Moti L. Sudeen v. Richard Castleberry
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IN THE COURT OF APPEALS
OF THE
STATE OF MISSISSIPPI
NO. 1999-CA-01241-COA
MOTI L. SUDEEN
v.
RICHARD CASTLEBERRY AND ALMA CASTLEBERRY D/B/A
CASTLEBERRY REALTY
APPELLANT
APPELLEES
DATE OF JUDGMENT:
05/10/1999
TRIAL JUDGE:
HON. JOHNNY LEE WILLIAMS
COURT FROM WHICH APPEALED: PEARL RIVER COUNTY CHANCERY COURT
ATTORNEY FOR APPELLANT:
THOMAS M. MATTHEWS JR.
ATTORNEY FOR APPELLEES:
LAWRENCE CARY GUNN JR.
NATURE OF THE CASE:
CIVIL - CONTRACT
TRIAL COURT DISPOSITION:
JUDGMENT FOR THE PLAINTIFFS FOR $48,000 IN
COMPENSATORY DAMAGES WITH INTEREST AT 8%
PER YEAR. JUDGMENT FOR PLAINTIFFS FOR $100,000
IN PUNITIVE DAMAGES.
DISPOSITION:
AFFIRMED - 02/20/2001
MOTION FOR REHEARING FILED: 3/23/2001; denied 5/15/2001
CERTIORARI FILED:
6/13/2001; denied 9/6/2001
MANDATE ISSUED:
9/27/2001
BEFORE McMILLIN, C.J., PAYNE, AND LEE, JJ.
LEE, J., FOR THE COURT:
¶1. The Pearl River County Chancery Court found that the plaintiffs, Richard and Alma Castleberry, d/b/a
Castleberry Realty, were the procuring cause for the sale of certain realty from former Louisiana Governor
Edwin W. Edwards (hereinafter "Governor Edwards" or "governor") to Moti L. Sudeen, and awarded $48,
000 to them in real estate commission plus interest and an additional $100,000 for punitive damages and
attorney's fees. Sudeen asserts that the Castleberrys were not the procuring cause of the sale of the
property he purchased from Governor Edwards because the contract to purchase procured by the
Castleberrys had expired when the final agreement upon which the sale was consummated was reached.
Sudeen claims that the final agreement was a "new deal" to which the Castleberrys had no part. Sudeen, the
appellant, contends that there is not substantial, credible evidence in the record to support the chancellor's
findings of fact on each of the six issues which he asserts as error. Our review of the proceedings yields the
firm and definite conviction that the decision below was consistent with established law and well within the
evidence. We therefore affirm the judgment of the Pearl River County Chancery Court.
¶2. At this point an examination of the facts, including an overview of the cast of characters and their
respective functions, though somewhat lengthy, is appropriate so that this information can be applied to the
legal aspects of the this issue.
FACTS
¶3. Sudeen was born and educated in Guyana and had moved to the United States in 1974. He became a
U.S. citizen in 1982 and had lived in Chalmette, Louisiana with his family for over twenty years at the time
of trial. Sudeen wore several hats. He is a pharmacist as well as the pastor of several Baptist churches. He
hosted a radio program called "Christ is the Answer" from 1976 until 1996. He had incorporated his
business in Louisiana as Sudeen Enterprises in 1981. At the time of trial he owned a pharmaceutical
company in Guyana, and he traveled to Guyana once a month.
¶4. Sudeen had formed a partnership called Mississippi Carbonate in April 1996 with Everett and June
Lawrence for the purpose of building a fertilizer plant for the manufacture of urea in Pearl River County. The
Lawrences had a 25% interest and Sudeen a 50% interest in Mississippi Carbonate. It is unclear who had
the remaining interest. Nevertheless, there was no evidence presented to indicate that Mississippi
Carbonate had any assets. Everett Lawrence ultimately admitted, on cross-examination, that he had
invested money in Mississippi Carbonate and that all he had to show for his investment was ownership in a
company with no assets. The Lawrences had the responsibility to locate property for purchase upon which
the plant would be built while Sudeen was to secure the necessary financial support for the project. Most of
Sudeen's efforts to secure financing were being made in London where he traveled every week, spending
four days a week there and three days in Louisiana. The fertilizer plant project required financing in the
amount of 4.5 billion (with a "b") dollars, and Sudeen testified that at the time of the trial one-third of that
amount had already been financed. The plant would employ 465 people. Sudeen testified that he
intentionally stayed in the background during negotiations for the purchase of property because in the past,
sellers had increased the asking price for property once it was brought to their attention that he was
involved in the purchase.
¶5. The Lawrences pursued their quest for property. Ultimately, two separate purchases were made in
acquiring the property needed for the project. This appeal is in regard to the second purchase; however, we
will review the testimony regarding the first purchase as well, for it provides insight on the issue presented
before us regarding the second purchase.
Purchase of the First Tract
¶6. Castleberry and his wife had been in the real estate business in the Poplarville area of Pearl River
County since 1987. He served as a director of the Pearl River County Development Association and had a
special interest in new industries coming into the county. According to Mr. Castleberry, he first heard about
the search for property for this fertilizer plant from a telephone call he received from Everett Lawrence.
Everett described the property he needed as several hundred acres with a railroad and a gas line running
through it. Castleberry said that he told Everett that he knew of some property fitting that description but
that he did not know who the current owner was. Castleberry's property owner's map showed that the
property was owned by a large company, and he knew from personal knowledge that that company had
sold the property and the owner's map had yet to be updated. Castleberry told Everett that he would find
out who the current owner was. Castleberry testified that he went to the courthouse and found out that the
owner was Lampton Williams. Castleberry called Williams who told him that coincidentally the property
was for sale and was already listed with another realtor. Williams told Castleberry that he would be glad to
meet with the prospective buyers himself; however, he would not be able to meet with them on that day,
which Castleberry says was Friday, but he could meet with them on Monday. Castleberry gave this
information to Lawrence. Instead of waiting until Monday, the Lawrences went to Williams's office that day
and waited until he would see them. Castleberry said that the Lawrences must not have realized that the
property was listed until they met with Williams since there was no "for sale" sign on the property. A
contract for purchase was signed that day. Castleberry said that Everett later showed the contract to him
and that the purchase price was $500,000 plus a six percent real estate commission. Castleberry said that
after this contract was signed he talked with Everett almost daily because Everett was so enthused about the
project. He also said that once the sale of that property closed, though he did not receive a real estate
commission for the sale, that Lampton Williams sent a check to him for $5,000 as a finder's fee. Williams
told Castleberry that he thought he was entitled to the finder's fee because he had found the buyers.
¶7. The testimony of June and Everett Lawrence tells this story differently. Both testified that Castleberry
had nothing to do with any part of the sale of the Williams property. Everett testified that when the decision
was made to build the fertilizer plant, that he hired someone to fly him over the gas pipeline from
Hattiesburg following the Pearl River to the Lucedale area in search of a 600 acre site that would be
suitable for the project. Everett said he and his wife then went to the courthouse and looked up the maps
themselves and determined on their own that Williams was the owner of the property which he sought.
Everett testified that he had already spoken with Williams regarding the property before ever having
discussed it with Castleberry. Everett was discredited, however, on cross-examination, when he
acknowledged that a notation made in his telephone log on April 8,1996 revealed he had met Castleberry
at the courthouse to search the records for the papers on section 17 and that that was in regard to the
Lampton Williams property.
Negotiations for the Purchase of the Second Tract
¶8. Though the actual plant was to be built on the Williams tract, a second tract was needed with
appropriate facilities to serve as temporary office quarters while the plant was under construction, to
provide a site for a proposed lake to be utilized by the plant as a water source, and to serve as a buffer
zone. Therefore, shortly after arrangements were made for the purchase of the Williams tract, a search for a
second tract of land was pursued. The Edwards property was ultimately purchased as a result, and it is that
purchase which is the basis of this appeal. Though it is undisputed that Castleberry procured the initial
contract for the sale of the Edwards property, Sudeen argues that the final sale was the result of a new deal
and that Castleberry was no part of it. A review of the initial contract and its related extensions is necessary
in order to provide an understanding of its relationship to the final agreement which resulted in the sale of the
property.
¶9. During mid-April, just a matter of days after arrangements were made for the purchase of the Williams
property, Everett Lawrence contacted Castleberry in search of the second parcel of land. The Castleberrys
took the Lawrences for a ride in their car to view potential cites, and Everett inquired if the tract adjacent to
the Williams tract, which Castleberry knew belonged to Governor Edwards, was for sale. There was no
sign posted on the property but Castleberry told Everett that he was familiar with the property because he
had handled the inventory of the property after the death of the prior owner, Mr. Bill Watson. Castleberry
told Everett that he had a map of the property as well as its valuation and the inventory of equipment in his
filing cabinet. Castleberry's initial efforts to contact the governor, who had an unlisted number, were
unsuccessful and he finally contacted the widow of the prior owner, Mrs. Watson. She called her son,
Steven, who was a friend of the governor's son. Castleberry obtained Steven's number through Mrs.
Watson and first contacted him on April 18, 1996. Steven told him the property was not for sale but his
father would sell anything if the price was right. Steven told Castleberry that his father was at his
condominium in Aspen and that he would call him to see if he was interested in selling the property. Steven
called Castleberry back and told him his father was interested in selling and that he would be home in a few
days. Steven gave Castleberry the governor's number, and Castleberry called him when he returned. The
governor told him that the property was not on the market but he would sell the property for one million
dollars. Castleberry testified that the governor, being experienced in real estate, told him on the front end
that he had no agent, that Castleberry was not his agent, and that Castleberry was working for the buyer.
This is corroborated in the governor's deposition, where he stated in regard to his conversation with
Castleberry, "I was very explicit that I would not be responsible for any real estate fees or commissions."
The governor went on to say that Castleberry told him he understood that.
¶10. Castleberry showed the property to the Lawrences. The property included a main house, a guest
house, two apartment buildings, a large equipment shop on two levels. Castleberry also made arrangements
with the property manager, Ricky Wells, to unlock the gate on a Sunday afternoon so that Sudeen could
tour the property. Castleberry testified that he gave Wells a check for $25 payment for his services that day
and entered that cancelled check into evidence. At some point in time the Castleberrys took an inventory of
the property along with the Lawrences and the governor's daughter.
¶11. After negotiating and three counter-offers, an agreement was reached and the initial contract for the
purchase of the Edwards property was signed on May 24, 1996 for a purchase price of one million dollars.
That agreement required that Sudeen deposit $50,000 earnest money, which would be applied to the
purchase price at closing, into Castleberry's brokerage account, by June 10, 1996. Closing was to take
place on or before July 31, 1996. The offer included all the furnishings in the main and guest houses and
outside kitchen, except for personal items and artwork and a few pieces of furniture specifically excluded.
Also included was all of the operating and maintenance equipment. This agreement stated that the buyer
would pay Castleberry Realty a 6% commission. The Lawrences secured a loan on their own behalf for the
$50,000 in earnest money. Castleberry testified that this deposit was delivered to him just three hours prior
to the bank's closing on June 10, the deadline date. Castleberry called the governor to tell him that the
deadline had been met for the deposit. However, Sudeen was not able to meet the July 31 deadline for
closing and sought an extension.
¶12. The governor wanted $25,000 of the deposit in the form of a certified check to grant an extension to
August 15. This amount would be applied to the purchase price at closing. On July 26 Castleberry called
Sudeen for his authorization to release the $25,000 from his account for the extension. Sudeen faxed
authorization to Castleberry. Castleberry purchased a certified check and hand-delivered the check to the
governor and the governor wrote his initials on a letter Castleberry had written to Sudeen explaining what
had occurred. The August 15 deadline was extended to August 31. That deadline was not met either. On
September 4, Sudeen and the governor agreed that Sudeen would bring an additional $25,000 to the
governor by 5:00 p.m. the next day and the deadline would be extended to November 1. This agreement
required that Sudeen pay $250,000 at closing and the governor would finance the remainder of $700,000.
Furniture was now excluded from the sale. Castleberry was not involved in negotiating this extension but the
agreement for this extension was written by the governor on the second page of the original contract by
Castleberry Realty. Sudeen called Castleberry after this extension was agreed upon to release the
additional $25,000 required by the governor as a non-refundable deposit. Under the original contract, the
$50,000 deposit would have been divided between the seller and realtor in case of default. Castleberry
insisted that Sudeen sign a promissory note for $25,000 in case of default in order to release the $25,000.
Castleberry made the check out and gave it to June Lawrence just before the 5:00 P.M. deadline on
September 5. June Lawrence gave the check to the governor.
¶13. As November 1 approached, June Lawrence asked Mrs. Castleberry to obtain an estimate of the
monthly expenses necessary for the maintenance of the property. These expenses were listed and entered
into evidence as an exhibit. At some time before the deadline Mrs. Lawrence told Castleberry that there
would be no closing on November 1 and that an arrangement had been made where Sudeen would take
possession of the property and the responsibility of paying maintenance expenses, utilities, and the salary for
the property manager until he was able to purchase the property. The governor left his cattle and horses on
the property and they were cared for at Sudeen's expense.
¶14. The governor stated in his deposition that after November 1 he granted several extensions in his
negotiations with Sudeen and the Lawrences; however, there was not any written agreement after that time.
Pursuant to the gentlemen's agreement between him and Sudeen, the governor agreed that he would sell the
property to Sudeen in the next few months if Sudeen could arrange for payment. He said that in exchange
for the extensions he excluded property that had been included in the original agreement. He stated, "I was
reducing the scope of the property to be sold as consideration for giving the extensions." The governor said
he did not believe he could get one million dollars for the property once the furnishings and equipment were
excluded. He said it was a relief to him that Sudeen was paying the property expenses; however, because
he did not believe that a sale would ever be consummated after so many extensions, he listed the property
with Ford Realty in February, 1997, excluding Sudeen as a buyer.
The Purchase of the Second Tract
¶15. Ford Realty located a buyer in August, 1997 who made an offer of $800,000 cash for the property,
excluding furnishings and equipment. Edwards said he gave Sudeen the opportunity to meet this price
because it was less than the agreement he already had with him, he had given his word to him, and he
already had $50,000 of his money. Because of his prior experience with Sudeen, the governor required that
Sudeen make a $100,000 down payment within 24 hours. Sudeen met the deadline for the down payment
and an agreement was signed on August 11 that the governor would finance the $700,000 balance, just as
the governor had agreed to do when the contract had been extended to allow for the November 1, 1996
deadline. This agreement stated that a 6% commission was to be paid to the realtor by the buyer.
¶16. The closing for the property was scheduled for August 18. Mr. Castleberry happened to hear from an
outside source that the closing date for the sale had been scheduled and contacted Lawrence for the details.
Lawrence told Castleberry that he did not know when closing was scheduled and that he could call Gerald
Cruthird, the attorney Sudeen had selected to handle the closing, for that information. Castleberry then
testified that Lawrence said, "I might as well go ahead and tell you, we have changed the amount of the
contract, but you are going to get your six percent commission on eight hundred thousand dollars."
¶17. On August 18 all the parties appeared at Cruthird's office for the closing. Sudeen claims he was
surprised to see Castleberry there. Actually, Sudeen came to the closing with no money to pay the realtor's
commission or the attorney's fees. Cruthird and Castleberry both testified that Sudeen stated that he could
not pay those fees on that date but that Sudeen explicitly stated at the closing that he would pay the realtor's
commission within two weeks. At the closing Sudeen signed a closing statement which specifically stated
that Sudeen would pay a $48,000 realtor's fee to Castleberry Realty. This closing statement is the third
document Sudeen signed acknowledging his liability for Castleberry's commission. Sudeen testified at the
trial that he signed this document under protest because he was faced with losing his $100,000 deposit. He
said that he did not believe he owed Castleberry a fee because the agreement at closing was a "new deal"
since the terms had changed from the last written extension for November 1, 1996 of the original contract
where Sudeen had agreed to pay a realtor's fee.
¶18. Sudeen paid the attorney's fees but refused to pay Castleberry. He claims that he had obtained an
opinion regarding his obligation to pay the realtor's fee from the Mississippi Real Estate Commission and
that according to that opinion he did not owe a fee.
STANDARD OF REVIEW
¶19. The applicable standard of review will not permit that the finding of the trier of fact be disturbed on
appeal if there is substantial supporting evidence even if under the same proof we might have found
otherwise. The finding of fact may not be set aside unless manifestly wrong. Dungan v. Dick Moore, Inc.,
463 So. 2d 1094, 1100 (Miss. 1985); Cotton v. McConnel, 435 So. 2d 683, 685 (Miss. 1983).
"Findings of fact made by a chancellor which are supported by credible evidence, may not be set aside on
appeal." Allgood v. Allgood, 473 So. 2d 416, 421 (Miss. 1985). In evaluating the issues before us in this
case, the standard of review to which we are bound does not permit us as an appellate court to disturb the
factual findings of a chancellor, when they are supported by substantial credible evidence, unless the Court
can say with reasonable certainty that the chancellor abused his discretion, was manifestly wrong, clearly
erroneous or applied an erroneous legal standard. Cummings v. Benderman, 681 So. 2d 97, 100 (Miss.
1996). Therefore, if there is supporting evidence and "even if this Court disagreed with the lower court on
the finding of fact and might have arrived at a different conclusion, we are still bound by the chancellor's
findings unless manifestly wrong." Richardson v. Riley, 355 So. 2d 667, 668 (Miss. 1978).
ISSUES AND DISCUSSION
I. DID THE COURT ERR IN FINDING THAT CASTLEBERRY REALTY WAS THE
PROCURING CAUSE OF THE SALE OF THE PROPERTY FROM EDWIN EDWARDS
TO MOTI SUDEEN?
¶20. The preponderance of the evidence is the common law standard of review for contract breaches
involving an intentional wrong. Paracelsus Health Care Corp. v. Willard, 754 So. 2d 437, 447-48 (¶ 53)
(Miss. 1999). The plaintiff has the burden to prove by a preponderance of the evidence the existence of a
binding contract, that the defendant breached the contract, and that the plaintiff has suffered monetary
damages as a result. Warwick v. Matheney, 603 So. 2d 330, 336 (Miss. 1992)(citing 17A C.J.S.
Contracts, § 590(d) at 1148); Garner v. Hickman, 733 So. 2d 191, 195 (¶ 15) (Miss. 1999).
¶21. In general terms, precedent established by case law in this state entitles a real estate agent to recover a
commission on a sale if the agent was the procuring cause of the sale of the subject property. Partee v.
Pebble, 197 Miss. 486, 493, 20 So. 2d 73, 74 (1944). Whether a broker may be considered the
procuring cause of a sale depends upon the particular facts and circumstances of each case, and this is
ordinarily a question of fact to be resolved by the trier of fact. 12 Am.Jur.2d Brokers §§ 189, 190 (1964);
Smith v. London, Stetelman & Kirkwood, Inc., 185 So. 2d 150, 154 (Miss. 1966). The broker's efforts
need not be the sole cause of the sale, but must be the predominant cause. Id.
¶22. Sudeen concedes that Castleberry was the procuring cause of the initial contract but claims that his
involvement ended on November 1, 1996 and that the agreement which culminated in the sale was a "new
deal." Sudeen testified that he was able to negotiate more favorable terms for the purchase himself than
Castleberry had negotiated prior to the expiration of the November 1, 1996 extension. The question thus
becomes whether the agreement for the sale of land which expired on November 1 was abandoned and
whether the agreement which culminated in the sale was an entirely new one. Precedent has clearly
established that the major factors in determining if an agreement for the sale of land has been abandoned is
whether parties had abandoned all expectations of culminating the sale and whether the negotiations which
led up to the sale began anew. Swain v. Pitts, 120 Miss. 578, 594, 82 So. 305, 306, (1919).
¶23. Looking at the facts, we cannot say that the either the governor or Sudeen had abandoned
expectations of the sale being culminated. Sudeen clearly testified that he intended to finalize the purchase if
he could secure financing. In addition, the arrangement agreed upon whereby Sudeen took possession of
the property and the responsibility of paying maintenance expenses, utilities, and the salary for the property
manager was made in anticipation of his ultimately purchasing the property. Though the governor stated that
he finally listed the property with another realtor because he did not believe that Sudeen would ever come
up with the money, he clearly had not abandoned the possibility that Sudeen may come through with the
financing as is evident by the fact that his contract with Ford Realty excluded Sudeen as a buyer.
¶24. Neither are we persuaded that the negotiations which led up to the sale began anew. Negotiations
were considered to have begun anew after the sale had been clearly abandoned by the broker and the
purchaser in Swain v. Pitts because an entirely new and independent element entered into the trade for
which the broker was in no sense responsible, which consummated the sale. Swain v. Pitts, 120 Miss. at
594, 82 So. 305 at 306. The party who finally brought the buyer and the seller together in that case was not
connected with the realtor, and it was through the negotiations and efforts of this party that a final sale was
made for a different lot than had been previously considered for purchase. The court noted that the record
did not indicate that the final agreement between the buyer and the seller was made for the purpose or with
the object of defeating the broker of a commission, but that the negotiations instituted by Pitts & Weeks, the
broker, ended in a failure to make a sale, and that the subsequent agreement was made without reference to
the activities of Pitts & Weeks. Id.
¶25. We cannot say that the final agreement between Sudeen and the governor was made without reference
to the activities of Castleberry Realty. The governor clearly stated in his deposition that the reason he gave
Sudeen the opportunity to purchase the property when another buyer was found was because he had given
his word to him and he already had $50,000 of his money. This was clearly a result of Castleberry's efforts.
There was no new element involved in the final agreement as there was in Swain v. Pitts, and negotiations
were not begun anew. The general proposition is established that if property is placed in the hands of a
broker for sale at a certain price, and a sale is brought about through the broker as the procuring cause, he
is entitled to commissions on the sale even though the final negotiations were conducted through the owner,
who, in order to make a sale, accepts a price less than that stipulated to the broker. Partee v. Pepple, 197
Miss. 486, 493, 20 So. 2d 73, 74 (1944); Case v. Harrison, 192 Miss. 531, 6 So. 2d 582, 587, (1942);
Roell v. Offutt, 138 Miss. 599, 103 So. 239, 239, (1925). We therefore find that the preponderance of
the evidence showed that Castleberry was the procuring cause of the subject sale.
¶26. We find Sudeen's affirmative defense that he did not purchase the property prior to the November 1,
1996 deadline because he was not able to secure the necessary financing is not relevant to the issue of
whether the ultimate sale was a "new deal" and the issues relating to that question.
II. DID THE COURT ABUSE ITS DISCRETION IN AWARDING PREJUDGMENT
INTEREST OF 8% FROM THE DATE OF THE SALE?
¶27. An award of prejudgment interest is discretionary with the court. Sunburst Bank v. Keith, 648 So.
2d 1147, 1152 (Miss. 1995). In addition, prejudgment interest may be awarded to the prevailing party for
breach of contract. Warwick v. Matheney, 603 So. 2d 330, 340 (Miss. 1992). We do not therefore find
that the chancellor abused his discretion in awarding prejudgment interest.
III. DID THE COURT ERR IN NOT FINDING THAT THE ORIGINAL AGREEMENT
HAD BEEN AMENDED SO THAT CASTLEBERRY REALTY WAS TO RECEIVE $25,
000 AS A COMMISSION RATHER THAN $48,000?
¶28. Sudeen asserts that he owes Castleberry Realty $25,000 at most as opposed to $48,000 for
commission. He apparently arrives at this conclusion from a statement in the initial contract signed on May
24, 1996, for purchase which required that Sudeen deposit $50,000 earnest money with Castleberry
Realty. That contract stated that one-half, or $25,000, of the earnest money would be retained by the
broker if the purchaser failed to perform the terms of the contract. Twenty-five thousand dollars was
released to the governor as consideration for the first extension. When Sudeen asked for a second
extension to the initial contract, the governor required that he pay him another $25,000 as consideration for
that extension. Sudeen then asked Castleberry to release the remaining $25,000 of the original $50,000 that
Castleberry had deposited to his brokerage account to the governor. Because that $25,000 was to serve as
compensation to Castleberry for liquidated damages in case of default, Castleberry required that Sudeen
sign a letter to him stating that Sudeen would compensate him $25,000 if he defaulted on the purchase of
the property. That letter was dated September 5, 1996 and stated, "This is to certify that in case of default
on behalf of the buyer to go to an act of sale with the property owned by Mr. Edwin Edwards, the realtor
fees of $25,000 (twenty- five thousand US dollars) will be paid by the buyer." The $25,000 to which
Sudeen refers was to serve as compensation to Castleberry in case of default and was clearly not intended
as realtor's commission for the sale of property. We therefore find that there is substantial supporting
evidence for the court's finding that there was no amendment to the initial contract regarding the amount of
the realtor's commission. "Findings of fact made by a chancellor which are supported by credible evidence,
may not be set aside on appeal." Allgood v. Allgood, 473 So. 2d 416, 421 (Miss. 1985).
¶29. We have reviewed Anderton v Business Aircraft, Inc., 650 So. 2d 473 (Miss. 1995), and do not
find those facts similar to those in the case at bar as asserted by Sudeen in his brief. That case was in regard
to a summary judgment and explicitly regarded negotiations to modify the amount of realtor's fees.
IV. DID THE COURT ERR IN FINDING THAT CASTLEBERRY REALTY DID NOT
ACT IN THE CAPACITY OF DUAL AGENT?
¶30. Sudeen complains that the court failed to consider that Castleberry had attempted to act in a dual
agency role and in so doing violated Miss. Code Ann. § 73-35-21(1)(e) (Rev. 2000). We will not burden
this opinion with a lengthy discussion on this issue. Suffice it to say that the governor himself testified in his
deposition that he explicitly told Mr. Castleberry from the outset that he would not be responsible for any
real estate fees or commissions and Castleberry himself also testified to that fact. In addition, the fact that
the governor later listed the property with a different realtor is persuasive evidence that Castleberry was not
acting as his agent and there was therefore no dual agency. As the chancellor noted in his order denying
Sudeen's motion to reconsider, there was no evidence presented to indicate or infer that Castleberry listed
or attempted to sell the property to anyone other than Sudeen. Though Sudeen presented as evidence
certain documents stating that Castleberry Realty represented the buyer, these were shown to be unsigned
preprinted working drafts of the initial contract. Thus, there was no evidence presented to support the claim
of a dual agency other than Sudeen's mere assertion. "Findings of fact made by a chancellor which are
supported by credible evidence, may not be set aside on appeal." Allgood v. Allgood, 473 So. 2d 416,
421 (Miss. 1985).
V. DID THE COURT APPLY THE WRONG STANDARD OF REVIEW WHEN IT
FOUND THAT SUDEEN REQUESTED ASSISTANCE IN OBTAINING FINANCING
OR THAT HE WAS UNABLE TO PROVIDE FINANCING FOR THE INITIAL
CONTRACT?
¶31. Sudeen argues that because Castleberry, as the appellee, did not plead or attempt to prove that
Sudeen had the financial support to close the transaction within the time period of the original contract and
refused to do so in an effort to defraud that he, Sudeen, did not have the obligation to prove by clear and
convincing evidence that he was not financially capable of closing within that time frame. He argues that the
court erred in requiring this of him and refers to the following statement made in the opinion of the lower
court:
Defendant did not prove to the Court an inability to secure financing for the real estate purchase, as he
attempted to prove in his defense of the payment of such commission. Defendant, further, did not
prove by clear and convincing evidence that he requested assistance in obtaining such financing from
Plaintiffs nor did he prove that the Plaintiffs were or would have been unable or unwilling to provide
assistance in his obtaining financing for the real estate purchase.
¶32. We concede that the correct standard of proof for the defendant is the "preponderance of the
evidence" standard, not the "clear and convincing evidence" standard. The preponderance of the evidence is
the common law standard of review for contract breaches involving an intentional wrong. Paracelsus
Health Care Corp. v. Willard, 754 So. 2d 437, 447-48 (¶ 53) (Miss. 1999). However, this language was
corrected by the court in the corrected judgment, and it further stated that it was satisfied after review that
the correct standard was applied and met. The record shows that the evidence supports the correct
standard. Though Sudeen and his associates testified to their repeated but unfruitful efforts to obtain
financing, there was no loan application or other documentation submitted to support their assertions. In
addition, Sudeen testified that ultimately financing was no problem. "Findings of fact made by a chancellor
which are supported by credible evidence, may not be set aside on appeal." Allgood, 473 So. 2d at 421.
¶33. At trial Sudeen attempted to justify his course of action by claiming that he was unable to obtain
financing to pay Edwards and he criticized Castleberry for not assisting him in his efforts to obtain financing.
However, as Sudeen himself points out in his brief, we do not find this defense relevant to the theory of the
plaintiff's case, that it was entitled to a realtor's commission because it was the procuring cause of the sale
of the property, and it can therefore not provide the basis for reversible error. It is our opinion that the
relevance of the chancellor's comment regarding Sudeen's ability to obtain financing was in regard to the
issue of punitive damages, though not expressly stated.
VI. DID THE COURT ERR IN AWARDING PUNITIVE DAMAGES AND
ATTORNEY'S FEES?
¶34. The trial court found that Sudeen's breach of contract was willful and wanton and evidenced his
intentional disregard for Castleberry's rights under his contract with him. The law in Mississippi is settled
that punitive damages are recoverable in an action for breach of contract. Polk v. Sexton, 613 So. 2d 841,
845 (Miss. 1993); Fought v. Morris, 543 So. 2d 167, 173 (Miss.1989). The trial court relied on Polk v.
Sexton, 613 So. 2d 841 (Miss. 1993), in rendering its judgment and opinion regarding the issue of punitive
damages. Polk reaffirms that punitive damages are recoverable in breach of contract cases "where such
breach is attended by intentional wrong, insult, abuse, or such gross negligence as amounts to an
independent tort." Id. at 845. Punitive damages, however, are appropriate "only in extreme cases," and
should be awarded only with "caution and within narrow limits." Bryant v. Alpha Entertainment Corp.,
508 So. 2d 1094, 1098 (Miss. 1987). The award of punitive damages and the amount, however, is within
the discretion of the trier of fact. Polk, 613 So .2d at 845.
¶35. The accepted theory regarding exemplary or punitive damages permits their imposition as a punishment
upon the wrongdoer, or as a restraint on the transgressor. Yazoo & Miss. Valley Railroad Co. v. May,
104 Miss. 422, 426, 61 So. 449, 450 (1913). Such damages are assessed as a warning and example to
deter not only the offender but others similarly situated from committing like offenses in the future. West
Bros., Inc. v. Barefield, 239 Miss. 530, 542, 124 So. 2d 474 (1960). What is otherwise a windfall is
deemed necessarily granted to the plaintiff as his reward for public service in bringing the wrongdoer to
account. Neal v. Newburger Co., 154 Miss. 691, 700, 123 So. 861, 863 (1929). Fraud has become a
principal basis for an award of punitive damages. Tideway Oil Programs, Inc. v. Serio, 431 So. 2d 454,
461 (Miss. 1983).
¶36. The trial court, in its order denying Sudeen's motion to reconsider, stated:
Plaintiffs are real estate agents and would generally not be viewed as a group of individuals likely to
befall harm due lack of arms length dealing in the contracts with which they are associated. However,
when such contracts involve multi-million dollar corporate dealings with international business people
trained in the arts of "wheeling and dealing" and obtaining the best possible deals and prices under
both the stresses of immediate time constraints and in procuring lengthy delays, such a category of
individuals is in need of protection from harm. It is the opinion of the Court that such breach of
contract actions as have warranted punitive damage awards and have been upheld by our Supreme
Court are not limited to areas other than real estate contracts.
We construe this statement to mean that the lower court in essence found that Sudeen intentionally delayed
closing on the Edwards property as a strategy for his own benefit and that it would not allow Sudeen to
employ this strategy to the detriment of Castleberry as the realtor. Being mindful that our standard of review
will not permit that the finding of the trier of fact be disturbed on appeal if there is substantial supporting
evidence, Dungan v. Dick Moore, Inc., 463 So. 2d at 1100, we now look to the facts for such evidence.
¶37. Sudeen struggles mightily to defend his numerous delays in closing as an affirmative defense by
explaining that they were a result of his inability to obtain financing. We believe that the lower court looked
upon evidence regarding Sudeen's efforts to obtain financing not as an affirmative defense, but as evidence
providing insight as to Sudeen's credibility and business practices and their impact on the issue of bad faith
and punitive damages. We note that Sudeen's testimony regarding financing was supported only by his
assertions and those of his associates. It was never corroborated with testimony of bankers with whom he
applied or documents introduced into evidence in the form of a loan application. The court concluded that
the delays were part of Sudeen's strategy in his dealings. A chancellor has the authority and the
responsibility to assess the credibility of witnesses. Estate of Taylor, 609 So. 2d 390, 393 (Miss. 1992).
The court's conclusion that financing was not really a problem is also supported by the fact that Sudeen
came up with $100,000 deposit in only twenty-four hours when Edwards had another buyer.
¶38. Sudeen's testimony did not serve to enhance his credibility on several other occasions as well. In an
effort to disarm Castleberry of any effectiveness Sudeen testified that in the end he himself negotiated with
the governor far more effective terms than Castleberry was able to negotiate for him. Sudeen neglected to
mention that the initial agreement included considerable property that was excluded in the final agreement.
In addition, Governor Edward's deposition testimony regarding the final terms made it clear that the final
offer was a matter of giving Sudeen the opportunity to match the same offer the governor had received from
a prospective purchaser procured through Ford Realty. Governor Edwards did not indicate that he had any
negotiations with Sudeen himself regarding the final terms of purchase. Furthermore, the governor testified
that the only reason he gave Sudeen the opportunity to match the offer was because of the ongoing
relationship he had had with Sudeen. It is uncontested that this ongoing relationship was initiated by
Castleberry.
¶39. In addition, the court was mindful that Sudeen was a sophisticated and well-heeled entrepreneur with
enough savvy to broker a multi-billion dollar project; yet, after having signed three documents
acknowledging that he owed Castleberry Realty $48,000, Sudeen testified that he did not expect to see
Castleberry at the closing because he thought no broker was involved in the transaction.
¶40. The record also is supportive that there were also credibility problems with the testimony of Sudeen's
associates. Nevertheless, we find enlightening the testimony of Cruthird, Sudeen's closing attorney. He
testified that he had had contact with both Sudeen and Edwards from November 1, 1996, the date of the
expiration of the second extension, until the actual closing in August 1997, and that during that time he
operated under the assumption that "this thing was still in the works" and that the contract was a continuous
one. He said the final arrangement was a modification of the original contract. He testified that he always
thought Castleberry was the realtor of record and that neither Sudeen nor Edwards or anyone else ever
informed him that Castleberry was out of the picture until two to three weeks after the closing. Cruthird said
that he expected Castleberry would be at the closing but that Sudeen was shocked that Castleberry there.
Cruthird said that he told Sudeen at the closing that he owed Castleberry the realtor's commission and that
Sudeen told him he did not have the money to pay him at that time and that it would be paid later. Cruthird
testified that he believed he had a legal and ethical duty to provide for Castleberry's fee in the closing and
that he had an overriding concern for his own liability to Castleberry. He said that he consented to closing
the transaction without Sudeen's providing payment to Castleberry at that time because Sudeen agreed that
he would pay Castleberry the commission later and Cruthird would place the amounts into escrow and
defer recording the deed until the realtor's fee was paid. It was only after closing that Sudeen obtained his
opinion from the Real Estate Commission of Mississippi which provided Sudeen's primary defense to the
punitive damage award. However, the record shows that Sudeen's behavior at the closing clearly indicates
that he did not intend to pay Castleberry his realtor's commission even then. He made the false promise to
pay the commission only because his attorney refused to close otherwise and Sudeen did not want to lose
his $100,000 down payment. Sudeen asserts that the Real Estate Commission of Mississippi had rendered
a verbal opinion to him that the realtor's fee was not owed. There was no corroboration of this testimony at
the trial. It is not difficult to understand that the Real Estate Commission would render an opinion that no
realtor's fee was due Castleberry by Sudeen if that opinion was based on a manipulation of the facts as
presented and edited by Sudeen on direct examination and in his brief to this Court, that is, upon his
conclusion that the final contract upon which the sale was based was a "new deal" and was unrelated to the
initial contract for purchase. In addition, we also understand such a conclusion if Sudeen failed to give the
Real Estate Commission the same facts that his brief fails to mention regarding the arrangement with
Edwards to take possession of the Edwards property on November 1, 1996 when he failed to close after
the second extension.
¶41. Sudeen's own attorney, Gerald Cruthird, testified that he made it clear to Sudeen that his research
showed that the real estate fee was due Castleberry. Sudeen's brief stops short in quoting Cruthird on
cross-examination regarding his conversation with Sudeen regarding the realtor's fee:
I looked at further cases and, you know, again, I am up here I guess as an expert from that
standpoint, but I felt like that based on my research the commission was due and I told Mr. Sudeen
that.
Sudeen had the opinion of his own attorney who was personally familiar with the negotiations from the
beginning and he intentionally chose to ignore that opinion for his own personal gain and disregarded
Castleberry's rights under the contract. Punitive damages are recoverable in breach of contract cases
"where such breach is attended by intentional wrong, insult, abuse, or such gross negligence as amounts to
an independent tort." Polk v. Sexton, 613 So. 2d . at 845. The chancellor indicated that he was concerned
with the protection of realtors dealing with parties whose business practices incorporate delays and
extensions as a matter of course. Punitive damages are often assessed as a warning and example to deter
not only the offender but others similarly situated from committing like offenses in the future. West Bros.,
Inc. v. Barefield, 239 Miss. at 542, 124 So. 2d at 474.
¶42. We also note that Castleberry required evidence of Sudeen's financial status when Castleberry
released the second $25,000 for the second extension to the initial contract because that $25,000 was to
serve as compensation to Castleberry for liquidated damages in case of default. In response to this request
Sudeen supplied a financial statement of Sudeen Pharmaceuticals, which showed a net worth of $7,500,
000. However, it was brought out at trial that this amount was expressed in terms of Guyanan dollars and
the true value in U.S. dollars was $52,000. There was nothing in the document to indicate that the dollar
figure did not represent U.S. dollars.
¶43. The trial court relied on Polk v. Sexton, 613 So. 2d 841, in rendering its judgment and opinion
regarding the issue of punitive damages, which reaffirms that punitive damages are recoverable in breach of
contract cases "where such breach is attended by intentional wrong, insult, abuse, or such gross negligence
as amounts to an independent tort." Id. at 845. Reviewing the evidence, we find that there is substantial
supporting evidence to support the trial court's finding that Sudeen's breach of contract was willful and
wanton and evidenced his intentional disregard for Castleberry's rights under his contract with him. The
applicable standard of review will not permit that the finding of the trier of fact be disturbed on appeal if
there is substantial supporting evidence even if under the same proof we might have found otherwise. The
finding of fact may not be set aside unless manifestly wrong. Dungan v. Dick Moore, Inc., 463 So. 2d at
1100; Cotton v. McConnel, 435 So. 2d at 685. Sudeen testified that his net worth was $2,500,000 and
the trial judge awarded $100,000 in punitive damages and attorney's fees. We do not believe this amount to
be injudicious. The award of punitive damages and the amount is within the discretion of the trier of fact.
Polk v. Sexton, 613 So. 2d at 845.
¶44. Likewise, the award of attorney's fees is clearly justified in cases where punitive damages are merited.
Aetna Casualty & Surety Co. v. Steele, 373 So. 2d 797, 801 (Miss. 1979). The chancery court stated in
its opinion:
Evidence was presented to the Court of a percentage based fee arrangement being made between
Plaintiffs and their attorney and no specific award of attorney's fees is made in light of this fee
arrangement which has been satisfied to the Court as being reasonable in light of the efforts and
amount of time put forth as evidence by Plaintiffs' attorneys in the request for reimbursement of such
fees.
In this case the chancellor recognized the percentage based fee arrangement between the plaintiffs and their
attorney and chose to award $100,000 to encompass both punitive damages and attorney's fees, which
was within his discretion.
¶45. THE JUDGMENT OF THE PEARL RIVER COUNTY CHANCERY COURT IS
AFFIRMED. STATUTORY DAMAGES AND INTEREST AWARDED TO THE APPELLEES.
ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
McMILLIN, C.J., PAYNE, BRIDGES, THOMAS, MYERS AND CHANDLER, JJ.,
CONCUR. IRVING, J., CONCURS IN PART, DISSENTS IN PART WITH A SEPARATE
WRITTEN OPINION JOINED BY KING AND SOUTHWICK, P.JJ.
IRVING, J., CONCURRING IN PART, DISSENTING IN PART:
¶46. I agree with the majority that the judgment of the lower court in the amount of $48,000 plus
prejudgment interest should be affirmed. However, I do not believe the facts of this case support an award
for punitive damages. Accordingly, I dissent from that portion of the majority opinion affirming said award.
¶47. It is a giant stretch to conclude that Sudeen's failure to close the loan for more than a year after the
initial closing date was due to some diabolical scheme to avoid paying a $48,000 broker's commission. It is
true as the majority points out that Sudeen was able to come up with $100,000 in twenty-four hours to save
the deal, but it is also true that Sudeen came within three hours of missing the deadline for producing the
initial $50,000 earnest money deposit despite having had seventeen days to produce it. Further, it is
noteworthy that four closing deadlines came and expired without Sudeen being able to come up with the
cash to close the deal. When Sudeen worked out yet a fourth extension and called upon Castleberry to
release to the seller the final portion of the earnest money as consideration for the extension, Castleberry
became concerned that the deal may not ever close and sought protection of the percentage of the earnest
money due him under the terms of the original contract, in case of default by Sudeen. As noted by the
majority, Castleberry acquired this protection by way of a separate promissory note from Sudeen.
¶48. The seller became convinced that Sudeen could not come up with the cash to close the deal and put
the property on the market for sale in February 1997. Clearly, it seems to me, that if Sudeen had the
financial ability to close the transaction all along, yet chose to miss deadlines simply to avoid the broker's
fee, he would have terminated his scheme and acquired the property when the property went back on the
market in February 1997. However, the final agreement for the purchase of the property did not occur until
August 11, 1997. Under these circumstances, I do not believe there is substantial evidence, or indeed any
evidence, to support the conclusion that the delay in closing the transaction from July 31, 1996, to August
18, 1997, was the result of an intentional scheme on the part of Sudeen to avoid paying a $48,000 realtor
fee. Accordingly, I dissent as to the majority's affirmance of the award of punitive damages.
KING AND SOUTHWICK, P.JJ., JOIN THIS SEPARATE WRITTEN OPINION.
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