IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2015-CA-01285-COA TELECOM TOWER GROUP, LLC A PPELLANT/ CROSS-APPELLEE

v. HONEYSUCKLE CREEK HOLDINGS, INC. APPELLEE/ CROSS-APPELLANT
DATE OF JUDGMENT: 02/13/2015 TRIAL JUDGE: HON. J. DEW AYNE THOMAS COURT FROM W HICH APPEALED: HINDS COUNTY CHANCERY COURT, SECOND JUDICIAL DISTRICT ATTORNEYS FOR APPELLANT: GARY DALE THRASH JOHN NEW TON SATCHER II ADAM FRAZIER THRASH ATTORNEYS FOR APPELLEE: MICHAEL JAMES BENTLEY MICHAEL LELAND COW AN NATURE OF THE CASE: CIVIL - OTHER DISPOSITION: AFFIRMED - 09/12/2017 MOTION FOR REHEARING FILED: MANDATE ISSUED: BEFORE IRVING, P.J., ISHEE AND FAIR, JJ. IRVING, P.J., FOR THE COURT: ¶1. Telecom Tower Group LLC (Telecom ) appeals the judgm ent of the Hinds C o u n t y Chancery Court, Second Judicial D istrict, allowing H oney suckle C r e e k H oldings Inc. (HCH)

to garnish i ncom e that Telecom received f rom a num

ber o f c e l l u l ar-tower leases. The chancellor allowed t he garnishm ent as a m eans to satisf y the e quitable lien that HCH obtained against a property lease that Telecom obtained through an assignm ent f r om Cross Developm ent LLC (Cross). Finding no error, we af f irm the chancellor’s judgm ent.FACTS

¶2. In February 2006, HCH obtained a lessee’s interest in approxim ately .23 acres of land via an O ption and Lease Agreem ent t h a t it e ntered with Judy W ashington. Per that
agreem ent, W ashington leased h er property to HCH so it could build a cellular tower. The initial term

was f ive y ears, and HCH agreed to pay W ashington $450 per m onth. ¶3. In April 2 006, HCH entered an agreem ent with Cross. HCH would assign its lessee’s interest in the land to Cross f o r $75,000 (m i nus Cross’s expenses f o r preparing the site f

or construction of the tower). HCH a lso had to f u lf ill a num b er of other conditions bef ore Cross had to p ay , including obtaining a signed lease f rom C ingular W i reless L L C in which Cingular agreed to install t elecom m unications equipm ent on the tower. In N ovem ber 2006, HCH assigned its land lessee’s inte r e s t t o Cross, which subsequently began m aking lease
pay m ents to W ashington. In January 2007, Cross f

inished building the tower. ¶4. It is unclear when HCH entered a lease agreem ent with Cingular, but it is undisputed that one existed. It i s also u n d i s p u t e d t hat Cingular unilaterally decided not to honor the tower-lease agreem ent. The tower w ent unu s e d f or eleven m onths. In late 2007, Cross entered a separate tower lease with Cingular, which installed its equipm ent on t he t ower. In other words, Cross was the tower lessor, and Cingular was the t ower lessee. Cross ref used

to p ay HCH f

o r the assignm ent of the land lease because C ross incurred dam ages due to the eleven-m o nth delay

in obtaining a pay ing tower lease. ¶5. In January 2 0 0 8 , H C H s u e d Cross f or breach of contract. H CH wanted Cross to

2perf

orm under the assignm ent agreem ent by pay ing the f ull assignm ent price plus interest. Alternatively , HCH wanted to cancel the assignm e nt. HCH later f iled a lis pendens notice

on the tower site. The c hancellor subsequently entered a def ault j udgm ent f

or HCH and set
t h e property to b e sold at a public auction. Telecom successf ully sought an injunction to prevent the p ublic sale. Telecom also intervened in HCH’s lawsuit a gainst Cross. By then, Cross had assigned its land-lessee and tower-lessor i nterests t o Telecom in exchange f or a reduction of the d ebt that Cross 1 owed T e l e c o m’ s parent com p any . The chancellor consolidated both lawsuits. ¶6. In May 2011, T 8 Unison Site Managem ent LLC 2 of f ered to buy W a shington’s lessor interest in the land. T8’s of f er contem plated additional a d

jacent land, thus creating what Telecom describes as a superior interest in a larger t ract of real property

. In June 2011, Telecom received notice f rom T8 that W ashington had assigned her land lessor’s rights, and Telecom should m a ke its land-lease pay m ents to T8. ¶7. Telecom told T8 that it planned to exercise its right of f i rst ref usal that it had obtained in the “double-assigned” la n d

- l e a s e a greem e nt. In July 2011, Telecom sued T8 and
W a shington. Telecom also joined HCH a s an interested party

. HCH f iled an answer, but it did not m ake a claim against W a shington’s interest or com m ent on T elecom ’s claim against T8’s interest. HCH later successf ully sought to be dism issed f

rom Telecom ’s lawsuit.

1 C alv in B ailey is th e f

o rm er co -o w n er o f C ro ss. P er C alv in , C r o s s o f f i c i ally d isso lv ed so m etim e d u rin g 2 0 0 7 b ecau se it co u ld n o t p ay its d e b ts.

2 T h is co m

p an y later ch an g ed its n am e to T 8 U ly sses S ite M an ag em e n t L L C

. 3¶8. In October 2011, the parties went to t rial on the consolidated l awsuits involving HCH

and Cross/Telecom

. On March 7 , 2 0 1 2, the chancellor entered a judgm ent m em orializing his bench opinion. 3 The chanc e l l o r o r dered Cross to pay HCH approxim ately $50,000 in dam ages and prejudgm ent interest. HCH a l so received an equitable lien a g a i n s t the land lease. Telecom a

ppealed, but this Court af

f irm ed the chancellor’s judgm ent. Telecom Tower Grp

. L L C v
. Honeysuckle C reek H oldings Inc. , 130 So. 3 d 135, 139 (¶17) (Miss. Ct. App. 2013) (“ Telecom I

”). ¶9. On Decem

ber 31, 2013, Telecom and T8 e xecu t e d a “ Wi r e l e s s C o mm unication
Easem ent and Assignm ent A greem ent.” Through that agreem ent, Telecom a c q u i r e d T 8’s i n t erest as the l and lessor. As a result, Telecom no longer needed to m ake land- l e a s e pay m ents. On February 6, 2014, the m andate issued in T elecom I

. One week later, Telecom f iled a “Mem orandum of Term ination of the [ Land] Lease.” Two w eeks a f ter t he m andate issued, Telecom sent HCH a letter stating t hat Telecom did not owe HCH a ny m oney because of the equitable lien. ¶10. On Septem

ber 29, 2014, H CH f

iled a “m otion to u nwind f raudulent term i nation of the leasehold interest, to enf orce equitable lien, a n d t o e stablish a constructive trust.” HCH claim ed T elecom acquired T8’s land-lessor interest to f raudulently

term inate the lease that

was subject to HCH’s equitable lien. HCH wanted the chancellor to “unwind” the land-lease

3 In th e b e n ch o p in io n , th e ch an cello r h eld th at T eleco m k n e w o r s h o u ld h av e k n o w n f ro m p rio r d ealin g s th at H C H h ad an in tere s t i n t h e lan d , an d T eleco m s h o u ld h a v e cu r ed th at b e f o re clo sin g o n th e lease o r th e lan d

. 4term ination. HCH also c laime d t h a t Telecom had received tower-lease pay m ents f or the

tower on t he land-lease property , and Telecom h ad f raudulently retained that tower-lease incom e. HCH reasoned that it s hould be allowed to garnish Telecom ’s tower-lease incom e
to satisf y HCH’s judgm ent against Cross. HCH also wanted t o g arnish a ny m oney that Cross or Telecom

paid f or the land lessor’s interest. Finally , HCH sought a constructive trust. ¶11. On Septem

ber 30, 2014, HCH f

iled a suggestion f

or writ of garnishm ent against Cross and Telecom

. HCH also f iled a writ of garnishm ent against garnishee AT&T Mobility LLC (f o rm erly Cingular). Telecom m oved to quash the writ of garnishm ent. Telecom argued that HCH’s judgm ent against C ross was not a b a s i s t o garnish its incom e. HCH responded to Telecom ’s m otion to q u a s h the writ of g arnishm ent, and Telecom r esponded as an “intervenor def

endant” to HCH’s “m otion to unwind.” ¶12. On January 5, 2015, t he c hancellor conducted a hearing. The chancellor entered his order o n February 19, 2015. The chancellor held that HCH’s e qu i t a b l e lien should not be extinguished under the doctrine of m erger, a nd “reaf f ir m[ e d]” HCH’s equitable lien. The chancellor later denied Telecom ’s m o tion f o r reconsideration. On Augus t 1 0 , 2015, HCH f iled a m o tion to release the m oney held in the chancery court’s registry

. Telecom appeals. According to Telecom , the chancellor erred by issuing the w rit of g arnishm ent and deny ing the m otion to quash it. HCH has f iled a “ conditional” cross-appeal. Because we af f irm the chancellor’s judgm ent, there is no need to address HCH’s cross-appeal. S TANDARD OF REVIEW

5¶13. W e “em ploy a lim ited s tandard of review i n appeals f rom chancery courts.” Telecom
I , 130 S o. 3d at 1 38 (¶13). W e will not disturb the chancellor ’ s f a c t ual f i ndings “when supported b y s u b stantial evidence unless the [ c hancellor] abused [ his] discretion, was

m anif estly wrong, c learly erroneous[ , ] or a p pli e d a n e rroneous legal standard.” Id

. W e review questions of

law de novo. Id

. DISCUSSION ¶14. Telecom devotes a substantial portion o f its brief to the c oncept that g arnishm ent was im p roper because HCH does n ot have an equitable lien on the property

. H owever, this was clearly resolved by Telecom I . Even so, we reiterate: Equitable liens

. . . are not estates or property in t he thing itself , nor are they rights to recover the thing, that is t hey are not rights which m ay be the basis of a p ossessory action. They are m erely a charge on property f or the p urpose of security , and a re ancillary to and s e parate f rom the debt. They are neither debts nor rights of property , but m erel y r e me d ies f or a d ebt. Of extrem e im p ortance is the f

act that such liens do not d i v e s t the debtor of title or possession. Baldwin v. Baldwin , 7 8 8 S o . 2 d 800, 806 (¶16) (Miss. Ct. A pp. 2001) (quoting Lindsey v. Lindsey , 612 So. 2d 376, 380 ( Miss. 1992)). A c hancellor m a y “im press a[ n equitable] lien

as security f

or a judgm ent.” Id

. A chancellor m ay also use a n equitable lien to prevent unjust enrichm ent when it would be inequitable f or som eone to r etain a property interest acquired

at som eone else’s expense. Neyland v. Neyland , 482 So. 2d 228, 230 (Miss. 1986). ¶15. W h at is m ore, we a gree with the reasoning of the Colorado Suprem e Court, which has held t hat “[ a]n e quitable lien is good as against a ll persons who acqu i r e d a n i n t e r est with

6knowledge or notice of [ a] plaintif

f ’s equitable lien . . . .” Leyden v. Citicorp Indus. Bank , 782 P.2d 6, 12 (Colo. 1989). “‘Notice,’ in t he context o f an equitable l ien[ ,]

. . . is notice of the f a cts giving rise to t he lien[ ,]

. . . and ‘a person has notice of f acts giving rise to a [ lien] if he k nows the f

acts o r should k

now them .’” Id

. (quoting Restatem ent of Restitution § 174 (1937)). Here, Telecom d id not just obtain Cross’s interest as t he property lessor and tower les s e e . I n 2 0 0 7 , Cross’s f orm e r president, Doug Irving, resigned and began w orking as Telecom ’s site-developm ent m anager. Telecom I , 130 So. 3d at 137 ( ¶8). It w as then that Cross assigned its rights to Telecom

. Id

. And Irving previously testif ied that HCH would have norm ally been paid f o r t he assignm ent at the tim e that it occurred. I d

. Accordingly , Telecom a t l e a st had constructive notice of the f acts and circum stances g iving rise to the equitable lien when it obtained its interest in the property

. ¶16. Telecom argues that garnishm ent was im proper because H CH did not have a m oney j udgm ent against it. It is true that the chancellor o nly awarded H CH a m o n e y j u d g me n t against Cross, but t he chancellor also awarded HCH an equitable lien agai n s t Telecom ’s property interest in the land. And Telecom m akes m uch of the chancellor’s r

uling that the equitable l ien applied to the land lease – not the tower lease. At that tim e , Telecom was the lessee in that arrangem ent. Narrowly interpreting the equitable lien a s though i t w as solely enf orceable against Telecom ’s obligation to pay W a shington would r ender the equitable lien

m eaningless in a practical sense. “An equitab l e l i e n w o uld be m e aningless u nless the lienholder had the power to enf orce it.” Baldwin , 788 S o. 2d at 811 ( ¶35). The equitable lien

7could o nly be a r em edy if it also extended to T elecom ’s interest as the t ower lessor, and that

interest only existed by virtue of the rights that Cross assigned Telecom as the land lessee.
It f ollows that HCH could satisf y its equitable lien by tracing Telecom ’s tower-lease incom e that f l owed through Telecom ’s land lease. See First Nat’l B ank of Jackson v
. H

uff , 441 So. 2d 1317, 1322 (Miss. 1983) (“Through tracing, a person who in t he f irst instance would be entitled to the restitution of m oney or other property is o f ten perm i tte d t o a s s e r t his claim against a substituted asset – an asset [ that] is t r a c e a ble t o o r the product of s u ch m oney or other p roperty

. ”). And “the c hancery court has access to broad equitable powers to enf orce its judgm ents . . . .” L adner v. Ladner , 843 So. 2d 81, 82 (¶4) (Miss. Ct. App. 2003). ¶17. Finally , Telecom argues that HCH’s equitable lien was term inated t hrough m erger of

t itle when Telecom acquired W ashington’s rights as the land lessor f rom T8. “A me r g e r generally takes place when two estates, either related inter se as derivative and original, or else being both d erived out o f t he sam e original, and both being held in the sam e right, m eet together in t he sam e” owner. City Sav. B ank & Tr. Co. o f Vicksburg v. Cortright , 122 Miss. 75, 84, 84 So. 136, 138 (1920). But “ [ t]his r ule

. . . will not be applied b y [ ] a court of equity when the extinguishm ent of the l essor estate wi ll w o rk an injustice to

. . . another person interested in its preservation.” Id

. W e agree that the application of m erger, to t he extent that it would extinguish HCH’s e quitable lien, would result i n a n i n justice under the circum stances. W e also f ind n o m erit t o Telecom ’s claim that HCH could only garnish its tower-lease incom e solely f rom rent pay m ents on the tower at i ssue. To the extent that the

8garnished incom e f lowed f rom other tower leases, that incom e m ay be s et of f f rom the incom e on the precise t ower a t issue. Based o n t h e f o r e going, w e af

f irm the chancellor’s judgm ent. ATTORNEYS’ FEES ¶18. HCH has f

iled a m otion f

or attorney s’ f

ees under Rule 38 of the Mississippi Rules of Appellate Procedure and the L itigation Accountability Act se t f o rth in Mississippi Code Annotated section 1 1-55-5(1) (Rev. 2012). Rule 38 provides that this C ourt “shall award just dam ages and single or d ouble costs to the appellee” in the event that we “determ ine that an appeal is f rivolous.” S im ilarly , “the Litigation Accountability A ct perm i ts a court to im pose

s a n c t i o n s on an a ttorney who asserted any c l aim or def ense[ ] that is without substantia l j u s t i f ication, or was i nterposed f or delay or harassm ent[ ,] or i f t he a ttorney unnecessaril y expanded the proceedings by other im proper conduct.” In re Spencer , 985 So. 2 d 330, 338 (¶26) ( Miss. 2008). Although we agree with t he chancellor’s conclusion tha t T e l ecom ’s positions were m eritless, we decline to f ind that Telecom ’s behavior in this appeal or the underly ing litigation m erits sanctions or an award of attorney s’ f

ees. CONCLUSION ¶19. Accordingly , the judgm e nt perm itting garnishm ent against Telecom to an equitable lien on T elecom ’s p roperty is af f irm ed. Because we af

f i rm the chancery court’s j udgm ent on direct appeal, there is no need to address HCH’s “conditional” cross-appeal. ¶20. AFFIRMED.

9LEE, C. J . , GRIFFIS, P.J., BARNES, ISHEE, FAIR, GREENLEE AND

WESTBROOKS, JJ., CONCUR. C A R L T ON, J ., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. WILSON, J., NOT PARTICIPATING.

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