IN THE SUPREME COURT OF MISSISSIPPI
NO. 2024-FC-00827-SCT
CALEB CRABTREE AND ADRIANE CRABTREE AS ASSIGNEES OF THE CLAIMS OF CASEY COTTON
v.
ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY
ATTORNEYS FOR APPELLANTS: SAMUEL S. McHARD P. MANION ANDERSON ATTORNEYS FOR APPELLEE: GRAFTON ERIC BRAGG CORY L. RADICIONI MALLORY M. STREET NATURE OF THE CASE: CIVIL - FEDERALLY CERTIFIED QUESTION DISPOSITION: CERTIFIED QUESTION ANSWERED - 05/15/2025 MOTION FOR REHEARING FILED:
EN BANC.
CHAMBERLIN, JUSTICE, FOR THE COURT:
¶1. The United States Court of Appeals for the Fifth Circuit has asked this Court to
answer the following question: “[d]oes Miss. Code Ann. § 97-9-11 (Rev. [2020]) allow a
creditor in bankruptcy to engage a disinterested third party to purchase a cause of action from
a debtor?” Crabtree v. Allstate Prop. & Cas. Ins. Co., No. 23-60537, 2024 WL 3451894, at
*1 (5th Cir. July 18, 2024). This Court finds that the plain language of Mississippi Code
Section 97-9-11 (Rev. 2020) prohibits a disinterested third party engaged by a bankruptcy
creditor from purchasing a cause of action from a debtor’s estate. FACTS AND PROCEDURAL HISTORY
¶2. The facts and procedural history are fully detailed in the federal court’s opinion. The
conflict between Allstate and Caleb and Adriane Crabtree originates from a car collision
between Casey Cotton and the Crabtrees. Id. Caleb was severely injured, and he and
Adriane, his wife, filed suit against Cotton and Cotton’s insurer, Allstate, on December 10,
2018. It is the Crabtrees’ contention that Allstate refused early settlement offers and failed
to inform Cotton of the Crabtrees’ offers. Id. The claims against Allstate were eventually
dismissed, but the claims against Cotton proceeded in the Lamar County Circuit Court.
¶3. During the pendency of the personal injury suit, Cotton declared bankruptcy. Included
in his bankruptcy estate was a potential bad faith claim against Allstate based upon the timing
with which liability proceeds were tendered to the Crabtrees. The Crabtrees were unsecured
creditors to Cotton’s estate and petitioned the bankruptcy court to allow the personal injury
suit to proceed to trial. “The [b]ankruptcy [c]ourt directed that the suit in Lamar County
Circuit Court against Cotton be liquidated by proceeding to jury trial to obtain a judgment
in order to pursue the claims against Allstate for any resulting excess judgment and other
damages.” Crabtree v. Allstate Prop. & Cas. Ins. Co., 695 F. Supp. 3d 808, 811 (S.D. Miss.
Sept. 2023). The Crabtrees sought an assignment of Cotton’s bad faith claim as a settlement
of their unsecured claims in Cotton’s bankruptcy estate. The trustee agreed to allow the
Crabtrees to purchase Cotton’s bad-faith claim for $10,000. The Fifth Circuit recounts the
facts as follows:
The Crabtrees, however, could not afford the $10,000 up-front, so they engaged Court Properties, L.L.C., to assist with financing. Court Properties
2 paid the bankruptcy trustee $10,000 to acquire the bad-faith claim, then assigned that claim to the Crabtrees in exchange for $10,000 plus interest at 8% with repayment contingent on successful recovery from Allstate.
Crabtree, 2024 WL 3451894, at *2.
¶4. On January 11, 2022, Cotton was discharged from bankruptcy, and on January 19,
2022, a jury verdict in favor of the Crabtrees on the personal injury suit in the amount of
$4,605,000 was entered. Crabtree, 695 F. Supp. 3d at 811. This was in excess of the
$25,000 policy limit on Cotton’s insurance with Allstate.
¶5. The Crabtrees filed this action in the United States District Court for the Southern
Distict Mississippi on December 22, 2022. Id.
The district court dismissed that action for lack of subject matter jurisdiction. It held that the assignment of Cotton’s claim to Court Properties and Court Properties’s assignment to the Crabtrees were champertous and hence void under § 97-9-11. Thus it found that the Crabtrees lacked Article III standing because absent Cotton’s bad-faith claims, the Crabtrees had not suffered any injury at Allstate’s hands.
The Crabtrees appealed, averring that (1) champerty is not available to Allstate as a defense to its suit, or, alternatively, (2) the assignments at issue were not champertous.
Crabtree, 2024 WL 3451894, at *1.
¶6. On appeal, the Fifth Circuit determined that tension exists between the text of Section
97-9-11 and our caselaw that deprived it “of state-court guidance on whether § 97-9-11 voids
the assignment in this case.” Id. at *5. Accordingly, the Fifth Circuit certified a question to
this Court for an answer. Id.
CERTIFIED QUESTION
¶7. Does Section 97-9-11 allow a creditor in bankruptcy to engage a disinterested third
3 party to purchase a cause of action from a debtor?
STANDARD OF REVIEW
¶8. Mississippi Rule of Appellate Procedure 20 authorizes the Fifth Circuit to certify a
question to this Court when in a proceeding before that court a question or proposition of law
arises that may be “determinative of all or part of that cause and there are no clear controlling
precedents” in this Court’s decisions. M.R.A.P. 20(a). “The Supreme Court may, in its
discretion, decline to answer the questions certified to it.” Id. If this Court answers the
question, it will restrict its review to “[‘]declaring in general terms the controlling rules’ of
state law, and not application of law to fact.” Id. cmt. (quoting Boardman v. United Servs.
Auto. Ass’n, 470 So. 2d 1024, 1031 (Miss. 1985)). The role of this Court is limited to law
declaration; fact finding and law application is the responsibility of the fact-finding court,
which in this instance is the Fifth Circuit.
ANALYSIS
¶9. Mississippi Code Section 97-9-11 (Rev. 2020), is the Mississippi statute that prohibits
champerty and maintenance. It states:
It shall be unlawful for any person, firm, partnership, corporation, group, organization, or association, either incorporated or unincorporated from this state or any other state, either before or after proceedings commenced: (a) to promise, give, or offer, or to conspire or agree to promise, give, or offer, (b) to receive or accept, or to agree or conspire to receive or accept, (c) to solicit, request, or donate, any money, bank note, bank check, chose in action, personal services, or any other personal or real property, or any other thing of value, or any other assistance as an inducement to any person to commence or to prosecute further, or for the purpose of assisting such person to commence or prosecute further, any proceeding in any court or before any administrative board or other agency, regardless of jurisdiction; provided, however, this section shall not be construed to prohibit the constitutional right of regular
4 employment of any attorney at law or solicitor in chancery, for either a fixed fee or upon a contingent basis, to represent such person, firm, partnership, corporation, group, organization, or association before any court or administrative agency.
Miss. Code Ann. § 97-9-11 (Rev. 2020).
¶10. The Court analyzed this statute in Sneed v. Ford Motor Co., 735 So. 2d 306 (Miss.
1999). In Sneed, this Court defined champerty as “[a] bargain between a stranger and a party
to a lawsuit by which the stranger pursues the party’s claim in consideration of receiving part
of any judgment proceeds . . . .” Id. at 309 (alterations in original) (quoting Champerty,
Black’s Law Dictionary (6th ed. 1990)). The Court defined maintenance as “officious
intermeddling in a suit which in no way belongs to one, by maintaining or assisting either
party, with money or otherwise to prosecute or defend it . . . .” Id. (alteration in original)
(quoting State ex rel. Carr v. Cabana Terrace, Inc., 247 Miss. 26, 153 So. 2d 257, 259
(1963)). This Court also, however, stated that the terms champerty and maintenance, “have
been used by the courts almost interchangeably.” Id. (internal quotation mark omitted)
(quoting Cabana Terrace, Inc., 153 So. 2d at 259).
¶11. Mississippi Code Section 97-9-23 (Rev. 2020) provides exceptions to maintenance.
It states in relevant part:
Nothing in Sections 97-9-11 through 97-9-23 is intended to be in derogation of the constitutional right of real parties in interest to employ counsel or to prosecute any available legal remedy. The intent, as herein set out, is to prohibit and punish, more clearly and definitely, champerty, maintenance, barratry, and the solicitation or stirring up of litigation, whether the same be committed by licensed attorneys or by others who are not real parties in interest to the subject matter of such litigation.
Miss. Code Ann. § 97-9-23 (Rev. 2020) (emphasis added).
5 ¶12. The parties spend a considerable amount of their supplemental briefing arguing issues
unrelated to the question certified to this Court. The dissent takes the bait and proceeds to
answer every imaginable question . . . except the one we were asked. In accordance with this
Court’s appellate rules, any answer by this Court will only address the legal question asked
by the Fifth Circuit, not ancillary arguments or applications of law to fact.1 M.R.A.P. 20 cmt.
(quoting Boardman, 470 So. 2d at 1031). Further, this Court is not asked how it would rule
on the dispositive issues of this case. Instead, this Court restricts its answer to the question
asked by the Fifth Circuit.2
¶13. The answer to the certified question is that Section 97-9-11, by its plain language,
prohibits a creditor in bankruptcy from engaging a disinterested third party to purchase a
cause of action from a debtor. Section 97-9-11 clearly states that it is unlawful for any
person to “solicit, request or donate any money . . . as an inducement to any person to
commence or to prosecute further . . . any proceeding in any court[.]” Solicitation of a truly
disinterested third party to prosecute a case in which it has no legitimate interest would
violate the plain terms of Section 97-9-11.
¶14. Pursuant to Section 97-9-23, the maintenance statute does not apply when a real party
in interest is seeking to “prosecute any available legal remedy.” Accordingly, Section 97-9-
1 We invite the dissent to follow Supreme Court caselaw and the rules of appellate procedure by limiting its answer to questions of law. 2 In other words, we will not be making any factual determination regarding whether Court Properties, LLC, constitutes a disinterested party nor how its relationship with Crabtree might affect such a determination. Those are issues being decided by the federal court. Further, the federal court does not ask this Court to decide this issue but instead provides us with a scenario in which we are told there is a disinterested third party.
6 23 would not prohibit a real party in interest from procuring funds to continue litigation in
which they have a legitimate interest.3 This Court has stated that “a party is a ‘real party in
interest’ if it has the legal right under the applicable substantive law to enforce the claim in
question[.]” Sneed, 735 So. 2d at 313 (internal quotation marks omitted) (quoting Real Party
in Interest, Black’s Law Dictionary (6th ed. 1990)). The disinterested third party in the Fifth
Circuit’s question would not be a real party in interest (hence, the term disinterested), and
thus the purchase of the cause of action would not qualify under the stated exception of
Section 97-9-23 as the pursuit of any legal remedy by a real party in interest.4 Again,
engaging a truly disinterested third party to purchase a cause of action in which they have no
legitimate interest would be champerty.
¶15. In Sneed, the Court was tasked with determining whether a settlement agreement
between United States Fire Insurance Company and National Union Fire Insurance Company
3 As we understand the facts, for reasons that are not before us, Crabtree chose not to borrow funds from Court Properties, LLC, to purchase the claim. Rather, they solicited Court Properties, LLC, to actually purchase the claim. Court Properties, LLC, however briefly, apparently became the owner of the claim. These facts are relevant because this federal question only exists because Allstate contends that “the transaction became infected with champerty and maintenance when the Crabtrees invited an outsider to buy the claim, assign it to them, and receive repayment and interest rights from future lawsuit proceeds.” The federal court has already found that “if the Crabtrees had purchased the bad-faith claim directly, the assignment would likely not have been champertous under Sneed.” Crabtree, 2024 WL 3451894, at *4. According to the parties and the federal court, it is Court Properties’ brief ownership that raises the issue of champerty. 4 To address the dissent’s concern with an overly simplified answer, we specifically disclaim any finding about third-party funding of litigation. Diss. Op. ¶ 55. That would require factual scenarios not before this Court and would expand this opinion to advisory. Tunica Cnty. Democratic Exec. Comm. v. Jones, 233 So. 3d 792, 797 (Miss. 2017) (“This Court does not issue advisory opinions.” (citing Hughes v. Hosemann, 68 So. 3d 1260, 1263 (Miss. 2011))).
7 (collectively, the Insurers) and the plaintiffs, who were injured guest passengers in the
vehicle driven by the insured, was champertous. Sneed, 735 So. 2d at 307. The terms of the
settlement agreement were that the Insurers would pay their policy limits and all expenses
of prosecuting an action against Ford Motor Company, and, in exchange, the plaintiffs would
sue Ford and share the proceeds of the action with the Insurers. Id. at 307-08. The terms of
the settlement agreement were discovered by Ford, and the trial court found that the
settlement violated Mississippi’s prohibition on champerty and maintenance. Id. at 308.
¶16. The plaintiffs appealed to this Court. This Court found that “the ultimate disposition
of the questions before the Court” depended on “whether the Insurers here have a real and
legitimate interest in the individual plaintiffs’ claims against Ford[.]” Id. at 311. The Court
found that “at the time of the settlement here the Insurers and their insureds had a real and
substantial interest in the allocation of responsibility among the plaintiffs and all potential
defendants.” Id. at 313. The Court ruled that “agreements with potential defendants who
have a legitimate interest in the allocation of responsibility should not be declared
champertous.” Id. at 314.
¶17. Returning to the certified question, the answer to the certified question aligns with this
Court’s caselaw. Sneed’s analysis of Section 97-9-23, to determine who would be a real
party in interest under the statute, only aids in showing that a disinterested third party is not
a real party in interest. A disinterested third party, under Sneed, is one who has no real or
legitimate interest in the litigation, “as distinguished from one who has only a nominal,
formal, or technical interest in or connection with it.” Id. at 313 (quoting Real Party in
8 Interest, Black’s Law Dictionary (6th ed. 1990)). The facts of this case, as they pertain to
the meaning of the statute or any similarities to Sneed, are not a proper consideration for this
Court on a certified federal question. We make no decision as to whether we would come
to the same conclusion as the federal court on the factual determinations or as to whether
Court Properties, LLC, was a disinterested third party. Further, we will not decide the
ultimate outcome of this case.
¶18. Section 97-9-11 remains a binding statute enacted by our legislature. The parties have
not shown any reason to question the enforceability or constitutionality of Section 97-9-11.
This statute would clearly prohibit the actions described in the certified question. This Court
does not “broaden or restrict a legislative act[,]” and when the “statute’s language is clear and
unambiguous, we apply its plain meaning[.]” Watson v. Oppenheim, 301 So. 3d 37, 41
(Miss. 2020) (internal quotation mark omitted) (quoting Lawson v. Honeywell Int’l, Inc.,
75 So. 3d 1024, 1027 (Miss. 2011)).
¶19. Bankruptcy rules are not relevant to the answer of the certified question because the
issue must be resolved according to our Mississippi maintenance statutes.5 See Travelers
Cas. & Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 451, 127 S. Ct. 1199, 167
5 The dissent incorrectly creates arguments for the parties under the bankruptcy proceedings. Dissent Op. ¶¶ 60-64. These arguments were not raised in the appellate briefs, the federal court opinions, or the certified question. This Court does not “advocate for one party to an appeal” and does not address issues not briefed on appeal. Rosenfelt v. Miss. Dev. Auth., 262 So. 3d 511, 519 (Miss. 2018) (internal quotation mark omitted) (citing Jefferson v. State, 138 So. 3d 263, 265 (Miss. Ct. App. 2014)). Even if we share the dissent’s sympathy with the Crabtrees’ situation, the dissent’s considerations are irrelevant to the question before this Court and fly in the face of the Court’s rules. The dissent quixotically tilts at these windmills, setting up and knocking down one straw man after another. In reality, the dissent merely provides solutions that are looking for problems.
9 L. Ed. 2d 178 (2007) (“‘[p]roperty interests are created and defined by state law,’ and
‘[u]nless some federal interest requires a different result, there is no reason why such
interests should be analyzed differently simply because an interested party is involved in a
bankruptcy proceeding.” (quoting Butner v. United States, 440 U.S. 48, 99 S. Ct. 914, 59 L.
Ed. 136 (1979))); see also In re MacDonald, 326 B.R. 6, at *10 (Bankr. D. Mass 2005)
(evaluating Massachusetts law on assignability of a personal injury claim to determine if the
claim was exempt in bankruptcy court). We assume that the Fifth Circuit’s question was
framed in the context of bankruptcy to reference the Fifth Circuit’s determination that “[t]he
Crabtrees have a real and legitimate interest in Cotton’s bad-faith claim as creditors of
Cotton’s bankruptcy estate.” Crabtree, 2024 WL 3451894, at *4. The Crabtrees’ interest
in Cotton’s estate is not, however, a question before this Court.
CONCLUSION
¶20. Section 97-9-11 prohibits a creditor in bankruptcy from engaging a disinterested third
party to purchase a cause of action from a debtor.
¶21. CERTIFIED QUESTION ANSWERED.
COLEMAN, P.J., MAXWELL, GRIFFIS AND BRANNING, JJ., CONCUR. RANDOLPH, C.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY KING, P.J., ISHEE AND SULLIVAN, JJ.
RANDOLPH, CHIEF JUSTICE, DISSENTING:
¶22. The answer to the Fifth Circuit’s question is YES. Criminal statutes only prohibit
what is expressly barred by the text, and the words “disinterested third party” do not exist in
Mississippi Criminal Code Section 97-9-11 (Rev. 2020). Nor can the words be inferred from
10 the statute. The concept of interest or disinterest is simply completely absent from the text
or implications of Section 97-9-11.
¶23. It is bedrock law that the legislature writes laws, and the judiciary interprets them.
This Court does not have the authority to add words to statutes, and to do so violates the
constitutionally mandated separation of powers. “No person or collection of persons, being
one or belonging to one of these departments, shall exercise any power properly belonging
to either of the others.” Miss. Const. art. 1, § 2. Section 97-9-11 criminalizes the offering
something of value “as an inducement” to litigate. If there is no inducement, there is no
crime. The Fifth Circuit’s words “disinterested third party” have nothing to do with the text
of the statute, and when the majority accepts the addition of three words to the statute, there
is a violation of the constitutionally mandated separation of powers.
¶24. Charity—not champerty—is at the heart of this case. As will be discussed infra, Mark
Gibson’s6 act of selfless concern for the well-being of Caleb and Adriane Crabtree was not
a champertous act. The settlement agreement7 was transparent and in accordance with the
law. After negotiations between the Crabtrees, Casey Cotton, and their counsel, both of
whom are Mississippi attorneys, the bankruptcy trustee, also a Mississippi attorney who
initiated settlement discussions, filed the agreement in the United States Bankruptcy Court
for the Southern District of Mississippi. The bankruptcy judge, Katherine Samson, also a
Mississippi attorney, then approved the agreement and signed an order. ORDER
6 Mark Gibson was the manager and owner of Court Properties Real Estate Company, LLC. The members were Resurrection Life Ministries, Inc., and Haybren Land & Cattle Co. 7 See Appendix A.
11 APPROVING SETTLEMENT AND COMPROMISE OF DISPUTES AND TO
APPROVE ASSIGNMENT OF BAD FAITH CLAIM. This authorized and directed the
trustee and the Crabtrees to execute the settlement agreement. In oral arguments before this
Court, Allstate described these actions as criminal.
¶25. Mark Gibson did not violate Section 97-9-11. Nothing in the record suggests anything
other than that this was an act of a Good Samaritan. Despite Allstate’s statement to the
contrary in oral arguments, being a Good Samaritan in this case was not a crime.
I. Statutory Construction
¶26. Criminal statute, Mississippi Code Section 97-9-11, titled Champerty and
maintenance; solicitation and stirring up of litigation prohibited, located in Chapter 9.
Offenses Affecting Administration of Justice, of Title 97 Crimes, codifies common law
champerty. The section actually incorporates some of the crime’s origins.
¶27. Champerty and maintenance have been illegal in the common law since medieval
times. See infra ¶ 38. They have always included the elements of “officious intermeddling”
and the “stirring up of litigation.” Sneed v. Ford Motor Co., 735 So. 2d 306 (Miss. 1999)
(quoting State ex rel. Carr v. Cabana Terrace, Inc., 247 Miss. 26, 153 So. 2d 257, 259
(1963)); see also 14 Am. Jur. 2d Champerty, Maintenance, Etc. § 1 Westlaw (database
updated Jan. 2025); 14 C.J.S. Champerty and Maintenance § 1 Westlaw (database updated
Dec. 2024). The Corpus Juris Secondum defines officious intermeddling as: “Officious
intermeddling, as a necessary element of champerty, is offering unnecessary and unwanted
advice or services or being meddlesome in a high-handed or overbearing way.” 14 C.J.S.
12 Champerty and Maintenance § 1 (footnote omitted) (citing Kraft v. Mason, 668 So. 2d 679
(Fla. DCA 1996)). These common law elements of officious intermeddling and stirring up
of litigation are preserved in the statute by the requirement that the transfer of value act “as
an inducement” to continue or begin litigation. Miss. Code Ann. § 97-9-11. Therefore,
disinterested third parties purchasing a cause of action from a debtor, which does not induce
litigation as result of that purchase, would not be criminalized by the precise language of
Section 97-9-11.
¶28. As with all statutory construction, we begin with the text. Furthermore, we must
adhere to the rule that “[i]t is bedrock law in Mississippi that criminal statutes are to be
strictly construed[.]” Coleman v. State, 947 So. 2d 878, 881 (Miss. 2006) (citing McLamb
v. State, 456 So. 2d 743, 745 (Miss. 1984)). Criminal statutes must be read narrowly, not
broadly.
¶29. The Fifth Circuit’s certified question described Section 97-9-11 as a “verbose and
difficult to construe” statute. Crabtree v. Allstate Prop. & Cas. Ins. Co., No. 23-60537,
2024 WL 3451894, *1 (5th Cir. July 18, 2024). I agree. Hopefully, breaking down the
statute into its component parts will assist all. The crime prohibited by the statute can be
reduced to four essential elements:
Element 1:
It shall be unlawful for any person, firm, partnership, corporation, group, organization, or association, either incorporated or unincorporated from this state or any other state, either before or after proceedings commenced: (a) to promise, give, or offer, or to conspire or agree to promise, give, or offer, (b) to receive or accept, or to agree or conspire to receive or
13 accept, (c) to solicit, request, or donate . . .
Restated: A person or entity gives, receives, or solicits
Element 2:
any money, bank note, bank check, chose in action, personal services, or any other personal or real property, or any other thing of value, or any other assistance . . .
Restated: anything of value
Element 3:
as an inducement
Restated: but for the value transfer, the parties would not want to bring suit
Element 4:
to any person to commence or to prosecute further, or for the purpose of assisting such person to commence or prosecute further, any proceeding in any court or before any administrative board or other agency, regardless of jurisdiction[.]
Restated: to bring or continue litigation.
¶30. Answering the certified question with these elements in mind, the answer can only be
YES. Absent inducement to litigate, there is no crime.
The Inducement Element
¶31. The inducement element’s importance is even more clearly shown by its central
inclusion in two companion affidavit statutes: Mississippi Code Sections 97-9-15 and -17
(Rev. 2020). These sections allow a party or the court sua sponte to require that opponents
14 sign affidavits swearing they are not in a champertous agreement.8 The affidavits specifically
disavow having committed the crime found in Section 97-9-11. The affidavit from
Mississippi Code Section 97-9-15 reads in relevant part:
. . . I have neither received, nor conspired to receive, any valuable consideration or assistance whatever as an inducement to the commencement or further prosecution of the proceedings in this matter.
Miss. Code Ann. § 97-9-15 (Rev. 2020) (emphasis added). Inducement is central.
¶32. The affidavit found in Mississippi Code Section 97-9-17 applies to the attorney
representing the party and reads in relevant part:
neither I nor, to the best of my knowledge and belief, any other person, firm, partnership, corporation, group, organization, or association has promised, given, or offered, or conspired to promise, give, or offer, or solicited, received, or accepted any valuable consideration or any assistance whatever to said (__________) as an inducement to said (__________) to the commencement or further prosecution of the proceedings herein.
Miss. Code Ann. § 97-9-17 (Rev. 2020) (emphasis added). Once again, inducement is
central. These affidavits swear that affiant did not commit the crime forbidden in companion
statute, Section 97-9-11. Inducement is central to the affidavit statutes’ purposes because
it is central to the crime.
Mark Gibson did not induce the Crabtrees.
¶33. Mark Gibson did not purchase the cause of action to induce the Crabtrees to sue.
Gibson, as shown by his affidavit, facilitated the Crabtrees’ acquisition of the cause of action
8 In Sneed, the Mississippi attorneys involved refused to sign the court ordered affidavits, which led to the interlocutory appeal. Sneed, 735 So. 2d at 308. In today’s case, nothing in the record indicates that Allstate ever asked the Crabtrees or their attorneys to sign the affidavits from Sections 97-9-15 and -17.
15 “solely as a way to assist a young family that was in a terrible situation due to the motor
vehicle collision[.]” He had no intent to induce. The purchase was not a profit seeking
venture by Gibson. He only stood to recover $10,000 (the amount of the purchase) plus 8
percent interest9 and only if the Crabtrees themselves recovered a minimum of $100,000 from
Allstate. There was no inducement. No one participated in stirring up litigation or
officiously intermeddling.
¶34. Importantly and clearly from the Fifth Circuit’s record, the Crabtrees were not
induced to litigate by the purchase. The Fifth Circuit’s record reveals that the Crabtrees had
already brought suit against Allstate in this matter twice before.10 The previous litigation
reveals that an unambiguous prior intent to pursue litigation was already present. The
Crabtrees were not induced to bring suit by Gibson’s purchase.
¶35. Section 97-9-11 criminalized the inducement of litigation to prevent “officious
intermeddl[ers]” seeking to profit from abusing the judicial system and stirring up litigation
which parties do not truly want to pursue. Cabana Terrace, Inc., 153 So. 2d at 259 (quoting
10 Am. Jur. Champerty and Maintenance § 1). Section 97-9-11 is a crime against the
administration of justice. Our judicial system is not a no-holds-barred arena for gamblers and
9 Eight percent interest is the statutorily prescribed interest rate. Miss. Code Ann. § 75-17-1 (Rev. 2016) (“ The legal rate of interest on all notes, accounts and contracts shall be eight percent (8%) per annum, calculated according to the actuarial method, but contracts may be made, in writing, for payment of a finance charge as otherwise provided by this section or as otherwise authorized by law.”). 10 Crabtree v. Allstate Prop. & Cas. Ins. Co., No. 1:21 CV 399 TBM BWR, 2022 WL 17813701 (S.D. Miss. Dec. 19, 2022); Crabtree v. Cotton, State Farm Mut. Auto. Ins. Co., Allstate Prop. & Cas. Ins. Co., and John Does 1–5, No. 37:18cv119 (Lamar Cnty., Miss., Cir. Ct. 2019).
16 hustlers to traffic in lawsuits in pursuit of personal profit. The prevention of interloping
profiteers from stirring up litigation that otherwise would not be brought is inherent to
champerty and is preserved in the statutes by the required inducement. Inducement directly
addresses the historical and continuing definition of the crime.
The History of Champerty
¶36. The text of the statute answers the question from the Fifth Circuit. But there is more.
The text of Mississippi Code Section 97-9-23 (Rev. 2020) includes an explicit statement of
the legislature’s intent to ban the common law crimes of champerty and maintenance.
Section 97-9-23 reads, “[t]he intent, as herein set out, is to prohibit and punish, more clearly
and definitely, champerty, maintenance, barratry, and the solicitation or stirring up of
litigation[.]” Miss. Code Ann. § 97-9-23 (Rev. 2020).
¶37. The historical justification for disallowing champerty can be found in Sneed. “The
historical condemnation of champerty and maintenance is grounded in the estimable purpose
of preventing the marketing of lawsuits where the parties might, but for the commerce in
claims reach an amicable or at least mutually satisfactory settlement.” Sneed, 735 So. 2d at
314 (emphasis added). The marketing or trafficking of lawsuits by officious intermeddlers
is at the core of champerty.
¶38. Sneed’s historical analysis is supported by other jurisdictions. The Supreme Court
of Minnesota summarized the origins of champerty and maintenance laws:
In medieval England, those with means played “the game of writs” to increase
17 their power and harass their rivals[11] through the medieval court system. R. D. Cox, Champerty as We Know It, 13 Mem. St. U. L. Rev. 139, 142 (1983). Part of this practice included the maintenance by a lord of a lawsuit against a landowner in exchange for a share of the proceeds of land. Id. at 143–44.
To address this problem, English statutes and common law prohibited third parties from taking a financial interest[12] in litigation. Id. at 153–54. The law against champerty explains the early prohibitions against assignment of claims and against contingency fees for attorneys in both England and the United States, because both practices were seen as champertous. [Max Radin, Maintenance by Champerty, 24 Calif. L. Rev. 48, 68–70 (1935)].
Maslowski v. Prospect Funding Partners LLC, 944 N.W.2d 235, 237 (Minn. 2020). Since
their arrival, champerty laws have existed to prevent the abuse of the legal system by
speculators and profiteers seeking to advance their own interests by inducing litigation that
otherwise would not have been brought.
¶39. In 1929, Benjamin Cardozo, respected jurist and chief judge of the New York Court
of Appeals, wrote about the essence of the law of champerty and maintenance. In In re
Estate of Gilman, he wrote:
Even [in England which has stronger champerty laws] the maintenance inspired by charity or benevolence[13] has been sharply set apart from maintenance for spite or envy or the promise or hope of gain[14]. ‘It seems to be agreed, that anyone may lawfully give money to a poor man to enable him
11 Mark Gibson did not “increase [his] power” or “harrass [his] rival” in the case sub judice, much less “play the game of writs.” 12 Mark Gibson did not further his “financial interest” in the case sub judice. He merely sought to be repaid $10,000 plus statutory interest. And that is only if the Crabtrees recover at least $100,000 from Allstate. 13 Mark Gibson did indeed act out of “charity or benevolence,” as the record clearly demonstrates. 14 Mark Gibson did not act out of “spite or envy or the promise or hope of gain.”
18 to carry on his suit’
In re Est. of Gilman, 251 N.Y. 265, 270 (1929) (emphasis added) (quoting 1 Hawkins, Pleas
of the Crown, ch. 27(6), § 26, p. 460)). The benevolent charity in this case is not champerty.
II. Mississippi Supreme Court Caselaw
¶40. The requirement of officious intermeddling or stirring up of litigation is also
supported by Mississippi caselaw. Section 97-9-11 has never been used to prosecute a crime
and, although there is an admitted paucity of Mississippi case law regarding champerty, the
few cases which this Court has considered provide more than adequate guidance for
determining what constitutes champertous conduct. But it bears repeating that Section 97-9-
11 has not resulted in a single criminal conviction reported in Mississippi.
¶41. In Calhoun County v. Cooner, 118 So. 706, 707 (Miss. 1928), Cooner was seeking
payment of a disputed portion of his salary as county clerk. Calhoun County had argued that
because a public accountant informed Cooner of the potential to recover his salary and
offered to help recover it in exchange for a percent of the recovery, the agreement was
champertous and therefore could not be prosecuted. Id. The trial court granted a demurrer
on the issue in Cooner’s favor, and Calhoun County appealed. Id. On appeal, this Court said
it “th[ought] the trial court was right” but declined to rule on the nature of the arrangement,
instead holding that it was irrelevant because “a champertous contract in relation to the
prosecution of the suit between plaintiff and his attorney, or between plaintiff and another
layman, in no wise affects the obligation of the defendant to the plaintiff.” Id. (quoting 11
C. J. § 2). This Court shunned the defendant’s attempt to avoid accountability by alleging
19 a champertous arrangement between the plaintiff and another15 and affirmed the demurrer.
¶42. But Calhoun County was not done yet. It then filed a suggestion of error arguing that
this Court was contradicting its precedent because it had previously condemned as
champertous the transfer of “an interest in a disputed claim to certain slaves” in Rives v.
Weaver, 36 Miss. 374 (1858). Cooner, 118 So. at 707. This Court cited the importance of
the passage of an intervening statute Chapter 134, Laws of 1916, which it quoted:
“In case of a transfer or an assignment of any interest in such chose in action before or after suit brought, the action may be begun, prosecuted and continued in the name of the original party, or the court may allow the person to whom the transfer or assignment of such interest has been made, upon his application therefor, to be substituted as a party plaintiff in said action.”
Id. (quoting Hemingway’s 1927 Code § 511). Indeed, the Court acknowledged that this
statute changed the law in Mississippi. And that “[u]nder this statute [disinterested third
party accountant] Smith had the right to make the contract with Cooner, and the suit could
be prosecuted in the name of the latter.” Id. at 708. The language of this statute quoted
above still exists, verbatim, in Mississippi Code Section 11-7-3 (Rev. 2019).
¶43. When this Court decided Fry v. Layton, 2 So. 2d 561 (Miss. 1941), Mississippi had
very strict usury laws. See Miss. Code (1930) ch. 37. At the time, if a plaintiff could prove
that a lender had charged more than 20 percent on a loan, the lender would have to forfeit
both the full amount of the loan and the interest of the loan as his penalty. Id. § 1946.
Layton took out two loans from Fry at a usurious rate. Fry, 2 So. 2d at 562-63. After paying
back his usurious loans, Layton purchased, for the nominal amount of one dollar each, the
15 This is precisely what Allstate is doing now.
20 notes and the “rights of such borrowers growing out of these loans” of eighteen other
borrowers who had also paid Fry back at an usurious rate of interest.16 Id. at 562. Layton
then proceeded to sue Fry for usury on all the notes. Id. In the trial court, he prevailed and
was awarded the entire amount of all the loans and the interest paid on them. This Court
described his conduct as “a profitable business indeed[.]” Id. at 565. We held Layton’s
actions to be a “champertous business of gathering up these claims for a nominal
consideration” and reversed the judgment of the trial court. Id. This case provides an
excellent example of the type of officious intermeddling, stirring up of litigation, and
trafficking in lawsuits that the statute prohibits. In contrast with Fry, here, there is only one
cause of action, purchased for much more than a nominal amount, for the benefit of a party
already injured, with approval of the bankruptcy court, and with notice to the world. That
does not amount to public-policy-threatening officious intermeddling which the statute
criminalizes.
¶44. In 1999, this Court decided the seminal case on Mississippi Code Section 97-9-11.
Sneed, 735 So. 2d at 315. In Sneed, William Hough, along with several passengers,
including Lori Sneed, was driving a Ford Bronco when it rolled over and caused extensive
injuries to all inside. Id. at 307. The Bronco was insured by United States Fire Insurance
Company and National Union Fire Insurance Company (Insurers), which entered a settlement
agreement with Sneed and the other injured parties. When Sneed filed suit against Ford
Motor Company, the trial court determined that “[i]t would appear from the ‘agreement’ that
16 Allstate conceded at oral argument that Mark Gibson’s payment was not a nominal amount.
21 the current action violates the laws of this State which prohibit champerty and maintenance
. . . .” Id. at 308 (second alteration in original).
¶45. The disclosed terms of the agreement included:
(1) The Insurers must pay $5,000,000 to the insureds.
(2) The insureds must file suit against Ford Motor Company.
(3) The Insurers must pay the litigation expenses of the insureds.
(4) Upon successful recovery of damages under the suit, the Insurers would be reimbursed for their expenses, then the law firm would receive 15 percent, then the Insurers and insureds would split the remaining proceeds until the Insurers recovered $5,000,000.
Id. at 307-08. The circuit court further noted that “[t]he individual Plaintiffs have absolutely
no control of the litigation, nor do they have any financial investment nor interest in the
success of the litigation until all expenses including attorney fees have been deducted.” Id.
at 308.
¶46. On appeal to the Mississippi Supreme Court, this Court found “that the agreement at
issue constitutes a valid and enforceable assignment[.]” Id. at 311. This Court considered
the general definition of champerty and noted that “Champerty is a species of maintenance
and that term and ‘maintenance’ have been used by the courts almost interchangeably.” Id.
at 309 (internal quotation marks omitted) (quoting Cabana Terrace, Inc., 53 So. 2d at 259).
Then the Court continued:
Perhaps the best, because it is the most flexible, definition of maintenance is that it is an officious intermeddling in a suit which in no way belongs to one, by maintaining or assisting either party, with money or otherwise, to prosecute or defend it . . . .
22 Id. (emphasis added) (quoting Cabana Terrace, Inc., 53 So. 2d at 259). In Sneed, this Court
found that a $5,000,000 settlement agreement did not constitute officious intermeddling and
validated the settlement agreement.17
¶47. The Court held that “[t]his is not the kind of trafficking in lawsuits that the common
law of champerty was designed to forbid” before concluding that “[w]e find that the
Plaintiffs did not bring their action due to inducement by or assistance from the Insurers.”
Id. at 313-14.
¶48. Then the Court repeated the law as written nearly one hundred years before in Cooner,
holding:
most importantly, whether or not the subject agreement is champertous is not a defense to Ford. . . .[“]the fact that there is a champertous contract in relation to the prosecution of the suit between plaintiff and his attorney, or between plaintiff and another layman, in no wise affects the obligation of defendant to plaintiff.[“]
Sneed, 735 So. 2d at 314-15 (quoting Cooner, 118 So. at 707). Sneed clearly stands, inter
alia, for the proposition that Mississippi Code Section 97-9-11 only bans officious
assignments which act as an inducement to stir up litigation.
¶49. The majority erroneously opines that its “answer to the certified question aligns with
this Court’s caselaw.” Maj. Op. 17. Respectfully, I disagree. The majority analyzes Sneed
to argue that a disinterested third party may not be engaged by a creditor to purchase a cause
of action from a bankruptcy proceeding. In Sneed, there was no champerty just as in the case
today there is no champerty.
17 If the question today read, “was the bankruptcy approved settlement agreement consistent with Mississippi law,” no question that it was then, and it is today.
23 ¶50. In Sneed, the agreement before the Court explicitly required the insureds to sue Ford
Motor Company in exchange for $5,000,000 from the Insurers. Sneed, 735 So. 2d at 307.
The agreement sub judice has no such requirement. In Sneed, the Insurers had total control
of the litigation, including choice of attorneys. Id. at 308. The Crabtrees retain control of
this litigation and their choice of attorney. In Sneed, the expenses of the litigation were to
be paid back to the Insurers before any other damages were distributed. Such a provision is
not in today’s record. In Sneed, the “remaining proceeds would be evenly divided between
the Insurers and the Plaintiffs until the Insurers had recovered the $5,000,000 paid to the
Plaintiffs under the settlement agreement. Finally, the remainder of the proceeds would go
to the Plaintiffs for their division.” Id. at 307-08. Here, Mark Gibson only gets repaid
$10,000 plus statutory interest if the Crabtrees recover at least $100,000.
¶51. As the agreement in Sneed was not champertous, certainly the charitable loan sub
judice is not either. The logical contradiction is irreconcilable. But the answer is
clear—neither transaction is champertous because neither transaction involves trafficking in
lawsuits, speculative profiteering off the judicial system, marketing lawsuits, officious
intermeddling, stirring up litigation, or similar activities.
III. Allstate’s Absurd Application of the Statute
¶52. At oral argument, Allstate admitted that its application of Mississippi Code Section
97-9-11 prevents Good Samaritans from helping people out of kindness.
Chief Justice: So nobody in the world could be a Good Samaritan, according to your position, and give [the Crabtrees] money to continuing the litigation?
Allstate: Under the statute, that is my answer. If it meets the criteria for the
24 statute, that is correct. And I will say, I don’t know if that’s a good result, a bad result as far as the public policy ramifications.
That application of this statute is absurd and not founded on the plain text of Mississippi
Code Section 97-9-11. Allstate’s interpretation, which prohibits charitable acts of kindness
is preposterous, against expressed public policy,18 and incongruent with the Court’s prior
holdings.
¶53. Allstate alleges that it would be a crime for a bank or credit union to loan the
Crabtrees money to pursue their case. As there is no knowingly requirement in Section 97-9-
11, according to Allstate, a bank could give out a loan, which the recipient then would use
to pursue litigation completely unbeknownst to the bank. Yet the lender would be guilty of
a felony punishable by one year in prison.
¶54. Allstate even went so far as to argue that the bankruptcy trustee was guilty of a felony.
A trustee, working in good faith, to further the best interests of the estate she represented is
now, according to Allstate, guilty of a crime. This is not what the statute says, and it is not
what the crime codified in Section 97-9-11 has ever sought to forbid.
Effects of the Majority’s Certified Answer
¶55. The majority’s answer to the Fifth Circuit’s question will have widespread
ramifications. One common assignment that today’s answer would immediately make a
crime is the sale of debt. In our banking system, lenders often sell their clients’ debt. These
sales are assignments of chose of actions. Such actions allow financial institutions to
18 The legislature has exhibited a clear public policy favoring giving. Mississippi’s tax code alone is rife with examples.
25 facilitate available loans for businesses and individuals alike. In Garrett v. Gay, this Court
defined chose of actions as
the right of bringing an action, or a right to recover a debt or money, or a right of proceeding in a court of law to procure the payment of a sum of money, or a right to recover a personal chattel or a sum of money by action, or, as it is defined by statute, a right to recover money or personal property by a judicial proceeding.
Garrett v. Gay, 394 So. 2d 321, 322 (Miss. 1981) (quoting 73 C.J.S. Property § 9 (1951)).
When a debt is sold, it is the right to recover the debt that is transferred—a chose in action.
The majority’s answer criminalizes any financial institution that was not a party to the initial
loan agreement purchasing debt because they would be a disinterested third party.
¶56. Almost all student loans are transferred at some point in the loans’ life. Each of these
transfers is an assignment to a disinterested third party. And each of these assignments
would be void under an erroneous interpretation of the statute. Were this to become the law
of Mississippi, every indebted student could refuse to pay their loan and when pursued in
court, simply declare that the assignment of their loan was void and therefore the party
seeking collection had no standing to sue.
¶57. Every patient who signs in to a hospital or medical office executes documents that
assign his rights to sue his insurance company in order to recover payment. The providers
were not a part of the insurance contract that he signed with his insurance company. Under
this interpretation, even routine medical assignments would become criminal. Such an
absurd reading of the statute would undoubtedly lead to extensive litigation whenever any
26 claim is brought subsequent to an assignment.19
IV. Scope of Review
¶58. In inviting this Court to answer its certified question, the Fifth Circuit expressly
“disclaim[ed] any intention or desire that [we] confine [our] reply to the precise form or
scope of the question certified.” Crabtree, 2024 WL 3451894, at *5. Evaluating the full
record, the following facts of the case are helpful to understanding the Fifth Circuit’s
dilemma.
In the Matter of Casey James Cotton, Debtor. Allstate Insurance Company, Interested Party. Case No. 21-50399-KMS.
¶59. Casey Cotton filed bankruptcy on March 31, 2021. When the bankruptcy’s automatic
stay of litigation against Cotton expired, on May 5, 2021, the Crabtrees filed their Motion to
Authorize Crabtree Lawsuit to Proceed in State Court. The Crabtrees were diligently
pursuing their claims well before the allegedly criminal settlement agreement was entered
into.
¶60. Allstate was an interested party to the bankruptcy proceedings at least as early as May
27, 2021. On that day, Allstate filed a protective motion with the bankruptcy court. Allstate
received notice of all filings that transpired. So when, on September 13, 2021, Bankruptcy
Trustee Kimberly Lentz filed the Trustee’s Motion to Approve Compromise or Settlement
under Rule 9019, Motion For Sale of Property under Section 363(b) Approve Assignment of
Bad Faith Claim, seeking court approval of the settlement agreement, Allstate received
19 At oral argument, Justice Griffis questioned Allstate’s counsel regarding whether this case is about third party litigation funding. He answered no. Whatever the Fifth Circuit decides, today’s case is not about third party litigation funding.
27 electronic notice. There was a twenty-one day period allotting time for filing written
objection or response. Allstate did neither.20
¶61. This bankruptcy court approved settlement agreement noted that “Cotton . . . has a
potential bad faith claim against Allstate Insurance Company” and that the claim “is property
of Cotton’s bankruptcy estate and the Trustee has sole authority to pursue or otherwise
administer the Bad Faith Claim.” (Emphasis added.) It continued, “Cotton and Crabtree
have agreed to settle their disputes and, as a part of the settlement, the Trustee has agreed to
assign the Bad Faith Claim to Crabtree or his designee, all on the terms contained herein.”
Finally, the approved agreement declared explicitly, “The Trustee will sell and assign the Bad
Faith Claim to Crabtree’s designee, Court Properties, Inc., P.O. Box 1, Picayune, MS 39466,
for the sum of $10,000.00.”
¶62. Allstate was given twenty-one days to file an objection to the settlement agreement,
but it did not. Far be it for me to rule on a federal bankruptcy court proceeding, but was it
not improper for the district court to consider an issue to which Allstate failed to timely
object as a party to the bankruptcy proceedings in that same district?
¶63. It is longstanding judicial policy of Mississippi that settlement agreements are favored
in the law. “We begin with an acknowledgment of the general premise that compromise
reached by way of mediation or otherwise, is favored in the state of Mississippi. Moreover,
the law favors the settlement of disputes by agreement of the parties and, ordinarily, will
20 I do not know why any debate did not end then. The record reveals that a United States bankruptcy court issued a legally binding order, of which Allstate was on notice, and Allstate neither objected nor filed an appeal.
28 enforce the agreement which the parties have made[.]” Chantey Music Publ’g, Inc. v.
Malaco, Inc., 915 So. 2d 1052 (Miss. 2005) (citing Hastings v. Guillot, 825 So. 2d 20, 24
(Miss. 2002)).
¶64. A bankruptcy court judge approved the settlement agreement entered into by the
bankruptcy trustee, Cotton, the Crabtrees, and their designee, Mark Gibson, all of whom
came together in a meeting of the minds and all of whom gave up something of value in
exchange for something of value. Allstate was on notice of the contents of the settlement
agreement and had twenty-one days in which to file an objection. It is irresponsible to
invalidate an agreement legally formed in good faith as a result of this unwarranted attack
by a party who could have objected in the first place but declined.
V. Conclusion
¶65. Let us never forget that unintended consequences can occur. If a credit union
provides a loan to a similarly situated unfortunate family, will the credit union be subjected
to accusations of committing the crime of champerty? If Adriane Crabtree’s father had given
his daughter and son in law the money, would he have been committing a crime? Would a
bank, credit union, savings and loan, or any other lending institution be prevented from
selling the right to recover the debt of one of their defaulted clients lest they be found guilty
of a crime?
¶66. The words “disinterested third party” do not appear in Section 97-9-11. Nor do they
appear in the sister statutes Sections 97-9-15 or -17. The statute codifies the crime of
champerty and requires officious intermeddling to be present via the inducement element of
29 the crime. All of this Court’s precedent indicates that the assignment in the case sub judice
did not violate Mississippi law.
¶67. Interpreting Section 97-9-11 by adding three words as the majority’s answer does,
transforms charity into criminality. That is not how the statute reads, and it is not what the
law should do. The legislature did not criminalize compassion. The statutory text, the
common law tradition, and the public interest all point in the same direction: the assignment
was lawful, and the Crabtrees deserve their day in court.
KING, P.J., ISHEE AND SULLIVAN, JJ., JOIN THIS OPINION.
30 Appendix A Bankruptcy Court Approved Settlement Agreement
31 32 33 34 35