Bolton v. Equiprime, Inc.
| Decision Date | 27 March 2007 |
| Docket Number | No. 2005-CA-01744-COA.,2005-CA-01744-COA. |
| Citation | 964 So.2d 529 |
| Parties | Rosemary BOLTON and Clemmie Bolton, Marvia N. Bolton and Byron Bolton, James Brooks and Geneva Brooks, Peggy L. Brown, Thomas Bruce and Cawandra Bruce, Ruby N. Butler, Sylvia J. Collins, Vincent K. Cross and Sherlie E. Cross, Charles R. Davis and Raymonda C. Davis, Anthony Dobson and Trina Dobson, Rex Everett and Cassandra Everett, K.C. Gates, Karen Stout Carnell Harden and Jerry B. Harden, Vickie S. Jones and Leo F. Jones, Jr., Harold Mincy and Marguerite Mincy, Inez McCullum, Estella Morgan and James Morgan, Michael S. Netto and Salena L. Netto, Vivian J. Nichols, Esserlena G. Pickens, Richard Dale Pierce and Tina Pierce, Rita Reynolds and James Mitchell Reynolds, Benny L. Spann and Pamela J. Spann, Charles Sutton and Evelyn Sutton, and Robert J. Thomas and Martha S. Thomas, Appellants v. EQUIPRIME, INC., Appellee. |
| Court | Mississippi Court of Appeals |
R. Charles Robb, attorney for appellants.
Kenneth B. Rector, Vicksburg, attorney for appellee.
Before KING, C.J., IRVING and GRIFFIS, JJ.
IRVING, J., for the Court.
¶ 1. The Circuit Court of Hinds County dismissed a lawsuit filed by mortgagor Rosemary Bolton and several other mortgagors1 against Equiprime, Inc., an Alabama corporation.2 The circuit court determined that the mortgagors had alleged fraud on the part of Equiprime but had not pleaded fraud with the specificity required by Rule 9(b) of the Mississippi Rules of Civil Procedure. Additionally, the circuit court found that the mortgagors had not pleaded any affirmative acts by Equiprime which were designed to conceal the fraud allegedly committed by Equiprime. The circuit court also ruled, alternatively, that the mortgagors' action was barred by the three-year statute of limitations and that the claims of the mortgagors who had sued an assignee of Equiprime in the Chancery Court of Hinds County were also barred by the doctrines of res judicata and collateral estoppel. Consequently, the circuit court granted Equiprime's Rule 12(b)(6) motion to dismiss.
¶ 2. The mortgagors appeal, asserting that the circuit court erred in finding the doctrines of res judicata and collateral estoppel applicable and in not hearing their claims regarding clouds on their titles due to the assignment of their mortgages by Equiprime.
¶ 3. We find that the trial court erred in granting the motion to dismiss. However, we find that summary judgment was appropriate; therefore we affirm on this ground.
FACTS
¶ 4. Bolton and forty-two individuals acquired home mortgage loans from Southern Mortgage, Inc. d/b/a Heritage Mortgage. On the day the mortgages were closed, Southern assigned the mortgages to Equiprime. One of the closing documents advised the mortgagors that the assignment was being made. More than three years after the closing of the loans, the mortgagors filed suit against Equiprime and Southern's sole stockholders. The mortgagors also sued two of Southern's employees: Douglas Carson and Artie Armstrong. Southern itself was not made a defendant. However, this appeal involves only Equiprime.
¶ 5. The mortgagors alleged in their complaint that Equiprime and Southern's stockholders were generally engaged in a scheme that targeted "high-interest and otherwise high-cost residential mortgage transactions [involving] non-wealthy persons, who for one reason or another were in situations of economic duress, had limited or `sub-prime' credit histories, and had limited experience with complex mortgage or other commercial transactions." More specifically, the mortgagors alleged that Southern's stockholders and Equiprime "combined their money, time and skills and aided in [a] common undertaking . . . to cause the [mortgagors] to incur a debt and encumber [their] residence[s] by a mortgage lien thereon so as to pay to [Equiprime and Southern's stockholders] unreasonable and unnecessary closing costs and expenses associated with the mortgage loan[s], including future interest, all to the [mortgagors'] damages."
¶ 6. In the prayer of their amended complaint, the mortgagors sought a finding that:
d) the Plaintiffs have of and from Royce McNeal, Brent McNeal, Brian Michael Pellissier, James R. Hall, and Craig A. Netterville, and Equiprime, Inc., jointly and severally, all closing costs, the pre-payment penalty of their previous mortgage, interest on said sums at the Disclosure rate from and after the date of closing, the costs of the interest differential between their previous mortgage and the subject mortgage on the amount of the promissory note, pre-judgment and post-judgment interest from the date of judicial demand at the contractual rate as provided by § 75-17-7 of the Mississippi Code of 1972 as amended, attorneys fees and such legal expenses reasonably and necessarily incurred, and
e) in addition to the above relief and damages, each Plaintiffs have judgment against Royce McNeal, Brent McNeal, Brian Michael Pellissier, James R. Hall, and Craig A. Netterville, and Equiprime, Inc., jointly and severally, compensatory and punitive damages in a sum in excess of $1,360,000.00, together with interest from and after the date of each loan closing.
¶ 7. In response, Equiprime filed an answer generally denying the material allegations of the amended complaint and asserting certain defenses, including the doctrines of res judicata and collateral estoppel, estoppel and waiver, and the statute of limitations. After discovery, Equiprime filed a motion to dismiss or for summary judgment. Additional facts, as appropriate, will be related during the discussion of the issues.
ANALYSIS AND DISCUSSION
¶ 8. As stated, the mortgagors assert that the circuit court erred in finding the doctrines of res judicata and collateral estoppel applicable and in not hearing their claims regarding clouds on their titles due to the assignment of their mortgages by Equiprime. As best we can tell, the mortgagors also assert that it was error for the circuit court to apply the statute of limitations to their equitable claims, although they apparently admit that the statute of limitations may be applied to their law claims. We quote from their brief:
Where title of a person who is in undisputed possession of land is brought into question, he may set forth any equitable defense in favor of his right to the property, and the statute of limitations will not run so as to prevent him from setting forth such a defense. 37 C.J. 804. McLendon [v. McGee, 189 Miss. 712, 721, 198 So. 725,] 727 (1940)].
While the trial court may make findings as to the running of the statute of limitations by the legislature with regard to the damage cause of action, this Court has found that substantive rights may not be impaired.
¶ 9. The mortgagors argue that they have "a right of recoupment in defense of enforcement of and as a parry to the debt via foreclosure of the mortgage" and that "recoupment is a substantive defensive right that is not subject to legislative impairment through the setting of a statute of limitations." However, the mortgagors do not explain how they can have a viable equitable right to either some future recoupment or the cancellation of their mortgages without first proving that the mortgages were obtained illegally or fraudulently, nor do they explain why the statute of limitations does not apply to that part of their action in which they seek to have the mortgages declared illegal.
¶ 10. We decline to address in detail the specific issues raised by the mortgagors because, as is explained later in this opinion, we find that, on the facts of this case, the appropriateness of the trial court's judgment does not turn on the applicability vel non of the doctrines of res judicata and collateral estoppel. We further find that the mortgagors' third issue, that the trial court erred in refusing to hear their claims concerning clouds on their titles, must fail because the mortgagors failed to refute the showing by Equiprime that no genuine issue of material fact exists with respect to...
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