A Motion to Strike Cannot Substitute for Partial Summary Judgment on a Loan Clause’s Enforceability

1. Introduction

In Priority One Bank v. Hall, the Mississippi Supreme Court addressed the procedural method for challenging a construction-loan provision as unconscionable. The underlying litigation involved defective-construction allegations, disputed loan disbursements, and an alleged financial relationship between a contractor and a bank officer. The appeal, however, turned on a narrower question: could the borrowers obtain a substantive ruling invalidating part of their agreement through a motion to strike?

The eight-justice majority, writing through Justice Griffis, answered no. It held that the borrowers should have sought partial summary judgment under Mississippi Rule of Civil Procedure 56 and complied with the applicable circuit-court procedural requirements. Chief Justice Randolph dissented, reasoning that the challenged clause was unconscionable and that the trial court’s decision should stand.

The controlling precedent is procedural, not substantive: the Court did not decide whether the challenged provision was enforceable, whether the borrowers had waived their objection, or whether their challenge was timely.

2. Background and Procedural History

The construction project and disputed conduct

Derek and Keisha Hall hired Jose Silva to build their home in 2018 and obtained construction financing from Priority One Bank. Harvey Lott served as a bank loan officer and division president. The initial loan principal was $346,689.50; after changes to the plans, the bank approved an increase to $408,711. The parties signed a Construction Loan Agreement in June 2018.

After moving into the house, the Halls obtained an independent inspection and alleged deficiencies involving air conditioning, ventilation, electrical outlets, woodwork, sinks, and plumbing. They sued the bank, Lott, Silva, and others, asserting breach of contract and additional claims involving misrepresentation, fraud, conspiracy, supervision, good faith and fair dealing, warranties, and emotional distress.

The Halls alleged that the bank and Lott inadequately inspected construction and permitted disbursements without the Halls’ approval. They also alleged a secret, profit-generating relationship among defendants. Silva testified that he and Lott referred customers to one another and that he paid Lott “tips” on several projects, including the Halls’ home. Lott denied receiving tips, gifts, or kickbacks. The Halls themselves testified that they had not seen evidence of a kickback scheme.

The purpose of the bank’s inspections was also disputed in significance. Lott testified that inspections protected the bank by confirming construction progress, rather than assuring workmanship. He further testified that some contractor advances preceded completed work and that he communicated verbally with Derek before advances to Silva. These matters remained disputed; the Supreme Court did not resolve them.

The challenged contractual provision

The provision at issue stated:

This Agreement is for the sole benefit of Lender and Lender's successors and assigns, and binds Borrower and its successors, assigns, executors, heirs, administrators and personal representatives. All conditions to Lender's obligation to make any Advance are solely for Lender's benefit. No other person or entity shall have standing to require satisfaction of those conditions or be deemed to be the beneficiary of those conditions.

The Halls argued that this language conflicted with the agreement’s advance requirements, operated oppressively, deprived them of contractual benefits and remedies, and improperly insulated the bank and Lott from responsibility. They sought to strike the provision and establish that the advance requirements applied to the bank and Lott.

The route to the Supreme Court

The bank previously sought summary judgment on several grounds, including lack of supporting evidence, waiver through loan modifications, and limitations. The trial court denied that motion because the bank had not established the absence of genuine issues of material fact. The Supreme Court denied interlocutory review of that ruling on January 10, 2025.

The Halls subsequently filed their “Motion to Strike Contract Provision.” The bank opposed it on three principal grounds: unconscionability had not been pleaded; the dispositive-motion deadline had passed more than a year earlier; and the clause was substantively valid and customary in construction lending.

The circuit court nevertheless declared the provision “void, invalid, and unconscionable” and struck it. The Supreme Court granted interlocutory review of that ruling and stayed the proceedings. The earlier denial of review did not adjudicate the merits of the later contract-enforceability dispute.

3. Summary of the Opinion

The Supreme Court reversed the order striking the provision and remanded for further proceedings. Its principal conclusions were:

1. Rule 12(f) concerns pleadings. It authorizes striking specified improper matter from a pleading, not invalidating substantive terms of a contract.
2. The loan agreement was not a pleading. The Halls conceded that point under Rule 7(a), while maintaining that their motion was not brought under Rule 12(f).
3. A substantive enforceability ruling required proper dispositive procedure. The Court directed the parties to partial-summary-judgment practice under Rule 56(c) and (d), with compliance with Rule 4.02 of the Uniform Civil Rules of Circuit and County Court Practice.
4. The merits remained open. The Court expressly declined to decide timeliness, waiver, and unconscionability.

The reversal therefore removed the existing order invalidating the clause, but it did not establish that the clause was valid or immunize any defendant from liability.

4. Analysis of the Majority’s Reasoning

A. The scope of a motion to strike

Rule 12(f) permits a court to strike from a pleading an insufficient defense or redundant, immaterial, impertinent, or scandalous matter. Its function is to address the contents of pleadings, not to rewrite the parties’ underlying agreement.

The Halls’ motion sought more than removal of objectionable allegations. It asked the court to declare a contractual provision unenforceable and thereby alter the legal framework governing their claims. For the majority, that was an important substantive determination requiring an authorized procedural vehicle.

The Halls argued that their motion was simply a request for judicial review of unconscionability, rather than a Rule 12(f) motion. That explanation did not resolve the majority’s concern: the motion identified no governing procedural authority, and the relief sought belonged within established dispositive-motion practice.

B. Partial summary judgment can resolve less than the entire case

The dissent stressed that deleting one clause would not dispose of the Halls’ entire lawsuit. The majority nevertheless treated the clause’s enforceability as an issue appropriate for partial summary judgment.

This distinction is central. A motion may be dispositive as to a particular legal issue without ending every claim. The continued existence of fraud or other extracontractual claims did not make the enforceability question merely administrative or evidentiary.

The bank had identified both judgment on the pleadings under Rule 12(c) and summary judgment under Rule 56 as possible procedural alternatives. The Court’s ultimate direction was more specific: the proper motion in this case was partial summary judgment under Rule 56(c) and (d).

C. Compliance matters beyond the motion’s title

The majority acknowledged that the circuit court effectively treated the Halls’ request as a partial-summary-judgment motion. It nevertheless found that the court had not required compliance with Rule 4.02 of the Uniform Civil Rules of Circuit and County Court Practice.

Accordingly, the decision is not merely an instruction to change a caption. It requires parties and courts to use the procedural framework governing the substantive relief requested. The majority expressly connected enforcement of those requirements to preserving the integrity of procedural rules generally.

D. The Court rejected the motion-in-limine characterization

Chief Justice Randolph characterized the motion as, in substance, a motion in limine. The majority rejected that approach because neither the Halls’ motion, the related trial-court materials, the order, nor the appellate briefs framed the request as one to exclude evidence or used the terminology “in limine.”

The distinction also reflects the nature of the requested relief. An evidentiary ruling ordinarily regulates what may be presented at trial; the Halls sought a declaration affecting the legal enforceability of a contract term. The majority would not sustain that substantive determination through an evidentiary characterization the Halls had not advanced.

E. Matters deliberately left undecided

The opinion cited the rule that contract interpretation presents a question of law reviewed de novo. But the Court stopped at the procedural defect rather than independently deciding unconscionability.

Its reservation of other questions is consequential. Although the Court noted that unconscionability first appeared in the motion rather than the complaints, it did not hold the challenge waived. Nor did it decide whether a properly framed motion would be timely despite the bank’s scheduling objection. Remand was not a guarantee that a renewed motion would succeed procedurally or substantively.

5. Precedents Cited and Their Significance

A. Standard of review and availability of contract defenses

Sanderson v. Sanderson, 170 So. 3d 430, 434 (Miss. 2014)

The majority cited this decision for the proposition that contract interpretation is a question of law reviewed de novo. It supplied the appellate-review framework, but did not require the Court to reach the contract’s substantive meaning after identifying a procedural error.

Harris v. Harris, 988 So. 2d 376, 378 (Miss. 2008)

This authority appeared through the quotation from Sanderson v. Sanderson and supported the same standard of review. The opinion did not draw a separate substantive contract rule from it.

E. Ford, Inc. v. Taylor, 826 So. 2d 709, 714 (Miss. 2002)

The Court relied on this case to acknowledge that ordinary contract defenses—including fraud, unconscionability, duress, and lack of consideration—may invalidate contractual provisions. Its importance is limiting: the majority accepted unconscionability as a recognized doctrine while rejecting the particular procedure used to obtain relief.

B. Limits on motions to strike

Southland Broad. Co. v. Tracy, 210 Miss. 836, 50 So. 2d 572 (1951)

The majority repeatedly invoked this case’s warning that motions to strike should not replace regular pleading procedures or settle important questions and the merits of a case. The underlying dispute concerned an attempt to strike allegations about a driver’s drinking habits after the defendants had already joined issue on the subject.

The dissent also relied on the decision, emphasizing that removing this clause would not end the litigation. The competing uses reveal the central disagreement: the majority focused on the substantive importance of the enforceability issue, while the dissent focused on the survival of the rest of the lawsuit.

There is an internal tension in the majority’s treatment of this authority. After relying on it in paragraphs 25 and 27, the opinion states in paragraph 30 that it is “simply not applicable” because it predates the Mississippi Rules of Civil Procedure. The opinion does not expressly reconcile those statements. The operative holding nevertheless rests on the current rules and the express direction to use Rule 56.

McDowell v. Minor, 158 Miss. 788, 131 So. 278 (1930)

This decision appeared within the majority’s extended quotation from Southland Broad. Co. v. Tracy. It criticized substituting a motion to strike for appropriate formal pleadings and described narrow historical circumstances in which striking was available. Its role was historical support for procedural regularity, rather than an independent construction of modern Rule 12(f).

Daigle v. Daigle, 626 So. 2d 140, 144 (Miss. 1993)

The majority cited its statement that Rule 12(f) concerns motions to strike pleadings. That description reinforced the distinction between a pleading and a loan agreement. The Court found no Mississippi authority authorizing the use of Rule 12(f) to obtain the contractual relief sought here.

C. Motions in limine

Owens v. Mississippi Farm Bureau Casualty Insurance Co., 910 So. 2d 1065, 1077 (Miss. 2005)

The dissent cited this case under the abbreviated title Owens v. Miss. Farm Bureau Cas. Ins. Co. to show that Mississippi courts recognize motions in limine.

The majority distinguished it closely. The appeal in that case concerned a directed-verdict ruling and a defense jury verdict, including allegations of prejudicial questioning and remarks. The Court observed that a carefully drafted motion in limine might have moderated how certain information reached the jury, but it did not decide a motion in limine or authorize one to invalidate contractual language. Recognition of an evidentiary procedure therefore did not establish its suitability here.

D. Unconscionability and severance authorities

Covenant Health & Rehabilitation of Picayune, LP v. Estate of Moulds ex rel. Braddock, 14 So. 3d 695 (Miss. 2009)

The majority distinguished this authority because it involved a motion to compel arbitration. It did not regard the arbitration setting as supporting the motion used in this case.

The dissent cited it as Covenant Health & Rehab. of Picayune, LP v. Est. of Moulds ex rel. Braddock for three available responses to unconscionability: refuse to enforce the contract, enforce the remainder without the offending clause, or limit the clause’s application to avoid an unconscionable result. That framework supported the dissent’s view that the trial court could remove one provision while allowing the litigation to continue.

The decision also supplied the dissent with substantive descriptions of oppressive terms and contractual imbalance. The majority did not reject those principles; it declined to apply them through the procedure before it.

Caplin Enterprises, Inc. v. Arrington, 145 So. 3d 608 (Miss. 2014)

The majority likewise distinguished this case as involving a motion to compel arbitration. The dissent, using the title Caplin Enters., Inc. v. Arrington, relied on its definition of unconscionability and its instruction to examine the agreement’s terms for abuses, frustrated expectations, and gross disparity between the parties.

The competing treatment illustrates the divide between substantive doctrine and procedural authority: a case may explain unconscionability without authorizing every procedural method of presenting it.

Russell v. Performance Toyota, Inc., 826 So. 2d 719, 725 (Miss. 2002)

The dissent cited this decision for the proposition that an arbitration agreement could remain binding even if its limitation period were void. It supported severability—the possibility of preserving an agreement while removing an objectionable term—not the particular motion used by the Halls.

Entergy Miss., Inc. v. Burdette Gin Co., 726 So. 2d 1202, 1207 (Miss. 1998)

Quoted through Caplin Enters., Inc. v. Arrington, this case supplied the formulation combining absence of meaningful choice with terms unreasonably favorable to the other party. The dissent used that formulation to evaluate the lender-only benefit language. The majority made no finding on either component.

Bank of Ind., Nat'l Ass'n v. Holyfield, 476 F. Supp. 104, 110 (S.D. Miss. 1979)

Quoted through the Mississippi unconscionability authorities, this federal district-court decision described oppressive agreements that deprive one party of contractual benefits or leave that party without a remedy for the other’s breach. It supported the dissent’s substantive analysis, but did not become a holding that the Halls had actually lost all remedies under this agreement.

6. The Dissent: One-Sided Benefit Language and Severability

Chief Justice Randolph would have affirmed. He viewed the challenged ruling as the permissible removal of one unconscionable clause from a larger agreement, rather than an effort to dispose of the entire case. He also considered the majority’s procedural distinction an elevation of form over substance.

His substantive objection centered on the declaration that the agreement existed for the “sole benefit of Lender.” In his reading, that wording did more than exclude unrelated third-party beneficiaries: it expressly denied the borrower any contractual benefit while continuing to bind the borrower.

The dissent contrasted the provision with language in a Fannie Mae agreement identified in the Mississippi Bankers Association’s amicus brief:

This Loan Agreement is for the sole benefit of Lender and me and is not for the benefit of anyone else.

For the dissent, “and me” was decisive because it preserved the borrower’s position while excluding outsiders. He considered its omission to create unreasonable favoritism and a gross disparity inconsistent with contractual expectations.

That analysis provides a substantive roadmap for a future challenge, but it is not controlling. Nor did the majority adopt the dissent’s view that adding those words would eliminate every unconscionability concern. The effect of the separate language reserving advance conditions to the lender also remained undecided.

7. Potential Impact

Procedural discipline in contract litigation

The immediate practical lesson is that litigants seeking to invalidate a contractual provision must use a procedure suited to that substantive determination. In this litigation, that means partial summary judgment under Rule 56 and compliance with Rule 4.02—not an unsupported motion to strike.

The decision also confirms that an issue can require dispositive-motion safeguards even when resolving it will not terminate the lawsuit. Surviving claims do not convert a substantive contract ruling into a routine evidentiary matter.

No substantive safe harbor for lenders

The bank’s procedural victory does not establish that lender-benefit clauses are generally enforceable, that customary language is necessarily fair, or that the bank owed no duties concerning disbursements or inspections. Those issues were not decided.

Nevertheless, the dissent gives lenders and borrowers a reason to examine whether drafting intended to exclude third parties inadvertently appears to exclude the borrower as well. That is a drafting caution, not a new majority-imposed requirement.

Limits on the decision’s reach

The opinion should not be read to require summary judgment for every unconscionability issue in every procedural setting. The majority distinguished cases involving motions to compel arbitration; it did not invalidate that established context for considering contractual defenses.

Nor does the remand automatically cure pleading omissions or reopen expired deadlines. Because the Court reserved waiver and timeliness, those objections may still matter in subsequent proceedings.

8. Complex Concepts Simplified

Interlocutory appeal

An appeal of an intermediate ruling before the entire lawsuit has ended. Here, the Supreme Court reviewed the order striking the clause, not a final liability judgment.

Pleading

A formal document stating claims or responses, such as a complaint or answer. The parties agreed that their loan agreement was not itself a pleading.

Motion to strike

A request to remove specified improper matter from a pleading. It does not ordinarily serve as a vehicle for declaring a contractual provision unenforceable.

Partial summary judgment

A ruling resolving a legal issue or part of a case without trial when the applicable summary-judgment requirements are satisfied. Other issues may remain for trial.

Unconscionability

A doctrine permitting courts to refuse enforcement of sufficiently oppressive contractual arrangements. The cited authorities discuss meaningful choice, unreasonable favoritism, and deprivation of benefits or remedies.

Severability

Preserving the remainder of an agreement while declining to enforce an offending provision.

Motion in limine

A preliminary request commonly used to regulate evidence at trial. The majority rejected treating the Halls’ enforceability challenge as such a motion.

De novo review

Independent appellate review of a legal question, without deference to the trial court’s legal conclusion.

Third-party beneficiary

Someone outside the contracting parties who may have enforceable rights under an agreement. The dispute concerned whether language excluding others also improperly excluded the borrowers from contractual protection.

9. Conclusion

Priority One Bank v. Hall establishes that a motion to strike cannot substitute for the proper dispositive procedure when borrowers seek a substantive ruling invalidating a construction-loan clause. The Court required partial-summary-judgment practice and reversed without deciding unconscionability, waiver, or timeliness.

The broader lesson is the separation of procedural entitlement from substantive entitlement: a potentially valid contract objection must still be presented correctly. The dissent identifies a significant concern about lender-only benefit language, but the enforceability of this provision remains unresolved.