Miller v. Parker McCurley Props., LLC
| Docket Number: | 2009-CA-00435-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 06-10-2010 Opinion Author: Carlson, P.J. Holding: On Direct Appeal: Affirmed. On Cross-Appeal: Affirmed |
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| Additional Case Information: |
Topic: Contract - Insurance proceeds - Section 83-17-1 - Penalties - Section 75-17-27 - Finance charge - Section 75-17-1(4) & (5) - Setoff - Attorney's fees - Destruction of property Judge(s) Concurring: Waller, C.J., Graves, P.J., Kitchens and Chandler, JJ. Dissenting Author : Dickinson, J., With Separate Written Opinion Dissent Joined By : Randolph, Lamar and Pierce, JJ. Procedural History: Bench Trial Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 11-18-2008 Appealed from: Jones County Chancery Court Judge: Franklin C. McKenzie, Jr. Disposition: The chancellor found all the elements of breach of contract and ordered “that all sums paid by the Millers to McCurley be refunded to them less the reasonable fair rental value of the property while they occupied it.” As a result of this ruling, McCurley was able to retain the insurance proceeds as well as the subject property. Case Number: 2006-0513 |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Joe Miller and Alice Miller |
LAWRENCE E. ABERNATHY, III, LESLIE D. ROUSSELL |
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| Appellee: | Parker McCurley Properties, L.L.C. and Parker McCurley, Individually | WAYMAN DAL WILLIAMSON | ||
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 - Insurance proceeds - Section 83-17-1 - Penalties - Section 75-17-27 - Finance charge - Section 75-17-1(4) & (5) - Setoff - Attorney's fees - Destruction of property |
| Summary of the Facts: | Joe Miller and Alice Miller filed suit against Parker McCurley Properties, L.L.C., and Parker McCurley, individually, alleging breach of contract and statutory violations by McCurley. This action involves the contract for purchase of a home by the Millers from McCurley, where the home subsequently was rendered uninhabitable by Hurricane Katrina. The chancellor found all the elements of breach of contract and ordered “that all sums paid by the Millers to McCurley be refunded to them less the reasonable fair rental value of the property while they occupied it.” As a result of this ruling, McCurley was able to retain the insurance proceeds as well as the subject property. The Millers appeal, and McCurley cross-appeals. |
| Summary of Opinion Analysis: | Issue 1: Insurance proceeds The Millers argue that, because they paid the insurance premiums prior to the destruction of the property, they should receive the insurance proceeds. The trial judge found that McCurley should have planned for contingencies in his contract with the Millers and that he had several options at the time of loss, although it was impossible for him to provide the house to the Millers after its destruction. However, McCurley offered the Millers no relief other than to place them in another house for which they could not afford the payments. There are three circumstances where performance is excused: a subsequent change in the law, rendering performance unlawful; the destruction, from no fault of either party, of an object which has to exist for there to be performance; and the illness or death of the promisor who contracted to render personal services. Only the second circumstance applies in today’s case, and it is applicable in excusing the Millers’ performance under the contract, not McCurley’s performance. McCurley clearly had a duty to provide the property to the Millers, and Hurricane Katrina undoubtedly rendered it impossible for McCurley to continue providing the property to the Millers. However, as reasoned by the judge, McCurley, in agreeing to obtain insurance for the Millers at their expense, where he knew the Millers would be unable to obtain insurance on their own, had a duty to provide adequate insurance on the property. McCurley failed to do so, and his failure to plan for such an event does not render him exempt from liability. McCurley failed to provide adequate insurance to repair the house, failed to refund the Millers’ payments to them, and failed to give all or part of the insurance proceeds to the Millers at the time they were received. The judge thus did not abuse his discretion in finding that McCurley was liable to the Millers for their loss. In light of the evidence before the judge that the Millers never had inquired about the remaining amounts owed on the property, or a payoff coupled with the property’s continued deterioration since Hurricane Katrina, the judge did not abuse his discretion. The Millers argue, as a matter of law, that section 83-17-1 makes McCurley the Millers’ agent for the procurement of insurance, and in the alternative, makes McCurley the insurer. However, this statute is inapplicable to this case. Issue 2: Penalties The Millers argue that their contracted-for late fee of $50 was charged on four occasions in excess of the maximum statutory amount. Section 75-17-27 allows a late-payment charge of five dollars or four percent of the amount of any delinquency, whichever is greater. The statute further provides that if the contracted for late fee does not exceed the statutory maximum, then it will not be considered a finance charge. Thus, it would follow that a late fee in excess of the statutory maximum will be considered a finance charge. Two of the four late fees exceeded four percent of the delinquency, totaling $21.40 paid in late fees in excess of the statutory maximum. Therefore, the amount of $21.40 must be considered a finance charge. Additionally, the judge found, as required by section 75-17-27, that the record establishes “some delinquency for more than fifteen days” prior to a late-fee assessment. There is nothing to show that the chancellor was clearly erroneous in making this finding of fact. Issue 3: Finance charge The Millers argue that McCurley violated section 75-17-1(4) by charging a finance charge in excess of ten percent on residential real estate. However, as argued by McCurley, subsection 5 of this statute provides that the interest rate provided for in the Agreement is lawful. This subsection is applicable where any debtor contracts for and agrees to pay, and any extender of credit contracts for and receives, any finance charge agreed to in writing by the parties, under which the principal balance to be repaid originally exceeds $2,000. This subsection further provides that, as to any such agreement, the claim of usury or violation of any law prescribing, limiting, or regulating the rate of finance charge by any debtor is prohibited. In today’s case, Miller and McCurley contracted for – in writing by the parties – a nineteen percent interest rate where the original principal balance to be repaid exceeded $2,000. Therefore, in accordance with section 75-17-1(5), the Millers cannot now claim usury or a violation of section 75-17-1(4). Issue 4: Unrequested relief The Millers argue that the judge awarded McCurley an unrequested setoff of rental value together with the $35,000 in insurance proceeds. A setoff is a counterclaim which the defendant has against the plaintiff, but which is extrinsic to the plaintiff’s claim. McCurley was not awarded a setoff by the judge. Rather, the judge, in seeking an equitable remedy, granted the Millers a refund of all their payments to McCurley, including taxes and insurance, less reasonable fair rental value of the property while they occupied it. This was in no way a setoff to McCurley; it was an award to the Millers, deducting fair rental value for the benefit the Millers received in occupying the property. Issue 5: Attorney’s fees The judge correctly found no provision for attorney’s fees in the event of breach of contract in the Agreement between the parties, and no statutory basis for awarding attorney’s fees for a breach of contract. If attorney’s fees are not authorized by the contract or by statute, they are not to be awarded when an award of punitive damages is not proper. There has been no finding for an award of punitive damages. Issue 6: Destruction of property On cross-appeal, McCurley asks the Court to adopt the rule applied by other jurisdictions involving the destruction of a property in the middle of the payment schedule under a land-sale contract prior to the transfer of legal title, i.e., once an insurance company has paid the full amount of the policy to the seller, the proceeds received by the seller must be applied toward the purchase price, and upon the payment of any difference, legal title shall be transferred to the buyer. The judge applied the proper legal standard and was able to provide an equitable remedy in today’s case. This proposition might have had some merit when the property was damaged more than four years ago, but today, the effect of applying the rule that the insurance proceeds are to be applied to the remaining balance owed to the seller, McCurley, under the contract, as requested by McCurley on cross-appeal, would leave the Millers with a dilapidated property where they would not only have to bear the cost of the remaining balance owed McCurley, but also potentially unaffordable repair costs and/or demolition expenses. |
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