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

The Arkansas Court of Appeals reversed enforcement of a settlement agreement in Roberts v. Green Bay Packaging, No. 07-60 (1/23/08).

This case was a dispute over use of an easement that involved the Robertses, Mr. Rhodes and Green Bay Packaging. A week before trial, the Robertses sent a letter to the other parties proposing settlement. Rhodes and Green Bay claim they accepted it. However, Green Bay presented an "agreed decree" that differed from the terms of the letter. The trial court entered the "agreed decree" on grounds that the parties had reached settlement.

The court of appeals reversed, holding there was no evidence the parties had come to mutual agreement of final terms of settlement. Even if Rhodes and Green Bay had accepted the letter offer, the order entered did not match terms. The case will now proceed to trial.

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The Arkansas Court of Appeals affirmed resolution of a boundary dispute in Boyster v. Shoemake, No. 07-593 (1/23/08).

The parties' lands are separated by a fence, although a survey showed the actual boundary is south of the fence. Shoemake presented evidence from her family and friends that the parties had always treated the fence as the boundary. The trial court entered judgment that the fence is the boundary. The court of appeals affirmed, with a slight reversal for a more detailed description of the boundary.

The interesting part of this case comes from Judge Hart's scathing dissent, which focuses on the fact that,  further to the east, the fence dips significantly into the surveyed description of Shoemake's property. Judge Hart believes Shoemake will be judicially estopped in the future from arguing the fence is not the boundary line and will have lost this property east of the fence.  

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The long-standing trade secret dispute between R.K. Enterprises and Pro-Comp Management (previously posted 1/10/07) has finally come to an end on the third appeal. True to form, it took two published opinions to end the case. See Pro-Comp Management, Inc. v. R.K. Enterprises, LLC, No. 07-648 (1/24/08) and R.K. Enterprises, LLC v. Pro-Comp Management, Inc., No. 07-741 (1/24/08).

Recap of the first two appeals

In 2004, the trial court let R.K. Enterprises choose if it wanted judgment on the conversion claim or trade secrets claim. They chose conversion, and the court awarded damages of $262,303. The supreme court reversed and said the Arkansas Trade Secrets Act (ATSA) is the exclusive remedy. On remand, the trial court ruled the damages were too speculative for the ATSA. The supreme court again reversed and said the trial court may consider the general law of unjust enrichment in awarding damages under the ATSA.

Trial court proceedings the third time around

With the case back for a third determination of damages, the trial court awarded damages of . . . wait for it . . . $262, 303. The trial court did not grant attorney's fees or prejudgment interest. Both parties appealed again.

And on appeal a final time

The supreme court affirmed the judgment in all respects. The amount of unjust enrichment was not definite so as to qualify for prejudgment interest, and R.K. Enterprises had already failed to obtain a ruling on its motion for attorney's fees prior to the second appeal. After 4 years of postjudgment litigation and 4 published opinions, the parties find themselves right where they started in 2004.

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Late last year, the Eighth Circuit ruled that use of professional sports statistics in fantasy games is protected by the First Amendment. See C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., 505 F.3d 818 (8th Cir. 2007) (previously posted 10/16/07). The ramifications from this opinion are now taking effect. The Sports Law Blog reports that ESPN is now seeking a major reduction in digital rights fees that it pays to MLB Advanced Media. As the deal currently stands, ESPN believes it is paying licensing fees for use of the statistics in fantasy games.

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A declaratory action alleging no trademark infringement was filed yesterday in the Western District of Arkansas. Flexible Staffing Services, Inc. v. Integro Employment Services, Inc., No. 08-5018 (W.D. Ark., filed 1/22/08).

Flexible Staffing Services (FSS) is a nationwide firm providing temporary staffing services. FSS operates in 10 states by setting up local affiliates that use variations of the FSS name. Integro offers a competing service in northwest Arkansas. Integro claimed trademark rights to "flexible staffing" and filed a state trademark infringement action against the FSS affiliate in northwest Arkansas (but did not sue FSS).

FSS filed this action to declare that the terms "flexible" and "staffing" are generic for the temporary staffing services industry. Because it is not a party to the state lawsuit, FSS claims the federal lawsuit is necessary to fully defend its rights.  

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The Arkansas Supreme Court affirmed summary judgment in Talbert v. U.S. Bank, N.A., No. 07-497 (1/17/08).

During the summer of 2005, Talbert lent $25,000 to a man she knew as David Smith. In mid-November 2005 Smith sent her a check for $85,000. The check was from Pelican Management, Inc., in New York. She deposited the check in her account at U.S. Bank and began disbursing the funds to other people. Additionally, she paid $75 for a special collections service. Not surprisingly, the check turned out to be a forgery. U.S. Bank put a temporary hold on the account, but Talbert withdrew all the remaining funds when the hold was lifted. U.S. Bank filed suit.

Talbert's main argument was that U.S. Bank agreed to assume the risk of loss. She made this argument from her payment for the special collections service. However, she failed to conduct adequate discovery to establish the existence of such an agreement, much less the terms. The trial court granted summary judgment to U.S. Bank. On appeal, the supreme court observed that Arkansas law prohibits anyone from contracting away transfer warranties. See A.C.A. § 4-4-207. Even if Talbert could prove the terms of the agreement as she argued, it would be void. The court affirmed summary judgment.

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The Arkansas Supreme Court affirmed judgment in Royal Oaks Vista, LLC v. Maddox, No. 07-542 (1/17/08).

The Royal Oaks Vista subdivision was platted in 1972. Among other things, the restrictions prohibited any "noxious trade or activity." In 2004, ROV filed a replat and began constructing a temporary septic easement across one of the lots. The manner in which the replat was filed violated the bill of assurances, but Maddox waited a year before filing suit in 2005. The trial court found the replat was invalid and denied ROV's defense of laches.

The supreme court affirmed. The Although ROV spent $200,000 building the septic infrastructure, most of this cost was incurred soon after the replat was filed. The delay in filing suit had no effect on ROV's costs.  

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The Arkansas Supreme Court affirmed the trial court's reversal of administrative order in Arkansas Board of Collection Agencies v. McGhee, No. 07- 129 (1/17/08).

The case centered upon a class action against Russellville Check Express (RCE) for charging usurious interest. In 1999, Old Republic Surety Company issued a $50,000 bond to cover any violation of Arkansas law by RCE. Shortly after, Arkansas enacted the Arkansas Check-Cashers Act, A.C.A. § 23-52-101, et seq.  The class ultimately obtained a consent judgment against RCE, and they moved to recover against the bond. The ABCA conducted a hearing but denied recovery, stating the class had to show violations of either the ABCA's Rules or the Arkansas Check-Cashers Act. The trial court disagreed and reversed the decision.

The supreme court affirmed the reversal, finding that the bond was not as limited as the ABCA's interpretation. Because it covered any violation of Arkansas law, it applied to the class claims for usury.

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The Arkansas Supreme Court affirmed dismissal for want of prosecution in Watson v. Connors, No. 07-208 (1/10/08).

This case was inactive for 2 years, so the trial dismissed the case pursuant to Ark. R. Civ. P. 41(b). Unfortunately, the court failed to notify the parties. Watson found out about the dismissal a year later and moved to have the case reinstated under Ark. R. Civ. P. 60(b). Under this rule, trial courts can amend a "clerical error" at any time, but  they cannot make other amendments after 90 days. The trial court acknowledged the dismissal was entered in error but determined it did not have jurisdiction to reinstate the case.

The supreme court agreed and affirmed the dismissal. The court hinted that it may make an exception if circumstances dictate, but it refused to create an exception when Watson failed to do anything in the case for 3 years.

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The Arkansas Supreme Court reversed a grant of attorney's fees in City of Ft. Smith v. Carter, No. 07-220 (1/10/08).

The Hacklers sold a parcel of land to the Carters for $60,000; and the Hacklers held a mortgage for the outstanding debt. The city obtained an order of immediate possession by depositing $14,000. At the trial, the jury determined that the land was worth $30,000. A statute provides that, if the jury award is more than 20% of the deposit, then the landowner is entitled to attorney's fees. See A.C.A. § 18-15-605(b). The trial court found that both the mortgagor and mortgagee are landowners and awarded attorney's fees to both the Hacklers and Carters.

In its reversal, the supreme court held that only the party in possession of the land can be considered a landowner. While a mortgagee has an interest in the land, it cannot possess the land unless and until the mortgagor defaults. The court reversed the award of attorney's fees to the Hacklers.

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The Arkansas Supreme Court affirmed dismissal based on defective service in Brennan v. Wadlow, No. 06-1406 (1/10/08).

Brennan and Wadlow were involved in a car accident. On his driver's license, Wadlow uses the address of his father's business, although this is a separate address from Wadlow's residence. This was the address that appeared in the police report. Brennan filed suit and left the complaint with Wadlow's father at the business address. Wadlow's father said he would pass it on. After the statute of limitations had run, Brennan moved to dismiss for defective service, which the trial court granted.

In affirming, the supreme court again stated that parties must strictly comply with Rule 4 of the Arkansas Rules of Civil Procedure, which governs service. The rule requires that a person be served at his/her "dwelling house or usual place of abode." The rule does not provide an exception when a business address is listed on a driver's license.

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The Eastern District of Arkansas dismissed a copyright infringement case based on sovereign immunity in InfoMath, Inc. v. University of Arkansas, 2007 WL 4562878 (E.D. Ark. 12/21/07).

In 2000, InfoMath contracted with the University of Arkansas at Little Rock to provide an internet based pre-calculus course. UALR dissolved the contract in 2001 but continued to use the course materials; InfoMath claims it owns the copyright in the course materials. The Arkansas Claims Commission ("ACC") awarded InfoMath $15,000 for the balance of the contract. Unhappy with the result, InfoMath brought this suit against the university and two individual employees.

InfoMath argued that the Copyright Remedy Clarification Act ("CRCA") abrogated Eleventh Amendment Immunity. This is a troublesome argument because the Supreme Court has already struck down as unconstitutional the CRCA's companion statutes, the Patent Remedy Act and Trademark Remedy Clarification Act. Numerous lower courts have already held the CRCA is unconstitutional. The district court sided with the great weight of authority and held that the CRCA is unconstitutional.

InfoMath's final argument was that the ACC's award was insufficient and violated the Fourteenth Amendment. The court disagreed and noted that, while InfoMath sought additional relief, the award was not so inadequate that it violated the Fourteenth Amendment.

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The District Court of Minnesota granted a preliminary injunction based on trademark infringement and trademark dilution in J&B Wholesale Distributing, Inc. v. Redux Beverages, LLC, 2007 WL 4563457 (D. Minn. 12/20/07).

J&B sells steaks and other meat products under the trademark No Name. It owns several trademark registrations for "No Name" and has sales over $26 million. Redux sold Cocaine energy drinks, but the FDA caused them to quit using the word "cocaine." Redux renamed its energy drinks No Name.  

Although the companies are not direct competitors, the court held the products are closely related enough to create confusion. The court found that J&B was likely to succeed on both claims and would suffer irreparable harm without the injunction. J&B was required to post a $50,000 bond.

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The District Court of Minnesota granted a preliminary injunction based on trademark infringement and false advertising in Fitger's On-The-Lake, LLC v. The Fitger Company, LLC, 2007 WL 4531502 (D. Minn. 12/19/07).

Fitger's has operated a brewery in Minnesota since the 1880's, and it holds a number of trademarks that have now become famous. The current location is a full resort spa complete with a hotel, restaurants and ample shopping. The defendant Douglas Donnelly claims he is related to August Fitger, the original brewmaster for Fitger's. Donnelly believes this entitles him to set up businesses using Fitger's trademarks and making false statements that his companies are the "official Fitger beer" operated "since 1881." He even filed fraudulent trademark applications with the USPTO.

Despite Donnelly's novel argument, ancestry cannot confer trademark rights. The court granted the preliminary injunction both on grounds of trademark infringement and false advertising.

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The District Court of Nebraska denied a motion to dismiss for lack of personal jurisdiction in Denenberg v. Djordjevic, 2007 WL 4525011 (D. Neb. 12/18/07).

Dr. Steven Denenberg is a plastic surgeon in Omaha, Nebraska. Like many in his profession, he posts before/after photographs on his website to promote his work. Denenberg obtained a copyright registration. Dr. Borko Djordjevic, a competing surgeon in California, copied  over 30 pairs of these photos and posted them on his websites as examples of his own work. Denenberg filed suit for copyright infringement, and Djordjevic moved to dismiss for lack of personal jurisdiction.

The court easily denied the motion to dismiss. Djordjevic used the photos to solicit clients in Nebraska. Moreover, he knew he had not performed the surgeries and publishing the photos on his website would cause harm to Denenberg in Nebraska.

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The Western District of Arkansas denied plaintiff's motion to dismiss the counterclaim in Lewis & Clark Outdoors, Inc. v. Mahco, Inc., 2007 WL 4510364 (W.D. Ark. 12/18/07) (previously posted 5/1/07).

Mahco has counterclaimed against Lewis & Clark Outfitters (LCO) for trademark infringement. Mahco has admitted it no longer uses the "Lewis & Clark" mark, and LCO moved to dismiss on grounds of abandonment. To abandon a trademark, the owner has to cease use and show an intent not to resume use. The court denied the motion because all that LCO established is that Mahco no longer uses the mark; no evidence has been submitted regarding Mahco's intent.

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