Court Opinion

ID: 6552019
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:28:19.871888+00
Date Added: 2024-06-11T15:56:08.014953
License: Public Domain

Melvin Mayfield, Judge, dissenting. I dissent from the majority opinion in this case because it does not decide the issues presented by the appellant. Without reciting all the history of the litigation, the background pertinent to the issues presented by this appeal can be briefly stated. In February of 1990, the Federal Deposit Insurance Corporation (FDIC), as receiver of a failed savings and loan company, filed suit in United States District Court seeking foreclosure of a mortgage on certain property in Monroe County, Arkansas. The appellant, Coleman’s Service Center, Inc., was operating a truck stop on the property under a lease with the mortgagor, and appellant was made a party to the foreclosure suit. Subsequently, appellee FDIC and appellee Southern Inns Management, Inc., who had been appointed receiver of the property by the federal court, dismissed their federal court suit against Coleman’s and filed the present case in Monroe County Circuit Court. This suit was based on breach of contract and sought damages and possession of the property. The case in state court was set for hearing on February 12, 1991, but Coleman’s and its attorney failed to appear at 9:00 a.m. The court proceeded in their absence and entered an order finding appellees entitled to possession of the property and money damages. Coleman’s filed a motion to set aside this order, but the motion was denied. In March of 1991, Coleman’s filed a counterclaim against FDIC and Southern based upon breach of contract and slander. This claim was dismissed in January of 1992 on the finding of the state court that it did not have subject matter jurisdiction to hear it. (A third party complaint was also dismissed.) On February 7, 1992, the state court entered an order pursuant to Ark. R. Civ. P. 54(b). The order makes the following pertinent findings: The court notes that there is related litigation pending between these parties in the United States District Court and the court further notes that Coleman’s Service Center, Inc. has indicated that it will appeal the United States District Court’s decision to the Eighth Circuit Court of Appeals. The court further observes that the plaintiffs’ claim against the defendant is reset for pretrial on April 3, 1992 by order filed January 23, 1992. The court finds that it would be highly prejudicial for the plaintiff to proceed to trial and obtain judgment against Coleman’s Service Center, Inc. on its cause of action without first having a final adjudication of said Coleman’s Service Center, Inc.’s right to assert its counterclaim and third party complaint. The court therefore determines that there is no just reason for the delay and the court further expressly directs entry of final judgment at this time pursuant to Rule 54(b). On February 7, 1992, Coleman’s filed a notice of appeal specifically stating that it “appeals all orders and judgments entered herein.” In its brief to this court, appellant makes four arguments. The first argument contends that the state court did not have jurisdiction to grant possession of the property to the appellees or to award appellees damages based upon a breach of contract involving the possession of said property. Coleman’s argument on this point is based on the contention that the appellees dismissed part of the issues in federal court pertaining to Coleman’s lease and filed those claims again in state court. Coleman’s argument is that this “is a clear violation of a long established rule in Arkansas that prohibits the splitting of causes of action.” Citing Lisenby v. Farm Bureau Mutual Ins. Co., 245 Ark. 145, 431 S.W.2d 484 (1968), and Eiermann v. Beck, 221 Ark. 138, 252 S.W.2d 388 (1952), as well as other authorities, the appellant says that the appellees’ suit in federal court originally included allegations sufficient to involve all security for the mortgage, but appellees dismissed Coleman’s interest in the collateral from that suit and brought suit in state court for possession of that portion of the collateral. This, it is argued, violated the rule against splitting causes of action and, under the authorities cited, the state court did not have jurisdiction over this “split” cause of action. I do not discuss the merits of the above point but only call attention to the fact that the majority does not decide this point. The majority simply says that the trial court did not err in “dismissing the appellant’s counterclaim.” The majority takes the position that subject matter jurisdiction, as argued under Coleman’s first point, is not before this court on appeal. The majority concedes that the trial court’s findings were sufficient to permit it to “direct the entry of a final judgment as to one or more but fewer than all the claims,” as authorized by Ark. R. Civ. P. 54(b). But the majority says that the trial court “directed the entry of final judgment as to the dismissal of appellant’s counterclaim and third party complaint, in order to permit Coleman’s to appeal that dismissal” and that the issues Coleman’s raises on appeal “are totally unrelated to the interlocutory order that it has been permitted to appeal.” In all due respect, I find this statement hard to understand. Coleman’s counterclaim, and amendments thereto, filed against the appellees alleged that appellees wrongfully breached the lease agreement under which Coleman’s operated the truck stop. The trial court dismissed the counterclaim and directed its entry as a final order, which could be appealed under Ark. R. Civ. P. 54(b), because “it would be highly prejudicial for the plaintiff [appellees] to proceed to trial and obtain judgment against [Coleman’s] . . . without first having a final adjudication of said [Coleman’s] right to assert its counterclaim and third party complaint.” Thus, it seems clear to me that Coleman’s first point, which argues that the appellees could not split their cause of action and sue for possession in state court, is a proper point to argue in this case in which a final order has been entered pursuant to Rule 54(b). This issue would clearly have some effect on Coleman’s counterclaim. Coleman’s second point on appeal is likewise properly before this court. This point argues that the trial court erred in refusing to set aside the order finding appellees entitled to possession and damages because Coleman’s was not in court in person or by counsel at 9:00 a.m. on February 12, 1991. Appellant filed a motion, with an affidavit, to set that order aside. Again, without discussing the merits of the argument, I dissent because the majority does not decide whether the motion should have been granted. The third and four points argued by the appellant are set out in the majority opinion. Without extending this discussion, I would only call attention to the fact that neither of these two points is decided by the majority. Without citation of authority, the majority opinion is based on the assumption that the judgment which a court makes “final” under the authority of Ark. R. Civ. P. 54(b) must be “reasonably related” to the order that is questioned on appeal. While it may be possible to think of a factual situation where there would be no reasonable relationship, I do not agree that this should be a rule or restriction announced by this court. But, in any event, the concept is not applicable in this case. Here, as the majority opinion points out, the trial court has directed the issuance of a writ of possession. No money judgment has yet been entered; further hearings are contemplated; and, as the trial court noted, a pretrial has been set. The order dismissed the appellant’s counterclaim because of lack of subject matter jurisdiction. The trial court directed that this is a final judgment, and one of the reasons this is allowed by Rule 54(b) will be defeated if we simply affirm the dismissal of the counterclaim and do not decide the points argued by the appellant in this appeal. The problem in this case is not that the points argued on appeal are unrelated to the order that dismissed the appellant’s counterclaim but that the appellant does not argue that the court erred in dismissing the counterclaim. Our Rule 54(b) is taken word-for-word from Rule 54(b) of the Federal Rules of Civil Procedure. In Curtiss-Wright Corporation v. General Electric Company, 446 U.S. 1 (1980), the Court discussed the application of Federal Civil Procedure Rule 54(b) and said that one of the considerations involved was “whether the nature of the claims already determined was such that no appellate court would have to decide the same issues more than once even if there were subsequent appeals.” 446 U.S. at 8. Here, the trial court properly directed that the order dismissing the appellant’s counterclaim be entered as a final judgment. Regardless of whether the dismissal is argued as error in this appeal, the points that are argued by appellant are related to the dismissal of the counterclaim, and if they are decided in this appeal they will not have to be decided in another appeal. I dissent because the majority opinion affirms the dismissal of the counterclaim, thus treating it as a final order, but refuses to decide the other issues presented in this appeal.