IN THE CHANCERY COURT OF THE JUDICIAL DISTRICT
OF COUNTY, MISSISSIPPI
PLAINTIFFS
VS. CIVIL ACTION NO.
DEFENDANTS
COMPLAINT FOR INJUNCTIVE RELIEF,
BREACH OF CONTRACT, BREACH OF FIDUCIARY DUTY,
DECLARATORY JUDGMENT AND PUNITIVE DAMAGES
COME NOW (the " "), Plaintiffs, and file this Complaint against
(" ") and (" "), to prevent and enjoin the proposed foreclosure under certain
deeds of trust executed by the on lands located in and Counties, Mississippi,
to recover actual and punitive damages for breach of the agreements between the parties,
breach of its fiduciary duties to the , and to determine and declare the ' rights
under their agreements with .
and are attempting to foreclose under the deeds of trust and take the '
property before the resolution of the question whether the promissory notes which the deeds of
trust secure are due and payable. and the are presently involved in a suit over
whether the promissory notes are due and payable, or whether agreed to forbear on the
notes. and should not allowed to foreclose prior to a judgment that the promissory
notes are in default.
The also seek to prevent and enjoin and from publishing any notices
or other matters related to or connected with and attempted foreclosure under
certain deeds of trust on lands located in and Counties, Mississippi. In support
thereof, the state as follows:
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PARTIES
1.
are adult resident citizens of , County, Mississippi.
2.
is a national banking association which is domiciled and has its principal place of
business in , . may be served with process of this Honorable Court pursuant
to Rule 4(c)(5) of the Mississippi Rules of Civil Procedure by mailing a copy of the Summons
and Complaint to .
3.
is an adult resident citizen of , who may be served with process of
this Honorable Court pursuant to Rule 4(c)(5) of the Mississippi Rules of Civil Procedure by
mailing a copy of the Summons and Complaint to .
4.
is a Mississippi corporation with its principal place of business in ,
County, Mississippi and can be served with process of this Court through its registered agent,
at , , Mississippi .
5.
is a Mississippi corporation with its principal place of business in ,
County, Mississippi and can be served with process of this Court .
JURISDICTION AND VENUE
6.
The Court has jurisdiction and venue. does business in the State of Mississippi,
including, but not limited to, making and extending loans and, in a systematic and ongoing way,
acquiring and owning deeds of trust and security interests in properties in Mississippi, including
, and Counties, Mississippi.
7.
has purposefully availed itself of the benefits of conducting business in
Mississippi by entering into agreements with the to be performed in whole or in part in
Mississippi. The agreements include loans against the deeds of trust on properties in ,
and Counties, Mississippi.
8.
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has committed torts against the , the injurious effect of which occurred in
Mississippi resulting in economic damage and losses in Mississippi.
9.
, as owner and holder of the deeds of trust at issue herein, substituted , as
Trustee on said deeds of trust by an instrument entitled "Substitution of Trustee" dated ,
20 , and recorded in the Substituted Trustee Book , Pages , on file in the office
of the Chancery Clerk of County, Mississippi, Judicial District, and in Substituted
Trustee Book , Pages on file in the office of the Chancery Clerk of County,
Mississippi. As Substituted Trustee, has instituted the foreclosure proceedings in
and Counties and is subject to the jurisdiction of this Court.
10.
does business in County, Mississippi. In addition, has published and
disseminated in County, that certain "Substituted Trustee's Notice of Sale" dated ,
20 , and attached to the hereto as Exhibit "A" and incorporated herein by reference. Such
publication occurred on and , 20 .
Respectfully submitted,
_______________________________________
Attorney for
11.
does business in County, Mississippi. In addition, has published and
disseminated in and Counties, that certain "Substituted Trustee's Notice of Sale"
dated , 20 , and attached hereto as Exhibit "A" and incorporated herein by reference.
Such publication occurred on 20 .
FACTUAL BACKGROUND
12.
For over years, the have been in the business of acquiring, developing,
investing in, and selling properties and other assets which include mineral interests, oil and gas
leases, oil and gas wells, real estate and timberland. The nature of this business is speculative
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and requires long-term loans, long-term financing, and long-term forbearance from a lending
institution which is willing to loan money long-term on and for speculative properties and to
await the development or sale of the properties to be paid.
13.
The began doing business with in 20 . The relied on 's
assurances that would provide the with long-term loans, financing, and, most
importantly, the necessary forbearance which the would need over a long period of time
in order to acquire, develop, and sell properties at the most optimum prices available.
14.
Since 20 , the have been one of the substantial customers of .
has provided the with long-term loans, financing, and the necessary forbearance for the
' acquisition, development, investment, and sale of various properties. Pursuant to written
and verbal agreements, including modifications and amendments of notes, and the course of
dealing between the parties, , e.g., has loaned money to the , has advanced monies to
the in anticipation of sale, has encouraged the to acquire properties, has paid debts
owed by the and has rolled the payments into the ' account, and has paid down the
' account with proceeds received from time to time from the ' income producing
properties and the ' periodic sales of properties.
15.
For example, the are presently involved in a sale of approximately acres of
timberland in on which holds a second mortgage. The have at all times kept
fully apprised of the ' efforts to sell the timberland and of the proposed sale, with
the agreement and understanding that the will use a portion of the sale proceeds to bring
current the accrued interest on the ' debt to the Bank. This course of dealing between the
and the has been followed since 20 .
16.
The have secured with various mortgages, deeds of trust, and security
interests in properties located in Counties, Mississippi. These properties include mineral
interests, real estate, oil and gas leases, oil and gas wells, and timberlands. The value of these
properties more than secures the ' debt to .
17.
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The relationship between the and has been a long-standing fiduciary
relationship of mutual trust and confidence for the mutual benefit and profit of both the
and . has exercised a degree of control and influence over the ' business
activities. The and have both benefited from the relationship. Since 19 , the
have paid over $ in interest and $ in principal in connection with loans
made by to the .
18.
has breached its agreements with the , its fiduciary duties to the , and
its duties of good faith and fair dealing. Among other breaches, as more fully set forth herein,
has demanded that the immediately pay the Bank $ in claimed principal and
interest, has sued the in the United States District Court for the District of
for the amount claimed to be due, has instituted foreclosure proceedings on the ' properties
in and Counties, Mississippi, and has threatened to foreclose on the ' other
properties, including the timberland in which the are in the process of selling.
These demands, suits attempting foreclosure and threats of foreclosure constitute breaches of the
's agreements with and duties to the and threaten the with substantial and
irreparable damages and losses.
19.
As a portion of the security for their indebtedness to the , the on ,
20 executed a certain Land Deed of Trust to , Trustee, for the benefit of ,
which is recorded in Book , Pages , Record of Mortgages and Deeds of Trust on
Land, County, Mississippi, Judicial District and in Book , Pages ,
Record of Mortgages and Deeds of Trust on Land, County, Mississippi. By instrument
dated , 20 , , as owner and holder of the said Land Deed of Trust substituted
, as Substituted Trustee, in place of and in lieu of , which instrument is recorded in
Substituted Trustee Book , Pages , on file in the office of the Chancery Clerk of
County, Mississippi, First Judicial District, and in Substituted Trustee Book , Pages
, on file in the office of the Chancery Clerk of County, Mississippi.
20.
On , 20 , commenced foreclosure of said Land Deed of Trust by
posting a "Substituted Trustee's Notice of Sale" on the main bulletin board at the County
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Courthouse in , Mississippi, and by commencing publication of said "Substituted Trustee's
Notice of Sale" in and . The "Substituted Trustee's Notice of Sale" was published
by said newspapers on , 20 .
FIRST CLAIM
Injunctive Relief
21.
The allegations of paragraphs 1 through 20 are incorporated herein by reference.
22.
In order to preserve the status quo and prevent irreparable harm, and should
be enjoined, both by a temporary restraining order and a preliminary injunction, from attempting
to foreclose on and from foreclosing on any of the ' lands and properties until after a
judgment has been rendered determining whether the are in default and whether the
promissory notes are due and payable. and attempted foreclosure constitutes an
attempted prejudgment seizure of property in anticipation of a judgment on the promissory
notes. If it is decided that agreed to forbear on the collection of the notes and that the
are not in default, then and do not have a right to foreclose.
23.
and should be enjoined from proceeding with any further publications of
the foreclosure notices.
24.
's demand for immediate payment is a breach of the agreements between the
and the Bank for the Bank to provide the with long-term loans, financing, and the
necessary forbearance while the , e.g., develop and sell various properties, so as to apply
the proceeds received to reduce the ' debt to .
25.
The agreements between the and include their numerous written and verbal
agreements, including modifications and amendments to notes, and their long-standing course of
dealing and custom and practice between one another, including the Bank's repeated waiver of
the strict enforcement of the default provisions of the written agreements between them. The
have relied to their detriment on these agreements.
26.
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The are presently involved in a sale of approximately acres of
timberland on which holds a second mortgage. Consistent with their long-standing course
of dealing, the and heretofore agreed that the will use a portion of the sale
proceeds to bring current accrued interest on the ' debt to the Bank. Nevertheless,
has demanded immediate payment of the ' entire debt even though the are not in
default under the terms of the agreements between the parties and has commenced foreclosure
proceedings on properties located in and Counties, Mississippi, as more fully set
forth and described in the "Substituted Trustee's Notice of Sale" attached hereto as Exhibit "A"
and incorporated herein by reference.
27.
should be held to be estopped to deny, dispute, renege on or breach its agreements
with the and from demanding or receiving the immediate payment of the '
outstanding account, an account which is fully secured by various deeds of trust, mortgages and
security interests; and to have waived strict enforcement of the default provisions of the written
agreements between them.
28.
The are not in default to and is prohibited and estopped from
demanding or obtaining immediate payment of the ' account, has waived strict
enforcement of the default provisions of written agreements between them, and the are
entitled to forbearance from while the develop and sell those properties which are
mortgaged or pledged to . The are entitled to injunctive relief to maintain the status
quo and to prevent the irreparable harm and injury which would result from 's foreclosure
sale of the properties listed in Exhibit "A" and such other injunctive relief as may be necessary
pending a final judgment in this action.
SECOND CLAIM
Breach of Contract
29.
The allegations of paragraphs 1 through 28 are incorporated herein by reference.
30.
In the alternative, the are entitled to damages resulting from 's breach of its
agreements with the . The damages include, but are not limited to, the diminution in the
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fair market value of the ' business and properties occasioned by having to sell or other
dispose of properties prematurely or at distressed prices; lost profits; and damages to the '
good will, business reputation and credit rating.
THIRD CLAIM
Breach of Duties of Good Faith and Fair Dealing
31.
The allegations of paragraphs 1 through 30 are incorporated herein by reference.
32.
These are duties of good faith and fair dealing, whether expressed or implied, in every
agreement. had and has a duty to deal with the in good faith and fairly with
respect to the agreements entered into and performed between the parties over the years.
33.
The actions of in connection with the agreements entered into with the ,
specifically including its acts with respect to interest rates charged, application of payments, and
its current demand for immediate payment from the , while the are not in default
and the is fully secured with respect to the ' debt, constitutes a breach of the duties
of good faith and fair dealing owed by to the .
34.
The are entitled to a declaratory judgment or appropriate decree that the are
not in default to , is prohibited and estopped from demanding or obtaining the
immediate payment of the ' account, has waived strict enforcement of the default
provisions of the written agreement, and the are entitled to forbearance from while
the develop and sell those properties which are mortgaged or pledged to .
should be enjoined or estopped from demanding or recovering immediate payment of the '
outstanding account based upon its breach of the duty of good faith and fair dealing to the
.
35.
In the alternative, the are entitled to damages resulting from 's breach of its
duty of good faith and fair dealing to the . The damages include, but are not limited to,
the diminution in the fair market value of the ' business and properties occasioned by
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having to sell or otherwise dispose of properties prematurely or at distressed prices; lost profits;
and damages to the ' good will, business reputation and credit rating.
FOURTH CLAIM
Breach of Fiduciary Duties
36.
The allegations of paragraphs 1 through 35 are incorporated herein by reference.
37.
's said conduct constitutes a breach of its fiduciary duties to the . The
are entitled to recover from all damages which the have suffered or will suffer as a
result of 's breach of its fiduciary duties.
FIFTH CLAIM
Breach or Anticipatory Breach of Agreement
Concerning the Application of Sale Proceeds
38.
All allegations in paragraphs 1 through 37 are incorporated herein by reference.
39.
has breached or has threatened to breach an agreement between the and
regarding the use and application of monies which the are to receive from the sale
of certain timberland property located in .
40.
In 19 , the entered into an agreement with concerning certain of the
oil, gas, and mineral interests in , under which agreement the received a
substantial sum of money. did not have a mortgage, deed of trust, or security interest on
said interests sold. The planned to use the monies received from to develop
further oil and gas leases and oil and gas wells in County, Mississippi, on which
held a deed of trust and security interest. In the past, these oil and gas leases and wells in
County, Mississippi, have provided over $ which the paid to on the '
account. These oil and gas leases and oil and gas wells continue to be valuable properties and a
source of revenue for the to pay their account with .
41.
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Upon learning of the ' sale to , proposed to the that, if the
would pay $ out of the monies received from , would apply that
sum of money to the ' account and then, when the sold a acre tract of
timberland in , on which held a second mortgage, the would be allowed to
use $ of the proceeds from that sale to develop further the ' said oil and gas leases,
wells and proposed oil and gas operations in the of County, Mississippi, on which
held a deed of trust and security interest. Based on the long-standing relationship of trust
and confidence, the agreed to 's proposal, relied on 's representations and
assurances, and wired over $ of the proceeds received from .
42.
The then proceeded to arrange for a sale of the acres of timberland in
for approximately $ . However, has now stated and indicated that it will not
allow the to use any part of the proceeds received from that sale to develop further the oil
and gas leases and oil and gas wells in Mississippi.
43.
's said conduct is a breach and violation of its agreement with the
concerning the use and application of the proceeds received from and the proceeds to be
received from the sale of the timberland; is a breach of its duties of good faith and fair
dealing; is a breach of its fiduciary duties to the ; and is a willful and intentional tortious
breach of contract and bad faith.
44.
should be estopped from reneging on and breaching its agreement with the
concerning the use and application of the proceeds and the sales proceeds to be received
from the sale of the timberland. Among other things, the agreement has been partially
performed. The are entitled to a declaratory judgment that, out of the sales proceeds to
be received from the sale of the timberland, the are entitled to use $ of the
proceeds to develop further the ' oil and gas leases, oil and gas wells and oil and gas
operations in and around the in County, Mississippi.
45.
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In the alternative, the are entitled to rescind and disgorge from the '
payment of the monies previously tendered to and to recover actual and punitive
damages from because of 's breach of its agreement.
SIXTH CLAIM
Incorrect Charges and Applications
46.
The allegations of paragraphs 1 through 45 are incorporated herein by reference.
47.
has breached its agreements with the by arbitrarily applying payments to
interest in lieu of principal, charging interest on advances of principal on a premature date,
arbitrarily adjusting interest rates, and calculating and charging interest on a daily rate for 365
days a year based on a 360 day year.
48.
The are entitled to recover damages resulting from 's said breaches of its
agreements with the , including recover of all overpayments of principal and interest.
SEVENTH CLAIM
Punitive Damages
49.
The allegations of paragraphs 1 through 48 are incorporated herein by reference.
50.
has willfully, intentionally and tortuously breached its agreements with and duties
to the , and has acted in bad faith. Additionally, is attempting to foreclose on the
' property in and Counties, Mississippi and has threatened to foreclose on the
' other properties, thereby threatening to disrupt or prevent one proposed sale of
timberland and to reduce the fair market value of the other pledged properties. The are
entitled to an award of punitive damages against in an amount not less than $ .
WHEREFORE, PREMISES CONSIDERED, the pray that summons issue to the
Defendants in accordance with law, and that the Court will grant the following relief to the
:
(1) Immediately issue a temporary restraining order and a preliminary injunction against
, , , and prohibiting them from proceeding or taking any other actions
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related to or connected with the foreclosure of the properties set forth in Exhibit "A" attached
hereto and incorporated herein by reference pending a final determination of this case on the
merits;
(2) A declaratory judgment or other appropriate decree that the are not in default
with , that is prohibited and estopped from reneging on and breaching its
agreement with the , and estopped from demanding and seeking to recover and collect the
' outstanding account with the Bank, and that the are entitled to forbearance while
the develop and sell those properties which are mortgaged or pledged to the Bank;
(3) A judgment for the against for the actual damages suffered by the
as a result of the various breaches by the Bank of its agreements, fiduciary duties, and
duty of good faith and fair dealing;
(4) A judgment for the against for not less than $ punitive damages
for the Bank's breach of its agreements with and duties to the ;
(5) A judgment for the against for all incidental and consequential
damages to which they may be entitled;
(6) A judgment that, out of the sales proceeds to be received by the from the sale
of the ' timberland, the are entitled to bring accrued interest current and, e.g.,
use $ of the proceeds to develop further the ' oil and gas leases, oil and gas wells and
oil and gas operations in and around the in County, Mississippi;
(7) Other appropriate temporary, preliminary and permanent injunctive relief, as may be
needed; and
(8) A judgment for the against for attorney's fees and costs of Court herein.
AND the pray for such further additional, general or specific relief to which they
may be entitled.
THIS, the day of , 20 .
Respectfully submitted,
_______________________________________
Attorney for
Of Counsel:
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Telephone:
MSB #
Attorney for
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STATE OF MISSISSIPPI
COUNTY OF
PERSONALLY APPEARED BEFORE ME, the undersigned authority in and for the
county and state aforesaid, the within named who being by me first duly sworn,
acknowledged that he/she signed and delivered the above and foregoing Complaint for
Injunctive Relief, Breach of Contract, Breach of Fiduciary Duty, Declaratory Judgment and
Punitive Damages on the day and year therein mentioned and for the intent and purposes therein
expressed.
_________________________________________
SWORN TO AND SUBSCRIBED BEFORE ME, this the day of , 20 .
______________________________
NOTARY PUBLIC
MY COMMISSION EXPIRES:
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