SOL in a Suit to Set Aside a Deed

December 17, 2018 § 1 Comment

Bryant was administrator of Cooley’s estate. She filed suit to remove cloud from title and to set aside a deed signed by Cooley, alleging undue influence, lack of capacity, and fraud. She also claimed the deed was void due to the fact that Cooley’s wife had failed to execute it.

A chancellor dismissed Bryant’s suit, finding it barred by the the three-year general SOL (statute of limitations). The judge found that Bryant had not maintained a possessory interest in the property, and so the three-year statute applied. Bryant appealed.

The COA, in Bryant v. Dent, et al., decided September 18, 2018, reversed and remanded, holding that the ten-year statute applied. Judge Lee wrote for a unanimous court:

¶11. Actions to recover land are subject to the ten-year statute of limitations found in Mississippi Code sections 15-1-7 and 15-1-9. In relevant part, section 15-1-7 provides:

A person may not make an entry or commence an action to recover land except within ten years next after the time at which the right to make the entry or to bring the action shall have first accrued to some person through whom he claims, or, if the right shall not have accrued to any person through whom he claims, then except within ten years next after the time at which the right to make the entry or bring the action shall have first accrued to the person making or bringing the same.

Miss. Code Ann. § 15-1-7 (Rev. 2012). Similarly, section 15-1-9 provides:

A person claiming land in equity may not bring suit to recover the same except within the period during which, by virtue of Section 15-1-7, he might have made an entry or brought an action to recover the same, if he had been entitled at law to such an estate, interest, or right in or to the same as he shall claim therein in equity.

Miss. Code Ann. § 15-1-9 (Rev. 2012). “A suit to remove a cloud on title is considered an action to recover land.” Lott v. Saulters, 133 So. 3d 794, 799 (¶8) (Miss. 2014).

¶12. We find the chancellor’s reliance upon O’Neal Steel Inc v. Millette, 797 So. 2d 869 (Miss. 2001), is misplaced. There, O’Neal sought to enforce a judgment lien, not title or possession of the property at issue. Id. at 874 (¶15). The supreme court stated that a “judgment lien does not create in O’Neal a possessory interest in the real property,” and “absent any possessory interest in the subject property, O’Neal cannot claim that this
litigation is an action to recover land.” Id. at 873 (¶¶12,13).

¶13. Here, Bryant, as administrator for Cooley’s estate and individually as a possible heir of Cooley, seeks possession of the real property deeded away by Cooley, allegedly due to undue influence. In a similar situation, the supreme court held that the ten-year statute of limitations applied. See In re Estate of Reid, 825 So. 2d 1, 6 (¶¶16-19) (Miss. 2002). There, the decedent’s potential heir alleged undue influence in an attempt to set aside the decedent’s transfers of real property to her adopted son. Id.

¶14. Because the ten-year statute of limitations applies, Bryant’s suit is not barred. Thus, we reverse and remand for further proceedings.

The court affirmed the chancellor’s dismissal of Bryant’s fraud claim, agreeing with the chancellor that that the pleading did not meet the requirements of MRCP 9(b).

The court also noted that, due to the remand, Bryant could pursue the claim of failure to join Cooley’s wife on in the transaction on remand if she chose to do so.

SOL, the PSA, and Rule 81

September 16, 2015 § 3 Comments

I posted here not too long ago about the need to assert a defense of statute of limitations (SOL), saying that “It is not an automatic bar to the action, but rather a defense that must be affirmatively pled.”

That quote goes a tad too far. Although MRCP 12 specifically requires that SOL be pled as an affirmative defense, R 12(b) goes on to say that, “If a pleading sets forth a claim for relief to which the adverse party is not required to serve a responsive pleading, he may assert at the trial any defense in law or fact to that claim for relief.” Of course, matters brought under R 81 do not require an answer, so no affirmative defensive pleading is required, and the SOL defense may be asserted at trial.

That is what happened in DHS v. Guidry, 830 So.2d 628, 634 (Miss. 2002). In a contempt action brought under R 81, Jackie Guidry did file an answer to the R 81 petition, but it did not include a SOL defense. Jackie instead raised the defense of SOL for the first time at trial, and DHS objected on the basis that no pleading asserting the defense had been filed. The chancellor ruled in Jackie’s favor, and DHS appealed. The MSSC affirmed:

¶ 19. DHS next argues Jackie waived his defense of statute of limitations when he failed to raise the defense in his answer. Jackie contends that though he did file responsive pleadings, no answer was required under Miss. R. Civ. P. 12(b). Because no answer was required, Jackie argues his affirmative defenses could have been properly pled at any time.

¶ 20. An affirmative defense, such as a statute of limitations, is waived if not raised by a pleading. Miss. R. Civ. P. 12(b). However, this rule only applies when a responsive pleading is required. Rule 12(b) states in pertinent part:

If a pleading sets forth a claim for relief to which the adverse party is not required to serve a responsive pleading, he may assert at the trial any defense in law or fact to that claim for relief….

Pursuant to Miss. R. Civ. P. 81(d)(2) & (4), no answer is required in a petition for contempt based on unpaid child support. Nevertheless, Jackie’s counsel did file an answer, but did not raise the affirmative defense of statute of limitations. However, at the hearing, Jackie made an ore tenus motion to dismiss the petition as being barred by the statute of limitations.

¶ 21. In a recent case handed down by the court of appeals, that court held there was no waiver for failure to plead an affirmative defense when no pleading was required. Brown v. Brown, 822 So.2d 1119 (Miss.Ct.App.2002). The facts of Brown are remarkably similar to the case sub judice. The Browns were divorced in 1979, and Mr. Brown was ordered to pay child support. Id. at 1120. In February 2000, Mrs. Brown filed a motion for contempt alleging Mr. Brown had failed to pay any child support since the 1979 decree. Id. The chancellor awarded Mrs. Brown $54,697.66 in unpaid child support. Id. at 1121.

¶ 22. The Court of Appeals held that because no answer was required to the petition for contempt, the answer, although filed by Brown, was not a required pleading. Id. “We find no waiver for failure to plead an affirmative defense when no pleading is required.” Id. Because the affirmative defense of statute of limitations had not been waived, the claim for the older child was barred. Id. But, the daughter’s claim was viable because she had not yet reached her twenty-eighth birthday. Id. at 1121-22.

¶ 23. This Court finds the affirmative defense of statute of limitations was not waived here because, although Jackie filed an answer, such pleading was not required. The chancellor was correct in finding Jackie had the right to raise his defenses at any stage, including at trial. Therefore, Jackie’s defense of statute of limitations will serve as a bar to any claims filed after February 1, 1998, seven years after his youngest child reached the age of 21.

So I was correct in the original post insofar as I advised you to assert the defense, but went too far in saying that it must be pled — at least in R 81 matters. It should go without saying that if you don’t get something into the record with the words statute of limitations included, you won’t be able to complain about it on appeal.

Actually, though, even if a matter is not required to be pled, you may file a pleading as Jackie did, and sometimes it’s just a good idea to do that.

______________

Thanks to Joe K. for the reference to Guidry.

SOL and the PSA

September 2, 2015 § 7 Comments

We visited the COA decision in Moseley v. Smith here before. It’s the 2014 case in which the importance of a hold-harmless agreement in a PSA was underscored when the COA held that, although the husband’s underlying debt obligation may have been discharged in bankruptcy, his obligation to his ex-wife based on a hold-harmless clause was not.

There’s another aspect of that case that merits your attention.

On appeal the ex-husband argued that his ex-wife’s claim against him was barred by the three-year statute of limitations (SOL) applicable to contract claims. His position was supported by the case of D’Avignon v. D’Avignon, 945 So.2d 401 (Miss. App. 2006), which held that property division matters in a property settlement agreement (PSA) are governed by the three-year SOL that applies to contracts.

In Moseley, however, the COA changed its position and held that all PSA provisions are incorporated into the court’s final judgment of divorce and, therefore, the seven-year SOL governing enforcement of judgments applies.

Two thoughts:

  • Remember that SOL is an affirmative defense that must be asserted by the party who claims it. It is not an automatic bar to the action, but rather a defense that must be affirmatively pled. In a recent case in my court the parties litigated the issue whether the ex-husband was in contempt for non-payment of installment lump-sum alimony. Some of the early payments were due more than seven years before suit was brought. No one raised a SOL issue; therefore there was no bar to obtaining a judgment on those unpaid amounts.
  • Before a judgment expires, you can renew the judgment per MCA 15-1-43. The extension is for a period of seven additional years. Most property provisions of PSA’s are resolved before that initial seven-year period expires, but some do not.

Non-marital Children, Estates, and the Statute of Limitations

November 18, 2014 § 4 Comments

Boyce Elmore died in 2000. His widow, Kathleen, opened an administration and was appointed administrator in 2002.

In 2010, more than ten years after Boyce Elmore died, Cedric Williams filed a paternity action in an effort to establish a claim to recover from Boyce’s estate.

The version of MCA 91-1-15(3)(c) in effect at the time provided that a non-marital child might file an action to establish paternity ” … within one (1) year of the death of the intestate or within ninety (90) days after the first publication of notice to creditors to present their claims, whichever is less …” Since Boyce’s estate had not been opened in the first year following his death, the publication provision was inapplicable.

Faced with the issue of Cedric’s timeliness, the chancellor ruled that, because Kathleen had failed to give Cedric notice of the estate, the statute of limitations had been tolled, and his action was timely.

The COA reversed the chancellor’s decision that failure to give Cedric notice tolled the statute of limitations, but would not apply the one-year statute because the appellant had failed to raise the issue on appeal.

MSSC granted cert.

In In the Matter of the Estate of Elmore: Jamison v. Williams, handed down November 6, 2014, the court affirmed the COA’s decision, but held that the appellant had “squarely presented” the issue before the chancellor on appeal and at trial by raising the issue of application of SOL under 91-1-15, so that the one-year statute did apply, and barred Cedric’s suit.

Based on all of this, I believe it is fair to say that failure to give notice to a purported non-marital heir will not toll the statute under the language in effect before 2005. The Mississippi legislature resolved the question in 2005 by adding language to MCA 91-1-15 that ” … this one-year limitation shall be self-executing, and may not be tolled for any reason, including lack of notice.”

Recovering Loans for the Estate

October 9, 2014 § Leave a comment

Thomas Kennedy, Sr., during his lifetime wrote twenty checks payable to his son, Timothy. The checks, ranging from $1,000 to $40,000 totaled in the aggregate $180,900. Timothy did not dispute that the checks constituted loans to him from his father.

Thomas, Sr., died, and Thomas, Jr., became executor of his father’s estate. A year and a half after opening the estate, Thomas filed a final account and petition to close the estate. In his prayer for relief, he asked that Timothy be required to repay the amounts loaned to him, or that his distributive share be decreased by that amount.

Timothy raised three defenses: (1) that filing the pleading in the estate action was not sufficient to toll the statute of limitations; (2) that the executor should have filed a collection action in circuit or county court; and (3) that collection of some or all of the loans was barred by the statute of limitations (SOL).

The chancellor found that the checks were, indeed, loans, and that, since they had no specific due dates, the general 3-year SOL applied, running from the date of each check, and that, therefore, some of the loans were barred from recovery. He calculated that Timothy owed $91,700, and that he could either repay the estate or have his share reduced by that amount. The chancellor did not buy Timothy’s argument about a separate action in a different court. Timothy appealed.

In Kennedy v. Estate of Kennedy, decided September 30, 2014, the COA affirmed. Here are the takeaways from this case:

  • Although Mississippi law is less than clear as to whether loans to a legatee should be treated differently than loans by the decedent to others, the COA held that they should be treated the same, and that the SOL does apply. The SOL is not interrupted by the death of the decedent. Judge Maxwell’s reasoning and authority on this point is so sound that it’s hard to imagine that the MSSC would reach a different conclusion, despite the fact that there is some old authority to the contrary. You might want to watch this case for cert if you do a lot of estate work.
  • The COA agreed with the chancellor that the SOL began to run on each transaction on the date of the check. The chancellor had analogized the checks to demand notes, which become due and payable from the date of execution, with no demand being necessary.
  • The executor was not required to file a separate collection action in circuit or county court to reduce the claim(s) to judgment. Since Timothy was an heir, his waiver of process in the estate matter made him amenable to the claims of the estate against him. The COA cited an 1870 case that said when ” … distributees are debtors of the estate there is no reason why their indebtedness should not be treated in the light of a set-off against their distributive share.” Judge Maxwell also cited one of the maxims of equity in support of his rationale. Hear, hear.

If you are representing an executor in an estate which is owed debts, keep in mind that the SOL is ticking away every day, and that your dilatoriness could cost the estate some money that you might have to find a way to repay. In my opinion, if your executor is not successful in collecting those debts from non-distributees, it would be better practice to get chancery authority to sue to collect them in circuit or county court, and to get a judgment. If the debtors are distributes, make sure you get process on them promptly in the estate action on a pleading to collect, so as to stop the SOL from running.

The 4(h) Club

July 24, 2014 § Leave a comment

No, I’m not talking about raising livestock and watermelons. I’m talking about how you can get clubbed by operation of MRCP 4(h), which can raise some nasty lumps.

R 4(h) states:

If service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint and the party on whose behalf such service was required cannot show good cause why such service was not made within that period, the action shall be dismissed as to that defendant without prejudice upon the court’s own initiative with notice to such party or upon motion.

The obvious peril of this rule is operation of the statute of limitations (SOL). If your complaint is dismissed and the statute runs before you can get it refiled, your proverbial goose is cooked. But it is equally parboiled if you fail to effect process within the 120-day period. Here’s what the MSSC said in the case of Holmes v. Coast Transit Auth., 815 So.2d 1183, 1185 (Miss. 2002):

Filing a complaint tolls the applicable statute of limitations 120 days, but if the plaintiff fails to serve process on the defendant within that 120-day period, the statute of limitations automatically begins to run again when that period expires. Watters v. Stripling, 675 So. 2d 1242, 1244 (Miss.1996). A plaintiff who does not serve the defendant within the 120 day period must either re-file the complaint before the statute of limitations ends or show good cause for failing to serve process on the defendant within that 120 day period; otherwise, dismissal is proper. Id. at 1244; Brumfield v. Lowe, 744 So. 2d 383, 387 (Miss. Ct. App.1999). The plaintiff bears the burden of establishing good cause. M.R.C.P. 4(h).

That language is quoted in the recent MSSC decision in Lewis Entertainment Inc. d/b/a Extreme Skate Zone v. Brady, decided July 17, 2014.

In that case, the plaintiffs had failed to get process on Lewis within the 120 days, and the SOL ran the day after the 120-day period ended. The court noted that, under the rule, the only way for the plaintiffs to keep their action alive was to show good cause for failure to serve Lewis within the 120 days.Justice Lamar, for the unanimous court, set out what constitutes good cause:

¶9. To establish good cause, the plaintiff has the burden to show “at least as much as would be required to show excusable neglect, as to which simple inadvertence or mistake of counsel or ignorance of the rules does not suffice.” When making a good-cause determination, the following factors should be considered:

a. the conduct of a third person, typically the process server,

b. the defendant has evaded service of the process or engaged in misleading conduct,

c. the plaintiff acted diligently in trying to effect service or there are understandable mitigating circumstances, or

d. the plaintiff is proceeding pro se or in forma pauperis.

The Bradys are not proceeding pro se or in forma pauperis and nothing in the record suggests that their failure to timely serve Lewis is attributable to the conduct of a third person or to Lewis. The Bradys simply claim their failure to serve Lewis is justified by their attempts to serve Oak Grove. We disagree.

¶10. The Bradys waited until the last day of the 120-day period to attempt to serve Oak Grove. On that day, their process server learned that the Bradys had named the wrong defendant, but, instead of identifying the correct defendant, the Bradys continued to attempt service on the wrong party for two weeks. The Bradys also failed to request additional time to serve process until seventy days after the 120-day period expired and three weeks after they were informed that their case was going to be dismissed. And, even after they filed a motion for additional time, they failed to set it for hearing and have yet to name the proper defendant.

The court went on to hold that those facts did not constitute good cause that would save the plaintiffs’ case.

Lewis is an appeal from a county court case. In chancery, we do not routinely deal with statutes of limitation like they do in county and circuit courts. But for those chancery matters that do involve SOL, R 4(h) is as applicable here as it is in the law courts.

Beware of the club.

THE CONSERVATOR AND THE STATUTE OF LIMITATIONS

March 20, 2013 § Leave a comment

Angela and Brian filed a joint complaint for divorce on the sole ground of irreconcilable differences. While the 60-day waiting period was running, Angela was involved in a car wreck, suffering a broken neck and brain damage. Because she was no longer able to handle her business, a conservator was appointed and authorized to proceed with the divorce action.

On January 10, 2000, the trial court entered the final judgment of divorce. It included a provision that Brian reimburse Angela for $5,500 she had paid toward purchase of an automobile. In a subsequent proceeding brought by the conservator for enforcement of the judgment, Brian was ordered to pay the money, and the court awarded a judgment with interest, entered January 9, 2001.

In January, 2011, nearly ten years after the 2001 judgment, Angela’s conservator sought and obtained a writ of garnishment. After back-and-forth series of rulings, the trial court cancelled the writ because the judgment had expired due to the statute of limitations in MCA 15-1-47. The court rejected the conservator’s claim that Angela’s incapacity had tolled the statute of limitations as provided in MCA 15-1-59 because the “conservator is fully authorized to employ attorneys and bring actions on the [ward’s] behalf,” citing USF&G v. Conservatorship of Melson, 809 So.2d 647, 654 (Miss. 2002).

Angela’s conservator appealed.

In the case of Conservatorship of Lewis v. Smith, rendered March 5, 2012, the opinion has some key observations about the duties of a conservator when it comes to enforcing and protecting the rights of the ward:

¶8. Lewis contends that the chancellor erred in finding that section 15-1-59 does not toll the statute of limitations in regard to the judgment’s expiration under section 15-1-47. Under section 15-1-47, a judgment lien expires after seven years from the entry of the judgment.

¶9. In her August 26, 2011 order, the chancellor found that section 15-1-59 was “inapplicable to the present matter as it concerns persons with disabilities and minor children; when a conservator was appointed to protect the legal rights of the mentally incapacitated Angela Ann Lewis, thus invoking the provisions of Miss[issippi] Code Ann[otated] [s]ection 15-1-53.” Mississippi Code Annotated section 15-1-53 (Rev. 2012) states:

When the legal title to property or a right in action is in an executor, administrator, guardian, or other trustee, the time during which any statute of limitations runs against such trustee shall be computed against the person beneficially interested in such property or right in action, although such person may be under disability and within the saving of any statute of limitations; and may be availed of in any suit or actions by such person.

It is important to note that “the duties, responsibilities and powers of a guardian or conservator are the same.” Harvey v. Meador, 459 So. 2d 288, 292 (Miss. 1984). See also Miss. Code Ann. § 93-13-259 (Rev. 2004).

¶10. From the language of the order, the chancellor found that the right vested in the conservator and not in Lewis. Lewis contends that this contention is contrary to Weir v. Monahan, 67 Miss. 434, 7 So. 291 (1890). The Mississippi Supreme Court in Weir found that section 15-1-53 only applies “where the legal title to property or the right of action, at law or in equity[,] is in the guardian, and not the infants.” Weir, 67 Miss. at 455, 7 So. at 296. The court noted that “[w]hen the legal title to the property is vested in a trustee who can sue for it, and fails to do so within the time prescribed by law[,] . . . his right of action is barred . . . .” Id.

¶11. Under Mississippi Code Annotated section 93-13-38(1) (Rev. 2004), “All the provisions of the law on the subject of executors and administrators[] relating to settlement or disposition of property limitations . . . shall, as far as applicable and not otherwise provided, be observed and enforced in all guardianships.” Also, Mississippi Code Annotated section 93-13-38(2) (Rev. 2004) states: “The guardian is empowered to collect and sue for and recover all debts due his said ward . . . .”

¶12. From the language of section 93-13-38, the conservator had a fiduciary duty to pursue the $5,500 owed to Lewis. Therefore, the right of action was in the conservator and not Lewis. The conservator was appointed prior to the entry of the judgment of the divorce. The conservator brought the motion to hold Smith in contempt for failure to pay. It was the conservator’s fiduciary duty to file a writ of garnishment when Smith failed to pay. Under the plain language of section 15-1-53, if the right is in the guardian, in this case the conservator, the statute of limitations runs against the guardian and not the ward.

¶13. The right in action is in the conservator, therefore making the savings clause of 15-1-59 inapplicable, because “[t]he purpose of the savings statute is to protect the legal rights of those who are unable to assert their own rights due to disability.” Rockwell v. Preferred Risk Mut. Ins. Co., 710 So. 2d 388, 391 (¶11) (Miss. 1998). Lewis has a court-appointed conservator who is able to assert rights on her behalf. Therefore, Lewis does not require, nor is subject to, the protections provided by the saving clause.

If you are representing a conservator — or a guardian, executor or administrator, for that matter — make sure that your client is doing what is necessary to protect the legal interests of the ward or beneficiary, and is not allowing statutes of limitation to run.

the burden of responsibility of a fiduciary is a heavy one, as I have emphasized here before. This case points up yet another way in which your fiduciary may make a “perilous mistake” in handling the ward’s business. It’s your job to steer your client in the right path, and to help avoid the common mistakes that fiduciaries commit.

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