Mound Bayou School Dist. v. CLEVELAND SCHOOL DISTRICT, 1999-CA-01612-SCT.

• Decision Date: 23 May 2002
• Docket Number: No. 1999-CA-01612-SCT.,1999-CA-01612-SCT.
• Citation: 817 So.2d 578
• Parties: MOUND BAYOU SCHOOL DISTRICT v. CLEVELAND SCHOOL DISTRICT.
• Court: Mississippi Supreme Court

817 So.2d 578

MOUND BAYOU SCHOOL DISTRICT v. CLEVELAND SCHOOL DISTRICT.

No. 1999-CA-01612-SCT.

Supreme Court of Mississippi.

May 23, 2002.

Sanford E. Knott, Jackson, attorney for appellant.

William Shattuck Adams, Cleveland, attorney for appellee.

EN BANC.

ON MOTIONS FOR REHEARING

WALLER, J., for the Court.

¶ 1. The motions for rehearing are denied, and this opinion is issued in lieu of our prior per curiam affirmance.

¶ 2. This case involves a dispute over money between two separate school districts in Bolivar County, Mississippi. The Cleveland School District filed suit against the Mound Bayou School District for what Cleveland contended was a failure to repay two separate loans. The Chancery Court of the Second Judicial District of Bolivar County granted summary judgment in favor of Cleveland on the issue of Mound Bayou's obligation to repay the loans, but declined to allow Cleveland to recoup the monies by set off.

¶ 3. Finding no error, we affirm the chancellor's grant of summary judgment in favor of Cleveland.

FACTS

¶ 4. Prior to January 1, 1992, the Bolivar County, Mississippi, Board of Education consisted of six school districts, including the Cleveland School District and the Mound Bayou School District. In 1988, Robert G. Mason, the Bolivar County Superintendent, loaned $300,000 to Mound Bayou. A few days later, at a regular meeting of the Board, the Superintendent explained his actions. The loan was treated as a claim on the monthly claims docket, and the Superintendent's actions were ratified in the minutes when the Board granted the Superintendent the discretion to make such loans. As of June 30, 1991, Mound Bayou had repaid $25,000 of this sum, leaving a balance of $275,000. The Bolivar County Superintendent made another loan to Mound Bayou in the amount of $87,597.81 on June 30, 1991.

¶ 5. On January 1, 1992, the Bolivar County Board of Education was dissolved by the State Legislature. An Interlocal Agreement was entered into by the six school districts, including Mound Bayou and Cleveland. The Agreement provided, inter alia, for the division of assets between the member school districts. Cleveland contends that, under the Agreement, it was entitled to 54.11% of all of the former Bolivar County assets and that the loan from Bolivar County to Mound Bayou should be considered one of the Bolivar County assets to be divided among the six school districts.

¶ 6. Mound Bayou adopted a resolution on June 30, 1993, in which it acknowledged that the State Auditor's Office had confirmed that Mound Bayou owed $275,000 to the other five school districts.

¶ 7. After Mound Bayou failed to pay off the loan, Cleveland filed a complaint for declaratory relief and declaratory judgment against Mound Bayou, alleging that the two debts were owed to it by Mound Bayou, and that Mound Bayou failed and refused to acknowledge the existence or the accuracy of its indebtedness. Cleveland then filed a motion for summary judgment and supported the motion with (1) relevant portions of audit reports prepared by the State Auditor's Office and other independent auditors; (2) copies of communications between Cleveland and Mound Bayou, between auditors and Mound Bayou's Superintendent confirming both the debt and the correct amount of the debt; and (3) Mason's affidavit, which contained a detailed explanation of the circumstances surrounding the loans and the Board of Education's actions, all of which were supported by pertinent bank statements, a canceled check from Bolivar County to Mound Bayou in the amount of $300,000, dated August 30, 1988, bookkeeping entries, minutes and various docket entries.

¶ 8. The only evidence submitted by Mound Bayou in opposition to Cleveland's motion for summary judgment was the affidavit of Arthur Holmes, a former Mound Bayou Board of Education Superintendent, who merely denied asking for the 1988 loan or agreeing to repay it by any particular date. Holmes did not deny that Mount Bayou received the funds. The affidavit did not address the 1991 loan as it was made after he had been removed from office. We find that Mound Bayou's response to the motion for summary judgment did not create a contested issue of fact.

¶ 9. The chancellor granted summary judgment in favor of Cleveland, finding as follows:

(1) The September, 1988, minutes reflect that Bolivar County authorized the Superintendent to transfer funds to its districts upon request.

(2) The transfer of the $300,000 to Mound Bayou was not specifically referenced in the minutes.

(3) The $300,000 loan was placed on the Bolivar County claims docket during the meeting.

(4) Mound Bayou deposited the check.

(5) Mound Bayou audit reports show that Mound Bayou repaid $25,000 of the loan.

(6) On February 28, 1994, Cleveland's Superintendent wrote a letter to Mound Bayou's Superintendent showing the amounts Mound Bayou owed each of the six districts as a result of the $300,000 loan.

(7) Mound Bayou's Superintendent responded on March 29, 1994, acknowledging the $275,000 still owing to the six districts and stating that Mound Bayou had passed a resolution of debt on June 30, 1993.

(8) $130,681.15 was transferred from Bolivar County to Mound Bayou in 1991, and Mound Bayou still owed $87,597.81 from this loan.

(9) Even though counties cannot be bound by contracts without evidence by way of entries on the minutes of meetings of the board of supervisors, Nichols v. Patterson, 678 So.2d 673, 676 (Miss.1996), strict legal technicality is not required, and if the meaning of the minutes can be fairly and reasonably interpreted, the minutes will be deemed sufficient. Id. at 679.

(10) A reasonable interpretation of the September, 1988, Board meeting is that the Board authorized the transfer of funds to Mound Bayou.

(11) Counties' protections from being bound by contracts made without the Board's authorization pertains to contracts between the counties and third parties, not between one county entity and another county entity. Here, both county entities serve the public interest.

(12) Mound Bayou received a benefit when the transfer of funds was made.

(13) Mound Bayou's partial payment on the two loans was an acknowledgment that the debts exist and that Mound Bayou has an obligation to repay. Where a party has acknowledged a debt, it is prohibited from arguing that the lender has waived its right to repayment. Therefore, waiver is not an available defense for Mound Bayou.

(14) The doctrine of equitable estoppel requires proof of a(1) belief and reliance on some representation; (2) change of position as a result of the representation; and (3) detriment or prejudice caused by the change of position. Covington County v. Page, 456 So.2d 739, 741 (Miss.1984). Here, Bolivar County relied on Mound Bayou's representation that it would repay the two loans. When Mound Bayou failed to repay the loans, it changed its position and harmed Cleveland because such change resulted in fewer funds available to Cleveland. Therefore, equitable estoppel bars Mound Bayou from denying the validity of the loans and its obligation to repay the loans.

(15) Cleveland's evidence of the debt was not rebutted by Mound Bayou. The evidence shows that the transfers of funds were made and were not repaid by Mound Bayou.

¶ 10. Aggrieved by the chancery court's grant of summary judgment to Cleveland, Mound Bayou appeals, raising issues of erroneous findings of fact, equitable estoppel and waiver. Cleveland cross appeals, raising an issue of set-off.

DISCUSSION

¶ 11. We employ a de novo standard of review of a trial court's grant or denial of summary judgment and examine all the evidentiary matters before it-admissions in pleadings, answers to interrogatories, depositions, affidavits, etc. The evidence must be viewed in the light most favorable to the party against whom the motion has been made. If, in this view, there is no genuine issue of material fact and, the moving party is entitled to judgment as a matter of law, summary judgment should be entered in his favor. The burden of demonstrating that no genuine issue of fact exists is on the moving party. That is, the non-movant should be given the benefit of the doubt. Williamson v. Keith, 786 So.2d 390, 393 (Miss.2001); Heigle v. Heigle, 771 So.2d 341, 345 (Miss. 2000) (quoting McCullough v. Cook, 679 So.2d 627, 630 (Miss.1996)).

I. WHETHER THE TRIAL COURT ERRED IN FINDING THAT BOLIVAR COUNTY LOANED FUNDS TO MOUND BAYOU.

II. WHETHER THE TRIAL COURT ERRED WHEN IT FOUND THAT MOUND BAYOU ASKED FOR A LOAN AND AGREED TO REPAY THE LOAN.

¶ 12. Mound Bayou contends that Cleveland cannot prove that the loans were made because school boards may speak only through their minutes, and public bodies may not be bound by contracts without evidence of the contract terms in the minutes. Nichols v. Patterson, 678 So.2d 673, 676 (Miss.1996). We find that a fair and reasonable interpretation of the Bolivar County minutes supports the chancellor's finding that the loan was ratified by the Bolivar County Board. The loan was placed on the Bolivar County claims docket during the meeting and the Bolivar County Superintendent was given the authority to make such loans.

¶ 13. The evidence submitted by Mound Bayou fails to show even remotely that the loans were not made. Mound Bayou was not required to come forward in opposition to the motion with conclusive evidence that the debt did not exist, but it was required to come forward and make a sufficient showing to establish the essential elements on which it would have the burden of proving at trial. See, e.g., Galloway v. Travelers Ins. Co., 515 So.2d 678, 683 (Miss.1987); Campbell v. Cranford, 737 So.2d 1032, 1038 (Miss.Ct.App.1999). See also M.R.C.P. 56(e).¹ Having reviewed all evidence that was provided in support of and against the motion for summary judgment, we agree with the chancellor that the two loans were indeed made from Bolivar County to Mound Bayou and that Mound Bayou acknowledged the...