Kirk v. Pope
| Docket Number: | 2005-CA-02164-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 12-06-2007 Opinion Author: WALLER, P.J. Holding: Reversed and Remanded |
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| Additional Case Information: |
Topic: Contract - Timeliness of M.R.C.P. 60(b) motion - Real party in interest - Standing - M.R.C.P. 17(a) - Judicial estoppel - Remittitur Judge(s) Concurring: SMITH, C.J., EASLEY, CARLSON, DICKINSON, RANDOLPH AND LAMAR, JJ. Concur in Part, Dissent in Part 1: Graves, J., with separate written opinion. Concur in Part, Dissent in Part Joined By 1: Diaz, P.J. Procedural History: Dismissal Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 11-04-2005 Appealed from: Hinds County Circuit Court Judge: Bobby DeLaughter Disposition: Dismissed Kirk's Claims Case Number: 251-96-101CIV |
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| Party Name: | Attorney Name: | |||
| Appellant: | MIKE KIRK |
W. ERIC STRACENER,
W. ANDREW NEELY |
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| Appellee: | RANDY POPE AND DIXIELAND FOREST PRODUCTS, INC. | CYNTHIA A. STEWART, EDWARD J. PETERS, EILEEN N. SHAFFER |
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Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Timeliness of M.R.C.P. 60(b) motion - Real party in interest - Standing - M.R.C.P. 17(a) - Judicial estoppel - Remittitur |
| Summary of the Facts: | Mike Kirk filed a breach-of-contract action against Randy Pope and Dixieland Forest Products, Inc. Kirk was represented by attorney David Baria, and Pope was represented by attorney Leonard Melvin. On August 27, 1998, Kirk filed a Chapter 7 bankruptcy petition in United States Bankruptcy Court. Derek A. Henderson was appointed the Chapter 7 trustee. Kirk did not disclose the existence of his lawsuit against Pope and Dixieland in the bankruptcy proceedings. On December 30, 1998, the bankruptcy case was closed, and Kirk was discharged. Approximately four years after his discharge from bankruptcy, Kirk’s breach of contract case was tried. The jury returned a verdict of $700,000 in favor of Kirk on October 18, 2002. On October 25, 2002, the Bankruptcy Court entered an Order Reopening the Bankruptcy Case. Pope later discharged Leonard Melvin and obtained new counsel, Edward J. Peters and Cynthia Stewart. On November 25, 2002, Pope filed a notice of removal to the United States District Court for the Southern District of Mississippi on the basis that the action related to the bankruptcy estate. On January 23, 2003, the bankruptcy court entered an order approving a motion to employ David Baria as the trustee’s special counsel and approving a contingency fee agreement. On June 24, 2003, the federal court remanded the case to Hinds County because the case already had been tried on the merits, and Kirk’s counsel had been appointed as the trustee’s representative to pursue the cause of action. The trial court granted a remittitur and reduced the judgment to $400,000, which Kirk accepted. Pope filed a Motion for Reconsideration and for Stay of Judgment, which was set for hearing apparently by ex parte order of the trial court, which also stayed all matters. The trial court entered another order granting Kirk additional time to respond to the motion, enjoining Kirk from executing on the judgment, and enjoining Pope from divesting any assets until the motion was heard. The trial court entered an agreed order continuing the hearing on the motion for reconsideration and motion for stay of judgment and continuing the injunctions on both parties. Prior to the hearing, Pope advised the trial court that there would be no hearing, as both parties were negotiating a settlement of the judgment. During this time, neither party submitted an order or requested that the trial court reschedule a hearing regarding Pope’s Motion for Reconsideration. Pope filed a legal-malpractice action against Melvin arising from previous representation in the instant case and executed a contingency-fee agreement with his new counsel, Peters and Stewart. Pope and Melvin settled the malpractice action for $275,000. Kirk filed a motion for contempt and for an injunction to freeze Pope’s assets. That same day, Pope filed a motion asking the court to clarify the December 9, 2003, order and admitting that Pope had disbursed the proceeds from the malpractice settlement and sold at least one asset. The trial court entered an order denying Pope’s Motion for Reconsideration and for Stay of Judgment and lifting the injunctions. Pope filed a Motion for Relief from Judgment, asserting that Kirk was judicially estopped from pursuing his claims against Pope. Thereafter, the trial court vacated the final judgment by memorandum opinion and order, finding that Kirk’s failure to disclose this case to the bankruptcy court effectively stripped Kirk of standing to pursue his claims against Pope. The trial court further found that it lacked jurisdiction over the case and dismissed the final judgment. Kirk appeals. |
| Summary of Opinion Analysis: | Issue 1: Timeliness of 60(b) motion Kirk argues that Pope’s 60(b) motion was not filed “within a reasonable time” from October 28, 2002, or from November 19, 2003—the dates on which the final judgment and remittitur were entered, respectively. Pope filed a Motion for Relief from Judgment on September 14, 2005, and asked the trial court to vacate the October 28, 2002, judgment pursuant to M.R.C.P. 60(b)(1), (4) and (6). Under Rule 60(b), a court may relieve a party from a final judgment, order, or proceeding when “(4) the judgment is void” or for “(6) any other reason justifying relief from the judgment.” A motion pursuant to Rule 60(b)(4) or (6) must be made within a reasonable time. On November 5, 2002, Pope filed a Motion for Judgment Notwithstanding the Verdict, or in the Alternative, for a New Trial. Pope’s motion alleged errors in the denial of jury instructions, ineffective assistance of counsel, and error in allowing perjured testimony regarding Kirk’s bankruptcy. The motion also incorporated by reference every objection made during trial and pre-trial motions. On November 19, 2003, the trial court overruled Pope’s Motion for Judgment Notwithstanding the Verdict and for New Trial. Subsequently, on November 25, 2003, Pope filed a Motion for Reconsideration and requested a stay of judgment. It was not until May 24, 2005, that the trial court entered an order denying Pope’s Motion for Reconsideration and lifting all injunctions. Pope then filed his Motion for Relief from Judgment pursuant to Rule 60(b) on September 14, 2005. Pope properly pursued all other remedies prior to requesting the exceptional relief afforded under Rule 60(b). Accordingly, the trial court correctly calculated the “reasonable time” period from the May 24, 2005, order. The trial court ultimately granted Pope’s Motion for Relief from Judgment pursuant to Rule 60(b)(4). Pope filed his 60(b) motion approximately four months after the court’s May 24, 2005, order—well within the six-month time frame applicable to other provisions under Rule 60(b). Accordingly, the trial judge did not abuse his discretion in finding that the 60(b) motion was timely. Issue 2: Real party in interest Kirk argues that the circuit court erred in finding that because Kirk was no longer the real party in interest when he filed his bankruptcy petition, he lacked standing to pursue the claim. A real-party-in-interest defense must be timely and may be waived if tardily asserted. Because the earliest Pope alluded to a possible real-party-in-interest defense was after jury selection and just prior to the start of the trial, Pope waived any real-party-in-interest defense. However, standing is a jurisdictional issue which may be raised by any party or the Court at any time. To have standing, there must be a present, existent actionable title or interest which must be completed at the time the cause of action is filed. Once Kirk filed his bankruptcy petition, he could have standing only if there was a proper ratification by the bankruptcy trustee. A valid ratification requires the ratifying party to authorize continuation of the action and agree to be bound by the result. A ratification also must satisfy the purpose of M.R.C.P. 17(a) which is to assure that the judgment will be final and that res judicata will protect the defendant from having to defend a separate action. The Motion to Employ Special Counsel and Approve Contingency Agreement approved by the bankruptcy court authorizes continuation of the action on behalf of the bankruptcy estate and therefore meets the first requirement for a valid ratification. However, the agreement does not expressly state that the trustee will be bound by the result or that Pope and Dixieland will be protected from having to defend a later lawsuit. Despite its deficiencies, the trustee’s Motion to Employ Special Counsel constitutes a valid ratification due to the status of the case at the time the bankruptcy court approved the motion. When the bankruptcy court approved the motion, Kirk already had obtained a judgment on the suit. The trustee’s motion noted that a judgment already had been entered and, thus, implicitly agreed to be bound by the result. While ratification did not occur until after the judgment had been entered, the trial court retained jurisdiction to enter a valid judgment in the subject case. Under Rule 17(a), ratification is given the same treatment as substitution—each has the same effect as if the action had been commenced in the name of the real party in interest. Accordingly, the ratifying party “steps into the shoes” of the original party so that subject matter jurisdiction remains intact. Moreover, post-judgment ratifications have been deemed valid by other courts. Because a proper ratification occurred, the trustee in bankruptcy has standing to pursue the claim. Issue 3: Judicial estoppel There are three requirements for judicial estoppel: the party is judicially estopped only if its position is clearly inconsistent with the previous one; the court must have accepted the previous position; and the non-disclosure must not have been inadvertent. Kirk’s failure to list the lawsuit represented that no such suit existed and is inconsistent with his subsequent pursuit of the claim. Because the bankruptcy court could only have granted Kirk’s discharge based on the information before it, the court necessarily relied on the contents of Kirk’s schedules. The trial court determined that Kirk was less than candid with his bankruptcy attorney regarding the status of the lawsuit. From the time Kirk filed his lawsuit in February 1996 until May 1997, activity on the suit included four notices of deposition and a Motion to Compel Production of Documents, which was denied by the trial court. Regardless, once Kirk resumed pursuit of the claim, he had an affirmative duty to disclose the suit to the bankruptcy court. There was sufficient evidence for the circuit court to conclude that Kirk’s non-disclosure was not inadvertent and that Kirk notified the bankruptcy trustee only because the defendants forced his hand. Therefore, the circuit court did not err in finding that judicial estoppel applied to Kirk. However, Kirk’s bankruptcy trustee should not be judicially estopped from pursuing the claim. On remand, should the trustee recover more than the amount necessary to fully compensate Kirk’s bankruptcy estate, judicial estoppel is invoked against Kirk individually to prevent him from recovering any proceeds of the judgment. Issue 4: Remittitur The trial court issued an order granting Kirk’s Motion for Reconsideration “contingent upon [Kirk’s] acceptance of a remittitur of the trial verdict of $700,000 to $400,000 . . . .” Kirk accepted the remittitur, and the trial court entered a final judgment in the amount of $400,000. The trial court acted in accordance with precedent at the time in granting the remittitur. While the subject case was pending appeal, the Supreme Court adopted a standard which requires that a remittitur take effect only if it is accepted by all parties. Furthermore, if all the parties do not agree to the remittitur, then each party shall have the right to either demand a new trial on damages, or appeal the order asserting an abuse of discretion on the part of the trial judge. Under the new rule, Pope could have chosen to accept the remittitur; demand a new trial on damages; or appeal the order asserting an abuse of discretion on the part of the trial judge. Pope did not agree to accept the remittitur. Because Pope was procedurally barred from demanding a new trial on damages, he should be afforded such opportunity on remand. |
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