Court Opinion

ID: 9612942
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:12:30.430664+00
Date Added: 2024-06-11T18:03:23.907619
License: Public Domain

Olly Neal, Judge, dissenting. I dissent from the majority opinion because it is inconsistent with a previous supreme court decision dealing with this issue, Donathan v. McDill, 304 Ark. 242, 800 S.W.2d 433 (1990). In that case, Donathan hired Hot Springs Tide Company to research the tide to a parcel of land he wished to buy that was to be sold for nonpayment of taxes. At the tax sale, Donathan and McDill, the president of Hot Springs Tide Company, both bid on the land, and Donathan’s bid was accepted. After the sale, McDill informed the owner of the land about the sale and the statutory right to redeem. Using his own money channeled through an account of Hot Springs Tide Company, McDill redeemed the land on behalf of the owner and then negotiated with the owner to purchase the land. Donathan sued McDill and Hot Springs Title Company for tortious interference with a business expectancy. The circuit court entered summary judgment for McDill and Hot Springs Title Company, and the supreme court affirmed with this explanation: Donathan, probably correcdy, did not allege a fiduciary relationship. His action was based solely on the tort of interference with a business expectancy. We have recognized the tort. Kinco, Inc. v. Schueck Steel, Inc., 283 Ark. 72, 671 S.W.2d 178 (1984); Walt Bennett Ford, Inc. v. Pulaski County Special School Dist., 274 Ark. 208, 624 S.W.2d 426 (1981). It consists of these elements: (1) a valid business expectancy (2) of which the defendants knew and (3) with which they intentionally interfered (4) causing a loss of the expectancy and (5) resulting damages. Donathan’s business expectancy was to purchase the land in question for $2800 from the commissioner unless the owner made a timely redemption. His expectancy was fulfilled. No authority is cited holding, or even suggesting, that causing such a contingency as redemption to occur constitutes tortious interference [emphasis added]. While we understand and might agree with Donathan’s contention that some facts remain in dispute, we must agree with the trial court that none of them are material facts, given our conclusion that Donathan had no expectancy other than the one subject to the contingency which occurred. 304 Ark. at 243-44, 800 S.W.2d at 434. I simply cannot understand how, in this case, appellant possibly had a valid business expectancy when the appellant in Donathan v. McDill did not. Here, it is undisputed that the bill of assurance could be amended at any time, so long as the proper procedure was followed. Therefore, following the supreme court’s reasoning in Donathan v. McDill, appellant’s business expectancy was to purchase land zoned for condominium use unless a sufficient number of the subdivision’s landowners amended the bill of assurance, which was a contingency. Donathan v. McDill stands for the proposition that, as a matter of law, causing a contingency to occur does not constitute tortious interference. The gist of appellant’s claims against Upton is that Upton caused such a contingency to occur by engineering the amendment of the bill of assurance. In my opinion, if McDill’s behavior did not amount to tortious interference with a business expectancy, Upton’s behavior did not, either. Gladwin and Robbins, JJ., join. SUPPLEMENTAL OPINION ON DENIAL OF REHEARING JUNE 29,2005 Johnny Merritt Belew and Michael Stephen Bingham, for appellant. Stuart W. Hankins, for appellee. Josephine Linker Hart, Judge. We delivered our opinion J in this appeal from the grant of summary judgment in Cleburne County Circuit Court on June 1, 2005. Richard Upton has petitioned for rehearing, asserting that this opinion contains errors of fact and law. We deny the petition.  Regarding mistakes of fact, Upton asserts, and we acknowledge, that our June 1, 2005, opinion incorrecdy states that Upton, rather than his various closely held corporations, was a predecessor in tide and adjoining landowner to Windsong. Furthermore, we acknowledge our error in stating that Upton had inadvertendy conveyed to Windsong some of the cart paths on the Red Apple Golf Course. In fact, as Upton points out, Windsong acquired the South-winds property, which had been sold in foreclosure to American Holdings, LLC. However, we find these misstatements of fact are of no moment. Although Upton surmises that these facts were somehow instrumental in our decision not to find merit in Upton’s “res judicata” and “piercing the corporate veil” grounds for summary judgment, for the reasons outlined below, this was simply not the case. It is simply a non sequitur for Upton to conclude that in identifying theories and questions of fact that should not have been disposed of by summary judgment, this court failed to consider arguments that we found to be meridess and that this court had shirked its duty to affirm the trial court if there was any tenable means to do so. Nonetheless, in the interest of clarity we will outline our reasons for rejecting Upton’s remaining theories for sustaining the trial court’s grant of summary judgment.  Regarding Upton’s “ResJudicata” argument, the doctrine of res judicata has two aspects: claim preclusion and issue preclusion. See Van Curen v. Arkansas Prof'l Bail Bondsman Licensing Bd., 79 Ark. App. 43, 84 S.W.3d 47 (2002). The purpose of the res judicata doctrine is to put an end to litigation by preventing a party who had one fair trial on a matter from relitigating the matter a second time. Id. Under the claim-preclusion aspect of the doctrine of res judicata, a valid and final judgment rendered on the merits by a court of competent jurisdiction bars another action by the plaintiff or his privies against the defendant or his privies on the same claim or cause of action. Id. The key question regarding the application of res judicata is whether the party against whom the earlier decision is being asserted had a full and fair opportunity to litigate the issue in question. Id. In our view, the privity-of-parties question is simply not clear enough to say that, as a matter of law, res judicata bars appellant’s claims. Upton was not a named party in the sewer case and, unless it can be demonstrated as a matter of law that he was in privity with Red Apple Enterprises, the dismissal in the sewer case cannot be res judicata as to the claims asserted against Upton personally in this lawsuit. Although Upton’s affidavit reflected that he was the sole shareholder of United Resorts, Inc., which was the corporate general partner of Red Apple Enterprises, and that Upton also owned a 100% interest in Island Enterprises, which was a limited partner in Red Apple Enterprises, Upton, as an individual, did not own any shares in Red Apple Enterprises. Privity of parties within the meaning of res judicata means a person so identified in interest with another that he represents the same legal right. Spears v. State Farm Fire & Cas. Ins., 291 Ark. 465, 725 S.W.2d 835 (1987). Precisely identical parties are not required; a substantial identity is sufficient. See Parker v. Perry, 355 Ark. 97, 131 S.W.3d 338 (2003); Terry v. Taylor, 293 Ark. 237, 737 S.W.2d 437 (1987). In Arkansas Department of Human Services v. Dearman, 40 Ark. App. 63, 68, 842 S.W.2d 449, 452 (1992), we explained: It has been suggested that privity is merely a word used to say that the relationship between one who is a party and another person is close enough that a judgment that binds the one who is a party should also bind the other person.... It has also been held that the identity of parties or their privies for res judicata purposes is a factual determination of substance, not mere form. (Citations omitted.) The fact that an individual owns stock in a corporation does not, in itself, create privity between the individual and the corporation. Walthour v. Finley, 237 Ark. 106, 372 S.W.2d 390 (1963). Given the substantial amount of proof offered by Upton to support his contention that he is separate in identity from Red Apple Enterprises and his other businesses, we cannot say as a matter of law that Upton and Red Apple Enterprises are so identified in interest that they represent the same legal right. Therefore, the summary judgment cannot be affirmed on the basis of res judicata.  Upton also argues that the so-called “corporate veil” justified the granting of summary judgment. We rejected this ground because we agree with Windsong that there is a question of fact regarding Upton’s personal involvement, and in this context, it is irrelevant whether a corporation is separate and distinct from its shareholders. Windsong points out that its claim is not that any business entity acted to interfere with its contractual relations and business expectancies but that Upton individually committed these tortious actions. A corporate agent may be held personally liable for torts committed in the corporate capacity. See Torchmark Corp. v. Rice, 945 F. Supp. 172 (E.D. Ark. 1996). When it can be shown that an individual employed by a corporation is personally involved in the events surrounding an injury, the individual may be sued. McGraw v. Weeks, 326 Ark. 285, 930 S.W.2d 365 (1996). See also Cash v. Carter, 312 Ark. 41, 847 S.W.2d 18 (1993). Because we cannot hold, as a matter of law, that Upton could not be personally liable on appellant’s claims, the summary judgment for Upton also cannot be affirmed on this ground.  As a final basis on which Upton moved for summary judgment, he asserted that Windsong’s complaint asserted a cause of action for intentional interference with the use and enjoyment of property, a tort that is not recognized by the courts of this state. See Carmical v. McAfee, 68 Ark. App. 313, 7 S.W.3d 350 (1999). We hold that this was simply a “straw man” argument in that we interpreted Windsong’s pleadings only to assert the cause of tortious interference with a business expectancy.  Finally, we reject out-of-hand Upton’s suggestion that this court somehow erred in not distinguishing Donathan v. McDill, 304 Ark. 242, 800 S.W.2d 433 (1990). We are not aware of anything that requires us to cite inapposite authority. For the foregoing reasons, Upton’s motion for rehearing is denied. Bird, Griffen, Vaught, Crabtree, and Roaf, JJ., agree. Gladwin, Robbins, and Neal, would grant.