Manderson v. Ceco Corp., EC83-133-NB-D.

• Decision Date: 27 June 1984
• Docket Number: No. EC83-133-NB-D.,EC83-133-NB-D.
• Citation: 587 F. Supp. 445
• Parties: C.L. MANDERSON, II, Plaintiff, v. CECO CORPORATION, d/b/a Mitchell Engineering Company, Defendant.
• Court: U.S. District Court — Northern District of Mississippi

587 F. Supp. 445

C.L. MANDERSON, II, Plaintiff, v. CECO CORPORATION, d/b/a Mitchell Engineering Company, Defendant.

No. EC83-133-NB-D.

United States District Court, N.D. Mississippi, E.D.

June 27, 1984.

C.E. Morgan, III, Kosciusko, Miss., for plaintiff.

Dudley H. Carter, Columbus, Miss., for defendant.

MEMORANDUM OPINION

BIGGERS, District Judge.

This cause came on for hearing on plaintiff's motion for partial summary judgment as to Count One of the complaint and the defendant's cross motion for summary judgment as to all counts of the complaint. Having read and considered the motions submitted by the parties, together with the pleadings, exhibits, depositions and affidavits, the court is now in a position to dispose of the issues raised by such motions.

This court has jurisdiction under 28 U.S.C. § 1332 (1966) since there is complete diversity of citizenship and the amount in controversy exceeds $10,000.00.

This is an action by C.L. Manderson, II, a Mississippi resident, against Ceco Corporation, a Delaware corporation doing business in Mississippi as Mitchell Engineering Company.

This action arose from the following undisputed facts. The defendant, Mitchell Engineering Company (Mitchell), sold a metal frame building on credit to S.L. Bailey Company, Inc. (Bailey, Inc.). Mr. S.L. Bailey, Jr., owner of Bailey, Inc., guaranteed the purchase price in his individual capacity. Although Bailey, Inc. was unable to pay for the structure in accordance with the credit terms, Mitchell filed no lien at that time on the building. Bailey, Inc. erected the building on corporate realty and eventually conveyed this realty and building to the plaintiff, Manderson. Both Bailey, Inc. and Mr. S.L. Bailey, Jr. declared bankruptcy without satisfying the debt to Mitchell. Thereafter, upon the advice of counsel, Mitchell filed a construction lien against the building now owned by Manderson and used as business rental property. Subsequent to the filing of the lien, it is alleged that two representatives of Mitchell advised Manderson's lessees that the building was not paid for and warned them against making further rental payments. It is further alleged that the lessees' rental payments, which previously were prompt, began to be untimely. Manderson denied any liability on the lien and never paid any amount to Mitchell; however, Mitchell subsequently canceled the lien showing full satisfaction. Manderson then filed suit seeking the following relief: (1) statutory damages for a violation of Miss.Code Ann. § 85-7-201 (1972) by the filing of a false construction lien; (2) damages for willful and malicious interference with plaintiff's business relationship with his lessee; (3) punitive damages for defendant's failure to rectify his allegedly false filing; and (4) damages equal to plaintiff's attorney fees in this action.

COUNT ONE

Miss.Code Ann. § 85-7-201 (1972) provides as follows:

Any person who shall falsely and knowingly file the notice mentioned in section 85-7-197 without just cause shall forfeit to every party injured thereby the full amount for which claim was filed, to be recovered in any action by any party so injured at any time within one year from such filing; and any person whose rights may be adversely affected may apply, upon two days' notice, to the chancery court or to the chancellor in vacation, or to the county court, if within its jurisdiction, to expunge; whereupon proceedings with reference thereto shall be forthwith had, and should it be found that the claim was improperly filed rectification shall at once be made thereof.

Although this section of the Mississippi code became law in 1928, the statutory provisions have never been interpreted by the Mississippi Supreme Court. Cf. Hicks v. Greenville Lumber Co., 387 So.2d 94, 96-97 (Miss.1980) (discussion of statute of limitations contained in statute). This being a case of first impression, a Federal court sitting in diversity must wager an "Erie guess" as to the Mississippi Supreme Court's interpretation of the terms "falsely and knowingly" and "without just cause" as used in the statute. See Bernhardt v. Polygraphic Company of America, 350 U.S. 198, 209, 76 S.Ct. 273, 279, 100 L.Ed.2d 199, 208 (1955) (Frankfurter, J., concurring).

Initially, it should be noted that this statute is penal in nature, inasmuch as it "makes a wrong-doer liable to the person wronged for a fixed sum without reference to the damage inflicted by the commission of the wrong...." State ex rel. Rogers v. Newton, 191 Miss. 611, 623-24, 3 So.2d 816, 818 (1941). One seeking to recover under a penal statute must bring his case clearly within the statute's terms. See W.T. Rawleigh Co. v. Hester, 190 Miss. 329, 339, 200 So. 250, 253 (1941); see also 70 C.J.S. Penalties § 15(e)(...