Miller v. Properties

Decision Date10 June 2010
Docket NumberNo. 2009-CA-00435-SCT.,2009-CA-00435-SCT.
Citation36 So.3d 1234
PartiesJoe MILLER and Alice Millerv.PARKER McCURLEY PROPERTIES, L.L.C. and Parker McCurley, Individually.
CourtMississippi Supreme Court

COPYRIGHT MATERIAL OMITTED

Lawrence E. Abernathy, III, Leslie D. Roussell, Laurel, attorneys for appellants.

Wayman Dal Williamson, attorney for appellees.

EN BANC.

CARLSON, Presiding Justice, for the Court:

¶ 1. Joe Miller and Alice Miller (the Millers) filed suit against Parker McCurley Properties, L.L.C.,1 and Parker McCurley (McCurley), individually, in the Chancery Court for the Second Judicial District of Jones County, alleging inter alia, breach of contract and statutory violations by McCurley. This action involves the contract for purchase of a home by the Millers from McCurley, where the home subsequently was rendered uninhabitable by Hurricane Katrina. The chancellor found all the elements of breach of contract and ordered “that all sums paid by the Millers to McCurley be refunded to them less the reasonable fair rental value of the property while they occupied it.” As a result of this ruling, McCurley was able to retain the insurance proceeds as well as the subject property. Aggrieved by the entry of the chancery court's judgment, the Millers appeal to this Court, and McCurley cross-appeals. In the end, we affirm on both the appeal and the cross-appeal.

FACTS AND PROCEEDINGS IN THE TRIAL COURT

¶ 2. On November 1, 2002, McCurley, as seller, and the Millers, as buyers, entered into an agreement pertaining to the sale and purchase of property located at 1119 North 8th Avenue in Laurel. The Agreement provided for a purchase price of $39,000, with a down payment of $3,000.2 The balance of $36,000 plus nineteen percent interest was to be paid in 300 monthly payments of $575 over a twenty-five-year period.3 The payments were to be due on the first day of each month, and the Agreement called for a $50 late fee if monthly payments were not received by 5:00 p.m. on the sixth day of each month.

¶ 3. The Millers also were required to pay all property taxes and to purchase and maintain property insurance, at their expense, naming McCurley and Union Planters Bank, along with themselves, as loss payees on the insurance policy. McCurley had executed a deed of trust on the property to Union Planters Bank for an amount not to exceed $55,287.50. However, the Millers were unable to secure insurance, since according to the agreement, the property would not be conveyed, and a warranty deed delivered to the Millers, until all payments had been made to McCurley. As a result, the parties agreed that McCurley would secure the insurance for the Millers, and the Millers would pay McCurley the premiums. McCurley secured insurance on the property in the amount of $35,000, but the Millers were not named as loss payees on the insurance policy.

¶ 4. On August 29, 2005, the widespread destruction wrought by Hurricane Katrina rendered the property uninhabitable. The Millers lived other places temporarily before asking McCurley if he had another house available. McCurley provided the Millers with another property on Meadow Lane in Laurel. The Millers made their customary monthly payment of $575 to McCurley in September 2005, and they subsequently made a partial payment for their occupancy of the Meadow Lane property for a portion of October 2005. In October 2005, the Millers moved out of the Meadow Lane property, because, according to the Millers, McCurley had told them their payments would increase on this property after September 2005.

¶ 5. At the time of the loss on August 29, 2005, the insurance on the subject property was with Shelter General Insurance Company (Shelter). Shelter estimated that replacement costs, less nonrecoverable depreciation, amounted to $42,720.21; thus, after applying the $1,000 deductible, Shelter paid the policy limit of $35,000 to McCurley.4 McCurley did not use any of the insurance proceeds to repair the property.

¶ 6. On June 15, 2006, the Millers filed their Complaint against McCurley in the Chancery Court for the Second Judicial District of Jones County, seeking an accounting of all monetary transactions involving the property, including insurance proceeds; an adjudication of the rights of each of the parties to the property; equitable distribution of the insurance proceeds; attorneys' fees; and any other proper equitable remedies. Before the chancery court, the parties stipulated to the amounts the Millers owed McCurley for insurance from November 1, 2002, through August 2005, and they stipulated to the amounts owed for taxes in the years 2002 through 2004. The parties did not stipulate to the amount owed for taxes for 2005; however, the chancellor determined the Millers' pro rata share of the taxes through August 2005. The parties also stipulated, and the chancellor found, that the Millers had paid McCurley a total of $25,415.77 in payments through August 2005, which included four late fees. The loan amortization schedule showed that a principal balance of $35,760.67 was owed as of September 1, 2005. The matter was tried on March 18, 2008, Chancellor Franklin C. McKenzie, Jr., presiding. On November 18, 2008, Judge McKenzie entered his Judgment, including findings of fact and conclusions of law, ordering that all sums paid by the Millers to McCurley be refunded, less the fair rental value of the property while the Millers had occupied it, and granting the Millers post-judgment interest at nineteen percent per annum.

¶ 7. The Millers filed their Motion to Reconsider on December 1, 2008, and McCurley filed his response on December 16, 2008. A hearing on the Motion to Reconsider as well as a motion to supplement the record on the issue of fair market rental value was held before Judge McKenzie on March 3, 2009. On March 11, 2009, Judge McKenzie entered his Order Denying Motion to Reconsider and Judgment. The judge determined that the fair rental value of the property during the Millers' period of occupancy was $375 per month, and the chancellor thus awarded the Millers judgment against McCurley in the amount of $12,665.77, with post-judgment interest at the rate of nineteen percent per annum. From this judgment, the Millers timely filed their Notice of Appeal, and McCurley filed his Notice of Cross-Appeal.

DISCUSSION

¶ 8. The Millers present five issues for this Court's consideration: (1) whether the chancellor erred in failing to award the insurance proceeds to the Millers based on the fact that the Millers had paid all of the insurance premiums and therefore, should be entitled to the benefits of the insurance proceeds; (2) whether the chancellor erred in failing to award penalties provided by Mississippi Code Section 75-17-25 for the collection of late fees which violated the provisions of Mississippi Code Section 75-17-27; (3) whether the chancellor erred in failing to rule that McCurley had violated Mississippi Code Section 75-17-1(4); (4) whether the chancellor erred in granting relief which was not requested by McCurley; and (5) whether the chancellor erred in failing to award the Millers the insurance benefits, finance charges, and attorney's fees. McCurley cross-appealed, asking this Court to rule that the proceeds from the policy are held by the seller in trust for the benefit of the buyer, and in the first instance, are to be applied to the remaining balance owed to the seller under the contract and any excess tendered to the buyer. Thus, if the insurance proceeds paid off the balance of the loan, then the buyer is entitled to conveyance of the real property via a warranty deed under the contract. McCurley relies on caselaw from other jurisdictions for this argument.

¶ 9. This Court employs a limited standard of review in reviewing the decisions of a chancery court judge. Parker v. Livingston, 817 So.2d 554, 557-58 (Miss.2002) (citing Reddell v. Reddell, 696 So.2d 287, 288 (Miss.1997)). A chancellor's findings will not be disturbed on appellate review “unless the chancellor was manifestly wrong, clearly erroneous, or applied the wrong legal standard.” Powell v. Campbell, 912 So.2d 978, 981 (Miss.2005) (citing McNeil v. Hester, 753 So.2d 1057, 1063 (Miss.2000); Bank of Miss. v. Hollingsworth, 609 So.2d 422, 424 (Miss.1992)). This Court reviews a chancellor's decision under an abuse-of-discretion standard. Id. (citations omitted). Questions of law, however, are reviewed de novo. Parker, 817 So.2d at 558 (citing Consol. Pipe & Supply Co. v. Colter, 735 So.2d 958, 961 (Miss.1999)).

¶ 10. The issues will be restated for the sake of today's discussion.

I. WHETHER THE CHANCELLOR ERRED IN FAILING TO AWARD THE INSURANCE PROCEEDS TO THE MILLERS.

¶ 11. The Millers argue that, because they paid the insurance premiums prior to the destruction of the property, they should receive the insurance proceeds. In determining relief for the Millers, the judge considered “the equities between the parties and the situation in which they find themselves following the destruction caused by Hurricane Katrina.” After a thorough review of caselaw from other jurisdictions concerning the rights of parties in a land-sale contract to insurance proceeds, the judge found the caselaw unpersuasive, especially in light of the fact that Mississippi had ample caselaw on which he could base his decision. As such, the judge ultimately analyzed this case from a breach-of-contract standpoint.

¶ 12. First, the chancellor recognized the forfeiture clause in the agreement between the parties, which stated, in pertinent part:

In case of failure of the [Millers] to make any of the payments ... or failure to perform any of the covenants for a period of thirty (30) days after the due date thereof, the agreement shall be forfeited and terminated ... and the [Millers] shall forfeit all payments made on this contract, and such payments shall be retained by [McCurley] as due or accumulated rent on the property.

Properly construing Mississippi law, the judge...

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