186 So. 3d 955
Miss. Ct. App.2016Background
- Tom and Shannon Brown bought a 2006 Hattiesburg home that later developed foundation cracks; an engineer attributed defects to faulty foundation construction.
- The Browns notified Murray Waldron on January 5, 2012 under the New Home Warranty Act (NHWA); after no response they sued Waldron (d/b/a Waldron Properties LLC) in July 2012 alleging negligence and breach of warranty.
- Documentary record (seller’s disclosure, permits, insurance, inspection reports) consistently identified Waldron Properties LLC (WP) as the builder; only the NHWA Notice was signed simply “Murray Waldron.”
- WP had been administratively dissolved in 2009; Waldron reinstated WP on July 31, 2012 (after the Browns filed suit); statute provides reinstatement "relates back" to dissolution.
- The Browns admitted they intended to sue only Waldron (not WP) and did not have a separate contract with him; trial court granted summary judgment for Waldron, which the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Is Waldron personally liable under NHWA as the builder? | Waldron signed the NHWA Notice and acted as the builder, so he is personally liable. | Documentary evidence shows WP, not Waldron individually, was the builder. | No personal liability; WP was the builder. |
| 2. Is the NHWA Notice a contract creating individual liability? | The Notice is an unambiguous contractual admission that Waldron was the seller/builder. | The Notice is a statutory form acknowledging receipt of NHWA info, not a contract. | Notice is not a contract; issue without merit. |
| 3. Was Waldron an agent for an undisclosed principal (making him liable)? | Waldron failed to disclose his agency for WP and presented himself as the builder. | The record (disclosure, permits, signage) identified WP; no evidence of concealment of agency. | No; Browns failed to show undisclosed-principal agency liability. |
| 4. Should the court pierce the LLC veil to hold Waldron liable? | If WP is the builder, pierce the veil due to evasion of liability and misconduct. | Browns offered no credible evidence to satisfy veil-piercing requirements. | No piercing; Browns failed to prove required elements. |
| 5. Does WP’s reinstatement absolve Waldron of individual liability for acts during dissolution? | Reinstatement should not extinguish personal liability incurred while WP was dissolved. | Mississippi statute provides reinstatement relates back and treats liabilities as if dissolution never occurred. | Reinstatement relates back; reinstatement does not absolve but treats liability as continuous with WP. |
| 6. Is the reinstatement statute (section 79-29-825) unconstitutional as applied? | The statute has no legitimate purpose and impairs NHWA/contractual rights. | Browns failed to follow procedural rules for constitutional challenges; statute governs reinstatement. | Challenge barred for failure to notify Attorney General; issue not considered on merits. |
Key Cases Cited
- City of Jackson v. Sutton, 797 So. 2d 977 (Miss. 2001) (summary-judgment review standard)
- Karpinsky v. Am. Nat’l Ins., 109 So. 3d 84 (Miss. 2013) (movant’s burden on summary judgment)
- Rest. of Hattiesburg LLC v. Hotel & Rest. Supply Inc., 84 So. 3d 32 (Miss. Ct. App. 2012) (elements required to pierce an LLC veil)
- Gray v. Edgewater Landing Inc., 541 So. 2d 1044 (Miss. 1989) (veil-piercing reserved for extraordinary circumstances)
- Johnson & Higgins of Miss. Inc. v. Comm’r of Ins., 321 So. 2d 281 (Miss. 1975) (discussion on when to disregard corporate form)
- Kelly v. Guess, 127 So. 274 (Miss. 1929) (agent liable if agency undisclosed at contract formation)
- Bailey v. Worton, 752 So. 2d 470 (Miss. Ct. App. 1999) (agency/disclosure principles reiterated)