Polk Productions Inc. v. Dowe

• Citation: 331 So.3d 1124
• Decision Date: 23 November 2021
• Docket Number: 2020-CA-00267-COA
• Parties: POLK PRODUCTIONS INC., Appellant v. Hazel DOWE, Ansh Property LLC, Steven Price Nixon and Milner & Nixon PLLC, Appellees
• Court: Court of Appeals of Mississippi

331 So.3d 1124

POLK PRODUCTIONS INC., Appellant

v.Hazel DOWE, Ansh Property LLC, Steven Price Nixon and Milner & Nixon PLLC, Appellees

NO. 2020-CA-00267-COA

Court of Appeals of Mississippi.

November 23, 2021

ATTORNEYS FOR APPELLANT: THOMAS McCARLEY BRYSON, Jackson, BEN J. PIAZZA JR.

ATTORNEYS FOR APPELLEES: TIMOTHY LAVELLE RUTLAND, Hazlehurst, PAUL E. ROGERS, Jackson, LAWRENCE MATTHEW QUINLIVAN

BEFORE BARNES, C.J., GREENLEE AND LAWRENCE, JJ.

GREENLEE, J., FOR THE COURT:

¶1. This appeal arises from the Hinds County Chancery Court's denial of Polk Productions Inc.'s request for specific performance and monetary damages against Hazel Dowe, Ansh Property LLC, Steven Price Nixon (Steven), and Milner & Nixon PLLC (collectively Appellees) regarding Hazel Dowe's sale of 3.17 acres of property in Hinds County, Mississippi. Polk Productions Inc. (Polk) acquired a "first right of refusal" to purchase the subject property in May 2012. In November 2016, Dowe and Ansh Property LLC (Ansh) entered into a contract to purchase the same property and then purchased the property. In August 2017, Polk filed suit for specific performance and monetary damages. After a trial, the chancellor denied both requests.

¶2. On appeal, Polk argues that the chancellor erred by not granting specific performance and by not accepting evidence of his anticipated business profits and losses. Finding no error, we affirm.

FACTS AND PROCEDURAL HISTORY

¶3. In May 2012, Hazel Dowe conveyed thirteen acres to Polk via a warranty deed, which contained a restricted covenant that limited Polk's ability to sell gasoline on the property. At the same time as the conveyance, Dowe executed a right of first refusal in favor of Polk regarding real property located at 1400 South Highway 18, Raymond, Mississippi. The right of first refusal provides, in relevant part, that Dowe grants Polk

[t]he Right of First Refusal to purchase [Dowe's] entire interest in fee simple in and to the below described lands at the price and terms of any bona fide written offer made for it. Provided, however, that [Dowe] shall deliver to [Polk] at [Polk's] address as set forth herein such offer in writing and delivered by U.S. mail, certified, return receipt requested and upon the receipt thereof [Polk] shall have ten (10) days in which to exercise the Right of First Refusal granted herein, by notifying [Dowe] in writing, addressed to [Dowe] at [Dowe's] address as set forth herein. Said notification shall be by United States mail, certified, return receipt requested. The closing of said purchase shall occur within a reasonable period after such notification.

¶4. About five years later, on January 31, 2017, Dowe conveyed the property to Ansh via a warranty deed for the purchase price of $400,000. The deed was prepared by Milner & Nixon PLLC (Nixon). Before purchasing the property, Dowe was required to provide an abstract of title and/or a certificate of title and to cure any title defects discovered. Instead of receiving a title abstract or a title certificate, Ansh was given a copy of a commitment for title insurance, which failed to identify a right of first refusal or any other defect against the property.

¶5. On August 16, 2017, Polk filed a complaint in the Chancery Court for the Second Judicial District of Hinds County, Mississippi, against Dowe and Ansh. In its complaint, Polk sought specific performance of the right of first refusal and damages for irreparable harm caused by the breach of contract. On October 5, 2017, Ansh filed its answer and defenses, third-party claim, and cross-claim, asserting that it lacked actual or constructive knowledge of the right of first refusal. Ansh contended that it was a good faith and bona fide purchaser.¹

¶6. In November 2017, Dowe filed her answer to the complaint, third-party complaint, cross-claims, her defenses, and cross-claim. Nixon filed its answers, affirmative defenses, and its counterclaim on December 7, 2017. On December 20, 2017, Ansh filed its motion to dismiss for failure to state a claim upon which relief may be granted. Specifically, Ansh asserted that because Polk's complaint sought specific performance and damages based on Dowe's breach of contract, there was no basis for relief against Ansh because he was not a party to the right of first refusal. Nixon also filed its motion to dismiss on January 22, 2018, claiming that specific performance was not feasible in this action because Dowe no longer owned the property. Further, Nixon asserted that due to the improvements made on the property, the property described in the right of first refusal no longer existed.

¶7. On February 6, 2018, after the recusal of all the Hinds County chancellors, the Mississippi Supreme Court appointed the Honorable James Walker as Special Chancery Judge. On October 5, 2018, Chancellor Walker held a hearing on both motions to dismiss. The chancellor relied on only the pleadings and arguments of counsel. On October 23, 2018, the chancellor entered his order dismissing Polk's original complaint requesting specific performance and ordered Polk to amend its complaint within fourteen days. In particular, the chancellor found that specific performance could not be ordered because the performance Polk requested was not the performance contemplated by the right of first refusal and, therefore, was impossible.

¶8. On October 19, 2018, Polk filed its amended complaint asserting several claims against Dowe and Ansh. In particular, Polk brought a breach of contract and unjust enrichment claim against Dowe and an interference of contract and unjust enrichment claim against Ansh. The amended complaint also alleged that Ansh was bound by the right of first refusal and that Polk should be allowed to purchase the property. Further, Polk claimed that the warranty deed between Dowe and Ansh was void or voidable, that there was an encumbrance on the property due to the right of first refusal, and that the contract of sale was also void. Polk further requested that the chancellor award damages for Polk's loss of business opportunity and lost profits. In November 2018, Dowe and Ansh filed their answers to Polk's amended complaint, and in February 2019, Steven and Nixon jointly filed a motion to dismiss Polk's amended complaint.

¶9. On October 1, 2019, the chancellor issued an agreed scheduling order and subsequently issued a corrected agreed scheduling order on October 31, 2019. Later, the discovery deadline was extended to November 11, 2019, to allow time to supplement discovery and re-open Polk's deposition. On November 11, 2019, at 4:17 p.m., Polk supplemented discovery and named Jimmy Odom and Michael Byrd as lay witnesses. Polk also supplemented discovery by providing documents to the Appellees after the discovery deadline.

¶10. Nixon filed a motion to exclude improperly designated experts, a motion for summary judgment, and a motion in limine. Polk filed its response to the motions on January 10, 2020. The matter was set for trial on January 13, 2020. On the morning of the trial, the chancellor heard Nixon's motions. Ultimately, the chancellor held the motion for summary judgment in abeyance until the conclusion of trial, denied the motion to exclude improperly designated experts, and declined to hear the motion in limine. As the trial commenced, the chancellor heard testimony from Dowe, Odom, Byrd, and Polk's owner (Buell).

¶11. After hearing all testimony and arguments of counsel, the chancellor gave his ruling from the bench but later memorialized his ruling on February 7, 2020, in his findings of fact and conclusions of law. The chancellor held that four of the seven claims brought by Polk were invalid causes of action because those counts were steps toward granting specific performance.² The chancellor held that the other three counts were valid causes of action. The chancellor found that the right of first refusal was valid and binding, and because Dowe failed to uphold her end of the agreement, she breached the contract. The chancellor had already ruled on the remedy of specific performance and eliminated it, so the chancellor only considered damages. The chancellor held that Polk failed to present any credible evidence of his lost business opportunities, lost profits, or consequential or punitive damages.

¶12. Polk now appeals, arguing that the chancellor erred by not granting specific performance, by not accepting evidence of Polk's anticipated business profits, and by not enforcing the contract against a subsequent purchase pursuant to Mississippi Code Annotated section 89-5-7 (Rev. 2021).

STANDARD OF REVIEW

¶13. An appellate court employs a "limited standard of review when reviewing the decisions of a chancellor." Rush v. R&D Props. LLC , 270 So. 3d 1098, 1103 (¶15) (Miss. Ct. App. 2018) (citing Little v. Richey , 230 So. 3d 336, 338 (¶9) (Miss. Ct. App. 2017) ). "We will only reverse a chancellor's determinations if ‘they were manifestly wrong, clearly erroneous, or the chancellor applied an incorrect legal standard.’ " Id . "The standard of review employed by this Court for review of a chancellor's decision is [an] abuse of discretion." Alexis v. Black , 283 So. 3d 1105, 1107 (¶10) (Miss. 2019) (internal quotation marks omitted) (quoting McNeil v. Hester , 753 So. 2d 1057, 1063 (¶21) (Miss. 2000) ). Questions of law are reviewed de novo. Biglane v. Under The Hill Corp. , 949 So. 2d 9, 14 (¶17) (Miss. 2007).

DISCUSSION

I. Specific Performance

¶14. "A ‘right of first refusal’ is a conditional option empowering its holder with a preferential right to purchase property on the same terms offered by or to a bona fide purchaser." Richmond v. EBI Inc. , 53 So. 3d 859, 864 (¶17) (Miss. Ct. App. 2011). Polk's complaint alleged that Dowe had breached their right-of-first refusal agreement, and Polk claimed that specific performance was the most appropriate remedy due to the uniqueness of the real estate. Accordingly, Polk requested that the chancery court set aside the warranty deed,...