Background
Derek and Keisha Hall hired Jose Silva in 2018 to build their home and obtained construction financing through Priority One Bank and loan officer Harvey Lott. The initial loan was $346,689.50 and later increased to $408,711 after plan modifications. After moving into the home in January 2019, the Halls obtained an inspection identifying problems including air conditioning, ventilation, electrical outlets, woodwork, sinks, and plumbing.
The Halls sued the bank, Lott, Silva, and others for breach of contract and additional claims, including fraudulent and negligent misrepresentation, conspiracy, fraud, breach of the duty of good faith and fair dealing, and emotional-distress claims. They alleged inadequate construction inspections and unauthorized loan disbursements. Silva testified that he and Lott referred business to each other and that he gave Lott tips on several jobs, including the Halls’ home. Lott denied accepting gifts, kickbacks, or tips and denied referring customers to Silva. Derek and Keisha Hall each testified that they had not seen evidence of a kickback scheme.
The bank’s earlier summary-judgment motion was denied, and its first petition for interlocutory appeal was denied on January 10, 2025. The Halls then filed a “Motion to Strike Contract Provision,” raising unconscionability for the first time. The circuit court struck as “void, invalid, and unconscionable” the provision stating that the agreement was for the lender’s sole benefit and that conditions to advances were solely for the lender’s benefit. The Supreme Court subsequently granted the bank’s interlocutory appeal and stayed the trial proceedings.
The Court’s Holding
The Supreme Court reversed. Reviewing contract interpretation de novo, the majority held that the motion to strike was not the appropriate procedural avenue for determining whether the loan provision was unconscionable and unenforceable. Mississippi Rule of Civil Procedure 12(f) authorizes striking insufficient defenses or redundant, immaterial, impertinent, or scandalous matter from pleadings. The Halls agreed that the loan agreement was not a pleading under Rule 7(a) and maintained that their motion was not brought under Rule 12(f).
The majority concluded that the circuit court had effectively treated the request as a motion for partial summary judgment under Rule 56(c), without requiring compliance with Rule 4.02 of the Uniform Civil Rules of Circuit and County Court Practice. Because unconscionability was an important substantive question affecting the case’s outcome, it should have been presented through a dispositive motion. The court identified partial summary judgment under Rule 56(c) and (d), accompanied by compliance with Rule 4.02, as the proper procedure.
The court expressly declined to decide whether the motion was timely, whether unconscionability had been waived, or whether the provision actually was unconscionable and unenforceable. It therefore reversed the order striking the clause and remanded for further proceedings, without resolving the merits of the Halls’ underlying claims.
Key Takeaways
- A contract’s enforceability should not be resolved through a motion to strike when the contract is not a pleading subject to Rule 12(f).
- The court prescribed a Rule 56(c) and (d) partial-summary-judgment motion, with Rule 4.02 compliance, for this unconscionability issue.
- The reversal was procedural: the majority did not decide timeliness, waiver, or whether the clause was substantively unconscionable.
Why It Matters
The decision requires Mississippi litigants to use the appropriate dispositive-motion procedure when seeking a substantive ruling on a contract provision’s enforceability. It leaves the challenged clause’s validity unresolved on remand and does not adjudicate the Halls’ remaining claims.
Chief Justice Randolph dissented. He viewed the motion as functionally a motion in limine rather than a case-ending motion and would have upheld the circuit court’s unconscionability ruling. He reasoned that the clause benefited only the lender and, unlike the Fannie Mae language discussed in the Mississippi Bankers Association’s amicus brief, omitted “and me” language protecting both lender and borrower. That analysis was not adopted by the majority.