Harrison Enterprises, Inc. v. Trilogy Communications, Inc.

• Decision Date: 14 February 2002
• Docket Number: No. 2000-CA-01345-SCT.,2000-CA-01345-SCT.
• Citation: 818 So.2d 1088
• Parties: HARRISON ENTERPRISES, INC. d/b/a Paulding Cable Company, A Mississippi Corporation and Elvin Lee Harrison, Jr. v. TRILOGY COMMUNICATIONS, INC., A Delaware Corporation.
• Court: Mississippi Supreme Court

818 So.2d 1088

HARRISON ENTERPRISES, INC. d/b/a Paulding Cable Company, A Mississippi Corporation and Elvin Lee Harrison, Jr. v. TRILOGY COMMUNICATIONS, INC., A Delaware Corporation.

No. 2000-CA-01345-SCT.

Supreme Court of Mississippi.

February 14, 2002.

Rehearing Denied June 20, 2002.

Thomas Quitman Brame, Jr., Bay Springs, Joseph E. Roberts, Jr., Jackson, Attorneys for Appellants.

T. Calvin Wells, Charles R. Wilbanks, Jr., Jackson, Attorneys for Appellee.

EN BANC.

COBB, J., for the Court.

¶ 1. Trilogy Communications, Inc. (Trilogy) manufactured, sold, and delivered goods and merchandise to Harrison Enterprises, Inc. (Harrison Enterprises) on an open account status by invoices dated May, June, and July of 1995, and August of 1996. When Harrison Enterprises failed to pay, Trilogy made demand for payment, triggering discussions and negotiations regarding payment of the account. These discussions and negotiations failed to resolve the issue.

¶ 2. On October 28, 1998, Trilogy filed a complaint in the Rankin County Circuit Court, seeking payment of the open account naming Harrison Enterprises and Elvin Lee Harrison, Jr. (Harrison) as defendants. After discovery, Harrison Enterprises and Harrison filed a motion for judgment on the pleadings, or in the alternative summary judgment. In response, Trilogy filed its own motion for summary judgment. After a hearing on the motions, the circuit court granted summary judgment in favor of Trilogy, and denied the motion of Harrison Enterprises and Harrison.

¶ 3. Harrison Enterprises and Harrison timely perfected this appeal raising the following contention:

I. THE TRIAL COURT ERRED IN AWARDING SUMMARY JUDGMENT TO THE PLAINTIFF.

¶ 4. Viewing the evidence in the light most favorable to Harrison Enterprises and Harrison, we conclude that Trilogy is entitled to a judgment as a matter of law, and we affirm the judgment of the circuit court.

FACTS

¶ 5. Trilogy began to manufacture, sell, and deliver goods to Harrison Enterprises, on an open account, in August of 1994. At the beginning of this relationship, Harrison signed a personal guarantee agreeing to be liable for the debts of Harrison Enterprises in its dealings with Trilogy. Trilogy continued doing business with Harrison Enterprises until August of 1996, at which time Harrison Enterprises owed Trilogy $71,453.75. Trilogy made several attempts to collect this outstanding debt, to no avail.

¶ 6. In March of 1997, Trilogy offered to work with Harrison Enterprises by renegotiating their payment schedule, requesting them to pay $2,000 a week until the debt was paid. Trilogy warned that failure to do so could result in Trilogy taking legal action.

¶ 7. In May of 1997, Trilogy sent a letter to Harrison Enterprises stating:

Dear Mr. Harrison,

Your account with Trilogy Communications is SERIOUSLY DELINQUENT!!!

We have made arrangements for you to pay a set amount per month, and you have not followed through with your payments, nor have you returned the signed promissory note. We have extended your terms in order to help you out when you needed an additional 30 days. Yet we have not received any type of payment from you.

At this point, unfortunately it is out of my hands. I have been instructed to give you an additional 15 days to make payment in FULL and if you do not send payment in full, you will receive a final demand letter from our attorney whereupon you will be given 30 days to pay the entire balance or he will file suit immediately.

¶ 8. Thirteen days later, on June 10, 1997, Harrison responded to this communication with a letter that acknowledged the account was overdue and asked Trilogy to give them until the middle of August and they would pay their account in full. After receiving the letter, Trilogy again gave Harrison Enterprises additional time to pay. However, again Harrison Enterprises failed to live up to its promise.

¶ 9. In early September of 1997, Harrison Enterprises' attorney contacted Trilogy's attorney and requested that Trilogy withhold filing the lawsuit as they were trying to obtain the funds to pay the account. Harrison Enterprises' attorney made a similar request in October, stating that the payment would be made by October 31, 1997.

¶ 10. In spite these continuing assurances, the account was never paid, forcing Trilogy to file a complaint against Harrison Enterprises and Harrison in October of 1998, seeking collection of the balance of the account, accrued interest and attorney fees. After discovery, both sides filed motions for summary judgment. After a hearing on the motions, the circuit court granted Trilogy's motion for summary judgment holding that: the statute of limitations had not run; Harrison Enterprises and Harrison had failed to assert a viable defense to the action; there was no material issue of fact; and Trilogy was entitled to a judgment as a matter of law. Later, the circuit court assessed attorney fees of $17,000, bringing the total judgment against Harrison Enterprises and Harrison to $88,453, jointly and severally. Aggrieved, Harrison Enterprises and Harrison now appeal.

STANDARD OF REVIEW

¶ 11. This Court conducts de novo review of an order granting or denying summary judgment and examines all the evidentiary matters before it-admissions in pleadings, answers to interrogatories, depositions, affidavits, etc. Gant v. Maness, 786 So.2d 401, 403 (Miss.2001). The evidence is viewed in the light most favorable to the party against whom the motion has been made. Id. Consequently, summary judgment should be granted if the pleadings, discovery materials and affidavits show that there is no genuine issue of material fact, and that the moving party is entitled to summary judgment as a matter of law. Id; Ainsworth v. Stroud, 765 So.2d 598, 601 (Miss.Ct.App.2000).

ANALYSIS

I. THE TRIAL COURT ERRED IN AWARDING SUMMARY JUDGMENT TO THE PLAINTIFF.

A. Was the 6/10/97 letter sufficient to toll the statute of limitations?

¶ 12. All parties agree that this case deals with an open account, and thus, the three-year statute of limitation of Miss. Code Ann. § 15-1-29 (1995) is applicable. However, the parties differ as to whether the June 10, 1997, letter sent by Harrison to Trilogy was an acknowledgment of an indebtedness and a renewed promise to pay sufficient to toll the statute of limitations, as allowed by Miss.Code Ann. § 15-1-73 (1995).

¶ 13. This Court has long held that such acknowledgment is not sufficient if it is "vague and indefinite." United States Fid. & Guar. Co. v. Krebs, 190 So.2d 857, 861 (Miss.1966) (citing Trustees of Canton Female Acad. v. Gilman, 55 Miss. 148 (1877)). Instead, it must "state when the balance was due, to whom the balance was due, and for what the balance was due." Id. It must "be both a specification of the debt referred to and a promise to pay a fixed amount in order to support a new promise." Id. (citing Fletcher v. Gillan, 62 Miss. 8 (1884)). Further, "the acknowledgment of the debt and the promise to pay must be definite and unequivocal." Id. (citing Philp v. Hicks, 112 Miss. 581, 589, 73 So. 610, 612 (1917)).

¶ 14. However, this Court has also held that "[s]uperficial uncertainties as to exact amounts due, resolvable by explanation, are not sufficient to impair identification of the indebtedness." Dyer v. Lowe, 201 Miss. 516, 521, 29 So.2d 324, 325 (1947). Also, the requirement "when the balance was due," does not necessarily require a specific date. For example, this Court held that a letter, which had been either lost or destroyed, that reportedly said, "Inclosed [sic] I hand you $25.00, which you will credit on my note in the county treasury. I will come down some time soon, and pay you the balance of the note," was sufficient proof of a new promise to toll the statute of limitations. Heflin v. Kinard, 67 Miss. 522, 524, 7 So. 493, 493 (1890).

¶ 15. However, a "[s]imple acknowledgment of a debt on account, even in writing, is not sufficient to take the account out of the operation of the statute." McArthur v. Acme Mech. Contractors, Inc., 336 So.2d 1306, 1308 (Miss.1976).

The rule in Mississippi is that a partial payment does not take a case out of the operation of the running of the statute of limitations unless such partial payment is accompanied by (1) an express acknowledgement of a further indebtedness, and (2) an express promise to pay.

Id. (quoting United States Fid. & Guar. Co. v. Krebs, 190 So.2d 857, 861 (Miss. 1966)). "We, therefore, now apply the rule adopted in Krebbs, supra, on `partial payment' to apply to a simple debit and credit open account." Id. Still, "[i]t has never been held in this state that parol evidence is inadmissible to apply the writing to its subject, and, this being done here, there is no uncertainty as to what debt was meant by the writer." Heflin, 67 Miss. at 525, 7 So. at 494.

¶ 16. At issue here is the letter addressed to Trilogy, dated June 10, 1997, on Harrison Enterprises official stationary, and signed by Harrison in his official capacity as president of Harrison Enterprises. That letter reads:

WE REALIZE OUR ACCOUNT IS OVER DUE. IF YOU WILL GIVE U.S. UNTIL THE MIDDLE OF AUGUST WE WILL BE ABLE TO PAY OUR ACCOUNT IN FULL.

¶ 17. Harrison Enterprises and Harrison contend that this letter falls short of the legal requirements of an acknowledgment of indebtedness and a promise to pay necessary to toll the running of the statute. They claim the letter does not state the amount of the balance, or when, to whom, or for what it was due. They claim it does not contain a specification of the debt, nor does it promise to pay anything at all; therefore, it is not definite and unequivocal.

¶ 18. Harrison Enterprises and Harrison rely on several cases to support this contention, but their reliance is misplaced since these cases are clearly distinguishable. Since 1877, the law in this area has been clear.

¶ 19. In Trustees of Canton Female Acad. v. Gilman, 55 Miss. 148 (1877), the debt was rent...