Michael E. Earwood v. Mary Elizabeth Reeves ( 1998 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 1998-IA-01456-SCT
MICHAEL E. EARWOOD AND FOX, EARWOOD & CHILDERS, PLLC
v.
MARY ELIZABETH REEVES, EXECUTRIX OF THE ESTATE OF E.P. REEVES,
DECEASED
DATE OF JUDGMENT: 09/21/1998
TRIAL JUDGE: HON. ROBERT G. EVANS
COURT FROM WHICH APPEALED: COVINGTON COUNTY CIRCUIT COURT
ATTORNEY FOR APPELLANTS: ROBERT BOSTICK CHILDERS
ATTORNEYS FOR APPELLEE: DAVID SHOEMAKE
EDDIE H. BOWEN
NATURE OF THE CASE: CIVIL - LEGAL MALPRACTICE
DISPOSITION: AFFIRMED AND REMANDED - 08/23/2001
MOTION FOR REHEARING FILED: 9/21/2001; denied 11/8/2001
MANDATE ISSUED: 11/15/2001
BEFORE PITTMAN, C.J., MILLS AND COBB, JJ.
COBB, JUSTICE, FOR THE COURT:
¶1. This is an interlocutory appeal from the Covington County Circuit Court's denial of a joint motion filed
by Michael E. Earwood (Earwood) and his law firm, Fox, Earwood and Childers, PLLC (the firm),
requesting transfer of this case to the Hinds County Circuit Court, First Judicial District. Transfer was
sought on the grounds that neither Earwood nor the firm resided in, nor was domiciled in, Covington
County and that all substantial acts and omissions set forth in the complaint of E. P. Reeves (Reeves)
occurred and accrued within Hinds County.
¶2. Aggrieved by the Covington County Circuit Court's denial of the transfer and subsequent denial of
Earwood's and the firm's joint motion to amend or withdraw certain admissions, Earwood and the firm
sought certification from the circuit court for an interlocutory appeal pursuant to M.R.A.P. 5(a). Upon the
trial court's denial of the interlocutory appeal certification, Earwood and the firm filed a joint petition for
interlocutory appeal with this Court, and it was granted in December 1998. The issues raised by Earwood
and the firm are as follows:
I. DID THE TRIAL COURT ERR IN DENYING THE DEFENDANTS' MOTION TO
TRANSFER AND REFUSING TO TRANSFER THE CASE UNDER THE PROVISIONS
OF MISS. CODE ANN. § 11-11-3?
II. DID THE TRIAL COURT ERR IN DENYING THE DEFENDANTS' MOTION TO
WITHDRAW OR AMEND ADMISSIONS PURSUANT TO MRCP 36(b)?
¶3. Finding no error in the Covington County Circuit Court's decisions, we affirm.
FACTS
¶4. Reeves's son, D. Preston Reeves (Preston), retained Earwood to provide him with legal representation
concerning a proposed $1.3 million purchase of the business known as Tech Plastic Products of Jackson,
Inc. (TPJ), a Mississippi corporation. In connection with the proposed purchase, Earwood prepared
certain documents for Preston to send to Darrell Hart (Hart), the president of Tech Plastics and
Engineering, Inc. (TPE), a Mississippi corporation and Chapter 11 Debtor-in-Possession, which owned
TPJ. The first was a letter of agreement dated April 13, 1995, printed on Preston's letterhead showing his
Jackson address, and signed by Preston in his individual capacity, and Hart as president of TPE. The
second was a purchase and sale agreement executed by Preston and Hart, in the same capacities, on April
24, 1995. The wording of both documents regarding earnest money was virtually identical. The first
document provided that Preston "shall deposit the sum of $100,000 in escrow with the firm of Fox,
Earwood & Childers of Jackson, MS, same to be paid to TPE at closing and applied to the cash down
payment" and the second document stated that Preston "has deposited the sum of $100,000 in escrow with
the firm of Fox, Earwood & Childers, of Jackson, MS, same to be paid to TPE at closing and applied to
the cash purchase price. . . ."
¶5. One month after the execution of the purchase and sale contract, a third document was prepared and
executed. This was an asset purchase agreement between TPE and Preston's newly-formed corporation,
Precision Plastics & Engineering, Inc. (PPE). It was executed by Hart as president of TPE and Preston as
president of PPE and contained the following provision:
This Agreement supersedes, in its entirety, the Purchase and Sale Agreement dated April 24, 1995
by and between TPE and Precision which is hereby terminated and canceled in its entirety and any
and all other agreements, written or oral, by and between the parties pertaining to the subject matter
hereof.
(emphasis added). The earnest money provision in this document was worded somewhat differently,
acknowledging that Preston had previously paid the $100,000 into the law firm's escrow and providing that:
"The Escrow Deposit shall be applied to the Purchase Price at Closing or otherwise held and disbursed in
accordance with the terms and provisions hereof." (emphasis added).(1)
¶6. Apparently at Preston's direction and after being furnished copies of all three documents, Reeves wired
$100,000 from his Covington County bank account to the firm's trust account for Preston's purchase of
TPJ. Reeves alleges in his complaint that he talked by phone from Collins (in Covington County) with
Earwood (in Hinds County) on several occasions and that Earwood confirmed that the $100,000 belonging
to Reeves would go toward the down payment of the purchase price and would be" paid unto TPE at
closing." In his complaint, Reeves did not claim to be a party to any of the contracts, rather that a fiduciary
relationship arose when he placed confidence in Earwood upon "enter[ing] into the escrow arrangement."
¶7. Earwood, on the other hand, avers that neither he nor the members of the firm were aware of the
source of Preston Reeves's earnest money or the nature of what Earwood considered to be a loan
transaction between Preston and his father. In support of their contention that the funds were a loan,
Earwood asserts that a few months after the termination of the proposed purchase, Preston filed a Chapter
7 personal bankruptcy petition, listing Reeves as an unsecured creditor to whom Preston owed $33,000.
Furthermore, Earwood asserts in his answer that prior to execution of the asset purchase agreement
Preston entered into an hourly fee agreement with Earwood whereby all legal fees and expenses incurred
on the acquisition would be paid out of the earnest money deposit, either at closing of the sale or upon
termination of the escrow account. Earwood also asserts in his that he mailed to Preston and Reeves an
itemized statement of professional services rendered to Precision Plastics and Engineering, Inc., which
Reeves acknowledges receiving, and a bill to him as well. The bill and fee agreement are not a part of the
record.
¶8. Approximately six months after the contract was executed, the proposed purchase fell through and the
escrow account was terminated. Earwood asserts that the fees and expenses of some $33,000 were
deducted in accord with the fee arrangement and at the direction of Preston, the client and legal owner of
the funds. On October 2, 1995, Reeves faxed Earwood demanding that the funds retained from the escrow
account be paid over to him.
¶9. On the same day Earwood received the fax, Earwood responded by a letter written to Reeves and
Preston, mailed separately to their respective addresses in Collins and Jackson. Earwood stated that
Reeves's assumption that the escrow funds were to be used for the purchase of Tech Plastics of Jackson
was correct, but he further stated his understanding that the legal fees and expenses, which he viewed as
part of the costs of acquisition, were to be paid at closing or, if closing did not take place, upon the
termination of the escrow account. However, Earwood indicated that he had represented and worked with
Preston on various matters over a period of 12 or 13 years and that he hoped the matter of payment for
work this time would not adversely affect their relationship. Earwood's letter advised that substantial fees
had been incurred, owing in part, to the protracted nature of the negotiations, much of which were beyond
his control and explained that it had been eight months since Earwood was retained and that settlement on
the legal fees and expenses incurred needed to be made. Accordingly, Earwood advised Reeves and
Preston that the attorney's fees and expenses were being withheld from the $100,000 in escrow and he
enclosed a check in the amount of $66,983.80 which Reeves deposited in his bank in Covington County on
October 5, 1995.
¶10. More than two years after depositing Earwood's check, Reeves filed his complaint. He does not claim
to be a party to the contract. Rather, he relied upon the language of the clause which stated that the $100,
000 would either be applied to the purchase or "otherwise disbursed in accordance with the terms and
provisions hereof." Reeves interprets the phrase to mean that his entire $100,000 would be returned if the
purchase did not transpire. Specific directions concerning disbursement may have been in the contract
which Earwood alleges existed between Preston and Earwood; however, such contract is not part of the
record.
DISCUSSION
I. DID THE COURT ERR IN DENYING EARWOOD'S MOTION TO TRANSFER AND
REFUSING TO TRANSFER THE CASE PURSUANT TO MISS. CODE ANN. § 11-11-3?
Standard of Review
¶11. An application for a change of venue is addressed to the discretion of the trial judge, and his ruling
thereon will not be disturbed on appeal unless it clearly appears that there has been an abuse of discretion
or that the discretion has not been justly and properly exercised under the circumstances of the case.
Beech v. Leaf River Forest Prods, Inc., 691 So. 2d 446, 448 (Miss. 1997) (quoting Mississippi State
Highway Comm'n v. Rodgers, 128 So. 2d 353, 358 (1961). "The trial court must give the plaintiff the
benefit of reasonable doubt with respect to the venue selection, and this Court must do the same on
appeal." Pisharodi v. Golden Triangle Reg'l Med. Ctr., 735 So. 2d 353, 354 (Miss. 1999) (citing
Flight Line, Inc. v. Tanksley, 608 So. 2d 1149, 1156 (Miss. 1992).
Analysis
¶12. Reeves points to several factors in support of his contention that venue is proper in Covington County.
Reeves is a resident of Covington County. He never met with Earwood in Hinds County and all
correspondence and telephone conversations occurred while he was in Covington County. In particular,
Earwood's correspondence was addressed to Reeves at his address in Collins. The $100,000 which
Reeves wired to the Earwood firm trust account was wired from his bank account in Covington County.
When the purchase failed to materialize, Earwood sent a check to Reeves at his address in Covington
County which, Reeves claims was $33,016.20 short. He reasons that his financial loss occurred in
Covington County because that is where he lived and realized the shortage or loss upon receipt of the
check which had been mailed to him at his Covington County address.
¶13. Miss. Code Ann. § 11-11-3 (Supp. 2000) provides: "Civil actions of which the circuit court has
original jurisdiction shall be commenced in the county in which the defendant or any of them may be found
or in the county where the cause of action may occur or accrue. . . . "
¶14. Because the statute provides that venue may be proper either where a cause of action occurs or
accrues, this Court has upheld venue in either of two separate locations in instances where occurrence and
accrual are not concurrent. This Court first defined and distinguished "occur" and "accrue" in Flight Line,
Inc. v. Tanksley, 608 So. 2d 1149 (Miss. 1992), in which it stated:
"Occur" and "accrue" are not synonymous, legally or otherwise, as the disjunctive connector
forthrightly suggests. We read accrual in its formalistic sense. A cause of action accrues when it
comes into existence as an enforceable claim, that is, when the right to sue becomes vested. . . this
may well mean the moment injury is inflicted, that point in space and time when the last legally
significant fact is found. . .
Id. at 1156 (emphasis added). See also Burgess v. Lucky, 674 So. 2d 506, 509 (Miss. 1996). In
Tanksley, the plaintiff was injured unloading a plane in Chicago that had been negligently loaded in
Vicksburg. This Court held that the place where the plane was incorrectly loaded was where the injury
occurred, and therefore, held that venue was proper there. This Court further stated that "the cause of
action at least partially occurred in Warren County." Tanksley, 608 So. 2d at 1156 (emphasis added).
This Court noted that, while it is common sense that a "divided" injury could not take place absent the
conduct in the county of origin, the converse is equally true. Id.
¶15. At the least, Reeves's alleged claim accrued in Covington County where he received the check for
$66,983.80 from the firm's escrow account. This would be tantamount to the last legally significant fact
as contemplated in Tanksley. Id. at 1156.
¶16. Reeves's alleged cause of action at least partially occurred in Covington County from whence he
initially wired the money from his bank account, discussed the acquisition telephonically, received the check
he considered short, and deposited it back into his account. The trial court's holding that venue was proper
in Covington County is in harmony with this Court's decision in Tanksley.
In the final analysis, venue is about convenience.. . . [T]here is nothing in the phrase "where the cause
of action may occur. . . " that limits the judicial search for but a single county.. . . [I]t is common
experience that breach and causation and impact do not all always happen at once.[ ] At the very
least, the word "occur" connotes each county in which a substantial component of the claim takes
place. . . .
Id. at 1157 (emphasis added). It is not unreasonable to view Reeves's receipt of the check for an allegedly
insufficient amount as substantial components of the claim.
¶17. Where venue is proper in two different counties, "[o]f right, the plaintiff selects among the permissible
venues, and his choice must be sustained [ ] unless in the end there is no credible evidence supporting the
factual basis for the claim of venue." Id. at 1155. Furthermore, the trial court "must give the plaintiff the
benefit of the reasonable doubt, and we do so on appeal as well." Id. at 1155 (quoting Jefferson v.
Magee, 205 So. 2d 281, 283 (Miss. 1967)). See also Pisharodi, 735 So. 2d at 354; Salts v. Gulf Nat'l
Life Ins. Co., 743 So. 2d 371, 373 (Miss. 1999).
¶18. Finally, the foregoing principles coincide with the logical principle of practicality. Applying all to the
instant case, venue is proper in Covington County and Hinds County. Therefore, the trial court's denial of
transfer of the case was not error.
II. DID THE COURT ERR IN DENYING EARWOOD'S MOTION TO WITHDRAW OR
AMEND ADMISSIONS PURSUANT TO M.R.C.P. 36(b)?
Standard of Review
¶19. The action of the lower court is subject to review by this Court using the abuse of discretion standard.
Sawyer v. Hannan, 556 So. 2d 696, 698 (Miss. 1990). A certain amount of discretion is vested in the trial
judge with respect to whether he or she will take matters as admitted. In re City of Ridgeland, 494
So. 2d 348, 353 (Miss. 1986) (Although no response to the request for admissions was filed within the
thirty days prescribed in M.R.C.P. 36(a), this Court regarded a timely filed motion to stay to be the
equivalent of a motion for extension of time within which to respond to the request for admission). Matters
of discovery are left to the sound discretion of the trial court, and discovery orders will not be disturbed
unless there has been an abuse of discretion. Dawkins v. Redd Pest Control Co., 607 So. 2d 1232, 1235
(Miss. 1992).
Analysis
¶20. In order to analyze the arguments regarding this issue, the following chronology of events is helpful:
11- Reeves filed a complaint against Earwood and the firm. Simultaneously Reeves
14- filed his first request for admissions, production of documents and first set of
97 interrogatories.
12- Summons returned, personal service on Earwood and the firm.
01-
07
12- Without having answered, or responded to discovery, and with no request for
22- additional time having been made, Earwood and the firm filed their motion to
97 transfer the case to Hinds County, but did not set the motion for hearing.
3- Reeves notices hearing on Earwood's motion to transfer, set for April 17, 1998.
23-
98
5- Brief telephonic hearing on motion to transfer. No record was made.
22-
98
6- Order filed by Covington County Circuit Judge denying the motion to transfer,
17- without stating any reasons for the denial.
98
6- Earwood and firm file Motion for Reconsideration saying simply that "under
29- recent applicable case authority to be presented upon the hearing hereof, no
98 causative events occurred in Covington County".
7- Reeves filed motion to deem requests for admissions admitted, motion to
17- compel, and motion for partial summary judgment, set for hearing September 4,
98 1998. (However, these motions were not mentioned at the September 4, 1998
hearing which addressed only the motion to reconsider).
9- Earwood and the firm filed a joint answer to Reeves' complaint, joint response
9- to requests for admissions, and an affidavit of Earwood.
98
9- Hearing on Earwood's and the firm's motion to reconsider the trial court's earlier
4- denial of their motion to transfer case to Hinds County.(2)
98
9- Orders denying motion for reconsideration, compelling discovery, and setting for
22- trial entered.
98
9- Reeves filed brief in support of motion to deem responses to admissions
23- admitted and for partial summary judgment.
98
9- Earwood and the firm filed joint motion to withdraw or amend admissions
30- pursuant to M.R.C.P. 36(b).
98
10- Earwood and the firm filed motion to amend order for certification pursuant to
12- M.R.A.P. 5(a).
98
10- Trial court entered Findings of Fact and Conclusions of Law (following
16- consideration of briefs submitted by the parties) granting Reeves' motion to
98 deem requests admitted but denying partial summary judgment as to liability.
10- Trial court entered orders denying Earwood's motion to withdraw or amend
29- admissions and granting Reeves' motion to deem requests for admissions
98 admitted.
11- Order of amendment denying certification under M.R.A.P. 5(a).
4-
98
¶21. Earwood and the firm argue that their delay in serving responses was not the result of inexcusable
delay, rather, that it was because they believed in good faith that the filing of their Motion to Transfer tolled
the time limit for responding. They based their belief upon the fact that M.R.C.P. 12(a)(1) provides for the
court's altering of time within which the defendant must serve his answer to a pleading. Yet they do not
assert that the court of its own initiative extended the time period for response. Nor do Earwood and the
firm assert that they requested that the court extend the response period. Further, they cite no specific
provision in the rules, nor any case law which expressly states that the filing of a motion to transfer in any
way automatically tolls the time limit for responding. In short, they do not provide this Court with specific
authority on which they based their belief.
¶22. Rules 12 and 36 are well-delineated rules carrying harsh sanctions for failure to comply therewith. The
permissive language of these rules respecting the trial court's duties clearly provides that relief from the
definite time periods is only available at the trial court's discretion. There is no language in either rule which
would indicate an automatic tolling of a response period, which Earwood seems to argue is provided in
M.R.C.P. 12(a)(1).
¶23. M.R.C.P. 12 states, in pertinent part:
(a) When presented. A defendant shall serve his answer within thirty days after the service of the
summons and complaint upon him or within such time as is directed pursuant to Rule 4. . . . The
service of a motion permitted under this rule alters these periods of time as follows, unless a different
time is fixed by order of the court:
(1) if the court denies the motion or postpones its disposition until the trial on the merits, the
responsive pleading shall be served within ten days after notice of the court's action;
...
The times stated under this subparagraph may be extended, only once, for a period not to exceed ten
days, upon the written stipulation of counsel filed in the records of the action. . . .
M.R.C.P. 12 (emphasis added).
¶24. M.R.C.P. 36 provides in pertinent part:
(a) Request for Admission. A party may serve upon any other party a written request for the
admission, for the purpose of the pending action only, of the truth of any matters within the scope of
Rule 26(b) set forth in the request that relate to statements or opinions of fact or of the application of
law to fact. . . .The matter is admitted unless, within thirty days after service of the request, or
within such shorter or longer time as the court may allow, the party to whom the request is
directed serves upon the party requesting the admission a written answer or objection addressed to
the matter, signed by the party or by his attorney, but, unless the court shortens the time, a defendant
shall not be required to serve answers or objections before the expiration of forty-five days after
service of the summons upon him. . . .
(b) Effect of Admission. Any matter admitted under this rule is conclusively established unless the
court on motion permits withdrawal or amendment of the admission. Subject to the provisions
governing amendment of a pre-trial order, the court may permit withdrawal or amendment when the
presentation of the merits of the action will be subserved thereby and the party who obtained the
admission fails to satisfy the court that withdrawal or amendment will prejudice him in maintaining his
action or defense on the merits. . . .
M.R.C.P. 36 (emphasis added).
¶25. Notwithstanding the language of the rule, Earwood argues that, pursuant to M.R.C.P. 36, the court
should have permitted withdrawal of the deemed admissions because the presentation of the case on the
merits would be promoted and that permitting withdrawal would not result in undue prejudice or delay to
Reeves in maintaining his action on the merits. Yet Earwood's dilatory response had already delayed
Reeves's action. Earwood's response was not forthcoming until almost ten months after the complaint, and
only after Reeves filed a motion to deem requests admitted, to compel and for partial summary judgment.
Therefore, the trial court's reluctance to exercise its broad discretion in favor of Earwood is not illogical.
¶26. We are compelled to acknowledge the adage that rules are promulgated for a purpose, this being
precisely an instance in which that principle applies. Mechanisms exist whereby a trial court may hold that
an untimely response does not constitute a deemed admission because the trial court has broad discretion in
pretrial matters. However, because of the trial court's broad discretion in such matters, it certainly may also
require that parties comply with the rules as stated. Here, the trial court found no compelling reason to
allow disrespect of M.R.C.P. 36 regarding the set time for responding to requests for admissions; and we
find no compelling reason to hold that such was an abuse of discretion. Earwood knew or should have
known the severe consequences of failing to timely respond.
¶27. Earwood avers that:
the lower court's refusal to permit withdrawal has and will continue to impose extreme, undue
prejudice in the presentation of evidence in defense of the lawsuit and, most likely, will result in entry
of summary judgment against Earwood and his firm, thus foreclosing any trial and defense of the case
on the merits before the jury.
¶28. Any prejudice which Earwood believes has been or will be imposed upon them is self-imposed.
Earwood was aware of the date on which the requests for admission were served. It was completely within
their power to either comply with the rules, request additional time in which to respond, or seek clarification
from the court concerning a rule they, in good faith, may have believed, yet were aware was neither
expressly stated in the controlling rules nor case law. This is not an instance where an attorney's mistake
prejudiced the defense of a client who knew nothing of the rules or requirements and would suffer because
of his attorney's inaction. The client was an attorney and his entire firm.
¶29. In Martin v. Simmons, 571 So. 2d 254 (Miss. 1990), this Court affirmed the chancellor's action of
deeming the requests for admissions admitted where the chancellor found no justifiable excuse for the
attorney's failure to file an answer. Id. at 255. Another case in which a party failed to comply with
M.R.C.P. 36 was Sunbelt Royalty, Inc. v. Big G Drilling Co., 592 So. 2d 1011 (Miss. 1992). There,
the requests for admissions went unanswered for nine months. This Court affirmed the trial court's finding
that the matters therein could have been answered in a few minutes and the trial court's deeming the
requests admitted. Id. at 1012-13.
¶30. In the case sub judice, the trial court, as did the lower courts in Martin and Sunbelt, insisted upon the
operation of Rule 36. Earwood failed to communicate to the court their reason for delay, or belief that they
should, by whatever mechanism, be allowed to delay their response. Thus the court had no way to know of
such belief on the part of Earwood, and could only assume that this was, if not willful disregard for the rules,
an oversight. Even such oversight does not place the matter beyond the purview of Rule 36. The court
found that Earwood failed to justify his dilatory response and beyond that, found no compelling
circumstances existed in which the court should allow the untimely reply to avoid admissions.
¶31. There was no abuse of discretion on the part of the trial court, and this issue is without merit.
CONCLUSION
¶32. Earwood's assignments of error are without merit. The trial court did not err in ruling that venue is
proper in Covington County and that the requests for admissions not timely answered by Earwood are
therefore deemed admitted. Thus, we affirm the orders of the Covington County Circuit Court and remand
this case to that court for further proceedings.
¶33. AFFIRMED AND REMANDED.
PITTMAN, C.J., McRAE, P.J., MILLS AND DIAZ, JJ., CONCUR. SMITH , J.,
CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN
OPINION JOINED BY BANKS, P.J., AND EASLEY, J. WALLER, J., NOT
PARTICIPATING.
SMITH, JUSTICE, CONCURRING IN PART AND DISSENTING IN PART:
¶34. The majority concludes that venue is proper in Covington County because Reeves is a resident of that
county, the $100,000 placed in Earwood's escrow account was wired from Covington County to Hinds
County, correspondence transpired between Earwood and Reeves in Covington County, and Reeves
realized his loss when he opened the letter from Earwood enclosing the earnest money less attorney's fees
at his residence in Covington County. For these reasons, Reeves chose to file this civil action in Covington
County, and the trial court concluded that venue was proper in Covington County pursuant to Miss. Code
Ann. § 11-11-3 (Supp. 2000). However, venue was not proper in Covington County under the applicable
statute. Therefore, the circuit court's order denying a change of venue should be reversed and this case
should be remanded for a prompt transfer of venue to Hinds County.
¶35. According to Section 11-11-3, "civil actions . . . shall be commenced in the county in which the
defendant or any of them may be found or in the county where the cause of action may occur or accrue . . .
." Earwood, is a resident of Hinds County, his law firm is located there, and all business conducted in this
case and all legal services rendered to Preston Reeves in this case were performed there. As such, venue is
proper in Hinds County. Additionally, this cause of action did indeed both occur and accrue in Hinds
County. As this Court distinguished in Flight Line, Inc. v. Tanksley, 608 So. 2d 1149 (Miss. 1992),
"'occur' means event oriented, connoting the place where a substantial component of the claim takes place,
whereas, an action 'accrues' at that time when it comes into action as an enforceable claim, that is, the right
to sue becomes vested at that point in space in time when the last legally significant fact is found." Id. at
1156.
¶36. Here, the cause of action occurred during the time Preston Reeves hired Earwood to represent him in
purchasing Tech Plastic Products of Jackson. According to the record, at the time the earnest money was
wired to him, Earwood did not know the source of the earnest money or the loan made by E.P. Reeves to
his son, Preston. In applying the definition of "occur" from Flight Line, it is clear that the county in which a
substantial component of the claim took place was Hinds County, not Covington County. According to the
record, Earwood and Preston Reeves entered into a fee agreement that Earwood would be paid an hourly
fee and all legal expenses incurred on the Tech Plastics acquisition would be paid out of the earnest money
deposit, either at the closing of the sale or upon termination of the escrow. Every document, contract, and
agreement involving the sale of Tech Plastics of Jackson was prepared, executed, and was to be performed
in Hinds County. The injury alleged by Reeves took place in Hinds County where the disputed funds were
retained, that being Earwood's law firm trust account located in Hinds County. The majority addresses
when it believes the cause of action accrued, but it does not address when the cause of action occurred.
¶37. The majority concludes that the cause of action accrued when Reeves received the check for $66,
983.80 at his home in Covington County and that was the last legally significant fact in the case. However,
the causes of action in this case accrued at the point in time when Earwood allegedly breached his duty of
good faith and fair dealing, allegedly breached his fiduciary duties, allegedly made fraudulent
misrepresentations, and allegedly breached his contract with Reeves. The point in time these alleged causes
of action accrued was when Earwood was representing Preston Reeves in Hinds County. That was the
point in time when the last legally significant fact took place. Looking at when the cause of action accrued, it
is clear that the cause of action accrued in Hinds County.
¶38. In Forrest County Gen. Hosp. v. Conway, 700 So. 2d 324 (Miss. 1997), this Court heard a case
on interlocutory appeal involving a medical malpractice suit which was filed in Hinds County. Even though
the acts of the defendant hospital and doctors occurred in Forrest County, the plaintiffs argued that venue
was proper in Hinds County because the defendants' negligence was first realized at the University Medical
Center in Hinds County. The Hinds County Circuit Court agreed with the plaintiffs and denied the
defendants' venue transfer motion. This Court concluded that, even though the plaintiffs' injuries became
apparent in Hinds County, the injuries occurred in Forrest County where the doctors failed to properly
diagnose. This Court further held that the manifestation of the plaintiffs' injuries in Hinds County did not
constitute a substantial causative event necessary to establish venue there under Miss. Code Ann. § 11-11-
3. Therefore, the circuit court order denying the change of venue was reversed.
¶39. Conway is analogous here. Even though Earwood's acts may have been realized by Reeves in his
home in Covington County, the alleged economic injury to Reeves occurred and accrued in Hinds County
when Earwood performed his services for Preston Reeves.
¶40. It is clear from the facts of this case and the holdings of this Court that the causes of action listed in
Reeves's complaint occurred and accrued in Hinds County, not Covington County. For the foregoing
reasons, I would reverse the order of the Covington County Circuit Court denying the change of venue
motion and remand this case to that court with directions that it promptly transfer this case to the Circuit
Court of the First Judicial District of Hinds County.
¶41. Accordingly, I respectfully dissent.
BANKS, P.J., AND EASLEY, J., JOIN THIS OPINION.
1. The record contains only pages 1, 5, 12 and 14 of the Asset Purchase Agreement. Page 12 contains the
following partial subsection:
In the event that Closing does not take place on or before the Closing Date herein specified, Escrow
Agent shall continue to hold the Escrow Deposit pending receipt of joint written instructions from TPE
and Precision authorizing and directing the disbursement thereof. However, in the event that
disbursement of the Escrow Deposit is not made on or before September 30, 1995, Escrow Agent
shall either deliver the Escrow Deposit to Precision or tender same into the registry or custody of any
court of competent jurisdiction that Escrow Agent may deem appropriate and, thereupon, the Escrow
Agent shall be discharged from all further duties and obligations with respect to the Escrow Deposit.
2. At the close of the September 4,1998, hearing the trial judge announced from the bench his finding that
"the cause of action accrued where [Reeves] suffered his damages, and ....the alleged conversion became
complete when [Reeves} received a $100,000 check less than (sic) the $33,000." The judge further stated,
"I'm reasonably comfortable in following this Forrest County General Hospital case [on which Earwood
relied to argue that Hinds County was the proper venue] and standing by my initial judgment [that this case
should not be transferred.]"