Court Opinion

ID: 4207310
Source: CourtListenerOpinion
Date Created: 2017-09-28 19:12:27.315819+00
Date Added: 2024-06-11T14:14:30.157671
License: Public Domain

IN THE SUPREME COURT OF MISSISSIPPI

                                  NO. 2015-CT-00710-SCT

CITY OF MERIDIAN, MISSISSIPPI d/b/a EAST
MISSISSIPPI DRUG TASK FORCE

v.

$104,960.00 U.S. CURRENCY, AND A 2003 FORD
F-150 SUPERCAB TRUCK, VIN
#1FTRX17213NB65899 AND MARIA I. VALLE
CATALAN

                               ON WRIT OF CERTIORARI

DATE OF JUDGMENT:                            04/28/2015
TRIAL JUDGE:                                 HON. LESTER F. WILLIAMSON, JR.
COURT FROM WHICH APPEALED:                   LAUDERDALE COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANT:                      ANDY DAVIS
ATTORNEYS FOR APPELLEE:                      J. STEWART PARRISH
                                             JESSICA LEIGH MASSEY
NATURE OF THE CASE:                          CIVIL - OTHER
DISPOSITION:                                 REVERSED AND REMANDED - 09/28/2017
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       EN BANC.

       BEAM, JUSTICE, FOR THE COURT:

¶1.    The City of Meridian filed a petition for forfeiture under Mississippi Code Sections

41-29-153(a)(5) and/or 41-29-153(a)(7) against Maria Catalan after police found $104,690

in her truck during a traffic stop. Catalan filed a motion to dismiss for failure to state a claim

under Rule 12(b)(6) of the Mississippi Rules of Civil Procedure, which the Lauderdale

County County Court granted. The Lauderdale County Circuit Court affirmed. The City
appealed, and the Court of Appeals affirmed the judgment of the circuit court. City of

Meridian v. $104,960.00 U.S. Currency, 2016 WL 3906076 (Miss. Ct. App. July 19, 2016).

The City petitioned this Court for writ of certiorari.

¶2.    Having granted certiorari, we agree with the Court of Appeals’ dissent that the City’s

forfeiture petition satisfies the notice pleading requirements of Rule 8 of the Mississippi

Rules of Civil Procedure. We also agree with the Court of Appeals’ dissent that in deciding

the Rule 12(b)(6) motion, the county court considered matters outside the City’s petition.

The court also considered matters outside the pleadings for purposes of Rule 12(c), which

allows for a judgment on the pleadings. In doing so, the county court in effect converted the

Rule 12(b)(6) and/or 12(c) motion into a motion for summary judgment, as provided in Rule

56 of the Mississippi Rules of Civil Procedure. Rule 56(c) of the Mississippi Rules of Civil

Procedure requires at least ten days’ notice to both parties that the court is converting the

motion, which did not occur in this instance. Accordingly, we reverse the judgment of the

Court of Appeals as well as the county court’s order, and remand the case for further

proceedings.

                                PROCEDURAL HISTORY

¶3.    The Court of Appeals set forth the facts of the case as follows:

             On June 2, 2012, Catalan was pulled over for “tired” driving. A
       consensual search revealed $104,690 hidden in one of the truck’s
       compartments. No contraband or drugs were found in the truck. Nor was
       Catalan charged with any criminal offense or even a traffic citation.

               A few weeks later, the City filed a petition for forfeiture requesting the
       forfeiture of Catalan’s truck and the $104,690. Catalan filed an answer and a

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       request for production. The City then filed a motion to continue and/or set the
       case, and the case was set for November 3, 2012.

              The case dragged on for over a year with discovery and motions. On
       August 14, 2013, Catalan filed a motion to dismiss under Rule 12(b)(6). After
       a hearing, the court granted the motion and ordered the City to return the
       confiscated money and truck to Catalan. The City appealed to the circuit court,
       which affirmed the county court’s decision. . . .

City of Meridian, 2016 WL 3906076, at *1.

¶4.    The Court of Appeals held that, while the City’s petition named the currency and truck

as items for forfeiture, it failed to state any reason for their forfeiture.        Id. at *3.

“Specifically, the City presented no facts or circumstances to show how the use or intended

use of the money and truck violated the Mississippi Uniform Controlled Substances Law.”

See id. (relying on M.R.C.P. 8 cmt., which states, “[a]lthough Rule 8 abolishes many

technical requirements of pleadings, it does not eliminate the necessity of stating

circumstances, occurrences, and events which support the proffered claim”). Therefore,

according to the Court of Appeals, the City failed to meet Rule 8’s threshold requirements,

and its petition was properly dismissed under Rule 12(b)(6). Id.

¶5.    The Court of Appeals also rejected the City’s claim that the county court made

findings of fact and conclusions of law outside the complaint, which would have converted

Catalan’s Rule 12(b)(6) motion to dismiss into a motion for summary judgment, and which

requires the City be given ten days’ notice of the motion for response. Id.

¶6.    The Court of Appeals found that, in looking at the county court’s order, “it is clear

that the court relied solely on the pleadings to find that the City had failed to state a claim

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upon which relief could be granted.” Id. According to the Court of Appeals, “[n]o exhibits,

affidavits, or other forms of evidence were presented to the court.” Id.

¶7.    We disagree with the Court of Appeals that the City’s petition failed to state a claim

for purposes of Rule 12(b)(6). We also disagree with the Court of Appeals that the county

court did not go outside the petition for purposes of Rule 12(b)(6) or the pleadings for

purposes of Rule 12(c) of the Mississippi Rules of Civil Procedure. Based on our review of

the record, the county court did do so and effectively treated the motion as one for summary

judgment. Accordingly, we must reverse.

                                      DISCUSSION

¶8.    A motion to dismiss under Rule 12(b)(6) for failure to state a claim upon which relief

can be granted raises an issue of law, which is reviewed de novo. Jourdan River Estates,

LLC v. Favre, 212 So. 3d 800, 802 (Miss. 2015). The motion tests the legal sufficiency of

the complaint, specifically the City’s petition for forfeiture in this case. Id. Review is

limited to the face of the pleading, and allegations must be accepted as true. Id. The motion

should not be granted unless it appears beyond a reasonable doubt that the plaintiff will be

unable to prove any set of facts in support of the claim. Rose v. Tullos, 994 So. 2d 734, 737

(Miss. 2008). “There must be no set of facts that would allow the plaintiff to prevail.” J.B.

Hunt Transp., Inc. v. Forrest Gen. Hosp., 34 So. 3d 1171, 1173 (Miss. 2010) (quoting

Wilbourn v. Equitable Life Assurance Soc’y of the U.S., 998 So. 2d 430, 435 (Miss. 2008)).

A reviewing court need “not defer to the trial court’s ruling.” Favre, 212 So. 3d at 803

(quoting Rose, 994 So. 2d at 737).

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¶9.    Further, Mississippi is a “notice-pleadings” state; fact pleadings are not required.

Children’s Med. Grp., P.A. v. Phillips, 940 So. 2d 931, 934 (Miss. 2006). This means:

       [U]nder our rules, [the plaintiff] is not required to plead the specific wrongful
       conduct. At the pleading stage, he is required only to place [the defendant] on
       reasonable notice of the claims against it and to demonstrate that he has
       alleged a recognized cause of action upon which, under some set of facts, he
       might prevail.

Id.

¶10.   Here, as the Court of Appeals’ dissent found, the City’s petition for forfeiture

informed Catalan this is “a civil action of the forfeiture of property under the authority of

Mississippi Code Annotated sections 41-29-101, et. seq.” City of Meridian, 2016 WL
3906076, *3 (Carlton, J., dissenting). The petition says “the property, $104,960 in currency

and a 2003 Ford F-150 Supercab truck, VIN # 1FTRX17213NB65899, was lawfully seized

on June 2, 2012, [in Lauderdale County, Mississippi] by the East Mississippi Drug Task

Force and that the City has lawfully retained custody of subject property since seizure.” Id.

The petition states that “both the currency and the truck were subject to forfeiture under

section 41-29-153(b).” Id. It alleges that “the truck and currency have been used, or

intended for use, or constituted proceeds in violation of the Mississippi Uniform Controlled

Substances Law.” Id. And it states that “the truck and currency should be forfeited pursuant

to Mississippi Code Annotated sections 41-29-179(4) (Rev. 2013) and 41-29-181(2) (Rev.

2013).” Id.

¶11.   We find that the petition for forfeiture puts Catalan on reasonable notice of the City’s

claims, and it sufficiently demonstrates that a recognized cause of action exists upon which

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the City might prevail under some set of facts. The petition describes with specificity the

property subject to forfeiture and provides when, where, and why it was seized. And if, as

the City alleges, the currency and truck have been used, or were intended for use to facilitate

any violation of the Mississippi Uniform Controlled Substance Law, then the property is

subject to forfeiture under Section 41-29-153. Viewing the petition in the light most

favorable to the City, we cannot say it appears beyond reasonable doubt there is no set of

facts by which City could prevail in its claim.1

¶12.   Further, we also agree with the Court of Appeals’ dissent that the county court went

outside the petition in ruling on Catalan’s Rule 12(b)(6) motion. We also find that the county

court went outside the pleadings for purposes of Rule 12(c), which allows a party to move

for a judgment on the pleadings. Similar to a Rule 12(b)(6) motion, a Rule 12(c) motion is

decided on the pleadings alone. Hartford Cas. Ins. Co. v. Halliburton Co., 826 So. 2d 1206,

1210 (Miss. 2001). “If . . . matters outside the pleading are presented and not excluded by

the court, the motion shall be treated as one for summary judgment and disposed of as

provided in Rule 56, and all parties shall be given reasonable opportunity to present all

material made pertinent to such a motion by Rule 56 . . . .” M.R.C.P. 12(c).

       1
         We acknowledge that the United States Supreme Court has rejected the “no set of
facts” standard for federal cases appraising a Rule 12(b)(6) motion. See Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 560-63, 127 S. Ct. 1955, 1969, 167 L. Ed. 2d 929 (2007) (“The
phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard:
once a claim has been stated adequately, it may be supported by showing any set of facts
consistent with the allegations in the complaint.”). For purposes of our decision in this case,
we need not decide whether this Court will adopt the Twombly standard.

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¶13.   In the court’s “order on motion to dismiss,” the county court found, inter alia, that:

(1) Catalan was stopped for investigation of “tired” driving and “gave permission for the

officers to search the vehicle”; (2) officers conducted a “very detailed search,” and found the

currency “in a hidden compartment of the truck”; (3) law enforcement maintained that

Catalan “denied ownership of the currency” when it was seized and Catalan, through counsel,

subsequently “claim[ed] ownership of the truck as well as the confiscated money” in her

answer(s) to the City’s petition; (4) following a motion to compel filed by the City to require

Catalan to supply a more detailed and specific answer to interrogatories and request for

production of documents, the county court held that Catalan “had a right to assert her Fifth

Amendment Privileges[.]”

¶14.   Based on our review of the record, the court’s order contains a number of facts and/or

evidence that are neither contained in the City’s petition (for purposes of Rule 12(b)(6)) nor

in Catalan’s responsive pleading(s) (for purposes of Rule 12(c)). Some of these facts and/or

evidence are disputed by the parties and, as the City contends, may be probative with respect

to the ultimate question of whether the seized property has been used, or was intended for

use, or constitute(s) proceeds in violation of the Mississippi Uniform Controlled Substances

Law. See e.g., One Hundred Seven Thousand Dollars ($107,000.00) U.S. Currency v.

State ex rel. Harrison County Sheriff’s Dep’t, 643 So. 2d 917, 923 (Miss. 1994) (“forfeiture

may be based wholly on circumstantial evidence and inference”); see also United States v.

U.S. Currency in the Amount of $119,984.00, More or Less, 304 F.3d 165, 177 (2d Cir.

2002) (in contrast to a criminal case, if claimants in a civil forfeiture case exercise their Fifth

                                                7
Amendment rights to avoid discovery, “the Government may be able to obtain an adverse

inference based on their refusal to testify”).

                                      CONCLUSION

¶15.   For these reasons, we reverse the county court’s order of Rule 12(b)(6) dismissal

and/or Rule 12(c) judgment as well as the judgment of the Lauderdale County Circuit Court

and remand the case to the county court for further proceedings consistent with this opinion.

¶16.   REVERSED AND REMANDED.

    WALLER, C.J., RANDOLPH AND KITCHENS, P.JJ., KING AND
MAXWELL, JJ., CONCUR. COLEMAN, J., DISSENTS WITH SEPARATE
WRITTEN OPINION JOINED BY CHAMBERLIN, J.     ISHEE, J., NOT
PARTICIPATING.

       COLEMAN, JUSTICE, DISSENTING:

¶17.   The Court of Appeals correctly held that the petition for forfeiture filed by the City

of Meridian failed to state a viable claim and affirmed the trial court’s dismissal of the

petition. The “no set of facts” test employed by the majority to hold the petition sufficient

has for good reason been abandoned by the United States Supreme Court from which the

Mississippi Supreme Court adopted it in 1985. Furthermore, “no set of facts” contradicts

another standard, also adopted by the Mississippi Supreme Court for determining the

sufficiency of the complaint, that requires that facts supporting the allegations be pleaded.

Because the Supreme Court’s reasons for abandoning “no set of facts” are persuasive, and

because doing so would resolve the conflict in our own caselaw, I would abrogate “no set of

facts” in favor of the current standard of sufficiency established in Ashcroft v. Iqbal, 556
U.S. 662 (2009), which is consistent with Penn National Gaming, Inc. v. Ratliff, 954 So.
8
2d 427 (Miss. 2007). In so doing, I would affirm the judgments of the Court of Appeals and

the trial court. Accordingly, and with respect, I dissent.

¶18.   As noted by the Court of Appeals, the City of Meridian’s petition wholly failed to

allege facts or circumstances that showed that the money and truck were used or were

intended to be used in violation of the Mississippi Uniform Controlled Substances Law. City

of Meridian v. $104,960.00 U.S. Currency, 2016 WL 3906076, *2 (¶ 9) (Miss. Ct. App. July

19, 2016). Such use or intended use is a prerequisite to forfeiture under Mississippi Code

Section 41-29-153(a)(5) and (a)(7), under which the city’s petition traveled. Accordingly,

even when taking all of the facts alleged in the petition as true, the city cannot seize the

property unless, as the majority holds, no facts in support of the necessary element may be

pleaded.

¶19.   The majority excuses the absence by relying on Children’s Medical Group P.A. v.

Phillips, 940 So. 2d 931, 934 (Miss. 2006), to hold that all that is required in a pleading is

that the defendant be put on notice of the type of claim and that allegations of supporting

facts are not required. In Phillips, an estranged husband sued his wife’s co-worker and the

employer of his wife and her co-worker for alienation of affections. Id. at 932 (¶ 1). The

defendants challenged the sufficiency of his claims pursuant to Rule 12(b)(6). Id. The

Phillips Court emphasized the “any set of facts rule,” id. at 933 (¶ 6), and acknowledged that

the “any set of facts” standard required “a high degree of speculation” on the part of the

reviewing court. Id. at 934 (¶ 7). The Phillips Court allowed the claim to proceed and

affirmed the denial of the motions to dismiss, writing, “At the pleading stage, [the plaintiff]

                                              9
is required only to place CMG on reasonable notice of the claims against it and to

demonstrate that he has alleged a recognized cause of action upon which, under some set of

facts, he might prevail.” Id. at 934 (¶ 10).

¶20.   There exist two readily identifiable problems with the majority’s continued

employment of the “no set of facts” standard in today’s case. First, the “no set of facts”

standard contradicts other opinions from the Mississippi Supreme Court that followed

Phillips and require that some facts be pleaded. Second, the United States Supreme Court

has wholly abandoned the “no set of facts” standard because, when taken to its extreme, it

allows claims to proceed with nothing more alleged than legal conclusions that fall short of

the Rule 8 standard of showing entitlement to relief.

¶21.   As to the first problem, we have been inconsistent, to say the least, when delineating

what a pleading must contain to be sufficient. Contrary to Phillips, which handed down in

2006, in Penn National Gaming, Inc. v. Ratliff, 954 So. 2d 427 (Miss. 2007), which was an

unanimous decision with three justices not participating, the court wrote the following:

       In construing our rules, we sometimes look for guidance to the federal cases,
       since the Mississippi Rules of Civil Procedure were patterned after the Federal
       Rules of Civil Procedure. White v. Stewman, 932 So. 2d 27, 39 (Miss. 2006)
       (“federal practice should be our guide when considering questions arising
       under the Mississippi Rules of Civil Procedure.”); Bourn v. Tomlinson
       Interest, Inc., 456 So. 2d 747, 749 (Miss. 1984). A majority of federal circuits
       have held that “even under the liberal pleading requirements of Rule 8(a), a
       plaintiff must set forth factual allegations, either direct or inferential,
       respecting each material element necessary to sustain recovery under some
       actionable legal theory.” United States ex rel. Karvelas v. Melrose–Wakefield
       Hosp., 360 F.3d 220, 240 (1st Cir. 2004); see also Varljen v. Cleveland Gear
       Co., 250 F.3d 426, 429 (6th Cir. 2001) (“To survive a motion to dismiss under
       Fed.R.Civ.P. 12(b)(6), a complaint must contain either direct or inferential
       allegations respecting all the material elements to sustain a recovery under

                                               10
       some viable legal theory.”); Carl Sandburg Vill. Condo. Ass’n No. 1 v. First
       Condo. Dev. Co., 758 F.2d 203, 207 (7th Cir. 1985) ( “A complaint must state
       either direct or inferential allegations concerning all of the material elements
       necessary for recovery under the relevant legal theory.”).

Ratliff, 954 So. 2d at 432 (¶ 11). The Ratliff Court held that the plaintiffs failed to allege

sufficient facts to support the attempt in their complaint to pierce the corporate veil of a

corporate defendant. Ratliff, 954 So. 2d at 432 (¶ 12). “The Ratliffs fail to make any

assertion in their complaint that BSL is a mere corporate shell or alter ego of Penn National.

The Ratliffs do not allege in their complaint that Penn National has disregarded corporate

formalities or has used the corporate form to commit misfeasance.” Id. The Ratliff standard,

which held a case should be dismissed for failing to allege sufficient facts, contradicts and

cannot be reconciled to the “no set of facts” standard employed by the Phillips Court, yet

neither case has been overruled.

¶22.   As to the second problem, the Mississippi Supreme Court adopted the standard

employed by the majority, that the complaint should not be dismissed unless, beyond a

reasonable doubt, no set of facts exists to support it, in Stanton & Associates, Inc. v. Bryant

Construction Company, Inc., 464 So. 2d 499 (Miss. 1985). In doing so, the Court looked

to the then-leading federal case Conley v. Gibson, 355 U.S. 41 (1957). Stanton & Assoc.,

Inc., 464 So. 2d at 505. However, the United States Supreme Court abrogated Conley and

“no set of facts” in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). The Twombly

Court wholly rejected the “literal reading of Conley’s ‘no set of facts’” employed by the

majority today and, frankly, by the Phillips Court. Twombly, 550 U.S. at 561. “This “no set

of facts” language can be read in isolation as saying that any statement revealing the theory

                                              11
of the claim will suffice unless its factual impossibility may be shown from the face of the

pleadings. . . .” Id. The Twombly Court came not to praise “no set of facts,” but to bury it.

“The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading

standard: once a claim has been stated adequately, it may be supported by showing any set

of facts consistent with the allegations in the complaint.” Id. at 563.

¶23.   Two years later, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Court provided a

standard for factual sufficiency in a complaint that Mississippi would do well to adopt.

There, the Court characterized Twombly as describing the federal Rule 8 standard as not

requiring “detailed factual allegations” but demanding more than “unadorned, the-defendant-

harmed-me” accusation. Iqbal, 556 U.S. at 678. “A pleading that offers ‘labels and

conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Id.

(citing Twombly, 550 U.S. at 555). A complaint that “tenders ‘naked assertions’ devoid of

‘further factual enhancement’” fails. Id. (quoting Twombly, 555 U.S. at 557). The Iqbal

Court continued as follows:

       To survive a motion to dismiss, a complaint must contain sufficient factual
       matter, accepted as true, to state a claim to relief that is plausible on its face.
       A claim has facial plausibility when the plaintiff pleads factual content that
       allows the court to draw the reasonable inference that the defendant is liable
       for the misconduct alleged. The plausibility standard is not akin to a
       “probability requirement,” but it asks for more than a sheer possibility that a
       defendant has acted unlawfully. Where a complaint pleads facts that are
       “merely consistent with” a defendant’s liability, it “stops short of the line
       between possibility and plausibility of ‘entitlement to relief.”

Iqbal, 556 U.S. at 678 (citations and quotations to Twombly omitted).

                                               12
¶24.   The Iqbal Court went on to identify “two working principles” that underlay the

Twombly opinion. The first, very much applicable to the case sub judice, is that the principle

requiring courts to accept as true all factual allegations in a complaint does not apply to legal

conclusions. Iqbal, 556 U.S. at 678. As the Court of Appeals pointed out, the City does no

more than allege a legal conclusion when it alleges that the assets in question are subject to

forfeiture by their owner. “Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citing

Twombly, 555 U.S. at 555). Rule 8 of the Federal Rules of Civil Procedure, which remains

in pertinent part identical to Mississippi’s, “marks a notable and generous departure from the

hypertechnical, code-pleading regime of a prior era, but it does not unlock the doors of

discovery for a plaintiff armed with nothing more than conclusions.” Iqbal, 556 U.S. at 678-

679.

¶25.   The second working principle, also applicable, is that only a complaint that states a

plausible claim for relief survives a Rule 12(b)(6) motion to dismiss. Id. at 679. While the

determination is “context-specific,” when “the well-pleaded facts do not permit the court to

infer more than the mere possibility of misconduct, the complaint has alleged—but it has not

‘show[n]’ – ‘that the pleader is entitled to relief.’” Id. (quoting Fed. R. Civ. P. 8(a)(2)). In

the instant case, the City’s petition alleges – but fails to show – that the City is entitled to the

property at issue.

¶26.   Pursuant to the foregoing reasoning, I would adopt the standard for sufficiency

elucidated by the Twombly and Iqbal Courts and affirm the judgments of the Court of

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Appeals and the trial court. In truth, as the law stands in Mississippi today, lawyers filing

or responding to Rule 12(b)(6) motions can cite our cases that require facts to be pleaded,

e.g., Ratliff, or cases that apply the extreme version of “no set of facts” decried by the

Twombly Court, i.e., Phillips. We have managed to keep both lines of cases alive, despite

the fact that they cannot be reconciled. I am persuaded by the Twombly Court’s reasoning

in burying “no set of facts.” However, as the majority chooses to follow it, the majority

should take the step of overruling Ratliff and other cases that require the pleading of facts

to overcome a motion to dismiss.

       CHAMBERLIN, J., JOINS THIS OPINION.

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