Singing River Mall Co. v. Mark Fields, Inc.

• Decision Date: 01 April 1992
• Docket Number: No. 07-CA-59493,07-CA-59493
• Citation: 599 So.2d 938
• Parties: SINGING RIVER MALL COMPANY, a Partnership v. MARK FIELDS, INC., a Mississippi Corporation.
• Court: Mississippi Supreme Court

Page 938

599 So.2d 938

SINGING RIVER MALL COMPANY, a Partnership v. MARK FIELDS, INC., a Mississippi Corporation.

No. 07-CA-59493.

Supreme Court of Mississippi.

April 1, 1992.

Rehearing Denied June 24, 1992.

Vincent J. Castigliola, Jr., Bryan Nelson Allen Schroeder & Backstrom, Pascagoula, for appellant.

Robert A. Pritchard, Pritchard & Chapman, Henry P. Pate, Pascagoula, John W. Chapman, Brandon, for appellee.

Before ROY NOBLE LEE, C.J., and PRATHER and BANKS, JJ.

PRATHER, Justice, for the court:

I.

INTRODUCTION

This case for past-due rent arose on the appeal of the plaintiff-landlord, Singing River Mall Co., from the October 13, 1988, judgment of the Circuit Court of Jackson County in favor of the defendant-tenant, Mark Fields, Inc. The mall timely appeals the judgment of $25,000 in actual damages, raising the following questions:

A. Did the mall improperly act as a public utility?

1. Did the circuit court have subject-matter jurisdiction?

2. Did the trial court commit reversible error when it instructed the jury that it could find actual damages based on the mall's acting as a public utility?

B. Did the mall fraudulently overcharge Fields, thus entitling Fields to a setoff counterclaim against its unpaid rent?

1. Did the store assert its setoff counterclaim outside the statutory limitation period?

2. Did the mall commit fraud?

C. Did a March 1986 agreement bind the mall?

D. Did the mall's acceptance of Field's reduced rent payments constitute accord and satisfaction?

This Court reverses, partially renders, and partially remands for further proceedings not inconsistent with this opinion.

II.

BACKGROUND

Lyle Klasky is a major shareholder and officer of Mark Fields, Inc., hereinafter referred to as "Fields," which owns the Brumfields store in Singing River Mall. Singing River Mall is owned by O'Connor Realty Investors Limited Partnership and is managed by O'Connor Management Inc. of Dallas. Sometime in 1979, Fields leased store space in Singing River Mall, which lease included the mall's agreement to provide Before Fields opened, it installed a lighting and air conditioning system based on the advice of its electrical engineers. What quickly ensued, described in more detail below, was a troubled relationship between landlord and tenant over the matter of electricity bills. During the time preceding this trial, the Fields store consistently complained that the mall overcharged for electricity. Several billing verifications and electricity-usage audits failed to bring the parties to agreement. As a consequence, Fields deducted a substantial amount from its rent based on an expert, but disputed, determination of usage.

electricity at the cost the tenant would have paid a utility company. The lease did not expressly indicate that the mall would redistribute electricity at a price differing from the price it paid the utility company. The tenant's cost included the leased space and Field's pro rata share for heating or cooling the common areas of the mall.

On January 15, 1987, Singing River Mall filed a complaint in the Circuit Court of Jackson County alleging that Fields had failed to pay a substantial amount of rent. Pursuant to the lease agreement, Singing River Mall also asked for attorney's fees. Fields, in its answer, denied any allegations of delinquency and alleged that it had paid all that it owed. Fields also alleged (1) a setoff due it because of allegedly excessive electricity charges by Singing River Mall, (2) accord and satisfaction, and (3) a defense that the mall improperly acted as a public utility by allegedly overcharging the tenant for electricity. Also, Fields claimed a credit and damages due to fraud. As for actual damages, Fields claimed that many customers had commented to store employees about the lawsuit.

On March 14, 1988, trial began. On April 20, the jury found for the defendant-tenant, Fields, and awarded $25,000 actual damages. The mall appeals.

III.

DISCUSSION

A. Did the mall improperly act as a public utility?

On appeal, Singing River Mall challenges the court's subject-matter jurisdiction on the utility issue, complaining that the trial court constituted an improper forum in which to adjudicate whether the mall improperly acted as a public utility. Further, the mall contends that the trial court erred in instructing the jury that it could award actual damages for the mall's having improperly operated as a public utility.

1. Did the circuit court have subject-matter jurisdiction under Mississippi statutes and did the store have standing arising out of some actual harm?

In order to provide electricity to tenants, the mall bought electricity from the Singing River Electric Power Association ("EPA"). While the mall paid a discounted industrial rate for the electricity, the lease called for the mall to charge the tenant the same rate it would have paid the utility company directly. At trial, the mall stipulated that nobody affiliated with the mall qualifies as a public utility in the State of Mississippi.

The mall engaged Value Engineering Inc. of Dallas ("VEI"), an electrical engineering firm, to compute its monthly electricity charges based on Electric Power Association (EPA) rates. VEI uses this manner of calculation and billing for eighty-seven client malls in thirty-five states. The practice is variously termed "tenant environmental charge," "utility redistribution," "energy redistribution," and "master metering." Mr. Hosey Chambers of VEI testified that this method of billing is accepted as industry standard. He explained that the master metering method lowers developer construction costs.

Considering applicable law, subject-matter jurisdiction defines a court's authority "to entertain and proceed with a case." Bullock v. Roadway Express, Inc., 548 So.2d 1306, 1308 (Miss.1989); see also Petters v. Petters, 560 So.2d 722, 723 (Miss.1990). For circuit courts, that authority arises from the constitutional provision stating that circuit courts have "original jurisdiction in all matters civil and criminal In public utility matters, the Public Service Commission has "exclusive original jurisdiction over the intrastate business and property of public utilities." Id. Sec. 77-3-5 (1972) ¹; see also Mississippi Power & Light Co. v. Conerly, 460 So.2d 107, 111 (Miss.1984). In Mississippi Power Co. v. Goudy, 459 So.2d 257, 267-69 (Miss.1984), Justice Hawkins, in his concurring opinion, addressed the issue of whether or not a party, having brought an action before the Public Service Commission, could raise a separate constitutional issue in a circuit court. Justice Hawkins acknowledged the commission's authority to decide judicial questions and to pass upon the rights of parties, which decisions could then be appealed to a circuit court. Id. at 268-269 (citing Illinois Central R.R. Co. v. Mississippi Public Serv. Comm'n, 220 Miss. 439, 445, 71 So.2d 176, 177 (1954)). Justice Hawkins also approvingly cited an Arkansas case in which a consumer, without ever seeking commission relief, brought an action in a circuit court. There, the Arkansas Supreme Court ruled that the circuit court did not have concurrent jurisdiction with the public service commission, which offered "a complete and adequate remedy." Id. at 269 (citing Oklahoma Gas & Elec. Co. v. Lankford, 278 Ark. 595, 601, 648 S.W.2d 65, 66 (1983)). Thus, the plain meaning of the Mississippi statute, supported by a persuasive Court interpretation, leads this Court to conclude that only the Mississippi Public Service Commission may initially decide a matter relating to the regulation of intrastate public utility activity.

in this state not vested by this Constitution in some other court...." Miss. Const. art. 6, Sec. 156. In reviewing a subject-matter jurisdiction challenge to the Constitution's grant of authority, the Supreme Court looks at the type of case by examining the nature of the controversy and the relief sought. Hood v. Dep't of Wildlife Conservation, 571 So.2d 263, 266 (Miss.1990); see also Penrod Drilling Co. v. Bounds, 433 So.2d 916, 924-25 (Miss.1983) (Robertson, J., concurring). The question becomes, then, whether Mississippi's laws authorize some body other than a circuit court to entertain and proceed with public utility matters.

Therefore, given the nature of the controversy presented and the relief sought by Fields in its counterclaim, this Court holds that this issue presents a matter outside the subject-matter jurisdiction of the circuit court to originally hear. Based on the plain meaning of the public utilities statute, the circuit court had no jurisdiction to decide that the Singing River Mall improperly acted as public utility. The commission's jurisdiction is exclusive, but subject to the appellate process.

Further, in its brief, Fields made no allegation of harm arising from the mall's alleged behavior as a public utility. While the store pointed to the uncontradicted fact that the mall made a profit by buying power at an industrial rate and reselling it at a rate the individual stores would have paid the EPA, Fields stated no grounds for damages. The store's contention that the claim had to be brought as a compulsory counterclaim has no merit; Fields demonstrated no compelling nexus between the alleged harm and the mall's allegedly acting as a utility. The store's argument that the claim had to be heard in a circuit court in order for the store to obtain money damages also fails to persuade: the store is not a private utilities commissioner, deserving of compensation for ferreting out violations. ²

2] If any harm of overcharging occurred, that counterclaim could have stood on its own, without the necessity of proving a utilities law violation.

The next question, then, is whether the trial court committed reversible error when it submitted the issues of utilities violation and resulting damages to the jury.

2. Did the trial court commit reversible error when it instructed the jury...