        IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

                               NO. 2014-CA-01434-COA

JIMMY GIBBS                                                                APPELLANT

v.

RITA F. MOODY                                                                APPELLEE


DATE OF JUDGMENT:                         09/03/2014
TRIAL JUDGE:                              HON. H. DAVID CLARK II
COURT FROM WHICH APPEALED:                SCOTT COUNTY CHANCERY COURT
ATTORNEY FOR APPELLANT:                   P. SHAWN HARRIS
ATTORNEY FOR APPELLEE:                    JUSTIN TYLER MCCAUGHN
NATURE OF THE CASE:                       CIVIL - CONTRACT
TRIAL COURT DISPOSITION:                  GRANTED JUDGMENT IN APPELLEE’S
                                          FAVOR
DISPOSITION:                              AFFIRMED - 12/01/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

       BEFORE LEE, C.J., CARLTON AND FAIR, JJ.

       CARLTON, J., FOR THE COURT:

¶1.    Jimmy Gibbs appeals the Scott County Chancery Court’s judgment settling a contract

dispute in Rita Moody’s favor. On appeal, Gibbs argues that the chancellor erroneously

applied Mississippi caselaw to interpret a written contract between the parties. Finding no

error, we affirm.

                                         FACTS

¶2.    Gibbs owned a home and a lot in Forest, Mississippi. On June 7, 2010, he entered into

a rent-to-own contract with Moody. Under the contract’s terms, Gibbs agreed to rent the

home to Moody for four years. At the end of the four-year period, Moody planned to
purchase the home by paying Gibbs the remaining balance she owed on the home’s purchase

price. Gibbs wrote the contract himself. Both he and Moody signed and dated the contract,

and a third party witnessed the contract.

¶3.    The contract set forth the following provisions: (1) Gibbs agreed to rent the home and

property to Moody for $500 a month; (2) Moody agreed to obtain at least $33,000 in

insurance; (3) Moody was required to provide proof of insurance at least twice a year; (4) if

Moody failed to make her monthly payment, the agreement would become null and void; (5)

Moody would assume the responsibility of maintaining the home once she took charge of the

property; (6) Moody could not structurally alter the home or the property until she paid the

full purchase price of the home; (7) the agreement could not be transferred or passed on to

another party; (8) the rent-to-own contract would last for four years, with the remaining

balance to be fully paid after the fourth year; and (9) Moody agreed to pay the closing costs.

The contract also stated that Gibbs agreed to “pay the [$8,000] loan against the house until

the loan is paid off.”

¶4.    On June 4, 2011, Gibbs signed a second document titled “Rental Agreement” and

mailed a copy of the agreement to Moody. The rental agreement provided that rent was due

on the first day of every month and that a $10 late fee would be assessed after the fourth day

of the month. The agreement reiterated that a loan existed against the home for the leveling

of the foundation and that Gibbs assumed responsibility for paying the loan each month. The

agreement further stated that a late fee would be imposed on Gibbs if he failed to make the

foundation loan’s monthly payment.



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¶5.    As the record reflects, Gibbs obtained the $8,000 loan from BancorpSouth to repair

the home’s foundation. When the four-year term on the parties’ contract ended, $4,000

remained on the balance of the foundation loan. A disagreement arose between the parties

as to the responsibility of paying the remainder of the BancorpSouth loan. Although the

contract stated that Gibbs agreed to “pay the [$8,000] loan against the house until the loan

is paid off[,]” Gibbs argued he only intended to make the loan payments until Moody

satisfied the terms of the contract. Once Moody made her payments under the contract’s

terms, Gibbs stated that Moody was to assume responsibility for the BancorpSouth loan

payments. Moody contended, however, that Gibbs retained responsibility for full payment

of the BancorpSouth loan.

¶6.    As a result of their disagreement over the repayment of the foundation loan, the parties

also disagreed on the total purchase price of the home, which the contract failed to specify.

At the chancery court hearing, the parties agreed that the base purchase price of the home

was the $33,000 mentioned in the contract’s second provision. While Moody argued the

$33,000 constituted the full amount of the purchase price, Gibbs contended that the total

purchase price included the $33,000 plus the remaining balance of the foundation loan.

¶7.    After failing to resolve her dispute with Gibbs, Moody filed a complaint in chancery

court. By the end of the contract’s four-year period, Moody had paid Gibbs $24,000 toward

the home’s purchase price. Moody therefore requested that the chancellor order Gibbs to

deed her the property in exchange for $9,000, which Moody argued was the remaining

balance of the home’s purchase price. Moody also sought to have Gibbs retain responsibility



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for the $4,000 remaining on the BancorpSouth foundation loan.

¶8.    After considering the parties’ testimony and evidence, the chancellor found the

contract was ambiguous as to the purchase price of the home. After reviewing the four

corners of the contract, the chancellor moved to the canons of contract interpretation for

further analysis. Finding that caselaw clearly established a contract should be interpreted

against the drafter, the chancellor found that the parties’ testimony supported Moody’s claim

that the home’s agreed-upon purchase price totaled $33,000. The chancellor further found

no ambiguity in the contract and rental agreement as to the repayment of the foundation loan.

The chancellor found the contract directed Gibbs to retain responsibility for the full payment

of the loan. The chancellor thus ordered Gibbs to pay the loan balance from the home’s sale

proceeds.

¶9.    Aggrieved by the chancellor’s judgment, Gibbs appeals to this Court.

                               STANDARD OF REVIEW

¶10.   This Court will not disturb a chancellor’s findings of fact unless they are manifestly

wrong or clearly erroneous or unless the chancellor applied an erroneous legal standard.

Ainsworth v. Ainsworth, 139 So. 3d 761, 762 (¶3) (Miss. Ct. App. 2014). However, we

review a chancellor’s conclusions of law de novo. Lowrey v. Lowrey, 25 So. 3d 274, 285

(¶26) (Miss. 2009). Our precedent establishes that questions involving the construction and

interpretation of contracts are questions of law that we review de novo. Royer Homes of

Miss. Inc. v. Chandeleur Homes Inc., 857 So. 2d 748, 751 (¶4) (Miss. 2003).

                                       DISCUSSION



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¶11.   On appeal, Gibbs argues that the chancellor erroneously applied Mississippi caselaw

on contract construction to interpret the parties’ written contract. Gibbs asserts that he poorly

drafted the parties’ contract and that, as a result, the contract contained an ambiguity as to

the repayment of the foundation loan. As previously discussed, the contract stated that Gibbs

agreed to “pay the [$8,000] loan against the house until the loan is paid off.” Gibbs alleges

the contract’s language failed to specify whether he would pay the foundation loan until that

loan was satisfied or whether he would pay the foundation loan until Moody satisfied her

loan payments to him for the purchase of the home.

¶12.   Alleging that the contract’s meaning was ambiguous, Gibbs contends the chancellor

erred by finding the four corners of the contract clearly established that Gibbs bore full

responsibility for repaying the foundation loan. Gibbs further argues that the chancellor

erred by finding the total purchase price of the home amounted to $33,000. Due to these

alleged errors, Gibbs asks this Court to reverse the chancellor’s judgment and to remand the

matter for a hearing to allow extrinsic evidence as to the parties’ intent.

¶13.   In Royer, the supreme court provided the following guidance on issues of contract

construction and interpretation:

               The question of law/question of fact dichotomy requires a two-step
       inquiry in contract law. First of all, it is a question of law for the court to
       determine whether a contract is ambiguous and, if not, enforce the contract as
       written. Questions concerning the construction of contracts are questions of
       law that are committed to the court rather than questions of fact committed to
       the fact finder. Appellate courts review questions of law de novo.

              In the event of an ambiguity, the subsequent interpretation presents a
       question of fact for the jury which we review under a substantial
       evidence/manifest error standard. If the terms of a contract are subject to more

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than one reasonable interpretation, it is a question properly submitted to the
jury.

        The primary purpose of all contract construction principles and methods
is to determine and record the intent of the contracting parties. In contract
construction cases[,] a court’s focus is upon the objective fact—the language
of the contract. A reviewing court is concerned with what the contracting
parties have said to each other, not some secret thought of one not
communicated to the other. A reviewing court should seek the legal purpose
and intent of the parties from an objective reading of the words employed in
the contract to the exclusion of parol or extrinsic evidence. The reviewing
court is not at liberty to infer intent contrary to that emanating from the text at
issue.

        This Court has set out a three-tiered approach to contract interpretation.
Legal purpose or intent should first be sought in an objective reading of the
words employed in the contract to the exclusion of parol or extrinsic evidence.
First, the “four corners” test is applied, wherein the reviewing court looks to
the language that the parties used in expressing their agreement. We must look
to the “four corners” of the contract whenever possible to determine how to
interpret it. When construing a contract, we will read the contract as a whole,
so as to give effect to all of its clauses. Our concern is not nearly so much with
what the parties may have intended, but with what they said, since the words
employed are by far the best resource for ascertaining the intent and assigning
meaning with fairness and accuracy. Thus, the courts are not at liberty to infer
intent contrary to that emanating from the text at issue. On the other hand, if
the contract is unclear or ambiguous, the court should attempt to harmonize the
provisions in accord with the parties’ apparent intent. Only if the contract is
unclear or ambiguous can a court go beyond the text to determine the parties’
true intent. The mere fact that the parties disagree about the meaning of a
contract does not make the contract ambiguous as a matter of law.

        Secondly, if the court is unable to translate a clear understanding of the
parties’ intent, the court should apply the discretionary “canons” of contract
construction. Where the language of an otherwise enforceable contract is
subject to more than one fair reading, the reading applied will be the one most
favorable to the non-drafting party. Finally, if the contract continues to evade
clarity as to the parties’ intent, the court should consider extrinsic or parol
evidence. It is only when the review of a contract reaches this point that prior
negotiation, agreements[,] and conversations might be considered in
determining the parties’ intentions in the construction of the contract. Of
course, the so-called three-tiered process is not recognized as a rigid

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       “step-by-step” process. Indeed, overlapping of steps is not inconceivable.

Royer, 857 So. 2d at 751-53 (¶¶7-11) (internal citations and quotation marks omitted).

¶14.   Upon review, we find no error in the chancellor’s application of Mississippi caselaw

to construct and interpret the written contract between Gibbs and Moody. The chancellor

first considered the question of whether Gibbs or Moody bore the responsibility for paying

the remaining balance of the foundation loan. In accordance with the supreme court’s

guidance in Royer, the chancellor initially examined the contract itself and the language

contained within the four corners of the document. See id. at 752 (¶10). As the Royer court

stated, the appellate court’s “concern is not nearly so much with what the parties may have

intended, but with what they said, since the words employed are by far the best resource for

ascertaining the intent and assigning meaning with fairness and accuracy. Thus, the courts

are not at liberty to infer intent contrary to that emanating from the text at issue.” Id.

(citations omitted).

¶15.   Examining the four corners of the parties’ contract and related rental agreement,

which were both prepared and signed by Gibbs, the chancellor noted the contract’s statement

that Gibbs agreed to “pay the [$8,000] loan against the house until the loan is paid off.” The

chancellor next acknowledged Gibbs’s statement in the rental agreement that he bore the

responsibility for paying the foundation loan each month and that he would incur a late fee

if he failed to make the payments. Based on his reading of the contract and the rental

agreement, and the language Gibbs himself employed when drafting the documents, the

chancellor found no ambiguity within the four corners of the contract as to the repayment of



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the foundation loan. Instead, the chancellor found the terms of the contract and the rental

agreement clearly established that Gibbs bore full responsibility for repaying the loan to

BancorpSouth.

¶16.   The chancellor next considered the parties’ dispute over the purchase price of the

home. Again looking to the four corners of the contract, the chancellor found the contract

failed to clearly express the parties’ intent. Due to the contract’s ambiguity and failure to

specify a purchase price, the chancellor questioned the parties about the home’s purchase

price. Moody testified that the purchase price was $33,000, as evidenced by the contract’s

requirement that she secure at least $33,000 in insurance. The chancellor determined that

Moody had already paid Gibbs $24,000 over the four-year term of the contract. Therefore,

if the chancellor found the home’s purchase price to be $33,000, Moody would still owe

Gibbs a balance of $9,000. When the chancellor questioned Gibbs about the home’s

purchase price, Gibbs testified that the parties agreed on $33,000 plus the balance left on the

foundation loan at the expiration of the contract’s four-year term. Because $4,000 remained

unpaid on the foundation loan, the total purchase price under Gibbs’s theory amounted to

$37,000.

¶17.   After considering the issue, the chancellor interpreted the contract’s language in favor

of Moody, the non-drafting party, and found the home’s purchase price totaled $33,000. The

chancellor provided that, as the contract’s drafter, Gibbs possessed the ability and the

opportunity to clearly state his intentions as to the home’s purchase price. Looking to canons

of contract construction, the chancellor held Gibbs’s failure to do so against him and



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interpreted the contract in Moody’s favor. See Royer, 857 So. 2d at 753 (¶11) (“Where the

language of an otherwise enforceable contract is subject to more than one fair reading, the

reading applied will be the one most favorable to the non-drafting party.” (citation omitted)).

¶18.    After reviewing the record and applicable caselaw, we find no merit to Gibbs’s claim

that the chancellor misconstrued Mississippi caselaw in interpreting the parties’ written

contract. Instead, the chancellor’s judgment reflects that he followed applicable precedent

in construing and interpreting the parties’ contract in Moody’s favor. See id. at 751-53 (¶¶7-

11). As a result, we find no error in the chancellor’s conclusions that the home’s purchase

price totaled $33,000 and that Gibbs retained full responsibility for repaying the foundation

loan.

¶19. THE JUDGMENT OF THE SCOTT COUNTY CHANCERY COURT IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE
APPELLANT.

     LEE, C.J., IRVING AND GRIFFIS, P.JJ., BARNES, ISHEE, MAXWELL,
FAIR, JAMES AND WILSON, JJ., CONCUR.




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