Natchez Electric and Supply Co., Inc. v. Wayne Johnson

Mississippi Supreme Court·Decided October 17, 2003·No. 2004-CT-00155-SCT·Published

Opinion

IN THE SUPREME COURT OF MISSISSIPPI NO. 2004-CT-00155-SCT

NATCHEZ ELECTRIC AND SUPPLY CO., INC. v. WAYNE JOHNSON d/b/a JOHNSON ELECTRIC

ON MOTION FOR REHEARING

ON WRIT OF CERTIORARI

DATE OF JUDGMENT: 10/17/2003 TRIAL JUDGE: HON. ROBERT B. HELFRICH COURT FROM WHICH APPEALED: FORREST COUNTY CIRCUIT COURT ATTORNEY FOR APPELLANT: CLIFFORD C. WHITNEY, III ATTORNEY FOR APPELLEE: SCOTT J. SCHWARTZ NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED. THE JUDGMENT OF THE FORREST COUNTY CIRCUIT COURT IS REINSTATED AND AFFIRMED -

01/18/2007

MOTION FOR REHEARING FILED: 02/01/2007 DISPOSITION UPON REHEARING: THE JUDGMENT OF THE COURT OF APPEALS IS AFFIRMED IN PART AND REVERSED IN PART. THE JUDGMENT OF THE FORREST COUNTY CIRCUIT COURT IS REVERSED AND THIS CASE IS REMANDED TO THE FORREST COUNTY CIRCUIT COURT FOR FURTHER PROCEEDINGS IN ACCORDANCE WITH THIS OPINION - 09/06/2007 MANDATE ISSUED:

EN BANC.

WALLER, PRESIDING JUSTICE, FOR THE COURT:

¶1. The motion for rehearing is granted. Prior opinions are withdrawn and these opinions are substituted therefor.

¶2. In this open-account case where the jury returned a verdict for the defendant, we are asked whether the trial court erred in denying the plaintiff’s motions for judgment notwithstanding the verdict (JNOV) and for new trial. Because the jury’s verdict in favor of Wayne Johnson was without evidentiary basis, we affirm the Court of Appeals’ decision reversing the judgment entered by the Circuit Court of Forrest County. However, rather than affirming the damages rendered by the Court of Appeals, we reverse and remand the case to the circuit court for a new trial on damages only.

FACTS

¶3. Wayne Johnson operated an electrical contracting business in Hattiesburg as Johnson Electric. Natchez Electric sold electrical materials to Johnson under an open-account agreement. According to Stacy Taggert, manager of the Hattiesburg branch of Natchez Electric, Johnson “was probably . . . the largest commercial contractor [Natchez Electric] was dealing with” out of its Hattiesburg branch, and over the years he purchased “[h]undreds of thousands” of items from the company. Johnson and Taggert were “good business associates, [and] good friends.” Taggert estimated that Johnson had purchased “a little over $200,000” in materials from Natchez Electric.

¶4. The relationship soured when Johnson got behind on his payments to Natchez Electric, which ultimately sued him for more than $40,000 in debt. The suit was instituted under the open account statute, Mississippi Code Annotated section 11-53-81 (Rev. 2002). At trial, the jury found in favor of Johnson, but the Court of Appeals reversed and rendered,

ordering that a judgment in the amount of $39,098.83 be entered in favor of Natchez Electric.

DISCUSSION

¶5. Under Mississippi law, a plaintiff suing on an open account must attach to the complaint a copy of the account. See M.R.C.P. 10(d). Natchez Electric complied with this rule. Johnson raised several affirmative defenses: mistakes in Natchez Electric’s accounting system, non-delivery of the goods, lack of signatures on delivery tickets, and theft. Since a portion of statutory law governing the burden of proof on actions on open accounts has been repealed, the first issue before the court is what proof establishes a prima facie case for an action on an open account. The second issue is whether Natchez Electric made its prima facie case and met its burden of going forward.

I. PRIMA FACIE PROOF FOR OPEN-ACCOUNT CASES

¶6. The United States Court of Appeals for the Fifth Circuit has defined “prima facie” as: “[evidence] such as will suffice until contradicted and overcome by other evidence . . . [a] case which has proceeded upon sufficient proof to that stage where it will support [a] finding if evidence to the contrary is disregarded.” In re Int'l Sys. & Controls Corp. Sec. Litig., 693 F.2d 1235, 1242 (5th Cir. 1982) (quoting Black's Law Dictionary 1353 (4th ed. 1968)) (cited with approval in Hewes v. Langston, 853 So. 2d 1237, 1270 (Miss. 2003)). A prima facie case is made by the proponent solely on his proof. When this burden of proof has been met, the burden of going forward shifts to the contestants to overcome the prima facie case. Smith v. Averill, 722 So. 2d 606, 611(Miss. 1998). More specifically, once a prima facie case is made on an open account, the burden of proof shifts to the account debtor to prove that the amount claimed is incorrect. B.E.I., Inc. v. Newcomer Lumber & Supply Co., 745

N.E.2d 233, 237 (Ind. Ct. App. 2001) (citing Auffenberg v. Board of Trustees of Columbus Regional Hosp., 646 N.E.2d 328, 331 (Ind. Ct. App. 1995)).

¶7. The Iowa Supreme Court has explained what is required to make a prima facie case in an open-account case:

It is our conclusion that plaintiff's actual ledger cards showing each entry of debit and credit, the testimony of plaintiff's manager showing the simultaneous business machine posting and invoice billing of the customer, his testimony concerning the correctness of the entries, and his testimony that all materials represented by the entries had been delivered to defendant constitute sufficient evidence to make a prima facie case.

Prestype, Inc. v. Carr, 248 N.W.2d 111, 119 (Iowa 1976) (quoting Gardner and Beedon Co. of Springfield v. Cooke, 513 P.2d 758 (Ore. 1973)).

¶8. Stacy Taggert, branch manager for Natchez Electric, testified as to how Natchez Electric operated its daily business. He provided specific detail concerning the three methods of delivery and billing to the Johnson Electric account that occurred over the period from April 1994 to May 1996, when Natchez Electric did business with Johnson. The most common method involved employees from Johnson Electric entering the Natchez Electric store with either a written or verbal list of supplies for purchase. Natchez Electric employees would pull the material, take the name of the job from Johnson Electric, print a delivery ticket, and forward an invoice to Johnson Electric at regular intervals for payment. The Johnson Electric employees would either sign the delivery ticket upon receipt of the goods or leave the store once the materials were loaded without signing the delivery ticket. In case of the latter, Natchez Electric might hand-write on the delivery ticket the name of the

Johnson Electric employee who picked up the goods. Taggert testified Natchez Electric was instructed not to detain Johnson Electric employees waiting on the delivery ticket to print.

¶9. The other two methods of delivery occurred when Natchez Electric delivered electrical goods to a Johnson Electric job site, or a manufacturer, at the request of Natchez Electric, delivered goods directly to a job site. In both cases, the delivery ticket would be unsigned. A freight charge would appear on Natchez Electric invoices for material forwarded from a manufacturer to a Johnson Electric job site. The trial testimony and exhibits contain evidence of all three types of delivery. Taggert testified that the outstanding balance on the invoices entered as an exhibit, less the $19,000 adjustment for overbilling and returned merchandise found on those invoices, is an accurate calculation of the amount Johnson Electric owed to Natchez Electric: $41,794.45.

¶10. We find that Taggert’s testimony constituted a prima facie case for the open-account debt. The testimony described Natchez Electric’s standard practice of conducting business with Johnson and supported the accuracy of the invoices.

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