WAYNE JOHNSON ELECTRIC INC. AND WAYNE JOHNSON, JR.
ROBINSON ELECTRIC SUPPLY COMPANY, INC., TONY WALTERS AND CHRIS ELLZEY
OF JUDGMENT: 05/25/2017
FORREST COUNTY CHANCERY COURT HON. DEBORAH J. GAMBRELL TRIAL
COURT ATTORNEYS: PAUL MANION ANDERSON LAWRENCE CARY GUNN, JR.
J. RICHARD BARRY JOSEPH RANDLE TULLOS SAMUEL STEVEN McHARD
ROBERT THOMAS BAILEY
ATTORNEYS FOR APPELLANTS: PAUL MANION ANDERSON SAMUEL S.
ATTORNEYS FOR APPELLEES: LAWRENCE CARY GUNN, JR. J. RICHARD
BARRY JOSEPH RANDLE TULLOS
Johnson Electric sued Robinson Electric
Supply in the Forrest County Chancery Court for
numerous claims, including breach of contract, fraud, and a
variety of other torts. Johnson asserted that Robinson
Electric Supply carried out a fraudulent scheme to overcharge
Johnson. Robinson Electric Supply counterclaimed for balances
due on Johnson's accounts. Both parties requested an
accounting. The chancellor appointed a special master to hear
the case due to its complexity and size of the amount in
controversy. The chancellor stayed discovery until the
special master could release her findings; however, the
chancellor also ordered Robinson to release numerous business
records sought by Johnson. Before the accounting was
concluded by the special master, Johnson Electric was
administratively dissolved, and as a result, the chancellor
dismissed the claims brought on behalf of the corporation.
After the special master released her recommendations and a
supplemental report, the chancellor agreed with the special
master's findings and adopted the report.
On appeal, Johnson challenges the chancellor's decision
to dismiss Johnson Electric from the lawsuit, the
chancellor's adoption of the special master's report,
and the chancellor's decision to stay discovery until an
accounting could be conducted by the special master. This
Court finds that because Johnson Electric was
administratively dissolved, it cannot "maintain" a
claim as a corporation under Mississippi Code Section
79-4-14.22(a)(4) (Rev. 2013). In addition, we find that
neither the chancellor's acceptance of the special
master's report nor the chancellor's discovery
rulings were an abuse of discretion.
& PROCEDURAL HISTORY
Johnson Electric was established in 1993 and provided
electrical services to general contractors on large
commercial construction projects in the Hattiesburg area.
Johnson bought electrical parts and supplies for various jobs
from Robinson Electric Supply. Robinson Electric Supply and
Johnson entered into a "joint pay agreement," in
which Johnson Electric would submit orders to Robinson
Electric Supply, and Robinson Electric Supply would fill the
orders and send the invoice for payment to Johnson and the
respective general contractor. The invoices were to be paid
by the general contractor.
In June of 2010, Hanco Corporation awarded Johnson a
subcontract for the electrical work for the Camp Shelby
project, a massive undertaking including the construction of
over 315 buildings. It is undisputed that both parties came
to an agreement regarding the price of the supplies and
fixtures. While the project was ongoing, however, Johnson
Electric ceased doing business.
Johnson alleged that, beginning in 2010, Robinson Electric
Supply conspired to fraudulently overcharge for the supplies
and fixtures that Johnson ordered. Johnson alleges that the
fraudulent scheme continued until 2012, when he discovered
the conspiracy and confronted Robinson Electric Supply.
According to Johnson, Robinson Electric Supply admitted
overbilling and charging for nondelivered items. But in
court, Robinson Electric Supply vehemently denied the charge
and asserted that-by the time of the Camp Shelby Project-
Johnson was delinquent in payment to Robinson Electric Supply
for a sum approaching $100, 000.
Johnson sued Robinson Electric Supply on June, 5, 2013. In
response, Robinson Electric Supply filed a motion for an
accounting and requested a special master. The chancellor
granted Robinson Electric Supply's request and appointed
a special master. The chancellor required Robinson Electric
Supply to produce to the special master all documents related
to Johnson's (1) invoices; (2) delivery tickets; (3) pick
tickets; (4) payment records; (5) charges; (6)
joint-checking agreements; (7) orders; and (8)
return/exchange receipts. The chancellor also stayed all
discovery until the special master had an opportunity to
review the records submitted by Robinson Electric Supply.
On December 17, 2013, and January 7, 2014, both parties met
separately with the special master. Robinson Electric Supply
sent the special master a chronology of events, along with a
letter that denied Johnson Electric's allegations and
asserted that Robinson Electric Supply was owed $93, 522 of
what remained on Johnson's balance. Likewise, Johnson
submitted a letter to the special master that sought to
identify the specific instances of Robinson Electric
Supply's overbilling. Johnson also provided documents
pertaining to direct shipments from manufacturers and an
itemization of amounts owed by Robinson Electric Supply to
Johnson Electric was administratively dissolved on December
20, 2014, for failing to file an annual report. On July 6,
2015, Robinson Electric Supply filed a motion to dismiss
Johnson Electric as a party, contending, under Mississippi
Code Section 79-4-14.21 (Rev. 2013), that because Johnson
Electric had been administratively dissolved, it could not
continue in the lawsuit. After Johnson filed a response in
opposition, the matter was heard before the chancellor on
July 15, 2015. While the chancellor acknowledged that Wayne
Johnson, as an individual, had signed personal guarantees
relating to the debts and liabilities of Johnson Electric,
she held that Johnson Electric must be dismissed from the
suit. However, the court found that Wayne Johnson could
proceed with his individual claim against Robinson Electric
With all parties in agreement, the special master categorized
three general issues to be addressed in her
report. On September 23, 2015, the special master
filed her report. The report documented thousands of
transactions-including a line-by-line itemization for each of
the jobs Johnson alleged was overbilled-and found that
Johnson owed Robinson Electric Supply $38, 585.99. Robinson
Electric then filed a motion to accept the special
master's report, and Johnson filed a motion objecting to
it. Johnson's objection discussed, in great detail, many
objections to the special master's findings on specific
On January 1, 2016, a hearing was conducted by the
chancellor. At the hearing, both parties had an opportunity
to question the special master regarding the methodology used
to reach the conclusion in her final report. At Johnson's
request, the chancellor ordered the special master to
reconsider three issues but stayed discovery until the special
master's supplemental report had been filed.
On March 7, 2016, the chancellor conducted another hearing,
which included testimony by the special master. On September
20, 2016, the special master released her supplemental
report, which found that the objections raised by Johnson to
the original report were not supported by evidence or
additional arguments. The special master also confirmed her
prior finding that Johnson owed Robinson Electric Supply $38,
585.99. Robinson Electric Supply subsequently filed a motion
for summary judgment.
An additional hearing was conducted on December 8, 2016, at
which Johnson once again objected to the special master's
conclusions. Specifically, Johnson contended that the special
master's finding was erroneous because Johnson was unable
to conduct discovery. After the hearing, the chancellor
entered an order accepting the special master's report.
The chancellor also delayed ruling on Robinson Electric
Supply's motion for summary judgment. ¶13. On March
1, 2017, after both parties had filed motions regarding
whether discovery should be conducted or stayed, the
chancellor granted Johnson's request to depose eight key
witnesses, while requiring both parties to produce documents
requested by the other party. However, the chancellor limited
discovery only to Johnson's claims for negligent
infliction of emotional distress and to his individual claims
for fraud. Ultimately, Johnson and Robinson Electric Supply
agreed to dismiss the case to make the chancellor's
rulings immediately appealable. On May 25, 2017, the
chancellor granted an agreed judgment of dismissal. On June
1, 2017, Johnson filed a notice of appeal in this Court.
Dismissal of Wayne Johnson Electric, Inc., as a
Whether dismissal of a dissolved corporation is appropriate
is governed by statute and is therefore a question of law.
See Columbus Cheer Co. v. City of Columbus, 155
So.3d 744, 746 (Miss. 2014). A chancellor's conclusions
on issues of law are reviewed de novo. In re Estate of
Baumgarder, 82 So.3d 592, 598 (Miss. 2012) (citing
Corp. Mgmt., Inc. v. Greene Cty., 23 So.3d 454, 459
Under the plain language of Mississippi Code Section
79-4-14.21(f) (Rev. 2013), "[a] corporation that has
been administratively dissolved may not maintain any action,
suit or proceeding in any court of this state until the
corporation is reinstated."
Johnson argues that the Court of Appeals has interpreted
"maintain" to mean "to commence"
litigation. Johnson cites the Court of Appeals's holding
in Royer Homes of Mississippi v. Steiner 131 So.3d
592 (Miss. Ct. App. 2013). In Royer, the Court of
Appeals held that "[d]issolution of a corporation does
not . . . [p]revent commencement of a proceeding by or
against the corporation in its corporate name . . . ."
Id. at 593 (quoting Miss. Code Ann. §
79-4-14.05(b)(5) (Rev. 2013)). The Court of Appeals also
found that the legislature did not intend to stop a lawsuit
that was legally commenced because the lawsuit was not
concluded within the five-year time frame enunciated in the
statute. Id. at 593.
However, the Royer court repeatedly mentioned that
the statutes used to make a decision were the statutes in
effect at the time of the corporation's dissolution.
Id. The Royer corporation was dissolved in
December of 2003. Id. In 2013, the Legislature
enacted Section 79-4-14.21(f), which bars administratively
dissolved corporations from maintaining an
action. Specifically, that statute states,
"[a] corporation that has been administratively
dissolved may not maintain any action, suit or proceeding in
any court until the corporation is reinstated." Miss.
Code. Ann. § 79-4-14.21(f) (Rev. 2013). Although Section
79-4-14.21(f) was in effect at the time of the Royer
decision, the Royer court ...