Whitaker v. LIMECO CORP.

32 So. 3d 429, 2010 Miss. LEXIS 182, 2010 WL 1379991
CourtMississippi Supreme Court
DecidedApril 8, 2010
Docket2009-CA-00351-SCT
StatusPublished
Cited by44 cases

This text of 32 So. 3d 429 (Whitaker v. LIMECO CORP.) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whitaker v. LIMECO CORP., 32 So. 3d 429, 2010 Miss. LEXIS 182, 2010 WL 1379991 (Mich. 2010).

Opinion

CARLSON, Presiding Justice,

for the Court:

¶ 1. Failing in their efforts to collect more than $850,000 purportedly owed to them as a result of the trial court’s dismissal of their claims against Limeco Corporation and William Kidd, R.W. Whitaker and Monty Fletcher appeal to us for relief. Although we find that the trial court correctly dismissed some of the claims asserted by Whitaker and Fletcher, we likewise find error on the part of the trial court in dismissing in their entirety all claims asserted by Whitaker and Fletcher against Limeco and Kidd. Thus, the Lee County Circuit Court’s judgment of dismissal is affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion.

FACTS AND PROCEEDINGS IN THE TRIAL COURT

¶ 2. Some of the facts in today’s case are gleaned from our opinion in a related case, Fletcher v. Limeco Corporation, 996 So.2d 773 (Miss.2008). William Kidd served as managing director of Limeco Corporation. Beginning in 2001, negotiations began between Kidd/Limeco, the Defendants/Appel-lees, 1 and R.W. Whitaker and Monty Fletcher, 2 the Plaintiffs/Appellants, in connection with what later became a failed effort to purchase a hockey team in Tupe-lo. The Plaintiffs maintain that in the course of these 2001 negotiations, Kidd misrepresented to them that Limeco was a corporation with substantial assets. The Plaintiffs further allege that, as a result of Kidd’s misrepresentations, they were *432 fraudulently induced by Kidd to lend Li-meco $750,000. According to the Plaintiffs, these loans were made based on Kidd’s misrepresentations to the Plaintiffs that, to the extent Kidd could not pay back the loans, Limeco had sufficient assets to repay the loans in full. The Plaintiffs claim Kidd concealed the fact that Limeco had no assets, and in doing so, shared with the Plaintiffs certain financial records and books which showed the corporation to be a solvent corporation possessing sufficient assets to repay the loans. See Fletcher, 996 So.2d at 774.

¶ 3. The Plaintiffs further allege that, on or about February 19, 2002, Kidd induced Whitaker to take out an additional $100,000 loan from Peoples Bank & Trust Company in Tupelo, and, in turn, to lend Kidd the full amount of this loan, which came due on April 19, 2002. This loan was extended by Whitaker in the form of a continuing guaranty with the understanding that the Defendants would be responsible to the bank for any and all indebtedness of Whitaker to the bank for an amount up to $100,000.

¶ 4. On July 1, 2002, the parties entered into what they referred to as promissory notes (referred to as the “Fletcher note” and the “Whitaker note”) to memorialize the terms of the loan agreements they had made in early 2002. Both Fletcher and Whitaker, in an effort to secure what they thought were promissory notes, were granted a continuing lien on Limeco’s monies, securities, and/or other property for the entire amount of the promissory notes (each in the amount of $375,000).

¶ 5. On December 11, 2003, Whitaker and Fletcher filed separate complaints against Limeco and Kidd. 3 The Plaintiffs alleged that they had lent Kidd more than $850,000 that had never been repaid. Both complaints alleged claims of breach of promissory notes. Whitaker also alleged that he had been induced to lend Kidd an additional $100,000 and had allowed Kidd to enter into a continuing guaranty when the loan came due; thus, Whitaker’s complaint included both a breach-of-promissory-note claim and breaeh-of-continuing-guaranty claim. The Lee County Circuit Court dismissed both complaints due to defective service. The cases were consolidated, and the dismissal for lack of proper service was affirmed by this Court on appeal. Fletcher, 996 So.2d at 781.

¶ 6. However, on September 18, 2007, during the early stages of the Fletcher appeal, 4 the Plaintiffs filed a complaint against Kidd and Limeco in the Lee County Chancery Court, alleging breach of promissory notes, breach of continuing guaranty, fraud, and fraudulent transfer of assets. 5 Due to the alleged fraud, the Plaintiffs sought to pierce the corporate veil in order to include as defendants not only Limeco, but William Kidd, individual *433 ly. The trial court ultimately found the suit to be time-barred. The breach-of-promissory-note claims were dismissed due to the trial court’s determination that the notes did not meet the statutory requirements to be considered instruments of negotiability; thus, according to the trial court, the claims were subject to a three-year breach-of-contract statute of limitations, as opposed to the six-year statute of limitations for a breach-of-promissory-note cause of action. The fraud claims were found to be time-barred because, according to the trial court, the Plaintiffs first had knowledge of the fraud in 2003 when they filed the original suit. As a result, according to the trial court, the three-year statute of limitations for fraud would have run in 2006. The trial court rejected the Plaintiffs’ argument that the factual basis for their fraud claims had been fraudulently concealed from them by Kidd until March 2007. The trial court found that, because the Plaintiffs had failed to establish a basis for a claim of fraud, there was no justification for piercing the corporate veil and holding Kidd responsible for Limeeo’s failure to repay the $850,000.

¶ 7. The Defendants, Limeeo and Kidd, filed separate answers and defenses to the complaint. Subsequently, the Defendants filed a motion to dismiss and a motion to stay discovery, to which the Plaintiffs responded. Finally, by mutual agreement, the parties agreed to transfer this case to the Circuit Court of Lee County on February 4, 2008.

¶ 8. Following an August 12, 2008, hearing on the Defendants’ motion to dismiss, Judge James L. Roberts, Jr., presiding, the trial court entered an order on January 30, 2009, dismissing the complaint on the grounds that the statute of limitations had expired for the breach-of-promissory-note claim, the breach-of-continuing-guaranty claim, and the fraud claim. The trial court rejected the argument made by the Plaintiffs that Kidd fraudulently had concealed the facts supporting their fraud claim. The trial court found the statute of limitations for fraud began running on December 11, 2003, when the Plaintiffs had filed their original claim; thus, according to the trial court, all claims were time-barred as of December 2006. The trial court concluded that, because their fraud claims were time-barred, the Plaintiffs were precluded from bringing a cause of action against Kidd in an individual capacity because, in order to pierce the corporate veil, the Plaintiffs were required to have a viable fraud claim. From the trial court’s judgment of dismissal, the Plaintiffs timely appealed to this Court.

DISCUSSION

¶ 9.

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Cite This Page — Counsel Stack

Bluebook (online)
32 So. 3d 429, 2010 Miss. LEXIS 182, 2010 WL 1379991, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whitaker-v-limeco-corp-miss-2010.