author: COOKS, Judge. SAUNDERS, Judge.

text:
    STREAM FAMILY LIMITED PARTNERSHIP, et al. v. MARATHON OIL CO., et al.
    No. 09-561.
    Court of Appeal of Louisiana, Third Circuit.
    Dec. 23, 2009.

      A.J. Gray, III, Bert R. Yakupzack, The Gray Law Firm, Lake Charles, LA, for Plaintiffs/Appellants, Stream Family Ltd. Partnership, et al.
    Richard E. Gerard, Robert E. Landry, Scofield, Gerard, Singletary & Pohorelsky, Lake Charles, LA, David A. Pluehinsky, Beirne, Maynard & Parsons, L.L.P., Houston, TX, for Defendant/Appellee, Marathon Oil Company.
    Court composed of SYLVIA R. COOKS, JOHN D. SAUNDERS, and SHANNON J. GREMILLION, Judges.
   COOKS, Judge.

| ]This case involves an oil and gas lease (hereafter the “Stream Lease”) issued in 1984 by ancestors in title of the Stream Family Limited Partnership, Harold Steam Investment Trust, Gray Stream Investment Trust, Sandra Stream Investment Trust, and Harold H. Stream, III (hereafter referred to as “Stream”) to TXO Production Corporation. The lease covered 662 acres of land near the coast in southwest Cameron Parish. TXO Production became Marathon Oil Company.

Marathon successfully drilled and completed the TXO Gray Estate No. 1 Well on the Stream Property. Approximately one year after completing the well, Marathon began selling interests in the Stream Lease to various third parties. In 1985, Marathon sold a 25% interest in the Stream Lease to Apcot-Finadel Joint Venture (hereafter Apcot). In accordance with the Stream Lease, Marathon requested consent to assign from Stream. Stream consented to the requested assignment on the condition that Marathon (then TXO) remain sole operator of the lease.

In 1987, Apcot assigned its 25% interest in the Stream Lease to Fina Oil and Chemical Company and Petrofina Delaware, Inc. Apcot did not request that Steam consent to the assignment. In 1998, the 25% interest was sold by Fina and Petrofina to E.K. Properties, Inc. According to Stream, it had no knowledge of, and did not consent to, this assignment.

In 1992, Marathon assigned all its remaining 75% interest in the Stream Lease to Shocker Energy of Louisiana, Inc. By letter dated July 13, 1992, Marathon requested that Stream consent to the assignment of the lease to Shocker. By letter dated July 17, 1992, Stream consented on the condition that Marathon not be relieved of any obligations under the Stream Lease. Thereafter, Marathon had no direct involvement with the Stream Lease.

12Shocker assigned its interest in the Stream Lease to La Mesa Production, Inc. By letter dated November 5, 1992, La Mesa requested that Stream consent to the assignment of the lease to it from Shocker. By letter dated November 9, 1992, Stream consented with the understanding that the consent did not relieve Marathon and/or Shocker from any obligations under the Stream Lease.

Pursuant to the Stream Lease, La Mesa, as operator, produced the TXO Gray Estate No. 1 Well from 1992 to March 1, 2004. Despite continuing to operate the well and procure revenues in excess of two million dollars, La Mesa made no royalty payments to Stream for six years, from May 1998 through March 2004.

The last royalty payment made by La Mesa occurred on May 25,1998. According to Stream’s Chief Financial Officer/Administrator, Bruce Kirkpatrick, not long after the last royalty payment made by La Mesa, Gayle Bourdier, a Stream land records assistant, prepared a memo to her supervisor concerning La Mesa’s failure to make royalty payments. Ms. Bourdier also referenced the fact La Mesa was classified as a “bad operator” by the Department of Conservation, and had numerous complaints against it. She specifically concluded Stream would “have a hard time getting your money.” Mr. Kirkpatrick acknowledged the memo raised a red flag within the Stream organization concerning La Mesa’s nonpayment of royalties. Kirkpatrick also stated he was unaware of any communication from Stream to Marathon about the royalty nonpayments until a demand letter was sent on March 12, 2004.

In that demand letter, Stream requested payment of royalties from Marathon, Ap-cot, Shocker and La Mesa, pursuant to La. R.S. 31:137 et seq. and La. R.S. 31:212.21 et seq. Total E & P USA, Inc. and Atofina Petrochemicals, Inc., as successors to Ap-cot, Fina and Petrofina responded to Stream’s demands by entering into a settlement agreement in exchange for their release. Marathon, Shocker, La [-¡Mesa and E.K. Producers did not pay the past due royalties requested by Stream.

On September 17, 2004, Stream filed its Petition for Damages in this matter requesting judgment in an amount equal to all royalties due since May 1, 1998 under the Stream Lease. Defendants filed peremptory exceptions of prescription. In a judgment dated December 18, 2006, the trial court ordered that any claims of Stream for unpaid royalties under the Stream Lease earlier than three years pri- or to the filing of the lawsuit were prescribed. This decision has not been appealed, and is a final judgment.

Stream subsequently filed a motion for summary judgment on August 29, 2008, stating it was entitled to all royalties attributable to production from the TXO Gray Estate No. 1 Well from September 17, 2001 through March 1, 2004. Marathon filed its own motion for summary judgment on September 4, 2008, arguing that language in the Stream Lease should absolve Marathon from its obligation to pay Stream the royalties. After a hearing on the motions on October 29, 2008, the trial court set forth the following oral reasons for judgment:

The Court’s going to rely upon a maxim of statutory and contract construction that the [lesser] — and not the lessee— but the [lesser] is included in the greater. Here, this contract is drafted by the Stream interest, and we don’t have to worry whether or not Paragraph 8(C)(4) is covered by [Louisiana Mineral Code] Article 133 because it’s — the paragraph is fashioned to fit into and it says that certain actions will be an expressed re-solutory condition, and if untimely and improper payments of royalties meet this condition, certainly nonpayment would fit. So by the terms of this lease, the history of nonpayment would have activated this condition and resulted in a cancellation of the lease or a dissolution of the lease. Considering that the lease was dissolved well before the last three years, for which plaintiff is now seeking these royalties, [Marathon] would be relieved.
And so the Court will first deny the Motion for Summary Judgment by the plaintiff because I think there’s too many things that would develop into material facts of disputed facts, but after that denial, I will grant the Motion for Summary Judgment by [Marathon].

Thus, the trial court found the Stream Lease terminated in accordance with the |4express resolutory condition prior to September of 2001, which was well after the continued nonpayment of royalties by La Mesa that began in May of 1998.

Stream has appealed the trial court’s grant of summary judgment in favor of Marathon, asserting the following assignments of error:

(1) The trial court erred in granting the motion for summary judgment dismissing Stream’s claims against Marathon;
(2) Having failed to apply as a matter of law that La. R.S. Art. 31:137 is an indispensable prerequisite to judicial demand for damages or dissolution of the lease, the trial court erred in granting a motion for summary judgment dismissing Stream’s claims against Marathon;
(3) If the Stream Lease terminated by express resolutory condition, the lease was reconducted when the lessee remained in possession and the trial court erred in granting the motion for summary judgment dismissing Stream’s claims against Marathon.

ANALYSIS

Because the judgment on appeal is a summary judgment, our review is de novo, “using the same criteria that govern the trial court’s consideration of whether summary judgment is appropriate, i.e., whether there is a genuine issue of material fact and whether the mover is entitled to judgment as a matter of law.” Supreme Serv. & Specialty Co., Inc. v. Sonny Greer, Inc., 06-1827, p. 4 (La.5/22/07), 958 So.2d 634, 638.

The motion for summary judgment is a procedural device to avoid a full-scale trial when there is no genuine issue of material fact. Prime Income Asset Management, Inc. v. Tauzin, 07-1380 (La.App. 3 Cir. 4/30/08), 981 So.2d 897. Summary judgment procedure is designed to secure the just, speedy and inexpensive determination of every action, except certain domestic actions. The procedure is favored and shall be construed to accomplish these ends. La.Code Civ.P. art. 966(A)(2). The motion should be granted if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that [ 5there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. La.Code Civ.P. art. 966(B).

At issue in this case is Paragraph 8(C)(4) of the Steam Lease, which provides as follows:

Untimely or improper payment for royalties shall constitute an express resolu-tory condition of this lease with respect to LESSEE’S rights. Except in instances of willfully or persistently late or improper payment LESSOR shall give twenty-one (21) days written notice of LESSEE’S failure to make timely or proper payment of royalties as a prerequisite to a successful judicial demand for dissolution of the lease. In the instance of willfully or persistently late or improper payment, LESSOR need not give such notice and the lease shall resolve immediately.

Marathon argued, and the trial court agreed, that the record established the royalty payments owed by La Mesa to Stream were “willfully or persistently late or improper,” thereby activating the mandatory, express resolutory condition contained in the lease.

Stream argues, while the record is clear that royalties ceased being paid in 1998, there is no evidence in the record that the cessation of payments were willful or intentional as found by the trial court. The record simply establishes payments were not made.

We note Stream’s Chief Financial Officer/Administrator, Bruce Kirkpatrick, testified as follows:

Q .... to the Stream interest, is it your belief that the nonpayment of royalties by E.K., La Mesa and/or Shocker was willful and intentional at that point in time when the — I mean, were there any other royalty owners under the particular well other than the Stream interest?
A. There were not.
Q. And again, its your belief that—
A. It’s my belief that it was intentionally or willfully not paid.
Q. Okay. And we don’t know why?
IfiA. No.

Although he was unsure as to the reasons why royalties were not paid, Kirkpatrick was steadfast that he believed that the royalties were “intentionally or willfully not paid.” Moreover, in its opposition memorandum, La Mesa admitted they were “unable to pay the royalties during [the six-year] time period” and that “these payments became persistently late and improper.” Considering these admissions, we cannot say the trial court erred in finding the payments were “willfully or persistently late or improper.”

Stream also attempts to argue that Paragraph 8(C)(4) refers only to “willfully or persistently late or improper payment,” and makes no specific reference to nonpayments. Essentially, Stream argues that nonpayment, even over a substantial period of time, falls outside of the phrase “willfully or persistently late or improper payment.” The trial court disagreed, finding if the express resolutory condition applied to a willfully or persistently late or improper payment, then “certainly nonpayment would fit.” Marathon notes that the trial court’s conclusion that nonpayment “fits” is buttressed by Stream itself. In the March 12, 2004 demand letter sent by Stream, it specifically stated that “[u]n-der Paragraph 8(C)(4) of the subject lease, failure to pay royalties is an express reso-lutory condition of the subject lease.” We agree, and find no merit in this argument.

Stream also argues on appeal that the first sentence of Paragraph 8(C)(4) only refers to the “LESSEE’S rights” and not the “Lessee’s obligations.” We agree with Marathon, that this argument is “purely semantical,” and does not change the outcome in this case. The termination of the “lessee’s rights” under the express resolu-tory condition ends all rights that La Mesa had under the lease, including the right to operate wells. This would make La Mesa a trespasser on the leased property, and 17Stream would have every right to pursue them for recovery of the amounts illegally removed from the property. The same result follows whether the termination occasioned by the activation of the express resolutory condition is described as the termination of the lease or the termination of the lessee’s rights.

In its second assignment of error, Stream argues should this Court consider the express resolutory condition as applicable, La. R.S. 31:137 et seq., recognizes written notice by the lessee as an indispensable prerequisite to judicial demand for dissolution of a lease. La. R.S. 31:137 provides that “[i]f a mineral lessor seeks relief for the failure of his lessee to make timely or proper payment of royalties, he must give his lessee written notice of such failure as a prerequisite to a judicial demand for damages or dissolution of the lease.”

Stream argues it and Marathon “attempted to avoid the indispensable, prerequisite of notice by making willfully late, persistently late or improper payments an express resolutory condition. The attempt purports to avoid judicial discretion for dissolution of a lease by suggesting the reason for and the occasion of nonpayment of royalties could be determined subjectively.” Stream argues it and Marathon cannot contract away the indispensable prerequisite of written notice as required by the Mineral Code because such is barred by public policy.

Marathon notes that the public policy argument by Stream attempts to distance itself from the express resolutory condition it placed in the lease. Marathon also | scontends La. R.S. 31:137 does not contradict La. R.S. 31:133, but “rather provides the framework for situations in which a lease does not contain an express resoluto-ry condition for royalty nonpayment, thereby requiring the mineral lessor to seek judicial demand for dissolution of the lease.” La. R.S. 31:133, entitled “Termination of Mineral Lease,” provides “[a] mineral lease terminates at the expiration of the agreed term or upon the occurrence of an express resolutory condition.” The official comments to La. R.S. 31:133 discuss the intent of that article, stating it is “to distinguish those situations in which a lease expires by its own terms ... by the occurrence of some express resolutory condition ... from those in which the grievance is nonperformance of the obligations of the lease.” The comments further state that “when such resolutory conditions occur, no putting in default is necessary as a prerequisite to an action seeking to have the lease declared terminated.”

The express resolutory condition found in the Stream lease clearly provides, “[i]n the instance of willfully or persistently late or improper payment, LESSOR need not give such notice and the lease shall resolve immediately.” The trial court found La Mesa’s failure to make royalty payments triggered the express resolutory condition in the lease and, thus, there was no need to seek judicial demand for dissolution under La. R.S. 31:137. We find no error in this conclusion.

Stream argues this Court’s decision in Acquisitions, Inc. v. Frontier Explorations, Inc., 432 So.2d 1095 (La.App. 3 Cir.1983) stands for the proposition that the written notice prerequisite of La. R.S. 31:137 is applicable in any situation where lease termination results from nonpayment of royalties. However, in Acquisitions, the shut-in provision at issue did not contain an express resolutory condition. In analyzing La. R.S. 31:133 and La. R.S. 31:137, this Court noted “whether the remedy of cancellation is available without a putting in default depends \ 9upon the terms of the lease.” Because the lease did not contain an express resolutory condition, we found the written notice requirement on La. R.S. 31:137 applicable. That is not the case here because the Stream lease contains such an express resolutory condition.

In its final assignment of error, Steam argues that the lease reconducted and remained in existence on a month to month basis. Marathon notes that Stream failed to raise this argument below, and it cannot be considered for the first time on appeal. Stream acknowledges it did not argue the issue of reconduction below, but asserts this court, “has authority to consider any legal point or theory presented in the case, when the record contains all the necessary evidence to determine the question, even though no ruling was made on that issue by the trial court.” See Placid Oil Company v. Taylor, 313 So.2d 626 (La.App. 3 Cir.1975). Placid relied upon this court’s earlier ruling in Devillier v. City of Opelousas, 247 So.2d 412 (La.App. 3rd Cir.1971), wherein we expressed the applicable rule as follows:

Ordinarily, issues not passed on by the trial court are not reviewable by the appellate court. Nevertheless, the appellate court in discharging its duty to render a judgment which is just, legal and proper upon the record, has authority to consider any legal point or theory presented in the case, when the record contains all the evidence necessary to determine the question, even though no ruling was made on that issue by the trial court. LSA-C.C.P. Art. 2164, and comment (a) under that article; Blanchard v. Ogima, 200 So.2d 374 (La.App. 4 Cir.1967); Norman v. City of Shreveport, 141 So.2d 903 (La.App. 2 Cir.1962); Ohanna v. Ohanna, 129 So.2d 249 (La.App. 4 Cir.1961); Williams v. American Employers’ Insurance Co., 10 So.2d 516 (La.App. 1 Cir.1942).

In reviewing the record, we note Stream was aware of and had sufficient opportunity to prepare and submit the issue of reconduction for consideration below, but for whatever reason elected not to do so. Where a party fails to raise an issue in the trial court in pleadings, in an opposition to a motion for summary judgment, or in a motion for new trial, the issue is not preserved for consideration on appeal. Warner v. Alex Enterprises, Inc., 08-929 (La.App. 4 Cir. 1/28/09), 4 So.3d 922; see also Rule 1-3, Uniform Rules — Courts of Appeal. Therefore, we will not entertain this issue for the first time on appellate review.

DECREE

For the foregoing reasons, the judgment of the trial court if affirmed. All costs of this appeal are assessed to plaintiffs-appellants, Stream Family Limited Partnership, et al.

AFFIRMED.

SAUNDERS, J., dissents with written reasons.

SAUNDERS, Judge.

lilt is well settled that summary judgment should be granted “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.” La.Code Civ.P. art. 966(B).

In the matter before us there are still an unresolved issue of material fact. There is no evidence in the record as to the willfulness of the nonpayment of royalties. Testimony from Bruce Kirkpatrick, Stream’s CFO, does not settle the issue as to La Mesa’s intentions. Further, the language “willfully or persistently late or improper payment” indicates that there must, in fact, be a payment. The majority notes with approval the trial court’s statement that “certainly nonpayment would fit” into this language. I don’t find this to necessarily be true. It is an issue that comes down to the intent of the parties to the lease. A literal reading of the lease indicates that a nonpayment is not one of the triggers that would effectuate the resolutory condition. At a minimum, the intent of the parties is a factual determination that is not appropriate for summary judgment.

Even if the requisite conduct necessary to trigger the clause in Paragraph 8(C)(4) existed, it is still unclear that the parties intended for the lease to automatically dissolve. Not only does it seem improbable that Stream would desire such a result, when read as a whole, the lease suggests in paragraphs 6 and 19 that they did not.

Paragraph 6 of the lease states that if the lease terminates for any cause, the Lessee must furnish the Lessor with a recordable release within thirty (30) days. Paragraph 19 states that if Lessee is not complying -with the terms of the lease, Lessor shall notify Lessee in writing and allow fifteen (15) days for Lessee to cure all | ginonetary defaults. Certainly nonpayment of royalties would fall under such noncompliance and therefore should not automatically dissolve the lease.

Furthermore, there remains the issue of reconduction of the lease. When a lease is for a fixed term, as was the lease in question, the lease terminates upon the expiration of that term unless it is reconducted. La.Civ.Code art. 2720. A lease is recon-ducted if, after the expiration of the term, and without notice to vacate or terminate or other opposition by the lessor or the lessee, the lessee remains in possession for one week in the case of a nonagricultural lease with a fixed term that is longer than a week. La.Civ.Code art. 2721. The lessee clearly remained in possession of the leased premises long after it ceased making royalty payments, and it appears that the lease was reconducted.

The hangup on this issue is that the argument for reconduction was not made at the trial court level. However, Louisiana Code of Civil Procedure Article 2164 provides this court with the express authority to render any judgment which is just, legal, and proper:

The appellate court shall render any judgment which is just, legal, and proper upon the record on appeal. The court may award damages for frivolous appeal; and may tax the costs of the lower or appellate court, or any part thereof, against any party to the suit, as in its judgment may be considered equitable.

The court in Givens v. Richland-Morris Agency, Inc., 369 So.2d 1184, 1185 (La.App. 2 Cir.1979), considered a similar issue and held that “this court has the authority under La. C.C.P. art. 2164 to render any judgment which is just, legal, and proper upon the record on appeal irrespective of whether a particular legal point or theory is made.”

It is also well settled law before this court that when the record is sufficient to | smake a determination, the court has the authority to consider an issue despite whether the issue had been ruled on at the trial court level. Placid Oil v. Taylor, 313 So.2d 626 (La.App. 3 Cir.), writ granted and remanded for rehearing, 318 So.2d 40 (La.), on remand, 325 So.2d 313 (La.App. 3 Cir.1975), writ denied, 329 So.2d 455 (La. 1976), Devillier v. City of Opelousas, 247 So.2d 412 (La.App. 3 Cir.1971), Savoy v. Cecil Perry Imp. Co., 96-889 (La.App. 3 Cir. 2/5/97), 691 So.2d 692.

Ordinarily, issues not passed on by the trial court are not reviewable by the appellate court. Nevertheless, the appellate court in discharging its duty to render a judgment which is just, legal and proper upon the record, has authority to consider any legal point or theory presented in the case, when the record contains all the evidence necessary to determine the question, even though no ruling was made on that issue by the trial court. LSA-C.C.P. Art. 2164, and comment (a) under that article; Blanchard v. Ogima, 200 So.2d 374 (La.App. 4 Cir.1967); Norman v. City of Shreveport, 141 So.2d 903 (La.App. 2 Cir.1962); Ohanna v. Ohanna, 129 So.2d 249 (La.App. 4 Cir.1961); Williams v. American Employers’ Insurance Co., 10 So.2d 516 (La.App. 1 Cir.1942).

Devillier, 247 So.2d at 418.

The majority opinion notes the Uniform Rules, Courts of Appeal, Rule 1-3, Scope of Review, which states that “[t]he Courts of Appeal will review only issues which were submitted to the trial court and which are contained in specifications or assignments of error, unless the interest of justice clearly requires otherwise.” I find that this is a case where this caveat would be well applied. There is a great probability that the entire case will turn on the issue of the lease’s reconduction. To ignore the issue when the record provides us with ample information to make a judgment would clearly run contrary to the interests of justice.

Given the questions regarding the intent of the parties, whether the resolutory condition should apply, and the strong case to be made for entertaining the reconduction issue, I feel that this matter would be better resolved at trial and that the Lgrant of summary judgment should be reversed.

      . The official comments to La. R.S. 31:137 state that the "total effect of [La. R.S. 31:137-141], then, is to provide a spur to timely payment of royalties due while giving lessees
        a reasonable way in which to avoid the harsh remedy of cancellation.” (Emphasis added.) The comments also further note it is the "intent of Articles 137-141 to provide lessors with a meaningful remedy while simultaneously giving operators who have made substantial investments in producing properties the security of title which the nature and size of their investment deserves.” The comments clearly indicate of great concern was the situation of a lessee, who expended considerable sums of money in developing and producing a property, from being subject to dissolution simply because a few payments were missed. That situation is not present here. What we have instead, is a lessor who, by its own acknowledgment, was aware of the lessee's nonpayments, yet did nothing to pursue payment. This was not the situation which Articles 137-141 were designed to protect. Clearly, Stream has a remedy and can pursue La Mesa for the payments owed.


source: Caselaw Access Project

author: CHANDLER, Justice, CARLSON, Presiding Justice, PIERCE, Justice,

license: Public Domain

text:
    Don BARRETT, Individually; Barrett Law Office, P.A. and Lovelace Law Firm, P.A. v. JONES, FUNDERBURG, SESSUMS, PETERSON & LEE, LLC. Don Barrett, Individually, Barrett Law Office, P.A., and Lovelace Law Firm, P.A. v. Jones, Funderburg, Sessums, Peterson & Lee, LLC Don Barrett, Individually, Barrett Law Office, P.A., and Lovelace Law Firm, P.A. v. Jones, Funderburg, Sessums, Peterson & Lee, LLC.
    Nos. 2008-IA-00421-SCT, 2008-IA-00788-SCT.
    Supreme Court of Mississippi.
    Nov. 12, 2009.
    Rehearing Denied Jan. 28, 2010.

      Larry D. Moffett, Wilton V. Byars, III, Shea Stewart Scott, Oxford, attorneys for appellants.
    William K. Duke, Jr., Grady F. Tollison, Cameron Morgan Abel, Oxford, attorneys for appellee.
   CHANDLER, Justice,

for the Court.

¶ 1. The Circuit Court of Lafayette County imposed sanctions against all members of the Scruggs Katrina Group (SKG), a joint venture, along with Don Barrett and Richard Scruggs individually, based upon the misconduct of Richard F. Scruggs, who pleaded guilty to conspiracy to bribe the trial judge in the underlying lawsuit over attorneys’ fees. The SKG co-venturers, including the Scruggs Law Firm, P.A. (the Scruggs Firm); Nutt & McAllister, PLLC (the Nutt Firm); the Barrett Law Office, P.A. (the Barrett Firm); and the Lovelace Law Firm (the Lovelace Firm), along with Don Barrett and Richard Scruggs individually, were defendants in a fee-dispute lawsuit filed by a former co-venturer, the law firm of Jones, Funderburg, Sessums, Peterson & Lee, LLC (the Jones Firm). The trial court sanctioned the defendants by striking their answer, striking their motion to compel arbitration, entering a default against all defendants, and ordering the defendants to pay the plaintiffs’ reasonable attorneys fees and costs incurred since July 17, 2007.

¶ 2. In these interlocutory appeals, the Barrett Law Office, P.A. (the Barrett Firm); Don Barrett, individually; and the Lovelace Law Firm (the Lovelace Firm) (hereinafter, collectively, “the appellants”) argue that: (1) the imputation of Richard Scruggs’s bad-faith misconduct to the appellants exceeded the circuit court’s inherent power to sanction; (2) the court erred by sanctioning the appellants because Richard Scruggs had acted outside the ordinary course of business of the joint venture; (3) the court’s failure to consider lesser sanctions was an abuse of discretion; (4) the sanctions violated the appellants’ constitutional rights; (5) the court erred by denying arbitration as a sanction, because the court already had found that the case was subject to mandatory arbitration; (6) the Jones Firm’s settlement with Richard Scruggs, the Scruggs Firm, and the Nutt Firm after the entry of the sanctions order also released the appellants as a matter of law.

¶ 3. We find that the trial court had the discretionary authority to impose sanctions against SKG based upon the acts of a single partner that occurred in the ordinary course of business of SKG. However, we conclude that the trial court erred by finding that Richard Scruggs’s misconduct occurred in the ordinary course of SKG business. Therefore, we reverse the order of sanctions against the appellants. The trial court already has determined that, but for the sanctions, this ease is subject to mandatory arbitration. Therefore, we remand this case for the entry of an order compelling arbitration.

FACTS AND PROCEDURAL HISTORY

A. Preliminary proceedings

¶ 4. On March 28, 2007, the Jones Firm filed an amended complaint, alleging that the parties had executed the SKG joint venture agreement in November 2005. The joint venture agreement provided that the Scruggs Firm’s role was that of lead counsel, the Barrett Firm’s role was that of witness development, the Nutt Firm’s role was that of funding and client relations, the Jones Firm’s role was that of briefing, and the Lovelace Firm’s role was that of expert retention and adjuster retention. The agreement provided for the removal of a member of the joint venture by a supermajority vote, consisting of affirmative votes by four of the co-venturers. The Nutt Firm was to provide one million dollars per year in capital contributions, with any further necessary contributions to be paid pro rata by the other co-ventur-ers. The proceeds of the joint venture were to be distributed in the order of capital contributions first, the firms’ reasonable out-of-pocket expenses second, and attorneys’ fees third. Also, the Nutt Firm was to receive thirty-five percent of the net fee. The distribution was to be made in the following order:

(1) Reimburse Nutt/McAlister for all expenses paid, (2) Refund all capital contributions, (3) Payment of 35% of net fee to Nutt/McAlister for financing the litigation and for their professional efforts, (4) the remaining 65% of the net fees will be divided among the remaining venturers taking into consideration all factors including Rule 1.5 of the Model Rules of Professional Conduct, and contribution to the success of the litigation.

The joint-venture agreement further provided that “any dispute arising under or relating to the terms of this agreement shall be resolved by mandatory binding arbitration, conducted in accordance with the guidelines of the American Arbitration Association. The site of the arbitration shall be Oxford, MS.”

¶ 5. In the amended complaint, the Jones Firm alleged that SKG’s settlement with State Farm Insurance Company had yielded $26,500,000 in attorneys’ fees. The Jones Firm claimed that, despite its performance of the bulk of SKG’s most difficult discovery and trial work, Richard Scruggs and Don Barrett had conspired to set the Jones Firm’s fee allocation at one million dollars, an unacceptably low percentage. Further, the Jones Firm alleged, upon its refusal of the unfair fee allocation, the other four members of SKG voted to remove it from the joint venture and tendered a check for three percent of the net fees, which the Jones Firm refused. Based upon this conduct, the Jones Firm asserted claims against the co-venturers, and Richard Scruggs and Don Barrett individually, for breach of contract, tortious bad-faith breach of contract, breach of fiduciary duties, usurpation, conversion, intentional interference with prospective business advantage, fraud, constructive trust, conspiracy, and unconscionability. The Jones Firm requested a declaratory judgment that it is entitled to twenty percent of all past and future attorneys’ fees collected by SKG. The Jones Firm also requested punitive damages, pre-judgment interest, post-judgment interest, costs, expenses, and reasonable attorneys’ fees. The Jones Firm also claimed that the defendants had waived any right to arbitration by repeatedly refusing requests to arbitrate.

¶ 6. The defendants answered and filed a motion to stay the proceedings and compel arbitration. They asserted that all of the Jones Firm’s claims arose under the joint-venture agreement, and thus were subject to the agreement’s provision for mandatory binding arbitration of any disputes arising under or related to the agreement. After a series of filings concerning the arbitration issue, a hearing occurred before Judge Henry Lackey on July 17, 2007.

¶ 7. However, on November 29, 2007, Judge Lackey entered an order of recusal, and on December 5, 2007, this Court appointed Judge William F. Coleman to preside over the case. On December 7, 2007, the Jones Firm moved for sanctions against the defendants based upon the November 28, 2007, six-count federal indictment of Richard Scruggs and his law partners, David Zachary Scruggs (Zach Scruggs) and Sidney Backstrom, along with Timothy Balducci of the law firm Patterson and Balducci, PLLC, and Steven Patterson, a nonattorney member of Patterson and Balducci, PLLC. The indictment charged Scruggs and the other named codefendants, inter alia, with a conspiracy to attempt to influence Judge Lackey to grant the motion to compel arbitration by offering to pay Judge Lackey $40,000 in exchange for a favorable order.

¶ 8. In summary, the indictment charged the following. Between March 15 and March 28, 2007, Richard Scruggs, Zach Scruggs, Balducci, and Patterson met at the offices of the Scruggs Firm to discuss how to influence the outcome of the case. On March 28, 2007, Balducci met with Judge Lackey and made an overture. However, Judge Lackey became a cooperating witness for the Federal Bureau of Investigation, and he began assisting their investigation in an undercover capacity. On May 4, 2004, Backstrom transmitted a proposed order to Balducci, who in turn transmitted it to Judge Lackey. On September 21, 2007, Balducci and Judge Lackey agreed that Balducci would pay Judge Lackey $40,000 in cash on behalf of Scruggs and the Scruggs Law Firm in exchange for a favorable order. On September 27, 2007, Balducci delivered $20,000 in cash to Judge Lackey. On October 18, 2007, Balducci delivered the order to Richard Scruggs and received from Richard Scruggs a $40,000 check and false documentation that cloaked the bribery reimbursement as fees for jury-selection work and preparation of jury instructions in another case. The same day, Balducci delivered $10,000 to Judge Lackey. On November 1, 2007, Balducci delivered another $10,000 to Judge Lackey. The same day, Balducci and Richard Scruggs discussed making a third $10,000 payment to Judge Lackey; on November 5, 2007, Bal-ducci took hand delivery of the $10,000 check and associated false documentation.

¶ 9. In the motion for sanctions, the Jones Firm averred that “this entire cause of action and the proceedings that have flowed therefrom have been forever tainted, infected by criminal allegations of corrupt acts of certain Defendants or their agents....” The Jones Firm requested an evidentiary hearing, and if clear and convincing evidence of judicial bribery were presented, the Jones Firm requested that the court impose the following sanctions on all defendants: (1) strike the defendants’ answer and their motion to stay proceedings and compel arbitration; (2) enter a default judgment; (8) determine damages; and (4) reimburse the Jones Firm for attorneys’ fees related to defending the motion to stay proceedings and compel arbitration.

B. The trial court’s rulings

¶ 10. Judge Coleman entered three orders on the pending motions, two of which are the subject of these consolidated appeals. The first order held that the parties were bound to mandatory arbitration of the fee dispute; the second order held that the court was empowered to sanction the defendants by striking the motion to compel arbitration and entering a default judgment; the third order imposed that sanction and the other requested sanctions.

1) The January 15, 2008 order

¶ 11. After a hearing, on January 15, 2008, Judge Coleman entered an order finding that the motion to compel arbitration should be granted. However, the trial court held referral of the matter to arbitration in abeyance pending resolution of the motion for sanctions. In an accompanying opinion, Judge Coleman found, inter alia, that: (1) the Jones Firm had knowingly entered into the arbitration agreement, (2) the defendants had not waived their right to arbitration, (3) matters arising out of the fee dispute were subject to arbitration, but (4) the motion for sanctions was not within the scope of the arbitration agreement.

2) The February 26, 2008 order

¶ 12. On February 26, 2008, a hearing occurred on the issue of whether the court has the inherent power to deny arbitration as a sanction for judicial bribery, despite its finding that the issues in the ease were otherwise subject to arbitration. The appellants and the Nutt Firm argued that sanctions could not be assessed against them because they had no knowledge of or culpability in the alleged judicial bribery. In a February 26, 2008, order, Judge Coleman ruled that the trial court had the authority to strike the defendants’ pleadings and enter a default judgment against them as well as the authority to deny referral of the matter to arbitration as a sanction for the alleged judicial bribery. Judge Coleman further found “that as to the conduct on the part of one or more of the defendants in this matter, the actions for one, if shown to have occurred in the furtherance of the purpose of the joint venture, are the actions for all, and the [cjourt may order sanctions accordingly.” The trial court ordered an evidentiary hearing on the motion for sanctions and permitted discovery. On March 13, 2008, the Scruggs defendants filed a petition for an interlocutory appeal of the February 26, 2008, order. On March 26, 2008, the appellants and the Nutt Firm filed a joinder in the petition for an interlocutory appeal.

8) The April 16, 2008 order

¶ 13. At the April 15-16, 2008, hearing on the motion for sanctions, it was established that in the United States District Court for the Northern District of Mississippi, Richard Scruggs, Backstrom, Bal-ducei, and Patterson all had pleaded guilty to conspiracy to commit bribery of an elected state official, that Zach Scruggs had pleaded guilty to misprision of a felony, and that all were awaiting sentencing. No members of the other defendant law firms had been charged in the bribery investigation.

¶ 14. In his testimony before Judge Coleman, Richard Scruggs invoked his rights under the Fifth Amendment. Judge Lackey testified that he initially was contacted by Balducci and had several subsequent interactions with him; at one point, Balducci gave him a proposed order compelling arbitration as to all the defendants. During one such interaction, Bal-ducci told Judge Lackey that “they” had decided to change tactics to delay the entry of the proposed order, and Judge Lackey had assumed that “they” referred to the four other SKG firms. However, Judge Lackey testified that Balducci never told him that Barrett, Nutt, Lovelace, or anyone at their firms knew anything about his contact with Judge Lackey. In fact, Judge Lackey testified, Balducci later told Judge Lackey that the only persons who knew about the scheme were himself, Judge Lackey, and Richard Scruggs.

¶ 15. David Nutt testified that he lacked any knowledge of the attempted bribery scheme until the day after the indictments. Nutt further testified that before the bribery allegations, all the defendants had been represented by the law firm of Daniel, Coker, Horton, and Bell, but they had no joint defense agreement. However, Nutt admitted that all defense fees had been advanced by the Nutt Firm on behalf of the other codefendants. Nutt testified that Richard Scruggs had not been authorized to hire attorneys to act on behalf of the other defendants.

¶ 16. Nutt also testified that the Nutt Firm had paid a $40,000 invoice for voir dire services performed by Balducci in an SKG case referred to in the record as Lisanby v. USAA. Lisanby was one of several SKG cases that were handled exclusively by the Scruggs Firm, but at the time the Nutt Firm was billed for voir dire, Lisanby had not gone to trial. The $40,000 invoice was among many invoices attached to a manifest for $750,000 in SKG expenses submitted by the Scruggs Firm in November 2007 for payment by the Nutt Firm. In fact, the $40,000 invoice was a falsified invoice that billed the bribe money to SKG. Nutt testified that he had not seen the invoice when it arrived, but, apparently, his law partner had approved the invoice for payment along with the rest of the items in the manifest. Nutt testified that after the bribery charges arose, he located the invoice and contacted the FBI. Nutt further testified that the invoice had appeared to be a reasonable charge, and that his firm had had nothing to do with the Lisanby case.

¶ 17. Dewitt Lovelace testified that he never had authorized any ex parte contact with Judge Lackey. Lovelace testified that he had lacked any knowledge of the attempted bribery until he saw the indictments, and that he never had authorized any of the other defendants to act on his behalf. Lovelace further testified that he never paid any defense fees to Daniel Coker, and he never requested that the case go to arbitration. Following this testimony, the parties stipulated that Don Barrett’s testimony would be substantially the same as that of Nutt and Lovelace.

¶ 18. In a bench ruling, Judge Coleman found that in March 2007, Balducci had met with members of the Scruggs Firm and had agreed to influence Judge Lackey for a favorable decision in the Jones case. Judge Coleman further found that this attempt to influence developed into a conspiracy among Richard Scruggs, Zach Scruggs, Backstrom, Balducci, and Patterson to bribe Judge Lackey, which was carried out. However, Judge Coleman found that “there is little, if any, evidence that the other defendants participated or were aware of the bribe or part of the conspiracy.”

¶ 19. Noting that no motion for reconsideration had been made, Judge Coleman refused to reconsider his prior ruling “that as to the conduct on the part of one or more of the defendants in this matter, the actions for one, if shown to have occurred in the furtherance of the purpose of the joint venture, are the actions for all, and the [cjourt may order sanctions accordingly.” Judge Coleman found that, although the complaint listed individual defendants, the Jones Firm’s lawsuit was against SKG itself, or against its assets. Notwithstanding, Judge Coleman granted the motion for sanctions against all defendants, struck the defendants’ pleadings and answer, and entered default in favor of the Jones Firm.

¶ 20. In an April 17, 2007, order, Judge Coleman struck the defendants’ answer and their motion to stay proceedings and compel arbitration, and entered default against them. Judge Coleman ordered a hearing to take an account and to determine the amount due the Jones Firm under the joint-venture agreement. At the hearing, the defendants would be permitted to raise legal issues such as whether the facts established a legal basis for recovery. Judge Coleman allowed discovery on the issue of the Jones Firm’s damages, including its claim for punitive damages. Additionally, Judge Coleman ordered the defendants to pay the Jones Firm’s reasonable attorneys’ fees and expenses incurred since July 17, 2007, until the date of the order, without prejudice to the Jones Firm’s claim for attorney’s fees in the first amended complaint.

¶ 21. On May 1, 2008, the Scruggs defendants moved to supplement their petition for an interlocutory appeal to include the April 16, 2008, order. On May 7, 2008, the Barrett Firm, Don Barrett, the Nutt Firm, and the Lovelace Firm filed a petition for an interlocutory appeal, later joined by the Scruggs Firm, from the April 16, 2008, order. On June 4, 2008, a panel of this Court denied the petition, but on motion for reconsideration, on August 14, 2008, this Court, sitting en banc, granted the petition for an interlocutory appeal and stayed all proceedings in the trial court. On August 25, 2008, the Jones Firm and the Scruggs Firm filed a “Joint Motion to Partially Lift Stay and to Dismiss Certain Parties to Appeal,” and stated that the Jones Firm had settled with the Nutt Firm, Richard Scruggs, and the Scruggs Firm. This Court granted the joint motion. Accordingly, the remaining appellants are the Barrett Firm, Don Barrett, and the Lovelace Firm. This Court granted the appellants’ motion to consolidate the interlocutory appeals.

STANDARD OF REVIEW

¶22. “This Court reviews a trial court’s imposition of sanctions for abuse of discretion.” Wyssbrod v. Wittjen, 798 So.2d 852, 357 (Miss.2001). On review of the sanctions imposed in Pierce v. Heritage Properties, Inc., 688 So.2d 1385, 1388 (Miss.1997), this Court stated:

When this Court reviews a decision that is within the trial court’s discretion, it first asks if the court below applied the correct legal standard. Burkett v. Burkett, 537 So.2d 443, 446 (Miss.1989). If the trial court applied the right standard, then this Court considers whether the decision was one of several reasonable ones which could have been made. Id. This Court will affirm a trial court’s decision unless there is a “definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon weighing of relevant factors.” Cooper v. State Farm Fire & Cas. Co., 568 So.2d 687, 692 (Miss.1990).

DISCUSSION

¶ 23. This Court confínes its discussion to the appellants’ first two issues, which are dispositive of this appeal.

I. WHETHER THE IMPOSITION OF SANCTIONS AGAINST THE APPELLANTS EXCEEDED THE TRIAL COURT’S INHERENT POWERS.

¶ 24. At issue is the trial court’s finding “that as to the conduct on the part of one or more of the defendants in this matter, the actions for one, if shown to have occurred in the furtherance of the purpose of the joint venture, are the actions for all, and the [c]ourt may order sanctions accordingly.” The appellants argue that, absent a finding of bad faith personal to the party to be sanctioned, a court lacks the inherent power impose a sanction on that party. In other words, the appellants argue, a court may not use vicarious liability to sanction an innocent party through the imputation of bad faith to that party.

¶ 25. A court has the inherent power to impose sanctions in order to protect the integrity of the judicial process. Wyssbrod, 798 So.2d at 368. Mississippi’s court rules and statutes specifically provide for the imposition of sanctions against parties or attorneys appearing before the court; under these rules the court may: order the payment of money to a party or an attorney; strike pleadings; enter a default; or set aside a judgment. See Miss. R. Civ. P. 11(b), 37(b), 41(b), and 60(b). Of particular relevance in this case, Uniform Rule of Circuit and County Court Practice 1.10 provides that “no person shall undertake to discuss with or in the presence or hearing of the judge the law or the facts or alleged facts of any case then pending in the court or likely to be instituted therein, ... nor attempt in any manner, ... to influence the decision of the judge in any such case or matter.” Uniform Rule of Circuit and County Court Practice 1.03 provides that any person embraced by the rules who violates any provision of the rules “may be subjected to sanctions, contempt proceedings, or other disciplinary actions imposed or initiated by the court.”

¶ 26. The appellants contend that a court’s inherent power to sanction arises upon a showing that the party to be sanctioned acted in bad faith, and that bad faith cannot be imputed to another party through the doctrine of vicarious liability. The Jones Firm counters that there was evidence before the trial court that the appellants had constructive notice of the criminal acts, because the $40,000 in bribe money was reimbursed from joint-venture funds; thus, there was evidence that they acted in bad faith. Nonetheless, the trial court rejected this evidence, concluding that there was “little, if any” evidence the appellants had knowledge of the bribery conspiracy, and the court ordered sanctions based upon the vicarious liability of joint venturers. Although the Jones Firm does not challenge this finding by the trial court, this Court has held that “where the basis for the award is itself a product of abused discretion, so too is the award.” Ford Motor Co. v. Tennin, 960 So.2d 379, 395 (Miss.2007). We find that the trial court’s refusal to attribute knowledge of the bribery conspiracy to the appellants was not manifestly erroneous; therefore, the finding was within the court’s discretion. For that reason, this Court proceeds to review the trial court’s decision to award sanctions based upon vicarious liability.

¶ 27. The appellants essentially argue that the trial court applied an incorrect legal standard by imposing sanctions upon them based upon their status as joint ven-turers with the Scruggs Firm. They cite the rule that a federal court may not, in the exercise of its inherent powers, order attorney’s fees as a sanction without a finding that the opposing party personally has acted in bad faith. Roadway Express, Inc. v. Piper, 447 U.S. 752, 765-66, 100 S.Ct. 2455, 2468-64, 65 L.Ed.2d 488 (1980); Alyeska Pipeline Service Co. v. Wilderness Soc’y, 421 U.S. 240, 258-59, 95 S.Ct. 1612, 1622-23, 44 L.Ed.2d 141 (1975); Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973). They also cite cases that hold a judicial finding that a plaintiff or defendant acted in bad faith in litigation does not permit the court to impose sanctions against that party’s innocent attorney, or against that party’s innocent coplaintiff or codefendant. Dow Chem. Pacific, Ltd. v. Rascator Maritime S.A., 782 F.2d 329, 344 (2d Cir.1986) (stating that “[a] finding that one defendant has acted in bad faith in conducting litigation does not justify an award of fees against a codefendant”); Browning Debenture Holders’ Comm. v. DAS A Corp., 560 F.2d 1078, 1089 (2d Cir.1977) (stating “[s]ince an award of costs or attorneys’ fees based on bad faith must likewise be personal, such an award may be assessed against plaintiffs ... only after reconsideration and such hearing as the district court finds necessary, that they personally were aware of or otherwise responsible for the procedural action instituted in bad faith”); Bower v. Weisman, 674 F.Supp. 109, 112 (S.D.N.Y.1987) (the plaintiffs counsel could not be assessed sanctions based upon the plaintiffs perjury because there was no showing that counsel knew of, or aided the plaintiff in, the perjury); Arista Records, L.L.C. v. Tschirhart, 241 F.R.D. 462, 464-65 (W.D.Tex.2006) (citing Pressey v. Patterson, 898 F.2d 1018, 1021 (5th Cir.1990)) (a party’s bad-faith discovery violation, consisting of the destruction of evidence, could not be attributed to her attorney). These authorities stand for the tenet that bad faith is personal and cannot be attributed to the acting party’s attorney or to another party.

¶ 28. The federal courts have recognized that a court may, pursuant to its inherent powers, impose a sanction upon a partnership based upon its vicarious liability for a partner’s litigation misconduct. Perna v. Electronic Data Systems Corp., 916 F.Supp. 388, 402-03 (D.N.J.1995). In Eppes v. Snowden, 656 F.Supp. 1267 (D.Ky.1986), the district court ordered sanctions against a silent partner, Doherty, based upon a fraud upon the court committed by his partner, Snowdon, in the defense of a declaratory judgment action by an insurer. Id. at 1282. Doherty and Snowdon were partners who owned a thoroughbred stallion covered by policies of mortality insurance. Id. at 1268. When the stallion died, the insurer sought a declaratory judgment for purposes including establishing the stallion’s cash value at the time of his death. Id. The court declared a mistrial after discovering that Snowdon had produced fraudulent letters from prominent horse dealers who had offered to buy a share in the stallion. Id. at 1269, 1272-73. Snowdon had offered these letters to establish the stallion’s high cash value at his death. Id. at 1269. These letters were dated before the horse’s death, but witnesses established that at least two of the letters were written after the horse’s death and backdated at Snow-don’s direction. Id. Snowdon also had coached one letter’s author to lie during a hearing concerning the letter’s authenticity. Id. at 1276.

¶ 29. The trial court determined that Snowdon’s manufacture of false evidence constituted a fraud upon the court that authorized the court to dismiss his answer and counterclaim pursuant to the court’s inherent power to protect the integrity of judicial proceedings. Id. at 1279. The court then addressed the question of whether the acts of Snowdon could be imputed to his partner, Doherty. Id. at 1279-81. Doherty had given Snowdon a general power of attorney authorizing him to transact business on his behalf and to institute or defend suits concerning his property rights. Id. at 1270. Doherty had not participated in the litigation and he had not appeared at the trial due to illness. Id. Defense counsel had informed the court that, at the trial, Doherty’s interests would be represented by Snowdon. Id.

¶ 30. After reviewing the Uniform Partnership Act and Kentucky law, and citing the fact that Snowdon and Doherty were partners in the stallion, the court “ha[d] no doubt that the acts of Snowdon must be imputed to his partner, Doherty, who has remained a silent partner throughout.” Id. at 1280. The court noted that because Snowdon was Doherty’s partner, agent, and attorney-in-fact, Doherty could not expect to reap any benefits of Snowdon’s activities in the litigation without also being held accountable for Snowdon’s misdeeds. Id. at 1280-81. The court attributed particular importance to the fact that there was nothing before the court to rebut the inference that Doherty had acquiesced in Snowdon’s misdeeds with full knowledge. Id. at 1270. The court struck the partners’ answer and counterclaim, and imposed monetary sanctions on Snow-don. Id. at 1282. However, in its discretion, the court found that it would be inequitable to impose monetary sanctions on Doherty, because Snowdon was the active partner in the commission of the fraud on the court, and Doherty had taken no affirmative action at any time in purchasing the stallion, in filing the insurance claim, or in the litigation. Id. at 1280.

¶ 31. A joint venture is a single-purpose partnership. Duggins v. Guardianship of Washington, 632 So.2d 420, 427 (Miss.1993). As a joint venture, SKG was governed by Mississippi’s partnership law, the Uniform Partnership Act of 1997, effective January 1, 2005. Under the Act, a joint venture is liable for any penalty incurred as the result of a wrongful act or omission, or other actionable conduct, of a joint venturer acting in the ordinary course of business of the joint venture. Miss.Code Ann. § 79-13-305 (Rev.2009). In the absence of an agreement with the claimant or as otherwise provided by law, all co-venturers are jointly and severally liable for joint-venture obligations. Miss. Code Ann. § 79-13-306(b) (Rev.2009). A litigant may sue a joint venture “in the name of the partnership” or he may bring an action against “any or all of the partners in the same action or in separate actions.” Miss.Code Ann. § 79-13-307(a), § 79-13-307(b) (Rev.2009). However, a judgment against a partnership may not be satisfied from a partner’s assets unless there is also a judgment against the individual partner. Miss.Code Ann. § 79-13-307(c) (Rev.2009).

¶ 32. We find that the trial court’s treatment of this lawsuit as one against SKG or SKG assets was not an abuse of discretion. The lawsuit was an attempt by the Jones Firm to obtain what it asserted to be its rightful share of joint-venture profits under the joint-venture agreement. Rather than suing SKG, the Jones Firm chose to sue the co-venturers, a litigation strategy encouraged by Mississippi Code Section 79-13-307(c), and two individuals who were not co-venturers. Given the facts that: (1) under Section 79-13-307(c), a partnership creditor must sue an individual partner in order to obtain a judgment against the individual partner’s assets; (2) accordingly, the trial court found that this suit was against SKG or SKG assets brought in the name of SKG’s partners; (3) partners are jointly and severally liable for partnership obligations; and (4) under Section 79-13-305, a partnership may be liable for “any penalty” incurred as a result of the wrongful act or actionable conduct by a partner in the ordinary course of partnership business; thus, this Court finds that the trial court possessed the discretion to sanction SKG, but only upon a finding that Richard Scruggs’s misconduct was within the ordinary course of business of SKG. We proceed to review the trial court’s implicit finding that the misconduct occurred within SKG’s ordinary course of business.

II. WHETHER RICHARD SCRUGGS’S WRONGFUL ACTS WERE IN THE ORDINARY COURSE OF BUSINESS OF THE JOINT VENTURE.

¶ 33. Under Mississippi Code Section 79-13-305, a partnership is liable for “loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.” Mississippi Code Section 79-13-302(1) provides that:

Each partner is an agent of the partnership for the purpose of its business. An act of a partner, including the execution of an instrument in the partnership name, for apparently carrying on in the ordinary course the partnership business or business of the kind carried on by the partnership binds the partnership, unless the partner had no authority to act for the partnership in the particular matter and the person with whom the partner was dealing knew or had received a notification that the partner lacked authority.

Miss Code Ann. 79-13-302(1) (Rev.2009). It is undisputed that Richard Scruggs’s misconduct was not actually authorized by SKG, and there is no assertion that he acted with apparent authority under Section 79-13-302(1). Therefore, we confine the discussion to vicarious liability under Section 79-13-305, under which a partnership is liable for “any penalty” incurred by a partner’s misconduct committed in the ordinary course of business of the partnership. This Court is guided by several cases in which a trial court exercised its discretion to decide whether to hold an innocent partner hable for damages or judicial sanctions based upon another partner’s misconduct.

¶ 34. The Jones Firm cites Duggins v. Guardianship of Washington, 632 So.2d 420 (Miss.1993). In Duggins, an attorney, Duggins, associated another attorney, Bar-field, to represent a guardianship in a medical-malpractice suit. Id. at 422-23. The two attorneys agreed that they would divide the fees equally. Id. at 423. Dug-gins’s role was to compile medical records and medical bills and maintain contact with the client; Barfield was to draft and file the complaint, arrange for expert witnesses, and attempt to negotiate with the defendant’s insurer. Id. at 423. However, Barfield made material misrepresentations to Duggins and the client and misappropriated settlement funds, for which he eventually was disbarred and convicted of a felony. Id. at 423-25. A chancellor determined that Barfield and Duggins were liable to the guardianship in tort and for breach of contract, and that Duggins was vicariously liable for Barfield’s misconduct because it was committed in the scope of the partnership. Id. at 426. In addition to compensatory damages, the chancellor ordered Barfield and Duggins to pay punitive damages and attorney’s fees. Id. at 426. On appeal, Duggins contended that, like the client, he was but an innocent victim of the nefarious Barfield and, thus, he could not be held vicariously liable for Barfield’s misconduct. Id. at 429.

¶ 35. This Court affirmed. We first determined that the legal relationship between Duggins and Barfield constituted a joint venture governed by the Uniform Partnership Act. Id. at 427. We then examined the Uniform Partnership Act’s provisions governing a partnership’s liability to third parties. Id. at 427. The court examined Section 79-12-17(1), the prior version of Section 79-13-301(c), and Section 79-12-25, the prior version of Section 79-13-305. The Court found that Bar-field’s misconduct was imputable to Dug-gins under the Uniform Partnership Act because the misconduct was “well within” the scope of the joint venture’s business. Id. at 428. The Court found that “Bar-field’s actions were committed while in the furtherance of the partnership and was certainly within the partnership business. The handling of client funds is clearly within the realm of an attorney’s representation of a guardianship in a legal action.” Id. Thus, the Court determined that Dug-gins was vicariously liable for Barfield’s actions. Id. The Court further found Dug-gins vicariously liable for punitive damages, stating:

If the partner acted within the course and scope of actual or apparent authority, then even liability for fraudulent wrongs can be imputed to the partnership. The other partners, though innocent without knowledge of the act or omission, can be vicariously liable.... [Prior cases] found punitive damages appropriate against an innocent partner for actions done by another partner while engaged in work within the scope of the partnership.

Id. at 429-30 (citations omitted).

¶ 36. However, in affirming the damages assessed against Duggins, this Court did not solely rely upon partnership principles, but also upon the chancellor’s finding that Duggins was guilty of omissions that had contributed to the guardianship’s loss of assets. Id. at 429. We noted that the guardianship had relied on Duggins, as well as Barfield, to pursue its interests, and the chancellor recognized that “there were sufficient ‘red flags’ which should have caused Duggins to realize that something was amiss.” Id. Therefore, we stated, in addition to Barfield’s misdeeds, “Duggins’ negligence and inaction in investigating Barfield’s suspicious conduct allowed the guardianship to be stripped of all its assets.” Id.

¶ 37. The appellants cite Idom v. Weeks & Russell, 135 Miss. 65, 99 So. 761 (1924). In Idom, the sheriff of the town of Acker-man rallied the citizenry after two burglaries and a sighting of suspicious characters. Id. at 74, 99 So. at 762. Weeks and Russell were partners who owned and operated a drug store, and Russell, without Weeks’s knowledge or authorization, decided to lie in wait overnight at the store with a gun in case burglars tried to break in. Id. at 73-74, 99 So. at 762. Tragically, Russell shot and killed Idom, an innocent person who was checking on the store. Id. at 74, 99 So. at 762.

¶ 38. In a suit by Idom’s widow against Russell and Weeks, this Court held that, while Russell was liable for the killing, his partner, Weeks, was not liable because Russell had not acted in furtherance of partnership business. Id. at 76-77, 99 So. at 763-64. The Court reviewed the rules pertaining to a partner’s liability for the acts of another partner. Id. at 76-79, 99 So. at 763-64. The Court stated that whether a partner is so liable is governed by the law pertaining to principal and agent, such that:

If the act or tort of the partner be committed while he is engaged in the partnership business, and is in furtherance of the interest of the partnership, then the partnership and all partners are liable.... If a tort be committed by one partner while engaged in a transaction within the scope of the partnership business, and such tort be committed in furtherance of the interests of the partnership, it will be liable. But it will not be liable for a tort committed by one partner in a transaction outside of the partnership business, where he acts from his own private malice or ill will, unless the act which constituted the tort was authorized by the members of the partnership, or subsequently ratified by them; the act itself having been done in their behalf and interest.

Id. at 76-77, 99 So. at 763 (citations omitted). The Court defined “course of business” as “what is usually done in the management of trade or business.” Id. at 78, 99 So. at 764 (citation omitted).

¶ 39. The Court determined that Russell’s act of lying in wait for burglars at the partnership’s drug store emanated from his own private malice or ill will and was not within the scope of the partnership’s business. Id. at 78, 99 So. at 764. There was testimony that, after the shooting, Russell told the sheriff that he was in the store for the purpose of trying to capture the burglars; he mentioned no intent to protect the partnership’s property. Id. at 76, 99 So. at 763. From this, the Court concluded that “[a]ccording to this statement of Russell his dominant purpose was not for the preservation of the partnership property but rather to try and capture the burglars.” Id. The Court found that the scope of the partnership business did not contemplate that one partner, when the place of business is closed for the night, should conceal himself inside the store for the purpose of capturing burglars. Id. at 78, 99 So. at 763-64.

¶ 40. Similarly, in Pema v. Electronic Data Systems Corp., 916 F.Supp. 388, 402-03 (D.N.J.1995), a federal district court declined to sanction a partnership for the unethical conduct of one partner because the partner’s behavior was outside the scope of the partnership’s business. The partnership was a plaintiff in litigation. Id. at 391. During a visit by defense counsel to the partnership’s premises, the partner surreptitiously viewed and photocopied documents in defense counsel’s briefcase. Id. at 392-93. The partner stated that he had committed the misconduct to protect his own interest. Id. at 402. As in this case, no other partners authorized the misconduct. Id. Further, as in this case, the defendant urged sanctions against the partnership because the partner’s misconduct was in the furtherance of the partnership’s interest and was in the ordinary course of partnership business. Id. at 402. The defendant demanded the sanction of dismissal of the partnership’s lawsuit. Id.

¶ 41. While the district court sanctioned the individual partner for fraud on the court, the court declined to sanction the partnership. Id. The district court found that the partner’s misconduct had been motivated by a desire to protect his own interest and his own individual claim. Id. Therefore, the district court concluded, the partner’s “extraordinary behavior was outside the scope of the business and was an individual act.” Id. The district court stated that “dismissal of the partnership’s claim without a demonstration of an intentional and willful conduct on the part of the entire partnership is too severe a sanction.” Id. at 403.

¶ 42. We turn to the facts at hand. The SKG joint-venture agreement specified that the joint venture’s purpose was to “bring a number of lawsuits on behalf of individuals and businesses who were wrongfully denied insurance coverage for property damage arising out of Hurricane Katrina.” SKG earned $26.5 million in profits from the Katrina litigation. When a fee dispute arose, SKG ousted the Jones Firm, resulting in its suit against SKG’s remaining co-venturers for a share of the joint-venture profits. When the Jones Firm sued, the remaining co-venturers hired attorneys and filed a motion to compel arbitration pursuant to the joint-venture agreement’s arbitration clause. As with other SKG expenses, the Nutt Firm advanced the defense fees, and the testimony of Lovelace and of Barrett, by stipulation, indicates that some co-venturers/co-defendants made the strategic decision on behalf of all the co-venturers/codefendants to file a motion to compel arbitration. Subsequently, Richard Scruggs pleaded guilty to a conspiracy to bribe the trial judge to enter an order granting the motion to compel arbitration. Members of the other co-venturer law firms testified that they lacked any knowledge of the conspiracy and did not authorize or ratify it.

¶ 43. The record aptly demonstrates that the scope of SKG’s business did not contemplate an attempted bribery of the trial judge. See Idom, 135 Miss, at 78, 99 So. at 763-64. This unauthorized criminal act constituted extraordinary behavior outside the ordinary course of SKG business and amounted to an act of “private malice or ill will” equivalent to the conduct in Idom. There was no evidence that Scruggs intended, by this act, to benefit SKG; in fact, the Nutt Firm, having been allotted thirty-five percent of the net fee by the joint-venture agreement, could not have lost its share of the net fee at a trial over the division of the remaining sixty-five percent. Because the misconduct of Richard Scruggs was outside the ordinary course of SKG business, the trial court abused its discretion in finding otherwise. Moreover, unlike in Duggins, there was no evidence of “red flags” that should have alerted the Barrett Firm, Don Barrett, or the Lovelace Firm to Scruggs’s activities. Because there was no basis for sanctioning the appellants, we reverse the order imposing sanctions upon them.

CONCLUSION

¶ 44. The trial court erred by sanctioning the appellants because Richard Scruggs’s wrongful acts did not occur in the ordinary course of SKG business. Because the trial court already has ruled that, but for the sanctions, this case is subject to mandatory arbitration, we reverse the order of sanctions and remand this case for the entry of an order compelling arbitration.

¶ 45. REVERSED AND REMANDED.

WALLER, C.J., GRAVES, P.J., RANDOLPH AND LAMAR, JJ., CONCUR. CARLSON, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED IN PART BY PIERCE, J. PIERCE, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED IN PART BY CARLSON, P. J. DICKINSON AND KITCHENS, JJ., NOT PARTICIPATING.

CARLSON, Presiding Justice,

Dissenting.

¶46. I agree with the majority inasmuch as “the trial court possessed the discretion to sanction SKG, but only upon a finding that Richard Scruggs’s misconduct was within the ordinary course of business of SKG.” (Maj. Op. at ¶33). However, as to issue two, concerning whether Scruggs was acting in the ordinary course of business, I must disagree with the majority’s conclusion that Scruggs was not acting in furtherance of SKG.

¶ 47. Vicarious liability falls under the auspices of Section 79-13-305(a), which states:

A partnership is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner acting in the ordinary course of business of the partnership or with authority of the partnership.

Miss.Code Ann. § 79-13-305(a) (Rev.2009). I do not interpret this statute as implying that the other partners need have knowledge (actual or constructive) of the wrongful or actionable conduct to be held liable — so long as the wrongdoer has acted in the ordinary course of business of the partnership. I believe Duggins v. Guardianship of Washington Through Huntley, 632 So.2d 420 (Miss.1993), is in accord with this premise, because this Court clearly stated therein: “[Ojther partners, though innocent without knowledge of the act or omission, can be vicariously liable.” Id. at 429. Unlike the majority, I do not interpret the holding in Duggins as having also relied on the fact that Duggins should have known of his partner’s malfeasance due to the presence of “red flags.” The majority interprets Duggins as follows:

[I]n affirming the damages assessed against Duggins, this Court did not solely rely upon partnership principles, but also upon the chancellor’s finding that Duggins was guilty of omissions that contributed to the guardianship’s loss of assets. We noted that the guardianship had relied on Duggins, as well as Bar-field, to pursue its interests, and the chancellor recognized that “there were sufficient ‘red flags’ which should have caused Duggins to realize that something was amiss.” Therefore, we stated in addition to Barfield’s misdeeds, “Dug-gins’ negligence and inaction in investigating Barfield’s suspicious conduct allowed the guardianship to be stripped of all its assets.”

(Maj. Op. at ¶ 37) (quoting Duggins, 632 So.2d at 429) (internal citations omitted). I submit that what the majority quotes as the holding in Duggins is merely dicta, and that the holding of the case is not premised on Duggins’s negligence. A plain reading of the statute does not lend itself to an interpretation that actual or constructive knowledge of the wrongful conduct is required for liability to attach. “In considering a statute passed by the legislature, ... the first question a court should decide is whether the statute is ambiguous. If it is not ambiguous, the court should simply apply the statute according to its plain meaning and should not use principles of statutory construction.” Miss. State Univ. v. People for Ethical Treatment of Animals, Inc., 992 So.2d 595, 606-07 (Miss.2008) (quoting Estate of Klaus v. Vicksburg Healthcare, LLC, 972 So.2d 555, 556 (Miss.2007)).

¶ 48. That having been said, even if this Court is prepared to hold in today’s case that an innocent partner can be held hable for the acts of another only if the circumstances are such that “there were sufficient red flags,” then I wish to point out that the $40,000 used in the bribery scam was paid out by SKG to Richard Scruggs under the pretense that Richard Scruggs owed $40,000 to Timothy Balducci for voir dire services in the Lisanby case, a Katrina case which had never been tried. I am persuaded by the Jones Firm’s argument that this fabricated invoice for a case that had never been tried was sufficient notice to SKG, its associated firms, and the respective partners of those firms that something was amiss.

¶49. Moreover, Richard Scruggs did not act on his own behalf in concocting this bribery scheme but on behalf of all the remaining associated firms in SKG. The testimony by Judge Lackey indicated that the quid pro quo in this scheme was to be an exchange of $40,000 for a ruling from Judge Lackey in favor of SKG’s motion to compel arbitration. This ruling would have been favorable as to all the SKG defendants — not Scruggs alone. “If a tort be committed by one partner while engaged in a transaction within the scope of the partnership business, and such tort be committed in furtherance of the interests of the partnership, it will be liable.” Idom v. Weeks & Russell, 185 Miss. 65, 76-77, 99 So. 761, 763 (1924). This bribery attempt, albeit a fraud upon the court, was committed in furtherance of the interests of all the SKG firms. Had this bribery attempt succeeded with an unscrupulous judge, then presumably SKG stood also to reap the benefit of a favorable ruling in arbitration proceedings against the Jones Firm— retaining all of the disputed profits that perhaps rightly belonged to the Jones Firm and lining all of the pockets of the SKG firms and their respective partners. Surely, if this were the scenario and the bribe had been successful, this Court would not then say the arbitration ruling should stand. In fact, I submit that this Court would unhesitatingly agree that such a judgment must be set aside. Why then are we saying a trial judge abused his discretion in striking an answer and motion — a motion that was accompanied by an attempted fraud upon the court?

¶ 50. The majority relies on the holding in Idom v. Weeks & Russell, 135 Miss. 65, 99 So. 761 (1924), wherein the Court held that Weeks was not liable for his partner Russell’s act of lying in wait within the drug store for burglars and subsequently shooting an innocent passerby. Id. at 764. The Idom holding was premised on the fact that Russell’s lying in wait and disposing of burglars was outside of the scope of the partnership agreement between Weeks and Russell to own and operate a drug store. Id. at 763-64. According to Idom, the shooting constituted an act of “private malice or ill will” on the part of Russell. Id. at 764.

¶ 51. The majority likens Scruggs’s conduct to that depicted in Idom because it was an “unauthorized criminal act” outside of SKG’s ordinary course of business that amounted to “private malice or ill will.” (Maj. Op. at ¶44). The majority neglects to see the mutual benefits in the form of retained profits that would have been bestowed upon the Scruggs firm and the Barrett and Lovelace firms alike had the bribery attempt not been brought to light by an honorable whistle-blower in Judge Lackey. I submit that had Russell been engaging in dispensing medication to a patron without a prescription, albeit a criminal act, then this Court in Idom would have held that there was partnership liability, since Russell’s criminal act would have had a mutual benefit to the partnership in the form of increased revenue. Scruggs’s conduct was to protect all the coffers of SKG — not just his own. After all, the ordinary course of business for lawyers on the most basic level is that lawyers are in the business of winning— arguing for and receiving favorable rulings from trial judges. Such was the intention of Scruggs in the course of his self-confessed criminal act — the $40,000 was to secure a favorable ruling to compel arbitration — a ruling from which each and every SKG firm stood to benefit.

¶ 52. Accordingly, with the utmost respect for my esteemed colleagues in the majority, I must respectfully dissent, because I would not find an abuse of discretion on the part of the trial judge in imputing Scruggs’s criminal conduct to the remaining SKG defendants. I believe that sanctions were properly imposed in today’s case, and I would thus affirm the trial court, in toto.

PIERCE, J., JOINS THIS OPINION IN PART.

PIERCE, Justice,

Dissenting.

¶ 53. I respectfully dissent from the majority because I believe the partnership should be responsible for the dealings of one of its partners in this instance. I concur in part with the analysis by Justice Carlson in his dissent concerning the $40,000 payment. I believe that this payment to Timothy Balducci for voir dire services on a case that had not yet gone to trial was a red flag that should have been noticed. I disagree with the Carlson dissent that partners are liable for all actions completed in the course of the partnership, because there may be many situations where an innocent partner should not be held accountable for the intentional and/or criminal behavior of another partner. However, such is not the case here.

¶ 54. Regardless of the amount of fees paid out by SKG, a $40,000 bill paid out for voir dire services on a case that had not yet gone to trial should have raised red flags causing all members of SKG to question the payment. Members of a partnership cannot simply bury their heads in the sand and then claim lack of knowledge to obtain the benefit of the bargain. Therefore, I would find that arbitration is not proper in this matter because the partnership is charged with constructive knowledge of the deal, based on the ignored $40,000 invoice that was paid without question.

CARLSON, P.J., JOINS THIS OPINION IN PART.

      . Neither Balducci nor Patterson ever entered an appearance in the case sub judice.

      . The Scruggs defendants include Richard Scruggs and the Scruggs Firm.

      . The trial court previously had sustained an objection to the admission of Don Barrett's affidavit.

      . The Court in Duggins specified that "the only purpose in distinguishing a joint venture from a partnership is to define a business relationship which is limited to specific undertakings for profit, rather than a general and continuing business of a particular kind.” Duggins, 632 So.2d at 427. "In simplest form, a joint venture can be defined as a single purpose partnership, whereby the joint venturers undertake a single project for profit.” Id.

      . Before January 1, 2007, the Uniform Partnership Act of 1997 applied to all partnerships formed after January 1, 2005; after January 1, 2007, the revised Act applies to all partnerships. Miss.Code Ann. § 79-13-1205 (Rev.2009). Therefore, the revised Act applies to SKG.

      . The Uniform Partnership Act relied upon in Duggins was repealed on January 1, 2007.

      . The Uniform Partnership Act of 1997 did not substantially alter the provisions cited in Duggins as they pertain to the issues of partnership liability presently under review.