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    K.R. DAUGHTREY and Paul Upton, Appellants v. William Wallace ALLRED, Appellee.
    No. 2008-CA-00826-COA.
    Court of Appeals of Mississippi.
    Dec. 8, 2009.

      John D. Smallwood, Larry 0. Norris, Hattiesburg, attorneys for appellants.
    James L. Quinn, attorney for appellee.
    Before KING, C.J., IRVING and CARLTON, JJ.
   IRVING, J.,

for the Court.

¶ 1. This appeal arises out of contracts between Kenneth R. Daughtrey, Paul Upton, Charles Thomas Carden, and William Allred. In 1992, Allred approached Daughtrey and Upton with an opportunity to purchase mineral rights from Amoco Corporation. Thereafter, Upton and Daughtrey each purchased mineral rights and promised to convey, as a commission, fifteen percent of those rights to Carden, after their expenses for the purchase of the mineral rights had been recouped. Carden subsequently passed away, and Allred was assigned Carden’s rights to the fifteen-percent interests. In 2003, Allred filed suit in the Jones County Chancery Court against Daughtrey and Upton, seeking conveyance of the fifteen-percent interests as well as damages for lost profits. The chancery court found in favor of All-red, and ordered Daughtrey and Upton to convey their interests and pay Mired $26,807, each, as damages. Feeling aggrieved by the chancery court’s judgment, Daughtrey and Upton appeal, asserting that Allred lacked standing to file his complaint, that the court erred in finding the contract enforceable, and that the court erred in finding that a ten-year statute of limitations applied to Allred’s claim, rather than a three-year statute of limitations.

¶ 2. Finding no reversible error, we affirm.

FACTS

¶ 3. In 1992, Carden learned of an opportunity to purchase from Amoco around fifty-three thousand acres of mineral rights, spread over numerous Mississippi counties. Carden and Allred had been close friends and business associates for a number of years, and Carden brought All-red into the Amoco deal. Allred in turn brought in Daughtrey, Upton, and two other investors, each of whom agreed to convey fifteen percent of their mineral rights to Carden as a commission for the Amoco deal. In total, thirteen investors purchased various percentages of the Amoco mineral rights. Allred purchased 5.68% of the mineral rights for almost seventy-five thousand dollars, and Daughtrey and Upton each received a 1.89% ownership interest in the mineral rights for about twenty-five thousand dollars each. Testimony indicated that there were transactional costs and expenses of approximately fifty thousand dollars, of which Daughtrey and Upton each paid around a thousand dollars as their pro rata share. Shortly after the purchase of the mineral rights, Daughtrey, Upton, and the two other investors recruited by Allred each signed an agreement to convey fifteen percent of their mineral rights to Carden as promised prior to being allowed to purchase a percentage of the Amoco mineral rights. The fifteen percent was to be paid “at such time as [the] investment had paid out.” The agreement also stated that each investor “agrees to notify C.T. Carden at such time as payout occurs and within thirty (30) days of payout[,] assign in writing by recordable Assignment 15% of the interest acquired by [the investor].... ” Testimony at trial indicated that Daughtrey and Upton expressed qualms about the commission before finally signing the contracts.

¶ 4. Carden passed away on September 12, 1995. On May 15, 1998, Jay Cuccia, Carden’s stepson, was appointed and confirmed as administrator of Carden’s estate. Carden’s rights to the fifteen-percent interests were assigned to Allred by Cuccia on February 28, 2000. The assignment stated that “although the agreements were executed in favor of Carden, same was done for the purpose of convenience only and were held in the name of Carden on behalf of William Wallace Allred.” In September 1999, Daughtrey and Upton received the payout of their investment in the mineral rights. Despite having contracted to do so, neither made any effort to inform anyone that their investment had paid out.

¶ 5. On February 27, 2003, Allred filed a complaint in the chancery court against Upton and Daughtrey, asserting that they had breached contracts requiring them to transfer fifteen percent of their mineral rights to Carden, and, subsequently, to Allred due to the assignment of that right to Allred. The complaint also sought reimbursement for the profits on the fifteen-percent interests that Upton and Allred had each been receiving.

¶ 6. Upton’s answer to Allred’s complaint was filed on April 8, 2003, while Daughtrey filed his answer on April 10, 2003. In them answers, Upton and Daughtrey asserted three affirmative defenses: (1) that the statute of limitations had run, (2) that Allred and Upton had an attorney-client relationship that should have prevented Allred from filing the action, and (3) that Allred’s dealings with them, combined with the lack of a disclosure agreement, prohibited Allred’s action because he was “in violation of the Standards of the Code of Ethics of Attorneys practicing in the State of Mississippi.” Both answers also stated that Upton and Daughtrey had assigned their fifteen-percent interests to Carden only after being assured by Allred that he had also assigned a portion of his interest to Carden.

¶ 7. On May 2, 2003, Upton and Daugh-trey filed separate motions requesting that their cases be consolidated. The record reflects that little was done in the case from mid-2003 until early 2005, when All-red filed a motion requesting a trial setting and consolidation of Upton’s and Daugh-trey’s cases. On June 6, 2005, the chancery court consolidated the two cases and set trial for November 9, 2005. Trial was delayed for a variety of reasons, including Hurricane Katrina. In August 2006, the chancery court entered an order bifurcating the trial “as to liability and damages.” Trial was ultimately held in September 2006.

¶ 8. Cuccia was the first witness to testify at trial. He testified that he had worked with Carden in the oil and gas industry for many years. He explained that Carden and Allred had been close friends who also conducted business together; he indicated that his stepfather and Allred “probably talked close to daily.Cuccia indicated that Carden and Allred trusted each other enough that many of their business deals were conducted verbally: “We were not worried about it if we sent a check to Wallace Allred for fifty thousand dollars, you know. It wasn’t like I had to follow up and say, oh, where is this deed, you know. Like, you know, you knew it was coming.”

¶ 9. Allred testified next. Like Cuccia, Allred testified about his close friendship with Carden. Allred explained that he had attempted to teach Daughtrey about the oil and gas business after Daughtrey approached him wanting to enter the market. Allred testified that he brought Upton into the Amoco deal because he and Upton had been very good friends for many years. Allred explained that, in the oil and gas business, it was not unusual to “pay for 100 percent and get 75 percent,” to, in other words, forfeit twenty-five percent of the mineral rights as a commission. All-red testified that, because he was friends with Upton, Daughtrey, and the other investors, he and Carden decided to charge only fifteen percent as a commission, and to make the commission payable only once the investors had recouped their initial outlay. The court asked Allred what “payout” meant in the oil and gas industry, and Allred explained: “In the industry, payout is that time and point at which the investor has received in income or sufficient income to cover his cost of drilling.... [I]t’s that point in time at which the participant has received sufficient income to cover the cost of buying it and managing it....” Allred admitted that he should have informed Upton, Daughtrey, and the other investors after he and Carden decided that Allred would receive the fifteen-percent interests rather than Carden. However, Allred indicated that Carden did not initially decide that Allred would receive the interests. Allred testified that, when Daughtrey informed him that he would not convey his fifteen-percent interest as he had promised, Daughtrey told him that his reasons for refusal were that he was upset that he had lost so much money in the oil industry and that he believed that Allred thought that he had no class.

¶ 10. Allred admitted that only Daugh-trey, Upton, and the two other investors who Allred brought into the Amoco deal paid the fifteen percent as a commission. Allred testified that this was because the other investors all had years of experience in the oil and gas business; as such, they had provided deals and opportunities for each other many times and knew what they were doing. Allred testified that the four investors that he brought into the deal, by contrast, knew nothing about the oil and gas business and would, therefore, need a lot of help to successfully utilize their mineral rights. Allred indicated that that was why only those four investors were asked to pay fifteen percent of their interest as a commission.

¶ 11. As Daughtrey and Upton’s attorney concluded his cross-examination of All-red, he asked a series of questions intimating that Allred had acted as Daughtre/s or Upton’s attorney in the Amoco deal. After Allred’s cross-examination, the chancellor inquired of Upton and Daughtrey’s attorney whether he had “any document that establishes [an] attorney-client relationship.” The attorney responded that he did not. He further admitted to the court that there are no checks showing payments for legal fees to Allred.

¶ 12. Wallace Stewart Leggett, one of the four investors brought into the deal with Upton and Daughtrey, then testified on behalf of Allred. Leggett was a business partner with Bobby Joe Dykes, another of the four investors that Allred brought into the Amoco deal. Leggett testified that he purchased fifty thousand dollars’ worth of mineral rights in the Amoco spread, and that he understood that he would be required to convey fifteen percent of his interest therein once he had recouped all of his expenses. Leggett indicated that all of the investors that Allred brought into the Amoco deal had been told about the fifteen-percent commission before they purchased any of the mineral rights. Unlike Daughtrey or Upton, Leg-gett gave notice once he received his payout. Leggett testified that he conveyed fifteen percent of his interest to Allred in June 2000, after confirming that the fifteen-percent interests had been transferred to Allred by Carden’s estate. Leg-gett also indicated that he was never led to believe that everyone involved in the Amoco deal would convey a fifteen-percent interest. Finally, Leggett testified that he had never considered Allred to be working as his attorney on the Amoco deal, and that, to his knowledge, Upton and Daugh-trey had never indicated that Allred was acting as their attorney in the matter.

¶ 13. After the testimonies of a few more witnesses, Allred rested. Neither Upton nor Daughtrey made a motion for a directed verdict at the close of Allred’s case. Upton testified after Allred rested. Upton confirmed prior testimony to the effect that he and Allred had been very close friends for a long time. Upton also described the initial meetings regarding the Amoco deal. Upton testified that, regarding the first meeting, “I don’t ever recall him mentioning anything about a backup 15 percent or any other thing.” Upton stated that the first time he heard about the fifteen-percent commission to Carden was when Allred presented him with the agreement for Upton to sign. Upton claimed that Allred had come to his home one morning after Upton’s initial refusal to sign the agreement, and that the following conversation ensued:

In my den, he told me that everybody had signed the agreement over to Mr. Carden. And I says, What do you mean, all the investors has signed [sic] it? He said, That’s right. I said, Wallace, did you sign one over to him? Yes. Told me yes. The [sic] he told me — and I still told him I didn’t want to sign it. And — because I just didn’t believe I owed anymore money to nobody. And he told me, Well, Mr. Carden will sue you for it if you don’t sign it. He’ll get his money one way or the other. That’s the words he told me. And he says, [y]ou’re the last one, Paul. Everybody else has signed it. And he told me he’d signed it.

Upton testified that he signed the agreement after this meeting in his home. However, he further testified that he was still unconvinced that he should have signed the agreement. In the days following his signing, sometime in 1992, he spoke with two Amoco investors, neither of whom were brought in by Allred. He learned that neither of them was assigning a fifteen-percent interest to Carden as a commission. Upton testified that he then had a confrontation with Allred, wherein he accused Aired of swindling him.

¶ 14. Upton also testified about a meeting with Aired several years later, after Carden’s death, wherein Aired attempted to get Upton to convey the fifteen-percent interest in accordance with the agreement that he had signed. Upton testified that he refused to convey fifteen percent of his interest to Aired. When asked by his attorney whether he had signed the agreement to convey the fifteen-percent interest to Carden, Upton replied that he had done so “[u]nder duress.” Upton indicated that he received his payout from the Amoco minerals on September 29, 1999. Upton testified that he would have conveyed the fifteen-percent interest to Carden if Car-den had still been alive. Essentially, Upton testified that it was Allred’s reception of the interest that Upton refused to acquiesce to.

¶ 15. The chancellor questioned Upton’s actions after Upton came to believe that he had been defrauded by Allred, as follows:

[THE COURT]: Well, that’s why I asked you if you thought this was a fraud from 1992 forward, why in the world didn’t you do something about it — report it to the law, call the Oil and Gas Board, call the District Attorney, call the county attorney, call the Attorney General’s office, file a lawsuit to have it all set aside or at least your agreement set aside because it was fraudulent?
[UPTON]: I can’t answer that question for you, Judge, because I don’t know why. I was just so upset with [All-red]. And I knew, because he kept threatening me with a lawsuit. Now, I guess I ought to have sued him.

(Emphasis added).

¶ 16. Daughtrey testified after Upton. Daughtrey testified that, like Upton, he had misgivings about the agreement to convey a fifteen-percent interest to Carden but that he signed the agreement after Allred told him that Carden would sue Daughtrey if he did not sign the agreement. Daughtrey testified that his Amoco investment paid out on September 23, 1999. Daughtrey further testified that he refused to convey fifteen percent of his mineral rights to Allred because Daugh-trey had signed an agreement to convey the interest to Carden, not Allred. Daughtrey testified that he did not think the assignment of the fifteen-percent interest to Allred was valid, because:

I — I don’t think it is. I don’t think it’s a legitimate assignment, because Mr. Cuccia — Cuccia signed this over for the estate of Mr. Carden, C.T. Carden, as the administrator and I don’t — I know I’m not — I don’t know anything about the legal ends of that. But I wouldn’t think that it was on the up and up, sir.

Daughtrey also had the following exchange with his attorney during direct examination:

Q. At the time you signed that agreement, if it had been signed over to Mr. Allred, would you have signed it?
A. No, sir. Because I wouldn’t have.
Q.- If Mr. Carden had presented the mineral deed to you after payout was assigned, would you have done that?
A. I certainly would have, because I had an agreement with him. I had an agreement with him to do just that and I would have done that.
[THE COURT]: Let me ask you this question.
A. Yes, sir.
[THE COURT]: Same one I asked Mr. Upton over there. If Wallace Allred, tomorrow said, well, you know, I’m tired of fooling with this. I’m just gonna reassign this back over to the Estate of C.T. Carden and they’ll own it, whoever his heirs are. Would you sign it then?
A. To the Estate of Mr. C.T. Carden?
[THE COURT]: Uh-huh.
A. I would have to, sir. Because I had signed that agreement to Mr. C.T. Carden and he was deceased and then his succession was in the process [sic].

¶ 17. After stating that he assumed that Allred was his attorney, Daughtrey was asked by the court what fees he had paid Allred for legal representation. Daugh-trey admitted that he had not paid Allred for any legal fees and that Allred had never billed him for any legal services. Daughtrey further admitted that Allred had never told him that he was acting as his attorney.

¶ 18. After Daughtrey’s testimony concluded, Daughtrey and Upton rested their case. The chancellor then related his findings, which stated, in pertinent part, as follows:

Based on the testimony that the Court has heard, the Court finds that, when these two defendants along with the other two investors from Covington County met with Mr. Allred, that they were in fact informed about a commission involving Mr. C.T. Carden. They knew it going in, knew it on the front end. I’ve had one of the original investors to so testify that he was at a meeting where all of them were in attendance when this was discussed, and I find his testimony to be credible. In fact, he has honored his agreement that he signed.
Mr. Daughtrey and Mr. Upton readily admit they signed the agreement for the 15[-]percent back-end commission. They both readily admit that, if C.T. Carden had called upon them during his lifetime to execute the conveyance, that they would have done so. They would have been legally obligated and bound to do so; even suggest that, if the C.T. Carden Estate[J which now exists[,] called upon them to do so, that they would be bound to do so.
Mr. Allred’s interest comes to him through C.T. Carden[,] assigned by the C.T. Carden Estate to him. He is the rightful owner of whatever rights that C.T. Carden had against Daughtrey and Upton. And, of course, this is subject to the executor sending the Court, certified under the Acts of Congress, whatever court order is necessary to formerly [sic] approve the conveyance or assignment to Mr. Allred.
What it seems to me like is, is that the defendants don’t have a problem paying anybody other than Allred. And why? I don’t know. Seems to me that folks that have had and maintained the kind of friendships these people have had over the years, it looks to me like one friend ought to feel good about another friend making money; and that, if somebody is gonna make a commission, I would rather have a friend of mine make a commission than I had somebody I had never seen and laid eyes on. But sometimes human nature prevails and folks get all bent out of shape when they think somebody’s gonna make some money that they’re not gonna make. And that seems to be the basis for what happened here.
Additionally, Mr. Upton testified that in 1992, he knew about all this [sic] shenanigans as he inferred that they were. I’m sure he discussed it with Mr. Daughtrey. From 1992 until this lawsuit was filed, they did absolutely nothing to attempt to challenge this agreement that they both agreed that they had signed in favor of C.T. Carden. Mr. Upton complains that, because of all [sic] the investors didn’t sign it, then that’s — -he shouldn’t have to sign it. But, nevertheless, he did sign it and did nothing whatsoever to challenge it, even though he believed that Mr. Allred had lied to him about all the other investors signing it and about Mr. Allred having signed it.
Frankly, I find Mr. Allred’s testimony to be credible in that regard. I don’t believe that he misrepresented anything to Mr. Upton in that regard. He may have said all other investors have signed it. And I think by that, who he was talking about were the four guys in Covington County, Mississippi, that he was meeting with on a regular basis as being all of the investors that he was referring to, if in fact it was even questioned. So, this agreement — these agreements signed by these gentlemen are enforceable.

The chancellor then went on to discuss the statute of limitations. He asked the parties to provide briefs supporting their arguments regarding the statute of limitations and whether it had run. Thereafter, on March 13, 2007, the chancery court entered a judgment as to liability. In pertinent part, the court found the following:

By separate written agreements executed by Paul Upton and K.R. Daughtrey!,] each is obligated to convey to William Wallace Allred, assignee of the succession of C.T. Carden, deceased, 15% of the interest each originally acquired in certain mineral interests formerly owned by Amoco Production Company ... consisting of approximately 53,000 mineral acres over various counties in Mississippi.
“Payout” as defined in the Agreement of Paul Upton ... occurred on September 29, 1999.... “Payout” as defined in the Agreement executed by K.R. Daughtrey ... occurred on September 23, 1999.... Within thirty days of payout, each Defendant was obligated to assign in writing by recordable instrument 15% of the interest he originally acquired in the Amoco Minerals. Neither defendant at any time gave notification of payout nor executed a written Assignment in favor of C.T. Carden, his successors or assigns, of 15% of the interest originally acquired in the Amoco minerals.
C.T. Carden died in September, 1995.... By instrument dated February 28, 2000[,] ... the [administrator] assigned to [Allred] all right, title, and interest in and to the Agreements signed by Paul Upton and K.R. Daugh-trey. ... The Agreements executed by the Defendants ... are supported by consideration, are valid and enforceable, and were not procured by fraud or misrepresentation as alleged by the Defendants.
No attorney-client relationship between the Plaintiff and either Defendant ever existed concerning or relating to the Amoco Minerals. The Assignment by the succession representative of C.T. Carden ... in favor of the Plaintiff, is supported by consideration, is otherwise valid and enforceable, and has been approved and ratified by the District Court of the 22nd Judicial District of St. Tammany Parish, Louisiana, in the Matter of the Succession of Charles Thomas Car-den, No. 95-30506.
[Allred] filed each of the above captioned actions on February 27, 2003. The three[-]year “catch-all” statute of limitations in Mississippi] Code Annotated section] 15-1-49 applies to the Plaintiffs claim for recovery of a percentage of income and proceeds from production paid to the Defendants. A ten[-]year statute of limitations provided in Mississippi] Code Annotated section] 15-1-7 and [section] 15-1-9 applies to the Plaintiffs claims for recovery of a percentage of the Defendants’ interests originally acquired in the Amoco Minerals. The Defendants should each provide an accounting for all income and production proceeds attributable to their respective interests in the Amoco Minerals from and after September 30, 1999[,] to date.
Judgment should be granted in favor of [Allred] on his complaints against [Upton and Daughtrey] in the above captioned actions, but only insofar as set forth herein. [Allred’s] claims for defamation and for tortuous interference should be dismissed. The affirmative defenses and all relief requested by [Upton and Daughtrey] against [Allred] should be denied and their counterclaims dismissed.

The judgment finally ordered Daughtrey and Upton to each convey fifteen percent of their mineral rights to Allred and to pay Allred “an amount equal to income attributable to 15% of [the] 1.89% undivided interest in the Amoco Minerals paid or received from and after February 27, 2000[,] with interest at the rate of 8% per year.” The order further stated that a hearing would be held on the issue of damages once Daughtrey and Upton filed accountings with the chancery court.

¶ 19. On January 30, 2007, the Twenty-Second Judicial District Court of Saint Tammany Parish, Louisiana, entered a judgment granting Cuccia the authority to assign Carden’s rights to the fifteen-percent interests to Allred. The judgment stated, in pertinent part, as follows:

Considering the Petition for Authority to Execute Assignment and Conveyance of Mineral Leases of William Wallace Allred filed herein on January 8, 2007, by L. Jay Cuccia ... and that this Court deems it to be in the best interest of this Succession to authorize the Administrator to enter into the Assignment and Conveyance of certain interests in oil, gas and mineral leases located in the State of Mississippi ... and evidence having been submitted that Notice of the filing of the Petition was given according to law by publication in the Times-Picayune, that more than seven (7) days have expired since the date of publication of said Notice, and that no Opposition thereto has been filed;
IT IS ORDERED, ADJUDGED AND DECREED that Covington County, Mississippi residents Paul Upton, Bobby Jo Dykes, K.R. Daughtrey, and W. Stuart Leggett executed agreements in favor of the decedent C.T. Carden in September and October 1992 to convey after “payout” 15% of the interest each investor originally acquired in certain mineral properties in Mississippi.... For good and valuable consideration including the work of William Wallace All-red in the evaluation, acquisition and management of the Amoco Minerals, C.T. Carden during his lifetime agreed to assign to William Wallace Allred Car-den’s interest in those agreements described above. After the death of C.T. Carden, and on February 28, 2000, L.J. Cuccia, Administrator of the Succession of C.T. Carden, deceased, assigned to William Wallace Allred all right and title and interest of C.T. Carden, or his Succession, in and to the agreements....
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that ... Cuccia ... is hereby authorized, directed and empowered to enter into the Assignment and Conveyance of Mineral Leases to William Wallace Allred dated February 28, 2000, a true copy of which is attached to the Petition filed in this matter....
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Assignment is supported by consideration and is otherwise valid and the act of ... Cuccia ... in executing said Assignment is hereby ratified, approved, and allowed by the Court;
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that L. Jay Cuccia, Administrator, is hereby authorized, directed and empowered to execute, on behalf of this Succession, whatever other documents and take whatever other actions are necessary in order to effect the Assignment to William Wallace Allred of all right, title and interests under and through the Agreements described in the Assignment attached to the Petition....

¶ 20. On April 11, 2007, before submitting any accountings, Daughtrey and Upton filed a notice of appeal to the Mississippi Supreme Court from the March 13, 2007, judgment. On June 7, 2007, the Mississippi Supreme Court dismissed Upton’s and Daughtrey’s appeal, finding that “the judgment from which the notice of appeal was filed is not a final, appealable judgment....” On August 6, 2007, Daugh-trey and Upton filed an accounting with the chancery court. In it, Daughtrey and Upton stated that: “based upon the language of the Court’s ruling[,] the Defendants have done their best to calculate income and interest, however, the directive as to [ajccounting had a beginning date of September 30, 1999[,] while the directive as to the money judgment had a beginning date of February 27, 2000.” The parties further stated that: “[Bjoth ... [account-ings include calculations for said management costs and reduction of [Allred’s] judgment based upon said management costs. Though the Defendants did not in fact pay management costs, they nonetheless performed the very work which such a management entity would have performed.” The accountings also raised the issue of the validity of the assignment of the fifteen-percent interests to Allred:

Defendants assert that nothing in the record, not the Judgment on Petition for Authority to Execute Assignment ... nor any other document presented at trial nor the sworn testimony of any witness, breathed life into the original assignment dated February 28, 2000. The Assignment signed on that date was void as a matter of law. The Administrator of the Succession of C[.]T[.] Car-den was without authority to sign said document. Further, the Judgment ... entered on February 1, 2007, by the 22nd Judicial District Court, Parish of S[t]. Tammany, Louisiana, did not authorize the Assignment to be back dated to February 28, 2000.... Likewise, said Judgment is devoid of any mention of it being a nunc pro tunc order. As such, the S[t], Tammany Court merely gave the Administrator the authority to sign the Assignment as it read on February 28, 2000, but effective as of the date of said Judgment, that being February 1, 2007. As the Assignment cannot become effective until February 1, 2007, the Defendants have included calculations in their [accountings to reflect the same.

Essentially, the accountings provided multiple calculation for what was owed to All-red, depending on what amounts were discounted as expenses and what time period was used. With no deductions, the ac-countings provided a total of over twenty thousand dollars. Other calculations by Upton and Daughtrey figured that Allred was entitled to less than a thousand dollars for the profits that Upton and Daughtrey had improperly received.

¶ 21. On April 4, 2008, Upton and Daughtrey filed a motion to dismiss based on the premise that the federal Securities Acts prohibited Daughtrey’s and Upton’s ability to sell the fifteen-percent interests in their mineral rights. Allred filed an answer to the motion on April 8, 2008, denying that he had sold any interest to Daughtrey or Upton, denying that the transactions involved interstate commerce, denying that the Securities Acts would apply to the transactions, and arguing that Upton and Daughtrey waived any argument regarding the Securities Acts when they failed to raise the Acts as an affirmative defense in any pleadings or otherwise raise the issue of the Acts during litigation.

¶ 22. On April 15, 2008, the chancery court issued two judgments, one against Upton and one against Daughtrey, in which it found, in pertinent part, as follows: “that the Plaintiff WILLIAM WALLACE ALLRED shall have and recover from the Defendant ... the sum of $26,807 together with interest at the rate of 8% per annum until paid.” The judgments also ordered Upton and Daughtrey to pay for the “costs of this action,” with each responsible for one-half of the costs.

¶ 23. On April 18, 2008, Daughtrey and Upton filed a motion for a new trial, alleging that the judgment is against the overwhelming weight of the evidence, that Allred fraudulently obtained the fifteen-percent interests in the mineral rights, that the statute of limitations barred All-red’s recovery, that the chancellor erred in finding that Allred was assigned the right to the fifteen-percent interests on February 28, 2000, rather than February 1, 2007, and that the transfer was prohibited by federal securities laws. The court summarily overruled the motion on May 5, 2008.

¶ 24. Daughtrey and Upton filed a notice of appeal on May 7, 2008, leading to their appeal before this Court. Additional facts, as necessary, will be related during our analysis and discussion of the issues.

ANALYSIS AND DISCUSSION OF THE ISSUES

1. Standing to File Complaint

¶ 25. Upton and Daughtrey first claim that Allred had no standing to file a complaint because the transfer from Carden’s estate to Allred was invalid, and because the federal Securities Acts voided the mineral rights contracts. As we will discuss in the next issue, we find that the Securities Acts do not void the contracts.

¶ 26. The issue of the validity of the assignment of the fifteen percent to Allred was raised at trial during Cuccia’s cross-examination. However, the issue was never raised in any of the pleadings filed by Upton or Daughtrey. Furthermore, even though this issue was raised during trial, it was immediately objected to by Allred’s attorney on the ground that the issue had not been raised in any pleading. “[A] defendant’s failure to timely and reasonably raise and pursue the enforcement of any affirmative defense or other affirmative matter or right which would serve to terminate or stay the litigation, coupled with active participation in the litigation process, will ordinarily serve as a waiver.” Fletcher v. Limeco Corp., 996 So.2d 773, 780(¶ 20) (Miss.2008). See also M.R.C.P. 8(c); M.R.C.P. 12(b). Therefore, we find that this issue is procedurally barred due to Daughtrey’s and Upton’s failure to raise the issue as an affirmative defense.

¶27. Even were this issue not procedurally barred, we would find that it lacks merit. The judgment of the Louisiana district court validated Cuccia’s decision, as administrator, to transfer the fifteen-percent interests to Allred. The district court did so with the full knowledge that Cuccia had executed the transfer several years before, and nothing in the district court’s judgment indicated an intent to limit the conveyance to the date of the district court’s judgment. Per Article IV, Section 1, of the United States Constitution, we must give the Louisiana district court’s judgment full faith and credit.

¶ 28. This contention of error is without merit.

2. The Securities Acts

¶29. Daughtrey and Upton also contend that the transfer of mineral rights from Allred to them is void because Allred was not a registered broker under the federal Securities Acts. This argument misses the mark, as Allred did not convey any mineral rights to Daughtrey and Upton. Rather, Daughtrey and Upton purchased the mineral rights from Amoco. Allred contends that this issue is also procedurally barred due to Daughtrey’s and Upton’s failure to timely raise the issue. We find that we must first examine whether the Securities Acts would void the conveyance of the fifteen-percent interests to Allred from Daughtrey and Upton.

¶ 30. While Section 77e of Title 15 of the United States Code (2006), which is part of the Securities Act of 1933, prohibits the sale of an unregistered security through interstate commerce, no provision of the Securities Acts indicates that a transaction so consummated is thereafter void, as Daughtrey and Upton urge us to find. See 15 U.S.C. §§ 77a-77z (2006); 15 U.S.C. §§ 78a-78ff (2006). Furthermore, a careful scrutiny of the relevant case law has failed to reveal any situation where such a transaction has been deemed void as a matter of law. Therefore, the federal Securities Acts do not require a finding that any of the transactions here are void.

¶ 31. Neither Daughtrey nor Upton raised the issue of the Securities Acts until after the court had ruled against them as to liability. Rule 8(c) of the Mississippi Rules of Civil Procedure explicitly states that illegality and fraud are affirmative defenses that must be timely raised in pleadings. When Daughtrey and Upton’s attorney requested that the record be reopened so that the Securities Acts claim could be litigated, the chancellor refused but allowed the attorney to make a proffer regarding the claim. We find that the chancellor was correct in finding that Daughtrey and Upton had waived any claim of illegality as a result of the federal Securities Acts. As already discussed, nothing in the Securities Acts operates to void the transactions as a matter of law.

¶ 32. This issue is without merit.

S. Statute of Limitations

¶ 33. In their final issue, Upton and Daughtrey contend that the chancery court erred in finding that a ten-year statute of limitations applies to the conveyance of the fifteen-percent interests to Allred. Neither Upton nor Daughtrey protest the chancery court’s application of a three-year statute of limitations to the profits from the fifteen-percent interests.

¶ 34. Upton and Daughtrey do not disagree that a ten-year statute of limitations applies to suits involving recovery of land, including mineral rights; rather, Upton and Daughtrey contend that the present case involves only a claim for breach of contract, which they submit would be subject to a three-year statute of limitations. Specifically, Upton and Daughtrey contend:

The trial court commits error in its application of the law ... where the trial court loses focus of the allegations and actual claims by Mr. Allred. In his [c]omplaint[,] Mr. Allred makes claims for (1) [bjreach of [cjontract, (2) [c]on-structive [tjrust, (3) [ujnjust [ejnrichment, (4) [d]efamation[,] and (5) [intentional [interference with [bjusiness. In the [judgment on liability[,] the trial court specifically dismisses (4) and (5). As to “unjust enrichment” and “constructive trust,” neither term is found in said [judgment. Likewise, there is no discussion of “unjust enrichment” nor [sic] “constructive trust” during the trial court’s bench ruling.... As such, the trial court clearly finds for Mr. Allred based solely upon his claim of breach of contract.

¶ 35. We find our supreme court’s discussion in Allred v. Fairchild, 785 So.2d 1064, 1070-71 (¶¶ 16-18) (Miss.2001), a case also involving Allred, helpful:

In order to properly analyze a statute of limitations question, an understanding of the chronology of events and the limitations in question is necessary. Allred and [Wiley] Fairchild enter into the agreement in December 1973; the sale of the Windham properties is closed on February 1, 1974; and Allred files suit on December 19, 1990. In other words, a total of 17 years passed between the oral contract and the filing of suit. The applicable statutes of limitations which might control are Mississippi] Code Ann[otated] [sections] 15-1-7, 15-1-9, 15-1-29, 15-1-39, [and] 15-1-49 (1995). Section 15-1-7 requires suits involving recovery of land to be brought within 10 years of “right to make entry.” Section 15-1-9 is also a 10[-]year statute of limitations for actions “claiming land in equity.” Section 15-1-29 establishes a 3[-]year statute of limitations upon actions on unwritten accounts or contracts. Section 15-1-39 imposes a 10-year limit on actions seeking or concerning trusts, and [section] 15-1^49 is a catchall provision establishing a three-year deadline on all matters without specified limitations. Miss.Code Ann. §§ 15-1-7, 15 — 1— 9,15-1-29,15-1-39,15-1-49 (1995).
Although 17 years is obviously not within any of these limits, Allred argues that the statute of limitations did not begin to run until he could enforce his rights. See Burwell v. Planters Lumber Co., 220 Miss. 79, 70 So.2d 71 (1954). Since there is undisputed testimony that payout occurred sometime in July 1981, All-red contends this date is the true time of accrual for statute of limitations concerns. See S[.] Wholesalers, Inc. v. Stennis Drug Co., 214 Miss. 461, 59 So.2d 78, 79 (1952). Therefore, the action would not be barred by [sections] 15-1-7, 15-1-9, and 15-1-39. Furthermore, Fairchild made numerous false representations and swore under oath to them, including: denying the existence of an oral contract, until presented with evidence of one; denying the existence of any documented proof of a contract when P-67 (a February 1974 memo) evidenced the existence of a contract; sworn testimony that payout records were never kept when, in fact, his longtime secretary testified that they were; and failure to turn over many highly relevant documents, even after compelled to do so. This litany of violations clearly justifies any delay in filing. As this Court has repeatedly held, fraudulent concealment of the truth tolls all statutes of limitations. Van Zandt v. Van Zandt, 227 Miss. 528, 539, 86 So.2d 466, 470 (1956). There is also statutory authority for this position: “If a person liable to any personal action shall fraudulently conceal the cause of action from the knowledge of the person entitled thereto, the cause of action shall be deemed to have first accrued at, and not before, the time at which such fraud shall be, or with reasonable diligence might have been, first known or discovered.” Miss.Code Ann. § 15-1-67 (1995). Under this rule, accrual did not begin until the late 1980s when Allred discovered that payout had already occurred. Thus, the suit was filed well within all of the applicable statutes of limitation[s].
Allred testified that he asked about the payout status of the properties several times and was consistently lied to. Since accrual of his rights did not occur until 1981 and Fairchild fraudulently concealed the truth, the statutes of limitations do not bar Allred’s various claims.

This Court is now faced with the same statutes of limitations.

¶ 36. We find that the chancery court correctly ruled that a ten-year statute of limitations applies in this case. The ten-year statute of limitations found in Mississippi Code Annotated section 15-1-7 (Rev. 2003) applies to suits to recover mineral rights. See Fairchild, 785 So.2d at 1070-71 (¶¶ 16-18); Covington v. Butler, 242 So.2d 444, 448 (Miss.1970); Robinson v. Rhodes, 236 So.2d 746, 749 (Miss.1970). Despite Daughtrey’s and Upton’s protests to the contrary, Allred’s suit was essentially a suit that set out to accomplish two objectives: (1) conveyance of the fifteen-percent interests in the mineral rights and (2) recovery of the profits that Daughtrey and Upton had been fraudulently receiving from the interests. The first of these is covered by section 15-1-7, the aforementioned ten-year statute of limitations; as to the second, the court applied a three-year statute of limitations, a decision that neither Daughtrey nor Upton has challenged. The Robinson court even noted that the ten-year statute of limitations would apply in a mineral rights contract case “[i]f the purpose of the ... suit were to determine the validity of the instruments [contracts] .... ” Robinson, 236 So.2d at 749. Therefore, we find that the court properly determined that a ten-year statute of limitations applies to Allred’s claim for conveyance of the fifteen-percent interests.

¶ 37. Furthermore, Allred’s contention that an implied constructive trust exists in this case has merit, especially in the light of our supreme court’s holding in Fairchild. The Fairchild court stated, in pertinent part, that:

Before we can determine whether the chancellor erred, we must first determine what is necessary to justify the imposition of a constructive trust.
A constructive trust is one that arises by operation of law against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not, in equity and good conscience, to hold and enjoy.
Sojourner v. Sojourner, 247 Miss. 342, 153 So.2d 803, 807 (1963) (citing 54 Am. Jur., Trusts, § 218). Essentially, a constructive trust is an operation of equity. When one party holds title and benefits from land that he/she should not rightfully possess, a constructive trust is imposed for the benefit of another party who is rightfully entitled to a part or the whole. [M] at 808-[0]9 (citing Russell v. Douglas, 243 Miss. 497, 138 So.2d 730 (1962)). The determination of the existence of a constructive trust is a matter of law and thus, subject to de novo review. McNeil v. Hester, 753 So.2d 1057, 106[4 (¶ 26)] (Miss.2000). There is no question that Fairchild possesses the Windham properties. We need only determine whether Allred is due an interest in those properties.
In his original motion as well as in appeal briefs, Allred cites to an extensive list of alleged discovery violations in support of his assertion that Fairchild committed fraud. Allred’s contention is that Fairchild purposefully lied, withheld evidence, and did everything possible to cover up the fact that he owed Allred a percentage of the Windham properties. This fraud has allowed Fairchild to benefit from the 10% interest due Allred per their oral agreement. As such, Fairchild should not be allowed to benefit from his wrongdoing as a matter of law.
In addition, the evidence indicates that Allred and Fairchild shared a special relationship based upon trust and mutual respect. “While a confidential or fiduciary relationship does not in itself give rise to a constructive trust, an abuse of confidence rendering the acquisition or retention of property by one person unconscionable against another suffices.... ” Sojourner, 153 So.2d at 807. In harmony with the equitable purpose of constructive trusts, we are careful not to apply too narrow a definition of confidential relationship. “An abuse of confidence within the rule may be an abuse of either a technical fiduciary relationship or of an informal relationship where one person trusts in and relies upon another, whether the relation is a moral, social, domestic, or merely personal one.” Id. at 808. All-red’s and Fairchild’s long and informal business relationship is a clear indication that a confidential relationship existed. After all, the two did business for over 20 years based on little more than a handshake. It was this confidential relationship that allowed Fairchild to conceal the truth concerning payout for so long.
* * * *
The present situation is tailor-made for the imposition of a constructive trust. Fairchild owns and profits off the Wind-ham properties because he fraudulently hid the date of payout from Allred[,] with whom he shared a confidential relationship. A constructive trust is a fitting remedy to right such unjust enrichment. Id. at 807. The chancellor erred in not imposing a constructive trust for Allred’s benefit. Therefore, we reverse the chancellor’s order and remand the case for determination of the value of the trust.

Fairchild, 785 So.2d at 1067-68 (¶¶ 7-11). The Fairchild court found that a constructive trust applied, even though the chancellor at trial had declined to impose a constructive trust. Therefore, we may impose a constructive trust, even in the absence of a finding by the chancellor to that effect.

¶ 38. Like the Fairchild court, we find that an implied constructive trust exists in this case. Daughtrey and Upton withheld the fifteen-percent interests in their mineral rights, even though they had signed contracts promising to do otherwise. Furthermore, they did not report their payout dates, even though they were required to do so by their contracts. Although Leg-gett and Dykes had reported their payouts, Allred could not conclusively assume from this that Daughtrey and Upton had received their payouts. As Allred testified, payout was achieved only after the investors received their initial outlay plus expenses from the mineral rights. Since All-red had no way to know what expenses Daughtrey and Upton had incurred, he could not affirmatively state when each received their payout. Since we find that a constructive trust should have been imposed, we find that a ten-year statute of limitations would also apply on that basis.

¶ 39. This issue is wholly without merit.

¶ 40. THE JUDGMENT OF THE CHANCERY COURT OF JONES COUNTY IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANTS.

KING, C.J., LEE AND MYERS, P.JJ., GRIFFIS, BARNES, ISHEE, ROBERTS, CARLTON AND MAXWELL, JJ., CONCUR.

      . Payout was "deemed to [have] occur[ed] on the first day of the month following recoupment by Investor of all expenditures made in connection with the purchase, development and operation of the Amoco mineral interest.”

      . We use “Securities Acts” to refer to the Securities Act of 1933 and the Securities Exchange Act of 1934.


source: Caselaw Access Project

author: LEE, P.J.,

license: Public Domain

text:
    Rondell YOUNG, Appellant v. CITY OF BILOXI, A Body Politic and its Civil Service Commission, Appellees.
    No. 2008-CA-01848-COA.
    Court of Appeals of Mississippi.
    Dec. 8, 2009.

      Shannon Adele Ladner, Russell S. Gill, Biloxi, attorneys for appellant.
    Gina Bardwell Tompkins, Biloxi, attorney for appellees.
    Before LEE, P.J., CARLTON and MAXWELL, JJ.
   LEE, P.J.,

for the Court.

PROCEDURAL HISTORY

¶ 1. Rondell Young was suspended for three days without pay from his job as a code-enforcement administrator for the City of Biloxi. Young appealed the disciplinary action to the City of Biloxi Civil Service Commission (Commission). The Commission upheld the suspension. Young then appealed to the Harrison County Circuit Court, which affirmed the decision of the Commission.

¶ 2. Young now appeals, asserting the following issues: (1) the actions of the Commission were not made in good faith for cause, and (2) the Commission erred in finding that he failed to satisfy his burden of proof by either testimony or written materials. Finding no error, we affirm the decision of the Commission.

FACTS

¶ 3. Young has been employed by the City of Biloxi for approximately thirty-one years. At the time of the suspension, he was serving in the Community Development Department as a code-enforcement administrator. Young’s job was to perform residential-building inspections.

¶ 4. Caryle Draper, a building-permit clerk with the Community Development Department, received a phone call from a customer inquiring about a requested inspection. At the time, Draper was assisting customers at the counter and answering telephone calls. Draper called Young over the radio system to ask him if he was going to do the inspection that day. She testified as follows regarding Young’s response:

[H]e stated that he did not know when he was going to get it because he had just spent an hour and-a-half with [another customer], who was not happy and had written a letter to the Mayor and he was probably going to write two more letters to the Mayor. So he did not know when the inspection would be done. And I went back to my desk and sat down with the radio and he continued to talk and the phone was ringing and I had a customer at the counter, two gentlemen were standing there and someone behind them and he was talking about what was going on and like I said I did not catch all the information. And he said he did not know when he was going to get to it and if they did not like it they could kiss his ass.

¶ 5. Young was suspended for using profanity over the radio. At the hearing, Young denied making the statement and called into question Draper’s credibility. Draper testified that she was sure she heard Young correctly because “[she] had to endure what the customer said to [her] after the comment was made.” She stated that she “was more embarrassed by [the comment from the customer] then [sic] anything.” A hearsay objection was sustained, and the comment made by the customer was not repeated by Draper. Draper testified that the radio “stays on speaker at all times unless someone requests us to go to private.”

¶ 6. The incident was reported to Jerry Creel, the Community Development Director. Creel questioned Draper about the incident and requested that she prepare a written report. Creel called Young into his office and asked Young whether he made the comment over the radio. Young stated that he did not remember. Creel then gave Young a notice of intent to initiate disciplinary action. Creel recommended a three-day suspension pursuant to Civil Service Regulation 10.01(a)(2), which states, in part, that an employee can be suspended without pay for “[c]onduct detrimental to the department or City including dishonesty, intemperance, immoral conduct, insubordination, discourteous treatment of the public or a fellow employee, or any other act of omission or commission tending to injure the public service.” The recommendation was approved by the Director of Administration for the City of Biloxi David Staehling and Biloxi Mayor A.J. Holloway.

STANDARD OF REVIEW

¶ 7. The civil service commission reviews the employment decisions of a city to remove, suspend, demote, or discharge a civil service employee. Miss.Code Ann. § 21-31-23 (Rev.2007). A city’s disciplinary action may be reversed if it was made for political reasons, religious reasons, or was not made in good faith for cause. Id. An administrative agency’s conclusions will not be overturned on appeal “unless the agency’s order 1) is not supported by substantial evidence, 2) is arbitrary or capricious, 3) is beyond the scope or power granted to the agency, or 4) violates one’s constitutional rights.” Sprouse v. Miss. Employment Sec. Comm’n, 639 So.2d 901, 902 (Miss.1994).

DISCUSSION

I. GOOD FAITH

¶ 8. Young argues that his suspension was not made in good faith for cause; rather, it was based on a pattern of behavior toward Young by Creel. Young alleges that the motive for his suspension stemmed from memoranda exchanged between himself and Creel in July 2006.

¶ 9. Young testified that since Creel assumed his position as director, the two have had disagreements over inspections. Young alleges that Creel’s actions in overruling his decisions on inspections and not following proper procedures led him to write the memoranda. The first memorandum Young gave to Creel pointed to specific instances where Young had failed two inspection sites, and the contractors contacted Creel who overturned Young’s decisions. The second memorandum concerned the order in which the inspections were performed. Creel’s response stated, in part, that:

You are a good inspector, but I cannot help but be amazed at your willingness to listen to, and readily believe, one side of an issue without thoroughly checking to see if a situation is true and how it may have evolved. Knee jerk reactions to one-sided information and writing disrespectful memos is both unprofessional and immature.

¶ 10. Young next argues that Creel’s treatment toward him regarding leave time shows that the suspension was not in good faith. In October 2000, Young was appointed to serve on the Harrison County Planning and Zoning Commission. Young obtained approval from his superiors prior to accepting the appointment. The job required him to attend a three-hour meeting once a month. On September 8, 2006, Creel held a staff meeting wherein he addressed the approval of leave for non-city related functions. Following the meeting, Young submitted a request for leave for three hours for the Planning and Zoning Commission meeting. Creel approved the request but only “if [Young’s] inspections are caught up at time of meeting.” Young argues that this shows that he was singled out by Creel because as a building inspector, his responsibilities accumulate daily and are never caught up. Young attended the meeting and later received a letter of reprimand because all of his inspections were not current. This letter was received on the same day as the suspension letter.

¶ 11. Young next argues that Creel wrongfully suspended him based on unverified information from Draper. Young argues that Draper had no credibility because she did not produce the identities of the customers who allegedly overheard the comment. Draper testified at the hearing that she had no doubt that she heard the comment correctly. Further, Civil Service Regulation 10.01(a)(2) authorizes suspension without pay for “discourteous treatment of the public or a fellow employee.” Therefore, it was not necessary for the customers who overheard the comment to be identified.

¶ 12. The job of this Court is to determine “whether or not, from an examination of the record there exists credible evidence substantiating the [Cjommission’s action.” Grant v. City of Columbus, 812 So.2d 976, 978(¶ 6) (Miss.2002). “[T]his Court must not reweigh the facts of the case or insert its judgment for that of the agency.” Allen v. Miss. Employment Sec. Comm’n, 639 So.2d 904, 906 (Miss.1994). Creel testified repeatedly that Young was disciplined for using profanity over the radio. Draper testified that she was sure she heard Young’s comment correctly. We find that sufficient evidence was presented for the Commission to find that it was Young’s inappropriate comment, not the memoranda, that led to the suspension. Therefore, we find that this issue is without merit.

II. SUBSTANTIAL EVIDENCE

¶ 13. Young argues that the decision of the Commission was not based on substantial evidence. Young asserts that the evidence he presented at the hearing before the administrative law judge was sufficient to show that the decision of the Commission should be reversed.

¶ 14. In support of his allegations that the City’s actions were not in good faith, Young presented the testimony of two fellow employees who stated that they had never received any conditions on their leave-request forms. Young also called Patricia Rose to testify as to Draper’s credibility. Rose testified as follows:

I had one incident where [Draper] had come up to the counter and just out of the blue had said that I had said something that I hadn’t. And so I went to Mr. Creel and told him I said, “I just want to make you aware of the fact I didn’t say what she said I said.” ... He said, “Well, don’t worry about it. You know I know how she is.... ”

¶ 15. Young also attempted to call Bill Prince as a witness, but the Commission did not allow Prince to testify because Young failed to give timely notice that he would be called as a witness. Young argues that the exclusion of this testimony was unduly prejudicial and resulted in an unfair hearing. A proffer was made at the hearing that Prince had been the city building official from 1988 to 2005, and during that time, he never heard Young use profanity on the radio. Young himself testified that he never used profanity over the radio, and we cannot find that the absence of Prince’s testimony prejudiced Young.

¶ 16. Despite the evidence presented by Young, we find that the Commission had substantial evidence to find that Young’s suspension was not based on political or religious reasons and was made in good faith for cause. The Commission conducted a thorough investigation and held a public hearing, which lasted approximately seven hours. We find substantial evidence in the record to support the Commission’s findings. Therefore, we find that this issue is without merit.

¶ 17. THE JUDGMENT OF THE HARRISON COUNTY CIRCUIT COURT IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.

KING, C.J., MYERS, P.J., IRVING, GRIFFIS, BARNES, ISHEE, ROBERTS, CARLTON AND MAXWELL, JJ., CONCUR.


author: Judge Madeleine M. Landrieu

text:
    ENGINE 22, LLC v. LAND & STRUCTURE, LLC Land & Structure, L.L.C. v. Marie Eva Yaeger Kern, Marie Francis Kern Cucullu Engine 22, L.L.C. Gregory K. Surrey, David Posner, City of New Orleans
    NO. 2016-CA-0664, NO. 2016-CA-0665
    Court of Appeal of Louisiana, Fourth Circuit.
    APRIL 5, 2017

      John A. E, Davidson, Christopher' J. Davidson, DAVIDSON & DAVIDSON, APLC, 2901 Independence Street, Suite 201, Metairie, LA 70006, COUNSEL FOR PLAINTIFF/APPELLEE
    Lizette M. Radovic, MILLER-RADO-VIC, LLC, 650 Poydras-Street, Suite 1400, New Orleans, LA 70130, COUNSEL FOR DEFENDANT/APPELLANT
    (Court composed of Judge Daniel L. Dysart, Judge Madeleine M. Landrieu, Judge Marion F. Edwards, Pro Tempore)
   Judge Madeleine M. Landrieu

. | ,The plaintiff, Engine 22, L.L.C.. (“Engine 22”), filed an action in the district court to annul a tax sale of a certain property from the City of New Orleans (“the City”) to the defendant, Land and Structure, L.L.C, (“Land and Structure”). Land and Structure filed a competing action to confirm its title to the property. These two actions were consolidated in the district court. Land and Structure asserted various exceptions in response to the suit to annul. The trial court rendered written judgment denying these exceptions on April 14, 2016. Land and Structure filed the instant appeal from that judgment, contending that the exceptions of no right of action, no cause of action and prescription were erroneously denied.

JURISDICTION

This court lacks appellate jurisdiction to review a judgment denying exceptions, which is an interlocutory, rather than a final, judgment. See La. C.C.P. arts. 1841, 2083; Box v. French Market Corporation, 593 So.2d 836 (La. App. 4th Cir. 1992). However, as the motion for appeal was filed within the thirty-day time period allowed for taking a writ application, we exercise our discretion to convert the appeal to a writ application. We grant the writ application and consider the)?, issues presented under our supervisory jurisdiction. See Stelluto v. Stelluto, 2005-0074, p. 7 (La. 6/29/05), 914 So.2d 34, 39.

FACTS AND PROCEEDINGS BELOW

There is no disagreement among the parties as to the essential facts of this matter. On November 20, 2003, the City acquired the property at issue as a result of the failure of the owners, Mr. and Mrs. Frank Kern, to pay their 1992 ad valorem taxes.

In 2007, Engine 22 purchased the property from the City at a sale of abandoned property. The deed reflecting the sale to Engine 22 states: “Purchaser agrees to renovate, develop and/or resubdivide the property in accordance with the plans submitted by Purchaser to the City within 270 days from the date hereof...” The deed also provides that in the event the purchaser violates the obligations it has agreed to, the City may enforce the purchaser’s obligations “by any means or remedy.. .allowed by law,” or may “revoke, rescind and dissolve this sale by ordinary, summary or executory process....” This deed was executed before two notaries, with Engine 22 signing on April 19, 2007, and the City’s representative signing on December 18, 2007. For reasons not reflected in the record, this deed was not recorded in the public records until March 31, 2011, nearly three and a half years after its execution.

After the deed was executed, but before it was recorded in the public record, the City conducted a tax sale for unpaid 2008/2009 ad valorem taxes by the prior owner, Mr. Kern. Land and Structure purchased the property at this tax sale, which was recorded on November 4, 2010. On June 19, 2011, Engine 22 filed a petition to annul the tax sale to Land and Structure. In its petition, Engine 22 alleges the sale should be nullified because the property was owned by the CityR and therefore not subject to taxation in 2008 and 2009. Alternatively, Engine 22 alleges the tax sale is an absolute nullity because there was no notice issued to Engine 22. Land and Structure asserted four exceptions to Engine 22’s suit: no cause of action, no right of action, prescription and non-joinder of a party (the City). The trial court conducted a hearing on these exceptions on April 4, 2016 and signed a judgment denying them the same day. Engine 22 seeks review of the denial of three of the exceptions, namely; no cause of action, no right of action, and prescription.

DISCUSSION

Exception of No Cause of Action

Land and Structure argues that Engine 22’s petition fails to state a cause of action. In its Petition to Annul Tax Sale, filed January 19, 2016, Engine 22 alleges that the tax sale to Land and Structure is an absolute nullity because “no proper notice of tax sale was issued in connection therewith.”

An exception of no cause of action questions whether the law extends a remedy to anyone under the factual allegations of the petition. Moses v. Moses, 2015-0140, p. 3 (La.App. 4 Cir. 8/5/15), 174 So.3d 227, 229-30, writ denied, 2015-1643 (La. 10/30/15), 180 So.3d 300 (citations omitted). No evidence may be introduced to support or controvert an exception of no cause of action. Id.-, see La. C.C.P. art. 931. The exception is tried on the face of the petition, and each well-pleaded fact contained therein must be accepted as true. Id. In reviewing the petition to determine whether a cause of action has been stated, the court must, if possible, interpret it to maintain the cause of action. Any reasonable doubt | ¿concerning the sufficiency of the petition must be resolved in favor of finding that a cause of action has been stated. Blanchard v. Blanchard, 2012-0106, p.7 (La.App. 1 Cir. 12/31/12), 112 So.3d 243, 248-49. Appellate courts conduct a de novo review of a trial court’s ruling granting an exception of no cause of action as the exception presents questions of law. Moses v. Moses, 2015-0140, p. 3, 174 So.3d at 229 (citations omitted).

A tax sale without proper notice is an absolute nullity. See Cititax Group., L.L.C. v. Gibert, 2012-0633, 2012-0634 (La. App. 4 Cir. 12/19/12), 108 So.3d 229. A suit to annul a tax sale is recognized as a cause of action in the Article VII, Section 25 (C) of the Louisiana Constitution. Therefore, Engine 22’s petition states a cause of action. The trial court did not err by denying this exception.

Exception of No Right of Action

The function of the peremptory exception of no right of action is to determine whether the plaintiff belongs to a class of persons to whom the law grants the cause of action asserted in the suit. Blanchard v. Blanchard, supra, 2012-0106, p. 7, 112 So.3d at 249. The focus is on whether the particular plaintiff has a right to bring the suit; it assumes that the petition states a valid cause of action for some person and questions whether the plaintiff in the particular case is a member of the class that has a legal interest in the subject matter of the litigation. Id. (citing Benoit v. Allstate Ins. Co., 2000-0424 (La. 11/28/00), 773 So.2d 702] R 708. Whether a plaintiff has a right of action is a question of law; therefore, it is reviewed de novo on appeal. Id.

The burden of showing that the plaintiff has not stated a cause or right of action is upon the party raising the exception. Kirksey v. New Orleans Jazz & Heritage Found., Inc., 2012-1351, p. 7 (La. App. 4 Cir. 2/27/13, 7), 116 So.3d 664, 669. Here, Land and Structure argues Engine 22 had no right to notice of the tax sale because Engine 22 did not comply with the obligations it agreed to undertake in the 2007 deed. However, Land and Structure provided no proof of Engine 22’s alleged noncompliance, nor any evidence that the City had revoked or rescinded the sale to Engine 22. As a party in possession of a deed showing it purchased the property from the City prior to the tax sale to Land and Structure, Engine 22 has a right of action to bring a suit to nullify the tax sale on account of lack of proper notice. Therefore, the trial court did not err by denying the exception of no right of action.

Exception of Prescription

In most cases, a party asserting a peremptory exception of prescription bears the burden of proof. However, if prescription is evident from the face of the pleadings, the plaintiff will bear the burden of showing an action has not prescribed. Johnson v. Allen, 2014-0490, p. 3 (La.App. 4 Cir. 1/7/15), 158 So.3d 852, 854 (citations omitted). If evidence is introduced on the exception of prescription, the trial court’s findings of fact are reviewed according to the manifest error/clearly wrong standard. Id.

| fjLand and Structure contends that Engine 22’s suit is prescribed because it was filed after the expiration of the redemptive period. Land and Structure has cited no law or jurisprudence supporting this argument.

A tax sale without proper notice is an absolute nullity; an absolute nullity may be attacked collaterally at any time, and is not cured by the peremptive period. Cititax Grp., L.L.C. v. Gibert, supra, pp. 9-10, 108 So.3d at 235. In Sutter v. Dane Investments, Inc., 2007-1268, 2007-1269 (La.App. 4 Cir. 6/4/08), 985 So.2d 1263, this court affirmed a judgment nullifying a tax sale for lack of notice where the nullity action was brought ten years after the recordation of the sale. We note that even the statutory time periods for bringing an action to declare a tax sale a relative nullity (i.e., a redemptive nullity or a payment nullity as provided for in La. R.S. 47:2286) are predicated upon receipt of due notice. La. R.S. 47: 2287 provides, in pertinent part:

A. Any action to annul a tax sale on grounds of a redemption nullity shall be brought before the earlier of:
(1) Six months after a person is duly-notified using a notice, other than the notice provided in R.S. 47:2156 that is sent between the time that the redemptive period ends and five years after the date of the recordation of the tax sale certificate.
(2) If a person is duly notified more than five years after the date of the recordation of the tax sale certificate, sixty days after the person is duly notified.
B. An action to annul a tax sale on grounds of a payment nullity shall be brought before the later of:
(1) Five years after the recordation of the tax sale certificate.
(2) If the person bringing the action was not duly notified at least sixty -days before the end of that five-year period, then within sixty days after the date that the person was duly notified.

|7In this case, Engine <22 alleges there was no proper notice afforded it by the City of the tax sale to Land and Structure. Therefore, the trial court did not err by denying the exception of prescription.

CONCLUSION

For the reasons stated, the appeal is converted to a writ application, the writ is granted and relief is denied.

APPEAL CONVERTED TO WRIT APPLICATION; WRIT GRANTED AND RELIEF DENIED

      . Engine 22 does not seek review of the trial court’s denial of the exception of non-joinder of the City.

      . La. Const, art. VII, § 25(C), provides, in pertinent part:
      . Annulment. No sale of property for taxes shall be set aside for any cause, except on proof of payment of the taxes prior to the date of the sale, unless the proceeding to annul is instituted within six months after service of notice of sale. A notice of sale shall not be served until the final day for redemption has ended. It must be served within five years after the date of the recor-dation of the tax deed if no notice is given.

      . Whether Engine 22 was a record owner entitled to notice under the facts of this case is a matter to be determined at trial.

      . As stated in footnote 3, whether Engine 22 is a party that was entitled to notice under the law as applied to the particular facts of this case is an issue for trial.