The Banking Grp. v. S. Bancorp Bank
| Decision Date | 06 December 2022 |
| Docket Number | 2021-CA-01077-COA |
| Parties | THE BANKING GROUP, INC. APPELLANT v. SOUTHERN BANCORP BANK, JOSEPH J. RICOTTA, AND CHRIS HESTER APPELLEES |
| Court | Mississippi Court of Appeals |
BEFORE BARNES, C.J., McDONALD AND LAWRENCE, JJ.
¶1. The Banking Group Inc. (TBG) appeals the Lamar County Circuit Court's grant of summary judgment in favor of Southern Bancorp Bank (SBB), Joseph J. Ricotta, and Chris Hester on the breach of contract and fraud complaint that TBG filed concerning fees it claimed SBB owed for TBG's recruitment services. TBG contends that there were genuine issues of material fact that precluded summary judgment and that the circuit court erroneously dismissed its fraud claim. After a review of the record and arguments of counsel, we reverse and remand.
¶2. TBG is a recruiting business that finds and refers qualified candidates for positions in the banking industry. Its sole shareholder is Charles West, who has over fifty years of experience in this field. SBB is located in Little Rock Arkansas, but has branches in Mississippi and other states. Ricotta was SBB's eastern regional CEO.
¶3. In 2018, TBG referred a candidate to SBB to fill a vacancy at an existing SBB branch in Picayune, Mississippi. According to West, TBG's standard fee for placements was 25% of the hiring salary plus a signing bonus, payable over nine months. However, in exchange for SBB's exclusive use of TBG for recruitment purposes, West said he lowered his fee to 20%.
¶4. TBG contends that the agreement for referrals was reflected in a letter that West emailed Ricotta on November 8, 2018. The letter began by stating, "This shall confirm our mutual agreement concerning our [TBG] search for potential employees for your institution [SBB]."[1] The letter explained that when SBB agrees on the terms of hire with a TBG referral, and the referral accepts those terms, TBG would then be entitled to a fee of twenty percent (20%) of the candidate's starting salary plus any signing bonuses. SBB would pay this fee in four installments at various times over nine months.[2] The letter continued "Should the applicant terminate during any of the time periods . . ., [SBB] will only be responsible for payment of fees accruing through the date of termination." However, if any installment was not paid, SBB would owe the full amount outstanding. In addition, if collection measures had to be undertaken and TBG prevailed, SBB agreed to pay all costs as well as attorney's fees.
¶5. TBG referred a candidate at that time in 2018 and SBB paid the fees outlined in the letter.[3] However, SBB contends that TBG unilaterally sent the letter, that no one at SBB signed it, and that SBB never intended to create a long-term contract with TBG.
¶6. In 2020, a dispute arose between TBG and SBB when TBG referred another candidate to SBB. Affidavits attached to pleadings in the record from West, Ricotta, and Hester give different versions of what occurred at that time.
¶7. According to West, he met Hester, a bank manager in Hattiesburg who was seeking to retain his position as "Market President," but with a new bank.[4] Hester even identified a specific commercial location where a branch bank could be located. With Hester's permission, West reached out to several banks on Hester's behalf, including Ricotta at SBB, which did not have a presence in the Hattiesburg area.
¶8. In an April 9, 2020 letter to Ricotta, West related Hester's twenty-three-year background in banking and the ties and faithful clientele Hester had built over the years. In that letter, West said that Hester was looking to move to a stable mid-size community bank. West also indicated that Hester would not be that expensive, and that with an assistant and a lender or two, Hester would be able to man an office. West suggested that this opportunity "never presents itself in a virgin state," and the potential for profit could "handle any real estate cost from it [SBB establishing a branch]." Based on the wording in this April letter, West contends that Ricotta "knew at all times that the consideration of Hester included hiring a team of employees" because SBB was interested in opening a branch, which could not be accomplished by only one individual. In addition, West said that Ricotta met not only with Hester, but with six other people from Hester's current bank whom Ricotta eventually hired. West said that Ricotta also brought Hester and the team to Arkansas for further discussions.
¶9. West said that Hester called him to talk about a request Ricotta made that Hester prepare a two-year detailed plan for a potential Hattiesburg operation. West said that he told Hester to prepare the document, although it was an onerous task, because it could be used with other potential employers. As evidence of this fact, TBG submitted an email that West had sent to another bank, to which West attached Hester's resume and evaluation, and promised to forward the plan Hester was preparing "for another company" when completed.
¶10. West said that after Ricotta's first interview with Hester, West spoke to Ricotta about the hires of Hester's team, which West called a "lift out," and which would result in a higher fee. West said he offered Ricotta a lower initial payment and an extension of the plan until the branch was profitable, but Ricotta said that such a discussion was "above his pay grade," and that Ricotta denied that he was hiring anyone but Hester.
¶11. West said that on July 9, 2020, Ricotta told him that he was going to make an offer to Hester. Ricotta asked, "how much will it take?" (i.e. what would be the terms). West told him that they could use the same agreement they used in 2018 and the fee would be 20%.[5]West said he asked Ricotta about the other potential hires, and Ricotta denied hiring the other employees. However, Ricotta wanted West to sign a document saying that TBG would not bill SBB for other hires. West declined to do so. West also denied any conversation about the names of the other individuals because, West contends, Ricotta always denied he was hiring anyone but Hester.
¶12. After the conversation, West prepared and emailed Ricotta another letter agreement. The subject line of the email reads: "Copy of our Service Agreement, for Chris Hester." The wording of the letter is exactly the same as the 2018 letter, the only difference is that West underlined the wording in two sections. He underlined the sentence that said SBB would not be responsible for future payments if the candidate should terminate at any time during the first nine months. West also underlined the wording concerning collection fees, specifically the section on attorney's fees which would be paid if it had to sue "and we prevail in the pursuit of same." Although the letter agreement is dated July 10, 2020, West emailed it to Ricotta on July 9, 2020, noting that the only change from the 2018 agreement was the underlining of certain words. The letter itself made no mention of any specific candidate's or candidates' name or names, and the email subject line referred only to Hester. West's email also requested a copy of Hester's offer. However, unlike SBB's practice in 2018, where the offer made to the candidate was supplied so TBG could prepare an invoice, in 2020, Ricotta did not provide TBG any information on the salary or bonus Hester was being paid.
¶13. Ricotta said that TBG solicited SBB's business and referred a candidate in 2018. However, TBG and SBB never formed an ongoing referral contract. In 2020, West sent him an unsolicited letter about Hester. West later called Ricotta and introduced the two. Ricotta met with Hester several times over the next few months and SBB ultimately decided to open an SBB loan production office in Hattiesburg, hiring only Hester, but also several others who had worked with Hester at the bank he was leaving.
¶14. According to Ricotta, prior to the formal hire, he and West discussed the fee to be paid to TBG in a "tense conversation." Ricotta said that he reiterated that SBB would only pay 20%, not the 25% that TBG usually charged. Ricotta also said that SBB would not pay TBG for the other employees it planned to hire because TBG did not refer them. Ricotta said that West could not even name these other individuals and admitted that he had had no discussions with any of them.[6] Ricotta said that West "eventually conceded that he did not know these individuals, had not referred them to the Bank, and would accept the 20% for Chris as closure." Ricotta points out that West's July 2020 letter provides that only referred candidates are compensable and that West did not ask for anyone's offer but Hester's.
¶15. According to Hester, he had been given West's name by a co-worker who had used West herself. Hester provided West with his resume and permitted TBG to communicate with banks on his behalf in his job search. Hester then met with Ricotta and told West that the talks went well. West told Hester that he was not involved in salary negotiations, just the initial referral. Thereafter, Hester said that he had no further communications with West and that West never asked him for any information or documentation thereafter.
¶16. On July 25, 2020, West wrote to SBB's headquarters about the situation. In that letter, West said that he had contacted Ricotta "about a candidate, Chris Hester, a market...
To continue reading
Request your trial