335 So.3d 583
Miss. Ct. App.2022Background
- HomeSafe (patentee of certain IR inspection processes) and InterNACHI (trade association) executed an October 2013 contract granting InterNACHI a bulk license for existing members and requiring new IR users to join via a special "IR application," with HomeSafe to receive a portion of new-member dues.
- HomeSafe was administratively dissolved at the time of the contract but was reinstated in 2015 before filing an amended complaint; the parties disputed the corporate identity but the court treated the 2003 HomeSafe as plaintiff.
- HomeSafe alleged InterNACHI failed to implement the IR application prominently, causing lost-license fees; HomeSafe’s damages model relied on web-archive research by unnamed contractors and multiple assumptions linking website advertising to IR use.
- Trial resulted in a jury verdict finding breach of contract and conversion against InterNACHI and negligent misrepresentation against InterNACHI and Gromicko; compensatory damages of $627,791.67 were awarded.
- On appeal the court addressed standing, the sufficiency of compensatory damages, and negligent misrepresentation; it affirmed liability findings but reversed the monetary awards for lack of reasonable certainty and reversed the negligent-misrepresentation verdict.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue after administrative dissolution | HomeSafe: reinstatement related back and restored capacity to maintain suit | InterNACHI: HomeSafe lacked standing because it was dissolved when suit was filed and/or a different 2014 entity was the filer | Held: Reinstatement restored HomeSafe’s right to sue; HomeSafe had standing |
| Compensatory damages for breach (and conversion) | HomeSafe: damages model shows lost new-member fees and renewals attributable to InterNACHI’s breach | InterNACHI: model speculative, unreliable, based on unsupported assumptions and unnamed researchers | Held: Damages model speculative; compensatory award reversed; remand to determine nominal damages for breach and conversion |
| Negligent misrepresentation | HomeSafe: Gromicko’s statements and conduct misled HomeSafe about implementation and promotion of the IR application | InterNACHI/Gromicko: statements were promises of future conduct and opinions, not actionable as negligent misrepresentation | Held: Reversed and rendered for negligent misrepresentation — statements were promises/future conduct and not actionable facts |
Key Cases Cited
- Bryant Const. Co. v. Cook Const. Co., 518 So. 2d 625 (Miss. 1987) (reinstatement restores corporate capacity to sue)
- Columbus Cheer Co. v. City of Columbus, 155 So. 3d 744 (Miss. 2014) (dissolved corporation cannot maintain suit)
- Wayne Johnson Elec. Inc. v. Robinson Elec. Supply Co., 266 So. 3d 643 (Miss. 2019) (administrative dissolution bars continuation of suit)
- Bank of Shaw, a Branch of Grenada Bank v. Posey, 573 So. 2d 1355 (Miss. 1990) (promises of future conduct do not support negligent misrepresentation)
- Ballard Realty Co. v. Ohazurike, 97 So. 3d 52 (Miss. 2012) (lost-profits damages must be proven with reasonable certainty)
- Bus. Commc’ns Inc. v. Banks, 90 So. 3d 1221 (Miss. 2012) (plaintiff must prove contract damages with as much accuracy as possible)
- Saucier v. Peoples Bank of Biloxi, 150 So. 3d 719 (Miss. Ct. App. 2014) (elements of negligent misrepresentation)
- Emergency Med. Assocs. of Jackson PLLC v. Glover, 189 So. 3d 1247 (Miss. Ct. App. 2016) (damages must move from speculation to reasonable certainty)