Franklin Land Assocs., LLC v. Sethi, 2017-CA-00778-COA
| Decision Date | 29 January 2019 |
| Docket Number | NO. 2017-CA-00778-COA,2017-CA-00778-COA |
| Citation | 281 So.3d 119 |
| Parties | FRANKLIN LAND ASSOCIATES, LLC, Appellant v. S.L. SETHI, Appellee |
| Court | Mississippi Court of Appeals |
ATTORNEYS FOR APPELLANT: CHRISTOPHER DANIEL MEYER, Jackson, JAHVIAH DYJUAN COOLEY
ATTORNEYS FOR APPELLEE: WEBB FRANKLIN, SAM N. FONDA, Greenwood
BEFORE GRIFFIS, C.J., BARNES AND CARLTON, P.JJ.
BARNES, P.J., FOR THE COURT:
¶1. Franklin Land Associates LLC (Franklin), the Buyer, and S.L. Sethi, the Seller, entered into a real-estate purchase agreement (Agreement) in 2010. After two years and several amendments, Franklin terminated the Agreement in April 2012, claiming it failed to receive the necessary governmental approvals needed for the development of the property and was, therefore, entitled to a return of the $ 160,000 held in escrow. A lawsuit was filed to determine which party was entitled to the escrow funds. The Leflore County Chancery Court determined that John Dinkins, Franklin's agent, had authority to bind the company to the Sixth Amendment to the Agreement, which permitted Franklin to receive a complete refund of the escrow money if it failed to receive the necessary onsite and offsite governmental approvals reasonably deemed necessary by Franklin. However, because Franklin elected to withdraw its applications prior to the governmental authorities' decisions, the chancery court held that Franklin's termination of the Agreement was without justification, and Sethi was entitled to the escrow money. Franklin appeals the judgment. Finding no error, we affirm.
SUMMARY OF FACTS AND PROCEDURAL HISTORY
¶2. On April 27, 2010, Franklin and Sethi entered into a real-estate contract for the purchase of approximately sixty acres of land in Madison County, Mississippi.1 The Agreement provided Franklin the exclusive right to inspect the property for the development of a high-end shopping center and required Franklin to deposit $ 50,000 in earnest money with the escrow agent, Whittington, Brock and Swayze P.A. (WBS). Several amendments were made to the Agreement. The First Amendment, on May 26, 2010, required Franklin to deposit an additional $ 50,000 in earnest money, modified paragraph 16 of the agreement, and extended the property inspection period.2
¶3. On August 24, 2010, Franklin terminated the Agreement in accordance with its terms. The following day, the parties executed a Reinstatement and Second Amendment of the Agreement, which extended the inspection period until November 30. Three months later, on November 29, Franklin again terminated the Agreement, and the escrow funds were returned to Franklin. On January 11, 2011, the parties executed a Reinstatement and Third Amendment of the Agreement, requiring Franklin to deposit the previously refunded escrow ($ 100,000) with WBS, and the inspection period was extended to June 30, 2011. On June 6, the parties executed a Fourth Amendment, extending the inspection period to October 31.
¶4. The parties executed a Fifth Amendment on October 28, 2011. The amendment extended the inspection period to April 30, 2012, and required Franklin to deposit an additional $ 60,000 into escrow at intervals of $ 20,000 a month. Paragraph 8.C of the agreement was also amended to provide:
(Emphasis added).
¶5. In March 2012, Dinkins, who had been meeting and negotiating with Sethi on the terms of the Agreement and the amendments for the past two years, brought a proposed Sixth Amendment to Sethi signed by George Tomlin, Franklin's Chief Manager. In the proposed amendment, Paragraph 8.C of the Agreement was amended as follows:
(Emphasis added). After Dinkins and Sethi discussed the terms, a handwritten interlineation was added to the Sixth Amendment stating that Franklin agreed to pay additional earnest money of $ 100,000 beginning May 1. Sethi signed the amendment and initialed the handwritten portion on March 16, 2012.
¶6. On April 27, 2012, Franklin sent a letter to Sethi terminating the Agreement. Claiming it had "not received all necessary governmental approvals and agreements deemed necessary ... for [its] intended development and acquisition of the [p]roperty, as determined in [its] sole discretion," Franklin demanded a refund of the earnest money. Sethi objected to Franklin's request for a refund of the funds, asking that Franklin specify which governmental approvals had been denied.
¶7. On May 27, 2012, the escrow agent, WBS, filed a complaint for interpleader with the chancery court, requesting a ruling on who was entitled to the escrow funds.3 Franklin filed an answer and cross-claim against Sethi, demanding the return of its earnest money and legal fees incurred as a result of the dispute. On April 22, 2014, Franklin filed a motion for partial summary judgment, arguing that the Fifth Amendment to the Agreement was controlling because Franklin never accepted the additional handwritten interlineation to the Sixth Amendment. In response, Sethi "concede[d] that the added language by Sethi was never agreed to by Franklin because it elected to terminate because of financing problems," but asserted that both Sethi and Franklin "accepted and agreed to the language in the typed or printed portion of the Sixth Amendment."4 A hearing was held in chancery court on April 7-8, 2015.
¶8. On January 10, 2017, the chancery court entered its order. The court determined that Dinkins acted with apparent authority as Franklin's agent in negotiating the Sixth Amendment with Sethi; therefore, the Sixth Amendment contained the controlling contract language. The chancery court found that Sethi was entitled to the $ 160,000 in escrow money because Franklin "essentially began to abandon the development project several months before the termination letter" and, therefore, terminated the Agreement without justification.
¶9. On January 13, 2017, the chancery court entered a final decree and money judgment to comply with its order, awarding Sethi $ 160,000. On January 23, 2017, Franklin filed a motion to alter or amend the judgment. That same day, the court entered a second final decree and judgment; so Franklin filed a second motion to alter or amend the judgment on February 2. On May 4, 2017, the chancery court denied Franklin's motions. Aggrieved, Franklin appeals.
STANDARD OF REVIEW
¶10. Our Court's standard of review of a chancery court's decision is limited. Rester v. Greenleaf Res. Inc. , 198 So.3d 472, 474 (¶ 5) (Miss. Ct. App. 2016) (citing Cook v. Robinson , 924 So.2d 592, 594 (¶ 9) (Miss. Ct. App. 2006) ). A court's findings will not be disturbed on appeal "when supported by substantial evidence unless the chancery court abused its discretion, was manifestly wrong, clearly erroneous, or an erroneous legal standard was applied." Dobson v. Dobson , 179 So.3d 27, 29 (¶ 5) (Miss. Ct. App. 2015). Questions of law are reviewed de novo. Rester , 198 So.3d at 474 (¶ 5).
DISCUSSION
¶11. In the proceedings below, the parties disputed whether the Fifth or Sixth Amendment contained the Agreement's controlling language, and the court devoted a significant portion of its analysis to whether Dinkins had authority to negotiate and execute the Sixth Amendment to the Agreement on Franklin's behalf. As discussed, Dinkins brought Sethi the proposed Sixth Amendment already signed by Franklin's representative, Tomlin. The amended language to Paragraph 8.C to the proposed Sixth Amendment added the following emphasized terms—"all necessary on-site and off-site governmental approvals reasonably deemed necessary...
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