Court Opinion

ID: 5110520
Source: CourtListenerOpinion
Date Created: 2021-10-02 14:26:46.10356+00
Date Added: 2024-06-11T08:21:31.642759
License: Public Domain

ELANA CUNNINGHAM WILLS, Justice, concurring in part and dissenting in part. I concur in Part I of the majority opinion as to the untimeliness of the appellant Tasha Orr’s motion to strike, but I must respectfully dissent from Part II of the majority opinion regarding the dismissal of Orr’s complaint. In my view, our case law imposing a waiver of the right to plead further after an affirmance of the granting of a Rule 12(b)(6) motion to dismiss should have no application to venue dismissals pursuant to Rule 12(b)(3). I believe the facts of Servewell Plumbing, LLC v. Summit Contractors, Inc., 362 Ark. 598, 210 S.W.3d 101 (2005), are mostly distinguishable from the case at bar, rendering the discussion of waiver in that case dicta. To the extent Servewell is not distinguishable, I believe its conclusion that an affirmance on appeal after a dismissal for improper venue waives the cause of action is, as the court of appeals put it, “mistaken.” I therefore respectfully dissent. The origin of the rule imposing a waiver of the right to plead further after the appeal of the granting of a motion to dismiss appears to be found in the case of Arkhola Sand & Gravel Co. v. Hutchinson, 291 Ark. 570, 726 S.W.2d 674 (1987) (Arkhola II). In Arkhola, the plaintiff-appellant, Arkhola, a supplier of sand and gravel, attempted to sue on a material-man’s lien. Suit was brought against the owners of the property and the contractors who constructed the improvements. The owners moved to dismiss because the property | ^description in the lien was insufficient. The circuit court agreed and dismissed the complaint as to the owners. Arkhola appealed and the appeal was dismissed for lack of a final order. Arkhola Sand & Gravel v. Hutchinson, 289 Ark. 313, 711 S.W.2d 474 (1986) (.Arkhola I).1 Arkhola thereafter procured a certificate pursuant to Arkansas Rule of Civil Procedure 54(b) and appealed again. On the subsequent appeal in Arkhola II, Arkhola argued that, if its description was indeed found to be insufficient, it should be allowed to present extrinsic evidence to show that the description was adequate. This court agreed in principle, noting that the initial deficiency in the description would not necessarily have precluded Ark-hola from using extrinsic evidence to show that the description was adequate. The court concluded, however, that because Arkhola had appealed the circuit court’s dismissal of its complaint, rather than pleading further, it “waived its opportunity to plead further,” stating: We agree with Arkhola to the extent that it could have pled further to show by extrinsic evidence the description was sufficient. Arkhola’s deficiency was failure to state a claim and the trial court did not look beyond the pleadings to reach its decision. Nor were there any matters outside the pleadings presented to the trial court on this issue. See ARCP Rule 12(b)(8). Accordingly, the trial court correctly granted the motion to dismiss without any mention of prejudice to Arkhola, and Arkhola had an election at that time whether to plead further or appeal. See Ratliff [v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984) ].... Arkhola’s actions, however, have precluded that possibility. Arkhola did not plead further but elected instead to appeal to this court.... We declined to hear the case as it was not a final order under ARCP Rule 54(b). Arkhola then sought a final order form the trial court pursuant to Rule 54(b) and appealed again, which is the case now before us challenging the finding that the description was | ^insufficient. Arkhola has now waived its opportunity to plead further and when the case was resubmitted to the trial court for a final judgment under 54(b), it was properly dismissed with prejudice. Arkhola II, 291 Ark. at 578-74, 726 S.W.2d at 676 (emphasis added). The Arkhola II court relied upon the decision in Ratliff v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984). In Ratliff, the plaintiff filed a tort complaint that did not contain any allegations of negligence. The defendant moved to dismiss for failure to state facts, and then filed a motion for summary judgment. The plaintiff then filed an amended complaint, but the trial court granted the defendant’s motion for summary judgment and dismissed the complaint because it “contain[ed] conclusions, not particulars.” Ratliff 284 Ark. at 17, 678 S.W.2d at 370. On appeal, this court agreed that the complaint failed to state facts upon which relief could be granted. Id. at 18, 678 S.W.2d at 371. The court held, however, that the dismissal by the trial court should have been on that basis, rather than on summary judgment, and should have been without prejudice: If that procedure had occurred, the plaintiff would have had an election on whether to plead further or appeal. However, the dismissal order recites that it is on summary judgment and so plaintiff was never afforded a chance to plead further. Accordingly, we modify the order of the lower court to the extent that the dismissal is without prejudice. Id. at 18-19, 678 S.W.2d at 371 (emphasis added).2  This court later expanded on this principle in West v. Searle & Co., 305 Ark. 33, 806 S.W.2d 608 (1991): |12[S]ummary judgment based upon a failure to state a claim upon which relief can be granted is different from summary judgment based upon a lack of disputed material facts, which results in a party’s entitlement to the judgment as a matter of law. The first is the failure to state a claim, the second is the failure to have a claim.... When summary judgment is granted upon failure to have a claim, and the ruling is affirmed on that basis, the matter is ended with prejudice.... However, when summary judgment is granted in the trial court because of failure to have a claim, but is affirmed on the basis of failure to state a claim, we modify to make the dismissal without prejudice in order to afford the plaintiff-appellant a chance to plead further. Ratliff v. Moss, 284 Ark. 16, 678 S.W.2d 369 (1984). Id. at 36, 806 S.W.2d at 610 (emphasis in original). Thus, if a plaintiff-appellant is wrongly prevented from having the option to plead further, this court will modify a circuit court’s grant of summary judgment to a dismissal without prejudice to give the plaintiff that opportunity. Id. In Arkhola II, the court relied on the language in Ratliff, supra, and noted that, as distinguished from the facts of Ratliff, the circuit court’s dismissal in Arkhola I was proper for failure to state a claim, was granted purely on the pleadings, and no matters outside the pleadings were considered. The plaintiff was thus not deprived of its option to either plead further below or appeal. That being the case, the Ark-hola court then interpreted the two options discussed in Ratliff as mutually exclusive — that is, if the plaintiff chooses to appeal, he waives the right to plead further. The Arkhola II court also emphasized that when the first appeal by Arkho-la was dismissed for lack of a final order, Arkhola went back to the circuit court and obtained a final judgment dismissing the claim, and that dismissal was properly entered with prejudice. Arkhola II, 291 Ark. at 574, 726 S.W.2d at 676. Arkhola had elected to stand on its complaint, thus foreclosing its option to plead further. The matter was, at that |13point, transformed into a final ruling on the merits, and an affirmance on appeal was therefore with prejudice. We have repeated this principle in a number of other cases, usually discussing Rule 12(b)(6) dismissals and relying on the Arkhola decision. See Hollingsworth v. First Nat’l Bank & Trust Co., 311 Ark. 637, 846 S.W.2d 176 (1993); Hunt v. Riley, 322 Ark. 453, 909 S.W.2d 329 (1995); Cotten v. Fooks, 346 Ark. 130, 55 S.W.3d 290 (2001); Ark. Dep’t of Envtl. Quality v. Brighton Corp., 352 Ark. 396, 102 S.W.3d 458 (2003); and Sluder v. Steak & Ale of Little Rock, Inc., 368 Ark. 293, 245 S.W.3d 115 (2006). In my view, these principles of law do not apply in the context of the grant of a Rule 12(b)(3) motion to dismiss for improper venue. The granting of the 12(b)(3) motion, in my view, is not a decision on the merits; it is a dismissal without prejudice; and it is a final order for purposes of appeal even though entered without prejudice. See Provence v. Nat’l Carriers, Inc., 2010 Ark. 27, 360 S.W.3d 725 (affirming circuit court’s granting of motion to dismiss for improper venue “without prejudice” and making no mention of the lack of a final order).3  Because a dismissal for lack of proper venue is not a determination on the merits, it does not have preclusive res judicata effect. See, e.g., Parrish v. Marquis, 137 S.W.3d 621 (Tenn.2004) (dismissal for lack of venue is not a dismissal on the merits and permits plaintiffs |14to refile their action in the proper county before the statute of limitations has expired);4 Smith v. St. Vil, 714 So.2d 608, 605 (Fla.Dist.Ct.App.1998) (dismissals for improper venue are not on the merits and should not contain the words “with prejudice” because “[w]hen these problematic words are used incorrectly, they ... cause confusion as to whether a subsequent suit is barred by the doctrine of res judicata”) (citing North Shore Realty Corp. v. Gallaher, 99 So.2d 255 (Fla.Dist.Ct.App.1957) (it is not the inclusion of the words “with prejudice” which determine whether a dismissal is res judicata, but rather whether the order actually was an adjudication on the merits)). See also Res judicata effect of judgment dismissing action, or otherwise denying relief, for lack of jurisdiction or venue, 49 A.L.R.2d 1036 (“Since a judgment based on ... improper venue is not on the merits, it is obvious that such a judgment does not extinguish the cause of action and does not bar the plaintiff from maintaining another action on the same cause ... in the proper district or county.”); Restatement (Second) of Judgments § 49 (1982) (“Where a valid and final personal judgment not on the merits is rendered in favor of the defendant, the plaintiff is not thereby precluded from thereafter main-taming an action on the original cause of action and the judgment is conclusive only as to what is actually decided”); and cf. Fed.R.Civ.P. 41(b) (“Unless the dismissal order states otherwise, a 11Bdismissal under this subdivision ... except one for lack of jurisdiction, improper venue, or failure to join a party ... operates as an adjudication on the merits”) (emphasis added). See also Sunwest Bank of Albuquerque v. Nelson, 125 N.M. 170, 958 P.2d 740, 742 (1998) (dismissal without prejudice for improper venue is a final order for purposes of appeal and this conclusion is consistent with a majority of jurisdictions addressing the issue). On the other hand, a dismissal for failure to state a claim, without leave to plead further, is an adjudication on the merits. See, e.g., Ahmed v. United States, 147 F.3d 791, 797 (8th Cir.1998) (citing Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981)); Conservation Council of W. Australia, Inc. v. Aluminum Co. of Am., 518 F.Supp. 270, 273 (D.C.Pa.1981) (dismissal for failure to state a claim, if sustained without leave to plead further, is a disposition on the merits); Highmark W. Va., Inc. v. Jamie, 221 W.Va. 487, 655 S.E.2d 509, 512 (2007) (dismissal for failure to state a claim “with prejudice” was consistent with the entry of judgment pursuant to Rule 54(b), as the possibility of pleading further would have made an appeal inappropriate). Accordingly, I disagree with the majority that affirmance on appeal transforms a venue dismissal into one on the merits and thus renders it “with prejudice.” Our rule barring further pleading after affirmance on appeal of a Rule 12(b)(6) dismissal should have no application to a determination that venue was improper. This court’s holding in Servewell Plumbing, LLC v. Summit Contractors, Inc., supra, is largely consistent with the principles discussed above. In Servewell, appellant Servewell Plumbing was the plumbing subcontractor in an apartment complex development. The prime 11 (¡contractor was Summit Contractors, and the developer of the complex was the Gables of Maumelle (“the Gables”). Serve-well originally sued Summit and the Gables for breach of contract for refusal to pay for work done, asserting that the property was subject to a materialman’s lien. Servewell also alleged that the Gables had been unjustly enriched. Servewell, 362 Ark. at 601, 210 S.W.3d at 104. Summit moved to dismiss the complaint due to lack of jurisdiction and venue, based on a forum-selection clause in the contract designating Florida as the exclusive venue. The Gables eventually filed an amended answer incorporating a motion for judgment on the pleadings, asserting that Servewell’s lien was untimely and void. Summit posted a labor and material payment bond and, shortly thereafter, filed a motion to dismiss pursuant to Ark. R. Civ. P. 12(b)(3) for lack of venue, again pointing to the forum-selection clause. Id. Summit also filed a motion seeking to dismiss Gables from the lawsuit, alleging that Servewell’s lien was untimely and the bond posted by Summit caused the hen to be discharged. Id. at 601-02, 210 S.W.3d at 104. The circuit court, after a hearing, granted Summit’s motion to dismiss on venue grounds, citing the forum selection clause. It also granted the Gables’ motion for judgment on the pleadings, finding that Servewell had defaulted by not filing a separate response to that motion, and alternatively finding that the posting of the bond mooted the lien claim. Id. at 602, 210 S.W.3d at 104-05. Servewell filed a second amended complaint alleging a timely lien. The Gables and Summit again moved to dismiss the complaint, Summit again raising the forum-selection clause, and the circuit court granted Summit’s motion. Id. at 602, 210 S.W.3d at 105. |17On appeal, most of the claims in Serve-well were disposed of on the merits and were properly barred “with prejudice.” For example, this court found that the Gables’ motion for judgment on the pleadings as to the timeliness of the lien claim was converted to summary judgment, and Servewell defaulted by not responding in a timely fashion. Servewell thus failed to “meet proof with proof’ on that issue. Id. at 609-10, 210 S.W.3d at 110-11. That was a determination on the merits. This court also noted that Servewell’s arguments as to the timeliness of its lien filing were “without merit” — the lien was untimely. Id. at 610, 210 S.W.3d at 111. That was a determination on the merits. In addition, because Summit had posted the necessary bond, this court stated that “Servewell had recourse only against the principal [Summit] and surety on the bond” and was “left with no claim against the Gables.” Id. at 611-12, 210 S.W.3d at 111. That was a determination on the merits. This court also noted that the unjust-enrichment claim against the Gables was properly dismissed “on the grounds that the express contract between Servewell and Summit barred Servewell from asserting an unjust-enrichment claim.” Id. at 612, 210 S.W.3d at 112. That was a determination on the merits. Each of these issues was a merits-based determination and the disposition of the appeal as to them was properly “with prejudice.” The plaintiff failed to “have a claim” on these issues. See West v. Searle & Co., supra. The only remaining claim that was not disposed of on the merits was the breach-of-contract action against Summit. The circuit court held, and this court agreed, that the forum-selection clause in the contract between Summit and Serve-well, designating Florida as the proper venue, was applicable and enforceable, because Servewell’s 11slien was untimely and the action was thus not one in rem, which could have only been heard in Arkansas. The final paragraphs of the Servewell opinion provide as follows: Finally, Servewell asks this court that, in the event we affirm the trial court’s rulings, we do so without prejudice to Servewell’s claims. It argues that the merits of its complaint have never been heard, because the matter below was decided primarily on the basis of the venue clause. For that reason, Serve-well asks that, in the event this court affirms, “such ruling be made without prejudice to Servewell’s right to pursue its claims in Florida.” However, Arkansas law is well settled that, when a plaintiff elects to appeal rather than plead further where both options are available, then the option to plead further is waived in the event of affirmance by the appellate court. Here, Servewell could have taken a voluntary nonsuit prior to the trial court’s dismissal of its complaint and filed the matter in Florida in accordance with the forum-selection clause. Because it elected to appeal rather than to plead the case properly in Florida, there is no basis for granting its request to make our affirmance “without prejudice.” Id. at 613, 210 S.W.3d at 112-13 (citations omitted). It is clear that as to most of the claims disposed of in Servewell, this language was dicta. As discussed above, most of the claims were disposed of on the merits and were properly dismissed with prejudice. There was no need to also conclude that they were waived by the failure to plead further. To the extent the breach of contract claim against Summit was disposed of only on the basis of improper venue, like the court of appeals, I believe the application of the waiver rule to a venue dismissal was inappropriate. A plaintiff suffering a 12(b)(3) venue dismissal in Arkansas has a long-held right to appeal that determination. See McCutchen v. Ark. State Police, 2009 Ark. 204, 307 S.W.3d 582 (affirming, post-Servewell, dismissal of Sebastian County action against Arkansas State Police and stating that “the proper place of venue in this case is Pulaski County”); Tilmon v. Perkins, 292 Ark. 553, 731 S.W.2d 212 (1987) (affirming dismissal of Yell County action and stating that appellants must file their action in Carroll County); Odell v. Ark. Gen. Indus. Co., 288 Ark. 356, 705 S.W.2d 438 (1986) (affirming dismissal of Jackson County action and concluding that venue must be where the defendant resides); Fuller v. Robinson, 279 Ark. 252, 650 S.W.2d 585 (1983) (affirming dismissal of Woodruff County action and concluding that Cross County, not Woodruff County, was the proper venue). As indicated by these decisions, an affirmance on appeal does not preclude further proceedings in the proper venue. See also Provence, supra; Atkins Pickle Co. v. Burrough-Uerling-Brasuell Consulting Eng’rs, 275 Ark. 135, 628 S.W.2d 9 (1982) (affirming circuit court’s second venue dismissal after circuit court’s first venue dismissal was affirmed by the court of appeals). The appellees in this case argue, and the majority apparently agrees, that application of the waiver rule in venue cases is necessary to prevent “limitless appeals when dealing with venue,” in that a “plaintiff could repeatedly file her lawsuit in an improper venue, get her case dismissed without prejudice, appeal the dismissal, refile in another improper venue, and repeat the entire cycle.” I fail to see the real profit from pursuing such a course, or that rectifying this imaginary concern should take precedence over the very real right to appeal a venue dismissal. The majority has effectively eviscerated the latter right and, as a consequence, I respectfully dissent.  . The complaint had not been dismissed as to two other defendants (the contractors). Arkhola I, 289 Ark. 313, 711 S.W.2d 474.   . See also Ark. R. Civ. P. 12(j) ("Attorneys will be notified of action taken by the court under this rule, and, if appropriate, the court will designate a certain number of days in which a party is to be given to plead further.").   . The majority concludes that Provence merely "affirmed” the circuit court's ruling without stating whether it was with or without prejudice. The majority ignores the concluding clause of the first paragraph of Provence, which states that “we affirm the dismissal of appellants’ complaint without prejudice.” 2010 Ark. 27, at 1, 360 S.W.3d at 725 (emphasis added).   . Here, as the circuit court found, Orr refiled her complaint in Faulkner County within one year of the issuance of the mandate from the court of appeals. See Ark. R. Civ. P. 41(b) (a dismissal under this rule is without prejudice to future action by the plaintiff unless the action has been previously dismissed, whether voluntarily or involuntarily); Ark. Code Ann. § 16-56-126 (Repl.2005); West v. G.D. Searle & Co., 317 Ark. 525, 527, 879 S.W.2d 412, 413 (1994) (a dismissal of a complaint on a defendant's motion is the same as a nonsuit, and a plaintiff has one year from the date that dismissal becomes final — in that case, the date of the mandate — to commence a new action).