Court Opinion

ID: 9640512
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:07:25.343108+00
Date Added: 2024-06-11T18:10:30.495265
License: Public Domain

David Newbern, Justice, dissenting. The decision should be reversed and dismissed because the chancery court lacked jurisdiction of the subject matter of the action. The circuit court has jurisdiction of a civil action if jurisdiction has not been vested in another court established by the Arkansas Constitution. Ark. Const, art. 7, § 11. The complaint in this case was plainly one for damages for deceit. Punitive damages were sought. As the majority opinion points out, the complaint was filed in the circuit court but, for reasons not disclosed by the record, transferred to the chancery court. At the outset of the hearing, the chancellor was apparently exploring with counsel the nature of the remedy sought. BY MR. SUTTERFIELD [counsel for the plaintiffs Altech and Kusuma]:. . . .Your Honor, if I could make a very brief opening statement. Your Honor, essentially the claim being brought by my clients against Mr. Malakul is one based on equitable rescission of contract due to . . . fraudulent misrepresentation. Counsel then explained the facts surrounding the entry of the agreement including misrepresentations on which the plaintiffs relied. He also explained the position of plaintiff Spiker who was one of the creditors and who allegedly had been asked by Malakul to participate in the fraud. After responses by Mr. Whitehead, who represented the defendants, and Mr. Dixon representing Mr. Spiker, the court inquired of Mr. Dixon whether Spiker’s lien had been filed on time. Dixon replied that there was no lien, and that Spiker’s action was on his agreement with Malakul. ' BY THE COURT: You are suing for debt then? BY MR. DIXON: Yes, sir. That’s basically what it is. BY THE COURT: Let me ask one other thing. How did this get out of Circuit Court? Why is it out? BY MR. SUTTERFIELD: It’s out based on — BY THE COURT: Thickness of the file? BY MR. SUTTERFIELD: Probably, your honor. From that point on, the case became a jurisdictional charade which continues unabated in this court. The complaint of the Kusumas sought compensatory damages and punitive damages. The proof went to their losses rather than to the restitutionary award which would have been proper had this truly been a rescission action. Although the trial court’s judgment and the majority opinion here both avoid use of the term “damages” (and no punitive damages were awarded), there is no other legitimate description for the money judgments which were sought and granted. The answer filed by the Malakuls stated that Mrs. Malakul was not a party to the “dealings” between Robert Malakul and Mr. Kusuma and it sought dismissal of the complaint against her. Not only was she not dismissed, the judgment, which can only be characterized as one for damages, was awarded jointly and severally against Mr. and Mrs. Malakul. There was not even an allegation that Mrs. Malakul was a party to the contract, although it was alleged, and there was evidence from which it could have been concluded, that she was a party to the tort of deceit. It is difficult to imagine how the court could award restitution against a person on the basis of rescission of a contract to which it was not even alleged she was a party. In Liles v. Liles, 289 Ark. 159, 711 S.W.2d 447 (1986), and Carter v. Phillips, 291 Ark. 94, 722 S.W.2d 590 (1987), we noted that we would not raise the question of a chancery court’s jurisdiction on appeal unless it was wholly incompetent to have heard the case. That is the situation here. No equitable remedy was sought in the pleadings, and the weak statement of counsel that this was a rescission case is to no avail. If it were not clear enough at the trial that this was a deceit action, it becomes eminently so upon reading the majority opinion’s references to and reliance on the elements of a deceit action set out in Grendell v. Kiehl, 291 Ark. 228, 723 S.W.2d 830 (1987), which was clearly a tort action for deceit tried properly in the circuit court. While I can understand the temptation to overlook the jurisdictional issue when the parties are unconcerned about it, and when raising it may seem to upset a fair result, we have held that “[w]hen a trial court enters an order without jurisdiction over the subject matter, the question cannot be overlooked even if not raised.” Larey v. Continental Southern Lines, Inc., 243 Ark. 278 at 286, 419 S.W.2d 610 at 615 (1967). We have gone as far as we can or should go in effacing the jurisdictional lines between our chancery and circuit courts by our liberal interpretation of the cleanup doctrine. See, e.g., Liles v. Liles, supra. This case does not involve the cleanup doctrine. If the courts of law and equity are to be merged, leaving only the matter of jury trial dependent on the form of action or remedy sought, the constitution must be changed. It should not be done by judicial fiat. Hickman, J., and Dudley, J., join this opinion.