Cite as 2023 Ark. App. 179

ARKANSAS COURT OF APPEALS

DIVISIONS III & IV

No. CV-20-322

HOLLY WOOD, JOHN WOOD, AND 

TARA CAPITAL, LLC

APPELLANTS

V.

LADIMER ALKHASEH; GLORIA 

PETERSON, BENTON COUNTY 

COLLECTOR; TOMMY LAND, 

COMMISSIONER OF STATE LANDS; 

AND DAWN HILL TOWNHOUSE AND 

CONDOMINIUM PROPERTY 

OWNERS ASSOCIATION, INC.

APPELLEES

Opinion Delivered March 29, 2023

APPEAL FROM THE BENTON

COUNTY CIRCUIT COURT 

[NO. 04CV-16-77]

HONORABLE DOUG SCHRANTZ, 

JUDGE

AFFIRMED IN PART; DISMISSED IN 

PART

MIKE MURPHY, Judge

This is a contract case in which the circuit court entered default judgments against 

the appellants, John Wood, Holly Wood (John’s wife), and Tara Capital, LLC, on crossclaims filed by Luther Alkhaseh, appellee Ladimer Alkhaseh’s father and predecessor in 

interest. After a hearing on damages, the circuit court awarded Ladimer a judgment in the 

amount of $747,424.35. The circuit court also awarded a judgment of foreclosure in favor 

of appellee Dawn Hill Townhouse and Condominium Property Owners Association, Inc. 
2

(“Dawn Hill POA”), which had intervened in the lawsuit to collect unpaid assessment fees 

from Tara Capital on a condominium unit that it acquired in the contract with Luther. 

The appellants now appeal the orders striking the Woods’ answer to Ladimer’s crossclaims, the judgment awarding damages to Ladimer, and the judgment of foreclosure. They 

claim that the circuit court erred when it granted Luther’s motion to substitute Ladimer as 

the plaintiff on the cross-complaint. Additionally, the Woods appear to assert that the default 

judgment against them should be set aside because the allegations in the cross-complaint do 

not support Ladimer’s claims of breach of contract and fraud. The appellants also challenge 

the sufficiency of the evidence supporting the judgment awarding money damages to 

Ladimer—which they concede is not a final judgment—and Tara Capital urges reversal of the 

judgment of foreclosure in favor of Dawn Hill POA. We affirm in part and dismiss in part.

I. Factual Background

John and Holly (collectively “the Woods”) became acquainted with Luther while they 

were neighbors in California. In January 2014, Luther asked the Woods to lend him 

$150,000 so that he could settle a tax lien on a property in Arizona. Because the Woods were 

unable to lend Luther the full amount that he requested, they introduced Luther to John’s 

brother, David. According to John, the following transaction ensued:

[Luther] drew up a promissory note for $180,000 [payable to David Wood]. The 

money was to be used—he was going to use that money, the $150,000 principal, to 

pay a . . . tax lien on property . . . that was going to sale in Arizona. Shortly [after the 

promissory note was drafted] my brother was not able to come up with the $150,000 

principal. He notified me that he was not going to be able to . . . follow through . . . 

on [the] promissory note. 
3

. . . .

So, I put [in] a cashier’s check made out to Mr. Alkhaseh for $50,000, and . . . David 

. . . wrote . . . a cashier’s check for $100,000.[1]

In addition to the promissory note, Luther executed a mortgage that pledged his property in 

Benton County, Arkansas—Dawn Hill Country Club—as collateral for the debt. As further 

incentive for the transaction, John and Holly executed a note promising to pay David the 

principal amount of $100,000. The balance of that note would be reduced by Luther’s 

payments made on his note to David.

A few months later, on May 20, 2014, the Woods and Luther entered into another 

written agreement that was intended to help Luther settle unpaid property taxes on Dawn 

Hill Country Club in Benton County, Arkansas. Through their limited liability company, 

Tara Capital, the Woods agreed to pay the $180,000 debt that Luther owed to David. In 

exchange, Luther transferred his ownership interest in Dawn Hill Country Club and 

associated condominiums the Woods.

2 The Woods and Luther also agreed to share any 

profits earned by the country club, the condominium rentals, and any future sale of the 

property. Luther subsequently executed a quitclaim deed that transferred the property to 

Tara Capital. 

On January 14, 2016, David filed a lawsuit against Luther and the Woods alleging 

that they had each defaulted on their respective promissory notes. On September 27, 2017, 

 

1The additional $30,000 was interest charged on the loan. 

2This mortgage was not filed of record in Benton County, Arkansas. 
4

Luther followed with a cross-complaint against John and Holly (d/b/a Tara Capital) as well 

as a third-party complaint against Tara Capital, the Benton County collector, and the 

commissioner of state lands. The cross-complaint alleged that the appellants were liable for 

breach of contract and fraud as the result of their alleged failure to pay the debt, to pay the 

taxes on the property, and to fulfill their promise to share the profits. The complaint sought 

a constructive trust and an equitable accounting of the income and expenses of the country 

club, and it further claimed that the alleged fraud warranted piercing the corporate veil to 

disregard Tara Capital as a separate legal entity. The Benton County collector and 

commissioner of state lands were added as third-party defendants so that their respective 

interests in the unpaid taxes “may be properly reflected in [the] proceedings.” 

John and Holly filed a joint pro se answer denying the allegations in the crosscomplaint on October 26, 2017. Through out-of-state counsel, Tara Capital filed an answer—

also denying the facts alleged in the cross-complaint—on February 1, 2018. 

On February 28, 2018, the circuit court entered an order striking Tara Capital’s 

answer to the cross- and third-party complaints. The court found that Steven Rein, who 

appeared as counsel therein, was licensed out of state and had failed to take steps to be 

qualified to practice law in Arkansas. The circuit court also found Tara Capital “wholly in

default” as a consequence of the stricken answer and, therefore, granted Luther’s motion for 

a default judgment in the same order. Tara Capital did not file a notice of appeal from the 

court’s February 28 order.
5

On November 16, 2018, Luther filed a motion in which he requested leave to 

substitute Ladimer as the cross-plaintiff and on the cross- and third-party complaints. The 

motion asserted that Luther had assigned his interest in the litigation to Ladimer in January 

2018, and under Arkansas Rule of Civil Procedure 25(c), “the court may upon motion 

substitute a party upon a transfer of the original party’s interest.” The circuit court granted 

the motion in an order entered on December 13, 2018. 

Shortly thereafter, on December 21, Ladimer moved for sanctions against the Woods 

and Tara Capital. He alleged that a severe sanction—in the form of striking the Woods’ 

answer to the cross-complaint—was warranted because the Woods had failed to comply with 

a previous court order compelling discovery.

On January 25, 2019, John Wood filed a petition for Chapter 13 bankruptcy. The 

circuit court removed the case from the pending docket in an order entered on January 28. 

By order entered August 27, 2019, the bankruptcy court lifted the automatic stay “to allow 

the parties to resume the litigation pending before [the circuit court] for the purpose of 

obtaining a determination of the amount of debt that [John Wood] owes to Alkhaseh.” In 

particular, the bankruptcy court determined that the Woods’ objection to Ladimer’s claim 

against the bankruptcy estate should be held in abeyance pending the circuit court’s 

determination of the amount of the judgment that Ladimer was due in state court. 

Consequently, the circuit court entered an order reopening the case on August 27. 

The circuit court held a hearing on Ladimer’s motion for discovery sanctions on 

October 15, 2019. His attorney requested a default judgment against the Woods because a 
6

default judgment had already been entered against Tara Capital. Ladimer’s attorney also filed 

an affidavit setting forth the time spent on the motion for sanctions and sought an attorney’s 

fee of $450. The circuit court’s order granting the motion and awarding the requested fee 

was entered October 29. 

On November 4, 2019, the court also entered an order granting Ladimer’s motion 

for discovery sanctions. The court found that the Woods had failed to show that they were 

acting in good faith in defending against Ladimer’s claims. The court further found that the 

Woods had more than ample time to comply with the order compelling discovery but had 

failed to do so. As a sanction, the court struck the Woods’ answer and entered a default 

judgment against them, jointly and severally. The court also scheduled a hearing on damages 

to coincide with a damages hearing on the default judgment against Tara Capital. The 

appellants filed a notice of appeal from the October 29 and November 4 orders on 

November 20, 2019. 

In the meantime, Dawn Hill POA joined the lawsuit by filing a complaint in 

intervention against Tara Capital, the Benton County collector, the commissioner of state 

lands, and David Wood on September 30, 2019. In its complaint, the POA alleged that it 

“is charged with the duty to fix, levy, collect, and enforce the payments of charges and 

assessments authorized to be collected for services provided within a certain real estate 

subdivision known as Dawn Hill Country Club Resort ‘Cynthiana’ Townhouses Phase II.” 

The complaint also alleged that Lot 148 in the subdivision was subject to a recorded bill of 

assurances and protective covenants that provides for an assessment “to be collected and 
7

creates a lien on [Lot 148] to enforce and secure payment of the assessments.” In addition, 

the complaint claimed that Tara Capital, the recorded owner of the property, “ha[d] failed 

to pay assessments according to the terms of the Bill of Assurances and Protective 

Covenants,” and as of September 1, 2019, Tara Capital owed $5,850. Consequently, Dawn 

Hill POA requested a judgment in rem “against the interest of all intervenor defendants” for 

the amount of the outstanding debt and applicable interest. Tara Capital filed an answer 

denying the material allegations in the POA’s complaint in intervention on December 13, 

2019.3

A bench trial was held on January 9, 2020, on the POA’s complaint to foreclose its 

lien and to determine Ladimer Alkhaseh’s damages resulting from the default judgments.4

The court found that the POA had established that it had a lien in the amount of $6,050, 

the POA’s lien was superior to David Wood’s unrecorded mortgage, and it granted 

foreclosure on the unit. The judgment was in rem against the property. Also, the court 

awarded Ladimer a judgment against the Woods in the amount of $251,324.35. The court 

further awarded judgment to Ladimer in the amount of $496,000 for the Woods’ failure to 

account for one-half the profits of the operation of Dawn Hill as well as attorney’s fees. The 

 

3The Woods joined Tara Capital’s answer. The record does not reflect, however, that 

the POA amended its complaint to include them as intervenor defendants.

4David Wood did not present his case against appellants on the note they executed 

because he believed he was bound by the automatic stay issued in John Wood’s bankruptcy 

case, which, again, was lifted for the purpose of determining the debt that John owed to 

Ladimer.
8

court indicated that the case was not concluded because there were to be further proceedings 

in bankruptcy. 

A judgment memorializing the circuit court’s ruling was entered on January 23, 2020. 

A judgment was entered on March 4, nunc pro tunc to January 23, to correct the rate of 

interest on the judgment. The appellants amended their notice of appeal to include the 

October 29 and November 4, 2019, orders awarding attorney’s fees and striking their answer;

the January 23, 2020, judgment; and the March 4, 2020, nunc pro tunc judgment. 

The appellants now raise five issues on appeal. As we view their arguments, they assert

that (1) the default judgment against the Woods and the judgment awarding damages to 

Ladimer should be reversed because Luther and Ladimer failed to comply with the notice 

requirements in Ark. R. Civ. P. 25(a) and (c) before the circuit court entered its order 

substituting Ladimer as a plaintiff on the cross-complaint and third-party complaint; (2) the 

circuit court erred by granting a default judgment against the Woods because the factual 

allegations in the complaint also did not support Ladimer’s claims for breach of contract or 

fraud; (3) the judgment awarding damages and attorney’s fees to Ladimer is not supported 

by sufficient evidence; (4) the circuit court erred by denying their motion for certification 

under Ark. R. Civ. P. 54(b); and (5) insufficient evidence supports the foreclosure decree in 

favor of the POA.5

 

5The appellants also assert that the circuit court “appropriately did not grant Ladimer 

a constructive trust over Dawn Hill, but if the court did, it clearly erred.” Because we agree 

that the circuit court did not impose a constructive trust from which the appellants might 

take an appeal, we do not recognize it here as an assignment of error.
9

We affirm the default judgment because the Woods’ challenges to the sufficiency of 

the allegations in the complaint are not preserved for our review. We also affirm the 

foreclosure decree because the circuit court did not clearly err when it determined that the 

POA was entitled to foreclose on its lien. We dismiss the appellants’ remaining arguments, 

which challenge the order substituting Ladimer and the sufficiency of the evidence 

supporting damages and attorney’s fees, for lack of jurisdiction. 

II. Discussion

A. Default Judgment

The Woods first assert that the default judgment entered against them should be set 

aside because the allegations in the complaint were insufficient to establish their liability for 

breach of contract or fraud.6 According to the Woods, the allegations in the cross-complaint 

failed to establish any breach of their promise to share the profits. They argue that their May 

2014 agreement with Luther provided that they would share the profits “at a later time, not 

yet specified,” and there was no factual allegation or evidence regarding any further 

agreement about the time or amount that they would pay a share of the profits to Luther. 

Because there was insufficient evidence of agreement on those terms, the Woods say, “there 

was insufficient evidence of breach.” 

 

6We do not view this argument as extending to Tara Capital, which did not file any 

notice of appeal from the circuit court’s February 28, 2018, order striking its answer and 

granting a default judgment against it.
10

The Woods also suggest that the circuit court erroneously entered the default 

judgment because the factual allegations in the complaint failed to establish that they 

breached their promise to “take on the indebtedness and ownership of the [note with 

David].” They claim that David’s lawsuit against them, in which he claims they defaulted on 

the $100,000 loan, is evidence that they fulfilled their promise to take on that debt. 

Finally, the Woods argue that the circuit court erred to the extent it granted a default 

judgment on the basis of fraud. They say that the factual allegations in the cross-complaint 

fail to establish their alleged misrepresentation that they would “take on the indebtedness 

and ownership of the note with David” or, even so, that Luther or Ladimer justifiably relied 

on that statement. We have jurisdiction to hear these arguments under Ark. R. App. P.–Civ. 

2(a)(4), which allows an appeal to be taken from “an order [that] strikes out an answer,” and 

Arnold & Arnold v. Williams, 315 Ark. 632, 637, 870 S.W.2d 365, 367 (1994), in which the 

supreme court held that appellate jurisdiction under Rule 2(a)(4) extends to “all the issues 

dependent upon the stricken answer,” including default judgments.

Having said that, we must decline to reach the merits of the Woods’ challenges to the 

sufficiency of the allegations in the complaint for another reason: because they failed to raise 

them in a motion to set aside the default judgment under Arkansas Rule of Civil Procedure

55(c). While it is, indeed, erroneous to render a default judgment on a complaint that fails 

to state facts sufficient to state a cause of action, see Nucor Corp. v. Kilman, 358 Ark. 107, 127, 

186 S.W.3d 720, 732 (2004), that argument, like other grounds to set aside a default 

judgment, must be raised below. See Ark. Dep’t of Hum. Servs. v. Egbosimba, 2019 Ark. App. 
11

608, at 1; see also Rennels v. Four Seasons HVAC Distribs., 2011 Ark. App. 274, at 3 (refusing 

to consider arguments to set aside a default judgment that are raised for the first time on 

appeal). The Woods did not move to set aside the default judgment or challenge the 

sufficiency of the allegations in the complaint at the hearing on Ladimer’s motion for 

discovery sanctions. Consequently, they are not preserved for our review. 

Further, to the extent the Woods argue that Ladimer failed to introduce sufficient 

evidence to establish their liability for breach of contract or fraud, we do not view that 

argument as cognizable here. While the default judgment established their liability on those 

claims, see Jean-Pierre v. Plantation Homes of Crittenden Cnty., Inc., 350 Ark. 569, 575, 89 

S.W.3d 337, 340 (2002), there was no indication that the circuit court considered any 

evidence or made any factual findings that would transform the default judgment to one on 

the merits. See Harold M. v. Clark, 316 Ark. 439, 443–44, 872 S.W.2d 410, 414 (1994).7

Therefore, for all of these reasons, we cannot agree that the circuit court erred when it 

entered the default judgment against the Woods. 

B. The Judgment Awarding Damages and Attorney’s Fees to Ladimer

The Woods and Tara Capital next argue that the circuit court did not have sufficient 

evidence to support the damages and attorneys’ fees that it awarded. Regarding lost profits, 

 

7

Inasmuch as the Woods also claim that the circuit court should not have awarded 

damages because evidence supporting liability at the damages hearing was insufficient, we 

must dismiss that argument for the same reason that we dismiss their other arguments 

attacking the sufficiency of the evidence supporting damages: the judgment awarded to 

Ladimer is not a final judgment from which an appeal can be taken. See infra. 
12

they contend that the evidence did not support the circuit court’s finding that John earned 

a net income of $14,600 a month or the circuit court’s alleged assumption that the Dawn 

Hill property was profitable when the appellants took it over. They also contend that the 

circuit court’s calculation of damages was erroneous in other respects, including the circuit 

court’s failure to consider factors reducing the rental income they earned from the 

condominiums as well as their expenses. Regarding the damages awarded on the Woods’

breach of their agreement to pay David Wood’s note, the Woods claim that the circuit court 

erred by relying on a calculation of outstanding principal and interest that was not supported 

by the evidence. Finally, the appellants argue that all of these errors, which they say 

demonstrate that Ladimer was not a prevailing party under Ark. Code Ann. § 16-22-308, led 

to an erroneous award of attorney’s fees.

We must dismiss these claims because the judgment awarding damages to Ladimer is 

not a final order. The question of whether an order is final and appealable is jurisdictional, 

and this court is obligated to consider the issue on its own even if the parties do not raise it. 

Price v. Carver, 2017 Ark. App. 75, at 2, 513 S.W.3d 877, 879. The requirement that an order 

must be final and appealable is observed to avoid piecemeal litigation. Id. An order is final if 

it dismisses the parties, discharges them from the action, or concludes their rights to the 

subject matter in controversy. Id. at 3, 513 S.W.3d at 879. An order is not final, therefore, 

when it adjudicates fewer than all the claims or rights and liabilities of fewer than all the 

parties. Id. 
13

Entry of a final judgment on fewer than all claims is allowed, however, under the 

following circumstances:

(1) Certification of Final Judgment. When more than one claim for relief is presented

in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or 

when multiple parties are involved, the court may direct the entry of a final judgment 

as to one or more but fewer than all of the claims or parties only upon an express

determination, supported by specific factual findings, that there is no just reason for 

delay and upon an express direction for the entry of judgment. . . .

(2) Lack of Certification. Absent the executed certificate required by paragraph (1) 

of this subdivision, any judgment, order, or other form of decision, however 

designated, which adjudicates fewer than all the claims or the rights shall not 

terminate the action as to any of the claims or parties, and the judgment, order, or 

other form of decision is subject to revision at any time before the entry of the 

judgment adjudicating all the claims and the rights and liabilities of the parties.

Ark. R. Civ. P. 54(b)(1) & (2) (2021). Here, there is no judgment adjudicating the claims 

that originated the lawsuit—David Wood’s claims alleging default on the promissory note 

that the Woods executed. There is also no order dismissing the Benton County collector or 

the commissioner of state lands, who Ladimer also named as third-party defendants; and the 

record does not reflect that the circuit court has appointed a receiver or imposed a 

constructive trust, as Ladimer also requested in the cross- and third-party complaint. The 

circuit court did not certify a final judgment, moreover, under Rule 54(b). Accordingly, we 

do not have jurisdiction to review the appellants’ arguments challenging the sufficiency of 

the evidence supporting the judgment awarding damages to Ladimer or, for that matter, the 
14

associated award of attorney’s fees.8See Dodge v. Lee, 350 Ark. 480, 486–87, 88 S.W.3d 843, 

847 (2002) (“Without . . . a final order, no appeal may be entertained, even on a collateral 

issue such as attorney’s fees.”). 

We are not persuaded by the appellants’ argument that we have jurisdiction because 

their appeal from the order striking their answer is appealable under Ark. R. App. P.–Civ. 

(2)(a)(4), and the judgment awarding damages is dependent upon the stricken pleadings in 

the same manner as default judgments.9 While our cases have held that an appeal from a 

stricken answer permits review of “all issues dependent on the stricken answer,” Arnold & 

Arnold, 315 Ark. at 637–38, 807 S.W.2d at 367, the appellants do not cite—and we have not 

found—any case that permits any review beyond the default judgment that follows a stricken 

answer. 

Rather, the supreme court has stated that “[a]s a general rule, an appeal from an 

interlocutory decision brings up for review only the decision from which the appeal was 

taken.” Villines v. Harris, 340 Ark. 319, 323, 11 S.W.3d 516, 518–19 (2000). That means 

“the issues raised in the appeal must be reasonably related to the order appealed from,” and 

 

8We do not agree that this case warrants application of the exception that the supreme 

court recognized in Omni Farms, Inc. v Arkansas Power & Light Co., 271 Ark. 61, 607 S.W.2d 

363 (1980), as the appellants claim. The appellants’ speculation that Ladimer “might try to 

execute on the judgment and force the sale of Dawn Hill, thus making impossible to place 

the [appellants] back to their former condition,” falls short of the appellee’s concession at 

oral argument in Omni Farms that the appellant could not be restored to its previous 

condition if the condemnation order there was not immediately appealable. 

9This is especially so in the case of Tara Capital, which did not file any notice of 

appeal from the order striking its answer to the cross- and third-party complaint. 
15

an interlocutory appeal “may not be used as a ‘vehicle to bring up for review matters which 

are still pending before the trial court.’” Id. (quoting Coleman’s Serv. Ctr., Inc. v. S. Inns Mgmt., 

Inc., 44 Ark. App. 45, 49, 866 S.W.2d 427, 429 (1993)). A default judgment is 

unquestionably linked to an order striking an answer, and the default judgment, once 

granted, only establishes a defendant’s liability. See Jean-Pierre, 350 Ark. at 575, 89 S.W.3d at

340. The judgment awarding damages to Ladimer, then, is beyond the scope of the 

interlocutory order that the appellants claim as a basis for this court’s jurisdiction. 

We also cannot agree with our dissenting colleagues’ view that the bankruptcy court’s 

order lifting the automatic stay in John Wood’s Chapter 13 bankruptcy proceedings makes 

the judgment awarding damages final and appealable as it relates to him. While our supreme 

court has held that a bankruptcy court’s order allowing the continuation of state court 

proceedings restores full jurisdiction to proceed to a final determination on appeal, see Union 

Nat’l Bank of Ark. v. Nichols, 305 Ark. 274, 277, 807 S.W.2d 36, 37–38 (1991), the court 

made it plain that it did so because the Arkansas Constitution provided for “a right to appeal 

from all final orders of the circuit court.” Id. (citing Ark. Const. art. 7, § 1, repealed by Ark. 

Const. amend. 80, § 22(A) July 1, 2001) (emphasis added). As we conclude above, the 

judgment awarding damages to Ladimer is not final because claims and parties remain 

pending.

We are also influenced by our more recent decision in Yarborough v. Powell, 2015 Ark. 

App. 218, 459 S.W.3d 329, in which we dismissed an appeal on very similar facts. In 

Yarborough, appellant Terry Yarborough had been appointed as one of the trustees of his late 
16

mother’s trust. His sister, appellee Jane Powell, sued Yarborough for an accounting of the 

trust’s assets, distributions, and expenses. Powell also filed amended complaints that 

additionally sought an order setting aside Yarborough’s release of a mortgage that secured a 

loan he received from the family business (a cosmetology school); an accounting of the family 

business; Yarborough’s removal as an officer; the appointment of a receiver; and damages. 

The circuit court entered a judgment for Powell, but only on her claims concerning the 

cosmetology school. The court also reserved consideration of Powell’s request for attorney’s 

fees and costs for a later date.

Yarborough requested a new trial. He filed for bankruptcy before the circuit court 

could hear the motion, but the bankruptcy court partially lifted the automatic stay that 

accompanied the filing of his petition to allow the circuit court to consider (1) Powell’s 

entitlement to attorney’s fees and costs; and (2) Yarborough’s request to set aside the 

judgment. The circuit court ultimately denied Yarborough’s motion to set aside as well as 

several other postjudgment motions that he later filed. The circuit court also denied Powell’s 

request for attorney’s fees. Yarborough appealed the orders denying his postjudgment 

motions, and Powell cross-appealed the circuit court’s rulings.

We dismissed both the appeal and the cross-appeal for lack of a final order because 

the record did not reflect that Powell’s claims involving her mother’s trust, which originated 

the lawsuit, had been adjudicated. Id. at 4–5, 459 S.W.3d at 331–32. There was also no 

indication that an accounting of the family business or a settling of the family business by a 

receiver had taken place as the circuit court ordered. Id. at 4, 459 S.W.3d at 332. In 
17

dismissing the appeal, we noted that Yarborough’s bankruptcy “[did] not affect the lack of 

finality” because “a bankruptcy filing does not completely divest the circuit court of 

jurisdiction over all matters in a lawsuit.” Id. Rather, “it simply suspends the court’s 

jurisdiction, subject to that jurisdiction being restored.” Id. Accordingly, “while various 

claims in [the] lawsuit were stayed by the bankruptcy court at the time the orders on appeal 

were entered, those claims remained pending, and the circuit court could have reacquired 

the ability to rule on them at any time.” Id. We believe our decision in Yarborough controls 

here, and we therefore dismiss the appellant’s challenges to the sufficiency of the evidence 

supporting the damages the circuit court awarded to Ladimer as well as the award of 

attorney’s fees.

C. Rule 54(b) Certification

The appellants next argue that the circuit court erred by denying their motion to 

certify the judgment awarding damages to Ladimer under Rule 54(b). They allege that there 

was no just reason for delaying their appeal of the judgment; and considering the interest 

that will accrue until the entire case is resolved, any further delay would cause undue 

hardship to them. The appellants further contend that the circuit court’s failure to certify 

the judgment also contravenes the rule’s intent to prevent piecemeal appeals. We do not 

agree.

We have already observed that the “denial of certification [under Rule 54(b)] is not 

within itself appealable[.]” Cureton v. Stout, 2020 Ark. App. 414, at 5 n..6, 609 S.W.3d 435, 
18

438 n.6. Accordingly, we decline to review the circuit court’s denial of a Rule 54(b) 

certificate. 

D. Substitution of Parties

Appellants additionally argue that the circuit court erred when it granted Luther’s 

motion to substitute Ladimer as the cross- and third-party plaintiff in the case. In particular, 

they say that Rule 25(c) and Rule 25(a) of the Arkansas Rules of Civil Procedure required 

Luther to serve them with notice that he had assigned his interest in the litigation to Ladimer 

in the same manner that a “statement of the fact of death” is served when a party dies. Luther 

did not do so within ninety days of making the assignment, and according to the appellants, 

this failure deprived the circuit court of jurisdiction to grant the substitution. They further 

argue that the jurisdictional nature of the issue enables this court to consider it on appeal 

despite their failure to lodge an objection below. Unfortunately, we must also dismiss this 

argument for lack of jurisdiction because the appellants failed to include the substitution 

order in their notice of appeal. 

A notice of appeal must designate the judgment or order appealed from, see Ark. R. 

App. P.–Civ. (3)(e) (2022), and orders not mentioned in a notice of appeal are not properly 

before the appellate court. E.g., Daniel v. State, 64 Ark. App. 98, 100, 983 S.W.2d 146, 147 

(1998). In the instant case, the appellants’ fourth amended notice of appeal declares that 

they appeal “the orders entered on October 29, 2019 (awarding attorney’s fees); November 

4, 2019 (striking John and Holly’s answer and granting a default judgment); January 23, 2020 

(awarding foreclosure to the POA and damages to Ladimer); March 4, 2020 (the nunc pro 
19

tunc judgment); and April 8, 2020 (denying certification under Rule 54(b)). The notice does 

not include the December 13, 2018 order substituting Ladimer as the plaintiff on the cross 

and third-party complaint. 

Moreover, while we recognize that Ark. R. App. P.–Civ. 2(b) provides that “[a]n 

appeal from any final order also brings up for review any intermediate order involving the 

merits and necessarily affects the judgment,” we cannot view the substitution order as an 

intermediate order that is automatically brought up for our review. An order striking an 

answer is not a final judgment that would trigger application of Rule 2(b), see Allen v. 

Greenland, 347 Ark. 465, 467, 65 S.W.3d 424, 426 (2002), and for reasons that we have 

already explained, supra, the judgment awarding damages to Ladimer also does not constitute 

a final order. Accordingly, we cannot reach the merits of the appellants’ challenge to the 

circuit court’s order substituting Ladimer as the plaintiff on the cross- and third-party 

complaint. 

E. Sufficiency of the Evidence Supporting the Foreclosure Decree

Finally, Tara Capital argues that the judgment in favor of the POA is not supported 

by sufficient evidence that it was obligated to pay the assessments. As we say above, Tara 

Capital asserts that the evidence introduced at the hearing established that it owned only a 

condominium “lot” and not condominium “unit” that was subject to the fee assessment. We 

affirm.10

 

10We note that we have jurisdiction of the appeal from the foreclosure decree despite 

the lack of a Rule 54(b) certificate. The decree was placed into execution with the 
20

In civil bench trials, the standard of review on appeal is whether the circuit court’s 

findings were clearly erroneous or clearly against the preponderance of the evidence. Friday 

v. Friday, 2019 Ark. App. 129, at 3–4, 572 S.W.3d 884, 886. A finding is clearly erroneous 

when, although there is evidence to support it, the reviewing court, on the entire evidence, 

is left with a firm conviction that a mistake has been made. Id. at 4, 572 S.W.3d at 886. Facts 

in dispute and the determinations of credibility, however, are solely within the province of 

the fact-finder. Id. 

There was no dispute at the hearing that a bill of assurances allowed the POA to 

charge reasonable maintenance fees, and that covenant (as well as others) ran with the land.

Particularly, the POA offered proof establishing that the POA agreed to a bill of assurances 

that applied to “Dawn Hill Country Club Resort ‘Cynthiana’ Townhouses Phase II.” The 

pertinent paragraph in the Bill of Assurances provided that 

[t]he Dawn Hill Townhouse and Condominium Property Association, Incorporated, 

Board of Directors shall have the right and ability to charge reasonable maintenance 

fees to be assessed against each unit on a monthly basis. Said maintenance fee shall 

be used for trash services, septic system maintenance, lawn care, outdoor lighting of 

common areas, and for other expenses as determined by the exclusive decision of the 

 

appointment of a commissioner and an order to sell the property, and in a line of cases 

including Alberty v. Wideman, 312 Ark. 434, 850 S.W.2d 314 (1993); Scherz v. Mundaca 

Investment Corp., 318 Ark. 595, 886 S.W.2d 631 (1994); and Wantanabe v. Webb, 320 Ark. 

375, 896 S.W.2d 597 (1995), the supreme court has held that an executed foreclosure decree 

is appealable without a certification under Rule 54(b). See Alberty, 312 Ark. at 437, 850 

S.W.2d at 316 (“Where there is such an order, a certification under Rule 54(b) is not 

necessary.”). Moreover, while we are aware that the supreme court subsequently dismissed 

an appeal from a foreclosure decree in Grand Valley Ridge, LLC v. Metropolitan National Bank, 

2010 Ark. 402, at 3–4, we view that case as distinguishable because there is no indication 

that the decree in that case had been executed or any discussion of Alberty, Scherz, or 

Wantanabe, in which the existence of an executed decree was of paramount importance.
21

Dawn Hill Townhouse and Condominium Property Owners Association, 

Incorporated, Board of Directors. Any past due or unpaid maintenance fees shall be 

a lien against the unit owned by the person or entity whose fees are delinquent and 

shall be enforceable by foreclosure of said lien.

Johnathan Barnett, the president of the POA, also testified that the association provides all 

of the services set forth in the bill of assurances. The covenants further provide that they 

shall run with the land and shall be binding on all parties and all persons claiming 

under them for a period of 20 years from the date of these covenants are recorded 

unless changed or amended by a majority of the unit owners, after which time said 

covenants shall be automatically extended for successive periods of five years unless 

an instrument signed by a majority of then owners of the lots has been recorded 

agreeing to change the covenants in whole or in part.

In addition, Mr. Barnett testified that the legal description of the property subject to the bill 

of assurances matched the legal description of the property in the recorded plat of the 

Cynthiana Subdivision Townhouses Phase II. The POA also offered a quitclaim deed 

demonstrating that Tara Capital was the current owner of “Lot 148 of Cynthiana 

Townhouses Subdivision Phase 2.”

Nevertheless, as stated above, Tara Capital asserts that the proof at the hearing was 

insufficient to establish that it was obligated to pay the maintenance fees charged to each 

unit owner, as provided in the bill of assurances. There was no evidence, it says, that “a unit 

was on Lot 148.”

We disagree. In the following colloquy, John Wood testified, in pertinent part, that 

a townhouse was on Lot 148:

Q. Can you tell me a little bit about that lot so the court can be familiar?
22

A. It’s — as described in the legal description—it’s a townhouse that’s in Cynthiana

Phase II or whatever. 

(Emphasis added.) Black’s Law Dictionary, moreover, defines a townhouse as “a dwelling 

unit having usually two or three stories and often connected to a similar structure by a 

common wall and (particularly in a planned-unit development) sharing and owning in 

common the surrounding grounds. Townhouse, Black’s Law Dictionary (9th ed. 2009) 

(emphasis added). With John Wood’s testimony in mind as well as other evidence 

demonstrating that the development was for condominium townhouses, we cannot say that 

the circuit court’s judgment of foreclosure was clearly against the preponderance of the 

evidence. We therefore affirm the judgment of foreclosure.

IV. Conclusion

We decline to reach the Woods’ challenges to the default judgment entered against 

them because those issues are not preserved for appellate review. The judgment awarding 

damages to Ladimer is not a final and appealable order; therefore, we dismiss the appellants’ 

arguments challenging the sufficiency of the evidence supporting that judgment as well as 

the associated award of attorney’s fees. We also hold that the appellants’ failure to include 

the order substituting Ladimer in their notice of appeal deprives us of jurisdiction to reach 

that issue. Finally, we hold that sufficient evidence supports the decree of foreclosure in favor 

of the POA.

Affirmed in part; dismissed in part.

KLAPPENBACH, GRUBER, and WOOD, JJ., agree.
23

BARRETT and HIXSON, JJ., dissent.

STEPHANIE POTTER BARRETT, Judge, dissenting. The majority dismissed appellant 

John Wood’s challenges to the sufficiency of the evidence supporting the damages awarded 

against him to appellee Ladimer Alkhaseh on the basis of its conclusion that the judgment 

awarding these damages was not a final order. Because I believe the trial court’s award of 

damages to Alkhaseh was a final order from which John Wood may appeal, I respectfully 

dissent.

There are multiple parties to this litigation with complaints, cross-claims, 

counterclaims and third-party claims. On January 25, 2019, appellant John Wood filed for 

Chapter 13 bankruptcy protection, and on the same day, the bankruptcy court entered an 

automatic stay of “certain collection and other actions against the debtor and the debtor’s property.” 

(Emphasis added.) The case at bar is clearly a collection action against John Wood and John 

Wood’s property and was, therefore, subject to the stay.1 Accordingly, three days later, on 

January 28, 2019, the circuit court entered an order removing the case from the pending 

docket and ordered that “this matter is closed until the bankruptcy matter of [John Wood] is 

resolved and a Motion to Reopen is filed by any party.” (Emphasis added.) 

 

1

It should be noted, as addressed more fully below, that the judgment in favor of 

Alkhaseh in the amount of $747,424.35 is against John Wood and Holly Wood, jointly and 

severally. Hence, the judgment against Holly Wood is a “certain collection and other action[ ]

against [John Wood] and [John Wood’s] property.” (Emphasis added.) Further, any judgment 

against Tara Capital, LLC, is similarly a collection action against John Wood and his 

property because Tara Capital, LLC, is not a duly authorized limited liability company, and 

any liability of Tara Capital, LLC, will encumber any assets of John Wood. 
24

John Wood’s petition for bankruptcy proceeded through the bankruptcy court, and 

the bankruptcy judge was faced with the responsibility of creating and enforcing a Chapter 

13 repayment plan. Two of John’s largest liabilities were the contingent unliquidated claims 

set forth in the present circuit court litigation. The first unliquidated claim was John’s 

potential liability on David Wood’s complaint alleging that John had breached a $150,000 

promissory note. The second unliquidated claim was John’s potential liability on Alkhaseh’s 

cross-claim based on John’s alleged nonpayment on the promissory note and the allegation 

that John had breached a transfer agreement regarding the transfer of the ownership of Dawn 

Hill Country Club in exchange for certain promises. This amount of the potential liability 

on this cross-claim was so unascertainable and undefinable that Alkhaseh simply prayed for 

a judgment “in excess of federal court jurisdiction.” To fashion the repayment plan, it was 

imperative that these two claims were liquidated to a sum certain for use in fashioning the 

Chapter 13 repayment plan. 

In order to do so, the bankruptcy court maintained jurisdiction over David’s 

promissory-note complaint, but it transferred Alkhaseh’s claims against John to circuit court 

for disposition through a partial lift of the automatic stay it had imposed on the circuit court 

litigation. To that end, on August 27, 2019, the United States Bankruptcy Court lifted the 

automatic stay in the Chapter 13 bankruptcy filed by John by consent of John and Alkhaseh 

“to allow the parties to resume the litigation pending before the Honorable Doug Schrantz 

in the Circuit Court of Benton County, Arkansas for the purpose of obtaining a determination of 

the amount of the debt that the debtor owes Alkhaseh.” (Emphasis added.)
25

Due to the fact that “certain collection and other actions against the debtor and the debtor’s 

property” were stayed and due to the restrictive language of the bankruptcy order lifting the 

stay, I believe that the jurisdiction of the circuit court was conclusively and categorically 

limited to the issue of determining the amount of debt that John owes to Alkhaseh and that 

John remained protected from any other action by the circuit court to assess damages by 

other claimants by virtue of the stay under the bankruptcy proceeding. (Emphasis added.) 

The whole idea behind a bankruptcy stay is to maintain the status quo of the debtor vis-à-vis 

creditors during bankruptcy so as to prohibit various creditors from racing to the courthouse 

and obtaining judgments––and therefore, judgment liens—to the detriment of other similarly 

positioned creditors. I find that all orders of the circuit court herein that are not specifically 

related to the debt that John owes to Alkhaseh are void2because they emanate from claims 

independent of the limited jurisdiction granted by the bankruptcy court, and I further find 

that the order of damages against John in favor of Alkhaseh is final for the purposes of appeal 

and should be reviewed by this court. 

The majority opinion answers several ancillary questions arising from the bankruptcy 

estate except the one question specifically authorized by the bankruptcy court: “What is the 

amount of the debt that John Wood owes Alkhaseh.” To that narrow essential question, 

 

2

In light of the limited jurisdiction that the circuit court was granted to determine the 

amount of damages John owed Alkhaseh, all other orders, including the judgment of 

foreclosure entered in favor of Dawn Hill, are void for lack of subject-matter jurisdiction 

because the subject-matter jurisdiction was suspended by the filing of the Chapter 13 

bankruptcy. See Jones v. Nat’l Bank of Com. of El Dorado, 207 Ark. 613, 182 S.W.2d 377 

(1944).
26

the majority failed to answer, depriving the bankruptcy court of the one decision it needed 

and for which it asked. 

In fairness to the majority, we acknowledge that there may be additional litigation in 

the future in circuit court. The bankruptcy court stayed the prosecution of David’s 

complaint for breach of the $150,000 promissory note and did not lift that cause of action 

from the stay. The bankruptcy court may subsequently entertain that complaint, it may lift 

the stay in the future and transfer it to circuit court, or it may release it from the bankruptcy 

estate altogether. However, none of those options are of any consequence to the limited 

question asked of our court: What is the amount of debt that John owes Alkhaseh? I believe 

the circuit court’s award of damages against John to Alkhaseh is final for three reasons. First, 

because the order concludes the parties’ rights to the subject matter in controversy; second, 

because the order of judgment that arises from an order striking an answer is immediately 

appealable under Arkansas Rule of Appellate Procedure–Civil 2(a)(4); and third, because if 

the order is not immediately appealable, it will divest a substantial right in a way as to put it 

beyond the power of the court to place the party in the party’s former condition. 

In order for a judgment to be final, it must dismiss the parties from court, discharge 

them from action, or conclude their rights to subject matter in controversy. Taylor v. Taylor,

26 Ark. App. 31, 759 S.W.2d 222 (1988). To be final and appealable, an order must not 

only decide the rights of parties but also put court’s directive into execution, ending the 

litigation or a separable part of it. Tucker v. Lake View Sch. Dist. No. 25 of Phillips Cnty., 323

Ark. 693, 917 S.W.2d 530 (1996); Ark. Dep’t Hum. Servs. v. Farris, 309 Ark. 575, 832 S.W.2d 
27

482 (1992); Foreman v. Ark. Dep’t of Hum. Servs., 78 Ark. App. 48, 82 S.W.3d 176 (2002); Lee

v. Konkel-Swaim, 73 Ark. App. 429, 43 S.W.3d 767 (2001); Capitol Life & Accident Ins. Co. v.

Phelps, 72 Ark. App. 464, 37 S.W.3d 692 (2001). 

Alkhaseh’s judgment against John on appeal herein is a final and appealable order 

because the rights of the parties (John vis-à-vis Alkhaseh) have been decided, and the court’s 

directive has been put into execution by its determination presented to the bankruptcy court, 

ending a separable part of this litigation. The bankruptcy court will take the damages award 

that has not been reviewed and that clearly lacks support by the preponderance of the 

evidence and prepare and enforce a repayment schedule under the Chapter 13 bankruptcy 

plan that will be completed and implemented long before the state court concludes the 

litigation. After appellate review of this final damages order, we would surely find that there 

was insufficient evidence to support the damages awarded to Alkhaseh. The circuit court 

even stated as it recited its findings that the only information that it had was from an 

unreliable source: “Yet it is the only information that we have here related to what should 

have been a complete set of books regarding the income and expenses of a business 

operation. Totally absent. And it – it pains me to have to rely on the unreliable, if you will, 

but that’s all I have. . . .” So, we are sending a judgment back to the bankruptcy court for it 

to develop a repayment plan that is likely, if not probably, in error. 

Furthermore, an order striking an answer, as in the case presented, is immediately 

appealable under Arkansas Rule of Appellate Procedure–Civil 2(a)(4). An order is also 

immediately appealable if it would divest a substantial right in a way as to put it beyond the 
28

power of the court to place the party in the party’s former condition. See Smith v. Flash TV 

Sales & Serv., Inc., 17 Ark. App. 185, 706 S.W.2d 184 (1986). Not allowing Wood to appeal 

the damages awarded against him will forever bar his ability to do so after the bankruptcy 

court resumes its proceedings wherein Alkhaseh is asserting a claim for the debt that the 

state trial court has now determined. 

At the point that this court finally reviews the judgment of damages and finds them 

unsupported by a preponderance of the evidence, the court could reverse and remand the 

damages award; but should the bankruptcy have concluded or should the repayment 

schedule have progressed significantly, John will be divested of his rights, and no court will 

be able to place him in his former condition. Therefore, under Smith, supra, the award of 

damages is final and should be reviewed by this court. The bankruptcy court asked the state 

court to give it a sum certain to use in the Chapter 13 bankruptcy proceeding, and the 

defendant in that action has the right to have that sum—now determined by the circuit 

court—reviewed by an appellate court. To do otherwise is a grave injustice to the parties.

Furthermore, the bankruptcy court, in the August 27, 2019 order lifting the stay for 

a limited purpose, stated, “This Court shall hold the debtor’s objection to Claim 4 in 

abeyance until the state court has made such a determination.” When is this judgment for 

damages against John reviewable if not now? The majority relies on Yarborough v. Powell, 

2015 Ark. App. 218, 459 S.W.3d 329, claiming the case has similar facts. However, the 

majority’s conclusion fails to consider the distinct difference between a Chapter 7 

bankruptcy in Yarborough that was filed after a sum-certain judgment was obtained against 
29

the debtor staying the proceedings and preventing the collection of the judgment; and the 

Chapter 13 bankruptcy that was filed before judgment in the instant case and the stay lifted 

by the bankruptcy court for the sole purpose of ascertaining a judgment amount. The 

difference is that the debtor in Yarborough is protected by the stay, and once the bankruptcy 

is concluded, the debtor may be returned to the same position he was in before. In this case, 

the debtor is not protected from the collection of the error-prone judgment when the 

bankruptcy resumes and cannot be returned to the same position he was in before because 

a repayment plan will have commenced. 

Furthermore, Yarborough relies on cases such as Bank of the Ozarks v. Cossey, 2014 Ark. 

App. 581, 446 S.W.3d 214 (Cossey I), in which the court of appeals dismissed the case for 

lack of a final order and was overturned on review by the Arkansas Supreme Court. In 

Cossey I, a claim was filed alleging certain deficiencies by a trustee and requesting an 

accounting. The circuit court entered an order that declared the bank to be trustee of the 

Hamilton Living Trust and ordered the Bank to provide an accounting. Before the 

accounting was performed, the case was appealed. The Arkansas Court of Appeals held that 

the order was not final and appealable because there was more activity anticipated below in 

the form of an accounting and dismissed the appeal. See Cossey I, 2014 Ark. App. 581, 446 

S.W.3d 214. The appellant filed a petition for review with the supreme court, arguing, inter 

alia, that the order was final and appealable. The supreme court agreed and issued In re 

Hamilton Living Trust, 2015 Ark. 367, 471 S.W.3d 203, which vacated and set aside the court 
30

of appeals opinion in Cossey I. The supreme court affirmed the circuit court’s order after 

determining that the order was final and held: 

The circuit court’s order was appealable as a final judgment or decree. See Ark. 

R. App. P.–Civ. 2(a)(1) (2014). For a judgment to be final, it must dismiss the parties 

from the court, discharge them from the action, or conclude their rights to the subject 

matter in controversy; thus, the order must put the trial court’s directive into 

execution, ending the litigation, or a separable branch of it. Smith v. Smith, 337 Ark. 

583, 990 S.W.2d 550 (1999). Such is the case here. A single petitioner (Cossey) 

brought a single claim (accounting) against a single respondent (the Bank). After a 

hearing, the circuit court granted the petition and ordered the Bank to perform an 

accounting. Thus, the parties were dismissed from the court, the action was 

discharged, and the rights to the subject matter were concluded. 

Id. at 3 n.1, 471 S.W.3d at 206 n.1. 

That is the very instance that we have in this case before us involving John Wood and 

Ladimer Alkhaseh and the subject matter of damages. The majority is making the same 

mistake in this case as it did in Cossey I by claiming that the judgment is not a final, appealable 

order. 

I would be remiss if I did not point out one additional problem. There is a judgment 

jointly and severally against John Wood and Holly Wood for $750,000. If John’s stay does 

not extend to his co-debtor, Holly, then property co-owned by Holly and John is subject to 

execution. An execution against Holly will diminish John’s bankruptcy estate. This is exactly 

the scenario that a stay was designed to protect. Now, we have creditors (Alkhaseh and Dawn 

Hill Townhouse and Condominium POA) that have climbed over other creditors and 

enhanced their creditor status to the detriment of other creditors. This is why a stay can be 

extended against a co-debtor in certain circumstances.
31

Analogy to Federal Court/State Court Question

The purpose behind the bankruptcy court’s lifting of the stay to determine the 

amount of the debt that John owes Alkhaseh is obviously to allow the circuit court to litigate 

and liquidate Alkhaseh’s cross-claim to a sum certain so that the bankruptcy court can 

justifiably rely on that amount in fashioning John’s Chapter 13 repayment plan. That begs 

the question of why, or how, can the bankruptcy court rely on that sum certain in fashioning 

the repayment plan, if that sum certain is still subject to subsequent appellate review? The 

answer, obviously, is that it cannot rely on that amount with any reasonable certainty. The 

bankruptcy court requires a definitive answer. And the definitive answer can be supplied to the 

bankruptcy court only after appellate review. By way of analogy, this is not unlike the 

scenario where in federal court litigation, a federal district court—pursuant to Arkansas 

Supreme Court Rule 6-8—asks the Arkansas Supreme Court to accept jurisdiction and 

answer a state question posed therein. The federal court requires a definitive answer, not an 

intermediate answer. The federal court does not ask a circuit court for an answer and does 

not even ask the court of appeals for an answer to the question. Why? Because decisions of 

the circuit court and even the court of appeals can be reviewed and overturned by the 

supreme court and further delay the federal litigation. The federal court requires a definitive 

answer, and the definitive answer can only come from the Arkansas Supreme Court. This 

requirement of a definitive answer from the supreme court was discussed in the following 

excerpt:
32

Section (a) of Arkansas Supreme Court Rule 6-8 permits only the Arkansas Supreme 

Court to receive and respond to certified questions. The Arkansas General 

Assembly’s rejection of an alternative rule, which would have allowed the Arkansas 

Court of Appeals to respond to certified questions as well, sheds light on the reason 

why Section (a) may have been so structured. In 1966, the American Law Institute 

suggested this same limitation of allowing questions to be certified only to a state’s 

highest court, a limitation that the UCQLA Commissioners later accepted. 

According to one commentator, the reason for this decision was the thought by the 

UCQLA Commissioners that delay “would be increased by certification to an 

intermediate state court whose decisions would always be subject to appeal and 

reversal.” Therefore, certification to the Arkansas Court of Appeals would defeat major 

purposes of the certification process of obtaining a final, definitive answer on Arkansas state 

law and saving federal courts and litigants time and money. By adopting the more limited 

approach, and thereby avoiding the risks of appeal and reversal, the Arkansas General 

Assembly helped to ensure that the certification process in Arkansas would achieve 

these goals.

Coby W. Logan, Certifying Questions to the Arkansas Supreme Court: A Practical Means for Federal 

Courts in Clarifying Arkansas State Law, 30 U. Ark. Little Rock L. Rev. 85, 89 (2007) (footnotes 

omitted) (emphasis added). 

The analogy here is that just like a federal district court requires a definitive answer 

to the state question to proceed in the federal litigation, the federal bankruptcy court 

similarly requires a definitive answer to the question of how much debt the debtor, John 

Wood, owes Alkhaseh before it can proceed and fashion a Chapter 13 repayment plan. 

Without a definitive answer, and especially with an intermediate answer that is rife with 

potential error, the bankruptcy cannot proceed with any expectation of accuracy or 

reliability. If the bankruptcy court fashions a Chapter 13 repayment plan based on indefinite 

and inaccurate information from the circuit court, the plan is doomed to subsequently fail. 

For hypothetical purposes, assume the bankruptcy court utilizes the $747,424.35 judgment 
33

against John Wood in fashioning its repayment plan, and further assume that the circuit 

court was 100 percent in error and the judgment against John Wood should be $0. How 

can the federal bankruptcy court’s repayment plan possibly be correct when the circuit court 

has erroneously entered a $747,424.35 liability in John Wood’s bankruptcy estate? That 

judgment must be reviewed by this court, and we must provide the bankruptcy court with a 

definitive answer to the only question referred to us: How much debt does John Wood owe 

Alkhaseh? 

... or a Separable Part of it.

It is elementary that in order for judgment to be final, it must dismiss parties from 

court, discharge them from action, or conclude their rights to subject matter in controversy. 

Taylor v. Taylor, 26 Ark. App. 31, 759 S.W.2d 222 (1988). To be final and appealable, an 

order must not only decide the rights of the parties, but also put the court’s directive into 

execution, ending the litigation or a separable part of it. Tucker, 323 Ark. 693, 917 S.W.2d 

530; Farris, 309 Ark. 575, 832 S.W.2d 482; Foreman, 78 Ark. App. 48, 82 S.W.3d 176; Lee, 

73 Ark. App. 429, 43 S.W.3d 767; Phelps, 72 Ark. App. 464, 37 S.W.3d 692. 

The standard—to be final and appealable, an order must not only decide the rights of 

parties, but also put court’s directive into execution, ending the litigation or a separable part of 

it—has been quoted more than one hundred times in Arkansas appellate jurisprudence since 

apparently first used in 1978 in Festingor v. Kantor, 264 Ark. 275, 571 S.W.2d 82 (1978). 

While we are familiar with the premise that the order must decide the rights of the parties, 

the remainder of the standard,—but also put the court’s directive into execution, ending the 
34

litigation or a separable part of it—is not as familiar. In fact, the final phrase “. . . or a separable

part of it” has not received any judicial interpretation. But it has been quoted with approval 

more than one hundred times, so it must mean something. By using ordinary definitions, 

“or a separable part of it” must mean what it says. In some circumstances where part of the 

litigation can be “separated,” then that separated part may be deemed final and appealable. 

That is exactly what we have here. 

When the bankruptcy court entered its stay and the circuit court ordered “this matter 

is closed,” all proceedings in circuit court lurched to a stop. The circuit court, perhaps, could 

have entered a less expansive order, but it ordered “this matter is closed.” What was closed? 

David Wood’s complaint against John Wood and Holly Wood on the promissory 

note

Alkhaseh’s cross-claim for nonpayment on the promissory note and breach of the 

transfer agreement against John Wood and Holly Wood 

Alkhaseh’s third-party complaint against Tara Capital, LLC

Alkhaseh’s third-party complaint against the Benton County collector 

Alkhaseh’s third-party complaint against commissioner of state lands

Dawn Hill POA’s complaint in intervention 

When John Wood filed his petition for bankruptcy, an automatic stay was entered. 

The purpose of the automatic stay is to maintain the status quo of the debtor’s estate vis- àvis various creditors and to prevent a race to the courthouse where one creditor could 

favorably position itself ahead of another creditor. 
35

The bankruptcy court was faced with the six causes of action described above. For 

reasons known only to the bankruptcy court, the bankruptcy court separated out the crossclaim by Alkhaseh against John Wood to be lifted from the stay and remanded to the circuit 

court to determine how much money John owed Alkhaseh. Regardless of the finality of 

other aspects of the circuit court litigation, the bankruptcy court separated out Alkhaseh’s 

cross-claim against John so that the circuit court could determine that debt. This is perfectly 

in line with the premise that, to be final, an order must not only decide the rights of the 

parties, but also put the court’s directive into execution, ending the litigation or a separable part 

of it. Here, the parties are John Wood and Alkhaseh. The circuit court’s order decided the 

rights of John Wood vis-à-vis Alkhaseh to the tune of a $747,424.35 judgment. And the 

court’s order put the court’s directive into execution, ending a separable part of the litigation. 

The separable part of it was Alkhaseh’s cross-claim for nonpayment on the promissory note 

and breach of the transfer agreement, which was the only separable part of the multifaceted 

circuit court litigation that was lifted from the stay. To that end, the Alkhaseh’s judgment 

in the amount of $747,424.35 is a final and appealable order. 

The supreme court has stated that the “test of finality and appealability of an order is 

whether the order puts the court’s directive into execution, ending the litigation or a 

separable part of it.” Villines v. Harris, 362 Ark. 393, 397, 208 S.W.3d 763, 766 (2005). 

However, when the order appealed from reflects that further proceedings are pending, which do not 

involve merely collateral matters, the order is not final. Id. Under the particular circumstances 

of this case, where the circuit court was reinvested with limited jurisdiction for the sole 
36

purpose of assessing the debt owed from John to Alkhaseh, I would conclude that no further 

proceedings are presently pending in circuit court for purposes of finality and John Wood’s 

right to appeal from the amount of damages set by the circuit court. Furthermore, the often 

repeated “separable part of it” language must mean something, and under these 

circumstances and for the reasons explained herein, a separable part of this litigation has 

concluded for purposes of John’s appeal from the damages award. Therefore, I would hold 

that we have jurisdiction of the judgment for damages against John and that we should reach 

the merits and issue a ruling. 

HIXSON, J., joins.

Eric Soller, for separate appellants John Wood and Tara Capital, LLC.

Brett D. Watson, Attorney at Law, PLLC, by: Brett D. Watson, for separate appellant 

Holly Wood.

William R. Mayo, for separate appellee Ladimer Alkhaseh.

Carla Wasson, for separate appellee Dawn Hill Townhouse and Condominium 

Property Owners Association, Inc.