IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2014-CA-00875-COA MICHAEL R. SMITH, INDIVIDUALLY AND AS TRUSTEE OF THE MAGGIE LEGETT SMITH IRREVOCABLE TRUST APPELLANT

v. MAGGIE MAE, L.P.; DAVID B. SMITH, CONSERVATOR OF MAGGIE MAE SMITH; DAVID B. SMITH, EX ECUTOR OF THE ESTATE OF MAGGIE L. SMITH, DECEASED; AND DAVID B. SMITH, INDIVIDUALLY APPELLEES

DATE OF JUDGMENT: 06/16/2014 TRIAL JUDGE: HON. DAN H. FAIRLY COURT FROM W HICH APPEALED: RANKIN COUNTY CHANCERY COURT ATTORNEYS FOR APPELLANT: JAMES RAY MOZINGO HORACE HUNTER TW IFORD IV ATTORNEYS FOR APPELLEES: DAVID RINGER BRENTON MATTHEW CARTER NATURE OF THE CASE: CIVIL - OTHER TRIAL COURT DISPOSITION: CHANCELLOR FOUND LIMITED PARTNERSHIP AGREEMENT CONVEYED GENERAL PARTNERSHIP INTEREST TO APPELLEE, AND APPELLEE PROPERLY CONDUCTED BUSINESS AS CONSERVATOR DISPOSITION: REVERSED AND RENDERED IN PART; REVERSED AND REMANDED IN PART - 05/03/2016 MOTION FOR REHEARING FILED: MANDATE ISSUED: BEFORE GRIFFIS, P.J., ISHEE AND FAIR, JJ. GRIFFIS, P.J., FOR THE COURT: ¶1. Through a conservatorship proceeding, the parties have presented a dispute over theownership of a lim ited partnership, a trust, and certain assets. T he Rankin County C hancery

Court ruled that David R. Sm ith held a valid g e n eral-partner interest in Maggie Mae L.P., that Maggie Legett S m i th ( “Maggie”) n ever ceased to serve as m anaging g eneral p artner of Maggie Mae L.P. and that David, as her conservator, could act on h er behalf in his f iduciary capacity as m anaging general partner of Maggie Mae L.P. Michael R. Sm ith, i ndividually and as trustee of the M a ggie Legett Sm ith Irrevocable Trust (the “Trust”) appeals. Finding

error, we reverse the judgm ent of the chancellor. W e r e n d e r a judgm e nt f inding Michael becam e t he general p artner o f Maggie Mae L.P. on Februa r y 1 , 2002, when Maggie’s conservatorship was established, and w e rem a nd f or f urther proceedings consistent with this opinion.
FACTS 1. The Trust ¶2. On Novem

ber 20, 2000, M a g g i e created the Trust. M aggie i ncluded her sons, Michael a nd David in the trust agreem ent. The trust agreem ent nam ed Maggie as the trustor, Michael as the trustee, and Michael and David as the prim ary b enef iciaries. As trustee, Michael had the discretion to distribute the incom e and principal.
2. Maggie Mae L.P. ¶3. On Novem

ber 22, 2000, Maggie and the T rust executed t he Lim ited Partnership Agreem ent (the “LPA”) o f M a g gie Mae L.P. Michael signed the LPA f or the Trust. The
LPA established th e o wnership of the T rust as f ollows: “[ t]he Partners desire that Maggie Legett Sm ith be the sole General Partner and that a l l o f the other Partners be Lim ited

2Partners.” Schedule B to the LPA indicated the partnership interest as f ollows: Maggie Legett Sm ith 33 1/3% General Partner Maggie Legett Sm ith 33 1/3% Lim ited Partner Michael R. Sm ith, Trustee 33 1/3% Lim ited Partner
TOTAL 100%
3. Transfers of Partnership Interests and Assets ¶4. On Decem

ber 29, 2000, Maggie executed a transf e r of a portion of her generalpartnership interest. The transf er convey ed 1/3 of

1% to David as a new general partner. ¶5. On January 31, 2001, David, representing him self a s a general partner, sold a parcel of land (identif

ied as “the N issan property ”) owned by Maggie Mae L.P. t o the Mississippi
Econom ic Im

pact Authority f

or $186,000. A warranty deed f rom Maggie Mae L.P., signed by “David Sm ith, General Partner,” was executed and dated January 31, 2001. David did not deposit t he s ale p r oceeds into a Maggie Mae L.P. bank account, and the proceeds have not been distributed according to the LPA. ¶6. On Septem

ber 19, 2001, David, as a general partner, ente r ed into a contract f or the sale of a second parcel of land ( identif i e d a s “the Chisholm property ”) owned by Maggie
Mae L .P. David signed a contract with Charles Chisholm t o s e ll the land f or $ 32,000. The parties, however, did not im m ediately execute the contract.
PROCEDURAL HISTORY ¶7. O n J anuary 4, 2002, David f iled a petition to establish a conservatorship of Maggie

3in the chancery court. The petition was joined by Maggie, and her grandsons, Nathan B.

Sm ith and Allan L. Sm ith. It i n c l u d ed af f idavits f rom two doctors who concluded that Maggie had slight phy sical incapacities, but suf f ered f rom m oderate dem entia and s hort -term

m em ory loss. The c hancellor granted t he petition and o r d e r e d the conservatorship on February 1, 2002. David was appointed c onservator, and letters o f c o n s e r v a torship were issued on February 19, 2002. ¶8. On February 28, 2002, as conservator, David f iled a petition to sell property and asked
f or the c h ancery court’s approval of the sale of the Chisholm property

. T he p etition included

a legal d escription o f the property , at t a c h e d a n a p praisal of the property that valued it at $27,000, and asked the chancery court to ratif y a contract f

or t he sale of the property at a price of $32,000. ¶9. The p etition indicated that Maggie did not own t he property in her individual capacity

. Instead, it st a t e d that the property was owned by “Maggie M ae L .P.” The petition f urther explained that Maggie “was a general partner,” a nd s he owned an “equitable interest as a lim ited partner in the Lim ited Partnership [ of ] 66 1/3%.” The other owners were “Maggie Legett Sm ith I rrevocable Trust 33 1/3% [ a nd ] D a v i d B

. Sm i th 1/3%.” The petition also stated that the benef

iciaries o f the Trust were David and M i c h a el. On March 1, 2002, the chancellor entered an order that granted the petition and approved the sale of the property

. ¶10. On Aug u s t 9 , 2002, as conservator, David f iled a petition f

or authority to rem ove Michael a s the trustee of the Trust. David also requested t hat the chancery court order Michael to provide an accounting o f t h e T rust’s f inancial activity and appoint a certif ied

4public accountant to serve as the trustee or co-trustee.

¶11. Also, on August 9, 2002, as conservator, David f iled a petition f

or authority to rem ove Michael as the trustee of the Miss E v a E l i see Legett Irrevocable Trust (Eva T rust). This petition also asked that the chancery court order Michael t o provide an a ccounting of the Eva
Trust’s f inancial activity and a

ppoint a certif

ied public accountant to serve as the trustee or
co-trustee. ¶12. O n April 21, 2003, Michael, as the trustee o f the Trust f iled a com

plaint in the

c h a n c e r y court f

or the turnover of f

unds and f

or the d eterm ination of p artnership interest. Michael asked the chancery court to determ ine the general and lim ited partners of Maggie
Mae L.P., conf

irm that he is the “ m anaging general partner” of Maggie Mae L.P., and require David to turn over proceeds f rom any s ales of property owned by Maggie Mae L.P. He also asked f o r other relief against D avid f or his actions in the transf er o f p r o p e r t y under the conservatorship. ¶13. On M ay 7 , 2003, t he chancellor consol i d ated all o f t he cases. According to the record, t he parties f

iled additional pleadings through June 11, 2003. On February 22, 2008, Michael f iled a suggestion of bankruptcy that advised the c hancery c ourt that he had f iled a Chapter 13 bankruptcy proceeding on January 8, 2008, and the autom atic stay w as in ef f ect. ¶14. Maggie died on February 22, 2011. The bankruptcy case eventually concluded, and the bankruptcy

court rem anded several issues to the chancery court. ¶15. The trial w as s cheduled f or May 21, 2014. On that day , the p arties and their counsel appeared and m ade argum ents to the chancellor. The chancellor ended the hearing with an

5oral ruling.

¶16. On June 16, 2014, the chancellor entered a s even page “Amended Judgm ent.” The

am ended judgm ent was not a f in a l j u d gm ent. Instead, the c hancellor determ i ned that a special m a ster should be appointed and def erred r uling on t welve “issues.” The chancery court did, however, rule: [ T]he relief s ought by Michael

. . . o f a d eclaration that David

. . . was not a General Partner of Maggie Mae [ L.P.] is denied, as the C ourt f inds t he term s of the said [ LPA], including Section 1.2 (def ining “Certif

icate” as the “Certif i cate o f L im ited Partnership” and any am endm ents m ade thereto tim e to tim e); Section 1.6 ( r ef erencing and contem

plating successors t o General Partners); Section 8.1 (stating that Maggie

. . . w a s to serve as Managing General Partner until such tim e[ ,] a n d she “ceases t o serve[ ,”] w ith the Court f inding that Maggie

. . . never ceased to serve as M anaging G eneral Partner); and S ection 12.4 ( the last unnum bered paragraph thereof con t e mplating t hat there m ay be m ore than one (1) General P artner), are s uch that the term s of the [ LPA] m ade the appointm ent by Maggie

. . . of David

. . . as a General P artner a p roper and valid a

ppointm ent, as was done upon the execution by M aggie

.

. . of the Certif

ication of Partnership I nterest Transf ers of Maggie Mae[ ] L.P. on Decem

ber 2 9, 2000, with the transf er b eing f

urther ref

lected in t h e Am ended Schedule B to the [ LPA], said Am e nded Sched u l e B having been executed by

Maggie . . . on Decem

b er 29, 2000. Independently a nd alternatively , t h e Court f inds that under the l aws of the State of Mississippi, both as to the general powers o f conservators as provided f or in Chapter 13 of Title 93 of the Mississippi Code of 1972, as am ended, and as t o specif

ic powers of c onservators o f wards having partnership interests in a lim ited partnership as provide f or in [ s ] ection 79-14-705 of the Mississippi C o d e o f 1 972, as am ended, that David

. . . validly served as G eneral Partne r of Maggie Mae [ L.P.] in his capacity as Conservator of

Maggie[ .] The chancellor also r u l e d “ [ t ] he Court certif ies this J u dgm ent under Rule 54(b) of the Mississippi Rules of

Civil Procedure.” ¶17. Michael appeals the judgm ent as trustee of the Trust.
STANDARD OF REVIEW

6¶18. “An appellate court ‘ will not disturb t he f indings of a C hancellor unless the Chancellor w as m anif

e stly w rong, clearly erroneous[ ,] or an err o n e ous legal standard was applied.’” Daley v. Carlton , 19 So. 3d 781, 783 (¶6) (Miss. Ct. App. 2009) (quoting Bell v. Parker , 563 So. 2d 594, 596-97 (Miss. 1990)). However, “[ c]ontract in t e r pretation is a question of law and is reviewed de novo.” Id. (citing W arwick v
. Gautier Util. Dist. , 738 So. 2d 212, 215 (¶8) (Miss. 1999)).
ANALYSIS ¶19. Michael argues f

o ur issues:
1. W hether the lower court erred in concluding that David

. . . held a valid general partnership interest in Maggie Mae[ ] L.P.
2. W hether the lower court erred in concluding that M a g g i e . . . never ceased to serve as Managing General Partn e r o f Maggie Mae[ ] L.P., even af ter the [ c]onservatorship was established.
3. W hether the lower court e rred in c oncluding that David

. . . could serve a s M a naging G eneral Partner o f Maggie Mae[ ] L.P., by way of h i s of f ice as [ c]onservator of Maggie . . . .
4. W hether David

. . . had authority to sell p artnership assets of Maggie Mae[ ] L.P. Michael prim arily disputes the chancellor’s interpretation of the LPA. T h eref ore, we address these issues together. ¶20. First, Michael argues that the chancellor erred in his interpretation of the LPA and the Mississippi Unif

orm Lim ited Partnership Act (Act) when he determ ined that M aggie validly assig n e d a 1/3% general-partner interest to David. M ichael claim s t hat the LPA provided that l im ited partners cannot assign their interests, and the chancellor should have extended

7this to t he gen e r a l p artners. David responds t hat t he lack of any specif ic provisions about general-partner interests m eans the Act applies. ¶21. The interpretation of a contract, such as the LPA, requires a three-part analy sis: First, [ this Court] look[ s] t o the “f our corners” of the agreem ent and review[ s] the actual language the parties u sed in their agreem ent. W hen the language of the contract is clear or unam biguous, [ this Court] m

u st e f f ectuate the parties’ intent. However, if the language of the contract is n ot so clear, [ t h i s C ourt] will, if possible, harm onize the provisions in accord with t he parties’ apparent intent. Next, if the parties’ intent rem ains uncertain, [ this Court] m ay discretionarily em

p l oy canons of contract construction. F inally , [ this Court] m ay also consider parol or extrinsic evidence if necessary . Chapel Hill LLC v. SoilTech Consultants Inc. , 112 So. 3d 1 097, 1099 (¶10) (Miss. Ct. App. 2013) (quoting W

illiams v. W

illiams , 37 So. 3d 1196, 1200 (¶10) (Miss. Ct. App. 2009)). ¶22. The L PA did n o t have a specif ic clause that governed t h e a s s i g n me nt of generalpartner interests or the addition of a new general partner. Michael points t o t h e LPA, specif ically Re c i t a l C , t h at provides “[ t]he [ p]artners desire that Maggie

. . . be the sole [ g]eneral [ p]artner a nd that all o f the other [ p]artners be [ l ]im ited [ p]artners.” Michael claim s that this indicates the LPA does not conte m plate any general p artner o ther than M aggie or her successor. ¶23. Michael c ites s ection 1.9 of the LPA f o r the d ef inition of a partnership interest: “The

‘ [ p]artnership [ i]nterests’ are the relative interests of the [ p]artners in the [ p ]artnership, a s indicated i n [ s]chedule B attached hereto and incorporated in f ull by r ef erence, as am ended.”
Am ended schedule B lists David as a general p a rtner. However, Michael argues the

am ended schedule B is invalid. He claim s that the am ended schedule B m u st be f iled with the Mississippi Secretary of State bef o re taking e f

f ect. Section 1 .2 of the LPA provided that

8“[ t]he ‘[ c]ertif icate’ is the [ c]ertif

icate of [ l]im ited [ p]artnership f i led w i th the Secretary of
State of Mississippi on behalf o f Maggie Mae[ ] L.P., as m ay be am ended f rom tim e to tim e.” ¶24. W h ile n o t in ef

f e ct at the tim e the dispute a rose, the current A ct states that “[ a] partnership agreem ent m ay not:

. . . (3) Vary any requirem ent, p rocedure, or other provision of this act pertaining to:

. . . (B) T he Secret a r y o f S t a t e , including provisions pertaining to records authorized or required to b e d elivered to t he Secretary of State f or f iling under this act[ .]” Miss. Code Ann. § 79-14-105(c)(1)(3)(B) ( Supp. 2 015). At the tim e o f t he dispute, the Act also stated: Notwithstanding the requirem ents of s u b s e ction (b) o f this section, within thirty (30) day s af

t er the happening of any of the f o llo w i n g e vents[ ,] an am endm ent t o a certif

icate of lim ited partnership r ef lecting t he occurrence of the event or e vents s hall be delivered to the o f f ice o f t he Secretary of State f or f iling: (1) The adm ission of a new general partner[ .] Miss. Code Ann. § 79-14-202(c)(1) (Rev. 2013). ¶25. The record does not indicate that am ended schedule B was f iled with t he Secretary of
State. 1 W e do not f

ind an a m b iguity in the LPA. Indeed, section 1.2 of the LPA provided that “ [ t]he ‘[ c]ertif

icate’ is the [ c]ertif

icate of [ l]im ited [ p]artnership f iled with t he Secretary of State

. . . on behalf of M a ggie Mae[ ] L.P., as m ay be am ended f rom tim e t o tim e.” W hile the LPA allowed f

o r am endm ents o f t h e c ertif icate, it also specif

ically provided that an

am endm ent m

ust be f iled with the Secretary

of State.

1 D av id f iled a m o tio n to strik e th e o rig in al C ertif icate o f F o rm a tio n , w h ich M ich ael attach ed to h is b rief

. H o w ev er, th e ch an cello r r ef erred to a v alid certif

icate in th e tran scrip t. R e g a r d l ess, as o u r ru lin g tu rn s o n th e lack o f ev id en ce o f an am e n d m en t t o t h e certif icate rath er th an th e c ertif

icate itself

, w e g ran t D av i d ’s m o tio n to strik e th e certif icate attach ed to M ich ael’s b rief

. 9¶26. Second, Michael argues that the chancellor e rroneously f o u n d t hat David could properly serve as m anaging general partner of Maggie Mae L .P. His claim is that the LPA provided that only Maggie or Michael could serve as m a n a g i n g g eneral partner. David responds that he could step into her role as ma n a g i n g g e n eral partner as Maggie’s

conservator. ¶27. Under the contract-interpretation analy sis, this Court f irst looks to the provisions of the LPA addressing the m a naging general partner. Section 8.1 of the LPA stated:
All of the business of the Partnership, including, but not lim ited to, decisions on all t ax elections and the voting o f a ny s h ares of stock owned by the Partnership, shall be under the e x clusive m anag em ent of the Managing General Partner. A General Partner (including the Managing General Partner) has, wi t h r e s p e ct to partnership assets, only those powers ( and n o others) granted to him by this Agreem ent. I n no event d oes a General P artner (including the Mana g i ng General Partner) retain or have any personal right regarding p artnership assets. MAGGIE

. . . shall s erve as Managing General Partner for t he Partnership, and in the e v ent that MAGGIE

. . . ceases t o serve as Managing G e n e r al Partner for any r eason, MICHAEL

. . . shall serve as Managing General Partner , and if he ceases to s erve as Manag i n g General Partner, then a Successor Managing General Partner shall be elected

. . . . All ref erences herein to “General Partner” as it ap p l i e s t o m anagerial duties, discretions or decisio n s s h a l l ref er to t he Managing General Partner. The Managing General Partner shall have the discretion a nd authority to delegate any duties or responsibilities to any o r all of the other General Partner(s). The Lim ited Partners shall not participate in n o r h a v e any vote respecting the m anagem ent of the busin e s s and operations of the Partnership. The Lim i ted Partners shall have n o authority to bind or act on behalf of the Partnership in any way . No Lim ited Partner shall take part in or interf ere in any m anner with the conduct or control of

the Partnership. (Em phasis added). ¶28. Michael contends that Maggie ceased her r ole as m anaging general partner once the conservatorship began. On the other hand, D avid a r gues that a s conservator, he could

1 0m anage all of aspects o f Maggie’s business, including as m anaging general p a r tner.

However, “[ t]he m ere f

act that the parties disagree about the m eaning of a contract does not

m ake t he c ontract am

biguous as a m atter of law.” Daley , 19 So. 3d at 783 (¶6). Theref ore, this Court m

ust determ ine if

any am biguity exists. ¶29. “An am

biguity is def

ined as a susceptibility to two reason able interpretations.” Dalton v. Cellular S

. Inc. , 20 So. 3d 1227, 1232 ( ¶10) (Miss. 2009) (quoting Am. Guar. & Liab. Ins. Co. v. 1906 Co. , 129 F.3d 802, 811-12 (5th Cir. 1997)). T h e D a lton court elaborated:
An “am biguous” word or phrase is o ne capable of m ore than one m eaning when viewed o bjectively by a reasonably intelligent person who has exam i ned the context of the entire integrated a greem ent and who is c o g n i z a n t o f the custom s , p ractices, usages[ ,] and term inology a s generally understood in the particular trade or business. Id. (citation om itted). Based on this def inition, the provision appears am b iguous, as either David or Michael’s interpretation is reasonable. W i thout a clear indication o f when Maggie ceased to act as m a naging general partner, this C ourt “will attem pt to ascertain intent by

exam ining the language contained within the ‘f our c o rners’ of the i nstrum ent in d ispute . .

. [ as] [ p]articular words should not contro l ; r a t her, t he entire instrum e nt should be

exam i n e d

. ’ ” P u r

sue Energy C

orp. v. Perkins , 558 So. 2 d 3 49, 352 (Miss. 1990) (internal citations and citations om itted). ¶30. Section 2.4 sets f

orth the purposes o f Maggie Mae L.P., and it expressly states that the partnership inten ds “to avoid guardianship or c o nservatorship in the m a nagem ent of assets[ .]” Further, s ection 8.1 provides an agreed upon m echanism f or M aggie’s successor

1 1when s he can no longer serve . The LPA, w hen viewed as a whole, i ndicates that Maggie

shall b e the only m anaging general partner until she can no longer serve and her successor, Michael, steps into t he r ole. Based on t he express provisions and the construction of the LPA
to avoid third-party interf erence, this Court f

i n d s that the parties c learly intended that a conservatorship o f Maggie ef f e ctively e nded her role as m an a g i ng g eneral partner. Theref ore, this Court f

inds t hat the chancellor’s ruling that David was the general partner was

ma n i f e stly wrong and clearly erroneous. This Court r everses the chancellor’s j udgm ent f i n d i n g D avid the proper general partner, and w e render a judgm ent that Michael became

m anaging g eneral partner of Maggie Mae L

. P

. , as of February 1, 2002, when the conservatorship was established over Maggie. ¶31. W e rem and this case to the chancery court to d eterm ine t h e p r o p e r accounting and distribution of Maggie Ma e L

. P

. a s s ets and other m atters that m ay be necessary to resolve
any rem aining disputes. W e d ecline to render a declaratory judgm ent that David lacked the authority to sell partnership assets and m ust turnover all p artnership proceeds b a c k t o t he partnership. Instead, the chancellor m ay consider these m atters on rem and. ¶32. THE JUDGMENT OF T HE RANKIN COUNTY CHANCERY COURT IS REVERSED AND RENDERED IN PART; A ND REVERSED AND REMANDED IN PART FOR F URTHER PROCEEDINGS C ONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLEES. LEE, C.J., IRVING, P.J., BARNES, ISHEE, FAIR AND GREENLEE, JJ., CONCUR. CARLTON, J., C ONCURS IN RESULT ONLY WITHOUT SEPARATE W R I T T EN OPINION. JAMES, J., CONCURS IN PART WITHOUT SEPARAT E WRITTEN OPINION. WILSON, J., CONCURS IN PART AND IN T H E R E SULT WITHOUT SEPARATE WRITTEN OPINION.

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