IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2014-CA-01597-COA PAUL M. NEWTON JR. APPELLANT

v. RONALD LEE BROWN AND/OR THE ESTATE OF RONALD LEE BROWN, DECEASED, BY BETTY LOU BROWN AND LISA ANN RAZ Z E, SHEILA RENE BROWN AND DEBRA LOUHOLTON ELLIOTT, AS INDIVIDUAL HEIRSAT-LAW APPELLEES

DATE OF JUDGMENT: 02/15/2012 TRIAL JUDGE: HON. HOLLIS MCGEHEE COURT FROM W HICH APPEALED: HARRISON COUNTY CHANCERY COURT, FIRST JUDICIAL DISTRICT ATTORNEY FOR APPELLANT: PAUL M. NEW TON JR. ATTORNEY FOR APPELLEES: PETER C. ABIDE NATURE OF THE CASE: CIVIL - OTHER TRIAL COURT DISPOSITION: JUDGMENT FOR CONVERSION AND ASSESSMENT OF ATTORNEY’S FEES AGAINST APPELLANT DISPOSITION: AFFIRMED IN PART, REVERSED AND REMANDED IN PART, AND REVERSED AND RENDERED IN PART: 05/24/2016 MOTION FOR REHEARING FILED: MANDATE ISSUED: BEFORE GRIFFIS, P.J., CARLTON AND JAMES, JJ. GRIFFIS, P.J., FOR THE COURT: ¶1. Paul M. Newton Jr. appeals the judgm e nt o f the Harrison County C hancery Court that f ound N ewton c onverted the persona l p r o p e rty of Dr. Ronald Lee Brown 1 and assessed

1 D r. B ro w n p assed aw ay d u rin g th e l itig atio n . F o r sim p licity , d esp ite t h e f

act t h at D r . B ro w n is n o w d eceased , w e ref er to th e A p p e llees as D r. B ro w n .attorney ’s f ees against him

.

FACTS AND PROCEDURAL HISTORY ¶2. On Novem

ber 11, 1986, Dr. Brown, Dr. Arthur Matthews, and Dr. Gerald W essler 2
entered into a partnership agreem ent to purchase an of f ice building. The p artnership owned
two parcels of land, which included a building a nd its parking lot. The parties ref erred to this as the BMW

partnership. ¶3. On Novem

ber 1, 1989, Drs

. B rown and Matthews f orm ed a s e cond partnership to conduct their m edical practice, t h e Gulf port Urology Clinic. The parties ref erred to this partnership as the Clinic. ¶4. Drs. M atthews and Brown o perated the Clinic until 2004. At this tim e, Dr. Matthews experienced legal issues when it was di scovered that he had f ailed to pay s t ate and f

ederal
taxes f or a num b er of y e ars. Dr. Matthews p leaded guilty to two counts of f ailure t o f ile tax docum ents. As part o f this plea agreem ent, Dr. M atthews rece i v e d a s e n t ence o f one y ear and one day

in prison and a j udgm ent against him in the am ount of $284,543. The f

ederal
governm ent f

i led a judgm e nt lien in that am ount against Dr. Matthews’ s p r o p e r t y , which included the BMW -partnership property

. Due to these legal issues, Drs. Brown and Matthews agreed to dissolve both partnerships. ¶5. Drs. Brown and Matthews agreed that the Cli n i c p a rtnership would end ef f ective
Decem ber 31, 2004. They exec u ted a dissolution agreem ent on February 1 1, 2005. The
agreem ent provided that Dr. Matth e w s w ould receive m onies due to him f rom the Clinic

2 D r. Wessler lef

t th e p artn ersh ip p rio r to th e ev en ts th a t led to th is law su it. 2practice. It also provided that D r. Brown would collect Dr. Matthews’s outstanding accounts

t h r o ugh 2005 and r em it these f unds to Dr. Matthews, less a f ive-percent collecti o n f

e e . Further, the Clinic owned a l if e-i n s u r ance policy that insured both Dr. Matthews and Dr. Brown. T he agreem ent stipulated that the Clinic would turn in the policy f or its cashsurrender value, which would result in the pay m ent of $49,771.71 to each doctor. ¶6. The d iss o lution agreem ent f or the BMW partnership stated t hat Dr. B rown would purchase the building and parking lot f or one-half of t he m arket value of the property , which

was $195,600. A t the tim e of dissolution, D rs. Brown and Matthews were a ware of a state
tax lien against the p roperty in the am ount of $75,677.97. The parties also agreed to reduce Dr. Matthews’s proceeds by that am ount. On January 7 , 2005, Dr. Matthews executed the d i s s o l u t i o n agreem ent f

or the BMW partnership a nd a q uitclaim deed that convey ed th e property to Dr. Brown. ¶7. To com

plete the necessary transactions that resulted f rom the dissolution of the BMW
par t n e r s h i p , D r. Brown p repared two checks. T he f irst c heck was to the Mississippi State
Tax C om m ission in the am ount of $75,677.97 to satisf y the state tax lien. T he second check

was p ay able to Dr. Matthews f or the rem ainder of the dissolution proceeds, in the am ount of $119,922.04. Stephen Maggio, t he attorney who represented Dr. Brown, retained the check to the Mississippi State Tax Com m ission. Dr. Matthews negotiated his check. ¶8. Thereaf

ter, M aggio did not f

orward the check to the Mississippi S t a t e T a x Com m i ssion. Also, the parties learned that Maggio incorrectly draf ted the quitclaim deed, because h e lef

t out the parking lot f

rom the property d escription. Further, Maggio f ailed to

3record the quitclaim deed and subsequently lost the d eed. Then, on February 4 , 2005, Dr.

Brown learned that Maggio did not f ind or disclose t he judgm ent l ien on the property at the tim e of convey ance. ¶9. On February 7, 2005, David Blakeslee, an a c countant f o r the Clinic pa

r t n e r s h i p , called
Newto n. Newton had served as t he attorney f or D r. Matthews throughout the dissolution process. Blakeslee told Newton that two checks were ready f or Dr. Matthews. ¶10. First, a check w as pay able to Newton 3 in the am ount of $ 55,730. This check was f or Dr. Matthews’s portion of the Clinic partnership’s liquid assets. This check was drawn on an account in the nam e of the Clinic partnership at H ancock Bank (Hancock B ank check). ¶11. The second check was also pay able t o Newton in the a mo u n t o f $49,771.71. This check w as f

or p ay m ent of Dr. Matthews’s share of the insurance proceeds f rom t he surrender of the Clinic’s lif

e-insurance policy

. This check was drawn on a n account in the nam e of the Clinic Partnership at A.G. Edwards (A.G. Edwards check). ¶12. Newton and Blakeslee m et to resolve this m atter. D uring their m eeting, Blakeslee lef t the room , and N e w t o n took both checks, a f older, and papers and placed them in his car. Blakeslee dem anded that Newton return the checks because Dr. Brown wanted to retain the

m oney to of

f set the f ederal judgm ent lien that neither Dr. Matthews n o r N e w ton had previously disclosed. Newton ref u sed to r eturn the checks. Newton negotiated the Hancock Bank check and attem

pted, but f

ailed, to negotiate the A.G. Edwards check. ¶13. That sam e day , Dr. Brown f iled a com plaint in Harrison County Chancery Court. The

3 B o th c h eck s w ere p ay ab le to N ew t o n in h is rep resen tativ e cap acity f o r D r . M atth ew s, b ecau se D r. M atth e w s w as in carcerated at th at tim e. 4com

plaint sought to e njoin Newton or Dr. M a t t h e w s f r om disposing of the f

unds and to
return the checks to Blakeslee. Two day s later, the chancellor issued an ex parte tem porary order that enjoined D r. Matthews and Newton f rom expending the f

unds. T hen, on February 16, 2005, the chancellor entered another order, titled a s a tem porary restraining o rder, that replaced the prior order. Later, D r. Brown f iled an am ended com

plaint t hat s o ught dam ages based on Dr. Matthews’s breach o f his duty to Dr. Brown as a partner and Newton’s actions regarding the f

unds. ¶14. Af ter several y ears of litigation, the chancellor heard this m atter f rom February 6 to February 10, 2 012. T h e n , on February 23, 2012, the chancellor issued h is f indings of f

act and conclusions of law. The chancellor f ound Dr. Matthews v iolated his partnership duties
to Dr. B rown, a nd that M aggio com m itted s im ple negligence regarding the Mississippi State
Tax Com m ission check and the q uitclaim deed. The chancellor also determ ined that both the Hancock B a n k and A.G. Edwards checks belonged to D r. Brown, individually

. The chancellor f

urther held that Newton converted the f unds when h e cashed the Hancock Bank check, his intentional and wrongf ul act warrant ed a f

inding of punitive dam ages, and his actions necessitated an assessm e nt f or attorney ’s f

ees in the am o unt of

$113,462.83. ¶15. On March 5, 2012, Newton f iled a m otion to reconsider. The m otion was denied by order dated April 3 0 , 2012. On March 13, 2012, Newton a lso f iled a m otion to transf

er the

case to the circuit court. On April 17, 2013, the chancellor then issued a n order and am ended f indings of f

act and conclusions of law, which clarif ied an applicatio n of law but lef t the judgm ent the sam e. On April 1 7, 2013, Newton f iled another m otion to reconsider the April

517, 2013 o rde r . The chancellor denied Newton’s second m otion to reconsider and m otion

to transf er on October 28, 2014. ¶16. Newton f

iled his not i c e of appeal on N ovem ber 10, 2014. T he notice of appeal indicated that Newton a

ppealed the April 17, 2013 judgm ent, as well as the February 6, 2012 order deny ing sum m ary judgm ent, the February 23, 2 012 order, t he A pril 30, 2012 order, and the October 28, 2014 order. 4 It is f rom these judgm ents that Newton now appeals. ANALYSIS I. Whether the chancello r e rred by refusing to transfer the case to circuit court. ¶17. Newton h as raised a j urisd i c t i o n a l c hallenge. He argues t hat the chancellor should have transf

erred the case to the circuit c ourt because Dr. Brown’s claim s d id not f all under the specif ic jurisdiction o f the chancery court. Dr. Brown responds that the chancery court properly exercised jurisdiction over the claim s. ¶18. “The standard of review f or a ruling on a m otion to transf er f rom chancery court to circuit c ourt, or vice-versa, f or lack of subject-m atter jurisdiction is

. . . de novo.” Germany

v. G ermany , 123 S o. 3d 423, 427 (¶8) (Miss. 2013) (citing Union Nat’l Life Ins. v. Crosby , 870 So. 2d 1175, 1178 (¶2) (Miss. 2004)). “[ A] question of subject m a tter j urisdiction m ay be presented at any tim e.” Gale v. Thomas , 759 So. 2d 1150, 1159 (¶39) (Miss. 1999) (citing M.R.C.P. 12(h)(3) cm t.).

4 D r. B ro w n f

iled a m o tio n to d o ck e t an d d ism iss th is ap p e al w ith th e M ississip p i S u p rem e C o u rt o n Ju n e 4 , 2 0 1 5

. D r. B ro w n arg u e d t h at N ew t o n ’s ap p e al w as u n t i m e l y b ecau se N ew to n u ltim a tely ch a llen g es th e F eb ru ary 2 3 , 2 0 1 2 j u d g m en t, n o t t h e A p ril 1 7 , 2 0 1 3 o rd er. T h e su p rem e co u rt d en ied th e m o tio n o n Ju n e 2 4 , 2 0 1 5

. 6¶19. Newton prim arily contends that the conversion claim against him required a transf er of his claim to c ircuit court. “ A declaration setting f orth a cause of action b ased on the tort theory of conversion is an action a t l a w , a n d i s to be pursued i n the circuit rather than chancery courts.” Ga.-Pac. Corp. v. Blakeney , 353 So. 2d 769, 772 (Mis s . 1 9 7 8 ). Conversion, however, was not Dr. Brown’s only claim

. ¶20. “ [ I]f there is one issue o f exclusive equity cognizance, t hat ‘issue can b ring the entire

case within subject m atter jurisdiction of the chancery

court and that court m ay proceed to adjudicate all l egal issues as well.’” 1 Jef f rey Jackson et al., M

ississippi Civil Procedure § 1:1 (2015) (citing R e/Max Real E state Partner

s I n c
. v
. Lindsley , 840 So. 2 d 709, 711-12 ( ¶ 1 3 ) ( Miss. 2 003)). In addition to conversion, Dr. Brown asserted claim s f or breach o f f iduciary duty , a perm anent injunction, to quiet title on the BMW property , an accounting, punitive dam a ges and a tt o r n e y ’s f ees, and other equitable relief

. “Claim s regarding title, possession[ ,] and use of land are well within the c hancery c o u r t [ ’ s ] subject m atter jurisdiction.” Johnson v. H inds Cty. , 524 So. 2d 947, 952 (Miss. 1 988) ( citations om itted).
Dr. Brown asserted claim s that v ested jurisdiction in the chancery court, a nd the chancellor did not e rr in retaining jurisdiction. In addition, we n ote that Newton did not raise this issue until posttrial m otions. Theref ore, this issue is without m e r it.
II. Whether the cha n c ellor erred in finding Newton converted Dr. Brown’s property. ¶21. Newton contends that the chancellor erred when he decided that Newton was guilty of conversion. Here, New t o n a r g u e s t hat Dr. Brown f ailed to prove that h e was the true

owner o f the p roperty

. If Dr. Brown, individual l y , did not o wn the property , then Newton

7contends that he could not convert Dr. Brown’s property

.

¶22. The chancellor f

ound that t he Hancock Bank and A.G. Edwards checks belonged to Dr. Brown and Newton’s actions regarding the checks constituted conversion. “This Court has a lim ited standard o f r e v i e w w ith regard to a chancellor’s f indings of f

act. W e will af f irm a chan cellor’s f

i ndings unless they are clearly erroneous, m a n if estly wrong, or an

erroneous legal standard was a pplied.” Thweatt v
. Thweatt , 4 So. 3d 1 085, 1088 (¶9) (Miss. Ct. App. 2009) (citing Sanderson v. Sanderson , 824 So. 2d 623, 625-26 (¶8) ( Miss. 2002)).
“A f inding of f

a ct is c onsidered clearly erroneous when, e ven though t h e r e i s evidence to support t h e f

i n d i n g, the reviewing court has a f irm belief a m istake has been m ade.” Id. ( q u o t i n g Milligan v. M

illigan , 956 So. 2d 1066, 1071 (¶11) (Miss. C t. App. 2007))

. “However, i f a chancellor’s f indings o f f

a c t a re supported b y substantial evidence, broad discretion is given to support [ his] determ i nation.” Id. ¶23. “Conversion requires an intent to exercise dom inion or control over goods which is inconsistent with th e t rue owner’s right.” W alker v. Brown , 501 So. 2 d 358, 361 (Miss. 1987) (citation o m itted). “Ownership of the property

is an essential elem ent of a claim f or conversion.” W

ilso n v
. G e n
. Motors Acceptance Corp. , 883 So. 2d 56, 68 (¶50) (Miss. 2004). Theref

ore, this Court m

ust determ ine if the evidenc e suf f iciently s howed that Dr. Brown was the true owner of the Hancock Bank and A.G. Edwards checks and the f u nds disposed of by

Newton. ¶24. The chancellor determ i ned that the checks belonged t o Dr. Brown and, as such, Dr.
Brown had the right to retain the c hecks. W hile Dr. Brown did sign the checks, the checks

8them selves were drawn on two accounts owned by the Clinic p a r t n e rship and contained f

unds of the Clinic p artnership. “ Property acquired by a p artnership is property of the p artnership and not of the p artners indivi d u a l ly .” M iss. Code Ann. § 79-13-203 (Rev. 2 013). The Hancock Bank c heck represented liquid assets f rom the Clinic partnership. Also, the Clinic owned t he lif

e-insurance policy t hat constituted the $ 4 9 , 7 7 1

. 71 c ash-surrender-value am ount in the A.G. Edwards check. ¶25. Further, the dissolution of t he Clinic partnership did n ot com m ence until February 11, 2005. Thus, at the tim e of the February 7, 2005 incident, the Clinic partnership rem ained in place. Further, even if the dissolution started as of Decem ber 31, 2004, the dissolution o f a partnership does not term inate a partnership; rather, a partnership rem ains until the winding
up of business i s com

pleted. Miss. Co d e Ann. § 79-13-802(a) (Rev. 2013). Thus, the checks and f

unds were arguably

property of the Clinic partnership. ¶26. Alternatively , the f unds belonged to Dr. M atthews individually

. T he am ount f rom the Hancock Bank check represented Dr. Matthews’s share of the liquid assets o f t h e C linic partnership. U nder Article X of t he Clinic p artnership agreem ent, upon dissolution of the Clinic partnership, Dr. Matthews was entitled t o his share of the capital account, his accounts receivable, and his com

pensation. Further, the Unif orm Partnership Act (UPA) states: Each partner is entitled to a settlem ent o f all partnership accounts upon winding u p the partnership business. I n s ettling accounts am ong the partners, prof its a nd losses t hat result f

rom the liquidation of t he p artnership assets m ust be credited and c harged t o the p artners’ accounts. The partnership shall m ake a d istribution to a partner in an am ount equal to any excess of the credits over the c harges in the partner’s account. A pa r t n e r s h all c ontribute to the partnership an am ount equal to any excess o f the charges over the credits in the partner’s account b ut e xcluding f rom the calculation charges attributable to an
9obligation f or which the partner is not p e r s o n a lly l iable under Section 79-13-306. Miss. Code Ann. § 79-13-807(b) (Rev. 2013). Theref ore, under the U PA and the Clinic partnership agreem ent, the f unds could belong to Dr. Matthews. ¶27. Regardless, Ne w t o n d i d com m it an egregious act by rem oving the checks without authorization f

rom either Blakeslee or Dr. Brown. The c hecks were not properly delivered
to Newton s o that Newto n c o uld f reely negotiate the H ancock Bank check or attem pt to

n e gotiate the A.G. Edwards check. See Miss. Code Ann. § 75-3-203(a) (Rev. 20 0 2 ) ( “ A n instrum ent is transf

erred w hen it is delivered by a person other than its issuer f or the purpose

o f giving to the person receiving delivery the right to enf orce the instrum ent.”). Th e evidence, however, f

ails to establish t h a t t h e c h e c ks or the f unds belonged to Dr. Brown individually

. Theref

ore, this case is reversed and rem anded f or a determ i nation of

the true owner of the Hancock Bank check, the A.G. Edwards c heck, and the f unds disposed of

by
Newton. III. Whether t

he c h ancellor erroneously awarded attorney’s fees to Dr. Brown. ¶28. Newton l astly argues that the award of attorney ’s f e es was in error. H owever, because this Court f

inds that t h e chancellor erred i n determ ining that the Hancock Bank and A.G. Edwards checks constituted personal p roperty of Dr. Brown, the judgm ent of attorney ’s f ees against Newton f

o r conversion is reversed. ¶29. THE JUDGMENT OF THE HAR R I S O N COUNTY CHANCERY COURT, FIRST JUDICIAL DISTRICT, I S A F FIRMED IN P ART, REVERSED AND REMANDED I N P ART FOR FURTHER PROC E E D I N GS C ONSISTENT WITH THIS OPINION, AND REVERSED A ND R EN D E R ED I N PART. A LL COSTS OF

1 0THIS AP P E A L ARE A SSESSED ONE-HALF T O T HE APPELLANT AND ONEHALF TO THE APPELLEES. LEE, C .J., CARLTON, WILSON AND GREENLEE, JJ., CONCUR. BARNES, J., CONCURS IN P ART AND IN THE RESULT WITHOUT SEPARATE WRITTEN OPINION. JAMES, J., CONCURS IN PART WITHOUT SEPA R A T E WRITTEN OPINION. IRVING, P.J., ISHEE AND FAIR, JJ., NOT PARTICIPATING.

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