BancorpSouth Bank, Walter S. Pearson and Jane C. Pearson v. Bruce Sweet Potato, Inc

CourtCourt of Appeals of Mississippi
DecidedMay 5, 2020
DocketNO. 2019-CA-00597-COA
StatusPublished

This text of BancorpSouth Bank, Walter S. Pearson and Jane C. Pearson v. Bruce Sweet Potato, Inc (BancorpSouth Bank, Walter S. Pearson and Jane C. Pearson v. Bruce Sweet Potato, Inc) is published on Counsel Stack Legal Research, covering Court of Appeals of Mississippi primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BancorpSouth Bank, Walter S. Pearson and Jane C. Pearson v. Bruce Sweet Potato, Inc, (Mich. Ct. App. 2020).

Opinion

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2019-CA-00597-COA

BANCORPSOUTH BANK, WALTER S. APPELLANTS PEARSON AND JANE C. PEARSON

v.

BRUCE SWEET POTATO, INC. APPELLEE

DATE OF JUDGMENT: 03/08/2019 TRIAL JUDGE: HON. JOHN KELLY LUTHER COURT FROM WHICH APPEALED: CHICKASAW COUNTY CIRCUIT COURT, FIRST JUDICIAL DISTRICT ATTORNEYS FOR APPELLANTS: GENE D. BERRY TINA MARIE DUGARD SCOTT ATTORNEYS FOR APPELLEE: J. HALE FREELAND D. BETH SMITH NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: AFFIRMED IN PART; REVERSED AND REMANDED IN PART - 05/05/2020 MOTION FOR REHEARING FILED: MANDATE ISSUED:

CONSOLIDATED WITH

NO. 2019-CA-00601-COA

BANCORPSOUTH BANK, WALTER S. APPELLANTS PEARSON AND JANE C. PEARSON

DATE OF JUDGMENT: 03/08/2019 TRIAL JUDGE: HON. JOHN KELLY LUTHER COURT FROM WHICH APPEALED: CALHOUN COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANTS: GENE D. BERRY TINA MARIE DUGARD SCOTT ATTORNEYS FOR APPELLEE: J. HALE FREELAND D. BETH SMITH NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: AFFIRMED IN PART; REVERSED AND REMANDED IN PART - 05/05/2020 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE CARLTON, P.J., TINDELL AND McDONALD, JJ.

CARLTON, P.J., FOR THE COURT:

¶1. Walter Pearson and Jane Pearson purchased real property from Richard Bailey. After

purchasing the property, the Pearsons and BancorpSouth1 (collectively, the Appellants)

learned that the property was subject to a default judgment entered against Bailey. Prior to

the Pearsons’ purchase of the real property, the judgment was enrolled by Bruce Sweet

Potato Inc.

¶2. After the Pearsons purchased the property, Bruce Sweet Potato sought to execute on

its judgment against Bailey. The Appellants filed several actions seeking to enjoin Bruce

Sweet Potato from executing on the judgment.

¶3. The Appellants now appeal from three orders entered by the Chickasaw County

Circuit Court and Calhoun County Circuit Court.2 In these orders, the circuit courts found

that the default judgment entered against Bailey was not void and that the Appellants lacked

standing to attack the default judgment. The circuit courts also denied the Appellants’

motions to quash or stay the writ of execution filed by Bruce Sweet Potato.

1 The record reflects that BancorpSouth held a deed of trust on the real property in the amount of over $700,000. 2 The same circuit court judge presided over the actions in both counties.

2 ¶4. After our review, we affirm the Calhoun County Circuit Court’s order denying the

Appellants’ motion to intervene in the default judgment matter and to set aside as void the

default judgment. However, because we find that the Appellants possessed standing to

challenge the writ of execution, we reverse the March 8, 2019 orders of the Calhoun County

Circuit Court and Chickasaw County Circuit Court denying the Appellants’ motions to quash

or stay the writ of execution, and we remand these cases for further proceedings consistent

with this opinion.

FACTS

¶5. On April 26, 2016, Bruce Sweet Potato sent a demand letter to Magnolia Brand

Produce Inc. and “Richard Bailey, [I]ndividually,” seeking to collect a debt in the amount of

$177,019, owed for the purchase of sweet potatoes. The letter informed Bailey that “this is

an attempt to collect a corporate and individual debt from you as Guarantor . . . .”

¶6. After Bailey or the corporations failed to respond to the demand letter, Bruce Sweet

Potato filed an action in the Calhoun County Circuit Court on July 6, 2016, against “Richard

Bailey, d/b/a CC Farms, Magnolia Brand Produce, Inc., [and] REB Cane Creek Farms, Inc.,”

seeking recovery of that $177,019 that remained due. At the time of the action, Bailey was

the registered agent, incorporator, director, and president of Magnolia Brand Produce. Bailey

was also the registered agent, president, and director of REB Cane Creek Farms.

¶7. On July 6, 2016, a summons was issued to “Richard Bailey, d/b/a CC Farms,” “REB

Cane Creek Farms, Inc.” and “Magnolia Brand Produce, Inc.” The proof of service indicates

that Bailey was personally served on July 7, 2016. Bailey did not file an answer or otherwise

3 respond to the complaint.

¶8. On August 22, 2016, upon motion by Bruce Sweet Potato, the Calhoun County Circuit

Court entered a default judgment against Bailey in the amount of $207,019. The record

reflects that this amount included attorney’s fees plus interest accruing until the judgment

was paid. The default judgment reflects that Bailey did not “plead or otherwise defend”

against the summons and complaint. Bailey did not file a motion to set aside the default

judgment, and he is not a party to this appeal.

¶9. On August 24, 2016, the judgment was enrolled in the Chickasaw County Circuit

Clerk’s office. This judgment listed the defendant’s name as “Bailey Richard”3 and provided

his address as 14 Highway 341, Vardaman, Mississippi.

¶10. On November 23, 2016, the Pearsons purchased 220 acres of land from Bailey via

warranty deed. On January 30, 2017, after learning of the judgment lien against Bailey, the

Appellants filed a complaint to remove cloud on the title in the Chickasaw County Chancery

Court. In support of their complaint, the Appellants argued that the default judgment was

void because service of process on Bailey was defective. The Appellants explained that a

separate summons was not issued for each defendant as required by Mississippi Rule of Civil

Procedure 4. The Appellants also argued that the August 24, 2016 abstract of the judgment

against Bailey that was enrolled in the office of the Chickasaw County Circuit Clerk was

improper because the judgment listed the defendant’s name as “Bailey Richard,” and was

3 The Secretary of State website lists the registered agent’s name as “Bailey, Richard” on the corporation pages for Magnolia Brand Produce and REB Cane Creek Farms.

4 therefore not a valid lien on the real property of “Richard Bailey.”4

¶11. On August 15, 2018, the Appellants filed a motion for summary judgment on their

complaint to remove cloud on the title. Bruce Sweet Potato filed its response in opposition

to the motion for summary judgment, arguing that the service of process upon Bailey was not

defective and that the Appellants failed to perform a proper title check prior to purchasing

the land.

¶12. The Chickasaw County Chancery Court held a hearing on the matter on October 18,

2018. The chancellor entered an order on October 23, 2018, denying the Appellants’ motion

for summary judgment.

¶13. On January 9, 2019, more than two years after the entry of the default judgment, the

Appellants filed a motion in the Calhoun County Circuit Court to intervene in the default

judgment matter and to set aside as void the default judgment entered against Bailey.5 In

their motion, the Appellants argued that a separate summons was not issued for each

defendant as required by Rule 4, and, therefore, the default judgment was void because

service of process on Bailey was defective.

¶14. The Appellants attached to the motion an affidavit from Bailey dated January 9, 2019.

In his affidavit, Bailey stated that the debt claimed by Bruce Sweet Potato was not a debt by

4 The Appellants raised the issue in their motion for summary judgment in chancery court but not in the circuit court cases that are the subject of this appeal.

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Bluebook (online)
BancorpSouth Bank, Walter S. Pearson and Jane C. Pearson v. Bruce Sweet Potato, Inc, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bancorpsouth-bank-walter-s-pearson-and-jane-c-pearson-v-bruce-sweet-missctapp-2020.