E-Filed Document Jan 13 2014 16:30:11 2013-CA-01004 Pages: 21 IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI ARTHUR GERALD HUDSON and LINDA HUDSON VS. LOWE S HOME CENTER, INC. APPELLANT CAUSE NO. 2013-CA-01004 APPELLEE BRIEF OF APPELLANT ORAL ARGUMENT REQUESTED CHUCK MCRAE, MISS. BAR NO. 2804 MCRAE LAW FIRM 416 EAST AMITE STREET JACKSON, MISSISSIPPI 39201 chuck@mcraelaw.net Office: 601.944.1008 Facsimile: 866.236.7731 ATTORNEY FOR APPELLANT
IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI ARTHUR GERALD HUDSON and LINDA HUDSON VS. LOWE S HOME CENTER, INC. APPELLANT CAUSE NO. 2013-CA-01004 APPELLEE CERTIFICATE OF INTERESTED PERSONS Pursuant to Mississippi Rule of Appellate Procedure 28(a)(1), the undersigned counsel of record certifies that the following listed persons and/or entities have an interest in the outcome of the case. These representations are made in order that the Judges of this Court may evaluate possible disqualification or recusal. 1. Arthur Gerald Hudson, Appellant; 2. Linda Hudson, Appellant; 3. Lowe s Home Center, Inc., its agents and employees, Appellee; 4. Chuck McRae, Esq., Attorney for Appellant; 5. James H. Heidelberg, Esq., Attorney for Appellee; and 6. Jessica Dupont, Esq., Attorney for Appellee; 7. Ken Adcock, Esq., Attorney for Appellee; 8. Honorable Dale Harkey, Circuit Court Judge for Jackson County; 9. Honorable Kathy Jackson, Circuit Court Judge for Jackson County. Respectfully submitted, ARTHUR GERALD HUDSON and LINDA HUDSON, Appellant BY: /s/ Chuck McRae CHUCK McRAE, MSB #2804 Attorney for Appellant ii
TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS.ii TABLE OF CONTENTS...iii TABLE OF AUTHORITIES.iv REQUEST FOR ORAL ARGUMENT..1 STATEMENT OF THE ISSUES 1 PROCEDURAL HISTORY OF THE APPEAL.1 SUMMARY OF THE ARGUMENT...4 STANDARD OF REVIEW 5 ARGUMENT..6 CONCLUSION.16 iii
TABLE OF AUTHORITIES Cases City of Madison v. Bryan, 763 So.2d 162 (Miss. 2000)...11,13,14 Hill v. Ramsey, 3 So.3d 120 (Miss. 2009) 6 Knight v. Knight., 85 So.3d 832 (Miss. 2012)..6 Leaf River Forest Products, Inc. v. Deakle, 661 So.2d 188 (Miss. 1995).14 Lincoln Elec. Co. v. McLemore, 54 So.3d 833 (Miss. 2010)..6 Nationwide Mut. Ins. Co. v. Evans, 553 So.2d 1117 (Miss. 1989) 11 Peavey Elec. Corp. v. Baan USA, Inc., 10 So.3d 945 (Miss. Ct. App. 2009).8,9 In Re Spencer, 985 So.2d 330 (Miss. 2008) 5 Wright v. Public Employees Retirement System of Mississippi, 24 So.3d 382 (Miss. Ct. App. 2009) 7 Rules Mississippi Rule of Appellate Procedure 28...ii Mississippi Rule of Appellate Procedure 34...1 Mississippi Rule of Civil Procedure 4...6 Statutes Section 11-55-1 of the Mississippi Code of 1972, as amended.. 5 Section 11-55-7 of the Mississippi Code of 1972, as amended.11 iv
REQUEST FOR ORAL ARGUMENT Pursuant to Mississippi Rule of Appellate Procedure 34(b), oral argument would assist this Honorable Court in its decision-making process. Due to the complex nature of the case, the Court s consideration of the issues presented by this appeal may be assisted or advanced by the presence of the parties before the Court to comment upon the issues and respond to any inquiries concerning the circumstances in this case and why these facts differ from the cited cases. STATEMENT OF THE ISSUES 1. Appellant s Complaint Was Timely Filed in the Period of Time Remaining on the Statute of Limitations After Tolling Due to the Dismissal of the Previously Filed Action Without Prejudice. 2. Appellant s Complaint Was Not Frivolous or Filed For the Sole Purpose of Harassment and Therefore Should Not Have Resulted in Sanctions Pursuant to Rule 11 of the Mississippi Rules of Civil Procedure and the Litigation Accountability Act. PROCEDURAL HISTORY OF THE CASE Appellants, Arthur Gerald Hudson, and Linda S. Hudson initiated the underlying action following an injury caused by a forklift operated by an employee of Lowe s Home Center, Inc. ( Lowe s ) in Pascagoula, Mississippi. On May 5, 2006, while shopping at Lowe s Home Center, Inc., Arthur Gerald Hudson was hit with a forklift as it came around the corner at a high rate of speed. Counsel for the Plaintiff, Chuck McRae ( McRae ), and counsel for the Defendant, Ken Adcock ( Adcock ) began settlement negotiations. McRae had been informed that Adcock would be representing Lowe s and, for all intents and purposes, would be their spokesperson in this matter. Lowe s had instructed McRae that Adcock had been employed to represent them
and waived the statute of limitations by thirty days with an extension. The last of these three tolling agreements extended the statute of limitations to July 31, 2009. (R. 14-15). On July 27, 2009, Hudson filed his Complaint in the Jackson County Circuit Court against the Defendant, Lowe s Home Stores, Inc. in Civil Action No. 2009-00184; In the Circuit Court of Jackson County, Mississippi. (R. 3-8). The Complaint in 2009-00184 states in Paragraph C that... counsel of record for Lowe s Home Centers is Ken Adcock, Esq. and he may be served with process at 199 Charmant, Suite 1, Ridgeland, Mississippi 39158. (T. at Exhibit P-1). The filing of Appellant s Complaint in Civil Action No. 2009 came after counsel for the Appellant and Ken Adcock agreed to toll the running of the statute of limitations until July 31, 2009. (R. 14-15). In the Answer of Appellee Lowes in 2009-00184, it was admitted that Adcock was proper to be served on behalf of the Defendant. Counsel for the Plaintiff felt that this served as assurance that service had been accepted by Adcock, as agent of service, given their extensive discussions regarding the case and settlement. During all periods in which the tolling agreements were effective, Adcock asked for documents which he believed would assist him in negotiating a settlement. McRae fulfilled every request for documents and even agreed that Adcock could speak to Hudson s doctors. Essentially, Adcock was allowed to conduct informal discovery behind the façade of settlement negotiations. On or around August 6, 2009, Plaintiff s counsel served a copy, via hand delivery, of the Complaint to Adcock at his office located at 199 Charmant, Suite 1, Ridgeland, Mississippi. Various documents were requested informally by Adcock during this time period. In November of 2009, he advised that he had lost this copy of the Complaint and requested another copy. Settlement negotiations and informal discovery and investigations continued until January 5, 2010 when Adcock officially ended all negotiations following a telephone 2
conversation with McRae. Further, in a correspondence stating the same, Adcock again states he cannot find his copy of the Complaint and asked McRae to send a copy to him. On January 20, 2010, Lowe s was personally served process through their agent, Corporation Service Company, 506 South President Street, Jackson, Mississippi 39201. On February 8, 2010, Lowe s filed their Answer and Defenses to the Complaint. In the first numbered paragraph of their Answer, Lowes admits to the allegations in paragraph 1(c) of the Complaint which asserts that Adcock can alternatively be served process as their legal representative. Again, this was verification to counsel for Hudson that Adcock was able to accept service and that service on the registered agent had been waived. On November 15, 2010, an Order of Dismissal in the Circuit Court of Jackson County was issued in Civil Action No. 2009-00184, dismissing the claim against Lowe s with prejudice. (R. 28-30). The Appellant filed a Notice of Appeal on November 29, 2010, with briefing concluding on or around July 5, 2011. On February 21, 2012, the Court of Appeals affirmed as modified the decision of the trial court. The modification of the Court of Appeals was modifying the dismissal of the Appellant to without prejudice. Judge Barnes concurred in part and dissented in part without separate written opinion. Judge Carlton concurred in part and dissented in part with separate written opinion. (R. 31-36). On October 15, 2012, within four (4) days after the Supreme Court s decision of October 11, 2012 denying Appellant s Petition for Writ of Certiorari, Appellant filed a Complaint against the Appellee in Civil Action No. 2012-00241; In the Circuit Court of Jackson County, Mississippi. (R. 3-8). On February 5, 2013, Appellee filed its Motion for Summary Judgment on the grounds that the applicable statute of limitations had expired. (R. 23-37). On May 13, 2013, the Jackson County Circuit Court entered an Order granting Appellee s Motion for Summary Judgment, as well as ordering sanctions against counsel for the Appellant pursuant to 3
Rule 11 of the Mississippi Rule of Civil Procedure and the Litigation Accountability Act, despite the fact that Appellee did not file a separate Motion for Sanctions against counsel for the Appellant. (R. 80, 83-85, 100). On May 15, 2013, the Court entered its Judgment of Dismissal. (R. 85). The Jackson County Circuit Court entered its Final Judgment of Dismissal on June 19, 2013. (R. 102). On June 19, 2013, the Court also entered its Imposition of Sanctions against counsel for the Appellant. (R. 100). On July 1, 2013, Appellant filed the instant Notice of Appeal. (R. 103). SUMMARY OF THE ARGUMENT The Circuit Court of Jackson County erred in granting Appellee Lowes Home Center, Inc. s Motion for Summary Judgment and dismissing the cause of action of Appellant Arthur Hudson against Lowes Home Center, Inc. The previous civil action, 2009-0184, although dismissed with prejudice by the trial court, was modified by the Court of Appeals of Mississippi to a dismissal without prejudice. (R. 31-36). As such, the law of the case, established by the Mississippi Court of Appeals, is that Appellant s dismissal of Civil Action No. 2009-00184, due to Appellant s alleged failure to complete service of process within 120 days, was without prejudice. At the time Appellant filed Civil Action No. 2009-0184, four (4) days remained on the statute of limitations which was set by agreement of the parties. (R. 14-15). Because the dismissal without prejudice of Civil Action 2009-00184 tolled the statute of limitations during the pendency of Civil Action 2009-00184, at the time of final disposition of 2009-0184, Appellant had four (4) days to file a new complaint, which Appellant did in Civil Action No. 2012-0242. (R. 3-8). Furthermore, even if the pendency of 2009-00184 did not toll the statute of limitations, equity should serve as a tolling of the statute of limitations until the filing of Appellant s Complaint in Civil Action No. 2012-00241, as the Appellee should have been 4
estopped from claiming that Appellee was not served with process considering the clear acceptance by Appellee s counsel of process in Civil Action No. 2009-0184. The Circuit Court of Jackson County, Mississippi further erred in imposing sanctions against counsel for the Appellant for filing the Complaint in Civil Action No. 2012-00241. The Court made no findings that Appellant s Complaint had no hope of success, or that it was filed for the purposes of harassment. (R. 80-82). Furthermore, the Circuit Court of Jackson County did not follow the correct procedures in the imposition of sanctions, in that the Court made its decision to sanction counsel for the Appellant without a motion from the Appellee requesting such sanctions, and because the Court imposed sanctions without fully allowing the Appellant to fully hear the evidence and law that would negate a finding of frivolousness. (T. 1-23). As such, Appellant respectfully requests that the Court reverse the Order of the Jackson County Circuit Court dismissing Appellant s cause of action against the Appellee and remand back to the Jackson County Circuit Court for further proceedings. Appellant further requests that the Court reverse the Order of the Jackson County Circuit Court imposing sanctions upon counsel for the Appellant for the filing of Appellant s Complaint. STANDARD OF REVIEW [A]pplication of a statute of limitation is a question of law to which a de novo standard also applies. Sarris v. Smith, 782 So.2d 721, 723 (Miss.2001). We approach this question with a clean slate, for our standard of review is de novo in passing on questions of law. Watts v. Pennington, 598 So.2d 1308, 1311 (Miss.1992) (citing Harrison County v. City of Gulfport, 557 So.2d 780, 784 (Miss.1990)). The decision by a trial court to award monetary sanctions under Rule 11 of the Mississippi Rules of Civil Procedure or the Litigation Accountability Act (Miss. Code Ann. 5
11-55-1) is reviewed by the Court under an abuse of discretion standard. In re Spencer, 985 So.2d 330, 337 (Miss. 2008). ARGUMENT I. Appellant s Complaint Was Timely Filed in the Period of Time Remaining on the Statute of Limitations After Tolling Due to the Dismissal of the Previously Filed Action Without Prejudice. The Circuit Court of Jackson County, Mississippi erred in dismissing Civil Action No. 2012-0242 and finding that the applicable statute of limitations had not tolled during the pendency of Civil Action No. 2009-0184. Prior to dismissal of Civil Action 2009-0184, counsel for the Appellant and counsel for the Appellee agreed to toll the running of the statute of limitations until July 31, 2011. (R. 14-15). Appellant served the Complaint in 2009-0184 on July 27, 2011, leaving a period of four (4) days remaining on the tolled statute of limitations. (T. at Exhibit P-1). Although the Jackson County Circuit Court originally dismissed Civil Action No. 2009-0184 with prejudice, this dismissal was modified to without prejudice by the Mississippi Court of Appeals. (R. 31-36). The Mississippi Supreme Court has recognized that filing a complaint tolls the statute of limitations and permits a plaintiff to refile his or her case if the case is dismissed without prejudice and time remains on the statute of limitations. Knight v. Knight, 85 So.3d 832, 835 (Miss. 2012). See also Lincoln Elec. Co. v. McLemore, 54 So.3d 833, 839 (Miss. 2010) ( Ordinarily, when a complaint is filed and properly served, that complaint tolls the running of the statute of limitations. ); Hill v. Ramsey, 3 So.3d 120, 123 (Miss. 2009) ( It is elementary that, unless process is not timely served, the statute of limitations is tolled upon the filing of the complaint, and does not begin to run again until litigation has ended. ). Appellee will likely cite the fact that the Circuit Court of Jackson County dismissed Civil Action No. 2009-0184 for failure to serve Appellee within the 120 days prescribed by Rule 4 of 6
the Mississippi Rules of Civil Procedure. However, pursuant to the Law of the Case Doctrine, Civil Action No. 2009-0184 was modified by the Mississippi Court of Appeals from a dismissal with prejudice to a dismissal without prejudice. (R. 31-36). The law of the case doctrine is the general practice of courts to refuse to re-examine what has been previously decided. Wright v. Public Employees Retirement System of Mississippi, 24 So.3d 382, 386 (Miss. Ct. App. 2009). The law of the case, once established as the controlling legal rule of decision, between the same parties in the same case, continues to be the law of the case, so long as there is a similarity of facts. Id. In the instant case, despite any previous decisions to the contrary, the dismissal of Civil Action No. 2009-0184 was without prejudice. (R. 31-36). The Court of Appeals was confronted by the argument of the Appellee that the dismissal of Civil Action No. 2009-0184 for failure to serve process within 120 days should serve to forever bar Appellant from re-filing the civil action. Instead of completely affirming the trial court s decision, the Court of Appeals modified the ruling to reflect a dismissal without prejudice. (R. 31-36). Therefore, the law of the case in the instant civil action is that Appellant may re-file the case within the remaining period in the statute of limitations, which in the instant case is four (4) days. Furthermore, notions of equity also dictate that tolling should apply to provide Appellant with four (4) days under the statute of limitations to file the instant civil action. The instant case is not just a case of completely failing to serve process on the Appellee or provide the Appellee with any notice whatsoever of the pending civil action. Appellee, through counsel, had notice of the Appellant s civil action well before Civil Action No. 2009-0184 was even filed. Counsel for Appellee, Ken Adcock, prior to suit being filed, informed counsel for the Appellant that he would be Appellee s spokesperson in the matter, and proceeded to agree with counsel for the Appellant to toll the statute of limitations several times until July 31, 2011. (R. 14-15). In Appellee s Answer in Civil Action No. 2009-0184, Appellee admitted Paragraph C of 7
Appellant s Complaint which stated that counsel of record for Lowe s Homes Stores, Inc. is Ken Adcock and he may be served with process at 199 Charmant, Suite 1, Ridgeland, Mississippi 39158. (T. at Exhibit P-1). During the pendency of Civil Action No. 2009-0184, Adcock continued to request documents to assist in negotiation of settlement and conducted informal discovery. On August 6, 2009, prior to the expiration of the statute of limitations, Adcock was served with a copy of the Complaint. In November of 2009, Adcock asked for another copy of the Complaint. The facts of the case clearly demonstrate that Appellant engaged in good faith settlement discussions with counsel for the Appellee, that counsel for the Appellee held himself out as an agent and representative of the Appellee, and that the Appellee admitted in a pleading before the trial court pursuant to the requirements of Rule 11 of the Mississippi Rules of Civil Procedure that Adcock was a proper party to receive service of process on behalf of the Appelee. The fact that Adcock accepted service of the Complaint, and asked that said Complaint be re-sent to him several times, combined with the fact that Appellee admitted in a sworn pleading that Adcock was a proper party to receive service of process results in a unique situation in which the Appellee had clear notice of the civil action, accepted and acknowledged proper service of process, and yet then sought dismissal of Civil Action No. 2009-0184 because of an alleged lack of proper service of process. Dismissal of Appellant s civil action against the Appellee with no opportunity to re-file after a dismissal without prejudice would result in an inequity in which Appellant relied on the representations of counsel for the Appellee that service of process was properly completed and yet still suffered the consequence of dismissal as a result of such reliance. In Peavey Electronics Corp. v. Baan USA, Inc., 10 So.3d 945 (Miss. Ct. App. 2009), the Mississippi Court of Appeals discussed the doctrine of equitable estoppel and its application to 8
tolling statutes of limitation. In order to successfully invoke the doctrine of equitable estoppel to toll a statute of limitations, the party seeking protection of the doctrine must be able to prove by a preponderance of the evidence that (1) it was induced by the conduct of the other party not to file its complaint sooner; (2) resulting in its claim being barred by the statute of limitations; and (3) the other party knew or had reason to know that such consequences would follow. Id. at 953. Inequitable or fraudulent conduct must also be established to apply the doctrine of equitable estoppel to a statute of limitations. Id. The doctrine of equitable estoppel is applied when to refuse it would be inequitable. Id. at 954. In the instant case, notions of equity clearly dictate that the tolling of the statute of limitations for the four (4) days remaining on the statute of limitations when Appellant filed the instant civil action should be applied. Appellant relied on the representations of counsel that good faith settlement negotiations would be productive and fruitful and agreed to toll the statute of limitations during the pendency of such negotiations. (R. 14-15). Appellant also relied on Ken Adcock holding himself out as a spokesperson or agent of the Appellee, and the sworn representations of the Appellee in its Answer to Appellant s Complaint that Ken Adcock could accept service of process as an agent of the Appellee. It would result in great inequity if the Appellant were penalized for its alleged oversight in not serving the registered agent of the Appellee within 120 days, while the Court gave absolutely no effect whatsoever to Appellee s oversight, if there was an oversight, in admitting Appellant s allegations in the Complaint that Ken Adcock could accept service of process on behalf of the Appellee. In dismissing Appellant s civil action in 2009-0184, the Jackson County Circuit Court essentially gave no effect to such admission, while on the other hand ringing the death knell, dismissing with prejudice, the civil action of the Appellant which was only corrected by this Court in modifying dismissal to without prejudice. (R. 23-38). The guidelines and requirements of Rule 11 have no 9
effect if the sworn statements of counsel in pleadings before this Court are ignored or given the effect the words themselves should have. Appellee admitted in a sworn pleading that Ken Adcock, who had already received several copies of Appellant s Complaint, was an acceptable agent for service of process. At the point of this admission, in the eyes of both the Appellant and the Appellee, the Appellee was validly served with process. The Appellee should not be allowed to acknowledge service of process in one pleading, and then seek dismissal for a lack of service of process in a later pleading. The trial court s decision to allow this to occur resulted in the dismissal of Appellant s case in 2009-0184 and resulted in great inequity to the Appellant. Pursuant to notions of equity, the Court should apply equitable estoppel to toll the statute of limitations, allowing for the four (4) days between Appellant s filing of the Complaint in 2009-0184 to apply and thereby resulting in a determination that the statute of limitations for Civil Action No. 2012-00241 did not expire and that the matter should be remanded back to the Circuit Court of Jackson County, Mississippi for further proceedings. II. Appellant s Complaint Was Not Frivolous or Filed For the Sole Purpose of Harassment and Therefore Should Not Have Resulted in Sanctions Pursuant to Rule 11 of the Mississippi Rules of Civil Procedure and the Litigation Accountability Act. In addition to the dismissal of Appellant s civil action without prejudice, the Circuit Court of Jackson County determined that sanctions against Appellant s counsel for filing the Complaint in the instant civil action were appropriate. (R. 80-82, 100) (T. 1-23). The Circuit Court of Jackson County, Mississippi made this determination in Court during the hearing on Appellee s Motion for Summary Judgment, despite the fact that the imposition of sanctions were not brought up or argued by Appellee in the hearing on Appellee s Motion for Summary Judgment, and Appellant was not notified prior to the Court s ruling on sanctions that said sanctions would be considered, thereby giving Appellant the opportunity to provide evidence and 10
testimony at the hearing on the matter to rebut any allegation that Appellant s Complaint was frivolous. (T. 1-23). Rather, the Court gave its opinion that sanctions were appropriate, and then gave Appellant and Appellee the opportunity to brief the issue of whether the Court should impose sanctions upon the Appellant. (T. 19-23). Such a procedure is not recognized by this Court with regard to the imposition of sanctions. In Nationwide Mut. Ins. Co. v. Evans, 553 So.2d 1117 (Miss. 1989), the Mississippi Supreme Court reviewed the imposition of sanctions by a trial court against counsel for a frivolously filed counterclaim. Id. at 1122. At the end of the presentation of Nationwide s evidence at trial, the trial court granted Evans motion to dismiss a complaint for declaratory judgment and announced that it would impose Rule 11 sanctions against Evans for a frivolously filed counterclaim. Id. Evans was not allowed to offer proof on the veracity of his counterclaim. Id. One week later, the Court announced to the parties that Evans had frivolously filed pleadings. The record did not contain any findings that Evans had no hope of success on his counterclaim. Id. In overturning the trial court, the Court in Evans stated that Rule 11 sanctions should never be imposed until the trial court has heard fully the evidence and law which the party to be sanctioned says will negate a finding of frivolousness. Id. Other cases before this Court are in agreement that sanctions under Rule 11 or the Litigation Accountability Act should not be imposed absent specific findings by the trial court of why said pleading is frivolous or for the purposes of harassment. Miss. Code Ann. 11-55-7 states that the court imposing sanctions must specifically set forth the reasons for such an award. If the court is to impose sanctions under Rule 11, the court must likewise support the imposition of said sanctions with specific findings regarding the frivolity or harassment inherent in the pleading. See City of Madison v. Bryan, 763 So.2d 162, 167 (Miss. 2000) ( We also note that in its short order, the lower court failed to cite sufficient reasons in support of clear authority for the 11
award of costs and attorneys fees pursuant to Rule 11. ) ; ( We would have to speculate from this order as to sufficient support and clear authority, in view of our case law, that the trial court found for imposing sanctions upon the City. ). In the instant case, the Circuit Court of Jackson County, Mississippi clearly did not follow the proper procedures set forth in imposing sanctions upon counsel for the Appellant. First, the Court, without allowing Appellant the opportunity to provide proof to rebut the allegations of a frivolous pleading, announced to the parties that Rule 11 sanctions would be on the table, and despite the fact that Appellee did not request such sanctions at the hearing on Appellee s Motion for Summary Judgment, the Court instructed the parties to brief the issue of Rule 11 sanctions and submit said briefs within 10 days. (T. 19-23). On May 13, 2013, the trial court entered its Order imposing Rule 11 sanctions against counsel for the Appellant. (R. 80-82, 100-101). The trial court entered this Order despite not giving Appellant an opportunity to confront the submissions of the Appellee regarding attorneys fees in a hearing before the Court whereby the Appellee would be required to testify and provide sufficient evidence regarding said attorneys fees. Instead, the trial court, after already ruling in favor of the Appellee on the issue of sanctions, stated that the Appellant could then have an opportunity after the ruling to have a hearing on the issue of attorneys fees and the reasonableness of said fees. (R. 80-82). Such a procedure is not in accordance with the rulings of this Court, which clearly state that the potential sanctioned party should have the opportunity in open court to question and provide evidence and testimony rebutting allegations of frivolity or harassment pursuant to Rule 11, but also to confront any submissions regarding attorneys fees and their reasonableness. Appellant was not afforded this opportunity prior to the trial court s decision on the matter, and in that regard the Circuit Court of Jackson County abused its discretion. Allowing the sanctioned party to confront the Appellee s evidence regarding attorneys fees after a ruling on sanctions has 12
already been made and while the clock for appeal is ticking is not contemplated by the law in this state and should result in the overturning of said award of sanctions by this Court. The Circuit Court of Jackson County further failed to provide compelling justification and support for its award of sanctions pursuant to Rule 11 and the Litigation Accountability Act. In its Order imposing sanctions against the Appellant, the trial court cited the fact that Civil Action No. 2009-0184 had been dismissed, with such dismissal being affirmed by the Mississippi Supreme Court, as the reason that the Appellant had no hope of success in filing the subsequent civil action. (R. 80-82). If this is indeed the case, then any case dismissed without prejudice and refiled would be in danger of the imposition of sanctions, especially if the initial dismissal was upheld by an appellate court. It is clear that the trial court was unduly influenced by the proceedings of Civil Action No. 2009-0184 and let the occurrences in that proceeding dictate the court s decision to sanction counsel for the Appellant. In City of Madison v. Bryan, in overturning the trial court s decision to impose sanctions for the filing of an allegedly frivolous Bill of Exceptions, the Mississippi Supreme Court held that the trial court had allowed itself to be influenced by the fact that the Bill of Exceptions before the trial court was the third Bill of Exceptions to be filed, although only the third Bill of Exceptions was before the trial court. City of Madison, 763 So.2d at 167 (Miss. 2000). In the instant case, it is clear from the Order imposing sanctions that the trial court is affected by the fact that the Appellant filed an identical action previously in 2009-0184, and such action was dismissed with such dismissal affirmed by the Supreme Court. However, Civil Action No. 2009-0184 was not before the trial court in the instant case, and the previous dismissal of said action and affirmance in the Mississippi Supreme Court had no effect on whether the current pleading before the Court, the Complaint in Civil Action No. 2012-00241, was frivolous and filed with no hope of success. Although the trial court had previously been confronted with the argument of 13
the Appellant, that the Complaint did have hope of success due to notions of tolling, dismissal without prejudice and the inequitable conduct of counsel for the Appellee in 2009-0184, the trial court did not address those specific defenses to the claims of frivolousness in its order imposing sanctions. (R. 80-82). Rather, the Court gave the conclusory statements that the Appellant s defenses were without merit with no further explanation why such defenses were without merit. (R. 80-82). In its order imposing sanctions, the trial court stated that the institution of the instant litigation following an appellate affirmance of the dismissal of the identical claim by the same Plaintiffs against the same Defendant in a prior lawsuit under these circumstances establishes a prima facie case for the imposition of sanctions. (R. 80-82). This is simply not true and is not supported by any authority, and accordingly none is provided by the trial court. (R. 80-82). As stated above, if the re-filing of every case previously dismissed was a prima facie case for the imposition of sanctions, then the previous holdings of this Court allowing the re-filing of cases dismissed without prejudice would be of no effect, as no such cases would be re-filed out of fear of being sanctioned. This statement alone by the trial court in its Order imposing sanctions clearly demonstrates that instead of reviewing the filing of the Complaint in 2012-00241 in a vacuum, the trial court was unduly influenced by the fact that the Complaint in 2012-00241 was the re-filing of a civil action previously dismissed. As shown in City of Madison v. Bryan, such an influence on a ruling imposing sanctions is not proper and should be overturned. Furthermore, the fact that the defenses of the Appellant, made by the Appellant after the Court had essentially announced its decision to impose sanctions, were not sufficiently examined and rebutted by the trial court in its order imposing sanctions. Because the trial court did not do so, its order imposing sanctions should be overturned. 14
Though a case may be weak or light headed, this is not sufficient to label it as frivolous. Leaf River Forest Products, Inc. v. Deakle, 661 So.2d 188, 195 (Miss. 1995). Likewise, the fact that a case is weak is not sufficient to find that it was brought to harass. Id. Looking at the Complaint filed in 2012-00241 by itself and without the undue influence of the previously dismissed action does not result in a determination that said Complaint was filed with the intention of harassment or was frivolous with no hope of success. As stated before, the law of the case in the instant civil action stated that 2009-0184 was to be a dismissal without prejudice. Furthermore, the unique circumstances of 2009-0184 and the fact that service was made, accepted, and acknowledged by counsel for the Appellee prior to the expiration of 120 days leave open the question of whether equity should intervene to allow tolling to provide the four days remaining on the agreed upon extended statute of limitations between Appellant and Appellee. The instant case is clearly not a case of the dismissal of an action clearly resulting in a civil action against a party arising out of a particular occurrence being forever barred. Rather, questions still remain whether dismissal of the Complaint in 2012-00241 pursuant to expiration of the statute of limitations was proper, which certainly does not meet the stringent standard required for the imposition of sanctions pursuant to Rule 11 or the Litigation Accountability Act. The trial court clearly abused its discretion by first not following the proper procedure in providing the Appellant a full and fair opportunity to provide evidence and testimony rebutting the allegations of frivolousness and harassment regarding the filing of Appellant s Complaint. The trial court further abused its discretion in failing to provide substantial justification for the imposition of sanctions in its order granting said sanctions, and failing to rebut the Appellant s defenses to the Court s imposition of sanctions. For these reasons, the Court should reverse the trial court s order imposing sanctions against the Appellant in the instant civil action. 15
CONCLUSION The trial court erred in granting Defendant s Motion for Summary Judgment regarding the alleged expiration of the statute of limitations. The law of the case, as well as notions of equity, should have resulted in a tolling of the statute of limitations for the four (4) day period remaining between the date of filing of Appellant s Complaint and the expiration of the tolled statute of limitations. The trial court further erred in imposing sanctions upon the counsel for the Appellant pursuant to Rule 11 and the Litigation Accountability Act. The trial court did not follow proper procedures in allowing the Appellant a full and fair opportunity to rebut any allegations of harassment or frivolity in the filing of pleadings. The trial court further did not provide substantial justification in its order granting sanctions for the imposition of such sanctions. Accordingly, this Court should reverse the decisions of the trial court and remand this matter to the Circuit Court to allow this matter to be fully litigated and tried on the merits. THIS the 13 th day of January, 2014. Respectfully submitted, Arthur Gerald Hudson and Linda Hudson, Appellants By: /s/ Chuck McRae CHUCK McRAE, MSB #2804 MCRAE LAW FIRM 416 EAST AMITE STREET JACKSON, MS 39201 Chuck@mcraelaw.net Office: 601.944.1008 Fax: 866.236.7731 16
CERTIFICATE OF SERVICE I, Chuck McRae, do hereby certify that I have sent a true and correct copy of the above and foregoing to the following: Kathy Gillis, Clerk Mississippi Supreme Court Via Electronic Filing Judge Dale Harkey Jackson County Circuit Court Post Office Box 998 Pascagoula, Mississippi 39568 Via United States Mail James H. Heidelberg, Esq. Jessica Dupont, Esq. Via Electronic Filing THIS the 13th day of January, 2014. /s/ Chuck McRae CHUCK McRAE, MSB #2804 MCRAE LAW FIRM 416 EAST AMITE STREET JACKSON, MS 39201 Chuck@mcraelaw.net Office: 601.944.1008 Fax: 866.236.7731 17