Robert W. WEBB, Jr. and Senora B. Webb
v.
Chris BRASWELL, Jackson and Braswell, P.A. and First National Bank of Rosedale.
Robert W. Webb, Jr. and Senora B. Webb,
v.
First National Bank of Rosedale.
Supreme Court of Mississippi.
*390 Talbot O. McCain, Greenwood, attorney for appellants.
S. David Norquist, Gerald H. Jacks, Kathy R. Clark, attorneys for appellees.
P. Scott Phillips L. Carl Hagwood, attorneys for appellee.
Before SMITH, C.J., CARLSON and DICKINSON, JJ.
CARLSON, Justice, for the Court.
¶ 1. This consolidated appeal arises from orders entered by the Circuit Court for the Second Judicial District of Bolivar County granting summary judgment in favor of two defendants, Chris Braswell and his accounting firm, Jackson and Braswell, P.A. (the Braswell defendants), and granting partial summary judgment in favor of the remaining defendant, First National Bank of Rosedale. First National had filed a combined motion for partial summary judgment and to exclude expert testimony, which the trial court granted in toto. The trial court also denied an earlier motion to amend pleadings filed by the plaintiffs, Robert and Senora Webb. The plaintiffs' motion to amend their pleadings was denied due to untimeliness inasmuch as the trial judge concluded that the granting of the motion would have resulted in undue delay, causing prejudice to the defendants. *391 The trial judge entered final judgment as to the Braswell defendants, resulting in a direct appeal by the Webbs. As to the trial court's grant of a partial summary judgment in favor of First National, the Webbs petitioned this Court for an interlocutory appeal, which we granted. The Braswell defendants also filed a cross appeal from an order of the trial court denying their previously filed motion to dismiss. We have consolidated these appeals.
FACTS AND PROCEEDINGS IN THE TRIAL COURT
¶ 2. Robert and Senora Webb had farmed 1,600 acres of farmland in the Greenwood area for several years prior to the events leading to this litigation. During these years of farming, the Webbs had secured crop production loans by hiring accountant Chris Braswell of the Cleveland Certified Public Accounting firm of Jackson and Braswell, P.A. Braswell was able to secure loans from Valley Bank in Greenwood on behalf of the Webbs. In the early spring of 1997, Braswell informed the Webbs that Valley Bank would not make a loan to them that year to fund their farming operation; however, Braswell felt he could obtain that year's loan from First National Bank of Rosedale. First National required numerous conditions to be met prior to approving the loan, such as a requirement that the Webbs file for bankruptcy. In May of 1997, Braswell informed the Webbs that First National would not provide them the loan. The Webbs filed this lawsuit against both First National Bank of Rosedale and the Braswell defendants on October 10, 1998, claiming various causes of action, including breach of contract and malpractice. The Webbs' position was that the actions of First National Bank and Braswell prevented them from securing a production loan in time to harvest a profitable crop, causing them large financial losses, and practically removing them from the farming industry altogether.
¶ 3. In 2000, the Braswell defendants filed a motion "to enforce agreement of plaintiffs to dismiss all claims against them with prejudice," based on an alleged agreement between the lawyers to do so. The trial judge denied this motion because he was unable to determine if such an agreement actually existed. This is the basis for the Braswell defendants' cross-appeal.
¶ 4. After considerable discovery, the trial judge, on October 30, 2002, entered an order setting the trial of this case for December 15, 2003; however, on the day the trial was to commence, the trial court instead entered another order setting various deadlines and assigning a primary trial date of August 23, 2004, with an alternative trial date of December 13, 2004.[1]
*392 ¶ 5. On April 12, 2004, the Webbs filed a motion for leave to amend the complaint, adding new claims against both First National and the Braswell defendants, and seeking damages for future lost profits in unplanted crops. Some of these claims included breach of implied contracts, breach of duty of good faith, fraud, estoppel, intentional infliction of emotional distress, and claims for compensatory and punitive damages. Many of these claims were based on information the Webbs asserted they learned for the first time through discovery, thus they argued it was not possible for those claims to be included in the original complaint, filed before discovery was commenced. In their response, the Braswell defendants argued that the Webbs had not specifically pleaded fraud as required in Mississippi, and, because discovery deadlines had passed and trial preparation had been ongoing for years, that an amended complaint would cause the Braswell defendants to suffer substantial hardship.
¶ 6. First National filed a combined motion to exclude the new expert testimony and for a partial summary judgment in late April, 2004. The Braswell defendants filed a motion for summary judgment on the same day. On June 21, 2004, the trial court conducted a hearing on these motions and at the conclusion of the hearing, took these motions under advisement for subsequent ruling. Shortly thereafter, the trial court entered an order granting First National's combined motion to exclude expert testimony and for a partial summary judgment. The trial court also entered an order denying the Webbs' motion for leave to amend their pleadings because of untimeliness and the resulting undue delay and prejudice to the defendants. Additionally, the trial judge granted the Braswell defendants' motion for summary judgment. As to the Braswell defendants, the trial judge entered a final judgment pursuant to Miss. R. Civ. P. 54(b).
¶ 7. As to the order granting First National's motion for partial summary judgment, and the order denying their motion for leave to amend their complaint, the Webbs requested a certification from the trial court for interlocutory appeal and a stay of the proceedings, pending the outcome of that interlocutory appeal, which the trial court granted on July 26, 2004.[2] The Webbs also appealed the final judgment as to the Braswell defendants on their motion for summary judgment. The Braswell defendants meanwhile filed a cross-appeal from the denial of their earlier motion to dismiss filed in 2000. We have consolidated these appeals.
DISCUSSION
I. WHETHER THE TRIAL COURT ERRED IN DENYING THE WEBBS' MOTION FOR LEAVE TO AMEND THE PLEADINGS.
¶ 8. This Court has outlined the standard of review for motions for leave to amend a complaint:
Motions for leave to amend complaint are left to the sound discretion of [the] trial court; the Supreme Court reviews such determinations under an abuse of discretion standard; and, unless convinced that [the] trial judge abused [his/ her] discretion, the Supreme Court is without authority to reverse. Church v. Massey,697 So.2d 407 , 413 (Miss.1997). Grant or denial of [a] motion for leave to *393 amend is within [the] sound discretion of [the] trial court. MBF Corp. v. Century Bus. Communications, Inc.,663 So.2d 595 , 600 (Miss.1995); Frank v. Dore,635 So.2d 1369 , 1375 (Miss.1994). Amendments to the pleadings are properly addressed to the discretion of the lower court. Red Enters., Inc. v. Peashooter, Inc.,455 So.2d 793 , 796 (Miss.1984); McDonald v. Holmes,595 So.2d 434 , 436 (Miss.1992). Where the plaintiff filed his motion for amendment of declaration setting out its exact terms, and such terms were incorporated into an order which quoted [the] text of [the] motion and which was filed in [the] cause and entered upon [the] minutes of [the] court, [the] amendment was sufficient, as against [the] defendant's contention that [the] original declaration should have been manually amended by interlineation or otherwise. International Order v. Barnes,204 Miss. 333 , 341,37 So.2d 487 (1948) (overruled on other grounds by Mississippi Baptist Hosp. v. Holmes,214 Miss. 906 ,55 So.2d 142 (1951)). While the trial court has discretion to allow an amendment and should do so freely under the proper circumstances, an amendment should not occur when to do so would prejudice [the] defendant. Hester v. Bandy,627 So.2d 833 , 839 (Miss.1993).
Preferred Risk Mut. Ins. Co. v. Johnson,
¶ 9. The Webbs argue that because Miss. R. Civ. P. 15(a) requires "leave shall be freely given when justice so requires," the trial court should have granted their motion. Miss. R. Civ. P. 15(a). The Webbs also point out that this Court has found, in part through the comment to the rule, that amended pleadings have been liberally permitted throughout Mississippi's legal history. See Moeller v. Am. Guar. and Liab. Ins. Co.,
Rule 15(a) declares that leave to amend "shall be freely given when justice so requires"; this mandate is to be heeded. . . if the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits. In the absence of any apparent or declared reason such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of the amendment, etc. the leave sought should, as the rules require, be "freely given."
Moeller,
¶ 10. First, the Webbs argue that the comment to Rule 15 places the burden of proving prejudice on the party opposing the motion. Next, the Webbs argue that, even if prejudice is shown, the trial court is charged with granting a continuance as opposed to denying the motion. The *394 Webbs rely on the following portion of the comment to Rule 15: "[i]f the opposing party objects but fails to persuade the court that such party will be prejudiced in maintaining the party's claim or defense, the court must then grant leave to amend the pleadings to allow the evidence on the issue. If the objecting party can show prejudice, the court may grant a continuance to meet the evidence, but should again allow amendment of the pleadings." Miss. R. Civ. P. 15 (comment) (relying on 6 Wright & Miller, supra, Civil § 1495). In relying on this comment to Rule 15, the Webbs characterize their motion as one for leave to amend the complaint to conform to the evidence as provided under Rule 15(b). Mabus v. Mabus,
¶ 11. The trial judge here found that the Webbs filed their motion to amend four years after initiating suit, and only a few months before trial, and also noted that the Webbs' attorney admitted he was aware of the nature and extent of their claims in 2000, four years before filing this motion. The trial judge further found that the Webbs had more than an adequate amount of time to analyze their case and amend their pleadings much earlier than when they filed the motion and that failure to do so timely was the result of a lack of diligence. Finally, the trial judge found that granting the motion would result in undue delay to the litigation, undue prejudice to the defendants, and "would encourage delay, laches, and negligence." This is precisely what our case law warns against. "[T]he policy to freely grant amendments is not allowed to encourage delay, laches and negligence. Examples of when a motion to amend may be prejudicial include: where it would burden the adverse party with more discovery, *395 preparation, and expense, particularly where the adverse party would have little time to investigate and acquaint itself with the matter." Wal-Mart Super Center v. Long,
II. WHETHER THE TRIAL COURT ERRED IN GRANTING THE BRASWELL DEFENDANTS' MOTION FOR SUMMARY JUDGMENT.
¶ 12. Motions for summary judgment are governed by Miss. R. Civ. P. 56. When reviewing a trial court's grant of summary judgment, our standard of review is de novo. Williams v. Bennett,
¶ 13. The Braswell defendants argue the scope of their professional relationship did not exceed the limits of the provisions of an engagement letter and a letter of representation the firm sent the Webbs. The letters essentially stated the nature of the Braswell defendants' work, which consisted of compiling a statement of the Webbs' financial condition and obtaining records from which to compile the statement. The Webbs argued that an oral contract existed, requiring much more from the Braswell defendants, and the Webbs included this allegation in their attempted amendments to the original complaint. However, only count VI (a malpractice claim) and count VII (a misrepresentation claim), in the original complaint, allege any wrongdoing against the Braswell defendants. Count VI alleges that because the Braswell defendants *396 advised the Webbs to pursue funding from First National and no other source, the Braswell defendants committed malpractice which resulted in the Webbs having no funding. Count VII alleges that the Braswell defendants misrepresented to the Webbs that First National would provide their funding, which the Webbs assert was eventually shown to be a false statement, and which resulted in the Webbs pursuing no other funding.
¶ 14. The trial judge rendered his decision based on the following reasoning. Because the motion to amend the pleadings had been denied, the judge found that the only claims against the Braswell defendants which were properly before the court were those claims in the original complaint. Considering the facts and allegations in the light most favorable to the Webbs that Braswell did actually give the advice as alleged in Count VI the trial judge found no indication that such statements could give rise to liability, and therefore, the Braswell defendants were entitled to judgment as a matter of law. As to the allegations in Count VII, there was no credible or relevant evidence found by the trial judge to indicate that the statements were false at the time Braswell supposedly made them, assuming, arguendo, that Braswell indeed made the statements. Falsity of the statement, along with the speaker's knowledge of its falsity, are two of the elements of a cause of action for fraudulent misrepresentation. Levens v. Campbell,
III. WHETHER THE TRIAL COURT ERRED IN GRANTING FIRST NATIONAL'S MOTION TO EXCLUDE EXPERT TESTIMONY.
¶ 15. When reviewing the trial court's decision to allow or disallow evidence, *397 including expert testimony, we are bound by an abuse of discretion standard of review. Miss. Transp. Comm'n v. McLemore,
¶ 16. Rule 702 of our rules of evidence addresses the admissibility of expert testimony.
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
Miss. R. Evid. 702. In Miss. Transportation Comm'n v. McLemore,
¶ 17. In today's case, the trial court granted First National's motion to exclude the Webbs' expert testimony because it found the testimony did not meet the Daubert/McLemore standard of relevance and reliability, inasmuch as the expert was to testify to future damages resulting from unplanted crops. We are hesitant to allow such uncertain damages to be proven. In Kaiser Invs., Inc. v. Linn Agriprises,
¶ 18. In Kaiser, we held that evidence of lost profits for unplanted crops was not admissible because the amount of damage was not reasonably ascertainable based on past experience. Because the farming entity in that case had not established itself as profitable, and because there was no definite or certain data by which profits or losses for that unplanted crop might be estimated, we determined that evidence of the projected harvest was erroneously admitted by the trial court and should have been excluded.
¶ 19. In today's case, the testimony was proffered for one purpose, to show damages of lost profits as a result of unplanted crops. The Webbs brought this testimony forward without ever establishing that they were profitable. Rather, the Webbs had been farming and operating at a loss in the years prior to the farming year which is the subject of this litigation. Therefore, the amount of damage allegedly resulting from the unplanted crops was not reasonably ascertainable based on the Webbs' past experience, as the rule requires. This being the case, any testimony to prove damage to the Webbs is tenuous at best and fails the reliability prong of the Daubert/McLemore test. For these reasons, we find that the trial judge did not abuse his discretion in granting First National's motion to exclude certain expert testimony proposed to be offered by the Webbs. This issue is thus without merit.
IV. WHETHER THE TRIAL COURT ERRED IN GRANTING FIRST NATIONAL'S MOTION FOR PARTIAL SUMMARY JUDGMENT.
¶ 20. Again, we review de novo grants of summary judgment by the trial court. Williams,
CONCLUSION
¶ 21. The tardiness of the motion for leave to amend the pleadings is inexplicable and cannot be excused. Had the motion been granted, the defendants would have been subjected to undue prejudice, and the case itself would have been subjected to undue delay. As to the only two claims against the Braswell defendants which were properly before the trial court, no genuine issue of material fact existed in favor of the Webbs, even when viewing the evidence in the light most favorable to them; therefore, the Braswell defendants were entitled to judgment as a matter of law. Finally, expert testimony offered by the Webbs was not admissible, and partial summary judgment in favor of First National, as to the issues concerning lost profits from future unplanted crops, was proper. Accordingly, the trial court properly granted judgments in favor of all the defendants.
*399 ¶ 22. For these reasons, we affirm the judgments in favor of Chris Braswell, Jackson and Braswell, P. A., and First National Bank of Rosedale, as entered by the Circuit Court for the Second Judicial District of Bolivar County.
¶ 23. AFFIRMED.
SMITH, C.J., WALLER, P.J., EASLEY AND DICKINSON, JJ., CONCUR. GRAVES, J., CONCURS IN RESULT ONLY. RANDOLPH, J., CONCURS IN PART AND DISSENTS IN PART WITHOUT SEPARATE WRITTEN OPINION. COBB, P.J., AND DIAZ, J., NOT PARTICIPATING.
NOTES
Notes
[1] This order, entered on December 15, 2003, set numerous deadlines as follows: Pre-trial statement to be completed by the parties' counsel by February 16, 2004; counsel to exchange proposed jury instructions and motions in limine by March 1, 2004; objections to jury instructions and motions in limine to be exchanged between counsel by March 15, 2004; mediation to be conducted by March 15, 2004, in an effort to resolve this case prior to trial; conference between counsel by March 30, 2004, in an attempt to resolve objections to jury instructions, motions in limine, exhibits and qualifications of expert witnesses, and to agree on the contested issues of law and any anticipated questions concerning the admissibility of evidence during the trial; by April 15, 2004, counsel to submit a written report to the court on these conferences and any unresolved objections; all other motions to be filed by April 30, 2004; and, by August 16, 2004, counsel to notify the court administrator whether the case would go forward for trial on August 23, 2004, or would be settled or continued. The order also provided for the assessment of sanctions if counsel failed to comply with these various deadlines.
[2] Though of no moment here, we note that M.R.A.P. 5(a) was amended, effective March 1, 2005, eliminating as a prerequisite the trial court's grant or denial of interlocutory certification prior to submitting the interlocutory appeal issue to this Court. This amendment applies to all trial court orders entered on or after March 1, 2005.