Court Opinion

ID: 5110526
Source: CourtListenerOpinion
Date Created: 2021-10-02 14:26:47.507287+00
Date Added: 2024-06-11T08:21:31.660705
License: Public Domain

BAKER, J., dissenting. |fiThe majority affirms noting that appellants candidly state in their complaint that one of the Kelso appellees “actually suggested as early as March 2006 that appellants would need to file suit against the Kelso firms to resolve the problem but that appellants did not wish to do so.” The majority then opines that “such an invitation to sue is incompatible with a secretly executed and furtive plan to defraud, and we hold that appellants failed to present a material allegation of fact regarding the defense of fraudulent concealment.” However, the majority’s observation does not address the specifics of appellant’s allegations. From 2002 to 2006, Kelsos attempted various repairs to the roof. The allegations were that fifteen “fixes” took place. In March 2006, the Carlsons thought the problem was solved. However, in November 2006 the Carlsons discovered more water damage in sheet rock and water standing on furniture. Throughout the years and during the work on the roof, Kelsos maintained that repair of the roof was possible. Kelsos deviated from this position only when they made statements that the problem might be a product defect and sent samples off for “testing.” Kelsos explained that if the product was defective, the Carlsons would need to sue Kelsos, who would then sue the manufacturer. Thereafter, Wayne Kelso informed the Carlsons that testing showed the tile was not defective. While the majority finds that the invitation to sue is incompatible with a plan to defraud, the allegation is that Kelsos attempted at one point to place the blame on the roof manufacturer. Thus, the facts pled support the conclusion that Kelsos were creating a false 17impression that Kel-sos’ installation was not to blame for the leaks. When the tiles proved to be sound, no reason to sue for defective manufacturing existed. Only when the Carlsons hired a new company to repair the roof did they discover improper installation was the cause of the leaking, and that although haphazard repairs had been made, complete replacement of the roof was required. While Arkansas Rule of Civil Procedure 12(b)(6) provides the authority for the trial court to grant a dismissal, the Rule must be read in conjunction with Rule 8, which sets out the requirements of a complaint. Spires v. Members of Election Comm’n, 302 Ark. 407, 790 S.W.2d 167 (1990). Arkansas Rule of Civil Procedure 8(a) provides that a pleading “shall contain (1) a statement in ordinary and concise language of facts showing that the court has jurisdiction of the claim and is the proper venue and that the pleader is entitled to relief, and (2) a demand for the relief to which the pleader considers himself entitled.” In addition, it is well recognized that pleadings are to be liberally construed and are sufficient if they advise a party of its obligations and allege a breach of them. Deitsch v. Tillery, 309 Ark. 401, 833 S.W.2d 760 (1992); Bethel Baptist Church v. Church Mut. Ins. Co., 54 Ark.App. 262, 924 S.W.2d 494 (1996). In order to properly dismiss a complaint pursuant to a 12(b)(6) motion, the trial court must find that the complaint either (1) failed to state general facts upon which relief could have been granted or (2) failed to include specific facts pertaining to one or more of the elements of its claims after accepting all facts contained in the complaint as true and in the | slight most favorable to the non-moving party. See Perrodin v. Rooker, 322 Ark. 117, 908 S.W.2d 85 (1995). Arkansas Code Annotated section 16-56-112(a) (Repl.2005) provides that “[n]o action in contract ... to recover damages caused by any deficiency in the design, planning, supervision, or observation of construction or the construction and repair of any improvement to real property ... shall be brought against any person ... more than five (5) years after substantial completion of the improvement.” Section 16-56-112(d) contains an exception for fraudulent concealment. Section 16-56-112 is a statute of repose and cannot be used to extend what would otherwise be a three-year statute of limitations period under Arkansas Code Annotated section 16-56-105 (1987) for negligence or for implied contracts. East Poinsett County Sch. Dist. No. 14 v. Union Std. Ins. Co., 304 Ark. 32, 800 S.W.2d 415 (1990). Therefore, we must focus on the allegations as to Kelso’s actions that constitute the allegation of fraudulent concealment. Our supreme court has addressed what constitutes fraudulent concealment: In order to toll the statute of limitations, we said that plaintiffs were required to show something more than a continuation of a prior nondisclosure. We said that there must be evidence creating a fact question related to ‘some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiffs cause of action concealed, or perpetrated in a way that it conceals itself.’ Shelton v. Fiser, 340 Ark. 89, 96, 8 S.W.3d 557, 562 (2000) (quoting Martin v. Arthur, 339 Ark. 149, 3 S.W.3d 684 (1999)). | flIn evaluating whether fraudulent concealment is sufficiently alleged, the criminal definition of deception is helpful: (i) Creating or reinforcing a false impression, including false impressions of fact, law, value, or intention or other state of mind that the actor does not believe to be true; or (ii) Preventing another from acquiring information which would affect his judgment of a transaction; or (iii) Failing to correct a false impression that the actor knows to be false and that he created or reinforced or that he knows to be influencing another to whom he stands in a fiduciary or confidential relationship; or (iv) Failing to disclose a lien, adverse claim, or other legal impediment to the enjoyment of property which the actor transfers or encumbers in consideration for the property or service obtained, or in order to continue to deprive another of his property, whether such impediment is or is not valid or is or is not a matter of official record; or (v) Employing any other scheme to de-fraude.] Ark.Code Ann. § 5-36-101 (3)(A) (Repl. 2006). The Carlsons allege that Kelsos created and reinforced the impression that the leaks were caused by minor problems that Kelsos would be able to fix, that Kelsos prevented the Carlsons from inspecting the roof themselves by admonishing them that their presence on the roof would cause damage, that Kelsos knew the Carl-sons were relying on Kelsos’ expertise regarding the repair of the roof, and that Kelsos failed to disclose the full extent and nature of the problems and the inadequacy of the attempted repairs. The facts alleged in the complaint describe the ongoing repair attempts as a means by which Kelsos concealed the source and nature of the roof leaks. The ongoing repair process, | mcoupled with the assurances by Kelsos that the problem was fixable and to stay off the roof, constitute the allegations of fraudulent concealment. Appellees emphasize a lack of proof as to fraudulent concealment, but sufficiency of the allegations is the only correct inquiry when evaluating a 12(b)(6) dismissal, and only the allegations that Kelsos perpetuated fraudulent concealment of the faulty installation by continually representing that the roof could be repaired are necessary to withstand the 12(b)(6) motion to dismiss. For these reasons, I dissent. BROWN, J., joins.