Sullivan v. Tullos

• Decision Date: 22 October 2009
• Docket Number: No. 2007-CT-00823-SCT.,2007-CT-00823-SCT.
• Citation: 19 So.3d 1271
• Parties: Billy Mack SULLIVAN, Teresa Sullivan Rankin, Billy H. Sullivan, Alice M. Lowther, James H. Lowther, Jr., Julian Barry Lowther, Paul Edward Lowther and Sherri Lynn Lacy v. Eugene C. TULLOS d/b/a Tullos & Tullos, John Raymond Tullos d/b/a Tullos & Tullos, Crymes G. Pittman, Individually and d/b/a Pittman, Germany, Roberts & Welsh, LLP and Billy Means.
• Court: Mississippi Supreme Court

19 So.3d 1271

Billy Mack SULLIVAN, Teresa Sullivan Rankin, Billy H. Sullivan, Alice M. Lowther, James H. Lowther, Jr., Julian Barry Lowther, Paul Edward Lowther and Sherri Lynn Lacy v. Eugene C. TULLOS d/b/a Tullos & Tullos, John Raymond Tullos d/b/a Tullos & Tullos, Crymes G. Pittman, Individually and d/b/a Pittman, Germany, Roberts & Welsh, LLP and Billy Means.

No. 2007-CT-00823-SCT.

Supreme Court of Mississippi.

October 22, 2009.

W. Terrell Stubbs, for Appellants.

Cynthia Ann Stewart, S. Wayne Easterling, Hattiesburg, Robert G. Germany, Jackson, Pamela A. Ferrington, Natchez, C. Victor Welsh, III, Jackson, David Garner, for Appellees.

EN BANC.

PIERCE, Justice, for the Court.

¶ 1. This appeal arises from the Hinds County Circuit Court's grant of summary judgment on behalf of Eugene C. Tullos (Tullos) and John R. Tullos, individually and doing business as Tullos and Tullos; Crymes G. Pittman; Billy Means; and John Does 1-10 (the defendants) in a lawsuit filed by Billy M. Sullivan, Teresa S. Rankin, Billy H. Sullivan, Alice M. Lowther, James H. Lowther, Jr., Julian B. Lowther, Paul E. Lowther, and Sherri L. Lacy (the heirs). The Mississippi Court of Appeals affirmed this judgment in a plurality opinion. The heirs appeal and assert that the trial court erred procedurally in converting the Rule 12(b)(6) motion to dismiss into a motion for summary judgment under Rule 56 of the Mississippi Rules of Civil Procedure, that the trial court erred in finding that the statute of limitations had run against the heirs, and that the trial court erred in granting summary judgment on behalf of the defendants. Finding reversible error, we reverse and remand.

FACTS

¶ 2. The plaintiffs allege the following:¹ Jeff Wooley, a widower with no children, died intestate on March 9, 1998. At the time of his death, Wooley owned approximately 423 acres of land in Smith County. The appellants are some of Wooley's heirs at law. Annie Boone, Wooley's sister, was appointed administratrix of the estate. Eugene Tullos acted as Boone's attorney in the administration of the estate. At one time, some of the heirs retained the services of separate attorneys, as there was originally a dispute about the inheritance. However, each attorney had been dismissed by the time of the sale of the land that gave rise to this appeal.

¶ 3. On August 21, 2000, a judgment approving the final accounting, estate closing, and discharging of the administratrix was entered.² The heirs allege that on the same day, Tullos told them that bids had been "invited and accepted on [the] 420 acres of land and that the Defendant, Crymes G. Pittman, had made the highest and best bid of $750.00 per acre."³ However, the record contains no evidence that bids were taken on the property. Without knowledge of the failure to receive or request other bids as claimed by Tullos, the heirs allege they executed a warranty deed, prepared by Tullos, to Pittman. Each of the heirs received a check drawn on Tullos's "regular account" for his or her portion of the sale. The memo line of each check indicated that it was for the sale of estate land to Crymes G. Pittman.

¶ 4. On April 10, 2002, Pittman deeded the 420 acres to Tullos. Later on, allegedly, one of the heirs sought out Tullos in order to purchase some of the land back from Pittman. The heirs assert that Tullos was evasive when questioned about the land. According to the plaintiffs, this raised some suspicion, and they subsequently discovered that Pittman did not own any of the land; but instead, Tullos owned all of it. The heirs then filed suit on April 8, 2005, against Tullos, Pittman, and various others, contending that the 2000 sale was fraudulent and that Pittman had acted as a "straw man" for Tullos to buy the property. Additionally, the complaint alleged that the Pittman defendants "knew or should have known that they were being used as `straw men' to purchase the 420 acres on behalf of the Tullos defendants at a price substantially lower than would have been received if bids and/or a private sale had been solicited on said property."

¶ 5. The various defendants subsequently filed a motion to dismiss under Mississippi Rule 12(b)(6) without answering the heirs' complaint. On November 3, 2006, the court held a hearing on the Rule 12(b)(6) motion filed by the defendants. During the hearing, the heirs introduced copies of the checks that Tullos had tendered to them as payment for the land sold to Pittman. The defendants introduced an appraisal from the time of the sale showing the value of the land to be $500 per acre. Thereafter, during the hearing on the motion to dismiss, the court transformed the Rule 12(b)(6) motion into a motion for summary judgment under Rule 56, without ordering a continuance to allow the heirs a reasonable time to present evidence necessary for the proper adjudication of their claims as is required under the rule.

¶ 6. On November 7, 2006, three days after the conclusion of the hearing, counsel for the heirs sent a letter to the trial court advising it that the heirs had a witness, identified only as a Mr. Jennings, who would testify as follows:

[H]e was there with his money to pay more than what the property was sold for, but the way Mr. Tullos got around that was, he simply said that the time for bids had expired when actually no bids had been taken by him. Others who wanted to bid on the property were also told by Mr. Tullos they could not.

Subsequently, on November 30, the trial court entered a memorandum opinion, finding that summary judgment should be granted to the defendants. An order granting summary judgment was then entered on February 9, 2007. The heirs appealed accordingly.

ANALYSIS AND DISCUSSION OF THE ISSUES

¶ 7. This Court applies a de novo standard of review to questions concerning the statute of limitations. Ellis v. Anderson Tully Co., 727 So.2d 716, 718 (Miss.1998). Furthermore, "[t]his Court reviews grants of summary judgment under the de novo standard." Bullard v. Guardian Life Ins. Co. of Am., 941 So.2d 812, 814 (Miss.2006). Pursuant to Rule 56 of the Mississippi Rules of Civil Procedure, summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Miss. R. Civ. P. 56(c). The court views the evidence in the light most favorable to the nonmoving party. Univ. of Miss. Med. Ctr. v. Easterling, 928 So.2d 815, 817 (Miss.2006). "The moving party bears the burden of demonstrating there is no genuine issue of material fact." Id. (citing Fletcher v. Lyles, 999 So.2d 1271, 1276 (Miss.2009)).

I. WHETHER THE STATUTE OF LIMITATIONS HAS RUN AND THE HEIRS' CLAIMS ARE BARRED.

¶ 8. The heirs contend that the trial court erred in finding that the statute of limitations had run against them. Having reviewed the record, we agree the trial court erred in granting summary judgment and reverse the trial court.

¶ 9. The heirs allege that Tullos engaged in an act of fraudulent concealment when he indicated in the memo line of the checks given to them that the land was being sold to Pittman. In Mississippi, a claim of fraud has a three-year statute of limitations. Miss.Code Ann. § 15-1-49 (Rev. 2003); Sanderson Farms Inc. v. Ballard, 917 So.2d 783 (Miss.2005). ¶ 10.

¶ 10. The heirs signed over the property in question to Pittman on August 21, 2000. Pittman deeded the property to Tullos on April 10, 2002. The heirs filed suit on April 8, 2005. Neither party disputes that a three-year statute of limitations applies to the heirs' claims. However, the heirs contend that the statute of limitations began to run on April 10, 2002, while the defendants claim that the statute began to run on August 21, 2000.

¶ 11. The heirs assert that the ultimate purchase of the property by Eugene Tullos through Pittman was concealed fraudulently in an attempt to obtain the property at a value less than what the property was actually worth. According to the assertions in the heirs' complaint, they had no reason to suspect any wrongdoing until they discovered the April 2002 deed to Tullos.

¶ 12. The trial court found that the heirs failed to exercise reasonable diligence in seeking knowledge of the defendants' alleged fraudulent conduct.

¶ 13. The plaintiffs allege that their fraud claim could not have accrued prior to April 10, 2002. It is a factual issue as to whether the heirs exercised reasonable diligence and first discovered the alleged fraud on April 10, 2002. Miss.Code Ann. § 15-1-67 (Rev.2003). Thus, absent proof of any other knowledge the plaintiffs may have had regarding the alleged fraud, the statute of limitations began to run on April 10, 2002, and the plaintiffs' April 8, 2005, complaint was timely filed within the three-year limitation period.

II. WHETHER THE TRIAL COURT ABIDED BY MISSISSIPPI RULES OF CIVIL PROCEDURE 12 AND 56.

¶ 14. The issue here is whether the trial court acted in accordance with Mississippi law in converting the defendants' motion to dismiss into a motion for summary judgment. More specifically, the question is whether the trial court was required to give the plaintiffs ten days' notice prior to the hearing for the converted summary-judgment motion. We find that the trial court did not follow the proper procedure in converting the Rule 12(b)(6) motion into a motion for summary judgment, because timely notice was not given.

¶ 15. Rule 12 of the Mississippi Rules of Civil Procedure sets forth the proper procedure for converting a motion to dismiss into a summary-judgment motion. Rule 12(b) provides in part:

If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary...