Knox v. BancorpSouth Bank
| Docket Number: | 2008-CA-01390-COA | |
| Court of Appeals: |
Opinion Link Opinion Date: 06-22-2010 Opinion Author: King, C.J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Contract - Waiver - M.R.C.P. 8(c) - Merger Judge(s) Concurring: Lee and Myers, P.JJ., Irving, Griffis, Ishee, Roberts, Carlton and Maxwell, JJ. Non Participating Judge(s): Barnes, J. Procedural History: Summary Judgment Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 06-26-2008 Appealed from: DeSoto County Circuit Court Judge: Robert P. Chamberlin Disposition: GRANTED SUMMARY JUDGMENT FOR BANCORPSOUTH Case Number: CV06-287-CD |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | William P. Knox, Individually and as Trustee of the William P. Knox Revocable Living Trust |
PAIGE ANN MCDOWELL, CHRISTIAN T. GOELDNER |
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| Appellee: | BancorpSouth Bank, a Mississippi Banking Corporation | JAMES PATRICK CALDWELL, KEVIN B. SMITH | ||
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 - Waiver - M.R.C.P. 8(c) - Merger |
| Summary of the Facts: | William P. Knox met with Barry Hunt, a mortgage broker for United Mortgage DeSoto, in late 2004 to obtain a loan. The loan was to be for 80% of the appraised value of the collateral, the Continental Foundry Building. Knox believed that the Foundry Building would appraise for $3,200,000 and would allow a loan of approximately $2,560,000. Knox desired a fixed interest-rate loan repayable over a term of twenty years. Hunt informed Knox that it would take approximately thirty to sixty days to process and disburse the loan. However, because Knox had agreed to purchase some real estate, he needed approximately $400,000 immediately. Hunt encouraged Knox to meet with BancorpSouth representatives about obtaining a loan. Knox met with representatives of BancorpSouth. Representing BancorpSouth at this meeting were Michael Anderson, Anthony Vanderford, and Brian Walhood. According to Anderson, Knox requested a $2,000,000 replenishing line of credit to purchase some real estate. Anderson testified during his deposition that at the end of one year, the outstanding balance drawn against that line of credit would then be converted to a permanent loan. Anderson stated that during the meeting in January 2005, Knox requested that the permanent loan have an amortization period anywhere from ten to fifteen years with a three- to five-year balloon payment. Anderson informed Knox that the request for the permanent loan would require approval by BancorpSouth loan administration. According to Knox, he and BancorpSouth entered into two oral agreements during the meeting. Knox, as the trustee of the William P. Knox revocable living trust, executed a short-term loan with BancorpSouth. The short-term loan in the amount of $2,000,000 had an interest rate of 5.5% per annum, and it matured on February 14, 2006. On June 18, 2006, BancorpSouth representatives requested a meeting with Knox. BancorpSouth stated that after reviewing the builder-guidance line-of-credit relationship and other factors, it was concerned about Knox’s creditworthiness. As a result of BancorpSouth’s concerns, it offered Knox the option of renewing the existing balance on the short-term loan instead of calling the existing short-term loan as due and payable. The renewed note would be payable in three years with an interest rate of 8.5% per annum and a balloon payment to be made at the end of the three years. Knox signed the renewal document. A few months later, Knox filed a complaint against BancorpSouth for breach of contract, tortious breach of contract, promissory estoppel, equitable estoppel, and infliction of mental anguish. BancorpSouth filed a motion for summary judgment or, in the alternative, for partial summary judgment and a motion to enforce the waiver of a jury trial. Summary judgment was granted in favor of BancorpSouth. Knox appeals. |
| Summary of Opinion Analysis: | The trial court granted summary judgment on the grounds that the alleged oral agreement claimed by Knox merged into the written contracts of February 14, 2005, and June 19, 2006, and Knox neither alleged nor presented any proof that BancorpSouth had breached the written contracts. Knox argues that because BancorpSouth did not plead the affirmative defenses of merger and waiver until more than a year after filing its response, it waived its opportunity to raise these defenses in its motion for summary judgment. A defendant’s failure to timely and reasonably raise and pursue the enforcement of any affirmative defense or other affirmative matter or right which would terminate or stay the litigation, coupled with active participation in the litigation process, will ordinarily serve as a waiver. According to M.R.C.P. 8(c), waiver is an affirmative defense that should have been set forth in BancorpSouth’s responsive pleading. The record indicates that BancorpSouth invoked the defense of waiver as its first defense in its responsive pleading. However, the doctrine of merger is not an affirmative matter, which would terminate or stay litigation, that must be pled pursuant to Rule (8)(c). A party who has full knowledge of all defenses to a note and executes a new note payable at a future date waives all defenses and becomes obligated to pay the new note. In addition to having a ten-year business relationship with BancorpSouth, Knox was an experienced businessman. Not only was Knox aware of the consequences surrounding his execution of the renewal note, but he made a sound business decision to execute the written contracts. As a result, Knox waived his claim to any cause of action that he had against BancorpSouth. Under the doctrine of merger, acceptance of the terms of the written contracts constitutes acceptance of any prior oral discussions, negotiations, or agreements. A written contract cannot be varied by prior oral agreements. Knox freely agreed to sign both written contracts. The record does not indicate that Knox alleged or presented any evidence that BancorpSouth violated or breached the written agreements in any way. Moreover, Knox neither provided any evidence of any oral agreements between the parties nor any evidence of the intentions of both parties besides what was found in the written agreements. Summary judgment in this case was proper. |
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