Derr Plantation, Inc. v. Swarek

• Decision Date: 06 August 2009
• Docket Number: No. 2007-IA-02031-SCT.,2007-IA-02031-SCT.
• Citation: Derr Plantation, Inc. v. Swarek, 14 So.3d 711 (Miss. 2009)
• Parties: DERR PLANTATION, INC. v. Thomas L. SWAREK and Thomas A. Swarek.
• Court: Mississippi Supreme Court

14 So.3d 711

DERR PLANTATION, INC. v. Thomas L. SWAREK and Thomas A. Swarek.

No. 2007-IA-02031-SCT.

Supreme Court of Mississippi.

August 6, 2009.

Robert R. Bailess, Kenneth B. Rector, Vicksburg, attorneys for appellant.

Bradley S. Clanton, Walker (Bill) Jones, Barry W. Ford, Charles Willis Pickering, Eric Wynn Hospodor, Jackson, attorneys for appellees.

Before WALLER, C.J., RANDOLPH and CHANDLER, JJ.

CHANDLER, Justice, for the Court.

¶ 1. Thomas L. Swarek and Thomas A. Swarek (the Swareks) filed a complaint in the Chancery Court of Issaquena County against Derr Plantation, Inc. (DPI), a Mississippi corporation. The complaint alleged that DPI had breached a contract to lease and sell to the Swareks an operational farm including acreage, equipment, and livestock. The Swareks requested remedies including specific performance, a preliminary injunction, and compensatory and punitive damages. After the chancellor denied both parties' summary judgment motions, the Swareks successfully petitioned the chancery court to transfer the case to circuit court.

¶ 2. This Court granted DPI's petition for an interlocutory appeal of the transfer order. See Miss. R.App. P. 5. We find that because this case was within the jurisdiction of the chancery court, the chancery court erred by ordering its transfer to the circuit court. Therefore, we reverse the transfer order and remand this case to the Chancery Court of Issaquena County for further proceedings consistent with this opinion.

FACTS

¶ 3. In December 2004, Thomas L. Swarek entered into negotiations with DPI for the lease and purchase of an approximately 8,350-acre farm known as Derr Plantation, which lies in Issaquena and Sharkey Counties along the Mississippi River. The contemplated lease/purchase included real estate, equipment, and livestock. On March 1, 2005, the Swareks filed a complaint and a lis pendens notice in the Chancery Court of Issaquena County. In the complaint, the Swareks asserted that the parties had negotiated a contract providing for the Swareks' lease and purchase of Derr Plantation; the Swareks attached the contract documents to the complaint. These documents provided for a lease price of $750,000 payable over a two-year period and a sale price of 7.5 million dollars. The Swareks alleged that DPI had breached the contract after the Swareks refused to pay a higher price for the property, and that DPI's actions regarding the breach were willful, intentional, and fraudulent.

¶ 4. The complaint stated that the Swareks were ready, willing, and able to perform the contract and were willing to close at the contract price either now or later, and that "[i]t is difficult to measure the damages for refusing to sell the property to Plaintiffs, hence Plaintiffs are requesting specific performance of the contract of sale and are filing a lis pendens with this complaint." The complaint included the following counts:

COUNT ONE — SPECIFIC PERFORMANCE

7. Because of the nature of the breach of the contract herein, Plaintiffs are entitled to an order of this court directing specific performance ordering the Defendants to carry out the terms of the contract documents Exhibit A, B, and C.

COUNT TWO — PRELIMINARY INJUNCTION

8. Because the failure to permit the Plaintiffs to take possession of the property under the lease within the next 30 days will cause them immediate damage for which there is no adequate remedy at law, they are entitled to a preliminary injunction granting them a lease of the property according to the terms specified in the contract documents.

COUNT THREE — DAMAGES

9. Even if the Defendants go ahead and deliver the property according to the contract, the Plaintiffs have been damaged in that the cost of any loan will now be at least 1% per annum higher than it would have been had there been no breach. For breach of the agreement to lease, Plaintiffs are entitled to actual and consequential damages of not less than $500,000.00. For breach of the agreement to convey the equipment and cattle, Plaintiffs are entitled to actual and consequential damages of not less than $175,000.00. For breach of the agreement to sell the real estate, Plaintiffs are entitled to recover actual and consequential damages of not less than $1,000,000.00. By reason of its willful, intentional, and gross breach of this contract, [Plaintiffs] are entitled to recover punitive damages of not less than $5,000,000.00 together with reasonable attorneys fees and costs. Plaintiffs are entitled to pierce the corporate veil and are entitled to a judgment against the Defendants, jointly and severally.

The Swareks prayed for a preliminary injunction and for "specific performance according to the terms of the contract documents and/or award actual and consequential damages of $1,750,000.00 and punitive damages of $5,000,000.00 together with attorney's fees and costs...."

¶ 5. DPI filed an answer without contesting the jurisdiction of the trial court, and a counterclaim for reasonable attorney's fees and costs and for damages suffered as a result of the filing of the lis pendens notice. In the answer, DPI's primary contention was that there was no breach of contract because the parties had never formed a contract. Some discovery ensued and, more than one year after filing their complaint, the Swareks filed a motion for partial summary judgment on April 8, 2006, on the limited question of whether a valid contract existed under Mississippi law. DPI responded and filed its own competing motion for summary judgment, asserting that there was no contract. On December 4, 2006, the chancellor denied both parties' summary judgment motions, finding that there were genuine issues of material fact for trial. The Swareks petitioned this Court for an interlocutory appeal, which was denied.

¶ 6. On June 1, 2007, two years and three months after the Swareks initiated the case in chancery court, and after suffering adverse rulings from the chancery court and this Court, they filed a motion to transfer the case to circuit court. At the motion hearing, the Swareks acknowledged their complaint's request for specific performance, but they contended that due to the passage of time, they now preferred the alternatively-pleaded remedy of compensatory and punitive damages. The Swareks argued that when they filed the complaint, their main issue for decision was enforcement of a contract, but once the purported contract's validity came into question, the nature of the case changed to a legal claim for breach of contract. Invoking a right to a jury trial, the Swareks contended that the breach-of-contract issue appropriately should be tried by a jury in circuit court. DPI argued, inter alia, that the case should remain in chancery court because the Swareks' complaint for specific performance was within the jurisdiction of the chancery court and the Swareks' request for a transfer was belated.

¶ 7. The chancery court ruled that the complaint ultimately sounded in breach of contract, and that the chancery court lacked jurisdiction over breach-of-contract claims. The chancery court granted the motion to transfer, and it entered an order transferring the case to the Circuit Court of Issaquena County. This Court granted DPI's petition for an interlocutory appeal on the question of whether the chancery court erred in granting the Swarek's motion to transfer the case to circuit court.

STANDARD OF REVIEW

¶ 8. "Jurisdiction is a question of law, which this Court reviews de novo." Issaquena Warren Counties Land Co. v. Warren County, 996 So.2d 747, 749 (Miss. 2008) (citing Trustmark Nat'l Bank v. Johnson, 865 So.2d 1148, 1150 (Miss. 2004)). The grant of a motion to transfer from chancery court to circuit court, or vice-versa, is a jurisdictional question that is subject to de novo review. Id. (citing RAS Family Partners v. Onnam Biloxi, LLC, 968 So.2d 926, 928 (Miss.2007)).

ANALYSIS

¶ 9. Under the Mississippi Constitution of 1890, circuit courts are courts of general jurisdiction, while chancery courts have limited jurisdiction over "all matters in equity" and other designated matters. See Miss. Const. art. 6 § 156 (granting circuit courts "original jurisdiction in all matters civil and criminal in this state not vested by this Constitution in some other court"); Miss. Const. art. 6 § 159, § 160, § 161. The constitution contains complementary provisions for the transfer of cases commenced in the wrong forum. Miss. Const. art. 6 § 157 ("[a]ll causes that may be brought in the circuit court whereof the chancery court has exclusive jurisdiction shall be transferred to the chancery court"); Miss. Const. art. 6 § 162 ("[a]ll causes that may be brought in the chancery court whereof the circuit court has exclusive jurisdiction shall be transferred to the circuit court").

¶ 10. The jurisdiction of the chancery court is a question of subject matter jurisdiction that may be raised by either party at any time. Burnette v. Hartford Underwriters Ins. Co., 770 So.2d 948, 951 (Miss.2000). However, this Court is prohibited by the Mississippi Constitution from reversing on this issue after a final judgment. Id. (citing Miss. Const. art. 6 § 147). A party aggrieved by the trial court's grant or denial of a motion to transfer may seek relief by pursuing an interlocutory appeal, as DPI has done here. Id.

¶ 11. "To determine whether a court has subject matter jurisdiction, we look to the face of the complaint, examining the nature of the controversy and the relief sought." RAS Family Partners, 968 So.2d at 928 (citing Durant v. Humphreys Mem'l Hosp./Extended Care Facility, 587 So.2d 244, 250 (Miss.1991)). The reviewing court must look to the substance, not the form, of a claim to determine whether that claim is legal or equitable. Copiah Med. Assocs. v. Miss. Baptist Health Sys., 898 So.2d 656, 661 (Miss.2005). We have consistently held that if it appears from the face of a well-pleaded complaint that an independent basis for...