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

Filing 47

ORDER denying City of McComb's Motion to Dismiss 31 and for Summary Judgment 32 ; denying Pike County's Motion to Dismiss 35 and for Summary Judgment 36 ; finding as moot Aries's Waiver and Withdrawal of Request for Jury Trial 30 , insofar as it may be construed as a motion to withdraw the plaintiff's jury demand. Signed by Honorable David C. Bramlette, III on 3/7/2017 (EB)

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

PLAINTIFF

v.

CIVIL ACTION NO. 5:16-cv-16-DCB-MTP

PIKE COUNTY BOARD OF SUPERVISORS
and CITY OF MCCOMB, MISSISSIPPI

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This cause is before the Court on defendant City of McComb
(“McComb”)’s Motion to Dismiss and for Summary Judgment (docket
entries 31 and 32), defendant Pike County Board of Supervisors
(“Pike County”)’s Motion to Dismiss and for Summary Judgment
(docket entries 35 and 36), and plaintiff Aries Building Systems,
LLC (“Aries”)’s Waiver and Withdrawal of Request for Jury Trial
(docket entry 30).

Having carefully considered the motions,

responses, and applicable law, and being otherwise fully informed
in the premises, the Court finds as follows:
I. Facts and Procedural History
A. The Purchase Agreement
In 2014, Pike County entered into a Purchase Agreement with
Aries for the sale and purchase of 40 acres of land near McComb,
Mississippi. Doc. 1, ¶ 6.
construction

by

Aries

of

The purpose of this sale was for the
a

workforce

housing

facility

for

industrial workers. Pike County executed a Warranty Deed conveying

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the property to Aries on January 28, 2015, and the deed was
recorded on February 2, 2015. Id. at ¶ 7.
Pursuant to the terms of the Purchase Agreement, Aries was
required to have a minimum of 120 beds at the development site
within the first twelve months after the sale was finalized, and
a minimum of ten full time employees at the site within the first
twenty-four months.

Doc. 1-1, p. 22; Doc. 1-2, p. 3.

Should Aries

fail to comply with either condition, Pike County would have the
option to repurchase the land. Id.
enter

into

an

interlocal

agreement

Pike County also agreed to
with

the

City

of

McComb

(“McComb” or “the City”) for the construction of a sewer line and
roadway to serve the property purchased by Aries. Doc. 1-1, p. 22.
The parties dispute the City of McComb’s obligations under the
Agreement, but Aries contends that the City was a party to the
contract and related negotiations.
According to Aries, the deadline to have the 120 beds located
on the property was at the end of January 2016, and the deadline
for the full time employees was to be at the end of January 2017.
Doc. 1, ¶ 14.

On December 23, 2015, Aries sent a letter to Pike

County, informing the defendant that 120 beds had been placed on
the property in compliance with the first condition. Doc. 1-3.
Inspection of the development site revealed eight trailer-type
structures without power, running water, or sewage connections.
Doc. 1-4.

Finding these structures to be uninhabitable, Pike
2

County informed the plaintiff that it was unsatisfied that the
first condition of the Agreement had been met, and that it intended
to repurchase the property from Aries. Id.

According to Aries,

however, providing appliances and utility connections to service
the property was beyond the scope of its obligations under the
contract.
B. The Annexation and Subsequent Litigation
With litigation pending in both state and federal court, the
Aries development site has become the source of much disagreement
between the parties.

On April 23, 2015, the City of McComb filed

a petition in the Chancery Court of Pike County to annex Aries’s
property within the city’s boundaries. See Doc. 43-3; Doc. 1, ¶
15.

The

City

prevailed,

and

its

boundaries

were

enlarged

accordingly.1 Id. Meanwhile, the City of McComb filed another
complaint against Aries in chancery court on February 3, 2016,
alleging certain zoning ordinance violations in connection with
the development site. Doc. 43-5.

It appears that Pike County also

filed a related action against Aries and another defendant for
interpleader

and

specific

performance

in

connection

with

the

Purchase Agreement.2 Doc. 45, p. 6.

1 Aries claims that the annexation action was commenced without proper
notice or jurisdiction and is therefore challenging the judgment in state court.
2 Pike County filed suit in the Chancery Court of Pike County, but the
case was removed on February 3, 2017 and is currently pending before this Court.
See Pike Co., Miss. v. Aries Building Sys., LLC & CMS Consultants, LLC, civil
action no. 5:17-cv-17.

3

On February 26, 2016, Aries filed its Complaint against the
defendants in this Court, asserting four claims against Pike County
and two claims against the City of McComb.
Aries

alleges

equitable

injunctive relief.

estoppel

and

As to Pike County,

seeks

declaratory

and

Specifically, Aries seeks a declaratory

judgment finding that the plaintiff fulfilled its obligation under
the

contract,

and

an

injunction

preventing

exercising its option to repurchase.

Pike

County

from

Aries also asserts claims

for breach of contract and conspiracy against both defendants.
The City of McComb and Pike County now move for dismissal and
summary judgment as to all claims.
II. Standard of Review
The defendants bring their motions pursuant to Federal Rules
of Civil Procedure 12(b)(6) and 56, thus invoking two distinct
standards of review.

Dismissal is appropriate under Rule 12(b)(6)

if the complaint “fail[s] to state a claim upon which relief may
be granted[.]” Fed. R. Civ. P. 12(b)(6).

To survive the motion,

plaintiffs must plead “enough facts to state a claim to relief
that is plausible on its face.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 570 (2007).

When ruling on a motion to dismiss under

Rule 12(b)(6), the Court accepts all well-pleaded facts as true
and views them in the light most favorable to the plaintiff. Martin
K. Eby Const. Co., Inc. v. Dallas Area Rapid Transit, 369 F.3d
464, 467 (5th Cir. 2004).

Rule 12(b)(6) tests the sufficiency of
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the complaint; therefore, the court is bound to consider only the
well-pleaded allegations therein.

See Passman v. Thames, 2006 WL

1195627, *3 (S.D. Miss. May 2, 2006).

If matters outside the

complaint are considered and not excluded by the Court, the motion
to dismiss should be converted to a motion for summary judgment
under Rule 56. See Fed. R. Civ. P. 12(d).

Because the defendants’

motions reference material outside the Complaint, the Court shall
review each motion as one for summary judgment.3
Under Rule 56, “the court shall grant summary judgment if the
movant shows that there is no genuine issue of material fact and
the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a).

The party seeking summary judgment bears the

initial burden of “informing the district court of the basis for
its motion, and identifying those portions of the [record] . . .
which it believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once the moving party makes this demonstration, the burden shifts
to the nonmovant to “designate specific facts showing that there
is a genuine issue for trial.” Estate of Sanders v. U.S., 900 F.
Supp. 2d 730, 733 (S.D. Miss. Sept. 26, 2012).

The Court views

all of the evidence and draws reasonable inferences in the light

3 When converting a motion to dismiss under Rule 12(d), “all parties shall
be given a reasonable opportunity to present all material made pertinent to
such a motion by Rule 56.” Fed. R. Civ. P. 12(d). Because the defendants have
also moved for summary judgment, the Court is satisfied that the plaintiff has
been afforded such an opportunity in this case.

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most favorable to the nonmoving party. Paz v. Brush Engineered
Materials, Inc., 555 F.3d 383, 391 (5th Cir. 2009).
III. The City’s Motion
Aries alleges two counts against the City of McComb: (1)
breach of contract and (2) conspiracy.

The defendant argues that

the plaintiff’s breach of contract claim must fail because no valid
contract existed between Aries and the City of McComb.

Further,

the City contends that the Mississippi Tort Claims Act (“MTCA”)
mandates dismissal of Aries’s civil conspiracy claim.
A. Breach of Contract
To prevail on its breach of contract claim, the plaintiff
must prove by a preponderance of the evidence: (1) the existence
of a valid and binding contract and (2) that the defendant breached
the contract. Bus. Commc’ns, Inc. v. Banks, 90 So. 3d 1221 (Miss.
2012) (holding that monetary damages are a remedy for, and not an
element of, breach of contract).

The elements of a valid contract

under Mississippi law are: “(1) two or more contracting parties,
(2) consideration, (3) an agreement that is sufficiently definite,
(4) parties with the legal capacity to make a contract, (5) mutual
asset,

and

(6)

no

legal

prohibition

precluding

contract

formation.” Rotenberry v. Hooker, 864 So. 2d 266, 270 (Miss. 2003).
The City of McComb argues that Aries’s breach of contract
claim must fail because no valid contract existed between the
parties.

The City contends that it had no contractual obligation
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to provide utility services to Aries’s development site because it
was not a party to the Purchase Agreement between Aries and Pike
County.

The plaintiff, on the other hand, maintains that the City

expressly agreed to provide public utility services to Aries’s
development, to treat Aries’s wastewater, and to share in funding
of sewage transportation with Pike County.

Aries argues that the

City’s failure to provide such utility services amounts to a breach
of contract.
Generally, “the existence of a contract and its terms are
questions of fact to be resolved by the fact-finder, whether a
jury or a judge in a bench-trial.” Wells v. Price, 102 So. 3d 1250,
1256 (Miss. Ct. App. 2012).

While there is no single, form

contract signed by both Aries and the City of McComb in this case,
there is a letter from the City’s mayor, Whitney Rawlings, stating
that the City

of McComb

intended to provide certain utility

services to the Aries property. Doc. 40-3. The Purchase Agreement
between Aries and Pike County also provided that Pike County would
enter into an interlocal agreement with the City of McComb, and
the letter from Mayor Rawlings was included as an exhibit to that
Agreement.

See Doc. 1-1, pp. 22, 42.

In support of its motion,

the City of McComb submitted an affidavit signed by Mayor Rawlings,
which provided that “no contract of any type” was entered into by
Aries and the City. Doc. 32-1.

Nevertheless, the Court finds that

there is a genuine issue of material fact sufficient to preclude
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summary judgment on Aries’s breach of contract claim.

Whether a

valid and binding contract exists between Aries and the City of
McComb is a question of fact best left for the trier of fact.
Therefore, the City’s motion shall be denied as to Aries’s contract
claim.
B. Conspiracy
As to the conspiracy claim, the City argues that dismissal is
warranted based on Aries’s failure to comply with the pre-suit
notice requirement of the MTCA.

In Mississippi, the MTCA provides

the exclusive remedy for filing certain tort actions against a
governmental entity and its employees.

Through the provisions of

the MTCA, the State has “waived immunity for claims for money
damages arising out of the torts of [] government entities and the
torts of their employees while acting within the scope of their
employment[.]” Ivy v. East Miss. State Hosp., 191 So. 3d 120, 122
(Miss. 2016) (citing Miss. Code Ann. § 11-46-5(1) (Rev. 2012)).
Claims arising under the MTCA must be brought pursuant to the
procedures set forth in the statute, which require plaintiffs to
provide defendants with ninety days’ notice prior to bringing suit.
See Miss. Code Ann. § 11-46-11(1) (Rev. 2012).

The MTCA’s pre-

suit notice requirement is a “hard-edged, mandatory rule which the
Court strictly enforces.” Price v. Clark, 21 So. 3d 509, 519 (Miss.
2009).

When a plaintiff fails to provide the requisite notice of

claims covered by the MTCA, those claims are subject to dismissal.
8

See Univ. of Miss. Med. Ctr. v. Easterling, 928 So. 2d 815, 820
(Miss. 2006); Glaskox v. George Co. Hosp., 2016 WL 4083422, *4
(S.D. Miss. Aug. 1, 2016).

Aries does not dispute the lack of

pre-suit notice in this case. Instead, the plaintiff maintains
that its civil conspiracy claim is not covered by the MTCA.
“A conspiracy is an agreement between two or more persons for
the purpose of accomplishing an unlawful purpose or a lawful
purpose unlawfully.” Shaw v. Burchfield, 481 So. 2d 247, 255 (Miss.
1985).

To establish a claim for conspiracy, the plaintiff must

prove: “(1) an agreement between two or more persons, (2) to
accomplish an unlawful purpose or lawful purpose unlawfully, (3)
an overt act in furtherance of the conspiracy, and (4) damages to
the plaintiff as a proximate result.” Bradley v. Kelly Bros.
Contractors, Inc., 117 So. 3d 331, 339 (Miss. Ct. App. 2013).
civil

conspiracy’s

MTCA

status

depends

on

the

“A

plaintiff’s

allegations and the nature of the overt actions in furtherance of
the conspiracy.” Holloway v. Lamar County, 2015 WL 9094531, *5
(S.D. Miss. Dec. 16, 2015) (recognizing that civil conspiracy may
be based on fraudulent or tortious conduct).
In its Complaint, Aries claims that the City conspired with
Pike County to breach its contract and deprive the plaintiff of
its property rights by bringing the annexation matter to chancery
court and commencing litigation against Aries. See Doc. 1, ¶ 40.
Aries argues that the MTCA is inapplicable because its civil
9

conspiracy claim arises fully from the defendants’ alleged breach
of contract, which is beyond the reach of the Act.
disputes

this

characterization,

arguing

that

The City

the

alleged

conspiracy is based on an underlying theory of tortious breach of
contract.
It is well-settled that the MTCA is inapplicable to pure
breach of contract claims because “entering into a contract waives
sovereign immunity from suits brought to enforce the contract.”
Montgomery v. Miss., 498 F. Supp. 2d 892, 905 (S.D. Miss. 2007).
But

not

all

actions

arising

from

a

defendant’s

contractual

obligations escape the MTCA’s application. See Whiting v. Univ. of
Southern Miss., 62 So. 3d 907, 916 (Miss. 2011) (“the MTCA covers
both tortious breaches of contract and breaches of implied terms
and warranties of a contract”); Springer v. Ausbern Const. Co.,
Inc., 2016 WL 4083981, *4 (Miss. Ct. App. Aug. 2, 2016) (finding
that MTCA applies to claims for tortious interference with a
contract); Brown v. City of Saltillo, Miss., 106 F. Supp. 3d 784,
792 (N.D. Miss. 2015) (finding that “malicious interference claims
fall within the purview of the MTCA”).

Indeed, the Mississippi

Supreme Court has determined that that “the clear intent of the
legislature in enacting the MTCA was to immunize the State and its
political

subdivisions

from

any

tortious

conduct,

including

tortious breach of . . . contract.” City of Grenada v. Whitten
Aviation, Inc., 755 So. 2d 1208, 1213 (Miss. Ct. App. 1999)
10

(emphasis added); Papagolos v. Lafayette Co. School Dist., 972 F.
Supp. 2d 912, 932 (N.D. Miss. 2013).
While it appears that the MTCA’s notice provision may preclude
the plaintiff’s conspiracy claim, the Court is reluctant to make
such a determination without further factual development.

Because

the nature of the alleged conduct underlying Aries’s conspiracy
claim remains somewhat unclear at this stage, the Court declines
to grant summary judgment based on the MTCA’s application and shall
therefore deny the City’s motion as to this claim.
IV. Pike County’s Motion
Aries’s Complaint asserts four counts against defendant Pike
County:

(1)

declaratory

judgment

and

injunctive

relief;

(2)

equitable estoppel; (3) conspiracy; and (4) breach of contract.
Echoing the argument raised by its co-defendant, Pike County
maintains

that

all

claims

stated

against

it

are

subject

to

dismissal with prejudice based on Aries’s failure to comply with
the MTCA’s notice provision.
Because Aries’s civil conspiracy claims against the City and
Pike County are virtually indistinguishable, the Court finds it
unnecessary to revisit the alleged conspiracy in much detail.
Having decided that Aries’s conspiracy claim against the City of
McComb survives the motion, the Court finds that Aries’s conspiracy
claim against Pike County, which is largely based upon the same
facts and conduct, should also survive.
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As set forth above, the

nature of the defendants’ alleged conduct remains unclear; thus,
the Court declines to dismiss the conspiracy claim at this stage
based on the MTCA’s application.

Pike County’s motion shall

therefore be denied as to the conspiracy claim.
Although Pike County argues that all of the plaintiff’s claims
are subject to dismissal based on the MTCA’s notice provision, it
fails to address whether the MTCA should apply to Aries’s claims
for declaratory judgment, injunctive relief, equitable estoppel,
and breach of contract.

According to Aries, none of these claims

are governed by the MTCA, and from the record, it appears that
these claims are indeed beyond the scope of the Act. See Greyhound
Welfare Found v. Miss. State Univ., 736 So. 2d 1048 (Miss. 1999)
(“the [MTCA] applies only to tort suits for money damages”);
Atlantic Specialty Ins. Co. v. Webster Co., Miss., 2014 WL 3437019,
*6 (N.D. Miss. July 11, 2014) (“governmental immunity does not
prevent plaintiffs from seeking declaratory relief”); Kelley, LLC
v. Corinth Public Util. Com’n, 200 So. 3d 1107, 1123 (Miss. Ct.
App. 2016) (“the MTCA does not apply to pure contract actions”).
Therefore, the Court declines to grant summary judgment as to these
claims based on the MTCA’s application.

Finding no other basis

warranting summary judgment, the Court shall deny Pike County’s
motion as to Aries’s remaining claims for breach of contract and
equitable relief.
V. Aries’s Waiver of Request for Jury Trial
12

On January 6, 2017, Aries filed its Waiver of and Withdrawal
of Request for Jury Trial (docket entry 30).

Therein, Aries

“withdraws its previous request for, and also waives its right to,
a trial by jury,” and submits that the case would be appropriate
for a bench trial.

Aries also states that the plaintiff will sign

and submit a notice of consent to a bench trial before the
magistrate judge.

Although Aries does not appear to articulate

any specific request for relief, the plaintiff filed its waiver on
the docket as a motion.

Insofar as this document may be construed

as a motion to withdraw the plaintiff’s jury demand, the Court
finds that the motion is moot.
Under Federal Rule of Civil Procedure 38(d), “a proper demand
[for a trial by jury] may be withdrawn only if the parties
consent.”

Where one party has made a demand for a jury, other

parties are entitled to rely on that demand and need not make an
independent demand of their own. Peter Cabusao Plaintiff v. Michael
V. Lombardi, 2015 WL 12978158 (S.D. Miss. Jan. 30, 2015).

The

defendants have not provided consent to a bench trial in this case.
Without such consent, any attempt by Aries to unilaterally withdraw
its jury demand is ineffective.
Accordingly,

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IT IS HEREBY ORDERED AND ADJUDGED that defendant City of
McComb’s Motion to Dismiss and for Summary Judgment (docket entries
31 and 32) is DENIED;
FURTHER ORDERED AND ADJUDGED that defendant Pike County’s
Motion to Dismiss and for Summary Judgment (docket entries 35 and
36) is DENIED;
FURTHER ORDERED AND ADJUDGED that plaintiff’s Waiver and
Withdrawal of Jury Demand (docket entry 30), insofar as this
document may be construed as a motion to withdraw the plaintiff’s
jury demand, is MOOT.
SO ORDERED AND ADJUDGED, this the 7th day of March, 2017.

/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE

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