Barriffe v. Estate of Nelson

• Citation: 153 So.3d 613
• Decision Date: 02 October 2014
• Docket Number: No. 2011–CA–01664–SCT.,2011–CA–01664–SCT.
• Parties: Eugene BARRIFFE and Ernie Barriffe v. ESTATE OF Lawson V. NELSON, James Dwight Nelson and David R. Nelson.
• Court: Mississippi Supreme Court

153 So.3d 613

Eugene BARRIFFE and Ernie Barriffe

v.ESTATE OF Lawson V. NELSON, James Dwight Nelson and David R. Nelson.

No. 2011–CA–01664–SCT.

Supreme Court of Mississippi.

Oct. 2, 2014.

Rehearing Denied Jan. 15, 2015.

Jason B. Purvis, Gulfport, Matthew Quinlivan, attorneys for appellants.

Douglas L. Tynes, Sr., Douglas L. Tynes, Jr., attorneys for appellees.

EN BANC.

Opinion

DICKINSON, Presiding Justice, for the Court:

¶ 1. Ernie and Eugene Barriffe seek compensation for money they gave to Lawson Nelson to start a landfill business, and for improvements they made to an apartment on his land. The chancellor found that Nelson held the money and improvements in a constructive trust. But because the Barriffes failed to establish the existence of a constructive trust, we reverse in part and render.

FACTS AND PROCEDURAL HISTORY

¶ 2. This family stew began from a familiar recipe: Trusting family members enter financial transactions with each other and later discover that their recollections and expectations do not match. And because the family members failed to put anything in writing, the courts are left to sort it out.

The landfill business

¶ 3. The story began when a New Orleans lawyer, Eugene Barriffe, and his wife, Ernie, gave money to Ernie's brother, Lawson Nelson, to start a landfill business in Jackson County, Mississippi. The Barriffes testified that Lawson approached them for an initial “investment” of $100,000—and later, a second “investment” of $65,000—into his idea to start a landfill business. In return, the Barriffes understood they were to receive two-thirds of the profits from the landfill business, with payments to begin when Eugene retired. Nelson denied the conversation and denied receiving the “investments” from the Barriffes.

¶ 4. During the trial, the chancellor challenged Eugene's description of the transaction as an investment, noting “[y]ou said it was an investment. It sounds like a loan to me.” The chancellor emphasized that “[i]t looks like a loan. It smells like a loan. It walks like a loan. It talks like a loan....” Eugene flatly rejected this characterization and said he “made absolutely sure that everybody understood it was not a loan.”

¶ 5. Lawson used part of the money to purchase 240 acres. Approximately one year later, Lawson put eighty of the 240 acres in Ernie's name. He later claimed the transfer was for $60,000. In this strange twist to the story, the Barriffes claim they did not give Nelson the $60,000, and that they were unaware of the land transfer. Ernie claims that in March 2002, Nelson told her about the land transfer and asked her to return the land to his name so he could sell all the landfill property. She agreed.

¶ 6. When Lawson sold the landfill business nine months later, Ernie said she “assumed” Lawson would put her and her husband's interest “in an escrow account so that [they] would have it when [they] asked him for it.” Eugene admitted that he knew Lawson sold the landfill in December 2002, but that he never asked for their two-thirds share of the landfill “[b]ecause the way it had been agreed on was our money was going to come after I retired.” The chancellor then asked Eugene when he retired, and Eugene said he retired when he “hit 65 in 2005[,] which was the year of the hurricane. And we ... didn't make our demand, Judge.”

¶ 7. When the Barriffes later asked Nelson about their share of the proceeds of the sale of the landfill, Nelson denied they were entitled to anything.

The apartment

¶ 8. After Hurricane Katrina destroyed their home in New Orleans, Ernie and Eugene moved into an apartment on Lawson's property. The Barriffes testified that they made substantial improvements to the apartment and that Lawson had agreed to convey the property to them in the future. Lawson admitted that he told Ernie that she could live in the apartment for the rest of her life, but that, after he died, he planned to leave the building to his son Dwight.

¶ 9. In 2009, the Barriffes asked Lawson to deed the property with the apartment to them. According to Ernie, Lawson became furious and refused to deed the property to them, deeding it instead to his sons. Lawson's refusal sparked this litigation filed by the Barriffes on June 10, 2009, against Nelson and the sons.

¶ 10. During the course of the litigation, Lawson died, and his estate was substituted as the real party in interest. Throughout the trial the chancellor sporadically enforced time limits on the parties' ability to examine witnesses. In one important exchange between the Nelsons' attorney and Eugene, the chancellor admonished the attorney to “[a]sk your next question ... You're beyond your 30 by about eight minutes.”

¶ 11. After the trial, the chancellor entered an order finding that “the $165,000 given to Lawson by the Barriffes was a loan and not an investment.” And “[a]s to the apartment the Barriffes built inside the metal building on the Wildwood property, the Court finds that Lawson intended to convey this property to the Barriffes.” The Court then imposed two constructive trusts for the Barriffes—one for the $165,000 when the Barriffes transferred their eighty acres to Lawson to sell, and the second, which was in the nature of an equitable lien on the apartment and property, for $72,645.18.

¶ 12. Displeased with the chancellor's judgment, the Nelsons moved for reconsideration or a new trial. The chancellor ordered a new trial and re-opened discovery, stating in his order that he granted the new trial to correct “an error in limiting the Plaintiffs' and the Defendants' examination and cross examination of the witnesses and for reasons stated in the transcript, record[,] and judgments of the Court.”

¶ 13. After the testimony and other proof in the second trial—which was largely consistent with that of the first trial—the chancellor found that there were actually four constructive trusts, because “the Nelsons[,] through their position of trust and confidence as [a] family[,] received substantial sums of money from the Barriffes without making compensation for the same.”

¶ 14. The chancellor said the first constructive trust began in August 1986 when Lawson bought the landfill with the Barriffes' $100,000 check. While the Barriffes never produced this check, the chancellor “weighed the testimony and evidence around this transaction and finds it credible since it was uncontroverted that Ernie was at the bank when the transaction took place.” The chancellor found that the Barriffes' action on this trust was barred by the statute of limitations.

¶ 15. Next, the chancellor found that the second constructive trust began when the Barriffes built the first floor of the apartment in the metal building in the mid 1990s. The chancellor likewise found that the Barriffes' action was barred by the statute of limitations.

¶ 16. The chancellor found that the third constructive trust began in March 2002 when the Barriffes transferred eighty acres to Lawson. The chancellor said Lawson admitted the Barriffes gave him at least $60,000 but there was no proof the Barriffes received any money when Lawson sold the landfill. The chancellor found that the Barriffes' action on this constructive trust was timely and not time-barred.

¶ 17. And finally, the chancellor found that the fourth constructive trust began in December 2005 when the Barriffes spent $36,221.09 on a second-floor addition to the apartment. The chancellor found that “[a] constructive trust is appropriate in this instance due to the fact the statute of frauds prevents an actual award of the Wildwood property to the Barriffes.” The chancellor found that the Barriffes' action on this constructive trust was also timely.

¶ 18. Ultimately, the chancellor awarded the Barriffes a “joint and several judgment” for $96,221.09 ($60,000 from the third constructive trust plus $36,221.09 from the fourth constructive trust) against the Estate of Lawson Nelson and Nelson's two sons (Nelsons).

¶ 19. Following the chancellor's second judgment, both parties appealed to this Court. The Barriffes raise four issues in their appeal: First, they argue that the chancellor erred in granting a new trial; second, that he should have awarded attorneys' fees; third, that he erred in his application of the statute of limitations; and finally, that the statute of frauds does not apply to constructive trusts.

¶ 20. The Nelsons raise three issues in their cross-appeal: First, that the trial court erred in finding that a third constructive trust was created in March 2002; second, the trial court erred in giving the Barriffes' $96,221; and third, that the chancellor erred in imposing an equitable lien on the apartment.

ANALYSIS

¶ 21. First, we will review the chancellor's decision to grant a new trial. Second, we will review the chancellor's analysis of the agreements between the Barriffes and Lawson with respect to constructive trusts. And, finally, we will review the chancellor's decision to impose an equitable lien against the property for the improvements made by the Barriffes. Because issues two and three are dispositive, we will not address the chancellor's decision on attorneys' fees.

I. The chancellor did not abuse his discretion in granting the Nelsons' motion for a new trial.

¶ 22. Mississippi Rule of Civil Procedure Rule 59 provides that “[a] new trial may be granted ... in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the Courts of Mississippi.” Trial courts are “given great deference in deciding whether to grant a new trial.”¹ And “[g]iven the important corrective role of new-trial motions, the discretion granted to the court is exceedingly broad.”² We review a trial court's decision to grant a new trial under an abuse-of-discretion standard.³

¶ 23. In this case, the chancellor believed that a new trial was needed because he had sporadically enforced arbitrary time limitations throughout the trial. The chancellor believed a new trial and “a...