More on Judicial Estoppel

February 11, 2020 § Leave a comment

Yesterday we looked at the majority opinion in the COA’s November, 2019, 5-4 decision in Carpenter v. Conway, which affirmed a chancellor’s dismissal of a complaint to set aside land conveyances based on judicial estoppel.

Today we turn our attention to Chief Judge Barnes’s dissent, in which she was joined by Westbrooks, McCarty, and J. Wilson:

¶20. I dissent from the majority’s conclusion that Guy Carpenter is judicially estopped from contesting the conveyances at issue. First, any representations Guy made as administrator of Terry’s estate are not binding on his and Terry’s minor son, Cole. Second, because the real property at issue descended to Terry’s heirs by operation of law, Guy did not benefit from his prior position in the probate proceedings. Accordingly, I would reverse the court’s judgment dismissing the complaint and remand for further proceedings.

¶21. “The purpose of judicial estoppel is to prevent parties from knowingly taking a position in one court that is contrary to a position that party has asserted in, and that has been accepted by, another court.” Clark v. Neese, 131 So. 3d 556, 562 (¶21) (Miss. 2013) (emphasis added). Guy instituted the probate proceeding as administrator of Terry’s estate, not as next friend of his minor son, Cole. While I find no Mississippi cases addressing this specific issue, other jurisdictions have determined that actions filed in an individual capacity and actions filed on behalf of a minor are legally separate and distinct, even if founded on the same action. In Lambdin v. Travelers Ins. Co., 150 So. 2d 636 (La. Ct. App. 1963), a
mother filed suit after her minor child sustained injuries from a soda bottle that shattered. The mother sued individually to recover for medical expenses, as well as in her capacity as tutrix of her child’s estate to recover for the child’s personal injuries. Id. at 637. Judgment was entered in favor of the mother on her individual claim, but the defendant prevailed on the mother’s claim on behalf of the child. Id. In considering whether the judgment awarded to the mother was “a conclusive determination of fault binding upon the defendant,” the Louisiana Court of Appeals held that the claim asserted by the mother individually, “although founded on the same cause of action, is in the eyes of the law separate and distinct from the claim asserted by the mother in her capacity as tutrix of the minor child.” Id. at 638. For a judgment on one judicial demand to be a conclusive determination of the same question involved in the determination of another judicial demand, not only must the demands be the same and founded upon the same cause of action—the demands must also be asserted between the same parties, [e]ach acting in the same capacity. Id.

¶22. In Chance v. Gibson, 99 S.W.3d 108, 109 (Tenn. Ct. App. 2002), an adult daughter and her mother sought to establish paternity and recover child support from Carl Gibson, who they alleged was the adult daughter’s birth father. The trial court dismissed the claim on the basis of judicial estoppel because the mother, in a prior divorce proceeding, sought and was awarded child support from her ex-husband, James Chance. Id. at 110. The Tennessee Court of Appeals held that the daughter was not precluded by judicial estoppel from pursuing her claims because she was not a party to the prior child-support action and “was a minor at the time the pleadings were filed.” Id. at 111.

¶23. Because Cole was a minor and not a party to the probate proceedings, any representations made by Guy in those proceedings cannot be imputed to Cole. Therefore, I find that Guy, as parent and next friend of Cole, is not judicially estopped from pursuing the current action against the Conways.

¶24. Furthermore, Guy did not derive any benefit from his prior position in the probate proceedings. The Mississippi Supreme Court has held that “[w]hen the party asserting the prior inconsistent position has not benefitted by the assertion, the doctrine [of judicial estoppel] should not be applied.” Gibson v. Williams, Williams &Montgomery P.A., 186 So. 3d 836, 846 (¶25) (Miss. 2016) (emphasis omitted); see also Donaldson v. Ovella, 228 So. 3d 820, 829 (¶24) (Miss. Ct. App. 2017) (finding that because the appellants had “not benefitted from their prior position, . . . their claims are not barred by judicial estoppel”). The majority addresses the “benefit” requirement for judicial estoppel by stating that Guy benefitted “when the chancellor closed the estate and he and his son received ownership of [Parcel 3].”

¶25. Terry died intestate; so any interest she had in real property descended to Guy, her husband, as an heir by operation of law. See Miss. Code Ann. § 91-1-7 (Rev. 2018). This Court has recognized:

[R]eal property descends directly to, and title vests in, the heirs at law to enjoy until the contingency arises when it may be needed to pay debts. Administration then covers only the decedent’s personalty and the realty is in no way involved unless and until the personalty becomes insufficient to pay the debts and expenses.

Prout v. Williams, 55 So. 3d 195, 204 (¶28) (Miss. Ct. App. 2011) (quoting Robert Weems, Miss. Practice Series: Wills & Admin. of Estates in Miss. § 2:13 (3d ed. 2003)); see also Barnes v. Rogers, 206 Miss. 887, 892, 41 So. 2d 58, 60 (1949) (holding that administration of the estate “covers only the personal property belonging to the estate[,] and the real property is no[t] . . . involved in the administration unless and until the personal property becomes insufficient to pay the debts and it becomes necessary to resort to the land for the payment of the debts of the estate”); Estate of Mace v. Gardner, 66 So. 3d 1265, 1268 n.1 (Miss. Ct. App. 2011) (noting that “by operation of law, in the absence of a will, title of real
property vests immediately in the heirs at law upon the owner’s death”) (citing In re Will of Wilcher v. Wilcher, 994 So. 2d 170, 176 (¶12) (Miss. 2008)).

¶26. The majority does cite Johnson v. Herron, 33 So. 3d 1160, 1166-68 (¶¶19-25) (Miss. Ct. App. 2009), which affirmed a chancery court’s finding of judicial estoppel because Johnson, the decedent’s son and co-administrator of his father’s estate, failed to include real property as an asset when his father’s estate was closed. In Johnson, this Court cited portions of Mississippi Code Annotated section 91-7-47(1) (Supp. 2008):

When an administrator or executor undertakes to close an estate:

he shall take all proper steps to acquire possession of any part [of the estate] that may be withheld from him, and shall manage the same for the best interest of those concerned, consistently with the will, and according to law. He shall have the proper appraisements made, return true and complete inventories except as otherwise provided by law, shall collect all debts due the estate as speedily as may be, pay all debts that may be due from it which are properly probated and registered, so far as the means in his hands will allow, shall settle his accounts as often as the law may require, pay all the legacies and bequests as far as the estate may be sufficient, and shall well and truly execute the will if the law permit. He shall also have a right to the possession of the real estate so far as may be necessary to execute the will, and may have proper remedy therefor.

Id. at 1167 (¶23) (brackets in original). We found that “Johnson had a duty to discover all of the assets of his father’s estate before he agreed to close the estate.” Id. The majority relies on Johnson and Mississippi Code Annotated section 91-7-47(1) (Rev. 2018) to conclude that Guy, as administrator of Terry’s estate, “had an affirmative duty to ‘take all proper steps to acquire possession of any part of . . . [the estate] that may be withheld from him . . . .” (Emphasis added) (ellipses and brackets in original).

¶27. However, looking at the omitted and edited portions of section 91-7-47(1) as cited in Johnson and the majority’s opinion, two crucial distinctions are revealed. First, the statute addresses the duty of the executor or administrator “with the will annexed.” Terry died intestate; therefore, this statute does not apply. Second, the statute provides that the executor or administrator cum testamento annexo [Fn 3] “shall have the right to the possession of all the personal estate of the deceased, unless otherwise directed in the will; and he shall take all proper steps to acquire possession of any part thereof that may be withheld from him.” Miss. Code Ann. § 91-7-47(1) (emphasis added). Any right to possession of the real estate is only “so far as may be necessary to execute the will, and may have proper remedy therefor.” [Fn 4] Id.

[Fn 3] Cum testamento annexo is a Latin term meaning “with the will annexed.” Black’s Law Dictionary 52 (10th ed. 2014).

[Fn 4] The full text of the statute reads:

Every executor or administrator with the will annexed, who has qualified, shall have the right to the possession of all the personal estate of the deceased, unless otherwise directed in the will; and he shall take all proper steps to acquire possession of any part thereof that may be withheld from him, and shall manage the same for the best interest of those concerned, consistently with the will, and according to law. He shall have the proper appraisements made, return true and complete inventories except as otherwise provided by law, shall collect all debts due the estate as speedily as may be, pay all debts that may be due from it which are properly probated and registered, so far as the means in his hands will allow,shall settle his accounts as often as the law may require, pay all the legacies and bequests as far as the estate may be sufficient, and shall well and truly execute the will if the law permit. He shall also have a right to the possession of the real estate so far as may be necessary to execute the will, and may have proper remedy therefor.

Miss. Code Ann. § 91-7-47(1) (italicized language not quoted by Johnson or majority opinion).

¶28. It is unknown whether the citation to section 91-7-47(1) was critical to the holding in Johnson, as the Court concluded that the co-administrator had benefitted from a negotiated estate settlement agreement, [Fn 5] or if either party in that case raised the fact that real property descends by operation of law. But here, appellant’s counsel did raise the issue during the motions hearing, arguing:

There was no litigation of who owned certain property in the estate proceeding. The estate proceeding is commenced to cut off the claims of creditors and if there’s property to be devised or property to be dealt with, sometimes it’s listed in the inventory. Sometimes the inventories [are] improper or incorrect, but it doesn’t matter. As a matter of law, when someone dies, the land descends to where it goes if they die intestate.

(Emphasis added). This is a correct and pivotal statement of the law, and it cannot be ignored. Guy had no affirmative duty to identify the real property of the decedent unless the real property was required to pay the estate’s debts after the personalty was exhausted.

[Fn 5] Under the terms of the settlement agreement, Johnson received sixty-percent of the estate. A will was later discovered that left only fifty-percent of the estate to Johnson.

¶29. The majority contends that as administrator, Guy had the duty to ascertain the ownership of the real estate so that the ownership could properly be reported on the estate’s tax return. Supra at (¶13). However, there is no indication in the record that the estate was valued above $5,000,000 so as to require an estate tax return. Compare Miss. Code Ann. § 27-9-11 (Rev. 2017) (tying estate tax deduction to federal tax exclusion amount as codified in Section 2010 of Title 26 of the United States Code); and Miss. Code Ann. § 27-9-21 (Rev. 2017) (requiring executor to give notice to commissioner within sixty days where gross estate value exceeds exemption provided in section 27-9-11); and Miss. Code Ann. § 27-9-23 (Rev. 2017) (requiring executor to file estate tax return where gross estate exceeds amount of specified exemption in section 27-9-11) with 26 U.S.C. § 2010(c)(3)(A) (2018) (establishing the basic exclusion amount for a person dying in 2011 at $5,000,000). The fact that the estate (dealing only with the personalty) was “closed in a more timely fashion, and Guy’s ownership right to Parcel 3 was completely and definitively established” is hardly a benefit sufficient to apply judicial estoppel, considering there is no indication that there was ever any question as to his right to Parcel 3. The majority is, with respect, trying too hard to make the doctrine of judicial estoppel apply where it clearly does not.

Ins and Outs of Judicial Estoppel

February 10, 2020 § 1 Comment

Terry Carpenter Owned several parcels of property that had been conveyed to her by family members. She was diagnosed with terminal cancer, and her relationship with her husband, Guy, began to deteriorate and she conveyed two parcels — referred to as Parcels 1 and 2 — to her parents.

After Terry’s death in 2011, Guy was appointed administrator of her estate. Parcels 1 and 2 were not identified as estate property, and a judgment was entered closing the estate.

In 2016, Guy filed suit against Kenneth Conway, brother of Terry, who by then had become owner of the property, to set aside the conveyances of Parcels 1 and 2. The complaint was filed as next friend of Guy’s son alleging that Terry could not legally convey it without Guy’s signature because the property was part of the homestead, and Terry lacked mental capacity at the time of the conveyance.

Kenneth filed a motion to dismiss, and the chancellor did dismiss, finding that Guy’s claims were barred by judicial estoppel. Guy appealed.

In Carpenter v. Conway, a November 19, 2019, decision, the COA affirmed. Judge Tindell wrote the majority opinion:

¶7. In appealing the dismissal of his complaint, Guy asserts the chancellor erroneously found that judicial estoppel barred his claims. Although we review de novo a trial court’s grant or denial of a motion to dismiss, Trigg v. Farese, 266 So. 3d 611, 617 (¶9) (Miss. 2018), we review the application of judicial estoppel for abuse of discretion. Adams v. Graceland Care Ctr. of Oxford LLC, 208 So. 3d 575, 580 (¶13) (Miss. 2017). Thus, we must first determine whether the chancellor abused her discretion by finding that judicial estoppel barred Guy’s claims, and then we must review de novo whether the chancellor properly dismissed Guy’s complaint under Rule 12(b)(6). See id. at 579-80 (¶12); Rogers v. Gulfside
Casino P’ship, 206 So. 3d 1274, 1279 (¶9) (Miss. Ct. App. 2016).

¶8. As the Mississippi Supreme Court has explained:

Judicial estoppel precludes a party from asserting a position, benefitting from that position, and then, when it becomes more convenient or profitable, retreating from that position later in the litigation. Judicial estoppel has three elements: A party will be judicially estopped from taking a subsequent position if (1) the position is inconsistent with one previously taken during litigation, (2) a court accepted the previous position, and (3) the party did not inadvertently take the inconsistent positions.

Hinton v. Pekin Ins. Co., 268 So. 3d 543, 558-59 (¶62) (Miss. 2019) (citation and internal quotation marks omitted).

¶9. Regarding the first prong of judicial estoppel, Guy asserts that he has never been involved in a prior adverse proceeding with Kenneth. In Clark v. Neese, 131 So. 3d 556, 561-62 (¶21) (Miss. 2013), the supreme court “took the opportunity to clarify” its elimination of “the adverse-party requirement and overruled [its] prior judicial-estoppel opinions insofar as they included such a requirement.” As the Clark court explained:

The purpose of judicial estoppel is to prevent parties from knowingly taking a position in one court that is contrary to a position that party has asserted in, and that has been accepted by, another court. This purpose is served regardless of whether the inconsistent positions were taken in opposition to the same party.

Id. at 562 (¶21).

¶10. Even before the supreme court’s holding in Clark regarding the elimination of the adverse-party requirement, this Court determined in Johnson v. Herron, 33 So. 3d 1160 (Miss. Ct. App. 2009), that an estate proceeding could meet all the requirements necessary for judicial estoppel. In Johnson the decedent’s son by his first marriage and his niece by his second marriage acted as co-administrators of his estate. Id. at 1162 (¶7). The coadministrators and the decedent’s nephew by his second marriage entered into a settlement agreement to close the decedent’s estate and distribute his assets. Id. Almost three years after closing the estate, the son sought to contest the asset distribution. Id. at 1164 (¶10). As part of his requested relief, the son asked that the chancellor void deeds to certain pieces of real property and make him the sole owner of the properties. Id.

¶11. The chancellor in Johnson granted the niece and nephew’s summary-judgment motion after finding that judicial estoppel precluded the son from serving as co-administrator of his father’s estate, joining the petition to close the estate, and then filing a subsequent lawsuit to contest the asset distribution to which he had previously agreed at the estate’s closure. Id. at 1164-65 (¶13). On appeal, the son argued that judicial estoppel failed to apply because it required the parties to be involved in a prior adverse proceeding, and he contended that he had never been involved in such a proceeding with the niece and nephew. Id. at 1167 (¶21). In affirming the chancellor’s ruling, however, this Court agreed with the chancellor’s conclusion that, although the son and niece were both co-administrators of the decedent’s estate, the parties were still clearly in an adverse position as to the estate’s assets and their respective interests in those assets. Id.

¶12. Based on the holdings in both Clark and Johnson, we find that all the requirements for judicial estoppel have been met in the present case. We first note that, like the son in Johnson, Guy asserts on appeal that neither he nor his son has ever been involved in a prior adverse proceeding with Kenneth. As discussed, however, this is no longer a requirement for finding judicial estoppel. Clark, 131 So. 3d at 561-62 (¶21).

¶13. As administrator of Terry’s estate, Guy had an affirmative duty to “take all proper steps to acquire possession of any part of . . . [the estate] that may be withheld from him . . . .” Miss. Code Ann. § 91-7-47(1) (Rev. 2018). [Fn 2] Further, he had a duty to “ascertain whether the decedent was the sole owner, joint owner[,] or tenant in common” of the real estate. Robert E. Williford & Samuel H. Williford, Mississippi Probate and Administration of Estates § 8:3 (3d ed. 2019). Such a determination “is essential if the existence and nature of the ownership is to be correctly reported on the estate tax return.” Id.; see also Miss. Code Ann. § 91-7-157 (Rev. 2018) (“An executor or administrator shall pay all taxes that may be due on real and personal property belonging to the estate.”). In fulfilling his role as administrator, Guy never raised the claims he now seeks to assert—that Parcels 1 and 2 belonged to Terry’s estate and that he and his son possess an ownership interest in those parcels as tenants in common. Instead, Guy maintained during the probate proceedings that Parcel 3 alone comprised his and Terry’s homestead. By maintaining this position, Guy had no adverse claims to contend with during the probate of Terry’s estate. Thus, the estate was closed in a more timely fashion, and Guy’s ownership right to Parcel 3 was completely and definitively established. After benefitting from the position he maintained during the probate proceedings, Guy now adopts a contrary argument in the current litigation and asserts for the first time that Terry actually owned all three parcels of land when she died and that he and his son are tenants in common. Because the record clearly reflects that Guy has taken a
position in the current litigation that is contrary to the one he took in the prior probate proceedings, we find the first requirement of judicial estoppel has been met.

¶14. The second prong of judicial estoppel requires the court to have accepted the party’s prior position. Hinton, 268 So. 3d at 558-59 (¶62). By entering the order to close Terry’s estate, the chancellor effectively accepted Guy’s representation that Terry owned only Parcel 3 at the time she died. We therefore find this prong has also been met.

[Fn 2] As the dissent correctly points out, by operation of law, Parcel 3 descended to Guy and the couple’s minor son upon Terry’s death. See Miss. Code Ann. § 91-1-7 (Rev. 2018). Thus, Guy was not required to open an estate except to ensure that Terry’s other assets would in fact transfer to her next of kin, which were Guy and the couple’s minor son. See Miss. Code Ann. § 91-1-11 (Rev. 2018). And since Terry had already conveyed Parcels 1 and 2 to her parents prior to her death, Guy had a duty on behalf of Terry’s heirs to raise any claims to those parcels during the probate proceedings. See Miss. Code Ann. §§ 91-7-47(1) & -93 (Rev. 2018).

¶15. Relevant to the third requirement for judicial estoppel, Guy contends that his current and previous positions were not intentionally inconsistent but that his previous position was, at most, simply “incomplete.” When discussed within the context of a bankruptcy proceeding, this Court has explained:

A debtor’s non-disclosure is inadvertent only when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment. Moreover, it is the debtor’s burden to prove that her non-disclosure was inadvertent. The question is not whether the debtor subjectively knew at the time of her bankruptcy that she had a legal duty to disclose the claim in her bankruptcy proceeding. Rather, a debtor is deemed to have had knowledge of her claim so long as she was aware of the facts giving rise to it.

Rogers, 206 So. 3d at 1280 (¶11) (citations and internal quotation marks omitted).

¶16. Here, Guy makes no assertion that he was somehow unaware of Parcels 1 and 2 at the time he probated Terry’s estate. In fact, Guy admits his prior knowledge of Parcels 1 and 2 and states that he withheld his current claims regarding these parcels during the probate proceedings based on his attorney’s advice. As administrator of Terry’s estate, however, Guy possessed a duty to discover and inventory all her assets before he sought or agreed to the estate’s closing. Miss. Code Ann. § 91-7-93 (Rev. 2018). He also had a duty to determine the nature of Terry’s ownership interest in her real property. See Williford & Williford, Mississippi Probate and Administration of Estates § 8:3. Guy represented to the chancellor that Parcel 3 was the only real property Terry owned at the time of her death, the chancellor relied on his representation, and Guy benefitted when the chancellor closed the estate and he and his son received ownership of the parcel. We therefore find no merit to Guy’s claim now that his inconsistent positions were unintentional.

¶17. Based on the record and applicable caselaw, we find no abuse of discretion in the chancellor’s determination that all three requirements for judicial estoppel were met. We therefore find no error in the chancellor’s dismissal of Guy’s complaint under Rule 12(b)(6). Because we affirm the chancellor’s judgment on this ground, we decline to address Guy’s remaining assignment of error on appeal.

Chief Judge Barnes wrote an interesting dissent that we will look at tomorrow.

Judicial Estoppel or Not?

February 25, 2019 § Leave a comment

Judicial estoppel is the principal that prevents you from taking inconsistent positions in the course of litigation. An example might be where one admits adultery in a pleading, but then tries to deny it at trial.

A question of judicial estoppel arose in the adverse possession trial between the Winters and the Billings. The Winters claimed ownership of some land by adverse possession. In answering interrogatories, Mr. Billings stated seven times that he had not spoken with Mr. Winters about the land, but at trial he tried to testify that he had given Mr. Winters permission to use the land. Winters objected on the ground of judicial estoppel, and the chancellor overruled the objection. After the chancellor entered judgment in favor of the Billings, the Winters appealed on several grounds, one of which was that the judge erred in not ruling that the inconsistent statements were barred by judicial estoppel.

In Winters v. Billings, a COA decided January 15, 2019, the court affirmed the judge’s ruling on judicial estoppel. Judge Greenlee wrote for the court:

¶24. The Winterses assert that because Mr. Billings made seven statements in sworn interrogatories that he never spoke with Mr. Winters about the land, the chancellor should have judicially estopped Mr. Billings from asserting that he gave Mr. Winters permission to use the land.

¶25. “Judicial estoppel is designed to protect the judicial system and applies where intentional self-contradiction is being used as a means of obtaining unfair advantage in a forum provided for suitors seeking justice.” Kirk v. Pope, 973 So. 2d 981, 991 (¶31) (Miss. 2007) (internal quotation mark omitted). Our supreme court has held that there are three elements of judicial estoppel: “A party will be judicially estopped from taking a subsequent position if (1) the position is inconsistent with one previously taken during litigation, (2) a court accepted the previous position, and (3) the party did not inadvertently take the inconsistent positions.” Clark v. Neese, 131 So. 3d 556, 560 (¶16) (Miss. 2013).

¶26. The chancellor found that the jointly-submitted pretrial order indicated that “Mr. Billings gave Mr. Winters and his family ‘permission’ to use the disputed strip of property” and that the pleadings were amended to conform to that pretrial order. Furthermore, the chancellor noted that Mr. Winters indicated in his own testimony that he spoke with Mr. Billings about the land, and only the contents of that conversation were disputed. We also note that the interrogatories were vague as to their actual subject, but they meant to elicit general responses and do not focus on permission or lack thereof. “A chancellor sits as a fact-finder and in resolving factual disputes, is the sole judge of the credibility of witnesses.” Tice v. Shamrock GMS Corp., 735 So. 2d 443, 444 (¶3) (Miss. 1999). In this position, the chancellor may assess the materiality and relevance of answers to interrogatories, along with any inconsistent testimony thereto at trial and decide on its credibility. Mr. Billings’s assertion was not inconsistent with a prior position taken during litigation, the chancellor had not accepted the previous position, and the chancellor’s holdings indicated that at most Mr. Billings inadvertently may have taken the inconsistent positions.

¶27. Under our limited standard of review, we hold that the chancellor’s holding was not manifestly wrong or clearly erroneous, nor did the chancellor apply an incorrect legal standard. Thus, we affirm.

Two observations:

  • It’s not too far a stretch for the chancellor to suppose that Mr. Billings’s inconsistencies might have been inadvertent. The case took around 3 years to make it to trial, and lots of words get thrown around in a three-year span, some of which may be spoken or written based on misunderstanding. That pre-trial order was likely the nail in the coffin, so to speak, for the judicial estoppel argument.
  • Just because your claim of judicial estoppel is shot down by the trial judge, it does not mean that you can’t cash in on the inconsistencies. As the COA said, ” … the chancellor may assess the materiality and relevance of answers to interrogatories, along with any inconsistent testimony thereto at trial and decide on its credibility.” In other words, you can hammer away at the witness about his credibility and apparent inability to get his story straight. That sort of thing can be loads of fun, particularly on cross-examination.

Four Judges, and a Remand Makes Five

March 27, 2017 § 2 Comments

When Jon A. Swartzfager and Thomas R. Saul had a disagreement over the sale of some land, Saul filed suit in chancery court for breach of contract, equitable estoppel, and promissory estoppel.

The chancellor of the district recused, and the MSSC appointed Special Chancellor #1. That judge granted partial summary judgment and conducted some proceedings, in one of which he declared a written instrument to be a valid, enforceable contract. Before he got to a trial, however, Chancellor #2 unfortunately died.

Enter Chancellor #3. This time, the judge did set the case for trial, and it was heard on November 29, 2012, and January 25 and April 8, 2013. Before Chancellor #3 could render a final judgment, he, too, died.

The MSSC appointed Chancellor #4, who huddled with the attorneys and entered an order memorializing the parties’ agreement that he could review the existing record and render a decision. Chancellor #4 did just that, finding that Swartzfager had breached the contract, and awarding damages of more than $200,000, which included $79,098.81 in prejudgment interest. Swartzfager appealed.

In the case of Swartzfager v. Saul, decided February 16, 2017, the MSSC reversed in part and remanded. Essentially, the court affirmed everything but the award of prejudgment interest, and remanded for the chancellor to recompute damages without the prejudgment interest.

Only thing is, Chancellor #4 is now retired and is no longer sitting as a senior or special judge, so he will not be available to  deal with the case on remand.

Enter Chancellor #5. Stay tuned.

A few interesting points from the decision by Justice Maxwell:

  • Swartzfager argued that the MSSC should review the case de novo because Chancellor #4 based his decision on testimony before previously-assigned chancellors; he also urged that the previous chancellors’ findings should be given no deference. The court rejected that claim at ¶18 on the principle of judicial estoppel. The parties had agreed to follow that procedure, and he is precluded from taking a contrary position at a later stage of the case.
  • Another point pressed unsuccessfully by Swartzfager was that it was error for the chancellor to adopt Saul’s findings of fact and conclusions of law verbatim. The court disagreed, pointing out that the judge made his own findings, including adopting some findings of previous chancellors. I might add that even if the chancellor had wholly adopted Saul’s findings, it was not error for him to do so. You can read a post about the subject here.
  • The reversal on the issue of prejudgment interest came about because Saul had not included a prayer for that relief in his complaint, and so he was precluded from getting that relief per MRCP 8. The court noted that, since the reversal was based on the state of the pleadings, and not on the merits, it did not need to address whether the damages were liquidated, or if there were bad faith, which are two of the bases necessary to support an award of prejudgment interest.
  • There’s a lot of substance in this case that you might find useful, including: what it takes for a writing to be a contract; equitable estoppel; emotional distress damages arising out of a contract dispute; and assessment of attorney’s fees in absence of punitive damages.

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