Court Opinion

ID: 3174747
Source: CourtListenerOpinion
Date Created: 2016-02-05 09:50:01.129908+00
Date Added: 2024-06-11T09:20:06.728339
License: Public Domain

Cite as 2016 Ark. 32

                SUPREME COURT OF ARKANSAS
                                      No.   CV-15-396

RILEY VERNON McFALLS AND                         Opinion Delivered   February 4, 2016
LINDA SUE McFALLS
                  APPELLANTS                     APPEAL FROM THE WHITE
                                                 COUNTY CIRCUIT COURT
V.                                               [NO. CV-2014-170-1]

                                                 HONORABLE THOMAS HUGHES,
RALPH CRENSHAW AND DONNA                         JUDGE
CRENSHAW
                   APPELLEES                     PETITION FOR REVIEW DENIED.

                          PAUL E. DANIELSON, Associate Justice

       This is a companion case to Crenshaw v. McFalls, 2016 Ark. 39, which we also hand

down today. In addition to filing the cross-appeal in that case, appellants Riley Vernon

McFalls and Linda Sue McFalls filed an independent action in circuit court, pursuant to

Arkansas Rule of Civil Procedure 60(k), in which they sought to set aside the judgment

entered against them in the underlying case. The White County Circuit Court denied their

petition and amended petition to set aside, and the McFallses’ motion for reconsideration was

deemed denied. They filed an appeal, making the same argument as that raised in the cross-

appeal in the companion case: that the circuit court erred in entering judgment against them

in their individual capacities. On April 15, 2015, our court of appeals issued an opinion

dismissing the appeal as moot, as the issue had already been decided in the companion case.

McFalls v. Crenshaw, 2015 Ark. App. 249 (reh’g denied May 20, 2015).
                                      Cite as 2016 Ark. 32

       The McFallses filed a petition for review in this court, arguing that the court of

appeals’s decision conflicted with prior holdings and our rules and that it raised a substantial

question of law concerning the construction of a court rule. See Ark. Sup. Ct. R. 2-4(c)(ii)

& (iii). We granted the petition for review. However, for the same reasons expressed today

in Crenshaw v. McFalls, 2016 Ark. 39, we now hold that the petition was improvidently

granted. Accordingly, we deny review, and the decision in McFalls v. Crenshaw, 2015 Ark.

App. 249, remains the decision in this case.

       Petition for review denied.

       BAKER and HART, JJ., dissent.

       KAREN R. BAKER, Justice, dissenting. I dissent for the same reasons expressed in

my dissent today in Crenshaw v. McFalls, 2016 Ark. 39.

       HART, J., joins in this dissent.

       JOSEPHINE LINKER HART, Justice, dissenting. For the reasons stated in my dissent

in the companion case Crenshaw v. McFalls, 2016 Ark. 39, this appeal is not moot. I would

therefore uphold this court’s prior decision to take this case on review, affirm the circuit

court, and vacate the court of appeals decision holding that this case is moot.

       Riley Vernon McFalls and Linda Sue McFalls appeal from the denial of their petition

to set aside a judgment entered against them for breach of a real-estate sales contract. On

appeal, the McFalls argue that the circuit court erred when it sua sponte denied the McFallses’

petition without a motion hearing.

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       The Crenshaws were sellers of real estate in White County, and the McFallses,

purporting to act as trustees of the Riley Vernon McFalls Revocable Trust and the Linda Sue

McFalls Revocable Trust (McFalls Trust), contracted to buy it. A check for $5000 in earnest

money, drawn on the McFallses’ personal account, was placed in escrow. The McFallses

failed to complete the transaction. The Crenshaws sued the McFalls Trust for specific

performance and, alternatively, compensatory damages. The real estate was subsequently sold

to a third party.

       The McFallses were named in the Crenshaws’ complaint and served with process only

in their representative capacity as trustees. Nonetheless, the McFallses responded to the

complaint in their individual as well as their representative capacities. A similar representation

was made in their response to the Crenshaws’ summary-judgment motion. The McFallses

also signed their answers to interrogatories without designating whether they were doing so

in their representative capacities. The McFalls Trust conceded liability, and the case

proceeded to trial only on damages.

       After the circuit court announced its decision, the McFallses’ counsel stated:

       The only concern or question I have is that plaintiffs sued the defendants in their
       individual names and in the name of their revocable trust. There was no evidence
       established that there is a trust. There was nothing admitted that there was a trust. So
       I would ask that any judgment simply be applied towards the defendants in their
       individual capacity.

The circuit court expressed concern about the dearth of evidence concerning the existence

of the McFalls Trust. Nonetheless, the Crenshaws insisted that the McFalls Trust was the

proper party against whom judgment should be entered. The circuit court ordered the issue

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briefed, and the Crenshaws maintained that the McFalls Trust was the proper defendant. In

their brief, the Crenshaws quoted Rule 15 of the Arkansas Rules of Civil Procedure,

ostensibly in support of their contention that the McFalls Trust waived any issue regarding

the proper party by failing to litigate the issue. They noted, however, in their discussion of

Rule 15, that the “rule is liberal in its allowance of amendments to conform pleadings to

proof.” The Crenshaws noted as well that, under Rule 15(c), amendment by implication can

change the party or parties named in the lawsuit. The McFalls Trust also argued that the

McFallses, in their individual capacities, were not parties. The circuit court adopted the

proposed judgment that the Crenshaws had submitted, but made handwritten corrections

making the McFallses individually liable for $22,573.40 plus costs and interest.

       The Crenshaws filed a motion for attorney’s fees, requesting $18,375. The circuit

court awarded $1500. After the Crenshaws’ motion to reconsider was deemed denied, they

appealed.

       The McFallses subsequently filed a petition in accordance with Rule 60(k) of the

Arkansas Rules of Civil Procedure. They amended their petition on June 12, 2014. In their

petition, they asked the circuit court to set aside the judgment. The McFallses asserted that

they were never served with process in their individual capacities and were therefore never

made parties to the lawsuit. Accordingly, it was error for the circuit court to enter judgment

against them.

       In their July 9, 2014 response, the Crenshaws argued that if there was an issue of

personal jurisdiction, the McFallses waived it by asking the court to enter judgment against

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them personally. Further, the Crenshaws argued that the McFallses should be barred from

asserting that the circuit court erred in entering judgment against them individually because

it was done as a result of invited error.

       On July 9, 2014, the McFallses filed a motion for judgment on the pleadings. On July

21, 2914, the Crenshaws filed a response, generally opposing the McFallses’ motion, but

nonetheless asking in their prayer for relief that the McFallses’ petition be dismissed. On

August 11, 2014, the circuit court entered an order denying the McFalles’ petition. The

McFalles filed a motion to reconsider, which was deemed denied. The McFallses timely

appealed.

       On appeal, the McFallses argue that the circuit court erred when it “sua sponte”

denied their petition without a motion or a hearing. Citing Lipsey v. Giles, 2014 Ark. 309,

Rogers v. Lamb, 347 Ark. 102, 60 S.W.3d 456 (2001); Nichols v. Culotches Bay Navigation Rights

Committee, 2009 Ark. App. 365, 309 S.W.3d 218; and Commercial Street Warehouseing, LLC

v. Hastings Development, LLC, 98 Ark. App. 316, 255 S.W.3d 488 (2007), for the proposition

that deciding the case without a hearing or “responsive pleading” constituted reversible error,

they assert that the circuit court’s denial of their petition must be reversed. This argument

is unpersuasive.

       This court reviews the denial of a motion to set aside a judgment under Rule 60 for

an abuse of discretion. Stautzenberger v. Stautzenberger, 2013 Ark. 148, 427 S.W.3d 17. As this

court stated in Grant v. State, 357 Ark. 91, 93, 161 S.W.3d 785, 786 (2004), “Abuse of

discretion is a high threshold that does not simply require error in the trial court’s decision,

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but requires that the trial court act improvidently, thoughtlessly, or without due

consideration.” Rule 60(k) states as follows:

       Independent Action to Set Aside Judgment—Writs Abolished. A motion under this rule
       does not affect the finality of a judgment or decree or suspend its operation, except as
       provided herein. This rule does not limit the power of a court to entertain an
       independent action to relieve a party from a judgment who was not actually personally
       served with process or to set aside a judgment or decree for fraud upon the court.
       Writs of coram nobis in civil cases, coram vobis, audita querela, and bills of review and
       bills in the nature of a bill of review, are abolished, and the procedure for obtaining
       any relief from a judgment or decree shall be by motion as prescribed in these rules or
       by an independent action.

       The factual premise asserted by the McFallses in their appeal is faulty. As they note,

on July 9, 2014, they filed a motion asking the circuit court to decide their petition on the

pleadings. Although the Crenshaws generally opposed the motion, as noted previously, they

nonetheless asked the circuit court to deny the McFallses’ petition. This is not a situation in

which the circuit court acted without a specific request by the parties. The McFallses asked

for a decision on the pleadings and that is exactly what they received. On appeal, a party

cannot complain about receiving the relief he or she requested. Wyles v. State, 357 Ark. 530,

182 S.W.3d 142 (2004).

       I would affirm the circuit court and vacate the court of appeals opinion.

       BAKER, J., joins.

       Simpson, Simpson & Mercer, P.A., by: Justin G. Mercer; and Brett D. Watson, Attorney at

Law, PLLC, by: Brett D. Watson, for appellants.

       The Key Firm, PLLC, by: Shawn Key, for appellees.

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