McBride v. Meridian Public Imp. Corp.
| Decision Date | 12 November 1998 |
| Docket Number | No. 97-CA-00814-SCT., No. 96-CA-01018-SCT |
| Parties | Bill McBRIDE v. MERIDIAN PUBLIC IMPROVEMENT CORPORATION and the City of Meridian, Mississippi. |
| Court | Mississippi Supreme Court |
John R. Reeves, Oklahoma City, OK, Attorney for Appellant.
Tommie Sullivan Cardin, Jackson, William C. Hammack, Meridian, Attorneys for Appellees.
Before PITTMAN, P.J., and JAMES L. ROBERTS, Jr. and SMITH, JJ.
¶ 1. In April, 1993, the mayor and city council of Meridian, Mississippi elected to finance the purchase of property and construction of a public improvement project identified as "The Downtown Plaza Project" through Mississippi's public "Lease-Purchase-Law", Miss.Code Ann. § 31-8-1 et seq. (1990) with the issuance of Certificates of Participation ("COPS"). In March 1994, the City elected to use the same financing mechanism for a public improvement project identified as "The Multi-Modal Project."
¶ 2. Pursuant to Miss.Code Ann. § 31-13-5 (1990), both transactions were submitted to the State's Bond Attorney who rendered his opinion on their compliance with the law. Subsequently, both transactions were presented to the Chancery Court of Lauderdale County for validation. On May 26, 1993, for the Downtown Plaza Project and on August 12, 1994, for the Multi-Modal Project, the Chancery Court entered a Decree of Validation affirming the Opinions of the State's Bond Attorney. After the validations, the COPS were issued.
¶ 3. On August 19, 1996, Bill McBride, a taxpayer of the City of Meridian, filed his complaint against the City and the Meridian Public Improvement Corporation ("MPIC") attacking the validity of the agreements entered into by the City with MPIC. McBride sought to preliminarily and permanently enjoin the City from paying any portion of any indebtedness incurred by or on behalf of MPIC, to enjoin the City from proceeding with the projects, to dissolve MPIC and enjoin it from conducting any business whatsoever, to have the COPS declared null and void, to have a judgment entered against the defendants for all sums of taxpayer money expended in violation of the law, and for attorney's fees and all costs of bringing the action.
¶ 4. On August 23, 1996, the City filed its Motion to Dismiss Complaint or in the alternative for Judgment on the Pleadings or for Summary Judgment and for Sanctions. The City maintained that McBride's Complaint failed to state a claim upon which relief could be granted, and that all provisions and requirements of Miss.Code Ann. § 31-8-1 et seq. (1990) and other applicable laws had been met by the City and MPIC with regard to the subject transactions. On August 29, 1996, MPIC joined in the City's Motion.
¶ 5. On August 26, 1996, the City filed its Answer and Defenses essentially arguing the same issues presented in its Motion. The thrust of the City's Answer was that because the challenged COPS were properly validated pursuant to the provisions of Miss.Code Ann. § 31-13-3 (1990), without objection, McBride's action was barred. On September 3, 1996, MPIC joined in the City's Answer.
¶ 6. On September 4, 1996, McBride filed a Motion for Recusal requesting that Chancellor Springer recuse herself due to her prior employment with law firms which had previously represented the City and which at that time represented the City. McBride's Motion for Recusal was denied on that same day.
¶ 7. On September 6, 1997, the Chancellor dismissed McBride's Complaint pursuant to Miss. R. Civ. P. 12(b)(1), 12(b)(6) and 12(c), finding that the validation proceedings constituted res judicata on every issue raised in McBride's Complaint.
¶ 8. McBride timely filed his Notice of Appeal from the Chancellor's Opinion and Judgment granting the City's Motion to Dismiss on September 20, 1996.
¶ 9. On May 22, 1997, a subsequent hearing was conducted by the Chancellor on the City's Motion for Fees and Costs Pursuant to the Litigation Accountability Act of 1988. By Opinion and Judgment dated June 25, 1997, the Chancellor entered judgment in favor of the City against McBride's attorney, John R. Reeves, in the amount of $9778.93.
¶ 10. McBride and Reeves timely filed a Notice of Appeal on June 26, 1997. This appeal bears Cause No. 97-CA-00814-SCT. It has been consolidated with McBride's first appeal, Cause No. 96-CA-01018-SCT.
¶ 11. McBride raises the following alleged errors for this Court's consideration and review:
¶ 12. In April 1993 and March 1994, the City of Meridian's governing authorities elected to finance the purchase of property and the construction of two public improvement projects identified as the "The Downtown Plaza Project" and the "The Multi-Modal Project" through the use of Mississippi's "Lease-Purchase Law", Miss.Code Ann. § 31-8-1 et seq. (1990). Under the Lease-Purchase Law, the City owns the real property on which the project is to be constructed. The City then leases the property to a corporation, in this instance a non-profit corporation, the MPIC. The non-profit corporation commits to cause the construction of the project, and leases the project to the City. This is accomplished through a Lease and Option to Purchase Agreement, the terms of which are consistent with Miss.Code Ann. § 31-8-9 (1990). At the same time, the nonprofit corporation appoints the City, through an Agency Agreement, as its agent in connection with the "acquisition, construction, delivery and installation" of the project. This appointment is irrevocable and the City then constructs or causes the construction of the project, following the public bidding requirements.
¶ 13. Financing for the projects is provided through the issuance of COPS, which represent proportional interests in the Lease and Option to Purchase. In this case, Deposit Guaranty National Bank purchased the COPS to provide the proceeds to pay for the construction and financing costs for the Downtown Plaza Project. Three banks in Meridian did the same for the Multi-Modal Project. The proceeds were paid to Trustees. In the case of the Downtown Plaza Project, the amount of the COPS was $625,000 and for the Multi-Modal Project, $1,300,000. Thereafter, MPIC assigned all rights to rental proceeds to the banks.
¶ 14. Both transactions were submitted to the State's Bond Attorney and to the Chancery Court for approval and validation pursuant to Miss.Code Ann. § 31-13-3 et seq. (1990).
¶ 15. In both proceedings, the State's Bond Attorney opined that the issuance of the COPS "were conducted pursuant to lawful resolutions, order and proceedings, legally adopted and authorized, and were in strict accordance with the Constitution and laws of the State of Mississippi, including Miss.Code Ann. § 31-8-1 et seq. of the Mississippi Code of 1972, amended."
¶ 16. On May 26, 1993 and August 12, 1994, the Chancery Court entered Decrees of Validation affirming the Opinions of the State's Bond Attorney and declaring that the "[COPS] be, and the same hereby are, approved, confirmed and validated." Subsequent to validation, the COPS were issued for both projects.
¶ 17. On September 4, 1996, McBride filed a Motion for Recusal. His Motion was heard and ruled upon that same day. McBride sought to have Chancellor Springer recuse herself because he had discovered that she had worked for Tom Goldman, an attorney for the City who was involved with one of the projects involved in this litigation. McBride also pointed out that Chancellor Springer had worked for Bourdeaux & Jones, who was representing the City in the present case.
¶ 18. As it turns out, Chancellor Springer had worked for Bourdeaux & Jones for a few months prior to receiving her Mississippi license to practice law. She had been associated with the firm of Tom Goldman from 1985 to 1990 but neither of the projects in question had come into being at the time of the Chancellor's employment there.
¶ 19. The Chancellor considered the Motion carefully, and ruled that it should be denied.
¶ 20. Canon 3(C)(1) of the Code of Judicial Conduct provides in pertinent part that:
¶ 21. This Court reviews a judge's refusal to recuse herself using the manifest error standard. Bredemeier v. Jackson, 689 So.2d 770, 774 (Miss.1997)(citing Davis v. Neshoba County Gen. Hosp., 611 So.2d 904, 905 (Miss.1992)). There is no contention that Chancellor Springer was disqualified by virtue of Miss.Code Ann. § 9-1-11 (1991), therefore we review McBride's challenge under Canon 3(C)(1).
¶ 22. As this Court explained in Green v. State, 631 So.2d 167, 177 (Miss.1994);
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