O.W.O. Invs., Inc. v. Ston Inv. Co., Inc.
| Docket Number: | 2008-CA-01620-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 04-08-2010 Opinion Author: Chandler, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Fraud - Agency relationship - Tortious interference with contract Judge(s) Concurring: Graves, P.J., Randolph, Kitchens and Pierce, JJ. Dissenting Author : Dickinson, J., With Separate Written Opinion Dissent Joined By : Waller, C.J., Carlson, P.J., and Lamar, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - TORTS - OTHER THAN PERSONAL INJURY & PROPERTY DAMAGE |
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| Trial Court: |
Date of Trial Judgment: 08-14-2008 Appealed from: STONE COUNTY CHANCERY COURT Judge: D. Neil Harris Disposition: The Chancery Court of Stone County denied Diamond’s motion for summary judgment and granted Stone Investments’s motion for summary judgment. Case Number: 2007-0003-1 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | O.W.O. Investments, Inc. |
NICHOLAS VAN WISER |
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| Appellee: | Stone Investment Company, Inc. | JACK PARSONS, TADD PARSONS | ||
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 - Fraud - Agency relationship - Tortious interference with contract |
| Summary of the Facts: | O.W.O. Investments, Inc., commenced a lawsuit against Stone Investments, Inc.; John Diamond, individually, John Diamond; d/b/a Stone Ready Mix, LLC; and Diamond Disposal, Inc. The action involved a contract and an amended contract providing for O.W.O.’s purchase from Diamond of three hundred acres of land for a landfill in Stone County. O.W.O. alleged that Diamond had misrepresented that he owned the entire three-hundred-acre parcel when, in fact, 40.05 acres of the land were owned by Stone Investments. O.W.O. alleged that attorney Jack Parsons had represented Diamond at the execution of the contract. O.W.O. further alleged that Parsons also was the attorney for Stone Investments, and that Parsons had known, when the contract and the amended contract were executed, that the 40.05 acres were owned by Stone Investments, not Diamond. O.W.O. asserted claims for seller’s breach of warranties and representations, misrepresentation and fraud, imposition of a construction lien, and damages in the amount of $115,034, plus punitive damages. O.W.O. later filed a second amended complaint asserting a claim for tortious interference with contract. The court denied Diamond’s motion for summary judgment and granted Stone Investments’s motion for summary judgment. O.W.O. voluntarily dismissed Diamond and pursued this appeal against Stone Investments. |
| Summary of Opinion Analysis: | Issue 1: Fraud O.W.O. argues that there were genuine issues of material fact because there was sufficient evidence that Parsons had made a material misrepresentation that Diamond owned the entire three hundred acres under contract, and his misrepresentation constituted fraud and tortious interference with contract. The elements of fraud include a representation, its falsity, its materiality, the speaker's knowledge of its falsity or ignorance of its truth, his intent that it should be acted on by the hearer and in the manner reasonably contemplated, the hearer's ignorance of its falsity, his reliance on its truth, his right to rely thereon, and his consequent and proximate injury. This case must be resolved through the application of agency principles. O.W.O. sued Parsons’s client, Stone Investments, not Parsons individually. The relationship between client and attorney, regardless of the variations in particular compensation agreements or the amount of skill and effort the attorney contributes, is a quintessential principal-agent relationship. For liability to attach to Stone Investments based on Parsons’s misrepresentation, there must have been sufficient evidence to enable a jury to find that Parsons was acting as Stone Investments’ agent at the time that he made the alleged misrepresentation. An agent may bind his or her principal through actual or apparent authority. Apparent authority exists when a reasonably prudent person, having knowledge of the nature and the usages of the business involved, would be justified in supposing, based on the character of the duties entrusted to the agent, that the agent has the power he is assumed to have. Parsons’s status as the attorney for Stone Investments would have been sufficient to enable a jury to find that he had the requisite knowledge and was guilty of a misrepresentation. Nonetheless, even if Parsons committed a misrepresentation, viewing all of the evidence in the light most favorable to O.W.O., there was no evidence that Parsons was acting on behalf of Stone Investments at the relevant time. The evidence was that Parsons had represented Diamond during the negotiation and execution of the original contract; Stone Investments was not a party to that contract. No evidence tended to show that Stone Investments had cloaked Parsons with any authority to act on its behalf during the negotiation and execution of the original contract between Diamond and O.W.O. Rather, the evidence was that Stone Investments had authorized Parsons to negotiate with Diamond and to communicate with O.W.O. on its behalf only after O.W.O. had discovered that Stone Investments owned the 40.05 acres. Thus, Parsons’ alleged misrepresentation did not bind Stone Investments as a matter of law, and Stone Investments was entitled to summary judgment. Additionally, O.W.O. waived its claim to recover the earnest money by entering into a new contract which superceded the original contract. Issue 2: Tortious interference with contract O.W.O. argues that Parsons’s misrepresentation as to Diamond’s landholdings during negotiation and execution of the original contract constituted tortious interference with contract. The elements of tortious interference with contract are that the acts were intentional and willful; that they were calculated to cause damage to the plaintiffs in their lawful business; that they were done with the unlawful purpose of causing damage and loss, without right or justifiable cause on the part of the defendant (which constitutes malice); and that actual damage and loss resulted. Considering the evidence in the light most favorable to O.W.O., there was no evidence that Parsons was acting on behalf of Stone Investments during Diamond’s negotiation of the original contract with O.W.O. Additionally, there was no evidence from which it could be inferred that Parsons had concealed Stone Investments’s ownership of the land with the unlawful purpose of causing O.W.O. to suffer damage and loss, or that his conduct was calculated to cause damage to O.W.O. in its lawful business. Thus, Stone Investments was entitled to a judgment as a matter of law. |
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