Aries Building Systems, LLC v. Pike County Board of Supervisors et al
ORDER granting in part and denying in part 58 Motion for Summary Judgment; granting in part and denying in part 60 Motion for Summary Judgment; denying 62 Motion for Partial Summary Judgment Signed by Honorable David C. Bramlette, III on October 17, 2017 (jr)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
ARIES BUILDING SYSTEMS, LLC
CAUSE NO. 5:16-cv-16-DCB-MTP
PIKE COUNTY, MISSISSIPPI
AND CITY OF MCCOMB
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the Motions for Summary
Judgment [Doc. Nos. 58, 60] filed by defendants Pike County Board
of Supervisors (the “Board”) and City of McComb (the “City”) and
the Motion for Partial Summary Judgment [Doc. No. 62] filed by
plaintiff Aries Building Systems, LLC (“Aries”). Having considered
the motions, responses, and applicable statutory and case law, and
being otherwise fully informed in the premises, the Court finds as
I. Facts and Procedural History1
turn on the scope of the pre-suit notice
provision of the Mississippi Tort Claims Act (“MTCA”) and competing
interpretations of a “buy-back” clause in a contract between the
Board and Aries for the sale of 40 acres of land situated in Pike
County, Mississippi (the “Purchase Agreement”).
1 The facts of this case are familiar to the parties and the Court.
Therefore, the Court will not restate them in their entirety. For a detailed
exposition of the facts, see Doc. No. 22.
A. The “Buy-Back” Clause
The Purchase Agreement was apparently executed with an eye
toward developing an “oilfield workforce housing development or
lodging facility” [Doc. No. 62-1, ¶6]. Under its terms, the Board
was to convey the land to Aries for a purchase price of $475,000
[Doc. No. 62-1, at ¶9]. The Purchase Agreement granted the Board
certain “buy-back” rights. If Aries failed to deliver on specific
benchmarks by specific dates, the Board would have the right to
“buy-back” the property at the original purchase price [Doc. No.
62-1, at ¶5].
The benchmark triggering the disputed “buy-back” provision
requires Aries to have “a minimum of 120 beds located at the
Development Site within the first twelve (12) months after closing
on the property” [Doc. No. 62-1, at ¶5] (emphasis added).
Aries contends that it satisfied the “120 bed” benchmark when
it placed on the property six single-wide trailers housing 120
beds. Therefore, Aries submits, the City lacks the right to “buyback” the property at the purchase price [Doc. No. 63, p. 7]. The
Board and the City disagree [Doc. No. 64, p. 5]. They contend that
the phrase “120 beds” means 120 beds “provided with power, water,
and sewer connections and appliances in place” [Doc. No. 64, p.
B. This Suit
In February of 2016, Aries sued the Board and the City in
this Court, seeking a declaration that it had complied with the
“buy-back” clause, injunctive and other equitable relief, and
conspiracy [Doc. No. 1]. It is undisputed that Aries did not timely
comply with the pre-suit notice requirement of the Mississippi
Tort Claims Act (“MTCA”) with regard to either defendant [Doc.
Nos. 61, p. 3; 68, p. 4]. Thus, any of Aries’s claims that fall
within the MTCA are barred.
C. Motion Practice
The Board and the City have each previously filed motions to
dismiss and motions for summary judgment [Doc. Nos. 9, 12, 13, 31,
32, 35, 36]. The Court has denied each [Doc. Nos. 22, 23, 47].
The Board again moves for summary judgment, again seeking
dismissal of all Aries’s claims as barred by the MTCA’s pre-suit
notice provision. Likewise, the City moves for summary judgment,
invoking the same MTCA argument raised by the Board, but also
maintaining that Aries’s breach of contract action cannot stand
for lack of a contract between Aries and it. Aries seeks partial
summary judgment against the Board and the City, asking the Court
to declare that it has complied with the “120 bed” clause of the
Purchase Agreement and to permanently enjoin and equitably estop
addresses each motion in turn.
Summary Judgment Standard
A party is entitled to summary judgment if it shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). The
movant 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). If the movant makes this initial showing,
the burden shifts to the non-movant to “designate specific facts
showing that there is a genuine issue for trial.” Davis v. Fort
Bend Cty., 765 F.3d 480, 484 (5th Cir. 2014). A party cannot defeat
assertions, or only a scintilla of evidence. Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam).
With respect to each of the three summary judgment motions before
it, the Court views the facts and draws reasonable inferences in
the light most favorable to the non-movant. Duncan v. Wal-Mart
Louisiana, L.L.C., 863 F.3d 406, 409 (5th Cir. 2017).
The Board’s Motion for Summary Judgment
injunctive relief; (2) to equitably estop the Board from exercising
its “buy-back” option under the Purchase Agreement; (3) damages
for civil conspiracy; and (4) damages for breach of contract [Doc.
No. 1, at ¶¶25-49].
The Board moves for summary judgment dismissing all claims
against it, contending that all of Aries’s claims are barred by
the MTCA for failure to provide the requisite pre-suit notice2
[Doc. No. 58]. In its Response, Aries contends that the MTCA’s
pre-suit notice provisions are inapplicable because its claims for
breach of contract, civil conspiracy, and equitable, declaratory,
and injunctive relief are beyond the scope of the MTCA [Doc. No.
Generally, tort suits against the State of Mississippi and
its political subdivisions must be brought under the MTCA. MISS.
CODE ANN. § 11-46-7; City of Jackson v. Harris, 44 So. 3d 927, 932
(Miss. 2010). The MTCA also applies to claims for tortious breach
of contract and breach of an implied contractual term. Whiting v.
Univ. of Southern Miss., 62 So. 3d 907, 916 (Miss. 2011); City of
Jackson v. Estate of Stewart ex rel. Womack, 908 So. 2d 703, 711
(Miss. 2005). The MTCA springs from sovereign immunity, the idea
The Board also contends that Aries’s non-compliance with the MTCA’s presuit notice provision implicates federal subject-matter jurisdiction [Doc. No.
58, ¶1]. This argument is unpersuasive. Aries’s compliance vel non with the
pre-suit notice provision is a merits question with no bearing on the Court’s
constitutional power to adjudicate this controversy involving diverse parties,
an amount exceeding $75,000 in controversy, and a plaintiff alleging an injury,
traceable to the defendants, and redressable by a favorable decision. See 28
U.S.C. § 1332; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
that a political subdivision cannot be sued absent its consent.
Tallahatchie Gen. Hosp. v. Howe, 154 So. 3d 29, 31 (Miss. 2015).
Functionally, the MTCA represents the state’s limited consent to
[T]hrough the MTCA provisions, the State has waived its
immunity and the immunity of its political subdivisions
from claims for money damages arising out of the torts
of such governmental entities.
Ivy v. East Mississippi State Hosp., 191 So. 3d 120, 122 (Miss.
Like most tort claims acts, the MTCA incorporates a “Notice
of Claim” provision. See MISS. CODE ANN. § 11-46-11. Under its terms,
a plaintiff suing a governmental entity “must file a notice of
claim with the chief executive of the governmental entity.” MISS.
CODE ANN. § 11-46-11(1). The Supreme Court of Mississippi requires
“substantial compliance” with the MTCA notice provisions. Fairley
v. George Cty., 871 So. 2d 713, 717 (Miss. 2004).
Viewing all facts and drawing all inferences in Aries’s favor,
the Court separately analyzes each of the claims Aries has asserted
against Pike County to determine which, if any, fall under the
MTCA. See Zumwalt v. Jones Cty. Bd. of Sup’rs, 19 So. 3d 672, 688
(Miss. 2009) (“The MTCA does not apply to all claims against
governmental entities,” thus “each claim must be examined for MTCA
Declaratory, Injunctive, and Equitable Relief
The Board again cites no authority to support its contention
that Aries’s claims for declaratory, injunctive, and equitable
relief are subject to the MTCA [Doc. Nos. 58, 59]. The plain
language of the statute supports Aries’s position: the MTCA extends
only to those suits based upon “any wrongful or tortious act or
omission or breach of implied term or condition of any warranty or
contract.” MISS. CODE ANN. § 11-46-3(1). Requests for declaratory,
injunctive, and equitable relief neither sound in tort nor involve
the “breach of an implied term of any warranty or contract.” Id.
Other courts that have addressed the issue agree. See Atlantic
Specialty Ins. Co. v. Webster Cty., Miss., 2014 WL 3437019, *7
(N.D. Miss. July 11, 2014) (MTCA inapplicable to declaratory
relief); Ma v. City of Columbus, 1997 U.S. Dist. LEXIS 13514 at *4
(N.D. Miss. July 30, 1997) (same); Whiting, 62 So. 3d at 919
(describing injunctive relief as “an exception” to the MTCA).
On these claims, the Board fails to carry its summary judgment
burden —— i.e., proving, as a matter of law, that claims for
equitable, injunctive, and declaratory relief are governed by the
MTCA’s pre-suit notice provision. Therefore, the Board is not
entitled to summary judgment on Aries’s claims for declaratory,
injunctive, and equitable relief.
The parties dispute whether the MTCA applies to claims for
civil conspiracy. Aries directs the Court to the predicate wrong
supporting its civil conspiracy claim. Because that predicate is
breach of a contract rather than a tort, Aries contends, the MTCA
does not apply to its civil conspiracy claim.
Civil conspiracy requires proof of “(1) two or more persons
or corporations; (2) an object to be accomplished; (3) a meeting
of the minds on the object or course of action; (4) one or more
unlawful overt acts; and (5) damages as the proximate result.”
Cooper Tire & Rubber Co. v. Farese, 423 F.3d 446, 459 (5th Cir.
2005) (quoting Gallagher Bassett Servs., Inc. v. Jeffcoat, 887 So.
2d 777, 786 (Miss. 2004)). The civil conspiracy claim must be based
on an underlying tort. Aiken v. Rimkus Consulting Grp. Inc., 333
F. App’x 806, 812 (5th Cir. 2009).
It appears that no Mississippi court has determined whether
a claim for civil conspiracy is covered by the MTCA. See Alidoust
3298682, at *3 n. 4 (S.D. Miss. Aug. 2, 2017) (recognizing the
uncertainty of civil conspiracy’s MTCA status). In the absence of
applicability of the MTCA to civil conspiracy claims, it is the
duty of this Court “to determine, in its best judgment, how the
highest court of the state would resolve the issue if presented
with the same case.” American Intern. Specialty Lines Ins. Co. v.
Canal Indem. Co., 352 F.3d 254, 260 (5th Cir. 2003); see also,
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817 (1938).
In making an Erie guess, the Court’s task is “to predict state
law, not to create or modify it.” Keen v. Miller Envtl. Grp., Inc.,
intermediate state appellate court decisions . . . and may consult
a variety of sources, including the general rule on the issue,
decisions from other jurisdictions, and general policy concerns.”
Travelers Cas. And Sur. Co. of America v. Ernst & Young LLP, 542
F.3d 475, 483 (5th Cir. 2008).
Civil conspiracy is a tort. See Blanks v. State, 594 So. 2d
25, 28 (Miss. 1992) abrogated by Bilbo v. Thigpen, 647 So. 2d 678
(Miss. 1994); RESTATEMENT (SECOND)
TORTS § 876 (1979). Indeed,
limitations period set forth in MISS. CODE ANN. § 15-1-35, entitled
“actions for certain torts,” to conspiracy claims. Gasparrini v.
Bredemeier, 802 So. 2d 1062, 1066 (Miss. Ct. App. 2001). The nature
of the civil conspiracy cause of action does not change simply
because it is predicated upon a breach of contract.
The language of the statute, as well as decisions from the
Mississippi Supreme Court, suggest that Mississippi’s high court
would find civil conspiracy to be covered by the MTCA. The MTCA
applies to “any wrongful or tortious act.” MISS. CODE ANN. § 11-469
3(1). The “clear intent of the legislature in enacting MTCA was to
immunize the state and its political subdivisions from any tortious
conduct.” Black v. Ansah, 876 So. 2d 395, 397 (Miss. Ct. App. 2003)
(emphasis in original).
militates towards a finding that it is covered by the MTCA. For
example, Aries submits that the Board and the City conspired to
deprive it of its property rights by “annex[ing] certain territory
into the City’s corporate limits” [Doc. No. 1, ¶15]. As a result,
Aries contends that it “will suffer damages which include loss of
income and its own property rights” [Id. at ¶44]. Shorn of its
rhetorical dressing, the “wrong” or “tortious conduct” underlying
Aries’s conspiracy claim appears to be the Board and the City’s
wrongful filing of a petition to annex certain property —— not
simple breach of contract.
A comparison of Aries’s conspiracy claims to other claims
contractual relations, a claim which the Mississippi Supreme Court
has long held sounds in tort rather than contract. Bailey v.
Richards, 111 So. 2d 402, 407 (Miss. 1959).
Even drawing all reasonable inferences in Aries’s favor, this
conclude that Aries’s conspiracy claim is covered by the MTCA. And
there is no dispute that Aries did not comply with the MTCA’s presuit notice requirement. Therefore, the Court finds that summary
judgment is warranted as to Aries’s conspiracy claims against both
the Board and the City.
Breach of Contract
In an earlier Order and Opinion, this Court noted that the
Board “failed to address whether the MTCA should apply to Aries’s
claims for . . . breach of contract” [Doc. No. 47, p. 12]. It again
fails to do so here.
It is well-settled that the MTCA does not apply to suits for
breach of an express contract. See, e.g., Idom v. Natchez-Adams
Sch. Dist., 115 F. Supp. 3d 792, 805–06 (S.D. Miss. 2015); Weible
v. Univ. of S. Mississippi, 89 So. 3d 51, 60 (Miss. Ct. App. 2011)
(citing City of Jackson, 908 So. 2d at 710-11). Aries has sued the
Board for breach of an express contract in the form of the Purchase
Agreement [Doc. No. 1, at ¶¶45-49]. Therefore, the MTCA does not
apply, and the Board is not entitled to summary judgment on Aries’s
claims for breach of an express contract.
The City’s Motion for Summary Judgment
The City’s motion for summary judgment restates many of the
memorandum. Like the Board, the City contends that Aries’s claims
dismissed because of Aries’s non-compliance with the MTCA pre-suit
notice provision. For the reasons stated in section III(B) above,
the Court concludes that the City is not entitled to summary
equitable relief, but is entitled to summary judgment on Aries’s
Breach of Contract
The City’s motion differs from the Board’s on the issue of
breach of contract. Although it is undisputed that the Board and
Aries were parties to an express contract (the Purchase Agreement),
the parties dispute the nature and existence of any contract
between Aries and the City.
The nature of that contract is relevant for purposes of the
MTCA analysis. The MTCA applies to implied contracts but not
express contracts. See City of Jackson, 908 So. 2d at 711. If the
contract between the City and Aries is implied, the MTCA governs
and its pre-suit notice provision will defeat Aries’s claim.
Simpson v. Alcorn State Univ., 27 F. Supp. 3d 711, 719-20 (S.D.
Miss. 2014). If that contract is express, as Aries contends, then
the MTCA does not apply, and summary judgment would be unwarranted.
4703516, at *12 (N.D. Miss. Sept. 7, 2016).
Generally, “the existence of a contract and its terms are
questions of fact to be resolved by the fact-finder.” Wells v.
Price, 102 So. 3d 1250, 1256 (Miss. Ct. App. 2012). An implied
contract is one that arises from the conduct of the parties.
Dominquez v. Palmer, 970 So. 2d 737, 740-41 (Miss. Ct. App. 2007).
An express contract is “[a] contract whose terms the parties have
explicitly set out.” BLACK’S LAW DICTIONARY 393 (10th Ed. 2014).
The City attaches an affidavit from Mayor Whitney Rawlings
stating “no contract of any type” was entered into by Aries and
the City [Doc. No. 60-1]. Conversely, Aries insists that it “did
not sue for tortious breach, nor did it sue for implied breach”
and attaches a letter from Mayor Rawlings stating that the City
intended to provide certain utility services to the Aries property
[Doc. No. 68, p. 4]. Aries also directs the Court to deposition
Purchase Agreement [Doc. Nos. 67-5, 67-6].
The Court finds summary judgment inappropriate at this time
on this issue. It is significant that Mayor Rawlings’s letter, as
an exhibit to the Purchase Agreement, is considered part of the
Purchase Agreement. See Purchase Agreement, § 16(f) (“All of the
exhibits attached to this Agreement are incorporated in, and made
a part of, this Agreement.”). In that letter, Mayor Rawlings
documents the City’s “intent . . . to provide collection and
treatment of the sanitary wastewater (sewage) to be discharged
from [Aries’s] proposed development” [Doc. No. 62-1, p. 42]. Thus,
the Court finds genuine issues of material fact regarding the
nature and existence of an express contract between Aries and the
City which preclude summary judgment.
Aries’s Motion for Partial Summary Judgment
Aries moves for partial summary judgment against the Board,
asking the Court to (1) declare that it has complied with the “120
bed” clause of the Purchase Agreement; and (2) enjoin and equitably
estop the Board from exercising its “buy-back” rights under the
Purchase Agreement [Doc. No. 63].
Resolution of the motion centers on the meaning of “120 beds”
within the “buy-back” provision of the Purchase Agreement. That
provision requires Aries to have “a minimum of 120 beds located at
the Development Site within the first twelve (12) months after
closing on the property” [Doc. No. 62-1, at ¶5].
Armed with the “plain meaning” doctrine, Aries asserts that
the “buy-back” provision required only that it “have 120 beds on
the property before Jan. 28, 2016” [Doc. No. 63, p. 5]. The Board
results,” and insists “120 beds” means 120 occupiable beds, housed
in a structure outfitted with the utility connections necessary
for ordinary habitation [Doc. No. 64, pp. 8-11]. It offers a morass
understood “120 beds” to mean 120 beds fit for habitation [Doc.
No. 64, pp. 8-11]. It is undisputed that Aries has placed on the
property 128 beds, housed in six single-wide trailers, without
access to sewer services or electricity [Doc. Nos. 64, p. 10; 623, at ¶5].
Generally, the Mississippi Supreme Court resolves disputes
over contractual interpretation through a three-step process.
Tupelo Redevelopment Agency v. Abernathy, 913 So. 2d 278, 284
(Miss. 2005). First, the Court looks to the “four corners” of the
Purchase Agreement, analyzing the language used by the parties.
Id. at 284. If intent remains elusive, the Court looks to the
“discretionary ‘canons’ of contract construction.” Id. Finally,
“if the contract continues to evade clarity as to the parties’
intent, the court should consider extrinsic or parol evidence.”
But this three-tiered approach does not always resolve the
interpretative issue, and the Mississippi Supreme Court does not
require strict adherence to it in all circumstances. Enniss Family
Realty I, LLC v. Schneider Nat. Carriers, Inc., 916 F. Supp. 2d
702, 708 (S.D. Miss. 2013). Indeed, “[w]here terms of a contract
are ambiguous, the contract will be interpreted in a reasonable
manner.” Id. at 283. And “[w]here there is a dispute as to the
meaning of a contract clause, a party’s interpretation must be
Highway Comm’n of Mississippi, 673 So. 2d 742, 744 (Miss. 1996).
The existence of ambiguity in a contract is a question of law for
the courts, Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc.,
interpretation in the event of ambiguity “presents a question of
fact.” Tupelo Redevelopment Agency, 913 So. 2d at 283.
Turning to the “120 beds” clause at issue here, the Court
begins by reviewing the “four-corners” of the Purchase Agreement.
Because § 16(f) of the Purchase Agreement holds that all exhibits
attached to the Purchase Agreement are considered part of it,
Exhibits “A” – “I” attached to the Purchase Agreement are within
its “four-corners.” Those exhibits make plain that the parties
intended to expeditiously outfit the property with sewage services
and electricity [Doc. No. 62-1, pp. 34-51]. The Addendum to the
Purchase Agreement confirms that the parties intended to create an
“oilfield workforce housing development or lodging facility” [Doc.
No. 62-1, p. 23]. The “four-corners” approach mandates that the
Purchase Agreement’s “120 bed” clause be interpreted with these
objectives in mind.3
Aries submits that “bed” can have but one ordinary meaning:
a piece of furniture containing a mattress and springs. But the
Court remains unconvinced. Indeed, “bed” is also defined as “[a]
place where one may sleep, lodging.” AMERICAN HERITAGE DICTIONARY
ENGLISH LANGUAGE 159 (5th ed. 2016). It is not unreasonable to suggest
3 The second tier of contractual interpretation, “canons of construction,”
provides little help here. Both parties actively participated in the negotiation
and drafting of the Purchase Agreement [Doc. Nos. 62-1, p. 18; 62-6, p. 6].
that the parties, contemplating an “oilfield workforce housing
development or lodging facility,” intended the latter definition
of “bed,” one bespeaking habitation, to trump the former.
Adopting Aries’s interpretation of the “120 bed” clause could
also lead to absurd results. In its papers, Aries takes the
position that it would have fulfilled that clause had it simply
placed 120 army cots in the middle of a field [Doc. No. 69, pp. 67]. This cannot be.
immaterial where the terms of a contract are “express and free of
doubt” [Doc. No. 69, p. 4]. But it mistakenly characterizes the
“120 bed” clause as susceptible of only one meaning. As outlined
habitability and, by extension, access to utilities such as sewer
services and electricity. Because this clause is not free of doubt,
“[a] construction leading to an absurd, harsh or unreasonable
result . . . should be avoided.” Frazier v. Ne. Mississippi
Shopping Ctr., Inc., 458 So. 2d 1051, 1054 (Miss. 1984).
In light of the context of the agreement, the multiple
“ordinary meanings” of “bed,” and the potential consequences of
adopting the interpretation advanced by Aries, the Court finds the
“120 bed” clause of the Purchase Agreement to be ambiguous, and
submits that subsequent interpretation presents a question of fact
Redevelopment Agency, 913 So. 2d at 283. To be clear, the Court is
not declaring that the “120 bed” clause means what the Board says
it does, nor that it does not carry the meaning ascribed to it by
Aries. Rather, the Court rules that the phrase is ambiguous in its
context; thus, its interpretation must be resolved by the trier of
Having found summary judgment unwarranted on the contractual
interpretation issue, the Court does not reach Aries’s requests
for summary judgment on its injunctive and equitable relief claims
endorsement of Aries’s interpretation of the “120 beds” clause.
IT IS HEREBY ORDERED that the Motions for Summary Judgment
filed by Defendant Pike County [Doc. No. 58] and Defendant City of
McComb [Doc. No. 60] are GRANTED as to the conspiracy claims
Defendants in Count III of the Complaint and DENIED as to all other
IT IS FURTHER ORDERED that the Motion for Partial Summary
Judgment [Doc. No. 62] filed by Plaintiff Aries Building Systems,
LLC is DENIED;
SO ORDERED this the 17th day of October, 2017.
/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE
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