Employee’s wrongful discharge suit auctioned to employer to satisfy Florida judgment against her

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By Joy Waltemath

By Lorene D. Park, J.D.

Rejecting an employee’s appeal, the Mississippi Supreme Court explained that because she failed to challenge, in the court below, a requirement that she post a $100,000 bond to have quashed a writ of execution to auction off her pending suit in a Mississippi federal court against her former employer, she waived the right to challenge it here. The writ was issued to enforce a Florida judgment in the employer’s favor in its separate extortion suit against the same employee. At the auction, the employer ended up purchasing for $1,000 her federal suit against it, and will likely move to have the federal suit dismissed once it is substituted as plaintiff (Davenport v. HansaWorld, USA, Inc., January 19, 2017, Coleman, J.).

Employee’s federal lawsuit. From January 2011 to October 2012, the employee was a sales manager for HansaWorld USA, which is a software company that maintains its principal offices in Florida. Following her termination, she filed suit in a federal court in Mississippi, alleging a variety of federal and state law claims, including sexual harassment and wrongful discharge. In 2014, the court dismissed her Title VII claims. In a June 2015 opinion, it denied summary judgment on her claims of wrongful discharge in violation of public policy (she was allegedly fired for complaining of tax law violations) and breach of contract (for nonpayment of salary).

Employer seeks to recover on Florida judgment. In a separate lawsuit in a Florida state court, HansaWorld sued the employee on claims of conversion and extortion. In January 2015, the court entered judgment in HansaWorld’s favor and ordered the employee to pay $265,719. HansaWorld then filed a petition with a county clerk in Mississippi to enter a writ of execution on the Florida judgment. The clerk issued the writ, notifying the Forrest County sheriff to auction off the employee’s federal lawsuit in a sheriff’s sale, scheduled for July 13, 2015.

HansaWorld buys federal suit against itself. The employee filed with the state circuit court an emergency motion to quash the writ of execution. After a hearing on the same day as the pending sale, the Mississippi court granted the motion conditioned on the employee posting a $100,000 bond before the sale. She did not at that point object to the bond requirement. After she failed to post a bond, her federal lawsuit was auctioned to the highest bidder, HansaWorld, for $1,000.

The employee appealed and, as that was pending, HansaWorld filed a motion in the federal court in Mississippi to be substituted in for the employee. In response, she filed a motion to stay the federal proceedings pending the outcome of her appeal. The court granted that motion in a January 2016 order. Balancing the interests of the parties, it found the scale tipped in the employee’s favor based on HansaWorld’s expressed intent, should its motion to substitute be granted, to dismiss the suit with prejudice.

Final judgment and jurisdiction. Before the Mississippi Supreme Court, HansaWorld argued that the conditional granting of the motion to quash was not a final judgment that could be appealed. Disagreeing, the state high court explained that it could discern no other actions for the lower court to take in the case and the parties had not identified any other issues that were not settled by the circuit court’s order.

Employee waived challenge to bond requirement. On the merits, the employee argued that the lower court abused its discretion when it ordered the conditional bond because the bond served no purpose. HansaWorld took the opposite view, arguing that the bond was properly required as security for a request for injunctive relief under Mississippi Rule of Civil Procedure 65(c).

Affirming, the state supreme court noted that HansaWorld asked the lower court, both in its brief and at the July 13 hearing, to condition any relief given to the employee on her posting a bond, but she neither wrote a response brief nor objected at the hearing when the judge stated he was going to require the $100,000 bond. Consequently, the lower court never had an opportunity to address the appropriateness of the bond. Because the employee did not preserve her argument in the circuit court, she waived the right to challenge the bond on appeal.

Dissent. Dissenting, Justice King joined by Justice Kitchens noted that the high court had the power to notice “plain error” even if a party fails to object to it below. In the dissent’s view, the lower court committed plain error by conditioning the grant of a motion to quash on the posting of a bond. Rule 65(c) applies to restraining orders or preliminary injunctions, but the court’s order in this case did not enjoin or restrain the employee. Nor was the court’s order tantamount to a preliminary injunction, as argued by HansaWorld. Rather than temporary relief, the granting of a motion to quash offers permanent relief.

Source:: Employee’s wrongful discharge suit auctioned to employer to satisfy Florida judgment against her


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