Court Opinion

ID: 6553195
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:30:59.959988+00
Date Added: 2024-06-11T15:56:09.746267
License: Public Domain

SAM BIRD, Judge, dissenting. I agree with the majority opinion that the trial court erred in holding that there was no prevailing party. I also agree with the majority opinion in its holding that the prevailing parties in this action are Phi Kappa Tau Housing Corporation (PKT), Rick Marcum, and Anthony Capo. However, I disagree with the majority opinion’s holding that these prevailing parties are not entitled to an attorney’s fee because their cause of action is “based primarily in tort.” I believe that this case is based primarily in contract, and I would reverse and remand for the judge to determine a reasonable amount of attorney’s fees to be paid to the prevailing parties. I agree generally with the facts as recited in the majority opinion. I would add, however, that where the majority opinion states that appellees told appellants to “immediately” remove their furniture from appellees’ house after negotiations for a new lease broke down, what was actually said by Matt Wengert to Rick Marcum was that PKT had “fifteen minutes” to remove their furniture from the house or the furniture would be deemed to have been abandoned. When appellants did not meet this obviously impossible deadline, appellees claimed appellants’ furniture as their own and refused to return it. The majority opinion also fails to note that appellees specifically alleged in their counterclaim that PKT’s furniture had been abandoned by the appellants and became, the property of the appellees pursuant to section 17 of the lease agreement. The general rule in Arkansas is well settled that attorney’s fees are not awarded unless expressly provided for by statute or rule. Gill v. Transcriptions, Inc., 319 Ark. 485, 892 S.W.2d 258 (1995). Arkansas Code Annotated section 16-22-308 (Repl. 1999) states: In any civil action to recover on an open account, statement of account, account stated, promissory notes, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, or breach of contract, unless otherwise provided by law or the contract which is the subject matter of the action, the prevailing party may be allowed a reasonable attorney’s fee to be assessed by the court and collected as costs. This section has been held to authorize an award of attorney’s fees to a party who successfully defends against a contract action. Meyer v. Riverdale Harbor Mun. Property Owners Improvement, 58 Ark. App. 91, 947 S.W.2d 20 (1997). This section does not allow for an award of attorney’s fees in tort actions. Id. Where both contract and tort claims are advanced, an award of attorney’s fees to the prevailing party is proper only when the action is based primarily in contract. Id. In determining what cause of action was litigated, the courts look to the basis of the claim and also consider the issue presented to the jury. Id. In this case, the claim filed by appellants and the cross-claim filed by appellees were based primarily in contract. PKT’s cause of action is not simply an action for conversion in which it seeks to recover its property from one who has appropriated it to his own use. This is an action that depends for its existence solely upon the parties’ lease contract that resulted in PKT’s furniture being placed in Wengert’s house, the ownership of which furniture was claimed by Wengert solely in reliance upon the terms of the contract. Unless PKT wished to simply surrender to the Wengerts’ bullying tactic to take their furniture in unreasonable reliance upon the forfeiture provision of their lease contract, the only recourse they had was to file an action for conversion. Nonetheless, the sole underlying basis for the suit was their lease contract. In addition to the $8,500 awarded by the jury to appellants for PKT’s furniture, the jury also awarded appellants $4,000 for their unrefunded security deposit as provided for in the contract. Clearly there is no dispute as to whether appellants’ claim for the recovery of its security deposit was based solely on the contract. Nor is there any dispute that attorney’s fees incurred by appellants in defending against appellees’ counterclaim to obtain ownership of PKT’s furniture was based solely on the contract. Under these facts, it is difficult to understand how the majority can hold that appellants are not entitled to recover attorney’s fees under Ark. Code Ann. § 16-22-308 because their cause of action was “based primarily in tort.” I also believe that appellants should be entitled to a reasonable attorney’s fee because their contract specifically provided for it. Griffen v. First Nat’l Bank, 318 Ark. 848, 888 S.W.2d 306 (1994). See also C.R. Anthony Co. v. Wal-Mart Properties, 54 F.3d 514 (8th Cir. 1995). In Griffen v. First Nat’l Bank, supra, the supreme court held that where the parties entered into a written contract that specifically provides for the payment of attorney’s fees incurred in the enforcement of the contract, the agreement is enforceable according to its terms, independent of the statutory authorization set forth in Ark. Code Ann. § 16-22-308. The court went on to state that the intention of the Griffen decision was to make a clear statement of the law regarding the award of attorney’s fees when parties enter into such agreements. Given this clear statement, it is also difficult for me to understand how the majority can avoid applying the law of Griffen to this case, even if Ark. Code Ann. § 16-22-308 (Repl. 1999) did not apply. Paragraph 16 of the parties’ lease contract states: ATTORNEY’S FEES. In the case suit should be brought for recovery of the premises, or for any sum due hereunder, or because of any act which may arise out of the possession of the premises, by either party, the prevailing party shall be entided to all costs incurred in connection with such action, including a reasonable attorney’s fee. (Emphasis added.) This broad language does not limit the nature of the suit to an action in contract. An action in tort fulfills the definition of a suit. The only limitation imposed by this contract provision is that the suit be brought for the recovery of any sum due under the contract. The $8,500 judgment that the jury awarded to PKT for its furniture was a sum that became due under the contract. The contract provided that PKT’s furniture would be deemed abandoned only if it was not removed from the Wengerts’ house “upon termination or forfeiture” of the lease. PKT contended that the lease, by its terms, continued on a month-to-month basis and had not been terminated or forfeited, and that the Wengerts had acted unreasonably in allowing them only fifteen minutes to remove their furniture after the breakdown of their negotiations to renew the lease contract. That the Wengerts also considered the lease to have continued on a month-to-month basis is obvious from the fact that they continued to accept monthly rental payments after the original lease term had expired. When the Wengerts refused to permit PKT to retrieve its furniture after negotiations broke down, the furniture’s value became a “sum due under the contract.” The jury found that value to be $8,500. Under those circumstances, the contract provided that “the prevailing party shall be entitled to all costs incurred in connection with such action, including a reasonable attorney’s fee.” I would reverse and remand this case to the trial court with instructions to award a reasonable attorney’s fee to the appellants. I am authorized to state that Judge MEADS joins with me in this dissent.