Title: Chalmers v. Toyota Motor Sales, USA, Inc.

State: arkansas

Issuer: Arkansas Supreme Court

Document:

Hugh CHALMERS, et. al. v. TOYOTA MOTOR SALES,
USA, INC., et al.

95-891                                             ___ S.W.2d ___

                    Supreme Court of Arkansas
               Opinion delivered December 16, 1996


1.   Judgment -- grant of summary judgment -- standard of review. -
     - The standard for review of a grant of summary judgment is
     whether the evidentiary items presented by the moving party in
     support of the motion left a question of material fact
     unanswered and, if not, whether the moving party is entitled
     to judgment as a matter of law; the court views all proof in
     the light most favorable to the party opposing the motion,
     resolving all doubts and inferences against the moving party;
     however, once the moving party makes a prima facie showing of
     entitlement, the responding party must meet proof with proof
     to demonstrate that there is remaining a genuine issue of
     material fact; the response and supporting material must set
     forth specific facts showing that there is a genuine issue for
     trial.

2.   Limitation of actions -- two limitations periods involved --
     when limitations begin to run. -- The claims asserted by the
     appellants involved both the statute of limitations for breach
     of a written contract, five years, and the three-year statute
     of limitations found at Ark. Code Ann.  16-56-105(3) (1987);
     the limitations period found in Ark. Code Ann.  16-56-105(3)
     begins to run when there is a complete and present cause of
     action, and, in the absence of concealment of the wrong, when
     the injury occurs, not when it is discovered. 

3.   Limitation of actions -- statute of limitations raised as
     defense -- burden of proof. -- When the running of the statute
     of limitations is raised as a defense, the defendant has the
     burden of affirmatively pleading this defense; however, once
     it is clear from the face of the complaint that the action is
     barred by the applicable limitations period, the burden shifts
     to the plaintiff to prove by a preponderance of the evidence
     that the statute of limitations was in fact tolled.

4.   Limitation of actions -- fraud will suspend the running of
     statute -- how long suspension remains effective. -- 
     Fraud suspends the running of the statute of limitations, and
     the suspension remains in effect until the party having the
     cause of action discovers the fraud or should have discovered
     it by the exercise of reasonable diligence; no mere ignorance
     on the part of the plaintiff of his rights, nor the mere
     silence of one who is under no obligation to speak, will
     prevent the statute bar; there must be some positive act of
     fraud, something so furtively planned and secretly executed as
     to keep the plaintiff's cause of action concealed or
     perpetrated in a way that it conceals itself; and if the
     plaintiff, by reasonable diligence, might have detected the
     fraud he is presumed to have had reasonable knowledge of it.
  
5.   Limitation of actions -- three-year limitation applies to
     negligent acts -- fraudulent-concealment action may be suited
     to summary judgment. -- In determining when a negligent act
     occurs to begin the three-year statute of limitations, it has
     been determined that, at times, the beginning of the
     occurrence is a law question to be determined by the court; at
     other times, it is a fact question for the jury to determine;
     although the question of fraudulent concealment is normally a
     question of fact that is not suited for summary judgment, when
     the evidence leaves no room for a reasonable difference of
     opinion, a trial court may resolve fact issues as a matter of
     law.  

6.   Fraud -- mere allegations of fraud insufficient to create
     issue of material fact. -- Mere allegations of fraud,
     unsupported by evidence, are not enough to create an issue of
     material fact. 

7.   Limitation of actions -- appellant knew or should have known
     of alleged fraud at least six years prior to filing complaint
     -- statute of limitations had run. -- Where evidence clearly
     showed that the alleged wrong occurred at least six years
     prior to the filing of the complaint in 1993, letters 
     demonstrated that appellants knew or through reasonable
     diligence could have discovered the alleged fraud;
     furthermore, it was clear from the testimony of appellants'
     expert that the allegation of "dual pricing" was a further
     reference to the port-installed accessories, which appellant
     had known of since 1985; the evidence showed that the alleged
     wrong occurred even prior to 1987 and that appellants knew or
     through reasonable diligence could have discovered the alleged
     fraud and their other causes of action as early as 1987.
                                
8.   Limitation of actions -- fraudulent concealment alleged --
     promises to cure and offers of settlement admissible in action
     otherwise barred by statute of limitations. -- An offer of
     settlement is admissible as relevant to the issue of
     fraudulent concealment of a cause of action otherwise barred
     by a statute of limitations.

9.   Limitation of actions -- evidence showed no promise to cure or
     offer of settlement by appellee -- statue of limitations not
     tolled. -- Where the evidence submitted by appellants did not
     demonstrate conduct by appellees that could be considered a
     promise to cure or an offer of settlement, the statute of
     limitations was not tolled.

10.  Torts -- civil conspiracy defined. -- Civil conspiracy has
     been defined as a combination of two or more persons to
     accomplish a purpose that is unlawful, or oppressive, or to
     accomplish some purpose, not in itself unlawful, by unlawful,
     oppressive, or immoral means. 

11.  Torts -- continuous-tort theory not recognized in Arkansas --
     limitations begin to run at the date of the wrongful act. -- 
     The continuing-tort theory is not recognized in Arkansas; the
     continuing-tort theory of tolling the statute of limitations
     has been specifically rejected as inconsistent with the
     General Assembly's intent in stating that limitations begin to
     run at "the date of the wrongful act complained of and no
     other time." 

12.  Contracts -- Arkansas Unfair Practices Act applies to price
     discrimination in Arkansas -- statutes generally have no
     effect except within the state's territorial limits. -- The
     Arkansas Unfair Practices Act, by its very terms, applies to
     price discrimination between one area in Arkansas and another
     area in Arkansas; as a general rule, statutes have no effect
     except within the state's own territorial limits. 

13.  Contracts -- summary judgment granted to appellees not in
     error -- unfair practices act not applicable. -- Where
     appellants did not allege that there was any dual pricing
     within Arkansas, but instead argued for an extraterritorial
     application of the Arkansas Unfair Practices Act, under Ark.
     Code Ann.  4-75-207(b) (Repl. 1996), their argument was
     without merit; the Unfair Practices Act is not to be given
     application beyond the borders of Arkansas; the statute is
     penal in nature and must be strictly construed in favor of
     those upon whom the burden of the penalty is sought to be
     imposed; the trial court did not err in granting summary
     judgment to appellees on this claim.

14.  Appeal & error -- point not argued on appeal --  point waived.
     -- The appellants argument that the trial court erred in its
     dismissal of appellants' claims subject to no bar of any
     statute of limitations was waived on appeal where they
     presented no legal arguments or authority, but merely cited as
     an example certain objections and conduct by appellees'
     counsel during the taking of a deposition; failure to argue a
     point on appeal constitutes a waiver.  


     Appeal from Pulaski Circuit Court; Chris Piazza, Judge;
affirmed.
     Hargis, Wood, & Lockhart, by:  David M. Hargis, for
appellants.
     The Rose Law Firm, A Professional Association, by:  David L.
Williams and Vinson & Elkins, L.L.P., by:  Max Hendrick, III, for
appellees Gulf States Toyota, Inc. and Steven A. Woods.
     Wright, Lindsey & Jennings, by:  David M. Powell and Charles
L. Schlumberger, and Nelson, Mullins, Riley, & Scarborough, L.L.P.,
by: Stephen G. Morrison and Nina Nelson Smith, for appellee Toyota
Motor Sales, U.S.A., Inc.

     Andree Layton Roaf, Justice.
     The appellants filed suit against the appellees for breach of
contract, breach of implied contractual covenants of good faith and
fair dealing, fraud, interference of contract, violation of the
Arkansas Unfair Practices Act, and violation of the Arkansas
Franchise Practices Act.  The trial court granted summary judgment
for the appellees, holding that the Unfair Practices Act did not
apply to interstate price discrimination and that the remaining
claims were barred by the applicable statutes of limitations.  On
appeal, the appellants argue that the trial court erred in applying
the statutes of limitations because fraudulent concealment and the
Continuing Tort doctrine served to toll the running of the
statutes. The appellants further contend that the trial court erred
in finding that the Arkansas Unfair Practices Act did not apply to
their claims.  We find no error and affirm.
     Appellee Toyota Motor Sales, USA, Inc. ("TMS") is the
exclusive importer for Toyota vehicles in the continental United
States.  TMS uses a system of twelve multi-state distribution
regions, and sells imported and domestically produced vehicles to
these regional distributors.  The vehicles are in turn sold by the
twelve distributors to Toyota dealers in their regions.  
     Appellee Gulf States Toyota ("GST") is a privately owned
corporation and is the regional distributor for the states of
Texas, Oklahoma, Mississippi, Louisiana, and Arkansas.  Only GST
and one other regional distributor are not owned by TMS.  Appellee
Steve Woods is a former GST employee who served as its district
sales manager responsible for the state of Arkansas during 1989-
1993.  Appellee Toyota Motor Distributors ("TMD") is a wholly owned
subsidiary of TMS and is the regional distributor for Tennessee and
several other states.  
     The appellants Hugh Chalmers Chevrolet-Cadillac-Toyota, Inc.,
and its owners, Hugh B. Chalmers, and Hugh B. Chalmers, Jr. ("the
Chalmers"), are located in West Memphis, Arkansas, and became a
Toyota dealership in 1976 by entering into a Toyota Dealer
Agreement with GST.  
     On February 6, 1987, Hugh Chalmers wrote a letter to the
president of GST expressing dissatisfaction with its vehicle
distribution policy.  Chalmers complained of an inequitable
distribution of Toyotas which had increased over the past several
years and asserted that TMD and GST were engaged in different
marketing strategies.  Chalmers complained that Toyota's
distribution boundaries resulted in an injustice to his dealership
because he could not participate in the programs and promotions
advertised by TMD in the Memphis area.  
     Chalmers later voiced his concerns to TMS.  On October 4,
1989, Chalmers wrote a letter to a vice-president of TMS and stated
that the Memphis dealerships had an unfair advantage because of a
dual pricing policy between the two regions and that this
discriminatory practice was causing him to lose both new car sales
and personnel.  In the ensuing years, Chalmers continued to
correspond with TMS and GST regarding the difficulties created by
the  Arkansas-Tennessee distribution boundary. 
     The Chalmers filed suit against the appellees on August 27,
1993.  They asserted six claims for relief:  1) frustration of
contract performance, prevention and breach of contract; 2) fraud,
misrepresentation and deceit; 3) interference with contract rights
and expectations; 4) destruction of competition through price
discrimination; 5) violation of Arkansas franchise law, and 6)
punitive damages.  The Chalmers allege that the appellees acted
conspiratorially and as agents of one another in engaging in the
unlawful actions. They allege that TMS allowed GST and Woods to
force dealers within GST's region to accept vehicles loaded with
option and accessory packages not required of the Memphis dealers,
and that the resulting pricing disparity destroyed their ability to
compete in their economic market.  The complaint further asserted
that the conspiracy and pricing disparity had begun at an earlier,
unknown time but that "the effects were not perceived by the
Chalmers until late 1989."
     The appellees moved for partial summary judgment on the
alleged violations of the Arkansas Unfair Practices Act.  The trial
court granted this motion, finding that the act did not apply to
interstate price discrimination.  Chalmers then filed an amended
complaint which alleged additional violations of the Arkansas
Franchise Practices Act.  The appellees again moved for summary
judgment, raising multiple defenses.  The trial court granted the
motions and dismissed all claims against the appellees, finding
that the applicable statutes of limitations barred the remaining
claims.  The Chalmers appeal the granting of the summary judgments.
                   1. Statute of limitations.
   The Chalmers  first argue that the trial court erred in its
application of the statutory limitations periods as a bar to their
claims. This court has said that the standard for review of a grant
of summary judgment is whether the evidentiary items presented by
the moving party in support of the motion left a question of
material fact unanswered and, if not, whether the moving party is
entitled to judgment as a matter of law.  National Bank of Commerce
v. Quirk, 323 Ark. 769, 918 S.W.2d 138 (1996).  The court views all
proof in the light most favorable to the party opposing the motion,
resolving all doubts and inferences against the moving party.  Id. 
However, once the moving party makes a prima facie showing of
entitlement, the responding party must meet proof with proof in
order to demonstrate that there is remaining a genuine issue of
material fact.  Mount Olive Water Ass'n v. City of Fayetteville,
313 Ark 606,