Lancaster v. Miller

Decision Date23 February 2021
Docket NumberNO. 2019-CA-01715-COA,2019-CA-01715-COA
Citation319 So.3d 1174
CourtMississippi Court of Appeals
Parties Jonathan LANCASTER and Cassie Bickham, Appellants v. Andrea MILLER and Jan Macko, Appellees

ATTORNEY FOR APPELLANTS: DANIEL MYERS WAIDE, Starkville

ATTORNEYS FOR APPELLEES: PATRICK H. ZACHARY, Hattiesburg, VICKI R. LEGGETT

BEFORE BARNES, C.J., McDONALD AND LAWRENCE, JJ.

McDONALD, J., FOR THE COURT:

¶1. Jan Macko and Andrea Miller sold Jonathan Lancaster and Cassie Bickham a house that was titled in the name of Macko's limited liability company, Magnolia Properties and Remodel LLC (Magnolia LLC). After moving into the house, Lancaster and Bickham discovered problems with the plumbing, electrical, and roofing conditions. Lancaster and Bickham filed suit for fraud and breach of contract against Magnolia LLC, ICOM LLC, and Miller and Macko individually in the Lamar County Circuit Court. Miller and Macko filed for summary judgment, claiming that they were protected from individual liability by virtue of their membership in the limited liability company. The circuit court granted them summary judgment, holding that Lancaster and Bickham failed to present proof of the elements needed to pierce the corporate veil and because there was no genuine issue of material fact regarding Miller's and Macko's individual liability.

¶2. Although the parties briefed several issues, after oral argument, there remains only one issue on appeal: whether Miller's and Macko's personal involvement made them each individually liable for the damages. Therefore, the matter amounts to only a misrepresentation case. Finding that the circuit court erred in holding that there was no genuine issue of material fact regarding Miller's and Macko's individual liability, we reverse the court's ruling and remand the case for further proceedings.

Statement of the Facts and Procedural History

¶3. Macko formed Magnolia LLC on April 26, 2016, and served as the manager and a member of the company. Her daughter, Miller, was a member of the LLC. The LLC had an operating agreement and its own bank account. On May 25, 2016, Macko and Miller purchased a house located at 206 Lamar Avenue, Hattiesburg, Mississippi, from James Michael Pickett and Kathy Diane Pickett. The title to the home was in the name of the LLC. When selling the house, James advised Miller and Macko that they should replace the roof. According to Pickett, although the roof had been replaced only ten years prior to Magnolia LLC's purchase, it had started leaking again. James also advised Miller and Macko that they should replace the plumbing in the kitchen and utility room because of water leaks.

¶4. Miller and Macko remodeled the Lamar Avenue house between May 2016 through October 2016, but they replaced only certain parts of the roof, some plumbing items, and some electrical sockets. To finance the renovations, Macko obtained two loans in the name of the LLC for $114,561 and $12,000. Macko and Miller contributed $15,924 of their personal money to purchase and renovate the house.

¶5. On October 12, 2016, Miller used her personal Facebook account to advertise the Lamar Avenue house for the sale price of $149,900. In the Facebook post, Miller said the house was a "totally renovated home for sale by owner." Miller also posted that she was "[n]ot sure of exact year built. It has all new wiring, roof, etc."

¶6. Lancaster and Bickham were looking to purchase a house when they came across Miller's Facebook post. They contacted Miller to view the house. Following the tour, in November 2016, Lancaster and Bickham made an offer to buy the house based upon the representations made personally by Miller and Macko. During the negotiations to purchase the property, Lancaster and Bickham claimed that Miller and Macko represented that the entire house had been renovated and that renovations to the house were covered by warranties. The alleged renovations included new plumbing, a new electrical system, and a new roof.

¶7. On November 4, 2016, Bickham and Lancaster signed a purchase contract,1 which only had Miller and Macko listed as the sellers. On that same date, Bickham and Lancaster also signed a "Property Condition Disclosure Statement" that Miller and Macko also signed as the sellers. "Magnolia Properties" was listed at the beginning of the disclosure. The disclosure statement stated that the house had been totally renovated. In exchange, Lancaster gave Macko and Miller a check for $500 as earnest money on the purchase that same day. The check was made payable to "Magnolia Properties."

¶8. Lancaster and Bickham hired ICOM LLC to prepare an independent (although limited) inspection2 of the house on December 1, 2016. ICOM indicated that for the items it inspected, the house was in good condition. On February 2, 2017, Lancaster and Bickham signed closing documents, which listed Magnolia LLC as the owner. That same day, the home was conveyed to Lancaster and Bickham from Magnolia LLC by a deed signed by "Macko/Manager/Member" and "Miller/Member."

¶9. Shortly after purchasing the house, Lancaster and Bickham discovered severe and hazardous issues with the home, including but not limited to electrical shortages, burst water pipes, and a leaking roof. They also claimed that they discovered that none of the renovations were covered by warranties as promised by Miller and Macko. According to Lancaster and Bickham, they contacted the contractors who had previously worked on the house. These contractors said that Macko and Miller fired them before they finished their work3 because they recommended that the house needed additional work, including replacing the entire roof and replacing the entire electrical system. Because the contractors were fired and the work was not completed, none of the renovations were covered by warranty. Lancaster and Bickham presented estimates in excess of $134,745 for repairs needed to house.

¶10. On January 30, 2018, Lancaster and Bickham filed suit against Magnolia LLC, ICOM LLC,4 and against Miller and Macko individually in the Lamar County Circuit Court. Specifically, Lancaster's and Bickham's claims against Miller and Macko individually included the failure to disclose known issues with the house, breach of contract, negligent misrepresentation, intentional and/or fraudulent misrepresentation, negligent infliction of emotional distress, and breach of the duty of good faith. Lancaster and Bickham argued that they were not aware that an LLC owned the house until they closed on the property. Lancaster and Bickham requested a jury trial and judgment against all the listed defendants for actual, compensatory, pecuniary, special, and punitive damages, specific performance, and rescission of the contract.

¶11. Magnolia LLC answered the complaint admitting that some representations of the condition of the house were made by the member, Miller, and manager and member, Macko. Magnolia LLC denied any claims that representations were made that the "whole house" had new plumbing, new wiring, and that a new roof had been installed. According to Magnolia LLC, only certain plumbing and electrical sockets were repaired and replaced as well as certain portions of the roof were repaired. There was a new portion of the roof, which was redone that had a five-year labor and fifteen-year manufacturer's warranty. Finally, it was admitted that the warranties for the house were promised to be transferred to Lancaster and Bickham following the closing of the house.

¶12. Instead of filing an answer to the complaint, Miller and Macko filed a motion to dismiss on April 3, 2018, arguing that Lancaster and Bickham had no claims against them individually because they were not the owners of the property. According to Miller and Macko, several documents, including the contract of sale, closing documents, and the closing affidavit, clearly stated that they were acting only as manager and members of Magnolia LLC. Further, the warranty deed showed Magnolia LLC as the seller of the property. Therefore, Miller and Macko requested that the circuit court dismiss Lancaster's and Bickham's claims against them or grant them summary judgment because no genuine material fact existed. On August 2, 2019, Miller and Macko filed a brief in support of summary judgment, stating that they did not have individual interests in the property and that Lancaster and Bickham had no proof that supported any claim against them individually outside of their actions on behalf of the LLC.

¶13. Lancaster and Bickham filed their response in opposition to the motion for summary judgment on August 13, 2019. They claimed that "at the very least a genuine issue of material fact exist[ed] regarding the fraudulent intent of [Macko and Miller] in failing to disclose numerous known issues with the home." They also claimed that there was no viable warranty for the roof or any other renovation in the house as Macko and Milled had represented. Lancaster and Bickham argued that they were wholly unaware of the LLC and the original purchase contract did not list the LLC as owner of the property. Significantly, they argue that they would not have bought the house, but for Miller's and Macko's misrepresentations and fraud.

¶14. Lancaster and Bickham filed a supplemental response in opposition to the motion for summary judgment on August 17, 2019. They argued that they were not seeking to hold Miller and Macko individually liable because they were members of an LLC, but because they each individually committed torts.

¶15. On October 14, 2019, the circuit court granted summary judgment for Miller and Macko pursuant to the protection provided for members of LLCs by Mississippi Code Annotated section 79-29-311 (Rev. 2011). The circuit court first took judicial notice that "while a limited liability company is a legal entity within the State of Mississippi, it is not a living, breathing person and therefore can only act through its members/manager." The circuit court...

To continue reading

Request your trial
3 cases
  • Devine v. Cardinal Health 110, LLC
    • United States
    • Mississippi Court of Appeals
    • 12 Abril 2022
    ...187 So. 3d 1042, 1046 (¶8) (Miss. 2016) (quoting Williamson ex rel. Williamson v. Keith , 786 So. 2d 390, 393 (Miss. 2001) ); Lancaster v. Miller , 319 So. 3d 1174, 1181 (¶30) (Miss. Ct. App. 2021) (finding that a motion for summary judgment should be denied when both parties swear to oppos......
  • Dew v. Harris
    • United States
    • Mississippi Court of Appeals
    • 1 Marzo 2022
    ... ... party swears to one version of the matter in issue and ... another says the opposite." Lancaster v ... Miller, 319 So.3d 1174, 1181 (¶30) (Miss. Ct. App ... 2021). "When doubt is present about whether any genuine ... issues ... ...
  • Dew v. Harris
    • United States
    • Mississippi Court of Appeals
    • 1 Marzo 2022
    ...present where one 343 So.3d 390 party swears to one version of the matter in issue and another says the opposite." Lancaster v. Miller , 319 So. 3d 1174, 1181 (¶30) (Miss. Ct. App. 2021). "When doubt is present about whether any genuine issues of material fact exist, the trial court should ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT