IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-60367

Summary Calendar

EDITH CAROLYN FRYAR; ROBERT B. FRYAR RESIDUARY TRUST,

Patrick B. Mason, Trustee,

Plaintiffs–Appellants

v.

SAV-AMIL, LIMITED LIABILITY CORPORATION; ALAN NUNNELEE,

Individually and in his capacity as President of Sav-Amil, Limited Liability

Corporation; STEVE HAMMACK, Individually and in his capacity as

Treasurer of Sav-Amil, Limited Liability Corporation

Defendants–Appellees

Appeal from the United States District Court

for the Northern District of Mississippi

USDC No. 3:08-CV-63

Before WIENER, PRADO, and OWEN, Circuit Judges.

PER CURIAM:

*

Edith Carolyn Fryar and the Robert B. Fryar Residuary Trust (“the Fryar

Trust”) (collectively known as “the Fryar family”) appeal the district court’s

entry of judgment in favor of appellees after a three–day bench trial. The Fryar

United States Court of Appeals

Fifth Circuit

F I L E D

November 12, 2010

Lyle W. Cayce

Clerk

 Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not *

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

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family sold Sav–Amil, LLC (“Sav–Amil”)—a company owned by Alan Nunnelee

and Steve Hammack—roughly 3,600 acres of land in Mississippi and Tennessee

in December of 2004. The Fryar family previously reached an agreement to sell

the land under different terms to Nunnelee in November of 2004. Edith Fryar

was unaware that the terms of the November and December agreements were

different when she signed the December agreement. The Fryar family sued the

defendants for breach of the November 2004 agreement in state court in March

2008, which defendants removed to federal court. The district court entered

judgment in favor of defendants, ruling, inter alia, that the December 2004

agreement could not be rescinded due to Edith Fryar’s unilateral mistake.

Because the Fryar family has failed to establish that it qualifies for equitable

relief due to unilateral mistake or that the December agreement should

otherwise not be enforced, we affirm the judgment of the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Fryar family operated the Robert B. Fryar Sawmill in Tippah County,

Mississippi which eventually fell on hard economic times. On November 5, 2004,

Edith Fryar entered into an agreement with Nunnelee to sell approximately

3,600 acres of land for $1.7 million. That agreement included a right of first

refusal and the right to repurchase the land, and provided that Nunnelee would

pay the taxes and closing costs. The parties subsequently executed leases

regarding the sawmill property and equipment, whereby the Fryar family agreed

to pay Nunnelee $1,000 per month. Nunnelee subsequently advanced $216,000

to Robert Allen Fryar, Edith Fryar’s son, to cover the sawmill’s operating costs.

On December 30, 2004, appellants and appellees attended a closing at the

law office of Gifford, Allred, Tennison, and Smith in Ripley, Mississippi to convey

3,508 acres from the Fryar trust and Edith Fryar to Sav–Amil for $1.98 million.

The December agreement did not include a buy-back provision or a right of first

refusal, and appellants were charged with paying the taxes and closing costs.

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The payment amount was made in satisfaction of loans made by the Federal

Land Bank and the Small Business Association to the sawmill, and included a

lease of the sawmill property and equipment back to the Fryar family for $2,500

per month. At the closing were the appellants and appellees, the closing

attorneys, a representative of Federal Land Bank, and Robert Allen Fryar.

Fryar signed the December agreement without reading it or having anyone else

read it to her.

The parties entered into a Cancellation of Lease Agreement terminating

the Fryar family’s lease of the sawmill and its equipment in March of 2006. The

parties signed a First Right of Refusal with Option to Purchase certain tracts of

property on April 12, 2006, and Sav–Amil issued notices of right of first refusal

to the Fryar family shortly thereafter, which the Fryar family declined to

exercise. In mid-2007 and early 2008, appellants attached a lis pendens to

property conveyed-away by Sav–Amil, and brought suit in the Circuit Court of

Tippah County on March 17, 2008 alleging, inter alia, breach of the November

agreement. Appellees removed the case to federal court on June 2, 2008. The

district court held a three-day bench trial from August 31, 2009 through

September 2, 2009, after which appellants argued in their post-trial brief that

they had also proven the additional causes of action of fraudulent inducement

and procedural and substantive unconscionability. The district court issued a

final judgment on December 10, 2009, ruling, inter alia, that the December 2004

contract was the relevant agreement between the parties, that it was not

unconscionable, that appellants were not fraudulently induced to enter into it,

and that it could not be rescinded due to Edith Fryar’s unilateral mistake. The

Fryar family filed a motion to alter or amend judgment which was subsequently

denied, and timely filed the instant appeal.

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II. JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction under 28 U.S.C. § 1291. Following a bench trial, we

review the district court’s legal determinations de novo and its factual findings

for clear error. Flint Hills Resources LP v. Jag Energy, Inc., 559 F.3d 373, 375

(5th Cir. 2009).

III. ANALYSIS

Appellants argue that the December agreement should be rescinded due

to Edith Fryar’s unilateral mistake and argue that the December agreement

should not be enforced because it lacked consideration, appellees fraudulently

induced Edith Fryar to enter into the December agreement, and because it was

procedurally unconscionable.

It is undisputed that Edith Fryar did not read the terms of the December

agreement before signing it and that she did not have anyone else present at the

closing read it to her or on her behalf. Nor, apparently, did Pat Mason, the

trustee of the Fryar Trust. Under Mississippi law, contracting parties are bound

by what they sign and are charged with knowing the contents of any contract

they sign. Bailey v. Estate of Kemp, 955 So. 2d 777, 783 (Miss. 2007); Andrus v.

Ellis, 887 So. 2d 175, 180 (Miss. 2004). “A person cannot avoid a written

contract which he has entered into on the ground that he did not read it or have

it read to him.” Andrus, 887 So. 2d at 180; Turner v. Terry, 799 So. 2d 25, 36

(Miss. 2001) (“[P]arties to an arms-length transaction are charged with a duty

to read what they sign; failure to do so constitutes negligence.”). The Fryar

family therefore cannot ordinarily back out of the December agreement simply

because they did not read its contents before they signed it.

A. Unilateral Mistake

Under certain circumstances a court has discretion to fashion equitable

relief and undo the transaction. The Mississippi Supreme Court has provided

a four-part test which gives courts discretion to award equitable relief:

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[i] But where the mistake is of so fundamental a character, that the

minds of the parties have never, in fact, met; or where an

unconscionable advantage has been gained, by mere mistake or

misapprehension; and [ii] there was no gross negligence on the part

of the plaintiff, either in falling into the error, or in not sooner

claiming redress; and [iii] no intervening rights have accrued; and

[iv] the parties may still be placed in statu quo; equity will interfere,

in its discretion, in order to prevent intolerable justice.

Crosby–Miss. Res., Ltd. v. Prosper Energy, 974 F.2d 612, 618 (5th Cir. 1992)

(quoting Miss. State Bldg. Comm’n v. Becknell Constr., Inc., 329 So. 2d 57, 60–61

(Miss. 1976)) (internal quotation marks omitted, numbering added in Prosper).

It therefore “remains the obligation of a court of equity to determine whether,

despite [a party’s] misjudgment, it would be inequitable and fundamentally

unjust not to grant relief from [an] honest but negligent mistake.” Id. at 619.

For purposes of this appeal, the Court will assume Edith Fryar was

unaware of the terms of the December agreement and that the different terms

were so fundamental that there was no meeting of the minds. Appellants have

nonetheless failed to meet their burden for two reasons, first among them being

that appellants have failed to establish the two other elements necessary under

the Becknell test: that no intervening rights have accrued or that the parties can

still be placed back in the status quo. Several tracts of land previously owned

by the Fryar family have apparently been sold by Sav–Amil to other buyers, and

appellants have not argued that they have the resources to pay back the $1.98

million they received for the land in 2006 or even the $280,000 difference

between the November and December contract prices. While the record on these

fronts is inconclusive such that the Court cannot say that there is no way the

parties could be put in the status quo—whether that would be in a contract

under the terms of the November agreement or with no contractual relations to

each other at all—it remains the appellants’ burden to prove that theirs is a case

which qualifies for equitable relief. They have not done so.

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Second, even if all four elements of the Becknell test were met, the Court

retains discretion to award equitable relief “in order to prevent intolerable

justice.” Becknell, 329 So. 2d at 61. Appellants are not barred from such relief

due to their negligent failure to read the December closing documents, but “as

a general proposition, equity will not act to rescind a contract where the mistake

was induced by the negligence of the party seeking rescission.” Turner v. Terry,

799 So. 2d 25, 36 (Miss. 2001). While the Fryar family has suffered personal and

economic misfortunes over the years, they have failed to carry their burden to

show that it would be fundamentally unjust to hold them to the terms of the

December contract. Testimony at trial showed that the Fryar family eventually

entered into a separate contract for first right of refusal and right to purchase

their previously owned land—the “raison d’etre” of the November

agreement—and that they could not afford to repurchase the land when offered.

While it may never have been Edith Fryar’s plan to permanently sell the family

land holdings when she signed the December agreement, the evidence at trial

was that this outcome would have happened had the November agreement still

been in effect. The Fryar family clearly faced difficult financial choices in 2006

and 2007, but the court will not exercise its discretion to provide them relief to

undo decisions regarding their land that they might now regret.

B. Other Arguments

Appellants also argue that the December agreement should not be

enforced for three reasons: (1) it is void for lack of consideration, (2) appellees

fraudulently induced Edith Fryar to enter into the December agreement, and (3)

because of procedural unconscionability. While these arguments are phrased as

needed to be addressed only if the Court agrees that the December agreement

should be rescinded, they nevertheless amount to a direct attack on the

December agreement itself. With regard to the lack of consideration argument,

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this is clearly erroneous as the December agreement gave appellants $280,000

more for their land than the November agreement provided for.

Appellants’ fraudulent inducement and procedural unconscionability

arguments were thoroughly and accurately addressed by the court below such

that an extended discussion here would be repetitive. In brief, appellants’

fraudulent inducement claim fails because they had no right to rely on any oral

representations made to them which contradict the plain language of the

December agreement, Rankin v. Brokman, 502 So. 2d 644, 646 (Miss. 1987), and

appellants did not prove by clear and convincing evidence that any other

representations regarding the future sale of the land were made. Likewise,

appellants’ procedural unconscionability argument falls flat because there is no

evidence that Edith Fryar was prevented from consulting her attorney, Pat

Mason, or her son, or that she lacked the opportunity to ask for help, ask

questions, have the documents read to her, or walk out of the closing if she

disagreed with the terms of the December agreement.

IV. CONCLUSION

The district court correctly ruled that the December agreement should not

be rescinded due to Edith Fryar’s unilateral mistake, or that it was not

otherwise unenforceable due to procedural unconscionability, a lack of

consideration, or fraudulent inducement. We therefore affirm the district court’s

entry of judgment in favor of Sav–Amil.

AFFIRMED.

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