Aries Building Systems, LLC v. Pike County Board of Supervisors et al

Filing 23

ORDER denying 9 Motion to Dismiss for Lack of Jurisdiction; denying 10 Motion to Stay Proceedings Signed by Honorable David C. Bramlette, III on 10/28/2016 (EB)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
ARIES BUILDING SYSTEMS, LLC

PLAINTIFF

V.

CAUSE NO. 5:16-cv-16-DCB-MTP

PIKE COUNTY, MISSISSIPPI
AND CITY OF MCCOMB

DEFENDANTS

OPINION AND ORDER
This cause is before the Court on defendant City of McComb’s
Motion to Dismiss for Lack of Subject Matter Jurisdiction (docket
entry 9) and Motion to Dismiss or in the Alternative to Stay
(docket entry 10). Having considered the motions, responses, and
applicable statutory and case law, and being otherwise fully
informed in the premises, the Court finds as follows:
I. Facts and Procedural History
This case arises out of a land sale transaction between Aries
Building Systems, LLC (“Aries”) and the Pike County Board of
Supervisors (“Pike County”). In 2014, Pike County entered into a
Purchase Agreement with Aries for the sale and purchase of 40 acres
of land. Compl. ¶ 6. In January 2015, the County executed a
Warranty Deed to finalize the sale. Id. at ¶ 7.
It

appears

that

the

purpose

of

this

sale

was

for

the

construction by Aries of some type of residential development. The
terms of the Agreement allegedly required Aries to place a minimum
of 120 beds at the development site within the first twelve months

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after the sale was finalized, and a minimum of ten full time
employees within the first twenty-four months.

Id. at ¶¶ 10, 12.

In the event that Aries failed to comply with either of these
conditions, Pike County would have the option to repurchase the
land. Id.
County

The City of McComb (“McComb” or “the City”) and Pike

also

allegedly

promised

to

enter

into

an

interlocal

agreement for the construction of a sewer line and roadway to serve
the property purchased by Aries. Id. at ¶ 11.
According to Aries, the deadline to have the 120 beds located
on the property was at the end of January 2016, and the deadline to
have the full time employees was to be at the end of January 2017.
Id. at ¶ 14.

After allegedly placing 120 beds on the property,

Aries sent a letter informing Pike County of its compliance with
the first deadline. Id. at ¶ 18.

In response, Pike County

expressed its intention to repurchase the property from Aries
because no power, water, sewer connections, or appliances had been
placed on the site to date. Id. at ¶ 20. Aries contends that
utility connections were not part of the original agreement. Id.
In its Complaint, Aries seeks a declaratory judgment against
Pike County finding that the plaintiff has fulfilled its sole
obligation under the contract to date.

Aries also seeks an

injunction to prevent Pike County from exercising its option to
repurchase. Further, Aries alleges against both the City and Pike
County breach of contract and conspiracy to deprive property

2

rights.
The City of McComb now moves to dismiss under Federal Rules of
Civil Procedure 12(b)(1) and 12(b)(7), or in the alternative to
stay proceedings.
II. Rule 12(b)(1) Motion
A. Standard of Review
Dismissal pursuant to Rule 12(b)(1) is proper “when the court
lacks the statutory or constitutional power to adjudicate the
claim.” Kmart Corp. v. Kroger Co., 963 F.Supp.2d 605, 609 (N.D.
Miss. 2013)(internal quotations omitted). The Court shall accept
the factual allegations as true and view them in the light most
favorable to the plaintiff. Id. “A motion under 12(b)(1) should be
granted only if it appears certain that the plaintiff cannot prove
any set of facts in support of its claim that would entitle
plaintiff to relief.” Home Builders Ass’n of Miss.,Inc. v. City of
Madison, 143 F.3d 1006, 1010 (5th Cir. 1998).
B. Discussion
Aries asserts two claims against the City of McComb: (1)
conspiracy and (2) breach of contract.

McComb moves to dismiss

both claims based on plaintiff’s failure to comply with the ninety
day pre-suit notice requirement of the Mississippi Tort Claims Act
(“MTCA”). McComb argues that because Aries failed to file a Notice
of Claim pursuant to MTCA, it lacks standing to bring this suit,
thus stripping the Court of its jurisdiction.

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The MTCA provides the exclusive remedy for filing certain
kinds of actions against a governmental entity and its employees in
Mississippi. City of Jackson v. Jackson, 2016 WL 2860860, *2 (Miss.
Ct. App. May, 17, 2016). While the Act serves to provide immunity
to the state and its political subdivisions, the MTCA “waives
immunity for claims for money damages arising out of the torts of
government entities and employees while acting within the course
and scope of their employment.” Swindle v. Neshoba County Sch.
District, 137 So. 3d 869, 874 (Miss. Ct. App. 2013). To assert a
claim under the Act, claimants must comply with the procedures set
forth

in

appropriate

the

MTCA,

entity

which

prior

to

include
filing

providing
suit.

The

notice
MTCA’s

to

the

notice

provision provides in relevant part:
After all procedures within a governmental entity have
been exhausted, any person having a claim under this
chapter shall proceed as he might in any action at law or
in equity, except that
ninety (90) days before
instituting suit, the person must file a notice of claim
with the chief executive officer of the governmental
entity.
Miss. Code Ann. 11-46-11(1) (Rev. 2012). It is undisputed that no
pre-suit notice was filed in this case. Aries instead maintains
that the MTCA is inapplicable to the present action; therefore, no
Notice of Claim was required. Aries argues that this matter is not
a

tort

action

declaratory

regarding

judgment,

injuries,

injunctions,

but
and

rather
breach

an
of

action

for

contract.

Further, Aries asserts that because the conspiracy claim against
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both defendants arises fully from the breach of contract, that
claim is also beyond the reach of the MTCA.
Because the Court finds that it has insufficient information
to make a determination as to the MTCA’s application at this stage,
dismissal is premature. After five months, McComb has filed no
accompanying memorandum brief in support of its motion to dismiss
as required by Local Uniform Civil Rule 7, and the motion’s single
paragraph is void of any supporting legal authority. See L.U. Civ.
R. 7(b)(4)(2016)(“counsel for the movant must file a memorandum
brief in support of the motion . . . failure to timely submit the
required motion documents may result in the denial of the motion”).
Though McComb points to Plaintiff’s lack of notice under the MTCA,
it

fails

provisions

to
of

provide
the

any

MTCA

meaningful
are

argument

applicable.

as

to

“Generally,

why

the

where

a

defendant does not provide a memorandum of authorities in support
of its motion and [does] not cite any cases supporting its claim
that it is entitled to dismissal, the proper course is to deny the
motion.” C.W.P. v. Brown, 56 F.Supp.3d 834, 839 (N.D. Miss.
2014)(citing Bruner v. Cemex, Inc., 2010 WL 3455244 (S.D. Miss.
Aug. 27, 2010)); see also McPherson v. Kelsey, 125 F.3d 989, 995-96
(6th Cir. 1997)(“[I]ssues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are deemed
waived. It is not sufficient for a party to mention a possible
argument in the most skeletal way, leaving the court to . . . put

5

flesh on its bones.”). Following this general rule, the Court
refuses to put flesh on the bones of McComb’s motion argument by
engaging in conjecture as to why the MTCA should apply to the
claims at issue.
The

Court

is

also

reluctant

to

adopt

Plaintiff’s

broad

contention that all claims alleged, including conspiracy, are
beyond the scope of the MTCA simply because one claim is based on
a theory of contract. In opposition to the motion, Aries relies on
City of Grenada v. Whitten Aviation, Inc., 755 So.2d 1208 (Miss.
Ct. App. 1999) and Churchill v. Pearl River Basin Dev. Dist., 619
So.2d 900 (Miss. 1993) to assert that the MTCA is inapplicable to
all breach of contract claims, and thus inapplicable to the breach
of contract and conspiracy claims in this case. While it is wellsettled that the MTCA has no application to actions for breach of
the express terms of a contract, the Mississippi Supreme Court has
determined that not all actions sounding in contract will escape
the protections of the MTCA. See City of Jackson v. Estate of
Stewart ex rel. Womack, 908 So.2d 703 (Miss. 2005)(holding that a
claim for breach of implied contract falls within the purview of
the MTCA); Papagolos v. Lafayette Co. School Dist., 972 F.Supp.2d
912, 932 (N.D. Miss. 2013)(“[MTCA] does apply to claims for
tortious breach”); see also Idom v. Natchez-Adams School Dist., 115
F.Supp.3d 792 (S.D. Miss. 2015); Montgomery v. Mississippi, 498
F.Supp.2d

892

(S.D.

Miss.

2007).

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In

Estate

of

Stewart,

the

Mississippi Supreme Court abrogated the interpretation of Miss.
Code Ann. § 11-46-3 adopted in City of Grenada and Churchhill, and
relied upon by the plaintiff in this case.

The Court held that the

MTCA grants immunity to the state and its political subdivisions
for “breach of implied term or condition of any warranty or
contract.” Estate of Stewart, 908 So.2d at 711.

Following Estate

of Stewart, claims for breach of an express contract fall outside
the MTCA, while claims arising from breach of implied contracts are
governed by the Act.
Although neither party attempts to characterize the alleged
agreement as express or implied, the Court is concerned about the
nature of the contract between Aries and McComb in light of the
holding in Estate of Stewart.

In its Complaint, Aries references

the land sale contract with Pike County and alleges that the City
was a party to the negotiations and contracts, which included the
promise to enter into an interlocal agreement with the County.
Compl. at ¶ 46. But examination of the written contract reveals
that the City was not a signatory to that agreement. Nevertheless,
Defendant has raised no challenge to the sufficiency of the
contract claim, nor has any argument been asserted in favor of the
MTCA’s application. Without more, the Court finds that it is
premature to reach the issue.
While the Court recognizes that dismissal pursuant to the MTCA
may be warranted at a later stage, the Court is unwilling to make

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such a determination based on the information currently before it.
Accordingly, Defendant’s Motion to Dismiss for Lack of Subject
Matter Jurisdiction is denied.
III. Rule 12(b)(7) Motion
It appears that McComb is filing its Motion to Dismiss under
the provisions of both Rule 12(b)(1) and Rule 12(b)(7). Aside from
a single introductory sentence to the motion, McComb has presented
no factual contentions, supporting authority, or legal argument
whatsoever as to Plaintiff’s failure to join an indispensable
party. Given Defendant’s complete lack of discussion on the issue,
the Court recognizes that the above reference to Rule 12(b)(7) may
have been in error. However, to the extent that McComb intended to
move for dismissal pursuant to this Rule, that motion is denied.
IV. Motion to Dismiss or Stay
McComb also files its Motion to Dismiss, or in the Alternative
to Stay Proceedings based on a state court action between the
parties, which is currently pending in Pike County, Mississippi.
See City of McComb, Mississippi v. Aries Building Systems, LLC, a
Texas Limited Liability Company, Cause No. 57-201600056-WS. In its
motion, McComb argues that the pending state court matter presents
the same issues, not governed by federal law, between the same
parties. Further, McComb claims that all matters in controversy in
the present case will be fully adjudicated in the pending state
court proceeding.

Defendant urges this Court, in its discretion,

8

to grant a stay or abstain from exercising its jurisdiction under
the Declaratory Judgment Act in light of the pending case.
McComb
position.

provides

scarce

legal

authority

to

support

its

As with the 12(b)(1) motion discussed above, McComb has

filed no memorandum brief in support of its motion, and the motion
itself hinges on a single citation to the general notion that
courts should be guided by judicial economy. See Brillart v. Excess
Ins. Co. of Am.,316 U.S. 491 (1942). Defendant cites to Brillart in
support of its motion, but provides the Court with no analysis or
discussion as to the case’s application. Nevertheless, the Court
shall briefly address the merits of McComb’s motion argument, in as
much as it finds that denial is warranted.
When a district court is presented with the question of
whether

to

abstain

from

exercising

its

jurisdiction

in

a

declaratory judgment action, “it should ascertain whether the
questions in controversy between the parties to the federal suit,
and which are not foreclosed under the applicable substantive law,
can better be settled in the proceeding pending in the state
court.”

Brillart,

316

U.S.

at

495.

The

Fifth

Circuit

has

articulated seven non-exclusive factors to guide district courts in
this inquiry: “(1) whether there is a pending state action in which
all matters in controversy may be fully litigated; (2) whether the
plaintiff filed suit in anticipation of a lawsuit filed by the
defendant; (3) whether plaintiff engaged in forum shopping in

9

bringing suit; (4) whether possible inequities in allowing the
declaratory plaintiff to gain precedence in time or to change
forums exist; (5) whether the federal court is a convenient forum
for the parties and witnesses; (6) whether retaining the lawsuit
would serve the purposes of judicial economy; and (7) whether the
federal court is being called on to construe a state judicial
decree involving the same parties and entered by the court before
whom the parallel state suit between the same parties is pending.”
State Nat. Ins. Co. v. Hill, 2015 WL 5554311 (S.D. Miss. Sept. 21,
2015)(citing Sherwin-Williams Co. v. Holmes City, 343 F.3d 383, 388
(5th Cir. 2003)).
Aries argues that this inquiry weighs against dismissal, and
after considering the facts of the case in light of all relevant
factors, the Court agrees. Attached to Defendant’s Motion to
Dismiss is a copy of the Complaint filed in the Chancery Court of
Pike County, from which the Court discerns that the City of McComb
seeks to enforce a land use ordinance against the plaintiff.

It

appears that the matter is wholly unrelated to the land sale
transaction between Aries and Pike County, which forms the basis of
the complaint in this case.

Additionally, Pike County, the party

against which declaratory relief is presently sought, is not a
party to the state court proceeding.

Because it appears that all

matters in controversy may not be fully adjudicated in state court,
and that exercising jurisdiction will not interfere with the
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pending action, McComb’s motion is denied at this stage of the
proceedings.
Accordingly,
IT IS HEREBY ORDERED that the Defendants’ Motion to Dismiss
for Lack of Subject Matter Jurisdiction [docket entry 9] is
DENIED without prejudice.
It is HEREBY ORDERED that the Defendants’ Motion to Dismiss or
Stay Proceedings [docket entry 10] is DENIED.
SO ORDERED, this the 28th day of October, 2016.

/s/ David Bramlette
UNITED STATES DISTRICT JUDGE

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