Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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As reported by the Clarion-Ledger last week, Hinds County Chancery Judge Denise Owens issued an Order in favor of Meg Weidner against Trustmark Bank National Bank in a breach of fiduciary duty case. Here is a copy of the Order.

The case stemmed from Trustmark acting as trustee for a trust set up by Dr. William and Margaret Rosenblatt for the benefit of their children and grandchildren. Trustmark improperly disbursed over $1.7 million of principle from the trust to one of the two children (Dee Rosenblatt Farrell). Trustmark fired the employee who screwed up.  

Judge Owens ordered Trustmark to re-pay over $1.7 million to the trust. Trustmark also must pay $100,000 in punitive damages and the plaintiff's attorney's fees, which have not yet been adjudicated. I don't see how the attorney's fees could be less than six figures for a case of this nature.

The trust allowed the beneficiaries to withdraw from the corpus only to meet emergency needs. Trustmark's own policies required this type of distribution to be approved by the bank's trust committee with yearly accountings to the other beneficiaries. Each withdrawal had to be separately approved. None of the 150 corpus invasions over a six year period were approved by Trustmark's trust committee.

There was evidence that the Trustmark officer who screwed up alleged that Dee "had been conning him into invading the corpus to buy clothing."

Trustmark also never obtained the required approval of the disbursements from the other beneficiaries.  

Trustmark is in denial mode:

T. Harris Collier III, Trustmark's general counsel, said in a statement the bank is reviewing Owens' opinion "and considering all of our options."

"The ruling did not find any unauthorized disbursements from the trust," Collier said in the statement. "However, it found that certain administrative and documentation policies and procedures were not followed by the trust officer."

Mike Farrell of Jackson (no relation to Dee Farrell) represented the plaintiff. William Ray of Watkins & Eager represented Trustmark. Luke Dove of Jackson represented Dee Farrell.

My Take:

I didn't understand how this could happen.....until I read the statement by Trustmark's general counsel. Apparently, Trustmark's legal department can't read.

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Governor Barbour's appointment yesterday of Court of Appeals Chief Judge Leslie King to replace Justice James Graves on the Supreme Court was anticlimactic. It's a bit like hiring an assistant coach on your current staff to replace your head football coach. It may be the best move, but it's not very exciting for the fan base.

Many people predicted King would get the position from the day that President Obama appointed Justice Graves to the 5^th Circuit Court of Appeals. Gov. Barbour admitted that King was the only candidate who he considered. It is a safe pick and a smart pick.

So who does Barbour appoint to replace King on the Court of Appeals? This is more interesting because there is no one obvious candidate. The people who always predicted King would get promoted to the Supreme Court believe that Barbour will appoint a current African-American state court judge. But there are four judges in Hinds County alone who fit this profile even if you only consider circuit and chancery judges. And the district is much bigger than just Hinds County.

Judge Denise Owens is a name I hear a lot and would be a popular choice. But unlike with the Supreme Court position, Barbour promises to run this pick through his judicial advisory committee. That would seem to make it a more wide open race. And a more interesting appointment from the fans' point of view.

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With the U.S. Senate approving Justice James Graves' appointment to the 5^th Circuit Court of Appeals on Monday, attention turns to who Governor Barbour will appoint to replace Graves on the Miss. Supreme Court. I posted on this issue in this post last June. I've had lines in the water for weeks on this issue and do not really have any fresh information on this topic.  

Speculation in Jackson legal circles continues to center on Barbour appointing Graves' replacement from the Mississippi Court of Appeals. Under this theory Barbour will appoint Court of Appeals Chief Judge Leslie King to the Supreme Court, a sitting trial judge to the Court of Appeals and an attorney to replace the trial judge. Hinds County Chancery Judge Denise Owens is a name that I hear as the favorite to replace King on the Court of Appeals if it this happens. Others speculate that Owens could replace Graves on the Supreme Court.

I've gotten mixed signals on the possibility of Jackson attorney La'Verne Edney getting the Supreme Court appointment. I've heard that she does not want the position. And I've heard that she is campaigning for the job. So I've got no idea.

One interesting scenario would be for Barbour to appoint former Hinds County Circuit Judge Malcolm Harrison to one of the available positions. Word on the street is that Barbour was upset with Judge Bill Gowan for running against—and unseating Harrison. Appointing Harrison to another slot would at least put Harrison back into public service.

With Barbour still in the 2012 Presidential race, expect the position to go to an African-American. If Barbour appoints a white person to the Supreme Court, then he's not running for President.

At this point, I have no prediction on what's going to happen here. Let me know if you've heard any interesting rumors on the Supreme Court seat. If requested, I do not reveal the identity of sources. 

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Any doubts about whether Justice James Graves would be confirmed to serve on the Fifth Circuit Court of Appeals seemed to be put to rest on Friday with Mississippi Republican Senator Roger Wicker's endorsement of Graves.

So how does Graves' imminent departure impact the future of the Mississippi Supreme Court? It's hard to say at this point, but the possibilities are frightening. Graves is viewed as a left of center justice. His replacement will be appointed by the conservative Governor Haley Barbour. That is potentially bad for both the legal rights of individuals and the legal profession in Mississippi.

Barbour will face pressure from tort reformers to appoint a replacement for Graves who appears certain to uphold the legislative caps on non-economic damages and will support a reversion to the Court's pattern under Chief Justice Smith of going years without affirming a plaintiff's verdict. That practice was exposed in 2008 by respected Jackson defense lawyer Alex Alston.

According to Alston, in the 4 1/2 years prior to June 2008 the Mississippi Supreme Court reversed 88% of jury verdicts that favored wronged victims. During the same time period, the Court reversed 0% of jury verdicts that favored big business. Alston went public with his criticisms. The Court's swinging too far to the right is widely believed to be the primary reason that Chief Justice Smith lost his re-election bid to Jim Kitchens.

Smith's defeat signaled that any Supreme Court candidate who can be portrayed as always voting for one side is vulnerable in an election. After Smith's defeat, Justice Waller became Chief Justice and the Court's decisions in civil cases began to reflect a swing from the far right to the middle. No longer are defense lawyers telling plaintiff lawyers that if you get a verdict, we'll just appeal and get you reversed. No longer are defense lawyers bragging that: “there is not an argument I can make that (insert name-you know who I mean)will not buy.”

Incidentally, most of the defense lawyers who made these jokes were morons. They just couldn't figure out why plaintiff lawyers weren't filing cases any more. As if plaintiff lawyers were motivated by creating billable hours for defense lawyers. Smart defense lawyers were just as concerned about the Court's decisions as plaintiff lawyers and are now just as happy about the Court's moderation.

Some people speculate that Governor Barbour and Mississippi conservatives are happy to get Justice Graves off the Supreme Court so that they can appoint a more conservative successor and try to roll back the progress made under Chief Justice Waller's leadership.  

So who does Barbour appoint? Unless he wants to commit political suicide it must be an African-American, since Graves is the only African-American on the Court. The name that I have heard most often is Jackson attorney La'Verne Edney, who is a partner in the Brunini Law Firm and currently serves as General Counsel of the Mississippi Volunteer Lawyers Project. Edney's background is as a defense lawyers and she is perceived as being a possible conservative vote on the Court.

Hinds County Chancery Court Judge Denise Owens is a good judge who would be a popular pick in the Bar. But her husband and brother are prominent plaintiff lawyers, so her appointment might not be popular in all circles. Another possibility is Chancery Court Judge Vicki Barnes of Vicksburg. I have been impressed with Judge Barnes in my limited appearances before her and she has shown an attention to detail that would be a plus for an appellate judge.

There has also been speculation that Governor Barbour might promote Chief Judge Leslie King from the Court of Appeals, giving Barbour an additional appointment. Proponents of this theory point out that Barbour's record of appointing minority judges is still bad. Elevating King would allow Barbour to appoint two minority judges on the State's appellate courts.

One factor with Governor Barbour that is often over-looked is whether the appointee can win an election for the seat. It is my understanding that Barbour places great weight on this factor. He wants his appointees to win their next elections, presumably because they are a reflection on his political legacy.  

At this point, I am not aware of a clear favorite for the seat. My guess is that strong rumors will emerge within the next few weeks. I will do my best to stay on top of this developing story and post what I am hearing.  

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In this October post, I discussed the vacant 5^th Circuit Court of Appeals slot and mentioned Justice James Graves as a candidate to fill the position. Since then, President Obama’s administration has moved at its typical slow pace in filling the position. With the President’s White House Counsel leaving the administration at the end of the year, it appears unlikely that the announcement of a nominee is imminent.

It’s my understanding that Justice Graves remains on a growing list of candidates. Other names mentioned as candidates, in no particular order, include:

1. Hinds County Circuit Court Judge Winston Kidd,
2. Hinds County Chancery Court Judge Denise Owens,
3. former Hinds County Circuit Court Judge Robert Gibbs,
4. Jackson attorney Doug Minor,
5. Assistant U.S. Attorney Felicia Adams, and 
6. Circuit Court Judge Margaret Carey-McRae.

It sounds like Judge Winston Kidd is Congressman Bennie Thompson’s candidate. But each of the other candidates have their own supporters in political circles or the bar. I have not heard of Congressmen Gene Taylor or Travis Childers supporting a candidate. Taylor is known to stay out of appointment debates. Childers is rumored to have focused on pushing for Oxford attorney Christi McCoy to be named U.S. Attorney for the Northern District. But McCoy is unlikely to get the nod.

It is believed that some of the 5^th Circuit candidates have been interviewed over the phone by the White House.  

A huge question is when will the White House make an announcement. To see how long this could go on, look at the vacant U.S. District Court seat that has long been presumed to be going to Jackson attorney Carlton Reeves. The seat has been vacant for years and Reeves has been the only known candidate since Obama’s election more than a year ago. But the White House has yet to make an announcement and appears to be in no hurry to make an appointment.

If the White House follows a similar pace with the 5^th Circuit nominee, we will be still be talking about this vacancy this Summer, and perhaps later.