Indymac Bank, F.S.B. v. Young

966 So. 2d 1286, 2007 Miss. App. LEXIS 716, 2007 WL 3076928
CourtCourt of Appeals of Mississippi
DecidedOctober 23, 2007
DocketNo. 2006-CA-01175-COA
StatusPublished
Cited by8 cases

This text of 966 So. 2d 1286 (Indymac Bank, F.S.B. v. Young) 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
Indymac Bank, F.S.B. v. Young, 966 So. 2d 1286, 2007 Miss. App. LEXIS 716, 2007 WL 3076928 (Mich. Ct. App. 2007).

Opinion

KING, C.J., for the Court.

¶ 1. Indymac Bank appeals the Tishom-ingo County Circuit Court’s denial of its motion to set aside a default judgment. On appeal, Indymac presents several issues that will be consolidated into the following: (1) whether the circuit court erred in finding there was proper jurisdiction to hear the case, (2) whether the circuit court erred in denying the motion to set aside the default judgment, pursuant to Rule 60(b) of the Mississippi Rules of Civil Procedure, and (3) whether the judgment is void because the court’s award of damages is not supported by the evidence.

FACTS

¶2. On August 16, 2000, James C. Young borrowed $127,000 from Indymac Bank, F.S.B., and executed a deed of trust in favor of Indymac as security. The deed contained an incorrect legal description of property. The deed actually described another property that Young owned and resulted in the bank placing a lien on the wrong property. On July 17, 2001, Young filed suit against Indymac (Cause No. [1288]*1288CV01-0116) and, once Indymac changed the legal description of the property, Young dismissed the suit.

¶ 3. On April 12, 2002, Young filed another suit against Indymac, alleging intentional breach of contract based on Indymac’s failure to correct the deed description in a timely manner.1 Young argued that this failure violated Mississippi Code Annotated Section 89-5-21 (Supp.2006). He requested $60,000, plus interests, and statutory and punitive damages.

¶ 4. On April 23, 2002, service of process was issued to Kathy Hart, one of Indy-mac’s agents for service of process. Indy-mac failed to answer the complaint and, on May 29, 2002, Young obtained a final default judgment against Indymac in the amount of $60,000, plus $15,000 in attorney’s fees, for a total of $75,000. On October 4, 2004, Indymac filed a motion to set aside the default judgment. On June 15, 2006, the court held a hearing on the motion and denied Indymac’s request.

STANDARD OF REVIEW

¶ 5. This Court reviews motions to set aside default judgments under an abuse of discretion standard. Tatum v. Barrentine, 797 So.2d 223, 227(¶ 15) (Miss.2001). The trial court applies a three-prong balancing test in reviewing a motion to set aside a default judgment, pursuant to Rule 60(b) of the Mississippi Rules of Civil Procedure. Stanford v. Parker, 822 So.2d 886, 888(¶ 6) (Miss.2002). Where jurisdictional questions are raised, however, the standard of review is de novo. Trustmark Nat’l Bank v. Johnson, 865 So.2d 1148, 1150(¶ 8) (Miss.2004).

ANALYSIS

(1) Whether the circuit court erred in finding there was proper jurisdiction to hear the case.

¶ 6. Young filed his complaint against Indymac in the Tishomingo County Circuit Court, as an action for damages due to an intentional breach of contract. Indymac argues that the circuit court lacked subject matter jurisdiction to hear the case because Young’s cause of action involved a cloud of title upon real estate. Indymac asserts that Young should have properly filed an action for reformation of the deed of trust in order to clear the cloud of title, an action limited to the jurisdiction of the chancery court.

¶ 7. Mississippi circuit courts are courts of general subject matter jurisdiction while chancery courts maintain special or limited jurisdiction. Hall v. Corbin, 478 So.2d 253, 255 (Miss.1985). According to Article 6, Section 156 of the Mississippi Constitution, circuit courts maintain original jurisdiction for all civil and criminal matters in this state in which the Mississippi Constitution has not already vested into some other court. Hogrobrooks v. Progressive Direct, 858 So.2d 913, 916-17(¶ 10) (Miss.Ct.App.2003).

¶ 8. The Mississippi Constitution establishes the jurisdictional limitations of the chancery court as a court of equity. Article 6, Section 159 of the Mississippi Constitution provides as follows:

The Chancery Court shall have full jurisdiction of the following matters and cases, viz.:
(a) All matters in equity;
(b) Divorce and alimony;
(c) Matters testamentary and of administration;
[1289]*1289(d) Minor’s business;
(e) Cases of idiocy, lunacy, and persons of unsound mind;
(f) All cases of which the said court had jurisdiction under the laws in force when this Constitution is put in operation.

Miss. Const., art. 6, § 159. The chancery court is given additional jurisdiction over the following types of cases pertaining to real property:

And in addition to the jurisdiction heretofore exercised by the chancery court in suits to try title and to cancel deeds and other clouds upon title to real estate, it shall have jurisdiction in such cases to decree possession, and to displace possession; to decree rents and compensation for improvements and taxes; and in all cases where said court heretofore exercised jurisdiction, auxiliary to courts of common law, it may exercise such jurisdiction to grant the relief sought, although the legal remedy may not have been exhausted or the legal title established by a suit at law.

Miss. Const., art. 6, § 160. These two provisions define the parameters of the chancery court’s jurisdiction.

¶ 9. Young filed his suit as a intentional breach of contract claim. In ERA Franchise Sys. v. Mathis, 931 So.2d 1278, 1283(¶ 14) (Miss.2006), the supreme court held that the circuit court is in a better position to retain jurisdiction over breach of contract issues than the chancery court. The court acknowledged that recent case law favored allowing equitable claims to be heard before a circuit court when the claims are connected to a contractual relationship or other claims tied to questions of law. Id. The circuit court maintained the proper subject matter jurisdiction to hear Young’s intentional breach of contract claims.

¶ 10. Even if this Court held that Young’s claims did not correctly allege the elements of an intentional breach of contract claim, the trial courts determine whether a claim is legal or equitable by considering the substance, and not the form, of the claims. Copiah Medical Assocs. v. Mississippi Baptist Health Sys., 898 So.2d 656, 661(¶ 16) (Miss.2005). Trial courts resolve questions of whether a complaint is legal or equitable in nature by allowing the circuit courts to maintain jurisdiction over these cases. Id.

(2)Whether the trial court erred in denying the motion to set aside final default judgment under Rule 60(b) of the Mississippi Rules of Civil Procedure.

¶ 11. Rule 60 provides limited grounds for relief from judgments or orders. Under Rule 60(b), a trial court may grant relief based on a sufficient showing of fraud, mistake or other justifiable reason. Williams v. Kelly, 872 So.2d 783, 785(¶ 8) (Miss.Ct.App.2004). Rule 60(b) reads, in pertinent part, as follows:

(b) Mistakes; Inadvertence; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

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966 So. 2d 1286, 2007 Miss. App. LEXIS 716, 2007 WL 3076928, Counsel Stack Legal Research, https://law.counselstack.com/opinion/indymac-bank-fsb-v-young-missctapp-2007.