Hodnett v. Hodnett, 2016–CA–00885–COA

• Decision Date: 17 April 2018
• Docket Number: NO. 2016–CA–00885–COA,2016–CA–00885–COA
• Citation: 269 So.3d 317
• Court: Mississippi Court of Appeals
• Parties: Sarah HODNETT, Individually and as Trustee of the Hodnett Land Trust, and Bank of Anguilla, a Mississippi Banking Corporation, Appellants v. Tim HODNETT, Appellee

269 So.3d 317

Sarah HODNETT, Individually and as Trustee of the Hodnett Land Trust, and Bank of Anguilla, a Mississippi Banking Corporation, Appellants

v.Tim HODNETT, Appellee

NO. 2016–CA–00885–COA

Court of Appeals of Mississippi.

April 17, 2018

Rehearing Denied August 28, 2018

ATTORNEYS FOR APPELLANTS: OLIVER E. DIAZ JR., Jackson, DAVID NEIL MCCARTY, BENJAMIN MCRAE WATSON, JOHN C. HENEGAN, Ridgeland

ATTORNEY FOR APPELLEE: PHILIP MANSOUR JR., Greenville

BEFORE LEE, C.J., FAIR AND GREENLEE, JJ.

FAIR, J., FOR THE COURT:

¶ 1. Tim Hodnett sued his sister, Sarah Hodnett, to set aside a deed to the family farm from their mother to a revocable trust. The trust named Sarah as the sole beneficiary upon her mother's death. The chancery court found that Sarah, who had acted as her parents' attorney for many years and had prepared all of the various instruments involved in these transactions, had been in a confidential relationship with her mother when the deed was executed, raising the presumption that it was the product of undue influence. Sarah failed to rebut that presumption by clear and convincing evidence, and thus the chancellor set aside the deed.

¶ 2. On appeal, Sarah contends that Tim lacked standing to challenge the deed, that the statute of limitations had run at the time this suit was filed, and that the chancery court employed an incorrect legal standard in reaching its finding of a confidential relationship. The Bank of Anguilla also appeals, challenging the trial court's conclusion that Tim's claim had priority over some of the Bank's security interests in the deeded property, which were acquired by the Bank after a lis pendens was filed. We affirm the chancery court's judgment in its entirety.

STANDARD OF REVIEW

¶ 3. A chancellor's factual findings will not be reversed unless they are manifestly wrong or clearly erroneous. Paw Paw Island Land Co. v. Issaquena & Warren Ctys. Land Co. , 51 So.3d 916, 923 (¶ 26) (Miss. 2010). However, a chancellor's legal conclusions are reviewed de novo. Id.

DISCUSSION

1. Standing

¶ 4. Sarah contends that Tim lacks an interest in the deeded property and therefore does not have standing to pursue any claims relating to its disposition.

¶ 5. "In Mississippi, parties have standing to sue when they assert a colorable interest in the subject matter of the litigation or experience an adverse effect from the conduct of the defendant, or as otherwise provided by law." In re City of Biloxi , 113 So.3d 565, 570 (¶ 13) (Miss. 2013) (citation and internal quotation marks omitted). "A party's claim must be grounded in some legal right recognized by law, whether by statute or by common law and that party must be able to show that it has a present, existent actionable title or interest." Id. (citation and internal quotation marks omitted).

¶ 6. It is undisputed that Tim is one of his mother's heirs at law. See Miss. Code Ann. § 91–1–3 (Rev. 2013). If the conveyance of the property from his mother to the trust is set aside, Tim presumptively stands to inherit a child's share of the property. Id. He clearly has standing to challenge the transfer on the basis of undue influence.

2. Statute of Limitations

¶ 7. Tim filed suit shortly after his mother's death, but Sarah and the Bank point out that this was more than three years after the deed transferring the property to the Trust was executed. Both assert that the three-year "catch all" statute of limitations bars this suit, though they offer little argument as to why.

¶ 8. It is apparent to us that the applicable statute of limitations is actually ten years under Mississippi Code Annotated sections 15–1–7 (Rev. 2012) and 15–1–9 (Rev. 2012), for actions to recover land. See In re Estate of Reid , 825 So.2d 1, 6 (¶¶ 16–19) (Miss. 2002) ; see also Miss. Code Ann. § 15–1–49 (Rev. 2012). Sarah cites O'Neal Steel Inc. v. Millette , 797 So.2d 869, 872–75 (¶¶ 10–20) (Miss. 2001), for the proposition that a possessory interest in the land is required for the ten-year statute of limitations to apply. That is an accurate statement of the law, but Millette involved a judgment creditor seeking to set aside an allegedly fraudulent conveyance, and the creditor sought "neither title nor possession of the property." See id. at 874 (¶ 15). Here, Tim is an heir at law who seeks a child's share of the real property deeded away by his mother, allegedly as a result of undue influence. On this point, Estate of Reid is illustrative: Reid's potential heir at law brought an undue influence suit to set aside her transfers of real property to Reid's adopted son, including a deed that had been executed and recorded before her death. The Mississippi Supreme Court held that the ten-year statute of limitations applied. See Estate of Reid , 825 So.2d at 6 (¶¶ 16–19).

¶ 9. The statute of limitations does not bar this suit.

3. Laches

¶ 10. Sarah also contends that Tim's claim should be barred by laches, but laches is precluded by our prior decision on the statute of limitations issue. "A delay short of the statutory period of limitations does not bar recovery." Greenlee v. Mitchell , 607 So.2d 97, 111 (Miss. 1992). "The doctrine of laches is simply inapplicable where a claim has not yet been barred by the applicable statute of limitations." Id.

4. Venue

¶ 11. Next, we address Sarah's contention that the only proper venue for this suit was in Humphreys County, where the farm is located. She points to Mississippi Code Annotated section 11–5–1 (Rev. 2014), which provides in relevant part that "[s]uits to confirm title to real estate, and suits to cancel clouds or remove doubts therefrom, shall be brought in the county where the land, or some part thereof, is situated."

¶ 12. Sarah concedes, however, the venue issue was never pursued to a ruling in the chancery court. This operates as a waiver of the issue except in those rare cases where venue is also jurisdictional. "It is an appellant's duty to secure a ruling on a motion before the failure to grant it can be contested on appeal." Ford v. Magnolia Franchise Holdings Inc. , 112 So.3d 467, 471 (¶ 14) (Miss. Ct. App. 2013).

¶ 13. Aware of the potential waiver, Sarah contends that the particular defect she alleges is jurisdictional and therefore can be raised for the first time on appeal. She cites Donald v. Amoco Production Company , 735 So.2d 161, 181–82 (¶¶ 73–78) (Miss. 1999), which involved the local action doctrine. But Donald was founded on section 11–11–3 of the Mississippi Code, which at that time expressly limited circuit courts' jurisdiction over "actions of trespass on land, ejectment and actions for the statutory penalty for cutting and boxing trees" to the county in which the affected land was situated. Donald , 735 So.2d at 181 (¶ 73) (quoting Miss. Code Ann. § 11–11–3 (Supp. 1998) ). The court noted that in Mississippi the local action doctrine was limited to that statute and those causes of action. See id. at (¶ 74) (quoting City of Jackson v. Wallace , 189 Miss. 252, 263, 196 So. 223, 226 (1940) (McGowen, J., dissenting) ). "The only local actions with us are ejectment and trespass on land." Id. The United States Court of Appeals for the Fifth Circuit has also noted that "Mississippi has rejected the common law local action doctrine" and that the statute "alone determines whether a court can exercise jurisdiction over a ‘local’ cause of action." Trust Co. Bank v. U.S. Gypsum Co. , 950 F.2d 1144, 1149–50 (5th Cir. 1992).

¶ 14. Sarah also cites Belk v. State Department of Public Welfare , 473 So.2d 447, 449 (Miss. 1985), where the supreme court stated in dicta that unspecified "actions dealing with property" were an exception to the general rule that challenges to venue can be waived. But this statement appears to just refer to our limited, statutory implementation of the local action doctrine previously discussed.

¶ 15. In Ravesies v. Martin , 190 Miss. 92, 99–101, 199 So. 282, 284–85 (1940), the Mississippi Supreme Court directly addressed the question of whether venue was jurisdictional in suits to confirm title. It held that "[t]he jurisdiction of the chancery court to cancel a claim as a cloud upon the title of the real owner of any real estate is conferred by Section 404 of the Code of 1930, and this statute does not prescribe that jurisdiction of the subject matter shall be dependent upon the land being situated in the county where the suit is filed." Section 404 of the Code of 1930 is currently codified as Mississippi Code Annotated section 11–17–31 (Rev. 2004) and appears to be unchanged since the Ravesies decision in 1940. Sarah dismisses Ravesies as an "ancient case," but it appears to be controlling precedent nonetheless.

¶ 16. We conclude that venue was not jurisdictional in this case, and Sarah waived any objection to the suit being heard in Sharkey County.

5. Presumption of Undue Influence

¶ 17. Finally, Sarah challenges the chancery court's finding that there was a presumption of undue influence in various transfers related to the property because of a confidential relationship between Sarah and her mother and father. See generally Madden v. Rhodes , 626 So.2d 608, 618–19 (Miss. 1993). Sarah does not challenge the chancellor's finding that she failed to rebut that presumption.

¶ 18. Sarah's argument on appeal is based on the Mississippi Rules of Professional Conduct, specifically Rule 1.8(c), which states that "[a] lawyer shall not prepare an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse any substantial gift from a client, including a testamentary gift, except where the client is related to the donee." She points out that the chancellor, when announcing his decision from the bench, was very critical of Sarah's drafting the instruments that ultimately transferred her parents' property to her and appeared to assume her actions were a violation of the Rules of Professional Conduct.

¶ 19. First of all, it is not clear that Sarah complied with Rule 1.8(c). On its face,...