Court Opinion

ID: 9620800
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:47:54.953232+00
Date Added: 2024-06-11T13:37:08.885487
License: Public Domain

Karen R. Baker, Judge, dissenting. The majority’s holding is based on the presumption that an event of default occurred prior to the dispute over the timeliness of the November rent payment.1 The majority states that the “trial court apparently interpreted the provision at issue just as appellee did: when appellants failed to timely pay the rent on November 1, and within the six months had received notice of a prior failure to perform in October, then appellants’ failure to timely pay the November rent resulted in an automatic default.” Thus the majority’s interpretation is based upon the premise that an event of default occurred in October; however, that is the factual issue that must be determined in this case. The necessity of resolving this question renders the matter inappropriate for summary judgment. At issue is whether payment within the five-day cure period is a failure to timely perform resulting in an “event of default.” The notice letter of October 2, 2003 states that, “Your failure to pay within five (5) days after this notice . . . will result in an Event of Default.” (Emphasis added.) The notice letter does not say that your failure to pay the taxes on October 1, 2003, has resulted in an event of default pursuant to our settlement agreement. The language in the notice letter indicates the possibility that a default will occur if appellants fail to pay the taxes within five days of the notice. This language indicates that there is no event of default if payment is made within the five days. Nothing in the record indicates that appellants failed to pay the taxes within the five days of the receipt of the notice. In fact, appellee’s complaint upon which the summary judgment was granted does not even allege that appellants failed to pay the taxes within the five-day period. The language of the notice letter is entirely consistent with Appellants’ argument that when they cured the first late payment, no default occurred. The majority rejects appellants’ argument saying that appellants did not urge this interpretation below. However, the citation to the record by appellants in their brief includes the following argument from their response to the motion for summary judgment filed by appellee, plaintiff below: The final Paragraph of Section 10.1, the paragraph upon which the Plaintiff bases his whole case, clearly follows, and falls within, the “Notice requirement” part of the section. A reading of that final paragraph confirms that it is a specific “notice” provision, that states the circumstances under which a notice is not required. The final Paragraph sets out a necessary precondition, that being a factually confirmed failure to timely perform, at which point a subsequent such failure triggers a default for which notice need not be sent. However, “failures to timely perform” are simply not defined in this paragraph because this is not a default defining Paragraph. This Paragraph is part of the notice provisions. The dfault dfining part of Section 10.1 is found a full page before. After having first misconstrued the nature of this provision, the Plaintiff now goes on to misconstrue the meaning and substance of said provision. They accomplish this misconstruction by interpreting this provision to apply only to what is contained within Section 10.1 ofthe February 2003 Settlement Agreement. By the Plaintiff s reading, the only precedent occurrence to which this “no notice” provision can apply, are Lessee obligations satisfied within the cure period. Appellants’ Argument, p. 24, citing addendum 228-233. Appellants’ argument does not specifically address the majority’s presumption that a default occurred before the November dispute. That is understandable since the appellants’ argument presupposes that there is no default if a payment is made within the cure period. The majority quotes from appellant Newman McGee’s affidavit and adds emphasis to appellant’s understanding that the “ ‘no’ notice provision was simply a provision which allowed accelerated termination of the Lease without notice in case of a second event of default.” (Emphasis added by the majority). The majority ignores the fact that the appellants are saying that the five-day cure period is available for the November rent payment because no event of default occurred in October. No one alleges that appellants failed to pay the taxes within the five-day cure period in October, and there is no evidence that they did not pay within that period. So the fact question in this case is whether an event of default occurred prior to the November dispute that negated the notice requirement. The majority presumes that an event of default occurred in October regarding the payment of the taxes making the delay of the November rent payment a second failure to timely perform. The majority asserts that “under appellants’ reading a default may be automatically declared only when a lessee ‘fails to perform’ by failing to pay within the cure period.” However, that is not what appellants argue. Appellants actually argue that before the “no notice” provision can be applied, there must first be a factually confirmed failure to timely perform that results in an event of default. Given that the letter from appellee specifically stated that a failure to pay within five days of the notice would be an event of default, and there is no allegation nor evidence that appellants failed to pay within the five days, I cannot say that as a matter of law an event of default occurred prior to the November dispute. “Summary judgment is to be granted by a trial court only when it is clear that there are no genuine issues of material fact to be litigated, and the party is entitled to judgment as a matter of law.” Wallace v. Broyles, 331 Ark. 58, 66, 961 S.W.2d 712 (1998) (Wallace I) (citing Pugh v. Griggs, 327 Ark. 577, 940 S.W.2d 445 (1997)). The standard is whether the evidence is sufficient to raise a fact issue, not whether the evidence is sufficient to compel a conclusion. Id. (citing Caplener v. Bluebonnet Milling Co., 322 Ark. 751, 911 S.W.2d 586 (1995)). A fact issue exists, even if the facts are not in dispute, if the facts “may result in differing conclusions as to whether the moving party is entitled to judgment as a matter of law. . . [I]n such an instance, summary judgment is inappropriate.” Wallace v. Broyles, 332 Ark. 189, 961 S.W.2d 712 (1998) (supplemental opinion denying rehearing) (Wallace II). On review, this court should determine whether summary judgment was appropriate based on whether the evidence presented in support of summary judgment leaves a material question of fact unanswered. Wallace I, supra. This court views the evidence in a light most favorable to the party against whom the motion was filed, resolving all doubts and inferences against the moving party. Wallace I, supra. Our review focuses not only on the pleadings, but also on the affidavits and other documents filed by the parties. Id. (citing Angle v. Alexander, 328 Ark. 714, 945 S.W.2d 933 (1997)). Ultracuts Ltd. v. Wal-Mart Stores, Inc., 343 Ark. 224, 231, 33 S.W.3d 128, 133 (2000). Furthermore, the object of summary-judgment proceedings is not to try the issues, but to determine whether there are any issues to be tried, and if there is any doubt whatsoever, the motion should be denied. Flentje v. First National Bank of Wynne, 340 Ark. 563, 11 S.W.3d 531 (2000). Although the majority presumes a default occurred prior to the November controversy, the fact question at issue is whether such a default in fact occurred triggering application of the “no notice” automatic default provision. Appellants argue that no default occurred prior to November so the automatic default provision had no application. Since Appellants’ broad construction of the lease is as valid an interpretation as the appellees’ narrow construction, this case should be remanded for trial. Accordingly, I dissent.   The majority footnotes that no default occurred in October, rather a failure to perform occurred in October. Black’s Law Dictionary, 6th edition, defines “default” as “An omission of that which ought to be done_ Specifically, the omission or failure to perform a legal or contractual duty.” (Emphasis added.)