Howarth v. M & H Ventures, LLC
| Decision Date | 02 November 2017 |
| Docket Number | NO. 2016–CA–00742–SCT,2016–CA–00742–SCT |
| Citation | 237 So.3d 107 |
| Court | Mississippi Supreme Court |
| Parties | Cyndy HOWARTH, individually, Wife, Wrongful Death Beneficiary, and as Executrix of the Estate of Richard Howarth, Jr., Deceased, Juliet Howarth McDonald, individually, Daughter, and as Wrongful Death Beneficiary of Richard Howarth, Jr., Deceased, and Cyndy Howarth, as Guardian, Natural Mother and Next Friend of Cynthia Howarth, a Minor and Wrongful Death Beneficiary of Richard Howarth, Jr., Deceased v. M & H VENTURES, LLC |
ATTORNEYS FOR APPELLANT: WAYNE E. FERRELL, JR., BRADLEY S. CLANTON, WILLIAM WYATT SIMMONS
ATTORNEYS FOR APPELLEE: GLENN F. BECKHAM, RICHARD L. KIMMEL
BEFORE WALLER, C.J., KITCHENS, P.J., AND BEAM, J.
¶ 1. Richard H. Howarth, Jr., died in an airplane crash on January 16, 2012. Howarth was piloting the plane, which was the property of M & H Ventures, LLC ("M & H Ventures" or "the LLC"). The sole member of M & H Ventures was Howarth. On December 6, 2013, Howarth's widow, Cyndy Howarth, as executrix of Howarth's estate, wrongful death beneficiary of Howarth, and next friend of minor daughter Cynthia Howarth, along with adult daughter Juliet Howarth McDonald (the wrongful death beneficiaries), filed suit against the LLC in the Circuit Court of Neshoba County, alleging that Howarth's death had been caused by the negligence, gross negligence, and recklessness of M & H Ventures and others.
¶ 2. M & H Ventures filed a motion to dismiss, and, subsequently, a motion for summary judgment, arguing that the wrongful death beneficiaries could not recover because the success of their claims depended on proving that Howarth's own negligence had caused his death. In response, the wrongful death beneficiaries argued that, because M & H Ventures, an LLC, had owned the aircraft and all of Howarth's negligent actions had been performed as a member of this LLC, they could recover from M & H Ventures for Howarth's negligence. The trial court granted summary judgment in favor of M & H Ventures. Because the comparative negligence statute, Mississippi Code Section 11–7–15, prevents a plaintiff from recovering for negligence attributable to the injured person, and here Howarth's wrongful death beneficiaries were seeking recovery for Howarth's own negligence, we affirm.
¶ 3. On January 16, 2012, Howarth was taking off from the Philadelphia Municipal Airport in Philadelphia, Mississippi, when his airplane crashed, causing his death. Howarth was the sole occupant of the plane. Approximately six years before the crash, Howarth had created M & H Ventures, a Montana limited liability company. According to M & H Ventures' Operating Agreement, the LLC's purpose was investment in real and personal property. The Operating Agreement provided that the "Member (Owner)" of M & H Ventures was Howarth. In October 2011, M & H Ventures purchased the plane that later was involved in the crash.
¶ 4. The wrongful death beneficiaries sued M & H Ventures; Tracey Easom, an airplane mechanic; Ted Smith Aerostar Aircraft Corporation, the manufacturer of the airplane; and fictitious defendants A–M. The trial court granted the wrongful death beneficiaries' request to file an amended complaint on January 14, 2015, substituting Aerostar Aircraft Corporation, Piper Aircraft Corporation, Piper Aircraft Corporation Irrevocable Trust, New Piper Aircraft, Inc., and Piper Aircraft, Inc. for fictitious defendants A through E. The plaintiffs alleged that the plane piloted by Howarth had experienced a loss in directional control on takeoff that had resulted in the deadly crash. While the plaintiffs' claims in the complaint were somewhat repetitive, their basic allegations were that the defendants had been negligent, grossly negligent, and reckless in the maintenance, repair, and inspection of the aircraft, fuel system, fuel selector switches, exhaust system, and their component parts. They alleged that M & H Ventures and Easom negligently and recklessly had performed engine modifications, repairs, maintenance, and inspection, and also that they had certified, serviced, repaired, tested, inspected, overhauled, rebuilt, owned, and operated the plane and its parts. Further, they alleged that M & H Ventures and Easom falsely had certified in engine logs that the plane was airworthy and not unreasonably dangerous. They also made claims of defective condition and failure to warn against the manufacturers. The plaintiffs alleged that "[o]n the occasion in question the negligence of the Defendants, M & H Ventures, Tracey Easom, and Aircraft Manufacturer[s], was the proximate cause of the accident in question ...."
¶ 5. M & H Ventures' defense was provided pursuant to the terms of a liability insurance policy from which the wrongful death beneficiaries sought to collect in this lawsuit.1 M & H Ventures filed a motion to dismiss on grounds including failure to state a claim, followed by a motion for summary judgment. The wrongful death beneficiaries responded and requested a continuance to allow them to obtain discovery under Mississippi Rule of Civil Procedure 56(f). The trial court denied the motion for a continuance and granted summary judgment to M & H Ventures.
The trial court found that, under the comparative negligence statute, Mississippi Code Section 11–7–15, the wrongful death beneficiaries could not recover for the negligence of M & H Ventures, because M & H Ventures only could have acted through its sole member, Howarth, and a wrongful death beneficiary cannot recover for the decedent's own negligence. The trial court further denied the wrongful death beneficiaries' request for a continuance for further discovery because there was no possibility of unearthing any evidence that would have created a genuine issue of material fact. Finding that there was no just reason for delay, the trial court directed the entry of a final judgment as to M & H Ventures pursuant to Rule 54(b) of the Mississippi Rules of Civil Procedure.
¶ 6. The moving party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." M.R.C.P. 56(c). The movant has the burden to show that no genuine issue of material fact exists. Price v. Purdue Pharma Co. , 920 So.2d 479, 483 (Miss. 2006). In determining whether the movant is entitled to summary judgment, the trial court must view all of the evidence in the light most favorable to the nonmoving party. Id. This Court applies de novo review to the trial court's ruling on summary judgment. Ready v. RWI Transp. , LLC , 203 So.3d 590, 593 (Miss. 2016).
¶ 7. It was undisputed that Howarth was the sole member of M & H Ventures, and that M & H Ventures had no employees.2 Thus, as the trial court found, all of the allegations of negligence made by the wrongful death beneficiaries against M & H Ventures necessarily rested upon the actions or inactions of Howarth himself. The comparative negligence statute, Mississippi Code Section 11–7–15, provides:
In all actions hereafter brought for personal injuries, or where such injuries have resulted in death, or for injury to property, the fact that the person injured, or the owner of the property, or person having control over the property may have been guilty of contributory negligence shall not bar a recovery, but damages shall be diminished by the jury in proportion to the amount of negligence attributable to the person injured , or the owner of the property, or the person having control over the property.
Miss. Code Ann. § 11–7–15 (Rev. 2004) (emphasis added). The trial court found that, because Howarth was the sole member of M & H Ventures, the LLC could act or fail to act only through him. Therefore, the trial court found, the assertions in the amended complaint of negligence by M & H Ventures could only be the negligence of Howarth. Because, under Section 11–7–15, damages are reduced in proportion to the decedent's own negligence, the wrongful death beneficiaries' damages for Howarth's negligence would have to be reduced to nothing. Therefore, the trial court found that the wrongful death beneficiaries had failed to show a genuine issue of material fact for trial.
¶ 8. On appeal, the wrongful death beneficiaries argue that genuine issues of material fact exist on whether Howarth was totally responsible for his own death. First, they argue that the trial court's holding essentially pierced the veil of M & H Ventures by focusing on the acts of Howarth rather than on the acts of the LLC. An LLC member cannot be individually liable for the LLC's debts solely by virtue of his being a member. However, under extraordinary circumstances a court may "pierce the corporate veil" and disregard limited liability when certain facts are proven. Restaurant of Hattiesburg, LLC v. Hotel & Restaurant Supply, Inc. , 84 So.3d 32, 39 (Miss. Ct. App. 2012) (). The wrongful death beneficiaries do not seek to shield Howarth from individual liability for the debts of M & H Ventures. Thus, whether to pierce M & H Ventures' corporate veil is not at issue. Rather, the wrongful death beneficiaries seek to impose liability upon M & H Ventures based upon Howarth's negligent acts. And that endeavor implicates Section 11–7–15, which must reduce the wrongful death beneficiaries' damages by...
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