Court Opinion

ID: 3157670
Source: CourtListenerOpinion
Date Created: 2015-11-24 20:06:59.987791+00
Date Added: 2024-06-11T11:59:06.744673
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

                                NO. 2014-CA-01183-COA

JOHN KARSTEN SIMRALL, KATHERINE RAE                                       APPELLANTS
LEIST AND SIMRALL & SIMRALL, A
MISSISSIPPI GENERAL PARTNERSHIP

v.

BUNGE-ERGON VICKSBURG LLC                                                     APPELLEE

DATE OF JUDGMENT:                          07/29/2014
TRIAL JUDGE:                               HON. M. JAMES CHANEY JR.
COURT FROM WHICH APPEALED:                 WARREN COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANTS:                  PENNY B. LAWSON
                                           DAVID M. SESSUMS
ATTORNEYS FOR APPELLEE:                    CHARLES STEPHEN STACK JR.
                                           J. KEVIN WATSON
NATURE OF THE CASE:                        CIVIL - CONTRACT
TRIAL COURT DISPOSITION:                   GRANTED SUMMARY JUDGMENT IN
                                           FAVOR OF PLAINTIFF/APPELLEE
DISPOSITION:                               AFFIRMED – 11/24/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       EN BANC.

       IRVING, P.J., FOR THE COURT:

¶1.    This appeal arises from a summary judgment rendered in the Circuit Court of Warren

County in favor of Bunge-Ergon Vicksburg LLC (Ergon) against Simrall & Simrall, a

general partnership; and Simrall’s partners, Katherine Rae Leist and John Karsten Simrall

(the Simrall defendants, unless the context dictates otherwise). The Simrall defendants raise

several issues, which we condense into one: whether forbearance from a justiciable claim to
which there are conceivably valid defenses is consideration sufficient to support a promissory

note and a personal guaranty. Finding that it is, we affirm.

                                          FACTS

¶2.    Simrall was a farming business. On June 8, 2010, Katherine executed a contract that

obligated Simrall to sell Ergon 100,000 bushels of corn to be delivered no later than

September 30, 2011 (the contract). During the spring of 2011, Simrall planted corn near the

Yazoo River, but before the harvest, the river flooded, and most of the corn was destroyed.

So Simrall unilaterally cancelled the contract.

¶3.    On August 11, 2011, John executed a promissory note that obligated Simrall to pay

Ergon $283,812.50, representing “the fair market value of the market difference owed to

Ergon by Simrall” as a result of Simrall’s cancellation of the contract. That same day, John

signed a personal guaranty that obligated him to pay any unpaid debt owed by Simrall to

Ergon, but neither Simrall nor John made any such payments. So Ergon filed a complaint

against the Simrall defendants, based upon the Simrall defendants’ failure to perform their

respective obligations under the promissory note and the guaranty. The Simrall defendants

filed a motion for summary judgment, and Ergon countered with its own motion for summary

judgment. On July 29, 2014, the circuit court entered a summary judgment in favor of Ergon,

and this appeal ensued.

                                       DISCUSSION

¶4.    “In reviewing a lower court’s grant of summary judgment, this Court employs a de

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novo standard of review.” Criss v. Lipscomb Oil Co., 990 So. 2d 771, 772 (¶2) (Miss. Ct.

App. 2008) (citing Anglado v. Leaf River Forest Prods., 716 So. 2d 543, 547 (¶13) (Miss.

1998)). “[We] examine[] all evidentiary matters presented to the court below in the light

most favorable to the party against whom the motion is made.” Robinson v. S. Farm Bureau

Cas. Co., 915 So. 2d 516, 520 (¶12) (Miss. Ct. App. 2005) (citation omitted). The summary

judgment “will be reversed if a triable issue of fact exists; otherwise, the [judgment] will be

affirmed.” Id. (quoting Erby v. N. Miss. Med. Ctr., 654 So. 2d 495, 499 (Miss. 1995)).

¶5.    The Simrall defendants argue that the grant of summary judgment was improper

because the contract was unconscionable in that (1) “[t]here was no negotiation over [its]

terms and conditions,” and (2) it contained a force majeure clause that protected only Ergon.

They also argue that their duty to perform under the contract was discharged by the flood,

which, according to them, was an act of God. The Simrall defendants further argue that

because they would have had valid defenses to any breach-of-contract claims alleged by

Ergon, the note and guaranty were not supported by consideration.

¶6.    In response, Ergon argues that the contract is completely irrelevant to this litigation,

the basis of which is the note and the guaranty. Ergon also argues that forbearance was

sufficient consideration under Mississippi common law and the Uniform Commercial Code.

Additionally, Ergon argues that the Simrall defendants’ defenses to the original contract were

waived when John executed the note on behalf of Simrall & Simrall and the personal

guaranty. Alternatively, Ergon argues that because mutuality of contractual obligations is

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not required under Mississippi law, the one-sided force majeure clause does not render the

contract unconscionable or unenforceable and that by executing the promissory note and

guaranty, the Simrall defendants ratified the contract.

¶7.       In support of its motion for summary judgment, Ergon submitted an uncontested

affidavit executed by Debra Buckelew, a former Ergon employee. In the affidavit, Debra

stated:

          [1].   On or about June 21, 2011, John . . . called [Ergon and spoke with her].

          [2].   [John] told [her] that [Simrall & Simrall] would not be able to deliver
                 the corn that [Simrall & Simrall] had agreed to deliver to [Ergon]
                 because of [the] flooding of [Simrall & Simrall’s] farm lands.

          [3].   During that conversation, [John] requested that [Ergon] cancel its
                 contract with [Simrall & Simrall] and determine the fair market value
                 of the market difference owed to [Ergon] by [Simrall & Simrall] as a
                 result of such cancellation. That same day, Ergon determined the
                 market difference, and [Debra] called [John] back that day and told him
                 the amount of the market difference.

                                              ****

          [4].   On or about June 22, 2011, [John] called [Ergon], and [Debra] talked
                 to [John, who] told [her] that he would deliver a check to [Ergon] to
                 pay such market difference.

          [5].   On June 23, 2011, [John] called [Ergon and] told [Debra] that [Simrall
                 & Simrall] could not pay [Ergon] such market difference because
                 [Simrall & Simrall] would not receive flood[-]insurance proceeds until
                 September[] 2011, and the bank with which [Simrall & Simrall] did
                 business would not loan the partnership money to enable [it] to pay
                 such market difference.

          [6].   During that conversation, [Debra] proposed that [John, on behalf of
                 Simrall & Simrall,] sign [the] [p]romissory [n]ote to secure the fair[-

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              ]market difference that [Simrall & Simrall] owed to [Ergon]. [John]
              agreed to sign [the] [n]ote[,] saying “that would be great” because this
              would give him more time for [Simrall & Simrall] to pay the market
              difference owed by [Simrall & Simrall].

                                             ****

       [7].   The form of [the] [p]romissory [n]ote . . . was [later] changed to
              provide that the [n]ote was to be payable on . . . November 20, 2011[.]

       [8].   On August 11, 2011, [John] [went to Ergon’s] office[] and signed the
              [p]romissory note and [p]ersonal [g]uaranty in [Debra’s] presence.

¶8.    Where bargained for, “[a] party’s forbearance to sue on a justiciable claim can

constitute valuable consideration.” Hearn v. Shelton, 762 So. 2d 792, 794 (¶5) (Miss. Ct.

App. 2000) (citing Daniel v. Snowdoun Ass’n, 513 So. 2d 946, 949 (Miss. 1987)). To be

justiciable, a claim need only be “definite and concrete, . . . touch[ing] the relations of real

parties having antagonistic interests.” Swaney v. Swaney, 962 So. 2d 105, 107 (¶8) (Miss.

Ct. App. 2007) (citation omitted). And under Mississippi Code Annotated section 75-3-

303(a)(3) and (b) (Rev. 2002), if an instrument “is issued or transferred as payment of, or as

security for, an antecedent claim against any person, whether or not the claim is due[,]” then,

the instrument is “consideration sufficient to support a simple contract.”

¶9.    The record reveals that as consideration for the promissory note and the guaranty,

Ergon refrained from filing a complaint against the Simrall defendants after Simrall &

Simrall breached the contract. It is clear that Ergon’s breach-of-contract claims were definite

and concrete in that Simrall & Sumrall had unquestionably and admittedly breached the

contract; the claims touched real parties, Ergon and the Simrall defendants; and the parties

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had antagonistic views. The fact that the Simrall defendants could have asserted valid

defenses to Ergon’s claims does not invalidate their justiciability. Stanley v. Sumrall, 167

Miss. 714, 147 So. 786, 788 (1933) (citation omitted) (finding that “[a] doubtful or disputed

claim, sufficient to constitute a good consideration for an executory contract of compromise,

is one honestly and in good faith asserted, arising from a state of facts on which a cause of

action can be predicated, with a reasonable belief on the part of the party asserting it, that he

had a fair chance of sustaining his claim, and concerning which an honest controversy may

arise, although, in fact, the claim may be wholly unfounded”). So Ergon’s forbearance was

adequate consideration for the note and the guaranty. Therefore, the circuit court did not err

in granting summary judgment to Ergon. Accordingly, we affirm.

¶10. THE JUDGMENT OF THE CIRCUIT COURT OF WARREN COUNTY IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLANTS.

    LEE, C.J., GRIFFIS, P.J., BARNES, ISHEE, MAXWELL, FAIR AND
WILSON, JJ., CONCUR. CARLTON AND JAMES, JJ., NOT PARTICIPATING.

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