Knight Props, Inc., v. State Bank & Trust Co.
| Docket Number: | 2009-CA-01429-COA Linked Case(s): 2009-CP-01429-COA |
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| Court of Appeals: |
Opinion Link Opinion Date: 02-22-2011 Opinion Author: King, C.J. Holding: Affirmed. |
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| Additional Case Information: |
Topic: Contract - Election of remedies - Affirmative defense - M.R.C.P. 8(c) - Equitable estoppel - M.R.A.P. 31(d) - M.R.A.P. 2(a)(2) - Waiver of defenses Judge(s) Concurring: ee 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 - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 03-23-2009 Appealed from: MADISON COUNTY CIRCUIT COURT Judge: SAMAC RICHARDSON Disposition: SUMMARY JUDGMENT GRANTED TO APPELLEE. JUDGMENT ENTERED FOR $360,000. Case Number: CI-2008-029-R |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Knight Properties, Incorporated and Chad Knight |
DREW MCLEMORE MARTIN, MELISSA SELMAN MARTIN |
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| Appellee: | State Bank & Trust Company | RONALD KEITH FOREMAN, ANNETTE ELISE BULGER MATHIS |
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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 - Election of remedies - Affirmative defense - M.R.C.P. 8(c) - Equitable estoppel - M.R.A.P. 31(d) - M.R.A.P. 2(a)(2) - Waiver of defenses |
| Summary of the Facts: | Knight Properties, Inc. and Chad Knight entered into a contract with State Bank & Trust Co. for a loan and offered six tracts of land as security. KPI and Knight defaulted on the loan, and State Bank pursued a monetary judgment because of a discrepancy in the value of the land. The circuit court granted summary judgment to State Bank. KPI and Knight appeal. |
| Summary of Opinion Analysis: | Issue 1: Election of remedies KPI and Knight argue that the doctrine of election of remedies applies to bar State Bank from pursuing a monetary judgment against them after State Bank provided notice of foreclosure. M.R.C.P. 8(c) requires that, in pleading to a preceding pleading, a party shall set forth affirmatively certain listed defenses and any other matter constituting an affirmative defense. Generally, if the defense is not specifically pleaded in the original answer, the defense is deemed waived. KPI and Knight did not specifically plead election of remedies as a defense in their original answer. In fact, the first reference to the doctrine of election of remedies was within the supplemental memorandum in support of defendant’s motion for reconsideration and to vacate the judgment filed more than three months after the entry of the final judgment in favor of State Bank. Because KPI and Knight failed to raise the affirmative defense of election of remedies in a timely and reasonable manner and participated throughout the litigation process, including discovery and appearing for a hearing before the circuit court, they waived the defense of election of remedies. In addition, KPI and Knight failed to satisfy the necessary elements for the doctrine of election of remedies to bar State Bank from pursuing a monetary judgment instead of foreclosure. Issue 2: Equitable estoppel KPI and Knight argue that equitable estoppel applies to prevent State Bank from foregoing foreclosure and seeking a monetary judgment because KPI and Knight failed to participate in the appeal against the City in reliance on notice of foreclosure. In order to invoke the doctrine of equitable estoppel, KPI and Knight must prove by a preponderance of the evidence that the actions of State Bank induced Knight’s lack of participation in the pending appeal between North Place and the City and that KPI and Knight suffered a detriment in reliance on the notification of foreclosure. Further, State Bank must have had reasonable foresight that such consequences may result. Detrimental reliance on the notice of foreclosure does not seem plausible when Knight had failed to participate in the litigation of the appeal during the ten months prior to the notice of foreclosure. M.R.A.P. 31(d) permits dismissal of the appeal for failure to file timely the appellant’s brief. The circuit court recognized Knight’s failure and entered an order of deficiency pursuant to M.R.A.P. 2(a)(2) for failure to prosecute the appeal and to comply with the Mississippi Rules of Appellate Procedure. Also, there is no evidence to support the claim that State Bank could have anticipated the dismissal of the appeal. The appeal referenced the appellant as North Place; neither KPI nor Knight were named as parties to the appeal. Knight, as the principal owner of both businesses, did not inform State Bank of the restrictions imposed on the land or the appeal regarding the collateral. Issue 3: Waiver of defenses State Bank argued that KPI and Knight had waived the defenses of election of remedies and equitable estoppels by executing the contract. The language of the note and guarantee is clear and unambiguous. KPI and Knight waived the defenses of election of remedies and equitable estoppel in regard to State Bank’s decision to forgo foreclosure and pursue a monetary judgment. |
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