Court Opinion

ID: 865230
Source: CourtListenerOpinion
Date Created: 2013-04-27 00:26:53.475921+00
Date Added: 2024-06-11T11:16:04.140695
License: Public Domain

IN THE SUPREME COURT OF MISSISSIPPI

                       NO. 2006-IA-00976-SCT

RAS FAMILY PARTNERS, LP AND RAY A. SIMS

v.

ONNAM BILOXI, LLC

DATE OF JUDGMENT:              05/22/2006
TRIAL JUDGE:                   HON. JAMES B. PERSONS
COURT FROM WHICH APPEALED:     HARRISON COUNTY CHANCERY COURT,
                               SECOND JUDICIAL DISTRICT
ATTORNEY FOR APPELLANTS:       LAWRENCE CARY GUNN
ATTORNEYS FOR APPELLEE:        MEGAN MARTHINE BARBER CONNER
                               JOHN G. CORLEW
                               KATHERINE A. SMITH
NATURE OF THE CASE:            CIVIL - OTHER
DISPOSITION:                   REVERSED AND REMANDED - 11/15/2007
                               .
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

                      CONSOLIDATED WITH

                       NO. 2006-IA-01414-SCT

ONNAM BILOXI, LLC

v.

RAS FAMILY PARTNERS, LP AND RAY A. SIMS

DATE OF JUDGMENT:              08/28/2006
TRIAL JUDGE:                   HON. STEPHEN B. SIMPSON
COURT FROM WHICH APPEALED:     HARRISON COUNTY CIRCUIT COURT,
                               SECOND JUDICIAL DISTRICT
ATTORNEYS FOR APPELLANT:                    JOHN G. CORLEW
                                            MEGAN MARTHINE BARBER CONNER
                                            KATHERINE A. SMITH
ATTORNEY FOR APPELLEES:                     LAWRENCE CARY GUNN
NATURE OF THE CASE:                         CIVIL - OTHER
DISPOSITION:                                AFFIRMED AND REMANDED - 11/15/2007
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       BEFORE DIAZ, P.J., CARLSON AND RANDOLPH, JJ.

       DIAZ, PRESIDING JUSTICE, FOR THE COURT:

¶1.    The dispute in these consolidated cases centers around an agreement between Onnam

Biloxi, LLC, RAS Family Partners, LP, and Ray A. Sims. This Court is asked to determine

whether jurisdiction is proper in either chancery or circuit court. Finding that jurisdiction

was proper in circuit court, we affirm the circuit court’s order denying the motion to transfer

and reverse the chancery court’s order denying same.

                                           FACTS

¶2.    RAS Family Partners, LP, agreed to lease ten acres of land on the Biloxi Bay to

Onnam Biloxi, LLC, for casino development. Ray A. Sims is the managing partner of RAS,

and he also contracted with Onnam to sell his shares of stock in another corporation that

owns land adjacent to the proposed casino development. Both the lease and stock sale

agreements were subject to certain contingencies, which included approval of the site by the

Mississippi Gaming Commission; obtaining a gaming license and other necessary permits;

approval of the building plan by the City of Biloxi; a hazardous substances inspection; and

the negotiation of a tidelands lease.

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¶3.    The closing of the lease and stock sale was to take place on September 30, 2005. On

August 29, 2005, Hurricane Katrina devastated the Gulf Coast region, impeding the

conditions precedent to the agreements. In a letter dated November 1, 2005, RAS and Sims

notified Onnam that “[a]ll agreements between RAS Family Partners and Onnnam Biloxi

[had] expired by their own terms.”

¶4.    On November 30, 2005, Onnam filed suit in federal court against RAS and Sims.

RAS then filed a separate suit against Onnam in the Circuit Court of Harrison County on

December 27, 2005, seeking a declaratory judgment that the contracts were no longer binding

as well as damages for breach of contract and malicious filing of a lis pendens notice. RAS

amended its circuit court complaint to include Sims as a plaintiff on February 27, 2006.

¶5.    Onnam’s federal suit was dismissed on January 24, 2006, pursuant to a provision in

the lease agreement, which designated state court as the chosen forum. Onnam then filed suit

that same day against RAS and Sims in the Chancery Court of Harrison County, seeking

specific performance of the lease agreement and damages from Sims for breach of the stock

sale agreement.

¶6.    Onnam filed a motion in the circuit court action to transfer to chancery court, while

RAS and Sims filed a motion in the chancery court action to transfer to circuit court. Both

motions were denied, and this Court granted both of the interlocutory appeals that followed.

¶7.    The parties ask us to determine the appropriate jurisdiction, specifically whether the

circuit court has priority jurisdiction.

                                 STANDARD OF REVIEW

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¶8.    Jurisdiction is a question of law which this Court reviews de novo. Trustmark Nat’l

Bank v. Johnson, 865 So. 2d 1148, 1150 (Miss. 2004). We use this same standard of review

when examining a ruling on a motion to transfer from chancery court to circuit court, or vice-

versa. ERA Franchise Systems, Inc. v. Mathis, 931 So. 2d 1278, 1280 (Miss. 2006).

                                       DISCUSSION

¶9.    RAS and Sims argue that the circuit court has priority jurisdiction because they were

the first to file suit. Onnam, on the other hand, argues that the chancery court has proper

jurisdiction because (1) the suit involves a purely equitable matter which properly belongs

in chancery court, and (2) priority jurisdiction, even if applicable, does not preclude the

circuit court from considering a motion to transfer.

¶10.   “The principle of priority jurisdiction presupposes that the first court in which suit is

filed is a court of competent jurisdiction.” Harrison County Dev. Comm'n v. Daniels Real

Estate, Inc., 880 So. 2d 272, 276 (Miss. 2004), overruled on other grounds by City of

Jackson v. Estate of Stewart, 908 So. 2d 703, 711 (Miss. 2005). Accordingly, we address

the issues in the following order: (1) whether the circuit court could have subject matter

jurisdiction over the case at all; and (2) if so, we then determine priority jurisdiction by

examining in which court the suit was first filed.

       I. Whether the Circuit Court is a Court of Competent Jurisdiction.

¶11.   Generally speaking, circuit courts are courts of law and chancery courts are courts of

equity. See Miss. Const. art. 6, § 159 (granting chancery courts jurisdiction over “all matters

in equity”); Miss. Const. art. 6, § 156 (granting circuit courts “original jurisdiction in all

matters civil and criminal in this state not vested by this Constitution in some other court”).

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However, chancery courts are courts of limited jurisdiction, while circuit courts are courts

of general jurisdiction. IP Timberlands Operating Co. v. Denmiss Corp., 726 So. 2d 96, 112

(Miss. 1998) (citing Hall v. Corbin, 478 So. 2d 253 (Miss. 1985)). Therefore, “if one issue

is properly before the circuit court it has jurisdiction to decide all issues.” Id. at 111. To

determine whether a court has subject matter jurisdiction, we look to the face of the

complaint, examining the nature of the controversy and the relief sought. Durant v.

Humphreys County Mem’l Hosp./Extended Care Facility, 587 So. 2d 244, 250 (Miss.

1991); Hood v. Dept. of Wildlife Conservation, 571 So. 2d 263, 266 (Miss. 1990). If the

complaint seeks legal relief, even in combination with equitable relief, the circuit court can

have proper subject matter jurisdiction. IP Timberlands Operating Co., 726 So. 2d at 111.

¶12.     RAS’s and Sims’s complaint seeks a declaratory judgment that the contracts are no

longer binding as well as damages for breach of contract and malicious filing of a lis pendens

notice. The request for declaratory judgment does not affect our analysis as declaratory

judgments are “jurisdictionally neutral.” Burnette v. Hartford Underwriters Ins. Co., 770

So. 2d 948, 952 (Miss. 2000). Breach of contract actions, on the other hand, are better suited

for circuit court. Southern Leisure Homes, Inc. v. Hardin, 742 So.2d 1088, 1089 (Miss.

1999).

¶13.     The complaint also requests damages for the alleged breach of contract and malicious

filing. While chancery courts may certainly award legal and punitive damages as long as

chancery jurisdiction has attached, damages are traditionally considered a legal remedy. Id.

at 1090. Because the complaint seeks legal remedies, the circuit court is a court of competent

jurisdiction.

                                              5
¶14.   Onnam counters that the paramount claim is the equitable remedy of specific

performance, and therefore, the case properly belongs in chancery court. As discussed

above, the complaint clearly seeks legal remedies. Additionally, Onnam stipulated to the

circuit court’s jurisdiction in its answer and cross-complaint, acknowledging that “[t]his

Court has jurisdiction of the parties and subject matter.” Finally, Onnam’s cross-complaint,

which is nearly identical to its complaint filed with the chancery court, seeks a legal remedy

in the form of damages for breach of contract. This argument is therefore without merit.

       II. Whether the Circuit Court has Priority Jurisdiction.

¶15.   Because the circuit court is a court of competent jurisdiction, we next determine

whether the circuit court has priority jurisdiction.

¶16.   The “first to file” or “race to the courthouse” rule is well-established in Mississippi

case law: “[w]here two suits between the same parties over the same controversy are brought

in courts of concurrent jurisdiction, the court which first acquires jurisdiction retains

jurisdiction over the whole controversy to the exclusion or abatement of the second suit.”

Scruggs, Millette, Bozeman & Dent, P.A. v. Merkel & Cocke, P.A., 804 So. 2d 1000, 1006

(Miss. 2001) (quoting In re Petition of Beggiani, 519 So. 2d 1208, 1210 (Miss. 1988)). To

determine which court first acquired jurisdiction, we look at “the date the initial pleading is

filed, provided process issues in due course.” Scruggs, 804 So. 2d at 1006 (quoting

Huffman v. Griffin, 337 So. 2d 715 (Miss. 1976)).

¶17.   The circuit court complaint was filed on December 27, 2005, and the chancery court

complaint was filed on January 24, 2006. Because the chancery complaint was filed nearly

a month after the first pleading in circuit court, the circuit court has priority jurisdiction.

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¶18.   The chancellor found that priority jurisdiction did not apply because: (1) the

summonses were served on the same date; and (2) Sims was not a party to the circuit court

action until after the chancery action had been filed. These facts are of no matter. First,

priority jurisdiction attaches as long as process issues “in due course.” Id. The summons for

the circuit court action was served January 26, 2006, and thus, service of process was

accomplished within the 120-day time frame required under Mississippi Rule of Civil

Procedure 4(h). Second, Sims was added as a party through an amended complaint which

was filed before a responsive pleading was served. Under Mississippi Rule of Civil

Procedure 15(c) this amendment relates back to the date of the original complaint.

                                      CONCLUSION

¶19.   Because the case was filed first in the circuit court, and because the circuit court is a

court of competent jurisdiction, this case properly belongs in that court. The chancery

court’s order denying the motion to transfer is reversed, and Case Number 2006-IA-00976-

SCT is remanded to the chancery court with directions to transfer that case to the Harrison

County Circuit Court, Second Judicial District. The circuit court’s order denying the motion

to transfer is affirmed, and Case Number 2006-IA-01414-SCT is remanded to the circuit

court for further proceedings consistent with this opinion.

¶20. NO. 2006-IA-00976-SCT: REVERSED AND REMANDED. NO. 2006-IA-01414-
SCT: AFFIRMED AND REMANDED.

     SMITH, C.J., WALLER, P.J., EASLEY, CARLSON, GRAVES, RANDOLPH
AND LAMAR, JJ., CONCUR. DICKINSON, J., NOT PARTICIPATING.

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