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

The Arkansas Court of Appeals affirmed judgment in Bilo v. El Dorado Broadcasting Co., No. 07-507 (2/13/08).

Bilo owns land east of EDB; rainfall typically passed over Bilo's land and traveled south. He built a landfill, which caused rainfall to be diverted to EDB's land. There was no dispute the rainfall at issue was heavy and fast flowing. The issue turned on whether such rainfall is considered a watercourse or surface water. If the rainfall is surface water, then the common enemy doctrine applies, and Bilo's actions were probably legal.

The trial court found that the rainfall is a watercourse and enjoined his landfill. The court of appeals affirmed but did not provide a discussion on the watercourse/surface water issue. They just held the trial court did not err in its determination. Judge Gladwin, joined by Judge Griffen, dissented. He argued the rainfall should be considered surface water and that Bilo's actions were legal.

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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 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 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 reversed class certification in Georgia-Pacific Corp. v. Carter, No. 07-105 (10/11/07).

Property owners filed a class action against Georgia-Pacific claiming nuisance. The plaintiffs alleged that toxic substances from the Georgia-Pacific plant in Crossett, Arkansas (seen below) caused injury to their property. The trial court certified the class.

The supreme court reversed, finding that common issues predominate over individual issues. The court observed that toxic tort cases, like products liability cases, are less often suitable for class action treatment. Because the essence of a nuisance claim is the interference with the property owner's use, the individual issues predominated, and this class action could not be certified.

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The Arkansas Court of Appeals reversed a finding of an easement by prescription in Baysinger v. Biggers, No. 07-99 (10/10/07).

Biggers had been using Baysinger's road since 1961. He filed a lawsuit and obtained a temporary restraining order that required Baysinger to widen a gate on the road so large trucks could fit more easily. The trial court went on to find that Biggers had established an easement by prescription on the road.

The court of appeals reversed, holding that Biggers failed to present any evidence regarding the nature of the use. To obtain an easement by prescription, the use must be open and adverse to the property owner. Length of time, no matter how long, is not enough to create an easement. Biggers relied solely on length of time; he failed to present any evidence at trial that the use was adverse to Baysinger.

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The Arkansas Court of Appeals affirmed an amendment of judgment in Kennedy Funding, Inc. v. Shelton, No. 06-1035.

The case involved a dispute over the Rest in Peace Cemetery in Pulaski County and several other properties. Both parties held mortgages on the cemetery. In 2001, the trial court entered an order finding that Kennedy Funding had the superior interest in the other properties but that Shelton's interest in the cemetery was superior to Kennedy Funding's interest. However, this language  discussing Shelton's interest only appeared in the body of the opinion and did not appear at the conclusion directing sale of all properties.

A judicial sale for the cemetery was scheduled in 2006. Prior to the sale, Shelton asked the trial court to clarify its order. The trial court did so and clarified that the sale would be conducted with Shelton having a superior interest over Kennedy Funding. 

Kennedy Funding argued that Ark. R. Civ. P. 60 applied and that the trial court had no right to amend the order after 90 days had passed.  The court of appeals disagreed, holding that a trial court may interpret a foreclosure order before the sale is conducted. However, the court indicated that the trial court could not interpret its order after the sale was conducted. See First Nat'l Bank of Lewisville v. Mayberry, 368 Ark. 243 (2006).

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The Arkansas Court of Appeals reversed a grant of summary judgment in Millwood Sanitation & Park Co., Inc. v. Mattingly, No. 07-134 (10/3/07).

The dispute centered around a parcel of land that was part of a subdivision in Hot Springs created in 1960. The parcel was designated "Park," and every subdivision owner had an easement over the property to access Lake Hamilton. Through the years, the various owners of the parcel failed to pay property taxes. Mattingly purchased the property and paid the back taxes. He filed suit to quiet title in the parcel. The trial court extinguished the easement, finding that the easement was abandoned from failure to pay taxes on the property.

The court reversed, holding that the easement is a separate interest from the underlying property. When taxes are assessed, the easement is not levied against and cannot be extinguished at a tax sale.

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The Arkansas Court of Appeals affirmed judgment for property sellers in Burgess v. French, No. 06-1394 (9/26/07).

Burgess purchased a house from the Frenches. The house was in need of major repair; only one room was completed. Wiring and insulation were exposed throughout the house. The Seller Property Disclosure Form stated that the Frenches had not had any problems with the house. Burgess's agent had seen a puddle of water in the house and encouraged him to get a professional inspection. Burgess refused because he conducted inspections for a living.

The sales contract contained a "disclaimer of reliance" clause that he had inspected the property to his satisfaction and was not relying on the Frenches. The contract also stated that Burgess purchased the house "as is." A week after the sale, Burgess had problems with the roof and electrical system. He called Mrs. French, and she admitted that Mr. French had recently made repairs to the roof. Burgess sued for fraud and constructive fraud.

In affirming judgment for the sellers, the court held it was unreasonable for Burgess to claim reliance. Aside from the disclaimer and "as is" clauses, he had an obligation to make further inquiry when he saw the exposed wiring and was told about the puddle of water.

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The Arkansas Supreme Court reversed the setting aside of an easement in Sluyter v. Hale Fireworks Partnership, No. 06-1442 (9/13/07).

The Sluyters and Hale Fireworks Partnership ("HFP") own adjacent tracts of land. In 1991, the previous owners granted reciprocal easements that run with the land. The facts as stated in the case are unclear, but the Arkansas Highway Department widened the nearby highway. This somehow interfered with HFP's use of its easement but did not interfere with the Sluyters' use of their easement.

HFP filed suit to cancel the easement. The trial court applied the contract theory of frustration of purpose, finding that the essential purpose of the easement was frustrated. The supreme court disagreed because the language of the easement never contemplates termination of the easement. The parties intended the easements to be binding, not to be destroyed when one party was inconvenienced or even lost the use of its easement altogether.

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The Arkansas Court of Appeals reversed specific performance of sale of property in Youree v. Eshaghoff, No. 06-883 (5/9/07).

The Yourees entered into a contract to sell property to the Eshaghoffs for a total of $1.05 million. The contract provided the Yourees had one year to surrender the property. If they did not, they would lease the property for $12,000 per month until surrender. The parties executed addenda that reduced the surrender time to 6 months and required the Eshaghoffs to lease the property for $18,000 per month for no more than 3 months if they failed to meet the surrender deadline. 

The trial court found the addenda were enforceable and directed sale of the property. The court of appeals reversed, finding that the addenda were unenforceable because they provided no additional consideration . These addenda did not require the Yourees to do anything more than what they were already required to do. 

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The Arkansas Court of Appeals affirmed a finding of adverse possession in Boyd v. Roberts, No. 06-1050 (4/25/07). This boundary dispute had already incurred one appeal. See Roberts v. Boyd, 94 Ark.App. 345 (2006).

The Boyds purchased their property in 1981; it had a fence that separated property to the east, which the Roberts purchased in 1990. In 2002 the Boyds surveyed their property and found their boundary extended up to 96 feet inside the Roberts side of the fence. The Boyds sold the property to Winningham in 2004, who began tearing down the fence until he was enjoined by the trial court. After the Roberts v. Boyd decision, the trial court held the Roberts had adversely possessed the disputed property.

The Court of Appeals based its decision on the fact that the Roberts tended to the disputed tract of land. They spread fertilizer and planted grass as an exhibit of ownership. The court agreed that the Roberts satisfied all elements of adverse possession and affirmed the trial court's ruling.  

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The Court of Appeals reversed a sua sponte grant of summary judgment in 2200 Commercial Street Warehousing, LLC v. Hastings Development Co., Inc., No. 06-312 (4/11/07).

This case involved a dispute over whether an easement was conveyed with the sale of property. 2200 Commercial claimed there was an easement and moved for summary judgment. Hastings resisted the motion but did not cross move for summary judgment. The trial court sua sponte granted summary to Hastings.

The Court of Appeals reversed, finding that 2200 Commercial was not on notice that it needed to meet proof with proof in response to a motion for summary judgment. The fact that 2200 Commercial itself moved for summary judgment on the same issue was not enough notice for Hastings. The court noted that, if another defendant had moved for summary judgment, the sua sponte summary judgment to Hastings would have been appropriate.

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The Arkansas Court of Appeals held that defective service was waived in Trelfa v. Simmons First Bank of Jonesboro, No. 06-762 (4/4/07).

The Trelfas purchased a residence by giving State Street Bank a first mortgage. They later took out a loan from Simmons First Bank and gave Simmons a second mortgage. The Trelfas defaulted, and Simmons commenced foreclosure proceedings.

Simmons filed the complaint in December 2002 but did not serve the Trelfas. In January 2003, Simmons filed an amended complaint. This time the bank served the Trelfas, but it used the summonses from the original complaint rather than issuing new summonses. The Trelfas never answered or filed a pleading, but they agreed to an order appointing a receiver, which was entered in February 2003. The property was sold at a foreclosure sale and the trial court entered judgment for Simmons, although the Trelfas claimed they never waived the defective service.

The Court of Appeals affirmed, holding that the Trelfas waived the defective service by not objecting in their first responsive pleading. The court also agreed that entry of the order appointing receiver within 120 days of the amended complaint satisfied Ark. R. Civ. P. 4(i).

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The Arkansas Supreme Court affirmed a judgment enforcing restrictive covenants in Cochran v. Bentley, No. 06-743 (3/1/07).

On December 16, 1940, a restrictive covenant was recorded for the subdivision Denison Heights, where the parties live. That covenant provided that no structure shall be erected on a lot other than a detached single family dwelling. Although the restrictive covenant was recorded, it was not contained in the Cochrans' deed when they purchased the property. In 2003, the Cochrans built a 30-foot tall "shop building." 

The court held that the restrictive covenant was not ambiguous and there had not been a change in conditions sufficient to warrant invalidation. Most of all, the court rejected the Cochrans' defenses of waiver and estoppel because the Cochrans testified they still would have built the shop even if they had known about the restrictive covenant.

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