Telecom Tower Group, LLC v. Honeysuckle Creek Holdings, Inc.
227 So. 3d 1170
| Miss. Ct. App. | 2017Background
- HCH obtained a lessee’s interest for a cellular-tower site from Washington (2006) and assigned that interest to Cross for a promised payment; Cross later built the tower and leased it to Cingular/AT&T after an 11-month delay.
- Cross refused full payment to HCH for the assignment; HCH sued Cross for breach, obtained a default judgment, damages (~$50,000), and an equitable lien against the land lease; Telecom later acquired Cross’s interests and intervened in the litigation.
- This Court in Telecom I affirmed the chancellor’s judgment recognizing HCH’s equitable lien against the land lease assigned through Cross to Telecom.
- Telecom later acquired the lessor’s interest from T8 (eliminating its need to pay land rent) and attempted to terminate the land lease; HCH claimed the acquisition and retention of tower-lease income were fraudulent and sought to garnish Telecom’s tower-lease receipts to satisfy its judgment/equitable lien.
- The chancery court denied Telecom’s motion to quash garnishment, held the equitable lien survived merger, and allowed garnishment of Telecom’s tower-lease income traceable to the lien; Telecom appealed.
Issues
| Issue | Plaintiff's Argument (HCH) | Defendant's Argument (Telecom) | Held |
|---|---|---|---|
| Whether HCH has an equitable lien enforceable against Telecom’s interests | HCH: Equitable lien attaches to the land lease and follows interests acquired with notice; Telecom had notice and cannot take free of the lien | Telecom: Lien limited to land-lease payments and not a basis to garnish Telecom’s separate tower-lease income | Held: Equitable lien valid, Telecom had constructive/actual notice, lien may reach tower-lease income traceable to the land lease |
| Whether garnishment of Telecom’s tower-lease income to satisfy HCH’s judgment is proper | HCH: Garnishment is proper to satisfy equitable lien by tracing tower income derived from the leased site | Telecom: No money judgment against Telecom; garnishment improper as lien pertains only to the land-lease obligation | Held: Garnishment permitted; equitable relief and tracing allow garnishment of tower-lease receipts to satisfy lien |
| Whether the doctrine of merger extinguished HCH’s equitable lien when Telecom acquired the lessor’s rights from T8 | HCH: Merger should not defeat lien; applying merger would be unjust | Telecom: Acquisition merged estates and extinguished the lessor estate, terminating the lien | Held: Merger not applied to extinguish the equitable lien because doing so would work an injustice; lien survives acquisition |
| Whether sanctions or attorneys’ fees are warranted against Telecom on appeal | HCH: (sought fees) Telecom’s positions merit sanctions under Rule 38 and Litigation Accountability Act | Telecom: (implicitly) appeal not frivolous | Held: Court finds Telecom’s positions meritless but declines to award sanctions or fees |
Key Cases Cited
- Telecom Tower Grp. LLC v. Honeysuckle Creek Holdings Inc., 130 So. 3d 135 (Miss. Ct. App. 2013) (prior appeal affirming HCH’s equitable lien)
- Baldwin v. Baldwin, 788 So. 2d 800 (Miss. Ct. App. 2001) (equitable liens are charges on property, ancillary to the debt and enforceable as security)
- Lindsey v. Lindsey, 612 So. 2d 376 (Miss. 1992) (description of equitable liens as remedies, not estates)
- Neyland v. Neyland, 482 So. 2d 228 (Miss. 1986) (equitable lien used to prevent unjust enrichment)
- Leyden v. Citicorp Indus. Bank, 782 P.2d 6 (Colo. 1989) (equitable lien binds those who acquire interests with notice; notice includes constructive knowledge of facts giving rise to lien)
- First Nat’l Bank of Jackson v. Huff, 441 So. 2d 1317 (Miss. 1983) (tracing substituted assets to enforce restitutionary claims)
- Ladner v. Ladner, 843 So. 2d 81 (Miss. Ct. App. 2003) (broad chancery equitable powers to enforce judgments)
- City Sav. Bank & Tr. Co. of Vicksburg v. Cortright, 84 So. 136 (Miss. 1920) (doctrine of merger and equity’s exception where merger would work injustice)