First Money, Inc. v. Frisby, E-Z
| Decision Date | 04 April 1979 |
| Docket Number | No. 50969,E-Z |
| Citation | 369 So.2d 746 |
| Parties | FIRST MONEY, INC., formerly Money, Inc., d/b/aFinance Plan and Gerald Schaar v. Clifford C. FRISBY. |
| Court | Mississippi Supreme Court |
Eaton, Cottrell, Galloway & Lang, James B. Galloway, Gulfport, for appellant.
Denton & Persons, William L. Denton, Biloxi, Ray Mitchell, Ocean Springs, for appellee.
Before PATTERSON, C. J., and BROOM and BOWLING, JJ.
This is an appeal from a judgment of the Circuit Court of Harrison County, Second Judicial District, where a verdict of $35,000 was awarded Clifford Frisby for damages arising out of a controversy concerning a real estate financing scheme.
The amended declaration of Frisby, appellee, consisted of four counts, the first for breach of loan commitment, the second for negligent misstatements, the third for breach of fiduciary duties and the fourth for fraud. A demurrer was sustained to Count IV and Count III was dismissed upon the defendants' motion for a directed verdict. The theories expressed in Counts I and II of the declaration and the testimony related thereto were submitted to the jury for its resolution and when the verdict was returned for the plaintiff, the defendants moved for a judgment notwithstanding the verdict and for a new trial or a remittitur, all of which were overruled.
The amended declaration, after identifying the parties and alleging the jurisdictional necessities, alleges in Counts I and II the following:
FIRST CAUSE OF ACTION: BREACH OF LOAN COMMITMENT
That the money which was to be used by the Plaintiff was for the particular purpose of acquiring title to said thirty (30) acre tract and this particular purpose was known at the time by the Defendants who contracted to make said loans.
That as a direct and proximate result of the breach of said loan commitments by the Defendants, the Plaintiff suffered an ascertainable amount of loss of profits.
That said thirty (30) acre tract of property lost by the Plaintiff as a result of the breach of contract by the Defendants is that certain parcel of land (description omitted).
That the Defendants' breach of contract was willful, malicious and intentional and constitutes fraudulent, oppressive, and outrageous conduct on the part of the Defendants toward the Plaintiff entitling Plaintiff to recover from the Defendants punitive damages in addition to actual damages.
WHEREFORE, Plaintiff, CLIFFORD FRISBY, demands damages as follows:
1. Compensatory damages in the sum of Five Hundred Thousand Dollars ($500,000.00).
2. Punitive damages in the sum of Five Hundred Thousand Dollars.
COUNT II: NEGLIGENT MISSTATEMENT
That the Defendant, by and through its agent, acting within the scope of his authority, supplied to the Plaintiff, CLIFFORD FRISBY, false information for guidance of his business transactions, and that Plaintiff, CLIFFORD FRISBY, justifiably relied upon said information to his pecuniary loss, damages for which he is entitled to sue and recover.
That the Defendant knew or in the exercise of ordinary care should have known that it was supplying false information to CLIFFORD FRISBY.
As a direct and proximate result of said acts of the Defendant as aforesaid, Plaintiff suffered pecuniary loss.
WHEREFORE, Plaintiff, CLIFFORD FRISBY demands damages as follows:
1. Compensatory damages in the amount of Five Hundred Thousand Dollars ($500,000.00).
2. Punitive damages in the amount of Five Hundred Thousand Dollars ($500,000.00).
In compliance with a motion for a bill of particulars to Count II for negligent misstatement, the plaintiff responded with the following:
2. Response to Number 2(a): The nature of the false information given for guidance of Plaintiff's business transactions was the general plan and scheme set forth by agents of the Defendant for the acquisition of the thirty acre tract in issue. The information was false in that Defendant had no intention of following through on behalf of the Plaintiff.
Response to Number 2(b): The exact information for guidance of the Plaintiff's business transactions which is alleged to be false is contained in Plaintiff's deposition and answers to interrogatories. Specifically, the Defendant promoted and encouraged the purchase of the thirty acre tract in question through the Plaintiff, assuring him that loan monies would be available until the entire tract was purchased, when in fact, the Defendant had no intention of allowing Plaintiff to proceed to the completion of the project.
Response to Number 2(c): Approximately $500,000.
Response to Number 2(d): The name of the person who specifically supplied the false information is Gerald Schaar. The false information was supplied throughout the period of time Plaintiff was dealing with the Defendants in the effort to purchase the thirty acre tract in question. The place the false information was supplied was the Biloxi address of the Defendants.
The testimony reveals that Frisby first came into contact with Money, Inc., d/b/a E-Z Finance Plan (hereinafter E-Z), on May 2, 1974, through his father who had met Gerald Schaar, E-Z's agent, when he accompanied appellee's sister to E-Z's office to obtain a loan. The conversation, aside from their business, moved to the growth of North Biloxi and the increasing values of property. Plaintiff's father informed Schaar that his son owned property in the area. At the time Schaar suggested the possible acquisition of the properties adjoining that of the appellee and during the afternoon drove to the place of business of Frisby for a discussion with him. A plan emerged whereby Frisby was to attempt the purchase of the lots adjoining his in furtherance of their mutual thought that a consolidated tract would have a greater value for development than would a fragmented tract.
According to Frisby, Schaar represented ". . . that they had financing available, that if I could get something going as far as purchasing the additional pieces of property that I could get the financing on it," and further, that E-Z would obtain a buyer for the entire tract within a year at a profit to Frisby. Acting on these representations, Frisby testified that he purchased several lots for $89,901.70 which were financed by E-Z. Moreover, although the loan instruments specified monthly payments, that as a part of his agreement with Schaar he was not required to make either installment or interest payments.
Difficulties arose after Frisby obtained a written commitment for the purchase of the Joe Juen property and an oral commitment for the purchase of Mrs. Joe Wood's property, the remaining two parcels in the tract. A meeting was held with the attorney of Joe Juen to close the loan which would have secured that property, but the funds, $60,000, necessary to close the commitment were not provided by E-Z, instead E-Z deferred on the premise that another day was needed to research the title. In the weeks following Schaar continued to give assurances that the money was available. However, none was ever forthcoming.
In early September 1974 Schaar attempted to obtain an interest in the tract of property through a real estate investment group plan proposed by Schaar whereby he and his associates would receive 40% Participation in the investment. Frisby declined the proposal because he did not desire to share the fruits of his efforts with others.
Thereafter Frisby failed in his attempts with other institutions to finance the parcels previously purchased and E-Z foreclosed. Frisby was successful only in maintaining the mortgage payments on the tract that belonged to his sister. This suit, with the result stated, followed.
The appellants first contend that the trial court erred in overruling defendants' motion to strike Count II of the amended declaration, in overruling the defendants' motion for a directed verdict and in refusing defendants' request for a peremptory instruction. We are of the opinion there is some merit to appellants' argument that the demurrer or motion to strike should have been sustained. However, we think the cause should be decided on its merits and that the court erred in not sustaining the motion for a peremptory instruction at the conclusion of all of the evidence.
Although Count II is styled "Negligent Misstatement," the governing allegations are the defendants supplied "false information for guidance of his business transactions, and that plaintiff, . . . justifiably relied upon said information to his pecuniary loss," and "the defendant knew or in the...
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