E-Filed Document Oct 26 2015 16:36:29 2015-CA-00762 Pages: 19 IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI IN THE MATTER OF THE CONSERVATORSHIP OF VICTORIA D. NEWSOME: MARILYN NEWSOME, APPELLANT CA NO. 2015-CA-00762 APPEAL FROM THE CHANCERY COURT OF SIMPSON COUNTY, MISSISSIPPI BRIEF OF APPELLANT MARILYN NEWSOME Oral argument not requested. SUBMITTED BY: TERRELL STUBBS (MSB# 8017) THE STUBBS LAW FIRM, PLLC ATTORNEY FOR APPELLANT 120 W. COURT AVENUE P.O. BOX 157 MENDENHALL, MS 39114 601-847-4811-Telephone 601-847-5938-Fax terrell@stubbsms.com
IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI IN THE MATTER OF THE CONSERVATORSHIP OF VICTORIA D. NEWSOME: MARILYN NEWSOME, APPELLANT CA NO. 2015-CA-00762 CERTIFICATE OF INTERESTED PARTIES The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that the Justices of the Supreme Court and the Court of Appeals may evaluate possible disqualification or recusal. 1. Victoria D. Newsome, Ward 2. Marilyn Newsom, Appellant/Conservator of Victoria D. Newsome 3. Terrell Stubbs, Esq., counsel of record for the Appellant and Conservator 4. Richard Courtney, Esq. 5. Keely R. McNulty, Esq. 6. Marc Brand, Esq. 7. Krissy C. Nobile, Esq., Assistant Attorney General 8. Alexander Guidry, Esq., counsel for Keely McNulty, Esq. 9. Joe Dale Walker, former Chancellor 10. Chad Teater 11. Chris Dunn 12. Peoples Bank in Mendenhall, Mississippi 13. The Honorable David Shoemake, Chancellor 14. The Honorable Hollis McGhee, Special Chancellor i
15. Danny Drake, Esq. 16. Robert Parrott, Esq. 17. William Brabec, Esq. 18. Robert E. Evans, Esq. Respectfully Submitted, MARILYN NEWSOME, Appellant s/ Terrell Stubbs TERRELL STUBBS (MSB No. 8017) Attorney for Marilyn Newsome, Appellant ii
IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI IN THE MATTER OF THE CONSERVATORSHIP OF VICTORIA D. NEWSOME: MARILYN NEWSOME, APPELLANT CA NO. 2015-CA-00762 TABLE OF CONTENTS 1. CERTIFICATE OF INTERESTED PERSONS... i,ii 2. TABLE OF CONTENTS... iii Page 3. TABLE OF AUTHORITIES.. iv, v 4. STATEMENT OF THE ISSUES... 1 5. STATEMENT OF THE CASE 2 A. Nature of the Case... 2 B. Course of Proceedings Below & Statement of Fact. 2 6. SUMMARY OF THE ARGUMENT. 6 7. ARGUMENT 7 I. The lower court erred in severing and transferring the Complaint, Request for Full Accounting and Inventory, For Return of Funds, For Attorney Fees, and for Other Relief to a separate file/matter. 7 8. CONCLUSION 12 9. CERTIFICATE OF SERVICE 12 iii
TABLE OF AUTHORITIES CASES: Page Burgess v. Lucky, 674 So.2d 506, 510 (Miss. 1996) 10 Collins v. State, 594 So. 2d 29, 32 (Miss. 1992) 11 Cuevas v. Kellum, 12 So. 3d 1154, 1157 (Miss. Ct. App. 2009) 11 Delta Construction Company v. City of Jackson, 198 So. 2d 592, 601 (Miss. 1967) 11 In re Guardianship of McClinton, 157 So. 3d 862, 870 (Miss. Ct. App. 2015) 8,9 In re Conservatorship of Cole, 958 So.2d 276, 281 (Miss. Ct. App. 2007) 8,9 In re Conservatorship of Bardwell, 849 So.2d 1240, 1246 (Miss. 2003) 9 Issaquena Warren Counties Land Co., LLC. v. Warren County, 996 So. 2d 747, 751 (Miss. 2008) 11 Jackson v. Jackson, 732 So.2d 916, 920 (Miss. 1999) 9 Janssen Pharmaceutica, Inc. v. Armond, 866 So.2d 1092, 1098 (Miss. 2004) 10 Janssen Pharmaceutica, Inc. v. Scott, 876 So. 2d 306, 308 (Miss. 2004) 8, 10 Leaf River Forest Products, Inc. v. Deakle, 661 So. 2d 188, 193 (Miss. 1995) 10 RE/Max Real Estate Partners., Inc. v. Lindsley, 840 So. 2d 709, 712 (Miss. 2003) 11 Tillotson v. Anders, 551 So. 2d 212, 213 (Miss. 1989) 10 Thompson v. First Mississippi National Bank et al 427 So.2d 973, 976 (Miss. 1983) 10 STATUTES: Miss. Code Ann. 9-5-81 10 RULES OF COURT: M.R.C.P. 20, 21, & 42 7 iv
TREATISES: Mississippi Practice - Civil Procedure 11A:13 Procedure for consolidation, for ordering separate trials, and for severance of claims; preserving objections 7 Encyclopedia of Mississippi Law 13:247 8 v
STATEMENT OF THE ISSUES I. Whether the lower court abused its discretion in severing/transferring the Complaint filed in this matter against various parties for recovery of funds for the Conservatorship of Victoria Denise Newsome. 1
STATEMENT OF THE CASE A. Nature of the Case This appeal arises out of a conservatorship established for the benefit of the ward, Victoria Denise Newsome ( Victoria ) in the Chancery Court of Simpson County, Mississippi. More specifically, this is an appeal of the Special Chancellor s final order denying the conservator s motion to set aside, reconsider, alter or amend a sua sponte order entered by the Special Chancellor transferring and/or severing a complaint for damages and other equitable relief filed by the conservator, Marilyn Newsome, ( Marilyn ) in the conservatorship into a separate cause/matter. The following cases and appeals have been filed in this Court that are related to and/or arose out of the administration of the subject conservatorship: 1. Cause No. 2012-CA-02006-SCT styled In Re: The Conservatorship of Victoria Denise Newsome: Marilyn Newsome; 2. Cause No. 2013-CA-01433-SCT styled In Re: The Conservatorship of Victoria Denise Newsome: Marilyn Newsome; 3. Cause No. 2015-BD-00139-SCT styled The Mississippi Bar v. Joe Dale Walker; 4. Cause No. 2015-JP-00996-SCT styled The Mississippi Commission on Judicial Performance v. Judge David Shoemake. This is the third appeal taken from this conservatorship. This Court declined to review the orders that gave rise to the above matters and the Complaint. Cause No. 2015-JP-00996-SCT is currently pending before this Court. B. Course of Proceedings & Statement of the Facts Based on the conservatorship record and the record in the above-mentioned cases, Marilyn filed a Petition Seeking Authority to Bring Suit and for Approval of Contingency Fee 2
Contract and for Approval of an Inspection and Appraisal of Ward s Home on April 25, 2014 against various parties that were involved in the alleged mal-administration of the conservatorship established for Victoria Denise Newsome. The lower court entered its Order Granting Authority to Marilyn to file suit against the parties, hire a home inspector to inspect the house the lower court ordered built for Victoria, and hire a real estate appraiser to have the subject house inspected on November 26, 2014. [R.E. pp. 15-16; R. pp. 16 17]. On December 9, 2014, the special chancellor amended the above order sua sponte. [R.E. pp. 17-18; R. pp. 18 19]. Marilyn subsequently filed a Motion to Set Aside and Vacate Order Filed December 9, 2014 on December 19, 2014. [R. pp. 21 27]. Then, on December 23, 2014, the special chancellor entered another Amended Order Granting Authority to Marilyn to File Suit attaching the previous orders and excerpts from the transcripts of the hearing on the subject motion. [R.E. pp. 19-53; R. pp. 28 64]. Thereafter, Marilyn filed another Motion to Set Aside and Vacate the Amended Order filed December 23, 2014 on December 24, 2014. [R. pp. 85 104]. The court entered its order denying said motion on January 23, 2015. [R. p. 105]. The lower court also entered an Order Granting Oral Motion to Amend Amended Order Granting Authority to Marilyn Newsome, Conservator of Victoria Denise Newsome to File Suit December 23, 2014 on January 23, 2015. [R. p. 106 107]. On January 8, 2015, the former chancellor, Joe Dale Walker, presiding over the conservatorship pleaded guilty to charges of obstruction of justice involving the U.S. Attorney s investigation into the administration of this conservatorship. [R.E. pp. 116-147; R. pp. 169 200]. The former chancellor s nephew, Chad Teater, who was approved to construct the subject home for Victoria also pleaded guilty to charges of obstruction of justice on January 8, 2015 involving the U.S. Attorney s investigation into the administration of this conservatorship. [R.E. pp. 148-186; R. pp. 201 239]. 3
On February 9, 2015, Marilyn, Individually and as Conservator/Conservatrix of Victoria Newsome filed a Compliant, Request for Full Accounting and Inventory for Return of Funds, For Attorney Fees and for Other Relief ( the Complaint ) in the Conservatorship file being Cause No. 2010-0146 in the Chancery Court of Simpson County, Mississippi styled In the Matter of the Conservatorship of Victoria Denise Newsome and caused summons to be issued for the named defendants. [R.E pp. 11-14 & 55-105; R. pp. 12 13 & 108 159]. The parties named as defendants were all involved in the conservatorship and played a role in the maladministration and misappropriation of the ward s estate. Id; See also Cause No. 2012-CA- 02006-SCT styled In Re: The Conservatorship of Victoria Denise Newsome: Marilyn Newsome; Cause No. 2013-CA-01433-SCT styled In Re: The Conservatorship of Victoria Denise Newsome: Marilyn Newsome; Cause No. 2015-BD-00139-SCT styled The Mississippi Bar v. Joe Dale Walker; Cause No. 2015-JP-00996-SCT styled The Mississippi Commission on Judicial Performance v. Judge David Shoemake. Moreover, the issues alleged in the complaint arose out of the administration of the subject conservatorship. Without notice or motion, on March 11, 2015, the lower court entered a sua sponte Order for Severance and for Review of Prior Orders reasoning and ordering, among other things: (1) there have been orders entered and actions taken and omissions which substantially impacted the best interests of Victoria; (2) the chancery court has a high responsibility to all wards and particularly Victoria; (3) the lower court set a review of prior orders on April 9, 2015; (4) the lower court authorized the filing and pursuit of the complaint for damages and other relief; (5) the lower court is not the place for the filing of an action for damages; 4
(6) The conservatorship has special procedures, accountings and other things which are uniquely established and ordered for these matters; (7) the special judge has no authority to hear other separate actions in the absence of an order of the Supreme Court so authorizing; and (8) pursuant to MRCP 21, the lower court on its own initiative does hereby order a severance of the matter styled Marilyn Newsome, individually and as Conservator of Victoria Newsome v. Joe Dale Walker et al from this cause, the court requires this severance be effected immediately by the removal of all documents related to the new cause of action from the conservatorship file and the re-filing of the same in such manner as the rules and statutes related thereto provide. [R.E. pp. 11-12 & 106-110; R. pp. 12 13 & 160 164]. The Chancery Clerk immediately removed all documents related to the Complaint and placed them in a separate Chancery Court file. [R.E. pp. 11-12; R. pp. 12-13]. After being notified of the lower court s order, Marilyn filed a motion requesting the lower court set aside, reconsider, alter or amend its order for severance and for review of prior orders asserting that: 1. the Complaint, Request for Full Accounting and Inventory, For Return of Funds, For Attorney Fees and for Other Relief should remain in the conservatorship file because the Conservator specifically requested a full accounting, inventory and recovery of the ward s estate and the Chancellor is the ultimate guardian/conservator of a ward s estate. 2. Transferring the complaint to another file will only result in more funds of the ward being expended in attorney fees and expenses and does not serve judicial economy 5
because the court is seeking to review the various orders that will pertain to or constitute the actual damages the conservator is seeking in her complaint. 3. Counsel for the conservator has requested that the lower court take action and/or conduct hearings on the various orders that it is seeking to review. 4. Since the hearing on November 10, 2014, the former presiding judge, Joe Dale Walker, and the contractor that constructed the subject house have pleaded guilty in federal court to obstruction of justice charges involving a grand jury s investigation into the misappropriation of funds from the conservatorship. [R.E. 111-186; R. pp. 165 239]. The lower court entered a final order pursuant to MRCP 54(b) denying Marilyn s motion requesting the court to set aside its Order for Severance and for Review of Prior Orders. [R.E. pp. 187-188; R. pp. 240 241]. From said Order, Marilyn perfected this appeal. SUMMARY OF THE ARGUMENT The lower court erred in transferring the subject Complaint from the Conservatorship, Cause No. 2010-014-P2 to a separate file being Cause No. 2015-0068 in the same Chancery Court of Simpson County, Mississippi because the lower court possess jurisdiction over the parties and the subject matter, and proceeding on the complaint in the conservatorship will serve to reduce delay and expense to the parties, will serve to reduce confusion or improve comprehension of issues for the fact finder, will reduce or eliminate prejudice to the parties, and will be consistent with achieving justice in the matter. For these reasons, the lower court s order severing the subject complaint from the conservatorship should be reversed. 6
ARGUMENT I. The lower court erred in severing and transferring the Complaint, Request for Full Accounting and Inventory, For Return of Funds, For Attorney Fees, and for Other Relief to a separate file/matter. The lower court abused its discretion when it severed and transferred the complaint filed by the conservator in the conservatorship because proceeding on the complaint in the conservatorship will serve to reduce delay and expense to the parties, will serve to reduce confusion or improve comprehension of issues for the fact finder, will reduce or eliminate prejudice to the parties, and will be consistent with achieving justice in the matter. The lower court incorrectly concluded that it did not possess subject matter jurisdiction over the issues and personal jurisdiction over the parties. Based on these reasons, the lower court s order severing and transferring the complaint filed by Marilyn in the conservatorship should be reversed. A. Severance The only legal authority cited by the lower court to support its conclusion to transfer the complaint out of the conservatorship is M.R.C.P 21. However, the lower court incorrectly applied the law to the facts of this case. Under the rules and case law, a severance/consolidation analysis does not involve elements of subject matter jurisdiction or personal jurisdiction. Based on the court s analysis, the claims for accountings and damages should be retained in the conservatorship. The rules of Mississippi Civil Procedure provide for permissive joinder of parties and claims. See M.R.C.P. 20, 21, & 42. Adjudication of motions to sever claims generally requires the court to weigh the impact that severance would serve to reduce delay or expense, would serve to reduce jury confusion or improve jury comprehension of issues, reduce or eliminate prejudice, or otherwise would be consistent with achieving justice in the matter. 1 MS Prac. Civil Proc. 11A:13 Procedure for consolidation, for ordering separate trials, and for 7
severance of claims; preserving objections; 2 MS Prac. Encyclopedia MS Law 13:247 citing Janssen Pharmaceutica, Inc. v. Scott, 876 So. 2d 306, 308 (Miss. 2004) Under the facts of this case, the above factors weigh in favor of retaining the complaint in the conservatorship. The lower court s decision to sever the complaint will not serve to reduce delay or expense, will not serve to reduce confusion or improve comprehension of the issues, will not reduce or eliminate prejudice, and will not be consistent with achieving justice in the matter. If anything, the complaint should have been retained in the conservatorship because the lower court has ordered a review of all previous orders and accountings, and all of the issues raised by the conservator relate to the administration and conduct of the parties involved in the conservatorship. [R.E. pp. 55-105; R. pp. 108 159]. The severance has only increased delay and expense for Victoria as she was required to appeal the lower court s order severing the action. Additionally, the lower court has only duplicated work and attorney s fees by severing the actions. A special chancellor had to be appointed to preside over the severed action. The lower court has expressed intent to review all of the prior orders in the conservatorship. The special chancellor presiding over the severed action will be required to review prior orders in the conservatorship and conduct accountings and inventories outside of the conservatorship as requested in the complaint. Furthermore, the taxpayers are bearing the expense of the appointment of two special chancellors to address issues arising out of one conservatorship. The lower court presiding over the conservatorship is in a better position to understand the issues raised by the conservator, and as discussed below, the chancery court possesses subject matter jurisdiction over all of the issues. The chancery court is the ultimate guardian of the ward. In re Guardianship of McClinton, 157 So. 3d 862, 870 (Miss. Ct. App. 2015); see also In re Conservatorship of Cole, 958 So.2d 276, 281 (Miss. Ct. App. 2007) ( The chancellor is the 8
ultimate guardian of wards of the court. ); In re Conservatorship of Bardwell, 849 So.2d 1240, 1246 (Miss. 2003) ( We have held that the chancellor is the ultimate guardian of wards. ); Jackson v. Jackson, 732 So.2d 916, 920 (Miss. 1999) ( [T]he chancellor is the ultimate guardian of wards of the court... ). Concerning prejudice to the parties, there is no evidence that the named defendants will be prejudiced by proceeding on the issues in the conservatorship. Victoria is being prejudiced by the severance as discussed above regarding the delay and expense of essentially administering two conservatorships involving the same parties. Severing the complaint from the conservatorship is not consistent with achieving justice in this matter. In order for Victoria to be made whole, Marilyn will require the special procedures the lower court acknowledged in its order severing the case. Marilyn will need to conduct discovery on the appropriation of conservatorship funds, conduct accountings and inventories of estate assets, etc. B. Jurisdiction The lower court failed to cite any authority to support its conclusion that the conservatorship is not the place for the filing of an action for damages. The appellant is not aware of any legal authority prohibiting her from pursuing the relief she seeks on behalf of her daughter in the conservatorship. The lower court s order severing the complaint appears to be based on a determination involving subject matter jurisdiction and personal jurisdiction over the the defendants. The lower court s analysis and conclusion is not supported by Mississippi law concerning chancery court jurisdiction and should be reversed. It has been stated many times that the chancery court is the ultimate guardian of wards of the court. Id. 9
A plaintiff's choice of venue should not be disturbed unless there is no credible evidence supporting the factual basis for the claim of venue. Janssen Pharmaceutica, Inc. v. Scott, 876 So. 2d 306, 308 (Miss. 2004) citing Burgess v. Lucky, 674 So.2d 506, 510 (Miss.1996); see also Janssen Pharmaceutica, Inc. v. Armond, 866 So.2d 1092, 1098 (Miss.2004) ( plaintiff's choice of a forum should not be disturbed except for weighty reasons ). Chancery courts properly retain full jurisdiction in all the matters and cases expressly conferred upon [them] by the constitution. Miss. Code Ann. 9-5-81. Such jurisdiction exists even when the complaint includes claims sounding in both law and equity. Tillotson v. Anders, 551 So. 2d 212, 213 (Miss. 1989) ( Where there appears from the face of the well-pleaded complaint an independent basis for equity jurisdiction, our chancery courts may hear and adjudge law claims. ); Thompson v. First Mississippi National Bank and Mutual Sav. Life Ins. Co.; 427 So.2d 973, 976 (Miss. 1983) ( It is well established that, where there is in a case one issue of exclusive equity cognizance, such an issue can bring the entire case within the subject matter jurisdiction of the chancery court and that court may proceed to adjudicate all legal issues as well. ) Additionally, [w]here the chancery court has exercised its equity jurisdiction, it may proceed to a complete adjudication of the suit and award all appropriate legal and equitable remedies. Leaf River Forest Products, Inc. v. Deakle, 661 So. 2d 188, 193 (Miss. 1995). This complete adjudication extends to include the award of any punitive damages appropriate, although the chancery court has actual subject matter jurisdiction over such claims rather than merely pendant jurisdiction. Id (citing Tideway Oil Programs, Inc. v. Serio, 431 So. 2d 454, 464 (Miss. 1983)). Further, [u]nless the case is one historically tried by a jury, the chancery court may retain jurisdiction and make determinations typically made by a jury. Id (quoting Cossitt v. Nationwide Mut. Ins. Co., 551 So. 2d 879, 883 (Miss. 10
1989)). It is also widely recognized and accepted that, in matters involving accounting, [a] Mississippi chancery court holds the authority to hear a case for an accounting. Cuevas v. Kellum, 12 So. 3d 1154, 1157 (Miss. Ct. App. 2009) (citing Crowe v. Smith, 603 So. 2d 301, 307 (Miss. 1992)). See also Delta Construction Company v. City of Jackson, 198 So. 2d 592, 601 (Miss. 1967) (Holding that claims by contractor against engineering firm, city and municipal airport authority should be heard in chancery court because it involved an accounting.) Additionally, chancery courts have the discretion to award legal and even punitive damages as long as the chancery court's jurisdiction has attached. RE/Max Real Estate Partners., Inc. v. Lindsley, 840 So. 2d 709, 712 (Miss. 2003) (citing Southern Leisure Homes, Inc. v. Hardin, 742 So. 2d 1088, 1090 (Miss. 1999)). In this instant case, the conservator s claims sound in law and equity, and therefore, should be retained under the proper jurisdiction of the conservatorship. The nature of the controversy and the relief sought from the appellant lies within the lack of accountings and inventories. Collins v. State, 594 So. 2d 29, 32 (Miss. 1992). As noted above, the issue of accounting central to this case necessarily gives the chancery court pendant jurisdiction over all claims. Issaquena Warren Counties Land Co., LLC. v. Warren County, 996 So. 2d 747, 751 (Miss. 2008). A claim invokes the court s pendant jurisdiction if it arises out of the same transaction or occurrence as the principal claim or, as others put it, out of a common nucleus of operative fact. RE/Max Real Estate Partners., Inc. v. Lindsley, 840 So. 2d at 712 (Miss. 2003) (quoting McDonald s Corp. v. Robinson Indus., Inc., 592 So. 2d 927, 934 (Miss. 1991)). There exists no better recourse for the equitable remedy of accounting than continued jurisdiction of the chancery court, which has proper jurisdiction over all matters of 11
equity and any claims associated therewith. 1 Regarding personal jurisdiction, there is no evidence in the record or legal authority to support the lower court s conclusion on personal jurisdiction of the parties in the conservatorship. CONCLUSION This Court should reverse the lower court s order transferring the subject Complaint from the Conservatorship, Cause No. 2010-014-P2 to a separate file being Cause No. 2015-0068 in the Chancery Court of Simpson County, Mississippi because the lower court possesses jurisdiction over the parties and the subject matter and proceeding on the complaint in the conservatorship will serve to reduce delay and expense to the parties, will serve to reduce confusion or improve comprehension of issues for the fact finder, will reduce or eliminate prejudice to the parties, and will be consistent with achieving justice in the matter. For these reasons, the lower court s order severing the subject complaint from the conservatorship should be reversed. Respectfully submitted, MARILYN NEWSOME, CONSERVATOR BY: s/ W. Terrell Stubbs W. TERRELL STUBBS, Attorney for Appellant 1 All Defendants have now answered the Complaint and not one has requested the Complaint be transferred to Circuit Court. 12
CERTIFICATE OF SERVICE I hereby certify that on this day I electronically filed the foregoing pleading or other paper with the Clerk of the Court using the MEC system which sent notification of such filing to the following: Richard A. Courtney, Esq. Further, I hereby certify that I have this day delivered by hand-delivery, U.S. Mail and/or electronic transmission the foregoing document to the following non-mec participants: Honorable Hollis McGehee Special Chancellor P.O. Box 659 Gulfport, MS 39502 This the 27 th day of October, 2015 s/ W. Terrell Stubbs W. TERRELL STUBBS (MSB#8017) 13