Ernest Lane, III v. Ronald D. Lampkin
234 So. 3d 338
| Miss. | 2017Background
- Limestone Products, Inc. was a 50/50 corporation owned and operated by Ronald Lampkin and James Oldrum Smith Jr.; both personally guaranteed a line of credit.
- Smith died in August 2006; the Estate refused to guarantee the credit line when it came up for renewal; Lampkin then formed Delta Stone (Jan. 2007) which operated on the same property and served the same customers.
- Executors counterclaimed after the chancery court found Lampkin breached fiduciary duties by usurping a corporate opportunity; damages were bifurcated and assessed after expert testimony on valuation and lost profits.
- This Court in Lampkin II reversed and remanded, instructing the chancellor to evaluate the entire loss to Limestone taking into account: post-breach rock-price increases, time frame of loss, unreported rock, and lease proceeds.
- On remand the chancellor recalculated damages (lost assets, lost profits for 2007–2012, unreported rock at $1/ton, lease damages through Nov. 2011) and applied a management setoff; the Estate appealed the remand judgment and Lampkin cross‑appealed on lease acreage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Lost assets calculation | Chancellor wrongly reduced lost-assets by $55,104 | Reduction was proper | Court reversed and rendered: add back one-half ($27,552); new lost-assets = $64,363.50 |
| Lost profits (entire-loss measure) | Chancellor should have accepted Estate expert’s lost-profits forensic analysis, accounted for unreported rock and price changes | Chancellor properly used adjusted cost/expense figures and Delta Stone sales to measure entire loss; chancellor may reject expert portions | Court affirmed chancellor’s lost-profits calculation ($240,147.52 for Limestone; half to Estate) as not an abuse of discretion |
| Valuation of unreported rock | Rock should be valued at $1.70/ton per Estate’s expert (higher amount); oral $1/ton agreement unenforceable/statute of frauds | Chancellors relied on evidence that $1/ton arrangement was used and supported trial judge’s valuation | Court affirmed $1/ton valuation for 36,000 tons ($36,000 total; $18,000 to Estate); Estate’s challenge procedurally barred and unsupported |
| Lease damages, period, interest, and attorney’s fees | Damages period should run through July 2012; prejudgment interest and attorney’s fees should be awarded under lease | Damages limited through Nov. 2011 (partition awarded land to Lampkin then); no prejudgment interest or attorney’s fees shown as reasonable | Court affirmed: lease damages limited to 2007–Nov.2011, no interest, no attorney’s fees (no evidentiary basis); Lampkin’s cross-appeal denied on acreage (usurpation of entire lease) |
Key Cases Cited
- Lane v. Lampkin, 175 So. 3d 1222 (Miss. 2015) (remanding for calculation of entire loss including price changes, time frame, unreported rock, and lease proceeds)
- Lovett v. E.L. Garner, Inc., 511 So. 2d 1346 (Miss. 1987) (lost future profits recoverable if proved with reasonable certainty)
- R & S Dev., Inc. v. Wilson, 534 So. 2d 1008 (Miss. 1988) (defendant cannot escape liability merely because perfect measurement of damages is impossible)
- Aqua-Culture Techs., Ltd. v. Holly, 677 So. 2d 171 (Miss. 1996) (breaching fiduciary liable for entire loss suffered by corporation, not limited to out-of-pocket loss)
- Norte & Co. v. Huffines, 288 F. Supp. 855 (S.D.N.Y. 1968) (entire loss measured by difference between value had representations been true and value actually received; applied as loss-of-bargain principle)