United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS March 23, 2005 FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk
No. 04-60615 (Summary Calendar)
GRAND HOUSING, INC.; ET AL,
Plaintiffs,
VICKY BARNES,
Plaintiff-Appellant,
versus
BOMBARDIER CAPITAL, INC.; ET AL,
Defendants,
BOMBARDIER CAPITAL, INC., BOMBARDIER CAPITAL FLORIDA,
Defendants-Appellees.
Appeal from the United States District Court for the Southern District of Mississippi (1:02-CV-49-GuRu)
Before WIENER, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:*
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Plaintiffs-Appellants Grand Housing and Vicky Barnes seek the reversal of the district court’s
grant of summary judgment for Defendants-Appellees Bombardier Capital, Inc. and Bombardier
Capital Florida, Inc. (collectively “Bombardier”). We affirm for essentially the same reasons
expressed by the district court.
BACKGROUND
In May of 1998, Grand Housing, a manufactured home dealership owned by Vicky Barnes
(“Barnes”), entered into a Retail Dealer Agreement (“Dealer Agreement”) with Bombardier Capital
Florida. In the Dealer Agreement, Bombardier Capital Florida agreed to provide financing to retail
customers who purchased manufactured homes from Grand Housing. Grand Housing also entered
into an Inventory Security Agreement with Bombardier Capital in which Bombardier Capital agreed
to provide floor financing for Grand Housing’s manufactured home inventory. In 2000, Bombardier
found that Grand Housing defaulted on the Dealer Agreement with respect to sales made to Patricia
Reese, Charlotte Mitchell, and Dennis McDonald, and as a result, Bombardier withheld from Grand
Housing the proceeds from those sales.
On November 12, 1998, Patricia Reese purchased a mobile home from Grand Housing that
was financed by Bombardier. Grand Housing asserts that Reese represented to them that all city and
county zoning ordinances had been complied with in the installation of the mobile home.
Nonetheless, it was later determined that the installation of the mobile home did not comply with local
zoning ordinances. Grand Housing removed the home pursuant to a directive from the City of
Gulfport, Mississippi. On August 17, 2000, Bombardier demanded that Grand Housing repurchase
Patricia Reese’s security instrument pursuant to the terms of the Dealer Agreement.
2 In the misty of the dispute over Reese, Bombardier found Grand Housing in default of the
Dealer Agreement again, this time with respect to the sale of a mobile home to Charlotte Mitchell.
Shortly after Mitchell purchased her home, she stopped payments and initiated suit against Grand
Housing. She alleged that her manufactured home was riddled with manufacturer defects, as well as
defects in the materials and workmanship of the mobile home. Grand Housing contends that
Bombardier repossessed the home without their knowledge, and then inexplicably lost the home. On
August 21, 2000, Grand Housing received a demand letter from Bombardier concerning Charlotte
Mitchell’s security instrument.
Bombardier issued a demand letter yet again, on September 28, 2000, commanding that Grand
Housing repurchase the security instrument of Dennis McDonald. McDonald acquired a mobile home
from Grand Ho using and then, like Mitchell, initiated suit alleging his home was defective.
Specifically, he alleged that he suffered personal injury from airborne mold and spores emanating from
his mobile home.
On January 2, 2002, Grand Housing filed suit in the Circuit Court of Harrison County,
Mississippi, asserting entitlement to the withheld sale proceeds. The co mplaint alleged that
Bombardier was liable for conversion, tortious interference with prospective economic advantage,
breach of the Dealer Agreement, and breach of the implied duty of good faith and fair dealing.
Bombardier removed the case to the United States District Court, for the Southern District of
Mississippi, and filed a motion for summary judgment. The district court granted the motion for
summary judgment. This timely appeal followed.
DISCUSSION
We review the district court's grant of summary judgment de novo, applying the same legal
3 standards used by the district court. Vulcan Materials Co. v. City of Tehuacana, 369 F.3d 882, 886
(5th Cir. 2004). Summary judgment is proper when there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). We review the district
court's legal conclusions de novo. Triad Elec. & Controls, Inc. v. Power Sys. Eng'g, Inc., 117 F.3d
180, 186 (5th Cir. 1997). The interpretation of an unambiguous contract presents a question of law,
and thus, is subject to de novo review. Id. at 186; see also L & A Contracting Co. v. Southern
Concrete Servs., Inc., 17 F.3d 106, 109 (5th Cir. 1994).
Grand Housing argues that the district court erred in granting summary judgment because
there are genuine issues of material fact in dispute. Specifically, Grand Housing contends that there
are factual disputes as to whether: 1) it was in default under the terms of the Dealer Agreement, 2)
Bombardier improperly withheld funds, 3) Bombardier breached the implied duty of good faith and
fair dealing, and 4) Bombardier breached a fiduciary duty owed to Vicky Barnes.
Despite Grand Housing’s assertions to the contrary, there are no factual disputes in the instant
case to preclude a ruling on summary judgment; only legal questions as to the interpretation of the
relevant contracts are left for us to review.1 We interpret contracts under Mississippi law using the
"four corners" doctrine, meaning, we exam the contract in its entirety and read its terms as would an
ordinary layman. Pursue Energy Corp. v. Perkins, 558 So.2d 349, 352 (Miss. 1990). Under
Mississippi law, we are prohibited from looking outside the plain language of the contract unless the
contract is ambiguous. Heritage Cablevision v. New Albany Electric Power System of City of New
1 Because Grand Housing does not brief arguments for conversion and tortious inference, we deem those arguments waived and do not address them here. United States v. Fagan, 821 F.2d 1002, 1015 n.9 (5th Cir. 1987) (arguments not briefed are deemed waived); see also Davis v. Maggio, 706 F.2d 568, 571 (5th Cir. 1983) (commenting that "[c]laims not pressed on appeal are deemed abandoned").
4 Albany, 646 So.2d 1305, 1313 (Miss. 1994). We agree with the district court that the contracts at
issue here are unambiguous. The district court determined that based on the express contract
language, Grand Housing did default under the Dealer Agreement as to each challenged sales
transaction, and consequently, Bombardier had the contractual right to demand payment and/or
repurchase. Accordingly, the district court found that Bombardier was entitled to judgment as a
matter of law as to Grand Housing’s breach of contract claim. Our review of the briefs, the
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United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS March 23, 2005 FOR THE FIFTH CIRCUIT Charles R. Fulbruge III Clerk
No. 04-60615 (Summary Calendar)
GRAND HOUSING, INC.; ET AL,
Plaintiffs,
VICKY BARNES,
Plaintiff-Appellant,
versus
BOMBARDIER CAPITAL, INC.; ET AL,
Defendants,
BOMBARDIER CAPITAL, INC., BOMBARDIER CAPITAL FLORIDA,
Defendants-Appellees.
Appeal from the United States District Court for the Southern District of Mississippi (1:02-CV-49-GuRu)
Before WIENER, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:*
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Plaintiffs-Appellants Grand Housing and Vicky Barnes seek the reversal of the district court’s
grant of summary judgment for Defendants-Appellees Bombardier Capital, Inc. and Bombardier
Capital Florida, Inc. (collectively “Bombardier”). We affirm for essentially the same reasons
expressed by the district court.
BACKGROUND
In May of 1998, Grand Housing, a manufactured home dealership owned by Vicky Barnes
(“Barnes”), entered into a Retail Dealer Agreement (“Dealer Agreement”) with Bombardier Capital
Florida. In the Dealer Agreement, Bombardier Capital Florida agreed to provide financing to retail
customers who purchased manufactured homes from Grand Housing. Grand Housing also entered
into an Inventory Security Agreement with Bombardier Capital in which Bombardier Capital agreed
to provide floor financing for Grand Housing’s manufactured home inventory. In 2000, Bombardier
found that Grand Housing defaulted on the Dealer Agreement with respect to sales made to Patricia
Reese, Charlotte Mitchell, and Dennis McDonald, and as a result, Bombardier withheld from Grand
Housing the proceeds from those sales.
On November 12, 1998, Patricia Reese purchased a mobile home from Grand Housing that
was financed by Bombardier. Grand Housing asserts that Reese represented to them that all city and
county zoning ordinances had been complied with in the installation of the mobile home.
Nonetheless, it was later determined that the installation of the mobile home did not comply with local
zoning ordinances. Grand Housing removed the home pursuant to a directive from the City of
Gulfport, Mississippi. On August 17, 2000, Bombardier demanded that Grand Housing repurchase
Patricia Reese’s security instrument pursuant to the terms of the Dealer Agreement.
2 In the misty of the dispute over Reese, Bombardier found Grand Housing in default of the
Dealer Agreement again, this time with respect to the sale of a mobile home to Charlotte Mitchell.
Shortly after Mitchell purchased her home, she stopped payments and initiated suit against Grand
Housing. She alleged that her manufactured home was riddled with manufacturer defects, as well as
defects in the materials and workmanship of the mobile home. Grand Housing contends that
Bombardier repossessed the home without their knowledge, and then inexplicably lost the home. On
August 21, 2000, Grand Housing received a demand letter from Bombardier concerning Charlotte
Mitchell’s security instrument.
Bombardier issued a demand letter yet again, on September 28, 2000, commanding that Grand
Housing repurchase the security instrument of Dennis McDonald. McDonald acquired a mobile home
from Grand Ho using and then, like Mitchell, initiated suit alleging his home was defective.
Specifically, he alleged that he suffered personal injury from airborne mold and spores emanating from
his mobile home.
On January 2, 2002, Grand Housing filed suit in the Circuit Court of Harrison County,
Mississippi, asserting entitlement to the withheld sale proceeds. The co mplaint alleged that
Bombardier was liable for conversion, tortious interference with prospective economic advantage,
breach of the Dealer Agreement, and breach of the implied duty of good faith and fair dealing.
Bombardier removed the case to the United States District Court, for the Southern District of
Mississippi, and filed a motion for summary judgment. The district court granted the motion for
summary judgment. This timely appeal followed.
DISCUSSION
We review the district court's grant of summary judgment de novo, applying the same legal
3 standards used by the district court. Vulcan Materials Co. v. City of Tehuacana, 369 F.3d 882, 886
(5th Cir. 2004). Summary judgment is proper when there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). We review the district
court's legal conclusions de novo. Triad Elec. & Controls, Inc. v. Power Sys. Eng'g, Inc., 117 F.3d
180, 186 (5th Cir. 1997). The interpretation of an unambiguous contract presents a question of law,
and thus, is subject to de novo review. Id. at 186; see also L & A Contracting Co. v. Southern
Concrete Servs., Inc., 17 F.3d 106, 109 (5th Cir. 1994).
Grand Housing argues that the district court erred in granting summary judgment because
there are genuine issues of material fact in dispute. Specifically, Grand Housing contends that there
are factual disputes as to whether: 1) it was in default under the terms of the Dealer Agreement, 2)
Bombardier improperly withheld funds, 3) Bombardier breached the implied duty of good faith and
fair dealing, and 4) Bombardier breached a fiduciary duty owed to Vicky Barnes.
Despite Grand Housing’s assertions to the contrary, there are no factual disputes in the instant
case to preclude a ruling on summary judgment; only legal questions as to the interpretation of the
relevant contracts are left for us to review.1 We interpret contracts under Mississippi law using the
"four corners" doctrine, meaning, we exam the contract in its entirety and read its terms as would an
ordinary layman. Pursue Energy Corp. v. Perkins, 558 So.2d 349, 352 (Miss. 1990). Under
Mississippi law, we are prohibited from looking outside the plain language of the contract unless the
contract is ambiguous. Heritage Cablevision v. New Albany Electric Power System of City of New
1 Because Grand Housing does not brief arguments for conversion and tortious inference, we deem those arguments waived and do not address them here. United States v. Fagan, 821 F.2d 1002, 1015 n.9 (5th Cir. 1987) (arguments not briefed are deemed waived); see also Davis v. Maggio, 706 F.2d 568, 571 (5th Cir. 1983) (commenting that "[c]laims not pressed on appeal are deemed abandoned").
4 Albany, 646 So.2d 1305, 1313 (Miss. 1994). We agree with the district court that the contracts at
issue here are unambiguous. The district court determined that based on the express contract
language, Grand Housing did default under the Dealer Agreement as to each challenged sales
transaction, and consequently, Bombardier had the contractual right to demand payment and/or
repurchase. Accordingly, the district court found that Bombardier was entitled to judgment as a
matter of law as to Grand Housing’s breach of contract claim. Our review of the briefs, the
applicable contracts and the record on appeal, leads us to the same conclusion reached by the district
court.
Grand Housing adamantly maintains that it was not in default of the Dealer Agreement with
respect to Patricia Reese, and therefore, Bombardier breached the terms of the Dealer Agreement by
withholding funds from the Reese sale. We disagree. Section 6(i) of the Dealer Agreement clearly
states that the Dealer (Grand Housing) warranties that:
Unless [Bombardier] has agreed otherwise in writing, the Home shall be duly delivered and set in place by Dealer in a good and workmanlike manner, and accepted by the Consumer in good and habitable condition and working order, and shall conform with all warranties, express or implied, representations, legal obligations and local, state and federal requirements and codes concerning the condition, constructions, and placement of the Home.
Because the Reese home failed to comply with Gulfport’s zoning ordinances, the plain language of
the contract dictates that Grand Housing was in default. Furthermore, a judicial determination of
default was unnecessary because Section 8 of the Dealer Agreement states that the “Dealer shall be
in default of this Agreement if (i) any warranty, covenant or representations contained herein is
determined by [Bombardier] to be untrue or false, whether or not such misrepresentations were
knowing or intentional and whether or not [Bombardier] relied upon thereon . . .”
5 Nonetheless, Grand Housing asserts that Bombardier failed to comply with the Remedy
provision of the Dealer Agreement by refusing to give them ninety days from the date of demand to
repurchase the security instrument. The Remedy provision states that the “Dealer will have ninety
(90) days from the date of [] demand to repurchase the Security Instrument, provided that (i) any
delinquency on account of the affected Security Instrument is cured within ten (10) days of []
demand, and (ii) the Security Instrument is kept current during the ninety (90) day period.” Grand
Housing conveniently ignores this conditional aspect of the Remedy provision. Because Grand
Housing did not cure the delinquency within 10 days and did not keep the instrument current,
Bombardier had the contractual right to demand immediate repurchase of the security instrument.
Grand Housing’s argument that it did not default as to Charlotte Mitchell’s account is
similarly without merit. In Section 6(i) of the Dealer Agreement, Grand Housing expressly
warrantied that it would deliver the Home in a “good and workmanlike manner, and the Home would
be accepted by the Consumer in good and habitable condition and working order.” Moreover, the
Remedy provision states that “[i]f Dealer fails to repurchase any Security Instrument under this
Agreement, [Bombardier] will have the right to take possession of the Collateral without notice to
Dealer . . .” and the Dealer still “will remain liable for any deficiency.” The default was triggered
because Mitchell asserted that her mobile home was not delivered in a “good and habitable
condition.” As a result, Bombardier did not breach the Dealer Agreement by withholding the
proceeds from the sales transaction.
For substantially the same reasons, we find Grand Housing’s argument that it was not in
default of the Dealer Agreement with respect to Dennis McDonald unavailing. Section 6(i) also
controls here and by virtue of McDonald’s allegations of a defective home, Grand Housing runs afoul
6 of the Dealer Agreement.
The plain language of the contract controls and requires finding Grand Housing in default as
to each of the challenged sales transactions. Grand Housing did not adhere to the requirements of
the Remedy provision in any of the defaults. Therefore, Bombardier permissively withheld the
challenged funds, and the district court correctly concluded that Bombardier was entitled to judgment
as a matter of law.
Grand Housing also claims that Bombardier did not act in good faith in discontinuing its floor
financing and by arbitrarily reducing its credit line. Grand Housing asserts that Bombardier utilized
its stronger economic position to place Grand Housing in an adverse financial condition. Under
Mississippi law, "[a]ll contracts contain an implied covenant of good faith and fair dealing in
performance and enforcement." Cenac v. Murry, 609 So.2d 1257, 1272 (Miss. 1992) (citation
omitted). “The breach of good faith is bad faith characterized by some conduct which violates
standards o f decency, fairness or reasonableness." Id. Bad faith requires a showing of more than
negligence; rather, "bad faith" implies some conscious wrongdoing "because of dishonest purpose or
moral obliquity." Bailey v. Bailey, 724 So.2d 335, 338 (Miss. 1998). Grand Housing presents no
evidence to even suggest that Bombardier’s intent was to maliciously harm Grand Housing. The
record indicates that Bombardier at all times acted within its contractual authority. See American
Bankers' Ins. Co. of Fla. v. Wells, 819 So.2d 1196 (Miss. 2001) (holding that defendants did not
breach duty of good faith where they took only those actions duly authorized by the contract). The
Inventory Security Agreement allowed Bombardier to provide financing to Grand Housing “at its
option;” accordingly, Bombardier was free to reduce or withdraw any financing it provided to Grand
Housing. Therefore, the district court correctly held that Bombardier should be granted summary
7 judgment as to this claim.
Finally, Vicky Barnes brings an individual action against Bombardier for breach of fiduciary
duty. Barnes executed an individual guaranty with Bombardier under which Barnes agreed to
indemnify Bombardier from all losses and expenses incurred in connection with the enforcement of
the guaranty. Barnes asserts that the existence of the guaranty agreement created a fiduciary
relationship between herself and Bombardier. She contends that Bombardier breached its fiduciary
duty to her because, as a shareholder and employee of Grand Housing, she suffered personal losses
when Bombardier improperly withheld funds from Grand Housing. For the reasons already stated
by the district court, we do not find a fiduciary relationship existed between Barnes and Bombardier.
Thus, Barnes has failed to establish a claim for breach of a fiduciary duty.
CONCLUSION
For the foregoing reasons, we AFFIRM the district court’s grant of summary judgment to
Bombardier.
AFFIRMED.