Sel Business Services, LLC and Skip Lloyd v. Wilburn Lord, Jr., Sharkey County, Mississippi, Issaquena County, Mississippi and Sharkey-Issaquena Community Hospital

• Court: Mississippi Supreme Court
• Decided: April 13, 2023
• Docket: 2021-CT-00368-SCT
• Status: Published

Opinion

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2021-CT-00368-SCT

SEL BUSINESS SERVICES, LLC, AND SKIP LLOYD

v.

WILBURN LORD, JR., SHARKEY COUNTY, MISSISSIPPI, ISSAQUENA COUNTY, MISSISSIPPI AND SHARKEY-ISSAQUENA COMMUNITY HOSPITAL

ON WRIT OF CERTIORARI

DATE OF JUDGMENT: 03/02/2021 TRIAL JUDGE: HON. JAYE A. BRADLEY TRIAL COURT ATTORNEYS: TIMOTHY D. MOORE C. W. WALKER, III FRANK J. DANTONE, JR. JOHN P. SNEED CHARLES EDWARD COWAN COURT FROM WHICH APPEALED: SHARKEY COUNTY CHANCERY COURT ATTORNEY FOR APPELLANTS: C. W. WALKER, III ATTORNEYS FOR APPELLEES: FRANK J. DANTONE, JR. JOHN P. SNEED CHARLES EDWARD COWAN EDWARD D. LAMAR NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: AFFIRMED IN PART; REVERSED AND REMANDED IN PART - 04/13/2023 MOTION FOR REHEARING FILED:

EN BANC.

MAXWELL, JUSTICE, FOR THE COURT: ¶1. In Barriffe v. Estate of Nelson, 153 So. 3d 613, 620-21 (Miss. 2014), this Court held

that “an equitable lien is not appropriate to enforce a contract that otherwise fails to meet the

requirements of the statute of frauds.” And it is of course true that a contract for the sale of

land that has not been reduced to writing is unenforceable. So specific performance of the

oral contract is not an available remedy. But, contrary to Barriffe’s suggestion, that does

not mean that a would-be property purchaser—when he fails to reduce the sales contract to

writing—never has any equitable recourse. Instead, long-standing Mississippi precedent has

allowed equitable claims when contract-enforcement claims fail due to the statute of frauds.

E.g., Powell v. Campbell, 912 So. 2d 978, 981-82 (Miss. 2005); Koval v. Koval, 576 So. 2d

134, 138 (Miss. 1991); PMZ Oil Co. v. Lucroy, 449 So. 2d 201, 206 (Miss. 1984); Dobbs

v. Bowling, 339 So. 2d 985, 986 (Miss. 1976).

¶2. Here, both the chancery court and Court of Appeals relied on Barriffe to conclude that

the statute of frauds bars not just claims for equitable liens but all potential equitable

remedies. We granted SEL Business Services, LLC, and Skip Lloyd’s petition for writ of

certiorari to overrule the erroneous Barriffe decision and to reinstate this Court’s long-

standing equitable principles.

¶3. Consequently, we affirm in part and reverse in part the judgment of the Court of

Appeals. Specifically, we reverse the chancellor’s dismissal of SEL and Lloyd’s equitable

claims against the would-be seller of the building, Dr. Wilburn Lord. We affirm the

chancellor’s judgment of dismissal as to the remaining defendants. And we remand the case

to the chancery court for further proceedings consistent with this opinion.

2 Background Facts and Procedural History

¶4. Lord had agreed to sell SEL and Lloyd (collectively, SEL) a building in Rolling Fork,

Mississippi, for $60,000. SEL moved into the building and alleges to have begun making

improvements and paying the taxes. But Lord never followed through with the sale. Instead,

on July 8, 2020, Lord sold the building to Sharkey Issaquena Community Hospital, a

community hospital operated by Sharkey and Issaquena Counties (collectively, Hospital

Defendants).

¶5. SEL initially sought to enjoin the sale. On July 7, 2020, SEL filed a petition for

injunctive relief against Lord in Sharkey County Chancery Court. Two weeks later, SEL

filed an amended petition, adding the Hospital Defendants. In the amended complaint, in

addition to seeking the injunction, SEL alleged Lord breached his contract with SEL to sell

the building. SEL requested specific performance. Alternatively, SEL alleged detrimental

reliance and promissory estoppel. SEL finally requested, “should the Court find that specific

performance, promissory estoppel and/or equitable estoppel are somehow inapplicable and/or

the Contract should not otherwise be enforced based on the principles of equity and/or other

grounds/for other reasons, . . . [that] the Court disgorge all funds paid to Defendants and/or

otherwise award all monetary damages available under Mississippi law.”

¶6. Both Lord and the Hospital Defendants moved for summary judgment based on the

statute of frauds. They claimed the statute of frauds barred not only SEL’s contract-based

claim for specific performance but also any “derivative” equitable claims. At the summary

judgment hearing, SEL conceded that the oral contract for the sale of the building was

3 unenforceable. For that reason, injunctive relief to specifically enforce the sales contract was

not available. But SEL insisted its equitable claims were still viable and that the statute of

frauds does not bar unjust enrichment claims.

¶7. The chancellor granted both summary judgment motions and dismissed all of SEL’s

claims. Relying on Barriffe, 153 So. 3d 613, the chancellor held the statute of frauds not

only barred SEL’s claim for specific performance of the oral property-sales contract but also

any equitable remedy. SEL timely appealed. And we assigned the appeal to the Court of

Appeals, which affirmed. SEL Bus. Servs., LLC v. Lord, No. 2021-CA-00368-COA, 2022

WL 2037761 (Miss. Ct. App. June 7, 2022). Citing Barriffe, the Court of Appeals agreed

that SEL’s claims of equitable estoppel and unjust enrichment were barred due to the failure

to reduce the property-sales contract to writing. Id. at *3.

¶8. SEL petitioned this Court for writ of certiorari, which we granted.

Discussion

¶9. We granted certiorari to correct the false notion that the statute of frauds always bars

not just specific performance of an oral contract to sell property but also any equitable

remedy. As part of our review, we conclude that Barriffe cannot merely be distinguished on

its facts. Instead, we find that Barriffe must be overruled to the extent it holds that the

statute of frauds bars, as a matter of law, any claim for an equitable lien and other forms of

equitable remedies.

¶10. In Barriffe, a couple moved into and made significant improvements to an apartment

on a relative’s property. Barriffe, 153 So. 3d at 616. There was an understanding that their

4 relative would transfer the property to them. The relative later refused to deed them the

property. So the Barriffes sued. Id. The chancellor imposed a constructive trust for the

value of the improvements, resulting in an equitable lien on the property. Id. On appeal, a

majority of this Court held the chancellor had erred by imposing the equitable lien. Id. at

621. And the reason for the error was the statute of frauds, which requires contracts

involving the transfer of real property to be in writing. Id. (citing Miss. Code Ann. § 15-3-

1(c) (Rev. 2012)). Citing Dobbs, the Barriffe majority reasoned that “[a]n equitable lien

cannot save a contract that violates the statute of frauds.” Barriffe, 153 So. 3d at 621 (citing

Dobbs, 339 So. 2d at 986).

¶11. But Dobbs simply does not support Barriffe’s conclusion. Dobbs, 339 So. 2d at 986-

88. Dobbs did not preclude equitable remedies when a contract fails under the statute of

frauds. Instead, Dobbs actually affirmed the imposition of an equitable lien. Id. at 988. In

Dobbs, the property owner appealing the imposition of the equitable lien had cited Lewis v.

Williams, which “involved a suit on an oral agrement for the convenyance of land and was

an attempt to establish a constructive trust which would require the conveyance.” Dobbs,

339 So. 2d at 986 (citing Lewis v. Williams, 186 Miss. 701, 191 So. 479, 481 (1939)). The

Dobbs court acknowledged Lewis’s holding that, “if the oral agreement constituted a

constructive trust, ‘then, we shall have practically abolished the statute of frauds . . . .’” Id.

(emphasis added) (quoting Lewis, 191 So. at 481). And it is this “practically abolished”

language from Lewis via Dobbs that the Barriffe majority seized on. Barriffe, 153 So. 3d

at 621 n.20.

5 ¶12. But Dobbs dismissed the property owner’s reliance on Lewis, finding that case was

distinguishable. Dobbs, 339 So. 2d at 986. The Dobbs Court then proceeded to discuss the

long-standing “rule allowing recovery of money expended under an unenforceable contract.”

Id. Of course, the would-be buyer “could not sue for specific performance, since the oral

contract was unenforceable under the statute of frauds,” but that did not leave him with no

remedy. Id. (quoting Hardy v. Candelain, 204 Miss. 328, 37 So. 2d 360, 361 (1948)).

Rather, “his remedy was recovery of the money he paid on the consideration for the broken

contract.” Id. (quoting Hardy, 37 So. 2d at 361). Indeed, “[i]t is a familiar principle of law

that, where payments are made by a purchaser under a parol contract for the sale of land, and

the vendor refuses to complete the transaction by the execution of the necessary deed, the

purchaser may recover the amount or amounts paid as for money had and received . . . .” Id.

at 986-87 (quoting Hardy, 37 So. 2d at 361).

¶13. That is what happened in Dobbs. The oral agreement between the property owner and

would-be purchaser—that the would-be purchaser would pay off the first and second

mortgages, which were in arrears, in exchange for the property—was unenforceable. Id. at

985. But the chancery court imposed an equitable lien on the property. Id. This equitable

lien was for the amount the would-be purchaser spent to pay off the mortgages. And the

court even ordered the sale of the property to satisfy the lien. Id. This Court affirmed the

imposition of the equitable lien, explaining that “[i]t would be inequitable and

unconscionable to permit [the property owners] to be unjustly enriched and to escape

payment of the sums expended . . . which inured to their benefit.” Id. at 988.

6 ¶14. So Dobbs does not support Barriffe’s conclusion that an equitable lien cannot be

imposed for the value of improvements made to a property when the oral agreement for

transfer of the property in exchange for the improvements fails due to the statute of frauds.

“An equitable lien cannot save a contract that violates the statute of frauds.” Barriffe, 153

So. 3d at 621. But it can in some instances provide a remedy for money expended under the

unenforceable contract. Dobbs, 339 So. 2d at 986. As this Court has previously said, the

statute of frauds does not apply to an equitable lien that arises by law, because such a lien

rests on the principles of justice and fairness and not whether an enforceable contract had

been formed. Koval, 576 So. 2d at 138.

¶15. The same is true for the equitable estoppel, which “is a well-established exception to

our statute of frauds.” PMZ Oil Co., 449 So. 2d at 206; see also Swartzfager v. Saul, 213

So. 3d 55, 65 (Miss. 2017) (alternatively holding that, “even if there was no enforceable

contract,” the property owner was “estopped from denying the [property] deal he struck”);

Powell, 912 So. 2d at 981-82 (“The doctrine of equitable estoppel may be used to enforce an

oral contract which would otherwise be unenforceable under the statute of frauds.” (citing

Koval, 576 So. 2d at 137; Sanders v. Dantzler, 375 So. 2d 774, 776 (Miss. 1979))). “Our

cases have repeatedly held that, where the elements of equitable estoppel are present, the

statute of frauds constitutes no bar to enforcement of that to which a party has agreed.” PMZ

Oil Co., 449 So. 2d at 206.

¶16. Similarly, this Court has certainly affirmed unjust enrichment awards in cases where

there was no legal contract. In fact, “[u]njust enrichment only applies to situations where

7 there is no legal contract and ‘the person sought to be charged is in possession of money or

property which in good conscience and justice he should not retain but should deliver to

another.” Powell, 912 So. 2d at 982 (quoting Koval, 576 So. 2d at 136); see also Hughes v.

Shipp, 324 So. 3d 286 (Miss. 2021) (affirming dismissal of breach-of-contract claim due to

the statute of frauds but reversing and remanding unjust enrichment claim).

¶17. For these reasons, we overrule Barriffe to the extent it held that the statute of frauds

barred not only specific performance of an oral contract but also any equitable recovery for

the value of improvements to the property. While we are very mindful of the rule of stare

decisis, that rule “is not completely immutable, but is flexible enough to admit of

change . . . where the previous rule of law would perpetuate error and wrong would result

if the decisions were followed.” Laurel Daily Leader, Inc. v. James, 224 Miss. 654, 80 So.

2d 770, 781 (1955). And, here, we find allowing Barriffe to stand would undoubtedly

perpetuate clear error and lead to inequitable results.

¶18. We thus affirm in part and reverse in part the judgment of the Court of Appeals. The

chancellor’s summary judgment ruling in favor of Lord is reversed in part. Specifically, we

reverse the chancellor’s dismissal of SEL’s equitable claims against Lord as derivative

claims barred by Barriffe. But at this summary judgment stage, we pass no judgment on the

merits of his claims or whether he is entitled to any equitable remedy. That is because

material fact questions exist concerning whether and to what extent SEL paid money as

consideration for the broken oral contract and/or made improvements to Lord’s building. We

8 instead remand SEL’s equitable claims against Lord to the chancery court for further

proceedings consistent with this opinion.

¶19. We affirm the grant of summary judgment to the Hospital Defendants, against which

SEL has no equitable claims.

¶20. AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

RANDOLPH, C.J., KITCHENS AND KING, P.JJ., COLEMAN, BEAM, CHAMBERLIN, ISHEE AND GRIFFIS, JJ., CONCUR.