I N T H E C O UR T O F APPEA LS O F TH E STAT E O F M I SS I SS I PPI NO . 2 0 1 3 - CA - 0 0 8 4 2 - CO A NO RMAN L . NE YL AN D, AS AD M I NI S T RA T OR OF THE ES TA TE OF M ARY CORY GA LLAGH ER, DECEASED AP P EL LA NT

v. TIM BE R LA N D M A N A G EM EN T SE R V I C ES, I NC. AND M I CH AEL J . DAU GH DRI LL APP ELLEE S
D A T E O F JU D G M E N T : 04/ 22/ 2013 TRI AL J UDG E: HON
. LI LL I E BL ACKM ON SANDERS CO UR T F RO M W HI CH AP P E AL E D: W I LKI NSON COUNTY CI RCUI T COURT ATTO RN EY FO R A PP ELLAN T: J OH N H
. OTT AT T OR NE YS F OR AP P E L L E E S GAR Y L
. HONE A J OH N B ENJ AM I N R OW LEY NATURE OF THE CAS E: CI VI L - CONTRACT TRI AL C OU RT D I SP OSI TI ON : SUM M AR Y J UD GM ENT G RA NTED TO APPELLEE S D I SPO SI T I O N : R E V E R SE D A N D R E M A N D E D : 10/ 28/ 2014 M OT I ON F OR RE HE AR I NG F I L E D: M ANDAT E I S S UE D: B E F O R E G R I F F I S, P . J. , R O B E R T S A N D C A R L T O N , JJ. GRI F F I S , P . J . , F OR THE COURT : ¶1. T hi s appeal consi der s w hetherthe ci r cui tcourtcorr ect l y gr ant ed a s um m ary j udgm ent bas ed on the s t atut e of l i m i t at i ons . W e f

i nd r ever s i bl e err orand rem and f orf ur ther proceed i ng s. FACTS ¶2. M ary C or y G al l agher ow ned l and i n A m i t e C ount y, M i s s i s s i ppi
. V er oni ca F. C arber
w as G all ag h er’s ca retak er a n d n u rse. O n N o v em b er 2 8 , 2 0 0 1 , G all ag h er g ran ted C arb er a

### Tim berland al so repr es ent ed to thi s Court that it al so charge d a st andard $400 pe r 1 

### daysup ervisio n fee fo r landdev elop ment an d refo restationpro jects. Th e p arties d ispute wh ether th at charg e was mad e clear in th e contract. 2 gener al pow erof

at t or ney. ¶3
. O n M ay 1 4 , 2 0 0 2 , C arb er e x ec u ted a co n tr ac t w ith T im b erlan d M an ag em ent S ervi ces, Inc
. , to h arv est p ine a n d h ard w o o d ti m b e r o n a p o rt ion o f he r pro p erty. T im b erlan d ’s p re sid e n t, M ich a e l J. D a u g h d rill, e x e c u ted th e c o n tra c t. It g ra n ted T im b e rla n d th e rig h t to h a rv e s t “ a ll p in e n o rt h o f th e [B lu ff S p ri n g s R o a d ] a n d s e le c tiv e ly m a rk e d h a rd w o o d tim b e r.” T he contr acts peci f

i ed types of

t r ees t o be har ves t ed, s etf or t h a pr i ce s chedul e f

ort he var i ous ty p e s o f tre e s to b e h a rv e ste d , an d sp e c ified th a t “T im b e rla n d w ill c h a rg e 8 % fo r th e ir
s e rv ic e .” 1 ¶4. I n a w r i t t en pr os pectus pr ovi ded w i t h the contr act , T i m ber l and es t i m at ed t he t i m ber
o n th e G a lla g h e r l a n d s to b e w o rt h $ 2 4 1 ,5 1 9 .6 0 . T h is in c lu d e d a fi n a n c ia l a n a ly s is o f 2 3 0 .5
acr es of G al l agher ’ s pr opert y i n both A m i t e and W i l ki ns on C ou nt i es . T he t erm s of the contr act , how ever , al l ow ed Ti m ber l and t o harves tt i m beron appr oxi m at el y s eventy- tw o acr es of pr oper ty l ocat ed nort h of B l uf f Spr i ngs R oad i n A m i t e C ount y. ¶5. G al l agher di ed on February 2, 2003, at her ho m e i n B at on R ou ge, L oui s i ana. H er dea th o c c urr e d b e f

or e t he Ti mber l a nd c on t r a c tw a s c ompl e t e d. A f t e rG a l l a gh e r ’ s de a th, C arberw as appoi nt ed trus t ee of t he M ary C
. G al l agherR evoca bl e Li vi ng T rus t . T i m ber l and
r ece i ved i t s f

i nal i ns t ruct i ons , t o compl et e the contr act , f r om C arberaf

t erG al l agher ’ s death.

### 3

¶6. T i m ber l and compl et ed t he contr act w or k by Sept ember of 2003. T i m ber l and, under th e in stru c tio n s o f C a rb e r, als o p e rfo rm e d “ tw o re m e d ial p rojec ts” o n G a llag h e r’s p ro p e rty to r epairpropert y d am age fr om H urr i cane K at ri na as w el l as a f i re caused by G al l agh er’ s nei ghbor
. T hes e r emedi al proj ect s w er e per f or m ed i n 2005 and 2006 and w er e pai d f orby separat e i nsurance fund s that covered t he d am ages. ¶7. O n J anuary 2 , 20 05 , T i m berl and recei ved a requestfr om the G al l agh er Est at e, thr ough the I n ter n a l R ev en u e S erv ice, f o r an ac co u n ti n g o f th e e stat e fu n d s ex p en d ed for w o rk per f or m ed undert he contr act . O n February 15, 2005, T i m berl and ’s acc ount ant , W ayne H ut chi ns on, pr ovi ded a pa r t i al acc ount i ng of t he contr actt o t he I R S of f i ce i n N ew O r l eans t o compl y w i t h t hi s r eques t . T he ac count i ng i ndi cat ed a ba l ance of $88, 697. 91. W hen the f i nal acc ount i ng w as compl et ed, as a partof thi s l i t i gati on, t he r emai ni ng char ges of $90, 455. 33 w er e pai d f

orD aug hd r i l l ’ s s up e rvi s i on f e es , m at er i al s , equi pm ent , and contr act or char ges . A bal ance of

$1, 757. 42 w as due Ti m ber l and f r om the G al l agherE s t at e. ¶ 8
. O n M a rc h 1 6 , 2 0 0 7 , N o rm a n L
. N e y lan d w a s a p p o in ted a s a d m in istra to r o f th e E sta te
o f M a ry C . G a llag h e r w h e n it w a s o p e n e d in L o u isia n a . N e y lan d s o u g h t to s e t as id e c e rta in conveya nces , w hi ch had be en exe cut ed by C arber , of s even tr act s of

G al l agher ’ s l and that
w oul d pas s t o C arber , i ndi vi dual l y, atG al l agher ’ s death. C arberdi ed i n February 2008. ¶9. O n A pr i l 1, 2010, N eyl and f i l ed a com pl ai ntagai ns tT i m ber l and and D aughdr i l l
. T he
c o m p lain t as se rte d c laim s fo r b re a c h o f c o n tra c t, frau d , co n sp ira c y , c o n sp ira c y to c o m m it f r aud, bre ach of

t he dut y of good f

ai t h and fa i rdeal i ng, fa i l ur e t o acc ountand conve r s i on of
es cr ow ed f

unds , cons t ruct i ve trus t , a nd unj us tenr i chment
. N eyl and al l eged thatT i m ber l and

### 4

a n d D a u g h d rill br e a c h e d th e c o n tra c t b y h a rv e stin g tim b e r o u tsid e o f th e a p p ro x im a tely
s eventy- tw o acr es des i gnat ed by the contr acti n A m i t e C ount y, m ade una uthor i zed expendi tur es f

orw or k out s i de of

t he contr act , a nd f

ai l ed t o a ccountf

ororpa y a l l s um s due
u n d e r th e c o n tra c t. ¶ 1 0
. A fte r d isc o v e ry , T im b e rla n d a n d D a u g h d rill f iled a m o tio n fo r su m m a ry ju d g m e n t. T he mot i on ar gued thatt he compl ai ntw as barr ed by the s t atut e of l i m i t at i ons and ci t ed M i s s i s s i ppi C ode A nnot at ed s ect i on 15- 1- 73 ( R ev. 2012)
. T he mot i on al s o ar gued t hatthe cl ai m s r el at ed t o t he harves t i ng contr actacc rued w hen the t ot al i t y of t he w or k undert he contr actw as compl et ed, w hi ch Ti m ber l and and D aughdr i l l cont ended occurr ed on orabout Sept ember1, 2003. ¶1 1. I n r e s po ns e , N e yl a nd a r gu e d t ha t t he s t a tut e of l i mi t a t i on s w a s t ol l e d bas ed on t he depos i t i on t es t i m ony of

D a ug hd r i l l a nd H ut c hi ns on tha te s t a bl i s he d tha tT i m ber l and depl et ed th e p ro c e e d s in th e e sc ro w a c c o u n t fo r th e b e n e fit o f th e G a llag h e r E sta te d e sp ite th e ir
m isre p re se n tatio n to th e IR S th a t th e fu n d s w e re sti ll i n th e e sta te in 2 0 0 5 . D a u g h d rill cl ai m ed t hat C arberal l ow ed him t o spen d the f un ds i n the escr ow accou nt on t he b usi ness, al though he had no w r i t t en docum ent at i on of thatagr eement . N eyl and al s o ar gued thatthe cl ai m s a s s er t ed w er e governed by a s i x- years t atut e of l i m i t at i ons a nd ci t ed s ect i on 15- 1- 73. I n addi t i on, N eyl and ar gued thatt he cl ai m f orf r audul entconce al m entby T i m ber l and and D aughdr i l l w as notexpos ed unt i l 2011. ¶ 1 2
. O n A p ril 2 5 , 2 0 1 3 , th e c irc u it c o u rt e n ter e d a n o rd e r th a t g ra n ted su m m a ry ju d g m e n t. T he courtrul ed thatt he ca s e s houl d be di s m i s s ed bas ed on t he f ai l ur e t o f

i l e w i t hi n the s i x-

### 5

y ea r st atute o f l im it ati o n s u n d er M issi ssipp i C o d e A n n o tat ed sec ti o n 7 5 -2-7 2 5 (R ev . 2 0 0 2 ). Iti s f rom this j ud gm ent that N eyland n ow app eal s. S TANDA RD O F REVI EW ¶13. T he gr antof a m ot i on f ors um m ary j udgm enti s r evi ew ed de novo. Ka r p i n s k y v . A m. N at ’ lI ns . C o. , 10 9 S o. 3d 84 , 88 (¶9) (M i ss. 20 13 ). W e v i ew the ev i den ce “in the li gh tm ost f avor abl e t o the part y a gai ns tw hom the m ot i on has been made. ” I d. T he supr eme courthas hel d: S um m ary j ud gm en t i s approp ri at e and shal l be rend ered i f the p l eadings, d e p o sitio n s, a n sw e rs to in ter ro g a to rie s a n d a d m iss io n s o n file, to g e th e r w ith the af f i davi t s , i f any, show t hatt her e i s no genui ne i s s ue as t o any mat er i al f act a n d t h a tt h e mo v i n g p a r t y i s e n t i t l e d t o [ a ] j u d g me n ta s a ma t t e ro f l a w. I m por t ant l y, t he part y oppos i ng s um m ary j udgm entm ay notr es tupon the m er e al l egat i ons orde ni al s of hi s pl eadi ngs , buthi s r es pons e, by af f i davi tor as ot herw i s e pr ovi ded i n [ M i s s i s s i ppi R ul e of C i vi l P r ocedur e 56] , m us ts et f or th s peci f

i c f act s s how i ng t hatther e i s a genui ne i ssue f ortr i al
. I f

he does n o ts o r e s p o n d , s u mma r y j u d g me n t , i f a p p r o p r i a t e , wi l l b e e n t e r e d a g a i n s th i m. T hi s C our thas expl ai ned thati n a s um m ary j udgm enthear i ng, the bur den of pr oduci ng evi dence i n s uppor tof , ori n oppos i t i on t o, the m ot i on i s a f unct i on o f M is s is s ip p i ru les re g a rd in g th e b u rd e n o f p ro o f a t trial o n th e iss u e s in ques t i on. T he movantbear s the bur den of per s uadi ng t he t r i al j udge t hat : ( 1) n o g e n u in e iss u e o f m a ter ial fa c t e x is ts , a n d (2 ) o n th e b a sis o f th e fa c ts estab li sh ed , he i s en ti tl ed t o [ a] jud g m en t as a m att er o f l aw . T h e m o v an t bea rs the bur den of

pr oduct i on i f

, att r i al , he w oul d beart he bur den of pr oof on the i s s ue r ai s ed. I n ot herw or ds , t he movantonl y bear s t he bur den of pr oduct i on w her e [ t he mova nt ] w ou l d b e a rt he bu r de n o f pr oo f a tt r i a l
. Furt he r more , su m m a ry ju d g m e n t is a p p ro p ria te w h e n th e n o n -m o v in g p a rty h a s fa iled to m a k e a s h o w in g s u ffic ien t to e sta b lish th e e x iste n c e o f a n e lem e n t es se n tial to th e p a rty ' s c a se , an d o n w h ich th a t p a rty w ill b e a r th e b u rd e n o f p ro o f a t trial. I d. at 88 -89 (¶¶ 1 0 -11 ) (i n terna l qu o tat ion m ark s an d cit ati o n s o m itted). A N A L Y S IS

### 6

¶14. T he ques t i on bef or e t he C our t i s w hether t he s t atut e of l i m i t at i ons expi r ed bef or e the compl ai ntw as f

i l ed. ¶15. A l though o ur revi ew is d e n ov o, w e st artw i t h t he ci r cui tcourt ’ s or der gr ant i ng
s um m ary j udgm ent . T he courtrul ed: F AC T UAL BA CK GR OUND U pon cons i der i ng t he mot i on forsumm ary j udgm ent , t he t r i al cour thas been present ed w i t h the f

oll ow i ng fact s: 1. M ary Cory G a l l a gh e ro w ne d r e a l p r op e r t y i n A m i t e and W i l ki ns on C o u n ties , M iss iss ip p i. 2
. M a ry C o ry G a llag h e r a n d h e r c a re g iv e r, V e ro n ica C a rb e r, e n ter e d in to a c o m p re h e n siv e lan d m a n a g e m e n t an d tim b e r h a rv e stin g c o n tra c t w ith T i m ber l and on M ay 10, 2002. T he pr oj ect ed compl et i on dat e w as app roxi m at el y tw o y ears . 3. M r s . G al l agherdi ed on February 5, 2003[ , ] i n B at on R ouge, L oui s i ana. 4. T he w or k w a s c ompl e t e d on o ra bo utSe pt e mber1 , 2 00 3[ , ] w i t h t he exce pt i on of

t w o pr oj ect s i n 2005 and 2006. 5. M r s . C arberdi ed on February 2008. 6. T hi s s ui tw as f

i l ed on A pr i l 1, 2010.

. . . . T h e c lim a x in th is c o n tro v e rsy w a s re a c h e d w h e n th is m a tter w a s p ro p e rly br oughtbef

or e thi s cour tatt he s um m ary j udgm enthear i ng. T he Pl ai nt i f f has notadduce d any t es t i m ony t o s how t hatt her e w er e genui ne i s s ues as t o any m a ter ial fa c ts o r la w . T h e e v id e n c e su b m itt e d b y P lain tiff is in a d e q u a te to s uppor ti t s oppos i t i on t o D ef endant s ' s um m ary j udgm entm ot i on. AR GUMENT I
. T H E S T A T U T E O F L IM ITA T IO N S H A S E X P IR E D O N T H IS

### Section 15-1- 73, ti tl ed “New promis e t o be in wri ting; e ff ec t of new promi seby one 2 

### or mo re joint contractors as ag ainst n on -pro misors,” p rov ides: In actio ns fo un dedup onanycontract, an ackno wled gment or p ro mi se sh all not be evi denc e of a new or continuing contra ct whereby to takeany ca seout 7 C L A I M. T he contr actbetw een M r s . G al l agherand Ti m ber l and w as exec ut ed on M ay 10, 2002. T hi s act i on w as f i l ed on A pr i l 1, 2010, w hi ch i s appr oxi m at el y ei ght y e a rs a fte r th is c o n tra c t w a s e x e c u ted
. It i s u n d isp u ted b y [th e ] p a rties tha t th is a c tio n is go v e rn e d b y a six -y e a r sta tu te o f li m itatio n s. M iss
. C o d e A n n [.] § 72- 2- 725 [ s i c]
. Ther ef

or e, i ti s cl eart hatt he s t atut e of l i m i t at i ons [ has ] expi r ed on t hi s cl ai m . Fur t herm or e, t he exce pt i on t o t he s t atut e of l i m i t at i ons does not appl y i n t hi s m att erbeca us e N eyl and w as aw ar e of t he al l eged f

utur e br eac hes w h en h e fi led a n acti o n on o r ab o u t A p ri l 2, 20 0 7 [, ] ag ains t V ero n ica C arb er, the ca r egi ver , i n W i l ki ns on C ount y C hance r y C our t , w hi ch al l eged many of th e sa m e fa c tu a l alle g a tio n s th a t ar e in th is c a se . H o w e v e r, N e y lan d fa iled to br i ng a s ui tagai ns tT i m ber l and dur i ng thatt i m e. I ti s unknow n t o t he courtas t o w hy a s ui tw as notf

i l ed by the [ P] l ai nt i f

f agai ns tt he [ D ] ef

endant s i n 2007. Be c a u s e t h e P l a i n t i f

f d i d n o tb r i n g th i s s u i twi t h i n th e r e q u i s i t e t i me f r a me pr ovi ded by l aw , t he D ef endant s ' m ot i on s houl d be gr ant ed. CO NC L US I ON T h e P lain tiff w a s a w a re o f th e a lleg e d fu tu re b re a c h e s th a t o c c u rre d in th is cas e bef or e the s t atut or y per i od expi r ed. T he Pl ai nt i f f has fai l ed t o pr es ent evi dence t hati s s uf

f i ci entt o f al l underan exce pt i on t o t he s t atut e of l i m i t at i ons i n thi s mat t er . Forthe f or egoi ng r eas ons , T i m ber l and i s ent i t l ed t o j udgm ent as a m att er o f l aw an d the C o u rtg ran ts sum m ary jud g m en t i n it s fav o r. ¶ 1 6
. W e b e g in w ith th e trial c o u rt’s f in d in g th a t “ [i]t i s u n d is p u ted b y p a rties th a t th is
a c tio n is g o v e rn e d b y a six -y e a r s ta tu te o f lim ita tio n s . M is s . C o d e A n n [.] § 7 2 -2 -7 2 5 [s ic ].” T hi s does notappea rt o be ac cur at e. ¶17. I n t he m ot i on forsumm ary j udgm ent , T i m ber l and and D aughdr i l l speci fi cal l y ci t ed M i s s i ssi pp i C ode A nnot at ed s ect i on 15- 1- 73. T hen, atthe hea r i ng on the mot i on, t he 2

### of the ope rati on of theprovi si ons of thi s c hapt er

or t o depriveany party of the bene fi t t her eof , unl es s s uch a cknowl edgm ent or promi sebema de or

cont ained by or in s om e wri t i ngs i gn e d b y theparty c harge abl e the r eby
. Wh e r e the re sha llbe two or m orejoint c ontrac tor s, one or more of the m s hal l not l osethe ben efit of th e pro visio ns o f this ch apter so as to be charg eable, b y reaso n o nly of an a c kn ow l e dgm e nt

o r p r om i s e m a deo r

s i gn e d byanyo the r

o r othe rs of the m. In a ctions aga ins t j oint contra ct ors , i f the pl ainti ff be barr ed as t o one or more of thede fe ndant s but be entitle d t o rec over aga ins t any othe r or

othe rs of them , by virt

ue of a ne w ackno wled gme nt or prom is e, or other

wis e, jud gmen t s hal l begive n for theplaintif

f a s t o any of

thedef endants against whom heis entitle d to rec over , andfo r theothe r de fe ndant s a gainst the plaintif f. S ection15 -1-4 9, titled“Limitatio ns ap plicab le to actio ns n ot o therw ise specifically 3 

### pro vid ed fo r,” pro vid es in relev ant p art: (1) Allac ti ons for

which no other

period of limi tati on is pre sc ribed s hal l be comme nce d within t

hre e ( 3) ye ar s ne xt a ft er

theca useof suc h a ction a cc rue d, and not af te r. (2) In a ctionsf

or whic h no othe r period of limi tati on is pre sc ribed and whic h involve l at ent

inj ury or dis ea se , the c aus e of

ac ti on does not accrue un til t he plainti ff has dis covere d, or

by re as onabl e di li genc e s hould have di sc over ed, theinj ury. Sectio n 7 5-2 -72 5, titled“Statute of limitati o n s in co ntracts fo r sale,” pro vid es in 4 

### relevant part: 8 at t or ney f

orT i m ber l and and D aughdr i l l a r gued t hatthe cl ai m s a s s ert ed w er e governed by the thr ee- yearcat ch- al l s t atut e of l i m i t at i ons , w hi ch i s M i s s i s s i ppi C ode A nnot at ed s ect i on15- 1- 49 ( R ev. 2012)
. T hei ratt or ney then ar gued that , r egar dl es s of w hi ch s t atut e of

l i m i t at i ons 3 is a p p lie d , th e lim ita tio n s p e ri o d e x p ir e d b e fo re th e c o m p la in t w a s fi le d
. ¶1 8. N eyl and’ s couns el ar gued t hatt he appl i cab l e l i mi t a t i on s p e r i od was under t he U ni f or m Com m er ci al Code, s peci f i cal l y s ect i on 75- 2- 725. T hi s a r gum entw as bas ed on the 4

### (1) A n actio n for breacho f any contract for sale mu st be co mmencedwith in

si x (6) years af

te r the c aus e of

ac ti on has ac cr

ued. (2) A ca

useof a ction a cc rue s whe n thebre ach o ccurs, regardl es s of the agg rievedparty ' s lack o f kn ow ledg e of th e brea ch . Abreachof w arranty occurs wh en ten der o f deliv eryi s mad e, excep t that where a w arranty expl ic itly ext ends t o f

uture per for

manc e of thegoods and di sc overy o f the bre ac h mus t awai t t

he time o f s uch pe rf

orm anc e the c aus e of

ac ti on ac cr

ues when the br ea ch i s or

shoul d havebee n dis cove re d.

9 f acttha tthe UC C ap pl i e s t o “ t r a ns a c t i on s i n go od s . ” M i s s . Code Ann. § 7 5- 2- 102 ( R ev. 2 0 0 2 ). “‘G oo ds’ m eans al l things ( i ncludi ng s pecial l y m anu factured goo ds) w hich are
m ovabl e att he t i m e of

i dent i f i cat i on t o the contr actf

ors al e othert han the money i n w hi ch the pr i ce i s t o be pai d. ” M i s s . C ode A nn. § 75- 2- 105( 1) ( R ev. 2002). T he U C C f ur ther d efine s “g o o d s” to inclu d e “ stan d ing ti m b er tha t i s to b e c u t and rem o v ed u n d e r a
c o n v e y a n c e o r c o n tr a c t f o r s a le .” M is s . C o d e A n n . § 7 5 -9 -1 0 2 (a )( 4 4 )( ii) (R e v . 2 0 0 2 ). ¶19. D es pi t e t hi s di f

f er ence i n t he ar gum ent , t he t r i al cour tdet erm i ned t hatt her e w as no di s put e as t o t he governi ng st atut e of l i m i t at i on and appl i ed t he si x- yearst atut e, M i s s i s s i ppi C ode A nnot at ed s ect i on 7 5-2-725. T he r es ol ut i on of thi s appea l w i l l be dec i ded bas ed on
w hetherther e i s a genui ne i s s ue of a m at eri al fac ti n di s put e as t o w hethert he l i m i t at i ons per i od w as t ol l ed by the def endant s ’ f

r audul entconce al m ent . N eyl and ar gues t hatt he l i m i t at i ons per i od w as t oll ed by T i m ber l and’ s f r audul entconce al m entof t he i ni t i al actof f r aud – the mi s r epr es ent at i on t hatt he pr ocee ds due t o the G al l agherE s t at e w er e i n an es cr ow
accou nt w hen T i m berl and had actuall y d eplet ed the f un ds. ¶2 0
. If th e d efe n d an t fr au d u lently c o n ce als a c au se o f ac ti o n , the n the c au se o f ac ti o n is

### 10

deemed t o acc rue at“the t i m e atw hi ch s uch f r aud shal l b e, o r w i t h r eas onabl e di l i gence mi g h th a v e b e e n , f

i r s tk n o wn o rd i s c o v e r e d
. ” M i s s . Cod e . Ann
. § 1 5
- 1
- 6 7 ( Re v . 2 0 1 2 )
. To pr ove f r audul entconce al m ent , t he pl ai nti ff m usts how ( 1) the def endantengage d i n an
a f f i r ma t i v e a c to rc o n d u c td e s i g n e d t o p r e v e n t , a n d wh i c h d o e s p r e v e n t , d i s c o v e r y o f a c l a i m, and ( 2) due di l i gence w as per f or m ed on the pl ai nt i f

f ' s par tt o di s coverthe def endant ' s f

r aud. St ephens v. E qui tabl e Li f e Ass ur ance Soc'

y o f the U
. S. , 85 0 S o. 2d 78 , 83 -84 (¶18) ( M i ss. 2 0 0 3 ). ¶ 2 1
. N e y lan d a rg u e s th a t th e re w a s e v id e n c e th a t T im b e rla n d a n d D a u g h d rill fra u d u len tly
c o n c e a led $ 8 8 ,6 9 7 .9 1 in p ro c e e d s to th e G a llag h e r E sta te. A s a re su lt, N e y lan d c laim s th a t, th r o u g h r e a s o n a b l e d i l i g e n c e , h e d i s c o v e r e d th e f r a u d a f t e rHu t c h i n s o n , T i mb e r l a n d ’ s CP A,
r epr es ent ed t o t he I R S, i n a F ebruary 15, 2005 l ett er , t hatT i m ber l and “hol ds $88, 697. 91 of the G al l agher[ E ] s t at e pr ocee ds i n i t s escr ow acc ount . ” A thi s depos i t i on, H ut chi ns on t es t i f i ed: Q
. N ow i n yo url e t t e r– y ou a nd y ou s e nta l l thi s i nf ormat i on t o the I RS? A
. Y e s, sir. F irst o f a ll, m y lette r is to M s . N a n c e a n d s a y s: W e a re in r ece i ptof

yourl ett erdat ed J anuary 27, 20 05 – w hi ch i s the I nt ernal R evenue not i ce thatw as s entt o M r . D aughdr i l l – pl eas e f i nd t he f ol l ow i ng encl os ed: A packe tof t i m bera gr eement s – w hi ch I ’ ve gi ven yo u t hatcopy – a t i m berr ecap s heets how i ng gr os s t i m bersal es, expens es of

s al e, expens es of

r es t or at i on and r ef

or est at i on and payment s t o M s . G al l agher
. A t t ache d t o thi s r ecap s heetar e i ndi vi dual t i m bert i cket s a nd c opi es of the expens es . A tthatt i m e, I w as t ol d that w e h e ld th a t $ 8 8 ,0 0 0 .0 0 in th e e sc ro w a c c o u n t. Q. Yo u we r e t o l d b y wh o m? A
. B y Ja n e a n d M ik e D a u g h d rill.

### 11

H ut chi ns on t es t i f

i ed f ur t hert hatnei t herT i m ber l and norD aughdr i l l w as ent i t l ed t o t he f unds i n e s c r o w: Q
. I n f

i gur i ng i ti n an i ncome t ax r eturn, f orexampl e, the $88, 000. 00 appr oxi m at e f

i gur e, w oul d t hathave be en i ncl uded as incom e on an i ncome t ax r etur n?

. . . . A
. N o. Q
. S o d o y ou rem em ber how yo u h and l ed thatm on ey as faras – A
. W el l , t hey had an es cr ow bal ance . In otherw or ds , t he money w oul d be i n t he bank, and ther e w oul d be an e s cr ow accoun tbal ance t hatt he m o n e y w a s d u e to so m e o n e , so th a t w o u ld b e th e o ffs e t. Q
. S o , ob v iou sly, T im b erlan d w o u ldn ’tp ay taxe s o n itb ec au se it ’s so m e b o d y e lse ’s, c o rre c t? A
. C o rr e c t. ¶ 2 2
. D a u g h d rill w a s a w a re th a t th e fu n d s w e re ac tu a lly n e v e r p lac e d in a n e sc ro w a c c o u n t. H e t es t i f i ed: Q
. N o w , this $ 8 8 ,0 0 0 .0 0 w a s su p p o se d to b e p u t u p o n a n e sc ro w a c c o u n t? A
. W e had t al ked about– m y s ecr et ary and I t al ked aboutput t i ng i ti n the Fi r s tB ank ac count . T hat ’ s how thatc ame out . B utl at er , w hen I t al ked to her and f

ou nd that i thad no tbeen, t he reas on bei ng i s t h at ev ery w eek w e w er e dr aw i ng i tdow n, pa yi ng f ors ervi ces . So i tw as a moot poi ntt o j us tgo puti ti n the bank, beca us e i tw as n’ tgoi ng t o s t ay i n the b a n k . W e w e re u sin g it.

. . . . Q
. So i n 2004, i tw as gone? A
. Y es, sir
.

### 12

¶2 3. T he f

ol l ow i ng di s cus s i on occurr ed att he s um m ary- j udgm enthear i ng, w hi ch ackno w l edges t hatT i m ber l and’ s and D aughdr i l l ’ s act i ons cons t i tut ed f r audul ent
c o n c e a lm e n t: Co u n s e l f

o r Ne y l a n d : A nd ba s e d o n t he Fr a ud ul e nt Conc e al m ent of

C l ai m St a tut e , Se c t i on 15
- 16 7 [ s i c ] , t he l aw s peci f i cal l y s ays thati f

a per s on l i abl e t o any per s onal act i on shal l f r audul ent l y conce al t he caus e of act i on fr om the know l edge of the per s on ent i t l ed ther et o, the ca us e of the ac t i on s hal l be deemed t o be f

i r s tacc rued atand notbef or e the t i me a twhi c h s uc h f

r a ud s ha l l b e f

i r s tk no w n or di s cover ed. T hi s w as f

i r s tknow n ordi s covered dur i ng t he d ep o sit ion s o f M r. D au g h d ri ll an d M r. H ut chi ns on, w hi ch j us thappene d l as tyear . So, ev en if the s ix- y e a r statute o f l im it ati o n s d o esn ’t appl y, r egar dl es s of

w hi ch s t atut e of

l i m i t at i ons appl i es , t hen w e w oul d cont end thati t ’ s been t o l l e d u n t i l l a s ty e a rwh e n th i s i n f o r ma t i o n c a me t o l i ghtt hr ough the di s covery pr oces s of t hi s cas e.

. . . . Cou n s e l f

o r Ti mbe r l a n d : B ut , Y our H ono r , t he mai n t hi ng i s t ha t i n ’ 05,

w h e n th e y sa w th a t lette r to th e [IR S ], th e y c o u ld have us ed r eas onabl e di l i gence t hen t o det erm i ne i f a n y t h i n g h a d g o n e wr o n g wi t h th e mo n e y . He c o u ld h a v e su e d M r. D a u g h d rill i n th a t su it. CO U RT : B utthe p r ob l e m i s , i f y ou s e e a l e t t e rt o t he [ I R S] and you gi ve s om ebody a c opy of t hatl ett ert o s om ebody and you s ay thatt hi s i s i n a t i m beraccountyou have e i ght yei ghtt hous and dol l ar s ( $88, 000. 00) , I w oul d expec tt o go t o t hatt i m beracc ount– a tthe t i m e they w r ot e the l ett er s ayi ng the ei ghty- ei ght t hous and dol l ar s ( $88, 000. 00) w as ther e and i tw as gone al r eady.

### 13 . . . . C O U R T : B utt hey di dn’ tknow
. O bvi ous l y nobody knew that the m o n ey w asn ’t i n the tim b er a cc o u n t. If t hey had know n – i f

t hey had gone t o the ac count a n d lo o k e d in it an d sa id th a t th e re w a s n o th in g in t hatti m beracc ount ; i t ’ s al l been s pental r eady, t hen the s t atue of

l i m i t at i ons w oul d have s t art ed t o run. B uti f

you t ol d m e thati n m y t i m ber acc ount , I am hol di ng ei ghty- ei ghtt hous and d o ll ars ($ 8 8 , 0 0 0
. 0 0 ), an d I d o n ’tg o o v er the re and che ck behi nd you, and then I di s coverf i ve year s l at erthatther e i s no t hi ng i n t hi s t i m ber acc ountand i tw as gone atthe t i m e you t ol d m e – t hat ’ s t he pr obl em, t he money w as gone w hen he t ol d t hem t hati tw as ther e.

. . . . C O U R T : H e knew w hen he ga ve the [ I R S] a l et t eri n 2005 s ayi ng t hatther e w as ei ghty- ei ghtthous and d o ll ars ($ 8 8 , 0 0 0
. 0 0 ) i n this acc o u n t, that there w as zero in t hat accou nt, w hatever accoun ti tw as, b e c a u se h e h a d sp e n t ita ll.

. . . . C O U R T : T hatw oul d be f r aud. C ouns el f

or T i m ber l and: W el l , b ut t hen w hat ’ s the s t atut e of l i m i t at i on s?

Y ou’ r e s ayi ng f

r om t he poi ntof

di s covery i s w hat y o u ’re say ing , Y o u r H o n o r? C O U R T : R ig h t. C ouns el f

orT i m ber l and: O kay. C O U R T : R igh t. T h ey ’re sitti n g there think ing that there ’s e ig h ty -e ig h t th o u sa n d d o llars ($ 8 8 ,0 0 0 .0 0 ) in th is acc ount . T her e’ s nothi ng thatr equi r es t hem t o go outa nd l ook a ti tordr aw i toutr i ghtthen. Y ou

### 14 oughtt o be abl e t o geti toutof t he ac count w h en ev er y o u g et rea d y . It ’s yo u r m o n ey . T h at’s w here hi s probl em i s. ¶24. B oth H ut chi s on and D aughdr i l l acknow l edged thatt he pr ocee ds fr om t he contr act f or t i m berharves t i ng w er e pl ace d i n an esc r ow acc ountf ort he bene f

i tof t he G al l agherE s t at e, onl y t o be depl et ed by T i m ber l and by 2004. A l t hough D aughdr i l l t es t i f i ed thatC arberagr eed t o al l ow T i m ber l and t o keep the f unds i n es cr ow t o putback i n the pr oper t y, he had no
w ritten p ro o f o f th a t ag re e m e n t. ¶ 2 5
. N e y lan d th u s a rg u e s th a t th e d e p lete d e sc ro w a c c o u n t w a s n o t d isc o v e re d u n til th is lit ig a tio n w a s file d , as T im b e rla n d m isre p re se n te d to th e IR S th e a m o u n t in th e a c c o u n t in 2005. H ow ever , i f

N eyl and che cked the ac countand di s cover ed the f r aud i n 2005, t hen the
s t atut e of l i m i t at i ons w oul d have s t ar t ed t o run then. I f thi s a ct i on i s gove r ned by t he s i x- year
s t atut e of

l i m i t at i ons , M i s s i s s i ppi C ode A nnot at ed s ect i on 75- 2- 725, i tw as t i m el y f i l ed. N eyl and w as notappoi nt ed admi ni s t r at orof the G al l agherE st at e unt i l 2007 af t erhe chal l enged Carber ’ s r i ght s as t rus t ee of G al l agher ’ s es t at e. ¶26. W e fi nd t hat N eyl and has pr es ent ed suf f i ci ent evi dence t o es t abl i s h t he pre s ence of a genui ne i s s ue of

m at er i al f

actas t o w hethert he f

r audul entconce al m entof t he es cr ow f

unds and N eyl and’ s due di l i gence t o di s coverthatf r aud t ol l ed the s i x- years t atut e of l i m i t at i ons i n thi s m at t er . A s a res ult , w e hol d t hatt he ci r cui tcour terr ed i n f i ndi ng t hatt he s i x- year
s t atut e of l i m i t at i ons had expi r ed. ¶27. Fur t her , al t hough N eyl and al s o ar gues t hat t he ci r cui t cour t err ed i n i t s f ai l ur e t o f

i nd thatthe di s covery rul e and the cont i nui ng- t or td octr i ne t ol l ed the s t atut e of l i m i t at i ons , as

### 15

w el l as i t s f

ai l ur e t o f

i nd a genui ne i ssue of

m at er i al f

actr el at ed t o t he othercl ai m s , w e do notcons i der thes e i s s ues . I ns t ead, w e f i nd t hatN eyl and has pr es ent ed s uf f i ci entevi dence t o i ndi cat e the ci r cui tcour terr ed i n gr ant i ng s um m ary j udgm entbas ed on the expi r at i on of the l i m i t at i ons per i od unders ect i on 75- 2- 725. T her ef or e, w e r ever s e the s um m ary j udgm ent and r emand f

orf ur t herpr ocee di ngs cons i s t entw i t h t hi s opi ni on. ¶ 2 8
. T H E JU D G M E N T O F T H E C IR C U IT C O U R T O F W IL K IN S O N C O U N T Y IS RE VE RS E D, AN D T HI S C AS E I S RE M AN DE D F OR F UR T HE R P RO CE E DI NG S CONS I S TE NT W I TH T HI S OP I NI ON. AL L C OS TS OF THI S AP P EA L A RE A SSESSE D TO TH E A PPE LL EE S. LE E, C . J. , I SH EE , R O BE R TS, C A R LT O N , M A X W EL L, FA I R A N D JAM ES, J J . , CO NCU R. BARNES, J . , CO NC UR S I N PART AND I N THE R ES ULT W I THOUT SE PARATE W RI TTEN OPI NI ON . I RVI NG , P. J . , DI S S ENTS W I THOUT S EP ARAT E W RI TT EN OP I NI ON.