Opinion ID: 1836737
Heading Depth: 2
Heading Rank: 1

Heading: whether phillips is entitled to an accounting.

Text: ¶ 8. We have previously defined an accounting as a written financial statement containing all receipts and disbursements: An accounting is by definition a detailed statement of the debits and credits between parties arising out of a contract or a fiduciary relation. It is a statement in writing of debts and credits or of receipts and payments. Thus an accounting is an act or a system of making up or settling accounts, consisting of a statement of the account with debits and credits arising from the relationship of the parties. State ex rel. King v. Harvey, 214 So.2d 817, 819 (Miss.1968) (citing Black's Law Dictionary 34-36 (4th ed.1957)). Also, an accounting implies that one is responsible to another for moneys or other things, either on the score of contract or of some fiduciary relation, of a public or private nature, created by law, or otherwise. 214 So.2d at 819-20; Miller v. Henry, 139 Miss. 651, 103 So. 203 (1925) (quoting Whitwell v. Willard, 42 Mass. (1 Met.) 216). ¶ 9. Although every contractual agreement does not give rise to a fiduciary relationship, in Mississippi, such a relationship may exist under the following circumstances: (1) the activities of the parties go beyond their operating on their own behalf, and the activities for the benefit of both; (2) where the parties have a common interest and profit from the activities of the other; (3) where the parties repose trust in one another; and (4) where one party has dominion or control over the other. Hopewell Enters., Inc. v. Trustmark Nat'l Bank, 680 So.2d 812, 816 (Miss.1996) (quoting Carter Equip. Co. v. John Deere Ind. & Equip. Co., 681 F.2d 386 (5th Cir.1982)). ¶ 10. We find that a fiduciary relationship existed between Phillips, the University and the Nursing PLLC. The uncontroverted facts from the face of the pleadings show that Phillips was required by her employment contract to work at a University-operated clinic. According to the employment contract, if Phillips in her capacity as a nurse received earnings from any source other than her salary, she was allowed to keep the first $10,000, and was then required to contribute to the Plan fifty percent of any earnings in excess of $10,000. However, in practice, Phillips was required to contribute all of her nurse-related earnings [5] in excess of $10,000. At the end of the year, she then was given a return. In the fiscal year 1998-99, Phillips paid approximately $6,000 to the Plan, meaning that she earned $6,000 from sources other than her regular salary, but only received $767.00, far less than fifty percent, back, without any explanation for the reduction. ¶ 11. This scenario squarely meets the conditions needed for the creation of a fiduciary relationship. (1) The activities of the parties go beyond their operating on their own behalf, and the activities for the benefit of both; and (2) Where the parties have a common interest and profit from the activities of the other. The activities that Phillips was required to perform were to her benefit and that of the University and the Nursing PLLC. She was allowed to keep some of her earnings and was given a return on her contributions. The University and the Nursing PLLC benefitted because she was working at a University-sponsored clinic and because Phillips was required to make contributions to the Plan. (3) Where the parties repose trust in one another. The University and the Nursing PLLC did not have to trust Phillips because she was required to perform the activities given her and to contribute her earnings to the Nursing PLLC for its management of her funds. (4) Where one party has dominion or control over the other. The University and the Nursing PLLC definitely exercised dominion and control over Phillips. In fact, when she refused to submit to the Plan's terms, she was fired. ¶ 12. We have refused to recognize the existence of a fiduciary relationship in cases where the relationship between the two parties was no more than an arms-length business transaction involving a normal debtor-creditor relationship. Merchants & Planters Bank of Raymond v. Williamson, 691 So.2d 398, 404 (Miss. 1997). The relationship between Phillips, the University and the Nursing PLLC was definitely not an arms-length business transaction. The terms of the contract were non-negotiable. Either Phillips could sign it or leave her employment with the University and the Nursing PLLC. ¶ 13. One of the key elements of a fiduciary relationship is the fiduciary's control of the supervised party's property, and that things of value such as land, monies, a business, or other things of value must be possessed or managed by the dominant party. Arnold v. Erkmann, 934 S.W.2d 621, 629 (Mo.Ct.App.1996). The University and the Nursing PLLC possessed and managed Phillips' earnings, and she had no say-so in how her earnings were used. ¶ 14. Mississippi chancery courts hold the authority to hear a case for an accounting. Crowe v. Smith, 603 So.2d 301, 307 (Miss.1992); Evans v. Hoye, 101 Miss. 244, 253, 57 So. 805, 806 (1912); see also Miss. Const. art. 6, § 159; Miss.Code Ann. § 9-5-81 (2002). However, the jurisdiction of a court of equity over matters of account rests upon three grounds, to wit, the need of a discovery, the complicated character of the accounts, and the existence of a fiduciary or trust relation. Henry v. Donovan, 148 Miss. 278, 114 So. 482, 484 (1927). Therefore, because a fiduciary relationship existed between Phillips, the University, and the Nursing PLLC, and the University and the Nursing PLLC had possession and dominion over Phillips' earnings and has refused to give Phillips any information about the management of her earnings, the chancellor did not err in concluding that Phillips is entitled to an accounting. See Miller v. Henry, 139 Miss. 651, 103 So. 203 (1925).