Cheryl B. White v. Edgar Truman Whitehead, Ruby E. Whitehead, Robert L. Thomas, Citizens Bank of Philadelphia, Carol B. Taff, Bethel Baptist Church, Thomas R. Boydstun, Leah H. Boydstun, Ben Kirk, James M. Whitehead, Alyssa Cameron Whitehead, Kevin E. Whitehead, Tami H. Whitehead, Gary M. Whitehead, Carol Whitehead, Bankfirst Financial Services, and Timothy L. Gowan;

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI

NO. 2018-CA-01556-COA

CHERYL B. WHITE APPELLANT

v.

EDGAR TRUMAN WHITEHEAD, RUBY E. APPELLEES
WHITEHEAD, ROBERT L. THOMAS,
CITIZENS BANK OF PHILADELPHIA, CAROL
B. TAFF, BETHEL BAPTIST CHURCH,
THOMAS R. BOYDSTUN, LEAH H. BOYDSTUN,
BEN KIRK, JAMES M. WHITEHEAD, ALYSSA
CAMERON WHITEHEAD, KEVIN E.
WHITEHEAD, TAMI H. WHITEHEAD, GARY
M. WHITEHEAD, CAROL WHITEHEAD,
BANKFIRST FINANCIAL SERVICES, AND
TIMOTHY L. GOWAN

DATE OF JUDGMENT: 10/23/2018
TRIAL JUDGE: HON. EDWARD C. FENWICK
COURT FROM WHICH APPEALED: WINSTON COUNTY CHANCERY COURT
ATTORNEY FOR APPELLANT: FRANK G. VOLLOR
ATTORNEYS FOR APPELLEES: EDGAR TRUMAN WHITEHEAD (PRO SE)
RUBY E. WHITEHEAD (PRO SE)
ALAN LEE SMITH
TAYLOR TUCKER
THOMAS R. BOYDSTUN (PRO SE)
LEAH H. BOYDSTUN (PRO SE)
BEN KIRK (PRO SE)
JOHN HOWARD SHOWS
CAROL WHITEHEAD (PRO SE)
JAMES PHILLIP WILSON, JR
RICHARD ALLEN EISENBERGER JR.
JOHN SAMUEL GRANT IV
CHARLES E. WINFIELD
JOSHUA J. WEINER
NATURE OF THE CASE: CIVIL - REAL PROPERTY
DISPOSITION: AFFIRMED - 06/30/2020
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
EN BANC.

LAWRENCE, J., FOR THE COURT:

¶1. On June 7, 2016, Cheryl White filed a complaint for a declaratory judgment and other

relief against Truman and Ruby Whitehead, Robert Thomas, Citizens Bank of Philadelphia,

Carol Taff, Bethel Baptist Church, Perkinsville Inc.,Thomas Boydstun, Leah Boydstun, Ben

Kirk, James Whitehead, Alyssa Whitehead, Kevin Whitehead, Tami Whitehead, Gary

Whitehead, Carol Whitehead, Bankfirst Financial Services, Timothy Gowan and Does 1-10,

asserting that she had a first lien on certain real property by virtue of a deed of trust recorded

on January 22, 2002. The defendants represent original owners, trustees and subsequent

purchasers of the subject property. White claimed that her lien (“the White lien”) should be

given priority over a lien held by Citizens Bank of Philadelphia (“the Bank lien”) by virtue

of a renewal deed of trust recorded on February 28, 2002, and foreclosed upon on August 5,

2008. Further, White claimed that her lien should be granted priority under the legal theories

of equitable subrogation and unjust enrichment. On February 10, 2017, one of the

defendants, Gary Whitehead, filed a motion for summary judgment, which was subsequently

joined by all other defendants. On September 21, 2018, and after the hearing on the motion

for summary judgment, White filed a motion to recuse the trial judge and for a new trial. On

September 24, 2018, the Winston County Chancery Court issued a final judgment and an

order granting the defendants’ motion for summary judgment. Further, on October 23, 2018,

the chancery court issued an additional opinion and final judgment that denied White’s

2
motion for recusal and motion for a new trial. Aggrieved by the rulings in both judgments,

White appealed. Finding no error in the chancery court’s ruling, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2. In 1994, Truman and Ruby Whitehead (“the Whiteheads”), joined by their eldest son

Gary Whitehead (“Gary”), embarked on a new business venture that included building a new

barn and beginning a dairy business. The Whiteheads procured the initial financing for their

business venture from Citizens Bank and Trust of Louisville (“Bank”).1 The Whiteheads

pledged their land to the Bank to secure a loan in the amount of $247,376 by executing a

deed of trust dated July 29, 1994, and recorded August 4, 1994.2 The 1994 deed of trust was

renewed by virtue of six additional deeds of trust recorded on July 19, 1996, May 15, 1998,

April 25, 2000, September 4, 2001, January 31, 2002, and February 28, 2002.3 The

subsequent deeds contained renewal and extension language relating them back to the

original deed of trust recorded on August 4, 1994.

¶3. In 2001, the Whiteheads began searching elsewhere for additional funding for their

business venture. R.W. Boydstun (“Boydstun”) agreed to loan the Whiteheads $351,978.55.

1
Citizen’s Bank and Trust of Louisville subsequently merged with Citizens Bank of
Philadelphia.
2
The Bank’s 1994 deed of trust was recorded in deed book 457 at page 115 of the
Winston County land records.
3
The Bank’s subsequent deeds of trust were recorded in the land records of Winston
County as follows: book 463, page 569, book 481, page 589, Book 505, page 545, book
526, page 505, book 532, page 22 and book 532, page 61.

3
The Whiteheads along with Gary and his wife Carol, signed a promissory note for

$351,978.55 that was loaned by Boydstun. The promissory note was signed on January 18,

2002. As security for the loan, the Whiteheads pledged their land by deed of trust, dated

January 18, 2002 and recorded on January 22, 2002.4 Boydstun named his daughter, Cheryl

White (“White”), the beneficiary of the note and deed of trust. On January 31, 2003, the

parties signed a note of extension wherein the White lien’s due date was extended to June 30,

2023. The note of extension was recorded on April 20, 2004.5

¶4. The Whiteheads filed for Chapter 12 bankruptcy on June 18, 2007, in the United

States Bankruptcy Court for the Northern District of Mississippi. On July 19, 2007, the Bank

filed its proof of claim for $518,295.83 and attached the deed of trust recorded on February

28, 2002, the deed of trust recorded on August 4, 1994, and a Uniform Commercial Code

(UCC) financing statement on the farm equipment. On August 10, 2007, White filed her

proof of claim for $265,517.48 and attached the deed of trust recorded on January 22, 2002,

which in addition to the land references a UCC-1 on the cows, dairy equipment, and farm

equipment. The promissory note which was dated January 18, 2002, two additional notes and

ledgers, and records of payments were also attached to White’s proof of claim.

¶5. On June 23, 2008, the Bank filed a notice of breach of order granting relief from

4
The Whiteheads’ deed of trust was recorded in deed book 548 at page 52 of the
Winston County land records.
5
The Whiteheads’ note of extension was recorded in deed book 583 at page 126 of
the Winston County land records.

4
automatic stay in the Whiteheads’ bankruptcy proceeding and after being granted permission

by the bankruptcy court, the Bank conducted a non-judicial foreclosure sale on August 5,

2008. White was present at the foreclosure sale but did not bid on the subject property. A

credit bid by the Bank of $566,937.99 was the only bid made at the sale. Importantly, there

were no cash sale proceeds in excess of the secured debt owed to the Bank. The foreclosure

sale was evidenced by a substituted trustee’s deed (“foreclosure deed”) recorded on October

7, 2008.6 On August 22, 2008, the bankruptcy court entered an agreed order pursuant to a

prior ore tenus motion by the bankruptcy trustee for authorization to auction the subject real

property. The order was not agreed to by the Bank nor was it signed by the Bank. However,

White signed the agreed order. The order stated in part that White was the beneficiary of the

second deed of trust and the Bank was the beneficiary of the first deed of trust. The auction

referenced in the agreed order never took place. After the Bank received the trustee deed for

the subject property, it parceled out all of its rights, title, and interest to third-party purchasers

by virtue of special warranty deeds. All of the third-party purchasers were named additional

defendants in White’s complaint.

¶6. On September 22, 2008, the Whiteheads filed a complaint for declaratory judgment

in the Winston County Chancery Court seeking to cancel White’s deed of trust and release

her lien against the subject property. On November 4, 2009, the Whiteheads’ complaint was

dismissed without prejudice pursuant to Mississippi Rules of Civil Procedure Rule 41(d).

6
The foreclosure deed was recorded in deed book 311 at page 270.

5
¶7. On April 20, 2009 White filed a complaint against Gary for breach of contract based

on the promissory note dated April 15, 2004, that had been secured by the White deed of

trust.7 The April 15, 2004 note was a renewal of the original January 18, 2002 note. The

parties ultimately reached a settlement in favor of White. On August 24, 2011, a judgment

was entered in which Gary and his wife Carol would pay White $15,000 plus 8 percent post-

judgment interest until the judgment was paid in full.

¶8. On June 7, 2016, White filed her complaint for declaratory judgment and other relief,

against Truman and Ruby Whitehead, Robert Thomas, Citizens Bank of Philadelphia, Carol

Taff, Bethel Baptist Church, Perkinsville Inc.,Thomas Boydstun, Leah Boydstun, Ben Kirk,

James Whitehead, Alyssa Whitehead, Kevin Whitehead, Tami Whitehead, Gary Whitehead,

Carol Whitehead, Bankfirst Financial Services, Timothy Gowan and Does 1-10, which is the

subject of this appeal. White subsequently filed her first amended complaint for a

declaratory judgment and other relief on November 10, 2016. White’s complaint asserted

that she had a first lien against the subject property and requested a judgment granting her

a priority lien on the legal theories of equitable subrogation and unjust enrichment.

¶9. On November 10, 2016, Gary filed his motion for summary judgment, which was later

joined by the remaining defendants, including the Bank. Gary’s motion for summary

judgment asserted legal theories under which his motion should be granted, including

judicial estoppel, res judicata, the statute of limitations, legal estoppel by acknowledgment

7
This was recorded in cause number 2009-088-CVL.

6
of lien position, laches, waiver, and unclean hands.

¶10. On June 22, 2017, the chancery court held oral arguments on Gary’s motion for

summary judgment. At the oral argument, the court declined to consider three depositions

that White attempted to present. Approximately one year later, on May 21, 2018 the

chancery court requested that the parties submit findings of facts and conclusions of law by

June 25, 2018, for the court’s consideration. On September 24, 2018, the chancery court

entered an order granting the defendants’ motion for summary judgment as well as a final

judgment. The final judgment held as follows: (1) the summary judgment was granted, (2)

White’s first amended complaint for declaratory judgment and other relief was dismissed,

(3) the White deed of trust and all liens arising out of the same were subordinate to the Bank

deed of trust, (4) as a result of the 2008 non-judicial foreclosure, the White deed of trust as

well as any other subordinate liens were “wiped out,” (5) by virtue of the subordinate deeds

being wiped out, all persons who received ownership interests in the subject property via

conveyance from the Bank took title free and clear, (6) the factual and legal issues

adjudicated by granting the summary judgment, were dispositive of all other counter-claims

or cross-claims, and (7) upon receipt of payment of applicable recording fees, a copy of the

final judgment would be recorded in the land records of Winston County, Mississippi.

¶11. After the oral argument but prior to the entry of the order granting defendants’ motion

for summary judgment and final judgment, the judge contacted the Bank’s attorney, Alan

Smith (“Smith”) requesting that he convert his proposed findings of fact and conclusions of

7
law into an order granting defendants’ motion for summary judgment. Via email dated

September 19, 2018, Smith circulated the order and final judgment to White’s attorney

wherein he disclosed his communication with the judge and court staff. On September 21,

2018, after learning of the judge’s phone call to Smith, White filed a motion to recuse and

for new trial.8 On October 23, 2018, the chancery court entered its opinion and final

judgment on White’s motion to recuse and motion for new trial, wherein both motions were

denied. Aggrieved by the final judgment and order granting defendants’ motion for summary

judgment entered on September 24, 2018, and the opinion and final judgment entered on

October 23, 2018.

STANDARD OF REVIEW

¶12. “The Court reviews a trial court’s grant or denial of summary judgment de novo.”

Collins v. City of Newton, 240 So. 3d 1211, 1216 (¶11) (Miss. 2018) (citing Crosthwait v.

Southern Health Corp. Of Houston Inc., 94 So. 3d 1070, 1073 (Miss. 2012)). Summary

judgment is proper when “the pleadings, depositions, answers to interrogatories and

admissions on file, together with the affidavits, if any, show that there is no genuine issue as

to any material fact [.]” M. R. C. P. 56(c). The evidence must be viewed in the light most

favorable to the opposing party. Collins, 240 So. 3d at 1216 (¶11).

ANALYSIS

I. Motion for Summary Judgment

8
There was not a hearing on White’s motion to recuse and motion for a new trial.

8
¶13. The motion for summary judgment asserted legal theories including: judicial estoppel,

res judicata, the statute of limitations, legal estoppel by deed, lien position, laches, waiver,

and unclean hands. However, the outcome of this case rests primarily on the issue of lien

priority. The Bank argues on appeal that the chancellor’s ruling on the core issue of lien

priority entitled the defendants to an order granting summary judgment. White argues on

appeal that the chancery court judge should have considered additional facts, testimony, and

evidence in support of her asserted claims under the legal theories of equitable subrogation

and unjust enrichment.

A. Lien Priority

¶14. On August 5, 2008, the Bank foreclosed on its deed of trust recorded on February 28,

2002. The 2002 deed of trust specifically stated, “THIS DEED OF TRUST IS A RENEWAL

AND EXTENSION OF THE ORIGINAL DEED OF TRUST DATED JULY 29, 1994[.]”

Further, the 2002 deed of trust set out five additional renewal and extension deeds of trusts

recorded between 1994 and 2002. The White deed of trust was recorded on January 22,

2002, after the Bank’s original deed of trust but before its last renewal and extension deed.

Finally, the White Deed of Trust contained language stating that it was “SUBJECT TO

EXISTING FIRST DEED OF TRUST.”

¶15. “In Mississippi, priority positions of deeds of trusts are ‘governed by the priority in

time of the filing of the several instruments.’” The Pennington Group LLC v. PriorityOne

Bank, 228 So. 3d 880, 884 (¶10) (Miss. Ct. App. 2017) (quoting Miss. Code Ann. § 89-5-5

9
(Rev. 2011)). In Smith v. Childress, the Mississippi Supreme Court held that a subsequent

loan which was made as a renewal or extension of a prior loan will keep the priority status

of the original deed of trust and prevail against intervening lien holders. 119 Miss. 20, 80

So. 245, 346 (1919). The law established in Smith as to the priority of subsequent renewal

deeds of trust was reaffirmed by this Court in the 2017 Pennington Group case. Id.

¶16. The law is clear that subsequent deeds of trust that serve as renewals or extensions of

prior deeds of trust should be given the same priority date as the original deed of trust.

Further, any intervening deeds of trust are subject to the lien of the original deed of trust. It

is clear by virtue of the plain language of the Bank’s 2002 deed of trust that it was a renewal

deed of trust relating back to the original deed of trust recorded on August 4, 1994. Further,

and important to the resolution of this case, the White deed of trust contained language that

it was subject to the existing first deed of trust. The chancery court held that as a matter of

law, the Bank’s deed of trust had priority over the White deed of trust. In finding that the

Bank’s deed of trust had priority over the White’s deed of trust, the chancery court further

found that the 2008 non-judicial foreclosure sale on the Bank’s deed of trust was valid and

in turn extinguished the rights of all subordinate lienholders, including White. It is

undisputed that the sale price of the property at the foreclosure sale was less than the amount

owed on the first deed of trust to the Bank and the Bank was the prevailing bidder as a result

of its credit bid. Finding no error with the chancery court’s ruling, we affirm as to issue of

lien priority. Because we affirm the ruling of the chancery court that the Bank’s deed of trust

10
takes priority status over White’s as a matter of law, there is no need to discuss the additional

remedies asserted in the summary judgment motion and outlined in the order granting the

defendants’ motion for summary judgment.

B. Equitable Subrogation

¶17. White argues on appeal that the chancery court should have considered additional

facts, testimony, and evidence in support of her claims arising out of equitable subrogation

despite a potential finding that the Bank had priority over her deed of trust. Specifically,

White alleges that her lien should be given priority over the bank to preserve fairness and

equity. The Bank argues that White is not entitled to equitable subrogation due to her actual

knowledge of the existing deed of trust held by the Bank.

¶18. The Supreme Court of Mississippi has defined equitable subrogation as:

[A]n equitable doctrine whereby a court may circumvent the race-notice
principles and substitute a later-filed lien into the primary lien holder position
on a tract of real estate, such that the substitute creditor ‘succeeds the rights of
the other in relation to the debt or claim, and its rights, remedies or securities.’

Community Trust Bank of Miss v. First Nat’l. Bank of Clarksdale, 150 So. 3d 683, 687 (¶11)

(Miss. 2014) (citing First Nat’l Bank of Jackson v. Huff, 441 So. 2d 1317, 1319 (Miss.

1983)). The application of equitable subrogation is extremely fact-specific to each case and

should be analyzed on a case by case basis. Id.

The doctrine of subrogation is one of equity and benevolence; its basis is the
doing of complete, essential, and perfect justice between the parties, without
regard to form, and its object is the prevention of injustice. It does not rest on
contract, but upon principles of natural equity.

11
Id. (citing Prestridge v. Lazar, 132 Miss. 168, 95 So. 837, 838 (1923)). However, there are

certain notice factors that may serve as an absolute bar to the application of equitable

subrogation. While constructive notice of a lien and negligence are not bars to equitable

subrogation, “The general rule is that actual knowledge and culpable negligence are the only

absolute bars to subrogation.” Prestridge, 95 So. at 838; Community Trust Bank of

Mississippi, 150 So. 3d at 690.

¶19. The White deed of trust includes specific language that states that it is “SUBJECT TO

EXISTING FIRST DEED OF TRUST.” The chancery court held that this language in

White’s deed of trust is a clear acknowledgment and admission by White that on the date that

she executed her deed of trust, she had actual knowledge that she had a subordinate lien on

the subject property. Further, White had an attorney representing her interest throughout the

bankruptcy hearing, wherein an agreed order was signed by her attorney recognizing the

Bank’s priority lien in the subject property. In finding that White had actual knowledge of

a priority lien, the chancery court held that White’s knowledge was an absolute bar to her

claim to invoke the doctrine of equitable subrogation. Finding no error in the chancery

court’s ruling, we affirm as to the application of equitable subrogation.

C. Unjust Enrichment

¶20. Finally, White asserted unjust enrichment in her complaint. She alleged that the

Whiteheads used the money secured by her deed of trust to pay down the amount owed to the

Bank; however, there was no evidence presented that would substantiate her assertions.

12
Under Mississippi law, the doctrine of unjust enrichment or recovery in quasi
contract applies to situations where there is no legal contract but where the
person sought to be charged is in possession of money or property which in
good conscience and justice he should not retain but should deliver to another,
the courts imposing a duty to refund the money or the use value of the property
to the person to whom in good conscience it ought to belong.

Kersey v. Fernald, 911 So. 2d 994, 997 (¶13) (Miss. Ct. App. 2005) (citing Dew v. Langford,

666 So. 2d 739, 745 (Miss. 1995)). The chancery court held that White’s claim for unjust

enrichment should be denied with prejudice not only for the lack of evidence presented but

further because of the existence of a legal contract. The court held that the bankruptcy

agreed order wherein the property lien issue was addressed should be considered a legal

contract to bar her claim for unjust enrichment. After review, we find no error in the

chancery court’s ruling. Thus, we affirm as to the issue of unjust enrichment.

II. Motion to Recuse

¶21. White also argues on appeal that the chancery court judge violated Mississippi Code

of Judicial Conduct, Canon 2A and Canon 3B(7). The basis for her allegation is an ex parte

communication between the judge and the attorney for the Bank, wherein the judge requested

the Bank’s attorney to submit his findings of fact and conclusions of law in the form of an

order and re-submit to his office. The phone call occurred on September 18, 2018, and

White’s attorney was made aware of the phone call the following day, September 19, 2018.

White asserts that as a result of the alleged violation, the chancery court judge should have

recused himself pursuant to Uniform Chancery Court Rule 1.11 and granted her motion for

a new trial pursuant to Rule 59 of the Mississippi Rules of Civil Procedure. The Bank argued

13
in its response to White’s motion and incorporated into its brief that the ex parte

communication fell under the “administrative purpose” exception in Mississippi Code of

Judicial Conduct, Canon 3(7)(a). The Bank asserts that as there was no violation of the

Mississippi Code of Judicial Conduct, there was no error in the chancery court judge’s ruling

which denied White’s request for recusal and for a new trial.

¶22. Canon 2A of the Mississippi Code of Judicial Conduct states, “A judge shall respect

and comply with the law and shall act at all times in a manner that promotes public

confidence in the integrity and impartiality of the judiciary.” Further, Canon 3B(7) states in

part:

A judge shall accord to all who are legally interested in a proceeding, or their
lawyers, the right to be heard according to law. A judge shall not initiate,
permit, or consider ex parte communications, or consider other
communications made to the judge outside the presence of the parties
concerning a pending or impending proceeding . . . .

However there is an exception to the rule regarding ex parte communications as follows in

Canon 3B(7)(a)(i-ii):

Where circumstances require, ex parte communications for scheduling,
administrative purposes or emergencies that do not deal with substantive
matters or issues on the merits are authorized, provided: (i) the judge
reasonably believes that no party will gain a procedural or tactical advantage
as a result of the ex parte communication, and (ii) the judge makes provision
promptly to notify all other parties of the substance of the ex parte
communication and allows an opportunity to respond.

In Zimmerman v. Three Rivers Planning Development District, 747 So. 2d 853, 857 (¶10)

(Miss. Ct. App. 1999). this Court held that a telephone conversation “regarding a scheduling

14
matter and mailing him, at his request, a proposed memorandum order and opinion after

making his decision to dismiss the complaint . . . .” was considered an exception within under

the scheduling and administrative exception.

¶23. In the case at hand, the ex parte phone call occurred approximately three months after

the parties submitted their findings of facts and conclusions of law and over a year after the

oral argument on the summary judgement motion. Further, the subject of the conversation

was solely the conversion of the form of the documents to prepare an order reflecting the

ruling upon which the court had already decided. That being said, the conversation between

counsel for the Bank and the chancery court judge did not deal with substantive matters nor

was either party given a tactical advantage as a result of the conversation. Finally the chain

of emails concerning the circulation of the final judgment and order granting defendants’

motion for summary judgment showed that White was made aware of the Bank’s attorney

and the chancery court judge’s conversation on the very next day. White was not deprived

of any time to respond to the communication. The chancery court judge held and we affirm

that there was no violation of the Mississippi Code of Judicial Conduct, Canon 2(A) or

3B(7). In affirming that there was no violation of the Mississippi Code of Judicial Conduct,

we find no error in the chancery court judge’s final judgment denying White’s motion to

recuse and motion for new trial. 9

9
Before filing her notice of appeal, White filed a motion asserting that the chancery
court judge should have recused himself. See M.R.A.P. 48B. A three-justice panel entered
an order passing the motion for consideration with the merits of the appeal. The parties

15
CONCLUSION

¶24. The Bank’s deed of trust recorded on February 28, 2002, clearly takes priority over

White’s deed of trust dated January 22, 2002, as a matter of law. The bank’s 2002 deed of

trust was a renewal deed of trust relating back to its original 1994 deed, therefore taking

priority. Further, White failed to prove that her deed of trust should have been given priority

by virtue of the legal theories of equitable subrogation or unjust enrichment. Finally, given

that there was no violation of the Mississippi Code of Judicial Conduct by the chancery court,

the court correctly held that White’s motion for recusal and motion for a new trial should be

denied. Therefore, we affirm the ruling of the chancery court as to the motion for summary

judgment, motion to recuse, and motion for a new trial.

¶25. AFFIRMED.

CARLTON AND J. WILSON, P.JJ., GREENLEE, WESTBROOKS,
McDONALD, McCARTY AND C. WILSON, JJ., CONCUR. BARNES, C.J., NOT
PARTICIPATING.

addressed the recusal issue in their appellate briefs. For the reasons discussed above,
White’s Rule 48B motion is denied.

16