Devine v. Cardinal Health 110, LLC

• Decision Date: 12 April 2022
• Docket Number: 2020-CA-01101-COA
• Citation: 350 So.3d 1107
• Parties: Stanley DEVINE and Roger Beardain, Appellants v. CARDINAL HEALTH 110, LLC, Appellee
• Court: Mississippi Court of Appeals

350 So.3d 1107

Stanley DEVINE and Roger Beardain, Appellants

v.CARDINAL HEALTH 110, LLC, Appellee

NO. 2020-CA-01101-COA

Court of Appeals of Mississippi.

April 12, 2022

Rehearing Denied August 09, 2022

ATTORNEYS FOR APPELLANTS: A. E. (RUSTY) HARLOW JR., ROGER ADAM KIRK, KATHI CRESTMAN WILSON, Grenada, MORGAN KAY JACKSON

ATTORNEY FOR APPELLEE: JONATHAN S. MASTERS, Jackson

BEFORE BARNES, C.J., McDONALD AND LAWRENCE, JJ.

LAWRENCE, J., FOR THE COURT:

¶1. On July 31, 2007, Stanley Devine (Devine) and Roger Beardain (Beardain), on behalf of PharmNet Inc. (PharmNet), entered into a contract with Cardinal Health 110 LLC (Cardinal Health) for the purchase of products and medicines to sell to the public. Devine and Beardain owned PharmNet. Cardinal Health alleges that the contract included a guaranty signed by Devine and Beardain, agreeing to be personally liable for any debts PharmNet owed to Cardinal Health. On October 20, 2017, PharmNet filed for bankruptcy. Cardinal Health requested that Devine and Beardain pay the debt owed by PharmNet, as required by the guaranty they had signed. Devine and Beardain refused. On January 29, 2018, Cardinal Health filed suit for breach of contract in the Circuit Court of Montgomery County. On September 6, 2018, Cardinal Health filed a motion for summary judgment. A hearing was held on August 28, 2020, to determine if summary judgment should be granted. The trial court granted Cardinal Health's motion for summary judgment, finding the guaranty bound Devine and Beardain to pay the PharmNet debt. Devine and Beardain appealed the trial court's decision, arguing that there were genuine issues of material fact that should have been left for a jury to decide. Upon review of the record, we affirm the trial court's grant of summary judgment for Cardinal Health.

FACTS

¶2. Cardinal Health and PharmNet entered into a contract on July 31, 2007. Devine was the president of PharmNet, and Beardain was the vice president. On July 31, 2007, Devine sent Cardinal Health a credit application that both he and Beardain signed on behalf of PharmNet, which would allow PharmNet to purchase and receive products from Cardinal Health and sell in their local store.¹ Cardinal Health alleged that the credit application included the guaranty, which provided that Devine and Beardain would be personally liable for the debts of PharmNet in relation to purchases PharmNet made from Cardinal Health if PharmNet could no longer make payments. Cardinal Health accepted the application and began a contractual partnership with PharmNet. On October 20, 2017, PharmNet filed for Chapter 7 bankruptcy. Upon this filing, Cardinal Health "made a demand to Devine and Beardain for the debt owed ...." Devine and Beardain refused to pay. Cardinal Health filed its complaint in the Montgomery County Circuit Court against Devine and Beardain for breach of contract and alleged they owed Cardinal Health $259,490.68.

¶3. In paragraph nine of its complaint, Cardinal Health alleged that Devine's and Beardain's refusal to pay PharmNet's debts breached the guaranty between the parties. Cardinal Health attached a copy of the contract, including the guaranty, to the complaint as Exhibit A. However, Exhibit A was almost entirely illegible. In their answers, Devine and Beardain denied Cardinal Health's claims about the Guaranty in paragraph nine.

¶4. On September 6, 2018, Cardinal Health filed a motion for summary judgment. In the motion, Cardinal Health stated, "The only issue before this Court is whether Defendants are personal[ly] liable to Cardinal Health under the Guaranty. Both Defendants signed the Guaranty.... Defendants now owe to Cardinal Health the Outstanding Balance incurred by PharmNet." Cardinal Health attached the executed agreement as Exhibit E.² In a footnote, Cardinal Health acknowledged that the "executed Credit Application is difficult to read," so it attached Exhibit F. Exhibit F was "an unexecuted version of Cardinal Health's standard Credit Application, which contains the same terms" as the executed contract between Cardinal Health and PharmNet. Exhibit F is legible. Cardinal Health also included the exact language of the guaranty from Exhibits E and F in its motion for summary judgment. Additionally, Cardinal Health admitted there was an error concerning the date the contract was executed in its original complaint and alleged that the error was a "minor scrivener's error."

¶5. To further support its motion for summary judgment, Cardinal Health attached as "Exhibit D to its motion for summary judgment" the affidavit of Phelton Woods (Woods), a credit manager for Cardinal Health. In his sworn affidavit, Woods stated he had personal knowledge that "[a] true and accurate copy of the Credit Application [was] attached to the Complaint as Exhibit A ." (Emphasis added). Woods stated he had personal knowledge that Devine and Beardain "executed and delivered to Cardinal Health a written Guaranty." Woods also stated he had personal knowledge that "[p]ursuant to the Guaranty, Defendants irrevocably and unconditionally guaranteed the prompt and full payment and performance of all obligations of PharmNet to Cardinal Health as defined in the Credit Application ...."

¶6. Devine filed a response to Cardinal Health's motion for summary judgment on September 17, 2018. Devine argued that Cardinal Health had committed fraud by making "numerous misrepresentations to [him] and PharmNet regarding working with him on developing projects, and with regard to working on underwater claims...." Devine also stated that he and PharmNet "would not have entered into the contract attached to [the] Complaint or remained in same for the period of time that they did but for the fraudulent conduct of Cardinal Health." Devine attached his own affidavit to his response. In his affidavit, Devine alleged various misrepresentations made by Cardinal Health. Devine also stated, "I signed the wholesale contract with Cardinal Health in my capacity as President of Pharmnet, Inc." (Emphasis added). Devine did not make any argument about the validity of the guaranty.

¶7. Beardain also filed a separate response to Cardinal Health's motion for summary judgment on October 12, 2018. In his response, Beardain argued that the motion for summary judgment should be denied because "the Plaintiff has failed to establish the ‘existence’ of a valid and binding contract dated July 31, 2017, as alleged in the complaint."³ Beardain argued that Cardinal Health's mistake in dates was not a scrivener's error. Instead, Beardain claimed that there were "genuine issues of material fact in dispute. Specifically, the credit application upon which [Cardinal Health] bases its claim for breach of guaranty/contract has not been produced, and therefore, cannot substantiate the claims of the Complaint." Additionally, Beardain argued that "even if the document attached to the complaint is the proper [contract], it is largely illegible and should be tendered to a jury to determine whether it says what [Cardinal Health] alleges." Beardain did not attach any affidavits to his response.

¶8. On August 28, 2020, a hearing was held to determine whether summary judgment should be granted. Cardinal Health argued that there was a valid contract, signed by Devine and Beardain, so they should be required to adhere to the contract's provisions. Cardinal Health also argued that the date of July 31, 2017, instead of July 31, 2007, was a "minor scrivener's error" that did not prejudice the parties because it was clear what contract was at issue. Cardinal Health agreed that the original contract attached to the complaint as Exhibit A was "hard to read," but the copy attached to the complaint was the only copy Cardinal Health was able to obtain. Cardinal Health also noted that PharmNet, Devine, and Beardain had been operating under this contract for ten years. Cardinal Health argued that neither the contract between the parties nor Mississippi law imposed a duty upon Cardinal Health to retrieve collateral from PharmNet first before pursuing Devine and Beardain. Cardinal Health claimed to have made a request for collateral from PharmNet when it filed for bankruptcy, but Cardinal Health never received any payment.

¶9. At the summary judgment hearing, Beardain argued that Cardinal Health's motion for summary judgment should be dismissed because the complaint referenced a contract dated 2017, instead of the actual contract from July 31, 2007. Beardain argued that "[it's] not a scrivener's error for Cardinal Health to put the incorrect date on its complaint." Therefore, Beardain contended summary judgment should not be granted.

¶10. Beardain also argued that the contract Cardinal Health attached to its complaint was "mostly illegible." Beardain stated that the supplement Cardinal Health attached as Exhibit F to its motion for summary judgment does not clarify what the language of the contract between PharmNet and Cardinal Health said. Therefore, he maintained, there is a genuine issue of material fact as to the language of the contract at issue that should go to a jury.⁴

¶11. Devine argued at the hearing for summary judgment that Cardinal Health had a "duty to collect [its] collateral" from PharmNet before it pursued him or Beardain. Devine stated that Cardinal Health's failure to adhere to its duty to collect collateral created a "jury question."

¶12. The trial court ultimately granted summary judgment. The judge noted that Mississippi is a notice-pleading state, so the need for a perfect complaint does not exist. The judge also stated that the amount requested in the complaint was the same amount requested at the hearing, the parties in the complaint were the same parties before him, and the contract at issue was dated correctly and attached to the complaint. In its order granting summary judgment, the trial court found:

On or about July 31, 2007, Devine and Beardain signed and agreed to personally guarantee a Credit Application [contract]

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