Merchants & Planters Bank of Raymond v. Williamson, 91-CA-00615-SCT

• Decision Date: 13 March 1997
• Docket Number: No. 91-CA-00615-SCT,91-CA-00615-SCT
• Citation: 691 So.2d 398
• Parties: MERCHANTS & PLANTERS BANK OF RAYMOND and H.R. "Dick" Kilby, Jr. v. Carolyn Josephine WILLIAMSON.
• Court: Mississippi Supreme Court

Page 398

691 So.2d 398

MERCHANTS & PLANTERS BANK OF RAYMOND and H.R. "Dick" Kilby, Jr. v. Carolyn Josephine WILLIAMSON.

No. 91-CA-00615-SCT.

Supreme Court of Mississippi.

March 13, 1997.

Donna Brown Jacobs, Butler Snow O'Mara Stevens & Cannada, Jackson; W. Wayne Drinkwater, Jr., Lake Tindall & Thackston, Jackson, for Appellant.

Karla J. Pierce, Dale Hubbard, Hubbard & Pierce, P.L.L.C., Jackson, for Appellee.

George R. Fair, Michael O. Gwin, Watkins & Eager, Jackson, for Amicus Curiae.

En Banc.

ON MOTION FOR REHEARING

PRATHER, Presiding Justice, for the Court:

We grant the motion for rehearing. The original opinion in this case is withdrawn and these opinions are substituted therefor.

I. INTRODUCTION

Carolyn Williamson filed suit against Merchants & Planters Bank of Raymond, Mississippi and its president, H.R. Kilby, in the Chancery Court of the Second Judicial District of Hinds County alleging, inter alia, that the Bank and Kilby breached a fiduciary duty owed to Williamson by refusing to accept her tender of the entire amount of her indebtedness to the Bank arising from a promissory note and by assigning the note and deed of trust to Robert and Shirley Hamilton. The chancellor found that the defendants breached fiduciary duties owed to Williamson and that the Bank had tortiously interfered with the contractual relationship between Williamson and the Hamiltons.

This Court concludes that the mortgagor/mortgagee relationship between Williamson and the Bank is not, as a matter of law, a fiduciary one and that the record does not offer substantial evidence to support a finding that a fiduciary relationship arose under the facts of the present case. This Court also concludes that the chancellor was in error as a matter of law in finding that the Bank had intentionally interfered with the contractual relationship between Williamson and the Hamiltons. Accordingly, we reverse.

II. STATEMENT OF THE CASE

On September 19, 1989, Carolyn Williamson filed a complaint in the Chancery Court of the Second Judicial District of Hinds County, alleging numerous instances of wrongdoing on the part of Merchants & Planters Bank of Raymond (hereinafter "the Bank"), as well as on the part of Robert and Shirley Hamilton. Williamson alleged that the defendants: (1) deprived her of five parcels of land located in Hinds County; (2) the Bank breached a fiduciary duty which, she asserts, was owed to her by the Bank; (3) breached the implied covenant of good faith and fair dealing; (4) negligently and intentionally inflicted emotional distress upon her; and (5) intentionally interfered with her contractual rights. On June 11, 1990, Williamson voluntarily dismissed with prejudice all claims against Robert and Shirley Hamilton, but later added H.R. "Dick" Kilby, Jr., the Bank's president, as a party to the suit.

The chancellor ruled that the Bank had breached fiduciary duties owed to Williamson on three separate occasions and that the same conduct constituted a breach of the implied covenant of good faith and fair dealing. The chancellor further found that the defendants had tortiously interfered with Williamson's contractual rights in a lease/purchase agreement previously made with the Hamiltons. The court awarded Williamson $64,477.71 in damages, prejudgment interest at the rate of 10% per annum from March 11, 1986, partial attorneys' fees in the amount of $11,000 and all court costs.

III. STATEMENT OF THE FACTS

On December 20, 1983, Tom and Carolyn Williamson, husband and wife at the time, entered into a lease/purchase agreement with Robert and Shirley Hamilton, which agreement provided for the lease of five parcels of land in Hinds County to the Hamiltons. Said agreement provided for a lease term of thirty (30) years or for such a period of time until the entire purchase price of $80,000 was paid. The purchase price was to be paid as follows: "$3,000 at the time of executing this lease agreement; payment of $200 a month beginning Jan[uary] 10, 1984 for two years. At the end of two years the monthly [payment] will be negotiated within [sic] terms suitable to both parties."

The agreement also provided that, if the purchasers did not make the payments as imposed by the terms of the agreement, "the parties will negotiate to reimburse the purchaser with monies or exchange of property in proportion to the amount the purchasers have paid toward this indebtedness." Pursuant to the agreement, the Hamiltons paid the Williamsons $3,000 in lease payments, leaving a balance due of $77,000 plus ten percent (10%) interest. On September 20, 1984, the Williamsons jointly executed a promissory note for $12,522.29 in favor of the Bank. This note renewed a prior debt the Williamsons owed to the Bank and was secured by a deed of trust covering the five parcels of land that were the subject of the lease/purchase agreement. Subsequent to the execution of the note, the Williamsons moved to Texas, and, shortly thereafter, they separated. Tom remained in Texas, and Carolyn returned to Jackson, Mississippi.

Upon Carolyn's return to Mississippi, she notified Kilby, the Bank president, of her marital situation. She requested that the Bank keep her informed regarding the status of their loan to the Bank since, at that time, her estranged husband was making the payments. Kilby refused to send separate notices to Tom and Carolyn regarding the status of their loan, but assured her that she would be notified if payments were not made. Carolyn's relationship with the Hamiltons became increasingly hostile. Tom Williamson telephoned Robert Hamilton and informed him, for the first time, about the existence of the deed of trust in favor of the Bank. Robert Hamilton understood from his telephone conversation that Tom Williamson did not intend to make any more payments on the note. Concerned that foreclosure of the deed of trust might jeopardize his interest in the property via the lease/purchase agreement, Hamilton contacted and met with Kilby on December 20, 1985, about purchasing the Williamsons' note and deed of trust. At this time, the Williamsons were only one month in arrears, and the Bank had made no effort to notify Carolyn Williamson.

On February 28, 1986, the Bank entered into an agreement with the Hamiltons to assign the Williamsons' note and deed of trust for $8,617.26, the outstanding balance on the Williamson note to the Bank. In so doing, the Bank loaned the Hamiltons the pay off amount, and the Hamiltons executed a promissory note in favor of the Bank for the principal amount of $8,617.26 and granted the Bank a security interest in their homestead. In essence, the Bank substituted the Hamiltons' indebtedness for the Williamsons', and Carolyn Williamson was initially not made aware of this transaction.

On March 3, 1986, Carolyn Williamson telephoned Kilby and inquired about the status of their Bank note. At this time, Kilby informed Williamson about its assignment agreement with the Hamiltons. Kilby testified that, for the first time, Carolyn informed him of her differences with the Hamiltons. On March 4, 1986, the Bank mailed a certified letter to Tom and Carolyn Williamson, with copies to Carolyn Williamson's attorney and to the Hamiltons, advising them of the assignment agreement. This letter, which was sent only to the Texas address, stated that the assignment would be postponed until March 11, 1986, and that, unless "the debt is relinquished prior to that date, the Bank will proceed with its plan to assign its note and deed of trust to Mr. and Mrs. Hamilton."

Having learned of the postponement of the assignment, Carolyn Williamson sought help from her aunt, Wilmer Champion. On March 10, 1986, Champion obtained from Trustmark National Bank a cashier's check, payable to Merchant and Planters Bank, in the amount of $8,617.26. Champion then telephoned Kilby and informed him of her desire to help Carolyn. Kilby testified that at no time did Carolyn or Champion inform him that they wanted to "pay off" the note, but stated rather that Champion told him that she wanted to "buy" the note. According to Kilby, he advised Champion there was no guarantee that if she paid the note, her money would be protected. Kilby also testified that he informed Champion that the Bank could not sell the note to her since the Bank had a prior assignment agreement with the Hamiltons.

According to the women's version of the story, Kilby told them not to bring the check to the Bank because he had already agreed to assign the note to the Hamiltons. Altogether, Carolyn and Champion conversed with Kilby no less than four times on that particular date, and at all times, their offer was rejected. During all of these telephone conversations, Kilby never advised Carolyn or Champion of the legal difference between "buying" and "paying off" a note, nor did he offer to accept the check as a pay off of the indebtedness. At 3:45 p.m. on March 11, 1986, when the Bank recorded the assignment, the Hamiltons became the new owners of the indebtedness. However, neither Tom nor Carolyn Williamson made any payments on this debt to the Hamiltons and, the Hamiltons foreclosed on the deed of trust. On May 28, 1986, the Hamiltons purchased four of the five parcels for $13,553, and Williamson was allowed to keep the fifth parcel of property.

IV. STANDARD OF REVIEW

The standard of review which governs this appeal is well known; that is, this Court will not disturb a chancellor's findings "unless the chancellor was manifestly wrong, clearly erroneous, or applied an erroneous legal standard." Tinnin v. First United Bank of Mississippi, 570 So.2d 1193, 1194 (Miss.1990). See Bell v. Parker, 563 So.2d 594, 596-97 (Miss.1990). If a chancellor's findings are supported by substantial, credible evidence, this Court will not reverse. Branton v. Branton, 559 So.2d 1038, 1042 (Miss.1990). With regard to issues of fact as to which the chancellor did not make a specific finding, this Court is required...