Woodruff v. Thames

• Decision Date: 31 July 2014
• Docket Number: No. 2013–CA–00815–SCT.,2013–CA–00815–SCT.
• Citation: 143 So.3d 546
• Court: Mississippi Supreme Court
• Parties: Sam WOODRUFF v. Rita THAMES and Larry Collins.

143 So.3d 546

Sam WOODRUFF

v.Rita THAMES and Larry Collins.

No. 2013–CA–00815–SCT.

Supreme Court of Mississippi.

July 31, 2014.

Anita M. Stamps, Larry Stamps, Jackson, attorneys for appellant.

Brenton Matthew Carter, David Ringer, Florence, attorneys for appellee.

Before RANDOLPH, P.J., KING and COLEMAN, JJ.

KING, Justice, for the Court:

¶ 1. In this real-estate contract case, the trial court entered a default judgment awarding specific performance in favor of the purchaser. The seller moved to have the default judgment set aside, and the trial court denied the motion, finding that the seller lacked good cause for the default and lacked a “compelling defense.” A serious question exists regarding whether a valid contract exists, giving the seller a colorable defense. Because the trial court abused its discretion by failing to set aside the default judgment, this Court reverses the trial court's judgment and remands the case for proceedings on the merits.

FACTS AND PROCEDURAL HISTORY¹

¶ 2. Sam Woodruff, a man in his eighties, owned land in Rankin County. He agreed to sell some part of that land to Rita Thames, his first cousin's daughter, who was also a neighbor. Woodruff claims that he agreed to sell Thames one acre from a tract of land for the purchase price of $9,750. Thames claims that Woodruff agreed to sell her 6.53 acres from a different tract of land for $9,750. Woodruff claims that Thames then brought him a blank contract of sale to sign, which he did. Thames appears to claim that the blank contract of sale included attachments that described the subject land; however, the appellate record contains no evidence of this. The record contains only base assertions by her attorney regarding whether the attachments were part of the contract when signed. Woodruff, however, claims that the attachments were not present at the time he signed the contract. Furthermore, Thames alleges that Larry Collins, her then-boyfriend, and Kimberly Richardson, a notary public, were present for the signing of the contract. Woodruff claims that neither Collins nor Richardson was present for the signing of the contract. According to Woodruff, Thames then gave him $4,000 earnest money and began pointing to the “wrong land.” He “then realized that [they] were not talking about the same piece of real property and immediately wrote ‘void’ on the check, and returned it to her.” Thames admits that he wrote void on the check and that he refused the earnest money. Thames argued at the hearing that Woodruff rejected the payment immediately after he signed the contract because he suddenly had another contract for a higher purchase price on the land.

¶ 3. On December 13, 2010, Thames and Collins filed a complaint for specific performance. With the complaint, Thames served requests for admission and other discovery. Thames attached the Contract for Sale and Purchase of Real Estate to the complaint, along with the alleged attachments to the contract. The contract states that the seller and purchaser agree to sell and purchase “the hereinafter described property on the terms and conditions stipulated in the following schedules and both Seller and Purchaser acknowledge that this is the procuring cause of this sale.” The next section is entitled “Description/Property Address.” The description is completely blank. It describes utterly nothing, and does not reference any exhibits. The Seller is listed as Sam Woodruff, and the purchasers as Rita Thames and Larry Collins. In the photocopy, Collins's name appears to be written in different ink than are Woodruff's and Thames's, but neither the original contract nor a color copy is in the appellate record, nor do they appear to have been before the trial court.

¶ 4. The contract then lists the price.² It further contains a title and conveyance provision that states that the “ Seller is to furnish Purchaser with Certificate of Title prepared by David attorney [sic], upon whose certificate of title will be obtained title insurance ...” ³ (Emphasis added.) That provision also contained a statement that “Title shall be good and merchantable, subject only to the following items recorded in the Chancery Clerk's office of –––– County[ ].” Notably, the county was left blank. Likewise, the closing date was left blank. The contract also provides for who is to pay for multiple costs, such as an appraisal and a survey. For every cost, the letters “N/A” were written. However, on the lines for “Attorney's fee: (including Certificate of Title and Transfer of Instrument)” and “Other Closing Costs,” “N/A” is scratched out and replaced with “P” to indicate that Thames is responsible for those costs. The letter “P” appears from the black-and-white photocopy to be written in different ink than are the letters “N/A.” No one initialed next to the scratched-out portions. Confusingly, the purchaser is to pay for the certificate of title when the contract specifically provided elsewhere that the seller was to provide the purchaser with the certificate of title prepared by “David attorney,” which apparently referred to David Ringer, the purchaser's attorney.

¶ 5. The contract contains a provision stating that “[t]his instrument is to contain all terms of this sale, and no representations have been made other than are herein contained.” (Emphasis added.) It also states that “[b]oth parties agree that this contract, unless subsequently amended in writing, contains the final and entire agreement between the parties hereto, and neither party shall be bound by any terms, conditions, oral statements, warranties, or representations not herein contained. ” (Emphasis added.) Again, the four corners of the contract make no mention of any attachments or amendments to the contract. The contract is dated November 5, 2010, and is signed by Woodruff, Thames, Collins, and a notary public.

¶ 6. Also attached to the complaint is a survey of the land Thames claims was the subject of the contract, and that Thames claims was attached to the contract when it was signed.⁴ None of the parties initialed or signed the survey to indicate their acceptance of it, nor is it dated. Thames also attached a written legal description of the land, also undated and unsigned, to the complaint. Thames claims that this description was also attached to the contract when it was signed. Additionally, Thames attached to the complaint a “First Preliminary Certificate of Title” prepared for Thames by her attorney, David Ringer, and signed by him on November 8, 2010, at 8:00 a.m. The certificate of title referenced the land's written legal description, which was attached thereto.

¶ 7. Woodruff was served with the complaint and discovery, including the requests for admission, on January 7, 2011. Woodruff was thus required to file an answer to the complaint within thirty days, and an answer to the discovery within forty-five days. M.R.C.P. 12(a), 36(a). The forty-fifth day after service was February 21, 2011. On February 25, 2011, Thames and Collins filed a Motion for Default Judgment, as well as an application for entry of default and supporting affidavit. That same day, the chancery clerk of Rankin County issued an entry of default against Woodruff. On March 3, 2011, just ten days after Woodruff's forty-five days to file an answer to discovery ended, the Chancery Court of Rankin County entered a default judgment against Woodruff. The default judgment granted specific performance, ordering the property transferred to Thames and Collins.

¶ 8. Before the thirty days to file an answer ran, Woodruff took the complaint and all of his paperwork to William Smith, an attorney. Woodruff does not specifically assert that he hired Smith, and it does not appear that Woodruff paid Smith or signed an engagement contract, although he maintains that he thought Smith was representing him. However, Woodruff states in his affidavit that he “dismissed” Smith once he learned about the default judgment. Thames maintained that, according to Smith, there was no engagement of services. Woodruff learned of the default judgment in March 2011, and at some point thereafter, retained his current counsel. On May 16, 2011, and May 19, 2011, Woodruff's current counsel sent urgent letters to Smith regarding why Smith failed to answer the original complaint.

¶ 9. On June 20, 2011, Woodruff filed a Motion to Set Aside Judgment, Stay Execution of Judgment, For Extension of Time for Appeal and for Other Relief, as well as his Answer and Affirmative Defenses. After a hearing on the same, the trial court denied the motion to set aside the default judgment. In making its ruling, the trial court considered that Woodruff did not timely answer the requests for admission, acknowledging Thames's argument that they should be deemed admitted and stating that “in the event that a trial was held, that would be a matter that would have to be considered by the Court.” In its bench ruling, the trial court found that it was “hard, in fact, impossible, to get by the first prong,” finding that Woodruff did not have good cause for his failure to answer in a timely manner. The court also found that the argument that Woodruff had a colorable defense because no meeting of the minds occurred was “not compelling.” It further found the argument that exhibits may have been added to the contract after the fact “unsubstantiated” because there was only “lip service to the fact that this was done,” noting that “[t]here has been no showing whatsoever that either Rita Thames or Larry Collins was in any mode to orchestrate misconduct, misrepresentation, or fraud, which fraud, of course, has to be proven by clear and convincing evidence[.]” The final judgment provided that Woodruff had “failed to show good cause for having failed to answer the Complaint in a timely fashion,” and that Woodruff had “failed to show a compelling defense or other reason why should be set aside the Judgment [sic].” It then noted regarding...