IN THE SUPREME COURT OF MISSISSIPPI
NO. 2008-CT-01521-SCT
COMMUNITY BANK OF MISSISSIPPI AND
RAYMON McALPIN a/k/a RAYMOND McALPIN
v.
DONNA STUCKEY
ON WRIT OF CERTIORARI
DATE OF JUDGMENT: 08/06/2008
TRIAL JUDGE: HON. ROBERT G. EVANS
COURT FROM WHICH APPEALED: COVINGTON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: MANDIE B. ROBINSON
ALAN W. PERRY
J. CHASE BRYAN
CLAY W. SLAY
G. DAVID GARNER
ATTORNEYS FOR APPELLEE: DAVID SHOEMAKE
A. REGNAL BLACKLEDGE
NATURE OF THE CASE: CIVIL - CONTRACT
DISPOSITION: THE JUDGMENT OF THE COURT OF
APPEALS IS REVERSED. THE JUDGMENT
OF THE COVINGTON COUNTY CIRCUIT
COURT IS REINSTATED AND AFFIRMED -
12/09/2010
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.
WALLER, CHIEF JUSTICE, FOR THE COURT:
¶1. Community Bank filed suit against Donna Stuckey, alleging that she had defaulted
on a loan for a cattle operation run by Donna and her husband, Mike. Donna alleged that her
signature was forged on this cattle-business loan and on documents related to several other
cattle-business loans as well. As a separate matter, Donna alleged that the Bank had made
certain misrepresentations concerning an eleven-acre parcel for which the Stuckeys had
executed a deed of trust. When the Bank sought to compel arbitration, Donna alleged that
her signatures on the arbitration agreements accompanying the cattle-business loans and the
eleven-acre deed of trust were forgeries. The trial court found no convincing evidence that
Donna had signed any of the pertinent arbitration agreements; therefore, it refused to compel
arbitration. We find that the trial court’s findings are not clearly erroneous. Furthermore,
because of the Bank’s impropriety, we refuse even to consider binding Donna to arbitration
as a third-party beneficiary or based on the principle of equitable estoppel. We thus reverse
the Court of Appeals and reinstate and affirm the trial court’s judgment.
FACTS & PROCEDURAL HISTORY
¶2. Mike and Donna Stuckey operated a cattle business named Stuckey Farms. According
to Donna, Mike befriended Raymond McAlpin, a loan officer at the Community Bank in
Raleigh, Mississippi, and made McAlpin a business partner.
¶3. While McAlpin made numerous loans to the Stuckeys during the time of his
partnership, this dispute concerns only four loans. Three of the loans concerned the
Stuckeys’ cattle business. The fourth involved a deed of trust on an eleven-acre parcel. The
Stuckeys executed the deed of trust in the name of Appleridge Estates, LLC, and hoped to
develop the property for residential use. All four loans included an arbitration agreement.
¶4. In June 2006, Community Bank filed a replevin suit to obtain possession of personal
property offered by the Stuckeys as collateral for several of the cattle-business loans. The
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Bank alleged that Mike had defaulted on six cattle-business loans, and that Donna had
defaulted on a June 16, 2003, cattle-business loan, numbered 6803148.
¶5. Mike and Donna each filed separate answers and counterclaims. In her counterclaim,
Donna alleged forgery, conversion, misrepresentation, breach of fiduciary duties, breach of
the duty of good faith and fair dealing, breach of warranty, intentional or negligent infliction
of emotional distress, damage to credit reputation, and gross negligence.
¶6. Donna’s counterclaim made two separate allegations. First, she contended that
McAlpin and the Bank had forged her signature on the June 2003 cattle-business loan, and
that her signature had been forged on two other cattle-business loans as well, one dated April
2004 and another dated February 2003. Second, Donna asserted that McAlpin had made
misrepresentations to induce the Stuckeys to execute the Appleridge Estates deed of trust.
¶7. The Bank responded with a motion to compel arbitration. Donna opposed this motion,
insisting that she had never signed any arbitration agreement. Donna maintained that she
went to the Bank only once, on May 12, 2003, to sign the Appleridge Estates deed of trust.
She freely admitted signing the deed of trust, but she adamantly denied signing any
arbitration agreement attached to that deed of trust.
¶8. The Bank and Donna each obtained a handwriting expert. Their experts’ divergent
opinions are discussed later in the opinion.
¶9. The trial court ordered Mike’s claims to arbitration, but refused to compel arbitration
as to Donna. The trial court concluded “[t]hat there does not exist convincing evidence that
Donna . . . executed any of the subject arbitration agreements . . . .” It further found that
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Donna had no interest in the Stuckey Farms cattle operation, and therefore, she was not a
third-party beneficiary of the cattle-business loans.
¶10. The Court of Appeals reversed and remanded the judgment of the trial court. It found
that Donna was bound to arbitration as a third-party beneficiary; hence, it was unnecessary
to determine whether she actually had signed any of the arbitration agreements. The Court
of Appeals further found that Donna was equitably estopped from asserting claims based on
the loan documents while simultaneously claiming that she was not bound by the arbitration
provisions in those same documents.
¶11. Donna, aggrieved by the Court of Appeals’ decision, filed this petition for writ of
certiorari, which we granted.
DISCUSSION
¶12. We review the denial of a motion to compel arbitration de novo. United Credit Corp.
v. Hubbard, 905 So. 2d 1176, 1777 (Miss. 2004).
I. Whether Donna signed an arbitration agreement attached to the
Appleridge Estates deed of trust or the June 2003 cattle-business
loan.
¶13. By alleging that she never signed any arbitration agreement, Donna challenges the
existence of a valid agreement to arbitrate. The trial court made a factual finding “[t]hat
there does not exist convincing evidence that Donna . . . executed any of the subject
arbitration agreements . . . .” We must accept a trial court’s factual findings unless they are
“clearly erroneous,” i.e., evidence exists to support the findings, but after reviewing the entire
evidence, we are left with a “definite and firm conviction that a mistake has been made.”
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UHS-Qualicare, Inc. v. Gulf Coast Cmty. Hosp., Inc., 525 So. 2d 746, 753-54 (Miss. 1987)
(citations omitted).
A. The Appleridge Estates deed of trust
¶14. Though some evidence suggests that Donna signed a version of an arbitration
agreement for the Appleridge Estates deed of trust, we are not firmly convinced that the trial
court made a mistake in concluding that she had not signed any arbitration agreement.
¶15. As it turns out, there are two different arbitration agreements for the Appleridge
Estates deed of trust, both dated May 12, 2003. Each agreement refers to the same loan
number, bears the same date, and obligates the same amount of money to the borrowers. Yet
there are glaring differences between the two documents. To add to the confusion, the two
experts based their opinions on different versions.
¶16. The Bank’s expert, Grant Sperry, referenced an arbitration agreement Bates-stamped
ORG-000098 and ORG-000099. This particular agreement was signed by Mike, Donna, and
McAlpin. The signature line lists Donna as “Vice President” and “Member” of Appleridge
Estates, LLC. The title “Vice President,” however, is manually crossed out with Donna’s
initials alongside. Sperry concluded to a reasonable degree of certainty that Donna had
signed this particular document, referred to here as the “Sperry agreement.”
¶17. In contrast to the “Sperry agreement,” the agreement to which Donna’s expert, Robert
Foley, referred is Bates-stamped ORG-0000101 and ORG-0000102. It was signed by Mike,
Donna, and an individual apparently named Dennis, whose last name is undiscernible. One
signature line merely lists Donna’s name, while the other line lists her as “Member” of
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Appleridge Estates, LLC. Foley found a “strong probability” that Donna had not signed this
document, referred to here as the “Foley agreement.”
¶18. Sperry and Foley thus rendered opinions based on two different, May 12, 2003,
arbitration agreements. It is unclear whether either expert examined the version referenced
by the other.
¶19. In her sworn affidavit and in her deposition testimony, Donna denied signing any
arbitration agreement on May 12, 2003. The Bank confronted Donna in her deposition about
the striking similarities between her actual signature and the signature on page ORG-000099
of the Sperry agreement. She answered, “I did not sign that. If a handwriting expert says I
did, then I’m wrong, but I did not sign that. . . . [F]or all I know, they traced it.”
¶20. Because of the evidentiary morass of different versions of the same document together
with conflicting expert and deposition testimony, we cannot say that the trial court clearly
erred in finding no convincing evidence that Donna had signed any arbitration agreement
pertaining to the Appleridge Estates deed of trust.
B. The June 2003 cattle-business loan
¶21. As with the arbitration agreements for the Appleridge Estates deed of trust, it appears
once again that Donna’s and the Bank’s respective experts did not review the same document
and that they based their opinions on two different documents.
¶22. Donna’s expert, Foley, concluded that the arbitration agreement for the June 2003
cattle-business loan, numbered 6803148, was forged by Donna’s husband, Mike. The Bank’s
expert, Sperry, countered that Donna had signed an arbitration agreement dated June 16,
2003. But the agreement that Sperry referenced pertained to a different loan—loan number
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6803091. He provided no opinion as to any arbitration agreement associated with the June
2003 cattle-business loan, numbered 6803148, which is the loan that is relevant to this case.
¶23. We cannot say that the trial court clearly erred in finding that Donna did not sign any
arbitration agreement for the June 2003 cattle-business loan.
II. Whether Donna should be bound to arbitration as a third-party
beneficiary or based on the principle of equitable estoppel.
¶24. Though the Bank contends that Donna actually signed an arbitration agreement for
the Appleridge Estates deed of trust and for the June 2003 cattle-business loan, it argues,
alternatively, that Donna is bound to arbitration as a third-party beneficiary or based on the
principle of equitable estoppel. Moreover, the Bank does not seem to challenge Donna’s
allegations that her signature was forged to the arbitration agreements for the April 2004 and
February 2003 loans. The Bank instead maintains that Donna is bound to arbitrate any
claims with respect to these particular loans because of her third-party-beneficiary status or
based on the principle of equitable estoppel.
¶25. We have recognized that “a signatory may enforce an arbitration agreement against
a non-signatory if the non-signatory is a third-party beneficiary . . . .” Qualcomm v.
American Wireless Group, 980 So. 2d 261, 269 (Miss. 2007) (citing Adams v. Greenpoint
Credit, LLC, 943 So. 2d 703, 708 (Miss. 2006)). Equitable estoppel, on the other hand,
prevents a party from embracing the benefits of a contract while simultaneously trying to
avoid its burdens. See Terminix Int’l, Inc. v. Rice, 904 So. 2d 1051, 1058 (Miss. 2004)
(quoting Washington Mut. Fin. Group, LLC v. Bailey, 364 F.3d 260, 268 (5th Cir. 2004)).
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We elect not to address or apply either theory in this case, however, because of the
impropriety involved in this case.
¶26. The Bank’s motion to compel arbitration is, in essence, a request for specific
performance. E.g., Cost Bros., Inc. v. Travelers Indem. Co., 760 F.2d 58, 59 n.1 (3d Cir.
1985). It is a fundamental principle of law that he who seeks equitable relief, such as specific
performance, must do so with clean hands. E.g., Pickett v. Boutwell, 240 Miss. 18, 22, 125
So. 2d 822, 823 (Miss. 1961).
¶27. The Bank’s hands are tainted here due to several apparently uncontested forgeries.
Donna alleges that on several occasions, Mike forged her signature at the behest of McAlpin,
an employee of the Bank. It appears that others forged Donna’s signature as well.
Regardless of who the forger might have been, we will not compel arbitration based on third-
party-beneficiary status or equitable estoppel where the movant has encouraged or engaged
in forging the nonmovant’s signature. Accordingly, we find that Donna is not bound to
arbitrate her claims as a third-party beneficiary or based on the principle of equitable
estoppel.
CONCLUSION
¶28. We find that the trial court did not clearly err in finding no convincing evidence that
Donna had signed any of the subject arbitration agreements. And because the Bank comes
before us with unclean hands, we refuse to consider binding her to arbitration as a third-party
beneficiary or based on the principle of equitable estoppel. We thus reverse the Court of
Appeals and reinstate and affirm the trial court’s refusal to compel arbitration.
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¶29. THE JUDGMENT OF THE COURT OF APPEALS IS REVERSED. THE
JUDGMENT OF THE COVINGTON COUNTY CIRCUIT COURT IS REINSTATED
AND AFFIRMED.
CARLSON AND GRAVES, P.JJ., DICKINSON, LAMAR, KITCHENS AND
CHANDLER, JJ., CONCUR. RANDOLPH AND PIERCE, JJ., NOT
PARTICIPATING.
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