Yeager et al v. Brand et al

Filing 56

ORDER granting 49 Motion to decide case on existing submissions; denying 52 Motion to deny damages; denying 53 Motion for Hearing; plaintiffs entitled to $210,000 in actual damages plus attorney's fees; and plaintiffs are directed to resubmit requested fees and expenses within seven (7) days of this order. Signed by District Judge Debra M. Brown on 9/28/18. (tab)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
GREENVILLE DIVISION
SUSAN L. YEAGER, et al.

PLAINTIFFS

V.

NO. 4:17-CV-168-DMB-JMV

R.L. BRAND, et al.

DEFENDANTS
ORDER

Before the Court for determination is the issue of damages to be awarded the plaintiffs
following the Court’s entry of default judgment against the defendants.
I
Procedural History
On December 1, 2017, Susan L. Yeager and Amelia A. Nichols, acting as guardians of
their mother Jacoba Louise Dooley, filed a complaint in this Court against R.L. Brand; Roderick
Mitchell; B & B Contracting Management Services, Inc. (“B&B”); and New Life Church of
Cleveland, Mississippi (“New Life”). Doc. #1. The complaint alleges that during the time relevant
to this action, Dooley’s mind was beginning to fail and:
The individual defendants, R.L. Brand and Roderick Mitchell, scammed and
fleeced the ward into buying a lot from New Life Church which lot was not owned
by New Life Church, but rather was owned by Roderick Mitchell and his wife and
which lot was mortgaged and could not be conveyed free and clear and by having
plaintiff enter into a construction contract with Brand [and B&B] for him, Brand,
to construct a house on said lot for $140,000.00 and toward which $140,000.00
plaintiff paid Brand $70,000.00 or $105,000.00 (as may be proved) for which house
Brand had no intention of completing and for which Brand never did any work
except to hip up the soil for the foundation. Thus Roderick Mitchell and R. L. Brand
conspired together to deprive and defraud the ward of that to which she was
lawfully entitled, a lot with a deed and a house erected thereon in order to steal from
ward the money she paid for the lot, title to which she never got, and the money the
ward paid to have the house constructed, which construction was never done. Brand
and Mitchell took advantage of the ward’s senility and dementia in so scamming
and fleecing said ward.
Id. at ¶ 50. As relief, the plaintiffs seek (1) rescission of the purchase contract with New Life and

Mitchell; (2) rescission of the construction contract with Brand and B&B; (3) damages in the form
of return of the purchase price and monies paid under the construction contract, plus interest; (4)
attorney’s fees; (5) treble damages assessed against Mitchell and New Life under Mississippi’s
Vulnerable Persons’ Act; and (6) any other relief to which they may be entitled. Id. at 16–17.
Mitchell and New Life were served with a summons and copy of the complaint on
December 2, 2017. Doc. #5 at 2; Doc. #6 at 2. Brand and B&B were served on December 5, 2017.
Doc. #3 at 2; Doc. #4 at 2. Mitchell and New Life filed separate answers to the complaint on
December 20, 2017. Doc. #7; Doc. #8. Neither Brand nor B&B answered the complaint and, on
December 28, 2017, the plaintiffs moved for entry of default. Doc. #11.
The Clerk of the Court entered default against Brand and B&B on January 2, 2018. Doc.
#12. The plaintiffs moved for default judgment the following day. Doc. #15. That same day, the
Clerk received from Brand a letter styled, “Answer to judgement.” Doc. #16. Brand’s letter
contradicts most of the facts alleged in the complaint but offers no excuse for the default and does
not request that the default be set aside.
On February 12, 2018, the plaintiffs filed a “Stipulation of Dismissal as to Two Defendants
Only.” Doc. #28. The stipulation, which is signed by Brand (on his own behalf and purportedly
on behalf of B&B),1 the plaintiffs’ counsel, Mitchell, and New Life, stipulates to the dismissal
with prejudice of Mitchell and New Life. Id. at 2. Over the next week, the plaintiffs, in support
of their motion for default judgment, filed two affidavits, a memorandum brief, and a letter from
a medical doctor opining on Dooley’s mental condition. Docs. #31, #32, #34, #35.
On April 12, 2018, this Court entered an order granting default judgment against the

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“[A] corporation as a fictional legal person can only be represented by licensed counsel.” In re K.M.A., Inc., 652
F.2d 398, 399 (5th Cir. 1981). To the extent Brand’s filings purport to represent B&B, they are properly considered
without legal effect. See Torres v. Krueger, 596 F. App’x 319, 321 (5th Cir. 2015) (“This court has previously affirmed
… striking of pleadings of unrepresented corporations.”).

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defendants on the issue of liability and setting an evidentiary hearing on the issue of damages for
April 30, 2018. Doc. #39 at 9. Four days later, the Court, at the plaintiffs’ request, issued an order
canceling the evidentiary hearing in favor of allowing the plaintiffs to submit documentary
evidence and arguments on the issue of damages. Doc. #40. The order also provided that “[t]he
defaulting defendants may file evidence and a response to the plaintiffs’ evidence and brief within
fourteen (14) days of receipt of such documents. The plaintiffs may reply within seven (7) days of
the response.” Id.
In compliance with this Court’s order, between April 23–30, 2018, the plaintiffs filed
various documents and a brief on the issue of damages. Docs. #42, #43, #44, #45, #46, #47. After
the defaulting defendants failed to respond to these filings, the plaintiffs, on May 18, 2018, filed a
motion asking the Court to decide the issue of damages on the existing submissions. Doc. #49.
On May 24, 2018, Brand filed a pro se “Answer” which summarizes various pieces of
evidence and expected testimony, and explains why the evidence would disprove certain
allegations in the complaint. Doc. #50. One week later, on May 31, 2018, the plaintiffs filed a
“response” to the “answer.” Doc. #51.
On June 25, 2018, Brand filed “Defendant’s motion to deny motion Quantum of damages.”
Doc. #52. Three days later, Brand filed a motion requesting an unspecified hearing. Doc. #53.
The plaintiffs responded in opposition to both motions. Doc. #54; Doc. #55.
II
Brand’s Answer
As explained above, approximately four months after default and one month after this
Court’s granted the plaintiffs’ motion for default judgment, Brand filed a document titled,
“Answer.” However, an untimely answer does not count as a pleading under the Federal Rules so
as to defeat a default judgment. In re Suprema Specialties, Inc., 330 B.R. 40, 46 (S.D.N.Y. 2005).
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This is especially true where, as here, there has been no motion to set aside entry of default and no
showing of good cause. See Fed. R. Civ. P. 55(c) (“The court may set aside an entry of default for
good cause ….”). Accordingly, Brand’s untimely answer does not alter the plaintiffs’ entitlement
to default judgment.
III
Damages Standard
Following a default judgment, “[a] plaintiff bears the burden of proving his damages.”
Niemi v. Lasshofer, 770 F.3d 1331, 1355 (10th Cir. 2014); see Flynn v. People’s Choice Home
Loans, Inc., 440 F. App’x 452, 457 (6th Cir. 2011) (after default judgment, “the burden of
establishing damages rest[s] squarely and solely” on plaintiff). Generally, a district court may
only award damages without an evidentiary hearing if “the amount claimed is a liquidated sum or
one capable of mathematical calculation.”2 James v. Frame, 6 F.3d 307, 310 (5th Cir. 1993).
Regarding damages, “[a] default judgment must not differ in kind from, or exceed in
amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c). Therefore, “the relief prayed
for in a complaint defines the scope of relief available on default judgment.” United States v.
Giles, 538 F.Supp.2d 990, 994 (W.D. Tex. 2008); see Silge v. Merz, 510 F.3d 157, 160 (2d Cir.
2007) (Rule 54(c) “permits neither increases ‘in kind ... or ... in amount’ from the figure specified
in the demand for judgment”). If the requested relief does not differ in kind from, or exceed in
amount, what is demanded in the pleadings, the Court must then determine “if the requested relief
is appropriate based on governing law.” Fagan v. Lawrence Nathan Assocs., Inc., 957 F.Supp.2d
784, 801 (E.D. La. 2013).

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For the reasons discussed below, the Court concludes that the amount to be awarded here is one capable of
mathematical calculation.

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IV
Analysis
In their brief, the plaintiffs seek (1) $70,000 in actual damages, representing the amount
paid to Brand by Dooley; (2) $11,649.44 in pre-judgment interest; and (3) $23,600.71 in attorney’s
fees and expenses. The plaintiffs also seek treble damages.
A. Actual Damages
There is no dispute that where, as here, a plaintiff has been induced to purchase property
through fraud or misrepresentation, the plaintiff is entitled to rescission of the construction contract
and return of the contract price.3 See Browder v. Williams, 765 So.2d 1281, 1285 (Miss. 2000)
(“We [have] held that a buyer who has been deceived by material false representations in the
procurement of a contract may elect to rescind and to be restored to the position he occupied at the
time of sale.”). There is also no dispute that Dooley paid the defaulting defendants $70,000
towards the construction contract price. In his “Answer” and motion to deny damages, Brand
argues that the proper recovery is actually $60,000 because Brand performed $10,000 worth of
improvements on the property and because the plaintiffs, during a state board hearing, said they
would accept $60,000 in damages. Doc. #52 at 1; Doc. #50-1.
As an initial matter, pursuant to Federal Rule of Evidence 408, the plaintiffs’ offer to settle
for a certain sum may not be used “to prove or disprove the validity or amount of a disputed claim
….” Furthermore, while it is possible that Brand, under a theory of unjust enrichment, may be
entitled to recover his expenses from the actual owner of the property, such recovery is wholly
inappropriate against Dooley, who received no benefit from Brand’s work. See Hans v. Hans, 482
So.2d 1117, 1122 (Miss. 1986) (unjust enrichment applies “where the person sought to be charged

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This Court previously concluded that the plaintiffs are entitled to rescission. Doc. #39 at 6.

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is in possession of money or property”). Accordingly, the plaintiffs are entitled to reimbursement
of the $70,000 paid for the property.
B. Pre-Judgment Interest
“State law governs the award of prejudgment interest in diversity cases.” Meaux Surface
Protection, Inc. v. Fogleman, 607 F.3d 161, 172 (5th Cir. 2010). Under Mississippi law, “[a]n
award of prejudgment interest is within the trial court’s discretion.” In re Miss. Medicaid Pharm.
Average Wholesale Price Litig., 190 So.3d 829, 843 (Miss. 2015). A trial court acts within its
discretion when it allows pre-judgment interest “in cases where the amount due is liquidated when
the claim is originally made or where the denial of a claim is frivolous or in bad faith.” Id.
“Damages being liquidated refers to damages that are set or determined by a contract when a
breach occurs.” Benchmark Health Care Ctr., Inc. v. Cain, 912 So.2d 175, 183 (Miss. Ct. App.
2005) (internal quotation marks omitted). “Unliquidated damages are damages that have been
established by a verdict or award but cannot be determined by a fixed formula, so they are left to
the discretion of the judge or jury.” Id. at 183–84 (alterations and internal quotation marks
omitted). However, “interest may be denied where there is a bona fide dispute as to the amount
of damages as well as the responsibility for the liability therefor.” Coastal Hardware & Rental
Co., LLC v. Certain Underwriters at Lloyds, London, 120 So.3d 1017, 1030 (Miss. Ct. App. 2013).
Here, the plaintiffs’ complaint alleged uncertainty on the amount owed under the contract.
Furthermore, there is no indication of a bad faith or frivolous denial of the plaintiffs’ claim.
Accordingly, the Court, in the exercise of its discretion, declines to award pre-judgment interest.
C. Attorney’s Fees
“In [a] diversity case, where [state] law supplies the rule of decision, state law controls
both the award of and the reasonableness of fees awarded.” Wal-Mart Stores, Inc. v. Qore, Inc.,

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647 F.3d 237, 242 (5th Cir. 2011) (alterations and internal quotation marks omitted). “Mississippi
law is well-settled with respect to awarding attorney’s fees. If attorney’s fees are not authorized
by the contract or by statute, they are not to be awarded when an award of punitive damages is not
proper.” Miller v. Parker McCurley Props., L.L.C., 36 So.3d 1234, 1243–44 (Miss. 2010)
(quotation marks omitted). “Punitive damages may not be awarded if the claimant does not prove
by clear and convincing evidence that the defendant against whom punitive damages are sought
acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard
for the safety of others, or committed actual fraud.” Miss. Code Ann. 11–1–65(1)(a).
Here, the plaintiffs’ allegations that the defaulting defendants intentionally entered into a
construction contract they had no intention of completing support a finding of actual fraud. See
Hamilton v. Hopkins, 834 So.2d 695, 703 (Miss. 2003) (punitive damages appropriate where
breach caused by intentional wrong or where defendant acted maliciously or with reckless
disregard of the plaintiff’s rights). The Court therefore finds that attorney’s fees are appropriate.
To this end, Mississippi requires that a court only award reasonable attorney’s fees. Mabus v.
Mabus, 910 So.2d 486, 488 (Miss. 2005). “The reasonableness of attorney’s fees are controlled
by the applicable Mississippi Rules of Professional Conduct 1.5 factors and the Mckee [v. Mckee,
418 So.2d 764, 767 (Miss. 1982)] factors.” Id. at 489 (footnote omitted).
Mississippi Rule 1.5(a) provides eight non-exclusive factors for determining
reasonableness:
(1) the time and labor required, the novelty and difficulty of the questions involved,
and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular
employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
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(7) the experience, reputation, and ability of the lawyer or lawyers performing the
services; and
(8) whether the fee is fixed or contingent.
Furthermore, the McKee factors include:
(1) relative financial ability of the parties[,] (2) the skill and standing of the attorney
employed, (3) novelty and difficulty of issues in the case, (4) the responsibility
required in managing the case, (5) time and labor required, (6) the usual and
customary charge in the community, and (7) whether the attorney was precluded
from undertaking other employment by accepting the case.
Black v. Black, 240 So. 3d 1226, 1235 (Miss. Ct. App. 2017).
In support of the request for attorney’s fees, the plaintiffs submitted an itemized bill of their
attorney Robert Johnston, showing 113 hours of legal work at an hourly rate of $180, for a total of
$20,340. Doc. #44 at 2–7. The same bill shows litigation expenses in the amount of $3,260.71.
Id. at 6–7. The plaintiffs also submitted the affidavit of Boyd Atkinson, a local attorney, who
states that Johnston’s “hourly rate … is reasonable in light of what other attorneys in this area
charge.” Doc. #45 at 7.
In considering the plaintiffs’ requested fees, the Court begins by recognizing that a fee
request should not include “hours that are excessive, redundant, or otherwise unnecessary ....”
Mabus, 910 So.2d at 494 (emphasis added). The plaintiffs’ fee request violates this rule by
including hours related to a state administrative proceeding before the Mississippi Board of
Contractors. Such hours must be excluded from the plaintiffs’ fee award.4
In considering the remaining fees, the Court finds that Johnston’s hourly rate is reasonable
for an attorney of his skill in this area. Furthermore, while this case involved a default judgment,
an ordinarily low-effort endeavor, it also necessarily involved guardianship issues. Accordingly,

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Rather than the Court ultimately determining which fees and expenses are associated with the Board of Contractors
matter, the plaintiffs, as indicated below, will have the opportunity to resubmit their requested fees and expenses.

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in the absence of any evidence of the parties’ respective financial means, the Court deems the
remaining fees to be reasonable.
D. Treble Damages
Mississippi’s Vulnerable Person’s Act provides:
In a civil action where it is proven that a person took property having a value of
Two Hundred Fifty Dollars ($250.00) or more belonging to a vulnerable adult by
conversion, embezzlement, extortion, theft or fraud without the owner’s consent,
or obtained the owner’s consent by intimidation, deception, undue influence or by
misusing a position of trust or a confidential relationship with the owner, then
whether the action is to recover the property or damages in lieu thereof, or both,
damages shall be recoverable up to three (3) times the amount of the monetary
damages or value of the property embezzled, converted or otherwise stolen, in
addition to any other damages.
Miss. Code Ann. § 11-7-165(1).
This Court, in its previous order determining liability, concluded that treble damages are
warranted under Mississippi’s Vulnerable Person’s Act. Doc. #39 at 8. However, in their brief,
the plaintiffs argue that the trebled damages authorized by the Act apply to their claim for
attorney’s fees in addition to the actual damages suffered. The Court does not agree.
By its express language, the Act provides for trebled damages of “the amount of the
monetary damages or value of the property embezzled, converted or otherwise stolen ….”
Mississippi courts have not appeared to have considered whether attorney’s fees are considered
“damages” within the meaning of the Act. In the absence of such authority, the Court turns to the
plain meaning of the word “damages.” See Edmonds v. State, 234 So.3d 286, 290 (Miss. 2017)
(“When interpreting a statute that is not ambiguous, this Court will apply the plain meaning of the
statute. To determine the plain meaning, we must look at the words of the statute.”) (citation and
internal quotation marks omitted).
When used in the legal context (as in the Act), damages are defined as “[m]oney … ordered

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to be paid to[] a person as compensation for loss or injury.” BLACK’S LAW DICTIONARY (10th ed.
2014), damages. Consistent with this definition, other courts have characterized attorney’s fees as
damages, so as to fall under a treble damage statute, when the fees “are part of the substance of a
lawsuit, that is, if the fees being sought are the legitimate consequences of the tort or breach of
contract sued upon, such as in an insurance bad faith case ….” Ferrell v. Glenwood Brokers, Ltd.,
848 P.2d 936, 941 (Colo. 1993) (citation and internal quotation marks omitted). Conversely, where
“attorney fees are … simply the consequence of a contractual agreement to shift fees to a prevailing
party, then they should be treated as ‘costs’ ….” Id. at 941. The Mississippi Supreme Court has
implicitly embraced a similar distinction, writing:
With the sole exception of punitive damages cases, in the absence of contractual
provision or statutory authority therefor, this Court has never approved awarding
trial expenses and attorney’s fees to the successful litigant. It has consistently been
our view that such expenses are not allowable as part of the costs ….
That a party may not be able to get his attorney’s fees paid as part of the costs does
not mean that attorney’s fees are not a proper element of damages in an appropriate
case. Where a grantee in a warranty deed was required to employ an attorney to
perfect his title, payment of grantee’s attorney’s fees was part of the damages in a
subsequent suit against the grantor for breach of warranty. Similarly, where an
insured is compelled to defend himself in an action because his insurer breached its
contract in denying its obligation to defend him under its liability policy, the
attorney’s fees incurred in the defense of that action may be awarded the insured as
contract damages in a subsequent action against the insurer.
Grisham v. Hinton, 490 So.2d 1201, 1205–06 (Miss. 1986) (citations omitted).
Based on the above authority, the Court concludes that attorney’s fees are properly deemed
costs, rather than damages, when they are based on punitive damages, contractual provisions, or
similar fee shifting provisions. In contrast, fees are properly considered an element of damages
when, as in the case of slander of title or bad faith denial of an insurance claim, the fees are a
natural consequence of the underlying action.
Here, the plaintiffs are entitled to fees not because of any natural consequence of the
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defendants’ conduct but because the nature of the conduct rose to the level of fraud. Under these
circumstances, the Court concludes that the fees are properly characterized as costs rather than
damages and, therefore, are not a part of the Act’s treble provision.
V
Remaining Motions
Having found the plaintiffs are entitled to a specific sum, the plaintiffs’ motion to decide
the case on existing submissions will be granted. Brand’s motion for an unspecified hearing and
motion to deny damages will both be denied.
VI
Conclusion
The plaintiffs’ motion to decide the case on existing submissions [49] is GRANTED.
Brand’s motion to deny damages [52] and motion for a hearing [53] are DENIED. The plaintiffs
are entitled to $210,000 in trebled actual damages, plus their requested attorney’s fees and related
litigation costs, less those fees and costs related to the administrative proceedings before the
Mississippi Board of Contractors. The plaintiffs are DIRECTED to resubmit their requested fees
and expenses within seven (7) days of this order.
SO ORDERED, this 28th day of September, 2018.
/s/Debra M. Brown
UNITED STATES DISTRICT JUDGE

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