G&B Invs., Inc. v. Henderson (In re Evans)

CourtUnited States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Mississippi
Writing for the CourtNEIL P. OLACK
Citation460 B.R. 848
Docket NumberBankruptcy No. 09–03763–NPO.,Adversary No. 10–00040–NPO.
Decision Date07 October 2011
PartiesIn re Jon Christopher EVANS, Debtor.G & B Investments, Inc., Plaintiff v. Derek A. Henderson, Trustee for the Bankruptcy Estate of Jon Christopher Evans, Stephen Smith, Trustee for the Bankruptcy Estate of Charles H. Evans, Jon Christopher Evans, Derek A. Henderson, Trustee for the Bankruptcy Estate of Hanover Investments, LLC, Derek A. Henderson, Trustee for the Bankruptcy Estate of Landsdowne Group, LLC, Derek A. Henderson, Trustee for the Bankruptcy Estate of Town Park of Madison, LLC, Derek A. Henderson, Trustee For The Bankruptcy Estate of White Oaks Investment Company, Derek A. Henderson, Trustee for the Bankruptcy Estate of Twinbrook Run Development Company, LLC, BankFirst Financial Services, Merchants & Farmers Bank, Bank of Forest, Heritage Banking Group, Mississippi Valley Title Insurance Company, and Old Republic National Title Insurance Company, Defendants.

460 B.R. 848

In re Jon Christopher EVANS, Debtor.G & B Investments, Inc., Plaintiff
v.
Derek A. Henderson, Trustee for the Bankruptcy Estate of Jon Christopher Evans, Stephen Smith, Trustee for the Bankruptcy Estate of Charles H. Evans, Jon Christopher Evans, Derek A. Henderson, Trustee for the Bankruptcy Estate of Hanover Investments, LLC, Derek A. Henderson, Trustee for the Bankruptcy Estate of Landsdowne Group, LLC, Derek A. Henderson, Trustee for the Bankruptcy Estate of Town Park of Madison, LLC, Derek A. Henderson, Trustee For The Bankruptcy Estate of White Oaks Investment Company, Derek A. Henderson, Trustee for the Bankruptcy Estate of Twinbrook Run Development Company, LLC, BankFirst Financial Services, Merchants & Farmers Bank, Bank of Forest, Heritage Banking Group, Mississippi Valley Title Insurance Company, and Old Republic National Title Insurance Company, Defendants.

Bankruptcy No. 09–03763–NPO.

Adversary No. 10–00040–NPO.

United States Bankruptcy Court, S.D. Mississippi.

Oct. 7, 2011.


West Codenotes

Recognized as Unconstitutional

28 U.S.C.A. § 157(b)(2)(C)

[460 B.R. 855]

Ashlee E. Hederman, Richard A. Montague, Jr., Wells, Moore, Simmons & Hubbard, PLLC, Dale Danks, Jr., Michael V. Cory, Jr., Danks Miller & Cory, Jackson,

[460 B.R. 856]

MS, John G. Holaday, Holaday & Moorehead, Attorneys, Lucy Elizabeth Johnson, Robert E. Moorehead, Attorneys at Law, PLLC, Ridgeland, MS, for Plaintiff.

Tylvester O.(J) Goss, Davis Goss & Williams, Janet Janet McMurtray, Kristina M. Johnson, Watkins Ludlam Winter & Stennis PA, John G. Corlew, Kathy K. Smith, Corlew Munford & Smith PLLC, William Liston, III, Richard C. Bradley, III, Terry R. Levy, Daniel Coker Horton and Bell, Mason E. Lowe, Bradley Arant Boult Cummings LLP, Jackson, MS, G. Todd Burwell, Michael Scott Jones, William C. Brabec, Adams & Reese LLP, Ridgeland, MS, Gene D. Berry, Jeff D. Rawlings, Michael S. MacInnis, Rawlings & MacInnis, P.A., Madison, MS, W. Lawrence Deas, Deas & Deas LLC, Tupelo, MS, for Defendants.Derek A. Henderson, pro se.
MEMORANDUM OPINION AND ORDER ON CROSS–CLAIMS OF MISSISSIPPI VALLEY TITLE INSURANCE COMPANY, OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, BANK OF FOREST, AND HERITAGE BANKING GROUP RELATED TO TRACT IV PHASE ONE: LIABILITY AND UNCONTESTED DAMAGES
NEIL P. OLACK, Bankruptcy Judge.

This matter came before the Court from February 28 through March 4, 2011, for the liability and uncontested damages phase (“Phase One”) 1 of the trial (the “Adversary Trial”) on the cross-claims of (1) Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company (the “Title Companies”), (2) Bank of Forest (“BOF”), and (3) Heritage Banking Group (“Heritage”).2 At the Adversary Trial,3 William C. Brabec and Michael Scott Jones represented the Title Companies; William Liston, III and W. Lawrence Deas represented BOF; and Michael D. Simmons represented Heritage.

The relevant pleadings in the above-styled adversary proceeding (the “Adversary”) are: First Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief ( Adv. Dkt. No. 21 ) 4; Trustee's Answer to First Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief and Counterclaim, Crossclaims and Third Party Complaint ( Adv. Dkt. No. 31 ); Answer and Defenses of BankFirst Financial Services to Amended Complaint of G & B Investments, Inc. with Counterclaim ( Adv. Dkt. No. 61 ); Merchants & Farmers Bank's Answer to First Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief and Counterclaim, Crossclaims and Third Party Complaint ( Adv. Dkt. No. 62 ); Answer and Defenses of BankFirst Financial Services to Cross–Claim of Trustee with

[460 B.R. 857]

Cross–Claim ( Adv. Dkt. No. 63 ); G & B Investments, Inc.'s Reply to Defendant Derek A. Henderson's Counterclaim ( Adv. Dkt. No. 67 ); Amended Answer, Defenses, Counterclaim and Cross Claims of Bank of Forest ( Adv. Dkt. No. 70 ); Amended Answer, Defenses, Counterclaim and Cross Claims of Bank of Forest ( Adv. Dkt. No. 71 ); Answer of Merchants & Farmers Bank to Trustee's Crossclaim Included in Trustee's Answer to First Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief and Counterclaim, Crossclaims and Third Party Complaint (Adversary Proceeding Dkt. No. 31) and Counterclaim of Merchants & Farmers Bank Against Trustee Incorporating by Reference Crossclaim Against Trustee (Adversary Proceeding Dkt. No. 62) ( Adv. Dkt. No. 73 ); Amended Cross–Claim for Declaratory Judgment And Damages and Third Party Complaint ( Adv. Dkt. No. 74 ) filed by the Title Companies; Bank of Forest's Answer and Affirmative Defenses to Amended Cross–Claim for Declaratory Judgment and Damages and Third Party Complaint of Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company [Dkt. # 74] ( Adv. Dkt. No. 75 ); Trustee Henderson's Answer to Merchants & Farmer Bank's Crossclaim (AP Docket No. 62) ( Adv. Dkt. No. 78 ); Trustee Henderson's Answer [to] Crossclaim by BankFirst Financial Services for Declaratory Relief and to Remove a Cloud on Title (AP Docket No. 63) ( Adv. Dkt. No. 79 ); Trustee Henderson's Answer to Bank of Forest's Crossclaim (AP Docket No. 70) ( Adv. Dkt. No. 80 ); Trustee Henderson's Answer to Bank of Forest's Crossclaim (AP Docket No. 71) ( Adv. Dkt. No. 81 ); Trustee Henderson's Answer to Merchants & Farmers Bank's Counterclaim (AP Docket No. 73) ( Adv. Dkt. No. 82 ); Title Companies' Answer and Affirmative Defenses to Cross–Claim Filed by Bank of Forest ( Adv. Dkt. No. 85 ); Title Companies' Answer and Affirmative Defenses to Cross–Claim filed by Bank of Forest ( Adv. Dkt. No. 86 ); Bank of Forest's Answer and Defenses to the Crossclaim of Merchants & Farmers Bank ( Adv. Dkt. No. 87 ); Second Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief ( Adv. Dkt. No. 88 ); Response of G & B Investments to Counterclaim of BankFirst Financial Services ( Adv. Dkt. No. 96 ); Response of G & B Investments, Inc. to Counterclaim of Merchants & Farmers Bank ( Adv. Dkt. No. 97 ); G & B Investments, Inc.'s Response to Bank of Forest's Counterclaim ( Adv. Dkt. No. 98 ); Bank of Forest's Amended Crossclaims against Defendants Mississippi Valley Title Insurance Company, and Old Republic National Title Insurance Company ( Adv. Dkt. No. 101 ); Bank of Forest's Amended Answer and Affirmative Defenses to Amended Cross–Claim for Declaratory Judgment and Damages and Third Party Complaint of Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company [Dkt. # 74] ( Adv. Dkt. No. 102 ); Answer and Defenses of BankFirst Financial Services to the Provisional Cross–Claim of Merchants & Farmers Bank ( Adv. Dkt. No. 105 ); Title Companies' Answer and Affirmative Defenses to Second Amended Complaint filed by G & B Investments, Inc. ( Adv. Dkt. No. 111 ); Answer of Bank of Forest to Second Amended Complaint [# 88] by G & B Investments, Inc., to Determine Validity, Priority and Extent of Liens and for Other Relief ( Adv. Dkt. No. 112 ); Answer of Merchants & Farmers Bank to Bank of Forest's Cross Claims ( Adv. Dkt. No. 113 ); Answer to Third Party Complaint by Dodd Enterprises, LLC ( Adv. Dkt. No. 118 ); Title Companies' Answer and Affirmative Defenses to Cross–Claim filed by Bank of Forest

[460 B.R. 858]

( Adv. Dkt. No. 119 ); Answer of Merchants & Farmers Bank to Second Amended Complaint (Adversary Proceeding Dkt. No. 88) by G & B Investments, Inc., to Determine Validity, Priority and Extent of Liens and for Other Relief ( Adv. Dkt. No. 120 ); Heritage Banking Group's Answer and Defenses to First Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief and Answer and Defenses to Trustee's Cross–Claim ( Adv. Dkt. No. 129 ); Answer of Charles Evans to Third Party Complaint of Merchants & Farmers Bank ( Adv. Dkt. No. 134 ); Answer and Defenses of Charles Evans to Third Party Complaint of Mississippi Valley Title Insurance Company and Old Republic National Title Insurance Company ( Adv. Dkt. No. 161 ); Answer of Charles Evans to Second Amended Complaint of G & B Investments, Inc. ( Adv. Dkt. No. 183 ); Stephen Smith, Trustee for the Bankruptcy Estate of Charles H. Evans' Answer and Defenses to Second Amended Complaint to Determine Validity, Priority and Extent of Liens and for Other Relief ( Adv. Dkt. No. 187 ); Stephen Smith, Trustee for the Bankruptcy Estate of Charles H. Evans' Answer and Defenses to Bank of Forest's Crossclaim ( Adv. Dkt. No. 188 ); Heritage Banking Group's Cross–Claim Against Mississippi Valley Title Insurance Company, Old Republic National Title Insurance Company and Derek A. Henderson, Trustee for the Bankruptcy Estate of Twinbrook Run Development Company, LLC ( Adv. Dkt. No. 195 ); Title Companies' Answer and Affirmative Defenses and Cross–Claim filed by Heritage Banking Group ( Adv. Dkt. No. 223 ).

Having considered the pleadings as well as the testimony, exhibits, and the arguments of counsel presented at the Adversary Trial, the Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052:

+-----------------+
                ¦TABLE OF CONTENTS¦
                +-----------------+
                
Jurisdiction 859
                Introduction 859
                Overview 863
                Procedural History 863
                
 1. Bankruptcy Filings 863
                 2. Adversary (Adv.Proc. No. 10–00040) 864
                
Summary of Claims, Counterclaims, Cross-claims, and Third–Party
                Complaints 866
                Settlements Reached Before the Adversary Trial 867
                Adversary Trial 869
                Findings of Fact 871
                Conclusions of Law 876
                
I. BOF's Tort Claims under the 2009 BOF Title Commitment 877
                
 A. Doctrines of Election of Remedies and/or Waiver 880
                 Whether Mississippi Law Imposes a Duty on the Title Companies
                 B. to Search the Record for and Disclose Title Defects Before 881
                 Issuing a Title Commitment
                 Whether the Title Companies Voluntarily
...

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14 practice notes
  • First Am. Title Ins. Co. v. Johnson Bank, No. CV–15–0244–PR
    • United States
    • Supreme Court of Arizona
    • June 13, 2016
    ...damages. See, e.g. , Citicorp , 840 F.2d at 529–30 (discussing that the insured's lien was unenforceable ab initio ); In re Evans , 460 B.R. 848, 895–99 (Bankr. S.D. Miss. 2011) (discussing that the lender had no right in the property). The Citicorp court reasoned that the policy was breach......
  • Henderson v. Cmty. Bank of Miss. (In re Evans), Bankruptcy No. 09–03763–NPO.
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Mississippi
    • April 26, 2013
    ...apply for determining “value.” The Woodgreen Banks rely on this Court's decision in G & B Investments, Inc. v. Henderson ( In re Evans ), 460 B.R. 848 (Bankr.S.D.Miss.2011),15( Heritage ), a separate adversary proceeding which arose from the same Ponzi-type scheme of the Evans Brothers but ......
  • In re Joan Cravens, Inc., CIVIL ACTION NO. 1:15-CV-385-KS-MTP
    • United States
    • United States District Courts. 5th Circuit. Southern District of Mississippi
    • November 30, 2016
    ..."the existence of apparent authority hinges upon the acts and representations made by the principal to the third party." In re Evans, 460 B.R. 848, 887 (Bankr. S.D. Miss. 2011) (citing Ford v. Lamar Life Ins. Co., 513 So.2d 880, 888 (Miss. 1987)) abrogated other grounds by First Am. Bank v.......
  • First Citizens Bank & Trust Co. v. Stewart Title Guar. Co., Court of Appeals Nos. 11CA2639
    • United States
    • Colorado Court of Appeals of Colorado
    • January 2, 2014
    ...the deed of trust was invalid at its inception. Thus, FCB could not, as a practical matter, foreclose on the property. See In re Evans, 460 B.R. 848, 899–900 (Bankr.S.D.Miss.2011) ( “[A]s a practical matter, [the insured] never could have foreclosed on the deed of trust because there was no......
  • Request a trial to view additional results
14 cases
  • First Am. Title Ins. Co. v. Johnson Bank, No. CV–15–0244–PR
    • United States
    • Supreme Court of Arizona
    • June 13, 2016
    ...damages. See, e.g. , Citicorp , 840 F.2d at 529–30 (discussing that the insured's lien was unenforceable ab initio ); In re Evans , 460 B.R. 848, 895–99 (Bankr. S.D. Miss. 2011) (discussing that the lender had no right in the property). The Citicorp court reasoned that the policy was breach......
  • Henderson v. Cmty. Bank of Miss. (In re Evans), Bankruptcy No. 09–03763–NPO.
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Southern District of Mississippi
    • April 26, 2013
    ...apply for determining “value.” The Woodgreen Banks rely on this Court's decision in G & B Investments, Inc. v. Henderson ( In re Evans ), 460 B.R. 848 (Bankr.S.D.Miss.2011),15( Heritage ), a separate adversary proceeding which arose from the same Ponzi-type scheme of the Evans Brothers but ......
  • In re Joan Cravens, Inc., CIVIL ACTION NO. 1:15-CV-385-KS-MTP
    • United States
    • United States District Courts. 5th Circuit. Southern District of Mississippi
    • November 30, 2016
    ..."the existence of apparent authority hinges upon the acts and representations made by the principal to the third party." In re Evans, 460 B.R. 848, 887 (Bankr. S.D. Miss. 2011) (citing Ford v. Lamar Life Ins. Co., 513 So.2d 880, 888 (Miss. 1987)) abrogated other grounds by First Am. Bank v.......
  • First Citizens Bank & Trust Co. v. Stewart Title Guar. Co., Court of Appeals Nos. 11CA2639
    • United States
    • Colorado Court of Appeals of Colorado
    • January 2, 2014
    ...the deed of trust was invalid at its inception. Thus, FCB could not, as a practical matter, foreclose on the property. See In re Evans, 460 B.R. 848, 899–900 (Bankr.S.D.Miss.2011) ( “[A]s a practical matter, [the insured] never could have foreclosed on the deed of trust because there was no......
  • Request a trial to view additional results

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