              IN THE SUPREME COURT OF MISSISSIPPI

                       NO. 2017-CA-01120-SCT

ADAM ROSENFELT AND
ELEMENT STUDIOS, LLC

v.

MISSISSIPPI DEVELOPMENT AUTHORITY AND
GLENN McCULLOUGH, JR., IN HIS OFFICIAL
CAPACITY AS EXECUTIVE DIRECTOR OF THE
MISSISSIPPI DEVELOPMENT AUTHORITY


DATE OF JUDGMENT:              07/18/2017
TRIAL JUDGE:                   HON. DENISE OWENS
TRIAL COURT ATTORNEYS:         MICHAEL B. WALLACE
                               THORNTON RUSSELL NOBILE
                               MICHAEL O. GWIN
                               J. COLLINS WOHNER, JR.
                               WAVERLY ALMON HARKINS
                               JANE WALLACE MEYNARDIE
COURT FROM WHICH APPEALED:     HINDS COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS:      MICHAEL B. WALLACE
                               JANE WALLACE MEYNARDIE
                               THORNTON RUSSELL NOBILE
ATTORNEYS FOR APPELLEES:       MICHAEL O. GWIN
                               J. COLLINS WOHNER, JR.
                               WAVERLY ALMON HARKINS
                               LEE DAVIS THAMES, JR.
NATURE OF THE CASE:            CIVIL - CONTRACT
DISPOSITION:                   AFFIRMED - 12/06/2018
MOTION FOR REHEARING FILED:
MANDATE ISSUED:


     BEFORE WALLER, C.J., MAXWELL AND ISHEE, JJ.

     ISHEE, JUSTICE, FOR THE COURT:
¶1.    This is a contract dispute between Adam Rosenfelt, a film producer, and the

Mississippi Development Authority (MDA). Rosenfelt claims the MDA promised loan

guarantees so he could make movies in Mississippi. He made one film, which was not

financially successful, and the MDA refused to guarantee the loan for his next project.

Rosenfelt now claims the MDA breached a contract with him, personally. We conclude that

the actual documents show that any agreement was between the MDA and one or more

LLCs, not Rosenfelt personally, and Rosenfelt cannot contradict the written documents with

parol evidence. See Epperson v. SOUTHBank, 93 So. 3d 10, 17 (Miss. 2012). Rosenfelt

therefore has no standing to pursue the claims because any obligations under the alleged

contracts are to the LLCs, not Rosenfelt personally. Bruno v. Se. Servs. Inc., 385 So. 2d

620, 622 (Miss. 1980). Furthermore, no error has been shown as to the dismissal of Element

Studios, LLC, for want of standing.

¶2.    This case also potentially presents a question of first impression regarding the

authority of the executive director of the MDA and his agents to bind the MDA in contract

without spreading the contract’s terms on the MDA’s minutes. But because we find that no

error has been shown in the circuit court’s dismissal of the suit on the basis of standing, that

issue is moot and will not be addressed.

                        FACTS AND PROCEDURAL HISTORY

¶3.    Through “government affairs professionals,” Rosenfelt reached out to Mississippi

officials to propose his company’s plan for the state to “invest” in a new production studio.


                                               2
The name of that studio was to be Mississippix or Mississip-pix, and it was to be located in

Mississippi. Rosenfelt testified that after pitching the idea to various officials in the MDA,

he met briefly with Governor Phil Bryant. Rosenfelt testified the governor expressed

enthusiasm for the plan and that the governor’s intent was to “put [the plan] in the 2013

special session.” But that never happened, and Rosenfelt testified that he planned to shop

the plan to other states.

¶4.    The MDA, however, continued to try to find a way to bring Rosenfelt’s business to

the State. In various emails, Kathy Gelston, MDA’s chief financial officer, explained, “The

governor wants a commitment, but doesn’t want to add anything to the Medicaid special

session . . . . We have to think of some kind of contract or something.” She forwarded a draft

letter to Rosenfelt’s representatives containing terms “agreed to by Governor Bryant.” On

June 27, 2013, Gelston signed the letter. The letter was addressed to Rosenfelt as “President

of Element Pictures.” It stated,

       Mississippi will commit to your Mississippi Production Investment Plan
       (attached hereto) for an initial investment of ten million dollars . . . proposed
       legislation notwithstanding, the initial ten million dollar commitment will be
       firmly committed by Mississippi and will not be contingent upon proposed
       legislation being passed by the legislature at any time in the future.

¶5.    Rosenfelt claims he relied on this letter in his decision to “not show elsewhere” and

to move his family and company to Mississippi. But it turned out that MDA did not have the

money. It tried to get it during the 2014 regular session, but that legislation also failed to

pass. In an email sent on March 4, 2014, Gelston told Rosenfelt, “I cannot express how sorry


                                              3
I am that you were misled. I will continue to work with you within our current program to

try and mitigate the damage.”

¶6.    Rosenfelt sought assurances that any new agreement would be enforceable. And so

MDA’s lawyer sent an email to Rosenfelt’s lawyer, attached to which was an attorney

general opinion that stated “the Executive Director of the MDA is authorized to execute an

agreement to guarantee the Loan pursuant to the [small business loan guarantee program] on

behalf of the State.” Then, on April 7, 2014, MDA Executive Director Brent Christensen

drafted a letter to Rosenfelt, again as “President of Element Pictures.” The letter stated,

       Mississippi will commit to a revolving loan guarantee of ten million dollars for
       five years. This guaranty can be utilized on any film over $5 million and under
       $20 million with a minimum of 50% of the production expenses occurring in
       Mississippi, and can be used to guarantee up to 80% of the cost of the film.

¶7.    During the summer of 2014, Regions Bank agreed to extend a $10 million revolving

loan to a company formed by Rosenfelt to finance his first movie in the state—The Duel

featuring Woody Harrelson. The loan was conditioned on the guaranty promised by MDA’s

April 7, 2014, letter. But before Rosenfelt and Regions could close on the loan, MDA issued

a letter refusing to guarantee the loan. The deal fell through, and Rosenfelt secured

emergency financing elsewhere. Eventually, MDA would agree to issue a guaranty for $4

million of a loan provided by Planters Bank.

¶8.    After The Duel was completed, Rosenfelt reached out to MDA in 2015 to discuss the

remainder of the originally promised $10 million guaranty. This resulted in the execution

of a “term sheet” on July 1, 2015. The term sheet was signed by the new chief financial

                                               4
officer, Jay McCarty, on behalf of MDA, and Rosenfelt, on behalf of “Mississippix Studios,

LLC and Element Studios LLC.” The term sheet described MDA’s terms for the release of

an additional $6 million loan guarantee. Among other things, it provided that any application

to MDA for another loan guarantee “will be considered by the internal loan guaranty

committee in accordance with established program processes.”

¶9.    Rosenfelt applied for this money to make a second movie, but the MDA declined the

application, leading to this litigation. Rosenfelt’s complaint sought a declaratory judgment

that MDA was bound by an enforceable contract, specific performance ordering MDA to

execute a guaranty of a loan Rosenfelt had arranged, and money damages. The chancery

court initially granted partial summary judgment in favor of Rosenfelt, finding that MDA’s

letter on April 7, 2014, “created an unconditional obligation on the MDA to a revolving loan

guaranty of $10 million over five years to fund Rosenfelt’s Mississippi-based film projects,”

and that “MDA [was] required to guarantee a loan to Rosenfelt for up to $7.5 million

dollars.” The chancery court further opined that the letter was “unambiguous.”

¶10.   Rosenfelt later filed another motion for summary judgment seeking specific

performance of the guaranty. The MDA responded with a summary-judgment motion of its

own, challenging Rosenfelt’s standing to bring any of his claims. This time the chancery

court agreed with the MDA; it dismissed the complaint on two grounds: the contract was not

recorded in the official minutes of the MDA, and both Rosenfelt and Element Studios, LLC,

lacked standing. Rosenfelt now appeals that decision.


                                             5
                                STANDARD OF REVIEW

¶11.   This Court reviews a grant or denial of summary judgment de novo. Hardy v. Brock,

826 So. 2d 71, 74 (Miss. 2002). Standing is also a question of law which we review de novo.

Brown v. Miss. Dept. of Human Servs., 806 So. 2d 1004, 1005 (Miss. 2000).

                                        DISCUSSION

¶12.   On appeal, Rosenfelt argues the chancery court erred when it found he did not have

standing to pursue these claims. This Court has held that “standing is a jurisdictional issue

which may be raised any party or the Court at any time.” City of Madison v. Bryan, 763 So.

2d 162, 166 (Miss. 2000). “In Mississippi, parties have standing to sue when they assert a

colorable interest in the subject matter of the litigation or experience an adverse affect from

the defendant’s conduct.” Miss. Manufactured Housing Ass’n v. Bd. of Alderman of

Canton, 870 So. 2d 1189, 1192 (Miss. 2004). “The individual’s legal interest or entitlement

to assert a claim must be grounded in some legal right recognized by law, whether by statute

or by common law.” Schmidt v. Catholic Diocese of Biloxi, 18 So. 3d 814, 827 (Miss. 2009)

(citations omitted). Put another way, standing is determined by “[w]hether the particular

plaintiff had a right to judicial enforcement of a legal duty of the defendant or whether a

party plaintiff in an action for legal relief can show in himself a present, existent actionable

title or interest, and demonstrate that this right was complete at the time of the institution of

the action.” Id. (citation omitted).




                                               6
¶13.   Rosenfelt cites three documents in the record he contends evidence an agreement

between him, personally, and the MDA. The first two are letters from MDA officials dated

June 2013 and April 2014. They are both addressed to Rosenfelt as president of Element

Pictures. The June 2013 letter states that Mississippi “will commit to your Mississippi

Production Investment Plan (attached hereto) for an initial investment of ten million dollars.”

The investment plan mentions two entities: Element Films and Element Pictures.1 It says it

is “designed by Element Films.” It further states, in its most active and operative language,

that if the plan is accepted, “Element Films will form MISSISSIP-PIX,” and Mississippix

will go on to do various things. The plan also includes an “executive summary” that lays out

“the company’s” management team; it identifies Rosenfelt as “Chairman,” then says he is

“president of Element Pictures” (our emphasis) and later refers to Rosenfelt as “president of

Element.” The plan does not say Rosenfelt will do anything in a personal capacity; it just

identifies him as chairman (presumably of Element Films) and president of Element Pictures.

The MDA’s 2013 letter is signed by “Kathy Gelston, Chief Financial Officer.”

¶14.   The MDA’s 2014 letter is also addressed to Rosenfelt as president of Element Pictures

and states that Mississippi “will commit to a revolving loan guarantee of ten million dollars

for five years.” It is signed by Brent Christensen, the executive director of the MDA.



       1
         The Appellant here is Element Studios, LLC, a Mississippi limited liability
company. Element Films and Element Pictures are apparently LLCs organized in the State
of Louisiana. They are all presumably controlled by Rosenfelt, but it is unclear what legal
or contractual relationships, if any, the various LLCs have to each other.

                                              7
¶15.   Finally, Rosenfelt cites the 2015 terms sheet, which recites terms relating to a $10

million revolving loan guarantee and notably includes that applications for loan guarantees

“will be considered by the internal loan guaranty committee in accordance with established

program processes.”     The 2015 terms sheet is signed by “Jay McCarty, Mississippi

Development Authority.” McCarty was at that time the MDA’s chief financial officer. The

term sheet was also signed by Rosenfelt as “Adam Rosenfelt, Mississippix Studios, LLC /

Element Studios LLC.”

¶16.   Thus, the standing issue essentially boils down to a question of contract interpretation.

This is well-suited for summary judgment: “[q]uestions of contract construction and

ambiguity are questions of law that are committed to the court rather than questions of fact

committed to the fact finder.” Epperson v. SOUTHBank, 93 So. 3d 10, 17 (Miss. 2012)

(citation omitted). Only if we find “the [material] terms of the contract to be ambiguous or

subject to more than one interpretation” will the case “be submitted to the trier of fact, and

summary judgment . . . not appropriate.” Id.

¶17.   Rosenfelt contends on appeal that the 2013/2014 letters and the 2015 terms sheet

reflect an agreement between him, personally, and the MDA. He alleges that the letters are

addressed to him and that he signed the 2015 terms sheet. But he offers no supporting

argument or authority, and as we explained above, the letters were clearly and

unambiguously addressed to Rosenfelt in his capacity as president of Element Pictures, the




                                               8
Louisiana LLC. The 2015 terms sheet was also signed by Rosenfelt only as an officer of the

two Mississippi LLCs, not in his individual capacity.

¶18.   All of the alleged contract documents were either addressed to Rosenfelt in his

capacity as an officer of an LLC or were signed by him in the same capacity. None of the

documents even suggest Rosenfelt would receive any benefit or incur any obligations except

in his capacity as an officer or owner of the LLCs. While there may be some ambiguity as

to which Louisiana LLC was the offering party in 2013 plan, there is no conceivable

interpretation of any of these written documents that Rosenfelt, personally, was a party to any

agreement. Thus, we conclude that parol evidence cannot be considered on the specific

question of whether Rosenfelt, personally, was one of the contracting parties.

¶19.   Because the alleged agreements were with the LLCs Rosenfelt was representing, he

has no right to enforce the agreements personally, even if the LLCs were entirely owned and

operated by him. “It is fundamental corporation and agency law that a corporation’s

shareholder and contracting officer has no rights and is exposed to no liability under the

corporation’s contracts.” Domino’s Pizza, Inc. v. McDonald, 546 U.S. 470, 471, 126 S. Ct.

1246, 163 L. Ed. 2d 1069 (2006). Under Mississippi law, “an action to redress injuries to a

corporation, whether arising in contract or in tort[,] cannot be maintained by a stockholder

in his own name, but must be brought by the corporation because the action belongs to the

corporation and not the individual stockholders whose rights are merely derivative.” Bruno

v. Se. Servs. Inc., 385 So. 2d 620, 622 (Miss. 1980) (quoting Schaffer v. Universal Rundle


                                              9
Corp., 397 F.2d 893 (5th Cir. 1968)). “The rule applies even though the complaining

stockholder owns all or substantially all of the stock of the corporation.” Id. (citations

omitted).

¶20.   Rosenfelt “elected to conduct [his] business through a limited liability company and

. . . just as [he] received protection of [his] personal assets from liability in doing so . . . .

[he] gave up standing to claim damages to the LLC, even if [he] also suffered personal

damages as a consequence.” Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 347-48

(4th Cir. 2013). The law takes a dim view of attempts by those using the corporate form to

cast it off whenever it suits their convenience to do so. Mont. Power Co. v. Fed. Power

Comm’n, 185 F.2d 491, 497 (D.C. Cir. 1950). Rosenfelt thus has no standing to sue in

contract or in tort unless a duty was owed to him, personally. See Bruno, 385 So. 2d at 622.

¶21.   Rosenfelt also seeks to show he was a party to the agreements by resort to extrinsic

evidence. He cites his own deposition, but all three of the excerpts he quotes in his brief just

offer his own interpretation of the letters’ terms or speculate about MDA’s motivation; and

they do not even necessarily have to be read as Rosenfelt referring to himself in an individual

capacity. Rosenfelt also cites various letters and quotes from officials at MDA suggesting

they understood themselves to be dealing with Rosenfelt, personally, rather than the various

companies he controlled. But this also is parol evidence.

¶22.   If a written contract is unambiguous, “the intention of the contracting parties should

be gleaned solely from the wording of the contract and parole evidence should not be


                                               10
considered.” Epperson, 93 So. 3d at 16. The contract need not be “fully integrated” such

that it encompasses the entire agreement between the parties; if it is partially integrated, that

is, if the parties “intend the writing to be the final expression of the terms it contains but not

a complete expression of all the terms agreed upon—some terms remaining unwritten,” then

“evidence of prior or contemporaneous agreements is admissible to supplement its terms

though not to contradict it.” Merk v. Jewel Food Stores Div. of Jewel Cos. Inc., 945 F.2d

889, 892-93 (7th Cir. 1991). We emphasize that what makes an agreement “integrated” or

“partially integrated” is not whether the contract unambiguously settled those terms, but

whether the parties intended it to be a final agreement. See id. Put another way, parol

evidence is admissible only “to supplement [the contract’s] terms,” “not to contradict it.” Id.

at 892-93. As this Court said in Epperson, the parol evidence rule “provides that where a

document is incomplete parol evidence is admissible to explain the terms but, in no event,

to contradict them.” Epperson, 93 So. 3d at 17 (citation omitted).

¶23.   The course-of-performance evidence cited by Rosenfelt is likewise not relevant unless

the written agreements are materially ambiguous. Only “[i]f the intent of the parties is not

yet ascertained after ‘four corners’ analysis” will “the court will employ any applicable

canons of contract construction” such as the “practical construction which the parties have

placed upon the instrument.” Warren v. Derivaux, 996 So. 2d 729, 735 (Miss. 2008)

(citations omitted). See also 17A C.J.S. Contracts § 426 (2018) (“The language of an

unambiguous contract governs, even in the face of a different interpretation the parties may


                                               11
have placed on the agreement themselves. The parties’ construction does not change the

terms of the agreement or control or vary the express unambiguous provisions of the

instrument itself; thus, the fact that the parties have placed an erroneous construction on an

unambiguous contract will not prevent the court from construing the contract properly.”).

¶24.   Rosenfelt also contends the letters and the terms sheet should be construed against

their drafter, MDA. But this is another canon of contract construction, and it also only

applies if the parties’ intent cannot be derived from the contract’s four corners. See, e.g.,

Pursue Energy Corp. v. Perkins, 558 So. 2d 349, 352-53 (Miss. 1990).

¶25.   Next, Rosenfelt cites Vickers v. First Mississippi National Bank, 458 So. 2d 1055,

1062 (Miss. 1984). But all Vickers held is that the shareholder’s status as a shareholder did

not preclude him from enforcing a contract remedy he would otherwise have if there was a

contractual duty owed to him, personally. See id. at 1063-64. In that case, the plaintiff was

a party to the contract in his individual capacity. See id. at 1057. As discussed above,

Rosenfelt was not a party to the alleged contracts.

¶26.   Nor was Rosenfelt a third-party beneficiary by virtue of his ownership or control of

the LLCs. “[A] third party beneficiary may sue for a breach of the contract only when the

condition which is alleged to have been broken was placed in the contract for his direct

benefit.” Miss. High Sch. Activities Ass’n, Inc. v. Farris, 501 So. 2d 393, 396 (Miss. 1987)

(citation omitted). “A mere incidental beneficiary acquires by virtue of the contractual

obligation no right against the promisor or promisee.” Id. Rosenfelt’s benefits and


                                             12
obligations under the alleged agreement were “merely derivative” of his position as an owner

or officer of the LLCs and were thus incidental to any agreements involving only the LLCs.

See Gerard J.W. Bos & Co., Inc. v. Harkins & Co., 883 F.2d 379, 382 (5th Cir. 1989)

(applying Mississippi law); see also Bruno, 385 So. 2d at 622.

¶27.   Finally, there is the question of the standing of Element Studios, LLC. Throughout

this litigation, Rosenfelt and Element Studios, LLC, have been represented jointly, and their

brief on appeal is almost entirely devoted to arguing that Rosenfelt personally contracted

with MDA. The only argument presented as to Element Studios, LLC, is the cursory

assertion that it had standing as a third-party beneficiary to an agreement either between the

MDA and Rosenfelt or, failing that, between the MDA and Mississippix. As noted above,

we reject the contention that an agreement existed between Rosenfelt and the MDA. As to

an alleged agreement between Mississippix and the MDA, Rosenfelt and Element Studios,

LLC, make no attempt to demonstrate that such an agreement existed or that Element

Studios, LLC, was a third-party beneficiary to it. Nor have they briefed the question of

whether Element Studios, LLC, has standing by virtue of its being a direct party to an

agreement with the MDA, as might be suggested by Rosenfelt’s signature as its agent on the

2015 terms sheet. We will not speculate whether this was an oversight or a strategic

decision, given the Appellants’ obvious preference for the terms of the 2014 letter over the

2015 terms sheet. Instead, we decline to address an issue that has not been briefed on appeal.

As the Court of Appeals has stated, “Simply put, we will not act as an advocate for one party


                                             13
to an appeal.” Jefferson v. State, 138 So. 3d 263, 265 (Miss. Ct. App. 2014). “The appellant

must affirmatively demonstrate error in the court below, and failure to do so waives an issue

on appeal.” Id.; see also M.R.A.P. 22(a)(3), (7).

¶28.   Finally, Rosenfelt and Element Studios, LLC, argue MDA should be equitably

estopped from challenging their standing. While it is true that MDA did not raise the

standing issue immediately, “standing is a jurisdictional issue [that] may be raised any party

or the Court at any time.” City of Madison v. Bryan, 763 So. 2d 162, 166 (Miss. 2000). The

record here reveals that Rosenfelt not only lacks standing, he is seeking to enforce causes of

action he does not own and which may actually belong to legally distinct entities that are not

parties to this suit. We can find no merit to the estoppel argument.

                                      CONCLUSION

¶29.   We conclude that neither Rosenfelt nor Element Studios, LLC, has shown error in the

trial court’s dismissal of their suit for want of standing. The remaining issues presented are

moot and will not be addressed.

¶30.   AFFIRMED.

   WALLER, C.J., RANDOLPH AND KITCHENS, P.JJ., KING, COLEMAN,
MAXWELL, BEAM AND CHAMBERLIN, JJ., CONCUR.




                                             14
