Wilbourn v. Stennett, Wilkinson & Ward

• Decision Date: 12 December 1996
• Docket Number: No. 93-CA-00148-SCT,93-CA-00148-SCT
• Citation: 687 So.2d 1205
• Court: Mississippi Supreme Court
• Parties: R.E. WILBOURN v. STENNETT, WILKINSON & WARD, a professional corporation and Gene A. Wilkinson, J. Stephen Wright, James C. Martin, James R. Mozingo, Stanley Q. Smith, Mark A. Carlson, Erwin C. Ward, individually, jointly and severally.

Page 1205

687 So.2d 1205

R.E. WILBOURN v. STENNETT, WILKINSON & WARD, a professional corporation and Gene A. Wilkinson, J. Stephen Wright, James C. Martin, James R. Mozingo, Stanley Q. Smith, Mark A. Carlson, Erwin C Ward, individually, jointly and severally.

No. 93-CA-00148-SCT.

Supreme Court of Mississippi.

Dec. 12, 1996.

Rehearing Denied Feb. 6, 1997.

Thomas L. Kirkland, Jr., Kathy S. Boteler, Kirkland & Barfield, Jackson, for Appellant.

John C. Henegan, Camille H. Evans, Butler, Snow, O'Mara, Stevens & Cannada, Jackson, Michael O. Gwin, James A. Becker, Jr., Watkins & Eager, Jackson, for Appellees.

Before DAN LEE, C.J., SULLIVAN, P.J., and JAMES L. ROBERTS, Jr., J.

JAMES L. ROBERTS, Jr., Justice, for the Court:

STATEMENT OF THE CASE

This is an appeal of an order from the Hinds County Circuit Court, granting summary judgment denying legal malpractice and dismissing counter claims of malicious prosecution and abuse of process. Richard Wilbourn contacted his long time friend Erwin Ward, a partner at the Stennett, Wilkinson & Ward Law Firm, in 1982 to prepare a bank regulatory filing on his behalf concerning Citizens National Bank stock. Later, the firm prepared a proposed tender offer on his behalf. The attorneys within the firm that performed the legal services for Wilbourn left in 1985 to open their own firm. Wilbourn directed his file to be sent to the new firm. Later in 1985, SW & W became Stennett, Wilkinson & Ward, a professional association. Ward entered the professional association only as an employee.

In 1986, Wilbourn and others purchased, from the Johnston family, a large amount of stock in Stonewall Bank, of which Wilbourn was a director. In 1987, the Johnston family decided to file suit against Wilbourn and others, alleging securities fraud and racketeering. As part of damages, the Johnston family requested the court to force Wilbourn to divest himself of Citizens National Bank stock. The Johnston family retained William Ready, an attorney in Meridian, to file suit on their behalf. Ready contacted SW & W, P.A. to associate their help in pursuing the litigation. SW & W, P.A., decided to take part in the representation. Wilbourn notified SW & W, P.A. that Ward and others at the firm held confidential information gained through the earlier representation. The firm wrote to Wilbourn stating all files were taken by the former employees as Wilbourn had directed in 1985. Wilbourn filed suit in 1990 alleging legal malpractice, and naming as defendants all shareholders of SW & W, P.A., Ward and an employee who helped prepare the Johnston suit.

On January 14, 1990, Circuit Court Judge Fred L. Banks, Jr., granted summary judgment to all defendants except SW & W, P.A. and Ward. On January 14, 1993, after thorough examination of the lengthy record, Circuit

Court Judge James E. Graves, Jr., granted summary judgment for the remaining defendants as to the claims of Wilbourn. Also, the counter claims of the individually named defendants were dismissed with prejudice. On January 19, 1993, Judge Graves entered final judgement on all claims.

I. DID THE TRIAL COURT ERR BY GRANTING THE MOTION FOR SUMMARY JUDGMENT OF GENE A. WILKINSON, J. STEPHEN WRIGHT, JAMES C. MARTIN, JAMES A. PEDEN, JR., DERRYL W. PEDEN, JAMES R. MOZINGO, STANLEY Q. SMITH, MARK C. CARLSON?

II. DID THE TRIAL COURT ERR BY GRANTING THE MOTION FOR SUMMARY JUDGMENT OF STENNETT, WILKINSON & WARD, A PROFESSIONAL ASSOCIATION?

III. DID THE TRIAL COURT ERR BY GRANTING THE MOTION FOR SUMMARY JUDGMENT OF ERWIN C. WARD?

IV. DID THE TRIAL COURT ERR BY DISMISSING THE COUNTER CLAIMS OF ABUSE OF PROCESS AND MALICIOUS PROSECUTION AGAINST WILBOURN?

V. DID THE TRIAL COURT ERR BY ENTERING A FINAL JUDGMENT IN THIS CASE?

STATEMENT OF THE FACTS

Wilbourn had acquired stock in Citizens National Bank of Meridian, Mississippi, for many years and has been in competition with others to acquire CNB stock. By 1982, Wilbourn had acquired approximately a 10% interest in the bank and was a director of CNB. Because of his large interest in CNB stock, he became concerned with federal and state regulations. Wilbourn contacted the Stennett, Wilkinson and Ward law firm in Jackson, Mississippi for a number of reasons: (1) SW & W performed bank regulatory work; (2) Wilbourn preferred out-of-town counsel, so that he could keep his plan to acquire CNB stock confidential; and (3) Wilbourn and Erwin C. Ward, a partner in SW & W, were long time friends or acquaintances.

In March, 1982, Wilbourn retained SW & W to prepare regulatory filings for his CNB stock interest. Wilbourn contacted Ward by telephone and then met Ward in his office at SW & W. Wilbourn alleges that he confided to Ward: his plan and his reasons to continue to buy CNB stock; the identification and motivation of the parties with whom he was competing to purchase CNB stock; relationships between Wilbourn and those other parties; and, other aspects of Wilbourn's private and confidential business affairs.

Ward indicated that he did not work in the bank regulatory field and suggested that Anson B. Chunn should handle the work. Ward contends that he has never practiced in the banking regulatory area. Wilbourn expressed his desire that Ward be part of the representation, and Ward agreed to remain involved in the representation. On their next meeting, Ward introduced Chunn to Wilbourn, at which time Chunn was first informed of the representation. Wilbourn discussed with Ward and Chunn his need to file a change in control notice. The purpose of filing the notice of change in control was to allow Wilbourn to lawfully obtain additional stock in the future. After discussion, Wilbourn decided that a tender offer for the purchase of CNB stock was needed as a defensive measure, and also needed to be prepared. The notice of change in control of a national bank was filed on March 19, 1982, with the Regional Administrator of National Banks. Wilbourn mailed a copy of the notice to Ward. However, Chunn and Craig Landrum, an associate, performed all of the work for Wilbourn. The notice of change in control disclosed Wilbourn's personal financial information including his 26% stock ownership of Stonewall Bank and a contingent option to purchase another 26% of the Stonewall Bank stock. Wilbourn stated that his financial statement, which was included in the change in control notice, was not made part of public filing by the regulatory agency. Wilbourn contends that discussions with Ward, Chunn and Landrum involved his stock interest in Stonewall Bank, and his director position with that bank. The tender offer that was prepared was never filed.

On March 24, 1982, SW & W prepared a new matter report; this report listed Chunn as the attorney responsible for the Wilbourn file with Ward and Landrum as assigned lawyers to the representation. The report indicated the representation was to "review change in control notice and formulate acquisition plan." In addition, the memo to the file was marked as confidential. Chunn, Landrum, Ward, James R. Mozingo, Leigh Patterson, Stanley Q. Smith, Gene A. Wilkinson, Derryl W. Peden, and James A. Peden, Jr. initialed the file to represent no known conflict of interest. Ward contends that, except for the new matter report and initial misdirected letters, he never received any files or documents prepared by Chunn or Landrum on behalf of Wilbourn or any other documents.

Wilbourn does not claim that any other attorneys, except Chunn, Landrum and Ward, consulted with or performed legal work for him. All other attorneys/defendants deny they have ever performed any professional services for Wilbourn or have knowledge of the substance of his prior representation. Only Chunn and Landrum billed Wilbourn for professional services. SW & W's representation of Wilbourn covered a period of almost three years. During that period, Wilbourn was billed for a total of fourteen (14) hours of services. The hours billed represented work performed by Chunn and Landrum. Wilbourn has never been billed for any time by Ward. A statement dated September 17, 1982, billed Wilbourn for 8.2 hours; a statement dated November 2, 1983, billed 1 hour; a statement dated May 1, 1985, billed 4.8 hours.

On or about August 20, 1985, Wilbourn was advised that Chunn and Landrum were leaving SW & W to form their own firm. Wilbourn was supplied with a form memo and requested to complete and mail it back to SW & W to direct how his file would be handled. Wilbourn directed that his files be delivered to Chunn and Landrum. Wilbourn handwrote, "I think Bob Chunn worked on everything that I asked of the firm and should probably have the files. I certainly want to be able to call on Mr. Ward in the future, however."

On August 15, 1985, three of the six partners of SW & W, along with others, formed a professional association known as Stennett, Wilkinson & Ward, a Professional Association. Ward did not join the association as a shareholder, but as an employee only.

Wilbourn does not contend that Ward performed substantive legal work in his representation; but he does allege Ward held confidential information from the 1982-1985 representation that was misused by SW & W, P.A.. Wilbourn never did call on Ward after the partnership dissolved in 1985. However, Wilbourn contends Ward and the SW & W professional association were still his attorneys, and he was not notified to the contrary until receiving notice of the Johnston complaint. The contacts that Wilbourn alleges constitute a breach of confidentiality by Ward and imputed to SW & W occurred in 1982. By August 20, 1985, the Wilbourn files were in the possession of Chunn and Landrum. SW & W and the individual defendants allege that no files remained with the professional association. SW & W, P.A. claims to only have billing documents relating to Wilbourn and the new matter report.

In November 1986, Archie McDonnell, Sr., Archie McDonnell, Jr. and Wilbourn, all directors of CNB, acquired 256 of...