Tricon Metals & Services, Inc. v. Topp

• Decision Date: 04 January 1989
• Docket Number: No. 57367,57367
• Citation: 537 So.2d 1331
• Court: Mississippi Supreme Court
• Parties: TRICON METALS & SERVICES, INC. v. Jim TOPP.

Page 1331

537 So.2d 1331

TRICON METALS & SERVICES, INC. v. Jim TOPP.

No. 57367.

Supreme Court of Mississippi.

Jan. 4, 1989.

Joel W. Howell, III, Jackson, for appellant.

Joe Clay Hamilton, Meridian, for appellee.

En Banc.

ROBERTSON, Justice, for the Court:

I.

In this its second appearance before the Court, this breach of employment contract case presents a contrast between the conventional and the new. First, we provide a relatively straight-forward review of credibility choices made by the trier of fact. Second, we tackle points of some novelty regarding enforcement of Rule 11, Miss.R.Civ.P.

On the appeal of the findings of fact which relate to the merits of this case, we find the Chancery Court's actions supported by substantial evidence and well within its authority and, accordingly, we affirm. On the Rule 11 matter, we find the sanctions imposed consistent with the language of the rule and its deterrent purpose and affirm as well.

II.

This case began when Tricon Metals & Services, Inc. sued its former marketing manager, Jim Topp, alleging that Topp had committed various breaches of his contract of employment. Topp counterclaimed for commissions said to have been earned but not paid. In Tricon Metals & Services, Inc. v. Topp, 516 So.2d 236 (Miss.1987) ("Tricon I "), we described the course of proceedings below and something of the history of this matter, points which need not be repeated here. In the end, we found the form of the decision below insufficient to enable us to perform our function of appellate review, and we remanded for findings of fact and conclusions of law under Rule 52(a), Miss.R.Civ.P.

In response to our opinion in Tricon I, the Chancery Court has now entered and filed the necessary findings of fact and conclusions of law. Generally speaking, these findings reflect a credibility choice made in the context of hotly disputed and widely differing versions of the facts, with little documentary evidence to aid in resolution. We recognize that the Court below could not escape the conclusion that one or more witnesses' memory was quite faulty. We say this in the context of our summary of our scope of review from Tricon I.

Ordinarily this Court will not reverse findings of fact made by a trial court sitting without a jury where those facts are supported by substantial credible evidence in the record. [citations omitted] This is as true of ultimate facts as of evidentiary facts. [citations omitted]

Put another way, this Court ought and generally will affirm a trial court sitting without a jury on a question of fact unless, based upon substantial evidence, the court be manifestly wrong. [citations omitted]

Tricon I, 516 So.2d at 238.

This case breaks down into three separate claims by the parties which we will discuss shortly, but prior thereto one fundamental point of contention should be mentioned. There is no question but that in July of 1982, Jim Topp entered into a contractual relation for employment with Tricon Metals and Services, Inc. What is very much in contention is whether that contractual relationship was memorialized by a written contract or whether it was an oral contract for employment supported by certain written notes and memoranda. Tricon sought to establish that it and Topp had executed a written employment contract on a form which Tricon says it uses for all of its employees. Significantly, the form contract contains a non-competition clause. Topp denied that he signed any such contract and there was offered at trial various items of circumstantial evidence corroborating Topp's view. The Court below found as a fact that Topp never signed any written contract with Tricon. Based upon the principles found in the cases cited above regarding our scope of review, this finding of fact is beyond our authority to disturb.

Turning to the specific claims, we first find Tricon claiming reimbursement for some $7,463.67 from a promissory note made by Topp, guaranteed by Tricon, upon which Topp defaulted and Tricon was forced to pay. The evidence reflected that on February 15, 1983, the First Commercial Bank of Birmingham, Alabama, extended a loan to Topp. In exchange Topp gave the bank his promissory note, and Tricon guaranteed it. Topp did in fact default, and on June 10, 1985, the note was paid by Tricon.

The Court found that the loan had originally been arranged by James Bell, Tricon president. Tricon treated the whole transaction as an advance against commissions which Topp in fact subsequently earned. Accordingly, Topp owes Tricon no reimbursement for Tricon's having picked up the note at the bank in Birmingham.

Second, Tricon sought to prove that Topp owed it an additional $15,000.00, this time for direct advances--$12,000.00 in commission advances plus "incidental and consequential damages." Topp did not dispute that certain advances were made but argued that he subsequently earned and was entitled to these commissions, in consequence of which Tricon's claim must fail. Indeed, Topp urged that Tricon owed him substantial additional sums for commissions earned but not paid which more than offset any "advances" Tricon had made to Topp. Here again, the Chancery Court resolved the factual dispute in Topp's favor. As Topp's testimony furnishes a legally sufficient basis for such fact finding in the court below, we decline to disturb that which has been done.

Third, there is the matter of Topp's counterclaim. Topp calculated that Tricon owed him some $96,755.00. He sought to prove that he was entitled to an overriding commission for the year 1984 in the sum of $59,360.00. He also claimed corrected commissions from July 1982 to May 1984 in the sum of $13,111.00, plus the sum of $6,278.00 on "house accounts", and unpaid 1984 commissions in the amount of $10,731.00. Subtracting from the aggregate of figures the commission advances Tricon had made to him and, as well, his obligation on the note at the Birmingham Bank, Topp demanded judgment on his counterclaim in the amount of $84,005.00 plus interest.

Implicit in the findings made on Tricon's claims against Topp, was a finding in Topp's favor on the liability phase of Topp's counterclaim. The Court seemed to recognize this but found great difficulty with Topp's damages proof.

The wide variance in the testimony regarding the agreement on payment of commissions, as well as that dealing with calculations by both parties, made it impossible for the Court to accurately compute any amount due Topp.

The Chancery Court, therefore, found that Topp had failed to prove that Tricon owed him "further commission on sales" and, accordingly, "awarded no damages for payment of commissions."

Elsewhere, the Court opined

that Topp had received all his commissions and income due him and refused to order any further commissions or damages.

The net effect of the decision below is that the Chancery Court has held Tricon's claim and Topp's counterclaim a wash. Common sense makes clear that this could not in fact be so. Our review of the record, however, leaves us with the same impression as that gleaned by the Court below: that the evidence regarding the quantum of any sums Tricon may owe Topp is quite problematical and inclusive. The net effect of the holding below was that Topp had failed to meet the burden of proof on the issue of his damages. We hold such an implied finding within the Court's authority and affirm.

III.

A.

Our final questions concern the Chancery Court's assessment of $3500.00 in attorneys fees against Tricon. The Court acted on the authority of Rule 11, Miss.R.Civ.P. The Court observed that Topp had to defend the original complaint for injunction which was "was an action filed on a contract which was non-existent." The Court then said that it "believes that this action was frivolous."

There can be no doubt of the authority of our trial courts to assess reasonable attorneys fees when in the opinion of the court a motion or pleading is "frivolous". Rule 11(b), Miss.R.Civ.P., provides, in relevant part:

If any party files a motion or pleading which, in the opinion of the court, is frivolous or is filed for the purpose of harassment or delay, the court may order such a party to pay to the opposing party or parties the reasonable expenses incurred by such other parties and by their attorneys, including reasonable attorneys' fees.

Topp invoked the Court's authority to sanction when in paragraph 7 of his counterclaim he alleged that Tricon's action "was malicious and groundless and wholly without merit and was a wilful effort on the part of the counterdefendant [Tricon] to harass and annoy the counterclaimant [Topp]." Topp demands punitive damages but makes no express demand for attorneys fees.

Topp's pleading makes no specific reference to Rule 11. We regard the fact beside the point, as the wording just quoted is wholly consonant with the language of Rule 11(b). If there be doubt, we regard it implicit in Rule 11's language that the Court may act on its own initiative. See, e.g., "If a pleading or motion ... is signed with intent to defeat ..., it may be stricken ..." "For wilful violation ... an attorney may be subjected to...." "If a party files a motion or pleading which ... is frivolous ..., the court may order...." In each instance the rule's language identifies a triggering event as requisite to the authority to sanction. In each instance that triggering event is litigation conduct by a party and/or his attorney. At no point does the rule read "and upon motion of a party aggrieved" or language to that effect. Our trial courts have authority to act sua sponte under Rule 11 and ought exercise that authority against the backdrop of their inherent authority to impose sanctions upon those who abuse the judicial process. See Allison v. State, 436 So.2d 792, 796 (Miss.1983); Scott v. State, 310 So.2d 703, 706 (Miss.1975).

In this light, we hold that the Chancery Court had authority to make the assessment of attorneys...