Arkansas Business Litigation Blog : Arkansas Business Litigation Lawyer & Attorney : Allen Law Firm : Serving Little Rock, Fort Smith, North Little Rock

The Eighth Circuit affirmed summary judgment in American Boat Co., Inc. v. Unknown Sunken Barge, No. 08-2166 (6/4/09).

 

The district court granted summary judgment to the United States. Plaintiffs failed to timely appeal because they claim not to have received the ECF notice of the summary judgment. An evidentiary hearing was held, and both parties had a computer forensics expert investigate the computer of Plaintiffs' counsel. Plaintiffs' expert was unable to provide an opinion as to why the notice failed to reach plaintiffs.

 

Although there was no evidence of the notice on Plaintiffs' counsel's server, there was evidence that Plaintiffs' counsel used a POP account to remotely check email. The court affirmed summary judgment, holding that denial of receipt cannot overcome the presumption that an ECF notice is received.

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The Eighth Circuit affirmed denial of a preliminary injunction in CDI Energy Services, Inc. v. West River Pumps, Inc., No. 08-1031 (5/29/09).

 

CDI sells oilfield equipment. It had one location in North Dakota with three employees. Those employees left CDI to form West River, a competing business. CDI's customers went to West River, and the CDI office went out of business. After obtaining a TRO for trade secret misappropriation and other counts, the district court dissolved the TRO and denied the preliminary injunction.

 

The Eighth Circuit affirmed, with two interesting holdings. First it held the customer lists were not trade secrets. Because the potential CDI customers was a small number of local oilfield companies, the information would be readily obtainable. Second, the court held no irreparable harm because, since CDI's office was closed, an injunction would do nothing to help them. In other words, CDI had been harmed to such a degree that the harm was no longer irreparable.

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The Arkansas Court of Appeals affirmed creation of a tacit contract in Crown Custom Homes, Inc. v. Buchanan Services, Inc., No. 09-20 (5/27/09).

 

The parties had a long history where Crown would send a request for work via fax. Buchanan would perform the work and then send a bill. The parties had conducted over $100,000 of business in this manner. Crown brought Cunningham to a meeting at Buchanan's office regarding some work. Cunningham faxed a work order to Buchanan from Crown's office. Buchanan performed the work, but Crown refused to pay, arguing the contract for that work was with Cunningham.

 

The trial court held a contract existed between the parties and entered judgment for Buchanan. The court of appeals affirmed, stating that course of dealing is properly considered to determine if a tacit contract is created.

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The Arkansas Supreme Court made a drastic change to Rule 5-2 in In re: Arkansas Supreme Court and Court of Appeals Rule 5-2, No. 09-540 (5/28/09).

 

Effective July 1, 2009, the electronic version of appellate decisions posted on the Arkansas Judiciary website will be the official reports. See Rule 5-2(d) for proper citation format to these decisions Additionally, the Reporter of Decisions will create a searchable database for all opinions issued after February 14, 2009. We believe Arkansas is the first jurisdiction to adopt electronic official reports.

 

The new rule also abandons the distinction between published and unpublished opinions. Every opinion issued after July 1, 2009, will be precedent.

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The Arkansas Supreme Court reversed a $689,526 judgment in Western Sizzlin Corp. v. Parks Land Co., LLLP, No. 08-1199 (May 14, 2009).

 

Parks filed suit for claimed violations of a lease agreement. Western Sizzlin hired an expert to calculate the cost of repair to the property. Western Sizzlin decided not to call this expert to testify. During the trial, Parks' counsel questioned Western Sizzlin's CFO about this expert. During closing argument, Parks' counsel made reference to this non-testifying expert.

 

In its reversal, the court stated: "Reference to the original employment of the non-testifying expert constitutes prejudicial error and requires a new trial." The case was remanded for a new trial.

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An arbitration provision that prohibited a class action was upheld in Smith v. Comcast Corp., 2009 U.S. Dist. LEXIS 25348 (E.D. Ark. 3/17/09).

Plaintiff filed a class action alleging fraud and deceptive trade practices. However,  Plaintiff's contract contained an arbitration clause. The arbitration clause prohibited Plaintiff from bringing a class action claim. The court clearly had misgivings about the clause but found it was enforceable. The court granted Comcast's motion to compel arbitration.

 

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The Arkansas Supreme Court affirmed dismissal in Trusclair v. McGowan Working Partners, No. 08-769 (4/16/09).

 

Trusclair voluntarily dismissed his first complaint. On the second complaint, the summons incorrectly stated that McGowan, a foreign corporation, had 20 days to answer. Otherwise, service was appropriate. Trusclair failed to cure this defect within 120 days. The trial court found it did not have jurisdiction to amend the summons and dismissed the second complaint with prejudice.

 

On appeal, Trusclair argued that Ark. R. Civ. P. 4(h) permits the trial court to amend the summons at any time. The court rejected this argument and held the trial court cannot amend the summons once the 120 day time limit has expired for strict compliance with Ark. R. Civ. P. 4. The court affirmed the dismissal with prejudice.

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The Arkansas Supreme Court reversed a holding of contempt in Holifield v. Mullenax Tax Financial and Tax Advisory Group, No. 08-955 (4/15/09).

 

Holifield was a former employee of Mullenax. When he left, Mullenax filed suit alleging trade secret misappropriation. The trial court entered an ex parte order compelling Holifield to preserve any information he took and to submit to discovery on an expedited basis. At his deposition, Holifield agreed to provide files to the plaintiff, but the plaintiff never submitted a formal discovery request. Holifield provided some of the information in an unusable format and did not provide the rest until almost a year later. The trial court found Holifield in contempt and ordered a $500 sanction.

 

The supreme court reversed because the trial court's order to "submit to discovery on an expedited basis" was not specific enough. This order was not definite or clear as to the duties it imposed. Without a specific order, there can be no contempt.

 

 

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The Arkansas Supreme Court affirmed a decision by the Alcoholic Beverage Control Board (the "Board") in Arkansas Beverage Retailers Association v. Langley, No. 08-287 (4/9/09).

 

The dispute stems around a liquor store opened by Sam's Club. To do this, Sam's Club created a separate corporate entity to operate the store. Although it was next to Sam's Club, the liquor store had a separate address, entrance, and loading areas from Sam's Club. The Board approved the application. The Arkansas Beverage Retailers Association (the "Association") objected because Arkansas law prohibits department stores from selling liquor on their premises. See Ark. Code Ann. § 3-4-218.

 

The case came down to one issue: what is meant by premises? The Board held that the separate corporate entity was not on the premises of Sam's Club, even though it was next door. Again noting the deference given to decisions of administrative agencies, the supreme court found substantial evidence existed to support this decision and affirmed the Board.

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