IN THE SUPREME COURT OF MISSISSIPPI No TS APPEAL FROM THE CIRCUIT COURT SECOND JUDICIAL DISTRICT HARRISON COUNTY, MISSISSIPPI

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1 E-Filed Document May :53: CA Pages: 18 IN THE SUPREME COURT OF MISSISSIPPI No TS FRANK BEATON APPELLANT vs. CAPSCO INDUSTRIES, INC. and CHRISTOPHER KILLION APPELLEES APPEAL FROM THE CIRCUIT COURT SECOND JUDICIAL DISTRICT HARRISON COUNTY, MISSISSIPPI BRIEF OF THE APPELLANT ORAL AGRUMENT REQUESTED SUBMITTED BY: Blewett William Thomas MSB # Blewett Road Columbus, MS Tel. (228) Fax (662) Attorney for the Appellant Frank Beaton

2 IN THE SUPREME COURT OF MISSISSIPPI No TS FRANK BEATON APPELLANT vs. CAPSCO INDUSTRIES, INC. and CHRISTOPHER KILLION APPELLEES CERTIFICATE OF INTERESTED PARTIES The undersigned counsel of record certifies that all listed persons have an interest in the outcome of this case. The representations are made in order that this Court may evaluate possible disqualifications or recusal. Frank Beaton, Appellant Capsco Industries, Inc., Appellee Christopher Killion, primary stockholder of Capsco Industries, Inc. Blewett William Thomas, Attorney for the Appellant R. Mark Alexander, Attorney for the Appellees Mathew McDade, Attorney for the Appellees Honorable Roger Clark, County Circuit Court Judge Submitted this the 18 th day of May, FRANK BEATON By: Blewett Thomas BLEWETT WILLIAM THOMAS ATTORNEY FOR APPELLANT i

3 TABLE OF CONTENTS CERTIFICATE OF INTERESTED PARTIES TABLE OF CONTENTS TABLE OF AUTHORITIES i ii iii STATEMENT OF THE ISSUES 1 STATEMENT OF THE CASE 2 STATEMENT OF THE FACTS 5 STANDARD OF REVIEW 7 STATEMENT CONCERNING ORAL ARGUMENT 7 SUMMARY OF THE ARGUMENT 8 ARGUMENT 8 I. The Harrison County Circuit Court violated Frank Beatonʼs rights under Sections 14, 24, 25 and 31 of Article Three of the Mississippi Constitution by denying him a jury trial on the pending claims that he had formally pled in Circuit Court CONCLUSION 12 CERTIFICATE OF SERVICE 14 ii

4 TABLE OF AUTHORITIES Constitutional and Statutory Authority Miss. Const, art, 3, 14 9 Miss. Const, art, 3, Miss. Const, art, 3, Miss. Const, art, 3, Cases Bailey Lumber & Supply Co. v. Robinson, 98 So.3d 986 (Miss. 2012) 7 Children's Med. Grp., P.A. v. Phillips, 940 So.2d 931 (Miss. 2006) 7 Delno v. Market St. Ry. Co., 124 F.2d 965 (9th Cir. 1942) 11 Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738, 6 L.Ed. 204 (1824) 12 Overton v. State, 2013-CT SCT (Miss. Sup. Ct., April 28, 2016) 11 White v. State, 742 So.2d 1126 (Miss. 1999) 12 Wilson v. Greyhound Bus Lines, Inc., 830 So.2d 1151 (Miss. 2002) 7 Secondary Authorities Black's Law Dictionary (10th ed. 2014) 12 iii

5 STATEMENT OF THE ISSUES This appeal challenges the Harrison County Circuit Courtʼs refusal to set Frank Beatonʼs ( Beaton ) pending claims for trial. Prior to the October 2014 trial of the construction claims of the Co-Appellant Ground Control, LLC ( Ground Control ), the Circuit Court entered a pre-trial order that bifurcated their pending tort claims from Ground Controlʼs claims for unpaid construction services. The October 13 th pre-trial order specifically excluded any testimony during trial concerning these tort claims. During the trial, Beaton gave testimony concerning his personal losses resulting from personal loans he obtained to finance Ground Controlʼs start-up at the Margaritaville casino project. The trial defendants immediately objected based upon the exclusion of tort claims in the pre-trial order, which the presiding judge sustained. The final judgment entered on Ground Controlʼs construction claims did not adjudicate nor did it reference Beatonʼs personal claims in any manner. Thereafter, Beaton moved the Circuit Court to enter a scheduling order and set his tort claims for trial. The Circuit Court refused to set Beatonʼs claims for trial and instead entered a final judgment denying that there were any pending tort claims. The Circuit Court abused its discretion by denying Beaton his constitutional rights under Sections 14, 24, 25 and 31 of Article Three of the Mississippi Constitution and refusing to grant the motion for a trial setting. 1

6 STATEMENT OF THE CASE This case arises from claims by Ground Control for unpaid labor and materials related to the installation of underground utilities at the Margaritaville casino project in Biloxi, Mississippi. Subsequent to Ground Control filling suit against Capsco Industries, Inc. ( Capsco ), W.G. Yates & Sons Construction Company ( Yates ) and Harrahʼs Entertainment, Inc. ( Harrahʼs ) for unpaid construction services and other damages, Capsco and its owner Christopher Killion ( Killion ) filed a third-party complaint against Ground Controlʼs owner Frank Beaton, which alleged that Beaton in his personal capacity had intentionally made fraudulent representations about Ground Control in order to obtain a construction contract with Capsco. The third-party complaint against Beaton individually was dismissed through summary judgment on August 13, In response to the third-party complaint filed against him personally, Beaton filed a counterclaim against Capsco and Killion, 2 which alleged: a. claims of abuse of process asserting that both Capsco and Killion disregarded the fact that no credible evidence existed to support the claims against Beaton personally, and that they authorized the filing of frivolous litigation against Beaton for vexatious and malicious reasons; b. claims that Capsco and its officials engaged in malicious acts against him personally and in his individual capacity, or alternatively that 1 2 See Record Excerpt ( RE ) No. 1, p. 39, referencing Dkt. # 237. See RE Nos. 4 and 5. 2

7 Capsco and its officials engaged in acts of gross negligence that meet the legal definition of malice, that constitute tortious interference with Beatonʼs personal expectancies of future contractual relations, to-wit, Capsco and its officials undermined both current and prospective business relations of Beaton through the publication of false, slanderous and/or disparaging statements to thirdpersons concerning Beaton individually and his business affairs; and c. as a proximate result of the respective representations and acts of Capsco and Killion ultra vires, Beaton was unable to repay the commercial loan and he suffered the loss of his homestead through foreclosure, for which he seeks damages. d. Killion individually engaged in acts that frustrated Beatonʼs expectations concerning Capscoʼs commitment to repay the aforesaid construction loans, that Killion disregarded Capscoʼs corporate formalities and personally obtained benefits through Capscoʼs renouncement of its representations and commitments to Beaton, and that Killionʼs acts in renouncing Capscoʼs commitments to repay Beatonʼs construction loans evidence misfeasance or injustice on the part of Killion for personal gain. Neither Capsco nor Killion challenged Beatonʼs counterclaims, and the entirety of Beatonʼs claims remained active at the time of the October 2014 trial. On October 13, 2014, the Circuit Court entered its order on various pretrial motions, which specifically stated that all tort claims against Capsco and 3

8 Killion were to be excluded from evidence during the October 2014 trial. 3 Beaton reasonable believed that the Circuit Court was holding in abeyance his tort claims for trial at a later date. During the trial, Beaton testified as to losses he had individually sustained due to defaults on the construction loans he personally obtained in order to fund both the start-up phase of Ground Control's work at Margaritaville and continued operations while Capsco was purportedly awaiting disbursements from Yates of payment for Ground Control's completed work. 4 Capsco and Killion immeidately objected to such testimony, and the Circuit Court sustained the objection. Beaton made no furtehr attempt to provided testimony of his personal losses, as he again believed that the Circuit Court was holding his personal claims in abeyance for trial at a later date. On September 18, 2015, the Circuit Court entered a Corrected Final Judgment concerning the matters adjudicated at the October 2014 trial. 5 The Corrected Final Judgment did not adjudicate nor did it reference in any manner Beatonʼs personal claims. On September 9, 2015, Beaton had moved the Circuit Court to set his personal claims for trial, or alternatively to enter a final, appealable judgment. 6 On November 24, 2015, the Circuit Court denied Beaton a trial setting and instead entered a final judgment on his personal claims See RE No. 7, p See RE No. 11, p. 731, ll See RE No. 8. See RE No. 9. See RE No. 2. 4

9 Anticipating that the Circuit Court would deny him a trial of his claims, Beaton had previously filed his Notice of Appeal on September 22, STATEMENT OF THE FACTS During late 2007, Frank Beaton, as President of Ground Control, was approached by Loye McIlveene and Jason Dollar, as representatives of Capsco, concerning Ground Controlʼs ability to install in-ground water, sewage and storm drain lines at the Margaritaville project. Specifically, Capsco proposed that Ground Control undertake all excavation work and in-ground pipe installation in the event it obtained this contract. Capsco was an Alabama company that represented itself as a fire protection specialist in the design, fabrication and installation of sprinkler systems. It had no prior experience in the installation of inground utilities nor did it have the equipment necessary for the installation of inground utilities. Contrary to Capscoʼs representations to Beaton, it was subsequently discovered after this litigation commenced that Capsco has not certified in either Alabama or Mississippi for the installation of underground utilities. Specifically, Capscoʼs certification in Mississippi was limited to certification in the installation of fire sprinkler systems, which Mississippi does not accept as proper certification for the installation of in-ground utilities. Eventually, Ground Control and Capsco entered into a construction contract on December 19, 2007, for Ground Control to install the in-ground utilities at Margaritaville. Thereafter, Ground Control commenced work under the contract, and it continued to work at the Project through June 2008, when it 8 See RE No. 3. 5

10 ceased work due to Capscoʼs failure to pay for completed work, which was calculated to be in excess of One Million Dollars ($1,000,000). Ground Controlʼs attempts to recover any portion of its unpaid services were futile. Due to his inability to collect the unpaid services from Capsco, and further considering that he and his wife had personally financed Ground Controlʼs ongoing work at Margaritaville after Capsco delayed payment for completed work, Beaton defaulted on loans he obtained for Ground Control to continue operations at Margaritaville. Specifically, Beatonʼs home (which was used as collateral for operating funds at Margaritaville) was subsequently foreclosed upon due to his default on the business loans. Additionally, Ground Controlʼs heavy equipment and trucks (which were financed based upon Beatonʼs personal guarantee) were also sold due to default on these loans. In addition to loosing his home and the business equipment, deficiency judgments were entered against Beaton after the sale of this property. Further, Beaton lost his favorable credit rating, which had previously been sufficient to receive immediate approval of the business lines of credit after Ground Control received the Margaritaville contract. In addition to the financial injury that was proximately caused by Capscoʼ retention of money Ground Control had earned for completed work at Margaritaville, both Capsco and Killion individually undertook action to disparage Beaton personally and cause him loss of other construction work and prospective financial advantage after Ground Control was forced to cease work at Margaritaville. 6

11 The underlying facts of this case show that Capscoʼs owner Christopher Killion use Capsco as his alter ego, and that Killion had a documented pattern of operating companies owned by him as his alter ego and thereby profiting personally from his exclusive control over those companies. Frank Beaton stated cognizable legal claims supported by factual evidence. These claims were never dismissed and remained live claims at the time the Circuit Court entered its final judgment on Beatonʼs counterclaim. This was an abuse of discretion by the Circuit Court. STANDARD OF REVIEW This Court reviews questions of law, including questions of the existence of legally cognizable claims, de novo. See, e.g., Children's Med. Grp., P.A. v. Phillips, 940 So.2d 931, 933 (Miss. 2006). This Court reviews issues of fact for abuse of discretion. Wilson v. Greyhound Bus Lines, Inc., 830 So.2d 1151, 1155 ( 9) (Miss. 2002). "When considering a trial court's denial of post-trial motions or a motion for a new trial, this Court's standard of review is abuse of discretion." Bailey Lumber & Supply Co. v. Robinson, 98 So.3d 986, 991 (Miss. 2012). STATEMENT CONCERNING ORAL ARGUMENT The Appellant believes that oral argument would be helpful in resolving the issues presented in this appeal. 7

12 SUMMARY OF THE ARGUMENT The Harrison County Circuit Court entered a pre-trial order on October 13, 2014, which excluded from the October 2014 trial all tort claims alleged against Capsco and its owner Christopher Killion. Following the trial of Ground Controlʼs construction claims, Beaton moved the Circuit Court to enter a scheduling order on his tort claims and set a trial date on those claims. The Circuit Court refused to set his tort claims for trial, and instead it asserted that those claims had in fact been tried during the October 2014, although the Circuit Court prevented Beaton from giving testimony on his personal claims during that trial. By denying Beatonʼs motion for a trial setting of his personal claims, the Circuit Court effectively dismissed his claims sua sponte and violated specific rights afforded Beaton under Article Three of the Mississippi Constitution. ARGUMENT I. The Harrison County Circuit Court violated Frank Beatonʼs rights under Sections 14, 24, 25 and 31 of Article Three of the Mississippi Constitution by denying him a jury trial on the pending claims that he had formally pled in Circuit Court The tort claims alleged by Beaton in his counterclaim were not challenged by either Capsco or Killion, and these claims remained pending at the time of the trial on Ground Controlʼs construction claims during October Prior to the October 2014 trial, the presiding judge entered a pre-trial order, which specifically excluded from trial the tort claims alleged against 8

13 Capsco and Killion. 9 Subsequent to the October 2014 trial, Beaton moved the Circuit Court to enter a scheduling order for the trial of his tort claims, or alternatively to enter a final judgment denying him a trial on his pending claims. 10 Thereafter, the Circuit Court entered a final judgment, 11 which asserted that Beatonʼs claims had been previously adjudicated. The final judgment was in violation of Beatonʼs applicable constitutional rights under Sections 14, 24, 25 and 31 of Article Three of the Mississippi Constitution. Section 14 of Article Three states, No person shall be deprived of life, liberty, or property except by due process of law. In this instance, Beaton filed his third-party counterclaims against Capsco and Killion on January 15, 2014, 12 and supplemented them on January 17, Thereafter, neither Capsco nor Killion took any action to dismiss Beatonʼs tort claims prior to the October 2014 trial. Further, Beaton was specifically denied the right to present tort claims against Capsco and Killion pursuant to the Circuit Courtʼs pre-trial order, which is substantiated by the Circuit Courtʼs refusal to allow Beaton to testify concerning his personal damages resulting from Capscoʼs retention of money earned by Ground Control. 14 The Circuit Courtʼs November 24, 2015 judgment 15 dismissing 9 See RE No. 7, p See RE No See RE No See RE No See RE No See RE No. 11, p. 731, ll. 3-25, referencing the Circuit Court sustaining objections to Beaton testifying about the foreclosure of his home as a result of his default on the lines of credit he personally obtained to finance Ground Controlʼs work at the Margaritaville project. 15 See RE No. 2. 9

14 Beatonʼs pending claims was a violation of his rights under the Mississippi Constitution. Section 24 of Article Three states, All courts shall be open; and every person for an injury done him in his lands, goods, person, or reputation, shall have remedy by due course of law, and right and justice shall be administered without sale, denial, or delay. Beaton clearly pled claims that Capsco and Killion engaged in abuse of process breached various contracts and representations to Beaton personally, and disparaged him personally and interfered with Beatonʼs personal business opportunities, with these acts by Capsco and Killion being the proximate cause of injury to Beaton personally. Neither Capsco nor Killion challenged the legal sufficiency of these claims or their facts supporting these claims. The Circuit Courtʼs November 24, 2015 judgment clearly denied Beaton a remedy for his injuries and resulting damages. Section 25 of Article Three states, No person shall be debarred from prosecuting or defending any civil cause for or against him or herself, before any tribunal in the state, by him or herself, or counsel, or both. In this instance, the Circuit Courtʼs October 13, 2014 pre-trial order specifically excluded all tort claims against Capsco and Killion from the October 2014 trial. The exclusion of the tort is reinforced by the Circuit Courtʼs refusal to allow Beaton to testify to his personal damages resulting from these torts. Subsequently the Circuit Court contradicted its pre-trial and stated that all of Beatonʼs claims had been tried during the October 2014 trial. The Circuit Courtʼs contradictory action concerning 10

15 the prosecution of Beatonʼs tort claims clearly debarred him from prosecuting the claims he pled in his counterclaim. Section 31 of Article Three states, The right of trial by jury shall remain inviolate, As referenced in Beatonʼs trial testimony, 16 the Circuit Court prevented him from testifying in any manner about his personal damages proximately caused by Capsco. In the Corrected Final Judgment concerning Ground Controlʼs construction claims, the Circuit Court omitted any mentioned of the tort claims Beaton had pled. 17 Thereafter, Beaton moved the Circuit Court to set his tort claims for trial, which the Circuit Court denied. Clearly, the Circuit Courtʼs refusal to let Beaton give testimony of his personal claims during the October 2014 trial and its subsequent refusal to set his tort claims for trial were in violation of Beatonʼs right to a jury trial. By denying Beaton these constitutional rights, the Circuit Court abused its discretion when it denied his motion for a scheduling order and trial setting. Courts have defined "abuse of discretion" in myriad ways. 18 Discretion, in this sense, is abused when the judicial action is arbitrary, fanciful, or unreasonable, which is another way of saying that discretion is abused only where no reasonable man would take the view adopted by the trial court. 19 "An appellate court's standard for reviewing a decision that is asserted to be grossly unsound, See RE No. 11. See RE No. 8. Overton v. State, 2013-CT SCT ( 36) (Miss. Sup. Ct., April 28, 2016). Id., citing Delno v. Market St. Ry. Co., 124 F.2d 965, 967 (9th Cir. 1942). 11

16 unreasonable, illegal, or unsupported by the evidence." 20 Rather than implying bad faith or an intentional wrong on the part of the trial judge, judicial discretion is defined as a "sound judgment which is not exercised arbitrarily, but with regard to what is right and equitable in circumstances and law, and which is directed by the reasoning conscience of the trial judge to just result." 21 The discharge of judicial duties requires consideration, deliberation and thoughtful use of the broad discretion given judges under the laws of this State. 22 Discretion is to be exercised in discerning the course prescribed by law, and when that is discerned, it is the duty of the court to follow it. 23 Clearly, the Circuit Court was required to recognize that, as Beatonʼs tort claims had neither been tried nor dismissed with prejudice, he had a constitutional right to his day in court. The facts of this case substantiates a claims that there is a definite and firm conviction that the Circuit Court committed clear error through its abuse of discretion in failing to recognize Beatonʼs constitutional rights. For the foregoing reasons, the Circuit Courtʼs denial of Beatonʼs motion for a trial setting must be reversed and his tort claims remanded to the Harrison County Circuit Court to set Beatonʼs tort claims for trial. CONCLUSION The refusal of the Circuit Court to grant Frank Beaton a trial on the claims pled in his counterclaim was both a violation of Beatonʼs aforesaid constitutional 20 Id. at 38, quoting Abuse of Discretion, Black's Law Dictionary (10th ed. 2014). 21 White v. State, 742 So.2d 1126, 1136 ( 42) (Miss. 1999). 22 Id. at 1137 ( 44). 23 Id., citing Osborn v. Bank of United States, 22 U.S. (9 Wheat.) 738, 866, 6 L.Ed. 204, 234 (1824). 12

17 rights and an abuse of discretion by the Circuit Court, especially when it is considered that the Circuit Court a pre-trial order that specifically excluded Beatonʼs tort claims for the October 2014 trial of Ground Controlʼs construction claims. As Beaton had pled specific tort claims that were pending when he requested a trial setting, this Court must remand Beatonʼs claims to the Harrison County Circuit Court with instructions to the Circuit Court that these claims be set for trial. This the 18 th day of May, Blewett Thomas BLEWETT W. THOMAS Blewett William Thomas MSB # Blewett Road Columbus, MS (228)

18 CERTIFICATE OF SERVICE I, BLEWETT W. THOMAS, do hereby certify that I have served this day true and correct copies of the Appellantʼs Brief to the following counsel of record and the trial judge: R. Mark Alexander, Esq. Matthew McDade, Esq. Balch & Bingham, LLP PO Box 130 Gulfport, MS Honorable Roger T. Clark Harrison County Circuit Court Judge PO Box 1461 Gulfport, MS This the 18 th day of May, Blewett Thomas BLEWETT W. THOMAS 14