April 3, 2012 § 3 Comments
The MSSC decision in Bluewater Logistics v. Williford, 55 So.3d 148 (Miss. 2011), is notable for several reasons. First, it’s of value to lawyers who litigate over LLC’s and contracts as a guide to the parameters of litigation in that field. Second, it spelled the demise of the “heightened scrutiny” and “lessened deference” rules formerly applied when judges adopt verbatim one side’s proposed findings of fact and conclusions of law; a post in which I touched on that point is here.
To me, though, the most potentially far-reaching impact of Bluewater is its treatment of the pleadings and the scope of relief granted by the trial judge. The COA had reversed, ruling that the chancellor had impermissibly gone beyond the scope of the pleadings. The COA decision rested on three 19th-century cases.
The MSSC granted cert and the Bluewater appellants argued to the high court that the COA was correct because Williford’s complaint had sought only injunctive relief in the form of reinstatement as a member of the LLC, and that, as a result, the chancellor was in error in awarding him equitable relief in the form of a judgment for the value of his interest in the LLC. Here’s what Justice Dickinson, writing for the majority, said, beginning at page 157:
¶ 35. Mississippi has been a “notice pleading” state since January 1, 1982, when we adopted the Mississippi Rules of Civil Procedure. [citation omitted] Under Rule 8, a complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” and “a demand for judgment.” [citation omitted] “No technical forms of pleading or motions are required.” [citation omitted] Moreover, “[a]ll pleadings shall be so construed as to do substantial justice.” [citation omitted] Rule 54(c) states that every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled by the proof and which is within the jurisdiction of the court to grant, even if the party has not demanded such relief in his pleadings …. ” [citation omitted]
¶ 36. Our decisions have reflected the shift from older forms of “code pleading” to the Rules’ “notice pleading” paradigm. In Pilgrim Rest Missionary Baptist Church v. Wallace, we stated “it is axiomatic that the relief need not be limited in kind or amount by the demand but may include relief not requested in the complaint.” [citation omitted] And in Turner [Turner v. Terry, 799 So.2d 25, 39 (Miss.2001)], we stated: “A trial judge may award a party any relief to which he is entitled, even if the party fails to make a specific demand for such.” [citation omitted]
¶ 37. In holding that the chancellor erred in granting Williford money damages, the Court of Appeals inexplicably relied on three pre–rules cases, two of which date to the 1850s. [citation omitted] We now overrule Barnes, French, and Tucker to the extent that they conflict with the requirements and provisions of the Mississippi Rules of Civil Procedure and subsequent decisions of this Court.
¶ 38. We hold that Williford’s complaint was clearly sufficient to support an award of monetary damages. The complaint is titled “Complaint for Preliminary and Permanent Injunction and Damages.” The opening paragraph stated that Williford was seeking damages. Paragraph 5 alleged the ouster was unlawful, “warranting equitable and monetary relief.” Count I of the complaint was titled “Breach of Contract” and alleged breach of contract, for which the remedy is compensatory damages. In Count III, titled “Violation of the Mississippi Limited Liability Company Act,” Williford asserted “all rights and remedies available under the applicable statute, Miss.Code Ann. § [79–29–101], et seq.” [citation omitted] Under the section titled “Damages and Relief Sought,” Williford sought (among other things) compensatory damages, an accounting of all company assets, an appraisal of the fair-market value of his share of the company, and “any other relief to which he may be entitled.”
¶ 39. Viewed as a whole, we cannot say the chancellor was in error by finding that the complaint was sufficient to put Bluewater on notice that Williford was seeking monetary relief. Accordingly, Defendants’ argument that the chancellor granted Williford relief that was beyond the scope of the pleadings is without merit.
One of those 19th-century cases reversed by the court Terry v. Jones, was referred to by me in a prior post to emphasize that pleadings are not proof.
It remains to be seen how far the courts will go in applying the pleadings aspects of Bluewater. If the decision is limited to the underlying facts, then it should not be too earthshaking because the pleadings arguably did invoke the remedies that the trial court applied. If, however, the decision is taken to mean that notice pleadings require only notice of subject matter jurisdiction, thereby opening the door to all species of relief available thereunder, then your practice of chancery law may change dramatically.
Or maybe not. It has long been the law in Mississippi that in granting equitable relief the chancellor may order all relief necessary to effect an equitable remedy, whether pled for or not. For instance, in awarding lump sum alimony the chancellor may impose an equitable lien on real propterty to secure the payment. Or, where custody is sought, the judge may order the noncustodial parent to pay child support even where it was not sought. So perhaps Bluewater is not so much a dramatic shift in the tide as it is a mere ripple on the pond.
FYI, the Bluewater holding also calls into question a prior post of mine in which I stressed that you have to ask for specific relief in your pleadings if you expect to get it.
I encourage you to read the Bluewater decision carefully to get a handle on how it can help or hurt you. You will likely come up with ways to argue it to your advantage.