Sec'y of State v. Gunn, 2010–CA–00719–SCT.

• Decision Date: 13 October 2011
• Docket Number: No. 2010–CA–00719–SCT.,2010–CA–00719–SCT.
• Citation: 75 So.3d 1015
• Parties: SECRETARY OF STATE of the State of Mississippi and City of Ocean Springs, Mississippi v. Clyde H. GUNN, III, D. Neil Harris, Sr. and Vecie Michelle Harris.
• Court: Mississippi Supreme Court

75 So.3d 1015

SECRETARY OF STATE of the State of Mississippi and City of Ocean Springs, Mississippi

v.Clyde H. GUNN, III, D. Neil Harris, Sr. and Vecie Michelle Harris.

No. 2010–CA–00719–SCT.

Supreme Court of Mississippi.

Oct. 13, 2011.

Rickey T. Moore Adam Stone Kaytie Michelle Pickett John B. Edwards, II, Attorneys for Appellants.

John G. Corlew Virginia T. Munford, Attorneys for Appellees.

EN BANC.

RANDOLPH, Justice, for the Court:

¶ 1. The Secretary of State of Mississippi (“State”) and the City of Ocean Springs (“Ocean Springs”) bring this appeal. The Hinds County Chancery Court enjoined the construction of a sidewalk along the beach, adjacent to the seawall, on property claimed by Gunn and Harris in Ocean Springs. This Court must determine whether the chancellor erred in granting the permanent injunction. The State and Ocean Springs assert that the chancellor erred in issuing the permanent injunction because: her finding of irreparable injury was not supported by substantial evidence; an adequate remedy at law was available; and she failed to rule on the merits of the underlying dispute regarding ownership of the land where the proposed sidewalk was to be located.

¶ 2. We find no error in the chancellor's earlier determination that irreparable injury would result if she did not grant an injunction and that no adequate remedy at law was available. We conclude that the chancellor's Order and Opinion is in fact a preliminary injunction, incorrectly styled as a permanent injunction. It is clear from its language that the chancellor sought to protect the interests of all parties until ownership of the property could be determined.¹ We therefore remand this case to the Hinds County Chancery Court, vacate the permanent injunction, and leave the earlier-issued preliminary injunction in place.²

FACTS AND PROCEDURAL HISTORY

¶ 3. Clyde H. Gunn and D. Neil Harris, Sr., each own property in an area of Ocean Springs known as East Beach. A roadway, a seawall, and the beach run adjacent to the Gulf of Mexico (“Gulf”), separating home sites from the beach and Gulf.³ The beach runs from the edge of the seawall to the shoreline, or water's edge. Tidelands—lands that are subject to the ebb and flow of the tides—span the area from the beach south into the Gulf.⁴ The State holds such tidelands in public trust.⁵ The mean high-water line marks the boundary between public-trust tidelands and private property. ⁶

¶ 4. In 2009, Ocean Springs received a federal grant to fund a beach-side public sidewalk project. On November 9, 2009, Ocean Springs applied for a permit from the Mississippi Department of Marine Resources (“Marine Resources”) to build the sidewalk.

¶ 5. On November 16, 2009, the State and Ocean Springs entered into a lease of public-trust tidelands, a narrow strip of beach known as East Beach, which the lease describes as located “seaward of the toe of the seawall.” The lease permits Ocean Springs to use the beach “for a free public walkway, access area, bicycle racks and other amenities which serve a higher public purpose of promoting the public access to and public use of tidelands and submerged lands.”

¶ 6. On January 11, 2010, Gunn and Harris filed a complaint against the State and Ocean Springs, challenging the validity of the lease. Gunn and Harris alleged that the State had acted contrary to its own statutory law, public policy, and the administrative rules and procedures, because the State had failed to obtain Gunn's and Harris's permission as property owners, or, at a minimum, as holders of littoral or riparian rights.⁷ Gunn and Harris requested that the chancellor enter a judgment declaring the lease void and enjoining the Secretary and Ocean Springs from any further action or proceeding under the lease.

¶ 7. On February 9, 2010, Marine Resources granted the permit for construction of the sidewalk, and construction was scheduled to begin in March 2010.

¶ 8. On March 24, 2010, the chancellor held a hearing on Gunn's and Harris's request for a preliminary injunction. The chancellor granted the preliminary injunction. The chancellor found that (1) the substantial likelihood of prevailing on the merits weighed equally in each party's favor; (2) Gunn and Harris would likely suffer irreparable injury because the project was scheduled to be completed “within a matter of weeks[,]” before litigation of the merits; (3) the Secretary of State or Ocean Springs would likely not suffer irreparable injury; and (4) maintaining the area in its natural state would serve the public interest.

¶ 9. On April 8, 2010, the chancellor signed a “Judgment for Preliminary Injunction and Setting Security” granting the preliminary injunction “ pending a hearing of this matter on the merits,” requiring Gunn and Harris “to forthwith post a security bond in the amount of $250,000[,]” and scheduling a hearing on the merits for a permanent injunction and declaratory relief for April 13 and 14, 2010. (Emphasis added.) Gunn and Harris posted the $250,000 bond the next day. The bond states that “should the Court find that its preliminary injunction was wrongfully granted, then this obligation be void; otherwise to remain in full force and effect.” (Emphasis added.) We find no evidence in the record that the Hinds County Chancery Court has held that the preliminary injunction was wrongfully granted, or that Gunn's and Harris's injunction bond has been cancelled.

¶ 10. On April 13 and 14, 2010, the chancellor held a hearing. On numerous occasions during the hearing, the chancellor expressed that the issue of property rights was not properly before the court and that a case to determine ownership was pending in Jackson County.

¶ 11. On April 23, 2010, the chancellor issued an Order and Opinion denying Gunn and Harris declaratory relief, but granting a permanent injunction. The chancellor again acknowledged the dispute over ownership of the leased land, but “refrain[ed] from drawing property lines or declaring fee simple ownership and other property ownership rights....” The chancellor balanced the required factors for granting an injunction, finding that: (1) “[u]ntil a judgment of ownership rights is resolved then ... this Court[ ] ... must balance the Plaintiffs' rights to free and quiet enjoyment of the real property now in their possession and the City of Ocean Springs['] contention that the Subject Lease is valid. At present, [the substantial likelihood of prevailing on the merits] factor weighs equally to both parties[;]” (2) Gunn's and Harris's property interests “will be irreparably injured if the injunction is not granted” and “if the subject lease were allowed to continue[,] ... the proposed pathway would be in place and construction complete before any other litigation could be resolved[;]” (3) she was “not persuaded that the Defendants will suffer harm [if the injunction is issued;]” and (4) “it is in the public's interest to refrain from altering the natural habitat of the Subject Lease area until such time as the ownership of the Subject Lease area and relevant surrounding areas is established.” The chancellor concluded that, on balance, equity dictated that an injunction should be granted enjoining construction of the pathway “[u]ntil there has been a final determination of property ownership.”

ISSUES

¶ 12. This Court will consider:

(1) Whether the trial court erred in granting a permanent injunction, because substantial evidence does not support a finding of irreparable injury;

(2) Whether the trial court committed legal error by granting a permanent injunction, because an adequate remedy at law is available; and

(3) Whether the trial court erroneously awarded a permanent injunction without ruling on the merits of the underlying action.⁸

LAW AND ANALYSIS

¶ 13. This Court “will not disturb the factual findings of a chancellor when supported by substantial evidence unless ... the chancellor abused his discretion, was manifestly wrong, clearly erroneous or applied an erroneous legal standard.” A–1 Pallet Co. v. City of Jackson, 40 So.3d 563, 567 (Miss.2010) (citations omitted).

¶ 14. In determining the propriety of issuing an injunction, a chancellor must balance four factors: “(1) there exists a substantial likelihood that plaintiff will prevail on the merits; (2) the injunction is necessary to prevent irreparable harm; (3) the threatened harm to the applicant outweighs the harm the injunction might do to the respondents; and (4) entry of the injunction is consistent with the public interest.” Am. Legion Post # 134 v. Miss. Gaming Comm'n, 798 So.2d 445, 454 (Miss.2001).

(1) Whether the trial court erred in granting a permanent injunction, because substantial evidence does not support a finding of irreparable injury.

¶ 15. We cannot conclude that the chancellor erred in finding that Gunn and Harris would suffer irreparable injury if she did not issue an injunction. The chancellor found that habitat destruction and damage to real property would cause irreparable harm to Gunn and Harris, if ownership is resolved in their favor. However, the chancellor's finding is couched in language that shows an intent to grant a temporary, not a permanent, injunction: “if the subject lease were allowed to continue[,] then the reality of it is that the proposed pathway would be in place and construction complete before any other litigation could be resolved.” The chancellor expressed concern that the resolution of Gunn's and Harris's property rights could be rendered meaningless if she failed to issue an injunction to prevent construction of the pathway until their property rights were determined. Allowing construction of the pathway to proceed before ownership rights are determined could result in irreversible harm to Gunn and Harris, should it be determined that they own the land upon which the pathway is built. We find no evidence that the chancellor “abused [her] discretion, was manifestly wrong, clearly erroneous[,] or applied...