Court Opinion

ID: 9764970
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:46:58.885993+00
Date Added: 2024-06-11T07:30:02.881496
License: Public Domain

Robert H. Dudley, dissenting. Plaintiff, Danny Roach, filed suit in chancery court against defendant, Concord Boat Corporation. Plaintiff’s complaint contained counts alleging deceit and mistake. Defendant did not file a motion asking that plaintiff be required to elect between the inconsistent remedies for these causes of action, rather it filed a counterclaim for an account stated, an action cognizable at law. The chancellor did not rule on the mistake count asking for rescission, but ruled on plaintiff’s deceit count asking for damages and the defendant’s counterclaim. The majority opinion reverses on both direct appeal and cross-appeal on matters cognizable at law and remands to chancery court for a new trial on those law matters. I dissent. I. Plaintiff’s complaint contained counts for inconsistent, or repugnant, remedies. In the first count, the deceit count, he sought to treat the contract as binding and fully in force and asked for both compensatory and punitive damages for the deceit that caused him to enter into the binding contract for the purchase of the boat. However, in the second count, the rescission count, he contended that due to a “mistake of material fact” he was “entitled to rescission of the contract for sale of the boat, and return of the purchase price plus interest.” In the first count, he sought damages as a result being tortiously induced to enter a binding contract, and in the second count he sought to rescind the contract and the return of his consideration. He sought a double redress for a single wrong. It is well settled that a purchaser must elect between inconsistent, or repugnant, remedies. A case in point is Eastburn v. Galyen, 229 Ark. 70, 313 S.W.2d 794 (1958). In that case, Eastburn purchased a cheese plant from Galyen. In discussing Eastburn’s options, we wrote that he had a choice of one of two inconsistent remedies: One was to accept title to the cheese plant and sue Galyen for the damage he had been caused by the alleged misrepresentations. The other remedy called for a rejection of title to the property, and a petition for recision of the sale and a refund of the purchase money which had been paid. When Eastburn elected to pursue the latter remedy, he was thereby precluded from later resorting to former remedy. All the essential conditions or elements applicable to the rule relating to election of remedies are present in this particular case: (a) Both remedies were available to appellants, (b) they are inconsistent, (c) they are based on the same state of facts, (d) the same parties were involved in both suits, and (e) appellants were not mistaken as to the existence of any material facts. In the case of Bigger v. Glass, 226 Ark. 466, 290 S.W.2d 641, the Court approved, and commented on, three essential elements: (1) The existence of two or more remedies, (2) the inconsistency between such remedies, and (3) a choice of one of them. Eastburn, 229 Ark. at 71, 313 S.W.2d at 795. The requirement of election of inconsistent remedies is a prohibition against more than one recovery on inconsistent remedies. Westark Specialties, Inc. v. Stouffer Family Ltd. Partnership, 310 Ark. 225, 232, 836 S.W.2d 354, 357 (1992). It is not a requirement that a plaintiff plead only one cause of action, and it is not applicable to counts involving consistent remedies. A plaintiff may pursue as many consistent, or concurrent, or cumulative remedies as exist, but he may have only one satisfaction of the debt. See Davis v. Lawhon, 186 Ark. 51, 52 S.W.2d 887 (1932), for a list of cases to that time so holding. As an example of consistent or concurrent remedies, in the case at bar, the plaintiff in count one, the deceit count, sought damages for the tort of deceit and breach of contract, and such was entirely proper as they are consistent with a remedy for a binding contract. II. Circuit court has subject matter jurisdiction of all actions for redress of civil wrongs except when exclusive jurisdiction is given to some other court. Ark. Const, art. 7, § 11 & Ark. Code Ann. § 16-13-201 (Repl. 1994). Jurisdiction of tort actions has never been given to chancery court by the General Assembly. Count one of the complaint is labeled in the majority opinion as being for the “tort of fraud, misrepresentation, or deceit.” Historically, the action has,-been labeled the tort of deceit. See MFA Mutual Ins. Co. v. Keller, 274 Ark. 281, 623 S.W.2d 841 (1981), for discussion of the history of the tort. The cquse of action has always been cognizable in a court of law. See Bagley v. Shoppach, 43 Ark. 375 (1884); Wheeler Motor Co. v. Roth, 315 Ark. 318, 867 S.W.2d 446 (1993), but see Nicholson v. Century 21, 307 Ark. 161, 818 S.W.2d 254 (1991), which was most likely based on the equitable remedy of indemnity. Thus, circuit court has subject matter jurisdiction of the cause of action for deceit. The counterclaim of the defendant is for recovery on an uncomplicated account stated. Equity has no jurisdiction of an account action when the account is not complicated and difficult. Arkadelphia Milling Co. v. Barker, 109 Ark. 171, 159 S.W. 208 (1913). Thus, the circuit court had subject matter jurisdiction of the cause of action for the tort of deceit and the account stated. On the other hand, chancery court has subject matter jurisdiction of actions for equitable rescission. Smith v. Walt Bennett Ford, Inc., 314 Ark. 591, 864 S.W.2d 817 (1993). Thus, subject matter jurisdiction of plaintiff’s second count was in chancery court. III. The majority opinion provides that because plaintiff “included a request for rescission in his complaint and presented evidence to support that claim, the equity court had jurisdiction of the fraud claim pursuant to the clean-up doctrine. Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1986).” Liles does not support the statement in majority opinion. Rather, it provides that chancery court has jurisdiction over tort claims only when they are “incidental for the purpose of exercising the clean-up doctrine.” Id. at 174. In the case at bar, the deceit action is not incidental to the rescission action. Instead, it is inconsistent with the rescission action. The equitable remedy of rescission cannot logically give rise to the inconsistent remedy of deceit. There is no nexus whatsoever. An inconsistent remedy cannot logically give rise to the clean-up doctrine. IV. Chancery court had subject matter jurisdiction of the count for rescission that alleged mistake. Circuit court had subject matter jurisdiction of the count for deceit that asked for damages. The issue is whether the plaintiff made an election of remedies when he filed the counts for inconsistent remedies in chancery court. There are no cases in point, but one is close, and its reasoning gives guidance. In Belding v. Whittington, 154 Ark. 561, 243 S.W. 808 (1922), Belding agreed to sell the Plateau Hotel in Hot Springs to Whittington and Wootton. Belding sued Whittington, Wootton, and Wootton’s wife in circuit court and alleged that Whittington and Wootton had refused to pay the remainder of the purchase price and that they and Wootton’s wife had sold the hotel to a third party. Belding alleged a breach of the contract and asked the circuit court to award damages for the breach of contract. Belding subsequently dismissed the circuit court suit without prejudice. He then filed a suit in chancery court and asked for specific performance of the contract. With regard to inconsistent remedies, we said: An action at law for damages growing out of an alleged breach of contract for failure to execute a deed is inconsistent with an action in equity seeking to have the contract specifically performed by having the deed executed. One cannot maintain an action at law for damages growing out of an alleged breach of contract in failing to execute a deed and at the same time maintain an independent action in equity to require the same party to perform the contract by executing the deed. Belding, 154 Ark at 565-66, 243 S.W. at 809. We affirmed the chancery court’s dismissal of the action because Belding had first filed the suit in circuit court and it had subject matter jurisdiction of the case. We said it did not matter that he had dismissed the circuit court suit. In so holding we wrote: We are aware that many very able courts hold that the mere bringing of an action which has been dismissed before judgment, and where no advantage has been gained by the party bringing the same, or no detriment has been occasioned to the party against whom the same is brought, is no election. See cases cited in Connihan v. Thompson, 111 Mass. 370; Otto v. Young, 227 Mo. 193; and other cases cited in brief of learned counsel for appellant. But there is-also excellent authority to the contrary. See cases cited in 9 R.C.L. 260, notes 1 and 5. The doctrine of our own court is in accord with the view that where there has once been an election between alternative and inconsistent remedies not occasioned by a mistake or ignorance or material facts, but as the result of a deliberate choice of election between the two, the party making such choice cannot afterwards recant, dismiss his pending action and invoke another remedy in the same or a different forum, even though no positive disadvantage or injury has resulted to the other party. We believe the better reason is to hold one to a deliberate choice once made between inconsistent remedies, where that choice involves nothing more than the determination by the party as to which of two remedies will best subserve his purpose. Certainly this doctrine has the merit of preventing one who is about to hale another into court from making a capricious choice between inconsistent remedies which he may pursue. Because he knows that whatever course he elects to pursue he will not thereafter be allowed to shift his ground, unless he can show that his election was based upon a mistake of material facts. No such showing is presented by the facts of this record. Belding, 154 Ark. at 568, 243 S.W. at 810. In the case at bar, the plaintiff, Roach, filed the two counts asking for inconsistent remedies in chancery court. Chancery court had subject matter jurisdiction only of the mistake count requesting rescission. Under the reasoning of Belding, the plaintiff, in filing the action in a court with subject matter jurisdiction of the first count, the rescission count, made an election to pursue the rescission action in chancery court. The defendant answered in that court and “should not be haled into another court” to try a deceit case. Equity will have jurisdiction of the counterclaim for the account stated under the clean-up doctrine. V. The majority opinion reverses this case on both direct and cross-appeal on the merits and remands for another trial on the inconsistent counts in chancery court. Such reasoning defies logic. Under our cases, the plaintiff-appellant has elected to pursue the rescission count, but the chancellor did not rule on that count. The case should be remanded for a hearing on the rescission count, and, under the clean-up doctrine, the chancery court has jurisdiction of defendant’s counterclaim. The chancellor should also be made aware that the remedy of rescission can include indemnity. For the reasons set out, I dissent. Holt, C.J., and Newbern, J., join in this dissent.