Knights' Piping, Inc. v. Knight
123 So. 3d 451
| Miss. Ct. App. | 2012Background
- Harold Knight filed suit in chancery court seeking dissolution of KPI, appointment of a custodian, and partition on February 24, 2000.
- Benny Knight and KPI answered February 9, 2001 and Benny asserted multiple counterclaims including fraud, fiduciary duty, and conspiracy against Harold and others.
- The chancery court dismissed most counterclaims, later granted Benny's motion to dismiss count 6, and ultimately held Benny personally liable for breach of Harold's employment contract, awarding Harold damages and a modest punitive award.
- Harold was awarded damages totaling $1,751,457, plus $25,000 in punitive damages and $43,910.23 in attorneys’ fees to Harold’s sons.
- On appeal, Benny and KPI challenged jurisdiction, witness interrogation, admission of non-responsive answers, dismissal of counterclaims, termination date, Benny’s personal liability, damages, punitive damages, and attorneys’ fees.
- The appellate court reversed in part (sick leave damages, certain other damages) and affirmed in part, remanding for specific findings on accrued sick leave, while awarding punitive damages and fees as issues not reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction whether equitable claims allowed suit in chancery | Harold | Benny | Equitable jurisdiction attaches; remains to adjudicate legal claims and remedies |
| Non-responsive answers admissibility | Benny | Harold | Court properly treated evasive answers as admissions; no reversible error |
| Dismissal of counterclaims | Benny | Harold | Chancery court did not err in dismissing counterclaims |
| Personal liability of Benny | Harold | Benny | Benny personally liable for breach of Harold's employment contract |
| Damages for accrued sick leave | Harold | Benny | Reverse for specific findings; full 180 days not proven; remand for amount used |
Key Cases Cited
- Derr Plantation, Inc. v. Swarek, 14 So.3d 711 (Miss. 2009) (equity jurisdiction allows full relief in one suit)
- McClendon v. Miss. State Highway Comm’n, 205 Miss. 71, 38 So.2d 325 (Miss. 1949) (equitable jurisdiction broad; reaches legal relief when appropriate)
- Fought v. Morris, 543 So.2d 167 (Miss. 1989) (close corporations; minority protections; fiduciary duties)
- Bluewater Logistics, LLC v. Williford, 55 So.3d 148 (Miss. 2011) (squeeze-out fiduciary breach in close entities)
- Hollis v. Hill, 232 F.3d 460 (5th Cir. 2000) (controlling shareholder duties; employment termination limits)
- Orchard v. Covelli, 590 F.Supp. 1548 (W.D. Pa. 1984) (boardroom control; minority rights in close corporations)