Kleyle v. Deogracias

• Decision Date: 11 May 2021
• Docket Number: No. 2019-CA-00671-COA,2019-CA-00671-COA
• Citation: 330 So.3d 401
• Parties: Gordon KLEYLE, Appellant, v. Myrna DEOGRACIAS, Philip Deogracias, and Philip Deogracias d/b/a The Railroad Café, LLC, Appellees.
• Court: Mississippi Court of Appeals

330 So.3d 401

Gordon KLEYLE, Appellant,

v.Myrna DEOGRACIAS, Philip Deogracias, and Philip Deogracias d/b/a The Railroad Café, LLC, Appellees.

No. 2019-CA-00671-COA

Court of Appeals of Mississippi.

May 11, 2021

Rehearing Denied October 5, 2021

ATTORNEYS FOR APPELLANT: JOHN D. SMALLWOOD WILLIAM C. WALTER

ATTORNEY FOR APPELLEES: RICHARD C. FITZPATRICK, Poplarville

EN BANC.

BARNES, C.J., FOR THE COURT:

¶1. Gordon Kleyle filed suit against Myrna and Philip Deogracias individually and/or d/b/a The Railroad Café Limited Liability Company (the LLC),¹ alleging breach of a lease agreement and requesting payment of past-due rent. Arguing that the lease was invalid, the Deograciases filed a motion to dismiss. The Pearl River County Circuit Court granted the motion to dismiss, finding that the lease was void and the Deograciases were month-to-month, at-will tenants. Kleyle appeals the circuit court's decision.

¶2. Because there was no evidence presented that Philip signed the lease or that Myrna had authority to sign on his behalf, we affirm the court's dismissal as to Philip in an individual capacity. However, finding the lease was valid as to Myrna and the LLC and was of sufficiently definite duration, we conclude that the court's findings were erroneous in this regard. We thereby reverse the court's judgment of dismissal in part and remand for further proceedings. As to the remaining issues raised by Kleyle, we find those are either waived or without merit.

FACTS AND PROCEDURAL HISTORY

¶3. Kleyle entered into an oral agreement to lease a building to the Deograciases, who intended to use the building to operate a new restaurant, The Railroad Café. Kleyle contends that the lease was reduced to writing on February 1, 2008, and "[u]nder the terms of the written lease, the Deograciases were to pay $1,850 per month in rent, the lease was to run from February 2008 through February 2010, and the Deograciases could cancel the lease at any time by providing Kleyle with ninety (90) days’ written notice." Kleyle states that the Deograciases stopped paying rent as of August 1, 2008. The Deograciases gave oral notice that they were vacating the building either in September 2008 (as alleged by the Deograciases) or on June 23, 2009 (as alleged by Kleyle).

¶4. On September 20, 2009, Kleyle filed a complaint in the circuit court against the Deograciases, alleging default under the lease agreement. Kleyle also demanded "unpaid rent of $15,500.00" and reimbursement for damages totaling $5,084.92.² The complaint was later amended to add The Railroad Café as a defendant.³ The Deograciases filed a motion to dismiss, claiming they had "no personal liability and/or obligation for the claims made." In its answer, the LLC requested dismissal of the action, arguing that "[t]he Lease Agreement between Kleyle and the Railroad Café was a verbal agreement and therefore on a month to month basis." Although the court initially denied the defendants’ motion to dismiss on July 19, 2010, the complaint was subsequently dismissed, and the statute of limitations tolled after the Deograciases filed a notice of bankruptcy on July 28, 2010.

¶5. On May 18, 2011, Kleyle filed a new complaint in the circuit court against the Deograciases "individually and/or d/b/a" The Railroad Café, again claiming that they had defaulted on the lease agreement. Kleyle sought $24,000 in past-due rent, damages for personal property that he claimed the Deograciases removed from the premises, and the cost of repairs to equipment and appliances.⁴ Attached to the complaint was a copy of a different lease agreement (later designated by the court as "Lease 2") between Kleyle and "The Railroad Café," dated February 9, 2008, which provided in relevant part: "Tenants shall pay the monthly rent of $1850 beginning February 1, 2008 and ending February __, 2010." The lease was purportedly "signed" by both Myrna and Philip.

¶6. The LLC answered Kleyle's complaint, asserting that (1) the written lease contained "a fraudulent and forged signature," (2) there was only an oral month-to-month lease, and (3) oral notice of cancellation was provided to Kleyle in September 2008 prior to the restaurant's ceasing operations in October 2008. The answer also stated that, on November 17, 2008, the Deograciases sold The Railroad Café restaurant to Rudy Packard, who continued to operate the restaurant and pay Kleyle rent of $200 per week through June 23, 2009, pursuant to an oral lease with Kleyle.

¶7. In 2013, the circuit court allowed the Deograciases to add Alabama Great Southern Railroad Company "AGS" as a necessary party. On June 11, 2013, the Deograciases filed an amended answer raising as a defense that Kleyle had violated the anti-assignment/sublease provision contained in the lease between AGS and Kleyle. AGS was subsequently dismissed from the case with prejudice on July 28, 2014.

¶8. The Deograciases filed a second motion to dismiss, based upon the alleged invalidity of their sublease with Kleyle because AGS had not agreed to the sublease. The circuit court granted the motion and dismissed the complaint; so Kleyle appealed, and the appeal was assigned to this Court. In Kleyle v. Deogracias , 195 So. 3d 234 (Miss. Ct. App. 2016) ("Kleyle I "), we reversed and remanded for further proceedings, holding that "[b]ecause AGS's lack of consent to the sublease never deprived the Deograciases of use or occupancy of the premises, it [was] not a basis for the Deograciases to avoid their concomitant obligation to pay rent." Kleyle , 195 So. 3d at 238 (¶12). However, we made no ruling in Kleyle I with regard to the validity of the lease agreement between Kleyle and the Deograciases or their status as tenants under the lease.

¶9. On remand, the case was reassigned from Judge Harrell to Judge Mozingo, who presided over the bench trial on March 20, 2019. At the close of Kleyle's case, counsel for the Deograciases moved for a dismissal, arguing "that the plaintiff has failed to carry its burden and prove his case, and based on that[,] ask[ed] for directed verdict." Finding Lease 2 controlling, the court granted the Deograciases’ motion because Lease 2 was "voidable, ... if not, void on its face," for the following reasons: (1) the lease had "no end date for the contract"; (2) Myrna had "forged her husband's name" on the lease agreement; and (3) "there's no attestation or notary page[; s]o we don't know who signed it." The court subsequently entered a judgment of dismissal on March 25, 2019, finding that (1) there was no valid, enforceable lease; and (2) the Deograciases were month-to-month, at-will tenants, which relieved them of any notice requirement to cancel contained in Lease 2. Kleyle was not awarded any past-due rent or damages. The court denied Kleyle's motion to reconsider.

¶10. Kleyle appeals the circuit court's judgment, alleging the court erred by: (1) granting the motion to dismiss on the basis that the subject lease agreement was not valid; (2) transferring the case from Judge Harrell to Judge Mozingo; and (3) refusing to enter a judgment for the costs of appeal assessed in Kleyle I and by allowing the Deograciases to participate in the trial of this case.⁵

STANDARD OF REVIEW

¶11. The Deograciases moved for a directed verdict at trial, which the circuit court granted. At a bench trial, "the proper motion to make at the close of plaintiff's case-in-chief is a motion for involuntary dismissal ... [;] directed verdicts are reserved only for jury trials." Ladner v. Stone Cty. , 938 So. 2d 270, 273 (¶9) (Miss. Ct. App. 2006) (citing M.R.C.P. 41(b), 50(a) ). However, "rather than reversing a trial court's judgment granting a directed verdict due to a procedural error, this Court has considered such appeals under the standard of review for a motion for involuntary dismissal." Vermillion v. Perkett , 281 So. 3d 925, 929 (¶11) (Miss. Ct. App. 2019) (citation omitted).

¶12. When making a determination on a motion for involuntary dismissal pursuant to Mississippi Rule of Civil Procedure 41(b), "the trial court should consider ‘the evidence fairly, as distinguished from in the light most favorable to the plaintiff,’ and the judge should dismiss the case if it would find for the defendant." Ladner , 938 So. 2d at 273 (¶10) (quoting Century 21 Deep S. Props. Ltd. v. Corson , 612 So. 2d 359, 369 (Miss. 1992) ). Upon review, "we will not overturn the decision of [the court] if its findings are supported by substantial evidence unless [the court] abused its discretion, was manifestly wrong, or applied an erroneous legal standard." SKL Invs. Inc. v. Hardin , 170 So. 3d 588, 591 (¶12) (Miss. Ct. App. 2014) (quoting Jones v. Jones , 101 So. 3d 731, 732 (¶4) (Miss. Ct. App. 2012) ).

DISCUSSION

¶13. We find the second assignment of error raised by Kleyle is waived on appeal. Nothing in the record indicates that Kleyle opposed the transfer of the case from Judge Harrell to Judge Mozingo; Kleyle even moved for a bench trial twice after the case was transferred to Judge Mozingo.

¶14. Regarding the third assignment of error, it was not until his motion for reconsideration that Kleyle complained that the Deograciases had not paid him the appeal costs assessed in Kleyle I —an issue that Kleyle had not raised previously. At the hearing on the motion to reconsider, Kleyle noted to the court that he had not received the costs. The court replied: "Well, you have a remedy and relief to that to collect that money, but it's not with me. I didn't decide the appeal, and you weren't appealing to me. That I can't do for you; although, I do contend that that's what the order says." Denying the motion to reconsider, the circuit court further noted in its order that "those costs appl[ied] to that appeal and not this trial" and that it was not the court's "place ... to enforce the payment of fees ordered by another court."

¶15. Mississippi Rule of Appellate Procedure 36(d) provides, "A party who is not aggrieved by the opinion or mandate but who seeks...