Decisions – Miss.S.Ct. – July 31, 2014 – part 1

BB Buggies v. Leon – This is an interlocutory appeal from a default judgment entered against BB Buggies and Textron. This all began when 14 year old Jean-ah Leon injured himself while riding an off the road vehicle called a Bad Boy Buggy. In June 2012, his parents sued the owner of the BBB and his insurer Textron in Louisiana. They also sued the same parties in Adams County, Miss. They served the summons on July 16, 2012. A week later they filed an amended compliant which they did not serve but mailed to the Textron HQ and when Textron attorneys requested a copy, e mailed the complaint to the Textron attorneys. Textron did not file an answer to the original or amended complaint and the Leons obtained an entry of default and a default judgment on August 23, 2012. Four days later, Textron’s insurer learned of the default and, on August 31, 2012, moved to set aside the default. The trial court denied the motion and Textron filed a petition for interlocutory appeal which was granted. The Court reverses and remands finding that Textron had a colorable defense and the Leons will not be prejudiced. Along the way, the Court discusses some civil procedure issues.

Textron first argued that the default was void because the amended complaint was improperly served. The Court does not buy this argument.

An amended complaint is a pleading. Miss. R. Civ. P. 7(a); Miss. R. Civ. P. 15(a). Because it is a pleading “subsequent to the original complaint,” its
service falls squarely within the scope of Rule 5 with one exception – if an amended complaint adds new or additional claims and the new claims are against a party who is in
default, then service must be made under Rule 4. In the instant case, the Textron Parties were not in default when the Leons served their amended complaint fifteen days after the
Textron Parties were properly served with the summons and original complaint, so the one exception to Rule 5(a) did not apply.

Textron next argues that it received insufficient notice of the entry of default. The Court holds that the one phone call and one e mail from the Textron parties’ Louisiana attorney who did not represent them in the Miss. case was not sufficiently an appearance for MRCP 55(b) purposes to require notice of the intent to obtain a default. The Court also rejects Textron’s argument that the default should be set aside because the complaint failed to state a claim against it.

Finally Textron hits on the winner argument. While Textron did not have a good reason for failing to answer the original complaint, it does have a colorable defense and this is the most important factor in determining whether to set aside a default judgment. Textron did not design the BBB. The BBB owner’s manual states that it is not to be operated by anyone under 18. There are also the issues of misuse and negligent operation of the vehicle. Furthermore, Textron moved promptly to set aside the default judgment.

Woodruff v. Thames and Collins – Another default judgment. Sam Woodruff owns land in Rankin County. Rita Thames and Larry Collins claimed that Woodruff agreed to sell them 6.53 acres of land for $9,750. Woodruff maintained that he agreed to sell one acre for that price. Thames and Collins filed a complaint for specific performance. Woodruff was served on January 7, 2011. 45 days after service was completed, Thames and Collins foiled a motion for default judgment which was entered that same day. Ten days later a default judgment as entered. Woodruff found out about it in March and hired counsel (he thought he had hired a lawyer before but that did not work out). On June 20, 2011, Woodruff filed a motion to set aside the default. The Court finds no good cause to explain the default. Woodruff thought he had hired a lawyer but never paid the lawyer or followed up with him. However, as in Textron, Woodruff has a colorable defense and this weighs in his favor. Furthermore, the plaintiffs will suffer no real prejudice. The land isn’t going anywhere. The Court reverses and remands.

Mississippi Bar v. Joe Donald Pegram – In 2005, Pegram agreed to represent Iroko Ayodele on a charge of felony possession of marijuana for $20,000 even though Pegram told Iroko that he did not do criminal work. Pegram enlisted the help of Oxford lawyer Jay Carmean who did do criminal law. Carmean and Pegram decided that Carmean would be paid $6000 for pre-indictment work and Pegram would be paid $4000 for pre-indictment work. Carmean entered into a contract with Iroko to represent him preindictment. Iroko rejected a plea offer. In June 2005, Iroko was indicted on 7 counts of possession of marijuana with intent. Carmean withdrew as counsel. In the next four years, Pegram looked into getting Iroko into pretrial diversion. The criminal case was continued multiple times. In January 2009, a new ADA Tom Levidiotis called Iroko’s case to trial on short notice. On the day of trial, Pegram called Iroko to his office. From there they went to court where Pegram made a verbal motion to withdraw because he had never tried a criminal case. The state objected pointing out that Pegramn had had the case for four years and nothing had been done. The Court relieved Pegram as counsel. Iroko’s father was still paying off the loan he took out to pay the original $20,000. Teh court appointed an attorney who negotiated a deal whereby Iroko plead guilty to posession and was sentended to three years. Iroko filed an informal bar complaint against Pegram. Pegram could not account for the $20,000. The Complaint Tribunal found that Pegram was guilty of violating MRPC 1.1 and issued a public reprimand. The Bar appeals asking for the Court to find additional violations and to suspend Pegram for at least six months.

In its opinion, the Court writes:

From the outset, Pegram was aware of his incompetence to try a criminal case and yet elected to continue sole representation of his
client, placing his client in the position of lacking a competent lawyer to try his case. Pegram’s incompetence led to his failure to comprehend the seriousness of the charges his
client was facing and the strong potential of the case going to trial.

In the end, the Court finds that Pegram is guilty of an additional charge – a violation of MRPOC 1.16 – ” by accepting the $20,000 fee to provide Iroko representation through the trial, undertaking representation, and then abandoning his client without providing him counsel or reasonable notice, and without returning any unearned portion of the flat fee.” The only additional punishment, though, is that Pegram should refund the amount to be determined by the Bar’s Fee Dispute Resolution Committee.

2 thoughts on “Decisions – Miss.S.Ct. – July 31, 2014 – part 1

  1. Has anyone else noticed that BB Buggies v. Leon creates a new paradox in the Rule 60b area? Factor one wins unless factors two and three combined overrule it, except that factor two is more important either of one and three.

    Traditionally, the existence of a colorable defense “outweighs the other two [factors], and [the MSCT] encouraged trial courts to vacate a default judgment where ‘the defendant has shown that he has a meritorious defense.'” One section earlier however, the court says something new and quite different, ruling that the “lack of good cause alone will not prevent the Court from setting aside a default judgment if the other two factors weigh in favor of setting it aside.” I’ve read American Cable Corp v. Trilogy a number of times and I still cannot make it read the way the Court claims it does. Given these two paragraphs are adjoining, someone should have checked to see if the equation balanced.

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