were also dismissed "without prejudice" for failure to serve process within 120 days.

         ¶20. As noted above, this Court affirmed the dismissal of Jones's petition for a writ of certiorari in August 2013. In 2014, this case stirred to life in the circuit court, and eventually trial was set for January 12, 2016.

         ¶21. On August 10, 2015, Jones filed a motion for leave to file an amended complaint. Jones stated that the proposed amended complaint would "simplify" the case by eliminating some claims, which he conceded were not viable. Alcorn opposed Jones's motion, arguing that the proposed amended complaint asserted a "brand new" claim for breach of contract based on Jones's termination. Alcorn contended that Jones's motion should be denied because of Jones's "lack of diligence" and because the amendment would unduly delay the litigation and prejudice Alcorn. In rebuttal, Jones argued that his original complaint "gave . . . notice that [he] was claiming breach of contract." Jones also pointed out that in Alcorn's previously filed motion to dismiss for lack of subject matter jurisdiction, Alcorn itself had argued that this case was premature until Jones has exhausted his administrative remedies by appealing his termination. See supra ¶18.

         ¶22. In November 2015, the circuit court denied Jones's motion for leave to amend his complaint to assert a breach of contract/wrongful termination claim. The court found that the motion should have been filed "at a much earlier stage" and that the amendment would unduly delay the litigation and prejudice Alcorn. In addition, in December 2015, the circuit court granted Hamilton's motion to dismiss all of Jones's claims against him. The court concluded that Jones's claim against Hamilton for tortious interference with contract was barred by the MTCA. Thus, Jones's only remaining claims were against Alcorn.

         ¶23. The case proceeded to a four-day jury trial in January 2016. The case was submitted to the jury on a theory that Alcorn breached its contract with Jones by breaching the implied covenant of good faith and fair dealing. The court instructed the jury that "all contracts contain an implied covenant of good faith and fair dealing," which "need not be written into the contract." The court further instructed the jury that Jones alleged that Alcorn had breached the covenant in three ways: "(A) By firing his assistant coaches; (B) By intentionally making false charges of financial misconduct; and (C) By failing to provide uniforms and shoes for the players in a timely fashion." The court also instructed the jury that "the trial [did] not have anything to do with" Alcorn's termination of Jones, that Jones "was still employed" as Alcorn's coach when he filed the lawsuit, and that they could not award damages based on Jones's termination or the remaining years of salary under his contract. The jury was instructed that they could award damages for emotional distress or mental anguish if Jones proved that Alcorn breached his contract, that such damages were a foreseeable consequence of the breach, and that Jones actually suffered such damages. After deliberating, the jury returned a verdict for Jones and found that Jones suffered damages of $500, 000, and the court entered final judgment on the verdict.[4]

         ¶24. IHL filed a post-trial motion for JNOV or a new trial. The circuit court granted the motion, set aside the verdict, and entered judgment in favor of Alcorn. The court ruled that Jones's good faith and fair dealing claim failed "as a matter of law" because Jones failed to "prove a breach of his written employment contract."

         ¶25. Jones filed a timely notice of appeal. On appeal, he argues that the circuit court erred by granting Alcorn's motion for JNOV. As noted above, he also argues that the circuit court erred prior to trial by denying his motion for leave to amend his complaint and by dismissing his tortious interference claim against Hamilton. Following oral argument, we entered an order directing the parties to file supplemental briefs addressing several issues, primarily related to Jones's good faith and fair dealing claim and the MTCA.

         ANALYSIS

         I. Jones has a viable claim for breach of the implied covenant of good faith and fair dealing, but the claim is subject to the MTCA.

         ¶26. We first determine whether Jones has a viable claim for breach of the implied covenant of good faith and fair dealing and, if so, whether and how the MTCA applies to that claim. All of the issues related to this claim are issues of law or statutory interpretation, which we review de novo. Kelley LLC v. Corinth Pub. Utils. Comm'n, 200 So.3d 1107, 1112-13 (¶14) (Miss. Ct. App. 2016).

         A. "All contracts contain an implied covenant of good faith and fair dealing in performance and enforcement."[5]

         ¶27. The implied covenant of good faith and fair dealing, inherent in every contract,

is based on fundamental notions of fairness, and its scope necessarily varies according to the nature of the agreement. Some conduct, such as subterfuge and evasion, clearly violates the duty. However, the duty may not only proscribe undesirable conduct, but may require affirmative action as well. A party may thus be under a duty not only to refrain from hindering or preventing the occurrence of conditions of his own duty or the performance of the other party's duty, but also to take some affirmative steps to cooperate in achieving these goals.

Cenac, 609 So.2d at 1272 (quoting E. Allan Farnsworth, Contracts § 7.17, at 526-27 (1982)). "Good faith is the faithfulness of an agreed purpose between two parties, a purpose which is consistent with justified expectations of the other party. The breach of good faith is bad faith characterized by some conduct which violates standards of decency, fairness or reasonableness." Id. Stated differently, "[t]he covenant holds that neither party will do anything which injures the right of the other to receive the benefits of the agreement." Ferrara v. Walters, 919 So.2d 876, 883 (¶19) (Miss. 2005) (internal quotation mark omitted). As stated above, this covenant is implied in "[a]ll contracts." Cenac, 609 So.2d at 1272; see also id. at 1259 ("[T]he covenant of good faith and fair dealing [is] inherent in every contract in our law.").

         B. A breach of the implied covenant of good faith and fair dealing does not require a breach of any express term of the contract.

         ¶28. In granting Alcorn's motion for JNOV, the circuit court ruled that Jones's "good faith and fair dealing claims must be rejected as a matter of law" because Jones "did not prove a breach of his written employment contract." The circuit court cited this Court's statement in Daniels v. Parker & Associates Inc., 99 So.3d 797 (Miss. Ct. App. 2012), that "to have a breach of the duty of implied good faith and fair dealing there must first be an existing contract and then a breach of that contract." Id. at 801 (¶13) (emphasis added). It certainly is true that "[t]he duty of good faith and fair dealing arises from the existence of a contract between parties." Am. Bankers' Ins. Co. of Fla. v. Wells, 819 So.2d 1196, 1207 (¶35) (Miss. 2001). Thus, Daniels was correct insofar as it stated that the implied covenant of good faith and fair dealing arises only where there is an "existing ...


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