362 So.3d 14
Miss.2023Background:
- Healy PLLC transferred its phone service (including an 1-800 number) to AT&T in 2016 and paid for an AT&T upgrade in 2017; testing at installation indicated success.
- The 1-800 number was cancelled and reassigned by AT&T in July 2018 without notice; Healy PLLC discovered the reassignment in January 2019.
- Healy PLLC sued AT&T (Feb. 2019) for breach of contract seeking damages for lost profits, advertising costs, reputation harm, and declaratory/injunctive relief.
- AT&T initially answered an interrogatory blaming a Healy employee for the cancellation; AT&T’s 30(b)(6) witness later admitted AT&T had cancelled the number.
- The chancery court found AT&T breached the contract, awarded nominal damages of $500, and granted Rule 37(c) sanctions for AT&T’s false discovery response but excluded attorney time claimed by George (the firm’s member who acted pro se).
- The Mississippi Supreme Court affirmed the nominal damages, reversed the exclusion of George’s hours as part of the sanctions award, and remanded for calculation of the proper sanction amount.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court erred by awarding only nominal damages for AT&T’s breach of contract | Healy: tax returns, QuickBooks, testimony and advertising evidence proved lost profits and causation; trial court ignored uncontroverted evidence | AT&T: plaintiff failed to prove lost profits with reasonable certainty or causation; ads and business cards listed other contact methods; tax return showed increased income | Court affirmed nominal $500; plaintiff failed to prove lost profits or causation with the reasonable certainty required |
| Whether plaintiff may recover attorney-time fees for the firm-member (George) who represented the LLC pro se in seeking Rule 37(c) sanctions | Healy: member-attorney’s time was work for the LLC and should be compensable under Rule 37(c); denying it undermines sanctions | AT&T: pro se attorney fees are not recoverable (Kay); individual claims were derivative and corporate harms belong to the LLC | Court reversed the exclusion: LLC can recover fees for the member-attorney’s hours; George individually may not recover damages; remanded to determine appropriate fee amount and rate |
Key Cases Cited
- Cane v. Mid-S. Pump Co., 458 So. 2d 1048 (Miss. 1984) (lost-profits proof: reasonable certainty standard and estimation when exact proof is impossible)
- Lovett d.b.a. Dixie Dandy v. E. L. Garner, Inc., 511 So. 2d 1346 (Miss. 1987) (lost future profits recoverable if proved with reasonable certainty)
- Mo. Bag Co. v. Chem. Delinting Co., 58 So. 2d 71 (Miss. 1952) (causation requirement for lost-profits recovery)
- Benchmark Health Care Ctr., Inc. v. Cain, 912 So. 2d 175 (Miss. Ct. App. 2005) (lost-profits methodology: use of prior-period actual profits and explained extrapolation to meet reasonable-certainty standard)
- Bruno v. Southeastern Servs., Inc., 385 So. 2d 620 (Miss. 1980) (corporate entity rule: claims for wrongs to a corporation belong to the corporation, not individual shareholders)
- Kay v. Ehrler, 499 U.S. 432 (1991) (pro se attorney generally may not recover an award of attorney’s fees under fee-shifting statutes)