IN THE SUPREME COURT OF MISSISSIPPI NO. 2017-CA-00959-SCT CINDY HENDERSON AND JOHN HENDERSON

v. COPPER RIDGE HOMES, LLC, RICHARD CONEY , INDIV I DUALLY AND FIRST BANK, A MISSISSIPPI BANKING CORPORATION

DATE OF JUDGMENT: 06/28/2017 TRIAL JUDGE: HON. MICHAEL M. TAYLOR TRIAL COURT ATTORNEYS: MACY DERALD HANSON DENNIS L. HORN SHIRLEY PAYNE W

. BRADY KELLEMS JOSEPH PRESTON DURR ALFRED L. FELDER LEVOY BRYANT AGNEW , IV COURT FROM W HICH APPEALED: PIKE COUNTY CIRCUIT COURT ATTORNEY FOR APPELLANTS: MACY DERALD HANSON ATTORNEYS FOR APPELLEES: DENNIS L. HORN W

. BRADY KELLEMS SHIRLEY PAYNE NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: AFFIRMED IN PART; REVERSED AND REMANDED IN PART - 03/14/2019 MOTION FOR REHEARING FILED: MANDATE ISSUED:

BEFORE RANDOLPH, C.J., MAX WELL AND BEAM, JJ. BEAM, JUSTICE, FOR THE COURT: ¶1. This appeal stem s f r om a breach-of

-contract and tort case i n the Pike County Circuit Court. John and Cindy Henderson f iled suit against Copper Ridge Hom es (“Copper Ridge”)and First Bank regarding the c o n s truction of their new hom e in Magnolia, M ississippi.

However, the case quickly spiraled into f oreclo s u r e proceedings upon the Hendersons’ def aulting on their loan with First Bank. The j udge g ranted First Bank’s m otion f or judicial f oreclosure. ¶2. Af ter that, the H e n d e r s o n s u n s u c c e s s f ully m oved m

ultiple tim es to am end their

com plaint to add w rongf

ul f o reclosure. The judge granted Copper Ridge’s and First Bank’s motions f o r sum m ary j udgm ent on the H endersons’ claim s, f inding that the claim s, which

arose f rom the alleged f

aulty construction of the h ouse traveled with the t itle to the property

. Because the Hendersons no longer owned a ny interest in the h ouse and l and, the judge f ound that they had lost their right to seek dam ages. ¶3. On appeal, the Hendersons argue that the tria l c o u r t erred by granting First Bank a judicial f oreclosure, by granting Coppe r R i dge’s and First Bank’s m otions f or sum m ary judgm ent, and by deny ing their m otions f or l eave to am e n d and to add wrongf ul f oreclosure

to their com

plaint. Finding th a t t h e t r ial court erred in granting Copper Ridge’s and First Bank’s post-f

oreclosure m otions f

or dism issal of the Hendersons’ claim s, the Court af f i rm s the grant of j udicial f

oreclosure, reverses the grant of sum m ary judgm ent to both parties, and

rem ands the case to the trial court f or determ ination of the Hendersons’ claim s . FACTS AND PROCEDURAL HISTORY ¶4. The Hendersons and Copper Ridge e ntered i nto a new-hom e construction contract on May 9, 2014, in Magnolia, Mississippi. S hortly thereaf t er, on May 24, 2 014, the Hendersons contracted with First Bank to f inance the construction of their new hom e.

2¶5. T h e H e n d e r s o n s ’ com plaint stem s f

rom a dispute over the price of the ho me a n d whether the contract was a f i xed-price or cost-plus c ontract. 1 The Hendersons contend that the contract was a f

ixed-price contract f

or $320,000, but C opper Ridge contends it was a cost-plus contract. ¶6. The c onstruction c ontract conta i n e d a p r o vision r egarding the changes to the scope of work: any

changes to be m ade had to be in writing. The record contains no evidence of
any change orders. Yet the Hendersons received two invoices f rom Copper Ridge f

o r o v e rage charges in the am o unts of $24,386.07 and $29,829.44. ¶7. The Hendersons f

urther allege t h a t F irst Bank, which exercised s ole and exclusive control over the disbursem ents, had paid a p proxim a tely $316,000 to Copper Ridge, leaving approxim a tely $4,000 to com p lete the h ouse under the f i xed-price contract. John Henderson

was asked to sign three backdated draw disbursem ents f or First Bank. However, he ref used to sign a f

inal disbursem ent because the house was not close to being com pleted. ¶8. Dissatisf

ied w ith Copper Ridge a nd First Bank, the Hendersons f iled their com

plaint

on April 30, 2015, a lleging breach-of -contract and tort claim s against both parties. Shortly af ter f i ling their com

plaint, the H endersons did not m ake their p ay m ent on May 23, 2015, as required by the prom issory note. First Bank a m ended its initial answer on October 1, 2015,

to include a counterclaim f or judicial f

oreclosure. In r esponse, the Hendersons f i led a m otion

1 A co st-p lu s co n tract is “a co n tract in w h ich p ay m e n t is b ased o n a f

ix ed f ee o r a p ercen tag e ad d ed to th e actu al co st in cu rred .” Cost-plus contract , Black’s Law Dictionary (3d ed. 2001). 3f

or leave to am end their com plaint so they could add wrongf ul f oreclosure, f

raud, and breach of the duty of good f aith and f air dealing to their com

plaint. ¶9. Because the f

o r e c l o s u r e had not occurred at that tim e, the j udge disallowed adding wrongf ul f oreclosure, b ut he a llowed the H endersons to am end their comp l aint to include f raud and breach of the duty of g o o d f aith and f air dealing. At the sum m ary -judgm ent hearing on judicial f

oreclosure, the trial court f ound that the H endersons had not produced suf f i cient evidence to rebut the f oreclosure; theref

o re, the judge granted F irst Bank’s m otion f or an order of

judicial f o reclosure. ¶10. F o l l o w i n g t h e j u d i c i a l f oreclosure, the Hendersons sought leave to am end th e i r

com plaint to add w rongf

ul f oreclosure a second t im e. Sim u ltaneously , Copper Ridg e a nd First Bank sought to dism iss the Hendersons’ claim s altogether. The trial court denied the Hendersons’ m otion f

or leave to am end and granted Copper Ridge’s and First Bank’s postf oreclosure sum m ary -

judgm ent m otions, f

inding that the claim s a r i sing out of the alleged f aulty construction of the house traveled with the titl e t o t h e p r operty

. In view of the f oreclosure, the trial court f ound that because the Hendersons no longer owned a ny interest in the house and land, they had lost their right to seek dam ages. ¶11. A t h i r d t i me , t h e H e n d e r s o n s m oved f or leave to am end their com plaint to add

w r ongf ul f oreclosure, and the trial judge denied the m otion. A ggrieved, the Hendersons appeal the orders entered by the trial court. LAW AND ANALYSIS
I. Standard of Review

4¶12. “W e review the grant or denial of a m otion f or sum m ary judgm ent de novo, viewing

t h e e vidence ‘in the l ight m ost f avorable to the party against whom the m o tion h a s b e e n

m ade.’” Karpinsky v. Am . Nat’l Ins. Co. , 109 So. 3d 8 4, 88 (Miss. 2013) (quoting Pratt v. Gulfport–Biloxi Reg’l Airport Auth. , 97 So. 3d 68, 71 (Miss. 2012)). Sum m ary j udgm ent is appropriate a nd “shall be rendered” if the “pleadings, depositions, answers to interrogatories a n d a dm issions on f i l e , t ogether with the af f idavits, if any , s how that there is no genuine issue as to any m aterial f act and that the m oving party is entitled to judgm ent as a m atter of law.” Id. (quoting M.R.C.P. 56(c)).
Im portantly , the party oppos i n g sum m ary judgm ent “m ay n ot rest upon the m ere allegations or denials of his pleadings, but his response, by af f idavit or as o therwise provided in this rule, m ust set f orth specif

ic f acts showing that th e r e i s a genuine issue f or trial. If he does not so respond, s um m ary judgm ent, if appropriate, will be entered against him .” Id. (quoting M.R.C.P. 56(e)).
II. Whether the t rial court erred in granting First Bank’s sum m ary judgm ent m otion for foreclosure. ¶13. In First B a n k ’ s mo t i o n f o r s u mma r y judgm ent on judicial f oreclosure, the bank produced evidence of the prom issory note that the Hendersons s igned on May 23, 2014. The
prom issory n ote stated that the Hendersons had agreed t o “pay this loan in one pay m ent with all o utstanding p r incipal plus a ll accrued unpaid interest on May 23, 2015,” and to pay “regular m onthly pay

m ents o f all accrued unpaid interest due a s of each pay m ent date beginning July 5, 2014, with all subsequent interest pay m ents to b e due o n the sam e day of each m onth af

ter that.” First B ank also provided evidence of the Hendersons’ security f or the prom issory note, the assignm ent of the deposit account, and a construction deed of trust

5w i t h F i r s t Bank as lender and benef iciary

. The prom issory note was not paid by May 2 3 , 2015, and as of

Septem ber 28, 2015, the pay of

f on the deed of

trust was $326,969.38. ¶14. In response to First B a n k ’ s mo t i o n , t h e Hendersons did not argue that the loan docum ents were erroneous; r ather they argued that First Bank’s a lleged m aterial breach was

an excuse or d ef

ense to their def

ault. The H endersons f

urther contended that ruling on the

m otion f or judicial f

oreclosure then would have been prem ature w hen their other claim s had
y et to be adjudicated. T h e j u d ge, in f inding that judicial f

oreclosure was a

ppropriate, responded, “And nothing about a ruling, nothing about granting sum m a ry judgm ent on the f oreclosure, cuts of

f any dam ages of the Plaintif f

. As a m atter of f

act, it m ay create dam age
argum ents f

or the Plaintif

f .” ¶15. This Court f

i nds that, absent a g enuine issue of m aterial f act, F irst Bank was entitled

to sum m a ry judgm ent a s a m atter of law. It is undisputed that the Hendersons breached their

contract with First Bank by f ailing to m a ke pay

m ents as required by the prom issory note and deed of trust. Accordingly , this Court af f irm s the order of judicial f oreclosure.
III. Wheth e r the trial court erred in granting Copper Ridge’s and First Bank’s p ost-fore c l o s u r e s u m m a r y - j u d g m e n t m o t i o n s a n d i n d i s m i s s i n g t h e Hendersons’ claim s. ¶16. First Bank argues that it h ad purchased all o f the Hendersons’ claim s or that the claim s had been extinguished because o f the f oreclosure. In the a l ternative, First Bank argued that

t h e Hendersons had lost the rights to those c laim s upon f oreclosure and that Fi r s t B a n k should be substituted as the real party in interest u nder Rules 17 and 25(c) of the Mississippi Rules of Civil Procedure. Copper Ridge contends that because First B ank holds title to the

6property , the bank holds all r ights and claim s associated with repairs or com pletion costs; theref ore, the Hendersons have no standing to p u r s u e d a m ages f or c o nstruction claim s against Copper Ridge. In r esponse, the Hendersons argue that their claim s are their choses in a ction 2 or their personal property and that their claim s do not travel wi t h t h e t i t l e to the property upon f oreclosure. The Hendersons argue that they did not lose standing by virtue of f oreclosure. ¶17. Af ter previously stating at the judicial f oreclosure m otion hearing that the Hendersons would n ot f

orf eit the opportunity to argue their other claim s, the trial judge ruled th a t “ the claim s arising out of

the f aulty construction of

the house travel with the property ” and that “no longer being in possession or owner[ ship] of the property , those claim s, to the e xtent that they exist, don’t belong to Plaintif f any m ore.” ¶18. The C ourt f

inds that the trial court erred in f inding that the claim s traveled with the land and that the Hendersons thus lost rights to those claim s. The deed o f trust specif

ically stated that it convey s all of Grantor’s right, title, and interest in and to the f o llowing d escribed real property , together with all existing or subsequently erected o r a f f i xed buildings, im

provem ents and f

ixtures; all easeme n t s , rights of w ay , and appurtenances; all water, water r i g h t s a n d ditch r ights; a nd all other rights, roy alties and p rof

i ts relating to the real property including without lim itation all m inerals, oil, g as, geotherm al a n d sim ilar m atte rs, (the “Real Property ”) located in Pike County , State of Mississippi.

2 A ch o se in a ctio n is “a p ro p rietary r i g h t in p e rso n am , su ch as a d eb t o w ed b y an o th er p erso n , a sh are in a j o in t-sto ck c o m p a n y o r a claim f

o r d am ag e s in to rt; th e rig h t to b rin g an actio n to reco v er a d eb t, m o n ey o r th in g ; p erso n al p ro p erty th at o n e p erso n o w n s b y an o th er p erso n p o s sesses, th e o w n er b e in g ab le t o reg ain p o ssessio n th ro u g h a law su i t.” Chose in action , Black’s Law Dictionary (3d ed. 2001). 7¶19. In support o f its theor y , t h e b a n k r e l i ed o n Citizens N ational Bank v. Dixieland Forest Products, LLC

, in which the Court held that the bank had purchased the plaintif f ’s lender-liability causes of action against the bank and thus had a right to be s ubstituted as the party i n i nterest and to have the case dism issed. Citizens N at. B ank v. D ixieland Forest Prods., LLC

, 935 So. 2d 1004, 1014 (Miss. 2006). This case is not a nalogous to Citizens , though, because the bank in C itizen s d i d not f

oreclose; it purchased the claim s in order to satisf y a debt. I d. a t 1008. The bank purchased those choses i n action and subsequently f iled

a m otion in the lender-liability suit (which it had purchased) to substitute itself as the party plaintif f and to have the suit d ism issed, a rguing that it owned the rem aining claim s in the suit and could rightf

ully dism i ss them

. Id. The trial court denied the bank’s m otion; however, this Court on appeal reversed the trial court’s ruling in light of Maranatha Faith Center, Inc. v. Colonial Trust Co. , 904 So. 2d 1004 (Miss. 2004). Citizens 935 So. 2d at 1009. ¶20. The Maranatha Court held that the b ank had purchased the plaintif f ’s lender-liability

causes of action against the b a nk and was subsequently substituted as a party int e r est with rights to dism i ss the case. I d. (citing Maranatha , 904 S o. 2d at 1009). In M ara n atha , a creditor w as granted a judgm ent against its debtor, a nd the judgm ent w e nt unsatisf ied f or

m onths. Id. (citing Mar a n a t h a , 9 04 So. 2d at 1005). The creditor levied e xecution on M aranatha’s choses in action against another c o m pany a nd f

ound that the chose in action could be sold under execution. Id. at 1010 (citing M aranatha , 904 S o. 2d at 1005). Here, First B a nk was not asserting that it had purchased the H endersons’ claim s to satisf y any

rem aining def

iciency on a judgm ent; it suggested that the claim s either traveled with the title

8to the property by virtue of the f oreclosure or that the Hendersons had lost their rights and the bank should be substituted as the real party in interest. ¶21. The Hendersons r ely on a Calif o rnia case, V

a u g h n v . D a m e Construction Co. , in which the original owner of a condom inium sold h e r h o me and subsequently sued the

const r u c t i o n com

pany f or def e ctive construction. V

aughn v. Dam e Constr. Co. , 223 Cal. App. 3d 1 44, 146 (Cal. Ct. App. 1990). T he construction com p any m oved f

o r sum m ary judgm ent, stating that the owner no longer had standing to s ue. I d . The court held, “As the
person who sustained the dam age, the c ause of acti o n w a s v e s t e d in plaintif f a nd she is theref ore the real party in interest entitled to m aintain the present action. The subsequent sale of the real property did not autom a tically assign or transf er her cause of action.” Id. at 149. ¶22. The Court f

inds that an analy sis of choses in action is irrelevant, because the deed o f

trust specif

ically convey s only the property identif ied in the deed of t r u s t i n the event of f oreclosure. Theref

ore, t h e Court h olds that the trial court erred in f inding that the Hendersons’ c laim s traveled with the title to the property upon f oreclosure. Accordingly , we reverse the grant of

sum m ary judgm ent to Copper Ridge and First Bank.
IV. Whether the trial court erred in deny ing the H endersons’ m otion for l eave of court to file its third am e n ded com plaint to add w rongful foreclosure. ¶23. The Hendersons m oved three t i me s f o r l e a v e t o a me n d t h e i r com p laint to add wrongf ul f oreclosure. Under Mississippi Rule of Civil Procedure 1 5(a), “a party m ay am end

a pleading only by l eave of c ourt o r upon written consent of the a dverse p arty ; leave shall be f reely given when j ustice so requires.” M.R.C.P. 15(a). “W hile the trial court has discretion

9to allow an am endm ent a n d s h o u l d do so f reely under the proper circum stances, an

am endm ent should not occur when to do so would prejudice [ the] def endant.” Webb v. Braswell , 930 So. 2d 387, 393 (Miss. 2006) (quoting Hester v. Bandy , 627 So. 2d 833, 839 ( M i s s . 1 9 93)). The C ourt reviews the trial c ourt’s d enial of a m otion to am e n d a pleading f or an abuse of

discretion. Webb , 930 So. 2d at 393. ¶24. Bef

ore the judge r

uled on the judicial f

oreclosure, the Hendersons f iled a m otion f

or leave to am end their c om plaint t o add wrongf

ul f oreclosure. First Bank, in r esponse to the Hendersons’ m otion, correctly stated that a claim f o r wrongf ul f oreclosure had y et to occur absent a ruling on judicial f oreclosure. The trial court f ound that the m atter was not ripe. ¶25. A t t h e t i me o f t h e s u b s equent m otions, Copper Ridge and F i r s t B a n k w e r e sim ultaneously m o ving f

or sum m ary judgm e n t, requesting dism issal of all of the Hendersons’ c laim s post f o r ecl o s u re. Because the Court f i nds that the grant o f sum m ary judgm ent on the Hendersons’ claim s was in error, the trial court should allow the com plaint to be am ended. CONCLUSION ¶26. Finding that the t r ial court erred in granting Copper Ridge’s and First Bank’s postf oreclosure sum m ary -judgm ent m otions on th e H e n d e r sons’ claim s, the Court af f irm s the grant of judicial f

oreclosure, reverses the grant of s um m ary judgm ent to C opper Ridge and First Bank, a n d r e m a nds the case to the trial court f or proceedings consistent with this opinion. ¶27. AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

1 0RANDOLPH, C.J., KING, P.J., COLEMAN, MAX WELL, CHAMB E R L IN,

ISHEE AND G RIFFIS, JJ., CONCU R . KITCHENS, P.J., CONCURS WITH SEPARATE WRITTEN OPINION JOINED BY KING, P.J., AND BEAM, J. KITCHENS, PRESIDING JUSTICE, CONCURRING: ¶28. I f ully join the m ajority opinion. I w rite separately to explain m y vote with regard to whether the trial court erred in granting First Bank’s sum m ary judgm ent m otion f or judicial f oreclosure. ¶29. Cindy and John Henderson allege that First Bank “m ade unauthorized disbursem ents of the Henderson new hom e construction loan f und to Copp er Ridge Hom es[ .]” Af ter d i s c o v e r i n g t

h o s e “ u n a u t h o r i z ed disbursem e nts,” the Hendersons chose not to m ake any m o r e
pa y m ents on the prom i ssory note. Assum ing that is true, 3 First Bank w a s the f irst party to breach the contract. The Hendersons essentially argue that, since First B ank breached f irst, the trial court erred i n granting the bank a judicial f oreclosure. That argum e nt is but partially correct and is not well developed. ¶30. Under the com m on law, “[ a] party who has b reached or f ailed to p roperly p erf

orm a
contract h as a responsibility and a right to cure the b reach.” Byrd Bros., LLC v. Herring , 861 So. 2d 1 0 7 0 , 1 0 7 3 (¶ 1 5) (Miss. Ct. App. 2003) ( citing Fitzner Pontiac–Buick–Cadillac, Inc.

v. Sm ith , 523 So. 2 d 324, 328 (Miss. 1988)). The n onbreaching party m ust give the breaching party notice of the breach a nd, a ssum ing the breach can be cured, “m u st give [ the breaching party ] a reasonable opportunity to cure the breach.” Id. (citing F i tzner , 523 So. 2d at 328).

3 “Wh en rev iew in g a n aw ard o f su m m ary j u d g m en t , th is C o u rt

. . . w i ll p resu m e th at all ev id en ce in th e n o n -m o v an t’s f av o r i s tru e.” D io

g en es E d itio n s, In c. v. S

ta te ex rel. B d

. o f T ru stees o f In sts. o f H ig h er L ea rn in g , 7 0 0 S o . 2 d 3 1 6 , 3 1 9 (¶ 1 8 ) (M iss. 1 9 9 7 ) (q u o tin g A l len v. M a c T o o ls In c. , 6 7 1 S o . 2 d 6 3 6 , 6 4 0 (M iss. 1 9 9 6 )). 1 1¶31. Additionally , there is a dif f erence between a m aterial and an im m aterial breach.
A b reach is m a terial when there “is a f ailure to perf

orm a s ubstantial part of the contract or o ne or m o re of its essential t erm s or conditions, o r i f t h e r e is such a breach a s substantially d ef eats its purpose,” or when “the breach of the contract is s uch that upon a reasonable construction of the contract, it i s shown that the parties considered t h e b r e a c h a s vital to the existence of the contract[ .]” UHS-Qualicare, Inc. v. Gulf Coast Cm ty. H osp., Inc . , 525 So. 2d 746, 756 (Miss. 1987) (citations om itted). “ W here the b r each is a m a terial one, the non-breaching party has a right

to end the contract[ .]” Herring , 8 6 1 So. 2d a t 1073 (¶ 16) (citing UHS-Qualicare, Inc. , 525 So. 2d at 756). “[ I]f the breach is im m aterial or m inor, the nonbreaching p arty i s not relieved of its duty to perf

orm but m ay still sue f

or dam ages.” Jef

f rey Jackson, M ary Miller, Donald Cam pbell, et al., Encyclopedia of Miss. Law § 21:35 (2d ed.) W e stlaw (database updated Oct. 2018) (citing Tim m s v. Pearson , 876 So. 2d 1083 (Miss. Ct. App. 2004)). ¶32. Based on these a

uthorities, the Hendersons could have term inated the contract with First Bank if the bank’s breach had been m aterial and i f they had given First Bank an opportunity to cure it. Had the Hendersons term i nated the contract, the trial court’s granting

a judicial f

oreclosure to F irst Bank would have been erroneous. The issues of breach and the

rem edies available both to the Hendersons and to the bank would have to have been resolved bef ore a judicial f

oreclosure could have o ccurred. But the r ecord and argum ents i n this case are unclear with respect to this issue. ¶33. In their appellate brief , the Hendersons cite only one authority on this issue, Ferrara

v. W a l ters , 919 So. 2d 876 (Mis s . 2005), using that case to def i ne a m aterial breach. However, the Hendersons o f f ered no argum ent or legal authorities to explain the reason First

1 2Bank’s b reach was m aterial as opposed to m i nor. Nor does the record ref lect whether First Bank was given an opportunity t o cure its alleged breach. Lacking argum ent on these points,

we cannot a s c e r t ain f

rom the record whether the contract was term inated bef ore the Hendersons def

a ulted on their obligations under the prom issory note. ¶34. “Failure to cite r elevant authority o bviates the appellate court’s obligation to review such i ssues.” Bell v. State , 879 So. 2d 423, 4 34 (¶ 28) (Miss. 2004) ( citing Sim m ons v. State , 805 So. 2d 452, 487 (¶ 90) (Miss. 2001)). Additionally , when no “m eaningf u l argum ent” is given i n support of an issue on appeal, “the issue is c onsidered waived.” Randolph v. State , 852 So. 2d 547, 558 (¶ 3 0) (Miss. 2002). See also D oss v. S tate , 9 56 So. 2d 1100, 1102 (¶
7 ) ( Miss. Ct. App. 2007). The Hendersons waived a f ull consideration o f the issue the y presented by f

ailing to cite relevant authority and to provide m eaningf ul argum ent in support of the sam e. ¶35. Lawy ers m

ust provide authority in support of their argum ents when appealing to this Cou r t

. I f a n issue is one of f irst im pression, attorney s should state a s m uch and, to the greatest extent possible, provide supporti n g a uthority f o r their argum ents. The Court recognizes that Mississippi jurisprudence has not addressed every legal issue. 4 All the sam e, citation of som e relevant authority —whether f

rom other jurisdictions or secondary sources—is an im

portant f eature of appellate practice. Miss. R. App. P. 28(a)(7). KING, P.J., AND BEAM, J., JOIN THIS OPINION.

4 T h e issu e at h an d d o es n o t f all in to th is categ o ry . 1 3