author: DICKINSON, Justice, WALLER, Chief Justice,

text:
    BLUEWATER LOGISTICS, LLC, Bluewater Bay LLC, Patricia L. Mosser, Marquetta Smith and Michael J. Floyd. v. James Stewart WILLIFORD, Jr.
    No. 2008-CT-00250-SCT.
    Supreme Court of Mississippi.
    Jan. 27, 2011.

      Robert R. Marshall, attorney for appellants.
    L. Clark Hicks, Jr., Hattiesburg, attorney for appellee.
   ON WRIT OF CERTIORARI

DICKINSON, Justice,

for the Court:

¶ 1. The four individual parties to this litigation formed two member-managed limited liability companies (LLCs) to operate a business known as Bluewater. The three defendants locked out the plaintiff (literally and figuratively) and notified him they were exercising a provision in both LLCs’ operating agreements that allowed them to buy his twenty-five percent interest in Bluewater. After he sued- them in chancery court, they changed their minds about buying him out, but insisted that “his firing as an employee [was] affirmed and confirmed.” The chancellor — finding the plaintiff was entitled to the fair-market value of his interest in Bluewater — entered judgment against the LLCs and the individual defendants. The defendants claim that, because they withdrew their offer to purchase the plaintiffs interest, the chancellor had no authority to force them to buy him out, and that there was no basis for individual liability.

¶ 2. Under Mississippi law, every member of a member-managed LLC is entitled to participate in managing the business. But even after the defendants claim they had changed their minds about buying the plaintiffs interest in Bluewater, they continued to insist that he was “fired” and could have no part in managing the business. The chancellor held this conduct was a willful, grossly negligent breach of contract. And because the operating agreements provided for individual liability in cases of willful, grossly negligent conduct, the chancellor entered judgment against the individual defendants. We cannot say the chancellor abused his discretion, so we affirm — in part. But because the chancellor incorrectly stated he had no authority to award attorney fees to the plaintiff; and because — without determining a reasonable rate of interest — he awarded post-judgment interest at the “statutory rate,” we remand for a hearing on those issues.

BACKGROUND FACTS AND PROCEEDINGS

¶ 3. James Williford Jr., Patricia Mosser, Marquetta Smith, and Michael Floyd formed two Mississippi limited liability companies — Bluewater Bay, LLC, and Bluewater Logistics, LLC, — to bid on lucrative government contracts related to the aftermath of Hurricane Katrina.

¶ 4. After Bluewater had completed more than $5 million in contracts, and with more than $1 million in payments due from the government, Smith called Willi-ford (who was working in Louisiana) to inform him that she, Mosser, and Floyd— as a “super majority” of seventy-fivé percent of the Bluewater ownership — had exercised their right under the operating agreements to buy him out. Williford returned to the Bluewater offices the next day and found the locks on the company offices had been changed. He then received from the Bluewater LLCs a formal notice that, as of January 31, 2006, his status as a “partner” of Bluewater had been “terminated”; that he was to “cease and desist from performing any business” on behalf of the company; and that he would be paid “one-quarter of the fair market value” of the companies.

¶ 5. Williford sued both LLCs and the three individual, super-majority members (“Defendants”). In addition to damages, he asked for injunctive relief to protect his interest in the LLCs, and to prevent the three super-majority members from improperly ousting him.

February 15, 2006, Hearing

¶ 6. On February 15, 2006, the chancellor held a hearing on the injunction issues. Counsel for Defendants told the chancellor that Bluewater’s certified public accountant (CPA), John Havard

is now working on the amount and . we anticipate a closing will be set on that in the next week or two.... The company and the other members are entitled to fire him and fire him they did, separate and apart.... He’s going to get his share of the corporation; it’s going to be tendered to him.... They fired him and they don’t want him back.... The 75% ownership can stop his salary. They can stop his benefits. They can do anything they want to do.

¶ 7. The chancellor granted a preliminary injunction and appointed Havard to “oversee the financial affairs of the LLCs.” The court ordered that Havard was to have “unlimited access to the financial records of the company on the premises” and that the records “may be made available to the plaintiff.” The court’s order further provided:

The defendants may continue with the normal operations of business and payment of expenses in the ordinary course of business so long as the CPA is aware of and approves of the regular operating expenses by signature.... No members of the LLCs may pay themselves salaries, distributions, draws, expense reimbursements, or any other funds or income of any kind without court approval. Any accounts or other income currently possessed by the LLCs may be used for payment of owed expenses per CPA approval, but will not be used for payment to the members absent court approval.

June 26, 2006, Order

¶ 8. On April 10, 2006, Williford’s counsel posted a letter to Havard, asking about the financial information the chancellor had ordered produced. Havard replied that he had, more than a month earlier, requested “a list of the pending jobs, the current status, and projected gross profit of these jobs (if awarded) as well as the status at January 31, 2006,” but that he had “yet to receive that information back.”

¶ 9. On June 7, 2006, still without the financial information, Williford’s counsel filed a motion to compel compliance with the chancellor’s prior order. Defendants’ counsel responded:

I am meeting with my clients later this week and we will determine all the issues then, but in the meantime for your information, I am informed that they no longer wish to purchase Mr. Williford’s shares.

¶ 10. On June 26, 2006, following a June 21, 2006, conference with the parties, the chancellor entered an order compelling the defendants to provide the information “within twenty (20) days of the conference.” The court also replaced Havard with Nancy Carpenter, CPA, “as the accountant to oversee the financial affairs of the LLC defendants.”

¶ 11. On July 20, 2006, Carpenter requested information from both Williford and the defendants. Having received no response from Defendants by August 10, Carpenter reported to the court:

To date I have received information from Mr. Williford, however; the other parties have not provided any information. I have talked with [defendants’ counsel] who advised information would be forthcoming. I have called and sent facsimile correspondence to [defendants’ counsel] and have been unable to talk with him this week.

¶ 12. On August 16, 2006, Defendants served what purported to be responses to Williford’s discovery requests. However, the responses were evasive and provided virtually no information. For instance, the first interrogatory and response stated:

INTERROGATORY NO. 1: List the name, address, and telephone number of all persons known to you or believed by you to have knowledge of any discoverable matter in this cause.
RESPONSE NO. 1: Bluewater objects to this interrogatory because counsel for Bluewater does not know what it means and calls for legal knowledge and a legal conclusion on the part of the respondent.

¶ 13. In a letter to Defendants’ counsel yet again requesting the court-ordered information, Williford’s counsel — referring to the evaluation Carpenter was to provide— stated: “I think it would be in the best interest of all the shareholders to see her evaluation. Do you agree?” Defendants’ counsel responded on August 21:

I met with the three stockholders in Bluewater last week. Based on that meeting, let me reiterate what I had already told you: The offer to purchase Mr. Williford’s stock is withdrawn. His firing as an employee is affirmed and confirmed.
Since there is no offer to purchase his stock and since there is no requirement that the stock be purchased, an evaluation of the LLC is irrelevant and [there] is no necessity for Nancy [Carpenter] to evaluate anything, so at this point I need not take up the issues of the information requested by her and confidentiality. The answer to your query and statement: (“... and I think it would be in the best interest of all the shareholders to see her evaluation. Do you agree? ....”) is NO. As an aside, I am not much interested in what you think; but aside from that fact, not only does the best interest of the shareholders have nothing to do with this litigation, an evaluation by Nancy [Carpenter] is unnecessary, useless, and irrelevant because the offer to purchase Mr. Willi-ford’s stock is withdrawn.

(Emphasis in original.)

¶ 14. Defendants’ counsel followed up the letter with a motion asking the court to dissolve, in part, the preliminary injunction. The primary argument was that, because defendants had withdrawn their offer to purchase Williford’s stock, the suit was moot. The motion also claimed: “A minority shareholder has no right to dictate or oversee or affect the operation of an LLC

Febmai'y 8, 2007, Order

¶ 15. On August 23, 2006 — having received neither the court-ordered information nor proper responses to discovery— Williford’s counsel filed a motion for contempt and for an order compelling Defendants to provide the requested, court-ordered, information. On September 11, 2006, the chancellor entered an agreed order temporarily staying all proceedings. The order stated that the parties had agreed to a procedure for appraisal of the LLCs; that the court’s previous orders were still in effect; and that Defendants were to provide the information Carpenter previously had requested. Specifically, Defendants were to provide her “any and all other financial records, as she deems necessary, to determine a fair market value of the Bluewater entities.”

¶ 16. On November 10, Carpenter posted a letter to the parties, pointing out that most of the requested information had not been provided, and requesting that the documents be provided “no later than noon on Friday, November 17, 2006.” Because the information still had not been provided a month later, Williford filed yet another motion for contempt, and Carpenter followed up on January 8, 2007, with another request for the documents. She had received no reply as of January 24, so Willi-ford’s counsel filed “Plaintiffs Renewed Motion to Compel and Motion for Contempt,” asking the court to go forward with a hearing and to take testimony from Carpenter.

¶ 17. When the chancellor heard the motion on February 6, Carpenter’s testimony clearly established that Defendants had failed to comply with discovery and the court’s previous orders. On one occasion during the hearing, the chancellor— referring to documents that had not been provided — vented his frustration to the defendants’ counsel:

And for any party to make a promise to this court that they’re going to in good faith — and I’m troubled by it — because I do not see good faith on the part of your clients.... If they were not going to do that, act in good faith, don’t make a promise and get it under my signature because the coui't is duly antagonized, aggravated and upset because it doesn’t take motion after motion, contempt after contempt, a request for it in order to get a party to comply....

¶ 18. The chancellor entered an order on February 8, holding Defendants in contempt and sanctioning them. He ordered them to pay — no later than February 12, 2007 — $750 in attorney fees to Williford’s counsel. Rather than pay the sanction on February 12, as ordered, Defendants waited until February 16, and then filed a motion requesting the court to “set aside, alter or amend” its February 8, 2007, order.

March 8, 2007, Hearing

¶ 19. Williford’s counsel responded by filing another motion for sanctions, informing the court that the sanctions previously ordered had not been paid. Counsel for all parties appeared before the chancellor on March 8, 2007. But rather than respond to the motion for additional sanctions, Defendants’ counsel argued that counsel for Williford should not be allowed to proceed on his motion for additional sanctions because he had not properly noticed the motion.

¶ 20. After much argument and discussion by the parties — and an utterly amazing display of patience and judicial temperament by the chancellor — counsel for Defendants agreed that his clients would pay the sanction within seven days, and the matter was set for trial. The record does not reflect whether Defendants paid the sanctions.

The Trial

¶21. When the matter proceeded to trial, Carpenter testified that the value of Williford’s interest, as of the date of the ouster, was $816,768.25. Havard’s testimony was approximately the same. At the conclusion of the trial, the chancellor held for Williford against all Defendants, jointly and severally. He awarded Williford the value of his interest in the companies, together with five percent interest from the date of the ouster to the date of judgment, for a total judgment of $340,760.25. He also ordered Defendants to pay Carpenter’s bill in the amount of $4,386.63, and post-judgment interest on the judgment at the “statutory rate.” Finally, the chancellor denied Williford’s request for attorney fees.

¶22. Defendants appealed and Willi-ford cross-appealed. The Court of Appeals reversed the judgment, holding that Bluewater successfully had rescinded its ouster of Williford and that the chancellor’s award was beyond the scope of the pleadings. We disagree.

ANALYSIS

The Issues On Appeal

¶23. Defendants present eight assignments of error and one issue concerning our standard of review. Williford’s cross-appeal asserts the chancellor should have awarded him attorney fees. Finally, we address sua sponte the question of post-judgment interest. We condense and restate these issues as follows:

1.Since the chancellor adopted verbatim the plaintiffs proposed findings of fact and conclusions of law, must this Court apply a different level of deference to the factual findings?
2. Were the pleadings sufficient under our notice-pleading requirements to allow the chancellor to award the plaintiff the value of his interest in Bluewater?
3. Did the chancellor have legal authority to award the plaintiff the value of his interest in Bluewater?
4. Did the chancellor have legal authority to grant a judgment against the individual defendants?
5. Did the plaintiff present facts sufficient to justify the chancellor’s award?
6. Did the chancellor err in concluding he had no authority to award attorney fees to the plaintiff?
7. Did the chancellor err in granting post-judgment interest “at the statutory rate?”

I. This Court is not required to apply a different level of deference to the chancellor’s factual findings.

¶ 24. We review a chancellor’s legal conclusions de novo; that is, we reach our own conclusions as to the applicable law. But we ordinarily accept a chancellor’s factual findings unless — given the evidence in the record — we conclude that the chancellor abused his or her discretion, and no reasonable chancellor could have come to the same factual conclusions.

¶ 25. But as to our review of the factual findings in this case, Defendants argue we must apply a different and higher standard of review because the chancellor adopted, verbatim, the plaintiffs proposed findings of fact and conclusions of law. That may be so, and probably is — Williford responds to the argument without denying it. But we cannot compare the two documents, because Williford’s proposed findings of fact and conclusions of law were not included in the record. Nevertheless, we shall address the issue.

1126. When a chancellor adopts verbatim, or nearly verbatim, a party’s proposed findings of fact, our precedent provides that we should apply “heightened scrutiny” to the chancellor’s findings of fact. This rule is fairly well-settled and accepted. Yet our precedent provides little guidance as to how we are to comply with our duty to “heighten” our scrutiny — which could be read to require us to review a case more carefully or, perhaps, to apply a different, more stringent standard to our review of the facts.

¶27. But our duty already requires us carefully to scrutinize every case, so we reject the former. And as to the latter, if “heightened scrutiny” requires us to abandon the reasonable-chancellor standard and apply a different, higher standard, we find no caselaw or other authority explaining that different standard, or suggesting how it should be applied. The dissent suggests that heightened scrutiny requires us to review a chancellor’s findings with “a heightened ‘sensitivity to the possibility of error....’” Yet our duty requires us in every case to be as careful and as sensitive to error as we can be, and we cannot condone a standard that allows us to be less sensitive to error in one case than in another.

¶ 28. In Rice Researchers, Inc. v. Hiter, this Court provided the following interesting insight into the issue:

Case complexities and crushing caseloads necessitate substantial reliance upon the submissions of trial counsel. Still, the judge is a judge and not a rubber stamp. He may not be able to afford the luxury of practicing his culinary art a la the Cordon Bleu. He should remember, however, that his oath precludes a McDonald’s approach to the judicial process. Where the trial judge wholly abdicates his judicial responsibilities — where, as it were, he abuses his discretion — we doubtless have authority to intervene. Here the Chancery Court quite properly requested that each party submit proposed findings of fact and conclusions of law. These submissions were considered at an adversary hearing. Thereafter, the Court considered RRI’s motion to amend findings. These steps, coupled with the fact that this case is quite complex (in spite of its simplicity), leave us convinced that the Chancery Court acted within its authority. As indicated above, however, our obligation of appellate deference to such findings is necessarily lessened.

¶ 29. The Hiter Court’s “less deference” standard, the Brooks Court’s “heightened scrutiny” standard, and the dissent’s “heightened sensitivity” standard all suggest that this Court — if not completely, then to some unspecified degree— must become the finder of fact, imposing (again, to some degree) our own view of the facts. But that would be a tricky task—given that we never saw or heard the witnesses.

¶ 30. One thing is clear. Applying a “heightened-scrutiny” or “lessened-deference” standard would require us to abandon the traditional standard (accepting a chancellor’s factual findings that the evidence supports), and employ some different standard. And although the new standard of review has been named (“heightened-scrutiny” or “less-deference”), this Court has yet to explain how it is to be applied.

¶ 31. While it is true that the United States Supreme Court has adopted various levels of scrutiny for particular kinds of cases—for instance, “intermediate-scrutiny” review of gender-based classifications —the Court explains the difference in each level, and provides a specific test for its application.

¶ 32. If we are to adopt and apply a “heightened-scrutiny” standard, simple fairness and justice requires us to publish that standard—in more than name—to the bench and bar. And because that has not been done—and because we decline to do it today—we shall continue to apply the familiar abuse-of-discretion standard to a trial judge’s factual findings, even where the judge adopts verbatim a party’s proposed findings of fact. And should a party suspect and suggest that the judge’s factual findings are somehow tainted or untrustworthy, we hold that the party—upon proper proof-may seek a new trial.

¶ 33. In the case before us today, we find not one sliver of evidence that the chancellor’s factual findings were untrustworthy or suspect. His bench opinion discussed his factual findings. And at the hearing on post-trial motions, he engaged in lengthy discussions with counsel concerning his view of the facts. Finally, his factual findings—whether or not identical to those submitted by the plaintiff—were supported by substantial evidence. So we are unable to say he abused his discretion, and this issue is without merit.

II. The pleadings sufficiently alleged breach of contract and compensatory damages.

¶ 34. Defendants persistently have argued that Williford sought only injunc-tive relief, and that his pleadings did not justify the chancellor awarding him the fair-market value of his interest in Bluewa-ter. For instance, in arguing post-trial motions, Defendants’ counsel stated:

This matter began with the filing on February 10, 2006, whereby Mr. Willi-ford sought a preliminary injunction.... There was a brief in support of the preliminary and permanent injunction .... Those are the pleadings we went to trial on. There was no other relief asked for as far as Bluewater was concerned except that he remain a member of the LLC.

¶ 35. Mississippi has been a “notice pleading” state since January 1, 1982, when we adopted the Mississippi Rules of Civil Procedure. Under Rule 8, a complaint need only contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” and “a demand for judgment.” “No technical forms of pleading or motions are required.” Moreover, “[a]ll pleadings shall be so construed as to do substantial justice.” Rule 54(c) states that

every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled by the proof and which is within the jurisdiction of the court to grant, even if the party has not demanded such relief in his pleadings

¶ 36. Our decisions have reflected the shift from older forms of “code pleading” to the Rules’ “notice pleading” paradigm. In Pilgrim Rest Missionary Baptist Church v. Wallace, we stated “it is axiomatic that the relief need not be limited in kind or amount by the demand but may include relief not requested in the complaint.” And in Turner, we stated: “A trial judge may award a party any relief to which he is entitled, even if the party fails to make a specific demand for such.”

¶ 37. In holding that the chancellor erred in granting Williford money damages, the Court of Appeals inexplicably relied on three pre-rules cases, two of which date to the 1850s. We now overrule Barnes, French, and Tucker to the extent that they conflict with the requirements and provisions of the Mississippi Rules of Civil Procedure and subsequent decisions of this Court.

¶ 38. We hold that Williford’s complaint was clearly sufficient to support an award of monetary damages. The complaint is titled “Complaint for Preliminary and Permanent Injunction and Damages.” The opening paragraph stated that Williford was seeking damages. Paragraph 5 alleged the ouster was unlawful, “warranting equitable and monetary relief.” Count I of the complaint’ was titled “Breach of Contract” and alleged breach of contract, for which the remedy is compensatory damages. In Count III, titled “Violation of the Mississippi Limited Liability Company Act,” Williford asserted “all rights and remedies available under the applicable statute, Miss.Code Ann. § [79-29-101], et seq.” Under the section titled “Damages and Relief Sought,” Williford sought (among other things) compensatory damages, an accounting of all company assets, an appraisal of the fair-market value of his share of the company, and “any other relief to which he may be entitled.”

¶ 39. Viewed as a whole, we cannot say the chancellor was in error by finding that the complaint was sufficient to put Bluewa-ter on notice that Williford was seeking monetary relief. Accordingly, Defendants’ argument that the chancellor granted Wil-liford relief that was beyond the scope of the pleadings is without merit.

III. The chancellor had authority to award the plaintiff the value of his interest in the two LLCs.

¶ 40. On several occasions, the chancellor expressed concern about Defendants’ conduct toward Williford, including their decision to lock him out of the company offices and prevent his involvement in company business. Also, he voiced concern over the large sum of money ($1.2 million) that was unaccounted for during the time Williford was “fired” and locked out.

¶ 41. For example, at the conclusion of trial, just before awarding Williford the fair-market value of his interest in the business, the chancellor stated in his bench opinion:

It seems to the court that it would be grossly unfair to Mr. Williford to say after the passage of so much time that he could come back into the company, and in particular the court is concerned about the distribution of assets that were determined by both experts. Even the company’s own expert, Mr. Havard, determined that the company’s value at that time was about 1.2 million dollars.

¶ 42. Defendants zero in on the chancellor’s use of the equitable term “unfair,” characterizing it as proof he exceeded his legal authority by awarding Williford the fair-market value of his interest. There is no law, they argue, that allows a chancellor to award a money judgment on a “finding of inequity” or “not being fair.” They also claim Mississippi’s Limited Liability Company Act does not allow such a remedy. On this point, they are incorrect.

¶ 43. While it is true that equitable principles ordinarily are not applied under contract law, this is not unheard of. For instance, rescission is an equitable remedy available in certain contract cases, and promissory estoppel is a quasi-contract remedy. But more importantly, the Legislature is free to establish, as a matter of substantive law, any contract remedy it finds appropriate.

Mississippi Limited Liability Act

¶44. In 1994, the Legislature authorized the formation of limited liability companies in Mississippi. Persons who form one of these legal entities — commonly known as an LLC — are allowed to enter into a contract called a limited liability company agreement “to regulate or establish the affairs of the limited liability company, the conduct of its business, and the relation of its members.”

¶ 45. Although an LLC operating agreement is a contract, subject to contract law, the Act specifically allows a chancellor to “enforce a limited liability company agreement by injunction or by such other relief that the court in its discretion determines to be fair and appropriate in the circumstances.” This language clearly established the chancellor’s authority to award Williford the fair-market value of his interest in the LLCs. We therefore find that this issue has no merit.

IV. The chancellor had authority to grant a judgment against the individual defendants.

¶ 46. Defendants argue that the chancellor had no authority to grant judgments against them as individuals. Under the Act, members of a limited liability company (such as Bluewater) normally are not individually liable for the obligations of the LLC. But because the members may modify this rule in the operating agreement, they may agree among themselves to be individually liable.

¶ 47. The Act also says that — subject to certain exceptions inapplicable here — an LLC’s operating agreement may address the liability of the individual members for “any action taken, or any failure to take any action, as a manager or member ....” So we must look to the operating agreements to see whether — and to what extent — they limit the individual defendants’ liability.

¶ 48. Both LLCs’ operating agreements included the following provision:

Liability of the Members. No Member shall be liable, responsible or accountable in damages or otherwise to any other Member or to the Company for any act or omission performed or omitted by him except for acts of gross negligence or intentional wrongdoing.

¶ 49. This provision — agreed to by all members — clearly establishes the chancellor’s authority to hold the individual defendants personally liable for acts of gross negligence or intentional wrongdoing. And in his Findings of Fact and Conclusions of Law, the chancellor stated that the

failure of the individual defendants to pay Williford his one-quarter interest despite agreement to do so constitutes a willful and intentional breach of contract and is grossly negligent.... The intentional breach of contract and gross negligence by the individual defendants, the court so finds, is sufficient to render the individuals liable in addition to the liability of the limited liability companies. The court had the opportunity to consider all of the evidence including the testimony of all of the defendant witnesses who testified on the witness stand, and the court had the opportunity to judge them credibility.

Fought v. Morris

¶ 50. The chancellor’s final judgment as amended cites our decision in Fought v. Morris for the proposition that it would be inequitable to allow the Bluewater super-majority to prevent Williford from participating in the company’s business, while claiming he remains a viable member. We agree with the chancellor’s application of Fought to these facts.

¶ 51. In Fought, we held that “in a close corporation where a majority stockholder stands to benefit as a controlling stockholder, the majority’s action must be ‘intrinsically fair’ to the minority interest.” While the Bluewater companies are limited liability companies and not corporations, the rationale of Fought applies with equal force.

¶ 52. A closely held corporation “is a business entity with few shareholders, the shares of which are not publicly traded.” Our decision in Fought overruled the traditional rule that “squeeze-outs” or “freeze-outs” in close corporations do not constitute breach of duty or good faith between shareholders. In so doing, we observed that

often close corporations consist of friends or family members where the directors, officers and shareholders are synonymous. Each contributes his or her capital, skill, experience, and labor to the company. Management and ownership are substantially identical. Each shareholder has an inside view of the company’s operations and maintains an element of trust and confidence in each other which is commonly lacking in a large or publicly-held corporation.

¶ 53. All of these factors are present in this case. Accordingly, the Bluewater members had a duty to one another and to the LLCs, a duty that the Bluewater super-majority breached by improperly squeezing Williford out of the companies.

¶ 54. Because of the Act’s provision, the agreement of the parties, and the authority cited above, we find this issue has no merit.

V. The record includes a sufficient factual basis for the chancellor’s judgment.

¶ 55. The chancellor found that Defendants had breached the Bluewater operating agreements in a willful, grossly-negligent manner. Both operating agreements provided that

[t]he company may, by a 75% Super Majority Vote of the members redeem any Members Interest [sic] for it’s [sic] then fair market value if the company determines in its sole and absolute discretion, that member has either committed a felony or under any other circumstances that would jeopardize the company status as an approved government contractor.

¶ 56. Despite the agreements’ provision that a super-majority ouster was allowed only when the member to be ousted had committed a felony or had jeopardized the company status as an approved government contractor, Defendants’ ouster notice alleged neither. The ouster notice informed Williford that, on January 31, 2006, at 1500 hours, “his status as a partner of Bluewater ... ha[d] been terminated,” and that he would be paid one-quarter of the fair-market value of Bluewater.

¶ 57. Only after Williford filed suit did Defendants attempt to reverse their super-majority decision. They took the position that they had not really exercised their super-majority rights, but had only made an “offer” which they had decided to withdraw. When their counsel argued that, even though Williford was “fired,” he was still a member of the LLCs, the chancellor asked him: “How can you fire an owner or a stockholder?” Counsel replied, “It’s easy, Judge. He’s an employee.... ”

¶ 58. Defendants’ position does not square with the facts or the law. Their notice and actions clearly were not consistent with an “offer” that later could be withdrawn. For instance, in the notice, they characterized the ouster as a thing that already had been accomplished — even providing the exact date and time (“January 31, 2006 at 1500 hours”) that Willi-ford’s “status as a partner of Bluewater” had been “terminated.”

¶ 59. Of more concern, however, were Defendants’ other actions that were wholly inconsistent with Williford’s rights as an LLC member. They changed the locks on the doors of the offices and notified Willi-ford that “as of January 31, 2006 he [was] to cease and desist from performing any business on behalf of Bluewater.” He was to

refrain from use of any and all company assets, including, but not limited to the use of the company name, bank account, tax identification number, business address ... Nextel Blackberry ... Dell ... laptop, any real or intellectual property of Bluewater ... or any other asset named or unnamed of Bluewater....

¶ 60. Defendants argue, without any citation of authority, that they were authorized to change their minds and allow Willi-ford to remain an LLC member while, and at the same time, to “fire” him and exclude him from any involvement in the LLCs’ business. While their argument might apply to other types of legal entities, it has no application to member-managed LLCs.

¶ 61. Unless the members of a Mississippi LLC employ or appoint a manager to manage the LLC’s business affair’s, “every member is an agent of the limited liability company for the purpose of conducting its business and affairs....” The operating agreements of both Bluewater LLCs stated: “The management of the Company’s business shall be vested in the members.”

¶ 62. So, according to the statute and the operating agreement, Williford — as a member of both LLCs — was entitled to participate in the management of both LLCs, and he could not be “fired.” Defendants could have removed him as a manager only by amending the operating agreements. But both operating agreements specifically prohibited amendment without “consent of all Members,” which would have required Williford’s vote.

¶ 63. An LLC operating agreement is contractual in nature and binding on the members of the company. Blue-water’s ouster of Williford was a formal company action taken according to the terms of the LLC operating agreement. The chancellor found that “[t]he Court was not provided with any credible official action taken by the company shareholders revoking its decision to pay Williford his twenty-five (25%) interest.”

¶ 64. The Court of Appeals found that “the remaining members communicated the rescission of the ouster to Williford multiple times” in the form of letters their attorney sent well into the litigation, as well as by a motion to dissolve the injunction which “clearly rescinded Williford’s ouster.” We disagree.

¶ 65. Neither Bluewater nor the Court of Appeals identified any authority that allowed Bluewater unilaterally to rescind Williford’s ouster after it had invoked the “Right of Redemption” provision of the LLC operating agreement. Bluewater repeatedly has argued in terms of “withdrawing its offer to purchase Williford’s shares.” But framing the issue in these terms does not square with the action Bluewater took.

¶ 66. By exercising the “Right of Redemption” provision in the operating agreement, the majority members of Blue-water were not merely making Williford an offer to purchase his shares; they were invoking their right to purchase his shares. In contract terms, Bluewater’s action was analogous to the exercise of an option contract rather than an offer which could be rescinded later. In short, because there was no offer for Williford to accept, there was no offer for Bluewater to rescind. And because the operating agreement contained no provision permitting the majority members unilaterally to rescind the action, Williford’s ouster could have been undone only by an official company action.

¶ 67. But Defendants’ argument fails for another reason. When they decided to exercise the super-majority provision and buy Williford’s interest in the LLCs — and assuming they were within their rights to do so — they could have made it effective either immediately, or at some future time. By choosing the former, they had every right to exclude him from the business, but they had a companion duty to tender payment to him. Had they chosen the latter, they had no right to exclude him from the business until they tendered payment.

¶ 68. Defendants chose the best of both options for themselves, and the worst for Williford. They locked him out and excluded him from all business affairs, and then later claimed they hadn’t really decided for sure to purchase his interest. The chancellor found this to be a willful, grossly negligent breach of contract, and we are unable to say the chancellor was manifestly in error. Therefore, this assignment of error is without merit.

VI. The chancellor erred in concluding he had no authority to award attorney fees to the plaintiff.

¶ 69. Williford argues on cross-appeal that the chancellor erred in failing to award him reasonable attorney fees. While Williford is correct that attorney fees may be awarded in some cases of intentional breach of contract and breach of fiduciary duty, that decision is within the chancellor’s sound discretion.

¶70. The chancellor did not find that Williford’s demand for attorney fees lacked merit. Instead, he was of the opinion that he had no authority to award attorney fees. Specifically, he stated: “[T]he Court does not know of any authority that the Court has to authorize attorney’s fees, so the Court does not approve attorney’s fees for Mr. Williford.” Thus, the question before us is a legal, rather than a factual, one.

¶ 71. Attorney fees generally are not available in breach-of-contract cases. But we have recognized exceptions to this rule, either where attorney fees are provided for in the contract, or in the case of “conduct so outrageous as to support an award of punitive damages.”

¶ 72. On remand, the chancellor may consider an award of attorney fees to Wil-liford. And if the chancellor decides not to award attorney fees, the decision must be based on the chancellor’s conclusion that attorney fees are not factually warranted, rather than the legally erroneous conclusion that they are not allowed.

VII. The chancellor erred in granting post-judgment interest “at the statutory rate.”

¶ 73. We raise this issue sua sponte. The chancellor awarded post-judgment interest at the “statutory rate.” For many years, Mississippi had a statutory rate of interest to be applied to judgments. However, in 1989, the Legislature amended the statute to provide that interest on judgments must be awarded “at a per annum rate set by the judge hearing the complaint from a date determined by such judge to be fair but in no event prior to the filing of the complaint.”

¶ 74. We have addressed this issue in several opinions, and do so again today, in an effort to alert the bench and bar to the change in the statute. Under the statute, a two- or three-percent interest rate might sometimes be fair and reasonable, while, at other times, market conditions and other relevant factors might require the trial judge to set a higher rate. Yet we note that many trial judges continue— without proof, protest or argument of counsel, or agreement of the parties — to award post-judgment interest at the eight-percent rate previously mandated by statute. And when that happens, without objection, we are not inclined to raise or address the issue.

¶ 75. But in today’s case, the chancellor did not award post-judgment interest at eight percent (the former statutory rate). Instead, he awarded post-judgment interest “at the statutory rate.” Since there is no specific “statutory rate” for post-judgment interest, we must reverse the award of post-judgment interest and remand for a determination of post-judgment interest at a rate that complies with the requirements of the statute.

CONCLUSION

¶ 76. We affirm the chancellor’s $340,760.25 judgment against all Defendants and reverse the judgment of the Court of Appeals. We remand the case for a hearing on the issue of whether Williford is entitled to recover attorney fees and, if so, in what amount; and for a determination of a reasonable rate of post-judgment interest.

¶ 77. THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED. THE JUDGMENT OF THE CHANCERY COURT OF FORREST COUNTY IS REINSTATED AND AFFIRMED. THIS CASE IS REMANDED TO THE CHANCERY COURT FOR PROCEEDINGS CONSISTENT WITH THIS OPINION.

CARLSON, P.J., RANDOLPH, LAMAR, KITCHENS AND CHANDLER, JJ„ CONCUR. GRAVES, P.J., CONCURS IN RESULT ONLY. WALLER, C.J., CONCURS IN PART AND IN RESULT WITH SEPARATE WRITTEN OPINION JOINED BY PIERCE, J.

WALLER, Chief Justice,

concurring in part and in result:

¶ 78. Because I disagree with the majority opinion addressing Issue I proeedurally and substantively, I concur in part and in result with an otherwise excellent opinion.

I. Standard of Review

¶ 79. Bluewater asserted on appeal in Issue I that this Court does not have to give deference to the chancellor’s factual findings as the chancellor had adopted verbatim Williford’s proposed findings of fact and conclusions of law. The discussion need go no further, as whatever Williford submitted to the trial court is not in the record. Notwithstanding the procedural bar, the majority then goes on to disregard our precedent on the “heightened-scrutiny” standard of review for certain limited decisions that are appealed to this Court. Bluewater did not provide the part of the record needed for us to determine whether a less deferential standard of review would be more appropriate. Miss. R.App. P. 28. All that we have is speculation that the chancellor did something (adopted Willi-ford’s findings verbatim) that is not supported in the appellate record before this Court. Therefore, we should find no merit in its argument without further discussion on the subtleties of standards of review. See Miss. R.App. P. 28; Wood v. Gulf States Capital Corp., 217 So.2d 257, 273 (Miss.1968).

¶ 80. While the majority’s discussion of our standards of review is unwarranted, two points must be emphasized. First, the abuse-of-discretion standard does not apply in situations in which a chancellor adopts a party’s proposed findings verbatim. Maj. Op. ¶ 32. City of Jackson v. Spann, 4 So.3d 1029, 1032 (Miss.2009). We apply heightened scrutiny, and this less deferential standard is firmly embedded in our jurisprudence. Heightened scrutiny refers to appellate review with a heightened “sensitivity to the possibility of error....” In re Estate of Grubbs, 753 So.2d 1043, 1048 (Miss.2000). In other words, the Court still defers to the chancellor’s findings but with a closer examination of the record. See id.

¶ 81. I agree with the majority that we must carefully review cases and remain sensitive to errors. Maj. Op. ¶ 27. No one disputes that. However, the issue is what deference chancellors should be afforded in their factual decisions when the record calls into question the independent findings our trial judges are obligated to make. Deferring to a chancellor’s factual findings does not mean that we intend to neglect our judicial function. See Ralph Walker, Inc. v. Gallagher, 926 So.2d 890, 898 (Miss.2006).

¶ 82. Second, the abuse-of-discretion standard is not limited to allowing a party a new trial upon proof that a chancellor’s factual findings are “tainted or untrustworthy.” Maj. Op. ¶ 32. Powell v. Campbell, 912 So.2d 978, 981 (Miss.2005). This Court defers to a chancellor’s findings unless the chancellor was “manifestly wrong, clearly erroneous, or applied the wrong legal standard.” Id.

II. Notice Pleading

¶ 83. Even though the Court of Appeals improperly relied on Barnes, French, and Tucker, those cases should not be overruled. Maj. Op. ¶ 37. They support the practice codified in our current procedural rules.

¶ 84. Barnes and French show that a party is entitled to what she proves at trial. In Barnes, we reversed the grant of exclusive possession of a couple’s land to the husband because the chancellor made the award without any proof at trial. Barnes v. Barnes, 317 So.2d 387, 388-89 (Miss.1975). Today, we would have reached the same result had a chancellor awarded a spouse marital property without proper Ferguson findings. Ferguson v. Ferguson, 639 So.2d 921 (Miss.1994). See, e.g., Reddell v. Reddell, 696 So.2d 287, 288 (Miss.1997) (failure to classify wife’s pension as marital asset reversible error). In French, this Court (then known as the High Court of Errors and Appeals of Mississippi) held that the plaintiff was entitled to judgment in the amount of his actual loss rather than the lesser specific amount he had requested in his complaint. French v. Davis, 38 Miss. 218, 1859 WL 3683, *4 (Miss.Err. & App.1859).

¶ 85. Finally, Tucker involved a lower court’s order for Jane Buckingham to account for trust-estate profits she had earned during the time frame that she had controlled and managed trust property. Tucker v. Cocke, 32 Miss. 184, 1856 WL 2657, **1-2 (Miss.Err. & App.1856). For reasons inapplicable today, Buckingham could not have been held liable. Id. at *3. Thus, the issue there was not so much that the Tuckers were denied relief that was outside the scope of their complaint. See id. Rather, the lower court had granted the Tuckers relief to which they were not legally entitled. Id. at **2, 4.

¶ 86. Here, Williford’s complaint clearly alleged breach of contract and requested compensatory damages. The chancellor awarded Williford the damages that he proved at trial. Because the result here does not conflict with principles in Barnes, French, or Tucker, these cases should not be overruled. Thus, I respectfully concur in part and result only.

PIERCE, J., JOINS THIS OPINION.

      . See Miss. R. Civ. P. 26(b)(1) ("Parties may obtain ... the identity and location of persons (1) having knowledge of any discoverable matter or (ii) who may be called as witnesses at the trial....")

      . Corporate Mgmt., Inc. v. Greene County, 23 So.3d 454, 459 (Miss.2009).

      . Limbert v. Miss. Univ. for Women Alumnae Ass’n, Inc., 998 So.2d 993, 998 (Miss.2008) (citing Hamilton v. Hopkins, 834 So.2d 695, 699 (Miss.2003)).

      . See, e.g., In re Estate of Grubbs, 753 So.2d 1043, 1046-47 (Miss.2000); Brooks v. Brooks, 652 So.2d 1113, 1118 (Miss.1995).

      . Some possibilities include elevating the standard from "reasonable chancellor” to "very reasonable chancellor,” or from "manifest error” to "catastrophic error.”

      . Dissent at ¶ 80 citing In re Estate of Grubbs, 753 So.2d 1043, 1048 (Miss.2000).

      . Rice Researchers, Inc. v. Hiter, 512 So.2d 1259 (Miss.1987).

      . Id. at 1266.

      . Craig v. Boren, 429 U.S. 190, 218, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976).

      . Intermediate scrutiny in gender-based discrimination cases requires that the challenged law or policy further an important government interest in a way that is substantially related to that interest. Id.

        .Upchurch Plumbing Inc. v. Greenwood Utils. Comm’n, 964 So.2d 1100, 1117 (Miss.2007) (citing Miss. R. Civ. P. 8 and cmt.).

      . Miss. R. Civ. P. 8(a).

      . Miss. R. Civ. P. 8(e)(1).

      . Miss. R. Civ. P. 8(f). '

      . Miss. R. Civ. P. 54(c) (emphasis added).

      . Pilgrim Rest Missionary Baptist Church ex rel. Bd. of Deacons v. Wallace, 835 So.2d 67, 75 (Miss.2003) (citing Miss. R. Civ. P. 54 cmt.; Turner v. Teny, 799 So.2d 25, 39 (Miss.2001); Tuck v. Blackmon, 798 So.2d 402, 410 (Miss.2001)).

      . Turner, 799 So.2d at 39.

      . Barnes v. Barnes, 317 So.2d 387, 388 (Miss.1975) ("It is a well settled rule that a party complainant may have relief only on the case made by his bill of complaint and that the allegations of the pleadings and proof must correspond.”); French v. Davis, 38 Miss. 218, 9 George 218, 224 (Miss.Err. & App. 1859) (under Statute of 1850, boilerplate claim for relief considered "surplusage” where not corresponding to facts pleaded); Tucker v. Cocke, 32 Miss. 184, 3 George 184 (Miss.Err. & App. 1856) (relief erroneously granted where complaint was imprecisely framed).

      .This includes Mississippi Code Section 79-29-306. See Miss.Code Ann. § 79-29-306 (Rev. 2009) (giving the chancellor broad equitable power to enforce the LLC operating agreement).

      . See, e.g., Turner v. Terry, 799 So.2d 25, 36 (Miss.2001).

      . See, e.g., Satellite Tracking of People, LLC v. G4S PLC, No. 3:08-cv-0126, 2009 WL 2983032, at *6 (M.D.Tenn. Sept. 14, 2009).

      . Mississippi Limited Liability Company Act (the "Act”), Miss.Code Ann. §§ 79-29-101 to 79-29-1201 (Rev. 2009).

      . Miss.Code Ann. § 79-29-103(k) (Rev. 2009).

      . Miss.Code Ann. § 79-29-306(1) (Rev. 2009).

      . Miss.Code Ann. § 79-29-306(3)(a) (Rev. 2004).

      . Miss.Code Ann. § 79-29-305(1) (Rev. 2009) ("A person who is a member of a limited liability company is not liable, by reason of being a member, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation or liability of the limited liability company, whether arising in contract, tort or otherwise or for the acts or omissions of any other member, manager, agent or employee of the limited liability company.”).

      . Miss.Code Ann. § 79-29-305(3) ("Notwithstanding the provisions of subsections (1) and (2) of this section, under a limited liability company agreement ... a member or manager may agree to be obligated personally for any or all of the debts, obligations and liabilities of the limited liability company.”).

      . Miss.Code Ann. § 79-29-403 (Rev. 2009).

      . Fought v. Morris, 543 So.2d 167 (Miss.1989).

      . Id. at 171.

      . Id. at 169.

      . Id. at 171.

      . Id.

      . See Champluvier v. State, 942 So.2d 145, 155 (Miss.2006) (Randolph, J., dissenting).

      . Miss.Code Ann. . § 79-29-303(1) (Rev. 2009).

      . Both LLC operating agreements contained an “Entire Agreement/Amendment'' clause which provided in pertinent part: "This Agreement constitutes the entire understanding and agreement among the parties with respect to the subject matter of this Agreement. ... This Agreement may not be amended or modified except with the consent of all members.”

        .Kinkle v. R.D.C., L.L.C, 889 So.2d 405, 409 (La.Ct.App.2004) (LLC operating agreement contractually binding on members, and rules of contractual construction apply). See also 54 C.J.S. Limited Liability Companies § 18 (2010); Am.Jur.2d Limited Liability Companies § 3 (2010).

      . An option contract gives a clear right to the option holder, regardless of the wishes of the option giver. Creely v. Hosemann, 910 So.2d 512, 520 (Miss.2005) (citing Duke v. Whatley, 580 So.2d 1267, 1272 (Miss.1991)).

      . The LLC operating agreement contains an "Entire Agreement/Amendment'’ clause which provides in pertinent part: “This Agreement constitutes the entire understanding and agreement among the parties with respect to the subject matter of this Agreement. ... This Agreement may not be amended or modified except with the consent of all members.”

      . Barnes, Broom, Dallas & McLeod, PLLC v. Cappaert, 991 So.2d 1209, 1214 (Miss.2008) (citing Garner v. Hickman, 733 So.2d 191, 198 (Miss.1999)).

      . Browder v. Williams, 765 So.2d 1281, 1287 (Miss.2000).

      . Garner v. Hickman, 733 So.2d 191, 198 (Miss.1999).

      . Id. (citing Greenlee v. Mitchell, 607 So.2d 97, 108 (Miss.1992); Central Bank of Miss. v. Butler, 517 So.2d 507, 512 (Miss.1987)).

      . Miss.Code Ann. § 75-17-7 (1975).

      . Miss.Code Ann. § 75-17-7 (Rev. 2009).

      . See, e.g., Stewart v. Prudential Life Ins. Co. of Am., 44 So.3d 953, 958 n. 1 (Miss.2010); Watson v. Watson, 882 So.2d 95, 111 (Miss.2004).

      . By way of comparison, in the federal context, the federal courts of appeals apply a clearly-erroneous standard of review to district courts’ factual findings. Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573-74, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). This deferential standard recognizes that the reviewing court stands in an inferior position to decide factual issues de novo. Id. at 573, 105 S.Ct. 1504.


source: Caselaw Access Project

author: GRAVES, Presiding Justice,

license: Public Domain

text:
    MISSISSIPPI COMMISSION ON JUDICIAL PERFORMANCE v. Larry BUFFINGTON.
    No. 2010-JP-00871-SCT.
    Supreme Court of Mississippi.
    Feb. 17, 2011.
    Mississippi Commission on Judicial Performance, by Darlene D. Ballard, attorney for appellant.
    J. Ashley Ogden, attorney for appellee.
   GRAVES, Presiding Justice,

for the Court:

¶ 1. The Mississippi Commission on Judicial Performance (Commission) recommended that Chancellor Larry Buffington, Thirteenth Chancery Court District, be publicly reprimanded for judicial misconduct and assessed costs of the proceedings in the amount of $100. Judge Buffington and the Commission filed a Joint Motion for Approval of Recommendations Filed by the Mississippi Commission on Judicial Performance. This Court grants the joint motion for approval and adopts the recommendations of the Commission.

FACTS AND PROCEDURAL HISTORY

¶ 2. On January 6, 2009, Judge Buffing-ton issued an order appointing Oliver Diaz as Youth Court public defender in Simpson County. News of the appointment was released to the media. On February 2, 2009, Judge Buffington asked members of the Simpson County Board of Supervisors to appear before him on February 11, 2009, to determine who was upset about the appointment and who had released the information to the media. Two members of the board, William A. “Pete” Lowery and Randy Moore, indicated they would not appear as requested. Judge Buffing-ton, in his official capacity as chancellor, had subpoenas issued and served upon the two supervisors, commanding them to appear before the Chancery Court of Simpson County on February 11, 2009. The subpoenas did not indicate a title or cause number of any pending action. Lowery and Moore retained an attorney, Robert Andrew Taggart, who filed a Motion to Quash Subpoenas on February 10, 2009. The subpoenas were quashed by order of Judge Buffington on February 11, 2009. However, during the meeting with the board of supervisors on February 11, Judge Buffington admitted that he had failed to comply with the law, specifically Rule 45 of the Mississippi Rules of Civil Procedure, in issuing the subpoenas, and stated that he was unconcerned that he had failed to comply.

¶ 3. On April 1, 2009, the Commission filed a formal complaint charging Judge Buffington with judicial misconduct under Section 177A of the Mississippi Constitution of 1890, as amended, and the Mississippi Code of Judicial Conduct. Judge Buffington filed an answer on June 1, 2009. On May 4, 2010, the Commission and Judge Buffington submitted an Agreed Statement of Facts and Proposed Recommendation. The agreed statement was later accepted by the full Commission. On May 27, 2010, the Commission filed with this Court the Commission Findings of Fact and Recommendation. On June 28, 2010, Judge Buffington and the Commission then filed a Joint Motion for Approval of Recommendations Filed by the Mississippi Commission on Judicial Performance with an accompanying memorandum brief.

ANALYSIS

¶ 4. Judicial misconduct proceedings are reviewed de novo, giving considerable deference to the findings, based on clear and convincing evidence, and the recommendations of the Commission. Miss. Comm’n on Judicial Performance v. Boland, 975 So.2d 882, 888 (Miss.2008) (citing Miss. Comm’n on Judicial Performance v. Boykin, 763 So.2d 872, 874 (Miss.2000)). However, this Court is obligated to conduct an independent inquiry. Id. (citing Miss. Comm’n on Judicial Performance v. Neal, 774 So.2d 414, 416 (Miss.2000)). Though the Commission’s findings are considered, this Court is not bound by its findings. Miss. Comm’n on Judicial Performance v. Whitten, 687 So.2d 744, 746 (Miss.1997).

¶ 5. The Mississippi Constitution provides the following:

On recommendation of the commission on judicial performance, the Supreme Court may remove from office, suspend, fine or publicly censure or reprimand any justice or judge of this state for: (a) actual conviction of a felony in a court other than a court of the State of Mississippi; (b) willful misconduct in office; (c) willful and persistent failure to perform his duties; (d) habitual intemperance in the use of alcohol or other drugs; or (e) conduct prejudicial to the administration of justice which brings the judicial office into disrepute; and may retire involuntarily any justice or judge for physical or mental disability seriously interfering with the performance of his duties, which disability is or is likely to become of a permanent character.

Miss. Const. art. 6, § 177A.

I. Whether Judge Buffington’s conduct constituted willful misconduct.

¶ 6. The Commission found by clear and convincing evidence that Judge Buff-ington had violated Canons 1, 2A, 3B(2), and 3C(1) of the Code of Judicial Conduct of Mississippi. Further, the Commission found by clear and convincing evidence that Judge Buffington had engaged in willful misconduct in office and conduct prejudicial to the administration of justice which brings the office into disrepute, under Section 177A of the Mississippi Constitution of 1890, as amended.

¶ 7. This Court has said:

Willful misconduct in office is the improper or wrongful use of power of his office by a judge acting intentionally or with gross unconcern for his conduct and generally in bad faith. It involves more than an error of judgment or a mere lack of diligence. Necessarily, the term would encompass conduct involving moral turpitude, dishonesty, or corruption, and also any knowing misuse of the office, whatever the motive. However, these elements are not necessary to a finding of bad faith. A specific intent to use the powers of the judicial office to accomplish a purpose which the judge knew or should have known was beyond the legitimate exercise of his authority constitutes bad faith.... Willful misconduct in office of necessity is conduct prejudicial to the administration of justice that brings the judicial office into disrepute. However, a judge may also, through negligence or ignorance not amounting to bad faith, behave in a manner prejudicial to the administration of justice so as to bring the judicial office into disrepute.

Miss. Comm’n on Judicial Performance v. Carr, 786 So.2d 1055, 1058-59 (Miss.2001) (quoting Mississippi Comm’n on Judicial Performance v. Russell, 691 So.2d 929, 937 (Miss.1997)).

¶ 8. Judge Buffington admitted that he had failed to comply with the law in issuing the subpoenas and stated that he did not care that he had failed to comply with the law. Judge Buffington has agreed to the Commission’s recommendations and has joined the Commission’s motion for approval of the recommendations. Therefore, Judge Buffington acknowledges that his actions constituted willful misconduct in office prejudicial to the administration of justice which brought the judicial office into disrepute. Accordingly, no further findings are necessary on this issue.

II. Appropriate Sanctions for Judge Buffington

¶ 9. In determining appropriate sanctions in judicial misconduct proceedings, this Court applies the following factors:

(1) The length and character of the judge’s public service; (2) Whether there is any prior case law on point; (3) The magnitude of the offense and the harm suffered; (4) Whether the misconduct is an isolated incident or evidences a pattern of conduct; (5) Whether moral turpitude was involved; and (6) The presence or absence of mitigating or aggravating circumstances.

Miss. Comm’n on Judicial Performance v. Gibson, 883 So.2d 1155, 1158 (Miss.2004).

¶ 10. With regard to these factors, the record in this matter indicates that: (1) Judge Buffington has been a chancery court judge since 1995; (2) There is a prior case on point. See Miss. Comm’n on Judicial Performance v. Jenkins, 677 So.2d 171 (Miss.1996) (this Court accepted recommendation of public reprimand where chancellor impropeidy issued subpoenas to nonparties to answer questions regarding rumors); (3) Judge Buffington violated Canons 1, 2A, 3B(2), and 3C(1) of the Code of Judicial Conduct of Mississippi. Judge Buffington further admitted that he had failed to comply with the law; (4) Judge Buffington has had two informal Commission actions and a private admonishment unrelated to this case; (5) Judge Buffing-ton stated that he knew the subpoenas did not comply with the applicable rules, but he did not care; and (6) Judge Buffington has agreed his actions were improper and has entered into an Agreed Statement of Facts and Proposed Recommendation without the requirement of a hearing. The record does not indicate any aggravating factors.

¶ 11. Based on Judge Buffington’s misconduct and his agreement with the Commission’s recommendation, we hereby grant the Joint Motion for Approval of Recommendations Filed by the Mississippi Commission on Judicial Performance. Further, we order that Judge Buffington be publicly reprimanded pursuant to Section 177A of the Mississippi Constitution of 1890, as amended, and assessed with costs of the proceeding in the amount of $100.

¶ 12. LARRY BUFFINGTON, CHANCERY COURT JUDGE OF THE THIRTEENTH DISTRICT CHANCERY COURT, SHALL BE PUBLICLY REPRIMANDED AND ASSESSED COSTS OF $100. THE PUBLIC REPRIMAND SHALL BE READ IN OPEN COURT BY THE PRESIDING JUDGE OF THE COVINGTON COUNTY CIRCUIT COURT ON THE FIRST DAY OF THE NEXT TERM OF THAT COURT IN WHICH A JURY VENIRE IS PRESENT AFTER THIS DECISION BECOMES FINAL.

CARLSON, P.J., DICKINSON, RANDOLPH, LAMAR, KITCHENS, CHANDLER AND PIERCE, JJ„ CONCUR. WALLER, C.J., NOT PARTICIPATING.


author: GRIFFIS, J., IRVING, J.,

text:
    Shirley Ann James HANSHAW, Appellant, v. Larry HANSHAW, Appellee.
    No. 2005-CA-01680-COA.
    Court of Appeals of Mississippi.
    Dec. 15, 2009.
    Rehearing Denied May 4, 2010.

      Ralph Stewart Guernsey, attorney for appellant.
    Thomas Henry Freeland, attorney for appellee.
   MODIFIED OPINION ON MOTION FOR REHEARING

GRIFFIS, J.,

for the Court.

¶ 1. Appellant’s motion for rehearing is granted. The prior opinion of this Court is withdrawn, and this opinion is substituted therefor.

¶2. Shirley Ann James Hanshaw and Larry Hanshaw were divorced by the Lafayette County Chancery Court, which also divided up the marital estate. Pursuant to the division, Shirley was ordered to vacate the marital residence so that it could be sold. When she failed to do so, she was cited for contempt of court and fined $12,000, which was paid to Larry from Shirley’s proceeds from the sale. Shirley raises the following issues on appeal, which we list verbatim:

I. THE TRIAL COURT ERRED BY GRANTING AN UNNOTICED OR IMPROPERLY NOTICED CONTEMPT CITATION AGAINST PLAINTIFF/APPELLANT, SHIRLEY HANSHAW;

II. THE TRIAL COURT ERRED IN ASSUMING JURISDICTION OF A CONTEMPT CHARGE WITHOUT PROPER NOTICE;

III. THE TRIAL COURT ERRED IN AWARDING $500 PER HOUR CONTEMPT PENALTY AGAINST PLAINTIFF/APPELLANT, AS SUCH PENALTY IS EXCESSIVE.

¶ 3. We find that the chancellor erred in holding that Shirley waived proper notice of the contempt action. Therefore, we reverse the chancellor’s finding of contempt.

FACTS

¶ 4. Shirley filed for a divorce in 1998. Eventually, the parties agreed to an irreconcilable differences divorce, leaving the issue of property division for the chancery court’s determination. On June 23, 2004, the chancery court entered a judgment dividing the property and requiring that if the house was not sold within ninety days, it would be sold at auction. On September 3, 2004, the court entered a final judgment regarding the division of the marital estate, which Larry sought clarification of pursuant to Rule 59 of the Mississippi Rules of Civil Procedure. Larry filed his motion for clarification on September 13, 2004. The court did not rule on the motion until October 14, 2004.

¶ 5. A buyer was found for the house, and closing was scheduled for September 30, 2004. At Shirley’s request, the closing was rescheduled to October 5, 2004. On October 4, 2004, both Shirley’s and Larry’s attorneys appeared before the chancellor and expressed concern that Shirley would not vacate the residence in time to complete the sale. Consequently the chancellor issued an order on October 5, 2004, providing that if Shirley did not vacate the residence by 2:00 p.m. on October 5, she would be fined $500 per hour every hour until 2:00 p.m. on October 6, at which time she could be held in contempt and would be subject to incarceration. While the chancellor referred to a potential finding of contempt and called the $500 per hour penalty a “fine,” it was a fine payable to Larry rather than to the court or the state. No summons was issued to give Shirley notice of the attorneys’ appearances before the chancellor on October 4, 2004, but it is clear from the record that Shirley’s attorney called her and related what had happened before the chancellor.

¶ 6. On October 4, 2004, Shirley was hospitalized due to chronic fatigue. She was not discharged until approximately 5:00 p.m. on October 5, and she did not fully vacate the marital residence until sometime after 2:00 p.m. on October 6. On October 7, 2004, the chancery court entered an order requiring that Shirley vacate by close of business on October 7 and requiring Shirley and Larry to sign an addendum extending the closing date until October 8, 2004. There were additional provisions fining Shirley $12,000, payable to Larry, and ordering Shirley arrested until she vacated the residence, but these provisions were struck by the chancellor. Eventually, the sale of the house took place without incident. It is undisputed that there was no loss of value in the sale as a result of Shirley’s delay in vacating the marital residence.

¶ 7. Sometime after this, the court held a hearing on Larry’s Rule 59 motion for clarification. At the hearing, the parties and the court discussed what should be done regarding Shirley’s contempt of court. It is undisputed that Shirley and her counsel attended and asked the chancery court to “reconsider [its] ruling concerning contempt.” In an October 14, 2004, order, the court clarified its judgment and denied Shirley’s request for reconsideration of contempt. A “settlement sheet” attached to the October 14 order shows that Shirley paid Larry $12,000 of her share of the proceeds from the sale of the marital residence as a fine for her late removal from the residence.

¶ 8. On October 15, 2004, new counsel for Shirley filed a Rule 59 motion, contending that jurisdiction had not been properly obtained in the contempt matter. The chancellor denied Shirley’s Rule 59 motion in a July 29, 2005, order, finding that her “general appearance” at the hearing leading to the October 14 order waived any issue regarding the lack of a Rule 81 summons. The July 29 order stated that Shirley had produced evidence that she was hospitalized with chronic fatigue on October 4, 2004, and was discharged the next day. The court found that it was “unable to accept” Shirley’s explanation that her hospitalization made her move impossible. The court noted that Shirley had scheduled movers for October 4, 2004, well in advance of the October 6, 2004, deadline, but she had cancelled the move.

¶ 9. Neither of the Rule 59 hearings was transcribed, nor is there any record of what transpired at the October 4 appearance by both counsel before the chancellor. Our record is limited to the pleadings by the parties in the chancery court and the court orders themselves.

ANALYSIS

Jurisdiction and Notice of the Contempt Citation

¶ 10. Shirley’s first two assertions of error go to the same issue and will be discussed together. We will not disturb a chancellor’s findings of fact unless the findings are “manifestly wrong, clearly erroneous or an erroneous legal standard was applied.” Isom v. Jernigan, 840 So.2d 104, 106(¶ 6) (Miss.2003) (quoting Bell v. Parker, 568 So.2d 594, 596-97 (Miss.1990)). However, we review the court’s findings of law de novo. Id.

¶ 11. The first two issues raised by Shirley turn upon whether she received proper notice of the court’s contempt action. Actions for contempt are governed by Rule 81(d) of the Mississippi Rules of Civil Procedure. Rule 81(d)(5) requires that upon the filing of an action for contempt, a summons be issued that commands the defendant to appear and defend at a specific time and place. Further, a Rule 81 summons must be personally served on the defendant. Dennis v. Dennis, 824 So.2d 604, 609-10(¶ 13) (Miss.2002).

¶ 12. Here, the chancellor found that Shirley waived any objection to improper service when her attorney made an appearance at a later hearing on an unrelated motion for clarification. This exact issue of waiver was decided by the supreme court in Isom. There, a Rule 81 summons was issued based on charges of contempt. Isom, 840 So.2d at 105(¶ 4). The summons was served on Isom’s attorney, but Kelly Isom was never personally served. Id. The supreme court held that it was error not to serve Isom personally; however, the court further determined that the requirements of Rule 81 had been waived by the appearance of Isom’s attorney at the contempt hearing. Id. at 107(¶ 9).

¶ 13. The supreme court held that special appearances are only recognized “where a party appears solely to object to the court’s jurisdiction over her person on grounds that she is not amenable to process.” Id. The appearance of Isom’s attorney waived all objections to insufficient service of process. Id.

¶ 14. The circumstances are similar here, yet not identical. In Isom, Isom’s attorney actually appeared at the contempt hearing. There, Isom’s attorney was able to present evidence on Isom’s behalf related to the contempt charge. That did not happen here.

¶ 15. There was no contempt hearing held in this case. On October 4, 2004, attorneys for both parties met with the chancellor because of the concern that Shirley would not vacate the house in time for its scheduled sale. Thus, the chancellor issued an order on October 5th providing that Shirley could be held in contempt if the house was not vacated by 2:00 p.m. on October 6th.

¶ 16. In Isom, the court held that the requirements of Rule 81 were waived because Isom’s attorney appeared at the contempt hearing, failed to challenge jurisdiction or service, and offered evidence on her behalf. Id. Here, Shirley was never given an opportunity to present evidence on her behalf before a finding of contempt was made. There was no Rule 81 notice of a contempt hearing because there was no contempt hearing at all.

¶ 17. On October 4th, Shirley’s attorney agreed that Shirley’s failure to vacate the house on October 6th would constitute contempt. However, it is unclear whether her attorney was aware of her hospitalization at that time. A hearing was never scheduled between the filing of Larry’s motion for relief for contempt on October 6th and the chancellor’s October 7th order finding Shirley in contempt. Thus, there was no opportunity to present evidence of her hospitalization as the basis for her failure to vacate the house.

¶ 18. Additionally, the dissent argues that the chancellor’s continuing jurisdiction over the case negated the requirement of a Rule 81 summons. Here, it is clear that the chancery court had continuing jurisdiction to enforce the judgment dividing the marital property. However, Shirley’s fundamental right to due process afforded her the right to notice and the right to be heard on the action for contempt. Dennis, 824 So.2d at 609(¶ 11).

¶ 19. As the supreme court held in Dennis, the chancery court’s continuing jurisdiction alone was not enough to waive David Dennis’s claims of insufficient service and violation of his due process rights. Id. at 610(¶ 16). Dennis received notice through his attorney, but more importantly, Dennis appeared and defended himself at the contempt hearing. Id. He was given a meaningful opportunity to explain his actions that were the subject of the motion for contempt; thus, his claims of insufficient service and violation of due process were waived. Id.

¶ 20. Shirley was not given notice or an opportunity for a hearing before the chancellor ruled on the motion for contempt. Unlike Isom and Dennis, Shirley was not given an opportunity to present evidence on her behalf regarding the motion. Thus, the service requirements of Rule 81 were not waived as in Isom and Dennis.

¶ 21. Accordingly, the chancellor erred by finding that Shirley’s general appearance at the hearing on a motion for clarification, which was held after the chancellor’s finding of contempt, waived any issue concerning the requirements of Rule 81 notice.

¶ 22. As we find that Shirley’s first two issues are dispositive, we decline to address her remaining assignment of error.

¶ 23. THE JUDGMENT OF THE LAFAYETTE COUNTY CHANCERY COURT IS REVERSED AND RENDERED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE AP-PELLEE.

LEE AND MYERS, P.JJ., BARNES AND ISHEE, JJ., CONCUR. IRVING, J., DISSENTS WITH SEPARATE WRITTEN OPINION. KING, C.J., ROBERTS, CARLTON AND MAXWELL, JJ., NOT PARTICIPATING.

IRVING, J.,

Dissenting.

¶ 24. The majority, finding that the chancery court lacked personal jurisdiction over Shirley Ann Hanshaw, reverses and renders the judgment of the chancery court. Because I believe the majority errs in its finding, on the facts of this case, that a Rule 81 summons was required for the chancery court to acquire jurisdiction over Shirley, I dissent. I find that the court possessed jurisdiction over Shirley when the contempt hearing was held. Therefore, I would affirm the court’s finding of contempt, but reverse and render the $12,000 fine levied against Shirley and remand the case for the chancellor to consider a more reasonable amount of sanctions and to whom those sanctions should properly be paid.

¶ 25. Shirley’s first two assertions of error go to the same issue and will be discussed together. We will not disturb a chancellor’s findings of fact unless the findings are “manifestly wrong, clearly erroneous or an erroneous legal standard was applied.” Isom v. Jernigam, 840 So.2d 104, 106(¶ 6) (Miss.2003) (quoting Bell v. Parker, 563 So.2d 594, 596-97 (Miss.1990)). However, we review the court’s findings of law de novo. Id.

¶ 26. The first two issues raised by Shirley turn upon whether she received proper notice of the court’s contempt action. The court’s final judgment was entered on September 3, 2004, and Larry Hanshaw filed a Rule 59 motion for clarification on September 13, 2004. Because Larry’s motion was filed timely, the court retained jurisdiction over the case until it finally ruled on Larry’s motion. The court did not rule on the motion for clarification until October 14, 2004. Therefore, there was no need for the court to issue a summons and notice to Shirley, as the court had continuing jurisdiction over the case.

¶ 27. In reviewing a judgment for contempt, our review of a chancellor’s finding of ultimate fact is limited, and the finding will be upheld where there is substantial evidence consistent with the finding and manifest error has not occurred. Moses v. Moses, 879 So.2d 1036, 1039(1111) (Miss. 2004). Our inquiry is limited to whether a judgment has been violated, a question that necessarily includes a review of whether it was possible to carry out the judgment of the court. Id. See also, Wing v. Wing, 549 So.2d 944, 947 (Miss.1989).

¶ 28. The record does not disclose precisely what evidence and argument was presented to the chancellor at the October 14 hearing where Shirley first requested relief from the contempt finding. The court’s order simply states that, “[hjaving heard argument,” relief was denied. However, at a prior hearing on April 14, 2004, Shirley testified that she had twice been treated for cancer, had been diagnosed with chronic fatigue syndrome, and had been determined to be fully disabled by the Social Security Administration. The court’s prior order dividing the marital estate explicitly referenced the disability: “The plaintiffs ability to work is diminished by her illness; however, she has earned a Ph.D. during that period of illness[,] and the Court feels that she will be able to gain gainful employment at sometime in the future.” It is therefore probable that Shirley raised the issue of her inability to move due to her illness at the hearing.

¶ 29. However, Shirley’s claims of inability are belied by the record, which reveals that she had hired movers to move her at 6:00 a.m. on October 4, but that she cancelled the movers and rescheduled for October 7. Shirley stated by affidavit that she did not begin to feel ill until she left for a doctor’s appointment on October 4. I find it highly unlikely that her doctor’s appointment was scheduled any earlier than 8:00 a.m. Since the movers were scheduled for 6:00 a.m., it appears that Shirley cancelled the scheduled move before she ever began to feel ill. Therefore, I would find that the court did not err in finding Shirley in contempt. However, I would find that the fine was excessive and that it was improper for the chancellor to order that the fine be paid to Larry rather than to the court without first addressing whether Larry suffered any injuries as a result of the contempt.

¶ 30. I note that the settlement sheet appended to the October 14, 2004, order denying relief indicates that the residence had been sold. Larry does not claim that Shirley’s delay resulted in any reduction in the sale price of the house. Moreover, the settlement sheet shows that after debts, attorney’s fees, and other costs, including the $12,000 fine, were paid, Larry was credited with $65,213.21, while Shirley was credited only with $11,633.21. Therefore, regardless of what evidence Shirley produced at the October 14, 2004, hearing, the chancellor knew that Larry had suffered no financial loss in the sale of the marital residence.

¶ 31. It is unclear to me what the chancellor here was attempting to do when he fined Shirley $12,000. Because the fine was intended to compel compliance with the court’s order, the contempt appears to be civil in nature. However, while civil contempt fines are sometimes payable to the opposing party, they “are related to, and ordinarily should not exceed, the injured party’s proved losses and litigation expenses, including counsel fees.” III. Cent. R.R. Co. v. Winters, 815 So.2d 1168, 1180(¶47) (Miss.2002) (overruled on other grounds) (quoting Hyde Constr. Co. v. Koehring Co., 387 F.Supp. 702, 715-16 (S.D.Miss.1974)). From the record, it appears that Larry received the lion’s share of the marital estate. It also appears that Larry’s proceeds from the sale of the house were not affected by Shirley’s tardiness in vacating the residence, as there has been no suggestion that the house sold for less than it would have otherwise sold. While attorney’s fees may be assessed as part of a contempt finding, there is no suggestion here that the court was attempting to order Shirley to pay Larry’s attorney’s fees. In fact, nothing in the record indicates what additional attorney’s fees, if any, Larry incurred as a result of Shirley’s contempt. Therefore, in the absence of any evidence that the $12,000 was even remotely related to any injury suffered by Larry, I would find that the court’s decision to levy such a large fine and then make that fine payable to Larry was in error.

¶ 32. I would reach the same result if we view Shirley’s contempt as criminal. There are two forms of criminal contempt — direct and indirect. Direct contempt occurs in the presence of the court, while indirect contempt occurs outside the presence of the court. Mingo v. State, 944 So.2d 18, 32(¶ 50) (Miss.2006). Shirley’s contemptuous actions would necessarily be indirect, because her refusal to vacate occurred outside the presence of the court. However, a person accused of indirect criminal contempt “must be provided with procedural due process safeguards, including a specification of charges, notice, and a hearing.” In re Smith, 926 So.2d 878, 888(¶ 14) (Miss.2006) (quoting In re Williamson, 838 So.2d 226, 237(¶ 31) (Miss.2002)). Those safeguards include the right to have “a different judge ... hear the contempt proceedings.” Id. Clearly, Shirley was not afforded the safeguards that would accompany a charge of criminal contempt. Additionally, criminal contempt charges are only payable to the court, not to an opposing party. Winters, 815 So.2d at 1180(¶ 47).

¶ 33. Therefore, I would find that whether Shirley’s contempt was civil or criminal, it was improper for her to pay the sum of $12,000 to Larry in the absence of any proof regarding any injury to Larry as a result of Shirley’s contempt. In addition, $12,000 was an excessive fine to levy against Shirley, regardless of to whom the fine was payable. The sanctions levied against a party must be reasonable. Twelve thousand dollars for a twenty-four delay is clearly excessive and was an abuse of the chancellor’s discretion. Although Shirley’s contempt did not constitute direct criminal contempt, we note that Mississippi Code Annotated section 9-1-17 (Rev. 2002) limits the fines for direct criminal contempt to $100 per offense. Even had each hour that Shirley tardied been considered a separate offense, her fine would have been limited to $2,400 dollars rather than $12,000.

¶ 34. For the reasons above, I would affirm the court’s finding of contempt, although I would reverse and render the $12,000 fine levied against Shirley. However, I would remand the case to the court to consider a more reasonable amount of sanctions and to whom those sanctions should properly be paid. If the court still chooses to make Shirley’s fine payable to Larry, I believe such a finding should necessarily entail a study of Larry’s injuries, if any, as a result of the contempt. If the purpose of the fine is to punish Shirley on the court’s behalf, the court should reassess a reasonable amount for the fine, as, in my judgment, $500 per hour is clearly excessive.