At 1:30, Monday, May 18, 2015, the Mississippi Supreme Court will hear the case of Clayton Hinton v. Nate Rolison.
Clayton Hinton purchased and financed property in Hattiesburg to use as a used car lot. The mortgage was financed by Wells Fargo. In agreement with his wife and in contemplation of divorce, he deeded the property to his two children, Nathan Hinton and Seneca Eubanks but remained obligated on the loan. Later Hinton took on a partner in the business, Nate Rolison. In 2012, a dispute arose between Clayton and Nate when Clayton discovered that the property was no longer titled in his children’s names but in Nate’s name. . The children filed suit to quiet and confirm title in their names, which Clayton joined as a necessary party due to his mortgage interest. The parties ultimately settled their lawsuit at mediation, though Clayton reserved a pending lawsuit against Nate over profit distribution from the business. Clayton remained obligated on the mortgage with Wells Fargo. The parties’ settlement agreement provided that the property be foreclosed but had no provision for who would receive any surplus foreclosure funds. At the foreclosure sale, the property sold for $576,000 to Rolison netting a surplus of $147,045.92.
The instant case was an interpleader filed by Wells Fargo. Nate filed a Motion for Judgment on the Pleadings claiming he was entitled to the surplus as the only person with an ownership in the property. Clayton opposed the Motion relying upon his right to the surplus funds pursuant to his deed of trust. Clayton also requested additional time to respond to Nate’s Motion because matters outside the pleadings were offered. The Court granted the Motion for Judgment on the Pleadings. Hinton filed a Motion to Alter or Amend Judgment and also requested permission to file an amended pleading setting forth facts regarding the settlement agreement The court denied the motions and Hinton appealed.
The issues as characterized by Hinton:
!. After a foreclosure, does the mortgagor or real property owner receive excess proceeds?
2. Did the Chancery Court err in failing to allow Clayton to amend his Answer, followingjudgm.ent·on the pleadings, when there was no showing of prejudice?
Watch the argument here.
Reminder: MRAP 28(k).