Carlson v. Brabham

• Decision Date: 19 January 2016
• Docket Number: No. 2014–CA–00367–COA.,2014–CA–00367–COA.
• Citation: 199 So.3d 735
• Parties: Linda CARLSON, Appellant v. Larry BRABHAM, Appellee.
• Court: Mississippi Court of Appeals

199 So.3d 735

Linda CARLSON, Appellant

v.Larry BRABHAM, Appellee.

No. 2014–CA–00367–COA.

Court of Appeals of Mississippi.

Jan. 19, 2016.

Rehearing Denied June 21, 2016.

Certiorari Denied Sept. 15, 2016.

James D. Shannon, Kathryn Lindsey White, Hazlehurst, attorneys for appellant.

Edwin L. Bean Jr., McComb, attorney for appellee.

Before GRIFFIS, P.J., CARLTON and WILSON, JJ.

GRIFFIS

, P.J., for the Court:

¶ 1. Linda Carlson sued Larry Brabham for equitable division of partnership assets amounting to $167,762.06. The Amite County Chancery Court granted Brabham's motion for a directed verdict. Carlson appeals and asserts the chancellor improperly granted Brabham's motion. We find no error and affirm.

FACTS AND PROCEDURAL HISTORY

¶ 2. Brabham and Carlson began living together in 2004. At the time, Brabham worked in the logging industry, and Carlson worked full-time for Telepak Networks. Carlson and Brabham were both married when they became romantically involved. Brabham divorced his wife shortly after the start of his relationship with Carlson. Carlson, however, remained married to her husband for the duration of her relationship with Brabham.

¶ 3. Before their relationship, Brabham owned and operated Brabham Logging. When Brabham started seeing Carlson, she encouraged him to incorporate the business and change the name to Longhorn Logging. Carlson set up a meeting with an attorney for the purpose of incorporating the business. The incorporation papers listed Brabham as the president of the business, and Carlson as the secretary, treasurer, and agent for service of process.

¶ 4. After Longhorn Logging had operated for several years, the Mississippi Secretary of State administratively dissolved it for failing to file articles of incorporation and issue stock. The Longhorn Logging profit and loss detail statement showed that Longhorn Logging ceased operations as a viable business after September 2007. However, Longhorn Logging maintained an active bank account until March 16, 2009.

¶ 5. In addition to Longhorn Logging, Brabham owned a parcel of land on Amazing Grace Lane in Amite County. Brabham received the parcel as part of the divorce settlement with his ex-wife. Brabham intended to build a house on the property and began construction a year after starting his relationship with Carlson. The construction funds came out of the Longhorn Logging checking account, which Brabham used as both his business and personal bank account. Brabham completed the majority of the work himself, while Carlson did minor labor and selected the light fixtures and some of the furniture. When the house was completed, Carlson knew the house and land were in Brabham's name.

¶ 6. After two years at Amazing Grace Lane, Brabham's ex-wife offered to sell him their former home located on East Fork Road. Brabham sold the house on Amazing Grace Lane for $385,916. He used the proceeds to pay off the remaining land note of $97,479.22 on Amazing Grace Lane and purchase the house on East Fork Road for $250,000. Just as with the Amazing Grace Lane house, Brabham did not put Carlson's name on the deed to the house on East Fork Road. Though Carlson confronted Brabham about leaving her name off of the deed, Brabham did not change the deed, but instead purchased a life-insurance policy worth $250,000, which named Carlson as the beneficiary.

¶ 7. When Carlson and Brabham ended their relationship, Carlson removed her personal property from the East Fork Road home. However, Carlson also wanted a share of Longhorn Logging and the East Fork Road property. Carlson filed her original complaint for an equitable distribution of the properties on May 12, 2011. Both parties filed motions for summary judgement, which the chancellor denied, and the case proceeded to trial on March 7, 2013.

¶ 8. Brabham filed a motion for a directed verdict after Carlson presented her case-in-chief. The chancellor requested both parties submit proposed findings of fact and conclusions of law. After reviewing both parties' submissions, the chancellor adopted Brabham's findings of fact and conclusions of law in toto and entered a judgment in favor of Brabham.

¶ 9. After the chancellor denied Carlson's motion to alter or amend the judgement or, in the alternative, for a new trial, Carlson appealed. Carlson primarily contends the chancellor erred in granting Brabham's motion for a directed verdict. Carlson's issues on appeal, edited for clarity, are whether: (1) Carlson filed her complaint within the three-year statute of limitations; (2) Brabham and Carlson formed a partnership; (3) Brabham and Carlson formed a joint venture; (4) Brabham was unjustly enriched and the chancellor erred by declining to create a constructive trust for the East Fork Road house; and (5) Carlson was entitled to “sweat equity.”

STANDARD OF REVIEW

¶ 10. “In a non-jury trial, such as this case, the appropriate motion is not a motion for [a] directed verdict pursuant to Mississippi Rule of Civil Procedure 50

; instead, the correct motion is a motion for [an] involuntary dismissal pursuant to Mississippi Rule of Civil Procedure 41(b).” Partlow v. McDonald, 877 So.2d 414, 416 (¶ 7) (Miss.Ct.App.2003) (citation omitted) (citing Buelow v. Glidewell, 757 So.2d 216, 220 (¶ 12) (Miss.2000) ). In this case, Brabham filed a Rule 50 motion for a directed verdict, rather than a Rule 41(b) involuntary-dismissal motion.

¶ 11. The Mississippi Supreme Court has held that in situations such as this, an appellate court must:

[C]onsider th[e] appeal based on the correct standard of review, which under Rule 41(b)

is different than the standard of review applicable to a motion for a directed verdict under Rule 50. In considering a motion for [an] involuntary dismissal under Rule 41(b), the trial court should consider the evidence fairly, as distinguished from in the light most favorable to the plaintiff, and the [trial court] should dismiss the case if it would find for the defendant. On appeal, [an appellate court] must apply the substantial evidence/manifest error standard to an appeal of a grant or denial of a motion to dismiss pursuant to [Rule 41(b) ].

Id. at 416–17 (¶ 7) (internal quotations and citations omitted) (citing Miss. Real Estate Comm'n v. Geico Fin. Servs. Inc., 602 So.2d 1155, 1156 n. 1 (Miss.1992)

).

¶ 12. Further, the supreme court has held that appellate courts must “apply the familiar abuse-of-discretion standard to a trial judge's factual findings, even where the judge adopts verbatim a party's proposed findings of fact.” Bluewater Logistics, LLC v. Williford, 55 So.3d 148, 157 (¶ 32) (Miss.2011)

.

ANALYSIS

I. Whether Carlson filed her complaint outside the three-year statute of limitations.

¶ 13. This Court begins with the question of whether Carlson timely filed her complaint within the applicable statute-of-limitations period. Statute-of-limitations issues are subject to a de novo review. Koestler v. Miss. Baptist Health Sys., Inc., 45 So.3d 280, 282 (¶ 7) (Miss.2010)

. The general three-year statute of limitations under Mississippi Code Annotated section 15–1–49 (Supp.2015) applies to Carlson's claims. Brabham argues that Carlson's cause of action for equitable division of the house at East Fork Road accrued when she discovered or reasonably should have discovered her name was not on the deed to the house. Brabham closed on the house at East Fork Road on March 21, 2007. At trial, Carlson admitted that she discovered that her name was not on the deed within a few days of the closing. But Carlson did not file her complaint until more than four years later on May 12, 2011, which would place the claim outside the three-year statute of limitations.

¶ 14. Carlson, however, alleges that the claim did not accrue until at least March 16, 2009, when the Longhorn Logging bank account closed. Carlson claims that Longhorn Logging funds, in which she also claims a partnership interest, were used to purchase the house at East Fork Road. Alternatively, Carlson contends that the statute of limitations has not begun to run because Brabham still owns the house as partnership property. Under either theory, Carlson's claims would fall within the time limitation.

¶ 15. The chancellor found that Carlson failed to prove all of the necessary elements of a partnership. The chancellor's judgment stated that the statute of limitations began on March 21, 2007, the closing date of the East Fork Road property. We agree. Therefore, this Court finds Carlson's claims are barred by the statute of limitations. Regardless, this Court will address the merits of each remaining issue.

II. Whether Brabham and Carlson formed a partnership.

¶ 16. Carlson claims she has a partnership interest in Longhorn Logging. Carlson further claims that she is entitled to an equitable division of Brabham's property at East Fork Road because she contributed to the house, and Brabham purchased it using funds from the Longhorn Logging checking account.

¶ 17. Mississippi Code Annotated section 79–13–202(a)

(Rev.2013) defines a partnership as “the association of two or more persons to carry on as co-owners [of] a business for profit[.]” “The three main questions that are considered in partnership determination are (1) the intent of the parties, (2) the control question, and (3) profit sharing.” Smith v. Redd, 593 So.2d 989, 994 (Miss.1991). The intent required to form a partnership may be implied. Id. However, profit sharing may be the most important factor. Century 21 Deep S. Props., Ltd. v. Keys, 652 So.2d 707, 715 (Miss.1995). “A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment ... of wages or other compensation to an employee.” Miss.Code Ann. § 79–13–202(c)(3)(iii).

A. Intent

¶ 18. We first look to intent to determine if the parties formed a partnership in Longhorn Logging. Brabham and Carlson agree that Carlson arranged to incorporate the business under Longhorn Logging, but Brabham...