IN THE SUPREME COURT OF MISSISSIPPI

NO. 97-CA-00210-SCT

CHARLES E. WARWICK d/b/a COAST MEADOWS MOBILE HOME PARK AND PARK

DEVELOPERS, INC.

v.

GAUTIER UTILITY DISTRICT

DATE OF JUDGMENT: 12/19/95

TRIAL JUDGE: HON. BILL JONES

COURT FROM WHICH APPEALED: JACKSON COUNTY CIRCUIT COURT

ATTORNEY FOR APPELLANTS: EARL L. DENHAM

ATTORNEYS FOR APPELLEE: DAVIS E. KIHYET

HENRY P. PATE, III

NATURE OF THE CASE: CIVIL - CONTRACT

DISPOSITION: REVERSED AND REMANDED - 4/15/1999

MOTION FOR REHEARING FILED: 4/29/99

MANDATE ISSUED: 7/8/99

EN BANC.

MILLS, JUSTICE, FOR THE COURT:

¶1. On January 15, 1986, Appellee Gautier Utility District, through an eminent domain action, took

property owned by Pasco Utilities, Inc. The property which was the subject of the eminent domain action

was encumbered by reversionary and contractual interests held by Appellant Charles E. Warwick pursuant

to a 1970 contract and a 1971 deed. Although Pasco was compensated for its loss, Charles Warwick was

never made a party to the eminent domain action, and therefore, was not compensated for his interests in

the property. Through a separate action in chancery court wherein Warwick sought to recover the property

pursuant to his reversionary interest, Gautier Utility District (hereinafter GUD) and Warwick entered into a

settlement agreement whereby Warwick agreed to release any claim over the subject property for

consideration of $90,000. In a separate action pending in circuit court, which is the subject of this appeal,

Warwick claimed that GUD, as a subsequent purchaser, is bound by the terms of the 1970 contract

between Warwick and Pasco, Inc. which set the price of utility rates for Warwick's mobile home park, as

well as imposing costs for maintenance and repair of the collection system upon GUD. On December 20,

1995, the Jackson County Circuit Court entered its order dismissing the action. Aggrieved, Charles E.

Warwick and Park Developers, Inc., appeal to this court, assigning as error the following issues:
I. WHETHER THE CIRCUIT COURT ERRED IN DETERMINING THAT A

SETTLEMENT AGREEMENT REGARDING A PROPERTY DISPUTE FILED IN

CHANCERY COURT SETTLED ALL MATTERS AT ISSUE BETWEEN PARTIES

INCLUDING A SEPARATE CAUSE OF ACTION INVOLVING A CONTRACT

DISPUTE IN CIRCUIT COURT?

II. WHETHER THE CIRCUIT COURT ERRED IN ITS DECISION THAT GAUTIER

UTILITY DISTRICT HAS NO LIABILITY WITH REGARD TO THE NOVEMBER, 1970

AGREEMENT?

STATEMENT OF THE FACTS

¶2. On November 25, 1970, Charles E. Warwick, individually and as President of Park Developers, Inc.,

entered into an agreement with Pasco Enterprises, Inc. The agreement stated that as consideration for the

conveyance of certain land and utility easements from Warwick to Pasco Enterprises, Inc., Pasco was to

construct and operate waste treatment facilities and sewer lines for the benefit of a mobile home park and

subdivision being developed by Warwick d/b/a Park Developers, Inc. and to charge a specified schedule

of rates for these services.

¶3. The 1970 Agreement provided in part:

III.

Pasco shall seek the approval and ratification of said Public Service Commission of rates for

sewerage collection, treatment, and disposal based on the following formula:

0-25 lots occupied - 50% of water consumption at the published rates for water of Seashore Utilities,

Inc.

26-50 lots occupied - 50% of water consumption at 40¢ per 100 cubic feet

Over 50 lots occupied - 50% of water consumption at

30¢ per 100 cubic feet

Costs for maintenance and repair of the collection system shall be borne as follows:

1

st year - Developers 100% - Pasco 0%

2

nd year - Developers 50% - Pasco 50%

3

rd year - Developers 25% - Pasco 75%

Following - Pasco 100%

In no event shall Developers have any responsibility to maintain or repair the sewerage treatment

facility or any lift stations or lines situated outside the boundaries of Developer's property. Further,

Pasco agrees that it will, at all times, maintain adequate sewerage collection and treatment facilities for

the Developers, not in excess of rates set by the Mississippi Public Service Commission.
¶4. On May 31, 1971, Warwick conveyed the property to Pasco Enterprises in a Sewerage Easement and

Deed which specifically referred to the 1970 Agreement and included a land description for the sewerage

treatment plant. This Sewerage and Easement Deed stated in part:

As to the property described in Exhibit "C", title thereto is conveyed in fee simple but solely for use as

a sewerage treatment plant or facility and in the event it is not so utilized for a period of thirty (30)

consecutive days after completion of construction [,] title will revert to the Grantor, his heirs, devisee

or assigns.

IN WITNESS WHEREOF, the Grantor has executed this instrument this the 31st day of May, 1971.

/s/ Charles E. Warwick

¶5. Warwick developed Coast Meadows Mobile Home Park (hereinafter "Coast Meadows"), and Pasco

Enterprises constructed the waste water treatment facility on the land acquired from Warwick as well as

sewer lines in the easements. Pasco Enterprises also obtained approval from the Mississippi Public Service

Commission for the rates agreed upon by the parties in the 1970 Agreement. The rate schedule remained in

effect as contracted between Pasco(1) and Warwick until the assets of Pasco Utilities, Inc., including the

waste water treatment facility property, were taken through eminent domain by Gautier Utility District.

From that point forward, Gautier Utility District provided water and sewer services to Coast Meadows

according to its own rate schedule. On October 19, 1993, Charles Warwick(2) d/b/a Coast Meadow

Mobile Home Park filed a complaint against Gautier Utility District in the Circuit Court of Jackson County,

Mississippi (1) charging that Gautier Utility District overcharged Charles Warwick and (2) seeking to

enforce the 1970 contract between Pasco Enterprises, Inc. and Park Developers, Inc.

¶6. On October 5, 1994, in consideration of $90,000, Warwick executed a Release and Settlement

Agreement regarding his separate suit in chancery court which he filed to recover the property upon which

Pasco's waste water and treatment facility had been built and also to recover the value of its sewage

treatment plant.

¶7. The circuit court relied upon the chancery court settlement agreement in finding that the agreement

released Gautier Utility District from any further liability relating to the lawsuit and finding that Gautier Utility

District ". . . has no liability regarding the enforcement of the Agreement dated November 25, 1970

between Pasco Enterprises, Inc. and Park Developers, Inc."

DISCUSSION OF THE ISSUES

I. WHETHER THE CIRCUIT COURT ERRED IN DETERMINING THAT A

SETTLEMENT AGREEMENT REGARDING A PROPERTY DISPUTE FILED IN

CHANCERY COURT SETTLED ALL MATTERS AT ISSUE BETWEEN PARTIES

INCLUDING A SEPARATE CAUSE OF ACTION INVOLVING A CONTRACT

DISPUTE IN CIRCUIT COURT?

¶8. The standard of review for questions concerning the construction of contracts are questions of law that

are committed to the court rather than to the fact finder. Mississippi State Highway Comm. v.

Patterson Enters., Ltd., 627 So. 2d 261, 263 (Miss. 1993). Appellate courts review questions of law de

novo. Legal purpose or intent should first be sought in an objective reading of the words employed in the
contract to the exclusion of parol or extrinsic evidence. Cooper v. Crabb, 587 So.2d 236, 239 & 241

(Miss. 1991). Thus, the courts are not at liberty to infer intent contrary to that emanating from the text at

issue. Id. at 241. Instead, when construing a contract, the court will read the contract as a whole, so as to

give effect to all of its clauses. Brown v. Hartford Ins. Co., 606 So.2d 122, 126 (Miss. 1992). One

should look to the "four corners" of the contract whenever possible to determine how to interpret it. McKee

v. McKee, 568 So.2d 262, 266 (Miss. 1990). Therefore, when interpreting a contract, the court's concern

is not nearly so much with what the parties may have intended, but with what they said, since the words

employed are by far the best resource for ascertaining the intent and assigning meaning with fairness and

accuracy. Simmons v. Bank of Mississippi, 593 So.2d 40, 42-43 (Miss. 1992).

¶9. Warwick charges in the case sub judice that the circuit court erred in interpreting the chancery court

release to include the circuit court action. He asserts that the circuit court's holding is contrary to the intent

of the parties as clearly indicated by the words of the Release and Settlement Agreement. Warwick argues

that the Release and Settlement Agreement refers only to the claims and issues connected with the specific

cause of action in Jackson County Chancery Court which involved the taking of certain property of

Warwick's in which he held a reversionary interest and not to all causes of action that may exist between the

parties. Specifically, Warwick argues that the chancery court cause of action did not concern or decide any

claim or issue related directly or indirectly to the 1970 Agreement which Warwick sought to have enforced

in the circuit court matter. Thus, he argues that Gautier Utility District is not released from liability under the

terms of the 1970 Agreement. We agree.

¶10. The Release and Settlement Agreement specifically states as follows:

That Charles E. Warwick, being an adult resident citizen above the age of twenty-one (21), for the

consideration of Ninety Thousand and No/100 Dollars ($90,000.00), to him in hand paid, including

cash and other good and valuable consideration, receipt and sufficiency of which is hereby

acknowledged, does hereby release and forever discharge Gautier Utility District and United States

Fidelity and Guaranty Company, their agents, servants, employees, successors, assigns, executors,

administrators, and all other persons, firms and /or corporations, except as specified herein, of and

from any and all claims of any kind or nature growing out of or in any way connected with the taking

of the undersigned's property which is in dispute in the lawsuit known as Charles E. Warwick v.

Gautier Utility District filed in the Chancery Court of Jackson County, Mississippi, bearing Cause No.

58,113.

¶11. The Release and Settlement Agreement clearly did not apply to the action for breach of contract

pending in circuit court. Although the agreement does state that it releases Gautier Utility District "from any

and all claims of any kind or nature growing out of or in any way connected with the taking of the

undersigned's property which is in dispute in the lawsuit known as Charles E. Warwick v. Gautier Utility

District filed in the Chancery Court of Jackson County, Mississippi, bearing Cause No. 58,113", a fair and

complete reading of the agreement reveals that the intent of the parties was to extinguish all claims regarding

the taking of the real property only. The release of "any and all claims" clearly refers to claims arising from

the taking of the property. Irrespective of the taking, the separate claim for breach of contract still stands.

Both parties to the chancery court lawsuit were aware of the lawsuit pending in circuit court, yet in the

agreement they limited the release and settlement agreement to the "lawsuit known as Charles E. Warwick

v. Gautier Utility District filed in the Chancery Court of Jackson County, Mississippi, bearing Cause No.

58,113." While the agreement specifically addressed the claim involving the taking of property, the breach
of contract claim pertaining to the dispute over utility charges was never mentioned in the Release and

Settlement Agreement. It is clear through examination of the words incorporated in the Release and

Settlement Agreement that the parties did not intend a release or settlement of the breach of contract claim

pending in Circuit Court.

¶12. Additionally, a complete reading of the Release and Settlement Agreement reveals that the parties

intended that the transcript of proceedings held before Chancellor Randle on August 22, 1994, be included

as part of the record before this Court. Unfortunately, the transcript of those proceedings is not part of the

record before this Court. However, an order issued by Chancellor Randle on May 17, 1996, which is part

of the record before this Court, specifically mentions the August 22, 1994, proceedings. In the May, 1996,

order Chancellor Randle recalled from the August, 1994, proceedings that, "the settlement was to

encompass the Chancery litigation as there was apparently other litigation pending before the Circuit

Court." The statement by Chancellor Randle is strong, if not conclusive, evidence that the parties did not

intend to include the circuit court controversy in the settlement reached in the chancery court dispute.

Therefore, we hold that the Release and Settlement Agreement did not release Gautier Utility District from

liability regarding Warwick's breach of contract claim.

II. THE CIRCUIT COURT ERRED IN ITS DECISION THAT GAUTIER UTILITY

DISTRICT HAS NO LIABILITY WITH REGARD TO THE AGREEMENT DATED

NOVEMBER 25, 1970.

¶13. Having determined that the Release and Settlement Agreement did not release Gautier Utility District

from liability concerning the breach of contract claim, it is now necessary to determine whether Warwick's

claim for breach of contract is indeed a valid claim. Warwick argues that when Gautier Utility District took

the land from Pasco Enterprises through eminent domain, it took on the obligation of the 1970 contract

between Pasco and Warwick which set the utility rates according to a specific rate schedule.

¶14. In Morley v. Jackson Redev. Auth., 632 So. 2d 1284, 1297 (Miss. 1994), we held that "the

restrictive covenant is an interest in land subject to compensation . . . ." The 1970 agreement between

Warwick and Pasco clearly imposed a burden upon the land now owned by Gautier Utility District, and a

benefit upon Warwick, and therefore, created real covenants that were to run with the land. See, Vulcan

Material Company v. Miller, 691 So.2d 908, 913-914 (Miss. 1997). The deed conveying the property

interest from Warwick to Pasco specifically referred to and made the conveyance subject to the 1970

Agreement, therefore putting any subsequent purchaser on notice of the agreement. See Payne v.

Campbell, 250 Miss. 227, 240, 164 So. 2d 780, 785 (Miss. 1964) ("Purchasers are charged with notice

of all the instruments referred to in the deed involved."). As such, the rights in the 1970 agreement are

compensable property rights, the taking of which requires due compensation from Gautier Utitlity District.

See Morley, 632 So. 2d at 1296-97. Pursuant to the 1970 Agreement, Warwick has a contractual right to

an established schedule of rates and the repair and maintenance of the sewerage collection system by

Gautier Utility District at its expense.

¶15. REVERSED AND REMANDED.

PRATHER, C.J., SULLIVAN AND PITTMAN, P.JJ., BANKS, McRAE, SMITH AND

WALLER, JJ., CONCUR. COBB, J., NOT PARTICIPATING.
1. On March 25, 1985, Pasco Enterprises, Inc. conveyed its interest to Pasco Utilities, Inc., who procured

a Certificate of Public Convenience and Necessity in June, 1985. The property was deeded to Pasco

Utilities, Inc. ". . . for the purpose of carrying out the terms of the contract by providing water, sewer, and

waste water treatment to what became known as Charles E. Warwick d/b/a Coast Meadows Mobile

Home Park at the schedule of rates."

2. In February, 1988, Park Developers, Inc. conveyed the property to Charles E. Warwick, individually.