Julie Rosson v. Mark McFarland

Mississippi Supreme Court·Decided May 30, 2006·No. 2006-CA-01107-SCT·Published

Opinion

IN THE SUPREME COURT OF MISSISSIPPI NO. 2006-CA-01107-SCT

CONSOLIDATED WITH

NO. 2004-CA-00078-SCT

JULIE ROSSON v. DR. MARK McFARLAND

DATE OF JUDGMENT: 05/30/2006 TRIAL JUDGE: HON. STEPHEN B. SIMPSON COURT FROM WHICH APPEALED: HANCOCK COUNTY CIRCUIT COURT ATTORNEY FOR APPELLANT: JOE SAM OWEN ATTORNEY FOR APPELLEE: S. CHRISTOPHER FARRIS NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: ON DIRECT APPEAL: REVERSED AND RENDERED; ON CROSS-APPEAL:

DISMISSED - 08/23/2007

MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE WALLER, P.J., DICKINSON AND RANDOLPH, JJ.

RANDOLPH, JUSTICE, FOR THE COURT:

STATEMENT OF THE CASE

¶1. In 1999, Dr. Mark McFarland filed a Complaint in the Circuit Court of Hancock County against Acadian Bay Development, Inc. (“Acadian Bay”), and Julie Rosson, individually (“Rosson”). McFarland pleaded that Acadian Bay and Rosson each breached

their contractual obligations, that they negligently failed to construct his home in a fit and workmanlike manner, and that they made false representations to induce McFarland to enter into the contract to build his home.

¶2. Subsequently, McFarland filed an amended complaint adding Time Warner, Inc., alleging it to be the parent company of Southern Living magazine. McFarland obtained the plans for building his home from Southern Living.

¶3. Following discovery and more than three years later, a second amended complaint was filed omitting Time Warner, Inc., as a defendant, but naming Southern Living, Inc. (“Southern Living”) as a defendant. The second amended complaint also named Julie Rosson Builder, Inc. as an additional defendant and alleged that all defendants made material misrepresentations and were guilty of fraud and deceptive advertising in addition to breach of contract. No claim was pleaded to pierce the corporate veil nor was there any claim to utilize an “alter ego” theory to impose individual liability.

¶4. During trial, Southern Living settled for $100,000. At the conclusion of McFarland’s case-in-chief and after final close, the remaining defendants moved for directed verdicts, which were denied by the trial court. The jury returned a verdict of $325,000, but only against Rosson as an individual. Rosson was then given credit for the settlement payment by Southern Living, and the verdict was reduced by agreement. Final judgment was entered against only Rosson, individually, for $225,000.

¶5. Rosson filed a combined motion and memorandum for judgment notwithstanding the verdict (JNOV), or in the alternative, for a new trial, or a remittur, and McFarland filed a

motion for assessment of attorney fees and expert witness fees, as well as a motion for new trial on the issue of punitive damages. All post-trial motions were denied by the trial court.

¶6. Rosson appealed. McFarland cross-appealed claiming the trial court erred in its decision to not allow the jury to hear the issue of punitive damages and also in its denial of a new trial on the issue of punitive damages and attorney’s expert witness fees.

¶7. Subsequent to the appeal, Rosson allegedly discovered evidence McFarland withheld at trial.1 Reviewing the record on appeal, this Court, sua sponte, found that a final judgment had not been entered. The final judgment from which Rosson appealed failed to address the corporate defendants Acadian Bay or Julie Rosson Builder, Inc., and was not certified as final under M.R.C.P. 54(b). See Salts v. Gulf Nat’l Life Ins. Co., 849 So. 2d 848, 850-51 (Miss. 2002).

¶8. This Court dismissed the appeal for lack of jurisdiction, since a certified final judgment was not entered by the trial court. See Rosson v. McFarland, 933 So. 2d 969 (Miss. 2006). Subsequently, Rosson filed a Motion for Correction of Final Judgment, to which McFarland agreed. The trial court granted the motion.

¶9. The trial court entered a Corrected Final Judgment, which found the following:

(a) McFarland was, after a credit of the $100,000 settlement with Southern Living, Inc., entitled to recover damages against Julie Rosson, individually, for

1 Rosson then filed a Rule 60(b)(1), (3), and (6) Motion to Set Aside Final Judgment and Other Relief, or Alternatively, a New Trial. Rosson twice supplemented the Rule 60(b) Motion. Rosson then filed a Motion to Extend, Stay and Abate Briefing Schedule pending a ruling by the trial court on her Rule 60(b) Motion. A hearing was ultimately held on Rosson’s Rule 60(b) Motion, and the Motion was denied by the trial court. As this evidence was not integral to this Court’s decision, we decline to address it.

the sum of $225,000, plus interest at the legal rate from the date of the original judgment of October 6, 2003, and costs of court.

(b) Judgment was entered for Acadian Bay Development, Inc. and Julie Rosson Builder, Inc. and all claims as to these defendants were dismissed with prejudice.

(c) Finally, it was ordered and adjudged that judgment be entered for all defendants, Acadian Bay Development, Inc., Julie Rosson Builder, Inc. and Julie Rosson, individually, as to attorney’s fees/expert witness’ fees and punitive damage claims as the trial court determined prior to submission to the jury that these claims should not be considered by the jury.

¶10. The trial court also adopted its previous findings and ruling on Rosson’s Rule 60(b)(1), (3) and (6) Motion to Set Aside Final Judgment or, Alternatively, a New Trial. The trial court re-stated that the evidence not produced at trial was not prejudicial in light of its cumulative nature and denied Rosson’s motion.

¶11. Julie Rosson appeals from the Corrected Final Judgment. One issue presented is dispositive of this case. Therefore, we will address only the following issue:2

I. Whether the lower court erred by not directing a verdict for Rosson and allowing McFarland to pierce the corporate veil of Acadian Bay Development, Inc.

FACTS

¶12. McFarland purchased three adjacent lots in Diamondhead, Mississippi, with the intent to build his first home there. Through his subscription to Southern Living magazine, McFarland examined several home designs advertised by the magazine as Southern Living

2 McFarland raised the following issue on cross-appeal: Whether the lower court erred in not allowing the jury to consider an award of punitive damages and/or in not awarding attorney’s fees. As the Court has found that damages should not have been awarded against Rosson individually, the cross-appeal is moot.

Idea Homes and Southern Living Custom Homes. McFarland chose the Crabapple Cottage Alternate home plan as the home he would like to build and purchased a set of blueprints from Southern Living.

¶13. When McFarland received the blueprints, he also received promotional literature from Southern Living. This literature included Southern Living’s recommendation of home builders in various states. Southern Living recommended Julie Rosson Builders, Inc., as one of its builders in Mississippi. McFarland testified that he spoke with a representative of Southern Living’s Custom Home program, who stated the builders recommended by Southern Living had to meet strict standards and guidelines in order to be eligible for the program.

¶14. Subsequently, McFarland contacted Rosson, the president and sole shareholder of Julie Rosson Builder, Inc., and met her at her Waveland home to view the caliber of its construction.

¶15. McFarland presented the Southern Living blueprints and specified the materials he wanted to be used for his home. Rosson acknowledged that she was aware that McFarland had a Southern Living home plan. However, she said the fact that Julie Rosson Builder, Inc., was a recommended Southern Living home builder was only “mentioned a time or two” and that the initial contact did not focus on McFarland’s conversations with Southern Living.

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